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Hawthorn Bancshares Reports Third Quarter 2024 Results

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Hawthorn Bancshares (NASDAQ: HWBK) reported Q3 2024 net income of $4.6 million, or $0.66 per diluted share, representing a 77% increase from Q3 2023. The company's net interest margin improved to 3.36%, while maintaining strong credit quality with non-performing loans at 0.28% of total loans. Total assets reached $1.81 billion, with loans decreasing by 2.1% and deposits declining by 3.0% compared to the previous quarter. Book value per share increased 24% year-over-year to $20.91, and the company remained well-capitalized with a total risk-based capital ratio of 14.91%.

Hawthorn Bancshares (NASDAQ: HWBK) ha riportato un utile netto per il terzo trimestre del 2024 di 4,6 milioni di dollari, ovvero 0,66 dollari per azione diluita, con un aumento del 77% rispetto al terzo trimestre del 2023. Il margine di interesse netto della società è migliorato al 3,36%, mantenendo una forte qualità del credito con prestiti non performanti allo 0,28% del totale dei prestiti. Il totale delle attività ha raggiunto 1,81 miliardi di dollari, con una diminuzione dei prestiti del 2,1% e dei depositi del 3,0% rispetto al trimestre precedente. Il valore contabile per azione è aumentato del 24% su base annuale a 20,91 dollari, e la società ha mantenuto una solida capitalizzazione con un rapporto di capitale di rischio totale del 14,91%.

Hawthorn Bancshares (NASDAQ: HWBK) reportó un ingreso neto en el tercer trimestre de 2024 de 4,6 millones de dólares, o 0,66 dólares por acción diluida, lo que representa un aumento del 77% en comparación con el tercer trimestre de 2023. El margen de interés neto de la compañía mejoró al 3,36%, manteniendo una fuerte calidad crediticia con préstamos en incumplimiento en el 0,28% del total de préstamos. Los activos totales alcanzaron 1,81 mil millones de dólares, con una disminución de los préstamos del 2,1% y depósitos del 3,0% en comparación con el trimestre anterior. El valor contable por acción aumentó un 24% interanual a 20,91 dólares, y la compañía siguió bien capitalizada con un ratio de capital basado en riesgos total del 14,91%.

호손 뱅크쉐어스 (NASDAQ: HWBK)는 2024년 3분기 순이익이 460만 달러, 즉 희석 주당 0.66달러로, 2023년 3분기 대비 77% 증가했다고 발표했습니다. 회사의 순이자 마진은 3.36%로 개선되었고, 부실채권 비율은 총 대출의 0.28%로 신용 품질을 유지했습니다. 총 자산은 18억 1천만 달러에 달했으며, 대출은 2.1% 감소하고 예금은 전 분기 대비 3.0% 감소했습니다. 주당 장부 가치는 작년 대비 24% 증가하여 20.91달러에 이르렀고, 회사는 총 위험 기반 자본 비율이 14.91%로 잘 자본화되어 있었습니다.

Hawthorn Bancshares (NASDAQ: HWBK) a annoncé un bénéfice net pour le troisième trimestre 2024 de 4,6 millions de dollars, soit 0,66 dollar par action diluée, représentant une augmentation de 77% par rapport au troisième trimestre 2023. La marge d'intérêt nette de l'entreprise s'est améliorée à 3,36%, tout en maintenant une forte qualité de crédit avec des prêts non performants à 0,28% du total des prêts. Les actifs totaux ont atteint 1,81 milliard de dollars, avec une diminution des prêts de 2,1% et des dépôts en baisse de 3,0% par rapport au trimestre précédent. La valeur comptable par action a augmenté de 24% d'une année sur l'autre pour atteindre 20,91 dollars, et l'entreprise est restée bien capitalisée avec un ratio de capital basé sur les risques de 14,91%.

Hawthorn Bancshares (NASDAQ: HWBK) meldete für das dritte Quartal 2024 ein Nettoergebnis von 4,6 Millionen Dollar, was 0,66 Dollar pro verwässerter Aktie entspricht und einem Anstieg von 77% im Vergleich zum dritten Quartal 2023 entspricht. Die Nettogewinnspanne des Unternehmens verbesserte sich auf 3,36%, während die Kreditqualität mit einem Anteil von 0,28% notleidender Kredite an den Gesamtkrediten stark blieb. Die Gesamtvermögenswerte beliefen sich auf 1,81 Milliarden Dollar, wobei die Kredite um 2,1% und die Einlagen im Vergleich zum Vorquartal um 3,0% zurückgingen. Der Buchwert pro Aktie stieg im Jahresvergleich um 24% auf 20,91 Dollar, und das Unternehmen blieb mit einer gesamten risikoangepassten Kapitalquote von 14,91% gut kapitalisiert.

Positive
  • Net income increased 77% year-over-year to $4.6 million
  • Net interest margin improved to 3.36% from 3.33% in Q2 2024
  • Book value per share increased 24% year-over-year to $20.91
  • Strong credit quality maintained with non-performing loans at 0.28%
  • Efficiency ratio improved to 66.23% from 79.79% year-over-year
Negative
  • Loans decreased by $31.8 million (2.1%) quarter-over-quarter
  • Deposits declined by $46.7 million (3.0%) quarter-over-quarter
  • Non-interest income decreased 5.3% from previous quarter
  • Non-performing assets increased to 0.58% from 0.54% in previous quarter

Insights

The Q3 2024 results show notable improvements in Hawthorn Bancshares' financial performance. Net income of $4.6 million represents a substantial 77% increase from Q3 2023, with EPS rising to $0.66 from $0.36. The net interest margin improved slightly to 3.36%, while efficiency ratio remained stable at 66.23%.

Key metrics reveal both strengths and challenges: While credit quality remains robust with non-performing loans at just 0.28% of total loans, there's a slight decline in loan portfolio (-2.1%) and deposits (-3.0%). The capital position remains strong with a total risk-based capital ratio of 14.91%, well above regulatory requirements.

Book value per share showed impressive growth of 24% year-over-year, reaching $20.91. The bank's focus on core business lines has successfully reduced overhead expenses while expanding fee income, indicating effective strategic execution despite challenging market conditions.

JEFFERSON CITY, Mo., Oct. 30, 2024 (GLOBE NEWSWIRE) -- Hawthorn Bancshares, Inc. (NASDAQ: HWBK), (the “Company”), the bank holding company for Hawthorn Bank, reported third quarter 2024 net income of $4.6 million, or earnings per diluted share (“EPS”) of $0.66.

Third Quarter 2024 Results

  • Net income improved $2.0 million, or 77%, from the third quarter 2023 (the "prior year quarter")
  • EPS of $0.66, an improvement of $0.30 per share, or 83%, from the prior year quarter
  • Net interest margin, fully taxable equivalent ("FTE") improved in the third quarter 2024 to 3.36% compared to 3.33% for second quarter 2024 (the "prior quarter”)
  • Return on average assets and equity of 1.00% and 12.87%, respectively
  • Loans decreased $31.8 million, or 2.1%, and deposits decreased $46.7 million, or 3.0%, compared to the prior quarter
  • Investments increased $17.9 million, or 9.3%, compared to the prior quarter
  • Credit quality remained strong with non-performing loans to total loans of 0.28%
  • Remained well capitalized with total risk-based capital of 14.91%
  • Book Value per share increased $4.09 to $20.91, or 24%, compared to the prior year quarter

Brent Giles, Chief Executive Officer of Hawthorn Bancshares, Inc. commented, “We are pleased with the progress we've made on our strategic objectives, and the corresponding financial results. Our focus on core lines of business has resulted in reduced overhead expenses and expansion of our fee income."

Financial Summary

(unaudited)
$000, except per share data

 September 30, June 30, September 30,
 2024 2024 2023
Balance sheet information:     
Total assets$1,809,769  $1,847,810  $1,879,005 
Loans held for investment 1,466,751   1,498,504   1,556,969 
Investment securities 209,019   191,159   240,521 
Deposits 1,503,504   1,550,250   1,580,365 
Total stockholders’ equity$146,474  $138,241  $118,404 
      
Key ratios and per share data:     
Book value per share$20.91  $19.71  $16.82 
Market price per share$25.03  $19.80  $16.25 
Diluted earnings per share (QTR)$0.66  $0.66  $0.36 
Net interest margin (FTE) (QTR) 3.36%   3.33%   3.35% 
Efficiency ratio (QTR) 66.23%   66.24%   79.79% 

Financial Results for the Quarter and Nine Months Ended September 30, 2024

Earnings

Net income for the third quarter 2024 was $4.6 million, a decrease of $0.1 million, or 1.2%, from the prior quarter, and an increase of $2.0 million, or 77.4%, from the prior year quarter. EPS remained consistent with the prior quarter at $0.66 compared to $0.36 for the prior year quarter.

Net income for the nine months ended September 30, 2024 was $13.7 million, or $1.95 per diluted share, an increase of $5.3 million compared to $8.4 million, or $1.19 per diluted share, for the nine months ended September 30, 2023.

Net Interest Income and Net Interest Margin

Net interest income for the third quarter 2024 was $14.3 million, an increase of $0.2 million from the prior quarter, and a decrease of $0.82 million from the prior year quarter. Net interest income for the nine months ended September 30, 2024 was $43.2 million, a decrease of $0.1 million compared to $43.3 million for the nine months ended September 30, 2023.

Interest income decreased $0.1 million in the current quarter compared to the prior year quarter, driven primarily by lower average interest earning assets, while interest expense increased $0.8 million compared to the prior year quarter. Net interest margin, on an FTE basis, was 3.36% for the current quarter, compared to 3.33% for the prior quarter, and 3.35% for the prior year quarter.

The yield earned on average loans held for investment was consistent at 5.83%, on an FTE basis, for both the third quarter 2024 and the prior quarter, compared to 5.67% for the prior year quarter.

The average cost of deposits was 2.74% for the third quarter 2024, compared to 2.69% for the prior quarter and 2.32% for the prior year quarter. Non-interest bearing demand deposits as a percent of total deposits was 26.0% as of September 30, 2024, compared to 25.9% and 26.9% at June 30, 2024 and September 30, 2023, respectively.

Non-interest Income

Total non-interest income for the third quarter 2024 was $3.8 million, a decrease of $0.2 million, or 5.3%, from the prior quarter, and an increase of $3.2 million, or 524.3%, from the prior year quarter. For the nine months ended September 30, 2024, non-interest income was $10.8 million, an increase of $5.4 million as compared to $5.4 million for the nine months ended September 30, 2023.

The decrease in the current quarter compared to the prior quarter was primarily due to the Company completing the sale of its mortgage servicing rights and recognizing a gain on sale on foreclosed property in the prior quarter.

The increase in the current quarter compared to the prior year quarter was primarily due to an increase in earnings on bank owned life insurance and a decrease in other real estate owned valuation write-downs, partially offset by a decrease in the gains on sale of mortgage loans in the current quarter.

Non-interest Expense

Total non-interest expense for the third quarter 2024 was $12.0 million, a decrease of $0.04 million, or 0.3%, from the prior quarter, and a decrease of $0.6 million, or 4.6%, from the prior year quarter. For the nine months ended September 30, 2024, non-interest expense was $36.6 million, a decrease of $1.2 million as compared to $37.8 million for the nine months ended September 30, 2023.

The third quarter 2024 efficiency ratio was 66.23% compared to 66.24% and 79.79% for the prior quarter and prior year quarter, respectively. The slight decrease in the current quarter compared to the prior quarter was primarily due to higher net interest margin and lower non-interest expenses in the current quarter.

Loans

Loans held for investment decreased $31.8 million, or 2.1%, to $1.5 billion as of September 30, 2024 as compared to June 30, 2024 and decreased $90.2 million, or 5.8%, from September 30, 2023.

Investments

Investments increased $17.9 million, or 9.3%, to $209.0 million as of September 30, 2024 compared to June 30, 2024 and decreased $31.5 million, or 13.1%, from September 30, 2023.

Asset Quality

Non-performing assets to total loans was 0.58% at September 30, 2024, compared to 0.54% and 0.48% at June 30, 2024 and September 30, 2023, respectively. Non-performing assets totaled $8.5 million at September 30, 2024, compared to $8.1 million and $7.4 million at June 30, 2024 and September 30, 2023, respectively. The increase in non-performing assets in the current quarter compared to the prior quarter is primarily due to a $2.0 million commercial loan relationship moving to non-accrual status and a $1.1 million commercial real estate loan that went to foreclosure during the current quarter.

In the third quarter 2024, the Company had net loan charge-offs of $0.6 million, or 0.04% of average loans, compared to net loan charge-offs of $2.0 million, or 0.13% of average loans, and $0.1 million, or 0.00% of average loans, in the prior quarter and prior year quarter, respectively. The charge-offs in the current quarter primarily related to one commercial real estate loan and one commercial loan relationship that were adequately reserved for in the prior quarter.

The Company's provision for credit losses and unfunded commitments was consistent at $0.5 million for both the third quarter 2024 and the prior quarter, and was $0.1 million for the prior year quarter.

The allowance for credit losses at September 30, 2024 was $21.9 million, or 1.50% of outstanding loans, and 539.52% of non-performing loans. At June 30, 2024, the allowance for credit losses was $22.0 million, or 1.47% of outstanding loans, and 495.38% of non-performing loans. At September 30, 2023, the allowance for credit losses was $22.5 million, or 1.44% of outstanding loans, and 583.88% of non-performing loans. The allowance for credit losses represents management’s best estimate of expected losses inherent in the loan portfolio and is commensurate with risks in the loan portfolio as of September 30, 2024 as determined by management.

Deposits

Total deposits at September 30, 2024 were $1.5 billion, a decrease of $46.7 million, or 3.0%, from June 30, 2024, and a decrease of $76.9 million, or 4.9%, from September 30, 2023. The decrease in deposits at September 30, 2024 as compared to September 30, 2023 was primarily a result of a decrease in demand deposits and brokered deposits.

Capital

The Company maintains its “well capitalized” regulatory capital position. At September 30, 2024, capital ratios were as follows: total risk-based capital to risk-weighted assets 14.91%; tier 1 capital to risk-weighted assets 13.66%; tier 1 leverage 11.33%; and common equity to assets 8.09%.

Pursuant to the Company's 2019 Repurchase Plan, management is given discretion to determine the number and pricing of the shares to be purchased under the plan, as well as the timing of any such purchases. The Company repurchased 56,692 common shares under the repurchase plan during the first nine months of 2024 at an average cost of $19.51 per share totaling $1.1 million. As of September 30, 2024, $3.9 million remains available for share repurchases pursuant to the plan.

During the fourth quarter of 2024, the Company's Board of Directors approved a quarterly cash dividend of $0.19 per common share payable January 1, 2025 to shareholders of record at the close of business on December 15, 2024.

[Tables follow]

FINANCIAL SUMMARY
(unaudited)
$000, except per share data

 Three Months Ended
 September 30, June 30, September 30,
Statement of income information:2024 2024
 2023
Total interest income$23,819 $23,556  $23,888
Total interest expense 9,492  9,384   8,741
Net interest income 14,327  14,172   15,147
Provision for credit losses on loans and unfunded commitments 500  457   110
Non-interest income 3,783  3,995   606
Investment securities gains (losses), net 8  (15)   3
Non-interest expense 11,994  12,034   12,569
Pre-tax income 5,624  5,661   3,077
Income taxes 1,050  1,033   498
Net income$4,574 $4,628  $2,579
Earnings per share:     
Basic:$0.66 $0.66  $0.36
Diluted:$0.66 $0.66  $0.36
      
   Nine Months Ended
   September 30,
Statement of income information:   2024   2023
Total interest income  $71,427  $66,748
Total interest expense   28,181   23,451
Net interest income   43,246   43,297
Provision for credit losses on loans and unfunded commitments   726   790
Non-interest income   10,798   5,384
Investment securities (losses) gains, net   (7)   18
Non-interest expense   36,603   37,772
Pre-tax income   16,708   10,137
Income taxes   3,049   1,738
Net income  $13,659  $8,399
Earnings per share:     
Basic:  $1.95  $1.19
Diluted:  $1.95  $1.19

FINANCIAL SUMMARY (continued)

(unaudited)

$000

 September 30, June 30, September 30,
 2024 2024 2023
Key financial ratios:     
Return on average assets (QTR) 1.00%   1.02%   0.54% 
Return on average common equity (QTR) 12.87%   13.75%   8.05% 
Net interest margin (FTE) (QTR) 3.36%   3.33%   3.35% 
Efficiency ratio (QTR) 66.23%   66.24%   79.79% 
      
Asset Quality Ratios:     
Allowance for credit losses to total loans 1.50%   1.47%   1.44% 
Non-performing loans to total loans (a) 0.28%   0.30%   0.25% 
Non-performing assets to loans 0.58%   0.54%   0.48% 
Non-performing assets to assets 0.47%   0.44%   0.39% 
Performing TDRs to loans$636  $1,977  $74 
Net Charge-offs to Average Loans (QTR) 0.04%   0.13%   0.00% 
Allowance for credit losses on loans to     
non-performing loans (a) 539.52%   495.38%   583.88% 
      
Capital Ratios:     
Average stockholders' equity to average total assets (QTR) 7.80%   7.40%   6.73% 
Period-end stockholders' equity to period-end assets 8.09%   7.48%   6.30% 
Total risk-based capital ratio 14.91%   14.30%   14.20% 
Tier 1 risk-based capital ratio 13.66%   12.94%   12.54% 
Common equity Tier 1 capital 10.53%   10.02%   10.09% 
Tier 1 leverage ratio 11.33%   10.94%   10.43% 

(a) Non-performing loans include loans 90-days past due and accruing and non-accrual loans.

About Hawthorn Bancshares

Hawthorn Bancshares, Inc., a financial-bank holding company headquartered in Jefferson City, Missouri, is the parent company of Hawthorn Bank, which has served families and businesses for more than 150 years. Hawthorn Bank has multiple locations, including in the greater Kansas City metropolitan area, Jefferson City, Columbia, Springfield, and Clinton.

Contact:
Hawthorn Bancshares, Inc.
Brent M. Giles
Chief Executive Officer
TEL: 573.761.6100
www.HawthornBancshares.com

The financial results in this press release reflect preliminary, unaudited results, which are not final until the Company's Quarterly Report on Form 10-Q is filed. Statements made in this press release that suggest the Company's or management's intentions, hopes, beliefs, expectations, or predictions of the future include "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. It is important to note that actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those projected in such forward-looking statements is contained from time to time in the Company's quarterly and annual reports filed with the Securities and Exchange Commission. These forward-looking statements are made as of the date of this communication, and the Company disclaims any obligation to update any forward-looking statement or to publicly announce the results of any revisions to any of the forward-looking statements included herein, except as required by law.


FAQ

What was Hawthorn Bancshares (HWBK) earnings per share in Q3 2024?

Hawthorn Bancshares reported earnings per diluted share of $0.66 in Q3 2024, an increase of $0.30 per share or 83% from Q3 2023.

How much did Hawthorn Bancshares (HWBK) deposits decrease in Q3 2024?

Deposits decreased by $46.7 million or 3.0% in Q3 2024 compared to Q2 2024, totaling $1.5 billion.

What was Hawthorn Bancshares (HWBK) net interest margin in Q3 2024?

Hawthorn Bancshares' net interest margin was 3.36% in Q3 2024, an improvement from 3.33% in Q2 2024.

What is Hawthorn Bancshares (HWBK) current book value per share?

As of Q3 2024, Hawthorn Bancshares' book value per share was $20.91, representing a 24% increase from $16.82 in Q3 2023.

Hawthorn Bancshars Inc.

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