Hawthorn Bancshares Inc. (NASDAQ: HWBK), today reported
consolidated financial results for the Company for the first
quarter ended March 31, 2016.
Net income for the current quarter was $2.0 million, or $0.37
per diluted share, compared to $2.0 million, or $0.37 per diluted
share, for the linked quarter ended December 31, 2015 and $2.1
million, or $0.39 per diluted share, for the quarter ended March
31, 2015.
The year-to-date annualized return on average common equity was
9.02% and the annualized return on average assets was 0.66% for the
current year compared to 8.97% and 0.65% for the prior linked
quarter, respectively, and 10.60% and 0.73%, respectively, for the
prior year quarter.
Commenting on earnings performance, Chairman David T. Turner
said, “Hawthorn continued to report positive earnings performance
for the current quarter with net income of $2.0 million equal to
the prior linked quarter and the prior year quarter. Our earnings
for the first quarter 2016 were negatively impacted when compared
to the prior linked quarter and the prior year quarter by lower
yields in our loan portfolio driven by recoveries of nonaccrual
interest recorded last year and the continued low rate environment
in spite of higher levels of average outstanding loans. In
addition, the yield on our investment securities has continued to
fall due to higher yielding securities being replaced with current
lower market yields. As a result, our net interest margin decreased
from the prior linked quarter and the prior year quarter by 14
basis points and 20 basis points, respectively, to the current
quarter level of 3.51%. Due to continued loan growth and our
analysis of the risks in the loan portfolio, the company recorded a
provision for loan losses of $250,000 during the current quarter
while no provision was recorded for either the prior linked quarter
or the prior year quarter. Partially offsetting this increase in
expense was a $472,000 securities gain recognized in the current
quarter. Non-interest expense of $9.1 million was below the prior
linked quarter by $0.5 million, or 5%, and above the prior year
quarter by $0.4 million, or 4%.”
Net Interest Income
Net interest income decreased by $0.4 million, or 3.8%, from
$10.4 million for the prior link quarter to $9.8 million for the
current quarter ended March 31, 2016 and decreased $0.1 million
from the prior year quarter. Average loans increased $7.6 million,
or 0.9%, from the prior link quarter and $9.4 million, or 1.1%,
from the prior year quarter. The net interest margin of 3.51% for
the current quarter was down 14 basis points from the prior linked
quarter and 20 basis points from the prior year quarter ended March
31, 2015.
Non-Interest Income and Expense
Non-interest income for the quarter ended March 31, 2016 was
$2.4 million compared to $2.4 million for the prior linked quarter
and $2.0 million for the prior year quarter. Although the change
from the prior linked quarter was flat, investment securities gains
of $0.5 million realized in the current quarter were primarily
offset by a $0.3 million decrease in combined real estate service
fees, net and gain on sale of mortgage loans, net resulting from
reduced market demand. The $0.5 million increase over the prior
year quarter was primarily due to the aforementioned investment
securities gains.
Non-interest expense was $9.1 million for the quarter ended
March 31, 2016 compared to $9.5 million for the prior link quarter,
and $8.7 million for the prior year quarter ended March 31, 2015.
The $0.4 million decrease from the linked December 2015 quarter
primarily resulted from lower operating costs including processing
expenses, advertising and promotion expense, occupancy expense and
charitable donations. The $0.4 million increase from the prior year
quarter was mostly due to increased real estate foreclosure expense
of $0.3 million caused by lower gains on sale of foreclosed
property and higher costs to maintain foreclosed properties in the
current quarter.
Allowance for Loan Losses
The Company’s level of non-performing loans continued to improve
during the current quarter to 1.03% of total loans at March 31,
2016, compared to 1.19% at December 31, 2015 and 3.38% at March 31,
2015. During the quarter ended March 31, 2016, the Company recorded
net charge-offs of $223,000, or 0.03% of average loans, compared to
net charge-offs of $642,000, or 0.07% of average loans for the
quarter ended December 31, 2014 and net recoveries of $662,000, or
(0.08%) of average loans for the quarter ended March 31, 2015. The
net recoveries in the prior year quarter related primarily to two
loan relationships. The allowance for loan losses at March 31, 2016
was $8.6 million, or 0.99% of outstanding loans, 96.01% of
non-performing loans and 275.05% of nonperforming loans when
excluding accruing TDR’s. At December 31, 2015, the allowance for
loan losses was $8.6 million, or 0.99% of outstanding loans, 83.75%
of non-performing loans and 194.48% of nonperforming loans when
excluding accruing TDR’s. The allowance for loan losses represents
management’s best estimate of probable losses inherent in the loan
portfolio and is commensurate with risks in the loan portfolio as
of March 31, 2016.
Financial Condition
Comparing March 31, 2016 balances with December 31, 2015, total
assets increased $33.2 million to $1.2 billion. Asset growth
occurred in investment securities which increased $10.8 million, or
4.4%, and gross loans which increased $10.2 million, or 1.2%. Total
deposits increased $45.4 million to $992.6 million while federal
funds purchased and securities sold under agreements to repurchase
decreased $15.3 million to $41.5 million at March 31, 2016. During
the same period, stockholders’ equity increased 2.9% to $89.9
million, or 7.3% of total assets. The total risk based capital
ratio of 14.65% and the leverage ratio of 9.90% at March 31, 2016
far exceed minimum regulatory requirements of 8.00% and 4.00%,
respectively.
FINANCIAL
SUMMARY
(unaudited)
$000
Three Months Ended Statement of income
information: March 31, 2016 December 31, 2015
March 31, 2015 Total interest income $ 11,176 $ 11,515 $
11,198 Total interest expense 1,328 1,278
1,220 Net interest income 9,848 10,237 9,978
Provision for loan losses 250 0 0 Noninterest income 2,448 2,381
1,987 Noninterest expense 9,083 9,541
8,708 Pre-tax income 2,963 3,077 3,257 Income taxes
965 1,083 1,119 Net income $ 1,998 $
1,994 $ 2,138
Earnings per share: Basic: $ 0.37 $ 0.37 $
0.39 Diluted: $ 0.37 $ 0.37 $ 0.39
Key financial
ratios: March 31, 2016 December 31, 2015 March
31, 2015 Return on average assets (YTD) 0.66 % 0.72 % 0.73
Return on average common equity (YTD) 9.02 % 10.14 % 10.6
March 31, 2016 December 31, 2015 March 31,
2015 Allowance for loan losses to total loans 0.99 % 0.99 %
1.13 Nonperforming loans to total loans 1.03 % 1.19 % 3.38
Nonperforming assets to loans and foreclosed assets 2.75 % 2.98 %
4.67 Allowance for loan losses to nonperforming loans 96.01 % 83.75
% 33.48 Allowance for loan losses to nonperforming loans -
excluding performing TDRs 275.05 % 194.48 % 54.85
Balance
sheet information: March 31, 2016 December 31,
2015 March 31, 2015 Loans, net of allowance for loan
losses $ 866,681 $ 856,476 $ 853,406 Investment securities 253,853
243,091 239,954 Total assets 1,234,156 1,200,921 1,197,511 Deposits
992,560 947,197 993,111 Total stockholders’ equity 89,853 87,286
82,956 Book value per share $ 16.53 $ 16.04 $ 15.24 Market price
per share $ 14.75 $ 15.75 $ 12.88
About Hawthorn Bancshares
Hawthorn Bancshares, Inc., a financial-bank holding company
headquartered in Jefferson City, Missouri, is the parent company of
Hawthorn Bank of Jefferson City with locations in the Missouri
communities of Lee's Summit, Liberty, Springfield, Branson,
Independence, Columbia, Clinton, Windsor, Collins, Osceola, Warsaw,
Belton, Drexel, Harrisonville, California and St. Robert.
Statements made in this press release that suggest Hawthorn
Bancshares' 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 and
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160516006685/en/
Hawthorn Bancshares Inc.Bruce Phelps, 573-761-6100Chief
Financial OfficerFAX: 573-761-6272www.HawthornBancshares.com
Hawthorn Bancshares (NASDAQ:HWBK)
Historical Stock Chart
From Jun 2024 to Jul 2024
Hawthorn Bancshares (NASDAQ:HWBK)
Historical Stock Chart
From Jul 2023 to Jul 2024