Hawthorn Bancshares Inc. (NASDAQ: HWBK), today reported
consolidated financial results for the Company for the quarter
ended March 31, 2017.
Net income for the current quarter was $2.1 million, or $0.37
per diluted common share, compared to $2.0 million, or $0.35 per
diluted common share, for the linked quarter ended December 31,
2016 and $2.0 million, or $0.35 per diluted common share, for the
quarter ended March 31, 2016.
The year-to-date annualized return on average common equity was
9.23% and the annualized return on average assets was 0.65% for the
current year compared to 8.50% and 0.62% for the prior linked
quarter, respectively, and 9.02% and 0.66%, respectively, for the
prior year quarter.
Commenting on earnings performance, Chairman David T. Turner
said, “Hawthorn continued to report solid earnings for the current
quarter with earnings per diluted common share of $0.37 compared to
$0.35 per diluted common share for both the prior linked quarter
and prior year quarter. Loans have continued to grow increasing
$36.1 million, or 3.7%, from the prior linked quarter and
increasing $134.9 million, or 15.4%, from the prior year quarter.
Our current quarter net interest margin of 3.48% decreased modestly
from the prior year quarter of 3.51% and net interest income
increased $0.7 million over the prior year quarter. Non-interest
income of $2.4 million for the current quarter was consistent with
both the prior linked quarter and prior year quarter. Non-interest
expense of $9.4 million was $0.1 million higher than the prior
linked quarter and $0.2 million higher than the prior year
quarter.”
Net Interest Income
Net interest income for the quarter ended March 31, 2017 was
$10.5 million compared to $10.4 million for the prior linked
quarter and $9.8 million for the prior year quarter. The increase
over the prior year quarter of $0.7 million was primarily due to
increased loan income of $1.1 million resulting from average loan
growth of $125.8 million partially offset by a $0.2 million
decrease in investment securities interest resulting from a $33.3
million decrease in average balances and an increase in interest
expense of $0.3 million mostly due to a $62.1 million increase in
average balances of interest-bearing liabilities.
Non-Interest Income and Expense
Non-interest income for the quarter ended March 31, 2017 was
$2.4 million compared to $2.4 million for the prior linked quarter
and the prior year quarter. Although there was no net change from
the prior year quarter to the current year quarter, real estate
service fees increased $0.4 million primarily due to the increase
in market valuation of mortgage servicing rights during the current
quarter partially offset by securities gains of $0.5 million
realized in the prior year quarter.
Non-interest expense was $9.4 million for the quarter ended
March 31, 2017 compared to $9.3 million for the prior linked
quarter and $9.1 million for the prior year quarter. There was
virtually no net change in non-interest expense from the prior
linked quarter due to increases in salaries and benefits, furniture
and equipment and processing costs being offset by decreases in all
other non-interest expense categories. The increase over the prior
year quarter was primarily due to increases in furniture and
equipment and processing expenses partially offset by decreases in
most other operating expenses.
Allowance for Loan Losses
The Company’s level of non-performing loans continued to improve
during the current quarter to 0.93% of total loans at March 31,
2017, compared to 0.95% at December 31, 2016 and 1.03% at March 31,
2016. During the quarter ended March 31, 2017, the Company recorded
net recoveries of $26,000 compared to net charge-offs of $35,000
and $222,000 for the prior linked quarter and the prior year
quarter, respectively. The allowance for loan losses at March 31,
2017 was $10.3 million, or 1.02% of outstanding loans, 109.70% of
non-performing loans and 288.50% of nonperforming loans when
excluding accruing TDR’s. At December 31, 2016, the allowance for
loan losses was $9.9 million, or 1.01% of outstanding loans,
107.35% of non-performing loans and 282.94% 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, 2017.
Financial Condition
Comparing March 31, 2017 balances with December 31, 2016, total
assets increased $32.6 million to $1.3 billion. The largest driver
in asset growth was the increase in loans of $36.1 million, or
3.7%. Total deposits increased $32.3 million to $1.0 billion at
March 31, 2017. During the same period, stockholders’ equity
increased 2.3% to $93.1 million, or 7.1% of total assets. The total
risk-based capital ratio of 13.37% and the leverage ratio of 9.74%
at March 31, 2017, respectively, 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, December 31, March
31, 2017 2016 2016 Total interest income $
12,099 $ 11,877 $ 11,176 Total interest expense 1,612 1,497 1,328
Net interest income 10,487 10,380 9,848 Provision for loan losses
350 450 250 Noninterest income 2,407 2,395 2,448 Noninterest
expense 9,351 9,285 9,083 Pre-tax income 3,193 3,040 2,963 Income
taxes 1,093 1,052 965 Net income $ 2,100 $ 1,988 $ 1,998
Earnings per share: Basic: $ 0.37 $ 0.35 $ 0.35 Diluted: $
0.37 $ 0.35 $ 0.35
Key financial ratios:
March 31, December 31, March 31, 2017
2016 2016 Return on average assets (YTD) 0.65 % 0.58
% 0.66 % Return on average common equity (YTD) 9.23 % 7.97 % 9.02 %
March 31, December 31, March 31,
2017 2016 2016 Allowance for loan losses to
total loans 1.02 % 1.01 % 0.99 % Nonperforming loans to total loans
0.93 % 0.95 % 1.03 % Nonperforming assets to loans and foreclosed
assets 2.24 % 2.37 % 2.75 % Allowance for loan losses to
nonperforming loans 109.70 % 107.35 % 96.01 % Allowance for loan
losses to nonperforming loans - excluding performing TDRs 288.50 %
282.94 % 275.05 %
Balance sheet information: March
31, December 31, March 31, 2017
2016 2016 Loans, net of allowance for loan losses $
999,920 $ 964,143 $ 866,681 Investment securities 226,029 224,308
253,853 Total assets 1,319,663 1,287,048 1,234,156 Deposits
1,043,004 1,010,666 992,560 Total stockholders’ equity 93,077
91,017 89,853 Book value per share $ 16.58 $ 16.14 $ 15.89
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, 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20170427006195/en/
Hawthorn BancsharesBruce Phelps, 573-761-6100Chief
Financial OfficerFAX: 573-761-6272www.HawthornBancshares.com
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