Hawthorn Bancshares Inc.
(NASDAQ:
HWBK), (the “Company” or “HWBK”) reported net
income of $5.0 million for the third quarter, an increase of $1.7
million compared to the linked second quarter (“linked quarter”)
and an increase of $1.1 million from the prior year quarter.
Earnings per diluted share (“EPS”) was $0.77 for the third quarter
2020 compared to $0.51 and $0.59 for the linked quarter and prior
year quarter, respectively. Net income and EPS in the current
quarter increased from the linked quarter due to higher noninterest
income and net interest income in the current quarter, offset by
increases in provision expense and noninterest expense compared to
the linked quarter, described in more detail below.
Chairman David T. Turner
commented, “The COVID-19 pandemic has continued
to challenge our customers and small business owners in the
communities we serve. Our bankers have responded very well through
these troubling times, and we appreciate the trust and confidence
our customers place in us as we journey together.
Now as before, and after six-months of
responding to the pandemic we continue to work with our customers
and small business owners in developing tailored solutions to meet
their specific needs. In total, we enabled over $88 million of
lending with the origination of over 1,275 SBA-approved loans
through the SBA Paycheck Protection Program ("PPP"), and we will
earn approximately $3.6 million in fees to be recognized over the
life of the loans in addition to the stated 1.0% interest rate on
the principal outstanding. Since then, we have provided loan
repayment modifications on over 500 loans, including temporary
interest only payment arrangements and payment forbearance
accommodations. As you would expect, we are finding certain
borrowers to be particularly susceptible to the financial hardships
brought-on by this pandemic. They include borrowers within the
hotel, restaurant, theater, and retail industries. We continue to
work closely and monitor the progress of our borrowers as they work
through the financial and operational hardships caused by this
pandemic."
Turner continued, “Despite these challenges, we
continued to deliver strong operating results in the third quarter.
Non-GAAP net income, which excludes an additional $0.6 million
after tax loan loss provision attributed to COVID-19 for the
current quarter, was $5.6 million, or 48.9% ahead of the linked
quarter, and 48.2% ahead of the prior year quarter. We felt it was
prudent and appropriate to supplement our loan loss reserves with
additional provision given the continued, unprecedented economic
uncertainty and fact pattern we are seeing emerge with our
borrowers. Net interest income was $13.8 million, or 3.8% ahead of
the linked quarter, and 12.0% ahead of the prior year quarter.
Loans held for investment were “flat” as compared to the linked
quarter, and have increased by $130 million, or 11.3% from the
prior year quarter.
Particularly noteworthy are the results achieved
by our real estate mortgage lending and loan processing teams.
Sales of mortgages originated and sold to secondary market
investors have delivered gains on sales totaling $3.0 million in
the current quarter, compared to $0.9 million and $0.2 million in
the linked quarter and prior year quarter, respectively. Remarkable
performance by our recently formed teams, but also enabled by this
historic low-interest rate mortgage market.”
Highlights
- Earnings – Net income in the
third quarter 2020 was $5.0 million and EPS was $0.77. Pre-tax
pre-provision income (“PTPP”) of $7.3 million in the third quarter
increased $2.4 million, or 48%, and $2.0 million, or 39%, from the
linked quarter and third quarter 2019, respectively.
- Net interest income and net interest
margin – Net interest income of $13.8 million for
the third quarter 2020, increased $0.5 million and $1.5 million
from the linked quarter and third quarter 2019, respectively. Net
interest margin, on a tax equivalent basis, was 3.50% for the third
quarter, an increase from 3.46% in the linked quarter, and a
reduction from 3.64% in the third quarter of 2019.
- Loans – Loans held for
investment reduced by $1.5 million, or 0.1%, equal to $1.3 billion
as of September 30, 2020 as compared to the linked quarter.
Year-over-year, loans grew $130 million, or 11.3%, from $1.1
billion as of September 30, 2019. Year-over-year growth in loans
was primarily due to an increase in commercial loans for customers
who participated in the PPP.
- Asset quality –
Non-performing loans totaled $5.8 million at September 30, 2020, a
decrease of $3.1 million from $8.9 million at the end of the linked
quarter, primarily due to one loan relationship that was paid off
during the quarter. The allowance for loan losses to total loans
was 1.39% at September 30, 2020, an increase from 1.30% at June 30,
2020 and an increase from 1.06% at September 30, 2019.
- Deposits – Total deposits
reduced by $1.0 million, or 0.1%, equal to $1.3 billion as of
September 30, 2020 as compared to the linked quarter.
Year-over-year deposits grew $189 million, or 16.6%, from $1.1
billion as of September 30, 2019. Growth in deposits over prior
year quarter was positively impacted in part by customers who
deposited PPP loan proceeds into demand deposit accounts, in
addition to an increase in interest bearing deposits.
- Capital – Total shareholder’s
equity was $124 million and the tangible common equity to tangible
assets ratio was 7.45% at September 30, 2020 as compared to 7.13%
and 7.78% from the linked quarter and third quarter of 2019,
respectively. Regulatory capital ratios remain “well-capitalized”,
with tier 1 leverage ratio of 9.99% and a total risk-based capital
ratio of 15.05%.
In the third quarter of 2020, the Company’s
Board of Directors authorized the purchase of up to $2.5 million
market value of the Company’s common stock. Management was given
discretion to determine the number and pricing of the shares to be
purchased, as well as, the timing of any such purchases. As of
September 30, 2020, $2.4 million remained for share repurchase
pursuant to that authorization.
The Company’s Board of Directors approved a
quarterly cash dividend of $0.12 per common share, payable October
1, 2020 to shareholders of record at the close of business on
September 15, 2020.
Net Interest Income and Net
Interest Margin
Net interest income for the third quarter
increased $0.5 million to $13.8 million from $13.3 million in the
linked quarter, and increased $1.5 million from the prior year
quarter. The increase in the linked quarter was driven by an
increase in interest income coupled with a decrease in interest
expense. The increase from the prior year quarter was all driven by
a decrease in interest expense. Included in net interest income in
the third quarter was $0.4 million of loan fees related to the PPP.
Net interest margin, on a tax equivalent basis, was 3.50% for the
third quarter, an increase from 3.46% in the linked quarter, and a
reduction from 3.64% in the third quarter of 2019.
Loans
Loans held for investment totaled $1.3 billion
at September 30, 2020, decreasing $1.5 million or 0.1% from the
linked quarter and increasing $130 million or 11.3% from the prior
year quarter. Growth in loans over the prior year quarter was
primarily due to an increase in commercial loans for customers who
participated in the PPP. Non-performing loans to total loans was
0.45% at September 30, 2020, and 0.70% and 0.41% at the end of the
linked quarter and prior year quarter, respectively.
The yield earned on average loans held for
investment was 4.66% for the third quarter, compared to 4.68% for
the linked quarter and 5.13% for the prior year quarter.
In April 2020, the Company began offering loans
through the PPP which was part of the CARES Act passed by Congress.
At September 30, 2020, it had provided over 1,275 loans to small
business customers totaling $88.4 million, for an average of
$69,200 per loan.
As provided for by the CARES Act, the Company
has also offered payment modifications to borrowers. Disaster
relief payment modifications granted to-date include approximately
578 loans totaling $303.2 million. At September 30, 2020, 42 loans
totaling $91.1 million or 7.1% of total loans remained in some form
of a modification. These loan modifications include $44.6 million
or 48.9% on interest only, and $46.5 million or 51.1% on full
deferral. (See table below titled Loan Modifications under the
CARES Act by NAICS Code.)
Asset
Quality
Non-performing loans totaled $5.8 million at
September 30, 2020, a decrease of $3.1 million from $8.9 million at
the end of the linked quarter, primarily due to one loan
relationship that was paid off during the quarter. In the third
quarter 2020, the Company had net loan charge-offs of $58,000
compared to net loan recoveries of $29,000 in the linked quarter,
and $155,000 of net loan charge-offs in the prior year quarter.
The Company recorded a provision for credit
losses of $1.2 million for the third quarter 2020 compared to $0.9
million for the linked quarter and $0.5 million for the third
quarter 2019. The increase in the allowance for loan losses in the
current quarter and linked quarter compared to the prior year
quarter is primarily due to the additional loan loss provision of
$0.8 million and $0.6 million, respectively, for the COVID-19
pandemic as previously described above.
The allowance for loan losses at September 30,
2020, was $17.8 million, or 1.39% of outstanding loans, and 305.5%
of non-performing loans. At June 30, 2020, the allowance for loan
losses was $16.6 million, or 1.30% of outstanding loans, and 186.6%
of non-performing loans. At September 30, 2019, the allowance for
loan losses was $12.2 million or 1.06% of outstanding loans, and
255.8% of non-performing loans. 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 September 30, 2020.
Deposits
Deposits totaled $1.3 billion at September 30,
2020, decreasing $1.0 million or 0.1% from the end of the linked
quarter and increasing $189 million, or 16.6% from the prior year
quarter. Growth in deposits over prior year quarter was positively
impacted in part by customers who deposited PPP loan proceeds into
demand deposit accounts, in addition to an increase in interest
bearing deposits.
Noninterest
Income
Total noninterest income for the third quarter
2020 was $5.1 million, an increase of $2.4 million compared to the
linked quarter, and an increase of $2.7 million compared to the
prior year quarter. The increase in noninterest income for the
current quarter as compared to the linked and prior year quarters
is primarily due to an increase in gain on sale of real estate
mortgage loans, which increased income by $2.1 million and $2.8
million, respectively. In addition, service charges and other fee
income increased $0.3 million as compared to the linked quarter due
to certain COVID-19-related service fee waivers being granted in
the linked quarter.
Noninterest
Expense
Total noninterest expense for the third quarter
2020 was $11.6 million, an increase of $0.6 million compared to the
linked quarter, and an increase of $2.0 million compared to the
third quarter 2019. The increase in noninterest expense in the
current quarter as compared to the linked and prior year quarters
is primarily due to the increased costs for mortgage lender’s
salaries, commissions paid, and benefits resulting from hiring
additional personnel for the mortgage lending group. The mortgage
lending group began its formation in late 2019, and grew
significantly in terms of resources and production capacity with
the addition of 25 full-time equivalent (“FTE”) personnel,
resulting in 36 FTEs at September 30, 2020.
The Company’s efficiency ratio was 61.41% for
the third quarter 2020 compared to 69.16% and 64.86% for the linked
quarter and prior year quarter, respectively.
Capital
The Company maintains its “well capitalized”
regulatory capital position. At the end of the third quarter 2020,
the capital ratios were as follows: total risk-based capital to
risk-weighted assets 15.05%, tier 1 capital to risk-weighted assets
13.28%; tier 1 leverage 9.99% and tangible common equity to
tangible assets 7.45%.
[Tables follow]
FINANCIAL
SUMMARY(unaudited)$000, except per share data
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
Statement of
income information: |
|
2020 |
|
2020 |
|
2019 |
|
Total interest income |
|
$ |
15,958 |
|
$ |
15,721 |
|
$ |
15,925 |
|
Total interest expense |
|
|
2,116 |
|
|
2,382 |
|
|
3,564 |
|
Net interest income |
|
|
13,842 |
|
|
13,339 |
|
|
12,361 |
|
Provision for loan losses |
|
|
1,200 |
|
|
900 |
|
|
450 |
|
Noninterest income |
|
|
5,075 |
|
|
2,633 |
|
|
2,424 |
|
Investment securities gains (losses), net |
|
|
12 |
|
|
7 |
|
|
(40 |
) |
Noninterest expense |
|
|
11,616 |
|
|
11,047 |
|
|
9,590 |
|
Pre-tax income |
|
|
6,113 |
|
|
4,032 |
|
|
4,814 |
|
Income taxes |
|
|
1,153 |
|
|
750 |
|
|
954 |
|
Net income |
|
$ |
4,960 |
|
$ |
3,282 |
|
$ |
3,860 |
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
Basic: |
|
$ |
0.77 |
|
$ |
0.51 |
|
$ |
0.59 |
|
Diluted: |
|
$ |
0.77 |
|
$ |
0.51 |
|
$ |
0.59 |
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended |
|
|
September 30, |
Statement of
income information: |
|
2020 |
|
2019 |
|
Total interest income |
|
$ |
47,487 |
|
$ |
48,023 |
|
Total interest expense |
|
|
7,780 |
|
|
11,876 |
|
Net interest income |
|
|
39,707 |
|
|
36,147 |
|
Provision for loan losses |
|
|
5,400 |
|
|
850 |
|
Noninterest income |
|
|
9,956 |
|
|
6,637 |
|
Investment securities gains (losses), net |
|
|
18 |
|
|
(40 |
) |
Gain on sale of branch, net |
|
|
— |
|
|
2,183 |
|
Noninterest expense |
|
|
33,111 |
|
|
29,149 |
|
Pre-tax income |
|
|
11,170 |
|
|
14,928 |
|
Income taxes |
|
|
2,060 |
|
|
2,882 |
|
Net income |
|
$ |
9,110 |
|
$ |
12,046 |
|
Earnings per
share: |
|
|
|
|
|
|
Basic: |
|
$ |
1.40 |
|
$ |
1.85 |
|
Diluted: |
|
$ |
1.40 |
|
$ |
1.85 |
|
FINANCIAL SUMMARY
(continued)(unaudited)$000,
except per share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
December 31, |
|
Key financial
ratios: |
2020 |
|
2020 |
|
2019 |
|
2019 |
|
Return on average assets (YTD) |
|
0.76 |
% |
|
0.53 |
% |
|
1.09 |
% |
|
1.09 |
% |
Return on average common equity (YTD) |
|
10.15 |
% |
|
7.06 |
% |
|
15.03 |
% |
|
14.77 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
December 31, |
|
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
Asset Quality
Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses to total loans |
|
1.39 |
% |
|
1.30 |
% |
|
1.06 |
% |
|
1.07 |
% |
Non-performing loans to total loans (a) |
|
0.45 |
% |
|
0.70 |
% |
|
0.41 |
% |
|
0.43 |
% |
Non-performing assets to loans (a) |
|
1.44 |
% |
|
1.67 |
% |
|
1.53 |
% |
|
1.53 |
% |
Non-performing assets to assets (a) |
|
1.10 |
% |
|
1.27 |
% |
|
1.22 |
% |
|
1.20 |
% |
Performing TDRs to loans (a) |
|
0.19 |
% |
|
0.19 |
% |
|
0.23 |
% |
|
0.22 |
% |
Allowance for loan losses to |
|
|
|
|
|
|
|
|
|
|
|
|
non-performing loans (a) |
|
305.49 |
% |
|
186.62 |
% |
|
255.79 |
% |
|
246.09 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
Average stockholders' equity to average total assets (YTD) |
|
7.47 |
% |
|
7.51 |
% |
|
7.22 |
% |
|
7.38 |
% |
Period-end stockholders' equity to period-end assets (YTD) |
|
7.45 |
% |
|
7.13 |
% |
|
7.78 |
% |
|
7.71 |
% |
Total risk-based capital ratio |
|
15.05 |
% |
|
14.64 |
% |
|
14.47 |
% |
|
14.89 |
% |
Tier 1 risk-based capital ratio |
|
13.28 |
% |
|
12.76 |
% |
|
12.60 |
% |
|
13.04 |
% |
Common equity Tier 1 capital |
|
9.97 |
% |
|
9.58 |
% |
|
9.50 |
% |
|
9.86 |
% |
Tier 1 leverage ratio |
|
9.99 |
% |
|
9.82 |
% |
|
10.69 |
% |
|
10.73 |
% |
(a) Non-performing loans include loans 90 days past due
and accruing and nonaccrual loans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
December 31, |
|
Balance sheet
information: |
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
Total assets |
|
$ |
1,669,770 |
|
|
$ |
1,683,736 |
|
|
$ |
1,449,338 |
|
|
$ |
1,492,962 |
|
Loans held for investment |
|
|
1,279,165 |
|
|
|
1,280,615 |
|
|
|
1,149,268 |
|
|
|
1,168,797 |
|
Allowance for loan losses |
|
|
(17,764 |
) |
|
|
(16,622 |
) |
|
|
(12,178 |
) |
|
|
(12,477 |
) |
Loans held for sale |
|
|
7,886 |
|
|
|
9,041 |
|
|
|
2,250 |
|
|
|
428 |
|
Investment securities |
|
|
193,175 |
|
|
|
199,012 |
|
|
|
187,480 |
|
|
|
180,901 |
|
Deposits |
|
|
1,326,752 |
|
|
|
1,327,633 |
|
|
|
1,137,407 |
|
|
|
1,186,521 |
|
Total stockholders’ equity |
|
|
124,367 |
|
|
|
120,031 |
|
|
|
112,814 |
|
|
|
115,038 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
19.15 |
|
|
$ |
18.47 |
|
|
$ |
17.29 |
|
|
$ |
17.63 |
|
Market price per share |
|
$ |
18.94 |
|
|
$ |
19.69 |
|
|
$ |
22.91 |
|
|
$ |
24.52 |
|
Net interest spread (FTE) (YTD) |
|
|
3.27 |
% |
|
|
3.26 |
% |
|
|
3.15 |
% |
|
|
3.20 |
% |
Net interest margin (FTE) (YTD) |
|
|
3.50 |
% |
|
|
3.51 |
% |
|
|
3.47 |
% |
|
|
3.51 |
% |
Net interest spread (FTE) (QTR) |
|
|
3.30 |
% |
|
|
3.25 |
% |
|
|
3.32 |
% |
|
|
3.33 |
% |
Net interest margin (FTE) (QTR) |
|
|
3.50 |
% |
|
|
3.46 |
% |
|
|
3.64 |
% |
|
|
3.63 |
% |
Efficiency ratio (YTD) |
|
|
66.67 |
% |
|
|
69.91 |
% |
|
|
68.13 |
% |
|
|
67.15 |
% |
Efficiency ratio (QTR) |
|
|
61.41 |
% |
|
|
69.16 |
% |
|
|
64.86 |
% |
|
|
64.35 |
% |
NON-GAAP FINANCIAL MEASURES
(unaudited)$000, except per share data
Use of Non-GAAP
Measures
Several financial measures in this press release
are non-GAAP, meaning they are not presented in accordance with
generally accepted accounting principles (GAAP) in the U.S. The
non-GAAP items presented in this press release are non-GAAP net
income, non-GAAP basic earnings per share, non-GAAP diluted
earnings per share, non-GAAP return on average assets and non-GAAP
return on average common equity. These measures include the
adjustments to exclude the additional loan loss provision recorded
in the three and nine months ended September 30, 2020 caused by the
impact on current economic conditions due to the COVID-19 pandemic
and the impact of the gain on the sale of our Branson branch that
closed during the quarter ended March 31, 2019. These are
non-recurring and not considered indicative of underlying earnings
performance. The Company believes that the exclusion of these items
provides a useful basis for evaluating the Company's underlying
performance, but should not be considered in isolation and is not
in accordance with, or a substitute for, evaluating performance
utilizing GAAP financial information. The Company uses non-GAAP
measures to analyze its financial performance and to make financial
comparisons to prior periods presented on a similar basis. The
Company believes that providing such adjusted results allows
investors to better understand the Company's comparative operating
performance for the periods presented. Non-GAAP measures are not
formally defined by GAAP or codified in the federal banking
regulations, and other entities may use calculation methods that
differ from those used by the Company. The Company has reconciled
each of these measures to a comparable GAAP measure below:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
Statement of
income information: |
|
2020 |
|
2020 |
|
2019 |
|
Net income – GAAP |
|
$ |
4,960 |
|
$ |
3,282 |
|
$ |
3,860 |
|
Effect of ALL provision COVID-19 (a) |
|
|
632 |
|
|
474 |
|
|
— |
|
Effect of net gain on branch sale (b) |
|
|
— |
|
|
— |
|
|
(86 |
) |
Net income - non-GAAP |
|
$ |
5,592 |
|
$ |
3,756 |
|
$ |
3,774 |
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
Basic – GAAP |
|
$ |
0.77 |
|
$ |
0.51 |
|
$ |
0.59 |
|
Effect of ALL provision COVID-19 (a) |
|
|
0.10 |
|
|
0.07 |
|
|
— |
|
Effect of net gain on branch sale (b) |
|
|
— |
|
|
— |
|
|
(0.01 |
) |
Basic - non-GAAP |
|
$ |
0.87 |
|
$ |
0.58 |
|
$ |
0.58 |
|
Diluted – GAAP |
|
$ |
0.77 |
|
$ |
0.51 |
|
$ |
0.59 |
|
Effect of ALL provision COVID-19 (a) |
|
|
0.10 |
|
|
0.07 |
|
|
— |
|
Effect of net gain on branch sale (b) |
|
|
— |
|
|
— |
|
|
(0.01 |
) |
Diluted - non-GAAP |
|
$ |
0.87 |
|
$ |
0.58 |
|
$ |
0.58 |
|
NON-GAAP FINANCIAL MEASURES
(continued)(unaudited)$000,
except per share data
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended |
|
|
September 30, |
Statement of
income information: |
|
2020 |
|
2019 |
|
Net income - GAAP |
|
$ |
9,110 |
|
$ |
12,046 |
|
Effect of ALL provision COVID-19 (a) |
|
|
3,476 |
|
|
— |
|
Effect of net gain on branch sale (b) |
|
|
— |
|
|
(1,725 |
) |
Net income - non-GAAP |
|
$ |
12,586 |
|
$ |
10,321 |
|
Earnings per
share: |
|
|
|
|
|
|
Basic – GAAP |
|
$ |
1.40 |
|
$ |
1.85 |
|
Effect of ALL provision COVID-19 (a) |
|
|
0.54 |
|
|
— |
|
Effect of net gain on branch sale (b) |
|
|
— |
|
|
(0.26 |
) |
Basic - non-GAAP |
|
$ |
1.94 |
|
$ |
1.59 |
|
Diluted – GAAP |
|
$ |
1.40 |
|
$ |
1.85 |
|
Effect of ALL provision COVID-19 (a) |
|
|
0.54 |
|
|
— |
|
Effect of net gain on branch sale (b) |
|
|
— |
|
|
(0.26 |
) |
Diluted - non-GAAP |
|
$ |
1.94 |
|
$ |
1.59 |
|
|
(a) An additional $0.8 million and $4.4 million pre-tax ALL
provision and $0.6 million and $3.5 million after tax was recorded
during the three and nine months ended September 30, 2020,
respectively, due to current economic conditions resulting from the
COVID-19 pandemic.
(b) The gain on the sale of the Branson Branch was $0.1 million
pre-tax and $86,000 after tax for the three months ended September
30, 2019, and $2.2 million pre-tax and $1.7 million after tax for
the nine months ended September 30, 2019.
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
December 31, |
|
Key financial ratios: |
|
2020 |
|
2020 |
|
2019 |
|
|
2019 |
|
|
Return on average assets (YTD)
– GAAP |
|
0.76 |
% |
0.53 |
% |
1.09 |
% |
|
1.09 |
% |
|
Effect of ALL provision
COVID-19 (a) |
|
0.29 |
|
0.36 |
|
— |
|
|
— |
|
|
Effect of net gain on branch
sale (b) |
|
— |
|
— |
|
(0.16 |
) |
|
(0.12 |
) |
|
Return on average assets (YTD)
- non-GAAP |
|
1.05 |
% |
0.89 |
% |
0.93 |
% |
|
0.97 |
% |
|
Return on average common
equity (YTD) – GAAP |
|
10.15 |
% |
7.06 |
% |
15.03 |
% |
|
14.77 |
% |
|
Effect of ALL provision
COVID-19 (a) |
|
3.87 |
|
4.84 |
|
— |
|
|
— |
|
|
Effect of net gain on branch
sale (b) |
|
— |
|
— |
|
(2.15 |
) |
|
(1.58 |
) |
|
Return on average common
equity (YTD) - non-GAAP |
|
14.02 |
% |
11.90 |
% |
12.88 |
% |
|
13.19 |
% |
|
|
|
|
|
|
|
|
|
|
|
(a) An additional $0.8 million and $4.4 million pre-tax ALL
provision and $0.6 million and $3.5 million after tax was recorded
during the three and nine months ended September 30, 2020,
respectively, due to current economic conditions resulting from the
COVID-19 pandemic.
(b) The gain on the sale of the Branson Branch was $0.1 million
pre-tax and $86,000 after tax for the three months ended September
30, 2019, and $2.2 million pre-tax and $1.7 million after tax for
the nine months ended September 30, 2019.
LOAN MODIFICATIONS
(unaudited)$000, except per share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Loan Modifications to date under the CARES
Act by NAICS Code |
|
|
Interest |
% |
Full |
% |
|
|
|
Industry Category |
|
Only |
Loans |
Deferral |
Loans |
Totals |
Real Estate and Rental and
Leasing |
|
$ |
124,903 |
|
|
41.2 |
% |
$ |
32,520 |
|
|
10.7 |
% |
$ |
157,423 |
|
Accommodations and Food
Services |
|
|
23,360 |
|
|
7.7 |
|
|
43,827 |
|
|
14.4 |
|
|
67,187 |
|
Construction |
|
|
9,856 |
|
|
3.2 |
|
|
4,497 |
|
|
1.5 |
|
|
14,353 |
|
Manufacturing |
|
|
7,715 |
|
|
2.5 |
|
|
485 |
|
|
0.2 |
|
|
8,200 |
|
Other Services |
|
|
5,717 |
|
|
1.9 |
|
|
1,803 |
|
|
0.6 |
|
|
7,520 |
|
Cinemas |
|
|
1,061 |
|
|
0.4 |
|
|
6,191 |
|
|
2.0 |
|
|
7,252 |
|
Health Care and Social
Assistance |
|
|
5,044 |
|
|
1.7 |
|
|
1,188 |
|
|
0.4 |
|
|
6,232 |
|
Retail Trade |
|
|
4,236 |
|
|
1.4 |
|
|
524 |
|
|
0.2 |
|
|
4,760 |
|
Arts, Entertainment,
Recreation |
|
|
11,378 |
|
|
3.8 |
|
|
3,186 |
|
|
1.0 |
|
|
14,564 |
|
Non-NAICS (Consumer) |
|
|
190 |
|
|
0.1 |
|
|
3,832 |
|
|
1.3 |
|
|
4,022 |
|
Other |
|
|
8,053 |
|
|
2.7 |
|
|
3,648 |
|
|
1.2 |
|
|
11,701 |
|
Total modifications |
|
$ |
201,513 |
|
|
66.5 |
% |
$ |
101,701 |
|
|
33.5 |
% |
$ |
303,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2020 |
|
|
Loan Modifications under the CARES Act by NAICS
Code |
|
|
Interest |
% |
Full |
% |
|
|
|
Industry Category |
|
Only |
Loans |
Deferral |
Loans |
Totals |
Real Estate and Rental and
Leasing |
|
$ |
13,003 |
|
|
14.3 |
% |
$ |
3,343 |
|
|
3.7 |
% |
$ |
16,346 |
|
Accommodations and Food
Services |
|
|
19,859 |
|
|
21.8 |
|
|
37,918 |
|
|
41.7 |
|
|
57,777 |
|
Construction |
|
|
505 |
|
|
0.6 |
|
|
- |
|
|
- |
|
|
505 |
|
Cinemas |
|
|
- |
|
|
- |
|
|
4,691 |
|
|
5.2 |
|
|
4,691 |
|
Retail Trade |
|
|
- |
|
|
- |
|
|
119 |
|
|
0.1 |
|
|
119 |
|
Arts, Entertainment,
Recreation |
|
|
10,166 |
|
|
11.2 |
|
|
- |
|
|
- |
|
|
10,166 |
|
Non-NAICS (Consumer) |
|
|
77 |
|
|
0.1 |
|
|
427 |
|
|
0.5 |
|
|
504 |
|
Other |
|
|
943 |
|
|
1.0 |
|
|
- |
|
|
- |
|
|
943 |
|
Total modifications |
|
$ |
44,553 |
|
|
48.9 |
% |
$ |
46,498 |
|
|
51.1 |
% |
$ |
91,051 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remaining loan modifications under the CARES Act
as a percent of the total loan portfolio |
|
|
7.1 |
% |
Total loan modifications under the CARES Act to
date |
|
$ |
303,214 |
|
Total loan modifications under the CARES Act to
date as a percent of the total loan portfolio |
|
|
23.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, St. Louis,
Springfield, Independence, Columbia, Clinton, 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.
Contact:
Hawthorn Bancshares Inc.
Stephen E. Guthrie,
Chief Financial Officer
TEL: 573.761.6100
Fax: 573.761.6272
www.HawthornBancshares.com
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