Hawthorn Bancshares Inc. (NASDAQ: HWBK), today reported
consolidated financial results for the Company for the year ended
December 31, 2015.
Net income for the current year was $8.6 million, or $1.58 per
diluted common share, compared to $7.7 million, or $1.41 per
diluted common share, for 2014.
The return on average common equity was 10.14% and the return on
average assets was 0.72% for the current year compared to 9.69% and
0.66% for the prior year, respectively.
Commenting on earnings performance, Chairman David T. Turner
said, “Hawthorn continued to report improved earnings for the
current year with net income of $8.6 million increasing 12% over
the prior year and reaching the highest level since 2006. Our
earnings improvement for 2015 was partially due to recoveries of
nonaccrual interest from several problem loan relationships
resolved during the current year although average loans increased
$9.5 million, or 1.1%, during the current year while the current
year net interest margin remained strong at 3.69%, exceeding peers.
We have continued to maintain our net interest margins during the
extended low interest rate environment and with improved loan
volumes; our net interest income has continued to grow increasing
$1.3 million, or 3.3%, over the prior year. Non-interest income of
$9.2 million for the current year was $0.4 million above the prior
year mostly due to increased combined income from servicing and
gains on sales of residential mortgage loans. Non-interest expense
of $36.5 million was flat compared to the prior year with the most
significant category being a continued reduction in real estate
foreclosure expenses.”
Net Interest Income
Net interest income improved by $1.3 million, or 3.3%, from
$39.5 million for the prior year to $40.8 million for the current
year ended December 31, 2015. Average loans increased $9.5 million,
or 1.1%, from the prior year, which contributed to the continued
strong net interest margin for the current year of 3.69%, down 3
basis points from the prior year.
Non-Interest Income and Expense
Non-interest income for the year ended December 31, 2015 was
$9.2 million compared to $8.7 million for the prior year ended
December 31, 2014. The $0.5 million increase over the prior year
was primarily due to a $0.5 million increase in combined real
estate servicing and mortgage loan sales income resulting from
increased financing activity in the housing market during the
current year.
Non-interest expense was $36.5 million for the year ended
December 31, 2015 compared to $36.5 million for the prior year.
Real estate foreclosure expense decreased $1.1 million during the
current year primarily due to net gains on sales of foreclosed
properties recognized in 2015 of $0.7 million compared to net
losses of $0.4 million during 2014. Offsetting this decrease was an
increase in salaries and benefits of $0.4 million, or 2.0%, and
increases in several other non-interest expenses.
Allowance for Loan Losses
The Company’s level of non-performing loans improved
significantly during the current year to 1.19% of total loans at
December 31, 2015, compared to 4.18% at December 31, 2014. During
the year ended December 31, 2015, the Company recorded net
charge-offs of $745,000, or 0.09% of average loans, compared to net
charge-offs of $4,620,000, or 0.54% of average loans for the year
ended December 31, 2014. The decrease from the prior year was
primarily due to a reduction in charge-offs from commercial real
estate mortgage loans where several larger relationships were
charged off in 2014. The allowance for loan losses at December 31,
2015 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. At December 31, 2014, the allowance for
loan losses was $9.1 million, or 1.06% of outstanding loans, 25.26%
of non-performing loans and 49.72% 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 December 31, 2015.
Financial Condition
Comparing December 31, 2015 balances with December 31, 2014,
total assets increased $31.2 million to $1.2 billion. The largest
driver in asset growth was investment securities increasing $39.4
million, or 19.3%. Total deposits decreased $23.3 million to $947.2
million; federal funds purchased and securities sold under
agreements to repurchase increased $38.9 million to $56.8 million
at December 31, 2015; and FHLB advances increased $7 million to $50
million at December 31, 2015. During the same period, stockholders’
equity increased 8.3% to $87.3 million, or 7.3% of total assets.
The total risk based capital ratio of 14.78% and the leverage ratio
of 9.84% at December 31, 2015, respectively, far exceed minimum
regulatory requirements of 8.00% and 4.00%, respectively.
FINANCIAL
SUMMARY (unaudited) $000
Three Months Ended Statement of income
information: December 31, 2015 September 30, 2015
December 31, 2014 Total interest income $ 11,515 $ 11,829 $
11,214 Total interest expense 1,278 1,271 1,217 Net interest income
10,237 10,558 9,997 Provision for loan losses 0 0 0 Noninterest
income 2,381 2,336 2,167 Noninterest expense 9,541 8,977 9,090
Pre-tax income 3,077 3,917 3,074 Income taxes 1,083 1,378 1,073 Net
income $ 1,994 $ 2,539 $ 2,001
Earnings per share: Basic: $
0.37 $ 0.47 $ 0.37 Diluted: $ 0.37 $ 0.47 $ 0.37
For the Year
Ended Statement of income information: December 31,
2015 December 31, 2014 Total interest income $ 45,756 $
44,498 Total interest expense 4,999 5,044 Net interest income
40,757 39,454 Provision for loan losses 250 0 Noninterest income
9,166 8,749 Noninterest expense 36,494 36,507 Pre-tax income 13,179
11,696 Income taxes 4,580 4,042 Net income $ 8,599 $ 7,654
Earnings per share: Basic: $ 1.58 $ 1.41 Diluted: $ 1.58 $
1.41
Key financial ratios: December 31,
2015 September 30, 2015 December 31,
2014 Return on average assets (YTD) 0.72 % 0.74 % 0.66 %
Return on average common equity (YTD) 10.14 % 10.55 % 9.69 %
December 31, 2015 September 30, 2015
December 31, 2014 Allowance for loan losses to total
loans 0.99 % 1.05 % 1.06 % Nonperforming loans to total loans 1.19
% 1.66 % 4.18 % Nonperforming assets to loans and foreclosed assets
2.98 % 3.32 % 5.49 % Allowance for loan losses to nonperforming
loans 83.75 % 63.51 % 25.26 % Allowance for loan losses to
nonperforming loans - excluding performing TDRs 194.48 % 99.36 %
49.72 %
Balance sheet information: December 31,
2015 September 30, 2015 December 31,
2014 Loans, net of allowance for loan losses $ 856,476 $
870,228 $ 852,114 Investment securities 243,091 253,487 203,720
Total assets 1,200,921 1,227,624 1,169,731 Deposits 947,197 972,168
969,514 Total stockholders’ equity 87,286 87,073 80,568 Book
value per share $ 16.04 $ 16.00 $ 14.80 Market price per share
$ 15.75 $ 13.97
$ 13.70
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.
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version on businesswire.com: http://www.businesswire.com/news/home/20160330006425/en/
Hawthorn Bancshares, Inc.Bruce Phelps, 573-761-6100Chief
Financial OfficerFAX: 573-761-6272www.HawthornBancshares.com
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