Hawthorn Bancshares Inc. (NASDAQ: HWBK), today reported
consolidated financial results for the Company for the third
quarter ended September 30, 2016.
Net income for the current quarter was $1.9 million, or $0.33
per diluted share, compared to $1.4 million, or $0.25 per diluted
share, for the linked quarter ended June 30, 2016 and $2.5 million,
or $0.45 per diluted share, for the quarter ended September 30,
2015. For the nine months ended September 30, 2016, net income was
$5.3 million, or $0.94 per diluted share, compared to $6.6 million,
or $1.17 per diluted share, for the nine months ended September 30,
2015.
The return on average common equity was 8.09% and the return on
average assets was 0.59% for the third quarter ended September 30,
2016, compared to 6.26% and 0.46%, respectively, for the linked
quarter ended June 30, 2016, and 11.09% and 0.84%, respectively,
for the third quarter ended September 30, 2015. For the current
year, return on average common equity was 7.78% and the return on
average assets was 0.57% compared to 10.55% and 0.74% for the prior
year-to-date, respectively.
Commenting on earnings performance, Chairman David T. Turner
said, “Hawthorn reported improved earnings for the current quarter
compared to the linked quarter, but lower earnings compared to the
prior year quarter. The increase from the linked quarter ended June
30, 2016 was primarily due to higher net interest income coupled
with reduced operating costs. The decrease from the prior year
quarter was primarily driven by continued net interest margin
contraction coupled with an increased loan loss provision mostly
driven by loan growth. Compared to the linked quarter ended June
30, 2016, we continued to experience loan growth with gross loans
increasing by approximately $25 million, or 2.7%, and compared to
the prior year quarter ended September 30, 2015, loans increased
$68 million, or 7.8%. This loan growth contributed to net interest
income remaining strong in spite of a continued tight interest rate
environment putting continued pressure on our net interest margin.
While the yield on our investment securities continues to fall due
to higher yielding securities being replaced with current lower
market yields, our net interest margin only decreased 5 basis
points from the linked quarter to 3.44% for the current quarter.
Due to continued loan growth and based upon our analysis of the
risks in the loan portfolio, the company recorded a provision for
loan losses of $300,000 during the current quarter compared to
$425,000 recorded for the linked quarter and no provision for the
prior year quarter. Non-interest income increased $176,000 from the
linked quarter primarily due to improved results from our
residential mortgage lending operations which includes real estate
servicing fees, net and gain on sale of mortgage loans, net.
Compared to the prior year quarter, non-interest income was down
$211,000 mostly due to lower results from our residential mortgage
lending operations partially offset by securities gains recognized
in the current quarter. Non-interest expense of $9.1 million was
lower than the linked quarter by $268,000, or 2.9%, and higher than
the prior year quarter by $108,000, or 1.2%.”
Net Interest Income
Net interest income increased by $0.1 million, or 1.8%, from
$10.0 million for the linked quarter to $10.1 million for the
current quarter ended September 30, 2016 and was lower than the
prior year quarter by $0.4 million, or 3.9%. Average loans
increased $34.4 million, or 3.8%, from the linked quarter and $35.1
million, or 4.1%, from the prior year quarter. The net interest
margin of 3.44% for the current quarter decreased 5 basis points
from the linked quarter and decreased 34 basis points from the
prior year quarter ended September 30, 2015. For the nine months
ended September 30, 2016, the net interest margin decreased 24
basis points from the prior year-to-date to 3.47%
Non-Interest Income and Expense
Non-interest income for the quarter ended September 30, 2016 was
$2.1 million compared to $1.9 million for the linked quarter ended
June 30, 2016 and $2.3 million for the prior year quarter ended
September 30, 2015. The $0.2 million increase from the linked
quarter was primarily due to increased real estate servicing fees,
net and gain on sale of mortgage loans, net. The $0.2 million
decrease from the prior year quarter was primarily due to a $0.2
million decrease in combined real estate service fees, net and gain
on sale of mortgage loans, net resulting from reduced market demand
partially offset by $0.1 million of investment securities gains
recognized in the current quarter.
Non-interest expense was $9.1 million for the quarter ended
September 30, 2016 compared to $9.4 million for the linked quarter,
and $9.0 million for the prior year quarter ended September 30,
2015. The $0.3 million decrease from the linked quarter primarily
resulted from lower salaries and benefits expenses. The $0.1
million increase from the prior year quarter was mostly due to
increased real estate foreclosure expense, net due to gains
recognized on sales of foreclosed property in the prior year
quarter.
Allowance for Loan Losses
The Company’s level of non-performing loans was 0.98% of total
loans at September 30, 2016, compared to 1.02% at June 30, 2016 and
1.66% at September 30, 2015. During the quarter ended September 30,
2016, the Company recorded net charge-offs of $222,000, or 0.02% of
average loans compared to net recoveries of $336,000 for the
quarter ended June 30, 2016 and net charge-offs of $740,000, or
0.08% of average loans for the quarter ended September 30, 2015.
The allowance for loan losses at September 30, 2016 was $9.5
million, or 1.00% of outstanding loans, 101.80% of non-performing
loans and 259.59% 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 September 30,
2016.
Financial Condition
Comparing September 30, 2016 balances with December 31, 2015,
total assets increased $76.8 million to $1.3 billion. Asset growth
occurred primarily in gross loans which increased $82.7 million, or
9.6%. Total deposits increased $70.8 million to $1.0 billion and
FHLB advances increased $29.0 million to $79.0 million, while
federal funds purchased and securities sold under agreements to
repurchase decreased $28.3 million to $28.5 million at September
30, 2016. During the same period, stockholders’ equity increased
6.3% to $92.8 million, or 7.26% of total assets. The total risk
based capital ratio of 14.11% and the leverage ratio of 9.86% at
September 30, 2016 far exceed minimum regulatory requirements of
8.00% and 4.00%, respectively.
FINANCIAL SUMMARY
(unaudited)
$000
Three Months Ended Statement of income
information: September 30, June 30, September
30, 2016 2016 2015 Total interest income $
11,606 $ 11,350 $ 11,829 Total interest expense 1,459 1,379 1,271
Net interest income 10,147 9,971 10,558 Provision for loan losses
300 425 0 Noninterest income 2,125 1,949 2,336 Noninterest expense
9,085 9,353 8,977 Pre-tax income 2,887 2,142 3,917 Income taxes
1,003 730 1,378 Net income $ 1,884 $ 1,412 $ 2,539
Earnings per
share: Basic: $ 0.33 $ 0.25 $ 0.45 Diluted: $ 0.33 $ 0.25 $
0.45
For the Nine Months Ended Statement of
income information: September 30, September 30,
2016 2015 Total interest income $ 34,133 $ 34,241
Total interest expense 4,167 3,721 Net interest income 29,966
30,520 Provision for loan losses 975 250 Noninterest income 6,522
6,785 Noninterest expense 27,522 26,953 Pre-tax income 7,991 10,102
Income taxes 2,697 3,497 Net income $ 5,294 $ 6,605
Earnings per
share: Basic: $ 0.94 $ 1.17 Diluted: $ 0.94 $ 1.17
Key financial
ratios: September 30, June 30, September
30, December 31, 2016 2016 2015
2015 Return on average assets (YTD) 0.57 % 0.56 % 0.74 %
0.72 % Return on average common equity (YTD) 7.78 % 7.62 % 10.55 %
10.14 %
September 30, June 30, September
30, December 31, 2016 2016 2015
2015 Allowance for loan losses to total loans 1.00 % 1.02 %
1.05 % 0.99 % Nonperforming loans to total loans 0.98 % 1.02 % 1.66
% 1.19 % Nonperforming assets to loans and foreclosed assets 2.47 %
2.98 % 3.32 % 2.98 % Allowance for loan losses to nonperforming
loans 101.80 % 99.37 % 63.51 % 83.75 % Allowance for loan losses to
nonperforming loans - excluding performing TDRs 259.59 % 257.03 %
99.36 % 194.48 %
Balance sheet information:
September 30, June 30, September 30,
December 31, 2016 2016 2015 2015
Loans, net of allowance for loan losses $ 938,301 $ 913,550 $
870,228 $ 856,476 Investment securities 231,064 244,194 253,487
243,091 Total assets 1,277,719 1,265,724 1,227,624 1,200,921
Deposits 1,018,031 1,005,241 972,168 947,197 Total stockholders’
equity 92,788 91,741 87,073 87,286
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/20161110006531/en/
Hawthorn BancsharesBruce 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