Hawthorn Bancshares (HWBK) investor relations material

Executive summary

• Net income for Q2 2026 was $7.3 million ($1.06 per diluted share), up 20.1% year-over-year and 27.6% sequentially; six-month net income was $13.1 million ($1.89 per share), up from $11.5 million ($1.65 per share) year-over-year.

• Return on average assets was 1.63% for Q2 2026 and 1.45% for the six months, with return on equity at 16.39% and 14.74%, respectively.

• Total assets were $1.77 billion as of June 30, 2026, with two operating segments: Bank and Wealth Management.

• Net interest margin (FTE) improved to 4.16% for Q2 2026 from 3.89% in Q2 2025 and 4.07% sequentially.

• Efficiency ratio improved to 60.66% for Q2 2026 from 62.32% in Q2 2025 and 64.29% sequentially.

Financial highlights

• Net interest income rose to $17.3 million for Q2 2026 (up 6.9% year-over-year), and $34.4 million for the six months (up 9.3%).

• Non-interest income grew 51.7% to $5.4 million for Q2 2026, driven by gains on other real estate owned, equipment sales, and a one-time gain on sale of a bank office.

• Non-interest expense increased 12.0% to $13.7 million for Q2 2026, mainly due to higher salaries and legal/professional fees related to an acquisition.

• Provision for credit losses was $0.2 million, compared to a release of $0.1 million in the prior year quarter.

• Total loans held for investment decreased $70.4 million to $1.42 billion from December 2025, down 2.6% sequentially and 3.2% year-over-year.

• Total deposits declined $66.0 million to $1.49 billion from December 2025, down 2.0% sequentially and year-over-year.

• Allowance for credit losses was $20.7 million (1.46% of loans) at June 30, 2026.

Outlook and guidance

• Pending acquisition of FSC Bancshares, Inc. for $28.3 million expected to close in Q3 2026.

• Management expects continued strong capital and liquidity positions, with ongoing focus on core deposit growth and prudent lending.

• Board approved a quarterly cash dividend of $0.21 per share, payable October 1, 2026.

• Repurchase plan amended to increase authorized limit to $10 million, with $8 million remaining.