Hawthorn Bancshares (HWBK) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $4.6 million ($0.66 per share), up 81.6% year-over-year and $0.2 million from the prior quarter; six-month net income was $9.1 million ($1.29 per share), up 56.1% year-over-year.

• Return on average assets for Q2 2024 was 1.02% and return on average equity was 13.75%; efficiency ratio improved to 66.2%.

• Focus remains on core banking, with the sale of the mortgage servicing rights portfolio completed in Q2 2024.

Financial highlights

• Net interest income for Q2 2024 was $14.2 million, flat year-over-year and down $0.6 million sequentially; net interest margin rose to 3.33% from 3.19% year-over-year.

• Non-interest income increased to $4.0 million in Q2 2024, up 150% year-over-year and 32.3% from Q1 2024, driven by bank-owned life insurance earnings and gains on sale of real estate.

• Non-interest expense decreased to $12.0 million, down 5.4% year-over-year and 4.3% from Q1 2024, reflecting operational efficiencies and lower salaries.

• Loans held for investment were $1.50 billion at June 30, 2024, down $40.6 million from year-end and $20.3 million sequentially.

• Deposits were $1.55 billion at June 30, 2024, up $22.4 million from Q1 2024 but down $20.6 million from December 31, 2023.

Outlook and guidance

• Management expects to continue expanding core products and services while managing expenses.

• The company maintains a well-capitalized position and expects to continue paying quarterly dividends; a $0.19 per share dividend was approved for Q3 2024.