Hawthorn Bancshares Reports 2019 Financial Results

JEFFERSON CITY, Mo., Jan. 30, 2020 (GLOBE NEWSWIRE) — Hawthorn Bancshares Inc. (NASDAQ: HWBK), today reported consolidated financial results for the Company for the year ended December 31, 2019.

Net income for the current year was $16.1 million, or $2.57 per diluted common share, compared to $10.7 million, or $1.71 per diluted common share, for 2018. Included in the current year net income is a pretax gain on the sale of our Branson branch of $2.2 million ($1.7 million after tax), or $0.27 per diluted common share. Excluding this gain, non-GAAP net income for the current year was $14.4 million, or $2.30 per diluted common share. Income taxes as a percentage of earnings before income taxes for the current year were 19.2% compared to 13.5% for the prior year. The change in the effective tax rate for the year ended December 31, 2019 over the year ended December 31, 2018, was primarily due to the final impacts of the Tax Cuts and Jobs Act that decreased the 2018 tax rate, as well as an increase to pre-tax income that increased the 2019 tax rate.

The year-to-date return on average common equity for the current year was 14.77% (13.19% excluding the Branson branch sale gain) compared to 11.45% for the prior year and the return on average assets was 1.09% (0.97% excluding the Branson branch sale gain) compared to 0.74% for the prior year.

Commenting on earnings performance, Chairman David T. Turner said, “Hawthorn reported a 34.5% increase in non-GAAP earnings per diluted common share to $2.30 for the current year excluding the Branson branch sale gain. This followed a 37.9% increase in non-GAAP earnings per diluted common share for 2018 excluding the impact of the Tax Act and tax planning initiatives in 2017. Although loan growth slowed during 2019, we still increased net loans by $21.8 million from year-end 2018 and year-to-date average loans increased $57.1 million, or 5.2% over 2018. In addition, we improved our year-to-date net interest margin by 20 basis points to 3.51% in 2019. In spite of this growth, we have continued to maintain high loan quality as nonperforming loans to total loans was 0.43% at December 31, 2019, compared to 0.49% at December 31, 2018.