Hawthorn Bancshares Reports Second Quarter 2025 Results

Core Viewpoint - Hawthorn Bancshares, Inc. reported strong financial results for the second quarter of 2025, with significant improvements in net income and earnings per share, reflecting effective management of net interest margin and expenses in a competitive market [1][3][6]. Financial Performance - Net income for Q2 2025 was $6.1 million, an increase of $1.5 million or 31.8% from Q2 2024, and an increase of $0.7 million or 13.3% from Q1 2025 [6][7]. - Earnings per diluted share (EPS) improved to $0.88, up $0.22 or 33% from the prior year quarter [6][7]. - The efficiency ratio improved to 62.32% from 66.24% in the prior year quarter, indicating better cost management [6][15]. Balance Sheet Highlights - Total assets as of June 30, 2025, were $1.877 billion, a slight decrease from $1.883 billion in Q1 2025 [4]. - Loans held for investment decreased by $7.4 million or 0.5% from Q1 2025, totaling $1.463 billion [4][16]. - Total deposits were $1.518 billion, down $25.9 million or 1.7% from Q1 2025 [4][22]. Interest Income and Margin - Net interest income for Q2 2025 was $16.1 million, an increase of $0.8 million from Q1 2025 and $2.0 million from Q2 2024 [9]. - The net interest margin improved to 3.89% from 3.67% in Q1 2025 and 3.33% in Q2 2024 [10][27]. Asset Quality - Non-performing assets to total loans ratio was 0.35% as of June 30, 2025, improving from 0.54% in the prior year quarter [18][27]. - The allowance for credit losses was $21.6 million, or 1.47% of outstanding loans, indicating a strong capital position [21][23]. Capital and Shareholder Returns - The company maintained a "well capitalized" status with a total risk-based capital ratio of 15.12% [23][28]. - A quarterly cash dividend of $0.20 per common share was approved, payable on October 1, 2025 [25]. Non-Interest Income and Expenses - Total non-interest income for Q2 2025 was $3.5 million, a slight increase from Q1 2025 but a decrease from Q2 2024 [13]. - Non-interest expenses decreased by $0.2 million or 1.8% from Q1 2025, totaling $12.3 million [14].