Hawthorn Bancshares (HWBK) Q2 EPS Up 33%

Core Viewpoint - Hawthorn Bancshares reported a strong second quarter for 2025, with significant improvements in profitability and cost control, despite declines in overall loans and deposits [1][5][12] Financial Performance - Net income reached $6.1 million, with earnings per share (EPS) of $0.88, a 33.3% increase from $0.66 in Q2 2024 [1][2] - Net interest income rose to $16.1 million, up 13.8% year-over-year, driven by higher loan yields and lower deposit costs [2][5] - The net interest margin expanded to 3.89%, an increase from 3.33% in the prior year [2][5] Efficiency and Cost Control - The efficiency ratio improved to 62.32%, down from over 66% in the prior year, indicating better cost management [2][6] - Non-interest income decreased by 11.3% year-over-year, reflecting challenges in service fee categories [2][6] Balance Sheet Trends - Loans held for investment decreased by $7.4 million (0.5%) from the previous quarter and $35.6 million (2.4% annualized) from the prior year [7] - Deposits declined primarily due to reduced balances in savings and interest-bearing accounts, while investment securities increased by $38.2 million compared to the prior year [7][10] Credit Quality - Non-performing assets constituted 0.35% of loans, an improvement from 0.54% in the prior year, although there was a sequential increase [8] - Net loan charge-offs were minimal at $51,000, significantly lower than the $1.98 million recorded in Q2 2024 [8] Business Overview and Priorities - Hawthorn Bancshares focuses on providing loans and deposit accounts to individuals and small-to-mid-size businesses in Missouri [3] - Recent priorities include maintaining regulatory compliance, managing capital levels, and adjusting the balance sheet in response to market changes [4] Outlook - Management did not provide formal guidance for the upcoming quarter or fiscal year 2025, indicating a cautious approach [11] - The quarterly dividend was maintained at $0.20 per share, with no changes to the dividend policy indicated [12]