JEFFERSON CITY, Mo., Jan. 28, 2026 (GLOBE NEWSWIRE) — Hawthorn Bancshares, Inc. (NASDAQ:HWBK), (the “Company”), the holding company for Hawthorn Bank, reported fourth quarter 2025 net income of $6.2 million, or earnings per diluted share (“EPS”) of $0.90, and net income of $23.8 million, or EPS of $3.43, for the year ended December 31, 2025.
Fourth Quarter 2025 Results
- Net income of $6.2 million, or $0.90 per diluted share, which improved from $6.1 million, or $0.88 per diluted share, for the third quarter 2025 (the “prior quarter”).
- Net interest margin, fully taxable equivalent (“FTE”), improved in the fourth quarter of 2025 to 4.03% compared to 3.97% for the prior quarter.
- Return on average assets and equity of 1.33% and 14.47%, respectively, compared to 1.33% and 15.21%, respectively, for the prior quarter and 1.00% and 12.49%, respectively, for the fourth quarter 2024 (the “prior year quarter”).
- Loans decreased $27.2 million, or 1.8%, to $1.49 billion from $1.51 billion at September 30, 2025.
- Deposits increased $28.2 million, or 1.9%, to $1.55 billion from $1.53 billion at September 30, 2025.
2025 Results
- Net income of $23.8 million, or $3.43 per diluted share, which improved $5.5 million, or 30.4%, from $18.3 million, or $2.61 per diluted share, for 2024 (the “prior year”), an increase of $0.82 per diluted share, or 31.4%.
- Net interest margin, FTE, of 3.89% compared to 3.41% for the prior year.
- Return on average assets and equity of 1.30% and 14.95%, respectively, compared to 1.00% and 13.04%, respectively, for the prior year.
- Efficiency ratio of 63.41%, an improvement of 451 basis points from 67.92% for the prior year.
- Loans increased $20.6 million, or 1.4%, to $1.49 billion from $1.47 billion at the end of the prior year.
- Deposits increased $21.0 million, or 1.4%, to $1.55 billion from $1.53 billion at the end of the prior year.
- Book value of $25.13 per share, an increase of $3.77, or 17.6% per share, from $21.36 per share for the prior year.
- Remained “well capitalized” with total risk-based capital of 15.49% at the end of the year compared to 14.79% at the end of the prior year.
Financial Results for the Quarter and the Year Ended December 31, 2025
Earnings
Net income increased $0.1 million, or 0.86%, to $6.2 million, or $0.90 per diluted share, for the fourth quarter 2025 compared to $6.1 million, or $0.88 per diluted share, for the prior quarter. Net income increased $1.6 million, or 34.5%, from $4.6 million, or $0.66 per diluted share, in the fourth quarter 2024 (the “prior year quarter”).
Net income for 2025 was $23.8 million, or $3.43 per diluted share, compared to net income of $18.3 million, or $2.61 per diluted share, for the prior year, an increase of $0.82 per diluted share, or 31.4%.
Net interest income
Net interest income was $17.6 million for the fourth quarter of 2025, which increased $0.7 million, or 4.2%, from the prior quarter total of $16.9 million, and increased $2.2 million, or 14.6%, from the prior year quarter total of $15.3 million.
Interest income increased $0.3 million, or 1.1%, to $25.3 million for the current quarter from $25.0 million in the prior quarter, and increased $1.4 million, or 5.7%, in the current quarter from $23.9 million for the prior year quarter, driven primarily by an increase in average interest earning assets. Interest expense was $7.7 million for the current quarter, which decreased $0.4 million, or 5.3%, from $8.1 million for the prior quarter, and decreased $0.9 million, or 10.2%, from $8.6 million in the prior year quarter. Net interest margin, on an FTE basis, was 4.03% for the fourth quarter, compared to 3.97% for the prior quarter, and 3.55% for the prior year quarter.
The yield earned on average loans held for investment was 6.13%, on an FTE basis, for the fourth quarter 2025, compared to 6.12% for the prior quarter and 5.86% for the prior year quarter.
The average cost of deposits was 2.23% for the fourth quarter 2025, compared to 2.36% for the prior quarter and 2.49% for the prior year quarter. Non-interest bearing demand deposits as a percent of total deposits was 27.3% as of December 31, 2025, compared to 27.8% and 25.1% at September 30, 2025 and December 31, 2024, respectively.
Net interest income for 2025 was $65.9 million and net interest margin was 3.89%, on an FTE basis, compared to net interest income of $58.6 million and net interest margin of 3.41%, on an FTE basis, for the prior year.
Interest income increased $2.3 million, or 2.4%, to $97.7 million for the current year compared to $95.4 million for the prior year. Interest expense decreased $5.0 million, or 13.5%, to $31.8 million for the current year compared to $36.8 million for the prior year.
The yield earned on average loans increased to 6.03%, on an FTE basis, for the current year compared to 5.80%, on an FTE basis, for the prior year. The yield on investment securities was 3.81% for the current year compared to 3.36% for the prior year.
The average cost of deposits was 2.35% for the current year compared to 2.63% for the prior year.
Non-interest Income
Total non-interest income for the fourth quarter of 2025 was $3.6 million, a decrease of $0.1 million, or 3.5%, from $3.7 million for the prior quarter, and an increase of $0.1 million, or 1.8%, from $3.5 million for the prior year quarter.
Total non-interest income was $14.3 million for both the current year and the prior year.
Non-interest Expense
Non-interest expense for the fourth quarter of 2025 was $13.3 million, an increase of $0.4 million, or 3.4%, from $12.8 million for the prior quarter, which was primarily due to an increase in other non-interest expense. Other non-interest expense was $1.9 million for the fourth quarter of 2025, an increase of $0.4 million, or 25%, from $1.5 million for the prior quarter.
Non-interest expense increased $0.3 million, or 2.6%, from $12.9 million for the prior year quarter, which was driven primarily by an increase of $0.4 million, or 6.6%, in salaries and benefits to $7.0 million for the fourth quarter of 2025 compared to $6.6 million for the prior year quarter.
Non-interest expense for 2025 was $50.8 million, an increase of $1.3 million, or 2.7%, from $49.5 million in the prior year. Salaries and employee benefits increased $1.3 million, or 4.8%, to $27.8 million for the current year compared to the prior year.
Efficiency Ratio
The fourth quarter efficiency ratio was 62.64% compared to 62.30% and 68.48% for the prior quarter and prior year quarter, respectively.
The efficiency ratio for the year was 63.41% compared to 67.92% for the prior year, an improvement of 451 basis points.
Loans
Loans held for investment decreased by $27.2 million, or 1.80%, to $1.49 billion as of December 31, 2025 compared to $1.51 billion as of September 30, 2025 and increased by $20.6 million, or 1.4%, from $1.47 billion as of December 31, 2024.
Investments
Investment securities decreased by $10.1 million, or 4.5%, to $215.9 million as of December 31, 2025 compared to $226.0 million as of September 30, 2025 and decreased by $7.9 million, or 3.5%, from $223.8 million as of December 31, 2024.
Asset Quality
Non-performing assets totaled $7.0 million at December 31, 2025, compared to $7.3 million and $4.2 million at September 30, 2025 and December 31, 2024, respectively. Non-performing assets to total loans was 0.47% at December 31, 2025, compared to 0.48% and 0.29% at September 30, 2025 and December 31, 2024, respectively.
In the fourth quarter of 2025, the Company had net loan charge-offs of $1.1 million, or 0.30% of average loans, compared to net loan charge-offs of $41,000, or 0.01% of average loans, and $43,000, or 0% of average loans, in the prior quarter and the prior year quarter, respectively. The increase was primarily due to a charge-off of one commercial relationship that had been reserved for in a prior period. The Company recognized provision for credit losses on loans and unfunded commitments of $0.4 million for both the fourth quarter of 2025 and prior quarter and $0.3 million for the prior year quarter.
For 2025, the Company had net loan charge-offs of $1.2 million, or 0.08% of average loans, compared to $2.7 million, or 0.18% of average loans, for 2024. For 2025, the Company recognized a provision for credit losses on loans and unfunded commitments of $0.4 million compared to $1.0 million for 2024.
The allowance for credit losses at December 31, 2025 was $21.1 million, or 1.42% of outstanding loans, and 307.52% of non-performing loans. At September 30, 2025, the allowance for credit losses was $21.9 million, or 1.45% of outstanding loans, and 446.02% of non-performing loans. At December 31, 2024, the allowance for credit losses was $22.0 million, or 1.50% of outstanding loans, and 802.48% of non-performing loans. The allowance for credit losses represents management’s best estimate of expected losses inherent in the loan portfolio and is commensurate with risks in the loan portfolio as of December 31, 2025.
Deposits
Total deposits at December 31, 2025 were $1.55 billion, an increase of $28.2 million, or 1.9%, from $1.53 billion as of September 30, 2025, and an increase of $21.0 million, or 1.4%, from $1.53 billion as of December 31, 2024.
Capital
The Company maintains its “well capitalized” regulatory capital position. At December 31, 2025, capital ratios were as follows: total risk-based capital to risk-weighted assets 15.49%, tier 1 capital to risk-weighted assets 14.24%, tier 1 leverage 12.12%, and common equity to assets 9.19%.
Pursuant to the Company’s Repurchase Plan, management is given discretion to determine the number and pricing of the shares to be purchased under the plan, as well as the timing of any such purchases. The Company repurchased 100,358 common shares under the Repurchase Plan during 2025. As of December 31, 2025, $8.4 million remained available for share repurchases pursuant to the Repurchase Plan.
On January 28, 2026, the Company’s Board of Directors approved a quarterly cash dividend of $0.21 per common share, an increase of $0.01 per common share, or 5%, from the previous quarterly dividend. The dividend is payable on April 1, 2026 to shareholders of record at the close of business on March 15, 2026.
[Tables follow]
| FINANCIAL SUMMARY
(unaudited) $000, except per share data |
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| As of | |||||||||||
| December 31, | September 30, | December 31, | |||||||||
| Balance sheet information: | 2025 | 2025 | 2024 | ||||||||
| Total assets | $ | 1,894,850 | $ | 1,932,105 | $ | 1,825,185 | |||||
| Loans held for investment | 1,486,792 | 1,514,002 | 1,466,160 | ||||||||
| Allowance for credit losses | (21,111 | ) | (21,904 | ) | (22,044 | ) | |||||
| Investment securities | 215,915 | 226,017 | 223,801 | ||||||||
| Deposits | 1,554,149 | 1,525,917 | 1,533,182 | ||||||||
| Total stockholders’ equity | 174,229 | 164,938 | 149,547 | ||||||||
| Market and per share data: | |||||||||||
| Book value per share | $ | 25.13 | $ | 23.76 | $ | 21.36 | |||||
| Market price per share | 34.88 | 31.04 | 28.35 | ||||||||
| Diluted earnings per share, year to date | 3.43 | 2.53 | |||||||||