Hawthorn Bancshares, Inc.
(NASDAQ: HWBK), (the
“Company”), the bank holding company for Hawthorn Bank, reported
third quarter 2023 net income of $2.6 million and earnings per
diluted share (“EPS”) of $0.36.
Third Quarter
2023 Highlights
- Net income of
$2.6 million, or
$0.36 per diluted share
- Net interest margin, fully
taxable equivalent ("FTE") of 3.35%
- Return on average assets
and equity of 0.54% and
8.05%, respectively
- Deposits
increased $37.1 million,
or 2.4%, compared to the
second quarter
2023 (“linked quarter”), while other
borrowings decreased $51.6
million, or
23.5%, compared to the linked
quarter
- Credit quality remained
strong with non-performing loans to total loans of
0.25%
Brent Giles, Chief Executive Officer of
Hawthorn Bancshares Inc. commented, “Our quarterly
earnings were impacted by a valuation adjustment on other real
estate owned. However, without this adjustment, our overall
performance improved during the quarter. Our net interest margin
has remained stable in one of the most challenging macro-economic
environments. During these times, our focus will continue to be on
prudent financial management, liquidity and credit quality."
Financial
Summary(unaudited)$000, except per share data
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
Total assets |
$ |
1,879,005 |
|
|
$ |
1,900,709 |
|
|
$ |
1,847,598 |
|
Loans held for investment |
|
1,556,969 |
|
|
|
1,563,206 |
|
|
|
1,491,997 |
|
Deposits |
|
1,580,365 |
|
|
|
1,543,270 |
|
|
|
1,592,798 |
|
Total stockholders’ equity |
$ |
118,404 |
|
|
$ |
126,473 |
|
|
$ |
115,405 |
|
|
|
|
|
|
|
Basic earnings per share (YTD) |
$ |
1.19 |
|
|
$ |
0.83 |
|
|
$ |
2.27 |
|
Basic earnings per share (QTR) |
$ |
0.36 |
|
|
$ |
0.36 |
|
|
$ |
0.70 |
|
Diluted earnings per share (YTD) |
$ |
1.19 |
|
|
$ |
0.83 |
|
|
$ |
2.27 |
|
Diluted earnings per share (QTR) |
$ |
0.36 |
|
|
$ |
0.36 |
|
|
$ |
0.70 |
|
Net interest margin (FTE) (YTD) |
|
3.23 |
% |
|
|
3.17 |
% |
|
|
3.57 |
% |
Net interest margin (FTE) (QTR) |
|
3.35 |
% |
|
|
3.19 |
% |
|
|
3.56 |
% |
Efficiency ratio (YTD) |
|
77.59 |
% |
|
|
76.54 |
% |
|
|
65.83 |
% |
Efficiency ratio (QTR) |
|
79.79 |
% |
|
|
80.55 |
% |
|
|
65.73 |
% |
Financial Results for the Quarter and
Nine Months Ended September 30, 2023
Earnings
Net income for the third quarter 2023 was of
$2.6 million, an increase of $0.03 million, or 1.2%, from the
linked quarter, and a decrease of $2.3 million, or 47.7%, from the
third quarter 2022 (the "prior year quarter"). EPS was consistent
at $0.36 for both the third quarter 2023 and linked quarter
compared to $0.70 for the prior year quarter.
Net income for the nine months ended
September 30, 2023 was $8.4 million, or $1.19 per diluted
share, a decrease of $7.6 million compared to $16.0 million, or
$2.27 per diluted share, for the nine months ended
September 30, 2022.
Net Interest Income and Net Interest
Margin
Net interest income for the third quarter 2023
was $15.1 million , an increase of $0.9 million from the
linked quarter, and an increase of $0.1 million from the prior
year quarter. Interest income increased $6.0 million in the
current quarter compared to the prior year quarter, driven
primarily by higher yields on interest earning assets and growth in
loans, while interest expense increased $5.9 million. Net
interest margin, on an FTE basis, was 3.35% for the third quarter,
compared to 3.19% for the linked quarter, and 3.56% for the prior
year quarter.
Net interest income for the nine months ended
September 30, 2023 was $43.3 million, a decrease of
$0.5 million compared to $43.8 million for the nine
months ended September 30, 2022. Interest income on earning
assets increased $17.3 million over the same comparative
periods. Interest expense on deposits and borrowings increased
$17.8 million over the same comparative periods, reflecting
the competitive marketplace and increasing interest rates for
securing sources of funding.
Non-interest Income
Total non-interest income for the third quarter
2023 was $0.6 million, a decrease of $1.0 million, or 62.0%, from
the linked quarter, and a decrease of $2.9 million, or 82.6%, from
the prior year quarter. The decline in the current quarter compared
to the linked quarter and prior year quarter is primarily due to
the recognition of a $2.8 million write-down on other real
estate owned properties.
For the nine months ended September 30,
2023, non-interest income was $5.4 million, a decrease of $5.5
million as compared to $10.9 million for the nine months ended
September 30, 2022. This decrease is primarily due to the
recognition of a $4.6 million write-down on other real estate owned
properties in the second and third quarter 2023.
Non-interest Expense
Total non-interest expense for the third quarter
2023 was $12.6 million, a decrease of $0.2 million, or 1.2%, from
the linked quarter, and an increase of $0.4 million, or 3.1%, from
the prior year quarter. The third quarter efficiency ratio was
79.8% compared to 80.5% and 65.7% for the linked quarter and prior
year quarter, respectively.
Loans
Loans held for investment decreased by $6.2
million, or 0.4%, to $1.6 billion as of September 30, 2023 as
compared to the end of the linked quarter and increased by $65.0
million, or 4.4%, from the end of the prior year quarter.
The yield earned on average loans held for
investment was 5.67%, on an FTE basis, for the third quarter 2023,
compared to 5.23% for the linked quarter and 4.51% for the prior
year quarter. The increase in yield as of September 30, 2023
compared to the end of the linked quarter reflects current market
conditions where most loan types have seen an increase in yield,
consistent with recent increases in the prime rate.
Asset Quality
On January 1, 2023, the Company adopted ASU
2016-13, Financial Instruments - Credit Losses (Topic 326), which
provides for an expected credit loss model, referred to as the
"Current Expected Credit Loss" ("CECL") model. The adoption of the
standard resulted in an increase to the allowance for credit losses
of $5.8 million and a new liability for unfunded commitments
totaling $1.3 million. These one-time cumulative adjustments
resulted in a $5.6 million tax-effected decrease to retained
earnings which was recognized in the first quarter 2023.
Non-performing loans totaled $3.9 million
at September 30, 2023, an increase from $3.8 million at
the end of the linked quarter, and a decrease of $13.5 million
from $17.3 million at the end of the prior year quarter. The
decrease in non-performing loans in the current quarter compared to
the prior year quarter is primarily due to three large non-accrual
loan relationships returning to accruing status. Non-performing
loans to total loans was 0.25% at September 30, 2023, compared
to 0.25% and 1.16% at the end of the linked quarter and prior year
quarter, respectively.
At September 30, 2023, with the adoption of
ASU 2016-13, $0.1 million of the Company’s allowance for
credit losses was allocated to individually analyzed loans totaling
$4.0 million compared to $0.1 million of the Company's
allowance for credit losses allocated to individually analyzed
loans totaling $4.1 million at the end of the linked quarter.
These loans were valued using a collateral-dependent practical
expedient.
Under the incurred method, $0.3 million of
the Company's allowance for loan losses was allocated to impaired
loans totaling $18.9 million at the end of the prior year
quarter. Management determined that $15.9 million, or 83%, of
total impaired loans required no reserve allocation at the end of
the prior year quarter, primarily due to adequate collateral
values.
In the third quarter 2023, the Company had net
loan charge-offs of $74,000 compared to net loan recoveries of
$92,000 and net loan charge-offs of $148,000 in the linked quarter
and the prior year quarter, respectively.
The Company recognized a $0.1 million
provision for credit losses on loans and unfunded commitments for
the third quarter 2023 compared to no provision for credit losses
on loans and unfunded commitments for the linked quarter and a
provision for loan losses of $0.3 million for the prior year
quarter.
For the nine months ended September 30,
2023, the Company recognized a provision for credit losses on loans
and unfunded commitments of $0.8 million compared to a $1.0 million
release of provision expense for the nine months ended
September 30, 2022. The release of provision expense for the
nine months ended September 30, 2022 was driven in part from
the release of specific reserves totaling $2.8 million in the
first quarter of 2022 due to returning significant loan balances to
accruing from non-accrual status or other collateral valuation
adjustments.
The allowance for credit losses at
September 30, 2023 was $22.5 million, or 1.44% of outstanding
loans, and 582.82% of non-performing loans. At December 31,
2022, the allowance for loan losses was $15.6 million, or 1.02% of
outstanding loans, and 83.35% of non-performing loans. At
September 30, 2022, the allowance for loan losses was $15.5
million, or 1.04% of outstanding loans, and 89.38% 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 September 30, 2023.
Deposits
Total deposits at September 30, 2023 were
$1.6 billion, an increase of $37.1 million, or 2.4%, from June
30, 2023, and a decrease of $12.4 million, or 0.8%, from
September 30, 2022. The increase in deposits at the end of the
third quarter of 2023 as compared to the linked quarter was
primarily a result of deposit promotions.
The yield earned on average deposits was 2.32%,
on an FTE basis, for the third quarter 2023, compared to 2.07% for
the linked quarter and 0.73% for the prior year quarter.
Non-interest bearing demand deposits as a percent of total deposits
was 26.9% as of September 30, 2023, compared to 28.4% and
31.3% at the end of the linked quarter and the end of the prior
year quarter, respectively.
Capital
On January 1, 2023, the Company adopted ASU
2016-13 and recorded a one-time cumulative effect adjustment to
retained earnings totaling $5.6 million. Total stockholders'
equity was $118.4 million and the common equity to assets
ratio was 6.30% at September 30, 2023 as compared to 6.65% and
6.25% at the end of the linked quarter and the prior year quarter,
respectively.
The Company maintains its “well capitalized”
regulatory capital position. At the end of the third quarter 2023,
capital ratios were as follows: total risk-based capital to
risk-weighted assets 14.20%; tier 1 capital to risk-weighted assets
12.54%; tier 1 leverage 10.43%; and common equity to assets
6.30%.
Pursuant to the Company's 2019 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 did not repurchase any shares
during the third quarter 2023. As of September 30, 2023,
$2.1 million remains available for share repurchases pursuant
to the plan.
During the fourth quarter of 2023, the Company's
Board of Directors approved a quarterly cash dividend of $0.17 per
common share payable January 1, 2024 to shareholders of record
at the close of business on December 15, 2023.
[Tables follow]
FINANCIAL SUMMARY(unaudited)$000, except per
share data
|
Three Months Ended |
|
September 30, |
|
June 30, |
|
September 30, |
Statement of income
information: |
2023 |
|
2023 |
|
2022 |
Total interest income |
$ |
23,888 |
|
$ |
21,927 |
|
$ |
17,893 |
|
Total interest expense |
|
8,741 |
|
|
7,725 |
|
|
2,826 |
|
Net interest income |
|
15,147 |
|
|
14,202 |
|
|
15,067 |
|
Provision for credit losses on loans and unfunded commitments |
|
110 |
|
|
— |
|
|
300 |
|
Non-interest income |
|
606 |
|
|
1,596 |
|
|
3,485 |
|
Investment securities gains, net |
|
3 |
|
|
7 |
|
|
1 |
|
Non-interest expense |
|
12,569 |
|
|
12,725 |
|
|
12,195 |
|
Pre-tax income |
|
3,077 |
|
|
3,080 |
|
|
6,058 |
|
Income taxes |
|
498 |
|
|
531 |
|
|
1,131 |
|
Net income |
$ |
2,579 |
|
$ |
2,549 |
|
$ |
4,927 |
|
Earnings per
share: |
|
|
|
|
|
Basic: |
$ |
0.36 |
|
$ |
0.36 |
|
$ |
0.70 |
|
Diluted: |
$ |
0.36 |
|
$ |
0.36 |
|
$ |
0.70 |
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
September 30, |
Statement of income
information: |
|
|
2023 |
|
2022 |
Total interest income |
|
|
$ |
66,748 |
|
$ |
49,471 |
|
Total interest expense |
|
|
|
23,451 |
|
|
5,698 |
|
Net interest income |
|
|
|
43,297 |
|
|
43,773 |
|
Provision for (release of) credit losses on loans and unfunded
commitments |
|
|
|
790 |
|
|
(1,000 |
) |
Non-interest income |
|
|
|
5,384 |
|
|
10,859 |
|
Investment securities gains (losses), net |
|
|
|
18 |
|
|
(12 |
) |
Non-interest expense |
|
|
|
37,772 |
|
|
35,962 |
|
Pre-tax income |
|
|
|
10,137 |
|
|
19,658 |
|
Income taxes |
|
|
|
1,738 |
|
|
3,633 |
|
Net income |
|
|
$ |
8,399 |
|
$ |
16,025 |
|
Earnings per
share: |
|
|
|
|
|
Basic: |
|
|
$ |
1.19 |
|
$ |
2.27 |
|
Diluted: |
|
|
$ |
1.19 |
|
$ |
2.27 |
|
FINANCIAL SUMMARY
(continued)
(unaudited)
$000, except per share data
|
September 30, |
|
June 30, |
|
September 30, |
|
2023 |
|
2023 |
|
2022 |
Key financial
ratios: |
|
|
|
|
|
Return on average assets (YTD) |
0.59 |
% |
|
0.62 |
% |
|
1.21 |
% |
Return on average common equity (YTD) |
8.73 |
% |
|
9.07 |
% |
|
16.00 |
% |
Return on average assets (QTR) |
0.54 |
% |
|
0.54 |
% |
|
1.08 |
% |
Return on average common equity (QTR) |
8.05 |
% |
|
7.99 |
% |
|
15.30 |
% |
Net interest margin (FTE) (YTD) |
3.23 |
% |
|
3.17 |
% |
|
3.57 |
% |
Efficiency ratio (YTD) |
77.59 |
% |
|
76.54 |
% |
|
65.83 |
% |
|
|
|
|
|
|
Asset Quality
Ratios |
|
|
|
|
|
Allowance for credit losses to total loans |
1.44 |
% |
|
1.42 |
% |
|
1.04 |
% |
Non-performing loans to total loans (a) |
0.25 |
% |
|
0.25 |
% |
|
1.16 |
% |
Non-performing assets to loans (a) |
0.48 |
% |
|
0.66 |
% |
|
1.78 |
% |
Non-performing assets to assets (a) |
0.39 |
% |
|
0.54 |
% |
|
1.44 |
% |
Allowance for credit losses on loans to |
|
|
|
|
|
non-performing loans (a) |
582.82 |
% |
|
578.01 |
% |
|
89.38 |
% |
|
|
|
|
|
|
Capital
Ratios |
|
|
|
|
|
Average stockholders' equity to average total assets (YTD) |
6.78 |
% |
|
6.81 |
% |
|
7.55 |
% |
Period-end stockholders' equity to period-end assets (YTD) |
6.30 |
% |
|
6.65 |
% |
|
6.25 |
% |
Total risk-based capital ratio |
14.20 |
% |
|
13.99 |
% |
|
13.84 |
% |
Tier 1 risk-based capital ratio |
12.54 |
% |
|
12.51 |
% |
|
12.25 |
% |
Common equity Tier 1 capital |
10.09 |
% |
|
9.92 |
% |
|
9.82 |
% |
Tier 1 leverage ratio |
10.43 |
% |
|
10.46 |
% |
|
10.60 |
% |
(a) Non-performing loans include loans 90-days
past due and accruing and non-accrual loans.
About Hawthorn Bancshares
Hawthorn Bancshares, Inc., a financial-bank
holding company headquartered in Jefferson City, Missouri, is the
parent company of Hawthorn Bank of Jefferson City with locations in
the Missouri communities of Lee's Summit, Liberty, St. Louis,
Springfield, Independence, Columbia, Clinton, Osceola, Warsaw,
Belton, Drexel, Harrisonville, California and St. Robert.
Contact:Hawthorn Bancshares,
Inc.Brent M. Giles Chief Executive OfficerTEL:
816.674.9806www.HawthornBancshares.com
The financial results in this press release
reflect preliminary, unaudited results, which are not final until
the Company's Quarterly Report on Form 10-Q is filed. Statements
made in this press release that suggest Hawthorn Bancshares' or
management's intentions, hopes, beliefs, expectations, or
predictions of the future include "forward-looking statements"
within the meaning of Section 21E of the Securities and Exchange
Act of 1934, as amended. It is important to note that actual
results could differ materially from those projected in such
forward-looking statements. Additional information concerning
factors that could cause actual results to differ materially from
those projected in such forward-looking statements is contained
from time to time in the Company's quarterly and annual reports
filed with the Securities and Exchange Commission. These
forward-looking statements are made as of the date of this
communication, and the Company disclaims any obligation to update
any forward-looking statement or to publicly announce the results
of any revisions to any of the forward-looking statements included
herein, except as required by law.
Hawthorn Bancshares (NASDAQ:HWBK)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Hawthorn Bancshares (NASDAQ:HWBK)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024