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8-K - LIVE FILING - HAWTHORN BANCSHARES, INC. | htm_45093.htm |
Exhibit 99.1
Hawthorn Bancshares Reports First Quarter Earnings
LEES SUMMIT, Mo. May 15, 2012 Hawthorn Bancshares Inc. (NASDAQ: HWBK), today reported consolidated financial results for the Company for the quarter ended March 31.
Net income for the quarter was $1.5 million, compared to $1.0 million for the first quarter of 2011. After deducting dividends and discount accretion of $0.5 million on the preferred stock issued to the U.S. Treasury under the Capital Purchase Program, Hawthorn earned $0.21 per diluted common share for the three months ending March 31, 2012, versus $0.10 for the first quarter of 2011. For the quarter, the annualized return on average common equity was 5.21% and the annualized return on average assets was 0.49% compared with 2.56% and 0.32%, respectively, for the same period in 2011.
Operating Results
Net Interest Income
Net interest income for the quarter ended March 31, 2012 increased 3.2% to $10.8 million from $10.5
million for the same period in 2011. The increase is attributed to continued strengthening of the
Companys net interest margin which increased from 3.84% at March 31, 2011 to 3.98% for the first
quarter of 2012. The net interest margin for the full year 2011 was 3.92%. In commenting on
growth in the margin, Chairman David T. Turner said With non-performing assets of $69.9 million,
there is significant downward pressure on asset yields. However, lower funding costs for the
company more than outpaced declining asset yields; thereby, resulting in a net improvement in the
companys margin.
Non-Interest Income and Expense
Non-interest income for the three months ended March 31, 2012 was $2.0 million compared to $2.1
million for the same period in 2011. Non-interest expense for the three months ended March 31, 2012
was $9.5 million compared to $9.4 million for first quarter 2011.
Loan Loss Reserve
Hawthorns level of non-performing loans increased to 5.92% of total loans at March 31, 2012, from
5.77% at March 31, 2011. However, the level of non-performing loans in relation to total loans
decreased when compared to the year-end 2011 level of 6.37%.
Net charge-offs for the quarter were $0.9 million compared to $3.9 million for the first quarter of 2011. Improvement in the level of charge-offs is largely attributed to losses realized in 2011 on fully reserved loans totaling $2.0 million.
Although net charge offs improved during the three months ended March 31, 2012 in comparison to the three months ended March 31, 2011, the provision for loan losses at March 31, 2012 was $1.7 million compared to $1.8 million for March 31, 2011. The provision was significantly higher than first quarter charge-offs due to a $1.1 million increase in specific reserves needed for impaired loans.
The total allowance for loan losses at March 31, 2012 was $14.6 million, or 1.74% of outstanding loans and 29.45% of non-performing loans. At December 31, 2011, the total allowance for loan losses was $13.8 million, or 1.64% of outstanding loans and 25.73% of non-performing loans. Management believes based on detailed analysis of each nonperforming credit and the value of any associated collateral that the allowance for loan losses at March 31, 2012 is sufficient to cover probable incurred credit losses.
Financial Condition
Comparing March 31, 2012 balances with December 31, 2011, total assets remained stable at $1.2
billion. Continued soft loan demand resulted in loans, net of allowance for loan losses, decreasing
0.5% to $825.3 million. With low loan demand, the Companys next highest yielding asset category
is investment securities which increased 7.2% to $229.2 million. Cash & due from banks increased
47.2% to $63.5 million. Total deposits increased 3.6% to $993.1 million. During the same period,
stockholders equity increased 1.2% to $103.8 million or 8.6% of total assets. On May 9, 2012,
Hawthorn Bancshares, Inc. redeemed 12,000 shares of its Fixed Rate Cumulative Perpetual Preferred
Stock issued to the U.S. Treasury Department under the TARP Capital Purchase Program at a
redemption price of $12 million. After incorporating the TARP redemption into the March 31, 2012
capital ratios, Hawthorn Bancshares capital would continue to surpass the regulatory guidelines
for a well-capitalized institution with a Tier 1 capital ratio of 13.85%, a total capital ratio of
17.22%, and a Tier 1 leverage ratio of 10.06%.
[Tables follow]
FINANCIAL SUMMARY
(unaudited)
Balance sheet information: | March 31, 2012 | December 31, 2011 | ||||||||||
Loans, net of allowance for loan losses |
$ | 825,299,296 | $ | 829,121,324 | ||||||||
Investment securities
|
229,154,263 | 213,806,001 | ||||||||||
Total assets
|
1,205,981,240 | 1,171,161,423 | ||||||||||
Deposits
|
993,104,655 | 958,224,153 | ||||||||||
Common stockholders equity
|
74,397,258 | 73,258,057 | ||||||||||
Total stockholders equity
|
103,834,093 | 102,575,773 | ||||||||||
Three Months | Three Months | |||||||||||
Statement of income information: | Ended March 31, 2012 | Ended March 31, 2011 | ||||||||||
Total interest income
|
12,645,945 | 13,582,676 | ||||||||||
Total interest expense
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1,831,184 | 3,102,140 | ||||||||||
Net interest income
|
10,814,761 | 10,480,536 | ||||||||||
Provision for loan losses
|
1,700,000 | 1,750,002 | ||||||||||
Noninterest income
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1,970,296 | 2,052,080 | ||||||||||
Noninterest expense
|
9,480,170 | 9,377,724 | ||||||||||
Pre-tax income
|
1,604,887 | 1,404,890 | ||||||||||
Income taxes
|
154,152 | 451,273 | ||||||||||
Net income
|
1,450,735 | 953,617 | ||||||||||
Dividends & accretion on preferred stock issued to U.S. Treasury |
488,902 | 488,902 | ||||||||||
Net income available to common shareholders |
961,833 | 464,715 | ||||||||||
Earnings Per Common Share:
|
||||||||||||
Basic: | $ | 0.21 | $ | 0.10 | ||||||||
Diluted: | $ | 0.21 | $ | 0.10 | ||||||||
Key financial ratios: | March 31, 2012 | December 31, 2011 | ||||||||||
Return on average assets
|
0.49 | % | 0.24 | % | ||||||||
Return on average common equity
|
5.21 | % | 1.15 | % | ||||||||
Allowance for loan losses to total loans |
1.74 | % | 1.64 | % | ||||||||
Nonperforming loans to total loans
|
5.92 | % | 6.37 | % | ||||||||
Nonperforming assets to loans and foreclosed assets |
8.13 | % | 8.11 | % | ||||||||
Allowance for loan losses to nonperforming loans |
29.45 | % | 25.73 | % |
About Hawthorn Bancshares
Hawthorn Bancshares, Inc., a financial-bank holding company headquartered in Lees Summit, Missouri, is the parent company of Hawthorn Bank of Jefferson City with locations in Lees Summit, Springfield, Branson, Independence, Raymore, Columbia, Clinton, Windsor, Collins, Osceola, Warsaw, Belton, Drexel, Harrisonville, California and St. Robert.
Contact: | Kathleen Bruegenhemke Senior Vice President, Investor Relations TEL: 573.761.6100 FAX: 573.761.6272 www.HawthornBancshares.com |
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Statements made in this press release that suggest Hawthorn Bancshares or managements 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 companys quarterly and annual reports filed with the Securities and Exchange Commission.