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8-K - LIVE FILING - HAWTHORN BANCSHARES, INC. | htm_45820.htm |
Exhibit 99.1
Hawthorn Bancshares Announces Second Quarter Earnings
LEES SUMMIT, Mo. August 14, 2012 Hawthorn Bancshares Inc. (NASDAQ: HWBK), today reported consolidated financial results for the Company for the second quarter ended June 30, 2012.
Net income for the quarter was $0.7 million, compared to $1.4 million for the second quarter of 2011. The Company earned $0.01 per diluted common share for the three months ended June 30, 2012, versus $0.19 for the second quarter of 2011 after deducting accrued dividends and normal and accelerated accretion of the discount totaling $0.7 million for the three months ended June 30, 2012, and $0.5 million for the three months ended June 30, 2011, respectively, on preferred stock issued to the U.S. Treasury under the Capital Purchase Program. The accelerated accretion is related to the Companys May 9, 2012 redemption of 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.
On a year to date basis, the Company generated net income of $2.2 million, compared to $2.4 million for 2011. After deducting accrued dividends and accretion on preferred stock issued to the U.S. Treasury, income available to common shareholders was $1.0 million for 2012 compared to $1.4 million for 2011. On a diluted earnings per common share basis, the Company generated $0.21 for the six months ended June 30, 2012 compared to $0.28 per common share for the same period in 2011.
For the quarter, the annualized return on average common equity was 0.26% and the annualized return on average assets was 0.25% compared with 4.93% and 0.47%, respectively, for the same period in 2011. Such was negatively impacted by the accelerated accretion of the discount associated with the TARP redemption.
Net Interest Income
Net interest income for the quarter ended June 30, 2012 decreased 5.7% to $10.2 million from $10.8
million for the same period in 2011. The decrease is largely attributed to a 3.77% net interest
margin compared to 3.95% for the same three month period in 2011. With lower average loan balances
and lower average rates, loan interest income was reduced; thereby, resulting in a lower net
interest margin for the quarter ending June 30, 2012.
Non-Interest Income and Expense
Non-interest income for the three months ended June 30, 2012 was $2.4 million compared to $2.2
million for the same period in 2011. The increase is primarily due to higher residential real
estate refinancing activity which impacted both the volume of loans sold and gains recognized.
Non-interest expense for the three months ended June 30, 2012 was $10.1 million compared to $9.0
million for second quarter 2011. The increase is largely attributed to a $0.6 million increase in
personnel costs and a $0.5 million increase in other real estate expenses related to fair market
value adjustments on foreclosed properties and expenses related to operating and maintaining those
properties. The increase in personnel costs is largely related to an accrual adjustment made
during the three-month period ended June 30, 2011 and an increase in staffing levels.
Allowance for Loan Losses
The Companys level of non-performing loans was 5.34% of total loans at June 30, 2012, down from
6.37% at year-end 2011. During the quarter ended June 30, 2012, the Company recognized net
charge-offs of $0.8 million compared to $0.4 million for the second quarter of 2011. The Company
provided $1.5 million to the allowance for loan losses for the second quarter of 2012, compared to
$1.9 million for the second quarter of 2011. The allowance for loan losses at June 30, 2012 was
$15.3 million, or 1.81% of outstanding loans and 33.9% of non-performing loans as of June 30, 2012.
At December 31, 2011, the 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 June 30, 2012 is adequate to cover probable losses.
Financial Condition
Comparing June 30, 2012 balances with December 31, 2011, total assets remained relatively unchanged
at $1.2 billion. Continued soft loan demand resulted in loans, net of allowance for loan losses,
remaining at $828.8 million. With low loan demand, the Companys next highest yielding asset
category is investment securities which increased 6.8% to $228.3 million. Cash and due from banks
decreased 6.5% to $40.3 million. Total deposits increased 2.8% to $984.6 million. During the same
period, stockholders equity decreased 10.2% to $92.1 million or 7.8% of total assets. The decrease
in the capital account for the period is due to the Companys election to repay $12 million of its
TARP obligation. The total risk based capital ratio of 16.90% and the leverage ratio of 10.17% at
June 30, 2012, respectively, far exceed minimum regulatory requirements of 8.00% and 3.00%,
respectively.
[Tables follow]
FINANCIAL SUMMARY
(unaudited)
Balance sheet information: | June 30, 2012 | December 31, 2011 | ||||||||||||||
Loans, net of allowance for loan losses |
$ | 828,791,399 | $ | 829,121,324 | ||||||||||||
Debt securities |
228,269,741 | 213,806,001 | ||||||||||||||
Total assets |
1,187,219,209 | 1,171,161,423 | ||||||||||||||
Deposits |
984,578,605 | 958,224,153 | ||||||||||||||
Total stockholders equity |
92,141,571 | 102,575,773 | ||||||||||||||
Three Months | Three Months | |||||||||||||||
Statement of income information: | Ended June 30, 2012 | Ended June 30, 2011 | ||||||||||||||
Total interest income |
$ | 12,296,790 | $ | 13,640,632 | ||||||||||||
Total interest expense |
2,124,820 | 2,858,101 | ||||||||||||||
Net interest income |
10,171,970 | 10,782,531 | ||||||||||||||
Provision for loan losses |
1,500,000 | 1,883,334 | ||||||||||||||
Noninterest income |
2,443,160 | 2,178,624 | ||||||||||||||
Noninterest expense |
10,097,699 | 9,008,125 | ||||||||||||||
Pre-tax income |
1,017,431 | 2,069,696 | ||||||||||||||
Income taxes |
277,400 | 661,202 | ||||||||||||||
Net income |
740,031 | 1,408,494 | ||||||||||||||
Dividends & accretion on preferred stock issued to U.S. Treasury |
692,103 | 501,508 | ||||||||||||||
Net income available to common shareholders |
47,928 | 906,986 | ||||||||||||||
Earnings Per Common Share: |
||||||||||||||||
Basic: | $ | 0.01 | $ | 0.19 | ||||||||||||
Diluted: | $ | 0.01 | $ | 0.19 | ||||||||||||
Six Months | Six Months | |||||||||||||||
Statement of income information: | Ended June 30, 2012 | Ended June 30, 2011 | ||||||||||||||
Total interest income |
$ | 24,942,735 | $ | 27,223,308 | ||||||||||||
Total interest expense |
3,956,004 | 5,960,241 | ||||||||||||||
Net interest income |
20,986,731 | 21,263,067 | ||||||||||||||
Provision for loan losses |
3,200,000 | 3,633,336 | ||||||||||||||
Noninterest income |
4,413,456 | 4,230,704 | ||||||||||||||
Noninterest expense |
19,577,869 | 18,385,849 | ||||||||||||||
Pre-tax income |
2,622,318 | 3,474,586 | ||||||||||||||
Income taxes |
431,552 | 1,112,475 | ||||||||||||||
Net income |
2,190,766 | 2,362,111 | ||||||||||||||
Dividends & accretion on preferred stock issued to U.S. Treasury |
1,181,005 | 990,410 | ||||||||||||||
Net income available to common shareholders |
1,009,761 | 1,371,701 | ||||||||||||||
Earnings Per Common Share: |
||||||||||||||||
Basic: | $ | 0.21 | $ | 0.28 | ||||||||||||
Diluted: | $ | 0.21 | $ | 0.28 |
FINANCIAL SUMMARY (Continued)
(unaudited)
Key financial ratios: | June 30, 2012 | December 31, 2011 | ||||||||
Return on average assets (YTD)
|
0.37 | % | 0.24 | % | ||||||
Return on average common equity (YTD)
|
2.73 | % | 1.15 | % | ||||||
Allowance for loan losses to total loans
|
1.81 | % | 1.64 | % | ||||||
Nonperforming loans to total loans
|
5.34 | % | 6.37 | % | ||||||
Nonperforming assets to loans and foreclosed assets
|
7.70 | % | 8.11 | % | ||||||
Allowance for loan losses to nonperforming loans
|
33.94 | % | 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.