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Hawthorn Bancshares Announces 1st Quarter Earnings of $0.26 Per Diluted Share
LEE'S SUMMIT, Mo.-(Business Wire)-May 6, 2008 - Hawthorn Bancshares (NASDAQ: HWBK) of Lee's Summit, MO, a financial services company, announced today first quarter earnings of $0.26 per diluted share, up 8% from diluted earnings per share of $0.24 for the fourth quarter of 2007 and down 53% from diluted earnings per share of $0.55 for the first quarter 2007.
Net income for the 3 months ended March 31, 2008 of $1.1 million increased $0.1 million when compared with fourth quarter 2007. Compared with the first quarter of 2007, net income is down $1.2 million.
For the quarter, the annualized return on average equity was 3.88%, and the annualized return on average assets was 0.36% compared with 8.98% and 0.83%, respectively, for first quarter 2007.
In commenting on earnings performance, Chairman & CEO James E. Smith said, "We decided to strengthen our allowance for loan losses during the first quarter by taking a $1.65 million provision, thus increasing our percentage of allowance to total loans to 1.08% compared with 1.02% at year-end 2007 and 1.13% at March 31, 2007. While Hawthorn's underlying business remains strong, the recent slowdown in the commercial development and construction market has led to an increase in nonperforming assets throughout the banking industry." During the quarter, Hawthorn's nonperforming assets increased $4.5 million. Mr. Smith added, "We continue to closely monitor the financial health of our borrowers through proactive risk management procedures."
The Company experienced moderate loan growth primarily in the commercial construction and real estate mortgage portfolios. Although the net interest margin for first quarter of 2008 declined to 3.55% (compared with 3.75% for the same period in 2007), net interest income actually rose $0.4 million as a result of the higher volume of earning assets.
Financial performance was also affected by a $0.2 million decrease in other noninterest income and a $0.5 million increase in other noninterest expense. The increased noninterest expense relates, in part, to growth of the Company's branch banking network and expansion in various technology areas including check imaging and electronic item capture.
Comparing March 31, 2008 balances with December 31, 2007, total assets increased 3.1% to $1.2 billion. Loans, net of allowance for loan losses, increased 1.9% to $919.6 million, while investment securities increased 15.4% to $181.5 million. Total deposits decreased 0.5% to $916.8 million. During the same period, stockholders' equity increased 1.0% to $112.2 million or 9.1% of total assets.
About Hawthorn Bancshares
Hawthorn Bancshares, Inc., a financial-bank holding company headquartered in Lee's Summit, Missouri, is the parent company of Hawthorn Bank of Jefferson City with locations in Lee's Summit, Springfield, Branson, Independence, Raymore, Columbia, Clinton, Windsor, Collins, Osceola, Warsaw, Belton, Drexel, Harrisonville, California, Tipton and St. Robert. -0- *T FINANCIAL SUMMARY (unaudited) ————————————————————————- Balance sheet information: March 31, 2008 December 31, 2007 Loans, net of allowance for loan losses $919,559,360 $901,996,263 Debt and equity securities 181,538,697 157,368,505 Total assets 1,233,427,311 1,195,804,079 Deposits 916,791,372 921,257,291 Stockholders' equity 112,194,684 111,198,823 Three Months Three Months Statement of income information: Ended March 31, 2008 Ended March 31, 2007 Total interest income $18,425,666 $18,030,683 Total interest expense 8,881,266 8,894,983 —————————— —————————— Net interest income 9,544,400 9,135,700 Provision for loan losses 1,650,000 225,000 Noninterest income 2,368,181 2,523,388 Noninterest expense 8,644,648 8,133,800 —————————— —————————— Pre-tax income 1,617,933 3,300,288 Income taxes 531,058 993,621 —————————— —————————— Net income 1,086,875 2,306,667 ==================== ==================== Earnings Per Share: Basic: $0.26 $0.55 Diluted: $0.26 $0.55 Key financial ratios: March 31, 2008 December 31, 2007 Return on average assets 0.36% 0.67% Return on average equity 3.88% 7.22% Allowance for loan losses to total loans 1.08% 1.02% Nonperforming loans to total loans 1.10% 0.67% Allowance for loan losses to nonperforming loans 97.65% 152.54% *T
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.
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