Exhibit 99.1
Hawthorn Bancshares Announces 2nd Quarter Earnings
Jefferson City, MO
August 7, 2007
Hawthorn Bancshares of Jefferson City, MO (NASDAQ: HWBK), a financial services holding company, announced today second quarter earnings of $0.56 per diluted share, down 20% from diluted earnings per share of $0.70 a year ago.
Net income for the three months ended June 30, 2007 of $2,363,000 decreased $570,000 when compared to the second quarter of 2006.
For the six months ended June 30, 2007, Hawthorn Bancshares earned $1.11 per diluted share, down 17% from diluted earnings per share of $1.34 a year ago. Net income for the six months ended June 30, 2007 of $4,670,000 decreased $952,000 when compared to the first six months of 2006.
In commenting on earnings performance, Chairman & CEO James E. Smith said “Significant efforts are underway this year to merge all of our subsidiary banks to a single platform under the newly brandedHawthorn Bankbanner. I am very pleased with our entire staffs’ efforts in making our company unique in the crowded world of banking. We knew that consolidation related expenses were going to be sizable in 2007 and our current performance reflects not only a tightening net interest margin, but also higher salaries & employee benefit costs related to the Company’s strategic growth plan and increased legal & professional fees associated with the consolidation.”
To summarize the Company’s performance for the six months ended June 30, 2007 compared to the same period in 2006, net interest income decreased $1,072,000 (6%) due to tightening of the net interest margin; non-interest income increased $1,098,000 (26%) due in large part to proceeds received from sale of two of the Company’s charters; and other non-interest expense increased $1,810,000 (12%). The majority of the non-interest expense increase is attributed to implementation of the Company’s strategic plan which included adding additional staff to execute key growth initiatives and legal & professional fees associated with the consolidation and rebranding effort.
For the three months ended June 30, 2007, return on average equity was 8.77% and return on average assets was 0.83% compared to 11.79% and 1.02% respectively for the same period in 2006. For the six months ended June 30, 2007, return on average equity was 8.87% and return on average assets was 0.83% compared to 11.47% and 0.99% respectively for the same period in 2006.
Comparing June 30, 2007 balances to December 31, 2006, total assets increased 1.5% to $1,160,108,000. Total loans grew 3.1% to $837,422,000, while investment securities decreased 6.6% to $177,214,000. Total deposits increased 1.9% to $917,158,000. During the same period, stockholders’ equity increased 2.5% to $107,574,000 or 9.3% of total assets.
About Hawthorn Bancshares
Hawthorn Bancshares, Inc., a multi-bank holding company headquartered in Lee’s Summit, Missouri, is the parent company of Hawthorn Bank of Clinton with locations in Springfield, Lee’s Summit, Branson, Windsor, Collins, Osceola and Warsaw, Belton, Drexel, Harrisonville, Independence and Raymore: and The Exchange National Bank of Jefferson City with locations in Columbia, California, Tipton and St. Robert.
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.
| Contact: | Kathleen Bruegenhemke Senior Vice President, Investor Relations TEL: 573.761.6100 FAX: 573.761.6272 www.exchangebancshares.com | |
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FINANCIAL SUMMARY
(unaudited)
| Balance sheet information: | June 30, 2007 | December 31, 2006 | ||||||||||||||
| Loans, net of allowance | ||||||||||||||||
| for loan losses | $ | 828,311,575 | $ | 803,297,381 | ||||||||||||
| Debt and equity securities | 177,214,033 | 189,773,310 | ||||||||||||||
| Total assets | 1,160,108,036 | 1,142,711,897 | ||||||||||||||
| Deposits | 917,157,733 | 899,864,734 | ||||||||||||||
| Stockholders’ equity | 107,574,377 | 104,944,590 | ||||||||||||||
| Three Months | Three Months | |||||||||||||||
| Statement of income information: | Ended June 30, 2007 | Ended June 30, 2006 | ||||||||||||||
| Total interest income | $ | 18,137,172 | $ | 17,929,821 | ||||||||||||
| Total interest expense | 9,052,155 | 8,095,272 | ||||||||||||||
| Net interest income | 9,085,017 | 9,834,549 | ||||||||||||||
| Provision for loan losses | 154,216 | 310,500 | ||||||||||||||
| Noninterest income | 2,849,641 | 2,249,180 | ||||||||||||||
| Noninterest expense | 8,445,161 | 7,457,467 | ||||||||||||||
| Income before taxes | 3,335,281 | 4,315,762 | ||||||||||||||
| Income taxes | 972,253 | 1,382,577 | ||||||||||||||
| Net income | 2,363,028 | 2,933,185 | ||||||||||||||
| Six Months | Six Months | |||||||||||||||
| Statement of income information: | Ended June 30, 2007 | Ended June 30, 2006 | ||||||||||||||
| Total interest income | $ | 36,167,855 | $ | 34,722,687 | ||||||||||||
| Total interest expense | 17,947,138 | 15,429,592 | ||||||||||||||
| Net interest income | 18,220,717 | 19,293,095 | ||||||||||||||
| Provision for loan losses | 379,216 | 628,000 | ||||||||||||||
| Noninterest income | 5,373,210 | 4,275,091 | ||||||||||||||
| Noninterest expense | 16,579,142 | 14,769,059 | ||||||||||||||
| Income before taxes | 6,635,569 | 8,171,127 | ||||||||||||||
| Income taxes | 1,965,874 | 2,549,335 | ||||||||||||||
| Net income | 4,669,695 | 5,621,792 | ||||||||||||||
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