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Hawthorn Bancshares Reports 2017 Financial Results
Jefferson City, Mo. — February 1, 2018 — Hawthorn Bancshares Inc. (NASDAQ: HWBK), today reported consolidated financial results for the Company for the year ended December 31, 2017.
Net income for the current year was $3.4 million, or $0.59 per diluted common share, compared to $7.3 million, or $1.24 per diluted common share, for 2016. Included in the 2017 net income is a $4.1 million charge, or $0.70 per diluted common share, that includes $3.1 million resulting from application of the Tax Cut and Jobs Act (the “Tax Act”) enacted in the fourth quarter of 2017, and $1.0 million resulting from tax planning strategies implemented at year-end 2017.
The return on average common equity was 3.59% (7.90% excluding the charge from the Tax Act) and the return on average assets was 0.25% (0.56% excluding the charge from the Tax Act) for the current year compared to 7.97% and 0.58% for the prior year, respectively.
Commenting on earnings performance, Chairman David T. Turner said, “Hawthorn reported a 4% increase in non-GAAP earnings per share to $1.29 excluding the impact of the Tax Act for the current year. Loans increased $94.4 million, or 9.7%, from the prior year end and they have increased $203 million, or 23.5%, since year-end 2015. This growth was accomplished without a deterioration in credit quality as nonperforming loans to total loans improved from 1.19% at 12/31/15 to 1.00% at 12/31/17. Our current year net interest margin remained strong at 3.41% while net interest income was $42.9 million, a $2.6 million increase from the prior year driven primarily by loan growth. Non-interest income of $9.0 million for the current year was level with the prior year, mostly due to securities gains of $0.6 million recognized in 2016 that offset increases in most other non-interest income categories. Non-interest expense of $38.8 million was $2.0 million higher than the prior year mostly due to a $0.9 million, or 4.5%, increase in salaries and benefits expense and a net increase in other operating expenses of $1.1 million primarily due to costs associated with technology related expenses to improve operating efficiencies and our ability to react to new technology developments.”
Net Interest Income
Net interest income for the year ended December 31, 2017 was $42.9 million compared to $40.3 million for the prior year. The increase in average loans from 2016 of $111 million, or 12.1%, was the primary contributor to the growth in net interest income. The net interest margin declined 7 basis points from 2016 to 3.41% for 2017 primarily due to the yield on average earning assets increasing 7 basis points while the cost of interest bearing liabilities increased 19 basis points.
Non-Interest Income and Expense
Non-interest income for the year ended December 31, 2017 was $9.0 million compared to $8.9 million for the prior year ended December 31, 2016. The net change from the prior year was primarily due to increases in trust income of $0.2 million and combined real estate servicing and mortgage loan sales income of $0.3 million offset by securities gains of $0.6 million recognized in the prior year.
The following information was filed by Hawthorn Bancshares, Inc. (HWBK) on Thursday, February 1, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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