Hawthorn Bancshares, Inc.

What they do

The company owns all outstanding capital stock of Hawthorn Bank, a Missouri-chartered bank founded in 1932 with predecessors dating to 1865. It provides commercial banking for small and mid-sized businesses, including equipment, operating, commercial real estate and SBA loans, plus retail banking services such as real estate mortgage lending, installment and consumer loans, checking, savings, money market and time deposit accounts. It also offers trust, estate planning, investment and asset management through its Wealth Management business.

Revenue drivers

• Bank segment — The primary source of revenue is net interest income from lending and deposit taking; much of the business is commercial, commercial real estate development and residential mortgage lending. For 2024 and 2023 this was the company's only reportable segment.
• Wealth Management segment — Trust services, estate planning, investment and asset management, and cash management; identified as a strategic opportunity in 2025 and reported as a separate segment beginning with the first quarter of 2025, making two reportable segments total.
• Mortgage brokerage activities — Income from mortgage brokerage is directly dependent on mortgage rates and the level of home purchases and refinancing activity, per the June 30, 2026 10-Q.
• Non-Bank — Remaining operations are not reportable segments; they primarily represent the parent holding company, other insignificant non-bank subsidiaries and eliminations.

Recent performance

Annual net income was $23.8M in 2025 and $18.3M in 2024, following $956,000 in 2023. Diluted EPS was $3.43 in 2025, $2.61 in 2024 and $0.14 in 2023. Operating cash flow was $26.9M in 2025, $25.6M in 2024 and $17.6M in 2023. At June 30, 2026, total assets were $1.77B, total liabilities $1.59B, shareholders' equity $182.8M, and cash and equivalents $32.7M. The company declared a quarterly cash dividend of $0.21 per common share on July 29, 2026, payable October 1, 2026.

Strategy

During 2025 the company identified its Wealth Management business as a strategic opportunity and hired additional management resources to provide structure for its products and processes. Beginning with the first quarter of 2025, Wealth Management became a separate reportable segment alongside the Bank. The company describes growth in commercial banking services, retail mortgage lending and retail banking as crucial to its community banking strategy. It states that it may seek expansion through acquisition and may engage in activities permitted under applicable law, with no current expectation of engaging in business other than that related to ownership of the Bank or other financial institutions.

Risks

• Geographic concentration — The company primarily serves central and west-central Missouri and the Kansas City MSA, so a decline in local economic conditions could lower profitability.
• Credit quality — A weaker local economy could impair borrowers' repayment ability, reduce collateral values and increase delinquencies, foreclosures and the allowance for credit losses.
• Interest rate environment — Changes in interest rates may reduce interest margins, and rate increases are cited among factors that could weaken the local economy.
• Mortgage and consumer lending dependence — Originating mortgage and consumer loans is a significant source of profits, and mortgage brokerage income depends directly on mortgage rates and home purchase and refinancing activity.

Outlook

The company has not provided forward guidance in the excerpts. Its 10-Q states there were no material changes to the risk factors disclosed in the 2025 Form 10-K during the quarter ended June 30, 2026. Management states that the success of its growth strategy depends primarily on the ability of its banking subsidiary to generate an increasing level of loans, and that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially.