Hawthorn Bancshares Reports $7.3 Million Net Income in Q2 2026, Announces FSC Bancshares Acquisition

Hawthorn Bancshares, Inc. reported a net income of $7.3 million, or $1.06 per diluted share, for the second quarter of 2026, reflecting an increase from $6.1 million, or $0.88 per diluted share, in the same period of the previous year. For the first half of 2026, net income reached $13.1 million, compared to $11.5 million for the first half of 2025. The company's return on average assets improved to 1.63% for the second quarter and 1.45% for the first half, up from 1.36% and 1.28%, respectively, in the prior year. Net interest income also increased, totaling $17.3 million for the second quarter and $34.4 million for the first half, compared to $16.1 million and $31.4 million in the same periods of 2025.

Total assets decreased to $1.77 billion as of June 30, 2026, down from $1.89 billion at the end of 2025. This decline was primarily driven by a reduction in cash and cash equivalents, which fell to $32.7 million from $104.3 million at year-end 2025. Loans held for investment also decreased to $1.42 billion, down from $1.49 billion at the end of 2025. Total deposits decreased to $1.49 billion, compared to $1.55 billion at the end of 2025. The allowance for credit losses was $20.7 million, or 1.46% of total loans, slightly down from $21.1 million, or 1.42%, at the end of the previous year.

In terms of operational developments, Hawthorn Bancshares announced a pending acquisition of FSC Bancshares, Inc. in a cash-and-stock transaction valued at approximately $28.3 million, expected to close in the third quarter of 2026, subject to shareholder approval. The company also reported an increase in its wealth management revenue, which rose by 20.7% in the second quarter compared to the previous year, contributing to the overall growth in non-interest income, which increased to $5.4 million from $3.5 million in the same quarter of 2025.

The company’s employee headcount remained stable at 269 full-time equivalent employees as of June 30, 2026. The efficiency ratio improved to 60.73% for the second quarter of 2026, down from 62.32% in the same quarter of 2025, indicating better cost management relative to revenue generation. The company continues to focus on enhancing customer relationships and expanding its product offerings, which are critical to its growth strategy.

Looking ahead, Hawthorn Bancshares remains optimistic about its financial performance, supported by its strong capital ratios, which exceed regulatory requirements. The company is well-capitalized, with a total risk-based capital ratio of 16.40% as of June 30, 2026. Management is focused on maintaining sufficient liquidity and capital levels while navigating the economic landscape, which includes potential impacts from interest rate fluctuations and market conditions.