Hawthorn Bancshares, Inc. · NASDAQ:HWBK
Hawthorn Bancshares — Shareholder Meeting (June 2022)
23 slides from Hawthorn Bancshares's shareholder meeting presentation, Jun 7, 2022
Slide 1: Annual Shareholders Meeting June 7, 2022
Annual Shareholders Meeting June 7, 2022 www.HawthornBancshares.com NASDAQ: HWBK
Slide 2: Senior Executive Team and Board of Directors
SENIOR EXECUTIVE TEAM DAVID TURNER KATHLEEN BRUEGENHEMKE, CPA STEVE GUTHRIE, CPA GREGG BEXTEN Chairman, CEO Director, Senior Vice President, Chief Chief Financial Officer, Regional President, Hawthorn Bank and President Risk Officer and Secretary Senior Vice President 24 years with Hawthorn 43 years
Slide 3: Forward-Looking Statements
Forward-Looking Statements FORWARD-LOOKING STATEMENTS. This presentation and oral statements made during this meeting contain forward looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These
Slide 4: Hawthorn Bancshares, Inc. corporate structure
Hawthorn Bancshares, Inc. Exchange Hawthorn Real Union State National Estate, LLC Bancshares, Inc. Statutory Trust I Exchange National Statutory Trust II Hawthorn Risk Jefferson City Management, IHC, LLC Inc. HB Realty, LLC 4
Slide 5: History of Asset Growth
History of Asset Growth 2019 Expanded Columbia LPO to 2003 Full-Service Bank Acquired: 1997 Missouri State Bank (Springfield) $32MM Assets Acquired: 2007 2020 Union State Bank & Trust $144MM Assets Rebranded all locations Established: 2000 2005 Mortgage Group Acquired: Acquired: Osage Valley Bank $5
Slide 6: Liberty, MO Expansion
Liberty, MO Expansion t =" ‘ FUTURE HOME OF — 4 & ; "| BANK
Slide 7: Liberty, MO Expansion
Liberty, MO Expansion 7
Slide 8: Financial Highlights / Key Performance
Financial Highlights 1Q As of the period ended 2017 2018 2019 2020 2021 2022 • NASDAQ Ticker Symbol: HWBK • Established in 1865 Balance Sheet Total Assets $ 1,429 $ 1,482 $ 1,493 $ 1,734 $ 1,832 $ 1,736 • Headquartered in Jefferson City, Missouri Total Gross Loans $ 1,068 $ 1,146 $ 1,169 $ 1,287 $ 1
Slide 9: Historical Growth Rates
Historical Growth Rates TOTAL ASSETS TOTAL DEPOSITS NET INCOME 7.3% 8.5% 25.3% CAGR CAGR CAGR $ in millions CAGR: Compound Annual Growth Rate Over 5 years 9
Slide 10: Loan Portfolio
Loan Portfolio LOAN PORTFOLIO COMPOSITION (Avg) MARCH 31, 2022 LOAN BALANCES LOAN YIELD • Loan composition is predominantly commercial real estate (51%) followed by residential real estate (21%). • Loan yields (ex. SBA PPP) have declined most recently due to new loan originations and repricing in a
Slide 11: Provision for Loan Losses
Provision for Loan Losses The substantial increase in provision expense in 2020 was primarily due to the pandemic and the perceived need to significantly increase reserves for certain of our customers whose business operations were negatively impacted. Negative provision expense was recognized in 20
Slide 12: Asset Quality and Reserve Level
Asset Quality and Reserve Level OVERVIEW NPAS + ORE / ASSETS • Historically solid asset quality and strong reserve position. • The increase in non-performing assets and higher reserve positions in 2020 is attributed to proactive reclassification of several loans negatively impacted by the pandemic.
Slide 13: Investment Portfolio Composition
Investment Portfolio Composition OVERVIEW AS OF MARCH 31, 2022 • $286.8 million total investments ◦ 100% available-for-sale • Average Tax Effective Yield of 2.00% • Effective duration of 5.2 years • Scheduled principal cash flows over the next 36 months projected to be 24% of portfolio • As % of Tot
Slide 14: Deposits
Deposits DEPOSIT COMPOSITION (Avg) DEPOSIT BALANCES AND COST OF TOTAL DEPOSITS AS OF MARCH 31, 2022 Savings Accounts 12% Non-Interest Bearing Demand CD's 31% 18% Avg Deposit Balances Cost of Total Deposits Money Market Other Interest- 20% Bearing Deposits 20% CD REPRICING OPPORTUNITIES • Growth in y
Slide 15: Net Interest Margin (NIM) and Key Drivers
Net Interest Margin (NIM) and Key Drivers NIM (Tax Equivalent Yield) YIELD ON LOANS COST OF FUNDS COST OF INTEREST-BEARING DEPOSITS 15
Slide 16: Net Income (As Reported)
Net Income (As Reported) NET INCOME (YTD) PRE-TAX / PRE-PROVISION (YTD) $ in thousands 16
Slide 17: Comparative Income Statement
Comparative Income Statement Twelve Months Ended December 31, Three Months Ended March 31, (dollars in thousands) 2020 2021 Change 2021 2022 Change Net Interest Income $53,263 $58,545 $5,282 $14,390 $14,145 $(245) Provision for Loan Losses 5,800 (1,700) (7,500) — (2,500) $(2,500) Non-Interest Income
Slide 18: Mortgage Banking Performance
Mortgage Banking Performance OVERVIEW OF SERVICES MORTGAGE ORIGINATIONS • Total mortgage loan originations have dropped 42% since 1Q 2021, driven by fewer loans refinancing as interest rates have increased. • Quarterly profit margins have also declined from 50% in 1Q 2021, to 23% in 1Q 2022 as a res
Slide 19: Financial Performance Comparison to Peer
Financial Performance Comparison to Peer OVERVIEW EFFICIENCY RATIO (YTD) • ROA and ROE continue to trend positively. • ROE has consistently outpaced Peer due to improved earnings and what has been historically, a more leveraged capital base. • Negative ALLL reserve provisions have positively impacte
Slide 20: Total Shareholder Return
Total Shareholder Return TOTAL RETURN STOCK SUMMARY (As of March 31, 2022) Ticker HWBK Exchange NASDAQ Stock Price $25.28 Market capitalization (in millions) $167.0 Dividend Yield 2.4 % Average Daily Volume (3 months) Average daily volume (shares) 6,342 Average daily volume $163,877 52-Week High and
Slide 21: Stock Repurchase Program
Stock Repurchase Program REPURCHASE BY QUARTER • The Board of Directors has granted authorization for HWBK shares to be repurchased when favorable market opportunities present. • In the 1Q 2022, $0.6 million of shares were repurchased, in addition to $2.1 million shares repurchased in 1Q 2021. • As
Slide 22: Questions
? @ QUESTIONS
Slide 23: Shareholder Vote
Shareholder Vote • Elect two Class III directors to hold office for a term expiring at our 2025 annual meeting of shareholders and until such director's successor is duly elected and qualified or until such director's earlier resignation or removal; • Ratify the appointment of KPMG LLP as the Compan
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