Hawthorn Bancshares, Inc. · NASDAQ:HWBK
Hawthorn Bancshares — Shareholder Meeting (June 2023)
25 slides from Hawthorn Bancshares's shareholder meeting presentation, Jun 6, 2023
Slide 1: Annual Shareholders Meeting June 6, 2023
Annual Shareholders Meeting June 6, 2023 www.HawthornBancshares.com NASDAQ: HWBK
Slide 2: Officers and Directors
Officers and Directors SENIOR DAVID TURNER BRENT GILES GREGG BEXTEN Director, Executive Chairman EXECUTIVE 44 years with Hawthorn Director, CEO 34 years of banking experience Director, President Director since 1997 25 years with Hawthorn TEAM KATHLEEN BRUEGENHEMKE, CPA STEVE GUTHRIE, CPA JASON SCHWA
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 1997 Acquired: Acquired: Missouri State Bank (Springfield) $32MM Assets Union State Bank & Trust 2020 $144MM Assets 2000 2007 Established: Acquired: Rebranded all locations 2005 Mortgage Group Osage Valley Bank $55MM Assets
Slide 6: Liberty, MO Expansion
Liberty, MO Expansion t =" ‘ FUTURE HOME OF — 4 & ; "| BANK
Slide 7: Liberty, MO Expansion
Liberty, MO Expansio ; it ee
Slide 8: Key Performance Snapshot
Snapshot • NASDAQ Ticker Symbol: HWBK Financial Highlights 1Q • Established in 1865 As of the period ended 2018 2019 2020 2021 2022 2023 • Headquartered in Jefferson City, Missouri Balance Sheet Total Assets $ 1,482 $ 1,493 $ 1,734 $ 1,832 $ 1,924 $ 1,896 (1) • 20 Branches and 3 LPO’s Total Gross Lo
Slide 9: Historical Growth Rates
Historical Growth Rates TOTAL ASSETS TOTAL DEPOSITS NET INCOME 6.1% 7.7% 43.5% CAGR CAGR CAGR $ in millions CAGR: Compound Annual Growth Rate Over 5 years (2018-2022) 9
Slide 10: Loan Portfolio
Loan Portfolio LOAN PORTFOLIO COMPOSITION Q1 2023 (Avg) LOAN BALANCES LOAN YIELD • Loan composition is predominantly commercial real estate (47%) followed by residential real estate (24%). • 15.6% growth in loans for 1Q 2023 as compared to 1Q 2022. • Loan yields have increased substantially during a
Slide 11: Allowance for Credit Losses
Allowance for Credit Losses On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) which provides for the current expected credit losses methodology (CECL) for estimating allowances for credit losses. The adoption of this standard resulted in an increa
Slide 12: Provision for Credit Losses
Provision for Credit Losses The Company recognized a provision for credit losses of $0.7 million for the three months ended March 31, 2023, compared to a release of provision for loan losses of $2.5 million for the three months ended March 31, 2022. The release of provision expense in 1Q 2022 primar
Slide 13: Asset Quality and Reserve Level
Asset Quality and Reserve Level OVERVIEW NPAS + ORE / ASSETS • Historically solid asset quality and a 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 14: Investment Portfolio Composition
Investment Portfolio Composition OVERVIEW AS OF MARCH 31, 2023 • $259.7 million total investments ◦ 100% available-for-sale • Average Tax Effective Yield of 2.7% • Effective duration of 5.3 years • Scheduled principal cash flows over the next 36 months projected to be 24% of portfolio • As a % of To
Slide 15: Deposits
Deposits DEPOSIT COMPOSITION Q1 2023 DEPOSIT BALANCES AND COST OF TOTAL DEPOSITS (Avg) Savings Accounts 11% Non-Interest Bearing Demand CD's 27% 19% Money Market Other Interest- Avg Deposit Balances Cost of Total Deposits 19% Bearing Deposits 24% DEPOSITS BY SOURCE AS OF (actual) 12/31/2022 03/31/23
Slide 16: Available Liquidity and Uninsured Deposits
Available Liquidity and Uninsured Deposits DEPOSIT COMPOSITION MARCH 31, 2023 Liquidity Sources Internal: Cash and cash equivalents $ 18,301 Federal funds sold 47 Other interest-bearing deposits 15,425 Certificates of deposit in other banks 2,215 Unencumbered securities 54,359 External: FHLB borrowi
Slide 17: Capital Position
CAPITAL POSITION REGULATORY CAPITAL AS OF MARCH 31, 2023 CAPITAL HIGHLIGHTS • Consistent payment history of quarterly cash dividend and annual stock dividend. • The Company recorded an after-tax decrease to retained earnings of $5.6 million as of January 1, 2023 for the cumulative effect of adopting
Slide 18: Net Interest Margin (NIM) and Key Drivers
Net Interest Margin (NIM) and Key Drivers NIM (Tax Equivalent Yield) YIELD ON LOANS COST OF FUNDS YIELD ON INVESTMENTS AVAILABLE-FOR-SALE 18
Slide 19: Net Income (As Reported)
Net Income (As Reported) NET INCOME (YTD) PRE-TAX / PRE-PROVISION (YTD) $ in thousands 19
Slide 20: Comparative Income Statement
Comparative Income Statement The Years Ended December 31, Three Months Ended March 31, (dollars in thousands) 2022 2021 Change 2023 2022 Change Net Interest Income $58,763 $58,545 $218 $13,948 $14,145 $(197) Provision for Credit Losses (900) (1,700) 800 680 (2,500) 3,180 Non-Interest Income 13,964 1
Slide 21: Mortgage Banking Performance
Mortgage Banking Performance OVERVIEW OF SERVICES MORTGAGE ORIGINATIONS • Growth in mortgage loan originations occurred in 1Q 2023 as compared to recent declines in 3Q 2022 through 4Q 2022. • Mortgage Banking revenue has remained strong over the past year as recurring interest income from growth in
Slide 22: Financial Performance Comparison to Peer
Financial Performance Comparison to Peer OVERVIEW EFFICIENCY RATIO (YTD) • 1Q 2023 ROA and ROE reflects lower earnings driven principally from lower non-interest income, and higher expense for both provision and non- interest expense. • ROE has consistently outpaced Peer due to improved earnings and
Slide 23: Total Shareholder Return
Total Shareholder Return TOTAL RETURN STOCK SUMMARY (As of MARCH 31, 2023) Ticker HWBK Exchange NASDAQ Stock Price $23.38 Market capitalization (in millions) $158.2 Dividend Yield 2.9 % Average Daily Volume (3 months) Average daily volume (shares) 5,974 Average daily volume $143,914 52-Week High and
Slide 24: Questions
? @ QUESTIONS
Slide 25: Shareholder Vote
Shareholder Vote • Elect three Class I directors to hold office for a term expiring at our 2026 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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