Hawthorn Bancshares Inc. (NASDAQ: HWBK), today reported consolidated financial results for the Company for the quarter ended March 31.
Hawthorn Bank, which is the main operating subsidiary of Hawthorn Bancshares, reported earnings for the first 3 months of 2010 at $1.3 million. “Hawthorn Bank has always been a source of strength for Hawthorn Bancshares and management is pleased that our core operations continue to be profitable in such a challenging economic cycle,” said Chairman and CEO James E. Smith. The net income available to common shareholders of Hawthorn Bancshares was reduced by non-bank expenses and preferred dividends on stock issued to the U.S. Treasury under the Capital Purchase Program.
On a consolidated basis, Hawthorn Bancshares generated net income for the quarter of $0.5 million, down from $1.1 million for the first quarter of 2009. After deducting accrued dividends and accretion on preferred stock issued to the U.S. Treasury, consolidated operations were essentially breakeven with earnings per diluted common share at $0.00 for the three months ended March 31, 2010 compared to $0.13 per diluted share for the first quarter of 2009.
Net Interest Income
Net interest income for the quarter ended March 31, 2010 increased 8.2% to $10.3 million from $9.5 million for the same period in 2009. The increase is attributed to continued strengthening of the Company’s net interest margin which increased from 3.32% for the first quarter of 2009 to 3.61% for the first quarter of 2010.
Non-Interest Income and Expense
Non-interest income for the three months ended March 31, 2010 was $2.0 million compared to $2.8 million for the same period in 2009. The decline is primarily the result of decreased residential real estate refinancing activity which was spurred in 2009 by the low rate environment. Non-interest expense for the three months ended March 31, 2010 was $9.1 million compared to $9.0 million for first quarter 2009. The increase is largely attributed to a $0.3 million increase in expenses related to foreclosed assets.