Hawthorn Bancshares Inc. (NASDAQ: HWBK), today reported consolidated financial results for the Company for the third quarter ended September 30, 2016. Net income for the current quarter was $1.9 million, or $0.33 per diluted share, compared to $1.4 million, or $0.25 per diluted share, for the linked quarter ended June 30, 2016 and $2.5 million, or $0.45 per diluted share, for the quarter ended September 30, 2015. For the nine months ended September 30, 2016, net income was $5.3 million, or $0.94 per diluted share, compared to $6.6 million, or $1.17 per diluted share, for the nine months ended September 30, 2015. The return on average common equity was 8.09% and the return on average assets was 0.59% for the third quarter ended September 30, 2016, compared to 6.26% and 0.46%, respectively, for the linked quarter ended June 30, 2016, and 11.09% and 0.84%, respectively, for the third quarter ended September 30, 2015. For the current year, return on average common equity was 7.78% and the return on average assets was 0.57% compared to 10.55% and 0.74% for the prior year-to-date, respectively. Commenting on earnings performance, Chairman David T. Turner said, "Hawthorn reported improved earnings for the current quarter compared to the linked quarter, but lower earnings compared to the prior year quarter. The increase from the linked quarter ended June 30, 2016 was primarily due to higher net interest income coupled with reduced operating costs. The decrease from the prior year quarter was primarily driven by continued net interest margin contraction coupled with an increased loan loss provision mostly driven by loan growth. Compared to the linked quarter ended June 30, 2016, we continued to experience loan growth with gross loans increasing by approximately $25 million, or 2.7%, and compared to the prior year quarter ended September 30, 2015, loans increased $68 million, or 7.8%. This loan growth contributed to net interest income remaining strong in spite of a continued tight interest rate environment putting continued pressure on our net interest margin. While the yield on our investment securities continues to fall due to higher yielding securities being replaced with current lower market yields, our net interest margin only decreased 5 basis points from the linked quarter to 3.44% for the current quarter. Due to continued loan growth and based upon our analysis of the risks in the loan portfolio, the company recorded a provision for loan losses of $300,000 during the current quarter compared to $425,000 recorded for the linked quarter and no provision for the prior year quarter. Non-interest income increased $176,000 from the linked quarter primarily due to improved results from our residential mortgage lending operations which includes real estate servicing fees, net and gain on sale of mortgage loans, net. Compared to the prior year quarter, non-interest income was down $211,000 mostly due to lower results from our residential mortgage lending operations partially offset by securities gains recognized in the current quarter. Non-interest expense of $9.1 million was lower than the linked quarter by $268,000, or 2.9%, and higher than the prior year quarter by $108,000, or 1.2%."