Hawthorn Bancshares, Inc. (HWBK): History, Ownership, Mission, How It Works & Makes Money

Hawthorn Bancshares, Inc. (HWBK) is a regional bank holding company, but how does a bank with $1.932 billion in total assets navigate the current high-rate environment and still deliver value to shareholders? The answer lies in their recent performance, which saw them report a third-quarter 2025 net income of $6.1 million and an impressive return on average equity of 15.21%, signaling a strong operational focus. For an investor, understanding how HWBK maintains a 14.90% total risk-based capital ratio while expanding its net interest margin (the difference between interest income and interest paid) to 3.97% is defintely the key to mapping near-term opportunity in the regional banking sector.

Hawthorn Bancshares, Inc. (HWBK) History

Hawthorn Bancshares, Inc. is a story of strategic consolidation, not a typical startup. The company's roots trace back over 160 years, but the modern holding company structure that drives its growth today was established to acquire and unify established community banks across Missouri. This approach has allowed it to maintain a local, relationship-driven focus while growing assets to nearly $1.9 billion as of mid-2025.

Given Company's Founding Timeline

Year established

The bank holding company, Hawthorn Bancshares, Inc., was originally established in 1982. However, its core banking subsidiary, Hawthorn Bank, traces its lineage back to the founding of its predecessor, Exchange National Bank, in 1865.

Original location

Jefferson City, Missouri. It remains headquartered there, which underscores its commitment to the Missouri market.

Founding team members

Hawthorn Bancshares was not founded by a small, traditional startup team. It was formed as a bank holding company to acquire and consolidate existing banking institutions, like the Jefferson City Banking and Trust Company. The current leadership, including Chief Executive Officer Brent M. Giles, focuses on executing this consolidation strategy.

Initial capital/funding

Specific initial capitalization figures for the 1982 holding company formation are not widely public. Still, the formation was essentially a strategic maneuver to control substantial existing assets from day one through the acquisition of established banks.

Given Company's Evolution Milestones

Given Company's Transformative Moments

The biggest shift for Hawthorn Bancshares was the strategic decision to operate as a bank holding company (BHC). This structure allowed for efficient, inorganic growth through acquisitions, which is how they expanded beyond Jefferson City into the greater Kansas City metropolitan area, Columbia, and Springfield. Honestly, that BHC model is what let them scale without losing their community bank feel.

The 2007 consolidation of four separate bank charters into the single Hawthorn Bank was a critical operational move. It cut complexity and costs, which is defintely a factor in their improved efficiency ratio of 62.30% in the third quarter of 2025.

The near-term focus is on capital strength and profitability. For the nine months ended September 30, 2025, the company reported net income of $17.6 million, translating to $2.53 per diluted share. That's a solid 33% increase in EPS from the prior year period, showing the strategy is paying off in a higher interest rate environment. The stock price reflects this, trading at $31.97 as of November 18, 2025.

• The company's total assets stood at $1.877 billion as of June 30, 2025, showing steady scale.
• Non-performing assets to total loans improved to 0.48% by Q3 2025, indicating strong credit quality management.
• The focus on core relationships helped grow total deposits to $1.53 billion by September 30, 2025.

For a deeper dive into who is betting on this performance, you should read Exploring Hawthorn Bancshares, Inc. (HWBK) Investor Profile: Who's Buying and Why?

Hawthorn Bancshares, Inc. (HWBK) Ownership Structure

Hawthorn Bancshares, Inc. is a publicly traded bank holding company, meaning its ownership is distributed among a mix of institutional investors, company insiders, and the general public. This structure ensures broad market transparency but also means the company's strategy must balance the interests of these diverse stakeholders.

Given Company's Current Status

Hawthorn Bancshares, Inc. is a public company trading on the NASDAQ Stock Exchange under the ticker symbol HWBK. As of November 2025, the company's market capitalization stands at approximately $215.41 million, with the stock trading around $31.23 per share. The company operates as the holding company for Hawthorn Bank, a full-service bank offering various financial products and services in Missouri.

For the latest fiscal reporting, the company announced quarterly Earnings Per Share (EPS) of $0.88 and revenue of $25.00 million in the release dated October 28, 2025. That's solid performance for a regional bank in a challenging rate environment.

Given Company's Ownership Breakdown

Understanding who owns Hawthorn Bancshares, Inc. is key to grasping its governance and strategic direction. Institutional investors hold the largest single block of shares, but the majority of the company remains in the hands of retail and other public shareholders.

The institutional stake of nearly 31% means you defintely need to watch the filings of major holders, as their buying or selling can move the stock. For a deeper dive into the major institutional movements, you can check out Exploring Hawthorn Bancshares, Inc. (HWBK) Investor Profile: Who's Buying and Why?

Given Company's Leadership

The company is steered by a seasoned executive team with deep roots in community banking, plus a board with an average tenure of 7.8 years. This stability in leadership is a significant factor in a regional bank's risk profile.

• Brent M. Giles, CEO & Director: Appointed in May 2023, Mr. Giles is the Chief Executive Officer. His total yearly compensation for 2024 was approximately $860.45 thousand, with about half tied to performance bonuses and stock.
• David T. Turner, Executive Chairman: Serves as the Chairman of the Board.
• Gregg A. Bexten, President & Director: Appointed President in May 2023, with 2024 compensation around $474.52 thousand.
• Christopher E. Hafner, Executive VP & CFO: Became Chief Financial Officer in October 2023, bringing over 30 years of experience with financial institutions.
• Kathleen L. Bruegenhemke, Executive VP, Chief Risk Officer & Secretary: A long-tenured executive who also serves as a Director, providing critical continuity in risk management.

Here's the quick math: the CEO's direct ownership of 0.42% of the company's shares is worth about $909.61 thousand, which is a clear personal incentive for long-term share price growth. What this estimate hides, though, is the value of unvested stock options and other compensation that further ties his wealth to your return.

Hawthorn Bancshares, Inc. (HWBK) Mission and Values

Hawthorn Bancshares, Inc. (HWBK) operates with a deep commitment to its local markets, defining its success not just by profit but by its role as a bedrock of community development and financial trust. This focus on local impact and long-term relationships forms the cultural DNA that guides its strategic decisions.

You can see the direct impact of this philosophy when you look at their Q3 2025 net income of $6.1 million, which reflects a strategy built on core relationship growth, not just transactional volume.

Hawthorn Bancshares, Inc.'s Core Purpose

Hawthorn Bancshares' core purpose is to be a true community bank, a model they have followed for over 150 years since its founding in 1865. This means putting client interests first and actively supporting the civic and business groups that make up their Missouri and Kansas markets.

This community-first approach is the strategic lens through which the company manages its approximately $2.0 billion asset portfolio.

Official Mission Statement

The company's formal mission statement is a clear, three-part directive that anchors its operations and customer interactions.

• Building communities through long-term relationships based on financial integrity, community focus, and competitive products.

This is not corporate filler; it is the framework for every lending decision and customer service interaction across its 18 locations. You can defintely see the link between this mission and the company's stable performance.

Vision Statement

While a single, formal vision statement is not always published, the company's long-term aspiration is clearly implied through its history and leadership commentary: to be the premier relationship-driven community bank in its regional markets.

• Sustain a 'well capitalized' regulatory position to ensure stability for customers, as demonstrated by a Tier 1 leverage ratio of 11.97% as of September 30, 2025.
• Enhance products, operations, and resources to collectively achieve success with customers in their communities.
• Leverage personalized service against larger competitors to maintain a stable market position in its local Missouri markets.

The vision is simple: be the trusted, local choice for generations of families and businesses. For more detail on how this translates to performance, you should read Breaking Down Hawthorn Bancshares, Inc. (HWBK) Financial Health: Key Insights for Investors.

Hawthorn Bancshares, Inc. Slogan/Tagline

The internal theme that drives collaboration and execution across the organization is a powerful, unifying concept.

• One Hawthorn: This theme was highlighted by the CEO in the Q2 2025 results, signifying a unified approach across all departments to achieve strategic goals.

This emphasis on a cohesive team is crucial for delivering the relationship-driven service that defines community banking, ensuring that all parts of the organization, from commercial lending to wealth management, work together seamlessly for the client.

Hawthorn Bancshares, Inc. (HWBK) How It Works

Hawthorn Bancshares, Inc. (HWBK) operates as a traditional community bank holding company, generating its primary revenue by lending money at higher interest rates than it pays on customer deposits, a process known as managing the net interest margin (NIM). The company's core business revolves around relationship banking for individuals and businesses across its Missouri and Kansas markets, focusing on core deposit growth to fund its loan portfolio.

For the nine months ended September 30, 2025, the company reported a net income of $17.6 million, demonstrating the effectiveness of this model in the current rate environment.

Hawthorn Bancshares, Inc.'s Product/Service Portfolio

Hawthorn Bancshares, Inc., through its subsidiary Hawthorn Bank, offers a full spectrum of financial services, structured into two reporting segments as of 2025: the Bank and Wealth Management.

Hawthorn Bancshares, Inc.'s Operational Framework

The company's operational framework is centered on optimizing the Net Interest Margin (NIM) and controlling non-interest expenses, which is the quick math for a bank's profitability. You saw this focus pay off with the NIM improving to 3.97% in the third quarter of 2025.

• Fund Loan Growth: Actively grow the loan portfolio, which reached $1.514 billion as of September 30, 2025, by expanding existing customer relationships and attracting new ones.
• Manage Deposit Costs: Strategically manage the cost of funding, with the average cost of deposits at 2.36% for Q3 2025, which is lower than the prior year quarter.
• Enhance Non-Interest Income: Drive revenue diversification through the Wealth Management segment, which was identified as a separate reporting segment in 2025 to focus on financial planning and trust services growth.
• Maintain Efficiency: Focus on improving the efficiency ratio (non-interest expense as a percentage of revenue), which improved to 62.30% in Q3 2025.

Hawthorn Bancshares, Inc.'s Strategic Advantages

Hawthorn Bancshares, Inc.'s market success stems from its community bank model, which provides defensive stability in volatile markets, plus a strong capital position that allows for strategic flexibility. This approach is what allows them to compete effectively against larger regional banks.

• Superior Credit Quality: Maintain strong asset quality, with non-performing assets to total loans at a low 0.48% as of September 30, 2025, which is an improvement from the prior year.
• Robust Capitalization: Hold a 'well capitalized' regulatory status; the Total Risk-Based Capital to Risk-Weighted Assets ratio was 14.90% at September 30, 2025.
• Attractive Shareholder Return: Offer a steady, reliable dividend, which is a distinguishing feature that attracts income-focused investors, especially when some peers are under earnings pressure.
• Local Market Penetration: Deeply embedded in Missouri and Kansas communities, which fosters the relationship banking model that is key to core deposit and loan growth.

For a deeper dive into the company's foundational principles, you can review their Mission Statement, Vision, & Core Values of Hawthorn Bancshares, Inc. (HWBK).

Hawthorn Bancshares, Inc. (HWBK) How It Makes Money

Hawthorn Bancshares, Inc. primarily makes money through the classic banking model: borrowing money from depositors at a lower interest rate and lending it out at a higher rate, which is captured as net interest income. The company also generates significant non-interest income from service charges, wealth management fees, and other banking services.

Hawthorn Bancshares, Inc.'s Revenue Breakdown

For the third quarter of 2025, the company's total revenue was approximately $20.6 million, demonstrating that the core lending business remains the dominant financial engine. Here's the quick math on how that revenue breaks down from the most recent quarterly filing:

Net Interest Income (NII) for Q3 2025 was $16.9 million, up by $0.7 million from the prior quarter, which shows a defintely positive trend in core lending earnings. Non-Interest Income, totaling $3.7 million for the quarter, is also growing, specifically driven by expansion in the wealth management group.

Business Economics

The company's profitability hinges on its ability to manage its interest rate spread-the difference between the interest earned on assets (like loans) and the interest paid on liabilities (like deposits). For a bank, the net interest margin (NIM) is the single most important metric here. The bank is currently executing on a strategy to maximize this spread, which is a clear opportunity in the current rate environment.

• Net Interest Margin (NIM): The fully taxable equivalent (FTE) NIM for the third quarter of 2025 stood at 3.97%, an improvement from 3.89% in the previous quarter. This expansion is the critical driver of recent earnings growth.
• Loan Portfolio Yield: The yield earned on average loans held for investment increased to 6.12% on an FTE basis in Q3 2025. This increase is a direct result of pricing new loans higher than the average portfolio rate.
• Cost of Deposits: The average cost of deposits was well-managed at 2.36% for Q3 2025. Keeping this cost low, especially with 27.8% of total deposits being non-interest bearing as of September 30, 2025, is key to margin expansion.
• Loan-to-Deposit Ratio: As of September 30, 2025, the bank held $1.51 billion in loans against $1.526 billion in deposits, yielding a healthy ratio of approximately 98.95%. This shows the bank is efficiently putting its deposit base to work in the loan portfolio.

For a deeper dive into the bank's long-term strategic direction, you should review the Mission Statement, Vision, & Core Values of Hawthorn Bancshares, Inc. (HWBK).

Hawthorn Bancshares, Inc.'s Financial Performance

The company's financial performance through the first nine months of 2025 reflects strong execution on core growth and margin management. Net income for the nine months ended September 30, 2025, was $17.6 million, a significant increase of $4.0 million compared to the same period in 2024.

• Net Income and EPS: Q3 2025 net income was $6.1 million, with diluted Earnings Per Share (EPS) at $0.88. This EPS figure represents a 33% improvement from the prior year quarter.
• Profitability Ratios: The Return on Average Assets (ROAA) was 1.33% and the Return on Average Equity (ROAE) was 15.21% for Q3 2025. These are strong metrics for a regional bank, indicating efficient use of assets and capital.
• Capital Strength: The bank remains exceptionally well capitalized, with a Total Risk-Based Capital ratio of 14.90% as of September 30, 2025. This provides a substantial buffer against unexpected losses and supports future loan growth.
• Asset Quality: Credit quality is strong, with non-performing assets to total loans improving to 0.48% as of September 30, 2025, down from 0.58% in the prior year quarter. This low level of bad loans is a key risk mitigator.

What this estimate hides is the potential for deposit costs to rise faster than loan yields if the Federal Reserve shifts its interest rate policy, which is the near-term risk to the NIM. Still, the current performance shows the company is managing its balance sheet effectively.

Hawthorn Bancshares, Inc. (HWBK) Market Position & Future Outlook

Hawthorn Bancshares, Inc. is positioned as a resilient, well-capitalized community bank focused on core organic growth within its established Missouri and Kansas footprint. The company's future outlook is tied to its success in expanding its wealth management services and maintaining its strong net interest margin, which hit 3.97% in the third quarter of 2025.

You're seeing a bank that prioritizes stability and relationship banking over aggressive, high-risk expansion, which is defintely a smart move in a volatile rate environment. You can review the foundational principles driving this strategy in the Mission Statement, Vision, & Core Values of Hawthorn Bancshares, Inc. (HWBK).

Competitive Landscape

Hawthorn Bancshares competes primarily against larger regional banks and smaller, local community banks across its operating markets. To put its size into perspective, its approximate $1.9 billion in total assets as of mid-2025 makes it a smaller player compared to major regional institutions.

Opportunities & Challenges

The company is actively working to drive shareholder value, notably by authorizing a new common stock repurchase program of up to $10.0 million in June 2025. Still, the competitive landscape requires constant attention to both service and efficiency.

Industry Position

Hawthorn Bancshares holds a solid position as a well-capitalized regional institution, consistently exceeding regulatory minimums. Its total risk-based capital ratio stood at a robust 14.90% as of September 30, 2025.

This high capital level provides a significant buffer against potential credit losses and allows for strategic flexibility, like the stock repurchase program. The bank's focus is clear: profitable, organic growth driven by deepening existing customer relationships and attracting new ones in its core Missouri markets.

• Maintain strong capital: Total risk-based capital at 14.90%.
• Prioritize loan growth: Loans increased by $51.1 million (3.5%) in Q3 2025.
• Focus on efficiency: Q3 2025 efficiency ratio improved to 62.30%.

Here's the quick math: a lower efficiency ratio means the bank is spending less to earn a dollar of revenue, a direct path to higher profitability. What this estimate hides, though, is the ongoing investment needed for digital services to keep up with larger competitors.