Hawthorn Bancshares, Inc. reported net income of $6.1 million for the second quarter of 2025, an increase of $1.5 million, or 31.8%, from the prior year quarter. Earnings per diluted share improved to $0.88, up from $0.66 in the second quarter of 2024. These results reflect the company's strategic focus on managing net interest margin and controlling expenses.
Net interest income for the quarter increased by $2.0 million from the prior year quarter, reaching $16.1 million. The net interest margin on a fully taxable equivalent basis expanded to 3.89%, up from 3.33% in the prior year quarter. This margin improvement was driven by an increase in the yield on average loans to 5.98% and a decrease in the average cost of deposits to 2.35%.
The efficiency ratio improved to 62.32% for the second quarter, compared to 66.24% in the prior year quarter, indicating enhanced cost control. Total non-interest expense decreased by $0.2 million, or 1.8%, from the prior quarter. Non-interest income for the quarter was $3.5 million, a decrease of $0.5 million, or 11.3%, from the prior year quarter.
Asset quality remained robust, with non-performing assets at $5.2 million, representing 0.35% of total loans. This is an increase from $3.1 million in the prior quarter, primarily due to moving an operational center property to other real estate owned. The company released $0.1 million from its provision for credit losses, reflecting continued confidence in its loan book.
Loans held for investment decreased by $7.4 million to $1.5 billion, and total deposits decreased by $25.9 million to $1.5 billion during the quarter. Hawthorn Bancshares maintained its "well capitalized" regulatory capital position, with a total risk-based capital ratio of 15.12%. The Board of Directors approved a quarterly cash dividend of $0.20 per common share, payable October 1, 2025.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.