HWBK · Hawthorn Bancshares, Inc.

Hawthorn Bancshares issued this 8-K/A to correct its preliminary Q1 2026 earnings released on April 29, 2026, after identifying an accounting adjustment during quarter-end close procedures. The key issue stems from a March 2026 property sale and leaseback transaction initially recognized with a $1.2 million gain, but contractual continuing involvement precluded sale-leaseback accounting as of March 31, 2026. The $1.9 million proceeds are now treated as a financing obligation, reducing reported net income by $1.1 million and diluted EPS by $0.15 to $5.7 million and $0.83, respectively. This revision will carry into the upcoming Form 10-Q. Despite the adjustment, core operations showed resilience: net interest income rose to $17.1 million, up from the prior-year quarter, supported by a stable 4.07% FTE net interest margin (up from 3.67% YoY) amid higher earning asset yields (6.11% on loans) and lower deposit costs (2.15%). Non-interest income dipped to $3.1 million due to seasonal factors, while expenses edged down slightly, yielding an improved efficiency ratio of 64.29% from 66.64% YoY. Credit quality held steady with non-performing assets at 0.47% of loans and a robust 1.44% allowance coverage. Balance sheet contraction reflected typical quarter-end dynamics, with loans down 2.2% QoQ to $1.45 billion and deposits off 2.3% to $1.52 billion. Capital remains strong at 15.84% total risk-based, affirming 'well capitalized' status. Share repurchases continued ($0.4 million, 12,000 shares), with $8.0 million authorized remaining, and a $0.21 quarterly dividend was declared, signaling confidence in liquidity and shareholder returns. Investors should monitor resolution of sale-leaseback obligations for potential future gain recognition.