Hawthorn Bancshares, Inc. reported net income of $4.6 million, or $0.66 per diluted share, for the fourth quarter of 2024. For the full year 2024, net income reached $18.3 million, or $2.61 per diluted share, a substantial increase from $1.0 million, or $0.14 per diluted share, in 2023. This significant improvement reflects the company's focus on operational efficiency and income growth.
Net interest income for the fourth quarter was $15.3 million, contributing to a full-year net interest income of $58.6 million. The net interest margin on a fully taxable equivalent basis expanded to 3.55% for the quarter and 3.41% for the full year 2024, up from 3.29% in 2023. The average cost of deposits decreased to 2.49% in the fourth quarter, indicating effective liability management.
Non-interest income for 2024 increased by $6.8 million, or 90.0%, to $14.3 million, primarily due to the absence of a $4.7 million valuation write-down on other real estate owned properties recorded in 2023. Total non-interest expense for 2024 decreased by $2.8 million, or 5.4%, to $49.5 million, driven by a $1.4 million reduction in salaries and benefits from restructuring the residential mortgage loan group. The efficiency ratio for the fourth quarter was 68.5%.
Asset quality showed significant improvement, with non-performing assets decreasing to $4.2 million, or 0.29% of total loans, at December 31, 2024. This reduction was primarily due to the sale of $3.2 million of other real estate owned. The allowance for credit losses stood at $22.0 million, representing 1.50% of outstanding loans and 802.48% coverage of non-performing loans.
Total deposits increased by $29.7 million to $1.5 billion in the fourth quarter, while loans held for investment remained stable at $1.5 billion. The company maintained its "well capitalized" regulatory capital position, with a total risk-based capital ratio of 14.79%. Additionally, Hawthorn Bancshares received approval to open a new banking center location in Overland Park, Kansas, in February 2025, marking a strategic expansion.
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