Hawthorn Bancshares, Inc. reported net income of $4.6 million for the third quarter of 2024, translating to earnings per diluted share of $0.66. This represents a significant increase of $2.0 million, or 77.4%, compared to the prior year quarter. Net income for the nine months ended September 30, 2024, reached $13.7 million, an increase of $5.3 million from the same period in 2023.
Net interest income for the quarter was $14.3 million, with the net interest margin on a fully taxable equivalent basis expanding to 3.36%. This margin improvement occurred despite a decrease in average interest-earning assets. Non-interest income also saw a substantial increase of $3.2 million, or 524.3%, from the prior year quarter, primarily due to higher earnings on bank-owned life insurance.
The company maintained disciplined expense management, with total non-interest expense decreasing by $0.6 million, or 4.6%, from the prior year quarter. The efficiency ratio improved to 66.23% for the quarter, down from 79.79% in the prior year quarter. Asset quality showed an increase in non-performing assets to $8.5 million, representing 0.58% of total loans, primarily due to a commercial loan moving to non-accrual status and a commercial real estate loan going to foreclosure.
Loans held for investment decreased by $31.8 million to $1.5 billion as of September 30, 2024, while total deposits also decreased by $46.7 million to $1.5 billion. The allowance for credit losses stood at $21.9 million, or 1.50% of outstanding loans, providing 539.52% coverage of non-performing loans. The Board of Directors approved a quarterly cash dividend of $0.19 per common share, payable January 1, 2025.
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