HWBKMEDIUM SIGNALOPERATIONAL10-K

HWBK launched Wealth Management as a new reportable business segment in 2025, representing a strategic expansion beyond traditional banking operations.

The creation of a dedicated Wealth Management segment with separate reporting indicates management's commitment to diversifying revenue streams and capitalizing on higher-margin advisory services. This strategic pivot could enhance long-term profitability and reduce dependence on traditional banking income, though execution risk remains as the company builds out new capabilities and processes.

Comparing 2026-03-05 vs 2025-03-17View on EDGAR →
FINANCIAL ANALYSIS

HWBK delivered solid financial performance with net income growing 30.4% to $23.8 million and stockholders' equity expanding 16.5% to $174.2 million, reflecting strong earnings retention and capital accumulation. Capital expenditures increased 35.8% to $4.1 million, likely supporting the wealth management expansion and other growth initiatives. The overall financial picture suggests a healthy, growing institution with adequate capital to fund its strategic diversification efforts.

FINANCIAL STATEMENT CHANGES
Capital Expenditure
Cash Flow
+35.8%
$3.0M$4.1M

Capital expenditure jumped 35.8% — major investment cycle underway; assess returns on deployment.

Net Income
P&L
+30.4%
$18.3M$23.8M

Net income grew 30.4% — bottom-line growth signals improving overall business health.

Stockholders Equity
Balance Sheet
+16.5%
$149.5M$174.2M

Equity base grew 16.5% — retained earnings accumulation or equity issuance strengthening the balance sheet.

LANGUAGE CHANGES
NEW — 2026-03-05
PRIOR — 2025-03-17
ADDED
As of March 2, 2026, the registrant had 7,554,893 shares of common stock, par value $1.00 per share, issued and 6,901,810 shares outstanding.
See "Forward Looking Statements" under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations", of this report.
During 2025, the Company identified its Wealth Management business as a strategic opportunity and hired additional management resources to provide the structure for products and processes for this business.
As a result, beginning with the first quarter of 2025, the Company identified its Wealth Management Business as a separate reportable segment and now has two reportable segments: the Bank segment and the Wealth Management segment.
The Company s remaining operations are not reportable segments, as defined by applicable accounting standards, and are classified as Non-Bank, and primarily represent the parent holding company, other insignificant non-bank subsidiaries and eliminations.
For the years ended December 31, 2024 and 2023, the Company had one reportable segment, the Bank.
Refer to Note 20, "Segment Information," in the Company's consolidated financial statements, included under the caption "Consolidated Financial Statements" in the Company's 2025 Annual Report to Shareholders (included as Exhibit 13 hereto), incorporated herein by reference.
The Bank also offers, through the Wealth Management segment, a broad range of financial and investment planning services for individuals and business owners, as well as trust services formerly included in the Bank segment.
HB Realty is intended to qualify as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "IRC").
As of December 31, 2025, the approximate aggregate book value of the mortgage loans held by HB Realty was $578.4 million.
REMOVED
As of March 17, 2025, the registrant had 7,554,893 shares of common stock, par value $1.00 per share, issued and 6,981,769 shares outstanding.
See "Forward Looking Statements" under Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of this report.
This consolidation was completed in October 2007, and the subsidiary bank is now known as Hawthorn Bank (the "Bank"); and On December 29, 2023, the Company dissolved its wholly-owned subsidiary, Union, which owned all of the outstanding capital stock of Hawthorn Bank, in order to streamline the Company's ownership of Hawthorn Bank.
HB Realty is intended to qualify as a "real estate investment trust" under the Internal Revenue Code of 1986, as amended (the "IRC").
As of December 31, 2024, the approximate aggregate book value of the mortgage loans held by HB Realty was $595,466,845.
Effective September 30, 2022, to comply with collateral eligibility requirements of the Federal Home Loan Bank with whom the Bank maintains credit facilities, any participation interest in mortgage loans owned by HB Realty as of that date were converted into mortgage loans owned by HB Realty and, after that date, HB Realty will only acquire mortgage loans from the Bank, not participation interests.
On April 1, 2018, the Bank contributed all 1,000 common shares and 850 preferred shares to Jefferson City IHC, LLC, a Missouri limited liability company that is wholly owned by the Bank ("JCIHC").
Under the IRC, a real estate investment trust must have at least 100 owners.
Pursuant to a newly established Hawthorn Bank Real Estate Investment Trust Ownership Plan, the Bank made available to certain of its employees, as an employee benefit, up to a total of 150 preferred shares of HB Realty.
Each selected employee was given the opportunity to own one preferred share of HB Realty.
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