KANSAS CITY – Hawthorn Bancshares Inc. posted net income of 1 cent per share in the second quarter 2012, a decline of 18 cents per share from the same period last year. The Lee’s Summit-based banking company reported total interest income of nearly $12.3 million, a 9.85 percent decline from the second quarter 2011.
The waning interest income—due to lower loan balances and interest rates for customers—accounts for much of the slump in Hawthorn’s net income, along with nearly $700,000 in dividend payments Hawthorn made to the U.S. Treasury during the quarter.
The dividend payments are a legacy of the national Troubled Asset Relief Program (TARP) that gave life support to banks during the 2008 financial crisis. For the year so far, Hawthorn has paid $1.18 million in dividend and accretion on preferred stock to the Treasury under TARP agreements.
Non-performing loans made up 5.34 percent of Hawthorn’s total loans in the second quarter 2012, an improvement over last year’s second quarter when non-performing loans made up 6.37 percent of loans. Hawthorn’s allowance for bad loans also decreased by $400,000 over second quarter last year.
In the early afternoon Hawthorn’s stock was trading at $9.40 per share, up 3.87 percent over Monday’s close.