HWBK

Hawthorn is a small central-Missouri commercial bank trading at just 11.3x FY2025 diluted EPS of $3.43 while earning a respectable 13.7% return on equity. FY2025 net income of $23.8M grew 30.4% YoY and diluted EPS grew 31.4%, and that growth sits on a strengthening base: stockholders' equity rose 16.5% to $174M, retained earnings climbed 20.5% to $108M, and cash more than doubled (+104.6%) to $104M. Management is returning capital thoughtfully — $5.43M of dividends (+7.5%) and $2.86M of buybacks (+155.7%) against a shrinking share count (-1.1%). For a profitable bank compounding book value, paying roughly 1.5x book (market cap ~$267M vs. $174M equity) is undemanding.

The filing tells a reassuring story on the risk that matters most for a small bank — interest rates. The 10-K's rate-shock model shows annual net interest income moving only (0.43)% for a +200bp shock and (1.58)% for a -200bp shock, i.e. the balance sheet is close to neutral and management calls this within board limits. That low rate sensitivity, plus a 9.88x liabilities/equity ratio that is normal for a commercial bank, argues the recent earnings recovery is durable rather than a rate-cycle windfall.