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Relative valuation derived from Financials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 61.1GRADE B
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
12.7%
Sector: 8.5%
Dividend Analysis audit
INCOME
2.51%
Trailing Yield
$2.51
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
26%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, HAWTHORN BANCSHARES, INC. (HWBK) receives a "Hold" rating with a composite score of 53.8/100, ranked #602 out of 4446 stocks. Key factor scores: Quality 61/100, Value 78/100, Momentum 51/100. This is quantitative analysis only — not investment advice.
HAWTHORN BANCSHARES, INC. (HWBK) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does HAWTHORN BANCSHARES, INC. Do?
Hawthorn Bancshares, Inc. operates as the bank holding company for Hawthorn Bank that provides commercial and personal banking services. It accepts checking, savings, money market, individual retirement, and other time deposit accounts; and certificates of deposit. The company also offers commercial and industrial, single payment personal, installment, commercial and residential real estate, and consumer loans, as well as equipment, operating, and small business administration loans; and debit and credit cards. In addition, it provides trust services that include estate planning, investment, and asset management services; and cash management, safety deposit box, brokerage, and Internet banking services. The company operates through 23 banking offices in Missouri communities, Jefferson City, Columbia, Clinton, Warsaw, Springfield, St. Louis, and the greater Kansas City metropolitan area. Hawthorn Bancshares, Inc. was founded in 1865 and is headquartered in Jefferson City, Missouri. HAWTHORN BANCSHARES, INC. (HWBK) is classified as a micro-cap stock in the Financials sector, specifically within the Banking industry. The company is led by CEO David T. Turner and employs approximately 310 people, headquartered in JEFFERSON CITY, Missouri. With a market capitalization of $237M, HWBK is one of the notable companies in the Financials sector.
HAWTHORN BANCSHARES, INC. (HWBK) Stock Rating — Hold (April 2026)
As of April 2026, HAWTHORN BANCSHARES, INC. receives a Hold rating with a composite score of 53.8/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.HWBK ranks #602 out of 4,446 stocks in our coverage universe. Within the Financials sector, HAWTHORN BANCSHARES, INC. ranks #181 of 891 stocks, placing it in the top quartile of its Financials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
HWBK Stock Price and 52-Week Range
HAWTHORN BANCSHARES, INC. (HWBK) currently trades at $34.92. The 52-week high for HWBK is $36.49, which means the stock is currently trading -4.3% from its annual peak. The 52-week low is $25.38, putting the stock 37.6% above its annual trough. Recent trading volume was 0 shares, suggesting relatively thin trading activity.
Is HWBK Overvalued or Undervalued? — Valuation Analysis
HAWTHORN BANCSHARES, INC. (HWBK) carries a value factor score of 78/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 10.23x, compared to the Financials sector average of 14.88x — a discount of 31%. The price-to-book ratio stands at 1.30x, versus the sector average of 1.22x. The price-to-sales ratio is 2.36x, compared to 0.90x for the average Financials stock. On an enterprise value basis, HWBK trades at 5.62x EV/EBITDA, versus 3.26x for the sector.
Based on these multiples, HAWTHORN BANCSHARES, INC. appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
HAWTHORN BANCSHARES, INC. Profitability — ROE, Margins, and Quality Score
HAWTHORN BANCSHARES, INC. (HWBK) earns a quality factor score of 61/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 12.7%, compared to the Financials sector average of 8.5%, which is within a healthy range. Return on assets (ROA) comes in at 1.2% versus the sector average of 1.2%.
On a margin basis, HAWTHORN BANCSHARES, INC. reports gross margins of 0.0%. The operating margin is 41.9% (sector: 21.8%). Net profit margin stands at 23.1%, versus 17.7% for the average Financials stock. Revenue growth is running at 6.1% on a trailing basis, compared to 9.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
HWBK Debt, Balance Sheet, and Financial Health
HAWTHORN BANCSHARES, INC. has a debt-to-equity ratio of 988.0%, compared to the Financials sector average of 121.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 1.10x, suggesting adequate working capital coverage. Total debt on the balance sheet is $227M. Cash and equivalents stand at $18M.
HWBK has a beta of 0.35, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for HAWTHORN BANCSHARES, INC. is 78/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
HAWTHORN BANCSHARES, INC. Revenue and Earnings History — Quarterly Trend
In TTM 2026, HAWTHORN BANCSHARES, INC. reported revenue of $96M and earnings per share (EPS) of $3.44. Net income for the quarter was $22M. Gross margin was 0.0%. Operating income came in at $40M.
In FY 2025, HAWTHORN BANCSHARES, INC. reported revenue of $98M and earnings per share (EPS) of $3.44. Net income for the quarter was $24M. Revenue grew 2.4% year-over-year compared to FY 2024. Operating income came in at $47M.
In Q3 2025, HAWTHORN BANCSHARES, INC. reported revenue of $25M and earnings per share (EPS) of $0.89. Net income for the quarter was $6M. Revenue grew 5.0% year-over-year compared to Q3 2024. Operating income came in at $12M.
In Q2 2025, HAWTHORN BANCSHARES, INC. reported revenue of $24M and earnings per share (EPS) of $0.88. Net income for the quarter was $6M. Revenue grew 1.5% year-over-year compared to Q2 2024. Operating income came in at $12M.
Over the past 8 quarters, HAWTHORN BANCSHARES, INC. has demonstrated a growth trajectory, with revenue expanding from $24M to $96M. Investors analyzing HWBK stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
HWBK Dividend Yield and Income Analysis
HAWTHORN BANCSHARES, INC. (HWBK) currently pays a dividend yield of 2.5%. At this yield, a $10,000 investment in HWBK stock would generate approximately $$251.00 in annual dividend income. This compares to the Financials sector average dividend yield of 2.5%, meaning HWBK offers above-average income for its sector. With a net margin of 23.1%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
HWBK Momentum and Technical Analysis Profile
HAWTHORN BANCSHARES, INC. (HWBK) has a momentum factor score of 51/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 31/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 2/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
HWBK vs Competitors — Financials Sector Ranking and Peer Comparison
Comparing HWBK against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full HWBK vs S&P 500 (SPY) comparison to assess how HAWTHORN BANCSHARES, INC. stacks up against the broader market across all factor dimensions.
HWBK Next Earnings Date
No upcoming earnings date has been announced for HAWTHORN BANCSHARES, INC. (HWBK) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy HWBK? — Investment Thesis Summary
HAWTHORN BANCSHARES, INC. presents a balanced picture with arguments on both sides. The quality score of 61/100 indicates above-average profitability and business fundamentals. The value score of 78/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 78/100) reduces downside risk.
In summary, HAWTHORN BANCSHARES, INC. (HWBK) earns a Hold rating with a composite score of 53.8/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on HWBK stock.
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Institutional Research Dossier
HAWTHORN BANCSHARES, INC. (HWBK) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Hawthorn Bancshares, Inc. (HWBK) currently holds a 'Hold' rating, a reflection of its mixed financial performance and inherent risks within the banking sector. While the company exhibits attractive valuation metrics and strong profitability compared to its peers, its high debt levels and inconsistent free cash flow generation temper our enthusiasm, warranting a neutral stance. The bank's future success hinges on its ability to manage its debt burden, sustain its profitability margins, and navigate the evolving regulatory landscape within the financial services industry.
The bank's relatively small market capitalization and regional focus expose it to idiosyncratic risks that larger, more diversified institutions are better equipped to handle. While Hawthorn Bancshares demonstrates strengths in certain areas, the combination of its financial leverage and the competitive pressures within its operating environment justify the current 'Hold' rating. Investors should closely monitor the bank's debt management strategies and its ability to maintain its profitability in the face of potential economic headwinds.
Business Strategy & Overview
Hawthorn Bancshares operates as a traditional community bank, primarily serving individuals and businesses within Missouri. Its core business revolves around gathering deposits and originating loans, generating revenue through interest rate spreads and fees. The bank's strategy appears to be focused on maintaining a strong local presence, fostering customer relationships, and providing a range of financial services tailored to the needs of its community. This approach is typical of smaller regional banks that aim to differentiate themselves through personalized service and local market expertise.
The company's product offerings include a variety of deposit accounts, commercial and industrial loans, real estate loans, and consumer loans. Additionally, Hawthorn Bancshares provides trust services, including estate planning and asset management, which contribute to its fee income. The bank's reliance on traditional banking activities exposes it to interest rate risk, credit risk, and regulatory compliance costs. Its ability to effectively manage these risks is crucial to its long-term profitability and stability.
Hawthorn Bancshares operates 23 banking offices across Missouri, indicating a geographically concentrated business model. This concentration can be both a strength and a weakness. On one hand, it allows the bank to develop deep relationships within its local markets. On the other hand, it makes the bank vulnerable to economic downturns or competitive pressures specific to those regions. Diversification of its loan portfolio and deposit base across different industries and geographic areas within Missouri could mitigate some of this risk.
The bank's strategic positioning within the competitive landscape of the Missouri banking market is crucial. While larger national and regional banks also operate in the area, Hawthorn Bancshares likely focuses on serving smaller businesses and individuals who value local expertise and personalized service. The bank's ability to maintain its market share and attract new customers will depend on its ability to differentiate itself from its competitors through superior service, competitive pricing, and a strong community presence. The increasing prevalence of online banking and fintech companies also presents both a challenge and an opportunity for Hawthorn Bancshares to adapt and innovate its service offerings.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
6.1%
Sector: 9.4%
-35% VS SCTR
Economic Moat Analysis
Hawthorn Bancshares' economic moat is likely Narrow. The bank operates in a highly competitive industry where differentiation is challenging. While it may possess some advantages due to its established local presence and customer relationships, these are not insurmountable barriers to entry for competitors. The banking industry is characterized by relatively low switching costs for customers, who can easily move their accounts to other institutions offering better rates or services.
One potential source of a narrow moat is the bank's local brand reputation and customer relationships. Over its long history, Hawthorn Bancshares has likely built a level of trust and familiarity within its communities. This intangible asset can provide a competitive edge in attracting and retaining customers. However, this advantage is limited by the fact that other banks also operate in the same markets and can build similar relationships over time.
Switching costs in the banking industry are generally low, particularly with the rise of online banking and mobile payment platforms. Customers can easily transfer funds, pay bills, and manage their accounts from anywhere, making it less cumbersome to switch banks. This puts pressure on Hawthorn Bancshares to continuously offer competitive rates and services to retain its customer base.
The bank's size and scale also limit its ability to achieve significant cost advantages. Larger banks often benefit from economies of scale in areas such as technology, marketing, and regulatory compliance. Hawthorn Bancshares may face higher per-unit costs in these areas, which could put it at a disadvantage compared to its larger competitors. Efficient scale is not a significant factor in the banking industry, as there are many successful banks of varying sizes.
Network effects are not a significant driver of competitive advantage in the banking industry, except perhaps for payment processing networks. Hawthorn Bancshares' participation in these networks is unlikely to provide it with a significant moat. Overall, while Hawthorn Bancshares may possess some advantages due to its local presence and customer relationships, these are not strong enough to create a wide economic moat. The bank operates in a competitive industry with relatively low barriers to entry and low switching costs for customers.
Financial Health & Profitability
Hawthorn Bancshares' financial health presents a mixed picture. The company has demonstrated solid revenue growth, with revenue increasing from $91.97 million in FY2023 to $97.66 million in FY2025. Net income has also shown significant improvement, jumping from $956,000 in FY2023 to $23.80 million in FY2025. This indicates a positive trend in profitability. Operating margins have also improved significantly, from 0.5% in FY2023 to 47.9% in FY2025, suggesting improved efficiency in managing operating expenses.
However, the company's free cash flow (FCF) is a concern. The TTM FCF is negative at -$92.89 million. This could indicate that the company is investing heavily in growth or that it is facing challenges in converting its earnings into cash. Further investigation into the drivers of the negative FCF is warranted. The current ratio of 1.10 suggests that the company has sufficient liquid assets to cover its short-term liabilities.
Compared to the financials sector, Hawthorn Bancshares exhibits strong profitability metrics. Its ROE of 12.7% is significantly higher than the sector average of 8.5%, indicating that the company is effectively generating profits from its equity. Its operating margin of 41.9% is also substantially higher than the sector average of 22.0%, suggesting superior operational efficiency. The net margin of 23.1% is also higher than the sector average of 17.8%.
The company's debt-to-equity ratio (D/E) of 988.00 is significantly higher than the sector average of 115.00. This indicates that the company is highly leveraged, which could increase its financial risk. High debt levels can make the company more vulnerable to economic downturns and interest rate increases. The company's strong profitability metrics partially offset the risk associated with its high debt levels, but investors should closely monitor its debt management strategies.
Analyzing the quarterly financial history reveals a consistent trend of revenue and net income growth. The operating margin has remained relatively stable over the past few quarters, indicating that the company is maintaining its operational efficiency. The EPS has also shown consistent improvement, reflecting the growth in net income. Overall, Hawthorn Bancshares' financial health is characterized by strong profitability and revenue growth, but its high debt levels and negative free cash flow warrant caution.
Valuation Assessment
Hawthorn Bancshares' valuation metrics suggest that the stock is undervalued compared to its peers in the financials sector. The company's P/E ratio of 9.4x is significantly lower than the sector average of 15.5x, indicating that investors are paying less for each dollar of earnings compared to other financial stocks. Similarly, its EV/EBITDA ratio of 1.2x is substantially lower than the sector average of 3.5x, suggesting that the company is undervalued on an enterprise value basis.
However, it's crucial to consider the company's growth prospects and financial health when assessing its valuation. While the low P/E and EV/EBITDA ratios may indicate undervaluation, they could also reflect concerns about the company's high debt levels and negative free cash flow. Investors may be discounting the stock due to these risks.
Compared to its historical valuation, Hawthorn Bancshares' current P/E ratio is relatively low. This could be due to the recent surge in net income, which has driven down the P/E ratio. However, it's important to assess whether the current level of profitability is sustainable. If the company's earnings growth slows down or declines, its P/E ratio could increase, potentially reducing its attractiveness as a value investment.
The company's negative free cash flow is a concern from a valuation perspective. Free cash flow is a key metric for assessing a company's ability to generate cash and return it to shareholders. The negative FCF suggests that the company is not generating enough cash to cover its investments and debt obligations. This could limit its ability to pay dividends or repurchase shares, which could negatively impact its valuation.
Overall, Hawthorn Bancshares' valuation appears attractive based on its P/E and EV/EBITDA ratios. However, investors should carefully consider the company's high debt levels, negative free cash flow, and growth prospects before making an investment decision. The stock may be undervalued, but it also carries significant risks. A more conservative valuation approach may be warranted given the company's financial challenges.
Risk & Uncertainty
Hawthorn Bancshares faces several specific risks that could negatively impact its business and financial performance. One of the most significant risks is its high level of debt. A high debt-to-equity ratio makes the company more vulnerable to economic downturns and interest rate increases. If interest rates rise, the company's borrowing costs will increase, which could reduce its profitability. Additionally, if the economy weakens, the company's borrowers may struggle to repay their loans, leading to higher loan losses and reduced earnings.
Another risk is the company's geographic concentration in Missouri. A significant portion of its business is dependent on the economic conditions in the state. If Missouri experiences an economic downturn, the company's loan portfolio and deposit base could be negatively impacted. Diversifying its operations into other geographic areas could mitigate this risk, but it would also require significant investment and management attention.
The banking industry is subject to extensive regulation, and changes in regulations could increase the company's compliance costs and limit its ability to generate profits. For example, changes in capital requirements or lending regulations could require the company to hold more capital or restrict its lending activities. The increasing prevalence of fintech companies also presents a competitive risk. These companies are often able to offer innovative financial products and services at lower costs, which could put pressure on traditional banks like Hawthorn Bancshares to adapt and innovate.
Credit risk is also a significant concern for Hawthorn Bancshares. The company's loan portfolio is exposed to the risk that borrowers will default on their loans. This risk is particularly acute in the current economic environment, where many businesses and individuals are facing financial challenges. The company's ability to effectively manage its credit risk will be crucial to its long-term profitability and stability.
Bulls Say / Bears Say
The Bull Case
BULL VIEWHawthorn Bancshares' low valuation multiples (P/E and EV/EBITDA) suggest significant upside potential if the company can sustain its recent profitability improvements.
BULL VIEWThe bank's strong ROE compared to the sector indicates efficient capital allocation and superior profitability, making it an attractive investment.
The Bear Case
BEAR VIEWHawthorn Bancshares' extremely high debt-to-equity ratio poses a significant financial risk, potentially leading to distress if economic conditions worsen.
BEAR VIEWThe negative free cash flow raises concerns about the company's ability to fund its operations and growth, potentially requiring additional debt or equity financing.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score HWBK and 4,400+ other equities.
HAWTHORN BANCSHARES, INC. exhibits a 52% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
1.2%
Sector: 1.2%
Gross Margin
Pricing power and cost efficiency
0.0%
Sector: 0.0%
Operating Margin
Core business profitability
41.9%
Sector: 21.8%
Net Margin
Bottom-line profitability
23.1%
Sector: 17.7%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield2.48%
Yield Delta+1%
Income Projection audit
A $10,000 investment would generate approximately $251 annually in dividends at the current trailing rate.
