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Here are 1-2 brief analogies to describe Hawthorn Bancshares (HWBK):

• Hawthorn Bancshares (HWBK) is like a local, community-focused version of a major bank such as Bank of America, specifically serving towns across Missouri.
• HWBK is like the 'Ace Hardware' of banking for its local Missouri communities, offering personal service for traditional banking needs, rather than the broad, national scale of a JPMorgan Chase.

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• Deposit Accounts: Attracting funds from individuals and businesses through various checking, savings, money market, and certificate of deposit accounts.
• Lending Services: Providing a range of loans to individuals and businesses, including commercial, real estate, and consumer loans.
• Wealth Management & Trust Services: Offering investment management, financial planning, and trust administration for individuals and institutional clients.

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Hawthorn Bancshares (symbol: HWBK) is a bank holding company. As such, it sells banking and wealth management services primarily to individuals and organizations, rather than to other public companies as its major customers in a traditional supply chain sense.

The company primarily serves the following categories of customers:

1. Individuals: Consumers who utilize personal banking services such as checking accounts, savings accounts, money market accounts, certificates of deposit, residential mortgages, home equity loans, and various types of personal loans.
2. Businesses: Commercial clients, including small to medium-sized businesses, corporations, and professional firms, that require commercial checking and savings accounts, commercial real estate loans, business lines of credit, term loans, equipment financing, treasury management services, and other business banking solutions.
3. Governmental Customers: Various local and state governmental entities that utilize banking services for their operational needs, including deposit accounts and other financial services.

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Brent M. Giles, Chief Executive Officer

Brent M. Giles has served as CEO of Hawthorn Bancshares, Inc. and Hawthorn Bank since May 2023. For the three years prior, he was the CEO of Wisconsin Bank and Trust and Bank of Blue Valley. From 2003 until its sale in 2019, Mr. Giles served as Chairman and Chief Executive Officer of Liberty Bancorp, Inc. and BankLiberty, where he took the company public and led it through several acquisitions and organic growth to become a top-performing community bank. Prior to 2003, he held various commercial banking roles and spent nine years as an FDIC examiner. He earned his bachelor's degree in banking and finance and his MBA from the University of Missouri.

Christopher E. Hafner, Chief Financial Officer

Christopher E. Hafner has served as Chief Financial Officer of Hawthorn Bancshares, Inc. and Hawthorn Bank since October 2023, bringing over 30 years of experience in financial institutions. From 2016 to 2022, he was the Chief Accounting Officer of Crossfirst Bank, where he led his team through its initial public offering in 2019. Prior to that, from 2011 to 2015, he served as Chief Financial Officer and Chief Risk Officer of MoBank until its acquisition. From 2005 to 2011, he was the Chief Financial Officer of First National Bank of Kansas until its merger. Mr. Hafner also served as Assistant Controller of Commerce Bancshares, Inc. from 2000 to 2005 and worked in public accounting focusing on audit and consulting services for banks from 1989 through 2005. He holds a Bachelor of Business Administration degree from Iowa State University and was previously a Certified Public Accountant.

Gregg A. Bexten, President

Gregg A. Bexten has served as a Director and President of Hawthorn Bancshares, Inc. and Hawthorn Bank since May 2023. From 2014 until May 2023, he was the Regional President of the Central Region, and from 2000 to 2014, he served as a commercial lender in the Central Region, holding titles of Senior Vice President and Vice President. Before joining Hawthorn Bank, Mr. Bexten worked as a Commercial Lender with Midwest Independent Bank and as a Commissioned Bank Examiner for the Federal Reserve Bank of St. Louis. He possesses over 30 years of expertise in overseeing lending, various finance, and regulatory compliance aspects of community banking.

Kathleen L. Bruegenhemke, Executive Vice President, Chief Risk Officer, Secretary, and Director

Kathleen L. Bruegenhemke has served as a Director of Hawthorn Bancshares, Inc. and Hawthorn Bank since March 2017. She has been Executive Vice President since May 2024 and served as Senior Vice President from 1997 until February 2024. Ms. Bruegenhemke has been Secretary of the Company since November 1997 and Chief Risk Officer since June 2006. With a brief exception, she has served as Chief Operations Officer of Hawthorn Bank since January 2017. From October 2014 to December 2016, she was the Columbia Market President, and from January 1992 to November 1997, she served as Internal Auditor of Hawthorn Bank. She is a CPA.

Martin J. Weishaar, Executive Vice President and General Counsel

Martin J. Weishaar serves as Executive Vice President and General Counsel for Hawthorn Bancshares, Inc.

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The key risks to Hawthorn Bancshares' (HWBK) business are:

1. Interest Rate Risk: Hawthorn Bancshares' business and earnings are significantly influenced by the fiscal and monetary policies of the federal government and its agencies, especially the Federal Reserve Board. Fluctuations in interest rates can materially affect the company's net interest income and overall profitability. For example, if prevailing interest rates decrease, the interest earned on loans and investments may decline faster than the interest paid on deposits and other liabilities, thereby reducing profitability.
2. Credit Risk and Asset Quality: The profitability of Hawthorn Bancshares is highly dependent on the quality of its loan portfolio and other assets. An increase in non-performing assets or adverse economic conditions could necessitate higher provisions for credit losses, negatively impacting the company's financial results. While recent reports indicate a relatively low level of non-performing loans, commercial real estate loans constitute a substantial part of its loan book, making the bank susceptible to potential downturns in the real estate market.
3. Regulatory Risk: As a banking institution, Hawthorn Bank is subject to extensive regulation by state and federal authorities, including the Missouri Division of Finance and the FDIC. Changes in legislative, regulatory, or tax laws, such as those arising from the Dodd-Frank Act, can have an adverse effect on the company's operations and financial performance. Regulatory agencies have the authority to impose cease and desist orders or civil money penalties for non-compliance, and their primary focus is the protection of depositors, not shareholders.

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Increased competition from digital-first financial technology (fintech) companies and major technology firms presents a clear emerging threat.

• Fintechs and Neobanks: These entities, often unburdened by legacy infrastructure and traditional branch networks, offer highly digitized, user-friendly, and often lower-cost banking services for deposits, payments, and lending. This directly challenges traditional banks like Hawthorn Bancshares by attracting and retaining customers, particularly younger demographics, who increasingly prioritize convenience and seamless online experiences over physical branches. The growing market share and adoption rates of these digital challengers demonstrate a clear shift in consumer preference and competitive landscape.
• Big Tech in Financial Services: Companies such as Apple, Google, and Amazon are leveraging their immense customer bases, data analytics capabilities, and technological expertise to offer a range of financial products, including payment solutions, credit cards, and small business lending. While they may not offer full traditional banking services, their targeted offerings can erode specific revenue streams and customer relationships historically held by regional banks.

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Hawthorn Bancshares (HWBK) operates as a community bank primarily focused on providing a variety of financial products and services to individuals and businesses within Missouri. The addressable markets for their main products and services, sized at the U.S. level, are as follows:

• Retail Banking: This market encompasses services like checking and savings accounts, personal loans, and mortgage lending. The U.S. retail banking market was valued at approximately USD 1.105 trillion in 2024 and is projected to reach USD 1.850 trillion by 2032, growing at a CAGR of 6.7% during the forecast period 2026-2032. Another estimate puts the market at USD 0.87 trillion in 2025, forecasted to reach USD 1.08 trillion by 2030, with a CAGR of 4.22% during 2025-2030.
• Commercial Banking: This includes commercial and industrial loans, commercial real estate loans, and treasury management services. The U.S. commercial banking market size is estimated at USD 226.44 billion in 2024 and is expected to reach USD 269.28 billion by 2029, growing at a CAGR of over 2%. Another source indicates the U.S. commercial banking market size as USD 732.5 billion in 2025, forecasted to reach USD 915.45 billion by 2030, with a CAGR of 4.56%. A different report states the market size of Commercial Banking in the U.S. is USD 1.6 trillion in 2025.
• Overall Loan Market: Hawthorn Bancshares provides various types of loans including residential mortgages, home equity loans, personal loans, and business loans. The United States loan market was valued at USD 1.12 trillion in 2024 and is expected to reach USD 1.87 trillion by 2030, growing at a CAGR of 16.23%. Within this, the U.S. small business loan market was valued at USD 245.39 billion in 2023 and is projected to reach USD 349.64 billion by 2033, growing at a CAGR of 3.4%.
• Community Banking: Hawthorn Bancshares operates as a community bank. The U.S. community banking market reached a valuation of USD 6.35 billion in 2024, showing stable growth with a projected CAGR of 3.8%. Another estimate for the community banking market in 2024 is USD 17.79 billion, projected to grow to USD 26.98 billion by 2029 at a CAGR of 8.6%.

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Hawthorn Bancshares (HWBK) is expected to drive future revenue growth over the next 2-3 years through several key strategies:

1. Loan Portfolio Expansion: The company aims to grow its loan portfolio by both expanding relationships with existing customers and attracting new ones. In the third quarter of 2025, loans increased by 3.5% compared to the prior quarter, and by 3.2% on an annualized basis from the prior year, with interest and fees on loans being a primary contributor to interest income.
2. Net Interest Margin Enhancement: Hawthorn Bancshares has demonstrated a focus on improving its net interest margin (NIM). The NIM, on a fully taxable equivalent basis, increased to 3.97% in the third quarter of 2025, up from 3.89% in the previous quarter and 3.36% in the prior year quarter. This expansion is primarily driven by higher rates earned on earning assets and lower costs associated with deposits.
3. Growth in Wealth Management Services: The company has identified its wealth management group as an area of growth. Commentary from the CEO highlighted the expansion in this segment during the third quarter of 2025, indicating a strategic effort to boost non-interest income.
4. Organic Growth within Established Markets: Hawthorn Bancshares is strategically focused on continued core growth within its primary operating regions in Missouri, which include Jefferson City, Columbia, Clinton, Warsaw, Springfield, and the greater Kansas City metropolitan area. This involves deepening market penetration and attracting new customers within these existing communities.

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Share Repurchases

• Hawthorn Bancshares' Board of Directors approved a new common stock repurchase program in June 2025, authorizing up to $10.0 million in repurchases, replacing a previous program. This new program has no termination date.
• In April 2021, the company announced an increased share repurchase authorization, bringing the total buyback amount to $5.0 million.
• During 2024, 56,692 common shares were repurchased under a plan, with $3.9 million remaining available for repurchases as of December 31, 2024.

Share Issuance

• The number of common shares outstanding for Hawthorn Bancshares increased from 6,362,476 as of April 28, 2021, to approximately 6,946,656 as of June 3, 2025.

Capital Expenditures

• The company reported quarterly capital expenditures of $652,000 for June 2025.