Hawthorn Bancshares (HWBK) is a Missouri-based community bank holding company with $1.86 billion in total assets at March 31, 2026. Under a liquidation lens, the recovery posture is heavily governed by the loan book, which at $1.45 billion gross (net $1.43 billion after a $20.9 million ACL) represents 78.4% of total assets. Applying a conservative 85-90% recovery haircut to net loans (reflecting real estate collateral but also illiquidity and forced-sale discounts), the loan portfolio yields roughly $1.22-$1.29 billion in liquidation proceeds. The AFS securities portfolio carries a $24.3 million unrealized net loss on an amortized cost of $229.5 million versus fair value of $205.2 million; at fair value, this recovers at or near 100% in a liquidation. Cash and equivalents of $101.9 million recover at par. BOLI of $40.8 million has limited liquidation recovery — typically 85-95% of cash surrender value, so roughly $35-$39 million. PP&E at $30.8 million net book value recovers at 50-70%, or $15-$22 million. Intangibles are not separately tagged but the filing does not indicate material goodwill or core deposit intangibles that would zero out. Total liability stack includes $1.52 billion in deposits (at face), $94.3 million FHLB advances, $49.5 million subordinated notes issued to grantor trusts (junior subordinated debentures carried at $49.5 million), $3.7 million operating lease liabilities, and $1.2 million finance lease liabilities — all carried at face in liquidation. Total liabilities per the balance sheet are $1.68 billion. Book equity is $175.4 million. The $6.5 million AOCI deficit (unrealized losses on AFS, net of pension) is already embedded in book equity and roughly corresponds to the AFS portfolio's fair value haircut already reflected above. A new material development this quarter is a disclosed material weakness in internal controls related to ASC 842-40 sale-leaseback accounting for a bank property held-for-sale transaction. MD&A notes a write-down on this property drove the $0.3 million non-interest income decline versus Q1 2025. The filing discusses the sale-leaseback in MD&A and in the controls disclosure but does not separately tag the ROU asset or lease liability created by this transaction in XBRL beyond the aggregate operating lease figures. Non-performing assets are stable at $6.9 million (0.47% of loans). The $49.5 million subordinated notes to grantor trusts (trust preferred) do not extinguish cheaply on windup — they remain face-value claims senior to equity. MFFAIS CLV/LLV/OLV are all reported at $97.1 million, which is broadly consistent with a practitioner's estimate of equity recovery after haircuts, though actual recovery could range meaningfully around that figure depending on loan loss severity and PP&E liquidation execution.
▼ Community Notes