Hawthorn Bancshares : 2024 Shareholder Meeting Presentation

Annual Shareholders Meeting

June 4, 2024

www.HawthornBancshares.com

NASDAQ: HWBK

Forward-Looking Statements

FORWARD-LOOKINGSTATEMENTS. This report contains certain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, strategy, future performance and business of Hawthorn Bancshares, Inc., and its subsidiaries (collectively, the "Company," "we," "our," or "us"), including, without limitation:

• statements that are not historical in nature, and
• statements preceded by, followed by or that include the words believes, expects, may, will, should, could, anticipates, estimates, intends, plans, hopes or similar expressions.

Forward-looking statements are not guarantees of future performance or results. They involve risks, uncertainties and assumptions. Actual results may differ materially from those contemplated by the forward-looking statements due to, among others, the following factors:

• competitive pressures among financial services companies may increase significantly,
• changes in the interest rate environment may reduce interest margins,
• general economic conditions, either nationally or in Missouri, may be less favorable than expected and may adversely affect the quality of our loans and other assets,
• increases in non-performing assets in the Company's loan portfolios and adverse economic conditions may necessitate increases to our provisions for credit losses,
• costs or difficulties related to any integration of any business of the Company and its acquisition targets may be greater than expected,
• legislative, regulatory or tax law changes may adversely affect the business in which the Company and its subsidiaries are engaged,
• credit and market risks relating to increasing inflation,
• economic or other disruptions caused by acts of terrorism, war or other conflicts, including the Russia-Ukraine conflict, and the Israel-Hamas conflict, natural disasters, such as hurricanes, freezes, flooding and other man- made disasters, such as oil spills or power outages, health emergencies, epidemics or pandemics, climate changes or other catastrophic events,
• changes may occur in the securities markets,
• changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses, and
• technological changes, including potential cyber-security incidents and other disruptions, or innovations to the financial services industry, including as a result of the increased telework environment.

We have described additional factors that could cause actual results to be materially different from those described in the forward-looking statements under the caption Risk Factors in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K"), and in other reports filed by us with the Securities and Exchange Commission ("SEC") from time to time. Other factors that have not been identified in this report could also have this effect. You are cautioned not to put undue reliance on any forward-looking statement, which speak only as of the date they were made. Except as required by law, the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes in its business, results of operations or financial condition over time.

MARKET AND INDUSTRY DATA. This presentation may reference certain market, industry and demographic data, forecasts and other statistical information. We obtain this data, forecasts and information from various independent, third-party industry sources and publications. Nothing in the data, forecasts or information used or derived from third party sources should be construed as advice. Some data and other information may also be based on our good faith estimates, which may be derived from our review of industry publications and surveys and independent sources. We believe that these sources and estimates are reliable but have not independently verified them. Statements as to our market position are based on market data currently available to us. Although we are not aware of any misstatements regarding the economic, employment, industry and other market data presented herein, these estimates involve inherent risks and uncertainties and are based on assumptions that are subject to change.

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Board of Directors

DAVID TURNER

Director, Chairman

45 years with Hawthorn, Retired

Director since 1997

KATHLEEN BRUEGENHEMKE, CPA

Director, Executive Vice President,

Chief Risk Officer and Secretary

32 years with Hawthorn

Director since 2017

PHILIP FREEMAN

Owner, Freeman Properties

JCMO, LLC

Director since 1990

SHAWNA HETTINGER

President, Streetwise, Inc.

Director since 2022

KEVIN RILEY

Former owner, Riley Chevrolet Buick GMC

Cadillac; Co-owner, Riley Toyota, Inc.

Director since 1995

JACK WETZEL

Co-owner, Meadows Contracting, LLC and

Meadows Development Company

Director since 2019

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BRENT GILES

Director, CEO

1 year with Hawthorn Director since 2023

GREGG BEXTEN

Director, President

26 years with Hawthorn

Director since 2023

DOUGLAS EDEN

Principal, Eden Capital

Management, LLC

Director since 2023

FRANK BURKHEAD, CPA

Co-owner, Burkhead & Assoc.

Owner, Burkhead Wealth Management

Director since 2014

JONATHAN HOLTAWAY

President, Ategra Capital Management, LLC; Managing Member, Ategra GP, LLC

Director since 2019

JOHN STATES

Member/Owner, Little Dixie Construction

Director since 2022

DR. GUS WETZEL, III

Physician/Surgeon

Advisory Director since 1974

CHARLES DUDENHOEFFER

Former Senior Vice President, Trust Officer

(Retired)

Hawthorn Bank

Advisory Director since 1978

Executive Leadership Team

	BRENT GILES	KATHLEEN BRUEGENHEMKE, CPA
	Executive Vice President,
	Chief Executive Officer
	Chief Risk Officer & Secretary
	1 year with Hawthorn
	32 years with Hawthorn
	Director since 2023
	Director since 2017

GREGG BEXTEN	JOHN BOWERS
President	Executive Vice President
26 years with Hawthorn	Chief Strategy Officer
Director since 2023	1 year with Hawthorn

CHRIS HAFNER	MARTIN WEISHAAR, JD
Executive Vice President	Executive Vice President
Chief Financial Officer	Chief Legal Counsel
1 year with Hawthorn	1 year with Hawthorn

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JASON SCHWARTZ

Executive Vice President Chief Credit Officer

24 years with Hawthorn

As of March 31, 2024, approximately 17% of HWBK's

common shares were owned by the Board and Executive Leadership.

Franchise History

1997				2003
			Acquired:
Acquired:
		Missouri State Bank (Springfield) $32MM Assets
Union State Bank & Trust		2007
$144MM Assets		2000						Rebranded all locations
			Acquired:				2005
		Osage Valley Bank $55MM Assets
				Acquired:
		Citizens Bank of Calhoun $70MM Assets
			Bank 10	$171MM Assets
	City National Savings Bank $91MM Assets
						2004			2007
								Opened:
						Opened:			Columbia, MO
						Branson, MO
						Lee's Summit, MO

$ in billions

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2009

Closed:

Tipton

Branch

2012

Opened:

Liberty, MO (LPO)

Columbia, MO (LPO)

2019

Expanded Columbia LPO to

Full-Service Bank

2020

Established:

Mortgage Group

2019

Opened St. Louis LPO

2015	2017	2018	2019	2022	2023
Closed:	Closed:	Closed:	Sold:	Closed:	Closed:
Raymore	Collins	Windsor Branson	Warsaw	Clinton;
Branch	Branch	Branch	Branch		2 LPOs

Strategic Initiatives

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ONEHAWTHORN

LINE OF BUSINESS FOCUS

OPERATIONAL EFFICIENCY & EFFECTIVENESS

M&A READINESS

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BRAND IDENTITY

CAPITAL MANAGEMENT

RISK PROFILE AND CREDIT DISCIPLINE

Franchise Overview and Financial Highlights

• Established in 1865
• Headquartered in Jefferson City, Missouri
• 17 Branches and 1 LPO
• 276 Employees

1. Includes the impact of the January 1, 2023 adoption of ASU 2016-13

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Financial Highlights ($ in millions)																1Q
As of the period ended		2019			2020			2021			2022		2023			2024
														(1)
Sheet	Total Assets	$	1,493		$	1,734		$	1,832		$	1,924	$	1,875		$	1,834
Total Gross Loans	$	1,169		$	1,287		$	1,302		$	1,521	$	1,539		$	1,519
Balance	Allowance for Credit Losses	$	(12)	%	$	(18)	%	$	(17)	%	$	(16)	$	(24)	%	$	(24)	%
Loans-to-Deposits		98.5		93.4		86.0		93.2	%	98.2		99.6
	Total Deposits	$	1,187		$	1,384		$	1,517		$	1,632	$	1,571		$	1,528
	% Core Deposits		87.0	%		90.3	%		94.1	%		91.7	%	93.1	%		91.5	%
PerformanceKey Indicators	Net Income	$	16.1	%	$	14.3	%	$	22.5	%	$	20.8	$	1.0	%	$	4.5	%
Efficiency Ratio		67.2		66.0		65.0		66.7	%	78.5		70.8
	Return on Assets		1.09	%		0.88	%		1.30	%		1.16	%	0.05	%		0.97	%
	Return on Equity		14.77	%		11.74	%		16.46	%		15.94	%	0.76	%		13.12	%
	Cost of Deposits		0.88	%		0.45	%		0.22	%		0.47	%	1.62	%		1.96	%
	Net Interest Margin		3.51	%		3.48	%		3.62	%		3.53	%	3.29	%		3.39	%
	Yield on Loans		5.09	%		4.71	%		4.67	%		4.51	%	5.47	%		5.75	%
	NCOs / Loans		0.03	%		0.01	%		(0.04)%		- %	0.02	%		- %
Credit& Capital
ALLL / Loans & ACL / Loans (1)		1.07	%		1.41	%		1.30	%		1.02	%	1.54	%		1.56	%
	NPLs / Gross Loans		0.43	%		2.69	%		1.96	%		1.23	%	0.42	%		0.56	%
	NPAs / Gross Loans		1.53 %		3.64 %		2.76 %		1.81 %	0.53 %		0.69 %
	Stockholders' Equity / Assets		7.71	%		7.53	%		8.13	%		6.62	%	7.26	%		7.45	%

Shareholder Vote

• Elect four Class II directors to hold office for a term expiring at our 2027 annual meeting of shareholders and until such director's successor is duly elected and qualified or until such director's earlier resignation or removal;
• Ratify the appointment of FORVIS LLP as the Company's independent registered public accounting firm for the current year;
• Take a non-binding, advisory vote on the compensation of our executives disclosed in the proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission; and
• Consider and act upon any other matters that properly may come before the meeting.

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Supplemental Information

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Net Interest Margin (NIM) and Key Drivers

NIM (Tax Equivalent Yield)

YIELD ON LOANS

COST OF FUNDS

YIELD ON INVESTMENTS AVAILABLE-FOR-SALE

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