EX-99.1

LEE’S SUMMIT, Mo. — August 3, 2009 — Hawthorn Bancshares Inc. (NASDAQ: HWBK), today reported consolidated financial results for the Company, including its main operating subsidiary, Hawthorn Bank, for the second quarter ended June 30.

Net income for the quarter increased $0.1 million over first quarter 2009 to $1.2 million. During the quarter, the company accrued for the FDIC’s recently announced special assessment of $0.6 million. After deducting dividends of $0.5 million on the preferred stock issued to the U.S. Treasury under the Capital Purchase Program, Hawthorn earned $0.17 per diluted share for the quarter, versus $0.14 per diluted share in the first quarter of 2009.

Average earning assets and net interest margin continued to increase over the prior quarter and as a result net interest income increased $0.5 million compared to first quarter 2009.

Noninterest income as a percent of total revenue remained steady at 21.9% for the quarter.

With a $1.4 million provision for loan losses for the quarter, the Company increased the allowance for loan losses to 1.36% of total loans compared with 1.26% at December 31, 2008. The recession has caused our provision rate to be larger than is customary for our Company.

Nonperforming assets remained steady at 2.94% of total assets when compared to March 31, 2009 and increased from 2.55% at December 31, 2008.

“Our second quarter results continue to demonstrate stable core operations and strong capital ratios,” said Chairman & CEO James E. Smith. “Our leverage and total risk-based capital ratios were 10.98% and 16.18%, respectively, far exceeding regulatory requirements.”

“We experienced substantial real estate refinancing activity during the quarter, which contributed $0.9 million to pre-tax income.”

Comparing June 30, 2009 balances with December 31, 2008, total assets remained stable at $1.3 billion. Loans, net of allowance for loan losses, remain unchanged at $996.4 million, while investment securities increased 1.7% to $161.0 million. Total deposits increased 3.0% to $984.1 million. During the same period, stockholders’ equity increased 0.2% to $106.6 million or 8.5% of total assets after paying common and preferred stock dividends totaling $2.4 million.

For the quarter, the annualized return on average common equity was 3.56% and the annualized return on average assets was 0.38% compared with 4.67% and 0.43%, respectively, for the same period in 2008.


Balance sheet information:			June 30, 2009		December 31, 2008

	Loans, net of allowance for loan losses		$	996,383,747	$	996,436,986
	Debt and equity securities			161,041,986		158,276,179
	Total assets			1,257,337,756		1,279,698,867
	Deposits			984,143,655		955,296,389
	Total stockholders’ equity			106,584,885		106,418,383
			Three Months		Three Months
Statement of income information:			Ended June 30, 2009		Ended June 30, 2008

	Total interest income			16,060,745	$	17,121,306
	Total interest expense			6,043,342		7,605,152

	Net interest income			10,017,403		9,516,154
	Provision for loan losses			1,404,000		1,300,000
	Noninterest income			2,807,490		2,321,771
	Noninterest expense			9,661,477		8,625,882

	Pre-tax income			1,759,416		1,912,043
	Income taxes			555,128		594,583

	Net income			1,204,288		1,317,460
	Preferred dividend to U.S. Treasury			501,508		—

	Net income available to common shareholders			702,780		1,317,460

	Earnings Per Common Share:
		Basic:	$	0.17	$	0.32
		Diluted:	$	0.17	$	0.31
			Six Months		Six Months
Statement of income information:			Ended June 30, 2009		Ended June 30, 2008

	Total interest income			32,094,995	$	35,546,972
	Total interest expense			12,547,135		16,486,418

	Net interest income			19,547,860		19,060,554
	Provision for loan losses			3,154,000		2,950,000
	Noninterest income			5,572,258		4,689,952
	Noninterest expense			18,656,209		17,270,530

	Pre-tax income			3,309,909		3,529,976
	Income taxes			1,048,990		1,125,641

	Net income			2,260,919		2,404,335
	Preferred dividend to U.S. Treasury			994,612		—

	Net income available to common shareholders			1,266,307		2,404,335

	Earnings Per Common Share:
		Basic:	$	0.31	$	0.58
		Diluted:	$	0.31	$	0.57


Key financial ratios:		June 30, 2009			March 31, 2009			December 31, 2008

	Return (loss) on average assets (YTD)		0.36	%		0.34	%		(2.45	)%
	Return (loss) on average common equity (YTD)		3.22	%		2.88	%		(27.33	)%
	Allowance for loan losses to total loans		1.36	%		1.31	%		1.26	%
	Nonperforming loans to total loans		2.91	%		2.93	%		2.46	%
	Nonperforming assets to loans and foreclosed assets		3.64	%		3.64	%		3.21	%
	Allowance for loan losses to nonperforming loans		46.56	%		44.75	%		50.94	%
Non-GAAPfinancial information:		June 30, 2009			March 31, 2009			December 31, 2008

	Tangible common stockholders’ equity	$	74,886,003	*	$	74,831,493	*	$	75,228,767	*
	Tangible common stockholders’ equity per share		18.10			18.09			18.19
					December 31, 2008

	Return on average assets					0.20	%**
	Return on average common equity					2.24	%**

* Excludes loss from writeoff of Goodwill in the quarter ended December 31, 2008.

Hawthorn Bancshares, Inc., a financial-bank holding company headquartered in Lee’s Summit, Missouri, is the parent company of Hawthorn Bank of Jefferson City with locations in Lee’s Summit, Springfield, Branson, Independence, Raymore, Columbia, Clinton, Windsor, Collins, Osceola, Warsaw, Belton, Drexel, Harrisonville, California, Tipton and St. Robert.

Statements made in this press release that suggest Hawthorn Bancshares’ or management’s intentions, hopes, beliefs, expectations, or predictions of the future include “forward-looking statements” within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended. It is important to note that actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those projected in such forward-looking statements is contained from time to time in the company’s quarterly and annual reports filed with the Securities and Exchange Commission.


Contact:		Kathleen Bruegenhemke Senior Vice President, Investor Relations TEL: 573.761.6100 FAX: 573.761.6272 www.HawthornBancshares.com