Hawthorn Bancshares, Inc. (HWBK) - Form 8-K Summary
Business Context and Reporting Period
Date: April 29, 2026
Company: Hawthorn Bancshares, Inc. (HBI)
Event: Entry into a Material Definitive Agreement to acquire FSC Bancshares, Inc. (FBI) and its subsidiary, Farmers State Bank.
HBI has entered into an Agreement and Plan of Reorganization to acquire FBI through a two-step merger. The transaction involves the merger of a wholly-owned subsidiary of HBI into FBI, followed by the merger of FBI into HBI. Simultaneously, Farmers State Bank will merge into Hawthorn Bank.
Key Financial Metrics and Transaction Terms
Transaction Value: Approximately $28.3 million (based on HBI closing price of $34.57 on April 28, 2026).
Consideration Structure:
- Cash Component: $14,000,000 total, subject to adjustment based on FBI's shareholders' common equity (must be at least $19,000,000).
- Stock Component: 413,101 shares of HBI common stock to be issued to FBI shareholders.
- Fractional Shares: Paid in cash.
Expected Closing: Third quarter of 2026.
Material Changes and Conditions
This filing represents a material change in HBI's corporate structure and strategic direction through the proposed acquisition. The transaction is subject to several material conditions, including:
- Approval by FBI's shareholders.
- Receipt of all required governmental and regulatory consents.
- Effectiveness of HBI's registration statement (Form S-4) with the SEC.
- Listing of HBI shares on Nasdaq.
- Absence of legal restraints or injunctions.
- Confirmation that the merger qualifies as a tax-free reorganization under Section 368(a) of the Internal Revenue Code.
The agreement includes a termination date of January 31, 2027, subject to extension.
Outlook, Risks, and Management Commentary
Management Commentary: The boards of directors of both HBI and FBI have unanimously approved the Reorganization Agreement. HBI has secured voting agreements with FBI directors and executive officers, who collectively own approximately 37.9% of FBI's outstanding shares, to vote in favor of the transaction.
Risks and Contingencies:
- Regulatory Risk: Failure to obtain necessary regulatory approvals or imposition of adverse conditions.
- Shareholder Approval: Risk that FBI shareholders do not approve the transaction.
- Integration Risk: Potential for business disruption, customer loss, or failure to realize expected cost savings.
- Market Risks: Exposure to economic downturns, interest rate fluctuations, credit quality deterioration, and geopolitical instability.
- Operational Risks: Cyber incidents, technology failures, and changes in accounting standards (e.g., CECL).
Investor Verification Checklist
- Equity Adjustment: Verify if FBI's shareholders' common equity meets the $19,000,000 threshold to ensure the full $14,000,000 cash consideration is paid.
- Regulatory Status: Monitor the status of regulatory approvals required for the merger of two Missouri state banks.
- Shareholder Vote: Confirm the outcome of the special meeting of FBI shareholders to approve the Reorganization Agreement.
- SEC Filings: Review the upcoming Form S-4 Registration Statement and Proxy Statement/Prospectus for detailed financial data and risk factors.
- Termination Clauses: Review the specific circumstances under which the $1,120,000 termination fee would be triggered.