Hawthorn reports material weakness in controls; NIM expands but asset quality deteriorates

Filed May 8, 2026 · Period ending March 31, 2026 · Compared to 10-Q May 12, 2025 · ~1 min read

Key Changes

• high

  Management identified a material weakness in internal controls over sale-leaseback accounting, concluding disclosure controls were ineffective as of March 31, 2026—a reversal from prior year's effective rating. Remediation underway; no financial restatements required.

  Controls & Procedures verify on EDGAR →
• high

  Non-performing assets more than doubled to $6.9M (0.47% of loans) from $3.1M (0.21%) year-over-year, reversing prior improvement trend. Company shifted from $340K credit loss release in Q1 2025 to $73K provision in Q1 2026.

  MD&A: Asset Quality verify on EDGAR →
• high

  Net interest margin expanded 40 basis points to 4.07% from 3.67% year-over-year, driving net income up 6.7% to $5.7M ($0.83/share). Growth rate decelerated from prior year's 20.8% increase.

  MD&A: Earnings verify on EDGAR →