Hawthorn Bancshares Inc., the holding company for Hawthorn Bank, and FSC Bancshares Inc., the holding company for Farmers State Bank, jointly announced the signing of an Agreement and Plan of Reorganization pursuant to which Hawthorn will acquire FSC in a cash and stock transaction valued at approximately $28.3 million in the aggregate, based on Hawthorn’s closing stock price of $34.57 as of April 28, 2026.
Based on financial data as of March 31, 2026, the combined company is expected to have total assets of approximately $2.2 billion, total loans of approximately $1.7 billion, and total deposits of approximately $1.9 billion. The proposed transaction will further strengthen Hawthorn’s community banking franchise and meaningfully expand its presence in northern Missouri, adding approximately $384 million in total assets and nine branch locations across the Farmers State Bank footprint. Hawthorn expects the proposed transaction to be accretive to earnings per share by approximately 20% on fully phased in basis. Tangible book value dilution at closing is expected to be approximately 9.8% and earned back in approximately 3.0 years using the crossover method.
“We are pleased to partner with Farmers State Bank as we continue to execute on our strategy of disciplined growth,” said Brent Giles, Chief Executive Officer of Hawthorn. “Farmers has developed strong customer relationships and a respected community presence that align closely with Hawthorn’s values. This proposed transaction expands our footprint in Northwest Missouri and positions us to deliver an expanded range of products and services while maintaining the personalized service that customers expect from a community bank.”
Michael Poland, President of FSC, added, “We are excited to join Hawthorn and believe this partnership represents a compelling opportunity for our customers, employees, and communities. Hawthorn shares our commitment to community banking and relationship-driven service, and this combination will allow us to offer broader capabilities, enhanced technology, and additional financial solutions while preserving the local decision-making and service culture our customers value.”
Under the terms of the proposed transaction, which has been unanimously approved by the boards of directors of both companies, FSC shareholders will receive 413,101 shares of Hawthorn common stock and $14.0 million of cash. The proposed transaction is expected to be completed in the third quarter of 2026, subject to the satisfaction of customary closing conditions, including approval by FSC shareholders and the receipt of all required regulatory approvals. The proposed transaction is expected to qualify as a tax-free reorganization for federal income tax purposes.
Raymond James & Associates Inc. served as financial advisor to Hawthorn Bancshares Inc., and Hunton Andrews Kurth LLP served as its legal counsel. Northland Capital Markets served as financial advisor to FSC Bancshares, Inc., and Stinson LLP served as its legal counsel. Olsen Palmer LLC rendered a fairness opinion to FSC.