Hawthorn Bancshares to Acquire FSC Bancshares for $28.3 Million, Expanding Northern Missouri Footprint

JEFFERSON CITY, Mo. — Hawthorn Bancshares, Inc. (NASDAQ: HWBK) announced on April 29, 2026, that it has signed a definitive agreement to acquire FSC Bancshares, Inc., the parent company of Farmers State Bank, in a cash and stock transaction valued at approximately $28.3 million. The deal marks a significant expansion for Hawthorn Bank into northern Missouri and continues a trend of consolidation within the community banking sector. Under the terms of the Agreement and Plan of Reorganization, FSC shareholders will receive a combination of 413,101 shares of Hawthorn common stock and $14.0 million in cash. The total valuation is based on Hawthorn's closing stock price of $34.57 on April 28, 2026. According to financial data from March 31, 2026, the acquisition will create a combined entity with approximately $2.2 billion in total assets, $1.7 billion in total loans, and $1.9 billion in total deposits. FSC Bancshares will contribute approximately $384 million in assets and nine branch locations from its Farmers State Bank subsidiary. Hawthorn projects the transaction will be significantly beneficial to its financial performance, expecting the acquisition to be approximately 20% accretive to its earnings per share once fully phased in. The company anticipates an initial tangible book value dilution of about 9.8%, which it expects to earn back within approximately three years. This type of regional bank merger is a strategic move we see frequently. For smaller institutions like Farmers State Bank, joining a larger entity can provide the scale needed to compete with national banks and manage rising technology and compliance costs. It offers shareholders a valuable liquidity event while ensuring customers are transitioned to a stable, well-capitalized institution. The acquisition strengthens Hawthorn’s community banking franchise and provides a meaningful entry into the northern Missouri market. The merger represents a common strategic path for smaller community banks facing an increasingly competitive environment. Pressures from regulatory compliance, cybersecurity investments, and competition from larger national banks and non-bank financial technology companies have driven consolidation across the industry. For the customers of Farmers State Bank, the acquisition will mean their accounts and services will be transitioned to Hawthorn Bank. This will likely provide them with access to a broader array of products, a larger network of branches and ATMs, and more advanced digital banking tools. At the same time, such transitions often raise questions for customers about whether the personalized service and local touch of their community bank will be maintained under new ownership. From the acquirer’s perspective, a deal like this is a direct path to inorganic growth, instantly adding established branches, a loyal customer base, and significant assets in a new territory. However, for the small and mid-sized business customers of the acquired bank, the transition can be uncertain. Relationships with local loan officers may change, and credit decision-making processes can become more centralized. Navigating these shifts is crucial. For any business owner contemplating their own growth strategy, whether through acquisition or preparing for a sale, understanding the M&A landscape is essential. This is a core focus of the mergers and acquisitions advisory services offered by C&S Finance Group LLC, where we guide clients through the complexities of valuation, due diligence, and integration planning. To understand how we can help your business, visit us at csfinancegroup.com. Hawthorn Bancshares, headquartered in Jefferson City, is the parent of Hawthorn Bank, which offers a wide range of commercial and consumer banking services with a focus on relationship-based community banking across Missouri. FSC Bancshares, based in Cameron, Missouri, is the holding company for Farmers State Bank. The bank has built its reputation on personalized service and local decision-making, cultivating deep relationships within the communities it serves. The completion of the transaction is contingent upon customary closing conditions, including the approval of the acquisition by FSC Bancshares' shareholders and the receipt of all necessary regulatory approvals. Following the satisfaction of these conditions, the integration of Farmers State Bank's operations and nine branch locations into the Hawthorn Bank system will commence, a process that will be closely watched by customers, employees, and investors.