HAWTHORN BANCSHARES, INC. 8-K

What Happened

• On April 29, 2026, Hawthorn Bancshares, Inc. (HBI) entered into a definitive Agreement and Plan of Reorganization to acquire FSC Bancshares, Inc. (FBI). The transaction is structured as a two-step merger (a Merger Sub into FBI, then FBI into HBI) with a simultaneous bank-level merger of Farmers State Bank into Hawthorn Bank.
• Each outstanding share of FBI common stock will receive: (i) a pro rata cash amount from a $14,000,000 cash pool (subject to adjustment), (ii) a stock component based on an Exchange Ratio derived from 413,101 HBI shares (subject to adjustment), and (iii) cash in lieu of fractional shares. Based on HBI’s closing price of $34.57 on April 28, 2026, the aggregate merger consideration is approximately $28.3 million. The deal is expected to close in the third quarter of 2026, subject to customary conditions.

Key Details

• Filing date: April 29, 2026. Expected close: Q3 2026 (subject to approvals).
• Aggregate consideration: ~ $28.3 million (based on HBI $34.57 closing price on 4/28/26).
• Cash component: $14,000,000 pool (pro rata per FBI share), with possible reduction if FBI’s GAAP common equity (net of intangibles and certain costs) is below $19,000,000.
• Stock component: 413,101 HBI shares allocated across FBI’s outstanding shares (Exchange Ratio subject to adjustment); cash in lieu for fractional shares.
• Conditions: FBI shareholder approval, Nasdaq listing of HBI shares to be issued, SEC effectiveness of HBI’s S-4 registration, required regulatory approvals, and customary accuracy of representations and performance covenants.
• Other items: $1,120,000 termination fee payable by FBI in certain circumstances; voting agreement with FBI directors/executives representing ~37.9% of FBI shares; director support agreements with post-closing restrictive covenants.

Why It Matters

• This is a strategic acquisition combining two Missouri banking organizations; it will expand Hawthorn’s franchise but involves issuing stock and paying cash, which may dilute existing HBI shareholders and change capital structure.
• The transaction’s completion depends on shareholder votes, SEC registration (S-4) and regulatory approvals—any of which could delay or prevent closing.
• Financial impact and synergies will depend on final exchange adjustments, FBI’s reported equity at closing, and successful integration; investors should review the forthcoming S-4/proxy and HBI/FBI SEC filings for detailed financial disclosures and risks.