Discounted Cash Flow (DCF) Analysis Levered

Hawthorn Bancshares, Inc. (HWBK)

$24.25

-0.42 (-1.72%)

All numbers are in Millions, Currency in USD

Stock DCF: 150.62 | 24.25 | undervalue

Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	48.24	50.70	53.75	64.11	75.08	83.99	93.96	105.12	117.60	131.56
Revenue (%)
Operating Cash Flow	12.48	16.30	19.09	20.15	30.61	27.84	31.15	34.85	38.98	43.61
Operating Cash Flow (%)
Capital Expenditure	-1.27	-2.33	-2.17	-1.83	-0.59	-2.50	-2.80	-3.13	-3.50	-3.92
Capital Expenditure (%)
Free Cash Flow	11.21	13.98	16.92	18.32	30.02	25.34	28.35	31.72	35.48	39.70

Weighted Average Cost Of Capital

Share price	$ 24.25
Beta	0.419
Diluted Shares Outstanding	6.76
Cost of Debt
Tax Rate	20.19
After-tax Cost of Debt	3.99%
Risk-Free Rate
Market Risk Premium
Cost of Equity	5.509
Total Debt	-
Total Equity	163.85
Total Capital	163.85
Debt Weighting	0.00
Equity Weighting	100.00
Wacc

Build Up Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	48.24	50.70	53.75	64.11	75.08	83.99	93.96	105.12	117.60	131.56
Operating Cash Flow	12.48	16.30	19.09	20.15	30.61	27.84	31.15	34.85	38.98	43.61
Capital Expenditure	-1.27	-2.33	-2.17	-1.83	-0.59	-2.50	-2.80	-3.13	-3.50	-3.92
Free Cash Flow	11.21	13.98	16.92	18.32	30.02	25.34	28.35	31.72	35.48	39.70
WACC
PV LFCF						18.37	19.48	20.65	21.90	23.22
SUM PV LFCF										135.48

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.51
Free cash flow (t + 1)	40.49
Terminal Value	1,153.53
Present Value of Terminal Value	882.19

Intrinsic Value

Enterprise Value	1,017.67
Net Debt	-
Equity Value	1,017.67
Shares Outstanding	6.76
Equity Value Per Share	150.62