EX-99.1

Hawthorn Bancshares Announces 2^nd Quarter Earnings
Jefferson City, MO
August 7, 2007

Hawthorn Bancshares of Jefferson City, MO (NASDAQ: HWBK), a financial services holding company, announced today second quarter earnings of $0.56 per diluted share, down 20% from diluted earnings per share of $0.70 a year ago.

Net income for the three months ended June 30, 2007 of $2,363,000 decreased $570,000 when compared to the second quarter of 2006.

For the six months ended June 30, 2007, Hawthorn Bancshares earned $1.11 per diluted share, down 17% from diluted earnings per share of $1.34 a year ago. Net income for the six months ended June 30, 2007 of $4,670,000 decreased $952,000 when compared to the first six months of 2006.

In commenting on earnings performance, Chairman & CEO James E. Smith said “Significant efforts are underway this year to merge all of our subsidiary banks to a single platform under the newly branded Hawthorn Bank banner. I am very pleased with our entire staffs’ efforts in making our company unique in the crowded world of banking. We knew that consolidation related expenses were going to be sizable in 2007 and our current performance reflects not only a tightening net interest margin, but also higher salaries & employee benefit costs related to the Company’s strategic growth plan and increased legal & professional fees associated with the consolidation.”

To summarize the Company’s performance for the six months ended June 30, 2007 compared to the same period in 2006, net interest income decreased $1,072,000 (6%) due to tightening of the net interest margin; non-interest income increased $1,098,000 (26%) due in large part to proceeds received from sale of two of the Company’s charters; and other non-interest expense increased $1,810,000 (12%). The majority of the non-interest expense increase is attributed to implementation of the Company’s strategic plan which included adding additional staff to execute key growth initiatives and legal & professional fees associated with the consolidation and rebranding effort.

For the three months ended June 30, 2007, return on average equity was 8.77% and return on average assets was 0.83% compared to 11.79% and 1.02% respectively for the same period in 2006. For the six months ended June 30, 2007, return on average equity was 8.87% and return on average assets was 0.83% compared to 11.47% and 0.99% respectively for the same period in 2006.

Comparing June 30, 2007 balances to December 31, 2006, total assets increased 1.5% to $1,160,108,000. Total loans grew 3.1% to $837,422,000, while investment securities decreased 6.6% to $177,214,000. Total deposits increased 1.9% to $917,158,000. During the same period, stockholders’ equity increased 2.5% to $107,574,000 or 9.3% of total assets.

Hawthorn Bancshares, Inc., a multi-bank holding company headquartered in Lee’s Summit, Missouri, is the parent company of Hawthorn Bank of Clinton with locations in Springfield, Lee’s Summit, Branson, Windsor, Collins, Osceola and Warsaw, Belton, Drexel, Harrisonville, Independence and Raymore: and The Exchange National Bank of Jefferson City with locations in Columbia, California, Tipton and St. Robert.

Statements made in this press release that suggest Hawthorn Bancshares’ or management’s intentions, hopes, beliefs, expectations, or predictions of the future include “forward-looking statements” within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended. It is important to note that actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those projected in such forward-looking statements is contained from time to time in the company’s quarterly and annual reports filed with the Securities and Exchange Commission.


Balance sheet information:	June 30, 2007		December 31, 2006
Loans, net of allowance
for loan losses	$	828,311,575	$	803,297,381
Debt and equity securities		177,214,033		189,773,310
Total assets		1,160,108,036		1,142,711,897
Deposits		917,157,733		899,864,734
Stockholders’ equity		107,574,377		104,944,590
Three Months			Three Months
Statement of income information:	Ended June 30, 2007		Ended June 30, 2006
Total interest income	$	18,137,172	$	17,929,821
Total interest expense		9,052,155		8,095,272
Net interest income		9,085,017		9,834,549
Provision for loan losses		154,216		310,500
Noninterest income		2,849,641		2,249,180
Noninterest expense		8,445,161		7,457,467
Income before taxes		3,335,281		4,315,762
Income taxes		972,253		1,382,577
Net income		2,363,028		2,933,185
Six Months			Six Months
Statement of income information:	Ended June 30, 2007		Ended June 30, 2006
Total interest income	$	36,167,855	$	34,722,687
Total interest expense		17,947,138		15,429,592
Net interest income		18,220,717		19,293,095
Provision for loan losses		379,216		628,000
Noninterest income		5,373,210		4,275,091
Noninterest expense		16,579,142		14,769,059
Income before taxes		6,635,569		8,171,127
Income taxes		1,965,874		2,549,335
Net income		4,669,695		5,621,792


Contact:		Kathleen Bruegenhemke Senior Vice President, Investor Relations TEL: 573.761.6100 FAX: 573.761.6272 www.exchangebancshares.com