8-K
LANDMARK BANCORP INC (LARK)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Dateof Report (Date of earliest event reported) July 26, 2022
LandmarkBancorp, Inc.
(Exactname of registrant as specified in its charter)
Commission
File Number: 000-33203
| Delaware | 43-1930755 |
|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (I.R.S. Employer<br><br> <br>Identification Number) |
701Poyntz
Manhattan,Kansas 66502
(Addressof principal executive offices, including zip code)
(785)565-2000
(Registrant’stelephone number, including area code)
N/A
(Formername or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
| ☐ | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange |
Securities registered pursuant to Section 12(b) of the Act:
| Title<br> of each class | Trading<br> Symbol(s) | Name<br> of each exchange on which registered |
|---|---|---|
| Common<br> Stock, $0.01 Par Value | LARK | The<br> Nasdaq Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
|---|
On July 26, 2022, Landmark Bancorp, Inc. (the “Company”) issued a press release announcing financial results for the three months ended June 30, 2022. The press release is furnished as Exhibit 99.1 and is incorporated herein by reference.
The information in this item and the attached exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filing.
| Item 8.01. | Other Events. |
|---|
The Company also announced on July 26, 2022, that its Board of Directors approved a cash dividend of $0.21 per share. The cash dividend will be paid to all stockholders of record as of the close of business on August 10, 2022 and payable on August 24, 2022.
| Item 9.01. | Financial Statements and Exhibits. |
|---|
| (d) | Exhibits |
|---|---|
| 99.1 | Press Release dated July 26, 2022 |
| --- | --- |
| 104 | Cover<br> Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LANDMARK BANCORP, INC | ||
|---|---|---|
| Dated:<br> July 26, 2022 | By: | /s/ Mark A. Herpich |
| Mark<br> A. Herpich<br><br> <br>Chief<br> Financial Officer |
Exhibit99.1
PRESSRELEASE
| FOR<br> IMMEDIATE RELEASE | Contacts: |
|---|---|
| July<br> 26, 2022 | Michael<br> E. Scheopner |
| President<br> and Chief Executive Officer | |
| Mark<br> A. Herpich | |
| Chief<br> Financial Officer | |
| (785)<br> 565-2000 |
LandmarkBancorp, Inc. Announces Second Quarter Earnings Per Share of $0.61
DeclaresCash Dividend of $0.21 per Share
(Manhattan, KS, July 26, 2022) – Landmark Bancorp, Inc. (“Landmark”; Nasdaq: LARK) reported diluted earnings per share of $0.61 for the three months ended June 30, 2022, compared to $0.62 per share in the first quarter of 2022 and $0.99 per share in the same quarter last year. Net earnings for the second quarter of 2022 amounted to $3.0 million, compared to $3.1 million in the prior quarter and $5.0 million for the second quarter of 2021. For the three months ended June 30, 2022, the return on average assets was 0.93%, the return on average equity was 10.04%, and the efficiency ratio was 69.1%.
For the first six months of 2022, diluted earnings per share totaled $1.23 compared to $2.07 during the same period of 2021. Net earnings for the six months of 2022 amounted to $6.2 million, compared to $10.3 million in the first six months of 2021. For the six months ended June 30, 2022, the return on average assets was 0.95% and the return on average equity was 9.81%.
In announcing these results, Michael E. Scheopner, President and Chief Executive Officer of Landmark, said, “Despite continued economic uncertainties and an increasing interest rate environment, in the second quarter 2022 we saw strong loan growth along with increased net interest income, higher fees and service charges and increased gains on sales of residential real estate loans. Compared to the first quarter 2022, total gross loans increased by $36.4 million while net interest income grew by $253,000 or 2.9%. Fees and service charges also increased by $227,000 while gains on sales of loans increased $168,000. The growth in loans was mainly due to increased customer demand for both commercial and commercial real estate loans coupled with higher originations of variable rate residential mortgage loans. During the second quarter 2022, Paycheck Protection Program (PPP) loans declined $4.6 million and totaled $652,000 at June 30, 2022. The increase in net interest income this quarter over the prior quarter was the result of higher interest on investment securities offset by a slight decline in loan interest and increased interest expense. Non-interest expense remained well controlled totaling $9.0 million in the second quarter 2022 and included $221,000 in costs associated with our announced acquisition of Freedom Bancshares, Inc. Total deposits declined slightly this quarter but have increased by $53.7 million, or 5.0% as compared to June 30, 2021. Overall, deposit costs remain low.”
Mr. Scheopner continued, “Credit quality remains strong as Landmark recorded net loan charge-offs of $42,000 in the second quarter of 2022 compared to net loan recoveries of $82,000 in the prior quarter and net loan charge-offs of $108,000 in the second quarter of 2021. Non-accrual loans totaled $4.9 million or 0.73% of gross loans at June 30, 2022 and have declined $8.4 million over the last twelve months. Also, the balance of loans past due 30 to 89 days remained low. The allowance for loan losses totaled $8.3 million at June 30, 2022, or 1.24% of period end loans. Our equity to assets ratio totaled 9.08% while loans to deposits totaled 58.5%. We believe Landmark’s risk management practices, liquidity and capital strength continue to position us well for future growth and to meet the financial needs of families and businesses in our markets.”
Total assets at June 30, 2022 were $1.3 billion, total gross loans were $669.9 million and total deposits were $1.1 billion. On June 28, 2022, Landmark announced plans to acquire Freedom Bancshares, Inc. a one-bank holding company with loans of $131.6 million and deposits of $169.1 million. Freedom Bank is located in Overland Park, Kansas and will expand Landmark’s presence in the Kansas City market. It is expected that this transaction will be completed in the fourth quarter of 2022. Also this quarter the Company purchased 21,115 shares of treasury stock.
Landmark’s Board of Directors declared a cash dividend of $0.21 per share, to be paid August 24, 2022, to common stockholders of record as of the close of business on August 10, 2022. Management will host a conference call to discuss the Company’s financial results at 10:00 a.m. (Central time) on Wednesday, July 27, 2022. Investors may participate via telephone by dialing (844) 200-6205 and using access code 665174. A replay of the call will be available through August 26, 2022, by dialing (866) 813-9403 and using access code 005230.
SUMMARYOF SECOND QUARTER RESULTS
NetInterest Income
Net interest income amounted to $8.9 million for the three months ended June 30, 2022, compared to $10.0 million in the same period last year and $8.6 million in the first quarter of 2022. The decrease of $1.1 million, or 10.8%, from the second quarter of 2022 was primarily the result of a decrease in interest on loans, which declined $1.7 million or 19.0%. This decrease was mainly due to lower interest and fees earned on PPP loans which declined by $2.0 million from the second quarter 2021. Net interest income, however, increased $253,000 from the first quarter 2022 due mainly to higher interest on investment securities but slightly lower loan interest. The average tax-equivalent yield on the loan portfolio was 4.40% in the second quarter of 2022 compared to 5.00% in the same quarter last year and 4.59% in the prior quarter. Interest costs on interest-bearing deposits totaled 0.18% in the second quarter of 2022, 0.14% in the second quarter of 2021 and 0.10% in the prior quarter. On a tax-equivalent basis, the net interest margin totaled 3.05% in the second quarter of 2022, compared to 2.99% in the prior quarter and 3.54% in the second quarter of 2021.
Non-InterestIncome
Non-interest income totaled $3.8 million for the second quarter of 2022, a decrease of $1.7 million, or 30.6%, compared to the same period last year and an increase of $233,000, or 6.5% from the previous quarter. The decrease in non-interest income during the second quarter of 2022 compared to the same period last year was primarily due to a decrease of $1.8 million in gains on sales of one-to-four family residential real estate loans as higher interest rates and low housing inventories reduced originations of these loan which are normally sold. Higher mortgage rates however did result in increased originations of adjustable-rate loans this quarter which are kept in the Company’s loan portfolio. Fees and service charges increased $227,000, or 10.5%, compared to the same quarter last year and were $192,000 higher than in the prior quarter.
Non-InterestExpense
During the second quarter of 2022, non-interest expense totaled $9.0 million, a decrease of $168,000, or 1.8% over the same period last year and an increase of $184,000, or 2.1% from the prior quarter. The decrease in non-interest expense in the second quarter of 2022 compared to the same period last year was mainly due to lower data process fees, reduced mortgage servicing rights amortization and a decline in compensation and benefits and other non-interest expense. The decline in data processing fees was due to a new contract with the Company’s main technology vendor in effect this year while lower mortgage banking activity this quarter resulted in lower costs for compensation, amortization and other non-interest expense. Compared to the prior quarter, non-interest expense increased by 2.1% mainly due to costs of $221,000 related to the recently announced acquisition of Freedom Bancshares, Inc. and its wholly owned subsidiary Freedom Bank.
IncomeTax Expense
Landmark recorded income tax expense of $639,000 in the second quarter of 2022 compared to $1.3 million in the second quarter of 2021 and $737,000 in the first quarter of 2022. The effective tax rate decreased to 17.4% in the second quarter of 2022 compared to 20.5% in the second quarter of 2021 and 19.0% in the first quarter of 2022, primarily due to lower pretax earnings.
BalanceSheet Highlights
As of June 30, 2022, gross loans totaled $669.9 million, an increase of $36.4 million since March 31, 2022. The balance of PPP loans totaled $652,000 at June 30, 2022 compared to $5.2 million at March 31, 2022. Excluding these loans, gross loans increased $40.9 million, or 26.1% annualized, during the second quarter of 2022, primarily due to increases of $23.0 million in one-to-four family residential real estate, $13.1 million in commercial real estate and $10.7 million in commercial loans. Compared to March 31, 2022, investment securities increased $19.7 million to $486.6 million as of June 30, 2020, while deposits decreased $8.1 million to $1.1 billion. At June 30, 2022 the loan to deposits ratio was 58.5% compared to 54.9% in the prior quarter and 62.5% in the same period last year.
Stockholders’ equity decreased to $117.3 million (book value of $23.57 per share) as of June 30, 2022, from $123.5 million (book value of $24.72 per share) as of March 31, 2022, due mainly to an increase in other comprehensive losses and the purchase of treasury stock. The increase in other comprehensive losses this quarter resulted from higher interest rates which increased unrealized losses on the Company’s investment securities portfolio. The ratio of equity to total assets decreased to 9.08% on June 30, 2022, from 9.45% at March 31, 2022.
The allowance for loan losses totaled $8.3 million, or 1.24% of total gross loans (excluding PPP loans) on June 30, 2022, compared to $8.4 million, or 1.33% of total gross loans (excluding PPP loans) on March 31, 2022. No allowance for loan losses has been allocated to PPP loans because they are guaranteed by the SBA. Net loan charge-offs totaled $42,000 in the second quarter of 2022, compared to net loan charge-offs of $108,000 during the same quarter last year and net loan recoveries of $82,000 during the first quarter of 2022. The ratio of annualized net loan charge-offs to total average loans was 0.03% in the second quarter of 2022, 0.06% in the second quarter of last year and -0.05% in the prior quarter. No provision for loan losses was recorded in the second quarter of 2022 and 2021. A credit provision for loan losses of $500,000 was made in the first quarter 2022 due to the decline in loan balances.
During the second quarter of 2022, non-performing loans totaled $4.9 million, or 0.73% of gross loans, while loans 30-89 days delinquent totaled $877,000, or 0.13% of gross loans, as of June 30, 2022. Real estate owned totaled $1.3 million at June 30, 2022.
AboutLandmark
Landmark Bancorp, Inc., the holding company for Landmark National Bank, is listed on the Nasdaq Global Market under the symbol “LARK.” Headquartered in Manhattan, Kansas, Landmark National Bank is a community banking organization dedicated to providing quality financial and banking services. Landmark National Bank has 30 locations in 24 communities across Kansas: Manhattan (2), Auburn, Dodge City (2), Fort Scott (2), Garden City, Great Bend (2), Hoisington, Iola, Junction City, Kincaid, La Crosse, Lawrence (2), Lenexa, Louisburg, Mound City, Osage City, Osawatomie, Overland Park, Paola, Pittsburg, Prairie Village, Topeka (2), Wamego and Wellsville, Kansas. Visit www.banklandmark.com for more information.
Special Note Concerning Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of Landmark. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of our management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this press release, including forward-looking statements, speak only as of the date they are made, and Landmark undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond our ability to control or predict, could cause actual results to differ materially from those in our forward-looking statements. These factors include, among others, the following: (i) the effects of the COVID-19 pandemic, including its effects on the economic environment, our customers and operations, as well as changes to federal, state or local government laws, regulations or orders in connection with the pandemic; (ii) the strength of the local, national and international economies; (iii) changes in state and federal laws, regulations and governmental policies concerning banking, securities, consumer protection, insurance, monetary, trade and tax matters; (iv) changes in interest rates and prepayment rates of our assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) timely development and acceptance of new products and services; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) our risk management framework; (ix) interruptions in information technology and telecommunications systems and third-party services; (x) changes and uncertainty in benchmark interest rates, including the elimination of LIBOR and the development of a substitute; (xi) the effects of severe weather, natural disasters, widespread disease or pandemics, or other external events; (xii) the loss of key executives or employees; (xiii) changes in consumer spending; (xiv) integration of acquired businesses; (xv) unexpected outcomes of existing or new litigation; (xvi) changes in accounting policies and practices, such as the implementation of the current expected credit losses accounting standard; (xvii) the economic impact of armed conflict or terrorist acts involving the United States; (xviii) the ability to manage credit risk, forecast loan losses and maintain an adequate allowance for loan losses; (xix) declines in the value of our investment portfolio; (xx) the ability to raise additional capital; (xxi) cyber-attacks; (xxii) declines in real estate values; (xxiii) the effects of fraud on the part of our employees, customers, vendors or counterparties; and (xxiv) any other risks described in the “Risk Factors” sections of reports filed by Landmark with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. Additional information concerning Landmark and its business, including additional risk factors that could materially affect Landmark’s financial results, is included in our filings with the Securities and Exchange Commission.
LANDMARK BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (unaudited)
| (Dollars<br> in thousands) | June<br> 30, | March<br> 31, | December<br> 31, | September<br> 30, | June<br> 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2022 | 2021 | 2021 | 2021 | |||||||||||
| Assets | |||||||||||||||
| Cash<br> and cash equivalents | $ | 30,413 | $ | 106,319 | $ | 189,213 | $ | 117,314 | $ | 131,018 | |||||
| Interest-bearing<br> deposits at other banks | 8,360 | 6,381 | 7,378 | 7,629 | 5,205 | ||||||||||
| Investment<br> securities: | |||||||||||||||
| U.S.<br> treasury securities | 135,459 | 119,882 | 42,675 | 40,314 | 36,646 | ||||||||||
| U.S.<br> federal agency obligations | 14,931 | 17,013 | 17,195 | 17,297 | 22,852 | ||||||||||
| Municipal<br> obligations, tax exempt | 134,994 | 130,915 | 137,984 | 140,788 | 140,526 | ||||||||||
| Municipal<br> obligations, taxable | 49,356 | 45,586 | 40,046 | 38,988 | 38,779 | ||||||||||
| Agency<br> mortgage-backed securities | 151,893 | 153,587 | 142,817 | 133,502 | 99,936 | ||||||||||
| Investment<br> securities available-for-sale, at fair value | 486,633 | 466,983 | 380,717 | 370,889 | 338,739 | ||||||||||
| Bank<br> stocks, at cost | 2,881 | 2,856 | 2,905 | 2,985 | 3,220 | ||||||||||
| Loans: | |||||||||||||||
| One-to-four<br> family residential real estate | 192,517 | 169,514 | 166,081 | 161,120 | 162,606 | ||||||||||
| Construction<br> and land | 23,092 | 25,408 | 27,644 | 26,658 | 27,092 | ||||||||||
| Commercial<br> real estate | 209,879 | 196,736 | 198,472 | 193,455 | 189,093 | ||||||||||
| Commercial | 137,929 | 127,226 | 132,154 | 135,790 | 127,672 | ||||||||||
| Paycheck<br> Protection Program (PPP) | 652 | 5,218 | 17,179 | 28,671 | 61,236 | ||||||||||
| Agriculture | 78,240 | 82,484 | 94,267 | 91,305 | 89,667 | ||||||||||
| Municipal | 2,076 | 2,212 | 2,050 | 2,115 | 2,178 | ||||||||||
| Consumer | 25,531 | 24,751 | 24,541 | 25,624 | 25,676 | ||||||||||
| Total<br> gross loans | 669,916 | 633,549 | 662,388 | 664,738 | 685,220 | ||||||||||
| Net<br> deferred loan (fees) costs and loans in process | 229 | (43 | ) | (380 | ) | 936 | (2,361 | ) | |||||||
| Allowance<br> for loan losses | (8,315 | ) | (8,357 | ) | (8,775 | ) | (8,766 | ) | (9,163 | ) | |||||
| Loans,<br> net | 661,830 | 625,149 | 653,233 | 656,908 | 673,696 | ||||||||||
| Loans<br> held for sale | 6,264 | 5,424 | 4,795 | 8,929 | 10,952 | ||||||||||
| Bank<br> owned life insurance | 32,483 | 32,293 | 32,106 | 31,914 | 31,722 | ||||||||||
| Premises<br> and equipment, net | 20,679 | 20,919 | 20,803 | 20,361 | 20,137 | ||||||||||
| Goodwill | 17,532 | 17,532 | 17,532 | 17,532 | 17,532 | ||||||||||
| Other<br> intangible assets, net | 52 | 67 | 84 | 104 | 132 | ||||||||||
| Mortgage<br> servicing rights | 4,025 | 4,128 | 4,193 | 4,201 | 4,143 | ||||||||||
| Real<br> estate owned, net | 1,288 | 1,288 | 2,551 | 2,578 | 1,385 | ||||||||||
| Other<br> assets | 19,911 | 17,095 | 13,458 | 13,190 | 12,545 | ||||||||||
| Total<br> assets | $ | 1,292,351 | $ | 1,306,434 | $ | 1,328,968 | $ | 1,254,534 | $ | 1,250,426 | |||||
| Liabilities<br> and Stockholders’ Equity | |||||||||||||||
| Liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Non-interest-bearing<br> demand | 343,107 | 350,342 | 350,005 | 317,827 | 307,125 | ||||||||||
| Money<br> market and checking | 520,056 | 517,936 | 536,868 | 488,213 | 504,025 | ||||||||||
| Savings | 170,419 | 167,823 | 155,501 | 151,380 | 150,874 | ||||||||||
| Certificates<br> of deposit | 97,885 | 103,464 | 106,107 | 109,267 | 115,739 | ||||||||||
| Total<br> deposits | 1,131,467 | 1,139,565 | 1,148,481 | 1,066,687 | 1,077,763 | ||||||||||
| Subordinated<br> debentures | 21,651 | 21,651 | 21,651 | 21,651 | 21,651 | ||||||||||
| Other<br> borrowings | 6,223 | 7,004 | 7,403 | 6,219 | 4,534 | ||||||||||
| Accrued<br> interest and other liabilities | 15,708 | 14,701 | 15,790 | 24,571 | 14,122 | ||||||||||
| Total<br> liabilities | 1,175,049 | 1,182,921 | 1,193,325 | 1,119,128 | 1,118,070 | ||||||||||
| Stockholders’<br> equity: | |||||||||||||||
| Common<br> stock | 50 | 50 | 50 | 48 | 48 | ||||||||||
| Additional<br> paid-in capital | 79,284 | 79,206 | 79,120 | 72,489 | 72,413 | ||||||||||
| Retained<br> earnings | 56,662 | 54,677 | 52,593 | 56,957 | 53,391 | ||||||||||
| Treasury<br> stock, at cost | (538 | ) | - | - | - | - | |||||||||
| Accumulated<br> other comprehensive (loss) income | (18,156 | ) | (10,420 | ) | 3,880 | 5,912 | 6,504 | ||||||||
| Total<br> stockholders’ equity | 117,302 | 123,513 | 135,643 | 135,406 | 132,356 | ||||||||||
| Total<br> liabilities and stockholders’ equity | $ | 1,292,351 | $ | 1,306,434 | $ | 1,328,968 | $ | 1,254,534 | $ | 1,250,426 |
LANDMARK BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings (unaudited)
| (Dollars<br> in thousands, except per share amounts) | Three<br> months ended, | Six<br> months ended, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June<br> 30, | March<br> 31, | June<br> 30, | June<br> 30, | June<br> 30, | ||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||
| Interest<br> income: | ||||||||||||
| Loans | $ | 7,156 | $ | 7,191 | $ | 8,840 | $ | 14,347 | $ | 17,244 | ||
| Investment<br> securities: | ||||||||||||
| Taxable | 1,543 | 1,053 | 763 | 2,596 | 1,574 | |||||||
| Tax-exempt | 730 | 722 | 759 | 1,452 | 1,537 | |||||||
| Total<br> interest income | 9,429 | 8,966 | 10,362 | 18,395 | 20,355 | |||||||
| Interest<br> expense: | ||||||||||||
| Deposits | 358 | 195 | 261 | 553 | 542 | |||||||
| Borrowed<br> funds | 173 | 126 | 121 | 299 | 242 | |||||||
| Total<br> interest expense | 531 | 321 | 382 | 852 | 784 | |||||||
| Net<br> interest income | 8,898 | 8,645 | 9,980 | 17,543 | 19,571 | |||||||
| Provision<br> for (reversal of) loan losses | - | (500 | ) | - | (500 | ) | 500 | |||||
| Net<br> interest income after provision for loan losses | 8,898 | 9,145 | 9,980 | 18,043 | 19,071 | |||||||
| Non-interest<br> income: | ||||||||||||
| Fees<br> and service charges | 2,380 | 2,188 | 2,153 | 4,568 | 4,186 | |||||||
| Gains<br> on sales of loans, net | 1,073 | 905 | 2,864 | 1,978 | 6,004 | |||||||
| Bank<br> owned life insurance | 190 | 187 | 153 | 377 | 301 | |||||||
| Gains<br> on sales of investment securities, net | - | - | 33 | - | 1,108 | |||||||
| Other | 153 | 283 | 270 | 436 | 599 | |||||||
| Total<br> non-interest income | 3,796 | 3,563 | 5,473 | 7,359 | 12,198 | |||||||
| Non-interest<br> expense: | ||||||||||||
| Compensation<br> and benefits | 4,953 | 4,775 | 5,023 | 9,728 | 9,964 | |||||||
| Occupancy<br> and equipment | 1,177 | 1,233 | 1,105 | 2,410 | 2,167 | |||||||
| Data<br> processing | 362 | 340 | 492 | 702 | 993 | |||||||
| Amortization<br> of mortgage servicing rights and other intangibles | 335 | 316 | 412 | 651 | 849 | |||||||
| Professional<br> fees | 415 | 451 | 431 | 866 | 823 | |||||||
| Acquisition<br> costs | 221 | - | - | 221 | - | |||||||
| Other | 1,559 | 1,723 | 1,727 | 3,282 | 3,467 | |||||||
| Total<br> non-interest expense | 9,022 | 8,838 | 9,190 | 17,860 | 18,263 | |||||||
| Earnings<br> before income taxes | 3,672 | 3,870 | 6,263 | 7,542 | 13,006 | |||||||
| Income<br> tax expense | 639 | 737 | 1,283 | 1,376 | 2,659 | |||||||
| Net<br> earnings | $ | 3,033 | $ | 3,133 | $ | 4,980 | $ | 6,166 | $ | 10,347 | ||
| Net earnings per<br> share (1) | ||||||||||||
| Basic | $ | 0.61 | $ | 0.63 | $ | 1.00 | $ | 1.24 | $ | 2.07 | ||
| Diluted | 0.61 | 0.62 | 0.99 | 1.23 | 2.07 | |||||||
| Dividends per share<br> (1) | 0.21 | 0.21 | 0.19 | 0.42 | 0.38 | |||||||
| Shares outstanding<br> at end of period (1) | 4,976,344 | 4,997,459 | 4,994,434 | 4,976,344 | 4,994,434 | |||||||
| Weighted average<br> common shares outstanding - basic (1) | 4,988,416 | 4,997,459 | 4,990,507 | 4,992,912 | 4,990,507 | |||||||
| Weighted average<br> common shares outstanding - diluted (1) | 5,002,425 | 5,017,055 | 4,997,473 | 5,009,822 | 4,997,473 | |||||||
| Tax<br> equivalent net interest income | $ | 9,094 | $ | 8,840 | $ | 10,185 | $ | 17,934 | $ | 19,986 |
(1) Share and per share values at or for the periods ended June 30, 2021 have been adjusted to give effect to the 5% stock dividend paid during December 2021.
LANDMARK BANCORP, INC. AND SUBSIDIARIES
Select Ratios and Other Data (unaudited)
| (Dollars<br> in thousands, except per share amounts) | As<br> of or for the three<br>months ended, | Six<br> months ended, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June<br> 30, | March<br> 31, | June<br> 30, | June<br> 30, | June<br> 30, | |||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Performance<br> ratios: | |||||||||||||||
| Return<br> on average assets (1) | 0.93 | % | 0.97 | % | 1.59 | % | 0.95 | % | 1.68 | % | |||||
| Return<br> on average equity (1) | 10.04 | % | 9.59 | % | 15.40 | % | 9.81 | % | 16.22 | % | |||||
| Net<br> interest margin (1)(2) | 3.05 | % | 2.99 | % | 3.53 | % | 3.02 | % | 3.53 | % | |||||
| Effective<br> tax rate | 17.4 | % | 19.0 | % | 20.5 | % | 18.2 | % | 20.4 | % | |||||
| Efficiency<br> ratio (3) | 69.1 | % | 72.7 | % | 58.9 | % | 70.9 | % | 59.1 | % | |||||
| Non-interest<br> income to total income (3) | 29.9 | % | 28.5 | % | 35.3 | % | 29.2 | % | 36.2 | % | |||||
| Average<br> balances: | |||||||||||||||
| Investment<br> securities | $ | 477,035 | $ | 421,996 | $ | 334,936 | $ | 449,667 | $ | 318,353 | |||||
| Loans | 653,013 | 636,032 | 709,872 | 644,569 | 719,985 | ||||||||||
| Assets | 1,307,112 | 1,305,813 | 1,253,995 | 1,306,446 | 1,242,155 | ||||||||||
| Interest-bearing<br> deposits | 791,257 | 792,354 | 771,728 | 791,803 | 767,243 | ||||||||||
| Subordinated<br> debentures and other borrowings | 28,632 | 28,476 | 26,038 | 28,554 | 26,805 | ||||||||||
| Stockholders’<br> equity | 121,147 | 132,429 | $ | 129,744 | 126,757 | $ | 128,668 | ||||||||
| Average<br> tax equivalent yield/cost (1): | |||||||||||||||
| Investment<br> securities | 1.97 | % | 1.83 | % | 2.02 | % | 1.90 | % | 2.19 | % | |||||
| Loans | 4.40 | % | 4.59 | % | 5.00 | % | 4.49 | % | 4.83 | % | |||||
| Total<br> interest-bearing assets | 3.23 | % | 3.10 | % | 3.67 | % | 3.16 | % | 3.66 | % | |||||
| Interest-bearing<br> deposits | 0.18 | % | 0.10 | % | 0.14 | % | 0.14 | % | 0.14 | % | |||||
| Subordinated<br> debentures and other borrowings | 3.06 | % | 2.30 | % | 2.20 | % | 2.68 | % | 1.82 | % | |||||
| Repurchase<br> agreements | 0.46 | % | 0.18 | % | 0.18 | % | 0.32 | % | 0.16 | % | |||||
| Total<br> interest-bearing liabilities | 0.26 | % | 0.16 | % | 0.19 | % | 0.21 | % | 0.20 | % | |||||
| Capital<br> ratios: | |||||||||||||||
| Equity<br> to total assets | 9.08 | % | 9.45 | % | 10.58 | % | |||||||||
| Tangible<br> equity to tangible assets (3) | 7.82 | % | 8.22 | % | 9.30 | % | |||||||||
| Book<br> value per share | $ | 23.57 | $ | 24.72 | $ | 26.50 | |||||||||
| Tangible<br> book value per share (3) | $ | 20.04 | $ | 21.19 | $ | 22.96 | |||||||||
| Rollforward<br> of allowance for loan losses: | |||||||||||||||
| Beginning<br> balance | $ | 8,357 | $ | 8,775 | $ | 9,271 | $ | 8,775 | $ | 8,775 | |||||
| Charge-offs | (76 | ) | (53 | ) | (228 | ) | (129 | ) | (292 | ) | |||||
| Recoveries | 34 | 135 | 120 | 169 | 180 | ||||||||||
| Provision<br> for loan losses | - | (500 | ) | - | (500 | ) | 500 | ||||||||
| Ending<br> balance | $ | 8,315 | $ | 8,357 | $ | 9,163 | $ | 8,315 | $ | 9,163 | |||||
| Non-performing<br> assets: | |||||||||||||||
| Non-accrual<br> loans | $ | 4,887 | $ | 4,676 | $ | 13,297 | |||||||||
| Accruing<br> loans over 90 days past due | - | - | - | ||||||||||||
| Real<br> estate owned | 1,288 | 1,288 | 1,385 | ||||||||||||
| Total<br> non-performing assets | $ | 6,175 | $ | 5,964 | $ | 14,682 | |||||||||
| Loans<br> 30-89 days delinquent | $ | 877 | $ | 846 | $ | 1,881 | |||||||||
| Other<br> ratios: | |||||||||||||||
| Loans<br> to deposits | 58.49 | % | 54.86 | % | 62.51 | % | |||||||||
| Loans<br> 30-89 days delinquent and still accruing to gross loans outstanding | 0.13 | % | 0.13 | % | 0.27 | % | |||||||||
| Total<br> non-performing loans to gross loans outstanding | 0.73 | % | 0.74 | % | 1.94 | % | |||||||||
| Total<br> non-performing assets to total assets | 0.48 | % | 0.46 | % | 1.17 | % | |||||||||
| Allowance<br> for loan losses to gross loans outstanding | 1.24 | % | 1.32 | % | 1.34 | % | |||||||||
| Allowance<br> for loan losses to gross loans outstanding excluding PPP loans | 1.24 | % | 1.33 | % | 1.47 | % | |||||||||
| Allowance<br> for loan losses to total non-performing loans | 170.15 | % | 178.72 | % | 68.91 | % | |||||||||
| Net<br> loan charge-offs to average loans (1) | 0.03 | % | -0.05 | % | 0.06 | % | -0.01 | % | 0.03 | % |
(1) Information is annualized.
(2) Net interest margin is presented on a fully tax equivalent basis, using a 21% federal tax rate.
(3) Non-GAAP financial measures. See the “Non-GAAP Financial Measures” section of this press release for a reconciliation to the most comparable GAAP equivalent.
LANDMARK BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financials Measures (unaudited)
| (Dollars<br> in thousands, except per share amounts) | As<br> of or for the three months ended, | Six<br> months ended, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June<br> 30, | March<br> 31, | June<br> 30, | June<br> 30, | June<br> 30, | |||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Non-GAAP<br> financial ratio reconciliation: | |||||||||||||||
| Total<br> non-interest expense | $ | 9,022 | $ | 8,838 | $ | 9,190 | $ | 17,860 | $ | 18,263 | |||||
| Less:<br> foreclosure and real estate owned expense | (9 | ) | (23 | ) | (65 | ) | (32 | ) | (76 | ) | |||||
| Less:<br> amortization of other intangibles | (15 | ) | (17 | ) | (36 | ) | (32 | ) | (74 | ) | |||||
| Less:<br> acquisition costs | (221 | ) | - | - | (221 | ) | - | ||||||||
| Adjusted<br> non-interest expense (A) | 8,777 | 8,798 | 9,089 | 17,575 | 18,113 | ||||||||||
| Net<br> interest income (B) | 8,898 | 8,645 | 9,980 | 17,543 | 19,571 | ||||||||||
| Non-interest<br> income | 3,796 | 3,563 | 5,473 | 7,359 | 12,198 | ||||||||||
| Less:<br> gains on sales of investment securities, net | - | - | (33 | ) | - | (1,108 | ) | ||||||||
| Less:<br> gains on sales of premises and equipment and foreclosed assets | - | (114 | ) | - | (114 | ) | (5 | ) | |||||||
| Adjusted<br> non-interest income (C) | $ | 3,796 | $ | 3,449 | $ | 5,440 | $ | 7,245 | $ | 11,085 | |||||
| Efficiency<br> ratio (A/(B+C)) | 69.1 | % | 72.7 | % | 58.9 | % | 70.9 | % | 59.1 | % | |||||
| Non-interest<br> income to total income (C/(B+C)) | 29.9 | % | 28.5 | % | 35.3 | % | 29.2 | % | 36.2 | % | |||||
| Total<br> stockholders’ equity | $ | 117,302 | $ | 123,513 | $ | 132,356 | |||||||||
| Less:<br> goodwill and other intangible assets | (17,584 | ) | (17,599 | ) | (17,664 | ) | |||||||||
| Tangible<br> equity (D) | $ | 99,718 | $ | 105,914 | $ | 114,692 | |||||||||
| Total<br> assets | $ | 1,292,351 | $ | 1,306,434 | $ | 1,250,426 | |||||||||
| Less:<br> goodwill and other intangible assets | (17,584 | ) | (17,599 | ) | (17,664 | ) | |||||||||
| Tangible<br> assets (E) | $ | 1,274,767 | $ | 1,288,835 | $ | 1,232,762 | |||||||||
| Tangible<br> equity to tangible assets (D/E) | 7.82 | % | 8.22 | % | 9.30 | % | |||||||||
| Shares<br> outstanding at end of period (F) | 4,976,344 | 4,997,459 | 4,994,434 | ||||||||||||
| Tangible<br> book value per share (D/F) | $ | 20.04 | $ | 21.19 | $ | 22.96 |