Equibles

10-Q

LANDMARK BANCORP INC (LARK)

10-Q 2024-11-13 For: 2024-09-30
View Original
Added on April 07, 2026

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

September 30, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For

the transition period from ________ to ________

Commission

File Number 0-33203

LANDMARK

BANCORP, INC.

(Exact name of registrant as specified in its charter)

Delaware 43-1930755
(State<br> or other jurisdiction of incorporation or organization) (I.R.S.<br> Employer Identification Number)

701Poyntz Avenue, Manhattan, Kansas 66502

(Address of principal executive offices) (Zip code)

(785)565-2000

(Registrant’s telephone number, including area code)

Securities

registered pursuant to Section 12(b) of the Act:

Title of each class: Trading Symbol(s) Name of exchange on which registered:
Common<br> Stock, par value $0.01 per share LARK Nasdaq<br> Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate

the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: as November 12, 2024, the issuer had outstanding 5,501,221 shares of its common stock, $0.01 par value per share.

LANDMARK

BANCORP, INC.

Form

10-Q Quarterly Report

Table

of Contents

Page<br> Number
PART<br> I
Item<br> 1. Financial<br> Statements 2<br> - 25
Item<br> 2. Management’s<br> Discussion and Analysis of Financial Condition and Results of Operations 26<br> – 35
Item<br> 3. Quantitative<br> and Qualitative Disclosures about Market Risk 34<br> – 35
Item<br> 4. Controls<br> and Procedures 35
PART<br> II
Item<br> 1. Legal<br> Proceedings 36
Item<br> 1A. Risk<br> Factors 36
Item<br> 2. Unregistered<br> Sales of Equity Securities and Use of Proceeds 36
Item<br> 3. Defaults<br> Upon Senior Securities 36
Item<br> 4. Mine<br> Safety Disclosures 36
Item<br> 5. Other<br> Information 36
Item<br> 6. Exhibits 37
Signature<br> Page 38 
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PART

I – FINANCIAL INFORMATION

ITEM

  1. FINANCIAL STATEMENTS

LANDMARK

BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED

BALANCE SHEETS

(Dollars in thousands, except per share amounts) December 31,
2023
Assets
Cash and cash<br> equivalents 21,211 $ 27,101
Interest-bearing deposits<br> at other banks 4,363 4,918
Investment securities available-for-sale,<br> at fair value 411,012 452,769
Investment securities,<br> held-to-maturity, net of allowance for credit losses of 91 and 91,fair value of 3,131 and 3,049 3,643 3,555
Bank stocks, at cost 7,894 8,123
Loans, net of allowance<br> for credit losses of 11,544 and 10,608 990,242 937,619
Loans held for sale, at<br> fair value 3,250 853
Bank owned life insurance 39,176 38,333
Premises and equipment,<br> net 20,976 19,709
Goodwill 32,377 32,377
Other intangible assets,<br> net 2,729 3,241
Mortgage servicing rights 3,041 3,158
Real estate owned, net 428 928
Accrued<br> interest and other assets 23,309 28,988
Total<br> assets 1,563,651 $ 1,561,672
Liabilities and Stockholders’<br> Equity
Liabilities:
Deposits:
Non-interest-bearing demand 360,188 $ 367,103
Money market and checking 565,629 613,613
Savings 145,825 152,381
Certificates of deposit 203,860 183,154
Total deposits 1,275,502 1,316,251
Federal Home Loan Bank<br> and other borrowings 92,050 64,662
Subordinated debentures 21,651 21,651
Repurchase agreements 9,528 12,714
Accrued<br> interest and other liabilities 25,229 19,480
Total<br> liabilities 1,423,960 1,434,758
Commitments and contingencies - -
Stockholders’ equity:
Preferred stock, 0.01 par value per share,<br> 200,000 shares authorized; none issued - -
Common stock, 0.01 par value per share,<br> 7,500,000 shares authorized; 5,522,582 and 5,481,407 shares issued at September 30, 2024 and December 31, 2023, respectively 55 55
Additional paid-in capital 89,532 89,208
Retained earnings 60,549 54,282
Treasury stock, at cost;<br> 21,361 and 3,812 shares at September 30, 2024 and December 31, 2023, respectively (396 ) (75 )
Accumulated<br> other comprehensive loss (10,049 ) (16,556 )
Total<br> stockholders’ equity 139,691 126,914
Total<br> liabilities and stockholders’ equity 1,563,651 $ 1,561,672

All values are in US Dollars.

See

accompanying notes to consolidated financial statements.

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LANDMARK

BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED

STATEMENTS OF EARNINGS

(Unaudited)

2024 2023 2024 2023
Three months ended Nine months ended
(Dollars in thousands, except per share amounts) September<br> 30 September<br> 30
2024 2023 2024 2023
Interest income:
Loans $ 15,933 $ 13,531 $ 45,445 $ 37,530
Investment securities:
Taxable 2,301 2,445 7,088 7,141
Tax-exempt 747 772 2,270 2,333
Interest-bearing<br> deposits at banks 41 46 144 193
Total<br> interest income 19,022 16,794 54,947 47,197
Interest expense:
Deposits 5,830 4,384 16,960 10,375
Federal Home Loan Bank<br> and other borrowings 1,100 1,251 3,149 2,845
Subordinated debentures 416 417 1,246 1,168
Repurchase<br> agreements 72 116 267 403
Total<br> interest expense 7,418 6,168 21,622 14,791
Net interest income 11,604 10,626 33,325 32,406
Provision for credit losses 500 - 800 299
Net interest income after<br> provision for credit losses 11,104 10,626 32,525 32,107
Non-interest income:
Fees and service charges 2,880 2,618 8,032 7,457
Gains on sales of loans,<br> net 704 491 1,864 2,014
Increase in cash surrender<br> value of bank owned life insurance 254 230 747 671
Other 415 313 730 834
Total<br> non-interest income 4,253 3,652 11,373 10,976
Non-interest expense:
Compensation and benefits 5,803 5,811 16,839 16,925
Occupancy and equipment 1,429 1,373 4,113 4,136
Data processing 464 458 1,437 1,478
Amortization of mortgage<br> servicing rights and other intangibles 256 474 924 1,407
Professional fees 573 624 1,869 1,722
Other 2,034 1,989 7,023 5,753
Total<br> non-interest expense 10,559 10,729 32,205 31,421
Earnings before income taxes 4,798 3,549 11,693 11,662
Income tax expense 867 671 1,972 2,065
Net earnings $ 3,931 $ 2,878 $ 9,721 $ 9,597
Earnings per share:
Basic (1) $ 0.72 $ 0.53 $ 1.77 $ 1.75
Diluted (1) $ 0.72 $ 0.52 $ 1.77 $ 1.75
Dividends per share (1) $ 0.21 $ 0.20 $ 0.63 $ 0.60
(1) Per<br> share amounts for the periods ended September 30, 2023 have been adjusted to give effect to the 5%<br> stock dividend issued in December of 2023.
--- ---

See

accompanying notes to consolidated financial statements.

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LANDMARK

BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

2024 2023 2024 2023
Three months ended Nine months ended
(Dollars in thousands) September<br> 30, September<br> 30,
2024 2023 2024 2023
Net earnings $ 3,931 $ 2,878 $ 9,721 $ 9,597
Other comprehensive income (loss):
Net unrealized holding<br> (losses) gains on available-for-sale securities 11,477 (12,810 ) 8,618 (9,639 )
Income tax effect on net<br> unrealized holding losses (gains) (2,812 ) 3,139 (2,111 ) 2,362
Other comprehensive income<br> (loss) gains 8,665 (9,671 ) 6,507 (7,277 )
Total<br> comprehensive income (loss) $ 12,596 $ (6,793 ) $ 16,228 $ 2,320

See

accompanying notes to consolidated financial statements.

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LANDMARK

BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED

STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands,<br> except per share amounts) Additional<br> paid-in capital Retained<br> earnings Treasury<br> stock Accumulated<br> other comprehensive income (loss) Total
Balance at July 1, 2023 52 $ 84,475 $ 55,498 $ - $ (22,672 ) $ 117,353
Net earnings - - 2,878 - - 2,878
Other comprehensive income (loss) - - - - (9,671 ) (9,671 )
Dividends paid (0.20<br> per share) (1) - - (1,096 ) - - (1,096 )
Issue of restricted common stock, 17,551 shares - - - - - -
Stock-based compensation - 93 - - - 93
Balance at September 30, 2023 52 $ 84,568 $ 57,280 $ - $ (32,343 ) $ 109,557
Balance at July 1, 2024 55 $ 89,469 $ 57,774 $ (330 ) $ (18,714 ) $ 128,254
Net earnings - - 3,931 - - 3,931
Other comprehensive income (loss) - - - - 8,665 8,665
Dividends paid (0.21 per share) - - (1,156 ) - - (1,156 )
Issuance of restricted common stock, 36,175<br> shares - - - - - -
Stock-based compensation - 63 - - - 63
Purchase of 3,338 shares treasury stock - - - (66 ) - (66 )
Balance at September 30, 2024 55 $ 89,532 $ 60,549 $ (396 ) $ (10,049 ) $ 139,691

All values are in US Dollars.

(1) Dividends per share<br>have been adjusted to give effect to the 5% stock dividend issued in December of 2023.
(Dollars in thousands,<br> except per share amounts) Additional<br> paid-in capital Retained<br> earnings Treasury<br> stock Accumulated<br> other comprehensive income (loss) Total
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Balance at December 31, 2022 52 $ 84,273 $ 52,174 $ - $ (25,066 ) $ 111,433
Cumulative effect of change in accounting
principle from implementation<br> of ASU 2016-3 - - (1,204 ) - - (1,204 )
Cumulative effect of change in accounting principle from implementation of ASU 2016-3 - - (1,204 ) - - (1,204 )
Balance at January 1, 2023 52 $ 84,273 $ 50,970 $ - $ (25,066 ) $ 110,229
Net earnings - - 9,597 - - 9,597
Other comprehensive income (loss) - - - - (7,277 ) (7,277 )
Dividends paid (0.60per<br> share) (1) - - (3,287 ) - - (3,287 )
Issue of restricted common stock, 17,551 shares - - - - - -
Stock-based compensation - 243 - - - 243
Exercise of stock options, 2,693 shares - 52 - - - 52
Balance at September 30, 2023 52 $ 84,568 $ 57,280 $ - $ (32,343 ) $ 109,557
Balance at January 1, 2024 55 $ 89,208 $ 54,282 $ (75 ) $ (16,556 ) $ 126,914
Net earnings - - 9,721 - - 9,721
Other comprehensive income (loss) - - - - 6,507 6,507
Dividends paid (0.63 per share) - - (3,454 ) - - (3,454 )
Dividends paid - - (3,454 ) - - (3,454 )
Issuance of restricted common stock, 41,175<br> shares - - - - - -
Issuance<br>of restricted common stock, shares - - - - - -
Stock-based compensation - 324 - - - 324
Purchase of 16,367 shares treasury stock - - - (321 ) - (321 )
Purchase<br> of shares treasury stock - - - (321 ) - (321 )
Balance at September 30, 2024 55 $ 89,532 $ 60,549 $ (396 ) $ (10,049 ) $ 139,691

All values are in US Dollars.

(1) Dividends per share<br>have been adjusted to give effect to the 5% stock dividend issued in December of 2023.

See accompanying notes to consolidated financial statements.

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LANDMARK

BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED

STATEMENTS OF CASH FLOWS

(Unaudited)

2024 2023
Nine months ended
(Dollars in thousands) September<br> 30,
2024 2023
Cash flows from operating activities:
Net earnings $ 9,721 $ 9,597
Adjustments to reconcile net earnings to net<br> cash provided by operating activities:
Provision for credit losses 800 299
Valuation allowance on<br> real estate held for sale 1,108 -
Amortization of investment<br> security premiums, net (18 ) 221
Accretion of purchase accounting<br> adjustments (850 ) (750 )
Amortization of mortgage<br> servicing rights and other intangibles 924 1,407
Depreciation 987 936
Increase in cash surrender<br> value of bank owned life insurance (747 ) (671 )
Stock-based compensation 324 243
Deferred income taxes (177 ) 7
Net loss on sales of premises<br> and equipment and foreclosed assets 282 -
Net gains on sales of loans (1,864 ) (2,014 )
Proceeds from sales of<br> loans 64,500 69,747
Origination of loans held<br> for sale (65,328 ) (67,472 )
Changes in assets and liabilities:
Accrued interest and other<br> assets (183 ) (625 )
Accrued<br> expenses, taxes, and other liabilities 5,849 445
Net<br> cash provided by operating activities 15,328 11,370
Cash flows from investing<br> activities:
Net increase in loans (52,761 ) (86,015 )
Net change in interest-bearing<br> deposits at banks 555 3,166
Maturities and prepayments<br> of investment securities 54,193 41,250
Purchases of investment<br> securities (3,800 ) (18,647 )
Redemption of bank stocks 11,956 8,564
Purchase of bank stocks (11,727 ) (11,103 )
Premiums paid on bank owned<br> life insurance (96 ) (96 )
Proceeds from sales of<br> premises and equipment and foreclosed assets 2,998 -
Purchases<br> of premises and equipment, net (2,214 ) (520 )
Net<br> cash used in investing activities (896 ) (63,401 )
Cash flows from financing activities:
Net (decrease) increase<br> in deposits (40,749 ) 7,374
Federal Home Loan Bank<br> advance borrowings 595,463 560,546
Federal Home Loan Bank<br> advance repayments (567,077 ) (494,179 )
Proceeds from other borrowings 360 -
Repayments on other borrowings (1,358 ) (998 )
Change in repurchase agreements (3,186 ) (16,812 )
Proceeds from exercise<br> of stock options - 52
Payment of dividends (3,454 ) (3,287 )
Purchase<br> of treasury stock (321 ) -
Net<br> cash (used in) provided by financing activities (20,322 ) 52,696
Net (decrease) increase<br> in cash and cash equivalents (5,890 ) 665
Cash and cash equivalents<br> at beginning of period 27,101 23,156
Cash and cash equivalents<br> at end of period $ 21,211 $ 23,821

(Continued)

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LANDMARK

BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED

STATEMENTS OF CASH FLOWS, CONTINUED

(Unaudited)

Nine months ended
(Dollars in thousands) September<br> 30,
2024 2023
Supplemental disclosure of cash flow information:
Cash payments<br> for income taxes $ 628 $ -
Cash paid for interest 21,371 13,641
Cash paid for operating<br> leases 128 118

See

accompanying notes to consolidated financial statements.

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LANDMARK

BANCORP, INC. AND SUBSIDIARIES

NOTES

TO CONSOLIDATED FINANCIAL STATEMENTS

1.Interim Financial Statements

The unaudited consolidated financial statements of Landmark Bancorp, Inc. (the “Company”) and its wholly owned subsidiaries, Landmark National Bank (the “Bank”) and Landmark Risk Management Inc., have been prepared in accordance with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements and should be read in conjunction with the Company’s most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 27, 2024, containing the latest audited consolidated financial statements and notes thereto. The consolidated financial statements in this report have not been audited by an independent registered public accounting firm, but in the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of financial statements have been reflected herein. The results of the three and nine month interim period ended September 30, 2024 are not necessarily indicative of the results expected for the year ending December 31, 2024 or any other future time period. The Company has evaluated subsequent events for recognition and disclosure up to the date the financial statements were issued.

2.Investments

A summary of the Company’s investment securities classified as available-for-sale and held-to-maturity as of September 30, 2024 and December 31, 2023 is as follows:

Schedule of Available-for-sale and Held to Maturity Securities

(Dollars in thousands) As<br> of September 30, 2024
Gross Gross
Amortized unrealized unrealized Estimated
cost gains losses fair<br> value
Available-for-sale:
U. S. treasury<br> securities $ 85,457 $ 1 $ (1,705 ) $ 83,753
Municipal obligations,<br> tax exempt 114,184 94 (2,152 ) 112,126
Municipal obligations,<br> taxable 76,753 723 (2,347 ) 75,129
Agency<br> mortgage-backed securities 147,928 421 (8,345 ) 140,004
Total<br> available-for-sale $ 424,322 $ 1,239 $ (14,549 ) $ 411,012
Held-to-maturity:
Other $ 3,643 $ - $ (512 ) $ 3,131
Total<br> held-to-maturity $ 3,643 $ - $ (512 ) $ 3,131
As<br> of December 31, 2023
--- --- --- --- --- --- --- --- --- ---
Gross Gross
Amortized unrealized unrealized Estimated
cost gains losses fair<br> value
Available-for-sale:
U. S. treasury<br> securities $ 99,340 $ - $ (3,673 ) $ 95,667
Municipal obligations,<br> tax exempt 122,775 186 (2,338 ) 120,623
Municipal obligations,<br> taxable 82,926 225 (4,068 ) 79,083
Agency<br> mortgage-backed securities 169,656 247 (12,507 ) 157,396
Total<br> available-for-sale $ 474,697 $ 658 $ (22,586 ) $ 452,769
Held-to-maturity:
Other $ 3,555 $ - $ (506 ) $ 3,049
Total<br> held-to-maturity $ 3,555 $ - $ (506 ) $ 3,049

The

amortized cost of the above held-to-maturity investment securities has been further reduced by the allowance for credit losses of $91,000 at both September 30, 2024 and December 31, 2023.

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The tables above show that some of the securities in the Company’s available-for-sale and held-to-maturity investment portfolios had unrealized losses, or were temporarily impaired, as of both September 30, 2024 and December 31, 2023. This temporary impairment represents the estimated amount of loss that would be realized if the securities were sold on the valuation date.

The following table summarizes available-for-sale securities in an unrealized loss position for which an allowance for credit losses has not been recorded at September 30, 2024 and December 31, 2023 along with the length of time each category of securities has been in a continuous loss position:

Schedule of Available for Sale Securities Continuous Unrealized Loss Position Fair Value

As<br> of September 30, 2024
(Dollars in thousands) Less<br> than 12 months 12<br> months or longer Total
No. of Fair Unrealized Fair Unrealized Fair Unrealized
securities value losses value losses value losses
Available-for-sale:
U.S. treasury<br> securities 45 $ 1,764 $ (4 ) $ 81,295 $ (1,701 ) $ 83,059 $ (1,705 )
Municipal obligations,<br> tax exempt 231 13,705 (97 ) 82,828 (2,055 ) 96,533 (2,152 )
Municipal obligations,<br> taxable 76 - - 47,358 (2,347 ) 47,358 (2,347 )
Agency<br> mortgage-backed securities 96 - - 114,329 (8,345 ) 114,329 (8,345 )
Total<br> for available-for-sale 448 $ 15,469 $ (101 ) $ 325,810 $ (14,448 ) $ 341,279 $ (14,549 )
As<br> of December 31, 2023
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Less<br> than 12 months 12<br> months or longer Total
No. of Fair Unrealized Fair Unrealized Fair Unrealized
securities value losses value losses value losses
Available-for-sale:
U.S. treasury<br> securities 47 $ 1,129 $ (7 ) $ 93,833 $ (3,666 ) $ 94,962 $ (3,673 )
Municipal obligations,<br> tax exempt 229 31,468 (337 ) 64,962 (2,001 ) 96,430 (2,338 )
Municipal obligations,<br> taxable 110 17,278 (151 ) 52,212 (3,917 ) 69,490 (4,068 )
Agency<br> mortgage-backed securities 100 6,480 (68 ) 128,512 (12,439 ) 134,992 (12,507 )
Total<br> for available-for-sale 486 56,355 (563 ) 339,519 (22,023 ) 395,874 (22,586 )

The Company’s U.S. treasury portfolio consists of securities issued by the United States Department of the Treasury (“U.S. treasury”). The receipt of principal and interest on U.S. treasury securities is guaranteed by the full faith and credit of the U.S. government. Based on these factors, along with the Company’s intent to not sell the securities and its belief that it was more likely than not that the Company will not be required to sell the securities before recovery of its cost basis, the Company believed that the available-for-sale U.S. treasury securities identified in the table above were temporarily impaired as of September 30, 2024 and December 31, 2023.

The Company’s portfolio of municipal obligations consists of both tax-exempt and taxable general obligations securities issued by various municipalities. As of September 30, 2024, the Company did not intend to sell and it was more likely than not that the Company would not be required to sell its municipal obligations in an unrealized loss position until the recovery of its cost basis. Due to the issuers’ continued satisfaction of the securities’ obligations in accordance with their contractual terms and the expectation that they will continue to do so, the evaluation of the fundamentals of the issuers’ financial condition and other objective evidence, the Company believed that the municipal obligations identified in the tables above were temporarily impaired as of September 30, 2024 and December 31, 2023.

The Company’s agency mortgage-backed securities portfolio consists of securities underwritten to the standards of and guaranteed by the government-sponsored agencies of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and the Government National Mortgage Association. The receipt of principal, at par, and interest on agency mortgage-backed securities is guaranteed by the respective government-sponsored agency guarantor, such that the Company believed that its agency mortgage-backed securities did not expose the Company to credit-related losses. Based on these factors, along with the Company’s intent to not sell the securities and the Company’s belief that it was more likely than not that the Company will not be required to sell the securities before recovery of their cost basis, the Company believed that the agency mortgage-backed securities identified in the table above were temporarily impaired as of September 30, 2024 and December 31, 2023.

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The Company’s other investment securities portfolio consists of seven subordinated debentures issued by financial institutions. These investment securities were acquired in the Freedom Bank acquisition in 2022 and classified as held-to-maturity. The securities were issued in 2021 and 2022 with a 10 year maturity and a fixed rate for five years. The securities are callable after the end of the fixed rate term, beginning September 3, 2026. The following table provides information regarding the Company’s allowance for credit losses related to held-to-maturity investment securities:

Schedule of Allowance for Credit Losses Related to Held-to-maturity Investment Securities

(Dollars in thousands) 2024 2023
Nine months ended
September<br> 30,
(Dollars in thousands) 2024 2023
Balance at January 1, $ 91 $ -
Balance $ 91 $ -
Impact of adopting ASC<br> 326 - 72
Provision<br> for credit losses - 19
Balance at September 30, $ 91 $ 91
Balance $ 91 $ 91

The table below sets forth the amortized cost and fair value of investment securities at September 30, 2024. The table includes scheduled principal payments and estimated prepayments, based on observable market inputs, for agency mortgage-backed securities. Actual maturities will differ from contractual maturities because borrowers have the right to prepay obligations with or without prepayment penalties.

Schedule of Investments Classified by Contractual Maturity Date

(Dollars in thousands) Amortized Estimated
cost fair<br> value
Available-for-sale:
Due in less<br> than one year $ 49,872 $ 49,319
Due after one year but<br> within five years 237,634 228,782
Due after five years but<br> within ten years 98,484 95,207
Due<br> after ten years 38,332 37,704
Total<br> available-for-sale $ 424,322 $ 411,012
Held-to-maturity:
Due<br> after one year but within five years 3,643 3,131
Total<br> held-to-maturity $ 3,643 $ 3,131

The Company did not record any sales of available-for-sale securities during the nine months ended September 30, 2024 or 2023.

Securities

with carrying values of $343.7 million and $380.4 million were pledged to secure public funds on deposit, repurchase agreements and as collateral for borrowings at September 30, 2024 and December 31, 2023, respectively. Except for U.S. federal agency obligations, no investment in a single issuer exceeded 10% of consolidated stockholders’ equity.

3.Loans and Allowance for Credit Losses

Loans consisted of the following as of the dates indicated below:

Schedule of Loans

September 30, December 31,
(Dollars in thousands) 2024 2023
One-to-four family residential<br> real estate loans $ 344,380 $ 302,544
Construction and land loans 23,454 21,090
Commercial real estate loans 324,016 320,962
Commercial loans 181,652 180,942
Agriculture loans 91,986 89,680
Municipal loans 7,098 4,507
Consumer loans 29,263 28,931
Total gross loans 1,001,849 948,656
Net deferred loan fees and loans in process (63 ) (429 )
Allowance for credit losses (11,544 ) (10,608 )
Loans,<br> net $ 990,242 $ 937,619 
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The following tables provide information on the Company’s allowance for credit losses by loan class and allowance methodology:

Schedule of Allowance for Credit Losses on Financing Receivables

(Dollars in thousands) One-to-four<br> family residential real estate loans Construction<br> and land loans Commercial<br> real estate loans Commercial<br> loans Agriculture<br> loans Municipal<br> loans Consumer<br> loans Total
Three<br> and nine months and six months ended September 30, 2024
(Dollars in thousands) One-to-four<br> family residential real estate loans Construction<br> and land loans Commercial<br> real estate loans Commercial<br> loans Agriculture<br> loans Municipal<br> loans Consumer<br> loans Total
Allowance for credit losses:
Balance at July 1, 2024 $ 2,020 $ 220 $ 4,515 $ 2,778 $ 1,118 $ 55 $ 197 $ 10,903
Impact<br> of adopting ASC 326
Charge-offs - - - (22 ) - - (131 ) (153 )
Recoveries - 45 - 8 54 - 37 144
Provision<br> for credit losses (30 ) (109 ) 38 611 50 2 88 650
Balance at September<br> 30, 2024 $ 1,990 $ 156 $ 4,553 $ 3,375 $ 1,222 $ 57 $ 191 $ 11,544
Allowance for credit losses:
Balance at January 1, 2024 $ 2,035 $ 150 $ 4,518 $ 2,486 $ 1,190 $ 15 $ 214 $ 10,608
Charge-offs - - - (105 ) - - (308 ) (413 )
Recoveries - 245 - 28 54 12 110 449
Provision<br> for credit losses (45 ) (239 ) 112 889 (22 ) 30 175 900
Balance at September<br> 30, 2024 $ 1,990 $ 156 $ 4,553 $ 3,375 $ 1,222 $ 57 $ 191 $ 11,544
(Dollars in thousands) One-to-four<br> family residential real estate loans Construction<br> and land loans Commercial<br> real estate loans Commercial<br> loans Agriculture<br> loans Municipal<br> loans Consumer<br> loans Total
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Three<br> and nine months ended September 30, 2023
(Dollars in thousands) One-to-four<br> family residential real estate loans Construction<br> and land loans Commercial<br> real estate loans Commercial<br> loans Agriculture<br> loans Municipal<br> loans Consumer<br> loans Total
Allowance for credit losses:
Balance at July 1, 2023 $ 1,852 $ 161 $ 4,373 $ 2,710 $ 1,134 $ 16 $ 203 $ 10,449
Charge-offs - - - (44 ) - - (98 ) (142 )
Recoveries - 626 - 9 1 - 27 663
Provision<br> for credit losses 38 (641 ) 81 469 (45 ) (1 ) 99 -
Balance at September<br> 30, 2023 $ 1,890 $ 146 $ 4,454 $ 3,144 $ 1,090 $ 15 $ 231 $ 10,970
Allowance for credit losses:
Balance at January 1, 2023 $ 655 $ 117 $ 3,158 $ 2,753 $ 1,966 $ 5 $ 137 $ 8,791
Balance $ 655 $ 117 $ 3,158 $ 2,753 $ 1,966 $ 5 $ 137 $ 8,791
Impact of adopting ASC<br> 326 1,022 49 1,063 145 (824 ) 11 57 1,523
Charge-offs - - - (151 ) - - (257 ) (408 )
Recoveries - 626 - 28 74 - 86 814
Provision<br> for credit losses 213 (646 ) 233 369 (126 ) (1 ) 208 250
Balance at September<br> 30, 2023 $ 1,890 $ 146 $ 4,454 $ 3,144 $ 1,090 $ 15 $ 231 $ 10,970
Balance $ 1,890 $ 146 $ 4,454 $ 3,144 $ 1,090 $ 15 $ 231 $ 10,970

The

Company recorded net loan charge-offs of $9,000 during the third quarter of 2024, compared to net loan recoveries of $521,000 during the third quarter of 2023. The Company recorded net loan recoveries of $36,000 during the nine months ended September 30, 2024, compared to net loan recoveries of $406,000 during the nine months ended September 30, 2023.

| 11 |

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The following table presents information regarding non-accrual and loans past due over 89 days and still accruing as of the dates indicated:

Schedule of Non-accrual and Loans Past Due Over 89 Days Still Accruing

Non-accrual<br> with no allowance for credit loss Non-accrual<br> with allowance for credit losses Loans<br> past due over 89 days still accruing
(Dollars in thousands) As<br> of September 30, 2024
Non-accrual<br> with no allowance for credit loss Non-accrual<br> with allowance for credit losses Loans<br> past due over 89 days still accruing
One-to-four family residential<br> real estate loans $ 76 $ - $ -
Commercial real estate loans 788 - -
Commercial loans 8,623 2,843 -
Agriculture loans 1,085 - -
Total<br> loans $ 10,572 $ 2,843 $ -
Non-accrual<br> with no allowance for credit loss Non-accrual<br> with allowance for credit losses Loans<br> past due over 89 days still accruing
--- --- --- --- --- --- ---
(Dollars in thousands) As<br> of December 31, 2023
Non-accrual<br> with no allowance for credit loss Non-accrual<br> with allowance for credit losses Loans<br> past due over 89 days still accruing
One-to-four family residential<br> real estate loans $ 161 $ 31 $ -
Commercial loans 363 1,517 -
Agriculture loans 295 - -
Consumer loans 24 - -
Total<br> loans $ 843 $ 1,548 $ -

The Company has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following table presents information regarding the amortized cost basis and collateral type of collateral-dependent loans as of the dates indicated:

Schedule of Amortized Cost Basis and Collateral Type

(Dollars in thousands) As<br> of September 30, 2024
Loan<br> balance Collateral<br> Type
One-to-four family residential<br> real estate loans $ 76 First mortgage on residential real<br> estate
Construction and land loans 189 First mortgage on residential or commercial<br> real estate
Commercial real estate loans 1,972 First mortgage on commercial real estate
Commercial loans 11,626 Accounts receivable, equipment and real estate
Agriculture loans 1,517 Crops, livestock, machinery<br> and real estate
Total<br> loans $ 15,380
(Dollars in thousands) As<br> of December 31, 2023
--- --- --- ---
Loan<br> balance Collateral<br> Type
One-to-four family residential<br> real estate loans $ 192 First mortgage on residential real<br> estate
Construction and land loans 192 First mortgage on residential or commercial<br> real estate
Commercial real estate loans 1,205 First mortgage on commercial real estate
Commercial loans 2,054 Accounts receivable, equipment and real estate
Agriculture loans 682 Crops, livestock, machinery and real estate
Consumer loans 24 Personal property or second<br> mortgages on real estate
Total<br> loans $ 4,349 
| 12 |

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The Company’s key credit quality indicator is a loan’s performance status, defined as accruing or non-accruing. Performing loans are considered to have a lower risk of loss. Non-accrual loans are those which the Company believes have a higher risk of loss. The accrual of interest on non-performing loans is discontinued at the time the loan is 90 days delinquent, unless the credit is well secured and in process of collection. Loans are placed on non-accrual or are charged off at an earlier date if collection of principal or interest is considered doubtful. There were no loans 90 days or more delinquent and accruing interest at either September 30, 2024 or December 31, 2023.

The following tables present information regarding the Company’s past due and non-accrual loans by loan class, as of the dates indicated:

Schedule of Past Due Financing Receivables

30-59<br> days delinquent and accruing 60-89<br> days delinquent and accruing 90<br> days or more delinquent and accruing Total<br> past due loans accruing Non-accrual<br> loans Total<br> past due and non-accrual loans Total<br> loans not past due
(Dollars in thousands) As<br> of September 30, 2024
30-59<br> days delinquent and accruing 60-89<br> days delinquent and accruing 90<br> days or more delinquent and accruing Total<br> past due loans accruing Non-accrual<br> loans Total<br> past due and non-accrual loans Total<br> loans not past due
One-to-four family residential<br> real estate loans $ - $ 59 $ - $ 59 $ 76 $ 135 $ 344,245
Construction and land loans - 13 - 13 - 13 23,441
Commercial real estate loans - - - - 788 788 323,228
Commercial loans 2,589 1,031 - 3,620 11,466 15,086 166,566
Agriculture loans 3,518 - - 3,518 1,085 4,603 87,383
Municipal loans - - - - - - 7,098
Consumer loans 76 16 - 92 - 92 29,171
Total $ 6,183 $ 1,119 $ - $ 7,302 $ 13,415 $ 20,717 $ 981,132
Percent of gross loans 0.62 % 0.11 % 0.00 % 0.73 % 1.34 % 2.07 % 97.93 %
30-59<br> days delinquent and accruing 60-89<br> days delinquent and accruing 90<br> days or more delinquent and accruing Total<br> past due loans accruing Non-accrual<br> loans Total<br> past due and non-accrual loans Total<br> loans not past due
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands) As<br> of December 31, 2023
30-59<br> days delinquent and accruing 60-89<br> days delinquent and accruing 90<br> days or more delinquent and accruing Total<br> past due loans accruing Non-accrual<br> loans Total<br> past due and non-accrual loans Total<br> loans not past due
One-to-four family residential<br> real estate loans $ 85 $ 247 $ - $ 332 $ 192 $ 524 $ 302,020
Construction and land loans - - - - - - 21,090
Commercial real estate loans 153 - - 153 - 153 320,809
Commercial loans 399 332 - 731 1,880 2,611 178,331
Agriculture loans 256 - - 256 295 551 89,129
Municipal loans - - - - - - 4,507
Consumer loans 110 - - 110 24 134 28,797
Total $ 1,003 $ 579 $ - $ 1,582 $ 2,391 $ 3,973 $ 944,683
Percent of gross loans 0.11 % 0.06 % 0.00 % 0.17 % 0.25 % 0.42 % 99.58 %

Under

the original terms of the Company’s non-accrual loans, interest earned on such loans for the nine months ended September 30, 2024 and 2023 would have increased interest income by $244,000 and $75,000, respectively. No interest income related to non-accrual loans was included in interest income for the three and nine months ended September 30, 2024 and 2023.

The Company also categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis. Nonclassified loans generally include those loans that are expected to be repaid in accordance with contractual loan terms. Classified loans are those that are assigned a special mention, substandard or doubtful risk rating using the following definitions:

Special Mention: Loans are currently protected by the current net worth and paying capacity of the obligor or of the collateral pledged but such protection is potentially weak. These loans constitute an undue and unwarranted credit risk, but not to the point of justifying a classification of substandard. The credit risk may be relatively minor, yet constitutes an unwarranted risk in light of the circumstances surrounding a specific asset.

Substandard: Loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged. Loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

| 13 |

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The following table presents information regarding the Company’s risk category of loans by type and year of origination, as of the dates indicated:

Schedule of Troubled Debt Restructurings on Financings Receivables and Year of Origination

2024 2023 2022 2021 2020 Prior Revolving loans<br> amortized cost Revolving loans<br> converted to term Total
(Dollars in thousands) As<br> of September 30, 2024
2024 2023 2022 2021 2020 Prior Revolving<br> loans amortized cost Revolving<br> loans converted to term Total
One-to-four family residential real estate<br> loans
Nonclassified $ 69,036 $ 87,966 $ 77,175 $ 38,548 $ 28,686 $ 36,751 $ 6,009 $ 133 $ 344,304
Classified - - - - - 76 - - 76
Total $ 69,036 $ 87,966 $ 77,175 $ 38,548 $ 28,686 $ 36,827 $ 6,009 $ 133 $ 344,380
Gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ -
Construction and land loans
Nonclassified $ 4,264 $ 11,468 $ 1,951 $ 1,722 $ 2,594 $ 1,353 $ 102 $ - $ 23,454
Classified - - - - - - - - -
Total $ 4,264 $ 11,468 $ 1,951 $ 1,722 $ 2,594 $ 1,353 $ 102 $ - $ 23,454
Gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ -
Commercial real estate loans
Nonclassified $ 39,708 $ 43,771 $ 69,510 $ 54,452 $ 42,825 $ 68,946 $ 1,744 $ 89 321,045
Classified 879 - - 477 - 1,615 - - 2,971
Total $ 40,587 $ 43,771 $ 69,510 $ 54,929 $ 42,825 $ 70,561 $ 1,744 $ 89 $ 324,016
Gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ -
Commercial loans
Nonclassified $ 21,221 $ 25,133 $ 25,238 $ 10,657 $ 8,622 $ 2,687 $ 65,215 $ 106 $ 158,879
Classified 2,884 10,609 1,932 55 3,993 34 2,003 1,263 22,773
Total $ 24,105 $ 35,742 $ 27,170 $ 10,712 $ 12,615 $ 2,721 $ 67,218 $ 1,369 $ 181,652
Gross charge-offs $ - $ - $ 16 $ 86 $ 3 $ - $ - $ - $ 105
Agriculture loans
Nonclassified $ 14,372 $ 3,839 $ 9,061 $ 3,887 $ 3,427 $ 14,533 $ 41,549 $ 233 $ 90,901
Classified - 182 241 402 9 86 165 - 1,085
Total $ 14,372 $ 4,021 $ 9,302 $ 4,289 $ 3,436 $ 14,619 $ 41,714 $ 233 $ 91,986
Gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ -
Municipal loans
Nonclassified $ - $ 5,551 $ 97 $ - $ - $ 1,450 $ - $ - $ 7,098
Classified - - - - - - - - -
Total $ - $ 5,551 $ 97 $ - $ - $ 1,450 $ - $ - $ 7,098
Gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ -
Consumer loans
Nonclassified $ 2,918 $ 3,483 $ 717 $ 1,139 $ 695 $ 3,257 $ 17,035 $ 19 $ 29,263
Classified - - - - - - - - -
Total $ 2,918 $ 3,483 $ 717 $ 1,139 $ 695 $ 3,257 $ 17,035 $ 19 $ 29,263
Gross charge-offs $ 275 $ 7 $ 1 $ - $ - $ - $ 25 $ - $ 308
Total loans
Nonclassified $ 151,519 $ 181,211 $ 183,749 $ 110,405 $ 86,849 $ 128,977 $ 131,654 $ 580 $ 974,944
Classified 3,763 10,791 2,173 934 4,002 1,811 2,168 1,263 26,905
Total $ 155,282 $ 192,002 $ 185,922 $ 111,339 $ 90,851 $ 130,788 $ 133,822 $ 1,843 $ 1,001,849
Gross charge-offs for the nine months ending<br> September 30, 2024 $ 275 $ 7 $ 17 $ 86 $ 3 $ - $ 25 $ - $ 413 
| 14 |

| --- | | | 2023 | | 2022 | | 2021 | | 2020 | | 2019 | | Prior | | Revolving<br> loans amortized cost | | Revolving<br> loans converted to term | | Total | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | (Dollars in thousands) | As<br> of December 31, 2023 | | | | | | | | | | | | | | | | | | | | 2023 | | 2022 | | 2021 | | 2020 | | 2019 | | Prior | | Revolving<br> loans amortized cost | | Revolving<br> loans converted to term | | Total | | | One-to-four family residential<br> real estate loans | | | | | | | | | | | | | | | | | | | | Nonclassified | $ | 95,290 | $ | 84,718 | $ | 42,533 | $ | 32,081 | $ | 12,776 | $ | 29,694 | $ | 5,097 | $ | 163 | $ | 302,352 | | Classified | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 192 | $ | - | $ | - | $ | 192 | | Total | $ | 95,290 | $ | 84,718 | $ | 42,533 | $ | 32,081 | $ | 12,776 | $ | 29,886 | $ | 5,097 | $ | 163 | $ | 302,544 | | Gross charge-offs | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | | Construction and land loans | | | | | | | | | | | | | | | | | | | | Nonclassified | $ | 6,283 | $ | 5,267 | $ | 5,367 | $ | 2,665 | $ | 916 | $ | 492 | $ | 100 | $ | - | $ | 21,090 | | Classified | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | | Total | $ | 6,283 | $ | 5,267 | $ | 5,367 | $ | 2,665 | $ | 916 | $ | 492 | $ | 100 | $ | - | $ | 21,090 | | Gross charge-offs | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | | Commercial real estate loans | | | | | | | | | | | | | | | | | | | | Nonclassified | $ | 41,644 | $ | 77,427 | $ | 58,327 | $ | 50,744 | $ | 30,551 | $ | 57,502 | $ | 3,017 | $ | 92 | $ | 319,304 | | Classified | $ | - | $ | - | $ | 481 | $ | 22 | $ | 180 | $ | 975 | $ | - | $ | - | $ | 1,658 | | Total | $ | 41,644 | $ | 77,427 | $ | 58,808 | $ | 50,766 | $ | 30,731 | $ | 58,477 | $ | 3,017 | $ | 92 | $ | 320,962 | | Gross charge-offs | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | | Commercial loans | | | | | | | | | | | | | | | | | | | | Nonclassified | $ | 38,818 | $ | 32,764 | $ | 16,747 | $ | 15,511 | $ | 2,514 | $ | 4,386 | $ | 61,046 | $ | 4,121 | $ | 175,907 | | Classified | $ | 226 | $ | 2,000 | $ | 158 | $ | 460 | $ | 57 | $ | - | $ | 1,952 | $ | 182 | $ | 5,035 | | Total | $ | 39,044 | $ | 34,764 | $ | 16,905 | $ | 15,971 | $ | 2,571 | $ | 4,386 | $ | 62,998 | $ | 4,303 | $ | 180,942 | | Gross charge-offs | $ | - | $ | 28 | $ | 407 | $ | 44 | $ | - | $ | - | $ | - | $ | - | $ | 479 | | Agriculture loans | | | | | | | | | | | | | | | | | | | | Nonclassified | $ | 7,862 | $ | 11,718 | $ | 4,864 | $ | 4,092 | $ | 3,902 | $ | 12,114 | $ | 44,352 | $ | 214 | $ | 89,118 | | Classified | $ | - | $ | 16 | $ | 171 | $ | - | $ | 131 | $ | 113 | $ | 131 | $ | - | $ | 562 | | Total | $ | 7,862 | $ | 11,734 | $ | 5,035 | $ | 4,092 | $ | 4,033 | $ | 12,227 | $ | 44,483 | $ | 214 | $ | 89,680 | | Gross charge-offs | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | | Municipal loans | | | | | | | | | | | | | | | | | | | | Nonclassified | $ | 2,774 | $ | 128 | $ | - | $ | - | $ | - | $ | 1,605 | $ | - | $ | - | $ | 4,507 | | Classified | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | | Total | $ | 2,774 | $ | 128 | $ | - | $ | - | $ | - | $ | 1,605 | $ | - | $ | - | $ | 4,507 | | Gross charge-offs | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | | Consumer loans | | | | | | | | | | | | | | | | | | | | Nonclassified | $ | 4,705 | $ | 1,332 | $ | 1,340 | $ | 1,380 | $ | 1 | $ | 4,906 | $ | 15,221 | $ | 21 | $ | 28,906 | | Classified | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 25 | $ | - | $ | 25 | | Total | $ | 4,705 | $ | 1,332 | $ | 1,340 | $ | 1,380 | $ | 1 | $ | 4,906 | $ | 15,246 | $ | 21 | $ | 28,931 | | Gross charge-offs | $ | - | $ | - | $ | 3 | $ | - | $ | - | $ | - | $ | 368 | $ | - | $ | 371 | | Total loans | | | | | | | | | | | | | | | | | | | | Nonclassified | $ | 197,376 | $ | 213,354 | $ | 129,178 | $ | 106,473 | $ | 50,660 | $ | 110,699 | $ | 128,833 | $ | 4,611 | $ | 941,184 | | Classified | $ | 226 | $ | 2,016 | $ | 810 | $ | 482 | $ | 368 | $ | 1,280 | $ | 2,108 | $ | 182 | $ | 7,472 | | Total | $ | 197,602 | $ | 215,370 | $ | 129,988 | $ | 106,955 | $ | 51,028 | $ | 111,979 | $ | 130,941 | $ | 4,793 | $ | 948,656 | | Gross charge-offs for the<br> year ending December 31, 2023 | $ | - | $ | 28 | $ | 410 | $ | 44 | $ | - | $ | - | $ | 368 | $ | - | $ | 850 | | Gross<br> charge-offs | $ | - | $ | 28 | $ | 410 | $ | 44 | $ | - | $ | - | $ | 368 | $ | - | $ | 850 |

| 15 |

| --- |

The following table provides information regarding the Company’s allowance for credit losses related to unfunded loan commitments for the periods indicated:

Schedule of Allowance for Credit Losses Related to Unfunded Loan Commitments

2024 2023 2024 2023
Three months ended Nine months ended
(dollars in thousands) September<br> 30, September<br> 30,
2024 2023 2024 2023
Balance at beginning of period $ 300 200 $ 250 170
Provision<br> for credit losses (150 ) - (100 ) 30
Balance at end of period $ 150 $ 200 $ 150 $ 200

The Company did not make any loan modifications to borrowers experiencing financial difficulty during the three or nine months ended September 30, 2024. The Company did not make any loan modifications to borrowers experiencing financial difficulty during the three months ended September 30, 2023. The following table presents the amortized cost basis of loans at September 30, 2023 that were both experiencing financial difficulty and modified during the nine months ended September 30, 2023 by class, type of modification and includes the financial effect of the modification.

**** Schedule of Troubled Debt Restructurings

(Dollars in thousands) As<br> of September 30, 2023
Amortized<br> cost basis %<br> of loan class total Financial<br> effect
Term extension:
Commercial $ 145 0.1 % 90 day payment deferral

4.Goodwill and Other Intangible Assets

The Company tests goodwill for impairment annually or more frequently if circumstances warrant. The Company’s annual impairment test as of December 31, 2023 concluded that its goodwill was not impaired. Based on that test and current conditions, as of September 30, 2024, the Company concluded it was more likely than not that its goodwill was not impaired.

Core deposit intangible assets are amortized over the estimated useful life of ten years on an accelerated basis. A summary of the other intangible assets that continue to be subject to amortization as of the dates indicated is presented in the following table:

Schedule of Other Intangible Assets and Goodwill

(Dollars in thousands) As<br> of September 30, 2024
Gross<br> carrying amount Accumulated<br> amortization Net<br> carrying amount
Core deposit intangible assets $ 4,170 $ (1,441 ) $ 2,729
(Dollars in thousands) As<br> of December 31, 2023
--- --- --- --- --- --- --- ---
Gross<br> carrying amount Accumulated<br> amortization Net<br> carrying amount
Core deposit intangible assets $ 4,170 $ (929 ) $ 3,241 
| 16 |

| --- |

The following table sets forth estimated amortization expense for core deposit and intangible assets for the remainder of 2024 and in successive years ending December 31:

Schedule of Finite-lived Intangible Assets, Future Amortization Expense

(Dollars in thousands) Amortization
expense
Remainder of 2024 $ 151
2025 588
2026 512
2027 436
2028 360
2029 284
Thereafter 398
Total $ 2,729

5.Mortgage Loan Servicing

Mortgage loans serviced for others are not reported as assets. The following table provides information on the principal balances of mortgage loans serviced for others:

Schedule of Participating Mortgage Loans

(Dollars in thousands) September 30, December 31,
2024 2023
FHLMC $ 635,359 $ 659,488
FHLB 27,915 28,621
Total $ 663,274 $ 688,109

Custodial

escrow balances maintained in connection with serviced loans were $10.0 million and $5.0 million at September 30, 2024 and December 31, 2023, respectively. Custodial escrow balances are included in the deposit balances on the balance sheet. Gross service fee income related to such loans was $425,000 and $450,000 for the three months ended September 30, 2024 and 2023, respectively, and is included in fees and service charges in the consolidated statements of earnings. Gross service fee income related to such loans was $1.3 million for both the nine months ended September 30, 2024 and 2023, and is included in fees and service charges in the consolidated statements of earnings.

Activity for mortgage servicing rights for the periods indicated was as follows:

Schedule of Servicing Asset at Amortized Cost

2024 2023 2024 2023
Three months ended Nine months ended
(Dollars in thousands) September<br> 30, September<br> 30,
2024 2023 2024 2023
Mortgage servicing rights:
Balance at beginning of period $ 2,997 $ 3,514 $ 3,158 $ 3,813
Additions 129 130 295 370
Amortization (85 ) (276 ) (412 ) (815 )
Balance at end of<br> period $ 3,041 $ 3,368 $ 3,041 $ 3,368

The

fair value of mortgage servicing rights was $8.8 million and $9.5 million at September 30, 2024 and December 31, 2023, respectively. Fair value at September 30, 2024 was determined using discount rate of 10.0%; prepayment speeds ranging from 6.00% to 31.67%, depending on the stratification of the specific mortgage servicing right; and a weighted average default rate of 1.82%. Fair value at December 31, 2023 was determined using discount rates at 10.0%; prepayment speeds ranging from 6.00% to 26.87%, depending on the stratification of the specific mortgage servicing right; and a weighted average default rate of 1.65%.

The

Company had a mortgage repurchase reserve of $140,000 at September 30, 2024 and $159,000 at December 31, 2023, which represented the Company’s best estimate at those dates of probable losses that the Company will incur related to the repurchase of one-to-four family residential real estate loans previously sold or to reimburse investors for credit losses incurred on loans previously sold where a breach of the contractual representations and warranties occurred. The Company charged $17,000 of losses against the reserve during the three months ended September 30, 2024 and $19,000 of losses against the reserve during nine months ended September 30, 2024. The Company charged $84,000 of losses against the reserve during the three months ended September 30, 2023 and $105,000 of losses against the reserve during the nine months ended September 30,2023. As of September 30, 2024, the Company had no outstanding mortgage repurchase requests.

| 17 |

| --- |

6.Earnings per Share

Basic earnings per share have been computed based upon the weighted average number of common shares outstanding during each period. Diluted earnings per share included the effect of all potential common shares outstanding during each period. The diluted earnings per share computation for both the three and nine months ended September 30, 2024, excluded

197,858

of unexercised stock options, because their inclusion would have been anti-dilutive during such periods. The diluted earnings per share computation for both the three and nine months ended September 30, 2023, excluded

136,930

of unexercised stock options because their inclusion would have been anti-dilutive during such periods. The Company’s Board of Directors declared a cash dividend of $0.21 per share to be paid November 27, 2024, to common stockholders of record as of the close of business on November 13, 2024. The Board of Directors also declared a 5% stock dividend issuable December 16, 2024 to common stockholders of record as of the close of business on December 2, 2024. The shares used in the calculation of basic and diluted earnings per share for the periods indicated are shown below:

Schedule of Shares Used in Calculation of Basic and Diluted Earnings Per Share

2024 2023 2024 2023
Three months ended Nine months ended
(Dollars in thousands, except per share amounts) September<br> 30, September<br> 30,
2024 2023 2024 2023
Net earnings $ 3,931 $ 2,878 $ 9,721 $ 9,597
Weighted average common shares outstanding - basic (1) 5,490,808 5,479,909 5,477,453 5,476,703
Assumed exercise of stock options (1) 4,920 2,724 4,003 4,567
Weighted average common shares outstanding<br> - diluted (1) 5,495,728 5,482,633 5,481,456 5,481,270
Earnings per share (1):
Basic ^(1)^ $ 0.72 $ 0.53 $ 1.77 $ 1.75
Diluted ^(1)^ $ 0.72 $ 0.52 $ 1.77 $ 1.75
(1) Share and per share values<br> for the periods ended September 30, 2023 have been adjusted to give effect to the 5% stock dividend paid during December<br> 2023.
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7.Federal Home Loan Bank Borrowings and Other Borrowings

The

Bank has a line of credit, renewable annually each September, with the Federal Home Loan Bank (“FHLB’) under which there were $86.4 million of borrowings at September 30, 2024 and $58.0 million at December 31, 2023. Interest on any outstanding balance on the line of credit accrues at the federal funds rate plus 0.15% (5.04% at September 30, 2024). The Company had no letters of credit issued through the FHLB at September 30, 2024 compared to $20.0 million letters of credit December 31, 2023 to secure municipal deposits. The Company did not have any term advances from FHLB at September 30, 2024 or December 31, 2023.

Although

no loans are specifically pledged, the FHLB requires the Bank to maintain eligible collateral (qualifying loans and investment securities) that has a lending value at least equal to its required collateral. At September 30, 2024 and December 31, 2023, there were blanket pledges of loans and securities to the FHLB totaling $391.2 million and $328.7 million, respectively. At September 30, 2024 and December 31, 2023, the Bank’s total borrowing capacity with the FHLB was approximately $272.2 million and $232.3 million, respectively. At September 30, 2024 and December 31, 2023, the Bank’s available borrowing capacity was $184.5 million and $153.1 million, respectively. The difference between the Bank’s total borrowing capacity and available borrowing capacity is related to the amount of borrowings outstanding and letters of credit. The available borrowing capacity with the FHLB is collateral based, and the Bank’s ability to borrow is subject to maintaining collateral that meets the eligibility requirements. The borrowing capacity is not committed and is subject to FHLB credit requirements and policies. In addition, the Bank must maintain a restricted investment in FHLB stock to maintain access to borrowings.

At

September 30, 2024, the Bank had no borrowings through the Federal Reserve discount window, while its borrowing capacity with the Federal Reserve was $54.0 million.

The Company has a $5.0 million line of credit from an unrelated financial institution maturing on November 1, 2025, with an interest rate that adjusts daily based on the prime rate less 0.50%. This line of credit has covenants specific to capital and other financial ratios, which the Company was in compliance with at September 30, 2024 and December 31, 2023. As of September 30, 2024 and December 31, 2023, the Company did not have an outstanding balance on the line of credit.

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On September 29, 2022, the Company borrowed $10.0 million from the same unrelated financial institution at a fixed rate of 6.15%. This borrowing has covenants specific to capital and other financial ratios, which the Company was in compliance with at September 30, 2024 and December 31, 2023. This borrowing matures on September 1, 2027 and requires quarterly principal and interest payments. Early principal payments are allowed and the balance was $5.7 million and $6.6 million at September 30, 2024 and December 31, 2023, respectively.

8.Repurchase Agreements

The Company has overnight repurchase agreements with certain deposit customers whereby the Company uses investment securities as collateral for non-insured funds. These balances are accounted for as collateralized financing and included in other borrowings on the balance sheet.

Repurchase

agreements are comprised of non-insured customer funds, totaling $9.5 million at September 30, 2024 and $12.7 million at December 31, 2023, which were secured by $13.9 million and $23.7 million of the Company’s investment portfolio at the same dates, respectively.

The following is a summary of the balances and collateral of the Company’s repurchase agreements as of the dates indicated:

Schedule of Repurchase Agreements

Continuous Up<br> to 30 days 30-90<br> days than<br> 90 days Total
As of September 30, 2024
(dollars in thousands) Overnight and Up to Greater<br><br>than
Continuous 30 days 30-90 days 90 days Total
Repurchase agreements:
U.S. treasury securities $ 9,528 $ - $ - $ - $ 9,528
Total $ 9,528 $ - $ - $ - $ 9,528
Continuous Up<br> to 30 days 30-90<br> days than<br> 90 days Total
--- --- --- --- --- --- --- --- --- --- ---
As<br> of December 31, 2023
(dollars in thousands) Overnight and Up to Greater <br><br>than
Continuous 30<br> days 30-90<br> days 90 days Total
Repurchase agreements:
U.S.<br> treasury securities $ 12,714 $ - $ - $ - $ 12,714
Total $ 12,714 $ - $ - $ - $ 12,714

The investment securities are held by a third party financial institution in the customer’s custodial account. The Company is required to maintain adequate collateral for each repurchase agreement. Changes in the fair value of the investment securities impact the amount of collateral required. If the Company were to default, the investment securities would be used to settle the repurchase agreement with the deposit customer.

9.Revenuefrom Contracts with Customers

All of the Company’s revenue from contracts with customers in the scope of ASC 606 is recognized within non-interest income. Items outside the scope of ASC 606 are noted as such.

Schedule of Revenue from Contracts with Customers Within Non-interest Income

2024 2023 2024 2023
Three months ended Nine months ended
(Dollars in thousands) September<br> 30, September<br> 30,
2024 2023 2024 2023
Non-interest income:
Service charges on deposit<br> accounts
Overdraft fees $ 1,066 $ 1,021 $ 3,019 $ 2,850
Other 526 318 1,233 792
Interchange income 765 756 2,226 2,298
Loan servicing fees (1) 425 450 1,293 1,344
Office lease income (1) 20 147 108 365
Gains on sales of loans<br> (1) 704 491 1,864 2,014
Bank owned life insurance<br> income (1) 254 230 747 671
Gains (losses) on sales<br> of premises and equipment and foreclosed assets 273 - 264 -
Other 220 239 619 642
Total<br> non-interest income $ 4,253 $ 3,652 $ 11,373 $ 10,976
(1) Not within the scope of ASC 606.
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A description of the Company’s revenue streams under ASC 606 follows:

ServiceCharges on Deposit Accounts

The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM usage fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period during which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance.

InterchangeIncome

The Company earns interchange fees from debit cardholder transactions conducted through the interchange payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder.

Gains(Losses) on Sales of Real Estate Owned

The Company records a gain or loss from the sale of real estate owned when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of real estate owned to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the real estate owned asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant financing component is present. There were no sales of real estate owned that were financed by the Company during the first nine months of 2024 or 2023.

10.Fair Value of Financial Instruments and Fair Value Measurements

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

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Fair value estimates of the Company’s financial instruments as of September 30, 2024 and December 31, 2023, including methods and assumptions utilized, are set forth below:

Schedule of Fair Value Estimates of Financial Instruments

amount Level 1 Level 2 Level 3 Total
As<br> of September 30, 2024
Carrying
amount Level<br> 1 Level<br> 2 Level<br> 3 Total
Financial assets:
Cash and cash<br> equivalents $ 21,211 $ 21,211 $ - $ - $ 21,211
Interest-bearing deposits<br> at other banks 4,363 - 4,363 - 4,363
Investment securities available-for-sale 411,012 83,753 327,259 - 411,012
Investment securities held-to-maturity 3,643 - 3,131 - 3,131
Bank stocks, at cost 7,894 n/a n/a n/a n/a
Loans, net 990,242 - - 981,755 981,755
Loans held for sale 3,250 - 3,250 - 3,250
Mortgage servicing rights 3,041 - 8,799 - 8,799
Accrued interest receivable 6,953 219 1,888 4,846 6,953
Derivative financial instruments 318 - 318 - 318
Financial liabilities:
Non-maturity deposits $ (1,071,642 ) $ (1,071,642 ) $ - $ - $ (1,071,642 )
Certificates of deposit (203,860 ) - (203,299 ) - (203,299 )
FHLB and other borrowings (92,050 ) - (91,872 ) - (91,872 )
Subordinated debentures (21,651 ) - (18,564 ) - (18,564 )
Repurchase agreements (9,528 ) - (9,528 ) - (9,528 )
Accrued interest payable (2,231 ) - (2,231 ) - (2,231 )
Derivative financial instruments (45 ) - (45 ) - (45 )
amount Level<br> 1 Level<br> 2 Level<br> 3 Total
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
As<br> of December 31, 2023
Carrying
amount Level<br> 1 Level<br> 2 Level<br> 3 Total
Financial assets:
Cash and cash<br> equivalents $ 27,101 $ 27,101 $ - $ - $ 27,101
Interest-bearing deposits<br> at other banks 4,918 - 4,918 - 4,918
Investment securities available-for-sale 452,769 95,667 357,102 - 452,769
Investment securities held-to-maturity 3,555 - 3,049 - 3,049
Bank stocks, at cost 8,123 n/a n/a n/a n/a
Loans, net 937,619 - - 920,984 920,984
Loans held for sale 853 - 853 - 853
Mortgage servicing rights 3,158 - 9,498 - 9,498
Accrued interest receivable 7,341 327 2,280 4,734 7,341
Derivative financial instruments 114 - 114 - 114
Financial liabilities:
Non-maturity deposits $ (1,133,097 ) $ (1,133,097 ) $ - $ - $ (1,133,097 )
Certificates of deposit (183,154 ) - (181,655 ) - (181,655 )
FHLB and other borrowings (64,662 ) - (65,478 ) - (65,478 )
Subordinated debentures (21,651 ) - (18,906 ) - (18,906 )
Repurchase agreements (12,714 ) - (12,714 ) - (12,714 )
Accrued interest payable (1,979 ) - (1,979 ) - (1,979 )
Derivative financial instruments (14 ) - (14 ) - (14 ) 
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Transfers

The Company did not transfer any assets or liabilities among levels during the nine months ended September 30, 2024 or during the year ended December 31, 2023.

ValuationMethods for Instruments Measured at Fair Value on a Recurring Basis

The following tables represent the Company’s financial instruments that are measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023, allocated to the appropriate fair value hierarchy:

Schedule of Fair Value Instruments Measured On Recurring Basis

Total Level 1 Level 2 Level 3
(Dollars in thousands) As<br> of September 30, 2024
Fair<br> value hierarchy
Total Level<br> 1 Level<br> 2 Level<br> 3
Assets:
Available-for-sale investment<br> securities:
U. S. treasury<br> securities $ 83,753 $ 83,753 $ - $ -
Municipal obligations,<br> tax exempt 112,126 - 112,126 -
Municipal obligations,<br> taxable 75,129 - 75,129 -
Agency mortgage-backed<br> securities 140,004 - 140,004 -
Loans held for sale 3,250 - 3,250 -
Derivative financial instruments 318 - 318 -
Liability:
Derivative financial instruments (45 ) - (45 ) -
Total Level<br> 1 Level<br> 2 Level<br> 3
--- --- --- --- --- --- --- --- --- --- ---
As<br> of December 31, 2023
Fair<br> value hierarchy
Total Level<br> 1 Level<br> 2 Level<br> 3
Assets:
Available-for-sale investment<br> securities:
U. S. treasury<br> securities $ 95,667 $ 95,667 $ - $ -
Municipal obligations,<br> tax exempt 120,623 - 120,623 -
Municipal obligations,<br> taxable 79,083 - 79,083 -
Agency mortgage-backed<br> securities 157,396 - 157,396 -
Loans held for sale 853 - 853 -
Derivative financial instruments 114 - 114 -
Liability:
Derivative financial instruments (14 ) - (14 ) -

The Company’s investment securities classified as available-for-sale include U.S. treasury securities, municipal obligations, and agency mortgage-backed securities. Quoted exchange prices are available for the Company’s U.S. treasury securities, which are classified as Level 1. U.S. federal agency mortgage-backed securities are priced utilizing industry-standard models that consider various assumptions, including time value, yield curves, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. These measurements are classified as Level 2. Municipal obligations are valued using a type of matrix, or grid, pricing in which securities are benchmarked against U.S. treasury rates based on credit rating. These model and matrix measurements are classified as Level 2 in the fair value hierarchy.

Changes in the fair value of available-for-sale securities are included in other comprehensive income to the extent the changes are not considered to be credit related which would instead result in a credit loss reserve. The Company evaluates any potential credit losses on available-for-sale securities on a quarterly basis and credit losses identified on individual securities result in a write-down of the relevant security’s cost basis.

Mortgage loans originated and intended for sale in the secondary market are carried at fair value. The mortgage loan valuations are based on quoted secondary market prices for similar loans and are classified as Level 2. Changes in the fair value of mortgage loans originated and intended for sale in the secondary market and derivative financial instruments are included in gains on sales of loans.

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The aggregate fair value, contractual balance (including accrued interest), and gains on loans held for sale as of September 30, 2024 and December 31, 2023 were as follows:

Schedule of Fair Value Contractual Balance and Gain Loss On Loans Held for Sale

As of As of
September 30, December 31,
(Dollars in thousands) 2024 2023
Aggregate fair value $ 3,250 $ 853
Contractual balance 3,204 848
Gain $ 46 $ 5

The Company’s derivative financial instruments consist of interest rate lock commitments and corresponding forward sales contracts on mortgage loans held for sale. The fair values of these derivatives are based on quoted prices for similar loans in the secondary market. The market prices are adjusted by a factor, based on the Company’s historical data and its judgment about future economic trends, which considers the likelihood that a commitment will ultimately result in a closed loan. These instruments are classified as Level 2. The amounts are included in other assets or other liabilities on the consolidated balance sheets and gains on sales of loans, net in the consolidated statements of earnings. The total amount of gains from changes in fair value of derivative financial instruments included in earnings for the periods indicated were as follows:

Schedule of Gains from Changes in Fair Value of Derivative Financial Instruments

(Dollars in thousands) 2024 2023 2024 2023
Three months ended Nine months ended
September<br> 30, September<br> 30,
(Dollars in thousands) 2024 2023 2024 2023
Total change<br> in fair value $ (42 ) $ (143 ) $ 173 $ 13

ValuationMethods for Instruments Measured at Fair Value on a Nonrecurring Basis

The

Company does not record its loan portfolio at fair value. Collateral-dependent loans are generally carried at the lower of cost or fair value of the collateral, less estimated selling costs. Collateral values are determined based on appraisals performed by qualified licensed appraisers hired by the Company and then further adjusted if warranted based on relevant facts and circumstances. The appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales and income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. Individually evaluated loans are reviewed at least quarterly for additional allowance and adjusted accordingly, based on the same factors identified above. The carrying value of the Company’s individually evaluated loans was $15.4 million at September 30, 2024 and $4.3 million at December 31, 2023. The Company’s individually evaluated loans with an allowance for credit losses was $2.9 million and $1.5 million, with an allocated allowance of $726,000 and $311,000, at September 30, 2024 and December 31, 2023, respectively.

Real estate held-for-sale includes premises and equipment that were previously used as a bank branch facility and is included in other assets on the balance sheet. Real estate held-for-sale is initially recorded at the fair value of the collateral less estimated selling costs. Subsequent valuations are updated periodically and are based upon independent appraisals, third party price opinions or internal pricing models. The appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales and income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. Real estate held-for-sale is reviewed and evaluated at least annually for additional allowance and adjusted accordingly, based on the same factors identified above.

Real estate owned includes assets acquired through, or in lieu of, foreclosure and land previously acquired for expansion. Real estate owned is initially recorded at the fair value of the collateral less estimated selling costs. Subsequent valuations are updated periodically and are based upon independent appraisals, third party price opinions or internal pricing models. The appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales and income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. Real estate owned is reviewed and evaluated at least annually for additional allowance and adjusted accordingly, based on the same factors identified above.

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The following table presents quantitative information about Level 3 fair value measurements measured at fair value on a nonrecurring basis as of September 30, 2024 and December 31, 2023:

Schedule of Fair Value Measurements On Nonrecurring, Valuation Techniques

(Dollars in thousands)
Fair<br> value Valuation<br> technique Unobservable<br> inputs Range
As of September 30, 2024
Individual evaluated loans:
Commercial $ 2,208 Sales comparison Adjustment to comparable value 0%-30 %
As of December 31, 2023
Individual evaluated loans:
One-to-four family residential<br> real estate $ 31 Sales comparison Adjustment to appraised value 7 %
Commercial 1,386 Sales comparison Adjustment to comparable value 0%-50 %
Real estate owned:
One-to-four family residential<br> real estate 266 Sales comparison Adjustment to appraised value 10 %

11. Regulatory Capital Requirements

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Management believed that as of September 30, 2024, the Company and the Bank met all capital adequacy requirements to which they were subject at that time.

Prompt

corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. The Company and the Bank are subject to the Basel III Rule, which is applicable to all U.S. banks that are subject to minimum capital requirements, as well as to bank and savings and loan holding companies other than “small bank holding companies” (generally, non-public bank holding companies with consolidated assets of less than $3.0 billion).

The

Basel III Rule includes a common equity Tier 1 capital to risk-weighted assets minimum ratio of 4.5%, a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%, a minimum ratio of Total Capital to risk-weighted assets of 8.0%, and a minimum Tier 1 leverage ratio of 4.0%. A capital conservation buffer, equal to 2.5% of common equity Tier 1 capital, is also established above the regulatory minimum capital requirements for the common equity Tier 1 capital ratio, and Tier 1 capital and total risk based capital ratios.

As of September 30, 2024 and December 31, 2023, the most recent regulatory notifications categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action then in effect. There are no conditions or events since that notification that management believes have changed the institution’s category.

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The following is a comparison of the Company’s regulatory capital to minimum capital requirements as of September 30, 2024 and December 31, 2023.

Schedule of Compliance with Regulatory Capital Requirements for Mortgage Companies

(Dollars in thousands)
For capital
Actual adequacy<br> purposes
Amount Ratio Amount Ratio<br> (1)
As of September 30, 2024
Leverage $ 137,179 8.88 % $ 61,784 4.0 %
Common Equity Tier 1 Capital 116,179 10.69 % 76,096 7.0 %
Tier 1 Capital 137,179 12.62 % 92,402 8.5 %
Total Risk Based Capital 148,362 13.65 % 114,143 10.5 %
As of December 31, 2023
Leverage $ 130,625 8.41 % $ 62,116 4.0 %
Common Equity Tier 1 Capital 109,625 10.39 % 73,854 7.0 %
Tier 1 Capital 130,625 12.38 % 89,680 8.5 %
Total Risk Based Capital 140,671 13.33 % 110,781 10.5 %
(1) The required ratios<br>for capital adequacy purposes include a capital conservation buffer of 2.5%.
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The following is a comparison of the Bank’s regulatory capital to minimum capital requirements as of September 30, 2024 and December 31, 2023:

Schedule of Compliance with Regulatory Capital Requirements Under Banking Regulations

To be well-capitalized
under prompt
(Dollars in thousands) For capital corrective
Actual adequacy<br> purposes action<br> provisions
Amount Ratio Amount Ratio<br> (1) Amount Ratio
As of September 30,<br> 2024
Leverage $ 138,502 8.99 % $ 61,600 4.0 % $ 77,000 5.0 %
Common Equity Tier 1 Capital 138,502 12.75 % 76,037 7.0 % 70,606 6.5 %
Tier 1 Capital 138,502 12.75 % 92,331 8.5 % 86,900 8.0 %
Total Risk Based Capital 149,685 13.78 % 114,056 10.5 % 108,625 10.0 %
As of December<br> 31, 2023
Leverage $ 134,422 8.68 % $ 61,951 4.0 % $ 77,439 5.0 %
Common Equity Tier 1 Capital 134,422 12.74 % 73,833 7.0 % 68,560 6.5 %
Tier 1 Capital 134,422 12.74 % 89,655 8.5 % 84,381 8.0 %
Total Risk Based Capital 144,468 13.70 % 110,750 10.5 % 105,476 10.0 %
(1) The required ratios<br>for capital adequacy purposes include a capital conservation buffer of 2.5%.
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ITEM

  1. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

**Overview.**Landmark Bancorp, Inc. is a financial holding company incorporated under the laws of the State of Delaware and is engaged in the banking business through its wholly owned subsidiary, Landmark National Bank, and in the insurance business through its wholly owned subsidiary, Landmark Risk Management, Inc. References to the “Company,” “we,” “us,” and “our” refer collectively to Landmark Bancorp, Inc., Landmark National Bank and Landmark Risk Management, Inc. The Company is listed on the Nasdaq Global Market under the symbol “LARK.” The Bank is dedicated to providing quality financial and banking services to its local communities. Our strategy includes continuing a tradition of holding and acquiring quality assets while growing our commercial, commercial real estate (“CRE”) and agriculture loan portfolios. We are committed to developing relationships with our borrowers and providing a total banking service.

The Bank is principally engaged in the business of attracting deposits from the general public and using such deposits, together with borrowings and other funds, to originate one-to-four family residential real estate, construction and land, CRE, commercial, agriculture, municipal and consumer loans. Although not our primary business function, we invest in certain investment and mortgage-related securities using deposits and other borrowings as funding sources.

Landmark Risk Management, Inc., which was formed and began operations in 2017, is a Nevada-based captive insurance company which provides property and casualty insurance coverage to the Company and the Bank for which insurance may not be currently available or economically feasible in the current insurance marketplace. Landmark Risk Management, Inc. is subject to the regulations of the State of Nevada and undergoes periodic examinations by the Nevada Division of Insurance.

Our results of operations depend generally on net interest income, which is the difference between interest income from interest-earning assets and interest expense on interest-bearing liabilities. Net interest income is affected by regulatory, economic and competitive factors that influence interest rates, loan demand and deposit flows. In addition, we are subject to interest rate risk to the degree that our interest-earning assets mature or reprice at different times, or at different speeds, than our interest-bearing liabilities. Our results of operations are also affected by non-interest income, such as service charges, loan fees, gains from the sale of newly originated loans, gains or losses on investments and certain other non-interest related items. Our principal operating expenses, aside from interest expense, consist of compensation and employee benefits, occupancy costs, professional fees, data processing expenses and provision for credit losses.

We are significantly impacted by prevailing economic conditions, including federal monetary and fiscal policies, and federal regulations of financial institutions. Deposit balances are influenced by numerous factors such as competing investments, the level of income and the personal rate of savings within our market areas. Factors influencing lending activities include the demand for housing and the interest rate pricing competition from other lending institutions.

Currently, our business consists of ownership of the Bank, with its main office in Manhattan, Kansas and twenty nine additional branch offices in central, eastern, southeast and southwest Kansas, one loan production office in Kansas City, Missouri and our ownership of Landmark Risk Management, Inc. On October 1, 2022, the Company completed its acquisition of Freedom Bancshares, Inc., the holding company of Freedom Bank. Freedom Bank was founded in 2006 and operated out of a single location in Overland Park, Kansas.

In October 2024, we declared our 93^rd^ consecutive quarterly dividend, and we currently have no plans to change our dividend strategy given our current capital and liquidity position. However, while we have achieved a strong capital base and expect to continue operating profitably, our future dividend practice is dependent upon the performance of the economy and the Company’s overall performance. In addition, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, we will not be permitted to make capital distributions (including for dividends and repurchases of stock) or pay discretionary bonuses to executive officers without restriction if we do not maintain 2.5% in Common Equity Tier 1 Capital attributable to a capital conservation buffer, a standard we exceeded at September 30, 2024. In October 2024, we also declared a 5% stock dividend. The stock dividend will be issued on December 16, 2024. This is the 24^th^ consecutive year that the Company has issued a 5% stock dividend.

CriticalAccounting Policies*.* Critical accounting policies are those which are both most important to the portrayal of our financial condition and results of operations and require our management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies relate to the allowance for credit losses and the accounting for business combinations, each of which involve significant judgment by our management. There have been no material changes to the critical accounting policies included under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 27, 2024.

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Summaryof Results. During the third quarter of 2024, we recorded net earnings of $3.9 million, which was an increase of $1.1 million, or 36.6%, from net earnings of $2.9 million in the third quarter of 2023. During the first nine months of 2024, we recorded net earnings of $9.7 million, which was an increase of $124,000, or 1.3%, from net earnings of $9.6 million during the first nine months of 2023. The increase in net earnings during 2024 was primarily related to an increase in net interest income and non-interest income.

The following table summarizes earnings and key performance measures as of or for the periods presented:

As of or for the As of or for the
(Dollars in thousands,<br> except per share amounts) three<br> months ended September 30, nine<br> months ended June 30,
2024 2023 2024 2023
Net earnings:
Net earnings $ 3,931 $ 2,878 $ 9,721 $ 9,597
Basic earnings per share (1) $ 0.72 $ 0.53 $ 1.77 $ 1.75
Diluted earnings per share (1) $ 0.72 $ 0.52 $ 1.77 $ 1.75
Earnings ratios:
Return on average assets<br> (2) 1.00 % 0.74 % 0.84 % 0.84 %
Return on average equity<br> (2) 11.82 % 9.87 % 10.18 % 11.13 %
Equity to total assets 8.93 % 7.03 % 8.93 % 7.03 %
Net interest margin (2)<br> (3) 3.30 % 3.06 % 3.21 % 3.19 %
Dividend payout ratio 29.17 % 38.08 % 35.59 % 34.24 %

(1) Per share values for the periods ended September 30, 2023 have been adjusted to give effect to the 5% dividend paid during 2023.

(2) Ratios have been annualized and are not necessarily indicative of the results for the entire year.

(3) Net interest margin is presented on a fully tax equivalent basis, using a 21% federal tax rate.

InterestIncome. Interest income of $19.0 million for the quarter ended September 30, 2024 represented an increase of $2.2 million, or 13.3%, compared to the same period of 2023. Interest income on loans increased $2.4 million, or 17.8%, to $15.9 million for the quarter ended September 30, 2024, compared to the same period of 2023 due to higher yields and average balances. Our yields increased from 5.93% in the third quarter of 2023 to 6.43% in the third quarter of 2024. The increase in interest income on loans was also driven by an increase in average loan balances which increased from $906.3 million in the third quarter of 2023 to $985.7 million in the third quarter of 2024. Interest income on investment securities decreased $169,000, or 5.3%, to $3.0 million for the third quarter of 2024, as compared to $3.2 million in the same period of 2023. The decrease in interest income on investment securities was primarily the result of a decrease in the average balances of investment securities which decreased from $486.7 million in the third quarter of 2023 to $428.3 million in the third quarter of 2024. Partially offsetting the lower average balances was in increase in yields, which increased from 2.77% in the third quarter of 2024 to 2.99% in the third quarter of 2024.

Interest income of $54.9 million for the nine months ended September 30, 2024 represented an increase of $7.8 million, or 16.4%, compared to the same period of 2023. Interest income on loans increased $7.9 million, or 21.1%, to $45.4 million for the nine months ended September 30, 2024 compared to the same period of 2023, due to an increase in our average loan balances, which increased from $877.0 million during the first nine months of 2023 to $962.3 million during the first nine months of 2024. Also contributing to higher interest income were higher yields on loans, which increased from 5.72% in the nine months ended September 30, 2023 to 6.31% during the nine months ended September 30, 2024. Interest income on investment securities decreased $116,000, or 1.2%, to $9.4 million for the first nine months of 2024, as compared to $9.5 million in the same period of 2023. The decrease in interest income on investment securities was the result of a decrease on average balances of investment securities which decreased from $493.9 million in the first nine months of 2023 to $440.7 million in the same period of 2024. Partially offsetting the lower average balances was an increase in yields, which increased from 2.72% in the first nine months of 2023 to 2.99% in the same period of 2024.

InterestExpense. Interest expense during the quarter ended September 30, 2024 increased $1.3 million to $7.4 million, as compared to the same period of 2023. Interest expense on interest-bearing deposits increased $1.4 million to $5.8 million for the quarter ended September 30, 2024, as compared to the same period of 2023. Our total cost of interest-bearing deposits increased from 1.93% in the third quarter of 2023 to 2.48% in the third quarter of 2024 as a result of higher rates and increased competition for deposits. Also contributing to higher interest expense was an increase in average interest-bearing deposit balances, which increased from $902.7 million in the third quarter of 2023 to $936.2 million in the third quarter of 2024. For the third quarter of 2024, interest expense on borrowings decreased $196,000 to $1.6 million, as compared to the same period of 2023 due to a decrease in our average borrowings and repurchase agreements which decreased $16.1 million from the third quarter of 2023 to the third quarter of 2024. Partially offsetting the decrease in average borrowing was an increase in rates, which increased from 5.60% in the third quarter of 2023 to 5.72% in the same period of 2024.

Interest expense during the nine months ended September 30, 2024 increased $6.8 million to $21.6 million, as compared to the same period of 2023. Interest expense on interest-bearing deposits increased $6.6 million to $17.0 million for the nine months ended September 30, 2024, as compared to the same period of 2023. The increase in interest expense on interest-bearing deposits was the result of higher rates as our cost of interest-bearing deposits increased from 1.57% in the first nine months of 2023 to 2.42% in the same period of 2024. The increase in interest expense on deposits was also due to an increase in average interest-bearing deposit balances, which increased from $886.2 million in the first nine months of 2023 to $936.0 million in the same period of 2024. For the first nine months of 2024, interest expense on borrowings increased $246,000, to $4.7 million as compared to the same period of 2023, due primarily to an increase in rates, which increased from 5.26% in the first nine months of 2023 to 5.75% in the same period of 2024. Partially offsetting the increase in interest expense on borrowings was a decrease in our average outstanding borrowings which decreased from $112.3 million in the first nine months of 2023 to $108.4 million in the first nine months of 2024.

NetInterest Income. Net interest income increased $978,000, or 9.2%, to $11.6 million for the third quarter of 2024 compared to the same period of 2023. The increase in net interest income was primarily a result of an increase in interest income on loans, partially offset by higher interest expense and a decrease in interest income on investment securities. The accretion of purchase accounting adjustments increased net interest income by $282,000 in the third quarter of 2023 compared to an increase of $336,000 in the third quarter of 2024, and was primarily related to fair value adjustments on loans acquired in the Freedom Bank transaction. Compared to the same period last year, the increase in interest rates raised the yields on our interest-earning assets and the cost of our interest-bearing liabilities. Net interest margin, on a tax-equivalent basis, was 3.06% in the third quarter of 2023, compared to 3.30% in the third quarter of 2024. Lower interest rates may not result in a higher net interest margin as a result of increased competition for loans and deposits.

Net interest income increased $919,000, or 2.8%, to $33.3 million for the first nine months of 2024 compared to the same period of 2023. The increase in net interest income was primarily a result of an increase in interest income on loans, partially offset by higher interest expense and a decrease in interest income on investment securities. The accretion of purchase accounting adjustments increased net interest income by $750,000 in the first nine months of 2023 compared to an increase of $850,000, in the first nine months of 2024 and was primarily related to fair value adjustments on loans acquired in the Freedom Bank transaction. Net interest margin, on a tax-equivalent basis, increased from 3.19% in the first nine months of 2023 to 3.21% in the same period of 2024.

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AverageAssets/Liabilities. The following table reflects the tax-equivalent yields earned on average interest-earning assets and costs of average interest-bearing liabilities (derived by dividing income or expense by the monthly average balance of assets or liabilities, respectively) as well as “net interest margin” (which reflects the effect of the net earnings balance) for the periods shown:

Three<br> months ended Three<br> months ended
September<br> 30, 2024 September<br> 30, 2023
Average<br><br> <br>balance Income/<br><br> <br>expense Average<br><br> <br>yield/cost Average<br><br> <br>balance Income/<br><br> <br>expense Average<br><br> <br>yield/cost
(Dollars in thousands)
Assets
Interest-earning assets:
Interest-bearing<br> deposits at banks $ 5,705 $ 41 2.86 % $ 8,733 $ 46 2.09 %
Investment securities (1) 428,301 3,217 2.99 % 486,706 3,396 2.77 %
Loans<br> receivable, net (2) 985,659 15,937 6.43 % 906,289 13,535 5.93 %
Total<br> interest-earning assets 1,419,665 19,195 5.38 % 1,401,728 16,977 4.81 %
Non-interest-earning<br> assets 142,817 147,996
Total $ 1,562,482 $ 1,549,724
Liabilities and Stockholders’<br> Equity
Interest-bearing liabilities:
Money market and checking $ 580,933 $ 3,499 2.40 % $ 596,405 $ 3,065 2.04 %
Savings accounts 148,835 51 0.14 % 157,157 31 0.08 %
Certificates<br> of deposit 206,450 2,280 4.39 % 149,165 1,288 3.43 %
Total interest-bearing<br> deposits 936,218 5,830 2.48 % 902,727 4,384 1.93 %
FHLB advances and other<br> borrowings 77,958 1,100 5.61 % 89,441 1,251 5.55 %
Subordinated debentures 21,651 416 7.64 % 21,651 417 7.64 %
Repurchase<br> agreements 10,774 72 2.66 % 15,387 116 2.99 %
Total borrowings 110,383 1,588 5.72 % 126,479 1,784 5.60 %
Total<br> interest-bearing liabilities 1,046,601 7,418 2.82 % 1,029,206 6,168 2.38 %
Non-interest-bearing liabilities 383,610 404,874
Stockholders’<br> equity 132,271 115,644
Total $ 1,562,482 $ 1,549,724
Interest rate spread (3) 2.56 % 2.43 %
Net interest margin (4) $ 11,777 3.30 % $ 10,809 3.06 %
Tax-equivalent interest<br> - imputed 173 183
Net interest income $ 11,604 $ 10,626
Ratio of average interest-earning assets to<br> average interest-bearing liabilities 135.6 % 136.2 %
(1) Income<br> on tax exempt securities is presented on a fully tax-equivalent basis, using a 21% federal<br> tax rate.
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(2) Includes<br> loans classified as non-accrual. Income on tax-exempt loans is presented on a fully tax-equivalent<br> basis, using a 21% federal tax rate.
(3) Interest<br> rate spread represents the difference between the average yield earned on interest-earning<br> assets and the average rate paid on interest-bearing liabilities.
(4) Net<br> interest margin represents annualized, tax-equivalent net interest income divided by average<br> interest-earning assets. 
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| --- | | | Nine<br> months ended | | | | | | | Nine<br> months ended | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | September<br> 30, 2024 | | | | | | | September<br> 30, 2023 | | | | | | | | | Average<br><br> <br>balance | | Income/<br><br> <br>expense | | Average<br><br> <br>yield/cost | | | Average<br><br> <br>balance | | Income/<br><br> <br>expense | | Average<br><br> <br>yield/cost | | | | (Dollars in thousands) | | | | | | | | | | | | | | | | Assets | | | | | | | | | | | | | | | | Interest-earning assets: | | | | | | | | | | | | | | | | Interest-bearing<br> deposits at banks | $ | 6,304 | $ | 144 | | 3.05 | % | $ | 10,973 | $ | 193 | | 2.35 | % | | Investment securities (1) | | 440,744 | | 9,874 | | 2.99 | % | | 493,853 | | 10,029 | | 2.72 | % | | Loans<br> receivable, net (2) | | 962,252 | | 45,456 | | 6.31 | % | | 877,048 | | 37,543 | | 5.72 | % | | Total<br> interest-earning assets | | 1,409,300 | | 55,474 | | 5.26 | % | | 1,381,874 | | 47,765 | | 4.62 | % | | Non-interest-earning<br> assets | | 145,382 | | | | | | | 147,064 | | | | | | | Total | $ | 1,554,682 | | | | | | $ | 1,528,938 | | | | | | | Liabilities and Stockholders’<br> Equity | | | | | | | | | | | | | | | | Interest-bearing liabilities: | | | | | | | | | | | | | | | | Money market and checking | $ | 587,203 | $ | 10,429 | | 2.37 | % | $ | 595,990 | $ | 7,759 | | 1.74 | % | | Savings accounts | | 150,950 | | 142 | | 0.13 | % | | 163,498 | | 92 | | 0.08 | % | | Certificates<br> of deposit | | 197,805 | | 6,389 | | 4.31 | % | | 126,739 | | 2,524 | | 2.66 | % | | Total interest-bearing<br> deposits | | 935,958 | | 16,960 | | 2.42 | % | | 886,227 | | 10,375 | | 1.57 | % | | FHLB advances and other<br> borrowings | | 74,496 | | 3,149 | | 5.65 | % | | 70,774 | | 2,845 | | 5.37 | % | | Subordinated debentures | | 21,651 | | 1,246 | | 7.69 | % | | 21,651 | | 1,168 | | 7.21 | % | | Repurchase<br> agreements | | 12,218 | | 267 | | 2.92 | % | | 19,903 | | 403 | | 2.71 | % | | Total borrowings | | 108,365 | | 4,662 | | 5.75 | % | | 112,328 | | 4,416 | | 5.26 | % | | Total<br> interest-bearing liabilities | | 1,044,323 | | 21,622 | | 2.77 | % | | 998,555 | | 14,791 | | 1.98 | % | | Non-interest-bearing liabilities | | 382,762 | | | | | | | 415,108 | | | | | | | Stockholders’<br> equity | | 127,597 | | | | | | | 115,275 | | | | | | | Total | $ | 1,554,682 | | | | | | $ | 1,528,938 | | | | | | | Interest rate spread (3) | | | | | | 2.49 | % | | | | | | 2.64 | % | | Net interest margin (4) | | | $ | 33,852 | | 3.21 | % | | | $ | 32,974 | | 3.19 | % | | Tax-equivalent interest<br> - imputed | | | | 527 | | | | | | | 568 | | | | | Net interest income | | | $ | 33,325 | | | | | | $ | 32,406 | | | | | Ratio of average interest-earning assets to<br> average interest-bearing liabilities | | | | | | 134.9 | % | | | | | | 138.4 | % | | (1) | Income<br> on tax exempt securities is presented on a fully tax-equivalent basis, using a 21% federal<br> tax rate. | | --- | --- | | (2) | Includes<br> loans classified as non-accrual. Income on tax-exempt loans is presented on a fully tax-equivalent<br> basis, using a 21% federal tax rate. | | (3) | Interest<br> rate spread represents the difference between the average yield earned on interest-earning<br> assets and the average rate paid on interest-bearing liabilities. | | (4) | Net<br> interest margin represents annualized, tax-equivalent net interest income divided by average<br> interest-earning assets. |

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Rate/VolumeTable*.* The following table describes the extent to which changes in tax-equivalent interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities affected the Company’s interest income and expense for the periods indicated. The table distinguishes between (i) changes attributable to rate (changes in rate multiplied by prior volume), (ii) changes attributable to volume (changes in volume multiplied by prior rate), and (iii) net change (the sum of (i) and (ii)). The net changes attributable to the combined effect of volume and rate that cannot be segregated have been allocated proportionately to the change due to volume and the change due to rate.

Three<br> months ended September 30, Nine<br> months ended September 30,
2024<br> vs 2023 2024<br> vs 2023
Increase/(decrease)<br> attributable to Increase/(decrease)<br> attributable to
Volume Rate Net Volume Rate Net
(Dollars<br> in thousands) (Dollars<br> in thousands)
Interest income:
Interest-bearing<br> deposits at banks $ 80 $ (85 ) $ (5 ) $ (163 ) $ 114 $ (49 )
Investment securities (529 ) 350 (179 ) (2,012 ) 1,857 (155 )
Loans 1,224 1,178 2,402 3,838 4,075 7,913
Total 775 1,443 2,218 1,663 6,046 7,709
Interest expense:
Deposits 167 1,279 1,446 618 5,967 6,585
FHLB advances and other<br> borrowings (165 ) 14 (151 ) 153 151 304
Subordinated debentures<br> and other borrowings - (1 ) (1 ) - 78 78
Repurchase<br> agreements (32 ) (12 ) (44 ) (170 ) 34 (136 )
Total (30 ) 1,280 1,250 601 6,230 6,831
Net interest income $ 805 $ 163 $ 968 $ 1,062 $ (184 ) $ 878

Provisionfor Credit Losses. During the third quarter of 2024, a $500,000 provision for credit losses was recorded, compared to no provision for credit losses recorded in the same period of 2023. As of September 30, 2024, our analysis of our allowance for credit losses indicated a provision was required based on loan growth, current and projected economic conditions and other qualitative factors. We recorded net loan charge-offs of $9,000 during the third quarter of 2024, compared to net loan recoveries of $521,000 during the third quarter of 2023.

During the first nine months of 2024, we recorded a $800,000 provision for credit losses, compared to a $299,000 provision for credit losses in the first nine months of 2023. The provision for credit losses during the first nine months of 2024 consisted of a $900,000 provision to the allowance for credit losses on loans and a $100,000 credit provision to the allowance for unfunded loan commitments. The $299,000 provision for credit losses during the first nine months of 2023 consisted of a $250,000 provision to the allowance for credit losses on loans, a $30,000 provision to the allowance for unfunded loan commitments and a $19,000 provision to the allowance for credit losses on held-to-maturity investment securities. We recorded net loan recoveries of $36,000 during the first nine months of 2024, compared to net loan recoveries of $406,000 during the first nine months of 2023.

For further discussion of the allowance for credit losses, refer to the “Asset Quality and Distribution” section below.

Non-interestIncome. Total non-interest income was $4.3 million in the third quarter of 2024, an increase of $601,000, or 16.5%, from the same period in 2023. The increase in non-interest income during the third quarter of 2024 compared to the same period in the prior year was primarily due to an increase in fees and service charges of $262,000 primarily due to higher fees related to deposit accounts. Gains on sales of one-to-four family residential real estate loans increased $213,000 due to lower interest rates. Other non-interest income also increased by $102,000, which was primarily due to a $273,000 gain on sale during the quarter of a former branch facility located in Overland Park, Kansas.

Total non-interest income was $11.4 million in the first nine months of 2024, an increase of $397,000, or 3.6%, from the first nine months of 2023, primarily as a result of an increase of $575,000 in fees and service charges due primarily to higher fees related to deposits accounts. Also contributing to the increase in non-interest income was an increase in bank owned life insurance of $76,000. Offsetting this increase was a decrease of $150,000 in gains on sales of loans. Other non-interest income also decreased by $104,000 primarily due to a decrease in lease income associated with the rental income from a former branch facility, which was sold in the third quarter of 2024.

Non-interestExpense. Non-interest expense totaled $10.6 million for the third quarter of 2024, a decrease of $170,000, or 1.6%, over the same quarter of 2023. The decrease in non-interest expense in the third quarter of 2024 compared to the same period in the prior year was mainly due to a decrease in amortization of mortgage servicing rights, other intangibles, and professional fees. Partially offsetting the decrease in non-interest expense was an increase in occupancy and equipment and other non-interest expense.

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Non-interest expense totaled $32.2 million for the first nine months of 2024, an increase of $784,000, or 2.5%, from $31.4 million for the first nine months of 2023. The increase in non-interest expense in the first nine months 2024 compared to the same period in the prior year was mainly due to an increase in other non-interest expense associated with a $1.1 million valuation allowance recorded against real estate held for sale. Also contributing to the increase in non-interest expense was an increase in professional fees associated with increased legal costs associated with revisions to our benefit plans. Partially offsetting the increase in non-interest expense was a decrease amortization of mortgage serving rights and other intangibles, data processing, occupancy and equipment and compensation and benefits.

IncomeTax Expense. During the third quarter of 2024, we recorded income tax expense of $867,000, compared to income tax expense of $671,000 during the same period of 2023. Our effective tax rate decreased from 18.9% in the third quarter of 2023 to 18.1% in the third quarter of 2024. The decrease in the effective tax rate was due to increases in tax credits and tax exempt income.

We recorded income tax expense of $2.0 million for the first nine months of 2024, compared to income tax expense of $2.1 million in the same period of 2023. Our effective tax rate was 17.7% in the first nine months of 2023, compared to 16.9% in the first nine months of 2024. The decrease in the effective tax rate was primarily due to increases in tax credits and tax-exempt income.

FinancialCondition. Economic conditions in the United States remained sluggish during the first nine months of 2024 as elevated inflation levels and high interest rates continued to impact the economy. The sustained high interest rates have impacted financial institutions generally, resulting in continued higher costs of funding and lower fair values for investment securities. We maintain strong capital and liquidity, and a stable, conservative deposit portfolio with a significant majority of our deposits being retail-based and insured by the Federal Deposit Insurance Corporation (“FDIC”) insured. We spend significant time each month monitoring our interest rate and concentration risks through our asset/liability management and lending strategies that involve a relationship-based banking model offering stability and consistency. The State of Kansas and the geographic markets in which the Company operates have also been impacted by economic headwinds. Supply chain constraints, labor shortages and geopolitical events have contributed to the rising inflation levels which are impacting all areas of the economy both nationally and locally. The Company’s allowance for credit losses continues to factor in estimates of the economic impact of these conditions and other qualitative factors on our loan portfolio. However, our loan portfolio is diversified across various types of loans and collateral throughout the markets in which we operate. Aside from a few problem loans that management is working to resolve, our asset quality has remained strong over the past few years. While further increases in problem assets may arise, management believes its efforts to run a high quality financial institution with a sound asset base will continue to create a strong foundation for continued growth and profitability in the future.

AssetQuality and Distribution. Our primary investing activities are the origination of one-to-four family residential real estate, construction and land, CRE, commercial, agriculture, municipal and consumer loans and the purchase of investment securities. Total assets were $1.6 billion at both December 31, 2023 and September 30, 2024.

The allowance for credit losses is established through a provision for credit losses based on our economic projections. At September 30, 2024, our allowance for credit losses on loans totaled $11.5 million, or 1.15% of gross loans outstanding, compared to $10.6 million, or 1.12% of gross loans outstanding, at December 31, 2023. The increase in our allowance for credit losses on loans as a percentage of gross loans outstanding was primarily due to current and projected economic conditions and other qualitative factors.

As of September 30, 2024 and December 31, 2023, approximately $26.9 million and $7.5 million, respectively, of loans were considered classified and assigned a risk rating of special mention, substandard or doubtful. These ratings indicate that these loans were identified as potential problem loans having more than normal risk and raised doubts as to the ability of the borrowers to comply with present loan repayment terms. Even though borrowers were experiencing moderate cash flow problems as well as some deterioration in collateral value, management believed the allowance for credit losses was sufficient to cover expected losses related to such loans at September 30, 2024 and December 31, 2023, respectively.

Loans past due 30-89 days and still accruing interest totaled $7.3 million, or 0.73% of gross loans, at September 30, 2024, compared to $1.6 million, or 0.17% of gross loans, at December 31, 2023. The increase in past due loans was primarily related to a single commercial loan and an agriculture loan. At September 30, 2024, $13.4 million in loans were on non-accrual status, or 1.34% of gross loans, compared to $2.4 million, or 0.25% of gross loans, at December 31, 2023. The increase in non-accrual status loans was primarily related to one commercial loan which was put on non-accrual status in the third quarter of 2024. Non-accrual loans consist of loans 90 or more days past due and certain individually evaluated loans. There were no loans 90 days delinquent and accruing interest at either September 30, 2024 or December 31, 2023.

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As part of our credit risk management, we continue to manage the loan portfolio to identify problem loans and have placed additional emphasis on CRE and construction and land relationships. We are working to resolve the remaining problem credits or move the non-performing credits out of the loan portfolio. At September 30, 2024 we had $428,000 of real estate owned compared to $928,000 of real estate owned at December 31, 2023. As of September 30, 2024, real estate owned primarily consisted undeveloped land and residential real estate properties. The Company is currently marketing all of the remaining properties in real estate owned.

LiabilityDistribution. Our primary ongoing sources of funds are deposits, FHLB borrowings, proceeds from principal and interest payments on loans and investment securities and proceeds from the sale of mortgage loans and investment securities. While maturities and scheduled amortization of loans are a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates and economic conditions. We experienced a decrease of $40.7 million, or 3.1% in total deposits during the first nine months of 2024, to $1.3 billion at September 30, 2024. The decrease in deposits was primarily due to a seasonal decrease in our deposit accounts due to public funds.

Non-interest-bearing deposits at September 30, 2024 were $360.2 million, or 28.2% of deposits, compared to $367.1 million, or 27.9% of deposits, at December 31, 2023. Money market and checking deposit accounts were 44.4% of our deposit portfolio and totaled $565.6 million at September 30, 2024, compared to $613.6 million, or 46.6% of deposits, at December 31, 2023. Savings accounts decreased to $145.8 million, or 11.4% of deposits, at September 30, 2024, from $152.4 million, or 11.6% of deposits, at December 31, 2023. Certificates of deposit totaled $203.9 million, or 16.0% of deposits, at September 30, 2024, compared to $183.2 million, or 13.9% of deposits, at December 31, 2023. The increase in certificates of deposit was primarily related to higher brokered certificates of deposits, which increased from $42.8 million at December 31, 2023 to $49.8 million at September 30, 2024.

Overdraft deposits consist of non-interest-bearing deposits, money market and checking deposit accounts with negative balances. These overdraft balances totaled $383,000 at September 30, 2024 and $318,000 as of December 31, 2023 and were presented as loans on the balance sheet.

Total deposits include estimated uninsured deposits of $388.0 million and $430.0 million as of September 30, 2024 and December 31, 2023, respectively. This represented approximately 30.4% of our total deposits at September 30, 2024 and compares favorably with other similar community banking organizations. Over 95% of the Company’s total deposits were considered core deposits at September 30, 2024. These deposit balances are from retail, commercial and public fund customers located in the markets where the Company has bank branch locations.

Certificates of deposit at September 30, 2024, scheduled to mature in one year or less totaled $130.6 million. Historically, maturing deposits have generally remained with the Bank, and we believe that a significant portion of the deposits maturing in one year or less will remain with us upon maturity in some type of deposit account.

Total borrowings increased $24.2 million to $123.2 million at September 30, 2024, from $99.0 million at December 31, 2023. The increase in total borrowings was primarily due to an increase in FHLB borrowings. The increase in FHLB borrowings was to fund loan growth and to offset the decline in deposits.

CashFlows. During the nine months ended September 30, 2024, our cash and cash equivalents decreased by $5.9 million. Our operating activities provided net cash of $15.3 million during the first nine months of 2024 primarily as a result of net earnings. Our investing activities used net cash of $869,000 during the first nine months of 2024, primarily due to loan growth. Financing activities used net cash of $20.3 million during the first nine months of 2024, primarily as a result of a decrease in deposits.

**Liquidity.**Our most liquid assets are cash and cash equivalents and investment securities available-for-sale. The levels of these assets are dependent on the operating, financing, lending and investing activities during any given year. These liquid assets totaled $436.6 million at September 30, 2024 and $484.8 million at December 31, 2023. During periods in which we are not able to originate a sufficient amount of loans and/or periods of high principal prepayments, we generally increase our liquid assets by investing in short-term, high-grade investments or holding higher balances of cash and cash equivalents.

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Liquidity management is both a daily and long-term function of our strategy. Excess funds are generally invested in short-term investments. Excess funds are typically generated as a result of increased deposit balances, while uses of excess funds are generally deposit withdrawals and loan advances. In the event we require funds beyond our ability to generate them internally, additional funds are generally available through the use of FHLB advances, a line of credit with the FHLB, other borrowings or through pledging or sales of investment securities. While the sale of available-for-sale investment securities would result in losses due to the current interest environment, pledging these securities as collateral would not result in a loss. At September 30, 2024, we had $86.4 million borrowed on our line of credit with the FHLB. At September 30, 2024, we had collateral pledged to the FHLB that would allow us to borrow $272.2 million, subject to FHLB credit requirements and policies. At September 30, 2024, we had no borrowings through the Federal Reserve discount window, while our borrowing capacity with the Federal Reserve was $54.0 million. We also have various other federal funds agreements, both secured and unsecured, with correspondent banks totaling approximately $30.0 million in available credit under which we had no outstanding borrowings at September 30, 2024. At September 30, 2024, we had subordinated debentures totaling $21.7 million and $9.5 million of repurchase agreements. At September 30, 2024, the Company had no borrowings against a $5.0 million line of credit from an unrelated financial institution maturing on November 1, 2025, with an interest rate that adjusts daily based on the prime rate less 0.50%. This line of credit has covenants specific to capital and other financial ratios, which the Company was in compliance with at September 30, 2024. The Company also borrowed $5.7 million from the same unrelated financial institution at a fixed rate of 6.15%. This borrowing matures on September 1, 2027 and requires quarterly principal and interest payments. The original $10.0 million of borrowings was used to fund part of the acquisition of Freedom Bancshares, Inc.

OffBalance Sheet Arrangements. As a provider of financial services, we routinely issue financial guarantees in the form of financial and performance standby letters of credit. Standby letters of credit are contingent commitments issued by us generally to guarantee the payment or performance obligation of a customer to a third party. While these standby letters of credit represent a potential outlay by us, a significant amount of the commitments may expire without being drawn upon. We have recourse against the customer for any amount the customer is required to pay to a third party under a standby letter of credit. The letters of credit are subject to the same credit policies, underwriting standards and approval process as loans made by us. Most of the standby letters of credit are secured, and in the event of nonperformance by the customers, we have the right to the underlying collateral, which could include commercial real estate, physical plant and property, inventory, receivables, cash and marketable securities. The contract amount of these standby letters of credit, which represents the maximum potential future payments guaranteed by us, was $1.5 million at September 30, 2024.

At September 30, 2024, we had outstanding loan commitments, excluding standby letters of credit, of $194.0 million. We anticipate that sufficient funds will be available to meet current loan commitments. These commitments consist of unfunded lines of credit and commitments to finance real estate loans.

**Capital.**Current regulatory capital regulations require financial institutions (including banks and bank holding companies) to meet certain regulatory capital requirements. The Bank is subject to the Basel III Rules that implemented the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Basel III Rules are applicable to all U.S. banks that are subject to minimum capital requirements, as well as to bank and savings and loan holding companies other than “small bank holding companies” (generally, non-public bank holding companies with consolidated assets of less than $3.0 billion). The Company is considered a “small bank holding company” and is not directly subject to these minimum capital requirements.

The Basel III Rules require a common equity Tier 1 capital to risk-weighted assets minimum ratio of 4.5%, a Tier 1 capital to risk-weighted assets minimum ratio of 6.0%, a Total Capital to risk-weighted assets minimum ratio of 8.0%, and a Tier 1 leverage minimum ratio of 4.0%. A capital conservation buffer, equal to 2.5% common equity Tier 1 capital, is also established above the regulatory minimum capital requirements (other than the Tier 1 leverage ratio). As of September 30, 2024 and December 31, 2023, the Bank met the requirements to be “well capitalized,” which is the highest rating available under the regulatory capital regulations framework for prompt corrective action. Management believed that as of September 30, 2024, the Company and the Bank met all capital adequacy requirements to which we are subject.

Dividends. During the quarter ended September 30, 2024, we paid a quarterly cash dividend of $0.21 per share to our stockholders.

The payment of dividends by any financial institution or its holding company is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations. In addition, under the Basel III Rules, financial institutions have to maintain 2.5% in common equity Tier 1 capital attributable to the capital conservation buffer in order to pay dividends and make other capital distributions. As described above, the Bank exceeded its minimum capital requirements under applicable guidelines as of September 30, 2024. The National Bank Act imposes limitations on the amount of dividends that a national bank may pay without prior regulatory approval. Generally, the amount is limited to the bank’s current year’s net earnings plus the adjusted retained earnings for the three preceding years. As of September 30, 2024, approximately $3.3 million was available to be paid as dividends to the Company by the Bank without prior regulatory approval.

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Additionally, our ability to pay dividends is limited by the subordinated debentures that are held by three business trusts that we control. Interest payments on the debentures must be paid before we pay dividends on our capital stock, including our common stock. We have the right to defer interest payments on the debentures for up to 20 consecutive quarters. However, if we elect to defer interest payments, all deferred interest must be paid before we may pay dividends on our capital stock.

ITEM

  1. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our assets and liabilities are principally financial in nature, and the resulting net interest income thereon is subject to changes in market interest rates and the mix of various assets and liabilities. Interest rates in the financial markets affect our decisions relating to pricing our assets and liabilities, which impact net interest income, a significant cash flow source for us. As a result, a substantial portion of our risk management activities relates to managing interest rate risk.

Our Asset/Liability Management Committee monitors the interest rate sensitivity of our balance sheet using earnings simulation models. We have set policy limits of interest rate risk to be assumed in the normal course of business and monitor such limits through our simulation process.

We have been successful in meeting the interest rate sensitivity objectives set forth in our policy. Simulation models are prepared to determine the impact on net interest income for the coming twelve months, including one using interest rates as of the forecast date, and forecasting volumes for the twelve-month projection. This position is then subjected to a shift in interest rates of 100, 200 and 300 basis points with an impact to our net interest income on a one-year horizon as follows:

As<br> of September 30, 2024 As<br> of December 31, 2023
Scenario Dollar<br> change in net interest income (000’s) Percent<br> change in net interest income Dollar<br> change in net interest income (000’s) Percent<br> change in net interest income
300 basis point rising ) (13.0 )% ) (13.8 )%
200 basis point rising (8.7 )% ) (9.3 )%
100 basis point rising (4.15 )% ) (4.9 )%
100 basis point falling 0.7 % 0.0 %
200 basis point falling ) (0.8 )% ) (2.1 )%
300 basis point falling ) (1.7 )% ) (4.7 )%

All values are in US Dollars.

SafeHarbor Statement Under the Private Securities Litigation Reform Act of 1995

Forward-Looking Statements

This document (including information incorporated by reference) contains, and future oral and written statements by us and our management may contain, forward-looking statements, within the meaning of such term in the Private Securities Litigation Reform Act of 1995, with respect to our financial condition, results of operations, plans, objectives, future performance and business. 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, including the negatives of such expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and we undertake no obligation to update any statement in light of new information or future events.

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Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on operations and future prospects of us and our subsidiaries include, but are not limited to, the following:

● The<br> effects of changes in interest rates (including the effects of changes in the rate of prepayments of our assets) and the policies<br> of the Federal Reserve (including potential decreases in rates by the Federal Reserve) including on our net interest income and the<br> value of our security portfolio.
● The<br> strength of the United States economy in general and the strength of the local economies in which we conduct our operations, including<br> the effects of continued inflationary pressures and supply chain constraints on such economies, which may be less favorable than<br> expected and may result in, among other things, a deterioration in the credit quality and value of our assets.
● The<br> economic impact of past and any future terrorist attacks, acts of war, including the ongoing conflict in the Middle East and Russian<br> invasion of Ukraine, or threats thereof, and the response of the United States to any such threats and attacks.
● The<br> effects of, and changes in, federal, state and local laws, regulations and policies affecting banking, securities, consumer protection,<br> insurance, tax, trade and monetary and financial matters, including any changes in response to the failures of other banks and including<br> and any other changes as a result of the 2024 presidential election.
● Our<br> ability to compete with other financial institutions due to increases in competitive pressures in the financial services sector,<br> including from non-bank competitors such as credit unions and “fintech” companies.
● Our<br> inability to obtain new customers and to retain existing customers.
● The<br> timely development and acceptance of products and services.
● Technological<br> changes implemented by us and by other parties, including third-party vendors, which may be more difficult to implement or more expensive<br> than anticipated or which may have unforeseen consequences to us and our customers.
● Our<br> ability to develop and maintain secure and reliable electronic systems.
● The<br> effectiveness of our risk management framework.
● The<br> occurrence of fraudulent activity, breaches or failures of our or our third-party servicers’ information security controls<br> or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools,<br> and our ability to identify and address such incidents.
● Interruptions<br> involving our information technology and telecommunications systems or third-party servicers.
● The<br> effects of severe weather, natural disasters, widespread disease or pandemics, and other external events.
● Our<br> ability to retain key executives and employees and the difficulty that we may experience in replacing key executives and employees<br> in an effective manner.
● Consumer<br> spending and saving habits which may change in a manner that adversely affects our business.
● Our<br> ability to successfully integrate acquired businesses and future growth.
● Potential<br> impairment to goodwill recorded in connection with our past acquisitions.
● The<br> costs, effects and outcomes of existing or future litigation or regulatory actions against us.
● Changes<br> in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the Financial Accounting Standards<br> Board.
● Our<br> ability to effectively manage our credit risk.
● Our<br> ability to forecast probable credit losses and maintain an adequate allowance for credit losses.
● Fluctuations<br> in the value of securities held in our securities portfolio.
● Concentrations<br> within our loan portfolio (including CRE loans), large loans to certain borrowers, and large deposits from certain clients.
● The<br> concentration of large deposits from certain clients, including those who have balances above current FDIC insurance limits and may<br> withdraw deposits to diversify their exposure.
● The<br> level of non-performing assets on our balance sheets.
● Our<br> ability to raise additional capital if needed to implement our business plan.
● The<br> effects of declines in real estate markets.
● The<br> effects of fraudulent activity on the part of our employees, customers, vendors, or counterparties.
● Any<br> material weaknesses in our internal control over financial reporting.
● Our<br> success at managing the risks involved in the foregoing items.

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 us and our business, including other factors that could materially affect our financial results, is included in our filings with the Securities and Exchange Commission, including the “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2023 filed on March 27, 2024.

ITEM

  1. CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, 2024. Based on that evaluation, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2024 to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

There were no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2024 that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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PART

II – OTHER INFORMATION

ITEM

  1. LEGAL PROCEEDINGS

There are no material pending legal proceedings to which the Company or its subsidiaries is a party or which any of their property is subject, other than ordinary routine litigation incidental to their respective businesses.

ITEM

1A. RISK FACTORS

There have been no material changes in the risk factors set forth under Part I, Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

ITEM

  1. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about purchases by the Company during the quarter ended September 30, 2024, of the Company’s equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act:

Period Total<br> number of<br><br> <br>shares<br> purchased Average<br><br> <br>price<br> paid<br><br> <br>per<br> share Total<br> number of shares purchased as part of publicly announced plans (1) Maximum<br> number of shares that may yet be purchased under the plans (1)
July 1-31, 2024 - $ - - 161,655
August 1-31, 2024 3,065 19.90 3,065 158,590
September 1-30, 2024 273 20.00 273 158,317
Total 3,338 $ 19.91 3,338 158,317
(1) In<br> March 2020, our Board of Directors approved a stock repurchase plan, permitting us to repurchase<br> up to 225,890 shares. Unless terminated earlier by resolution of the Board of Directors,<br> the stock repurchase plan will expire when we have repurchased all shares authorized for<br> repurchase thereunder. As of September 30, 2024, there were 158,317 shares remaining to purchase<br> under the March 2020 repurchase program.
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ITEM

  1. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM

  1. MINE SAFETY DISCLOSURES

Not applicable.

ITEM

  1. OTHER INFORMATION

Rule 10b5-1 Trading Plans

During the quarter ended September 30, 2024, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule10b5-1(c) or any non-Rule 10b5-1 trading arrangement.

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ITEM

  1. EXHIBITS
Exhibit<br> 3.1 Amended<br> and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s transition report on Form<br> 10-K filed with the SEC on March 29, 2002 (SEC file no. 000-33203))
Exhibit<br> 3.2 Certificate<br> of Amendment of the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to the Company’s<br> report on Form 10-K filed with the SEC on March 29, 2013 (SEC file no. 000-33203))
Exhibit<br> 3.3 Bylaws<br> (incorporated by reference to Exhibit 3.3 to the Company’s Form S-4 filed with the SEC on June 7, 2001 (SEC file no. 333-62466))
Exhibit<br> 10.1 Landmark<br> Bancorp, Inc. 2024 Stock Incentive Plan (incorporated by reference to Exhibit 4.4 to the Company’s Form S-8 filed with the<br> SEC on July 25, 2024 (SEC file no. 333-281020))
Exhibit<br> 10.2 Form<br> of Landmark Bancorp, Inc. 2024 Stock Incentive Plan Nonqualified Stock Option Award Agreement (incorporated by reference to Exhibit<br> 4.5 to the Company’s Form S-8 filed with the SEC on July 25, 2024 (SEC file no. 333-281020))
Exhibit<br> 10.3 Form<br> of Landmark Bancorp, Inc. 2024 Stock Incentive Plan Incentive Stock Option Award Agreement (incorporated by reference to Exhibit<br> 4.6 to the Company’s Form S-8 filed with the SEC on July 25, 2024 (SEC file no. 333-281020))
Exhibit<br> 10.4 Form<br> of Landmark, Inc. 2024 Stock Incentive Plan Restricted Stock Award Agreement (incorporated by reference to Exhibit 4.7 to the Company’s<br> Form S-8 filed with the SEC on July 25, 2024 (SEC file no. 333-281020))
Exhibit<br> 10.5 Form<br> of Landmark Bancorp, Inc. 2024 Stock Incentive Plan Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 4.8<br> to the Company’s Form S-8 filed with the SEC on July 25, 2024 (SEC file no. 333-281020))
Exhibit<br> 10.6 Change<br> in Terms Agreement, dated November 1, 2024, between Landmark Bancorp, Inc. and First National Bank of Omaha
Exhibit<br> 31.1 Certificate<br> of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)
Exhibit<br> 31.2 Certificate<br> of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)
Exhibit<br> 32.1 Certification<br> of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit<br> 32.2 Certification<br> of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit<br> 101 Interactive<br> data files pursuant to Rule 405 of Regulation S-T formatted in Inline XBRL: (i) Consolidated Balance Sheets as of September 30, 2024<br> and December 31, 2023; (ii) Consolidated Statements of Earnings for three and nine months ended September 30, 2024 and September 30,<br> 2023; (iii) Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2024 and<br> September 30, 2023; (iv) Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30,<br> 2024 and September 30, 2023; (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and September 30<br> 2023; and (vi) Notes to Consolidated Financial Statements
Exhibit<br> 104 Cover<br> Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) 
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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 thereunto duly authorized.

LANDMARK<br> BANCORP, INC.
Date:<br> November 13, 2024 /s/ Abigail M. Wendel
Abigail<br> M. Wendel
President<br> and Chief Executive Officer
(Principal<br> Executive Officer)
Date:<br> November 13, 2024 /s/ Mark A. Herpich
Mark<br> A. Herpich
Vice<br> President, Secretary, Treasurer and Chief Financial Officer
(Principal<br> Financial and Accounting Officer) 
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Exhibit10.6

CHANGEIN TERMS AGREEMENT

Principal Loan<br> Date Maturity Loan<br> No Call/Coll Account Officer Initials
$5,000,000.00 11-01-2024 11-01-2025 xxxxxxx ***
Borrower: LandmarkBancorp, Inc. Lender: First National Bank of Omaha
701 Poyntz Ave Branch #001
Manhattan KS 66502-6055 1620 Dodge St
Omaha, NE 68197
Principal<br>Amount: $5,000,000.00 Date of Agreement: November 1, 2024

DESCRIPTIONOF EXISTING INDEBTEDNESS. This Change in Terms Agreement is an amendment and/or modification of the terms and conditions of indebtednessof Borrower as set forth in a Promissory Note dated November 1, 2016, in the amount of $7,500,000.00, and most recently documented ina Change in Terms Agreement dated November 3, 2023, and shall include all renewals, modifications and extensions of such documents.

DESCRIPTIONOF CHANGE IN TERMS. As fully set forth herein below, this Change in Terms Agreement generally modifies the terms applicable to the existingindebtedness by extending the maturity date. Any sums due and owing hereunder shall take into account any principal and interest paymentsmade by the Borrower in accordance with regular established billing cycles.

PROMISETO PAY. Landmark Bancorp, Inc. (“Borrower”) promises to pay to First National Bank of Omaha (“Lender”), or order,in lawful money of the United States of America, the principal amount of Five Million & 00/100 Dollars ($5,000,000.00) or so muchas may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculatedfrom the date of each advance until repayment of each advance.

PAYMENT.Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on November 1, 2025. In addition,Borrower will pay regular quarterly payments of all accrued unpaid interest due as of each payment date, beginning December 1, 2024,with all subsequent interest payments to be due on the same day of each quarter after that. Unless otherwise agreed or required by applicablelaw, payments will be applied to interest, principal, and expenses owing under the Note in an order determined by Lender. Borrower willpay Lender at Lender’s address shown above or at such other place as Lender may designate in writing.

VARIABLEINTEREST RATE. The interest rate on this loan is subject to change from time to time based on changes in an independent index which is the U.S. Prime Rate as published by the Wall Street Journal and currently is determined by the base rate on corporate loans posted by at least seventy percent (70%) of the nations ten (10) largest banks (the “Index”). The Index is not necessarily the lowest rate charged by Lender on its loans. Lender will tell Borrower the current Index rate upon Borrower’s request. The interest rate change will not occur more often than each day during the term of the loan. If at any time the Index is less than zero, then it shall be deemed to be zero for the purpose of calculating the interest rate on the Note. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 8.000% per annum. Interest on the unpaid principal balance of this loan will be calculated as described in the “INTEREST CALCULATION METHOD” paragraph using a rate of 0.500 percentage points under the Index (the “Margin”), adjusted if necessary for any minimum and maximum rate limitations described below, resulting in an initial rate of 7.500% per annum based on a year of 360 days. If Lender determines, in its sole discretion, that the Index has become unavailable or unreliable, either temporarily, indefinitely, or permanently, during the term of this loan, Lender may amend this loan by designating a substantially similar substitute index. Lender may also amend and adjust the Margin to accompany the substitute index. The change to the Margin may be a positive or negative value, or zero. In making these amendments, Lender may take into consideration any then-prevailing market convention for selecting a substitute index and margin for the specific Index that is unavailable or unreliable. Such an amendment to the terms of this loan will become effective and bind Borrower 10 business days after Lender gives written notice to Borrower without any action or consent of the Borrower. NOTICE: Under no circumstances will the interest rate on this loan be less than 3.000% per annum or more than the maximum rate allowed by applicable law.

INTERESTCALCULATION METHOD. Interest on this loan is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over ayear of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.All interest payable under this loan is computed using this method.

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**PREPAYMENT.**Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments of accrued unpaid interest. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked “paid in full”, “without recourse”, or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender’s rights under this Agreement, and Borrower will remain obligated to pay any further amount owed to Lender. All written communicationsconcerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes “paymentin full” of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amountmust be mailed or delivered to: First National Bank of Omaha, Branch #001, 1620 Dodge St, Omaha, NE 68197.

LATECHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the regularly scheduled payment or $25.00, whicheveris greater.

INTERESTAFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this loan shall be increased by adding an additional 6.000 percentage point margin (“Default Rate Margin”). The Default Rate Margin shall also apply to each succeeding interest rate change that would have applied had there been no default. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.

**DEFAULT.**Each of the following shall constitute an Event of Default under this Agreement:

PaymentDefault. Borrower fails to make any payment when due under the Indebtedness.

OtherDefaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.

Defaultin Favor of Third Parties. Borrower defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s property or ability to perform Borrower’s obligations under this Agreement or any of the Related Documents.

FalseStatements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf, under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

**Insolvency.**The dissolution or termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

Creditoror Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

EventsAffecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness evidenced by this Note.

ChangeIn Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

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AdverseChange. A material adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired.

**Insecurity.**Lender in good faith believes itself insecure.

LENDER’SRIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due, and then Borrower will pay that amount.

ATTORNEYS’FEES; EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses, whether or not there is a lawsuit, including attorneys’ fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law.

JURYWAIVER. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lenderor Borrower against the other.

GOVERNINGLAW. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws ofthe State of Nebraska without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Nebraska.

CHOICEOF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of Douglas County, State of Nebraska.

DISHONOREDITEM FEE. Borrower will pay a fee to Lender of $30.00 if Borrower makes a payment on Borrower’s loan and the check or preauthorized charge with which Borrower pays is later dishonored.

RIGHTOF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower’s accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender to protect Lender’s charge and setoff rights provided in this paragraph.

**COLLATERAL.**Borrower acknowledges this Agreement is secured by a Commercial Pledge Agreement dated November 1, 2021, and any and all other security agreements or documents and any and all other collateral agreements or documents associated with this Loan or Note whether now existing or hereafter arising.

LINEOF CREDIT. This Agreement evidences a revolving line of credit. Advances under this Agreement may be requested either orally or in writing by Borrower or as provided in this paragraph. Lender may, but need not, require that all oral requests be confirmed in writing. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lender’s office shown above. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borrower’s accounts with Lender. The unpaid principal balance owing on this Agreement at any time may be evidenced by endorsements on this Agreement or by Lender’s internal records, including daily computer print-outs. Lender will have no obligation to advance funds under this Agreement if; (A) Borrower or any guarantor is in default under the terms of this Agreement or any agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with the signing of this Agreement; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor’s guarantee of this Agreement or any other loan with Lender; (D) Borrower has applied funds provided pursuant to this Agreement for purposes other than those authorized by Lender; or (E) Lender in good faith believes itself insecure.

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CONTINUINGVALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender’s right to strict performance of the obligation(s) as changed, nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s), including accommodation parties, unless a party is expressly released by Lender in writing. Any maker or endorser, including accommodation makers, will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension, modification or release, but also to all such subsequent actions.

U.S.A.PATRIOT ACT. To help the government fight the funding of terrorism and money laundering activities, the USA PATRIOT Act requires all banks to obtain and verify the identity of each person or business that opens an account. When Borrower opens an account Lender will ask Borrower for information that will allow Lender to properly identify Borrower and Lender will verify that information. If Lender cannot properly verify identity within 30 calendar days, Lender reserves the right to deem all of the balance and accrued interest due and payable immediately.

ELECTRONICCOPIES. Lender may copy, electronically or otherwise, and thereafter destroy, the originals of this Agreement and/or Related Documents in the regular course of Lender’s business. All such copies produced from an electronic form or by any other reliable means (i.e., photographic image or facsimile) shall in all respects be considered equivalent to an original, and Borrower hereby waives any rights or objections to the use of such copies.

CHANGEIN MEMBERSHIP. If Borrower or Guarantor is a limited liability company, any change in ownership of twenty-five percent (25%) or more of the membership interest of Borrower or Guarantor is an Event of Default.

CROSSDEFAULT. An Event of Default, beyond the applicable cure period, if any, or an Event of Default under any other Loan or any Related Document will constitute an Event of Default under this Agreement and a default and an Event of Default under any other agreement by Borrower or any affiliate or subsidiary of Borrower with or in favor of Lender and under any evidence of any Loan or Indebtedness held by Lender, whether or not such is specified therein. Borrower acknowledges that some Loan Documents will e preprinted forms and that it is the intent of Borrower and Lender that all Loans and Guaranties by Borrower or any affiliate or subsidiary of Borrower with or in favor of Lender be cross-defaulted with each other.

SUCCESSORSAND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower’s interest, this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower’s successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness.

MISCELLANEOUSPROVISIONS. If any part of this Agreement cannot be enforced, this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs, guarantees or endorses this Agreement, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Agreement, and unless otherwise expressly stated in writing, no party who signs this Agreement, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender’s security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may mod’1fy this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several.

PRIORTO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.BORROWER AGREES TO THE TERMS OF THE AGREEMENT.

BORROWER:
LANDMARK BANCORP, INC
/s/ Mark A Herpich
Mark A Herpich, Chief Fin. Officer/Secretary of
Landmark Bancorp, Inc.
LENDER:
FIRST NATIONAL BANK OF OMAHA
/s/ Tyler Sims
Tyler Sims, Director 
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Exhibit31.1

CERTIFICATIONPURSUANT TO

RULE13a-14(a)/15d-14(a)

I, Abigail M. Wendel, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Landmark<br>Bancorp, Inc.;
2. Based<br> on my knowledge, this report does not contain any untrue statement of a material fact or<br> omit to state a material fact necessary to make the statements made, in light of the circumstances<br> under which such statements were made, not misleading with respect to the period covered<br> by this report;
3. Based<br> on my knowledge, the financial statements, and other financial information included in this<br> report, fairly present in all material respects the financial condition, results of operations<br> and cash flows of the registrant as of, and for, the periods presented in this report;
4. The<br> registrant’s other certifying officer and I are responsible for establishing and maintaining<br> disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))<br> and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)<br> and 15d-15(f)) for the registrant and have:
(a) designed<br> such disclosure controls and procedures, or caused such disclosure controls and procedures<br> to be designed under our supervision, to ensure that material information relating to the<br> registrant, including its consolidated subsidiaries, is made known to us by others within<br> those entities, particularly during the period in which this report is being prepared;
--- ---
(b) designed<br> such internal control over financial reporting, or caused such internal control over financial<br> reporting to be designed under our supervision, to provide reasonable assurance regarding<br> the reliability of financial reporting and the preparation of financial statements for external<br> purposes in accordance with generally accepted accounting principles;
(c) evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented<br> in this report our conclusions about the effectiveness of the disclosure controls and procedures,<br> as of the end of the period covered by this report based on such evaluation; and
(d) disclosed<br> in this report any change in the registrant’s internal control over financial reporting<br> that occurred during the registrant’s most recent fiscal quarter (the registrant’s<br> fourth fiscal quarter in the case of an annual report) that has materially affected, or is<br> reasonably likely to materially affect, the registrant’s internal control over financial<br> reporting; and
5. The<br> registrant’s other certifying officer and I have disclosed, based on our most recent<br> evaluation of internal control over financial reporting, to the registrant’s auditors<br> and the audit committee of the registrant’s board of directors (or persons performing<br> the equivalent functions):
--- ---
(a) all<br> significant deficiencies and material weaknesses in the design or operation of internal control<br> over financial reporting which are reasonably likely to adversely affect the registrant’s<br> ability to record, process, summarize and report financial information; and
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(b) any<br> fraud, whether or not material, that involves management or other employees who have a significant<br> role in the registrant’s internal control over financial reporting.
Date:<br> November 13, 2024 /s/ Abigail M. Wendel
--- ---
Abigail<br> M. Wendel
Chief<br> Executive Officer

Exhibit31.2

CERTIFICATIONPURSUANT TO

RULE13a-14(a)/15d-14(a)

I, Mark A. Herpich, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Landmark<br>Bancorp, Inc.;
2. Based<br> on my knowledge, this report does not contain any untrue statement of a material fact or<br> omit to state a material fact necessary to make the statements made, in light of the circumstances<br> under which such statements were made, not misleading with respect to the period covered<br> by this report;
3. Based<br> on my knowledge, the financial statements, and other financial information included in this<br> report, fairly present in all material respects the financial condition, results of operations<br> and cash flows of the registrant as of, and for, the periods presented in this report;
4. The<br> registrant’s other certifying officer and I are responsible for establishing and maintaining<br> disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))<br> and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)<br> and 15d-15(f)) for the registrant and have:
(a) designed<br> such disclosure controls and procedures, or caused such disclosure controls and procedures<br> to be designed under our supervision, to ensure that material information relating to the<br> registrant, including its consolidated subsidiaries, is made known to us by others within<br> those entities, particularly during the period in which this report is being prepared;
--- ---
(b) designed<br>such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,<br>to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external<br>purposes in accordance with generally accepted accounting principles;
(c) evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented<br> in this report our conclusions about the effectiveness of the disclosure controls and procedures,<br> as of the end of the period covered by this report based on such evaluation; and
(d) disclosed<br> in this report any change in the registrant’s internal control over financial reporting<br> that occurred during the registrant’s most recent fiscal quarter (the registrant’s<br> fourth fiscal quarter in the case of an annual report) that has materially affected, or is<br> reasonably likely to materially affect, the registrant’s internal control over financial<br> reporting; and
5. The<br> registrant’s other certifying officer and I have disclosed, based on our most recent<br> evaluation of internal control over financial reporting, to the registrant’s auditors<br> and the audit committee of the registrant’s board of directors (or persons performing<br> the equivalent functions):
--- ---
(a) all<br> significant deficiencies and material weaknesses in the design or operation of internal control<br> over financial reporting which are reasonably likely to adversely affect the registrant’s<br> ability to record, process, summarize and report financial information; and
--- ---
(b) any<br> fraud, whether or not material, that involves management or other employees who have a significant<br> role in the registrant’s internal control over financial reporting.
Date:<br> November 13, 2024 /s/ Mark A. Herpich
--- ---
Mark<br> A. Herpich
Chief<br> Financial Officer

Exhibit32.1

CERTIFICATIONPURSUANT TO

18U.S.C. SECTION 1350,

ASADOPTED PURSUANT TO

SECTION906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Landmark Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Abigail M. Wendel, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Abigail M. Wendel
Abigail<br> M. Wendel
Chief<br> Executive Officer
November<br> 13, 2024

Exhibit32.2

CERTIFICATIONPURSUANT TO

18U.S.C. SECTION 1350,

ASADOPTED PURSUANT TO

SECTION906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Landmark Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark A. Herpich, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Mark A. Herpich
Mark<br> A. Herpich
Chief<br> Financial Officer
November<br> 13, 2024

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