Core Points - Landmark Bancorp, Inc. will release its fourth quarter 2024 earnings after market close on February 4, 2025 [1] - A conference call to discuss the earnings results is scheduled for February 5, 2025, at 10:00 am (CT) [1] - Investors can access the earnings call by dialing (833) 470-1428 with access code 296482 [1] Company Overview - Landmark Bancorp, Inc. is the holding company for Landmark National Bank, listed on NASDAQ under the symbol "LARK" [3] - The company is headquartered in Manhattan, Kansas, and operates as a community banking organization [3] - Landmark National Bank has 29 locations across 23 communities in Kansas [3]

Financial Data and Key Metrics Changes - Landmark reported net earnings of $3.9 million for Q3 2024, with earnings per share of $0.72, a return on average assets of 1.0%, and a return on average equity of 11.82% [4][5] - Net income increased by 30.5% compared to the prior quarter and 36.6% year-over-year, while earnings per share rose by 36.5% compared to Q3 2023 [5][11] - The efficiency ratio for Q3 2024 was 66.5% [4] Business Line Data and Key Metrics Changes - Total gross loans increased by $21.3 million, reaching $1 billion for the first time in company history, with net interest income growing by 5.7% [6][21] - Noninterest income rose by $533,000 over the prior quarter, driven by fee-based revenue and gains on the sale of a former branch facility [7][18] - Noninterest expense decreased by $536,000 compared to the prior quarter, totaling $10.6 million [19] Market Data and Key Metrics Changes - Deposits increased by 8.0%, totaling $1.3 billion at the end of Q3 2024 [22] - Interest checking and money market deposits grew by $19.2 million, while non-interest checking and savings accounts declined by $5.6 million [23] Company Strategy and Development Direction - The company is focusing on loan and fee business growth, particularly in Kansas City, where it is relatively new [35] - Landmark maintains a conservative deposit portfolio and employs a relationship-based banking model to ensure stability and consistency [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future interest rate environment, indicating that the balance sheet is well-positioned for potential rate cuts [12][13] - The current economic landscape in Kansas remains healthy, with a low unemployment rate and improving buyer activity in the housing market [32][33] Other Important Information - The Board declared a cash dividend of $0.21 per share and a 5% stock dividend, marking the 93rd consecutive quarterly cash dividend and the 24th consecutive year of stock dividends [9] Q&A Session Summary Question: Impact of recent rate cuts on margin and spread - Management noted that the full impact of the recent 50 basis point cut will be felt in Q4 2024 and into 2025, with optimism about future margins [38][39] Question: Mortgage volume and fixed-rate options - Management indicated an increase in activity for fixed-rate options as rates decline, with a robust pipeline for mortgage products [42][44] Question: Margins on fixed-rate sales - Margins on the sale of fixed-rate mortgages are currently stable, with no significant changes observed [45]

Financial Performance - Landmark Bancorp reported diluted earnings per share of $0.72 for Q3 2024, a 30.5% increase from the prior quarter and a 36.5% increase year-over-year[1]. - Net earnings for Q3 2024 reached $3.9 million, up from $3.0 million in Q2 2024 and $2.9 million in Q3 2023, reflecting a 30.5% quarter-over-quarter growth and a 36.6% year-over-year growth[1][3]. - Basic earnings per share rose to $0.72, up from $0.55 in the previous quarter, marking a 30.9% increase[19]. - Net earnings for the quarter were $3,931,000, representing an increase of 30.6% from $3,012,000 in the previous quarter[19]. Loan and Deposit Growth - Total loans increased by $21.3 million, or 8.6% annualized, driven by strong growth in residential mortgage, agriculture, and commercial real estate loans[3]. - As of September 30, 2024, gross loans totaled $1.0 billion, with a loan-to-deposit ratio of 77.6%[10][11]. - Total deposits rose to $1,275,502 thousand, compared to $1,250,482 thousand in the prior quarter, marking an increase of 2.00%[17]. - The net loans increased to $990,242 thousand from $969,089 thousand, showing a growth of 2.37%[17]. Income and Expenses - Net interest income grew by 5.7% to $11.6 million, with a net interest margin expanding to 3.30% from 3.21% in the prior quarter[6]. - Total interest income for the three months ended September 30, 2024, was $19,022,000, an increase of 4.6% from $18,180,000 in the previous quarter[19]. - Non-interest income totaled $4.3 million, an increase of $533,000, or 14.3%, from the previous quarter, primarily due to higher fees and a gain on the sale of a former branch[7]. - Total non-interest expense decreased to $10,559,000 from $11,095,000 in the previous quarter, a reduction of 4.8%[19]. Asset Management - Total assets as of September 30, 2024, increased to $1,563,651 thousand from $1,560,754 thousand as of June 30, 2024, reflecting a growth of 0.12%[17]. - Total gross loans reached $1,001,849 thousand, up from $980,575 thousand in the previous quarter, representing a growth of 2.73%[17]. - Cash and cash equivalents decreased to $21,211 thousand from $23,889 thousand, a decline of 11.16%[17]. - Investment securities available-for-sale totaled $411,012 thousand, down from $420,459 thousand, a decrease of 1.06%[17]. Equity and Capital - Stockholders' equity increased to $139.7 million, with a book value of $25.39 per share, up from $128.3 million and $23.45 per share in the prior quarter[12]. - The common stock remained stable at $55, with additional paid-in capital increasing to $89,532 thousand from $89,469 thousand[17]. - Retained earnings increased to $60,549 thousand from $57,774 thousand, reflecting a growth of 4.83%[17]. - Total stockholders' equity rose to $139,691 million, up from $128,254 million[24]. Credit Quality - The allowance for credit losses was $11.5 million, or 1.15% of total gross loans, with a provision for credit losses of $500,000 recorded in Q3 2024[13]. - Non-performing loans rose to $13.4 million, or 1.34% of gross loans, compared to $5.0 million, or 0.51% of gross loans in the prior quarter[14]. - Total non-performing assets increased to $13,843 thousand, up from $5,435 thousand[21]. - Loans 30-89 days delinquent rose to $7,301 thousand, compared to $1,872 thousand previously[21]. Efficiency and Returns - Return on average assets increased to 1.00% for September 30, 2024, compared to 0.78% for June 30, 2024[20]. - Return on average equity improved to 11.82% for September 30, 2024, up from 9.72% for June 30, 2024[20]. - The efficiency ratio improved to 66.5% for September 30, 2024, down from 67.9% for June 30, 2024[20]. - Tangible equity increased to $104,585 million, compared to $92,977 million previously[24].

Manhattan, KS, July 16, 2024 (GLOBE NEWSWIRE) -- Landmark Bancorp, Inc. (Nasdaq: LARK) announced that it will release earnings for the second quarter of 2024 after the market closes on Monday, August 5, 2024. The Company will host a conference call to discuss these results on Tuesday, August 6, 2024 at 10:00 am (CT). Investors may listen to the Company's earnings call via telephone by dialing (833) 470-1428 and using access code 974885. Investors are encouraged to call the dial-in number at least 5 minutes ...

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial statements and management's discussion and analysis for Q1 2024 [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents unaudited consolidated financial statements for Q1 2024, detailing key financial performance and position [Consolidated Balance Sheets](index=4&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) This section details the company's financial position, including assets, liabilities, and equity at quarter-end | Metric | March 31, 2024 (Unaudited, thousands) | December 31, 2023 (thousands) | Change (vs. Dec 31, 2023, thousands) | | :--------------------------------- | :------------------------- | :---------------- | :------------------------ | | Total assets | $1,553,217 | $1,561,672 | -$8,455 (-0.54%) | | Cash and cash equivalents | $16,468 | $27,101 | -$10,633 (-39.24%) | | Investment securities available-for-sale | $437,276 | $452,769 | -$15,493 (-3.42%) | | Loans, net | $952,611 | $937,619 | +$14,992 (+1.60%) | | Total deposits | $1,293,524 | $1,316,251 | -$22,727 (-1.73%) | | Federal Home Loan Bank and other borrowings | $74,716 | $64,662 | +$10,054 (+15.55%) | | Total stockholders' equity | $126,671 | $126,914 | -$243 (-0.19%) | [Consolidated Statements of Earnings](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20EARNINGS) This section reports the company's financial performance, highlighting revenues, expenses, and net earnings for the period | Metric | Three months ended March 31, 2024 (thousands) | Three months ended March 31, 2023 (thousands) | Change (YoY, thousands) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Total interest income | $17,745 | $14,577 | +$3,168 (+21.73%) | | Total interest expense | $6,998 | $3,630 | +$3,368 (+92.78%) | | Net interest income | $10,747 | $10,947 | -$200 (-1.83%) | | Provision for credit losses | $300 | $49 | +$251 (+512.24%) | | Total non-interest income | $3,400 | $3,495 | -$95 (-2.72%) | | Total non-interest expense | $10,551 | $10,343 | +$208 (+2.01%) | | Net earnings | $2,778 | $3,357 | -$579 (-17.25%) | | Basic earnings per share | $0.51 | $0.61 | -$0.10 (-16.39%) | | Diluted earnings per share | $0.51 | $0.61 | -$0.10 (-16.39%) | | Dividends per share | $0.21 | $0.20 | +$0.01 (+5.00%) | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) This section presents net earnings and other comprehensive income, reflecting changes in equity from non-owner sources | Metric | Three months ended March 31, 2024 (thousands) | Three months ended March 31, 2023 (thousands) | Change (YoY, thousands) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Net earnings | $2,778 | $3,357 | -$579 (-17.25%) | | Net unrealized holding (losses) gains on available-for-sale securities | $(2,457) | $6,739 | -$9,196 | | Income tax effect on net unrealized holding losses (gains) | $602 | $(1,651) | +$2,253 | | Other comprehensive (loss) gains | $(1,855) | $5,088 | -$6,943 | | Total comprehensive income | $923 | $8,445 | -$7,522 (-89.07%) | [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS%27%20EQUITY) This section details changes in stockholders' equity, including net earnings, dividends, and other comprehensive income | Metric | Balance at January 1, 2024 (thousands) | Balance at March 31, 2024 (thousands) | Change (thousands) | | :--------------------------------- | :------------------------- | :------------------------ | :------------------- | | Total stockholders' equity | $126,914 | $126,671 | -$243 (-0.19%) | | Net earnings | +$2,778 | | | | Other comprehensive loss | -$1,855 | | | | Dividends paid | -$1,148 | | | | Stock-based compensation | +$156 | | | | Purchase of treasury stock | -$174 | | | [Consolidated Statements of Cash Flows](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section reports cash flows from operating, investing, and financing activities for the period | Metric | Three months ended March 31, 2024 (thousands) | Three months ended March 31, 2023 (thousands) | Change (YoY, thousands) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Net cash provided by operating activities | $2,851 | $3,449 | -$598 (-17.34%) | | Net cash used in investing activities | $(2,670) | $(15,123) | +$12,453 (+82.35%) | | Net cash (used in) provided by financing activities | $(10,814) | $12,282 | -$23,096 | | Net (decrease) increase in cash and cash equivalents | $(10,633) | $608 | -$11,241 | | Cash and cash equivalents at end of period | $16,468 | $23,764 | -$7,296 (-30.70%) | [Notes to Consolidated Financial Statements](index=10&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed explanations and additional information supporting the consolidated financial statements [1. Interim Financial Statements](index=10&type=section&id=1.%20Interim%20Financial%20Statements) This note clarifies the unaudited nature and preparation basis of the interim financial statements - The financial statements are unaudited and prepared per Form 10-Q instructions, not including all GAAP footnotes, and should be read with the latest 10-K[25](index=25&type=chunk) - Management believes all necessary adjustments for fair presentation have been reflected, and Q1 2024 results are not necessarily indicative of future periods[25](index=25&type=chunk) [2. Investments](index=10&type=section&id=2.%20Investments) This note details the investment portfolio, including available-for-sale securities, fair values, and unrealized gains/losses | Investment Type (Available-for-sale) | Amortized Cost (Mar 31, 2024, thousands) | Estimated Fair Value (Mar 31, 2024, thousands) | Gross Unrealized Losses (Mar 31, 2024, thousands) | | :----------------------------------- | :---------------------------- | :---------------------------------- | :------------------------------------- | | U. S. treasury securities | $97,535 | $93,683 | $(3,852) | | Municipal obligations, tax exempt | $121,586 | $118,445 | $(3,218) | | Municipal obligations, taxable | $79,882 | $75,371 | $(4,640) | | Agency mortgage-backed securities | $162,658 | $149,777 | $(12,947) | | **Total available-for-sale** | **$461,661** | **$437,276** | **$(24,657)** | - The Company's available-for-sale and held-to-maturity investment portfolios had temporary unrealized losses as of March 31, 2024, and December 31, 2023, but the Company does not intend to sell these securities and expects to recover the cost basis[27](index=27&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - Securities with carrying values of **$375.5 million** were pledged to secure public funds, repurchase agreements, and as collateral for borrowings at March 31, 2024[35](index=35&type=chunk) [3. Loans and Allowance for Credit Losses](index=13&type=section&id=3.%20Loans%20and%20Allowance%20for%20Credit%20Losses) This note breaks down loan categories, allowance for credit losses, and key credit quality metrics | Loan Type | March 31, 2024 (thousands) | December 31, 2023 (thousands) | Change (thousands) | | :--------------------------------- | :---------------- | :---------------- | :---------------- | | Total gross loans | $964,040 | $948,656 | +$15,384 (+1.62%) | | Allowance for credit losses | $10,851 | $10,608 | +$243 (+2.29%) | | Loans, net | $952,611 | $937,619 | +$14,992 (+1.60%) | | Credit Quality Metric | March 31, 2024 (thousands) | December 31, 2023 (thousands) | Change (thousands) | | :--------------------------------- | :---------------- | :---------------- | :---------------- | | Net loan charge-offs (Q1) | $7 | $47 | -$40 (-85.11%) | | Loans past due 30-89 days and still accruing | $4,064 | $1,582 | +$2,482 (+156.89%) | | Non-accrual loans | $3,621 | $2,391 | +$1,230 (+51.44%) | | Classified loans (Special Mention, Substandard, Doubtful) | $14,146 | $7,472 | +$6,674 (+89.32%) | - The increase in the allowance for credit losses on loans as a percentage of gross loans outstanding was primarily due to growth in loan balances during the first quarter of 2024[118](index=118&type=chunk) [4. Goodwill and Other Intangible Assets](index=20&type=section&id=4.%20Goodwill%20and%20Other%20Intangible%20Assets) This note outlines goodwill and other intangible assets, including carrying amounts and amortization schedules - Goodwill was not impaired as of December 31, 2023, and management believes it remained unimpaired as of March 31, 2024[51](index=51&type=chunk) | Intangible Asset | Gross Carrying Amount (Mar 31, 2024, thousands) | Accumulated Amortization (Mar 31, 2024, thousands) | Net Carrying Amount (Mar 31, 2024, thousands) | | :----------------------------- | :----------------------------------- | :-------------------------------------- | :----------------------------------- | | Core deposit intangible assets | $4,170 | $(1,099) | $3,071 | | Year | Estimated Amortization Expense (thousands) | | :---------------- | :--------------------------------- | | Remainder of 2024 | $493 | | 2025 | $588 | | 2026 | $512 | | 2027 | $436 | | 2028 | $360 | | 2029 | $284 | | Thereafter | $398 | | **Total** | **$3,071** | [5. Mortgage Loan Servicing](index=21&type=section&id=5.%20Mortgage%20Loan%20Servicing) This note details mortgage loan servicing activities, including principal balances, servicing rights, and related income | Metric | March 31, 2024 (thousands) | December 31, 2023 (thousands) | Change (thousands) | | :--------------------------------- | :---------------- | :---------------- | :---------------- | | Principal balance of mortgage loans serviced for others | $680,013 | $688,109 | -$8,096 (-1.18%) | | Mortgage servicing rights (net) | $2,977 | $3,158 | -$181 (-5.73%) | | Fair value of mortgage servicing rights | $9,700 | $9,500 | +$200 (+2.11%) | | Mortgage repurchase reserve | $157 | $159 | -$2 (-1.26%) | - Gross service fee income related to serviced loans was **$436,000** for Q1 2024, a decrease from $453,000 in Q1 2023[54](index=54&type=chunk) [6. Earnings per Share](index=22&type=section&id=6.%20Earnings%20per%20Share) This note presents basic and diluted earnings per share calculations, along with related share and dividend information | Metric | Three months ended March 31, 2024 (thousands) | Three months ended March 31, 2023 (thousands) | Change (YoY, thousands) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Net earnings | $2,778 | $3,357 | -$579 (-17.25%) | | Basic earnings per share | $0.51 | $0.61 | -$0.10 (-16.39%) | | Diluted earnings per share | $0.51 | $0.61 | -$0.10 (-16.39%) | | Dividends per share | $0.21 | $0.20 | +$0.01 (+5.00%) | - **167,440 unexercised stock options** were excluded from diluted EPS calculation for Q1 2024 as their inclusion would have been anti-dilutive[57](index=57&type=chunk) [7. Federal Home Loan Bank Borrowings and Other Borrowings](index=23&type=section&id=7.%20Federal%20Home%20Loan%20Bank%20Borrowings%20and%20Other%20Borrowings) This note details FHLB and other borrowings, including capacities and outstanding balances | Metric | March 31, 2024 (millions) | December 31, 2023 (millions) | Change (millions) | | :--------------------------------- | :---------------- | :---------------- | :---------------- | | FHLB borrowings | $68.4 million | $58.0 million | +$10.4 million (+17.93%) | | FHLB total borrowing capacity | $235.0 million | $232.3 million | +$2.7 million (+1.16%) | | FHLB available borrowing capacity | $165.3 million | $153.1 million | +$12.2 million (+7.97%) | | Unrelated financial institution term borrowing | $6.3 million | $6.6 million | -$0.3 million (-4.55%) | - The Bank had no borrowings through the Federal Reserve discount window at March 31, 2024, with a borrowing capacity of **$56.9 million**[60](index=60&type=chunk) - The Company was in compliance with covenants for its **$5.0 million** line of credit at March 31, 2024, with no outstanding balance[61](index=61&type=chunk) [8. Repurchase Agreements](index=23&type=section&id=8.%20Repurchase%20Agreements) This note describes repurchase agreements, including their nature, balances, and securing collateral | Metric | March 31, 2024 (thousands) | December 31, 2023 (thousands) | Change (thousands) | | :--------------------------------- | :---------------- | :---------------- | :---------------- | | Repurchase agreements | $15,895 | $12,714 | +$3,181 (+25.02%) | | Investment securities securing repurchase agreements | $23,700 | $23,700 | $0 (0.00%) | - Repurchase agreements are accounted for as collateralized financing and are secured by U.S. federal treasury obligations held by a third-party financial institution[63](index=63&type=chunk)[66](index=66&type=chunk) [9. Revenue from Contracts with Customers](index=24&type=section&id=9.%20Revenue%20from%20Contracts%20with%20Customers) This note breaks down non-interest income categories and explains revenue recognition from customer contracts | Non-Interest Income Category | Three months ended March 31, 2024 (thousands) | Three months ended March 31, 2023 (thousands) | Change (YoY, thousands) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Service charges on deposit accounts | $1,237 | $1,107 | +$130 (+11.74%) | | Interchange income | $684 | $737 | -$53 (-7.19%) | | Loan servicing fees | $436 | $453 | -$17 (-3.75%) | | Gains on sales of loans | $512 | $693 | -$181 (-26.12%) | | Total non-interest income | $3,400 | $3,495 | -$95 (-2.72%) | - Service charges on deposit accounts include overdraft fees and other transaction-based and account maintenance fees, recognized at the time of transaction or over the service period[69](index=69&type=chunk) - Interchange income from debit cardholder transactions is recognized daily as a percentage of the underlying transaction value[71](index=71&type=chunk) [10. Fair Value of Financial Instruments and Fair Value Measurements](index=26&type=section&id=10.%20Fair%20Value%20of%20Financial%20Instruments%20and%20Fair%20Value%20Measurements) This note explains methodologies and categorization of fair value measurements for financial instruments - Fair value measurements are categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1 prices), and Level 3 (significant unobservable inputs)[73](index=73&type=chunk)[74](index=74&type=chunk) - U.S. treasury securities are Level 1. Municipal obligations and agency mortgage-backed securities are Level 2, valued using industry-standard models or matrix pricing with observable inputs[78](index=78&type=chunk) - Individually evaluated loans and real estate owned are often measured using Level 3 inputs due to significant unobservable adjustments in appraisals[82](index=82&type=chunk)[83](index=83&type=chunk) [11. Regulatory Capital Requirements](index=30&type=section&id=11.%20Regulatory%20Capital%20Requirements) This note details the company's and bank's compliance with regulatory capital adequacy requirements - The Company and the Bank met all capital adequacy requirements as of March 31, 2024[86](index=86&type=chunk) - The Bank was categorized as **"well capitalized"** under prompt corrective action regulations at March 31, 2024, and December 31, 2023[89](index=89&type=chunk) | Capital Ratio (Company) | Actual Ratio (Mar 31, 2024) | Minimum Required Ratio (1) | | :--------------------------------- | :-------------------------- | :------------------------- | | Leverage | 8.58% | 4.0% | | Common Equity Tier 1 Capital | 10.47% | 7.0% | | Tier 1 Capital | 12.45% | 8.5% | | Total Risk Based Capital | 13.45% | 10.5% | | Capital Ratio (Bank) | Actual Ratio (Mar 31, 2024) | Minimum Required Ratio (1) | Well-Capitalized Ratio | | :--------------------------------- | :-------------------------- | :------------------------- | :--------------------- | | Leverage | 8.81% | 4.0% | 5.0% | | Common Equity Tier 1 Capital | 12.75% | 7.0% | 6.5% | | Tier 1 Capital | 12.75% | 8.5% | 8.0% | | Total Risk Based Capital | 13.75% | 10.5% | 10.0% | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=32&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on Q1 2024 financial performance, condition, and key operational aspects [Overview](index=32&type=section&id=Overview) This section introduces the company's operations, primary business activities, and key drivers of financial results - The Company operates through Landmark National Bank (banking services) and Landmark Risk Management, Inc. (captive insurance)[94](index=94&type=chunk)[96](index=96&type=chunk) - Primary business involves attracting deposits and originating residential, commercial, agriculture, and consumer loans[95](index=95&type=chunk) - Net interest income, non-interest income (service charges, loan fees), and operating expenses (compensation, occupancy, data processing, provision for credit losses) are key drivers of results[97](index=97&type=chunk) - The Company declared its **91st consecutive quarterly dividend** in April 2024 and maintains a strong capital and liquidity position[100](index=100&type=chunk) [Critical Accounting Policies](index=32&type=section&id=Critical%20Accounting%20Policies) This section identifies key accounting policies requiring significant management judgment - Critical accounting policies include the allowance for credit losses and accounting for business combinations, both requiring significant management judgment[101](index=101&type=chunk) - No material changes to critical accounting policies since the Annual Report on Form 10-K for the year ended December 31, 2023[101](index=101&type=chunk) [Summary of Results](index=33&type=section&id=Summary%20of%20Results) This section provides a concise overview of the company's financial performance and key profitability ratios | Metric | Three months ended March 31, 2024 (thousands) | Three months ended March 31, 2023 (thousands) | Change (YoY, thousands) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Net earnings | $2,778 | $3,357 | -$579 (-17.3%) | | Basic earnings per share | $0.51 | $0.61 | -$0.10 (-16.4%) | | Diluted earnings per share | $0.51 | $0.61 | -$0.10 (-16.4%) | | Return on average assets | 0.72% | 0.90% | -0.18 pp | | Return on average equity | 8.88% | 12.04% | -3.16 pp | | Net interest margin (tax equivalent) | 3.12% | 3.31% | -0.19 pp | | Dividend payout ratio | 41.18% | 32.81% | +8.37 pp | - The decrease in net earnings was primarily due to interest expense on interest-bearing liabilities increasing faster than the yield on interest-earning assets, reducing the net interest margin[102](index=102&type=chunk) [Interest Income](index=33&type=section&id=Interest%20Income) This section analyzes interest income components, including loans and investment securities, and their respective yields | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | Change (YoY) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Total interest income | $17,745 | $14,577 | +$3,168 (+21.7%) | | Interest income on loans | $14,490 | $11,376 | +$3,114 (+27.4%) | | Average loan balances | $945.7 million | $850.3 million | +$95.4 million (+11.2%) | | Yield on loans | 6.16% | 5.43% | +0.73 pp | | Interest income on investment securities | $3,192 | $3,103 | +$89 (+2.9%) | | Yield on investment securities | 2.96% | 2.68% | +0.28 pp | [Interest Expense](index=33&type=section&id=Interest%20Expense) This section details interest expenses, primarily from deposits and borrowings, and their associated costs | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | Change (YoY) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Total interest expense | $6,998 | $3,630 | +$3,368 (+92.8%) | | Interest expense on deposits | $5,457 | $2,539 | +$2,918 (+114.9%) | | Cost of interest-bearing deposits | 2.35% | 1.18% | +1.17 pp | | Average interest-bearing deposit balances | $935.4 million | $872.9 million | +$62.5 million (+7.2%) | | Interest expense on borrowings | $1,541 | $1,091 | +$450 (+41.2%) | | Average borrowings | $108.6 million | $94.4 million | +$14.2 million (+15.0%) | | Rates on borrowings | 5.69% | 4.63% | +1.06 pp | [Net Interest Income](index=33&type=section&id=Net%20Interest%20Income) This section discusses net interest income, its drivers, and the impact on the net interest margin | Metric | Three months ended March 31, 2024 (thousands) | Three months ended March 31, 2023 (thousands) | Change (YoY, thousands) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Net interest income | $10,747 | $10,947 | -$200 (-1.8%) | | Net interest margin (tax-equivalent) | 3.12% | 3.31% | -0.19 pp | | Accretion of purchase accounting adjustments | +$209 | +$176 | +$33 (+18.8%) | - The decrease in net interest income was mainly due to increased interest expense on deposits and borrowings, partially offset by higher interest income on loans and investments[107](index=107&type=chunk) [Average Assets/Liabilities](index=34&type=section&id=Average%20Assets%2FLiabilities) This section presents average yields/costs for interest-earning assets and liabilities, and the interest rate spread | Metric | Q1 2024 Average Yield/Cost | Q1 2023 Average Yield/Cost | Change (YoY) | | :--------------------------------- | :------------------------- | :------------------------- | :------------------- | | Total interest-earning assets yield | 5.11% | 4.39% | +0.72 pp | | Total interest-bearing liabilities cost | 2.70% | 1.52% | +1.18 pp | | Interest rate spread | 2.41% | 2.87% | -0.46 pp | | Net interest margin (tax-equivalent) | 3.12% | 3.31% | -0.19 pp | - The ratio of average interest-earning assets to average interest-bearing liabilities decreased from **141.1%** in Q1 2023 to **135.1%** in Q1 2024[108](index=108&type=chunk) [Rate/Volume Table](index=35&type=section&id=Rate%2FVolume%20Table) This section analyzes changes in interest income and expense attributable to rate and volume fluctuations | Metric | Increase/(decrease) attributable to Volume (Q1 2024 vs 2023, thousands) | Increase/(decrease) attributable to Rate (Q1 2024 vs 2023, thousands) | Net Change (Q1 2024 vs 2023, thousands) | | :--------------------------------- | :------------------------------------------------ | :---------------------------------------------- | :----------------------------------- | | Total interest income | $1,032 | $2,117 | $3,149 | | Total interest expense | $461 | $2,907 | $3,368 | | Net interest income | $571 | $(790) | $(219) | - The significant increase in interest expense due to rate changes (**$2,907 thousand**) was the primary factor in the decrease of net interest income[111](index=111&type=chunk) [Provision for Credit Losses](index=35&type=section&id=Provision%20for%20Credit%20Losses) This section explains the provision for credit losses, its drivers, and impact on the allowance | Metric | Three months ended March 31, 2024 (thousands) | Three months ended March 31, 2023 (thousands) | Change (YoY, thousands) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Provision for credit losses | $300 | $49 | +$251 (+512.2%) | | Net loan charge-offs | $7 | $47 | -$40 (-85.1%) | - The increase in provision for credit losses was mainly due to the growth in the overall loan portfolio[111](index=111&type=chunk) - The Q1 2024 provision included **$250,000** for allowance for credit losses on loans and **$50,000** for unfunded loan commitments[111](index=111&type=chunk) [Non-interest Income](index=35&type=section&id=Non-interest%20Income) This section details non-interest income components, including service charges, interchange income, and gains on loan sales | Metric | Three months ended March 31, 2024 (thousands) | Three months ended March 31, 2023 (thousands) | Change (YoY, thousands) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Total non-interest income | $3,400 | $3,495 | -$95 (-2.7%) | | Gains on sales of loans, net | $512 | $693 | -$181 (-26.1%) | - The decrease was mainly due to lower gains on sales of residential real estate loans, as higher interest rates and low housing inventories reduced originations for sale in the secondary market[113](index=113&type=chunk) - Higher mortgage rates led to increased originations of adjustable-rate loans, which are retained in the loan portfolio[113](index=113&type=chunk) [Non-interest Expense](index=35&type=section&id=Non-interest%20Expense) This section breaks down non-interest expenses, such as compensation, occupancy, and data processing | Metric | Three months ended March 31, 2024 (thousands) | Three months ended March 31, 2023 (thousands) | Change (YoY, thousands) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Total non-interest expense | $10,551 | $10,343 | +$208 (+2.0%) | | Other non-interest expense | $2,089 | $1,891 | +$198 (+10.5%) | | Professional fees | $647 | $491 | +$156 (+31.8%) | | Data processing | $481 | $589 | -$108 (-18.3%) | - The increase in other non-interest expense was associated with a valuation allowance against real estate held for sale and increased operating losses[114](index=114&type=chunk) - Data processing expenses decreased due to the completion of the Freedom core conversion at the end of Q1 2023[114](index=114&type=chunk) [Income Tax Expense](index=35&type=section&id=Income%20Tax%20Expense) This section discusses income tax expense and effective tax rate, explaining influencing factors | Metric | Three months ended March 31, 2024 (thousands) | Three months ended March 31, 2023 (thousands) | Change (YoY, thousands) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Income tax expense | $518 | $693 | -$175 (-25.3%) | | Effective tax rate | 15.7% | 17.1% | -1.4 pp | - The decrease in the effective tax rate was primarily related to lower earnings before income taxes[115](index=115&type=chunk) [Financial Condition](index=36&type=section&id=Financial%20Condition) This section provides an overview of the company's financial health, including asset levels, capital, and liquidity - Economic conditions remained sluggish in Q1 2024 due to elevated inflation and higher interest rates, impacting funding costs and investment security fair values[116](index=116&type=chunk) - The Company maintains strong capital and liquidity, with a stable, conservative, and mostly retail-based, FDIC-insured deposit portfolio[116](index=116&type=chunk) - Total assets decreased by **$8.5 million (0.5%)** from December 31, 2023, to **$1.6 billion** at March 31, 2024[117](index=117&type=chunk) - Management believes its efforts to run a high-quality financial institution with a sound asset base will continue to create a strong foundation for future growth and profitability[116](index=116&type=chunk) [Asset Quality and Distribution](index=36&type=section&id=Asset%20Quality%20and%20Distribution) This section analyzes loan portfolio quality, including allowance for credit losses and non-performing assets | Metric | March 31, 2024 | December 31, 2023 | Change | | :--------------------------------- | :---------------- | :---------------- | :---------------- | | Allowance for credit losses on loans | $10.9 million | $10.6 million | +$0.3 million (+2.8%) | | ACL as % of gross loans | 1.13% | 1.12% | +0.01 pp | | Classified loans | $14.1 million | $7.5 million | +$6.6 million (+88.0%) | | Loans past due 30-89 days and still accruing | $4.1 million | $1.6 million | +$2.5 million (+156.3%) | | Non-accrual loans | $3.6 million | $2.4 million | +$1.2 million (+50.0%) | | Real estate owned | $428 | $928 | -$500 (-53.9%) | - The increase in ACL as a percentage of gross loans was primarily due to loan growth[118](index=118&type=chunk) - Management is actively working to resolve problem credits and move non-performing credits out of the loan portfolio[121](index=121&type=chunk) [Liability Distribution](index=36&type=section&id=Liability%20Distribution) This section details the composition of the company's liabilities, focusing on deposits and borrowings | Metric | March 31, 2024 | December 31, 2023 | Change | | :--------------------------------- | :---------------- | :---------------- | :---------------- | | Total deposits | $1.3 billion | $1.316 billion | -$22.7 million (-1.7%) | | Non-interest-bearing deposits | $364.4 million | $367.1 million | -$2.7 million (-0.7%) | | Non-interest-bearing deposits as % of total deposits | 28.2% | 27.9% | +0.3 pp | | Certificates of deposit | $191.8 million | $183.2 million | +$8.6 million (+4.7%) | | Brokered certificates of deposit | $45.1 million | $42.8 million | +$2.3 million (+5.4%) | | Total borrowings | $112.3 million | $99.0 million | +$13.2 million (+13.3%) | - The decrease in deposits was primarily due to a seasonal decrease in public funds[122](index=122&type=chunk) - Over **92%** of total deposits were considered core deposits at March 31, 2024[124](index=124&type=chunk) - The increase in total borrowings was due to FHLB advances used to fund loan growth and offset the decline in non-brokered deposits[126](index=126&type=chunk) [Cash Flows](index=37&type=section&id=Cash%20Flows) This section summarizes cash flows from operating, investing, and financing activities, explaining net cash change | Metric | Three months ended March 31, 2024 | Change | | :--------------------------------- | :-------------------------------- | :------------------- | | Net decrease in cash and cash equivalents | $(10.6) million | | | Net cash provided by operating activities | $2.9 million | | | Net cash used in investing activities | $(2.7) million | | | Net cash used in financing activities | $(10.8) million | | - The decrease in cash and cash equivalents was primarily driven by net cash used in financing activities (decrease in deposits) and investing activities (loan growth)[127](index=127&type=chunk) [Liquidity](index=37&type=section&id=Liquidity) This section discusses the company's liquidity position, including available funds and borrowing capacities | Metric | March 31, 2024 | December 31, 2023 | Change | | :--------------------------------- | :---------------- | :---------------- | :---------------- | | Liquid assets (cash & AFS securities) | $458.7 million | $484.8 million | -$26.1 million (-5.4%) | | FHLB available borrowing capacity | $165.3 million | $153.1 million | +$12.2 million (+8.0%) | | Federal Reserve borrowing capacity | $56.9 million | N/A | | | Correspondent bank available credit | $30.0 million | N/A | | - Liquidity management is a daily and long-term function, with excess funds invested in short-term, high-grade investments or held as cash[129](index=129&type=chunk) - The Company had **$68.4 million** borrowed on its FHLB line of credit at March 31, 2024[129](index=129&type=chunk) [Off Balance Sheet Arrangements](index=37&type=section&id=Off%20Balance%20Sheet%20Arrangements) This section describes off-balance sheet commitments, such as standby letters of credit and loan commitments - Standby letters of credit, representing contingent commitments, totaled **$1.6 million** at March 31, 2024[130](index=130&type=chunk) - Outstanding loan commitments, excluding standby letters of credit, were **$195.3 million** at March 31, 2024[131](index=131&type=chunk) - These arrangements are subject to the same credit policies, underwriting standards, and approval processes as loans, with recourse against the customer and underlying collateral[130](index=130&type=chunk) [Capital](index=38&type=section&id=Capital) This section assesses the company's capital adequacy and compliance with regulatory requirements - The Company and the Bank met all capital adequacy requirements as of March 31, 2024[133](index=133&type=chunk) - The Bank was **"well capitalized"** under prompt corrective action regulations at March 31, 2024[133](index=133&type=chunk) - The Company is considered a **"small bank holding company"** and is not directly subject to Basel III minimum capital requirements[132](index=132&type=chunk) [Dividends](index=38&type=section&id=Dividends) This section outlines the company's dividend policy and regulatory considerations - A quarterly cash dividend of **$0.21 per share** was paid in Q1 2024[134](index=134&type=chunk) - Dividend payments are contingent on maintaining adequate capital, including a **2.5% common equity Tier 1 capital conservation buffer**[135](index=135&type=chunk) - The National Bank Act limits dividends to the bank's current year's net earnings plus adjusted retained earnings for the three preceding years, with **$574,000** available from the Bank at March 31, 2024, without prior regulatory approval[135](index=135&type=chunk) - Interest payments on subordinated debentures must be paid before dividends on capital stock, with the right to defer interest for up to **20 consecutive quarters**[136](index=136&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=38&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section details the company's market risk exposure, primarily interest rate risk, and its management strategies - The Company's net interest income is subject to changes in market interest rates and the mix of assets and liabilities[137](index=137&type=chunk) - Interest rate risk is monitored by the Asset/Liability Management Committee using earnings simulation models, with policy limits in place[138](index=138&type=chunk) | Scenario (12-month impact) | Dollar change in net interest income (Mar 31, 2024, thousands) | Percent change in net interest income (Mar 31, 2024) | | :------------------------- | :-------------------------------------------------- | :--------------------------------------------------- | | 300 basis point rising | $(5,561) | (12.6)% | | 200 basis point rising | $(3,774) | (8.5)% | | 100 basis point rising | $(1,999) | (4.5)% | | 100 basis point falling | $342 | 0.8% | | 200 basis point falling | $(260) | (0.6)% | | 300 basis point falling | $(1,233) | (2.8)% | [ITEM 4. CONTROLS AND PROCEDURES](index=40&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management evaluated disclosure controls and procedures as effective for Q1 2024, with no material changes in internal control - Disclosure controls and procedures were effective as of March 31, 2024, ensuring timely and accurate reporting under the Exchange Act[143](index=143&type=chunk) - No material changes in internal control over financial reporting occurred during Q1 2024[144](index=144&type=chunk) [PART II – OTHER INFORMATION](index=40&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section includes disclosures on legal proceedings, risk factors, equity sales, defaults, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=40&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company reported no material pending legal proceedings beyond ordinary routine litigation incidental to business - No material pending legal proceedings exist, only ordinary routine litigation[146](index=146&type=chunk) [ITEM 1A. RISK FACTORS](index=40&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors since the 2023 Annual Report, with forward-looking statements subject to various risks - No material changes to the risk factors since the Annual Report on Form 10-K for the year ended December 31, 2023[147](index=147&type=chunk) - Forward-looking statements are subject to various risks, including changes in interest rates, economic conditions, regulatory policies, competition, technological changes, and credit quality[141](index=141&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=40&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[148](index=148&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=41&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reported no defaults upon senior securities during the period - None[149](index=149&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=41&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company's operations - Not applicable[150](index=150&type=chunk) [ITEM 5. OTHER INFORMATION](index=41&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No other information was reported under this item - None[151](index=151&type=chunk) [ITEM 6. EXHIBITS](index=41&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents and certifications - Exhibits include Amended and Restated Certificate of Incorporation, Bylaws, CEO/CFO certifications (Rule 13a-14(a)/15d-14(a) and 18 U.S.C. Section 1350), Claw Back Policy, and Interactive Data Files (Inline XBRL)[152](index=152&type=chunk) [SIGNATURES](index=42&type=section&id=SIGNATURES) This section contains official signatures of principal executive and financial officers, certifying report accuracy - The report was signed by Abigail M. Wendel (President and CEO) and Mark A. Herpich (VP, Secretary, Treasurer, and CFO) on May 14, 2024[154](index=154&type=chunk)

FOR IMMEDIATE RELEASE Contact: May 1, 2024 Mark A. Herpich Chief Financial Officer (785) 565-2000 Exhibit 99.1 PRESS RELEASE Landmark Bancorp, Inc. Announces First Quarter Earnings Per Share of $0.51 Declares Cash Dividend of $0.21 per Share (Manhattan, KS, May 1, 2024) – Landmark Bancorp, Inc. ("Landmark"; Nasdaq: LARK) reported diluted earnings per share of $0.51 for the three months ended March 31, 2024, compared to $0.48 per share in the fourth quarter of 2023 and $0.61 per share in the same quarter las ...

Manhattan, KS, May 01, 2024 (GLOBE NEWSWIRE) -- Landmark Bancorp, Inc. (("Landmark", NASDAQ:LARK) reported diluted earnings per share of $0.51 for the three months ended March 31, 2024, compared to $0.48 per share in the fourth quarter of 2023 and $0.61 per share in the same quarter last year. Net earnings for the first quarter of 2024 amounted to $2.8 million, compared to $2.6 million in the prior quarter and $3.4 million for the first quarter of 2023. For the three months ended March 31, 2024, the return ...

Manhattan, KS, April 25, 2024 (GLOBE NEWSWIRE) -- Landmark Bancorp, Inc. (Nasdaq: LARK) announced that it will release earnings for the first quarter of 2024 after the market closes on Wednesday, May 1, 2024. The Company will host a conference call to discuss these results on Thursday, May 2, 2024 at 10:00 am (CT). Investors may listen to the Company’s earnings call via telephone by dialing (833) 470-1428 and using access code 688391. Investors are encouraged to call the dial-in number at least 5 minutes pr ...

Manhattan, KS, April 25, 2024 (GLOBE NEWSWIRE) -- Landmark Bancorp, Inc. (NASDAQ:LARK) announced that it will release earnings for the first quarter of 2024 after the market closes on Wednesday, May 1, 2024. The Company will host a conference call to discuss these results on Thursday, May 2, 2024 at 10:00 am (CT). Investors may listen to the Company's earnings call via telephone by dialing (833) 470-1428 and using access code 688391. Investors are encouraged to call the dial-in number at least 5 minutes pri ...

Part I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Landmark Bancorp, Inc. operates as a financial holding company with $1.6 billion in assets, focusing on commercial, real estate, and agricultural lending across Kansas through 31 branches [Company Overview and Market Areas](index=4&type=section&id=Company%20Overview%20and%20Market%20Areas) Landmark Bancorp, Inc., a financial holding company with $1.6 billion in assets, primarily operates through Landmark National Bank, focusing on commercial, real estate, and agricultural loan growth across four distinct Kansas regions and a new Missouri loan production office - As of December 31, 2023, the Company had approximately **$1.6 billion** in consolidated total assets[13](index=13&type=chunk) - The Company's strategy focuses on increasing originations of commercial, commercial real estate, and agricultural loans, and diversifying its core deposit mix[15](index=15&type=chunk) - The Company operates **31 branch offices** in 24 Kansas communities and one loan production office in Kansas City, Missouri, serving four distinct geographic regions within Kansas[15](index=15&type=chunk)[20](index=20&type=chunk) - On October 1, 2022, the Company completed its acquisition of Freedom Bancshares, Inc., which had total assets of **$202.0 million**[14](index=14&type=chunk) [Lending and Deposit Activities](index=6&type=section&id=Lending%20and%20Deposit%20Activities) The Bank offers a full range of lending products, emphasizing commercial, commercial real estate, and agricultural loans, while diversifying its deposit base with services like ICS and CDARS, despite an increase in brokered deposits - The Bank's lending activities focus on commercial, commercial real estate, and agriculture loans to grow and diversify its portfolio[29](index=29&type=chunk)[43](index=43&type=chunk) - The balance of one-to-four family residential loans increased in 2023 due to higher demand for variable-rate loans, which the Bank retains in its portfolio[31](index=31&type=chunk) - The Bank offers Insured Cash Sweep (ICS) and Certificate of Deposit Agreement Registry Service (CDARS) to provide customers with FDIC insurance coverage for balances exceeding the $250,000 limit[45](index=45&type=chunk) Brokered Deposit Balances | Date | Brokered Deposits ($M) | % of Total Deposits | | :--- | :--- | :--- | | Dec 31, 2023 | $83.2 | 6.3% | | Dec 31, 2022 | $10.3 | 0.8% | [Supervision and Regulation](index=9&type=section&id=Supervision%20and%20Regulation) The Company and Bank are extensively regulated by federal agencies, primarily for depositor protection, adhering to Basel III capital requirements and other laws like CRA and BSA/AML, with the Bank being well-capitalized as of December 31, 2023 - The Company and the Bank are regulated by the Federal Reserve, OCC, FDIC, and CFPB, with a primary focus on protecting depositors[48](index=48&type=chunk) Well-Capitalized Requirements for the Bank (OCC) | Capital Ratio | Minimum Requirement | | :--- | :--- | | Common Equity Tier 1 to risk-weighted assets | 6.5% or more | | Tier 1 Capital to risk-weighted assets | 8.0% or more | | Total Capital to risk-weighted assets | 10.0% or more | | Tier 1 Capital to total adjusted average quarterly assets | 5.0% or greater | - As of December 31, 2023, the Bank was **well-capitalized** as defined by OCC regulations[59](index=59&type=chunk) - The Company elected to operate as a financial holding company in May 2017, allowing it to engage in a wider range of nonbanking activities, provided it and the Bank remain well-capitalized and well-managed[65](index=65&type=chunk) - The bank regulatory agencies issued a final rule to strengthen and modernize the Community Reinvestment Act (CRA) regulations, effective April 1, 2024, which the Bank is currently assessing for impact[93](index=93&type=chunk) [Statistical Data](index=19&type=section&id=Statistical%20Data) This section provides detailed financial statistics, including a decrease in net interest margin to 3.17% in 2023, growth in the loan portfolio, and a reduction in non-performing assets Net Interest Margin and Spread | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Interest Rate Spread | 2.58% | 3.05% | 3.33% | | Net Interest Margin | 3.17% | 3.21% | 3.39% | Loan Portfolio Composition (in thousands) | Loan Type | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | One-to-four family residential | $302,544 | $236,982 | | Commercial real estate | $320,962 | $304,074 | | Commercial loans | $180,942 | $173,415 | | Agriculture loans | $89,680 | $84,283 | | **Total gross loans** | **$948,656** | **$850,190** | Non-Performing Assets (in thousands) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Non-accrual loans | $2,391 | $3,326 | $5,230 | | Real estate owned, net | $928 | $934 | $2,551 | | **Total Non-performing assets** | **$3,319** | **$4,260** | **$7,781** | | Non-performing assets to total assets | 0.21% | 0.28% | 0.59% | Allowance for Credit Losses to Total Gross Loans | Date | Ratio | | :--- | :--- | | Dec 31, 2023 | 1.12% | | Dec 31, 2022 | 1.03% | | Dec 31, 2021 | 1.32% | [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant credit, interest rate, regulatory, operational, and reputational risks, including loan portfolio concentration, sensitivity to Federal Reserve policies, cybersecurity threats, and reliance on key personnel [Credit Risks](index=28&type=section&id=Credit%20Risks) The company faces substantial credit risk from its concentrated real estate and commercial loan portfolios, which are vulnerable to economic downturns and commodity price fluctuations, with the CECL adoption introducing new complexities in loss estimation - Real estate lending (commercial, construction, residential) constituted approximately **67.9%** of the total loan portfolio as of December 31, 2023, exposing the company to risks specific to real estate values[146](index=146&type=chunk) - Commercial real estate loans represented **36.1%** of the total loan portfolio and **237%** of the Bank's total capital at December 31, 2023[148](index=148&type=chunk) - The allowance for credit losses may be insufficient, as future losses are susceptible to economic changes beyond the company's control; the adoption of CECL on January 1, 2023, changes the methodology to a lifetime expected loss model[142](index=142&type=chunk)[143](index=143&type=chunk) - The business is concentrated in Kansas, making it dependent on local economic conditions, including the agricultural economy, which could be adversely affected by declines in commodity prices[139](index=139&type=chunk)[140](index=140&type=chunk)[154](index=154&type=chunk) [Interest Rate and Market Risks](index=32&type=section&id=Interest%20Rate%20and%20Market%20Risks) The company's profitability is highly sensitive to interest rate changes and Federal Reserve policy, which can impact net interest margin, investment portfolio value, and borrower repayment ability, potentially leading to further unrealized losses in fixed-rate securities - Profitability is significantly affected by the spread between interest earned on assets and interest paid on liabilities, which is influenced by Federal Reserve policies and market interest rates[157](index=157&type=chunk)[160](index=160&type=chunk) - Continued high interest rates may cause a further decline in the value of the company's fixed-rate debt securities, with unrealized losses recognized in other comprehensive income, reducing total stockholders' equity[162](index=162&type=chunk) - As of December 31, 2023, the company held **$199.7 million** in municipal securities (**44.1%** of the total securities portfolio), which are at risk of valuation declines if their credit enhancement insurers are downgraded[165](index=165&type=chunk) [Operational, Strategic and Reputational Risks](index=35&type=section&id=Operational%2C%20Strategic%20and%20Reputational%20Risks) The company faces intense competition, rapid technological changes, and significant cybersecurity threats, while also relying heavily on third-party IT systems and the retention of key management personnel in a competitive labor market - The company faces intense competition from national and community banks, credit unions, and fintech companies, which could compress margins and market share[174](index=174&type=chunk) - The business is susceptible to fraudulent activity and cybersecurity incidents; a breach of information security controls could lead to financial losses, litigation, and reputational damage[184](index=184&type=chunk)[186](index=186&type=chunk) - The business depends heavily on third-party information technology and telecommunications systems; failures or interruptions in these systems could adversely affect operations[187](index=187&type=chunk) - The unexpected loss of key managers or the inability to attract and retain qualified employees in a competitive labor market could adversely affect operations[180](index=180&type=chunk)[181](index=181&type=chunk) [Item 1C. Cybersecurity](index=41&type=section&id=Item%201C.%20Cybersecurity) The company maintains a comprehensive cybersecurity risk management program, overseen by management and the Board, to identify, assess, and mitigate threats, acknowledging potential material adverse effects from future incidents - The Company has a dedicated information security program to identify, assess, and manage cybersecurity risks, which is integrated into its broader risk management framework[201](index=201&type=chunk)[202](index=202&type=chunk) - Cybersecurity governance involves day-to-day management by the CEO and CFO, with oversight from the Board of Directors and the Bank's Enterprise Risk Management (ERM) Committee[204](index=204&type=chunk)[205](index=205&type=chunk) - The company utilizes independent consultants, legal advisors, and audit firms to evaluate the effectiveness of its risk management systems and respond to potential cybersecurity incidents[202](index=202&type=chunk) [Item 2. Properties](index=42&type=section&id=Item%202.%20Properties) The company owns its main office and 27 branch offices in Kansas, while leasing three additional branch offices in Kansas and one loan production office in Missouri - The Company owns its main office and **27 branch offices**, and leases three branch offices in Kansas and one loan production office in Missouri[206](index=206&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=43&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "LARK", with a history of consistent quarterly cash and annual stock dividends, and an active stock repurchase plan with 174,684 shares remaining as of year-end 2023 - The company's common stock trades on the Nasdaq Global Market under the symbol "**LARK**"[211](index=211&type=chunk) - In January 2024, the company declared its **90th consecutive quarterly cash dividend**; it also distributed a **5% stock dividend** for the **23rd consecutive year** in December 2023[212](index=212&type=chunk) - A stock repurchase plan from March 2020 had **174,684 shares** remaining for repurchase as of December 31, 2023[213](index=213&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights a 23.9% increase in 2023 net earnings to $12.2 million, driven by loan growth and higher interest rates, despite rising interest expenses, with total assets reaching $1.6 billion and strong asset quality and capital positions maintained [Comparison of Operating Results for 2023 and 2022](index=46&type=section&id=Comparison%20of%20Operating%20Results%20for%202023%20and%202022) Net earnings for 2023 increased by 23.9% to $12.2 million, primarily due to a $21.5 million surge in interest income, largely offset by a $17.0 million rise in interest expense, resulting in a modest $4.4 million net interest income growth Key Operating Results (in millions) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Net Earnings | $12.2 | $9.9 | +23.9% | | Net Interest Income | $43.3 | $38.9 | +11.3% | | Interest Income | $64.7 | $43.2 | +49.6% | | Interest Expense | $21.4 | $4.3 | +392.2% | | Non-Interest Income | $13.2 | $13.7 | -3.4% | | Non-Interest Expense | $42.0 | $41.3 | +1.7% | - The net interest margin (tax-equivalent basis) decreased to **3.17%** in 2023 from 3.21% in 2022, as the cost of interest-bearing liabilities rose faster than the yield on interest-earning assets[230](index=230&type=chunk) - A provision for credit losses of **$349,000** was recorded in 2023, compared to no provision in 2022, including provisions for loans, unfunded commitments, and held-to-maturity securities under the new CECL standard[232](index=232&type=chunk) [Financial Condition and Asset Quality](index=47&type=section&id=Financial%20Condition%20and%20Asset%20Quality) As of December 31, 2023, total assets increased by 3.9% to $1.6 billion, driven by an 11.5% growth in net loans, while asset quality remained strong with non-accrual loans decreasing and the allowance for credit losses increasing due to CECL adoption Key Balance Sheet Items (in millions) | Item | Dec 31, 2023 | Dec 31, 2022 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $1,600.0 | $1,500.0 | +3.9% | | Net Loans | $937.6 | $841.1 | +11.5% | | Investment Securities (AFS) | $452.8 | $489.3 | -7.5% | Asset Quality Metrics | Metric | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Non-accrual loans to gross loans | 0.25% | 0.39% | | Allowance for credit losses to gross loans | 1.12% | 1.03% | - Loans past due 30-89 days and still accruing interest increased to **$1.6 million** (**0.17%** of gross loans) at year-end 2023, from $738,000 (0.09%) at year-end 2022[240](index=240&type=chunk) [Liability Distribution, Liquidity, and Capital](index=48&type=section&id=Liability%20Distribution%2C%20Liquidity%2C%20and%20Capital) Total deposits increased by 1.2% to $1.3 billion in 2023, while borrowings rose 45.1% to $99.0 million to support loan growth, with the company maintaining strong liquidity and capital positions well above regulatory minimums Key Liability and Capital Metrics (in millions) | Item | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Deposits | $1,300.0 | $1,100.0 | | Total Borrowings | $99.0 | $68.3 | | Liquid Assets | $484.8 | $521.5 | - The Bank had available borrowing capacity of **$153.1 million** from the FHLB and **$60.7 million** from the Federal Reserve discount window at year-end 2023[248](index=248&type=chunk) Bank Capital Ratios (Dec 31, 2023) | Ratio | Actual | Minimum Required (w/ buffer) | | :--- | :--- | :--- | | Leverage Ratio | 8.7% | 4.0% | | Common Equity Tier 1 Ratio | 12.7% | 7.0% | | Total Risk-Based Capital Ratio | 13.7% | 10.5% | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company actively manages interest rate risk, showing short-term liability sensitivity where a 100 basis point rate increase is projected to decrease net interest income by 4.9% over the next twelve months Net Interest Income Sensitivity Analysis (as of Dec 31, 2023) | Interest Rate Scenario | Change in Net Interest Income ($000's) | % Change | | :--- | :--- | :--- | | +300 basis points | $(5,924) | (13.8)% | | +200 basis points | $(4,012) | (9.3)% | | +100 basis points | $(2,122) | (4.9)% | | -100 basis points | $17 | 0.0% | - The interest sensitivity gap analysis as of December 31, 2023, shows a cumulative negative gap of **$703.7 million** in the '3 months or less' repricing period, indicating short-term liability sensitivity[266](index=266&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=53&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2023, including an unqualified auditor's opinion from Crowe LLP, noting the adoption of the CECL accounting standard, and highlights asset growth and increased net earnings [Report of Independent Registered Public Accounting Firm](index=53&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Crowe LLP issued an unqualified audit opinion on Landmark Bancorp, Inc.'s 2023 consolidated financial statements, noting the adoption of ASC Topic 326 (CECL) and identifying the qualitative factors for the Allowance for Credit Losses on Loans as a critical audit matter - The auditor, Crowe LLP, issued an unqualified opinion, stating the financial statements present fairly, in all material respects, the financial position of the Company[267](index=267&type=chunk) - The auditor's report includes an explanatory paragraph noting the Company changed its method of accounting for credit losses in 2023 by adopting ASC Topic 326 (CECL)[268](index=268&type=chunk) - A critical audit matter was identified concerning the qualitative factors for the Allowance for Credit Losses on Loans, which involved significant management judgment and a high degree of auditor subjectivity[271](index=271&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk) [Consolidated Financial Statements](index=55&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets grew to $1.56 billion in 2023, driven by a $96.5 million increase in net loans, with net earnings rising to $12.2 million despite a significant increase in interest expense, and cash flows reflecting loan growth funded by FHLB borrowings Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Assets | $1,561,672 | $1,502,867 | | Loans, net | $937,619 | $841,149 | | Total Deposits | $1,316,251 | $1,300,649 | | Total Borrowings (FHLB, Sub. Debentures, etc.) | $99,027 | $68,253 | | Total Stockholders' Equity | $126,914 | $111,433 | Consolidated Earnings Highlights (in thousands) | Account | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net Interest Income | $43,292 | $38,880 | $38,320 | | Provision for credit losses | $349 | $0 | $500 | | Non-interest Income | $13,230 | $13,700 | $22,261 | | Non-interest Expense | $41,983 | $41,270 | $37,256 | | Net Earnings | $12,236 | $9,878 | $18,011 | - Net cash used in investing activities was **$50.6 million** in 2023, primarily for net loan growth, while net cash provided by financing activities was **$42.0 million**, largely from increased FHLB borrowings[288](index=288&type=chunk) [Notes to Consolidated Financial Statements](index=62&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial statement items, including the CECL adoption's impact on retained earnings, goodwill from the Freedom Bank acquisition, loan portfolio composition, and confirmation of the company's well-capitalized status - The adoption of CECL on Jan 1, 2023, resulted in a **$1.5 million** increase in the allowance for credit losses on loans and a corresponding **$1.2 million** after-tax decrease in retained earnings[300](index=300&type=chunk) - The October 2022 acquisition of Freedom Bancshares, Inc. for **$33.4 million** in cash resulted in goodwill of **$14.8 million** and a core deposit intangible of **$4.2 million**[346](index=346&type=chunk)[350](index=350&type=chunk) - As of Dec 31, 2023, non-accrual loans totaled **$2.4 million**; the allowance for credit losses on loans was **$10.6 million**[366](index=366&type=chunk)[373](index=373&type=chunk) - The Company and the Bank met all capital adequacy requirements as of December 31, 2023, with the Bank being categorized as **well capitalized**[447](index=447&type=chunk)[450](index=450&type=chunk) [Item 9A. Controls and Procedures](index=103&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of December 31, 2023, management, including the CEO and CFO, concluded that the company's disclosure controls and procedures, as well as internal control over financial reporting (based on COSO 2013), were effective, with no material changes during the fourth quarter - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were **effective** as of December 31, 2023[462](index=462&type=chunk) - Based on an assessment using the COSO framework, management concluded that the Company's internal control over financial reporting was **effective** as of December 31, 2023[465](index=465&type=chunk) Part III [Items 10, 11, 13, and 14](index=104&type=section&id=Items%2010%2C%2011%2C%2013%2C%20and%2014) Information for these items is incorporated by reference from the 2024 Proxy Statement, covering executive officers (including the upcoming CEO transition), executive compensation, related party transactions, director independence, and principal accountant fees - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the Company's 2024 Proxy Statement[470](index=470&type=chunk)[472](index=472&type=chunk)[473](index=473&type=chunk)[478](index=478&type=chunk)[479](index=479&type=chunk) - Abigail M. Wendel was appointed to serve as President and CEO of the Company and the Bank, effective March 29, 2024, succeeding Michael E. Scheopner, who is retiring[471](index=471&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=104&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section provides information on the company's equity compensation plans as of December 31, 2023, detailing 228,408 securities to be issued upon option exercise at a weighted-average price of $20.58, with 55,849 additional securities available for future issuance Equity Compensation Plan Information (as of Dec 31, 2023) | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted-Average Exercise Price (b) | Securities Remaining for Future Issuance (c) | | :--- | :--- | :--- | :--- | | Approved by security holders | 228,408 | $20.58 | 55,849 | | Not approved by security holders | - | - | - | | **Total** | **228,408** | **$20.58** | **55,849** | Part IV [Item 15. Exhibits and Financial Statement Schedules](index=106&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the audited Consolidated Financial Statements included in Item 8 and provides a comprehensive list of exhibits filed with the Form 10-K, including key agreements, corporate governance documents, and XBRL data files - This section lists the audited Consolidated Financial Statements included in Item 8 and all exhibits filed with the Form 10-K[482](index=482&type=chunk)[483](index=483&type=chunk) - Filed exhibits include key agreements such as the merger agreement with Freedom Bancshares, employment agreements for executives, and the 2015 Stock Incentive Plan[484](index=484&type=chunk)[485](index=485&type=chunk)