Landmark Bancorp(LARK) - 2025 Q1 - Quarterly Results

Performance Overview and Highlights Landmark Bancorp reported strong Q1 2025 growth, with net earnings up 43.2% to $4.7 million, driven by net interest income and lower expenses Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Diluted Earnings Per Share (USD) | $0.81 | $0.57 | $0.48 | | Net Income (Millions USD) | $4.7 | $3.3 | $2.8 | | Return on Avg Assets (%) | 1.21% | 0.83% | 0.72% | | Return on Avg Equity (%) | 13.71% | 9.54% | 8.88% | | Efficiency Ratio (%) | 64.1% | 70.8% | 72.1% | - The Board of Directors declared a cash dividend of $0.21 per share, payable on June 4, 2025, to stockholders of record as of May 21, 2025[4] - Key drivers for the strong quarter included solid loan demand, particularly in commercial and residential real estate, leading to an annualized loan growth of 8.7%[4] - Deposits also increased by $7.1 million, while other borrowed funds declined, improving the net interest margin[4] Detailed Financial Performance Q1 2025 financial performance showed a 5.8% sequential increase in net interest income and a $1.1 million reduction in non-interest expenses Net Interest Income Net interest income increased 5.8% to $13.1 million in Q1 2025, driven by loan growth and lower interest expenses, improving net interest margin to 3.76% Net Interest Income and Margin | Metric | Q1 2025 | Q4 2024 | Change (Millions USD / bps) | | :--- | :--- | :--- | :--- | | Net Interest Income (Millions USD) | $13.1M | $12.4M | +$0.7M | | Net Interest Margin (%) | 3.76% | 3.51% | +25 bps | - The increase in net interest income was due to a $440,000 rise in loan interest income and a combined $330,000 decrease in interest expense on deposits and other borrowed funds compared to the prior quarter[6] - Average loan balances increased by $38.4 million, and the average tax-equivalent yield on the loan portfolio rose by 6 basis points to 6.34%[6] Non-Interest Income Non-interest income was $3.4 million, a slight decrease, as the absence of a $1.0 million Q4 2024 investment loss offset other income declines - A $704,000 decline in bank-owned life insurance income (due to one-time benefits in Q4 2024) and a $322,000 drop in fee income were the primary reasons for the decrease[9] - These declines were largely offset because a $1.0 million loss on the sale of investment securities in Q4 2024 was not repeated in Q1 2025 (Q1 loss was only $2,000)[9] Non-Interest Expense Non-interest expense decreased by $1.1 million to $10.8 million in Q1 2025, driven by 2024 branch closures and reduced professional fees - The primary drivers of the expense reduction were decreases of $350,000 in other non-interest expense, $298,000 in occupancy and equipment, and $298,000 in professional fees[10] - Savings in occupancy and other expenses were related to branch closures in 2024, while the drop in professional fees was due to higher consulting costs for several initiatives in the prior quarter[10] Income Tax Expense Q1 2025 income tax expense was $1.0 million with a 17.8% effective tax rate, normalizing after a $886,000 Q4 2024 tax benefit Income Tax Comparison | Period | Income Tax Expense (Benefit) (Thousands USD) | Effective Tax Rate (%) | | :--- | :--- | :--- | | Q1 2025 | $1.0 million | 17.8% | | Q4 2024 | ($886,000) | -37.0% | Balance Sheet and Credit Quality As of March 31, 2025, the balance sheet showed healthy growth in gross loans and deposits, strengthened stockholders' equity, and robust credit quality with minimal charge-offs Balance Sheet Analysis Q1 2025 gross loans reached $1.1 billion (up 8.7% annualized), deposits grew to $1.3 billion, and stockholders' equity increased to $142.7 million Key Balance Sheet Items (as of March 31, 2025) | Metric | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Gross Loans (Billions USD) | $1.1 billion | $1.05 billion | | Total Deposits (Billions USD) | $1.3 billion | $1.3 billion | | Stockholders' Equity (Millions USD) | $142.7 million | $136.2 million | | Equity to Total Assets (%) | 9.04% | 8.65% | - Loan growth was primarily in commercial real estate (+$14.4 million), one-to-four family residential real estate (+$3.4 million), and construction/land loans (+$3.3 million)[12] - The increase in stockholders' equity was mainly due to net earnings and a decrease in accumulated other comprehensive losses (from $15.8 million to $13.0 million) as unrealized losses on investment securities declined[14][20] Credit Quality Q1 2025 credit quality remained strong, with ACL at $12.8 million (1.19% of loans), minimal net charge-offs of $23,000, and stable non-performing loans at 1.24% Credit Quality Metrics | Metric | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Allowance for Credit Losses (Millions USD / % of loans) | $12.8M (1.19% of loans) | $12.8M (1.22% of loans) | | Net Loan Charge-offs (Thousands USD) | $23,000 | $219,000 | | Non-performing Loans (Millions USD / % of loans) | $13.3M (1.24% of loans) | $13.1M (1.25% of loans) | - No provision for credit losses on loans was recorded in Q1 2025, compared to a provision of $1.5 million in Q4 2024[15] Financial Tables This section presents detailed unaudited financial statements, including Consolidated Balance Sheets, Statements of Earnings, Select Ratios, and Non-GAAP Financial Measures Consolidated Balance Sheets The Consolidated Balance Sheets present the company's financial position as of March 31, 2025, with total assets at $1.579 billion and equity at $142.7 million Balance Sheet Summary (March 31, 2025) | Category | Amount (Thousands USD) | | :--- | :--- | | Total Assets | $1,578,589 | | Total Liabilities | $1,435,938 | | Total Stockholders' Equity | $142,651 | Consolidated Statements of Earnings The Consolidated Statements of Earnings detail Q1 2025 revenues, expenses, and profitability, with net earnings reaching $4.7 million Earnings Summary (Q1 2025) | Category | Amount (Thousands USD) | | :--- | :--- | | Net Interest Income | $13,119 | | Total Non-interest Income | $3,358 | | Total Non-interest Expense | $10,761 | | Net Earnings | $4,701 | Select Ratios and Other Data This table provides key performance, capital, and credit quality ratios, highlighting Q1 2025 improvements like 1.21% return on average assets Key Ratios (Q1 2025) | Ratio | Value | | :--- | :--- | | Return on average assets | 1.21% | | Net interest margin | 3.76% | | Book value per share | $24.69 | | Total non-performing loans to gross loans | 1.24% | Non-GAAP Financial Measures This section reconciles non-GAAP financial measures, including the 64.1% efficiency ratio and $18.66 tangible book value per share Key Non-GAAP Metrics (March 31, 2025) | Metric | Value | | :--- | :--- | | Efficiency Ratio | 64.1% | | Tangible Equity to Tangible Assets | 6.99% | | Tangible Book Value Per Share | $18.66 |