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Landmark Bancorp, Inc. Announces Fourth Quarter Earnings Per Share of $0.48

Declares Cash Dividend of $0.21 per Share

Manhattan, KS, Jan. 31, 2024 (GLOBE NEWSWIRE) -- Landmark Bancorp, Inc. (“Landmark”; Nasdaq: LARK) reported diluted earnings per share of $0.48 for the three months ended December 31, 2023, compared to $0.53 per share in the third quarter of 2023 and $0.22 per share in the same quarter last year. Net earnings for the fourth quarter of 2023 amounted to $2.6 million, compared to $2.9 million in the prior quarter and $1.2 million for the fourth quarter of 2022. For the three months ended December 31, 2023, the return on average assets was 0.67%, the return on average equity was 9.39%, and the efficiency ratio was 71.9%.

For the year ended December 31, 2023, diluted earnings per share totaled $2.23 compared to $1.79 during 2022. Net earnings for 2023 totaled $12.2 million, compared to $9.9 million in 2022 or an increase of 23.9% which was mainly driven by increased net interest income and flat expenses. For the year ended December 31, 2023, the return on average assets was 0.80% and the return on average equity was 10.70%.

In making this announcement, Michael E. Scheopner, President and Chief Executive Officer of Landmark, said, “While the banking industry has been challenged this year through the third quarter with rapidly rising interest rates, in the fourth quarter the Federal Reserve started to stabilize short-term rates and long-term interest rates declined. This enabled us to grow deposits, reduce investment securities and fund continued loan growth. We also reduced our reliance on borrowed funds as we sold some lower rate investment securities at a pre-tax loss of $1.2 million and reduced higher cost funding sources. Lower rates overall effectively increased our book value per share to $23.17 while also increasing equity to assets. Compared to the third quarter of 2023, total gross loans increased by $11.2 million, or 4.8% on an annualized basis mainly due to growth in residential mortgage and agriculture loans. Deposits also increased $6.8 million during the fourth quarter of 2023. Our loan to deposit ratio totaled 71.3% in the fourth quarter reflecting ample liquidity for future loan growth. Net interest income this quarter totaled $10.9 million and an increase of 2.4% from the prior quarter, as growth in interest income on loans outpaced increased interest costs on deposits. Our net interest margin increased to 3.11% during the fourth quarter of 2023 from 3.06% in the prior quarter. Non-interest income decreased $1.4 million compared to the third quarter of 2023 mostly due to the securities losses mentioned above while non-interest expense declined due to acquisition costs incurred last year in the fourth quarter that did not reoccur.”

Mr. Scheopner continued, “The credit quality of our loan portfolio remains solid. Landmark recorded net loan charge-offs of $362,000 in the fourth quarter of 2023 compared to net loan charge-offs of $67,000 in the fourth quarter of 2022 and net loan recoveries of $521,000 in the third quarter of 2023. The ratio of net loan charge-offs to loans totaled 0.15% this quarter and remains low. Non-accrual loans totaled $2.4 million, or 0.25%, of gross loans at December 31, 2023 and declined $2.0 million from the prior quarter while the balance of loans past due 30 to 89 days remained low at $1.6 million, or 0.17%, of gross loans at December 31, 2023. The allowance for credit losses totaled $10.6 million at December 31, 2023, or 1.12% of period end gross loans, while our equity to assets ratio totaled 8.13%.”

Landmark’s Board of Directors declared a cash dividend of $0.21 per share, to be paid February 28, 2024, to common stockholders of record as of the close of business on February 14, 2024. During the fourth quarter of 2023 the Company also distributed a 5% stock dividend to common shareholders representing the 23rd consecutive year the Board of Directors has declared a 5% stock dividend.

Management will host a conference call to discuss the Company’s financial results at 10:00 a.m. (Central time) on Thursday, February 1, 2024. Investors may participate via telephone by dialing (833) 470-1428 and using access code 731415. A replay of the call will be available through February 29, 2024, by dialing (866) 813-9403 and using access code 252619.

SUMMARY OF FOURTH QUARTER RESULTS

Net Interest Income

Net interest income in the fourth quarter of 2023 amounted to $10.9 million representing an increase of $260,000, or 2.4%, compared to the previous quarter. This increase in net interest income was due mainly to growth in interest income on loans which was partially offset by higher interest expense on deposits. The net interest margin increased 5 basis points to 3.11% during the fourth quarter. Compared to the previous quarter, interest income on loans increased $692,000, or 5.1%, to $14.2 million due to both higher rates and balances while the average tax-equivalent yield on the loan portfolio increased 11 basis points to 6.04%. Interest expense on deposits increased $495,000 in the fourth quarter 2023, compared to the prior quarter, mainly due to higher rates and average balances on interest-bearing deposits. The average rate on interest-bearing deposits increased in the fourth quarter to 2.13% compared to 1.93% in the prior quarter. Interest on borrowed funds decreased $63,000 mainly due to lower borrowed balances.

Non-Interest Income

Non-interest income totaled $2.3 million for the fourth quarter of 2023, a decrease of $558,000, or 19.8%, compared to the same period last year and a decrease of $1.4 million, or 38.3%, from the previous quarter. The decrease in non-interest income during the fourth quarter of 2023 was primarily due to losses on sales of investment securities, which increased from $750,000 in the fourth quarter of 2022 to $1.2 million in the fourth quarter of 2023. These losses in the current quarter were related to the sale of lower yielding investment securities. The third quarter of 2023 did not include any sales of investment securities. Gains on sales of one-to-four family residential real estate loans declined $162,000 from the same period last year and $236,000 from the prior quarter, due to lower fixed rate mortgage loan originations while fees and service charges increased 7.4% compared to the same period last year.

Non-Interest Expense

During the fourth quarter of 2023, non-interest expense totaled $10.6 million, a decrease of $3.4 million, or 24.3%, over the same period in 2023 and a decrease of $167,000, or 1.6%, compared to the prior quarter. The decrease in non-interest expense compared to the fourth quarter of 2022 was primarily due to acquisition costs of $3.0 million in the 4th quarter of 2022 that did not reoccur this year. Also contributing to the decline in other non-interest expense in the fourth quarter 2023 were lower losses associated with our captive insurance subsidiary and a decline in the valuation allowance on other real estate owned which declined from $354,000 in the fourth quarter of 2022 to $6,000 in the fourth quarter of 2023. Compensation and benefits declined this quarter compared to the prior quarter while data processing costs were relatively flat.

Income Tax Expense

Landmark recorded an income tax benefit of $111,000 in the fourth quarter of 2023 compared to an income tax benefit of $466,000 in the fourth quarter of 2022 and income tax expense of $671,000 in the third quarter of 2023. The effective tax rate was (4.4%) in the fourth quarter of 2023 compared to (62.5%) in the fourth quarter of 2022 and 18.9% in the third quarter of 2023. The fourth quarter of 2023 included the recognition of $517,000 of previously unrecognized tax benefits compared to the recognition of $465,000 of previously unrecognized tax benefits in the fourth quarter of 2022, which reduced the effective tax rate in the periods.

Liquidity Highlights

In addition to local retail, commercial and public fund deposits, the Company has access to multiple sources of brokered deposits that can be utilized for liquidity. Landmark also has diverse sources of liquidity available through both secured and unsecured borrowing lines of credit. At December 31, 2023, Landmark had collateral pledged to the Federal Home Loan Bank (“FHLB”) that would allow for an additional $153.1 million of FHLB borrowings. Additionally, investment securities were pledged to the Federal Reserve discount window that provides borrowing capacity with the Federal Reserve of $60.7 million. Landmark also had various other federal funds agreements, both secured and unsecured with correspondent banks totaling approximately $30.0 million in available credit at December 31, 2023.

As of December 31, 2023, Landmark had unpledged available-for-sale investment securities with a fair value of $75.0 million as well as approximately $44.0 million of pledged investment securities in excess of required levels. The average life of the Company’s investment portfolio is approximately 4.2 years and is projected to generate cash flow through maturities of $83.4 million over the next 12 months.

Balance Sheet Highlights

As of December 31, 2023, gross loans totaled $948.7 million, an increase of $11.2 million, or 4.8% annualized since September 30, 2023. During the quarter, loan growth was primarily comprised of one-to-four family residential real estate (growth of $13.0 million), agriculture (growth of $5.1 million) and municipal (growth of $1.3 million). The increase in one-to-four family residential real estate loans is primarily related to continued demand in adjustable-rate mortgage loans which are retained in our portfolio. Investment securities decreased $4.1 million, during the fourth quarter of 2023, while pre-tax unrealized net losses on these investment securities decreased from $42.8 million at September 30, 2023 to $21.9 million at December 31, 2023. During the fourth quarter of 2023, approximately $26.9 million of U.S. treasury securities were sold at a pre-tax loss of $1.2 million. The proceeds from the sale of the low yield investment securities were used to reduce higher cost FHLB borrowings.

Deposit balances increased $6.8 million, or 2.1% on an annualized basis, to $1.3 billion at December 31, 2023. The increase in deposits was mainly driven by increases in money market and checking (increase of $25.6 million) and certificate of deposit accounts (increase of $13.9 million) in the fourth quarter but partly offset by lower non-interest-bearing demand and savings accounts, which decreased in total by $32.7 million. The increase in money market and checking accounts was mainly driven by seasonal growth in public fund deposit account balances. Total borrowings, including FHLB advances and repurchase agreements decreased $17.8 million this quarter. At December 31, 2023, the loan to deposits ratio was 71.3% compared to 70.8% in the prior quarter and 64.7% in the same period last year.

Estimated uninsured deposits, excluding collateralized public fund deposits, totaled $197.2 million and $202.8 million as of December 31, 2023 and September 30, 2023, respectively. This represents approximately 15% of total deposits at December 31, 2023 and compares favorably with other similar community banking organizations. Over 93% of Landmark’s total deposits were considered core deposits at December 31, 2023. These deposit balances are from retail, commercial and public fund customers located in the markets where the Company has bank branch locations. Brokered deposits are considered non-core and totaled $83.2 million at December 31, 2023 compared to $72.4 million at September 30, 2023 and are utilized as an additional source of liquidity.

Stockholders’ equity increased to $126.9 million (book value of $23.17 per share) as of December 31, 2023, from $109.6 million (book value of $19.99 per share) as of September 30, 2023, primarily due to a decrease in other comprehensive losses during the fourth quarter of 2023 related to lower market interest rates which decreased the unrealized losses on the Company’s investment securities portfolio. The ratio of equity to total assets increased to 8.13% on December 31, 2023, from 7.03% on September 30, 2023.

The allowance for credit losses totaled $10.6 million, or 1.12% of total gross loans on December 31, 2023, compared to $11.0 million, or 1.17% of total gross loans on September 30, 2023. Net loan charge-offs totaled $362,000 in the fourth quarter of 2023, compared to $67,000 during the same quarter last year and net loan recoveries of $521,000 during the third quarter of 2023. The ratio of annualized net loan charge-offs to total average loans was 0.15% in the fourth quarter of 2023 and 0.03% in the fourth quarter of 2022, while the ratio of annualized net loan recoveries to total average loans was 0.23% in the third quarter of 2023. The net loan recoveries in the third quarter of 2023 included $626,000 related to a construction loan previously charged-off in 2011. A provision for credit losses of $50,000 was made in the fourth quarter of 2023 related to an increase in unfunded loan commitments. No provision for credit losses was recorded in the fourth quarter of 2022 or the third quarter of 2023.

Non-performing loans totaled $2.4 million, or 0.25% of gross loans and decreased $2.0 million from the prior quarter, while loans 30-89 days delinquent totaled $1.6 million, or 0.17% of gross loans, as of December 31, 2023. Real estate owned totaled $0.9 million at December 31, 2023.

About Landmark

Landmark Bancorp, Inc., the holding company for Landmark National Bank, is listed on the Nasdaq Global Market under the symbol “LARK.” Headquartered in Manhattan, Kansas, Landmark National Bank is a community banking organization dedicated to providing quality financial and banking services. Landmark National Bank has 31 locations in 24 communities across Kansas: Manhattan (2), Auburn, Dodge City (2), Fort Scott (2), Garden City, Great Bend (2), Hoisington, Iola, Junction City, Kincaid, La Crosse, Lawrence (2), Lenexa, Louisburg, Mound City, Osage City, Osawatomie, Overland Park (2), Paola, Pittsburg, Prairie Village, Topeka (2), Wamego and Wellsville, Kansas. Visit www.banklandmark.com for more information.

Contacts:
Michael E. Scheopner
President and Chief Executive Officer
Mark A. Herpich
Chief Financial Officer
(785) 565-2000
 

Special Note Concerning Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of Landmark. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of our management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this press release, including forward-looking statements, speak only as of the date they are made, and Landmark undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond our ability to control or predict, could cause actual results to differ materially from those in our forward-looking statements. These factors include, among others, the following: (i) the strength of the local, national and international economies, including the effects of inflationary pressures and supply chain constraints on such economies; (ii) changes in state and federal laws, regulations and governmental policies concerning banking, securities, consumer protection, insurance, monetary, trade and tax matters, including any changes in response to the recent failures of other banks; (iii) changes in interest rates and prepayment rates of our assets; (iv) increased competition in the financial services sector and the inability to attract new customers, including from non-bank competitors such as credit unions and “fintech” companies; (v) timely development and acceptance of new products and services; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) our risk management framework; (viii) interruptions in information technology and telecommunications systems and third-party services; (ix) changes and uncertainty in benchmark interest rates, including the elimination of LIBOR and the development of a substitute and the recent and potential additional rate increases by the Federal Reserve; (x) the effects of severe weather, natural disasters, widespread disease or pandemics (including the COVID-19 pandemic), or other external events; (xi) the loss of key executives or employees; (xii) changes in consumer spending; (xiii) integration of acquired businesses; (xiv) unexpected outcomes of existing or new litigation; (xv) changes in accounting policies and practices, such as the implementation of the current expected credit losses accounting standard; (xvi) the economic impact of past and any future terrorist attacks, acts of war, including the current Israeli-Palestinian conflict and the conflict in Ukraine, or threats thereof, and the response of the United States to any such threats and attacks; (xvii) the ability to manage credit risk, forecast loan losses and maintain an adequate allowance for loan losses; (xviii) fluctuations in the value of securities held in our securities portfolio; (xix) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xx) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; (xxi) the level of non-performing assets on our balance sheets; (xxii) the ability to raise additional capital; (xxiii) cyber-attacks; (xxiv) declines in real estate values; (xxv) the effects of fraud on the part of our employees, customers, vendors or counterparties; and (xxvi) any other risks described in the “Risk Factors” sections of reports filed by Landmark with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. Additional information concerning Landmark and its business, including additional risk factors that could materially affect Landmark’s financial results, is included in our filings with the Securities and Exchange Commission.


LANDMARK BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (unaudited)

(Dollars in thousands)   December 31,     September 30,     June 30,     March 31,     December 31,  
    2023     2023     2023     2023     2022  
Assets                                        
Cash and cash equivalents   $ 27,101     $ 23,821     $ 20,038     $ 23,764     $ 23,156  
Interest-bearing deposits at other banks     4,918       5,904       8,336       8,586       9,084  
Investment securities available-for-sale, at fair value:                                        
U.S. treasury securities     95,667       118,341       121,480       121,759       123,111  
U.S. federal agency obligations     -       -       -       1,993       1,988  
Municipal obligations, tax exempt     120,623       115,706       124,451       128,281       127,262  
Municipal obligations, taxable     79,083       73,993       77,713       73,468       67,244  
Agency mortgage-backed securities     157,396       148,817       160,734       164,669       169,701  
Total investment securities available-for-sale     452,769       456,857       484,378       490,170       489,306  
Investment securities held-to-maturity     3,555       3,525       3,496       3,467       3,524  
Bank stocks, at cost     8,123       8,009       9,445       6,876       5,470  
Loans:                                        
One-to-four family residential real estate     302,544       289,571       259,655       246,079       236,982  
Construction and land     21,090       21,657       22,016       23,137       22,725  
Commercial real estate     320,962       323,427       314,889       316,900       304,074  
Commercial     180,942       185,831       181,424       172,331       173,415  
Paycheck Protection Program (PPP)     -       -       -       21       21  
Agriculture     89,680       84,560       84,345       80,499       84,283  
Municipal     4,507       3,200       2,711       2,004       2,026  
Consumer     28,931       29,180       28,219       28,835       26,664  
Total gross loans     948,656       937,426       893,259       869,806       850,190  
Net deferred loan (fees) costs and loans in process     (429 )     (396 )     (261 )     2       (250 )
Allowance for credit losses     (10,608 )     (10,970 )     (10,449 )     (10,267 )     (8,791 )
Loans, net     937,619       926,060       882,549       859,541       841,149  
Loans held for sale, at fair value     853       1,857       3,900       1,839       2,488  
Bank owned life insurance     38,333       38,090       37,764       37,541       37,323  
Premises and equipment, net     19,709       23,911       24,027       24,241       24,327  
Goodwill     32,377       32,377       32,199       32,199       32,199  
Other intangible assets, net     3,241       3,414       3,612       3,809       4,006  
Mortgage servicing rights     3,158       3,368       3,514       3,652       3,813  
Real estate owned, net     928       934       934       934       934  
Other assets     28,988       29,459       25,148       24,198       26,088  
Total assets   $ 1,561,672     $ 1,557,586     $ 1,539,340     $ 1,520,817     $ 1,502,867  
                                         
Liabilities and Stockholders’ Equity                                        
Liabilities:                                        
Deposits:                                        
Non-interest-bearing demand     367,103       395,046       382,410       421,971       410,142  
Money market and checking     612,243       586,651       606,474       588,366       626,659  
Savings     152,382       157,112       160,426       169,504       170,570  
Certificates of deposit     183,154       169,225       131,661       114,189       93,278  
Total deposits     1,314,882       1,308,034       1,280,971       1,294,030       1,300,649  
FHLB and other borrowings     64,662       74,567       76,185       37,804       8,200  
Subordinated debentures     21,651       21,651       21,651       21,651       21,651  
Repurchase agreements     12,714       20,592       22,293       28,750       38,402  
Accrued interest and other liabilities     20,849       23,185       20,887       20,864       22,532  
Total liabilities     1,434,758       1,448,029       1,421,987       1,403,099       1,391,434  
Stockholders’ equity:                                        
Common stock     55       52       52       52       52  
Additional paid-in capital     89,208       84,568       84,475       84,413       84,273  
Retained earnings     54,282       57,280       55,498       53,231       52,174  
Treasury stock, at cost     (75 )     -       -       -       -  
Accumulated other comprehensive (loss) income     (16,556 )     (32,343 )     (22,672 )     (19,978 )     (25,066 )
Total stockholders’ equity     126,914       109,557       117,353       117,718       111,433  
Total liabilities and stockholders’ equity   $ 1,561,672     $ 1,557,586     $ 1,539,340     $ 1,520,817     $ 1,502,867  


LANDMARK BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings (unaudited)

(Dollars in thousands, except per share amounts)   Three months ended,     Year ended,  
    December 31,     September 30,     December 31,     December 31,     December 31,  
    2023     2023     2022     2023     2022  
Interest income:                                        
Loans   $ 14,223     $ 13,531     $ 11,101     $ 51,753     $ 33,473  
Investment securities:                                        
Taxable     2,453       2,445       2,267       9,594       6,414  
Tax-exempt     761       772       786       3,094       3,018  
Interest-bearing deposits at banks     49       46       89       242       321  
Total interest income     17,486       16,794       14,243       64,683       43,226  
Interest expense:                                        
Deposits     4,879       4,384       1,452       15,254       2,776  
FHLB and other borrowings     1,203       1,251       478       4,048       584  
Subordinated debentures     422       417       318       1,590       840  
Repurchase agreements     96       116       109       499       146  
Total interest expense     6,600       6,168       2,357       21,391       4,346  
Net interest income     10,886       10,626       11,886       43,292       38,880  
Provision for credit losses     50       -       -       349       -  
Net interest income after provision for credit losses     10,836       10,626       11,886       42,943       38,880  
Non-interest income:                                        
Fees and service charges     2,763       2,618       2,572       10,220       9,651  
Gains on sales of loans, net     255       491       417       2,269       3,444  
Bank owned life insurance     242       230       214       913       780  
Losses on sales of investment securities, net     (1,246 )     -       (750 )     (1,246 )     (1,103 )
Other     240       313       359       1,074       928  
Total non-interest income     2,254       3,652       2,812       13,230       13,700  
Non-interest expense:                                        
Compensation and benefits     5,756       5,811       5,626       22,681       20,405  
Occupancy and equipment     1,429       1,373       1,373       5,565       5,118  
Data processing     462       458       495       1,940       1,580  
Amortization of mortgage servicing rights and other intangibles     437       474       481       1,844       1,446  
Professional fees     730       624       554       2,452       1,892  
Acquisition costs     -       -       3,043       -       3,398  
Other     1,748       1,989       2,380       7,501       7,431  
Total non-interest expense     10,562       10,729       13,952       41,983       41,270  
Earnings before income taxes     2,528       3,549       746       14,190       11,310  
Income tax expense     (111 )     671       (466 )     1,954       1,432  
Net earnings   $ 2,639     $ 2,878     $ 1,212     $ 12,236     $ 9,878  
                                         
Net earnings per share (1)                                        
Basic   $ 0.48     $ 0.53     $ 0.22     $ 2.23     $ 1.80  
Diluted     0.48       0.53       0.22       2.23       1.79  
Dividends per share (1)     0.20       0.20       0.19       0.80       0.76  
Shares outstanding at end of period (1)     5,477,595       5,481,805       5,473,894       5,477,595       5,473,894  
Weighted average common shares outstanding - basic (1)     5,481,119       5,479,909       5,475,433       5,477,700       5,492,286  
Weighted average common shares outstanding - diluted (1)     5,481,119       5,482,633       5,489,915       5,480,800       5,508,053  
                                         
Tax equivalent net interest income   $ 11,017     $ 10,809     $ 12,089     $ 44,040     $ 39,680  


(1 ) Share and per share values at or for the periods ended September 30, 2023 and December 31, 2022 have been adjusted to give effect to the 5% stock dividend paid during December 2023.

LANDMARK BANCORP, INC. AND SUBSIDIARIES
Select Ratios and Other Data (unaudited)

(Dollars in thousands, except per share amounts)   As of or for the
three months ended,
    As of or for the
year ended,
 
    December 31,     September 30,     December 31,     December 31,     December 31,  
    2023     2023     2022     2023     2022  
Performance ratios:                                        
Return on average assets (1)     0.67 %     0.74 %     0.32 %     0.80 %     0.73 %
Return on average equity (1)     9.39 %     9.87 %     4.50 %     10.70 %     8.25 %
Net interest margin (1)(2)     3.11 %     3.06 %     3.53 %     3.17 %     3.21 %
Effective tax rate     -4.4 %     18.9 %     -62.5 %     13.8 %     12.7 %
Efficiency ratio (3)     71.9 %     73.8 %     66.8 %     71.2 %     69.4 %
Non-interest income to total income (3)     24.3 %     25.6 %     23.1 %     25.1 %     27.4 %
                                         
Average balances:                                        
Investment securities   $ 463,763     $ 486,706     $ 504,495     $ 486,268     $ 474,732  
Loans     934,333       906,289       832,285       891,487       702,247  
Assets     1,555,742       1,549,724       1,507,454       1,535,694       1,357,479  
Interest-bearing deposits     910,610       902,727       850,041       892,373       804,146  
FHLB and other borrowings     84,408       89,441       43,870       74,210       15,061  
Subordinated debentures     21,651       21,651       21,651       21,651       21,651  
Repurchase agreements     13,785       15,387       31,533       18,361       13,239  
Stockholders’ equity   $ 111,560     $ 115,644     $ 106,782     $ 114,339       119,792  
                                         
Average tax equivalent yield/cost (1):                                        
Investment securities     2.86 %     2.77 %     2.56 %     2.76 %     2.15 %
Loans     6.04 %     5.93 %     5.29 %     5.81 %     4.77 %
Total interest-bearing assets     4.97 %     4.81 %     4.22 %     4.71 %     3.56 %
Interest-bearing deposits     2.13 %     1.93 %     0.68 %     1.71 %     0.35 %
FHLB and other borrowings     5.65 %     5.55 %     4.32 %     5.45 %     3.88 %
Subordinated debentures     7.73 %     7.64 %     5.83 %     7.34 %     3.88 %
Repurchase agreements     2.79 %     2.97 %     1.37 %     2.72 %     1.10 %
Total interest-bearing liabilities     2.54 %     2.38 %     0.99 %     2.13 %     0.51 %
                                         
Capital ratios:                                        
Equity to total assets     8.13 %     7.03 %     7.41 %                
Tangible equity to tangible assets (3)     5.98 %     4.85 %     5.13 %                
Book value per share   $ 23.17     $ 19.99     $ 20.36                  
Tangible book value per share (3)   $ 16.67     $ 13.46     $ 13.74                  
                                         
Rollforward of allowance for credit losses (loans):                                        
Beginning balance   $ 10,970     $ 10,449     $ 8,858     $ 8,791     $ 8,775  
Adoption of CECL     -       -       -       1,523       -  
Charge-offs     (442 )     (142 )     (101 )     (850 )     (336 )
Recoveries     80       663       34       894       352  
Provision for credit losses for loans     -       -       -       250       -  
Ending balance   $ 10,608     $ 10,970     $ 8,791     $ 10,608     $ 8,791  
                                         
Allowance for unfunded loan commitments   $ 250     $ 200     $ 170                  
                                         
Non-performing assets:                                        
Non-accrual loans   $ 2,391     $ 4,440     $ 3,326                  
Accruing loans over 90 days past due     -       -       -                  
Real estate owned     928       934       934                  
Total non-performing assets   $ 3,319     $ 5,374     $ 4,260                  
                                         
Loans 30-89 days delinquent   $ 1,582     $ 6,173     $ 738                  
                                         
Other ratios:                                        
Loans to deposits     71.31 %     70.80 %     64.67 %                
Loans 30-89 days delinquent and still accruing to gross loans outstanding     0.17 %     0.66 %     0.09 %                
Total non-performing loans to gross loans outstanding     0.25 %     0.47 %     0.39 %                
Total non-performing assets to total assets     0.21 %     0.35 %     0.28 %                
Allowance for credit losses to gross loans outstanding     1.12 %     1.17 %     1.03 %                
Allowance for credit losses to total non-performing loans     443.66 %     247.07 %     264.31 %                
Net loan charge-offs to average loans (1)     0.15 %     -0.23 %     0.03 %     0.00 %     0.00 %


(1 ) Information is annualized.
(2 ) Net interest margin is presented on a fully tax equivalent basis, using a 21% federal tax rate.
(3 ) Non-GAAP financial measures. See the “Non-GAAP Financial Measures” section of this press release for a reconciliation to the most comparable GAAP equivalent.


LANDMARK BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Finacials Measures (unaudited)

(Dollars in thousands, except per share amounts)   As of or for the
three months ended,
    As of or for the
year ended,
 
    December 31,     September 30,     December 31,     December 31,     December 31,  
    2023     2023     2022     2023     2022  
                               
Non-GAAP financial ratio reconciliation:                                        
Total non-interest expense   $ 10,562     $ 10,729     $ 13,952     $ 41,983     $ 41,270  
Less: foreclosure and real estate owned expense     (40 )     (1 )     (393 )     (61 )     (457 )
Less: amortization of other intangibles     (174 )     (196 )     (200 )     (765 )     (248 )
Less: acquisition costs     -       -       (3,043 )     -       (3,398 )
Adjusted non-interest expense (A)     10,348       10,532       10,316       41,157       37,167  
                                         
Net interest income (B)     10,886       10,626       11,886       43,292       38,880  
                                         
Non-interest income     2,254       3,652       2,812       13,230       13,700  
Less: losses (gains) on sales of investment securities, net     1,246       -       750       1,246       1,103  
Less: gains on sales of premises and equipment and foreclosed assets     -       (1 )     -       (1 )     (114 )
Adjusted non-interest income (C)   $ 3,500     $ 3,651     $ 3,562     $ 14,475     $ 14,689  
                                         
Efficiency ratio (A/(B+C))     71.9 %     73.8 %     66.8 %     71.2 %     69.4 %
Non-interest income to total income (C/(B+C))     24.3 %     25.6 %     23.1 %     25.1 %     27.4 %
                                         
Total stockholders’ equity   $ 126,914     $ 109,557     $ 111,433                  
Less: goodwill and other intangible assets     (35,618 )     (35,791 )     (36,205 )                
Tangible equity (D)   $ 91,296     $ 73,766     $ 75,228                  
                                         
Total assets   $ 1,561,672     $ 1,557,586     $ 1,502,867                  
Less: goodwill and other intangible assets     (35,618 )     (35,791 )     (36,205 )                
Tangible assets (E)   $ 1,526,054     $ 1,521,795     $ 1,466,662                  
                                         
Tangible equity to tangible assets (D/E)     5.98 %     4.85 %     5.13 %                
                                         
Shares outstanding at end of period (F)     5,477,595       5,481,805       5,473,894                  
                                         
Tangible book value per share (D/F)   $ 16.67     $ 13.46     $ 13.74                  


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