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Landmark’s Board of Directors declared a cash dividend of $0.21 per share, an increase of 5%, to be paid May 29, 2024, to common stockholders of record as of the close of business on May 15, 2024.

Management will host a conference call to discuss the Company’s financial results at 10:00 a.m. (Central time) on Thursday, May 2, 2024. Investors may participate via telephone by dialing (833) 470-1428 and using access code 688391. A replay of the call will be available through June 1, 2024, by dialing (866) 813-9403 and using access code 260752.

SUMMARY OF FIRST QUARTER RESULTS

Net Interest Income

Net interest income in the first quarter of 2024 amounted to $10.7 million representing a decrease of $139,000, or 1.3%, compared to the previous quarter. This decrease in net interest income was due mainly to higher interest expense on deposits, and was partially offset by growth in interest income on loans and lower interest expense on borrowings. The net interest margin increased to 3.12% during the first quarter. Compared to the previous quarter, interest income on loans increased $267,000, or 1.9%, to $14.5 million due to both higher balances and rates. The average tax-equivalent yield on the loan portfolio increased 12 basis points to 6.16%. Interest expense on deposits increased $578,000, or 11.8%, in the first quarter 2024, 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 first quarter to 2.35% compared to 2.13% in the prior quarter. Interest on borrowed funds decreased $180,000 due primarily to lower average balances.

Non-Interest Income

Non-interest income totaled $3.4 million for the first quarter of 2024, a decrease of $95,000, or 2.7%, compared to the same period last year and an increase of $1.1 million, or 50.8%, from the previous quarter. The increase in non-interest income compared to the fourth quarter of 2023 was primarily the result of securities losses of $1.2 million taken in the fourth quarter of 2023 which did not re-occur in the current quarter. Gains on sales of one-to-four family residential real estate loans declined $181,000 from the same period last year but increased $257,000 from the prior quarter. Fees and service charges increased $103,000 compared to the same period last year but declined $302,000 from the prior quarter.

Non-Interest Expense

During the first quarter of 2024, non-interest expense totaled $10.6 million, an increase of $208,000, or 2.0%, over the same period in 2023 and a decrease of $11,000 compared to the prior quarter. Compared to the 1^st quarter last year, compensation and benefits were flat while data processing expense declined 18.3%. Amortization expense also declined 10.6% but professional fees and other expenses increased $156,000 and $198,000, respectively. The increase in professional fees was associated with increased legal costs associated with revisions to the Company’s benefit plans while growth in other expense resulted from increased due to a valuation allowance recorded against real estate held for sale and an increase in operating losses incurred.

Income Tax Expense

Landmark recorded income tax expense of $518,000 in the first quarter of 2024 compared to income tax expense of $693,000 in the first quarter of 2023 and an income tax benefit of $111,000 in the fourth quarter of 2023. The effective tax rate was 15.7% in the first quarter of 2024 compared to 17.1% in the first quarter of 2023 and (4.4%) in the fourth quarter of 2023. The fourth quarter of 2023 included the recognition of $517,000 of previously unrecognized tax benefits, which reduced the effective tax rate in the periods.

Liquidity Highlights

In addition to local retail, commercial and public fund deposits, Landmark 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 March 31, 2024, Landmark had collateral pledged to the Federal Home Loan Bank (“FHLB”) that would allow for an additional $165.3 million of FHLB borrowings. Additionally, investment securities were pledged to the Federal Reserve discount window that provides borrowing capacity with the Federal Reserve of $56.9 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 March 31, 2024.

As of March 31, 2024, Landmark had unpledged available-for-sale investment securities with a fair value of $63.4 million as well as approximately $69.5 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 $71.5 million over the next 12 months.

Balance Sheet Highlights

As of March 31, 2024, gross loans totaled $964.0 million, an increase of $15.4 million, or 6.5% annualized since December 31, 2023. During the quarter, loan growth was primarily comprised of one-to-four family residential real estate (growth of $10.3 million), construction and land (growth of $3.7 million), commercial real estate (growth of $2.4 million), municipal (growth of $1.2 million) and commercial (growth of $1.0 million) loans. The increase in one-to-four family residential real estate loans is primarily related to continued demand for adjustable-rate mortgage loans which are retained in our portfolio. Investment securities decreased $15.5 million during the first quarter of 2024, while pre-tax unrealized net losses on these investment securities increased from $21.9 million at December 31, 2023 to $24.4 million at March 31, 2024 mainly due to slightly higher interest rates.

Period end deposit balances decreased $22.7 million to $1.3 billion at March 31, 2024. The decrease in deposits was mainly driven by declines in money market and checking (decrease of $30.3 million) and non-interest-bearing demand (decrease of $2.7 million) in the first quarter but partly offset by higher certificate of deposit accounts and savings accounts, which increased in total by $10.3 million. The decrease in money market and checking accounts was mainly driven by a seasonal decline in public fund deposit account balances. However average interest-bearing deposits increased $24.8 million this quarter. Average borrowings, including FHLB advances and repurchase agreements decreased $11.8 million this quarter. At March 31, 2024, the loan to deposits ratio was 73.6% compared to 71.2% in the prior quarter and 66.4% in the same period last year.

Estimated uninsured deposits, excluding collateralized public fund deposits, totaled $174.2 million and $197.2 million as of March 31, 2024 and December 31, 2023, respectively. This represents approximately 14% of total deposits at March 31, 2024 and compares favorably with other similar community banking organizations. Over 92% of Landmark’s total deposits were considered core deposits at March 31, 2024. 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 $95.7 million at March 31, 2024 compared to $83.2 million at December 31, 2023 and are utilized as an additional source of liquidity.

Stockholders’ equity decreased slightly to $126.7 million (book value of $23.14 per share) as of December 31, 2023, from $126.9 million (book value of $23.17 per share) as of December 31, 2023, primarily due to an increase in other comprehensive losses during the first quarter of 2024. The increase in other comprehensive losses resulted from higher market interest rates which increased the unrealized losses on the Company’s investment securities portfolio. The ratio of equity to total assets increased to 8.16% on March 31, 2024, from 8.13% on December 31, 2023.

The allowance for credit losses totaled $10.9 million, or 1.13% of total gross loans on March 31, 2024, compared to $10.6 million, or 1.12% of total gross loans on December 31, 2023. Net loan charge-offs totaled $7,000 in the first quarter of 2024, compared to $47,000 during the same quarter last year and $362,000 during the fourth quarter of 2023. A provision for credit losses of $300,000 was made in the first quarter of 2024 related to an increase loan balances and unfunded loan commitments.

Non-performing loans totaled $3.6 million, or 0.38% of gross loans at March 31, 2024 compared to $2.4 million, or 0.25% of gross loans at December 31, 2023. Loans 30-89 days delinquent totaled $3.9 million, or 0.41% of gross loans, as of March 31, 2024 compared to $1.6 million, or 0.17% of gross loans, as of December 31, 2023. Real estate owned totaled $428,000 at March 31, 2024.

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 30 locations in 24 communities across Kansas: Manhattan (2), Auburn, Dodge City (2), Fort Scott (2), Garden City, Great Bend (2), Hoisington, Iola, Junction City, Kincaid, La Crosse, Lawrence (2), Lenexa, Louisburg, Mound City, Osage City, Osawatomie, Overland Park, Paola, Pittsburg, Prairie Village, Topeka (2), Wamego and Wellsville, Kansas. Visit www.banklandmark.com for more information.

Special Note Concerning Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of Landmark. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of our management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this press release, including forward-looking statements, speak only as of the date they are made, and Landmark undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond our ability to control or predict, could cause actual results to differ materially from those in our forward-looking statements. These factors include, among others, the following: (i) the 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 timing of rate changes, if any, by the Federal Reserve; (x) the effects of severe weather, natural disasters, widespread disease or pandemics, 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)

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

(1) Share and per share values at or for the period ended March 31, 2023 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)

(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)