UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2021

OR

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

For the transition period from ________ to ________

Commission File Number 0-33203

LANDMARK BANCORP, INC.

(Exact name of registrant as specified in its charter)

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

701 Poyntz Avenue, Manhattan, Kansas 66502

(Address of principal executive offices) (Zip code)

(785) 565-2000

(Registrant’s telephone number, including area code)

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

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

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

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

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

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

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: as of November 11, 2021, the issuer had outstanding 4,759,890 shares of its common stock, $0.01 par value per share.

LANDMARK BANCORP, INC.

Form 10-Q Quarterly Report

Table of Contents

		Page Number
PART I
Item 1.	Financial Statements	2 - 25
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26 – 35
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	36
Item 4.	Controls and Procedures	37
PART II
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	38
	Signature Page	39

 1

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

LANDMARK BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)	September 30,		December 31,
	2021		2020
		(Unaudited)
Assets
Cash and cash equivalents	$	117,314	$	84,818
Investment securities available-for-sale, at fair value		378,518		297,270
Bank stocks, at cost		2,985		4,473
Loans, net of allowance for loans losses of $8,766 at September 30, 2021 and $8,775 at December 31, 2020		656,908		702,782
Loans held for sale, at fair value		8,929		15,533
Bank owned life insurance		31,914		25,420
Premises and equipment, net		20,361		20,493
Goodwill		17,532		17,532
Other intangible assets, net		104		206
Mortgage servicing rights		4,201		3,726
Real estate owned, net		2,578		1,774
Accrued interest and other assets		13,190		14,000
Total assets	$	1,254,534	$	1,188,027
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest-bearing demand	$	317,827	$	264,878
Money market and checking		488,213		491,275
Savings		151,380		126,124
Certificates of deposit		109,267		133,750
Total deposits		1,066,687		1,016,027
Subordinated debentures		21,651		21,651
Other borrowings		6,219		6,371
Accrued interest, taxes, and other liabilities		24,571		17,306
Total liabilities		1,119,128		1,061,355
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value per share, 200,000 shares authorized; none issued		-		-
Common stock, $0.01 par value per share, 7,500,000 shares authorized; 4,759,636 and 4,750,838 shares issued at September 30, 2021 and December 31, 2020, respectively		48		48
Additional paid-in capital		72,489		72,230
Retained earnings		56,957		44,947
Accumulated other comprehensive income		5,912		9,447
Total stockholders’ equity		135,406		126,672
Total liabilities and stockholders’ equity	$	1,254,534	$	1,188,027

See accompanying notes to consolidated financial statements.

 2

LANDMARK BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

	Three months ended				Nine months ended
(Dollars in thousands, except per share amounts)	September 30,				September 30,
	2021		2020		2021		2020
Interest income:
Loans	$	8,461	$	7,998	$	25,705	$	22,890
Investment securities:
Taxable		782		945		2,356		3,335
Tax-exempt		748		814		2,285		2,491
Total interest income		9,991		9,757		30,346		28,716
Interest expense:
Deposits		258		354		800		1,798
Borrowings		120		136		362		534
Total interest expense		378		490		1,162		2,332
Net interest income		9,613		9,267		29,184		26,384
Provision for loan losses		-		1,000		500		2,600
Net interest income after provision for loan losses		9,613		8,267		28,684		23,784
Non-interest income:
Fees and service charges		2,268		2,122		6,454		5,838
Gains on sales of loans, net		2,660		4,944		8,664		10,961
Bank owned life insurance		193		152		494		460
Gains on sales of investment securities, net		30		678		1,138		2,448
Other		314		269		913		783
Total non-interest income		5,465		8,165		17,663		20,490
Non-interest expense:
Compensation and benefits		5,132		5,559		15,096		15,394
Occupancy and equipment		1,101		1,106		3,268		3,248
Data processing		498		447		1,491		1,311
Amortization of mortgage servicing rights and intangibles		376		465		1,225		1,166
Professional fees		413		381		1,236		1,095
Other		1,923		1,564		5,390		4,531
Total non-interest expense		9,443		9,522		27,706		26,745
Earnings before income taxes		5,635		6,910		18,641		17,529
Income tax expense		1,118		1,483		3,777		3,639
Net earnings	$	4,517	$	5,427	$	14,864	$	13,890
Earnings per share:
Basic (1)	$	0.95	$	1.15	$	3.13	$	2.92
Diluted (1)	$	0.95	$	1.14	$	3.12	$	2.91
Dividends per share (1)	$	0.20	$	0.19	$	0.60	$	0.57

(1) Per share amounts for the periods ended September 30, 2020 have been adjusted to give effect to the 5% stock dividend paid during December 2020.

See accompanying notes to consolidated financial statements.

 3

LANDMARK BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three months ended						Nine months ended
(Dollars in thousands)	September 30,						September 30,
	2021			2020			2021			2020
Net earnings	$	4,517		$	5,427		$	14,864		$	13,890
Net unrealized holding (losses) gains on available-for-sale securities		(754	)		661			(3,544	)		7,970
Reclassification adjustment for net gains included in earnings		(30	)		(678	)		(1,138	)		(2,448	)
Net unrealized (losses) gains		(784	)		(17	)		(4,682	)		5,522
Income tax effect on net gains included in earnings		8			166			279			600
Income tax effect on net unrealized holding (losses) gains		184			(162	)		868			(1,953	)
Other comprehensive (loss) income		(592	)		(13	)		(3,535	)		4,169
Total comprehensive income	$	3,925		$	5,414		$	11,329		$	18,059

See accompanying notes to consolidated financial statements.

 4

LANDMARK BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands, except per share amounts)	Common stock		Additional paid-in capital		Retained earnings			Treasury stock			Accumulated other comprehensive income			Total
Balance at July 1, 2020	$	46	$	69,224	$	40,938		$	(2,349	)	$	9,421		$	117,280
Net earnings		-		-		5,427			-			-			5,427
Other comprehensive loss		-		-		-			-			(13	)		(13	)
Dividends paid ($0.19 per share)		-		-		(903	)		-			-			(903	)
Issuance of restricted common stock, 17,350 shares		-		-		-			-			-			-
Stock-based compensation		-		79		-			-			-			79
Balance at September 30, 2020	$	46	$	69,303	$	45,462		$	(2,349	)	$	9,408		$	121,870
Balance at July 1, 2021	$	48	$	72,413	$	53,391		$	-		$	6,504		$	132,356
Net earnings		-		-		4,517			-			-			4,517
Other comprehensive loss		-		-		-			-			(592	)		(592	)
Dividends paid ($0.20 per share)		-		-		(951	)		-			-			(951	)
Issuance of restricted common stock, 2,880 shares		-		-		-			-			-			-
Stock-based compensation		-		76		-			-			-			76
Exercise of stock options, 152 shares		-		-		-			-			-			-
Balance at September 30, 2021	$	48	$	72,489	$	56,957		$	-		$	5,912		$	135,406

(Dollars in thousands, except per share amounts)	Common stock		Additional paid-in capital		Retained earnings			Treasury stock			Accumulated other comprehensive income			Total
Balance at January 1, 2020	$	46	$	69,029	$	34,293		$	-		$	5,239		$	108,607
Net earnings		-		-		13,890			-			-			13,890
Other comprehensive income		-		-		-			-			4,169			4,169
Dividends paid ($0.57 per share)		-		-		(2,721	)		-			-			(2,721	)
Issuance of restricted common stock, 17,350 shares		-		-		-			-			-			-
Stock-based compensation		-		241		-			-			-			241
Exercise of stock options, 3,136 shares		-		33		-			-			-			33
Purchase of 106,894 treasury shares		-		-		-			(2,349	)		-			(2,349	)
Balance at September 30, 2020	$	46	$	69,303	$	45,462		$	(2,349	)	$	9,408		$	121,870
Balance at January 1, 2021	$	48	$	72,230	$	44,947		$	-		$	9,447		$	126,672
Net earnings		-		-		14,864			-			-			14,864
Other comprehensive loss		-		-		-			-			(3,535	)		(3,535	)
Dividends paid ($0.60 per share)		-		-		(2,854	)		-			-			(2,854	)
Issuance of restricted common stock, 2,880 shares		-		-		-			-			-			-
Stock-based compensation		-		237		-			-			-			237
Exercise of stock options, 5,918 shares		-		22		-			-			-			22
Balance at September 30, 2021	$	48	$	72,489	$	56,957		$	-		$	5,912		$	135,406

See accompanying notes to consolidated financial statements.

 5

LANDMARK BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months ended
(Dollars in thousands)	September 30,
	2021			2020
Cash flows from operating activities:
Net earnings	$	14,864		$	13,890
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for loan losses		500			2,600
Valuation allowance on real estate owned		48			19
Amortization of investment security premiums, net		1,481			906
Amortization of purchase accounting adjustment on loans		(43	)		(42	)
Amortization of mortgage servicing rights and other intangibles		1,225			1,166
Depreciation		742			743
Increase in cash surrender value of bank owned life insurance		(494	)		(460	)
Stock-based compensation		237			241
Deferred income taxes		105			1,041
Net gains on sales of investment securities		(1,138	)		(2,448	)
Net (gains) losses on sales of premises and equipment and foreclosed assets		(24	)		38
Net gains on sales of loans		(8,664	)		(10,961	)
Proceeds from sales of loans		277,635			285,497
Origination of loans held for sale		(263,965	)		(286,207	)
Changes in assets and liabilities:
Accrued interest and other assets		906			(3,615	)
Accrued expenses, taxes, and other liabilities		2,560			4,005
Net cash provided by operating activities		25,975			6,413
Cash flows from investing activities:
Net decrease (increase) in loans		44,224			(199,351	)
Maturities and prepayments of investment securities		37,194			46,231
Purchases of investment securities		(134,562	)		(36,863	)
Proceeds from sales of investment securities		16,623			61,164
Redemption of bank stocks		2,277			1,655
Purchase of bank stocks		(789	)		(3,005	)
Purchase bank owned life insurance		(6,000	)		-
Proceeds from sales of premises and equipment and foreclosed assets		488			343
Purchases of premises and equipment, net		(610	)		(239	)
Net cash used in investing activities		(41,155	)		(130,065	)
Cash flows from financing activities:
Net increase in deposits		50,660			122,894
Federal Home Loan Bank advance borrowings		-			156,950
Federal Home Loan Bank advance repayments		-			(139,881	)
Proceeds from other borrowings		-			1,075
Repayments on other borrowings		(152	)		(10,223	)
Proceeds from exercise of stock options		22			33
Payment of dividends		(2,854	)		(2,721	)
Purchase of treasury stock		-			(2,349	)
Net cash provided by financing activities		47,676			125,778
Net increase in cash and cash equivalents		32,496			2,126
Cash and cash equivalents at beginning of period		84,818			13,694
Cash and cash equivalents at end of period	$	117,314		$	15,820

(Continued)

 6

LANDMARK BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

(Unaudited)

	Nine months ended
(Dollars in thousands)	September 30,
	2021		2020
Supplemental disclosure of cash flow information:
Cash payments for income taxes	$	4,390	$	2,890
Cash paid for interest		1,195		2,523
Cash paid for operating leases		108		134
Supplemental schedule of noncash investing and financing activities:
Transfer of loans to real estate owned		1,193		1,586
Investment securities purchases not yet settled		5,528		-
Operating lease asset and related lease liability recorded		219		-

See accompanying notes to consolidated financial statements.

 7

LANDMARK BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.        Interim Financial Statements

The unaudited consolidated financial statements of Landmark Bancorp, Inc. (the “Company”) and its wholly owned subsidiaries, Landmark National Bank (the “Bank”) and Landmark Risk Management Inc., have been prepared in accordance with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements and should be read in conjunction with the Company’s most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 22, 2021, containing the latest audited consolidated financial statements and notes thereto. The consolidated financial statements in this report have not been audited by an independent registered public accounting firm, but in the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of financial statements have been reflected herein. The results of the three-month and nine-month interim periods ended September 30, 2021 are not necessarily indicative of the results expected for the year ending December 31, 2021 or any other future time period. The Company has evaluated subsequent events for recognition and disclosure up to the date the financial statements were issued.

2.        Investments

A summary of investment securities available-for-sale is as follows:

	As of September 30, 2021
			Gross		Gross
	Amortized		unrealized		unrealized			Estimated
(Dollars in thousands)	cost		gains		losses			fair value
U. S. treasury securities	$	40,397	$	11	$	(94	)	$	40,314
U. S. federal agency obligations		17,211		95		(9	)		17,297
Municipal obligations, tax exempt		135,818		4,999		(29	)		140,788
Municipal obligations, taxable		37,599		1,447		(58	)		38,988
Agency mortgage-backed securities		132,034		1,904		(436	)		133,502
Certificates of deposit		7,629		-		-			7,629
Total available-for-sale	$	370,688	$	8,456	$	(626	)	$	378,518

	As of December 31, 2020
			Gross		Gross
	Amortized		unrealized		unrealized			Estimated
(Dollars in thousands)	cost		gains		losses			fair value
U. S. treasury securities	$	2,000	$	37	$	-		$	2,037
U. S. federal agency obligations		18,804		138		(18	)		18,924
Municipal obligations, tax exempt		136,321		6,367		(12	)		142,676
Municipal obligations, taxable		46,643		2,892		-			49,535
Agency mortgage-backed securities		75,530		3,108		-			78,638
Certificates of deposit		5,460		-		-			5,460
Total available-for-sale	$	284,758	$	12,542	$	(30	)	$	297,270

 8

The tables above show that some of the securities in the available-for-sale investment portfolio had unrealized losses, or were temporarily impaired, as of September 30, 2021 and December 31, 2020. This temporary impairment represents the estimated amount of loss that would be realized if the securities were sold on the valuation date. Securities which were temporarily impaired are shown below, along with the length of time in a continuous unrealized loss position.

	As of September 30, 2021
(Dollars in thousands)	Less than 12 months							12 months or longer					Total
	No. of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	securities		value		losses			value		losses			value		losses
U.S. treasury securities		15	$	28,065	$	(94	)	$	-	$	-		$	28,065	$	(94	)
U.S. federal agency obligations		4		7,125		(7	)		3,068		(2	)		10,193		(9	)
Municipal obligations, tax exempt		25		8,628		(28	)		280		(1	)		8,908		(29	)
Municipal obligations, taxable		8		4,781		(58	)		-		-			4,781		(58	)
Agency mortgage-backed securities		21		72,908		(436	)		-		-			72,908		(436	)
Total		73	$	121,507	$	(623	)	$	3,348	$	(3	)	$	124,855	$	(626	)

	As of December 31, 2020
(Dollars in thousands)	Less than 12 months							12 months or longer				Total
	No. of		Fair		Unrealized			Fair		Unrealized		Fair		Unrealized
	securities		value		losses			value		losses		value		losses
U.S. federal agency obligations		4	$	11,772	$	(18	)	$	-	$	-	$	11,772	$	(18	)
Municipal obligations, tax exempt		12		4,191		(12	)		-		-		4,191		(12	)
Total		16	$	15,963	$	(30	)	$	-	$	-	$	15,963	$	(30	)

The Company’s U.S. treasury portfolio consists of securities issued by the United States Department of the Treasury. The receipt of principal and interest on U.S. treasury securities is guaranteed by the full faith and credit of the U.S. government. Based on these factors, along with the Company’s intent to not sell the securities and its belief that it was more likely than not that the Company will not be required to sell the securities before recovery of its cost basis, the Company believed that the U.S. treasury securities identified in the table above were temporarily impaired as of September 30, 2021.

The Company’s U.S. federal agency portfolio consists of securities issued by the government-sponsored agencies of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Federal Home Loan Bank (“FHLB”). The receipt of principal and interest on U.S. federal agency obligations is guaranteed by the respective government-sponsored agency guarantor, such that the Company believes that its U.S. federal agency obligations do not expose the Company to credit-related losses. Based on these factors, along with the Company’s intent to not sell the securities and its belief that it was more likely than not that the Company will not be required to sell the securities before recovery of their cost basis, the Company believed that the U.S. federal agency obligations identified in the tables above were temporarily impaired as of September 30, 2021 and December 31, 2020.

The Company’s portfolio of municipal obligations consists of both tax-exempt and taxable general obligations securities issued by various municipalities. As of September 30, 2021, the Company did not intend to sell and it was more likely than not that the Company will not be required to sell its municipal obligations in an unrealized loss position until the recovery of its cost. Due to the issuers’ continued satisfaction of the securities’ obligations in accordance with their contractual terms and the expectation that they will continue to do so, the evaluation of the fundamentals of the issuers’ financial condition and other objective evidence, the Company believed that the municipal obligations identified in the tables above were temporarily impaired as of September 30, 2021 and December 31, 2020.

The Company’s agency mortgage-backed securities portfolio consists of securities underwritten to the standards of and guaranteed by the government-sponsored agencies of FHLMC, FNMA and the Government National Mortgage Association. The receipt of principal, at par, and interest on agency mortgage-backed securities is guaranteed by the respective government-sponsored agency guarantor, such that the Company believed that its agency mortgage-backed securities did not expose the Company to credit-related losses. Based on these factors, along with the Company’s intent to not sell the securities and the Company’s belief that it was more likely than not that the Company will not be required to sell the securities before recovery of their cost basis, the Company believed that the agency mortgage-backed securities identified in the table above were temporarily impaired as of September 30, 2021.

 9

The table below sets forth amortized cost and fair value of investment securities at September 30, 2021. The table includes scheduled principal payments and estimated prepayments, based on observable market inputs, for agency mortgage-backed securities. Actual maturities will differ from contractual maturities because borrowers have the right to prepay obligations with or without prepayment penalties.

(Dollars in thousands)	Amortized		Estimated
	cost		fair value
Due in less than one year	$	29,938	$	30,020
Due after one year but within five years		232,658		235,528
Due after five years but within ten years		52,948		55,177
Due after ten years		55,144		57,793
Total	$	370,688	$	378,518

Sales proceeds and gross realized gains and losses on sales of available-for-sale securities were as follows for the periods indicated:

(Dollars in thousands)	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Sales proceeds	$	1,400	$	16,655	$	16,623	$	61,164
Realized gains	$	30	$	678	$	1,138	$	2,450
Realized losses		-		-		-		(2	)
Net realized gains	$	30	$	678	$	1,138	$	2,448

Securities with carrying values of $309.6 million and $282.2 million were pledged to secure public funds on deposit, repurchase agreements and as collateral for borrowings at September 30, 2021 and December 31, 2020, respectively. Except for U.S. federal agency obligations, no investment in a single issuer exceeded 10% of consolidated stockholders’ equity.

3.        Loans and Allowance for Loan Losses

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

	September 30,			December 31,
(Dollars in thousands)	2021			2020
One-to-four family residential real estate loans	$	161,120		$	157,984
Construction and land loans		26,658			26,106
Commercial real estate loans		193,455			172,307
Commercial loans		135,790			134,047
Paycheck protection program loans		28,671			100,084
Agriculture loans		91,305			96,532
Municipal loans		2,115			2,332
Consumer loans		25,624			24,122
Total gross loans		664,738			713,514
Net deferred loan costs (fees) and loans in process		936			(1,957	)
Allowance for loan losses		(8,766	)		(8,775	)
Loans, net	$	656,908		$	702,782

 10

The following tables provide information on the Company’s allowance for loan losses by loan class and allowance methodology:

	Three and nine months ended September 30, 2021
(Dollars in thousands)	One-to-four family residential real estate loans			Construction and land loans			Commercial real estate loans			Commercial loans			Paycheck protection program loans		Agriculture loans			Municipal loans			Consumer loans			Total
Allowance for loan losses:
Balance at July 1, 2021	$	725		$	131		$	3,412		$	2,588		$	-	$	2,156		$	5		$	146		$	9,163
Charge-offs		-			-			(540	)		-			-		-			-			(75	)		(615	)
Recoveries		8			120			-			11			-		50			-			29			218
Provision for loan losses		(89	)		(117	)		25			18			-		117			-			46			-
Balance at September 30, 2021	$	644		$	134		$	2,897		$	2,617		$	-	$	2,323		$	5		$	146		$	8,766
Balance at January 1, 2021	$	859		$	181		$	2,482		$	2,388		$	-	$	2,690		$	6		$	169		$	8,775
Charge-offs		(81	)		-			(540	)		(72	)		-		(50	)		-			(164	)		(907	)
Recoveries		10			221			-			13			-		50			6			98			398
Provision for loan losses		(144	)		(268	)		955			288			-		(367	)		(7	)		43			500
Balance at September 30, 2021	$	644		$	134		$	2,897		$	2,617		$	-	$	2,323		$	5		$	146		$	8,766

	Three and nine months ended September 30, 2020
(Dollars in thousands)	One-to-four family residential real estate loans			Construction and land loans			Commercial real estate loans			Commercial loans			Paycheck protection program loans		Agriculture loans			Municipal loans			Consumer loans			Total
Allowance for loan losses:
Balance at July 1, 2020	$	707		$	273		$	1,693		$	2,356		$	-	$	2,565		$	6		$	147		$	7,747
Charge-offs		(89	)		(91	)		-			(167	)		-		(3	)		-			(57	)		(407	)
Recoveries		-			-			-			1			-		-			-			25			26
Provision for loan losses		213			22			264			436			-		15			-			50			1,000
Balance at September 30, 2020	$	831		$	204		$	1,957		$	2,626		$	-	$	2,577		$	6		$	165		$	8,366
Balance at January 1, 2020	$	501		$	271		$	1,386		$	1,815		$	-	$	2,347		$	7		$	140		$	6,467
Charge-offs		(109	)		(191	)		(120	)		(200	)		-		(3	)		-			(180	)		(803	)
Recoveries		-			-			13			3			-		-			6			80			102
Provision for loan losses		439			124			678			1,008			-		233			(7	)		125			2,600
Balance at Seeptember 30, 2020	$	831		$	204		$	1,957		$	2,626		$	-	$	2,577		$	6		$	165		$	8,366

 11

	As of September 30, 2021
(Dollars in thousands)	One-to-four family residential real estate loans		Construction and land loans		Commercial real estate loans		Commercial loans		Paycheck protection program loans		Agriculture loans		Municipal loans		Consumer loans		Total
Allowance for loan losses:
Individually evaluated for loss	$	-	$	-	$	45	$	505	$	-	$	143	$	-	$	-	$	693
Collectively evaluated for loss		644		134		2,852		2,112		-		2,180		5		146		8,073
Total	$	644	$	134	$	2,897	$	2,617	$	-	$	2,323	$	5	$	146	$	8,766
Loan balances:
Individually evaluated for loss	$	917	$	919	$	6,124	$	1,086	$	-	$	2,387	$	36	$	2	$	11,471
Collectively evaluated for loss		160,203		25,739		187,331		134,704		28,671		88,918		2,079		25,622		653,267
Total	$	161,120	$	26,658	$	193,455	$	135,790	$	28,671	$	91,305	$	2,115	$	25,624	$	664,738

	As of December 31, 2020
(Dollars in thousands)	One-to-four family residential real estate loan		Construction and land loans		Commercial real estate loans		Commercial loans		Paycheck protection program loans		Agriculture loans		Municipal loans		Consumer loans		Total
Allowance for loan losses:
Individually evaluated for loss	$	-	$	-	$	177	$	22	$	-	$	67	$	-	$	-	$	266
Collectively evaluated for loss		859		181		2,305		2,366		-		2,623		6		169		8,509
Total	$	859	$	181	$	2,482	$	2,388	$	-	$	2,690	$	6	$	169	$	8,775
Loan balances:
Individually evaluated for loss	$	914	$	1,137	$	8,119	$	1,639	$	-	$	614	$	36	$	3	$	12,462
Collectively evaluated for loss		157,070		24,969		164,188		132,408		100,084		95,918		2,296		24,119		701,052
Total	$	157,984	$	26,106	$	172,307	$	134,047	$	100,084	$	96,532	$	2,332	$	24,122	$	713,514

The Company recorded net loan charge-offs of $397,000 during the third quarter of 2021 compared to net loan charge-offs of $381,000 during the third quarter of 2020. The Company recorded net loan charge-offs of $509,000 during the nine months ended September 30, 2021 compared to net loan charge-offs of $701,000 during the nine months ended September 30, 2020.

 12

The Company’s impaired loans decreased from $12.5 million at December 31, 2020 to $11.5 million at September 30, 2021. The difference between the unpaid contractual principal and the impaired loan balance is a result of charge-offs recorded against impaired loans. The difference in the Company’s non-accrual loan balances and impaired loan balances at September 30, 2021 and December 31, 2020, was related to troubled debt restructurings (“TDR”) that are current and accruing interest, but still classified as impaired. Interest income recognized on a cash basis was immaterial during the nine months ended September 30, 2021 and 2020.

The following tables present information on impaired loans:

(Dollars in thousands)	As of September 30, 2021
	Unpaid contractual principal		Impaired loan balance		Impaired loans without an allowance		Impaired loans with an allowance		Related allowance recorded		Year-to-date average loan balance		Year-to-date interest income recognized
One-to-four family residential real estate	$	917	$	917	$	917	$	-	$	-	$	933	$	6
Construction and land		2,569		919		919		-		-		996		16
Commercial real estate		6,124		6,124		2,384		3,740		45		6,173		28
Commercial		1,437		1,086		573		513		505		1,127		30
Agriculture		2,555		2,387		808		1,579		143		2,212		48
Municipal		36		36		36		-