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 March 31, 2024

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 May 13, 2024, the issuer had outstanding 5,473,867 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 - 26
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33 – 35
Item 4.	Controls and Procedures	35
	PART II
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	36
	Signature Page	37

1

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

LANDMARK BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)	March 31,			December 31,
	2024			2023
	(Unaudited)
Assets
Cash and cash equivalents	$	16,468		$	27,101
Interest-bearing deposits at other banks		4,920			4,918
Investment securities available-for-sale, at fair value		437,276			452,769
Investment securities, held-to-maturity, net of allowance for credit losses of $91 and $91, fair value of $3,104 and $3,049		3,584			3,555
Bank stocks, at cost		7,850			8,123
Loans, net of allowance for credit losses of $10,851 and $10,608		952,611			937,619
Loans held for sale, at fair value		2,697			853
Bank owned life insurance		38,578			38,333
Premises and equipment, net		20,696			19,709
Goodwill		32,377			32,377
Other intangible assets, net		3,071			3,241
Mortgage servicing rights		2,977			3,158
Real estate owned, net		428			928
Accrued interest and other assets		29,684			28,988
Total assets	$	1,553,217		$	1,561,672
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest-bearing demand	$	364,386		$	367,103
Money market and checking		583,315			613,613
Savings		154,000			152,381
Certificates of deposit		191,823			183,154
Total deposits		1,293,524			1,316,251
Federal Home Loan Bank and other borrowings		74,716			64,662
Subordinated debentures		21,651			21,651
Repurchase agreements		15,895			12,714
Accrued interest and other liabilities		20,760			19,480
Total liabilities		1,426,546			1,434,758
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; 5,486,407 and 5,481,407 shares issued at March 31, 2024 and December 31, 2023, respectively		55			55
Additional paid-in capital		89,364			89,208
Retained earnings		55,912			54,282
Treasury stock, at cost; 12,540 and 3,812 shares at March 31, 2024 and December 31, 2023, respectively		(249	)		(75	)
Accumulated other comprehensive loss		(18,411	)		(16,556	)
Total stockholders’ equity		126,671			126,914
Total liabilities and stockholders’ equity	$	1,553,217		$	1,561,672

See accompanying notes to consolidated financial statements.

2

LANDMARK BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

	Three months ended
(Dollars in thousands, except per share amounts)	March 31,
	2024		2023
Interest income:
Loans	$	14,490	$	11,376
Investment securities:
Taxable		2,428		2,317
Tax-exempt		764		786
Interest-bearing deposits at banks		63		98
Total interest income		17,745		14,577
Interest expense:
Deposits		5,457		2,539
Federal Home Loan Bank and other borrowings		1,022		567
Subordinated debentures		412		364
Repurchase agreements		107		160
Total interest expense		6,998		3,630
Net interest income		10,747		10,947
Provision for credit losses		300		49
Net interest income after provision for credit losses		10,447		10,898
Non-interest income:
Fees and service charges		2,461		2,358
Gains on sales of loans, net		512		693
Increase in cash surrender value of bank owned life insurance		245		218
Other		182		226
Total non-interest income		3,400		3,495
Non-interest expense:
Compensation and benefits		5,532		5,542
Occupancy and equipment		1,390		1,369
Data processing		481		589
Amortization of mortgage servicing rights and other intangibles		412		461
Professional fees		647		491
Other		2,089		1,891
Total non-interest expense		10,551		10,343
Earnings before income taxes		3,296		4,050
Income tax expense		518		693
Net earnings	$	2,778	$	3,357
Earnings per share:
Basic (1)	$	0.51	$	0.61
Diluted (1)	$	0.51	$	0.61
Dividends per share (1)	$	0.21	$	0.20

(1) Per share amounts for the periods ended March 31, 2023 have been adjusted to give effect to the 5% stock dividend paid during December 2023.

See accompanying notes to consolidated financial statements.

3

LANDMARK BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three months ended
(Dollars in thousands)	March 31,
	2024			2023
Net earnings	$	2,778		$	3,357
Net unrealized holding (losses) gains on available-for-sale securities		(2,457	)		6,739
Income tax effect on net unrealized holding losses (gains)		602			(1,651	)
Other comprehensive (loss) gains		(1,855	)		5,088
Total comprehensive income	$	923		$	8,445

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 (loss)			Total
Balance at December 31, 2022	$	52	$	84,273	$	52,174		$	-		$	(25,066	)	$	111,433
Cumulative effect of change in accounting
principle from implementation of ASU 2016-3		-		-		(1,204	)		-			-			(1,204	)
Balance at January 1, 2023	$	52	$	84,273	$	50,970		$	-		$	(25,066	)	$	110,229
Net earnings		-		-		3,357			-			-			3,357
Other comprehensive income		-		-		-			-			5,088			5,088
Dividends paid ($0.20 per share) (1)		-		-		(1,096	)		-			-			(1,096	)
Stock-based compensation		-		88		-			-			-			88
Exercise of stock options, 2,693 shares		-		52		-			-			-			52
Balance at March 31, 2023	$	52	$	84,413	$	53,231		$	-		$	(19,978	)	$	117,718
Balance at January 1, 2024	$	55	$	89,208	$	54,282		$	(75	)	$	(16,556	)	$	126,914
Net earnings		-		-		2,778			-			-			2,778
Other comprehensive loss		-		-		-			-			(1,855	)		(1,855	)
Dividends paid ($0.21 per share)		-		-		(1,148	)		-			-			(1,148	)
Issuance of restricted common stock, 5,000 shares		-		-		-			-			-			-
Stock-based compensation		-		156		-			-			-			156
Purhase of 8,728 shares treasury stock		-		-		-			(174	)		-			(174	)
Balance at March 31, 2024	$	55	$	89,364	$	55,912		$	(249	)	$	(18,411	)	$	126,671

(1) Dividends per share have been adjutsted to give effect to the 5% stock dividend paid during December 2023.

See Notes to Consolidate Finacial Statements

5

LANDMARK BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three months ended
(Dollars in thousands)	March 31
Cash flows from operating activities:	2024			2023
Net earnings	$	2,778		$	3,357
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for credit losses		300			49
Amortization of investment security premiums, net		99			102
Accretion of purchase accounting adjustments		(209	)		(176	)
Amortization of mortgage servicing rights and other intangibles		412			461
Depreciation		320			307
Increase in cash surrender value of bank owned life insurance		(245	)		(218	)
Stock-based compensation		156			88
Deferred income taxes		37			532
Net loss on sales of premises and equipment and foreclosed assets		9			-
Net gains on sales of loans		(512	)		(693	)
Proceeds from sales of loans		12,124			19,292
Origination of loans held for sale		(13,517	)		(18,053	)
Changes in assets and liabilities:
Accrued interest and other assets		(131	)		98
Accrued expenses, taxes, and other liabilities		1,230			(1,697	)
Net cash provided by operating activities		2,851			3,449
Cash flows from investing activities:
Net increase in loans		(15,062	)		(19,767	)
Net change in interest-bearing deposits at banks		-			493
Maturities and prepayments of investment securities		15,595			12,367
Purchases of investment securities		(2,660	)		(6,589	)
Redemption of bank stocks		3,553			2,011
Purchase of bank stocks		(3,280	)		(3,417	)
Proceeds from sales of premises and equipment and foreclosed assets		491			-
Purchases of premises and equipment, net		(1,307	)		(221	)
Net cash used in investing activities		(2,670	)		(15,123	)
Cash flows from financing activities:
Net decrease in deposits		(22,727	)		(6,626	)
Federal Home Loan Bank advance borrowings		204,398			209,670
Federal Home Loan Bank advance repayments		(194,012	)		(180,066	)
Proceeds from other borrowings		230			-
Repayments on other borrowings		(562	)		(333	)
Change in repurchase agreements		3,181			(9,319	)
Proceeds from exercise of stock options		-			52
Payment of dividends		(1,148	)		(1,096	)
Purchase of treasury stock		(174	)		-
Net cash (used in) provided by financing activities		(10,814	)		12,282
Net (decrease) increase in cash and cash equivalents		(10,633	)		608
Cash and cash equivalents at beginning of period		27,101			23,156
Cash and cash equivalents at end of period	$	16,468		$	23,764

(Continued)

6

LANDMARK BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

(Unaudited)

	Three months ended
(Dollars in thousands)	March 31,
	2024		2023
Supplemental disclosure of cash flow information:
Cash paid for interest		7,055		3,362
Cash paid for operating leases		39		42
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 30, 2024, 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 interim period ended March 31, 2024 are not necessarily indicative of the results expected for the year ending December 31, 2024 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 and held-to-maturity is as follows:

(Dollars in thousands)	As of March 31, 2024
			Gross		Gross
	Amortized		unrealized		unrealized			Estimated
	cost		gains		losses			fair value
Available-for-sale:
U. S. treasury securities	$	97,535	$	-	$	(3,852	)	$	93,683
Municipal obligations, tax exempt		121,586		77		(3,218	)		118,445
Municipal obligations, taxable		79,882		129		(4,640	)		75,371
Agency mortgage-backed securities		162,658		66		(12,947	)		149,777
Total available-for-sale	$	461,661	$	272	$	(24,657	)	$	437,276
Held-to-maturity:
Other	$	3,584	$	-	$	(480	)	$	3,104
Total held-to-maturity	$	3,584	$	-	$	(480	)	$	3,104

	As of December 31, 2023
			Gross		Gross
	Amortized		unrealized		unrealized			Estimated
	cost		gains		losses			fair value
Available-for-sale:
U. S. treasury securities	$	99,340	$	-	$	(3,673	)	$	95,667
Municipal obligations, tax exempt		122,775		186		(2,338	)		120,623
Municipal obligations, taxable		82,926		225		(4,068	)		79,083
Agency mortgage-backed securities		169,656		247		(12,507	)		157,396
Total available-for-sale	$	474,697	$	658	$	(22,586	)	$	452,769
Held-to-maturity:
Other	$	3,555	$	-	$	(506	)	$	3,049
Total held-to-maturity	$	3,555	$	-	$	(506	)	$	3,049

The amortized cost of the above held-to-maturity investment securities has been further reduced by the allowance for credit losses of $91,000 at March 31, 2024 and December 31, 2023.

8

The tables above show that some of the securities in the available-for-sale and held-to-maturity investment portfolios had unrealized losses, or were temporarily impaired, as of March 31, 2024 and December 31, 2023. This temporary impairment represents the estimated amount of loss that would be realized if the securities were sold on the valuation date.

The following table summarizes available-for-sale securities in an unrealized loss position for which an allowance for credit losses has not been recorded at March 31, 2024 and December 31, 2023 along with the length of time in a continuous loss position.

			As of March 31, 2024
(Dollars in thousands)			Less than 12 months					12 months or longer					Total
	No. of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Available-for-sale:	securities		value		losses			value		losses			value		losses
U.S. treasury securities		52	$	1,959	$	(4	)	$	91,724	$	(3,848	)	$	93,683	$	(3,852	)
Municipal obligations, tax exempt		267		22,079		(193	)		88,067		(3,025	)		110,146		(3,218	)
Municipal obligations, taxable		115		15,016		(243	)		55,090		(4,397	)		70,106		(4,640	)
Agency mortgage-backed securities		103		10,440		(21	)		128,458		(12,926	)		138,898		(12,947	)
Total for available-for-sale		537	$	49,494	$	(461	)	$	363,339	$	(24,196	)	$	412,833	$	(24,657	)

			As of December 31, 2023
			Less than 12 months					12 months or longer					Total
	No. of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Available-for-sale:	securities		value		losses			value		losses			value		losses
U.S. treasury securities		47	$	1,129	$	(7	)	$	93,833	$	(3,666	)	$	94,962	$	(3,673	)
Municipal obligations, tax exempt		229		31,468		(337	)		64,962		(2,001	)		96,430		(2,338	)
Municipal obligations, taxable		110		17,278		(151	)		52,212		(3,917	)		69,490		(4,068	)
Agency mortgage-backed securities		100		6,480		(68	)		128,512		(12,439	)		134,992		(12,507	)
Total for available-for-sale		486		56,355		(563	)		339,519		(22,023	)		395,874		(22,586	)

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 March 31, 2024 and December 31, 2023.

The Company’s portfolio of municipal obligations consists of both tax-exempt and taxable general obligations securities issued by various municipalities. As of March 31, 2024, 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 basis. 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 March 31, 2024 and December 31, 2023.

The Company’s agency mortgage-backed securities portfolio consists of securities underwritten to the standards of and guaranteed by the government-sponsored agencies of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“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 March 31, 2024 and December 31, 2023.

9

The Company’s other investment securities portfolio consists of seven subordinated debentures issued by financial institutions. These investment securities were acquired in the Freedom Bank acquisition and classified as held-to-maturity. The securities were issued in 2021 and 2022 with a 10 year maturity and a fixed rate for five years. The securities are callable after the end of the fixed rate term. The following table provides information on the Company’s allowance for credit losses related to held-to-maturity investment securities.

	Three months ended March 31,
(Dollars in thousands)	2024		2023
Balance at January 1,	$	91	$	-
Impact of adopting ASC 326		-		72
Provision for credit losses		-		19
Balance at March 31,	$	91	$	91

The table below sets forth amortized cost and fair value of investment securities at March 31, 2024. 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
Available-for-sale:	cost		fair value
Due in less than one year	$	43,396	$	42,807
Due after one year but within five years		216,817		204,500
Due after five years but within ten years		155,502		145,894
Due after ten years		45,946		44,075
Total available-for-sale	$	461,661	$	437,276
Held-to-maturity:
Due after one year but within five years		3,584		3,104
Total held-to-maturity	$	3,584	$	3,104

The Company did not record any sales of available-for-sale securities during the three months ended March 31, 2024 and 2023.

Securities with carrying values of $375.5 million and $380.4 million were pledged to secure public funds on deposit, repurchase agreements and as collateral for borrowings at March 31, 2024 and December 31, 2023, respectively. Except for U.S. federal agency obligations, no investment in a single issuer exceeded 10% of consolidated stockholders’ equity.

10

3. Loans and Allowance for Credit Losses

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

	March 31,			December 31,
(Dollars in thousands)	2024			2023
One-to-four family residential real estate loans	$	312,833		$	302,544
Construction and land loans		24,823			21,090
Commercial real estate loans		323,397			320,962
Commercial loans		181,945			180,942
Agriculture loans		86,808			89,680
Municipal loans		5,690			4,507
Consumer loans		28,544			28,931
Total gross loans		964,040			948,656
Net deferred loan fees and loans in process		(578	)		(429	)
Allowance for credit losses		(10,851	)		(10,608	)
Loans, net	$	952,611		$	937,619

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

	Three months ended March 31, 2024
(Dollars in thousands)	One-to-four family residential real estate loans		Construction and land loans		Commercial real estate loans		Commercial loans		Agriculture loans			Municipal loans	Consumer loans	Total
Allowance for credit losses:
Balance at January 1, 2024	$	2,035	$	150	$	4,518	$	2,486	$	1,190	</