Landmark Bancorp, Inc. Announces Fourth Quarter Earnings Per Share of $0.23. Declares Cash Dividend of $0.21 per Share

Manhattan, KS, Jan. 31, 2023 (GLOBE NEWSWIRE) — Landmark Bancorp, Inc. (“Landmark”; Nasdaq: LARK) reported diluted earnings per share of $0.23 for the three months ended December 31, 2022, compared to $0.48 per share in the third quarter of 2022 and $0.60 per share in the same quarter last year. Net earnings for the fourth quarter of 2022 amounted to $1.2 million, compared to $2.5 million in the prior quarter and $3.1 million for the fourth quarter of 2021. For the three months ended December 31, 2022, the return on average assets was 0.32%, the return on average equity was 4.50%, and the efficiency ratio was 66.8%. Effective October 1, 2022, Landmark completed its acquisition of Freedom Bancshares, Inc. (“Freedom”), and Freedom’s results of operations are included in Landmark’s fourth quarter results. Excluding acquisition costs of $3.0 million, adjusted net earnings for the fourth quarter of 2022 would have been $3.5 million or $0.67 of diluted earnings per share, while the return on average assets would have been 0.92%, and the return on average equity would have been 13.04%. The adjusted results excluding acquisition costs are a non-GAAP financial measure to make the periods more comparable.

For the year ended December 31, 2022, diluted earnings per share totaled $1.88 compared to $3.42 during 2021. Net earnings for 2022 amounted to $9.9 million, compared to $18.0 million in 2021. For the year ended December 31, 2022, the return on average assets was 0.73% and the return on average equity was 8.25%. Excluding the acquisition costs mentioned above, the adjusted net earnings for 2022 would have been $12.4 million or $2.37 of diluted earnings per share, while the adjusted return on average assets and the return on average equity would have been 0.92% and 10.39%, respectively.

In making this announcement, Michael E. Scheopner, President and Chief Executive Officer of Landmark, said, “We are pleased with the assimilation of Freedom’s associates and customers to date, and our core system conversion is scheduled for late first quarter which will provide opportunities for additional synergies. While our fourth quarter results were impacted by costs associated with the acquisition and losses on sales of investment securities, these strategic moves position us well for 2023 and beyond. Loan growth remained strong during the fourth quarter, and we experienced solid growth in net interest income over the prior quarter. Deposits also increased this quarter. Compared to the third quarter 2022 and excluding $118.0 million of loans acquired in connection with the acquisition of Freedom, total gross loans increased by $20.8 million, or 11.6% on an annualized basis. Net interest income also grew by 25.8% while our net interest margin increased to 3.53% during the fourth quarter of 2022. Non-interest income declined $1.8 million compared to the same period last year mostly the result of lower gains on sales of residential mortgage loans. We also recorded a $750,000 loss on sale of lower yielding investment securities that we had strategically sold this quarter. Excluding the $150.4 million of deposits assumed in the acquisition from Freedom, deposit balances increased by $33.1 million, or 11.7% on an annualized basis, as compared to September 30, 2022.”

Mr. Scheopner continued, “Credit quality remains very strong and non-accrual loans and delinquencies continue to decline. Landmark recorded net loan charge-offs of $67,000 in the fourth quarter of 2022 compared to net loan recoveries of $43,000 in the prior quarter and $9,000 in the fourth quarter of 2021. Non-accrual loans totaled $3.3 million or 0.39% of gross loans at December 31, 2022 and have declined $1.9 million over the last twelve months. Also, the balance of loans past due 30 to 89 days remained low. The allowance for loan losses totaled $8.8 million at December 31, 2022, or 1.03% of period end loans. Our equity to assets ratio totaled 7.41% while loans to deposits totaled 64.7%.”

Total assets at December 31, 2022 were $1.5 billion, total gross loans were $850.2 million and total deposits were $1.3 billion. On October 1, 2022, Landmark completed the acquisition of Freedom, a one-bank holding company with gross loans of $118.0 million and deposits of $150.4 million. Landmark’s newest branch, acquired from this acquisition, is in Overland Park, Kansas and expands our presence in the Kansas City market.

Landmark’s Board of Directors declared a cash dividend of $0.21 per share, to be paid March 1, 2023, to common stockholders of record as of the close of business on February 15, 2023.

Management will host a conference call to discuss the Company’s financial results at 10:00 a.m. (Central time) on Wednesday, February 1, 2023. Investors may participate via telephone by dialing (844) 200-6205 and using access code 653744. A replay of the call will be available through March 2, 2023, by dialing (866) 813-9403 and using access code 490365.

SUMMARY OF FOURTH QUARTER RESULTS

Net Interest Income

Net interest income amounted to $11.9 million for the three months ended December 31, 2022, an increase of $2.8 million, or 30.1% over the fourth quarter of 2021. The growth in net interest income compared with the same period last year was the result of growth in interest income of $4.8 million partially offset by an increase in interest expense of $2.0 million. The increase in interest income was mainly the result of higher rates and balances of both loans and investment securities while growth in interest-bearing liabilities and higher rates resulted in increased interest expense. Total gross loans totaled increased $187.8 million (includes $118.0 of acquired Freedom loans) in the fourth quarter of 2022 to $850.2 million compared to the same period last year while loan yields increased to 5.29%. Investment securities balances also increased by $108.6 million compared to the fourth quarter of 2021 and the tax- equivalent yield on these balances grew to 2.56%. Total deposits grew by $152.2 million (including Freedom acquired deposits of $150.4 million) over the same period last year while other borrowings also grew by $39.2 million. The average rate on interest-bearing liabilities increased this quarter to 0.99% compared to 0.17% last year in the fourth quarter and 0.55% in the prior quarter. Average net interest-earning assets increased $190.7 million to $1.4 billion this quarter compared to the same period last year. On a tax-equivalent basis, the net interest margin totaled 3.53% in the fourth quarter of 2022, compared to 3.21% in the prior quarter and 3.17% in the fourth quarter of 2021.

Non-Interest Income

Non-interest income totaled $2.8 million for the fourth quarter of 2022, a decrease of $1.8 million, or 38.8%, compared to the same period last year and $717,000, or 20.3%, from the previous quarter. The decrease in non-interest income during the fourth quarter of 2022 compared to the same period last year was primarily due to a decline of $1.4 million in gains on sales of one-to-four family residential real estate loans as higher interest rates and low housing inventories reduced originations of these fixed rate loans compared to the prior quarter and the same quarter last year. Higher mortgage rates, however, resulted in an increase in originations of adjustable-rate loans in the fourth quarter of 2022. Fees and service charges increased $169,000, or 7.0%, over the same period last year and increased $61,000 compared to the prior quarter mainly due to increased deposit-related income. Losses of $750,000 and $353,000 were recorded in the fourth and third quarters of 2022, respectively, on the sale of certain low yielding investment securities in our portfolio.

Non-Interest Expense

During the fourth quarter of 2022, non-interest expense totaled $14.0 million, an increase of $4.4 million, or 46.1%, over the same period in 2021 and $4.5 million, or 47.5% higher than in the prior quarter. The increase in non-interest expense was primarily due to $3.0 million of acquisition costs in the fourth quarter of 2022 compared to $134,000 in the prior quarter and none in the same period of 2021. Higher costs for compensation and benefits, occupancy and equipment and other non-interest expenses were primarily due to the costs associated with operating a new branch facility from the Freedom acquisition this quarter, while amortization expense increased due to the core deposit intangible recorded for the acquisition. During the fourth quarter of 2022, a valuation allowance of $354,000 was recorded on real estate owned and was included in other non-interest expense.

Income Tax Expense

Landmark recorded an income tax benefit of $466,000 in the fourth quarter of 2022 compared to income tax expense of $522,000 in the third quarter of 2022 and $1.0 million in the fourth quarter of 2021. The effective tax rate decreased to (62.5%) in the fourth quarter of 2022 compared to 24.8% in the fourth quarter of 2021 and 17.3% in the third quarter of 2022. The fourth quarter of 2022 included the recognition of $465,000 of previously unrecognized tax benefits, which reduced the effective tax rate in the period.

Balance Sheet Highlights

As of December 31, 2022, gross loans totaled $850.2 million, an increase of $138.9 million since September 30, 2022. The growth in loans was primarily due to the acquisition of Freedom’s $118.0 million loan portfolio coupled with core growth of $20.9 million in loans this quarter. During the quarter, loan growth was comprised of commercial real estate (growth of $75.4 million), commercial (growth of $28.8 million), residential real estate (growth of $31.5 million), and construction loans (growth of $4.6 million). Investment securities increased $8.7 million, during the fourth quarter of 2022, however gross unrealized net losses on these investment securities decreased from $41.0 million at September 30, 2022 to $33.2 million at December 31, 2022. Excluding the $150.4 million of deposits assumed in the Freedom acquisition, deposit balances increased $33.1 million, or 11.7% on an annualized basis, to $1.3 billion at December 31, 2022. The increase in deposits was mainly driven by seasonal growth in public fund deposit accounts. Other borrowings increased by $22.1 million this quarter, primarily due to $22.2 million of repurchase agreements assumed in the Freedom acquisition. At December 31, 2022, the loan to deposits ratio was 64.7% compared to 62.9% in the prior quarter and 56.9% in the same period last year.

Stockholders’ equity increased to $111.4 million (book value of $21.38 per share) as of December 31, 2022, from $105.5 million (book value of $20.20 per share) as of September 30, 2022, due mainly to a decrease in other comprehensive losses during the fourth quarter of 2022 related to the decline in the unrealized losses on investment securities mentioned above. The ratio of equity to total assets decreased to 7.41% on December 31, 2022, from 7.78% at September 30, 2022.

The allowance for loan losses totaled $8.8 million, or 1.03% of total gross loans on December 31, 2022, compared to $8.9 million, or 1.25% of total gross loans on September 30, 2022. Net loan charge-offs totaled $67,000 in the fourth quarter of 2022, compared to net loan recoveries of $9,000 during the same quarter last year and $43,000 during the third quarter of 2022. The ratio of annualized net loan charge-offs to total average loans was 0.03% in the fourth quarter of 2022, (0.01%) in the fourth quarter of last year and (0.02%) in the prior quarter. No provision for loan losses was made in either the fourth quarter of 2022 or 2021. A $500,000 provision for loan losses was recorded in the third quarter of 2022 primarily due to the growth in loans during the quarter.

Non-performing loans totaled $3.3 million, or 0.39% of gross loans, while loans 30-89 days delinquent totaled $738,000, or 0.09% of gross loans, as of December 31, 2022. Real estate owned totaled $0.9 million at December 31, 2022.

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.

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; (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; (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; (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 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) declines in the value of our investment portfolio; (xix) the ability to raise additional capital; (xx) cyber-attacks; (xxi) declines in real estate values; (xxii) the effects of fraud on the part of our employees, customers, vendors or counterparties; and (xxiii) 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,  
    2022     2022     2022     2022     2021  
Assets                                        
Cash and cash equivalents   $ 23,156     $ 49,234     $ 30,413     $ 106,319     $ 189,213  
Interest-bearing deposits at other banks     9,084       8,844       8,360       6,381       7,378  
Investment securities:                                        
U.S. treasury securities     123,111       127,445       135,459       119,882       42,675  
U.S. federal agency obligations     1,988       4,979       14,931       17,013       17,195  
Municipal obligations, tax exempt     127,262       128,392       134,994       130,915       137,984  
Municipal obligations, taxable     67,244       61,959       49,356       45,586       40,046  
Agency mortgage-backed securities     169,701       161,331       151,893       153,587       142,817  
Investment securities available-for-sale, at fair value     489,306       484,106       486,633       466,983       380,717  
Investment securities held-to-maturity     3,524                          
Bank stocks, at cost     5,470       6,641       2,881       2,856       2,905  
Loans:                                        
One-to-four family residential real estate     236,982       205,466       192,517       169,514       166,081  
Construction and land     22,725       18,119       23,092       25,408       27,644  
Commercial real estate     304,074       228,669       209,879       196,736       198,472  
Commercial     173,415       144,582       137,929       127,226       132,154  
Paycheck Protection Program (PPP)     21       410       652       5,218       17,179  
Agriculture     84,283       86,114       78,240       82,484       94,267  
Municipal     2,026       2,036       2,076       2,212       2,050  
Consumer     26,664       25,911       25,531       24,751       24,541  
Total gross loans     850,190       711,307       669,916       633,549       662,388  
Net deferred loan (fees) costs and loans in process     (250 )     (311 )     229       (43 )     (380 )
Allowance for loan losses     (8,791 )     (8,858 )     (8,315 )     (8,357 )     (8,775 )
Loans, net     841,149       702,138       661,830       625,149       653,233  
Loans held for sale     2,488       2,741       6,264       5,424       4,795  
Bank owned life insurance     37,323       32,672       32,483       32,293       32,106  
Premises and equipment, net     24,327       20,628       20,679       20,919       20,803  
Goodwill     32,199       17,532       17,532       17,532       17,532  
Other intangible assets, net     4,006       36       52       67       84  
Mortgage servicing rights     3,813       3,980       4,025       4,128       4,193  
Real estate owned, net     934       1,288       1,288       1,288       2,551  
Other assets     26,088       25,456       19,911       17,095       13,458  
Total assets   $ 1,502,867     $ 1,355,296     $ 1,292,351     $ 1,306,434     $ 1,328,968  
                                         
Liabilities and Stockholders’ Equity                                        
Liabilities:                                        
Deposits:                                        
Non-interest-bearing demand     410,142       347,942       343,107       350,342       350,005  
Money market and checking     626,659       504,973       520,056       517,936       536,868  
Savings     170,570       170,988       170,419       167,823       155,501  
Certificates of deposit     93,278       93,234       97,885       103,464       106,107  
Total deposits     1,300,649       1,117,137       1,131,467       1,139,565       1,148,481  
Federal Home Loan Bank borrowings     8,200       74,900                    
Subordinated debentures     21,651       21,651       21,651       21,651       21,651  
Other borrowings     38,402       16,349       6,223       7,004       7,403  
Accrued interest and other liabilities     22,532       19,775       15,708       14,701       15,790  
Total liabilities     1,391,434       1,249,812       1,175,049       1,182,921       1,193,325  
Stockholders’ equity:                                        
Common stock     52       50       50       50       50  
Additional paid-in capital     84,273       79,329       79,284       79,206       79,120  
Retained earnings     52,174       58,114       56,662       54,677       52,593  
Treasury stock, at cost           (1,040 )     (538 )            
Accumulated other comprehensive (loss) income     (25,066 )     (30,969 )     (18,156 )     (10,420 )     3,880  
Total stockholders’ equity     111,433       105,484       117,302       123,513       135,643  
Total liabilities and stockholders’ equity   $ 1,502,867     $ 1,355,296     $ 1,292,351     $ 1,306,434     $ 1,328,968  


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,  
    2022     2022     2021     2022     2021  
Interest income:                                        
Loans   $ 11,101     $ 8,025     $ 7,907     $ 33,473     $ 33,612  
Investment securities:                                        
Taxable     2,356       1,783       836       6,735       3,192  
Tax-exempt     786       780       737       3,018       3,022  
Total interest income     14,243       10,588       9,480       43,226       39,826  
Interest expense:                                        
Deposits     1,452       771       223       2,776       1,023  
Borrowed funds     905       366       121       1,570       483  
Total interest expense     2,357       1,137       344       4,346       1,506  
Net interest income     11,886       9,451       9,136       38,880       38,320  
Provision for loan losses           500                   500  
Net interest income after provision for loan losses     11,886       8,951       9,136       38,880       37,820  
Non-interest income:                                        
Fees and service charges     2,572       2,511       2,403       9,651       8,857  
Gains on sales of loans, net     417       1,049       1,823       3,444       10,487  
Bank owned life insurance     214       189       192       780       686  
(Losses) gains on sales of investment securities, net     (750 )     (353 )           (1,103 )     1,138  
Other     359       133       180       928       1,093  
Total non-interest income     2,812       3,529       4,598       13,700       22,261  
Non-interest expense:                                        
Compensation and benefits     5,626       5,051       5,061       20,405       20,157  
Occupancy and equipment     1,373       1,335       1,214       5,118       4,482  
Data processing     495       383       525       1,580       2,016  
Amortization of mortgage servicing rights and other intangibles     481       314       376       1,446       1,601  
Professional fees     554       472       595       1,892       1,831  
Acquisition costs     3,043       134             3,398        
Other     2,380       1,769       1,779       7,431       7,169  
Total non-interest expense     13,952       9,458       9,550       41,270       37,256  
Earnings before income taxes     746       3,022       4,184       11,310       22,825  
Income tax expense     (466 )     522       1,037       1,432       4,814  
Net earnings   $ 1,212     $ 2,500     $ 3,147     $ 9,878     $ 18,011  
                                         
Net earnings per share (1)                                        
Basic   $ 0.23     $ 0.48     $ 0.60     $ 1.89     $ 3.43  
Diluted     0.23       0.48       0.60       1.88       3.42  
Dividends per share (1)     0.20       0.20       0.18       0.80       0.73  
Shares outstanding at end of period (1)     5,213,232       5,221,966       5,247,332       5,213,232       5,247,332  
Weighted average common shares outstanding – basic (1)     5,214,698       5,228,270       5,247,294       5,230,749       5,244,273  
Weighted average common shares outstanding – diluted (1)     5,228,490       5,242,073       5,267,143       5,245,765       5,259,035  
                                         
Tax equivalent net interest income   $ 12,089     $ 9,657     $ 9,335     $ 39,680     $ 39,136  

(1 ) Share and per share values at or for the periods ended September 30, 2022 and December 31, 2021 have been adjusted to give effect to the 5% stock dividend paid during  December 2022.


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


    As of or for the     As of or for the  
(Dollars in thousands, except per share amounts)   three months ended,     year ended,  
    December 31,     September 30,     December 31,     December 31,     December 31,  
    2022     2022     2021     2022     2021  
Performance ratios:                                        
Return on average assets (1)     0.32 %     0.77 %     0.98 %     0.73 %     1.43 %
Return on average equity (1)     4.50 %     8.42 %     9.25 %     8.25 %     13.68 %
Net interest margin (1)(2)     3.53 %     3.21 %     3.17 %     3.21 %     3.39 %
Effective tax rate     -62.5 %     17.3 %     24.8 %     12.7 %     21.1 %
Efficiency ratio (3)     66.8 %     69.6 %     68.3 %     69.4 %     61.8 %
Non-interest income to total income (3)     23.1 %     29.1 %     33.6 %     27.4 %     35.5 %
                                         
Average balances:                                        
Investment securities   $ 504,495     $ 494,283     $ 383,508     $ 474,732     $ 343,059  
Loans     832,285       687,716       652,691       702,247       689,908  
Assets     1,507,454       1,307,866       1,276,079       1,357,479       1,255,696  
Interest-bearing deposits     850,041       782,533       758,061       804,146       765,537  
Subordinated debentures and other borrowings     65,521       37,532       21,651       36,712       21,653  
Repurchase agreements     31,533       7,411       7,982       13,239       5,915  
Stockholders’ equity   $ 106,782     $ 119,100       135,015     $ 119,792       131,654  
                                         
Average tax equivalent yield/cost (1):                                        
Investment securities     2.56 %     2.18 %     1.77 %     2.15 %     1.99 %
Loans     5.29 %     4.63 %     4.81 %     4.77 %     4.88 %
Total interest-bearing assets     4.22 %     3.59 %     3.29 %     3.56 %     3.52 %
Interest-bearing deposits     0.68 %     0.39 %     0.12 %     0.35 %     0.13 %
Subordinated debentures and other borrowings     4.83 %     3.58 %     2.14 %     3.88 %     2.18 %
Repurchase agreements     1.36 %     1.45 %     0.20 %     1.10 %     0.19 %
Total interest-bearing liabilities     0.99 %     0.55 %     0.17 %     0.51 %     0.19 %
                                         
Capital ratios:                                        
Equity to total assets     7.41 %     7.78 %     10.21 %                
Tangible equity to tangible assets (3)     5.13 %     6.57 %     9.00 %                
Book value per share   $ 21.38     $ 20.20     $ 25.85                  
Tangible book value per share (3)   $ 14.43     $ 16.84     $ 22.49                  
                                         
Rollforward of allowance for loan losses:                                        
Beginning balance   $ 8,858     $ 8,315     $ 8,766     $ 8,775     $ 8,775  
Charge-offs     (101 )     (106 )     (70 )     (336 )     (978 )
Recoveries     34       149       79       352       478  
Provision for loan losses           500                   500  
Ending balance   $ 8,791     $ 8,858     $ 8,775     $ 8,791     $ 8,775  
                                         
Non-performing assets:                                        
Non-accrual loans   $ 3,326     $ 4,823     $ 5,230                  
Accruing loans over 90 days past due                                  
Real estate owned     934       1,288       2,551                  
Total non-performing assets   $ 4,260     $ 6,111     $ 7,781                  
                                         
Loans 30-89 days delinquent   $ 738     $ 657     $ 1,990                  
                                         
Other ratios:                                        
Loans to deposits     64.67 %     62.85 %     56.88 %                
Loans 30-89 days delinquent and still accruing to gross loans outstanding     0.09 %     0.09 %     0.30 %                
Total non-performing loans to gross loans outstanding     0.39 %     0.68 %     0.79 %                
Total non-performing assets to total assets     0.28 %     0.45 %     0.59 %                
Allowance for loan losses to gross loans outstanding     1.03 %     1.25 %     1.32 %                
Allowance for loan losses to gross loans outstanding excluding PPP loans     1.03 %     1.25 %     1.36 %                
Allowance for loan losses to total non-performing loans     264.31 %     183.66 %     167.78 %                
Net loan charge-offs to average loans (1)     0.03 %     -0.02 %     -0.01 %     0.00 %     0.07 %

(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)


    As of or for the     As of or for the  
(Dollars in thousands, except per share amounts)   three months ended,     Year ended,  
    December 31,     September 30,     December 31,     December 31,     December 31,  
    2022     2022     2021     2022     2021  
                               
Non-GAAP earnings reconciliation:                                        
Net earnings   $ 1,212     $ 2,500     $ 3,147     $ 9,878     $ 18,011  
Add: acquisition costs     3,043       134             3,398        
Less: income tax expense (effective tax rate of 24.5%)     (746 )     (33 )           (833 )      
Adjusted net earnings (A)   $ 3,509     $ 2,601     $ 3,147     $ 12,443     $ 18,011  
                                         
Weighted average common shares outstanding – diluted (B)     5,228,490       5,242,073       5,267,143       5,245,765       5,259,035  
                                         
Adjusted diluted net earnings per share (A/B)   $ 0.67     $ 0.50     $ 0.60     $ 2.37     $ 3.42  
Adjusted return on average assets (1)     0.92 %     0.79 %     0.98 %     0.92 %     1.43 %
Adjusted return on average equity (1)     13.04 %     8.66 %     9.25 %     10.39 %     13.68 %

(1 ) Information is annualized.

Non-GAAP financial ratio reconciliation:                                        
Total non-interest expense   $ 13,952     $ 9,458     $ 9,550     $ 41,270     $ 37,256  
Less: foreclosure and real estate owned expense     (393 )     (32 )     (124 )     (457 )     (415 )
Less: amortization of other intangibles     (200 )     (16 )     (20 )     (248 )     (102 )
Less: acquisition costs     (3,043 )     (134 )           (3,398 )      
Adjusted non-interest expense (A)     10,316       9,276       9,406       37,167       36,739  
                                         
Net interest income (B)     11,886       9,451       9,136       38,880       38,320  
                                         
Non-interest income     2,812       3,529       4,598       13,700       22,261  
Less: losses (gains) on sales of investment securities, net     750       353             1,103       (1,138 )
Less: gains on sales of premises and equipment and foreclosed assets                 28       (114 )     4  
Adjusted non-interest income (C)   $ 3,562     $ 3,882     $ 4,626     $ 14,689     $ 21,127  
                                         
Efficiency ratio (A/(B+C))     66.8 %     69.6 %     68.3 %     69.4 %     61.8 %
Non-interest income to total income (C/(B+C))     23.1 %     29.1 %     33.6 %     27.4 %     35.5 %
                                         
Total stockholders’ equity   $ 111,433     $ 105,484     $ 135,643                  
Less: goodwill and other intangible assets     (36,205 )     (17,568 )     (17,616 )                
Tangible equity (D)   $ 75,228     $ 87,916     $ 118,027                  
                                         
Total assets   $ 1,502,867     $ 1,355,296     $ 1,328,968                  
Less: goodwill and other intangible assets     (36,205 )     (17,568 )     (17,616 )                
Tangible assets (E)   $ 1,466,662     $ 1,337,728     $ 1,311,352                  
                                         
Tangible equity to tangible assets (D/E)     5.13 %     6.57 %     9.00 %                
                                         
Shares outstanding at end of period (F)     5,213,232       5,221,966       5,247,332                  
                                         
Tangible book value per share (D/F)   $ 14.43     $ 16.84     $ 22.49                  

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