Business Overview Landmark Bancorp Inc (LARK) is a financial holding company headquartered in Manhattan, Kansas, with its primary subsidiary, Landmark National Bank, serving customers across the state. Landmark has a rich history dating back to its origins as Landmark Federal Savings & Loan Association, which was founded in 1885. Over the decades, the company has evolved and expanded its footprint, becoming a publicly traded bank holding company in 2001 and making strategic acquisitions to strengthen its community banking franchise.
Landmark Bancorp's success is rooted in its deep commitment to the local communities it serves. The company operates 30 banking centers across 24 communities in Kansas, providing a comprehensive suite of personal and business banking products and services. Landmark has cultivated a strong relationship-based model, catering to the unique needs of its retail, commercial, and agricultural customers.
Landmark's history is marked by significant growth and expansion. Since its establishment as Landmark Federal Savings & Loan in Manhattan, Kansas in 1885, the company has strategically expanded its footprint across central, eastern, southeast, and southwest Kansas through both organic growth and acquisitions. This expansion has allowed Landmark to serve a diverse range of communities and customers throughout the state.
The company's resilience has been demonstrated through its ability to navigate various challenges common to the banking industry. Landmark successfully weathered the 2008 financial crisis and the COVID-19 pandemic, showcasing its adaptability and strong risk management practices. This resilience has been a key factor in the company's long-term success and stability.
Landmark's commitment to shareholder value is evident in its impressive dividend history. The company has paid a cash dividend to shareholders for 93 consecutive quarters since its formation as a holding company in 2001. Additionally, Landmark has issued a 5% stock dividend for 24 consecutive years, further highlighting its dedication to creating value for its shareholders.
In 2022, Landmark made a strategic move to enhance its presence in the Kansas City metropolitan area by acquiring Freedom Bancshares, Inc., the holding company of Freedom Bank. This acquisition allowed Landmark to expand its reach and leverage its expertise in serving business owners and professionals in the dynamic Kansas City market.
Landmark's loan portfolio is well-diversified, with a significant focus on commercial real estate (CRE), commercial and industrial (C&I), and agricultural lending. As of December 31, 2024, the company's gross loan portfolio stood at $1.052 billion, a testament to its ability to generate consistent loan growth. The bank's credit quality has remained strong, with non-performing loans accounting for just 1.24% of the total loan portfolio.
Financial Highlights Landmark's financial performance has been consistently solid, with the company reporting net income of $13 million for the full year 2024, representing a 6.3% increase from the prior year. This translated to diluted earnings per share of $2.26, up from $2.13 in 2023. For the fourth quarter of 2024, Landmark reported net income of $3.3 million, driven by strong loan growth and higher net interest income. Diluted earnings per share for Q4 2024 was $0.57, an increase of 25% over the same quarter last year.
The company's net interest income grew by 6% to $45.7 million in 2024, driven by strong loan growth and disciplined pricing on both the asset and liability sides of the balance sheet. Landmark's net interest margin expanded to 3.21% in 2024, up from 3.19% in the previous year. In Q4 2024, the net interest margin increased further to 3.51%, a 21 basis point improvement.
Noninterest income also saw a healthy increase of 13% in 2024, reaching $11.4 million, primarily due to higher fees and service charges on deposit accounts. Landmark's efficiency ratio improved to 70.0% in the fourth quarter of 2024, reflecting the company's focus on operational excellence.
For the full year 2023, Landmark reported annual revenue of $56.52 million and annual net income of $12.24 million. The company's annual operating cash flow for 2023 was $12.60 million, with annual free cash flow of $11.61 million. In the most recent quarter (Q3 2024), Landmark reported revenue of $15.85 million and net income of $3.93 million, representing a year-over-year growth of 36.6% compared to Q3 2023.
Landmark's loan portfolio growth has been impressive, with the company adding $103.7 million in new loans in 2024. In Q4 2024 alone, total gross loans increased by $50.5 million or 20% on an annualized basis, reaching a new record high of nearly $1.1 billion. Deposit balances also increased by $53 million in Q4 2024.
Liquidity and Capital Position Landmark's balance sheet remains well-capitalized, with a leverage ratio of 9.1% and a total risk-based capital ratio of 13.5% as of December 31, 2024, both exceeding regulatory requirements for well-capitalized institutions. The company's strong capital position and liquidity profile provide a solid foundation for future growth and shareholder value creation.
As of December 31, 2023, Landmark reported a debt-to-equity ratio of 0.78, indicating a relatively conservative capital structure. The company's cash position stood at $27.10 million, with a current ratio and quick ratio both at 1.17, demonstrating strong short-term liquidity.
Landmark has access to additional liquidity through a $5 million line of credit from an unrelated financial institution, maturing on November 1, 2025, which was undrawn as of September 30, 2024. The company also maintains a line of credit with the Federal Home Loan Bank (FHLB) with $86.40 million in borrowings as of September 30, 2024, and an available borrowing capacity of $184.50 million.
Prudent Risk Management Landmark's approach to risk management has been a key driver of its consistent performance. The company closely monitors its loan portfolio, with a particular focus on its CRE and agricultural exposures, which represent over 50% of the total loan book. Landmark's proactive credit risk assessment and disciplined underwriting have resulted in low levels of non-performing assets, which stood at just 1.24% of total assets as of year-end 2024.
As of September 30, 2024, the company had $13.41 million in non-accrual loans, representing 1.34% of total gross loans. Additionally, Landmark had $428,000 in real estate owned, which primarily consisted of undeveloped land and residential real estate properties. The company maintains an allowance for credit losses to cover expected losses in its loan portfolio. As of September 30, 2024, the allowance for credit losses on loans totaled $11.54 million, or 1.15% of total gross loans.
In addition to its credit risk management, Landmark actively manages its interest rate risk through the use of simulation models and prudent asset-liability management strategies. The company's loan portfolio is well-positioned to withstand potential changes in the interest rate environment, with approximately 30% of the loan book expected to reprice in 2025.
Growth Initiatives and Outlook Looking ahead, Landmark remains focused on executing its strategic priorities, which include continuing to grow its commercial lending business, expanding its presence in the Kansas City metropolitan area, and enhancing its digital capabilities to better serve its customer base.
The company's pipeline of commercial loan opportunities remains robust, and Landmark is well-positioned to capitalize on the economic growth in its markets. The integration of the Freedom Bank acquisition has been progressing smoothly, and Landmark expects to continue to benefit from the expanded customer base and product offerings in the Kansas City region.
Landmark's management team is also committed to investing in technology and digital solutions to improve the customer experience and drive operational efficiencies. The company's focus on delivering exceptional service and tailored financial solutions to its clients has been a key differentiator in the competitive community banking landscape.
Landmark's loan portfolio is diversified across various types of loans, including one-to-four family residential real estate loans, construction and land loans, commercial real estate loans, commercial loans, agriculture loans, municipal loans, and consumer loans. As of September 30, 2024, one-to-four family residential real estate loans represented the largest portion of the portfolio at $344.38 million (34.4% of total gross loans), followed by commercial real estate loans at $324.02 million (32.4%), commercial loans at $181.65 million (18.2%), and agriculture loans at $91.99 million (9.2%).
The company's Board of Directors recently declared a cash dividend of $0.21 per share to be paid on March 5, 2025, further demonstrating Landmark's commitment to returning value to shareholders.
Conclusion Landmark Bancorp has established itself as a well-respected and financially sound community banking franchise in the state of Kansas. The company's consistent financial performance, prudent risk management, and strategic growth initiatives position it well to continue building value for its shareholders. With a strong balance sheet, diversified loan portfolio, and dedicated workforce, Landmark is poised to navigate the evolving banking environment and capitalize on opportunities in its target markets.