Landmark Bancorp (LARK) Q2 2024 earnings summary

Executive summary

• Net earnings for Q2 2024 were $3.0 million, down 10.4% year-over-year, with EPS of $0.55 and ROAE of 9.72%; six-month net earnings were $5.8 million, down 13.8% from 2023.

• Core performance was strong, driven by loan growth, higher net interest and non-interest income, and well-controlled expenses.

• A $979,000 pre-tax valuation adjustment on a former branch reduced net income by $739,000 after tax ($0.13–$0.14 per share).

• Board declared a $0.21 per share quarterly dividend, marking the 92nd consecutive quarterly dividend.

• Asset quality remains strong, with a diversified loan portfolio and allowance for credit losses at $10.9 million (1.11% of gross loans).

Financial highlights

• Net income increased to $3.0 million from $2.8 million in Q1 2024, but down from $3.4 million in Q2 2023; EPS was $0.55.

• Net interest income grew 2.1% sequentially to $11.0 million; net interest margin expanded to 3.21%.

• Non-interest income rose 9.4% sequentially to $3.7 million, mainly from higher fees and mortgage gains, but declined 2.9% year-over-year.

• Non-interest expense was $11.1 million, up due to the branch valuation adjustment; core expenses declined.

• Gross loans increased $16.5 million (6.9% annualized) to $980.6 million; deposits decreased $43 million to $1.3 billion.

Outlook and guidance

• Management expects continued strong core performance, with focus on loan and fee business, especially in Kansas City.

• No significant or non-core expenditures anticipated in the next quarter or two.

• Lower short-term rates expected to benefit net interest margin due to liability sensitivity.

• Management expects continued profitability and strong capital base but notes future dividends depend on economic and company performance.

• Interest rate environment and competition for deposits may pressure net interest margin.