Landmark Bancorp(LARK) - 2024 Q3 - Quarterly Report

Financial Performance - Landmark Bancorp recorded net earnings of $3.9 million for Q3 2024, a 36.6% increase from$ 2.9 million in Q3 2023[105]. - Basic earnings per share rose to $0.72 in Q3 2024, compared to$ 0.53 in Q3 2023[106]. - Total non-interest income rose to $4.3 million in Q3 2024, an increase of$ 601,000 or 16.5% from Q3 2023, primarily driven by higher fees and service charges[121]. - Non-interest expense decreased to $10.6 million in Q3 2024, down by$ 170,000 or 1.6% compared to Q3 2023, mainly due to lower amortization and professional fees[123]. - The effective tax rate decreased from 18.9% in Q3 2023 to 18.1% in Q3 2024, attributed to increases in tax credits and tax-exempt income[125]. Interest Income and Margin - Interest income for Q3 2024 was $19.0 million, up 13.3% from the same period in 2023, driven by a 17.8% increase in loan interest income to$ 15.9 million[107]. - The net interest margin improved to 3.30% in Q3 2024 from 3.06% in Q3 2023, reflecting higher yields on interest-earning assets[111]. - Net interest income for the three months ended September 30, 2024, was $11,604 thousand, up from$ 10,626 thousand in the same period of 2023, representing an increase of 9.2%[114]. - The interest rate spread increased to 2.56% in September 2024, compared to 2.43% in September 2023, reflecting a positive trend in interest rates[114]. Assets and Liabilities - Total assets remained stable at $1.6 billion as of September 30, 2024, consistent with December 31, 2023[128]. - Total interest-bearing liabilities rose to$ 1,046,601 thousand in September 2024, up from $1,029,206 thousand in September 2023, indicating a growth of 1.7%[114]. - Total deposits decreased by$ 40.7 million, or 3.1%, to $1.3 billion at September 30, 2024, primarily due to seasonal fluctuations[134]. - Total borrowings increased by$ 24.2 million to $123.2 million at September 30, 2024, driven by an increase in FHLB borrowings to support loan growth[139]. Loans and Credit Quality - Loans receivable, net, totaled$ 1,419,665 thousand in September 2024, compared to $1,401,728 thousand in September 2023, marking an increase of 1.3%[114]. - The allowance for credit losses on loans increased to$ 11.5 million, or 1.15% of gross loans, as of September 30, 2024, compared to $10.6 million, or 1.12% at December 31, 2023[129]. - Loans past due 30-89 days increased to$ 7.3 million, or 0.73% of gross loans, as of September 30, 2024, compared to $1.6 million, or 0.17% at December 31, 2023[131]. - The provision for credit losses was$ 500,000 in Q3 2024, up from $0 in Q3 2023, indicating a significant increase in expected credit losses[119]. Capital and Dividends - The company declared a 5% stock dividend in October 2024, marking the 24th consecutive year of such dividends[103]. - The company paid a quarterly cash dividend of$ 0.21 per share during the quarter ended September 30, 2024[148]. - The company met all capital adequacy requirements as of September 30, 2024, and was considered "well capitalized" under regulatory standards[147]. Market Presence and Acquisitions - The company completed the acquisition of Freedom Bancshares, Inc. on October 1, 2022, expanding its market presence[102]. Cash Flow and Liquid Assets - Net cash provided by operating activities was $15.3 million, primarily due to net earnings[140]. - Total liquid assets amounted to$ 436.6 million as of September 30, 2024, down from $484.8 million at December 31, 2023[141]. - Cash and cash equivalents decreased by$ 5.9 million during the nine months ended September 30, 2024[140]. Interest Rate Sensitivity - Interest rate sensitivity simulations indicated a potential 13.0% decrease in net interest income with a 300 basis point rise in rates[154].