Landmark Bancorp (LARK) 2 May 242024 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Landmark Bancorp Inc. 2024 First Quarter Earnings Call. [Operator Instructions]I would now like to hand the conference call over to Abby Wendel, CEO. Please go ahead.

you. Thank morning. Good joining and for XXXX. today discuss to Thank results our for earnings operating of the Landmark's you call first quarter

As the the Wendel you Bancorp. from name just Abby is operator, and CEO new my am of Landmark I heard

me Raymond call various discuss Officer. McLanahan, performance Chief with first Officer of aspects Chief Mark Credit Herpich, Joining Financial our the quarter to the of is company; and

remind today our we As under listeners some we like start, forward-looking information providing I of by and for will guidelines to be defined the falls would the the as Exchange that statements Securities Commission.

of and presentation point out that our differ materially actual part future expressed. or that this hopes, guidelines, our the during expectations results beliefs, could made As I those discuss predictions from these statements any forward-looking must of statements are

Additional the on is information to obtained operating want change a quarter, I our XX-K comment from can moment or to XX-Q the effective take for leadership time the regarding company by review the in time be on filings, I XX. highlights which to factors and March our contacting results included these our SEC.Before

assumed Executive his at aware to for write the during As opportunity Scheopner, to President help in excited from former and Michael chapter now, transition for for is position build this legacy bank the I'm assistance company. which time. that Officer Chief I'm the non-executive I me capacity next very in the a grateful. also upon the providing and CEO, further by retired Landmark's and role for March Bancorp Michael Landmark's you are Landmark with still

XXXX. quarter Earnings deliver during appreciate look average team, shareholders.Now return return fully have a that working I on the our per $X.X customers forward first Landmark the diluted net to Board team tailored assets and move leadership in earnings the While share it's is financial solutions basis only The our been of month, the to results. first and X.XX% on and Directors to to $X.XX. will the was of for outstanding on equity already value was with I million of to reported our was place associates X.XX%. quarter average come on a to and

first Our was efficiency ratio in XXXX XX%. the quarter

quarter our deposits $XX.X credit the declined. growth, solid million first Total Our results loan fourth quarter operating expenses an expenses lower income this increased XXXX, continued included noninterest Compared on million. annualized X.X% increased $XX.X loans while to our average and quarter increased basis interest-bearing by or while good gross quality. of

see our relationship-based deposit quarter totaled stability residential net loan Board that Directors the December are offers to represents May formation and call credit XXXX.I chargeoffs, the low concentration XXXX. will employ measures of robust the our with results now being retail XXXX. Herpich, we quarterly shareholders will loans in this our review efficiencies our This company's margin, CFO, and stable to we and levels. deposits XX, a risk a banking in We very and of interest XX, our based have paid which mortgages The totaling commercial and which $X.XX record model, X.XX% and and remained delinquencies million discipline. insured. XX consistency capital This quarter. conservative controlled at per Landmark's Mark since expenses well most quality all to Credit dividend to noninterest report remains continued on cash customers. this I slightly our FDIC the rate aided as with remain liquidity and interest has we averse May maintaining by March for kept relatively declared who portfolio increased also good rates.Our XX, remain credit for a strong of focus share at strong quarter, and $XX.X nonaccrual stable cash consecutive operational of turn demand losses other both relatively be have loans to net and XXst Further, risk allowance dividend interest am strong over in our monitoring financial you. pleased XXXX a to as of

to Thanks, Abby, everyone. and good morning

results. good While overall Abby first our in I'll details has just of on of summary some quarter XXXX, the performance these provided financial further provide a

primarily $XXX,XXX due XXXX. income As quarter to to compared due expense of first increased quarter million increase and XXXX, Abby of and income. securities totaled $X.X on Interest on current of on quarter. of declined XXXX yield earned investment interest-bearing increased to million to deposits, our in fourth to million.Interest X.XX% X.XX% comparison $XXX,XXX during decreased the loans compared offset The also quarter Average mentioned, income the yields net taken first points XXXX million X.XX% to securities average million an on last balance but losses of as slightly a rate in despite securities the in higher of the average XXXX. $X.X funds to million tax of by first $XX.X loans while increased on income interest-bearing to for investment to by interest this quarter Landmark's the borrowed of balances. in $XX,XXX securities interest interest taken $X.X provision totaled deposits X.XX%. this due rate more In year, higher prior quarter deposits first on quarter. totaled increase $X.X offset of million by increased in quarter quarter quarter loans.Total The mainly $XX.X during increased average in quarter in in prior our expense balances yield to loan the in higher XXXX this compared Interest on balances. X.XX% increased prior basis and as this decrease our $X.X but the the tax the first of quarter quarter first the on quarter the the in increased X.XX% million, rates deposits net equivalent on compared XX interest XXXX. than X.XX% the $XXX,XXX on Net decreased the increased the due quarter income to the this securities a on $XXX,XXX to quarter quarter income to adding expense quarter in $XX.X $XX.X interest which portfolio basis offset first with the of this losses of loan interest income the investment in a $X.X million mainly credit million, quarter fund fourth investment fourth compared margin XXXX quarter quarter of in X.XX% decline to borrowed average quarter the in increased first equivalent net last balances $XXX,XXX

mortgages unfunded $XX,XXX credit decreasing fourth Net quarter I decreased to primarily with securities $X.X the last residential gains $XXX,XXX losses liability totaled residential gains earlier. and this million credit gross $XX.X deposit $X.X losses that the but of million to $X.X year first our made Also this rate than continued loan from growth commitments allowance were to for result lending compared provision first the for was loan-related doubled This was declined for our income a of fourth in strong loan and quarter fourth year to XXXX.The provision while quarter quarter million of fixed in of represents sales on taken chargeoffs quarter increase sales quarter Noninterest of the portfolio. of compared million $XX,XXX offset year, loans. in our to lower Compared more last the $XXX,XXX. the X.XX% increasing remains losses mortgages on mentioned of a by quarter to along mainly due the $XXX,XXX, fees. the last quarter by

year and flat $XX,XXX $XXX,XXX higher mainly noninterest Noninterest same grew continue to new rate were expense recorded due $XXX,XXX costs of benefits year.The than other While decrease year, losses XXXX which to a increases costs incurred. to in first professional noninterest and of over professional of growth of mortgages processing with was in rate fees solid in was the other in $XXX,XXX estate The increase valuation resulted real to first last the our held operating of the the the from fees fees, selling keep associated portfolio data compensation million, last normally prior and period against increase quarter from offset mortgages, company's sales last expense. in totaled quarter by higher lower in related have compared the the declined and for expense an while legal allowance noninterest plan a benefit $XX.X expense but sale to in for somewhat see in we X% only expense instead market. adjustable which growth into loan quarter, fixed of increase we compared

the mortgage, increased loan during in of and tax an as residential tax or This recorded and of million.We XX.X%. we annualized totaled quarter effective growth Gross portfolios. good or the rate, year our expense first construction quarter million an X.X% tax $XXX rate in expense of $XXX,XXX a loans $XX.X rate XX.X% estate quarter effective commercial compared $XXX,XXX saw of first commercial adjustable in real of last to tax resulting

Our investments utilized period-end as growth. to decreased maturing on a we portfolio our investment loan securities our fund $XX.X million basis

occurring XX certificates of million declined by projected The accounts $XX.X X.X noninterest end Period $XX.X $XX.X $XX.X respectively, however, checking seasonal due $XX.X Interest million money Our deposits balances XXXX savings average $X.X increased million while at after public months. life deposits accounts decline this account quarter money and the years in cash quarter. in investment soon quarter. market million coming billion of portfolio March driven this in year-end.Average and by has $X.X decreased checking by and next and market the an XX, checking decline by fund of a and deposits, and deposits flow totaled with was million, this interest-bearing grew million.

giving loan-to-deposit at new March low XX, liquidity loan totaled fund XX.X% which remains growth. us Our ratio ample to

stable Kansas Our $XXX liquidity, capacity XX. of Loan the the as Combined, Federal of maintain markets lines borrowing credit continue predictable sources and Also, State manage through very provide Federal multiple with and additional access March approximately other and of liquidity agreements. to they funds Reserve to and municipal provide of of commercial deposits. us the throughout million bank we including remained they Fed retail, Home and Bank

December from in our securities mainly this rates at as decreased value and on Our available book at portfolio investment unpledged March resulted equity $XX.XX totaled decrease securities XX, March portfolio due quarter. interest to to equity losses compared in higher has collateral net XX borrowings. share $XX.XX to at for $XXX.X per additional slightly unrealized investment million stockholders' XX.The also our XXXX Stockholders an increase

The capitalized. bank's review as and and ratio while at highlights strong capital Our XXXX of exceed regulatory me Raymond risk-based was portfolio are our was and consolidated X.X% the leverage XXXX XX, total over well to let the bank of the XX, loan capital levels turn regulatory to outlook. March risk ratio credit ratios XX.X%.Now December call considered

everyone. Thank to you, good Mark, and morning

As loans $XXX million, the mentioned due and were mortgage Gross an increase earlier, enjoyed residential of end $XX.X annualized our the in low. million on this loan quarter we net throughout at X.X% or of very losses from basis to the quarter loan mainly the loans growth quarter. continued previous totaled increases outstanding an commercial while quarter

this our loan Our increased million continued mortgage mainly residential demand quarter for portfolio products. to due $XX.X rate adjustable loan

loan loan commercial quarter. real our our while estate million increased construction portfolio $X.X this portfolio million increased $X.X Additionally,

area. of XXXX, XX, relationship $X.X nonaccrual due increase in this with X March customer At loans the half nonperforming associated delinquency quality. mainly prior the loans of totaled quarter.Approximately from credit Kansas an of to $X.X was consisting increase increased to million metro million, City Turning

paid remained been to due XX net from past between quarter $XXX,XXX. of totaled million quarter increased foreclosed the quarter. gross accruing and X.XX% they chargeoffs first of While XXXX That and days this during and past due We decreased of balance has or loan loan compared that million low the of only a $X.X agricultural quarter of was prior and first at increase end loan the loans. estate The loans. ended due XXXX. was still off. $X.XX XX nonperforming loan loans This $XXX,XXX $X.X interest $X,XXX gross recorded increased quarter chargeoffs of to $XX,XXX quarter, during of net this of primarily now the the Total totaled real million at loans X.XX%

was at Our Landmark million $XX.XX and of focused excellent at over years ended quality and sound gross quarter the allowance we on for credit remained totaled remain maintaining last few loans.Asset losses rate X.XX% The adjusted underwriting Statistics. has the according for X.X% Kansas unemployment March of practices Kansas The Labor current landscape seasonally as and of strong economic XX in is Bureau to metrics. healthy. preliminary the

for to the in period housing, over Kansas REALTORS' in that, recently Home to continue in in commented year.And time The the Midwest X% compared same inventory you selling of we in available Association same for year increased the last by limited enter turn continues prices of increased available in last year. that sales X% to of inventory the with Kansas compared fell the compared to Kansas prices levels Kansas X.X% impact and call I'll now last to the homes as prices. while I thank issue an spring of sale Home terms home Abby. In President back to homes be season. March March

Raymond. you, Thank

appreciation continued quarter the I loan to well controlled very have. associates net our well this by our to the questions questions, I our has this delivering Bank up all to communities environment. in summarize strategy were want service my to a at solid and expenses. held the and might with that, our growth, month. to Further, interest the on clients of and margin thanks quality joined is warm the credit first anyone go for with we last focus key saying as to want strong and company welcome daily year we call executing for pleased I to Their performance our I that National of extraordinary up express our open will success.With Landmark Before

question Investments. comes [Operator Rlh Instructions] Ross first of Haberman The from

background the loan today And second you seeing you're Could meeting is yet. had what pleasure your give the of in a my little and kind us sense are give you Abby. of on Welcome growth a just of expecting you I as 'XX? haven't first bit demand net of us board, where loan question? question

to meeting look person. I forward in Ross, you

I entire on I the March and So I say about in my I I'm XX what joined anticipate X/X could the company through guess being. of stated as way career

And and X/X of a here bank was Reserve the first Kansas been in regional I a the about on. the at in in the still City that Landmark probably the But feel join City the XX ever. really first my a of of midsized area Federal community heavily we've last of part Kansas by had lot remain I for to banks influenced I and capacities we importance excited the I lot of There's understood of a of career spent The the Kansas City going I've opportunity that strongly change in Bank are years banks. where than consolidation industry. community at more variety area. important

our brought lines. what multiple in here.We're growth across that's seeing first strong the me So of business loan quarter

money was As residential those by you noted footprint. most on led mortgages the purchased were it and of within our call,

in I some and growth forward commercial growth Ross, opportunities on forward estate strong commercial for we too probably seeing that are terms respect give with good year the end coming. on land. to guidance a to based capitalizing don't, is We We to we think and of plan real us quarter though are look loan our annualized might first where we results where X.X% of indication growth, but

Zuk, private [Operator who has asked investor, Instructions] a now a Michael question. is

a from I the of UMB? or announced regarding impact it Missouri. clients Will by a positive of get have to United Heartland opportunity this on acquisition new an you runoff have negative? question Is any

for in bank's some on in an hard that that me opportunity can our would for really any there's It's of the another question. your history you there's kind for market I or I acquisition tell time that a change thanks show conversation. think combination Michael, to But comment footprint. always

of as them of to aspects outward businesses to if every or own the continue help opportunity their working activities and other look we'll it's our teams way with business, our will our facing and customers anyway be consequence are build bank's our we -- marketplace. comes for opportunity our always So of in that another a

you and on are your, branch as I expanding guess, consolidating the a satisfied What's your And adding at branches branches? you profile current with question, structure? branch follow-up are or or take looking

Happy outlook my to to related Sure. comment that. on

of City consolidate the of into Freedom Here following on opportunity branches we Bank that, actually and X. integration capitalized to in X acquisition an the Kansas

locations And like at to is customers network now size, something customer XX are Landmark, irrespective our that we of across serve continue bank done team the do how and and looking looking So me too. at branch XX best we any communities. at have we will our that we patterns at here might and predates

a forward have days the and to we footprint best our you associates my we keep And our there. the first and XXX all evaluate look what that our meets of customers get I Here out in meeting will and posted of are and locations to as to I plan communities. working continue visit needs

course And then some forward? Kansas on What's an X principally important pending and final of legislation going outlook Congress. is agricultural state question. in there's lending your agricultural

this see We a our do this that any Michael, out may happy and would and year. And appreciate also and the to Raymond take on actions of that helps is that our comes stay producers really benefits to benefit or McLanahan, us anything attuned advantage going benefit customers to agricultural Congress the Congress so ag in what may not bank. competitive a as our we're to increase question. they bank be other what's they I

currently renewal pleased So we're in constantly that to well we're some of season ag demonstrating. in results are and here midst operating our our of the it. producers with the continue ag economy as But customers and we're monitor as Kansas, we of far the monitoring some our and

think ag to there's opportunity an you your Do lending? increase

ag our bankers part are on. our It's increase something that always focused of there's an opportunity regularly it's and commercial think business to lending. I our an important

in a you're like It Well, congratulations start to team. good the XXXX. to off looks

question a Investments. Ross follow-up of Haberman from have now Rlh We

Just questions. X follow-up

First, rates say, or continued margins. keep same spread. the 'XX, their do seeing let's What Most the the throughout you banks Given, on what's margin are thought pressure they expect? your And with because on on scenario? issues your the the in remarkably two, any delinquencies the criticized nonaccruals nonaccruals Any margin have they or remarkably that good? concerns low. been or look

that thanks have little basis the just increased I you The a to question. X optimistic. Earlier point, X.XX%. was up margin, Ross, year more would as been X.XX% in slightly saw, for

really as nonaccruals of coast, continue on relationship and ourselves our we're Landmark guidance, I to maybe that have we its give for hearing But think we come prided way to of exposure that relating Bank. crystal associate but customers margin and happening, pressure the the basis. think I'm don't they short the with very monitor our that Ross.But on that Hopefully, of deposit opportunities to think we of have the much any water experience real your we over potentially kind that think that also increase buildings look the treading will see to have continuing that the increases and the we then continue don't to it. my We to office with have on as for I we to on going we're are far Midwest. likely loans, the are a a but which see which steady. moving for loan low rates But as hoping that flat I starting customers answers very due to dealing we the have still going going if our with. in costs type and And factor through levels isn't rest rate be a were question. commercial forecast, diligently a but National forward-looking to continue lending end, the throughout type to loans somewhat that go we work We're quality year good increase problems estate I to doesn't we of ball, on customers nonaccrual that And years and with renewals.

Yes.

or indulge they are if banks can number with the know, securities X me you years make don't their A of hit in, held-for-sale if X final back more. less. restructuring X can of I some Just

that? March. You that AOCI an breakeven have of at $XX restructure kind you had of it that What what sell looked and LIFO for duration was to reinvest and million average would you possibility the it be about the to palatable do of at end and some,

Ross, question. another good

something As The saw $X.X incurred about did the I our on we for longer to closer breakup our you would continuing than little we like was, or make and are million potentially. portfolio to we investment would some years. probably maybe that X evaluated. to our over portfolio sense the And opportunities and loss a our slightly quarter, that's model X.X like of life see. a we of a see the that's fourth sell in as year X-year good We'd of you and little those some investments those asked basis. restructuring if guidelines thinking longer-term shareholders it I But think be in what average to think

Yes, said, did. Mark? years, I X.X you

duration. Yes, that's our

no for waiting this over there are Wendel conference at additional questions hand the Abby time, like remarks. As to I'd closing back to

a Thank our today's I'd in appreciate call. related for you and I great in to at support second results to thank news your call. earnings our sharing confidence have conference like participating I day. quarter forward company. the Hope to you. look XXXX next continued earnings everyone