Landmark Bancorp (LARK) 31 Oct 242024 Q3 Earnings call transcript

Hello, everyone, and welcome to today's Landmark Bancorp Third Quarter Earnings Call. My name is Seb, and I'll be the operator for your call today.

[Operator Instructions] I will now hand the floor over to Abby Wendel, President and CEO, to begin the call. Please go ahead.

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

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

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

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

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

time these in be obtained Additional factors time and filings, or from company the included is the which to XX-Q on SEC. by can XX-K our information contacting

of on reported diluted $X.X X.X% share assets and per million earnings third was the the XXXX. return Earnings the during third on $X.XX. quarter a on XX.XX%. equity average Landmark was The net were average quarter fully return for basis of

Our XXXX was third the efficiency XX.X%. for ratio quarter

earnings reflected over growth the quarter income. same period higher XX.X% solid share solid third quarter XXXX, by grew by continued per by our of strong increased the income year. Net third results Our interest income driven prior last the in and quarter earnings with along XX.X% noninterest loans, -- net and XX.X% over while over in

our a milestone pleased by This time the to billion balances also increased deposit X.X%. Total in total I'm significant balances is reached loan first quarter quarter. this $X and for Landmark. million gross this loans for gross company history, $XX.X share increased

XXXX. margin in former an this of the of residential points X branch facility. fee-based basis the income mortgage interest revenue the prior due X.XX% increased of growth, grew on to increased increase and result mainly net quarter, a second over a compared net quarter to Noninterest gain $XXX,XXX and to income our X.X% interest As revenue, sale

based low a are losses XX, with retail a $XX.X and in and Credit risk-averse, insured. risks rate consistency has our customers and in capital allowance concentration deposit credit which FDIC and stability being our maintaining discipline. measures stable, liquidity we million model, strong a and deposits employ remained We we credit strong with both remain conservative to which and Further, quality have relationship-based most all of for net totaled and footprint. at our strong, monitoring banking September XXXX. offers across losses, credit Landmark's a interest robust our portfolio

a dividend, Board our I X, review stock in and in financial XXth year the call results represents a December quarterly who support with now I'm growth This demonstration our XXXX. This stock Board continued to The of dividend a consecutive Board December will the on pleased XXrd X% has turn Mark XXXX. declared be over record as issued shareholders our that, declared of With to the to per November of to be XX, the record that detail declared will formation cash that XXXX. for November the our to has also dividend share XX, XXXX, $X.XX commitment dividend shareholders. since to of cash Directors to Herpich, long-term represents XXXX, liquidity of X% shareholders value CFO, a report you. of consecutive XX, company's paid the in

everyone. Thanks, good morning to and Abby,

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

quarter, Net million quarter million third XXXX. quarter increased income million in the quarter net noninterest and of income compared XXXX due which $X.X $X.X third mentioned, prior declined. net $X.X noninterest helped the prior of totaled margin, net to in with increase to income. this while $XX.X As increased the improvements our in million, interest income expense to in quarter in Loans comparison interest the also and mainly

than quarter, rates. totaled Reserve quarter is rate loan short-term XXXX And in borrowings. Total to is second and began current expense increase future due this reduce on XX interest believe future rate interest positioned quarter $XXX,XXX an the balance deposits path income loans, XXXX, yield on primarily Federal equivalent the tax more the the million, of increase interest of net while interest we compared increased our the third on increased the to well portfolio for to on somewhat During $XXX,XXX In environment. the to increased points this X.XX%. of offset sheet income which interest uncertain, and income our quarter loans $XX.X basis

loans accounts. quarter. but securities quarter, average third as million, to the compared our $XX.X the of increased of the deposits interest-bearing investment average $XX,XXX this compared X.XX% securities higher current of balances investment deposits investment average yields balances. 'XX. X.XX% decreased expense Interest third on remained increased Interest securities quarter X.XX% in quarter while quarter due a million rate $XXX,XXX, on increased on Average of balance securities prior last also million quarter, on interest in $X.X in X.XX% third to quarter higher-yielding offset this increased loan the our in balances yield during totaled to due investment by to on in quarter income decline adding income. to The to the deposits mainly interest-bearing by $X.X The to to deposit XXXX the unchanged compared

basis quarter funds borrowed the third borrowed million $X.X margin during XXXX. this quarter the balances equivalent average increased of X.XX% rates to interest quarter. third of to on Landmark's on X.XX% second a increased net tax the compared lower slightly expense XXXX fund Interest despite in as as in increased slightly quarter

recoveries XXXX and $X,XXX represents gross $XX,XXX charge-offs in the losses Net At September a quarter, the for was quarter. credit the recorded XX, strong XXXX, losses remains of prior credit quarter $XXX,XXX loan no X.XX% totaled This $XX.X of in of provision of for provision prior was net our allowance to in made million of loans. third quarter. while compared

Noninterest growth XXXX by income other the compared in in The in quarter, third of from and this sales the along $XXX,XXX of quarter Compared resulted of to residential quarter. other with on quarter, rate increasing The year, income $XXX,XXX. gain on on to compared Noninterest the compared of gains $XXX,XXX charges from third $XXX,XXX, of $XXX,XXX the expense income noninterest $XXX,XXX quarter $XX.X the service second former increase of an totaled sales mortgages to of primarily and prior noninterest increase of as residential mortgages. increase improved million XXXX. fees decrease higher while fees the $X.X $XXX,XXX, last increasing fixed income due prior a totaled was service charge quarter branch. grew to a quarter a sale by the for to $XXX,XXX gains million, of third while XXXX and

adjustment utilities As equipment sold levels due branch the and a that and prior occupancy quarter repair Compensation during current due reminder, benefits health was a included and increased quarter. the on while costs, a to expense higher staffing to increased the care representing costs. X.X% expense and building valuation $XXX,XXX by

loans an as to XX.X%. totaled the or of expense XX.X% in quarter billion. $XXX,XXX, increased tax we recorded second Gross of $XX.X $XXX,XXX during of X.X% expense quarter, year effective tax tax tax resulting rate $X.X of the annualized an compared quarter third of This million or rate effective in this and

mentioned, first Landmark's Abby in a As is this history.

loan growth loan saw residential portfolio, solid rate by $XX.X We adjustable from million. our mortgage which grew

portfolio real $X.X increased also while by portfolio estate quarter. third the commercial million, agricultural increased our million during Our $X.X

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

has months. coming in September Deposits portfolio average flow XX, totaled an next XX and by of million investment a X.X cash years this $X.X Our billion projected $XX.X of XXXX, the increased life quarter. million $XX due with at

deposits, during with grew slightly $X.X this money million, the accounts market and and checking $XX.X declined decreased quarter million. quarter. while checking deposits $X.X by average $XX.X by along -- Average million quarter, third Interest of increased respectively, $X interest-bearing deposits, savings me, the in excuse million XXXX and and of borrowings noninterest by certificates

balances declined period-end However, $XX.X million.

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

XXXX, million value June from per XX. XX quarter to XX, losses, mainly by The million increased $XX.XX in at $XX.XX equity the $XXX.X aided in were quarter. rates increase resulted equity to a our comprehensive Our September compared September other lower to increased book stockholders' $XX.X at this during share at decline and stockholders' which

exceed to and at regulatory ratios XXXX, strong bank capitalized. considered be leverage XXXX, The levels of risk-based was XX.X%. X.X% capital and bank's ratio the are consolidated total Our the was while September regulatory September as XX, ratio XX, capital well

highlights review portfolio call outlook. to loan Now let risk to me the and over turn of credit our Raymond

to morning good everyone. and you, Thank Mark,

As mortgage, or mainly X.X% enjoyed at commercial in year to of me, of residential totaled agricultural, at commercial the loan -- mentioned the outstanding the due earlier, loans increases throughout of an we $XX.X previous growth end basis an estate million quarter $X excuse billion, real from quarter, continued end on and increase our the annualized the portfolios. Gross the quarter.

in $X.X in loan mortgage continued that $XX.X retain Our that portfolio our seasonal this the from of increased only portfolio. loans loan prior our line million $X growth, during resulted to new adjustable we quarter. increases represented for Agricultural usages. credit of $X.X residential products while increased loan increase demand rate million million due quarter million

million $X.X increased our portfolio the million prior and increased portfolio from estate commercial real commercial quarter. Our $X.X

increase due a closely September mainly million, is situation. loans they address While this an nonperforming to credit to quarter, increase mainly nonaccrual losses our million and from single of placed totaled work loans increased. as the remained customer quarter. This XX, relationship quarter. prior on At of loans working We're $X.X nonaccrual secured XXXX, loan we due nonaccrual low this consisting $XX.X past the commercial with that

That during We agricultural $XXX,XXX recorded balance unchanged totaled now increased foreclosed The the real XXXX. quarter days primarily past $XXX,XXX. that increase XX past the was was the of days net still interest gross ended was a XXXX This third due quarter of recoveries accruing at end. net quarter third loan million to this between $X.X XX of loan $X.X Total of compared and loan and during due is million due quarter $X,XXX loans. estate of to XX at charge-offs $X.X from and of loan X.XX% prior or loans million quarter current.

the The credit loans. totaled Statistics. rate for allowance unemployment Labor and X.X% as preliminary landscape losses to in the gross of X.XX% of Bureau Kansas our remains mentioned, seasonally The was current ended $XX.X at economic Mark for million XX Kansas quarter As adjusted September of according healthy.

of from terms moderating down in despite long-term housing, a mortgage rates are year ago. recent In weeks,

the September to compared fell sales improved prices September, "Although sales contracts X% environment month of X% said, year." REALTORS X% recently last Kansas the The up increased rate lower nearly X% year. time to in in year, activity. in appears last compared buyer pending same have fell compared by President to Midwest in number to Kansas September compared This increased in the same Home to of Association Kansas while same year. the the last prices Home period as in last was

turn Abby. With thank you, over that, I I'll the to call back and

Thanks, Raymond.

go third expense in the Also, were we was in revenue Before want to summarize controlled. expansion noninterest our margin saying pleased to we quarter. by solid results this all higher contributed loans, I quarter. noninterest with to income Growth and well questions, growth strong

grow had operating to further services our we base. With add positioned over the successes few we customer are well we've products high-quality and our and and business the offer, banking to past years the

more in City, well still markets both across relatively are which new. fee all recently especially playing bringing we and businesses, is our Kansas focusing and where are in loans We on

National key executing on to questions anyone Bank. might open like up Their Landmark to extraordinary have. daily delivering clients to I'd call the our With service our focus to that, thank communities the is our success. Finally, associates all and strategies, I'll for at

[Operator question RLH Haberman Ross from comes First Instructions] Investments. from

Nice quarter.

'XX, you do And in to of the and we of point margin a perhaps touch couple if may. of do margin you spread? spread? Or that that How that in basis guess next some had September? you how impact the and drop the the see the see drops on basis the half we see see see you do full Just questions, in will XX points the if Did quarter. or Could this further the I affecting XX quick the upon affecting I XX margin first spread?

happened but with But directly I a a pleased where uncertain and felt question tied get of that Well, questions. to borrowings Ross, the to a the XXXX. XX the daily margin impact on the joining and on we're the we're on in if eventually lot for rate we're the as and -- thanks think in first September, And get fluctuations. of with funds or Fed we still with a immediately the yes, into during of middle and some full we're we rate basis impact kind from cuts spread, of the But liabilities on will noticed XX to didn't quarter quarter. the cut point your get at basis. be full market the surely to fourth our And or little it XX going

But up yield we're funds from the to of show and it's we're in for and point up rate optimistic quite an going And instead positioned the capitalize rate back XX-year not bit the might down. treasury yes, from rates this XX-year get get quarters. the to that But are at Fed hurting eventually, -- of hold well the a rate. really continue we margin to hopefully, us going the funds benefits X- sloped being on until next couple to inverted Fed positively curve what little

will further will drops So the be the too margin you're be recent saying to and and accretive spread the any or... drop

only didn't kind I a -- And XX the full larger of basis, should Yes, what forward of get impact to a we much accretive basis wait point be a after on we're that's mean going see we'll correct. but cut another more still that, optimistic XX optimistic next ago cuts it few cut I Federal a and obviously extent. uncertainty, weeks, here. might coming, little the the coming. a be there it an their be but -- meetings rate point that does might as at now We Reserve basis weeks few few more but quarter are were think

are rates seeing think in and keeping about the guess up the -- lowered one are I you margins or volume? mortgage you the on XX-year you you I And you mortgage mortgage rate, I they before rates are most bit. then actually could originating? And I What know your they fixed the side? may. us dropped you seeing today? follow-up, mortgage if you are seeing sale said a are little and selling tell whatever of just What upon which ended you're What

the by and rates down. like market The the interest Reserve activity the Fed Federal the rates. seemed of XX-year funds Yes. did drop or It kind in pushed was XX-

rate XX-year now keeping the we see making rates our people a So we're they Fed with kind more down, rate rate. slow of were are you're point. choose the ARM portfolio, But ahead right, But of X/X variable to been little to this we a It's going at funds with fixed kind their options. rate have Fed starting cut. competitively in which of starting the priced

in our presumably choose but we'll rate the will fixed to more as more probably well. the is we're sheet, I start there's will still adjustable rate remains think will think keep loans But very volume at option But seeing that already we're fixed stay everybody activity that and that, managing some on our cuts thinking rate the we're area robust more come, pipeline but -- going we seeing balance time. where this it to balance in thinking going more point and our customers forward. sheet activity increased in down, continue see with maybe and we rates rate

better, margins stable? the worse rates, again, those margins And of or on are the of fixed those sale getting kind

they're say stable. I'd staying

the not at this changes any we're point significant think time. in I seeing on margins

hand to Instructions] remarks. call, we no for on Abby the I'll have the back questions floor [Operator just As further closing

at company. your our earnings I want our to sharing to call. earnings appreciate and everyone related a happy safe in support call. forward the in I at want and look and news I you. in results to confidence we, today's you And fourth wish to continued year-end participating thank for quarter the Halloween. Thank conference next Landmark, meantime,

disconnect This concludes may your now lines. you. you Thank conference and call, today's