Landmark Bancorp Inc (LARK) Q2 2025 Earnings Call Highlights: Strong Net Income Growth and ...

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Net Income: $4.4 million in Q2 2025, up from $3 million in Q2 2024.
Diluted Earnings Per Share: $0.75, a 56% increase over the same quarter last year.
Return on Average Assets: 1.11%.
Return on Average Equity: 12.25%.
Efficiency Ratio: 62.8% in Q2 2025.
Gross Loans: Increased by $42.9 million or 16% annualized, totaling over $1.1 billion.
Net Interest Income: $13.7 million, an increase of $564,000 from Q1 2025.
Net Interest Margin: Increased 7 basis points to 3.83%.
Allowance for Credit Losses: $13.8 million, representing 1.23% of total loans.
Noninterest Income: $3.6 million, an increase of $268,000 from the prior quarter.
Noninterest Expense: $11.0 million, an increase of $200,000 from the prior quarter.
Deposits: Totaled $1.3 billion at June 30, 2025, a decrease of $61.9 million from the previous quarter.
Stockholders' Equity: Increased by $5.7 million to $148.4 million.
Book Value Per Share: Increased to $25.66 at June 30, 2025.
Dividend: Declared a cash dividend of $0.21 per share.
Warning! GuruFocus has detected 3 Warning Sign with LARK.
Release Date: July 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Landmark Bancorp Inc (NASDAQ:LARK) reported a strong net income of $4.4 million for Q2 2025, up from $3 million in the same period last year.
Diluted earnings per share increased by 56% year-over-year to $0.75.
The company achieved a return on average assets of 1.11% and a return on average equity of 12.25%.
Total gross loans increased by $42.9 million or 16% on an annualized basis, contributing to a net interest income growth of 4.3% compared to Q1 2025.
Landmark Bancorp Inc (NASDAQ:LARK) declared a cash dividend of $0.21 per share, marking the 96th consecutive quarterly cash dividend since its formation in 2001.
Negative Points
Net income decreased from $4.7 million in the prior quarter to $4.4 million in Q2 2025.
Nonperforming loans increased by $3.7 million, totaling $17 million, primarily due to two commercial real estate credits placed on nonaccrual.
Deposits decreased by $61.9 million on a linked quarter basis, with declines in interest, checking, and money market deposits.
Interest income on investment securities decreased slightly due to a decline in average investment securities balances.
Noninterest expense increased by $200,000 compared to the prior quarter, driven by higher data processing costs and increased losses at the captive insurance subsidiary.
Q & A Highlights
Q: Can you provide further commentary on the loan provisions and the outlook for non-performing loans over the next 6 to 12 months? A: Abigail Wendel, President and CEO, explained that the $1 million provision was primarily due to loan growth. The non-accrual loans are evaluated individually, and the recent increase was mainly due to a $2.6 million credit that has since been brought current. The trend is expected to improve in the third quarter.
Q: Deposits decreased this quarter. Was this due to seasonality, and what is the strategy regarding Federal Home Loan Bank borrowings? A: Abigail Wendel noted that the decrease in deposits was partly seasonal. The bank is focusing on expanding customer relationships and gathering more deposits through its branch network. Mark Herpich, CFO, added that they have significant capacity with the Federal Home Loan Bank and Federal Reserve Bank, and the current borrowing levels are expected to decrease as investment portfolio cash flows improve.
Q: What are the strategic initiatives for deposit growth in the second half of the year? A: Abigail Wendel highlighted plans to leverage their 29 bank locations across Kansas to enhance deposit delivery channels and deepen customer relationships. The bank aims to engage teams in initiatives to gather more deposits, primarily through the branch network.
Q: How does the bank plan to support loan growth with its deposit base? A: Abigail Wendel emphasized the bank's focus on maintaining a high-quality deposit base to support strong loan demand. The bank is committed to aligning deposit growth with loan growth to ensure sustainable expansion.
Q: Can you elaborate on the impact of the Federal Home Loan Bank borrowings on the bank's financials? A: Mark Herpich explained that the borrowings were slightly higher at quarter-end due to a one-day slip in brokered funding bids. However, the bank expects these levels to diminish as investment portfolio cash flows improve, reducing the need for borrowed funds.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.