Landmark Bancorp, Inc.

What they do

The Company owns Landmark National Bank, which gathers deposits and originates commercial, commercial real estate (CRE), agriculture, one-to-four family residential real estate, construction and land, municipal and consumer loans. It operates 29 branch offices in 23 Kansas communities plus a Kansas City, Missouri loan production office, and offers demand, checking, money market, savings, time deposits and treasury management. Its other subsidiary, Landmark Risk Management, Inc., is a Nevada captive insurance company formed in 2017 that provides property and casualty coverage to the Company and the Bank.

Revenue drivers

• Net interest income — Earned as the spread between interest income on loans and securities and interest expense on deposits and borrowings; the primary driver of results. Net interest income was $15.1 million in Q2 2026, up 10.2% from Q2 2025, with a net interest margin of 4.22%.
• Commercial, CRE and agriculture lending — The stated growth focus; these portfolios plus construction and land grew $7.4 million in Q2 2026, an annualized 4.3% increase, partly offset by lower on-balance sheet residential mortgage loans.
• Deposit and fee-based services — Non-interest income includes service charges, loan servicing and loan fees, customer deposit services, and gains from sales of one-to-four family residential mortgage loans.
• Captive insurance — Landmark Risk Management, Inc. provides property and casualty coverage to the Company and the Bank where insurance is unavailable or uneconomical in the commercial market.

Recent performance

Second quarter 2026 net earnings were $5.4 million, or $0.88 diluted per share, versus $4.4 million and $0.72 in Q2 2025. First-half 2026 net earnings were $10.5 million, up 14.9% from $9.1 million, on diluted EPS of $1.70 versus $1.49. Q2 2026 return on average assets was 1.35% and return on average equity was 13.23%, with an efficiency ratio of 61.7%; net interest margin was 4.22%, down two basis points from Q1 2026 but up 39 basis points year over year. Total deposit costs improved to 1.30%, and tangible common equity to assets rose to 8.44% from 7.15% a year earlier.

Strategy

Management is focused on growing commercial, CRE and agriculture loan portfolios while maintaining credit quality. It emphasizes relationship banking, disciplined deposit pricing, and diversification of the deposit mix toward core checking, savings and money market accounts. Capital generation is used to fund investments in talent, technology and facilities. The Board declared a $0.21 per share quarterly dividend in July 2026, the 100th consecutive quarterly dividend, with no stated plans to change the dividend strategy.

Risks

• Credit quality deterioration — Nonperforming loans increased during Q2 2026 and remain higher than management would like, requiring proactive management and resolution of credits outside the desired risk profile.
• Concentrated loan portfolio — The loan book is concentrated in commercial real estate and agriculture loans within Kansas markets that are exposed to real estate values, commodity conditions and local economic cycles.
• Interest rate and margin pressure — Results depend on the spread between asset yields and funding costs, and assets and liabilities reprice at different times and speeds.
• Large uninsured deposits — Deposits above FDIC insurance limits could be withdrawn by clients seeking to diversify exposure, affecting liquidity and funding costs.

Outlook

Management cited record quarterly revenue of more than $19 million, accelerating commercial and agricultural loan growth, and improving profitability. It expects continued balance sheet strength to support investment in talent, technology and facilities, and intends to keep the current dividend strategy given capital and liquidity position. The Company disclosed it exceeded the 2.5% Common Equity Tier 1 capital conservation buffer as of June 30, 2026, which it must maintain to make capital distributions and discretionary executive bonuses without restriction.