Shares of Landmark Bancorp, Inc. LARK have declined 3.8% since reporting results for the second quarter of 2025. This compares with the S&P 500 index’s 0.6% growth over the same time frame. Over the past month, the stock has declined 1.2% against the S&P 500’s 3.3% rally.
For the second quarter ended June 30, 2025, Landmark Bancorp reported diluted earnings per share (EPS) of 75 cents, marking a 44% year-over-year increase from 52 cents in the prior-year quarter. However, EPS declined sequentially from 81 cents in the first quarter of 2025. Net income for the quarter totaled $4.4 million, up from $3 million in the same quarter last year but down from $4.7 million in the previous quarter.
Total revenues were driven largely by robust net interest income. Net interest income rose 24.7% year over year to $13.7 million and improved 4.3% sequentially. Return on average assets stood at 1.11%, while return on average equity came in at 12.25%, both up from the prior-year quarter.
Landmark Bancorp Inc. Price, Consensus and EPS Surprise
Landmark Bancorp Inc. price-consensus-eps-surprise-chart | Landmark Bancorp Inc. Quote
Net Interest & Non-Interest Metrics
Landmark Bancorp’s second-quarter financial strength was underscored by continued expansion in its net interest margin, which improved 62 basis points year over year to 3.83%. This improvement stemmed from higher yields on loans and controlled funding costs. Average loan balances grew $33.3 million in the quarter, and loan yields moved up 3 basis points to 6.37%.
Non-interest income came in at $3.6 million, increasing $268,000 from the first quarter, though slightly down from $3.7 million in the same quarter last year. Gains on mortgage loan sales rose by $178,000 sequentially, while fee and service charge income grew $88,000.
On the expense front, non-interest expenses totaled $11 million, up $200,000 from the first quarter, driven by higher data processing costs and increased losses at Landmark Bancorp’s captive insurance subsidiary. However, on a year-over-year basis, expenses declined by $134,000, helped by the absence of a $979,000 valuation adjustment recognized in the prior-year quarter related to a former branch building.
Management Commentary
CEO Abigail Wendel emphasized the bank’s continued loan growth and margin expansion as core earnings drivers. She highlighted strong loan demand across multiple segments, including commercial, commercial real estate and residential mortgage lending, which collectively contributed to the $42.9-million increase in gross loans in the quarter. Wendel reaffirmed the company’s commitment to disciplined credit oversight and a conservative risk profile, noting that net charge-offs were minimal at $40,000.
CFO Mark Herpich also pointed to the strong capital base and liquidity position. Stockholders’ equity rose $5.7 million in the quarter, lifting the book value per share to $25.66 from $24.69 sequentially. The efficiency ratio rose to 62.8% from 67.9% a year earlier, indicating improved operational leverage.
Credit Quality & Provision
Landmark Bancorp recorded a $1-million provision for credit losses in the second quarter, after recording none in the prior quarter. The increase in provisioning reflects both growth in loan balances and a more conservative reserve stance against certain non-accrual loans. The allowance for credit losses increased to $13.8 million, or 1.23% of gross loans.
Non-performing loans rose to $17 million from $13.3 million in the prior quarter due to two newly impaired commercial real estate credits. However, one of these loans was brought current shortly after quarter-end. Meanwhile, loans 30-89 days delinquent fell to $4.3 million from $10 million in the first quarter, suggesting improving near-term performance metrics.
Deposit Dynamics & Funding Strategy
Total deposits decreased by $61.9 million from the prior quarter to $1.3 billion. This decline was attributed primarily to brokered deposit outflows, and lower balances in money market and checking accounts. However, deposits rose by $23.4 million, or 1.9%, year over year. To offset deposit outflows and fund loan growth, Landmark Bancorp increased its Federal Home Loan Bank borrowings by $105.9 million.
Despite the spike in borrowings at the quarter-end, management expressed confidence in the liquidity position. Herpich noted that the company retains significant capacity for additional borrowing and expects to reduce borrowings through investment portfolio cash flows in the coming quarters.
Strategic Outlook
Management reiterated its intent to deepen customer relationships and grow deposits through its network of 29 community bank branches across Kansas. Abby Wendel indicated that several deposit-gathering initiatives will roll out in the second half of 2025, focusing on both expanding new relationships and strengthening existing ones. The company is prioritizing both sides of the balance sheet to ensure funding stability amid continued loan demand.
Other Developments
Landmark Bancorp’s board of directors declared a quarterly cash dividend of 21 cents per share, marking the 96th consecutive quarterly dividend since the company’s formation in 2001.
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This article originally published on Zacks Investment Research (zacks.com).