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Landmark Bancorp, Inc. Announces Fourth Quarter Earnings Per Share of $0.23. Declares Cash Dividend of $0.21 per Share
Source: Nasdaq GlobeNewswire / 31 Jan 2023 16:16:30 America/New_York
Manhattan, KS, Jan. 31, 2023 (GLOBE NEWSWIRE) -- Landmark Bancorp, Inc. (“Landmark”; Nasdaq: LARK) reported diluted earnings per share of $0.23 for the three months ended December 31, 2022, compared to $0.48 per share in the third quarter of 2022 and $0.60 per share in the same quarter last year. Net earnings for the fourth quarter of 2022 amounted to $1.2 million, compared to $2.5 million in the prior quarter and $3.1 million for the fourth quarter of 2021. For the three months ended December 31, 2022, the return on average assets was 0.32%, the return on average equity was 4.50%, and the efficiency ratio was 66.8%. Effective October 1, 2022, Landmark completed its acquisition of Freedom Bancshares, Inc. (“Freedom”), and Freedom’s results of operations are included in Landmark’s fourth quarter results. Excluding acquisition costs of $3.0 million, adjusted net earnings for the fourth quarter of 2022 would have been $3.5 million or $0.67 of diluted earnings per share, while the return on average assets would have been 0.92%, and the return on average equity would have been 13.04%. The adjusted results excluding acquisition costs are a non-GAAP financial measure to make the periods more comparable.
For the year ended December 31, 2022, diluted earnings per share totaled $1.88 compared to $3.42 during 2021. Net earnings for 2022 amounted to $9.9 million, compared to $18.0 million in 2021. For the year ended December 31, 2022, the return on average assets was 0.73% and the return on average equity was 8.25%. Excluding the acquisition costs mentioned above, the adjusted net earnings for 2022 would have been $12.4 million or $2.37 of diluted earnings per share, while the adjusted return on average assets and the return on average equity would have been 0.92% and 10.39%, respectively.
In making this announcement, Michael E. Scheopner, President and Chief Executive Officer of Landmark, said, “We are pleased with the assimilation of Freedom’s associates and customers to date, and our core system conversion is scheduled for late first quarter which will provide opportunities for additional synergies. While our fourth quarter results were impacted by costs associated with the acquisition and losses on sales of investment securities, these strategic moves position us well for 2023 and beyond. Loan growth remained strong during the fourth quarter, and we experienced solid growth in net interest income over the prior quarter. Deposits also increased this quarter. Compared to the third quarter 2022 and excluding $118.0 million of loans acquired in connection with the acquisition of Freedom, total gross loans increased by $20.8 million, or 11.6% on an annualized basis. Net interest income also grew by 25.8% while our net interest margin increased to 3.53% during the fourth quarter of 2022. Non-interest income declined $1.8 million compared to the same period last year mostly the result of lower gains on sales of residential mortgage loans. We also recorded a $750,000 loss on sale of lower yielding investment securities that we had strategically sold this quarter. Excluding the $150.4 million of deposits assumed in the acquisition from Freedom, deposit balances increased by $33.1 million, or 11.7% on an annualized basis, as compared to September 30, 2022.”
Mr. Scheopner continued, “Credit quality remains very strong and non-accrual loans and delinquencies continue to decline. Landmark recorded net loan charge-offs of $67,000 in the fourth quarter of 2022 compared to net loan recoveries of $43,000 in the prior quarter and $9,000 in the fourth quarter of 2021. Non-accrual loans totaled $3.3 million or 0.39% of gross loans at December 31, 2022 and have declined $1.9 million over the last twelve months. Also, the balance of loans past due 30 to 89 days remained low. The allowance for loan losses totaled $8.8 million at December 31, 2022, or 1.03% of period end loans. Our equity to assets ratio totaled 7.41% while loans to deposits totaled 64.7%.”
Total assets at December 31, 2022 were $1.5 billion, total gross loans were $850.2 million and total deposits were $1.3 billion. On October 1, 2022, Landmark completed the acquisition of Freedom, a one-bank holding company with gross loans of $118.0 million and deposits of $150.4 million. Landmark’s newest branch, acquired from this acquisition, is in Overland Park, Kansas and expands our presence in the Kansas City market.
Landmark’s Board of Directors declared a cash dividend of $0.21 per share, to be paid March 1, 2023, to common stockholders of record as of the close of business on February 15, 2023.
Management will host a conference call to discuss the Company’s financial results at 10:00 a.m. (Central time) on Wednesday, February 1, 2023. Investors may participate via telephone by dialing (844) 200-6205 and using access code 653744. A replay of the call will be available through March 2, 2023, by dialing (866) 813-9403 and using access code 490365.
SUMMARY OF FOURTH QUARTER RESULTS
Net Interest Income
Net interest income amounted to $11.9 million for the three months ended December 31, 2022, an increase of $2.8 million, or 30.1% over the fourth quarter of 2021. The growth in net interest income compared with the same period last year was the result of growth in interest income of $4.8 million partially offset by an increase in interest expense of $2.0 million. The increase in interest income was mainly the result of higher rates and balances of both loans and investment securities while growth in interest-bearing liabilities and higher rates resulted in increased interest expense. Total gross loans totaled increased $187.8 million (includes $118.0 of acquired Freedom loans) in the fourth quarter of 2022 to $850.2 million compared to the same period last year while loan yields increased to 5.29%. Investment securities balances also increased by $108.6 million compared to the fourth quarter of 2021 and the tax- equivalent yield on these balances grew to 2.56%. Total deposits grew by $152.2 million (including Freedom acquired deposits of $150.4 million) over the same period last year while other borrowings also grew by $39.2 million. The average rate on interest-bearing liabilities increased this quarter to 0.99% compared to 0.17% last year in the fourth quarter and 0.55% in the prior quarter. Average net interest-earning assets increased $190.7 million to $1.4 billion this quarter compared to the same period last year. On a tax-equivalent basis, the net interest margin totaled 3.53% in the fourth quarter of 2022, compared to 3.21% in the prior quarter and 3.17% in the fourth quarter of 2021.
Non-Interest Income
Non-interest income totaled $2.8 million for the fourth quarter of 2022, a decrease of $1.8 million, or 38.8%, compared to the same period last year and $717,000, or 20.3%, from the previous quarter. The decrease in non-interest income during the fourth quarter of 2022 compared to the same period last year was primarily due to a decline of $1.4 million in gains on sales of one-to-four family residential real estate loans as higher interest rates and low housing inventories reduced originations of these fixed rate loans compared to the prior quarter and the same quarter last year. Higher mortgage rates, however, resulted in an increase in originations of adjustable-rate loans in the fourth quarter of 2022. Fees and service charges increased $169,000, or 7.0%, over the same period last year and increased $61,000 compared to the prior quarter mainly due to increased deposit-related income. Losses of $750,000 and $353,000 were recorded in the fourth and third quarters of 2022, respectively, on the sale of certain low yielding investment securities in our portfolio.
Non-Interest Expense
During the fourth quarter of 2022, non-interest expense totaled $14.0 million, an increase of $4.4 million, or 46.1%, over the same period in 2021 and $4.5 million, or 47.5% higher than in the prior quarter. The increase in non-interest expense was primarily due to $3.0 million of acquisition costs in the fourth quarter of 2022 compared to $134,000 in the prior quarter and none in the same period of 2021. Higher costs for compensation and benefits, occupancy and equipment and other non-interest expenses were primarily due to the costs associated with operating a new branch facility from the Freedom acquisition this quarter, while amortization expense increased due to the core deposit intangible recorded for the acquisition. During the fourth quarter of 2022, a valuation allowance of $354,000 was recorded on real estate owned and was included in other non-interest expense.
Income Tax Expense
Landmark recorded an income tax benefit of $466,000 in the fourth quarter of 2022 compared to income tax expense of $522,000 in the third quarter of 2022 and $1.0 million in the fourth quarter of 2021. The effective tax rate decreased to (62.5%) in the fourth quarter of 2022 compared to 24.8% in the fourth quarter of 2021 and 17.3% in the third quarter of 2022. The fourth quarter of 2022 included the recognition of $465,000 of previously unrecognized tax benefits, which reduced the effective tax rate in the period.
Balance Sheet Highlights
As of December 31, 2022, gross loans totaled $850.2 million, an increase of $138.9 million since September 30, 2022. The growth in loans was primarily due to the acquisition of Freedom’s $118.0 million loan portfolio coupled with core growth of $20.9 million in loans this quarter. During the quarter, loan growth was comprised of commercial real estate (growth of $75.4 million), commercial (growth of $28.8 million), residential real estate (growth of $31.5 million), and construction loans (growth of $4.6 million). Investment securities increased $8.7 million, during the fourth quarter of 2022, however gross unrealized net losses on these investment securities decreased from $41.0 million at September 30, 2022 to $33.2 million at December 31, 2022. Excluding the $150.4 million of deposits assumed in the Freedom acquisition, deposit balances increased $33.1 million, or 11.7% on an annualized basis, to $1.3 billion at December 31, 2022. The increase in deposits was mainly driven by seasonal growth in public fund deposit accounts. Other borrowings increased by $22.1 million this quarter, primarily due to $22.2 million of repurchase agreements assumed in the Freedom acquisition. At December 31, 2022, the loan to deposits ratio was 64.7% compared to 62.9% in the prior quarter and 56.9% in the same period last year.
Stockholders’ equity increased to $111.4 million (book value of $21.38 per share) as of December 31, 2022, from $105.5 million (book value of $20.20 per share) as of September 30, 2022, due mainly to a decrease in other comprehensive losses during the fourth quarter of 2022 related to the decline in the unrealized losses on investment securities mentioned above. The ratio of equity to total assets decreased to 7.41% on December 31, 2022, from 7.78% at September 30, 2022.
The allowance for loan losses totaled $8.8 million, or 1.03% of total gross loans on December 31, 2022, compared to $8.9 million, or 1.25% of total gross loans on September 30, 2022. Net loan charge-offs totaled $67,000 in the fourth quarter of 2022, compared to net loan recoveries of $9,000 during the same quarter last year and $43,000 during the third quarter of 2022. The ratio of annualized net loan charge-offs to total average loans was 0.03% in the fourth quarter of 2022, (0.01%) in the fourth quarter of last year and (0.02%) in the prior quarter. No provision for loan losses was made in either the fourth quarter of 2022 or 2021. A $500,000 provision for loan losses was recorded in the third quarter of 2022 primarily due to the growth in loans during the quarter.
Non-performing loans totaled $3.3 million, or 0.39% of gross loans, while loans 30-89 days delinquent totaled $738,000, or 0.09% of gross loans, as of December 31, 2022. Real estate owned totaled $0.9 million at December 31, 2022.
About Landmark
Landmark Bancorp, Inc., the holding company for Landmark National Bank, is listed on the Nasdaq Global Market under the symbol “LARK.” Headquartered in Manhattan, Kansas, Landmark National Bank is a community banking organization dedicated to providing quality financial and banking services. Landmark National Bank has 30 locations in 24 communities across Kansas: Manhattan (2), Auburn, Dodge City (2), Fort Scott (2), Garden City, Great Bend (2), Hoisington, Iola, Junction City, Kincaid, La Crosse, Lawrence (2), Lenexa, Louisburg, Mound City, Osage City, Osawatomie, Overland Park, Paola, Pittsburg, Prairie Village, Topeka (2), Wamego and Wellsville, Kansas. Visit www.banklandmark.com for more information.
Contacts: Michael E. Scheopner President and Chief Executive Officer Mark A. Herpich Chief Financial Officer (785) 565-2000 Special Note Concerning Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of Landmark. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of our management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this press release, including forward-looking statements, speak only as of the date they are made, and Landmark undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond our ability to control or predict, could cause actual results to differ materially from those in our forward-looking statements. These factors include, among others, the following: (i) the strength of the local, national and international economies, including the effects of inflationary pressures and supply chain constraints on such economies; (ii) changes in state and federal laws, regulations and governmental policies concerning banking, securities, consumer protection, insurance, monetary, trade and tax matters; (iii) changes in interest rates and prepayment rates of our assets; (iv) increased competition in the financial services sector and the inability to attract new customers; (v) timely development and acceptance of new products and services; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) our risk management framework; (viii) interruptions in information technology and telecommunications systems and third-party services; (ix) changes and uncertainty in benchmark interest rates, including the elimination of LIBOR and the development of a substitute; (x) the effects of severe weather, natural disasters, widespread disease or pandemics (including the COVID-19 pandemic), or other external events; (xi) the loss of key executives or employees; (xii) changes in consumer spending; (xiii) integration of acquired businesses; (xiv) unexpected outcomes of existing or new litigation; (xv) changes in accounting policies and practices, such as the implementation of the current expected credit losses accounting standard; (xvi) the economic impact of past and any future terrorist attacks, acts of war, including the current conflict in Ukraine, or threats thereof, and the response of the United States to any such threats and attacks; (xvii) the ability to manage credit risk, forecast loan losses and maintain an adequate allowance for loan losses; (xviii) declines in the value of our investment portfolio; (xix) the ability to raise additional capital; (xx) cyber-attacks; (xxi) declines in real estate values; (xxii) the effects of fraud on the part of our employees, customers, vendors or counterparties; and (xxiii) any other risks described in the “Risk Factors” sections of reports filed by Landmark with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. Additional information concerning Landmark and its business, including additional risk factors that could materially affect Landmark’s financial results, is included in our filings with the Securities and Exchange Commission.
LANDMARK BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (unaudited)(Dollars in thousands) December 31, September 30, June 30, March 31, December 31, 2022 2022 2022 2022 2021 Assets Cash and cash equivalents $ 23,156 $ 49,234 $ 30,413 $ 106,319 $ 189,213 Interest-bearing deposits at other banks 9,084 8,844 8,360 6,381 7,378 Investment securities: U.S. treasury securities 123,111 127,445 135,459 119,882 42,675 U.S. federal agency obligations 1,988 4,979 14,931 17,013 17,195 Municipal obligations, tax exempt 127,262 128,392 134,994 130,915 137,984 Municipal obligations, taxable 67,244 61,959 49,356 45,586 40,046 Agency mortgage-backed securities 169,701 161,331 151,893 153,587 142,817 Investment securities available-for-sale, at fair value 489,306 484,106 486,633 466,983 380,717 Investment securities held-to-maturity 3,524 - - - - Bank stocks, at cost 5,470 6,641 2,881 2,856 2,905 Loans: One-to-four family residential real estate 236,982 205,466 192,517 169,514 166,081 Construction and land 22,725 18,119 23,092 25,408 27,644 Commercial real estate 304,074 228,669 209,879 196,736 198,472 Commercial 173,415 144,582 137,929 127,226 132,154 Paycheck Protection Program (PPP) 21 410 652 5,218 17,179 Agriculture 84,283 86,114 78,240 82,484 94,267 Municipal 2,026 2,036 2,076 2,212 2,050 Consumer 26,664 25,911 25,531 24,751 24,541 Total gross loans 850,190 711,307 669,916 633,549 662,388 Net deferred loan (fees) costs and loans in process (250 ) (311 ) 229 (43 ) (380 ) Allowance for loan losses (8,791 ) (8,858 ) (8,315 ) (8,357 ) (8,775 ) Loans, net 841,149 702,138 661,830 625,149 653,233 Loans held for sale 2,488 2,741 6,264 5,424 4,795 Bank owned life insurance 37,323 32,672 32,483 32,293 32,106 Premises and equipment, net 24,327 20,628 20,679 20,919 20,803 Goodwill 32,199 17,532 17,532 17,532 17,532 Other intangible assets, net 4,006 36 52 67 84 Mortgage servicing rights 3,813 3,980 4,025 4,128 4,193 Real estate owned, net 934 1,288 1,288 1,288 2,551 Other assets 26,088 25,456 19,911 17,095 13,458 Total assets $ 1,502,867 $ 1,355,296 $ 1,292,351 $ 1,306,434 $ 1,328,968 Liabilities and Stockholders’ Equity Liabilities: Deposits: Non-interest-bearing demand 410,142 347,942 343,107 350,342 350,005 Money market and checking 626,659 504,973 520,056 517,936 536,868 Savings 170,570 170,988 170,419 167,823 155,501 Certificates of deposit 93,278 93,234 97,885 103,464 106,107 Total deposits 1,300,649 1,117,137 1,131,467 1,139,565 1,148,481 Federal Home Loan Bank borrowings 8,200 74,900 - - - Subordinated debentures 21,651 21,651 21,651 21,651 21,651 Other borrowings 38,402 16,349 6,223 7,004 7,403 Accrued interest and other liabilities 22,532 19,775 15,708 14,701 15,790 Total liabilities 1,391,434 1,249,812 1,175,049 1,182,921 1,193,325 Stockholders’ equity: Common stock 52 50 50 50 50 Additional paid-in capital 84,273 79,329 79,284 79,206 79,120 Retained earnings 52,174 58,114 56,662 54,677 52,593 Treasury stock, at cost - (1,040 ) (538 ) - - Accumulated other comprehensive (loss) income (25,066 ) (30,969 ) (18,156 ) (10,420 ) 3,880 Total stockholders’ equity 111,433 105,484 117,302 123,513 135,643 Total liabilities and stockholders’ equity $ 1,502,867 $ 1,355,296 $ 1,292,351 $ 1,306,434 $ 1,328,968 LANDMARK BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings (unaudited)(Dollars in thousands, except per share amounts) Three months ended, Year ended, December 31, September 30, December 31, December 31, December 31, 2022 2022 2021 2022 2021 Interest income: Loans $ 11,101 $ 8,025 $ 7,907 $ 33,473 $ 33,612 Investment securities: Taxable 2,356 1,783 836 6,735 3,192 Tax-exempt 786 780 737 3,018 3,022 Total interest income 14,243 10,588 9,480 43,226 39,826 Interest expense: Deposits 1,452 771 223 2,776 1,023 Borrowed funds 905 366 121 1,570 483 Total interest expense 2,357 1,137 344 4,346 1,506 Net interest income 11,886 9,451 9,136 38,880 38,320 Provision for loan losses - 500 - - 500 Net interest income after provision for loan losses 11,886 8,951 9,136 38,880 37,820 Non-interest income: Fees and service charges 2,572 2,511 2,403 9,651 8,857 Gains on sales of loans, net 417 1,049 1,823 3,444 10,487 Bank owned life insurance 214 189 192 780 686 (Losses) gains on sales of investment securities, net (750 ) (353 ) - (1,103 ) 1,138 Other 359 133 180 928 1,093 Total non-interest income 2,812 3,529 4,598 13,700 22,261 Non-interest expense: Compensation and benefits 5,626 5,051 5,061 20,405 20,157 Occupancy and equipment 1,373 1,335 1,214 5,118 4,482 Data processing 495 383 525 1,580 2,016 Amortization of mortgage servicing rights and other intangibles 481 314 376 1,446 1,601 Professional fees 554 472 595 1,892 1,831 Acquisition costs 3,043 134 - 3,398 - Other 2,380 1,769 1,779 7,431 7,169 Total non-interest expense 13,952 9,458 9,550 41,270 37,256 Earnings before income taxes 746 3,022 4,184 11,310 22,825 Income tax expense (466 ) 522 1,037 1,432 4,814 Net earnings $ 1,212 $ 2,500 $ 3,147 $ 9,878 $ 18,011 Net earnings per share (1) Basic $ 0.23 $ 0.48 $ 0.60 $ 1.89 $ 3.43 Diluted 0.23 0.48 0.60 1.88 3.42 Dividends per share (1) 0.20 0.20 0.18 0.80 0.73 Shares outstanding at end of period (1) 5,213,232 5,221,966 5,247,332 5,213,232 5,247,332 Weighted average common shares outstanding - basic (1) 5,214,698 5,228,270 5,247,294 5,230,749 5,244,273 Weighted average common shares outstanding - diluted (1) 5,228,490 5,242,073 5,267,143 5,245,765 5,259,035 Tax equivalent net interest income $ 12,089 $ 9,657 $ 9,335 $ 39,680 $ 39,136 (1 ) Share and per share values at or for the periods ended September 30, 2022 and December 31, 2021 have been adjusted to give effect to the 5% stock dividend paid during December 2022. LANDMARK BANCORP, INC. AND SUBSIDIARIES
Select Ratios and Other Data (unaudited)As of or for the As of or for the (Dollars in thousands, except per share amounts) three months ended, year ended, December 31, September 30, December 31, December 31, December 31, 2022 2022 2021 2022 2021 Performance ratios: Return on average assets (1) 0.32 % 0.77 % 0.98 % 0.73 % 1.43 % Return on average equity (1) 4.50 % 8.42 % 9.25 % 8.25 % 13.68 % Net interest margin (1)(2) 3.53 % 3.21 % 3.17 % 3.21 % 3.39 % Effective tax rate -62.5 % 17.3 % 24.8 % 12.7 % 21.1 % Efficiency ratio (3) 66.8 % 69.6 % 68.3 % 69.4 % 61.8 % Non-interest income to total income (3) 23.1 % 29.1 % 33.6 % 27.4 % 35.5 % Average balances: Investment securities $ 504,495 $ 494,283 $ 383,508 $ 474,732 $ 343,059 Loans 832,285 687,716 652,691 702,247 689,908 Assets 1,507,454 1,307,866 1,276,079 1,357,479 1,255,696 Interest-bearing deposits 850,041 782,533 758,061 804,146 765,537 Subordinated debentures and other borrowings 65,521 37,532 21,651 36,712 21,653 Repurchase agreements 31,533 7,411 7,982 13,239 5,915 Stockholders’ equity $ 106,782 $ 119,100 135,015 $ 119,792 131,654 Average tax equivalent yield/cost (1): Investment securities 2.56 % 2.18 % 1.77 % 2.15 % 1.99 % Loans 5.29 % 4.63 % 4.81 % 4.77 % 4.88 % Total interest-bearing assets 4.22 % 3.59 % 3.29 % 3.56 % 3.52 % Interest-bearing deposits 0.68 % 0.39 % 0.12 % 0.35 % 0.13 % Subordinated debentures and other borrowings 4.83 % 3.58 % 2.14 % 3.88 % 2.18 % Repurchase agreements 1.36 % 1.45 % 0.20 % 1.10 % 0.19 % Total interest-bearing liabilities 0.99 % 0.55 % 0.17 % 0.51 % 0.19 % Capital ratios: Equity to total assets 7.41 % 7.78 % 10.21 % Tangible equity to tangible assets (3) 5.13 % 6.57 % 9.00 % Book value per share $ 21.38 $ 20.20 $ 25.85 Tangible book value per share (3) $ 14.43 $ 16.84 $ 22.49 Rollforward of allowance for loan losses: Beginning balance $ 8,858 $ 8,315 $ 8,766 $ 8,775 $ 8,775 Charge-offs (101 ) (106 ) (70 ) (336 ) (978 ) Recoveries 34 149 79 352 478 Provision for loan losses - 500 - - 500 Ending balance $ 8,791 $ 8,858 $ 8,775 $ 8,791 $ 8,775 Non-performing assets: Non-accrual loans $ 3,326 $ 4,823 $ 5,230 Accruing loans over 90 days past due - - - Real estate owned 934 1,288 2,551 Total non-performing assets $ 4,260 $ 6,111 $ 7,781 Loans 30-89 days delinquent $ 738 $ 657 $ 1,990 Other ratios: Loans to deposits 64.67 % 62.85 % 56.88 % Loans 30-89 days delinquent and still accruing to gross loans outstanding 0.09 % 0.09 % 0.30 % Total non-performing loans to gross loans outstanding 0.39 % 0.68 % 0.79 % Total non-performing assets to total assets 0.28 % 0.45 % 0.59 % Allowance for loan losses to gross loans outstanding 1.03 % 1.25 % 1.32 % Allowance for loan losses to gross loans outstanding excluding PPP loans 1.03 % 1.25 % 1.36 % Allowance for loan losses to total non-performing loans 264.31 % 183.66 % 167.78 % Net loan charge-offs to average loans (1) 0.03 % -0.02 % -0.01 % 0.00 % 0.07 % (1 ) Information is annualized. (2 ) Net interest margin is presented on a fully tax equivalent basis, using a 21% federal tax rate. (3 ) Non-GAAP financial measures. See the “Non-GAAP Financial Measures” section of this press release for a reconciliation to the most comparable GAAP equivalent. LANDMARK BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Finacials Measures (unaudited)As of or for the As of or for the (Dollars in thousands, except per share amounts) three months ended, Year ended, December 31, September 30, December 31, December 31, December 31, 2022 2022 2021 2022 2021 Non-GAAP earnings reconciliation: Net earnings $ 1,212 $ 2,500 $ 3,147 $ 9,878 $ 18,011 Add: acquisition costs 3,043 134 - 3,398 - Less: income tax expense (effective tax rate of 24.5%) (746 ) (33 ) - (833 ) - Adjusted net earnings (A) $ 3,509 $ 2,601 $ 3,147 $ 12,443 $ 18,011 Weighted average common shares outstanding - diluted (B) 5,228,490 5,242,073 5,267,143 5,245,765 5,259,035 Adjusted diluted net earnings per share (A/B) $ 0.67 $ 0.50 $ 0.60 $ 2.37 $ 3.42 Adjusted return on average assets (1) 0.92 % 0.79 % 0.98 % 0.92 % 1.43 % Adjusted return on average equity (1) 13.04 % 8.66 % 9.25 % 10.39 % 13.68 % (1 ) Information is annualized. Non-GAAP financial ratio reconciliation: Total non-interest expense $ 13,952 $ 9,458 $ 9,550 $ 41,270 $ 37,256 Less: foreclosure and real estate owned expense (393 ) (32 ) (124 ) (457 ) (415 ) Less: amortization of other intangibles (200 ) (16 ) (20 ) (248 ) (102 ) Less: acquisition costs (3,043 ) (134 ) - (3,398 ) - Adjusted non-interest expense (A) 10,316 9,276 9,406 37,167 36,739 Net interest income (B) 11,886 9,451 9,136 38,880 38,320 Non-interest income 2,812 3,529 4,598 13,700 22,261 Less: losses (gains) on sales of investment securities, net 750 353 - 1,103 (1,138 ) Less: gains on sales of premises and equipment and foreclosed assets - - 28 (114 ) 4 Adjusted non-interest income (C) $ 3,562 $ 3,882 $ 4,626 $ 14,689 $ 21,127 Efficiency ratio (A/(B+C)) 66.8 % 69.6 % 68.3 % 69.4 % 61.8 % Non-interest income to total income (C/(B+C)) 23.1 % 29.1 % 33.6 % 27.4 % 35.5 % Total stockholders’ equity $ 111,433 $ 105,484 $ 135,643 Less: goodwill and other intangible assets (36,205 ) (17,568 ) (17,616 ) Tangible equity (D) $ 75,228 $ 87,916 $ 118,027 Total assets $ 1,502,867 $ 1,355,296 $ 1,328,968 Less: goodwill and other intangible assets (36,205 ) (17,568 ) (17,616 ) Tangible assets (E) $ 1,466,662 $ 1,337,728 $ 1,311,352 Tangible equity to tangible assets (D/E) 5.13 % 6.57 % 9.00 % Shares outstanding at end of period (F) 5,213,232 5,221,966 5,247,332 Tangible book value per share (D/F) $ 14.43 $ 16.84 $ 22.49 
