Attached files
| file | filename |
|---|---|
| 8-K - LANDMARK BANCORP INC | v209819_8-k.htm |
PRESS
RELEASE
Contacts:
Patrick
L. Alexander
President
and Chief Executive Officer
Mark A.
Herpich
Chief
Financial Officer
(785)
565-2000
FOR
IMMEDIATE RELEASE
February
2, 2011
Landmark
Bancorp, Inc. Announces Results for Fourth Quarter and Year Ended December 31,
2010
Declares
Cash Dividend of $0.19 per Share for Landmark Stockholders
(Manhattan,
KS, February 2, 2011) Landmark Bancorp, Inc. (Nasdaq: LARK), a bank holding
company based in Manhattan, Kansas, reported net earnings of $844,000 ($0.32 per
diluted share) for the quarter ended December 31, 2010, compared to net earnings
of $1.1 million ($0.43 per diluted share) for the fourth quarter of 2009. For
the year ended December 31, 2010, we reported net earnings of $2.0 million
($0.78 per diluted share), compared to net earnings of $3.3 million ($1.25 per
diluted share) in 2009. Management will host a conference call to discuss these
results on Thursday, February 3, 2011, at 10:00 am (CT). Investors may
participate in the earnings call via telephone by dialing (877) 317-6789. A
replay of the call will be available through March 6, 2011, by dialing (877)
344-7529 and using conference number 447350.
Additionally,
we announced that our Board of Directors declared a cash dividend of $0.19 per
share, to be paid March 7, 2011, to common stockholders of record on February
23, 2011.
Patrick
L. Alexander, President and Chief Executive Officer, commented: “We reported net
earnings of $844,000 for the fourth quarter of 2010 and $2.0 million for the
full year of 2010, as we continued to achieve solid fundamental earnings while
providing for credit costs associated with working diligently to improve asset
quality and address issues in the loan portfolio. We have made steady progress
in reducing nonperforming assets by aggressively managing our loan portfolio and
strengthening our balance sheet in a challenging economic and credit
environment. Our ratio of nonperforming loans to total loans has decreased to
1.5% at December 31, 2010, compared to 3.4% at December 31, 2009. While it is
difficult to forecast future events, we believe our strong capital position,
loan portfolio management, and underlying fundamental earnings all position us
to deal with the current challenges and give us reason for optimism for 2011 and
beyond.”
Fourth-Quarter
Financial Highlights
Net
interest income was $4.4 million for the quarter ended December 31, 2010, a
decline of $184,000, or 4.0%, compared to the fourth quarter of 2009. While net
interest margin, on a tax equivalent basis, increased to 3.78% for the fourth
quarter of 2010 from 3.66% for the same period of 2009, this improvement was
more than offset by lower average interest-earning asset balances. The provision
for loan losses totaled $700,000 during the fourth quarter of 2010, compared to
$300,000 during the fourth quarter of 2009.
Total
non-interest income increased to $2.7 million for the fourth quarter of 2010, up
$924,000, or 51.7%, from a year earlier. The increase in non-interest income was
primarily attributable to a $747,000 increase in gains on sale of loans, as
origination volumes of residential real estate loans sold in the secondary
market increased in the fourth quarter of 2010. Higher refinancing activity
associated with the low mortgage rate environment drove the increase in
residential real estate loan originations.
We did
not record any net impairment losses on investment securities during the fourth
quarter of 2010 as compared to the fourth quarter of 2009, when we recorded a
credit-related, other-than-temporary impairment loss of $252,000 on our
investments in pooled trust preferred investment securities.
Non-interest
expense was $5.7 million for the fourth quarter of 2010, an increase of
$968,000, or 20.5%, compared to the same period of 2009. The change in
non-interest expense included increases of $381,000 in foreclosure and real
estate owned expense and $274,000 in professional fees. The increase in
foreclosure and real estate owned expense was primarily the result of a
provision to record valuation allowances to reflect declines in the fair value
of certain real estate owned assets. The increase in professional fees was
primarily related to legal action seeking payment from the guarantor of a
construction loan that was partially charged off in the second quarter of 2010.
During the fourth quarter of 2010, we recorded a tax benefit of $84,000 compared
to tax expense of $7,000, or an effective tax rate of 0.6%, during the same
period of 2009. The decline in effective tax rate was driven by lower taxable
income, while our tax-exempt investment income and bank owned life insurance
income remained similar between the quarters. In addition, the fourth quarters
of both 2010 and 2009 reflect the recognition of previously unrealized tax
benefits, amounting to $100,000 and $162,000 respectively, which favorably
impacted our effective tax rate in both periods.
Full-Year
Financial Highlights
Net
interest income for 2010 was $18.0 million, a decrease of $134,000, or 0.7%,
based on lower average interest-earning assets compared to 2009. Net interest
margin, on a tax equivalent basis, increased to 3.78% for 2010 from 3.57% during
2009. The provision for loan losses increased to $5.9 million in 2010, compared
to $3.3 million in 2009. The provision for loan losses reflected the
increased charge-offs that occurred in the second quarter of 2010, primarily
related to a significant decline in appraised value of the collateral securing a
previously identified and impaired construction loan. While it was necessary to
recognize the loss based on appraised value, we continue to pursue payment from
the guarantor.
Total
non-interest income increased $704,000, or 8.4%, to $9.1 million in 2010
compared to 2009. The increase in non-interest income included a $355,000
increase in gains on sales of loans and a $284,000 increase in fees and service
charges.
Net gains
and losses on investment securities experienced a favorable change of $1.1
million between 2010 and 2009. We recorded credit-related, other-than-temporary
impairment losses on our investment securities portfolio during both 2010 and
2009, but the net impairment loss declined from $961,000 during 2009 to $391,000
during 2010. Also, we realized a $563,000 gain on the sale of investments in
2010 due to the sale of a portion of our mortgage-backed investment securities
portfolio, compared to a gain of only $9,000 during 2009.
Non-interest
expense totaled $20.0 million in 2010, an increase of $1.1 million, or 5.7%,
compared to 2009. The increase in non-interest expense was primarily due to
increases of $452,000 in compensation and benefits and $355,000 in foreclosure
and real estate owned expense. The May 2009 acquisition of a branch in Lawrence,
Kansas, contributed to the increase in compensation and benefits expense in 2010
compared to 2009. During 2010, we recorded a tax benefit of $615,000 compared to
tax expense of $146,000, or an effective tax rate of 4.3%, during 2009. The
decline in effective tax rate was driven by lower taxable income, primarily as a
result of our increased provision for loan losses, while our tax-exempt
investment income and bank owned life insurance income remained similar between
the years.
Balance
Sheet Highlights
Total assets decreased to $561.5
million at December 31, 2010, from $584.2 million at December 31, 2009.
Stockholders’ equity was $53.8 million (book value of $20.41 per share) at
December 31, 2010, compared to $53.9 million (book value of $20.62 per share) as
of December 31, 2009. The ratio of equity to total assets improved to 9.58% at
December 31, 2010, from 9.23% a year earlier. Net loans decreased to $306.7
million at December 31, 2010, compared to $342.7 million at December 31, 2009.
The decline in our loan balances was the result of multiple factors, including
our decision to reduce exposure to construction and land loans, reduced loan
demand from our customers, increased loan charge-offs and normal run-off in our
one-to-four-family residential real estate loans.
At
December 31, 2010, the allowance for loan losses was $5.0 million, or 1.6% of
gross loans outstanding, compared to $5.5 million, or 1.6% of gross loans
outstanding at December 31, 2009. Loans past due 30-89 days and still
accruing interest totaled $1.4 million, or 0.4% of gross loans, at December 31,
2010, compared to $2.5 million, or 0.7% of gross loans, at December 31, 2009.
Non-accrual loans, which primarily consist of loans greater than 90 days past
due, totaled $4.8 million, or 1.5% of gross loans, at December 31, 2010, down
from $11.8 million, or 3.4% of gross loans, at December 31, 2009. During 2010 we
had net loan charge-offs of $6.4 million, compared to $1.7 million during 2009.
The increase in net loan charge-offs was principally associated with a $4.3
million construction loan and a $2.3 million commercial agriculture loan. During
2010, we charged off the remaining balance of the commercial agriculture loan
and $3.3 million of the construction loan. In 2009, our net loan charge-offs
related primarily to a commercial loan relationship that was liquidated in
bankruptcy.
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 21
locations in 16 communities across Kansas: Manhattan (2), Auburn, Dodge City
(2), Fort Scott, Garden City, Great Bend (2), Hoisington, Junction City,
LaCrosse, Lawrence (2), Louisburg, Osage City, Osawatomie, Paola, Topeka (2) and
Wamego, Kansas. Visit www.banklandmark.com for more information.
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 Bancorp, Inc. 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 the Company 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 its forward-looking statements. These
factors include, among others, the following: (i) the strength of the local
and national economy; (ii) changes in state and federal laws, regulations
and governmental policies concerning our general business; (iii) changes in
technology and the ability to develop and maintain secure and reliable
electronic systems; (iv) changes in interest rates and prepayment rates of our
assets; (v) increased competition in the financial services sector and the
inability to attract new customers; (vi) the economic impact of armed
conflict or terrorist acts involving the United States; (vii) the loss of
key executives or employees; (viii) changes in consumer spending;
(ix) unexpected outcomes of existing or new litigation; and
(x) changes in accounting policies and practices. 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 Bancorp, Inc.
and its business, including additional factors that could materially affect the
Company’s financial results, is included in our filings with the Securities and
Exchange Commission.
Financial
Highlights
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited):
|
(Dollars
in thousands)
|
December
31,
|
December
31,
|
||||||
|
2010
|
2009
|
|||||||
|
ASSETS:
|
||||||||
|
Cash
and cash equivalents
|
$ | 9,735 | $ | 12,379 | ||||
|
Investment
securities
|
175,872 | 169,619 | ||||||
|
Loans,
net
|
306,668 | 342,738 | ||||||
|
Loans
held for sale
|
12,576 | 4,703 | ||||||
|
Premises
and equipment, net
|
15,225 | 15,877 | ||||||
|
Goodwill
|
12,894 | 12,894 | ||||||
|
Other
intangible assets, net
|
2,233 | 2,481 | ||||||
|
Bank
owned life insurance
|
13,080 | 12,548 | ||||||
|
Other
assets
|
13,223 | 10,928 | ||||||
|
TOTAL
ASSETS
|
$ | 561,506 | $ | 584,167 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY:
|
||||||||
|
Deposits
|
$ | 431,314 | $ | 438,595 | ||||
|
Federal
Home Loan Bank and other borrowings
|
70,301 | 82,183 | ||||||
|
Other
liabilities
|
6,074 | 9,494 | ||||||
|
Total
liabilities
|
507,689 | 530,272 | ||||||
|
Stockholders'
equity
|
53,817 | 53,895 | ||||||
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 561,506 | $ | 584,167 | ||||
|
LOANS
(unaudited):
|
||||||||
|
(Dollars
in thousands)
|
December
31,
|
December
31,
|
||||||
|
2010
|
2009
|
|||||||
|
One-to-four
family residential real estate
|
$ | 79,631 | $ | 89,295 | ||||
|
Construction
and land
|
23,652 | 36,864 | ||||||
|
Commercial
real estate
|
92,124 | 99,459 | ||||||
|
Commercial
|
57,286 | 61,347 | ||||||
|
Agriculture
|
38,836 | 38,205 | ||||||
|
Municipal
|
5,393 | 5,672 | ||||||
|
Consumer
|
14,385 | 16,922 | ||||||
|
Net
deferred loan costs and loans in process
|
328 | 442 | ||||||
|
Allowance
for loan losses
|
(4,967 | ) | (5,468 | ) | ||||
|
Loans,
net
|
$ | 306,668 | $ | 342,738 | ||||
NONPERFORMING
ASSETS (unaudited):
|
(Dollars
in thousands)
|
December
31,
|
December
31,
|
||||||
|
2010
|
2009
|
|||||||
|
Non-accrual
loans
|
$ | 4,817 | $ | 11,830 | ||||
|
Accruing
loans over 90 days past due
|
- | - | ||||||
|
Nonperforming
investments
|
1,125 | 1,528 | ||||||
|
Real
estate owned
|
3,194 | 1,129 | ||||||
|
Total
nonperforming assets
|
$ | 9,136 | $ | 14,487 | ||||
|
Loans
past due 30-89 days and still accruing to gross loans
outstanding
|
0.4 | % | 0.7 | % | ||||
|
Total
nonperforming loans to gross loans outstanding
|
1.5 | % | 3.4 | % | ||||
|
Total
nonperforming assets to total assets
|
1.6 | % | 2.5 | % | ||||
|
Allowance
for loan losses to gross loans outstanding
|
1.6 | % | 1.6 | % | ||||
|
Allowance
for loan losses to total nonperforming loans
|
103.1 | % | 46.2 | % | ||||
Financial
Highlights (continued)
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited):
|
|
(Dollars
in thousands, except per share
data)
|
|
Three
months ended December 31,
|
Years
ended December 31,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
Interest
income:
|
||||||||||||||||
|
Loans
|
$ | 4,641 | $ | 5,041 | $ | 19,246 | $ | 20,574 | ||||||||
|
Investment
securities and other
|
1,160 | 1,585 | 5,105 | 6,692 | ||||||||||||
|
Total
interest income
|
5,801 | 6,626 | 24,351 | 27,266 | ||||||||||||
|
Interest
expense:
|
||||||||||||||||
|
Deposits
|
863 | 1,222 | 3,786 | 5,820 | ||||||||||||
|
Borrowed
funds
|
501 | 783 | 2,519 | 3,266 | ||||||||||||
|
Total
interest expense
|
1,364 | 2,005 | 6,305 | 9,086 | ||||||||||||
|
Net
interest income
|
4,437 | 4,621 | 18,046 | 18,180 | ||||||||||||
|
Provision
for loan losses
|
700 | 300 | 5,900 | 3,300 | ||||||||||||
|
Net
interest income after provision for loan losses
|
3,737 | 4,321 | 12,146 | 14,880 | ||||||||||||
|
Non-interest
income:
|
||||||||||||||||
|
Fees
and service charges
|
1,236 | 1,133 | 4,706 | 4,422 | ||||||||||||
|
Gains
on sales of loans, net
|
1,209 | 462 | 3,446 | 3,091 | ||||||||||||
|
Bank
owned life insurance
|
134 | 135 | 506 | 508 | ||||||||||||
|
Other
|
132 | 57 | 482 | 415 | ||||||||||||
|
Total
non-interest income
|
2,711 | 1,787 | 9,140 | 8,436 | ||||||||||||
|
Investment
securities gains (losses), net:
|
||||||||||||||||
|
Net
impairment losses
|
- | (252 | ) | (391 | ) | (961 | ) | |||||||||
|
Gains
on sales of investment securities
|
- | 9 | 563 | 9 | ||||||||||||
|
Investment
securities gains (losses), net
|
- | (243 | ) | 172 | (952 | ) | ||||||||||
|
Non-interest
expense:
|
||||||||||||||||
|
Compensation
and benefits
|
2,517 | 2,323 | 9,514 | 9,062 | ||||||||||||
|
Occupancy
and equipment
|
686 | 694 | 2,809 | 2,724 | ||||||||||||
|
Data
processing
|
239 | 195 | 879 | 778 | ||||||||||||
|
Professional
fees
|
398 | 124 | 831 | 678 | ||||||||||||
|
Amortization
of intangibles
|
221 | 193 | 790 | 767 | ||||||||||||
|
Foreclosure
and real estate owned expense
|
485 | 104 | 763 | 408 | ||||||||||||
|
Federal
deposit insurance premiums
|
181 | 193 | 723 | 849 | ||||||||||||
|
Advertising
|
243 | 119 | 617 | 480 | ||||||||||||
|
Other
|
718 | 775 | 3,104 | 3,200 | ||||||||||||
|
Total
non-interest expense
|
5,688 | 4,720 | 20,030 | 18,946 | ||||||||||||
|
Earnings
before income taxes
|
760 | 1,145 | 1,428 | 3,418 | ||||||||||||
|
Income
tax expense (benefit)
|
(84 | ) | 7 | (615 | ) | 146 | ||||||||||
|
Net
earnings
|
$ | 844 | $ | 1,138 | $ | 2,043 | $ | 3,272 | ||||||||
|
Net earnings per share
(1)
|
||||||||||||||||
|
Basic
|
$ | 0.32 | $ | 0.43 | $ | 0.78 | $ | 1.25 | ||||||||
|
Diluted
|
0.32 | 0.43 | 0.78 | 1.25 | ||||||||||||
|
Book value per share
(1)
|
$ | 20.41 | $ | 20.62 | $ | 20.41 | $ | 20.62 | ||||||||
|
Shares
outstanding at end of period
|
2,636,891 | 2,614,268 | 2,636,891 | 2,614,268 | ||||||||||||
|
Weighted
average common shares outstanding - basic
|
2,635,938 | 2,614,268 | 2,628,657 | 2,614,401 | ||||||||||||
|
Weighted
average common shares outstanding - diluted
|
2,636,939 | 2,619,477 | 2,629,683 | 2,619,762 | ||||||||||||
(1) Per
share values at or for the periods ended December 31, 2009 have been adjusted to
give effect to the 5% stock dividend paid during December
2010.
OTHER
DATA (unaudited):
|
Three
months ended December 31,
|
Years
ended December 31,
|
|||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||
|
Return on average assets
(2)
|
0.59%
|
0.75%
|
0.35%
|
0.54%
|
||||||||
|
Return on average equity
(2)
|
6.09%
|
8.33%
|
3.73%
|
6.18%
|
||||||||
|
Equity
to total assets
|
9.58%
|
9.23%
|
9.58%
|
9.23%
|
||||||||
|
Net interest margin (2)
(3)
|
3.78%
|
3.66%
|
3.78%
|
3.57%
|
||||||||
|
(2)
Information for the three months ended December 31 is
annualized.
|
|
(3)
Net interest margin is presented on a fully tax equivalent basis, using a
34% federal tax rate.
|