Attached files
| file | filename |
|---|---|
| 8-K/A - AMENDMENT TO FORM 8-K - LANDMARK BANCORP INC | v365536_8ka.htm |
| EX-99.3 - EXHIBIT 99.3 - LANDMARK BANCORP INC | v365536_ex99-3.htm |
| EX-23.1 - EXHIBIT 23.1 - LANDMARK BANCORP INC | v365536_ex23-1.htm |
| EX-99.1 - EXHIBIT 99.1 - LANDMARK BANCORP INC | v365536_ex99-1.htm |
| EX-99.2 - EXHIBIT 99.2 - LANDMARK BANCORP INC | v365536_ex99-2.htm |
Exhibit 99.4
Unaudited Pro Forma Condensed
Combined Financial Information
The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2013 is based on the unaudited historical consolidated balance sheet of Landmark Bancorp, Inc. ("Landmark") and First Capital Corporation ("First Capital) as of that date assuming that the transaction between Landmark and First Capital (the "Merger") consummated on November 1, 2013 had occurred on September 30, 2013.
The following unaudited pro forma condensed consolidated statements of earnings for the nine months ended September 30, 2013 and the year ended December 31, 2012 reflect the combination of Landmark and First Capital as if the purchase had occurred at the beginning of the respective periods. The unaudited condensed consolidated statements of earnings give effect to the purchase accounting adjustments recognized in the transaction.
These pro forma financial statements should be read in conjunction with the historical consolidated financial statements and related notes of Landmark Bancorp, Inc. in the Company’s December 31, 2012 Form 10-K, and in conjunction with the historical consolidated financial statements of First Capital and related notes included herein.
Goodwill and core deposit intangible recognized with respect to the merger were approximately $6.2 million. Core deposit intangible will be amortized from the acquisition date over a 10-year amortization period. In the opinion of Landmark’s management, the estimates used in the preparation of these financial statements are reasonable under the circumstances.
The pro forma adjustments are based upon information and assumptions available at the time of the filing of this current report on Form 8-K/A. The unaudited pro forma condensed combined financial information includes adjustments that are: factually supportable, directly attributable to the transaction and with respect to the unaudited pro forma condensed combined statements of operations and expected to have a continuing impact on Landmark on a consolidated basis. The adjustments reflect our preliminary estimates of the purchase price allocation, which may change upon finalization of appraisals and other valuations that are in process.
The combined company expects to achieve annualized benefits from the Merger including operating cost savings totaling approximately $2.0 million. These pro forma financial statements do not reflect any potential cost savings that are expected to result from the combination of operations of Landmark and First Capital. No assurance can be given with respect to the ultimate level of cost savings and revenue enhancements to be realized. As a result, these pro forma financial statements are not necessarily indicative of either the results of operations or financial condition that would have been achieved had the Merger in fact occurred on the dates indicated, nor do they purport to be indicative of results of operations or financial condition that may be achieved in the future by the combined company.
| Page 1 |
Exhibit 99.4
Landmark Bancorp, Inc. and Subsidiary
Pro Forma Condensed Consolidated Balance Sheet (unaudited)
(dollars in thousands)
| As of September 30, 2013 | ||||||||||||||||||||
| Landmark | First Capital | |||||||||||||||||||
| Bancorp, Inc. | Corporation | Excluded | Pro Forma | Pro Forma | ||||||||||||||||
| (historical) | (historical) | Assets | Adjustments | Combined | ||||||||||||||||
| ASSETS: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 12,130 | $ | 23,508 | $ | (1,360 | )A | $ | (6,288 | )C | $ | 27,990 | ||||||||
| Investment securities | 237,705 | 107,124 | (42,274 | )B | (940 | )D | 301,615 | |||||||||||||
| Loans, net | 319,523 | 107,294 | (9,909 | )A | (1,933 | )E | 414,975 | |||||||||||||
| Loans held for sale | 3,769 | 3,366 | 7,135 | |||||||||||||||||
| Premises and equipment, net | 14,636 | 9,221 | (4,812 | )A | 1,961 | F | 21,006 | |||||||||||||
| Bank owned life insurance | 17,177 | 7,098 | (7,098 | )A | 17,177 | |||||||||||||||
| Goodwill | 13,075 | - | 4,444 | G | 17,519 | |||||||||||||||
| Other intangible assets, net | 2,712 | 177 | 1,710 | H | 4,599 | |||||||||||||||
| Real estate owned, net | 455 | 967 | (967 | )A | 455 | |||||||||||||||
| Accrued interest and other assets | 8,871 | 2,300 | (178 | )A | 46 | J | 11,039 | |||||||||||||
| TOTAL ASSETS | $ | 630,053 | $ | 261,055 | $ | (66,598 | ) | $ | (1,000 | ) | $ | 823,510 | ||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||||||||||||||||||
| Deposits | $ | 499,107 | $ | 179,171 | $ | 678,278 | ||||||||||||||
| Federal Home Loan Bank and other borrowings | 60,232 | 56,351 | (42,274 | )B | (1,000 | )I | 73,309 | |||||||||||||
| Other liabilities | 7,498 | 2,175 | (966 | )A | 8,707 | |||||||||||||||
| Total liabilities | 566,837 | 237,697 | (43,240 | ) | (1,000 | ) | 760,294 | |||||||||||||
| Stockholders' equity | 63,216 | 23,358 | (23,358 | )A | 63,216 | |||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 630,053 | $ | 261,055 | $ | (66,598 | ) | $ | (1,000 | ) | $ | 823,510 | ||||||||
| Page 2 |
Exhibit 99.4
Notes to Pro Forma Condensed Consolidated Balance Sheet (unaudited)
Adjustments made in the preparation of the unaudited pro forma condensed consolidated balance sheet are as follows:
| A. | Adjustment to remove assets of Citizens Bank and First Capital that were excluded in the acquisition. |
| B. | Adjustment to record the prepayment of FHLB advances with sales of investment securities, which Citizens Bank completed prior to the acquisition. |
| C. | Adjustment to record cash purchase price of $6.3 million. The cash purchase price excludes $5.0 million of cash received from First Capital to assume $5.0 million of subordinated debentures. |
| D. | Adjustment represents the estimated fair value adjustment for acquired investment securities. |
| E. | Adjustment represents the estimated fair value adjustment for acquired loans. |
| F | Adjustment represents the estimated fair value adjustment for acquired premises and equipment. |
| G. | Adjustment to record estimated goodwill. |
| H. | Adjustment to record an estimated core deposit intangible. |
| I. | Adjustment represents the estimated fair value adjustment for the assumed subordinated debentures of First Capital (KS) Statuatory Trust. |
| J. | Adjustment to record a deferred tax liability on the fair value adjustment related to the assumed subordinated debentures and a deferred tax asset on the difference between goodwill for book and tax. |
| Page 3 |
Exhibit 99.4
Landmark Bancorp, Inc. and Subsidiary
Pro Forma Condensed Consolidated Statement of Earnings (unaudited)
(dollars in thousands)
| For the year ended December 31, 2012 | ||||||||||||||||||||
| Landmark | First Capital | |||||||||||||||||||
| Bancorp, Inc. | Corporation | Excluded | Pro Forma | Pro Forma | ||||||||||||||||
| (historical) | (historical) | Assets | Adjustments | Combined | ||||||||||||||||
| Interest income: | ||||||||||||||||||||
| Loans | $ | 16,723 | $ | 6,765 | $ | - | $ | 215 | B | $ | 23,703 | |||||||||
| Investment securities and other | 5,329 | 4,381 | (1,752 | )A | - | 7,958 | ||||||||||||||
| Total interest income | 22,052 | 11,146 | (1,752 | ) | 215 | 31,661 | ||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 2,149 | 747 | - | - | 2,896 | |||||||||||||||
| Borrowed funds | 1,761 | 2,320 | (1,890 | )A | 200 | B | 2,391 | |||||||||||||
| Total interest expense | 3,910 | 3,067 | (1,890 | ) | 200 | 5,287 | ||||||||||||||
| Net interest income | 18,142 | 8,079 | 138 | 15 | 26,374 | |||||||||||||||
| Provision for loan losses | 1,900 | 675 | (75 | )A | - | 2,500 | ||||||||||||||
| Net interest income after provision for loan losses | 16,242 | 7,404 | 213 | 15 | 23,874 | |||||||||||||||
| Non-interest income: | ||||||||||||||||||||
| Fees and service charges | 5,271 | 2,170 | - | - | 7,441 | |||||||||||||||
| Gains on sales of loans, net | 5,680 | 1,951 | - | - | 7,631 | |||||||||||||||
| Bank owned life insurance | 540 | 269 | (269 | )A | - | 540 | ||||||||||||||
| Other | 529 | 1,042 | (159 | )A | - | 1,412 | ||||||||||||||
| Total non-interest income | 12,020 | 5,432 | (428 | ) | - | 17,024 | ||||||||||||||
| Investment securities: | ||||||||||||||||||||
| Net impairment losses | (63 | ) | - | - | - | (63 | ) | |||||||||||||
| Gains on sales of investment securities, net | 486 | 924 | - | - | 1,410 | |||||||||||||||
| Investment securities gains, net | 423 | 924 | - | - | 1,347 | |||||||||||||||
| Non-interest expense: | ||||||||||||||||||||
| Compensation and benefits | 9,788 | 5,327 | - | - | 15,115 | |||||||||||||||
| Occupancy and equipment | 2,990 | 1,429 | - | - | 4,419 | |||||||||||||||
| Professional fees | 1,108 | 443.0 | - | - | 1,551 | |||||||||||||||
| Amortization of intangibles | 1,178 | - | - | 308 | C | 1,486 | ||||||||||||||
| Data processing | 842 | 516 | - | - | 1,358 | |||||||||||||||
| Advertising | 443 | 141 | - | - | 584 | |||||||||||||||
| Federal deposit insurance premiums | 364 | 369 | - | - | 733 | |||||||||||||||
| Foreclosure and real estate owned expense | 332 | 157 | (157 | )A | - | 332 | ||||||||||||||
| Other | 3,459 | 2,549 | (175 | )A | - | 5,833 | ||||||||||||||
| Total non-interest expense | 20,504 | 10,931 | (332 | ) | 308 | 31,411 | ||||||||||||||
| Earnings before income taxes | 8,181 | 2,829 | 117 | (293 | ) | 10,834 | ||||||||||||||
| Income tax expense | 1,814 | 100 | - | 882 | D | 2,796 | ||||||||||||||
| Net earnings | $ | 6,367 | $ | 2,729 | $ | 117 | $ | (1,175 | ) | $ | 8,038 | |||||||||
| Net earnings per share | ||||||||||||||||||||
| Basic | $ | 2.18 | $ | 2.75 | ||||||||||||||||
| Diluted | 2.16 | 2.73 | ||||||||||||||||||
| Weighted average common shares outstanding - basic | 2,922,031 | 2,922,031 | ||||||||||||||||||
| Weighted average common shares outstanding - diluted | 2,947,121 | 2,947,121 | ||||||||||||||||||
| Page 4 |
Exhibit 99.4
Landmark Bancorp, Inc. and Subsidiary
Pro Forma Condensed Consolidated Statement of Earnings (unaudited)
(dollars in thousands)
| For the nine months ended September 30, 2013 | ||||||||||||||||||||
| Landmark | First Capital | |||||||||||||||||||
| Bancorp, Inc. | Corporation | Excluded | Pro Forma | Pro Forma | ||||||||||||||||
| (historical) | (historical) | Assets | Adjustments | Combined | ||||||||||||||||
| Interest income: | ||||||||||||||||||||
| Loans | $ | 12,028 | $ | 4,539 | $ | - | $ | 161 | B | $ | 16,728 | |||||||||
| Investment securities and other | 3,676 | 2,708 | (1,083 | )A | - | 5,301 | ||||||||||||||
| Total interest income | 15,704 | 7,247 | (1,083 | ) | 84 | 21,952 | ||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 1,044 | 327 | - | - | 1,371 | |||||||||||||||
| Borrowed funds | 1,240 | 1,474 | (1,209 | )A | 150 | B | 1,655 | |||||||||||||
| Total interest expense | 2,284 | 1,801 | (1,209 | ) | 150 | 3,026 | ||||||||||||||
| Net interest income | 13,420 | 5,446 | 126 | 11 | 19,003 | |||||||||||||||
| Provision for loan losses | 800 | (4 | ) | 4 | A | - | 800 | |||||||||||||
| Net interest income after provision for loan losses | 12,620 | 5,450 | 122 | 11 | 18,203 | |||||||||||||||
| Non-interest income: | ||||||||||||||||||||
| Fees and service charges | 4,176 | 1,672 | - | - | 5,848 | |||||||||||||||
| Gains on sales of loans, net | 2,956 | 2,033 | - | - | 4,989 | |||||||||||||||
| Bank owned life insurance | 426 | 187 | (187 | )A | - | 426 | ||||||||||||||
| Other | 398 | 1,190 | (582 | )A | - | 1,006 | ||||||||||||||
| Total non-interest income | 7,956 | 5,082 | (769 | ) | - | 12,269 | ||||||||||||||
| Investment securities: | ||||||||||||||||||||
| Gains on sales of investment securities, net | - | 619 | - | - | 619 | |||||||||||||||
| Non-interest expense: | ||||||||||||||||||||
| Compensation and benefits | 7,450 | 4,374 | - | - | 11,824 | |||||||||||||||
| Occupancy and equipment | 2,198 | 1,138 | - | - | 3,336 | |||||||||||||||
| Professional fees | 875 | 346 | - | - | 1,221 | |||||||||||||||
| Amortization of intangibles | 478 | - | - | 231 | C | 709 | ||||||||||||||
| Data processing | 696 | 439 | - | - | 1,135 | |||||||||||||||
| Advertising | 321 | 101 | - | - | 422 | |||||||||||||||
| Federal deposit insurance premiums | 338 | 228 | - | - | 566 | |||||||||||||||
| Foreclosure and real estate owned expense | 305 | 1,346 | (1,346 | )A | - | 305 | ||||||||||||||
| Other | 2,627 | 1,078 | (175 | )A | - | 3,530 | ||||||||||||||
| Total non-interest expense | 15,288 | 9,050 | (1,521 | ) | 231 | 23,048 | ||||||||||||||
| Earnings before income taxes | 5,288 | 2,101 | 874 | (220 | ) | 8,043 | ||||||||||||||
| Income tax expense | 1,154 | 11 | - | 1,008 | D | 2,173 | ||||||||||||||
| Net earnings | $ | 4,134 | $ | 2,090 | $ | 874 | $ | (1,228 | ) | $ | 5,870 | |||||||||
| Net earnings per share | ||||||||||||||||||||
| Basic | $ | 1.41 | $ | 2.00 | ||||||||||||||||
| Diluted | 1.39 | 1.97 | ||||||||||||||||||
| Weighted average common shares outstanding - basic | 2,928,243 | 2,928,243 | ||||||||||||||||||
| Weighted average common shares outstanding - diluted | 2,978,692 | 2,978,692 | ||||||||||||||||||
| Page 5 |
Exhibit 99.4
Notes to Pro Forma Condensed Consolidated Statements of Earnings (unaudited)
Adjustments made in the preparation of the unaudited pro forma condensed consolidated statement of earnings are as follows:
| A. | Adjustment to remove the income and expense directly attributable to the assets of Citizens Bank and First Capital that were excluded in the acquisition. |
| B. | Adjustment to reflect the amortization of purchase accounting adjustments based on the average lives of the corresponding assets and liabilities as yield adjustments. The expected average lives are as follows: loans receivable - 108 months; and subordinated debentures - 60 months. |
| C. | Adjustment to reflect the amortization of the core deposit intangible recognized in the acquisition over the estimated 10-year period of benefit. |
| D. | Adjustment to reflect (i) tax expense on pro forma income statement adjustments at the statutory tax rate of 37% and (ii) additional tax expense to increase First Capital's historical tax expense to 37%. |
| Page 6 |