A Letter From Our CEO
February 12, 2014
Landmark Bancorp Inc. achieved a rebound in profitability during 2013 compared to 2012. Landmark’s net income after tax for 2013 was $1.65 million compared to $139,000 in 2012. Full year earnings per share improved to $.84 compared to $.07 in 2012. Return on average assets improved to .64% compared to .06% in 2012. Return on equity improved to 6.82% compared to .60% in 2012. While profits improved substantially, both the interest rate environment as well as legal and other expenses related to that municipal authority default had an impact on profits during the year.
Landmark’s results compare favorably to both our peer group and local competitors in many areas as measured by Uniform Bank Performance Reports. For instance, personnel expense is well below our national peer group at 1.33% of assets compared to the peer group at 1.73%. Landmark also compares favorably in other areas such as occupancy expense, yield on loans, net interest margin, total noninterest expense, assets per employee and other key drivers.
One area where Landmark needs to improve is in noninterest income. These are fees the bank charges for services provided to customers and a major component is NSF, or, overdraft fees. Our clients have few overdrafts and our employees work with clients to prevent overdrafts. Many banks of our size generate significant revenue from these types of fees. During 2013 Landmark’s total NSF fee income was less than $32,000. In order to bridge this gap, Landmark will be implementing new services for commercial clients during 2014which will save them time and money while generating new fee income for the bank. Over time the bank should be able to generate additional recurring fee income from these products which will add value for our clients, further strengthen our relationships and increase bank profitability. This is a key initiative for 2014 and future years.
Assets grew 2.5% to $263.8 million compared to $257.4 million at year-end 2012. Net loans expanded by 5.5% to $190.8 million compared to year-end 2012. The investment portfolio grew 8.8% to $53.3 million at year-end. The deposit portfolio grew 3.71% to $224.0 million at year-end 2013. The growth of non-interest bearing deposits, or checking accounts, has long been a priority for Landmark. Those balances expanded by 23.6% during 2013 and reached $39.7 million at year-end. These interest-free funds are critically important to the future profitability of the bank.
Landmark remains well capitalized at year-end 2013 and the bank’s Tier 1 Capital Ratio improved to 9.18% compared to 8.73% at year-end 2012. According to current regulatory guidelines a Tier 1 Capital Ratio of 5% is considered well capitalized. Total capital increased to $24.2 million at year-end. Book value per share was $12.10 at year-end 2013 compared to $12.02 at year-end 2012. The growth of book value is affected by dividends paid of about $517,000 and a reduction in the value of our investment portfolio of $1.02 million due to an increasing long term interest rates.
The Board of Directors declared a quarterly dividend of $.06 per share on February 13, 2014 and is payable on March 11, 2014 to stockholders of record on March 3, 2014.
Landmark remains financially strong and we are committed to serving business, professional, municipal and consumer clients in our market area. We will continue to offer the advice, service and products our clients need to be successful.
Landmark Community Bank’s staff, management, Board of Directors and Advisory Board members are committed to building a strong community bank and providing unparalleled service to our clients, as well as, delivering long term value to our shareholders. We appreciate your support and we encourage you to continue to use Landmark Community Bank for all your banking needs and request that you refer prospective clients to your bank.
Very Truly Yours,
Daniel R. Nulton
President & CEO
Savings, Money Market & Club Accounts Landmark Community Bank offers traditional savings accounts, money market accounts, certificates of deposit, club accounts and IRA accounts.
Checking Deposit accounts to meet all of your personal and business needs.
Online Banking Services Landmark Community Bank’s Net Teller allows you to bank from your personal computer, giving access to your bank accounts 24 hours a day.
Loans Landmark Community Bank offers a variety of home equity, personal and business loans.
At Landmark Community Bank our goal is to offer the highest customer service while establishing a long lasting relationship with you. We provide you with a high level of technology with experienced, responsive bankers to compliment and maximize your business. Landmark Community Bank offers a full range of services to accommodate all businesses. Please click on a link above to find out more about how Landmark can be "Better Business Banking" for you.