A Letter From Our CEO
July 15, 2016
Landmark Bancorp Inc. recorded net income of $573 thousand as of June 30, 2016. Net income is down compared to the same period of 2015 in spite of the fact that net loans grew nearly $23 million or 11.5% compared to the same period last year.
Two primary factors impacted results. The first factor is a reduction in net interest margin driven by the historically low interest rate environment. The net interest margin was 3.41% as of 6/30/2016 compared to 3.69% at 6/30/2015. The impact of margin compression is a reduction of $785 thousand of net interest income projected for the full year in spite of $20 million of growth in earning assets. The net result is that, even with this exceptional growth, net interest income is flat compared to last year. The other factor is the allowance for loan losses. In 2015 the bank recorded a recovery and the loan portfolio declined, which resulted in a negative provision of $874 thousand. Provision expense for 2016 is $339 thousand, a swing of $1.2 million year over year.
Earnings per share were $.29 compared to $.80 for the same period of 2015. Return on assets was .39% compared to 1.13% during the first six months of 2015. Return on equity was 4.14% compared to 11.45% during the same period in 2015.
Assets grew 9.9% year over year driven primarily by $22.8 million of growth in net loans year over year. The investment portfolio expanded 5.85% to $57.7 million from $54.5 million in the same period of 2015. The deposit portfolio showed growth of 7.5% compared to the same period in 2015.
The Board of Directors and Senior Management are working on several exciting initiatives, which you will hear about later this year, to improve both short and long term results.
Landmark remains well capitalized with the Tier 1 Leverage Ratio of 9.26% compared to 9.94% at June 30, 2015. Stockholder's equity grew to $28.3 million compared to $27.6 million as of 6/30/2015. Book value per share was $14.17 compared to $13.86 last year.
On July 14, 2016 the Board of Directors of Landmark Bancorp, Inc. declared a dividend of $.08 cents per share, payable on 8/5/2016 to stockholders of record on 7/28/2016.
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
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