A Letter From Our CEO
April 9, 2015
Landmark Bancorp Inc. first quarter results improved over the same period in 2014. While assets grew only 1.48%, net income increased more than 14% compared to the first quarter of 2014.
Landmark’s net income was $528.6 thousand compared to $463.2 thousand for the first quarter of 2014. First quarter earnings per share were $.27 compared to $.24 for the first quarter of 2014. Return on assets was .78% for the quarter compared to .70% during the first quarter of 2014. Return on equity was 7.95% for the first quarter compared to 7.62% during the same period in 2014. Landmark’s net interest margin declined to 3.76% compared to 3.83% during the first quarter of 2014. Expense related to provision for loan losses declined to $3 thousand compared to $60 thousand for the first quarter of 2014 due to improved asset quality.
Assets grew 1.48% to $274.6 million compared to $270.6 million for the first quarter of 2014. Loan growth was nominal at .85%. The investment portfolio increased to $54.8 million from $52.9 million in the same period of 2014. The deposit portfolio declined to $229.0 million or 2.38% compared to the first quarter of 2014. Non-interest bearing deposits grew 20% to $44.9 million at quarter end compared to $37.4 million at the end of the first quarter of 2014. These interest fee funds represented 19.6% of the total deposit portfolio. These deposits are critically important to the future profitability of the bank and are extremely valuable in a rising rate environment.
Landmark remains well capitalized. According to regulatory guidelines, a bank is considered well capitalized with a Tier 1 Leverage Ratio of 5%. Landmark’s Tier 1 Leverage Ratio increased to 9.62%. Stockholders’ equity was $27.2 million at quarter end compared to $24.8 during the same period of 2014, and book value per share increased nearly 10% to $13.67 compared to $12.43 for the first quarter of 2014.
This historically long period of near zero interest rates is taking a toll on the banking industry and Landmark is not immune. As referenced earlier, our net interest margin is declining. The only defense a bank can offer in this low rate environment is growth of the loan and investment portfolios. As you can see from our results, the growth of these portfolios is very limited. Loan demand has been soft and investment growth is limited by deposit growth. The remainder of 2015 will be very challenging and we would ask each of you to refer your friends, family and business associates to your bank.
On April 9, 2015 the Board of Directors of Landmark Bancorp, Inc. declared a dividend of $.08 per share, payable on May 4, 2015 to stockholders of record on April 24, 2015.
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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