A Letter From Our CEO

Landmark Bank CEO Letter

Dear Shareholder:

Our first quarter of 2018 resulted with improved balance sheet metrics. Loan to deposit ratio, net loans to assets, and investments to assets all revealed significant improvement compared to the end of the year. Delinquencies and non-performing loans also continued to show meaningful progress to financially strengthen Landmark Community Bank for the remainder of the year.

The second quarter of 2018 is emerging as anticipated with the potential sale of higher risk assets. Accordingly, we will be able to maneuver better with improved liquidity, enriched capital thereby fortifying the profitability trend for 2018. The board of directors and management has collaborated with a plan to stabilize our balance sheet and thereby provide the ability to reliably predict our financial future.

Our Chairman, Sandy Insalaco, has challenged and invigorated the entire board of directors and management team to execute our strategic plan to its fullest. Management reduced the bank’s reliance on wholesale, overnight borrowings by increasing time deposits, savings, interest checking, and money market balances. Management believes customer deposits will benefit the bank in the long term versus the immediate increases we would have experienced with elevated levels of overnight borrowings. The retail focus of our organization is the groundwork for a better mix of interest rate products to assist us in increasing our yields and profitability trend. With fully staffed branches and energetic financially capable bankers, we expect our cost of funds generated by core deposits to improve as we change the mix of deposits This will be a gradual and deliberate process, but our plan has been implemented and has already revealed signs of progress.

Our mortgage department is another revenue generation area that has been modernized to provide responsiveness and competitive rates. Our first quarter of 2018 compared to the first quarter of 2017 revealed a substantial increase in revenues. The mortgage pipeline is robust with a very encouraging indication that mortgage profitability will flourish as the year progresses.

The commercial lending area has been completely revamped with lenders prepared to make quality loans at competitive rates, but, most importantly, commensurate with the associated risk. The new leadership in this department provides much better focus on credit quality, relationship pricing and a well-documented commercial portfolio. It is the discipline instituted by the senior credit officer and his staff of credit analysts that is the foundation for the superior credit culture expected by Landmark Community Bank’s board of directors.

We have focused our marketing efforts to keep our existing customers engaged while reaching new audiences. The rebranding of Landmark Community Bank and our marketing campaign mission is to create brand awareness and become a more widely recognized financial institution that can support all the financial needs of our community. Short term marketing efforts include promotions, updated products and special product offers through print material, outdoor, radio and TV campaigns. Long term efforts will include a soon to be launched new website which will increase our search engine optimization(SEO), extend our market reach and expand our digital advertising.

Landmark Community Bank continues to evolve into a company based upon sound financial fundamentals. Our unwavering chief financial officer and his skilled staff continue to analyze and develop strategies to promote efficiencies throughout the organization. Our philosophy to be the best community bank focused on our employees, clients and community is initiated by our Chairman. Fittingly, it will be the methodical execution of the strategic plan by our dedicated and competent employees that will ultimately ensure the improvement of shareholder value.

A Warning About Forward-Looking Statements

In addition to historical information, this document may contain forward-looking statements. Examples of forward-looking statements include, but are not limited to, (a) projections or statements regarding future earnings, expenses, net interest income, other income, earnings or loss per share, asset mix and quality, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of management or the Board of Directors, and (c) statements of assumptions, such as economic conditions in the Corporation’s market areas. Such forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “intends”, “will”, “should”, “anticipates”, or the negative of any of the foregoing or other variations thereon or comparable terminology, or by discussion of strategy. Forward-looking statements are subject to certain risks and uncertainties such as local economic conditions, competitive factors, and regulatory limitations. Actual results may differ materially from those projected in the forward-looking statements. We caution readers not to place undue reliance on these forward-looking statements. They only reflect management’s analysis as of this date. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: the effects of new laws and regulations, including the impact of the Tax Cut and Jobs Act and Dodd-Frank Wall Street Reform and Consumer Protection Act; effects of short- and long-term federal budget and tax negotiations and their effect on economic and business conditions; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating locally, regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the internet; technological changes; the interruption or breach in security of our information systems and other technological risks and attacks resulting in failures or disruptions in customer account management, general ledger processing and loan or deposit updates and potential impacts resulting therefrom including additional costs, reputational damage, regulatory penalties, and financial losses; ineffectiveness of the business strategy due to changes in current or future market conditions; the effects of economic deterioration on current customers, specifically the effect of the economy on loan customers’ ability to repay loans; the effects of competition, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products and services; interest rate movements; difficulties in integrating distinct business operations, including information technology difficulties; disruption from the transaction making it more difficult to maintain relationships with customers and employees, and challenges in establishing and maintaining operations in new markets; volatilities in the securities markets; slow economic conditions; and acts of war or terrorism. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances.

Respectively Yours,

Thomas V. Amico

Landmark Bank

Banking Services

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.
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