Landmark Bancorp's Q4 2024: Unpacking Contradictions in Loan Repricing, Mortgage Profitability, and Growth Prospects

These are the key contradictions discussed in Landmark Bancorp, Inc.'s latest 2024Q4 earnings call, specifically including: Loan Repricing Expectations, Mortgage Business Profitability, and Loan Growth Expectations:



Strong Financial Performance:
- Landmark Bancorp reported net income of $13 million for the year ending December 31, 2024, an increase of 6.3% from the prior year, with net interest income increasing by 6% to $45.7 million.
- The growth was driven by significant loan growth, improved efficiency ratio, and solid credit quality.

Loan and Deposit Growth:
- Total gross loans increased by $50.5 million or 20% on an annualized basis in Q4, bringing the total to nearly $1.1 billion.
- Deposit balances increased by $53 million in Q4, contributing to loan growth and reduced expensive short-term borrowings.
- The growth reflects the bank's ability to capitalize on a relationship-based banking model in rural and metropolitan markets.

Improved Net Interest Margin:
- Landmark's net interest margin increased by 21 basis points to 3.51% in Q4 2024.
- This was primarily due to lower interest expense on deposits and other borrowings, impacted by the Federal Reserve's cuts to short-term rates.

Credit Quality and Liquidity Management:
- The bank's loan-to-deposit ratio remained low at 78.2%, providing sufficient liquidity to support loan growth.
- Despite strong loan growth, credit quality remained solid, with a low net credit loss rate and a robust allowance for credit losses at 1.22% of gross loans.
- This stability is attributed to risk-averse monitoring of interest rate and concentration risks and maintaining strong credit discipline.

Dividend and Shareholder Returns:
- Landmark distributed a 5% stock dividend and paid a $0.20 cash dividend per share in Q4 2024.
- The Board of Directors declared an additional $0.21 cash dividend for shareholders of record as of February 19, 2025.
- These distributions represent the 24th consecutive year for the stock dividend and the 94th consecutive quarterly cash dividend, indicating the bank's commitment to returning value to shareholders.