Landmark Bancorp (NASDAQ:LARK) executives used the company’s fourth-quarter earnings call to highlight year-end momentum in profitability, net interest margin expansion, and tangible book value growth, while also detailing a modest quarterly decline in loans and continued work to reduce credit risk.
Full-year and fourth-quarter results
President and CEO Abby Wendel said the company delivered a “strong” fourth quarter that capped a year of “outstanding revenue growth, increased profitability, pricing discipline, and per share increases in earnings and tangible book value.” Landmark reported fourth-quarter net income of $4.7 million, or $0.77 in diluted earnings per share. Tangible book value rose to $20.79 per share, up $0.83 from the prior quarter and up $4.09, or 24%, from year-end 2024.
Net interest income and margin driven by funding costs
Management repeatedly pointed to net interest income and deposit costs as key drivers in 2025. Wendel said revenue growth was “largely driven by continued expansion in net interest income,” which increased each quarter throughout the year. For full-year 2025, the net interest margin increased 58 basis points to 3.86%, which she attributed to the company’s cost of deposits improving to 1.56%.
Chief Financial Officer Mark Herpich said fourth-quarter net income increased versus the year-ago quarter “mainly due to continued growth in net interest income.” Net interest income totaled $14.8 million in the fourth quarter, up $695,000 from the third quarter, driven by increased asset yields and lower funding costs. Net interest income was also up $2.4 million from the fourth quarter of 2024.
Herpich said interest income on loans rose $75,000 from the prior quarter to $17.9 million, reflecting higher loan yields. Average loan balances decreased by $2.1 million during the quarter, while the tax-equivalent yield on the loan portfolio improved three basis points to 6.40%.
On the funding side, interest expense on deposits decreased $272,000 from the prior quarter despite an increase in average deposit balances, which Herpich attributed to lower deposit costs. Interest expense on borrowed funds fell by $325,000 due to lower average balances and borrowing rates. The average rate on interest-bearing deposits decreased 12 basis points to 2.06%, and the average rate on other borrowed funds decreased 16 basis points to 4.93%, which Herpich said resulted from lower short-term Fed funds rates.
Net interest margin (tax-equivalent) improved 20 basis points sequentially to 4.03% in the fourth quarter and improved 52 basis points versus the year-ago quarter, according to Herpich. Wendel added that the fourth-quarter total cost of deposits was 1.50%, which she said reflected pricing discipline and the company’s core deposit base.
Credit quality, allowance, and portfolio actions
Landmark recorded a $500,000 provision for credit losses in the fourth quarter after an $850,000 provision in the prior quarter, Herpich said. Net charge-offs were $341,000 in the fourth quarter, down from $2.3 million in the third quarter. Herpich said the third-quarter charge-offs were elevated due to the resolution of a single commercial credit.
At year-end, the allowance for credit losses was $12.5 million, representing 1.12% of gross loans, according to Herpich. Chief Credit Officer Raymond McLanahan said non-performing loans—primarily non-accrual loans—“decreased slightly” from the prior quarter and totaled just under $10 million, or 0.90% of gross loans. Compared with year-end 2024, McLanahan said Landmark reduced non-performing loans by $3.1 million, an improvement of 24%.
McLanahan said $1.9 million of remaining non-performing loans are covered by government guarantees that the company is in the process of collecting. Past-due loans between 30 and 89 days that were still accruing interest decreased slightly to $4.3 million, or 0.38% of gross loans. He added that year-to-date net loan charge-offs represented 0.25% of average loans.
Herpich also noted a fourth-quarter decline in non-interest income to $3.9 million, down $169,000 from the third quarter. The decrease was primarily due to a $101,000 loss on the sale of lower-yielding investment securities, which he said was part of a strategy to reposition the securities portfolio to improve future income. Investment securities declined by $1.9 million during the quarter as maturities exceeded purchases. He said the investment portfolio had an average duration of 4.0 years, with projected 12-month cash flow of $86.4 million. Pre-tax unrealized net losses declined by $1.7 million to $7.5 million.
Loans, deposits, expenses, and capital
Loan balances ended the year at $1.1 billion. Wendel said Landmark delivered 11.5% average total loan growth in 2025, with strong commercial loan production led by commercial real estate, while mortgage originations rose 11% year over year.
In the fourth quarter, gross loans decreased $6.3 million from the prior quarter, Herpich said. McLanahan noted growth in commercial real estate and agricultural portfolios, offset by reductions in commercial and 1–4 family portfolios. He said commercial real estate grew by $4.7 million due to production net of payoffs, and agricultural loans grew by $2.9 million due to increased line utilization.
Deposits totaled $1.4 billion at December 31, increasing by $63.4 million during the quarter, Herpich said. Interest checking and money market deposits rose by $71.6 million, while certificates of deposit declined by $12.1 million. He attributed the increase to seasonal growth in public funds accounts and growth in core deposits. Year over year, deposits increased by $60.1 million, and non-interest-bearing deposits were 26.3% of total deposits at year-end.
Total borrowings declined by $79.8 million in the quarter, as deposit growth enabled the company to reduce more expensive short-term borrowings. The loan-to-deposit ratio was 79.1% at December 31, which Herpich said provided sufficient liquidity to fund future loan growth.
On expenses, Herpich said non-interest expense rose to $12.3 million, up $1.0 million from the prior quarter, driven primarily by:
- $511,000 increase in compensation and benefits, reflecting a higher number of employees and higher incentive compensation tied to performance
- $173,000 increase in professional fees, due to higher audit and consulting costs
- $356,000 impairment loss on repossessed assets held for sale
Wendel said the company’s efficiency ratio improved to 62.7% in 2025 from 69.1% in 2024, reflecting controlled expense growth while investing in capabilities and talent.
Stockholders’ equity increased $4.9 million during the quarter to $160.6 million at year-end, and book value rose to $26.44 per share from $25.64 at September 30, Herpich said. He attributed the quarterly increase in equity mainly to net earnings and a decline in other comprehensive loss. Wendel said capital ratios remained above “well-capitalized,” and that tangible common equity to assets exceeded 8%.
The company also declared a cash dividend of $0.21 per share payable Feb. 26 to shareholders of record as of Feb. 12, 2026. Wendel said this marked the 98th consecutive quarterly cash dividend since the parent company’s formation in 2001.
Outlook and operating priorities
Looking ahead, Wendel said Landmark plans to build on its 2025 foundation by continuing to invest in employees, making strategic investments to better serve customers, and pursuing growth opportunities in its markets.
McLanahan added that management continues to proactively monitor credit quality “to identify emerging risks and minimize future losses,” and noted commentary on Kansas economic conditions, including a seasonally adjusted unemployment rate of 3.8% as of Nov. 30, according to the Bureau of Labor Statistics, and housing data from the Kansas Association of Realtors.
About Landmark Bancorp (NASDAQ:LARK)
Landmark Bancorp, Inc is the bank holding company for Landmark Community Bank, a community‐focused financial institution. The company provides a full range of deposit and lending products through its subsidiary, including checking and savings accounts, certificates of deposit, residential mortgages, home equity lines of credit and small business loans. Landmark Bancorp emphasizes personalized service, leveraging local decision-making to meet the unique needs of individuals and local enterprises.
In addition to traditional deposit and lending services, Landmark Bancorp offers comprehensive cash-management and treasury solutions for commercial clients.
Read More
- Five stocks we like better than Landmark Bancorp
- Do not delete, read immediately
- Refund From 1933: Trump’s Reset May Create Instant Wealth
- NEW LAW: Congress Approves Setup For Digital Dollar?
- “Fed Proof” Your Bank Account with THESE 4 Simple Steps
- A U.S. “birthright” claim worth trillions – activated quietly
