- Net Earnings: $3.9 million for Q3 2024.
- Earnings Per Share (EPS): $0.72 on a fully diluted basis for Q3 2024.
- Return on Average Assets: 1.0% for Q3 2024.
- Return on Average Equity: 11.82% for Q3 2024.
- Efficiency Ratio: 66.5% for Q3 2024.
- Net Income Growth: 30.5% over the prior quarter and 36.6% over Q3 2023.
- Total Gross Loans: Increased by $21.3 million, reaching $1 billion.
- Deposit Balances: Increased by 8.0%.
- Net Interest Income: Grew by 5.7% in Q3 2024.
- Net Interest Margin: Increased by 9 basis points to 3.30%.
- Noninterest Income: Increased by $533,000 over the prior quarter.
- Allowance for Credit Losses: $11.5 million as of September 30, 2024.
- Dividend: Cash dividend of $0.21 per share declared.
- Stock Dividend: 5% stock dividend declared.
- Interest Income on Loans: Increased by $911,000 in Q3 2024.
- Interest Expense on Deposits: Increased by $157,000 in Q3 2024.
- Noninterest Expense: Decreased by $536,000 compared to the prior quarter.
- Effective Tax Rate: 18.1% for Q3 2024.
- Loan-to-Deposit Ratio: 77.6% as of September 30, 2024.
- Stockholders' Equity: Increased by $11.4 million to $139.7 million.
- Book Value Per Share: $25.39 as of September 30, 2024.
- Nonperforming Loans: Totaled $13.4 million, an increase of $8.4 million from the prior quarter.
Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Landmark Bancorp Inc (LARK, Financial) reported net earnings of $3.9 million for the third quarter of 2024, a significant increase from the previous quarter and the same period in 2023.
- The company achieved a milestone with total gross loan balances reaching $1 billion for the first time in its history.
- Net interest income grew by 5.7%, and the net interest margin increased by 9 basis points to 3.30% compared to the second quarter of 2024.
- Noninterest income increased by $533,000 over the prior quarter, driven by higher fee-based revenue, residential mortgage revenue, and gains on the sale of a former branch facility.
- The Board of Directors declared a cash dividend of $0.21 per share and a 5% stock dividend, demonstrating a long-term commitment to shareholder value and liquidity.
Negative Points
- Nonperforming loans increased significantly, with nonaccrual loans totaling $13.4 million, primarily due to a single secured commercial loan relationship.
- Interest expense on deposits increased by $157,000, driven by higher balances in high-yielding deposit accounts.
- The balance of past due loans between 30 and 89 days increased by $5.4 million, indicating potential credit risk concerns.
- Interest income on investment securities decreased by $70,000 due to a decline in average investment securities balances.
- Noninterest checking and savings accounts declined by $5.6 million, which could impact future liquidity.
Q & A Highlights
Q: Could you touch upon the margin or the spread? Did you see the full impact of the 50 basis point drop in September? How do you see that affecting the margin and the spread?
A: Mark Herpich, CFO, explained that the full impact of the 50 basis point cut was not fully realized in the third quarter as it occurred mid-September. However, the full effect will be seen in the fourth quarter and into 2025. The company is well-positioned to benefit from future rate cuts, which are expected to be accretive to the margin and spread.
Q: What are you seeing on the mortgage side? Are you keeping most of the mortgages or selling them? What about the margins upon the sale today?
A: Mark Herpich noted that while they have been keeping variable rate loans, more customers are opting for fixed-rate options as rates decrease. The pipeline activity remains robust, and margins on the sale of fixed-rate mortgages are stable.
Q: Are the recent rate cuts accretive to the margin and spread, and will further cuts be as well?
A: Yes, the recent rate cuts are expected to be accretive to the margin and spread. The full impact will be more evident in the upcoming quarters, and further rate cuts are anticipated to continue benefiting the margin.
Q: How is the mortgage volume affected by the recent changes in interest rates?
A: Mortgage volume is seeing increased activity as rates drop, with more customers choosing fixed-rate options. The company expects this trend to continue if rates remain low.
Q: Are there any significant changes in the margins on the sale of fixed-rate mortgages?
A: The margins on the sale of fixed-rate mortgages are currently stable, with no significant changes observed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
