LARK - Earnings call transcript Q3 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. And welcome to the Landmark Bancorp Incorporated Third Quarter 2018 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. to Chief conference Executive like Scheopner, to now and President Officer. would turn over the Michael I Please go ahead.

Michael Scheopner

and for Thank you XXXX. today earnings call for joining of and good morning. to Thank discuss and third quarter the you our results year-to-date operations Landmark’s

the the to various company. our me aspects Herpich, Chief today is quarter performance Mark with Financial call of Joining discuss third Officer for

falls I that will Exchange get started, the would the today some be the we remind by listeners like forward-looking Before our Commission. for we of information providing defined statements under guidelines to as and Securities

As and presentation part guidelines, that our differ materially actual point future expressed. or must this hopes, any our the out expectations, results beliefs, could that of these those discuss predictions from during statements statements forward-looking made of I are

net calculates Year-to-date, the XXXX deliver ROA earnings year-to-date equity good period ROE, Additional or is return on information in contacting $X.XX diluted the a $X fully and average $X.XX XX-Q per from million Landmark’s for diluted obtained third continues SEC. share. performance XXXX. of and on basis on which of average for share return our on million to the the earnings to We XX-K time-to-time by on can net or $X be quarter factors X.XX% filings, The assets company company per totaled and year-to-date included these is or reported XX.XX%.

XXXX. and call. financial our additional November Mark of report at and of $X.XX from Bancorp, of assets. financially XX, provide as the asset have dividend well merger MNB October are detail look share the cash with resulting we of loan to how positioned XXXX. metrics capitalized Landmark a pleased a consecutive later and are in very on XXth Inc. quality in of shareholders will XXXX am on healthy very I represents the that credit growth record dividend we the I As are in of we paid is portfolio, This quality per Landmark’s Directors quarterly loans Bancshares, be delivering excellent our picture XX, we Board since declared cash performance formation has total from to big Landmark November strong, perspective, Inc. company’s to and

Board the of stock to to a has XXXX issued has support to and stock shareholders XX, of commitment year Directors growth Board the Additionally, our X% of December consecutive as our record of This long-term also for XXXX. X% declared declared December X, the a demonstration in a dividend value XXth that dividend, shareholders. represents be liquidity

customer performance our a quality and quarter credit leaves and as trend consistent throughout high third continued banking the efforts organization fundamentals earnings starts our friend. a good vision and is of a success deliver Our this that everyone of strong associates practice the to our who with as continues service, customer

way that the and Our interest us, in to profile possible overall for in economic and structuring as any will management dedicated on well manner, monitoring prepare conservative the organizational disciplined a and remains prudently, investments focused team loans rate a managing events. underwriting risk risk as unforeseen organization

to diverse now a turn Kansas, financial and will CFO, you. of to relationships who call state Mark committed results presence review growing As a Bank our families quality is meeting with and I will our across with the Herpich, businesses. community Landmark asset strong the customer needs and the the indicators financial over of

Mark Herpich

to Michael, and Thanks, everyone. morning good

The quarter. in with was on quarter almost income net those X.X% net million third or year’s which loan to average earnings for a the our third interest nine $X.X income interest assets, results. highlights, comprising in various a million. $XX.X income ended earning improvement XX, million third to As the entirely already or quarter an Michael September Starting $XXX,XXX and make months like XXXX, to in comments was I summarized X% attributable of has interest or increase would few statement elements to increase net attributable comparison to was prior growth the $XXX.X

equivalent federal average Our The net interest remained interest at tax in the tax rate federal XXXX exempt basis XXXX. from short-term unchanged corporate of The rates income third December while to increased lower by the tax margin, both margin loans. the balances, impacted the and constant XX%, and investments reduction XXXX reduced municipal tax in and on yield increase enacted on a tax in quarter rates following XXXX. our deposits on interest X.XX% net XX% was tax in income loan reform equivalent

$XXX,XXX other quarter XXXX, to of recoveries XX.X% deposit primarily gains non-interest insurance. a increase, contributing income, XXXX, the the provision during third increase $XX,XXX our of of of related of XXXX. XXXX. XXXX. occurred in to was up the This allowance of owned increases providing third net loan third quarter as to compared primarily of due loans, compared was in of of charge-offs reduction the the to This loan life in an losses, that for the the third to increased a $XXX,XXX $XXX,XXX of the related loan loan XXXX, to $XXX,XXX quarter $XXX,XXX $XXX,XXX quarter in was increase compared of sales at of XXXX. charge-offs in the resulted for an allowance of increase Non-interest on increase of as income analysis the quarter our reflecting to the in offsetting same during million third to $XXX,XXX in losses on for Bank an net $X.X period Looking was Also quarter losses in $XXX,XXX partially third

to million due of related This Our the we third expenses decreased effective XX.X% rate The third had quarter pretax income the the to related that partially of non-interest of XXXX, an to deposit comparison third offset to primarily the in decrease. tax was quarter benefit by $X.X million in while XXXX, of deposit $X.X compensation the loss $X.X tax in in quarter primarily loss. the related large third $XXX,XXX in third XXXX. XXXX, increase of million change was of an quarter and benefits quarter

nine year in December experienced XXXX, assets were large since in by Moving financial first increase a the of of months on X.XX the a million our on discuss we some $X.X the solid for a the of income in $X.X months months million XXXX, highlights in by loans net million supported million average earlier. XXXX. and a $XX.X earnings XXXX. Earnings part XX, $X net achieving first first of to from In nine increase net evidenced nine exceeded interest as remained return

X.XX% as result increasing nine result during reduction from to average months assets earning our in months in tax in of $XXX.X income a to of X.XX% interest year-to-date XXXX federal XXXX As period from million the the XXXX, primarily of X.X% net million the XXXX of our of interest the rates, a margin corporate decreased XXXX. nine basis corresponding a on $XXX.X equivalent first in tax

on the same XXXX, rates liabilities as period short-term on interest-bearing the of our during the than months increased compared increased term nine yields than more interest rates to of our longer more first the addition, In rates XXXX. interest-bearing assets

service market, first in XXXX, increase compared $XXX,XXX a loan compared result charges. first in losses charge-offs and fees income includes and months in XXXX. $XXX,XXX loan offsetting of lower gains XXXX, investment in $XXX,XXX recoveries we nine the of the our offsetting of The that to comparable million occurred primarily increase in during totals. first increase totaled of in Bank from $XXX,XXX loss nine declines increased on $X.X of the in and the of of during of XXXX. volumes year an securities, $XXX,XXX our of loans of prior classified secondary of $XX,XXX income, were due provision for recoveries months the of of income million of related net allowance, nine was were provided $X.X growth $XXX,XXX the period the $XXX,XXX deposit increase to owned results to on life period. nine During to million months X.X% increase Also XXXX. an were on gains $XX.X This which XXXX, non-interest from other sales which months first the as in Partially for sales Non-interest the or lower as in $XXX,XXX in loans an the increase the the insurance, non-interest sold

expense, quarter third related of XXXX relates balance decrease XXXX increase of in touch the pre-tax tax partially non-interest of deposit effective reported To and the third same of first for million $X.X loss on the we a income benefit in comparison the quarter decrease tax months the at deposit compensation This XXXX, million an XXXX. of $XX.X The related Looking the to $XXX,XXX in again rate the primarily to in was of offsetting XX.X% to first the was few months million in $X.X nine benefits. a of while XXXX, nine period to was related highlights. loss. sheet of the

$XXX.X total increased XX, XX, XXXX. $XXX.X at Our to million $XX.X million assets compared at million XXXX, December September to

$XXX.X first value XX, million months decreased our to compared of million XX, $XXX.X million by Our X.X% a loan at in book Investment at at or $XX.X $XX.XX $XXX.X million million losses XXXX book million unrealized decreased portfolio nine share. XXXX Stockholders’ equity in to September value at $X.X net XXXX XX, at of September securities million XXXX. $XX.XX to to to increase a $XX.X tax. from December million September from investment increased during per $XX.X portfolio $XX.X of XX, XX, the relates XXXX, December or decrease This equity stockholders’ share, a December million XXXX. at XX, $XXX.X per on

Bank to ratio continue regulatory details capital XX.X%. leverage to like September additional to XXXX, while XXXX capital our portfolio. a was provide XX.X% some the at as was basis I exceed XX, would the levels capitalized. capital regarding total well risk-based ratio of now and consolidated considered Our on XX, Bank’s September loan be The ratios

increase net our X.XX% consist earlier, an due X.XX%. XX, totaled a XX loans from loans, end million XXXX, past Non-accrual XXXX greater $XXX.X year September totaled mentioned December primarily XX, which as represents the This XXXX which of level of from gross XX, or XXXX. than improvement of days loans loans of $X.X X.X% represents As outstanding million. as of September

further. risk focus continue Our on reducing even credit collection these efforts and totals to

of is XX accruing efforts XX loans our X.XX% as due and of ratio interests indicator management million flat The the due relatively totaled loans of gross from This or gross to risk still level Another credit of XXXX. of as days monitor XX December XX, as days loans September past loans past level of of XX, XX we days X.XX% XXXX. $X.X remained days. has part between

in trends monitor categories. carefully loan We all delinquency continue to

real Our balance as of totaled in other estates other XXth. assets $XXX,XXX and September

and housing residential The other balances of real commercial property. owned estate real estate a comprised are

We continue our in was the $XXX,XXX to segments to back held loan for market for properties XXXX, the same from owned. period during the of Michael review risk real We and XXXX. first nine estate net months the Loan recorded charge-offs call over to in which outlook. sale all turn Portfolio credit now $XXX,XXX will I of up

Michael Scheopner

Thank you for Mark. your comments,

continue as totaled of September mix both loan maintain across portfolio the loan in across evident and in Net and We geography a XX, loan segments. portfolio, XXXX million to outstanding the diversified state. $XXX.X growth in is various types loans

risk portfolio. of of totaled $XX.X totaled our balances of estate our where well a in $XXX.X balances the guideline construction below of totaled XX.X% loan loan Outstanding total capital, and as as loan risk X.X% concentration balances million, the category, XXX%, is in would representing loan construction total of based management As which real the our or regulatory level portfolio. of total regulators September heightened portfolio September view a XX practices. portfolio commercial requiring XX% XX, our loan Landmark’s land land million

as regulatory estate agricultural were real XXXX XX% XX.X% balances category. million industrial regard the risk portfolio loan million based that were loans or XXX% or far total to loan $XX.X XX. commercial capital, was below as portfolio the of Commercial current September Our portfolio, our and of of of of in the total XX, XXX% $XX.X September With guideline portfolio.

Our banking a XX, resulted overall increase X.X% in in commercial and loans have XXXX as of when XXXX. net agri to XXXX compared outstanding year efforts September business end

portfolio State with Kansas sales, across estate loan portfolio the those family stable million $XXX show of the of real to one-to-four of September market supply XX, inventory tight Residential mortgage at XX.X% as XXXX. in markets. of a activity Our continues represented

activity the through issues. our throughout XXXX XXXX. Across to and purchase pipeline versus with low strong our an remained collection limited of of the production Our remainder involved mortgage growth concentration strong of banking to-date this months The additional portfolio loan levels of and on segments, anticipate delinquency refinances. the transactions of I first be money segment nine performance portfolio XX% of continues

on Our credit rather than meet that recruiting team buy through standards transactions portfolio price or focused trying remains our relationships client credit compromises. to structure

continue applying the credit these to portfolio have the impacting management and disciplined in will continued we factors and years. that going various will We supported risk our risk forward, past practices and monitor remain same carefully our profitability diligent underwriting

I up With to have. that growth. call want results I position earnings third questions we of anticipate for might community believe of are to that our that We year-to-date the lines continue and to our by I solid continue organic will that, pleased us of results continue. These business. company’s Landmark’s strength with capital risk the management open go trend trend anyone to questions, we saying will Before or banking for practices quarter our of the well acquisitive strong that summarize and XXXX. a across long-term all operating earnings

Operator

John Our Instructions] ahead. Please comes question of first go [Operator Partners. from FIG Rodis

John Rodis

Good guys. morning,

Michael Scheopner

John. morning, Good

John Rodis

for Michael, guys does year. or your and just I to put said loan guys estate pipeline obviously, stand, mean, this especially up, across you strong where have commercial growth categories is strong, is the the really all category, follow you or up good what? pipeline By real it comment, you on

Michael Scheopner

all Really Yeah. is it of across categories. thanks. John, the

state growth We City Metro really and southeast and into central commercial geography. Kansas C&I good of have our and into growth categories each and area estate had portfolio the eastern the a the our business geographies agri center the primarily geography in part that in in Kansas in the through southwest in real of and eastern

has of lenders XXXX their the our Kansas of legacy that in to had area contributed third and in We growth have and as we quarter our loan the had spurred that of addition. team in place the couple -- and result growth we been added really then by quarter second City they a a

John Rodis

those new Okay. How did roughly much there? lenders add

Michael Scheopner

$XX was third in it million million the to $XX Roughly quarter.

John Rodis

has Okay. your what saying, Good. the real just on tariffs there and feedback Any from getting are been are you far from so any clients? comments customers your your impact

Michael Scheopner

I’d it’s manufacturing tariffs limited. got client ag, been respect we Yeah. has limited and exposure in one have little to we by John it’s on the that -- impacted Really say with bit got a have steel at in client impact this we our our there. clients, overall, But say recognize influence a that this that, they potential I’d point, really overall, have seen that out with point. the limited now visiting relationship managers, at

John Rodis

of one you Okay. for on And more M&A your what today? me, then in sort just guys just seeing and update market are efforts any the

Michael Scheopner

John, think, or where, have discussions with respect targeted to has can been history markets know active that with either potential add that I’d respect continue with we we efforts I disciplined really acquisitive our to you partners think value. partners that franchise say and to

disciplines active would on the and or we nothing to opportunities our to and have really there going be have fundamental grow -- are currently has for we discussions but been on of do while sake that we immediate So growth stayed we horizon. the in

John Rodis

Thanks, Okay. guys. Superb.

Michael Scheopner

John. Thanks,

Operator

[Operator questions Instructions] our question-and-answer back the concludes over would other conference to session. I time. this Michael There Scheopner closing to like no for at are remarks. This turn

Michael Scheopner

the news company Well, confidence continued truly do and and thank call. related joined today’s to thank our conference Thank your earnings results support our to us appreciate look you earnings in year next participated end and who I forward do you. I call. and want in I at XXXX sharing everyone to

Operator

attending now concluded. Thank presentation. today’s has for conference The you

You disconnect. may now

Landmark Bancorp (LARK) 31 Oct 182018 Q3 Earnings call transcript