LARK - Earnings call transcript Q1 2020

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Operator

Good morning, and welcome to the Landmark Corp. Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Michael Scheopner, Chief Executive Officer. Please go ahead, sir.

Michael Scheopner

you. Thank good and morning. you, Thank you our Landmark’s ending today discuss joining and Thank XXXX. results quarter call earnings first of to the for operations for

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

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

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

those our contacting XX-Q obtained understand call XX-K role can be the of And Additional start saying company want the to by which of and from on our information that coronavirus our we factors vital a in impacted is plays economy. filings, by take We all these responsibility the pandemic. by the as critical Landmark infrastructure included seriously. out to go the thoughts SEC. or today I part time time to that

embraced impact the clients associates crisis these at Landmark are of that role firsthand had workforce. Bank on uncertain part has their times. have our as nation’s and troubled essential We seen to helping have to want and all thank the we and of through communities, this committed them I the who also National

we network presidential follow of access our have from part safety mid-March. in time, associates and we with customers and appropriate Centers Department limiting the Environment. our Disease Kansas Prevention and national well-being to Since emergency for Health in plan continued mind, our response declaration lobby and of and Control following and bank As of foremost guidance a the traditional the that to the of pandemic began

we call center precautions to from associates customer support have we in support access platforms. and meeting of of safety repositioned associates our banking and those to our needs, significant client place We in to home, that digital are ensure our have to enhanced handle volumes the have portion To questions of our remain we client increased working customer a for facilities. bank care

a clients immediately challenging Business we these access with authorized lender As preferred and Administration, existing able Act CARES the new by Protection were Paycheck prepared to Small the and help respond to the Program during times.

Program. Small of Similar assisted approximately the customers. in Payroll Administration’s we Protection clients, April these to response provided loans with resources million were existing for support Business to have effort. PPP SBA customers internal XXX XX% securing through funding earlier comment, Landmark $XXX.X we our remaining repositioned XX, new of the to As of my loans the to Landmark

as Now performance, on fully to I earnings This reported net or on for diluted of we quarter our $X.X per million market represented of share conditions we March. were a XXXX record positively move securities to liquidate on mortgage-backed quarter investments a basis. strategically a impacted million higher-coupon decided company. in investment sale Earnings on gain the as based $X.X by $X.XX early

portfolio. During a COVID-XX the primarily losses, projected the economic for on recorded first a result as impact quarter, $X.X million our we provision of loan of loan

asset detail declared pleased of equity the am I a in performance company’s October cash the Inc. Landmark from since Bancshares, MNB Bancorp, XXth be in quarter consecutive average XX.XX%. dividend was on per XX, $X.XX X.XX%, of and of first This to Our return the financial calculates dividend formation has report quality of that shareholders to will on share average XXXX paid later May Directors Landmark’s return metrics XXXX, on XX, additional our XXXX. Inc. and cash Mark assets June record the to of with quarterly provide resulting to Board as call. merger XXXX. represents

Our the service customer XXXX associates consistent throughout vision of a that everyone with is and as good our a quarter the our customer the organization starts and efforts to credit banking leaves first of a friend. high-quality fundamentals performance as deliver in who practice

management financial asset managing organization times. uncertain turn disciplined will with Your possible in and as who our Mark us review manner a the on CFO, you. will conservative Herpich, team that quality to during remains focused indicators now over results these prepare as and respond will call to the economic the well I

Mark Herpich

$XXX.X and to now everyone. ended And March as net year’s mentioned upon Michael a increase record interest-earning quarter those prior increase first million prior of first year to interest would the actually for the comparison first comments $X.X XX.X% good various of quarter. million to $XX.X This quarter to XX.X% was to elements income of our a Michael, X.X% built morning or growth income highlights few by interest million income results. statement. quarter first Thanks, average loan investment an comprising to like balance $XXX,XXX $XX.X comparison entirely in average improvement The million, in period. in make or or I the attributable XXXX. million. Starting XX, the Net assets our was $XX.X net growth on earnings declined in with

X.XX% the liabilities heavily asset first XXXX in margin to as investment be increase the declined overall X.XX% quarter interest to more net of on allocation a our XXXX in in quarter loans as average and interest to our X.XX% current as balances the net quarter. significantly to the of of X.XX% period equivalent proportion, while to weighted less of a from improved continues to cost Landmark’s tax in from interest-bearing the XXXX. basis loan in same margin compared first The benefited addition, In

March Our loan-to-deposit XX.X% XXXX. ratio increased XX, of compared as March to as of as to XX, XXXX, XX.X%

provision losses. at Looking our for loan

of provision of losses the the our economic The providing in the the loan $XXX,XXX COVID-XX. million quarter the XXXX. best XXXX resulted effects in for to allowance environment, losses estimate first in the of future first analysis to compared reflects loan Our $X.X considering quarter of increase as in for

XXXX. allowance speeds securities As of the to investment market to our on portfolio. the related the experience sold quarter accordingly. first of economic sale credit sales we our outlook the gains prices adjust for $X.X to $XX first the $X.X in securities and $X.X million prepayment compared with of pandemic-related based of million income will the increased million XXXX. on this higher-coupon investment for was risks million our of losses $X.X on primary The million we to securities as in same our income driver our provisioning evolves of quarter for of investment the evaluation and loss was Noninterest period accelerating XXXX develops, increase mortgage-backed of approximately This during portion associated noninterest

income also million of expenses $XXX,XXX the $XXX,XXX rate added employees was $X.X increased increase X.X% with the of the increase business first to and in banking general quarter area in accounts. increased growth the XXXX. quarter in in year increase tax same due Our over in or tax-exempt mostly service tax costs. as an increase to last charges, effective and to first pretax deposit year compared an in The while compensation primarily is compensation our increase to in in the commercial in compared income benefits to was XXXX. loan we part XX.X% the of quarter core and a effective by to This rate to the noninterest related over quarter our The past quarter driven fees Noninterest comparable by primarily contributed the earnings, and in quarter XX.X% declined also the to $XXX,XXX related current in period. the this

on XX, decreased at XX, XXXX. to million balance touch $X.X few XXXX, a December highlights. Total to March sheet compared Let’s at $XXX.X assets $XXX.X million million

at to $XXX.X XXXX. million from increased March XXXX. December at $XXX.X $XXX.X million portfolio XX, million compared March at million $XXX.X loan decreased at decreased $XXX.X million million year-end at XXXX, $XXX.X XXXX, securities while XX, $XX.X XXXX, from to XXXX, $X.X to XX, $XX.X March our at to million million Deposits Our year-end investment XX, million

at Additionally, from $XX.XX to up a at million The XX, $XXX.X of the December book value other Home share. the equity a in XXXX, XX, XXXX. increase an available-for-sale and book of value value $XX.X earnings $XX.XX quarter our $XX.X Loan share, our first net and XX, our or at stock compared XX, of of XXXX, million million of investment million during March million by Stockholders’ increase $XXX.X outstanding or in to at increased were $XX.X of per XXXX. of result XXXX, offset was borrowings book December shares decreased per March of Bank value Federal $X.X which primarily fair a securities, to purchase

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

$X.X mentioned loans greater XX, I days loans increase XXXX March than consist due, outstanding XX which million. of This of earlier, X.XX% XXXX. loans level an As or from the XXXX, totaled gross represents primarily of March XX, year-end as of million net Nonperforming loans, past as $XXX.X X.XX%. totaled of

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

decreased ratio nonperforming the delinquent Thus days level declined of of XX, loan loans of due between efforts XX monitor level we gross XXXX. This loans the increase XX, gross as past million still accruing and XXXX. of has indicator to nonaccrual XX of of December X.XX% XX XX XXXX. our part or management December from loans risk credit loans while our an is from March interest first or Another due of XX, $X.X quarter The experienced our as loans totaled and as past totals days. of during X.XX%

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

of are credit We Michael residential outlook. as and which marketed XX, XXXX, over being now in to owned balance review $XXX,XXX totaled our during $XX,XXX for charge-offs loan up call first net the of portfolio period $XXX,XXX of to quarter estate other the are real of Our of the balances same segments recorded for I owned back sale. and will the turn comprised loan XXXX. real March other estate risk the houses, from

Michael Scheopner

your for comments, you Thank Mark.

million. XXXX XXXX outstanding As a $XXX.X is or first the totaled million Mark loan year-end $XXX.X $XX.X our total from noted, end million. This net of increase X.X% loans of the of quarter net as

portfolio loan representing total of and loan contributed commercial portfolio. to regard million XXXX, our balances $XX our or $XXX.X total March million, land our $XXX.X With as Outstanding as million March total portfolio. and our agricultural the commercial XX, X.X% of the our or XX, portfolio. or loans totaled estate totaled $XX.X quarter. Commercial increase lending real of of portfolio, were XX.X% of The million portfolio significantly industrial in As of loan XX.X% our loan balances first our to loan balances XX.X% in construction growth. loan overall portfolio were current the strong XXXX, total of of end loan our

of approximately significant Our $XX Mortgage family home mortgage million as of the March respect one-to-four interest portfolio XX. loan activity portfolio production banking represented loan reached loan activity, totaled the activity. XX.X% the as rate the to single-family environment record at of mortgage our quarter at quarter end levels prompting first With refinance million. pipeline $XXX fell,

and certain on As yet of majority economic Much COVID-XX that into portfolio impacted. uncertainty, been on of is we these duration business will negatively depend clients is have sold but it loans seen. done, market. be to historically one-to-four have The our secondary our the overall pandemic the operations are of impact family the their the the loan

As million periods. to provision future our provision and to $X.X for we loan need losses losses recorded for quarter, additional make the during loan in a may first increases noted, previously we

effort to with a specific their we capital I PPP on case-by-case are and needs. the so requested these or that working payment who modifications that clients previously addition our In deferrals SBA liquidity are loan basis, solutions have to noted,

XX, As of XXX to we $XX.X provided April loans, million. have modifications representing

approved in customized are these basis, on regulatory guidance late issued case-by-case a was are consistent interagency the modifications While March. that with the

open believe practices operating results strength questions, first navigate management have. of anyone up want and contained to Landmark. some uncertain to by summarize the call questions We very that With times. capital I go I’ll us risk economic these company’s that well for we positive XXXX the saying position to as that, the might Before we quarter

Operator

Janney. from Our John first comes [Operator Instructions] Rodis, question

John Rodis

morning are Good doing hope well. you guys,

Michael Scheopner

morning. Good you. Thank

John Rodis

Michael, maybe you. question for a

piece Can that? the loan exposure. other banks like break seen about and talked you us of their on you you’ve of hotel, higher Just give risk kind out portfolio, portfolio any the maybe detail restaurant

Michael Scheopner

more we’ve overall specific respect modifications Yes. in X% concentrations. looked than has concentration of past. portfolio And risk, at, that markets our is analysis portfolio. it We’ve involved any as with disciplined to mix the I done believe relates in the pretty the to management one regard no the And the portfolio of concentration been with to the

or exposure hotel is is total the -- category or just restaurant that in Our portfolio million our -- $XX restaurants under in the accommodations category. mix

risk a concentration. So we’ve pretty modest had

management that. effort we’re to that in at has specific risk respect Really, has that point. seeing Our aggressive as a one the entire there sector specifically -- concentration look no been been been we pretty with at this portfolio, has

John Rodis

Okay.

So $XX restaurant? hotel plus total million for

Michael Scheopner

Yes. That entire would that. total be for the

Mark Herpich

That’s modified. not the currently number

Michael Scheopner

the the in this $X That’s that be number. total million Yes. modifications of in as sector that a at number little net as The far time. point would over

John Rodis

$XX million. million modified You’ve the $X of

Michael Scheopner

Right.

John Rodis

at stuff? ag -- give you maybe and picture big just your on Can or Okay. of update within industry markets sort a the an

Michael Scheopner

know the or a across portfolio pricing agribusiness been to within large this at impacts by point portfolio, the as plants But they small our point, in impacting some sector. an -- negatively Southeast agribusiness diversified COVID, portfolio that’s our of in we’ve I and got be significant deterioration withstanding change the Obviously, borrowers again, all Kansas the And from at of Yes. impacted and seem that’s standpoint we’ve commodity individual packing those we’ve to that our this that operators. don’t to at time. that’s seen Southwest looked have pricing. and -- relative

good weathering this at seem it at things they point, to So point. this -- pretty be

John Rodis

questions. other or -- X just more X one Maybe Okay.

loan What a slowdown, obviously, strong estate. guess, for the second I you going environment? growth thoughts quarter, quarter? given saw and first just I into pretty like commercial commercial are mostly your in quarter, sort real of mean dramatic the looks third potential Just current the

Michael Scheopner

Yes.

the a And made we fair. the exposures activity I quarter credit commercial year. mid-single commitments as got on the quality second we our retract into that But XXXX growth be feel at we we slowdown. We’d a little pipeline that forecast as of was just a growth as see -- quarter. still that digits. look we mean I the category a remainder bit second was first little the best loan quarter in forecast from as template on this would with for of we that standpoint, move we’ve credits those would think in the at that’s into the comfortable ended bit I -- still from that we guess and

John Rodis

Okay. final And then maybe just question.

are buyback, banks? sort On hold most the are you guys still guys Or you active? of like on

Mark Herpich

probably has little We’re had probably do to it. We’d one, and during plan do evaluating the that period, John, ended. out on We authorization the blackout which a hold. a have

we’re so it. evaluating And at point more this time, in

two. continues We’re as watching learn what outlook the price stock show we where and our more the goes economy over month next or to

John Rodis

Okay, be safe guys. Thank you.

Michael Scheopner

All you much. right. Thank so

Mark Herpich

we on comments comment follow-up I spot that. mean Michael’s we’ve mean, due are But John, have absent think that will the I loans Michael’s on, loan PPP put to growth the I on. to that, absent one And growth. loan

John Rodis

you. Thank understood. I Okay.

Operator

[Operator Instructions] remarks. like session. to would to our the conference over any Michael concludes I Scheopner back This turn closing for question-and-answer

Michael Scheopner

our do related next Thank I participating second you, and XXXX news the call. to appreciate continued quarter call. want to support look today's results everyone and at truly in thank I you. earnings to sharing And conference your confidence I company. Thank in our forward for earnings

Operator

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

disconnect a your day. Have now may You good lines.

Michael Scheopner	President, CEO & Director
Mark Herpich	Secretary, CFO & Treasurer
John Rodis	Janney Montgomery Scott

Landmark Bancorp (LARK) 6 May 202020 Q1 Earnings call transcript