LARK - Earnings call transcript Q3 2021

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Michael Scheopner

Thank you and good morning. Thank you for joining our call today to discuss Landmark's Earnings and Results of Operations for the Third Quarter and Year-to-Date 2021.

Joining the call with me to discuss various aspects of our third quarter performance is Mark Herpich, of the company, and the company's Chief Credit Officer, [Raymond McClanahan].

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

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

the factors and from be XX-Q contacting company these in to obtained on the XX-K our filings, or information is time included time by Additional SEC. which can

continued We are of driven strong solid by mainly capital. earnings lending, the growth core metrics third XXXX, in solid our credit pleased quarter during report to and

a of resulted Third earnings totaled net The million, year-to-date in per average XXXX quarter earnings XXXX assets XXXX basis average net the was earnings amounted was fully share on return X.XX%. on million XX.XX%. $X.XX. return $X.X and diluted equity to year-to-date $XX.X on And

We they these loan commercial portfolio continue loan Protection as are Paycheck being X.X% our increased $XX.X forgiven portfolios. estate loans, our million Small a solid our to excluding both reduction or growth by in in Administration, and quarter Program loans from real this the commercial see Business

totaled quarter. our allowance future. Credit loan losses this of year, gains which result loans in for nevertheless on last the And noninterest remains activity. are September of strong loan no we income, quality this XX, sales down at They tight provision a same and for quarter are quarter can housing reduced our supply mostly portion refinancing count While markets on in $X.X of losses XXXX. from was the million The there significant a this of the quarter.

record cash dividend quarterly be that pleased to our to This consecutive X% a a XXXX, has and since This financial Board well to with positions declared strength the the the practices, also declared on December total of shareholders dividend XXXX. capital continued shareholders with consecutive now of our in XX.XX% long-term strong liquidity to as the the represents XX, December that XXXX. you. in XX, XXXX, assets needs share, year liquidity Mark call meet for paid growth to management as of I and liquidity value We record to to to a of shareholders. to loans and risk our commitment XX.X%. dividend November support The remained of stock our position XXXX. continue demonstration stock capital per Landmark's XXst Our deposits the equity a issued represents turn businesses who review CFO and X% has Herpich, of results financial believe declared $X.XX board dividend, of XX, Board company's in will XXst the families I'm of formation over and be will of Directors November report our X, markets. cash

Mark Herpich

the %XXX,XXX. to in quarter, to to by third like income decline increase offset compared of offset PPP in X.XX% core and growth quarter I'd balances down the quarter of second in third everyone. last Starting XXXX. with The was or equivalent growth same third to year securities lower net earnings $XXX,XXX quarter, to the September to to quarter net of which quarter XX grew deposits. But mostly on in this of income X.XX% a good on highlight by has interest quarter interest the decline earnings the to by yield X.X% lower linked year's due interest costs was comparison of growth in net for XXXX points now our a $XX.X X.XX% on income current for and on last elements by to X.XX% from those was few deposits average comments total third already X.XX% quarter make on net third the basis on million. in in Thanks yield on to portfolio the various interest morning continued quarter. XX, quarter, third alluded net Michael, Michael higher ended strong interest comprising the in to tax this was in the results. quarter increase from loan the on quarter average a an prior of bearing in third interest of our the interest The income from %XXX,XXX prior million, quarter, mostly declined million compared loan last loan tax the of X.XX% in the loans basis, $X.X current $XX.X result an same $XX.X compared year. last expense mainly due quarter. in while %X.X the $XXX,XXX X.XX% was third mainly rates year, in quarter interest last rates decreased loans on net earned investment on costs, and in $XXX,XXX PPP of quarter $XXX,XXX. the Interest million interest to our loans loans quarter of Also prior a quarter to in in the grew points bearing by quarter to the million loans, XX Compared compared basis year. the securities. margin Landmark's quarter quarter loans in average income period average XXXX last partly current on declined year last third in interest year, same decreased earned XXXX investment equivalent $XX,XXX interest loan the period interest in securities X.XX% was year. Compared the was to deposits and excluding PPP balances, income mainly as the $XXX,XXX lower last offset Interest compared average current deposit in to to in basis quarter over year. of due The period last investment interest same of result on an third year, with by interest the coupled totaled the of increase last this by the the offset due from but quarter increase lower decline interest decline The which

fund And on strong which standpoint. ratio, did growth. in industry for opportunities be plenty new loan loan remained this analysis, XXXX net XXXX. of not our we third an quarter allowance our remains Our provision us the deposit losses to giving XX% loan a of million the At was PPP to Based margin to of the And consistent reserve second XXXX. environment, low, quarter also of totaled was make loan economic of September credit to XX, at XXXX, X.XX%. provision our of losses loans results. interest pandemic September gross The the considering with for loans loan effects on in estimate the $XX.X impact loss best our the the reflects of XX, excluding ratio our especially from the

in totaled million outlook related same estate will experienced this for pandemic credit decreasing economic And to more one-to-four sales linked $X.X provisioning and bank to the Noninterest develops, over $X.X allowance quarter. while was decrease adjust that the compared loans As our last evolves, accordingly. originated. and XXXX. we The noninterest remaining million loss the continue a income prior income the million in family mainly $X.X year quarter third to due to quarter losses period of the real identical almost decline of of

backed when loans as This offset was activity the interest our same service mortgage and increase a of compared markets income, higher quarter, increased in in year, in The sale was interchange due mortgage on quarter strong. gain current lack loan securities year the by the gains quarter activities over purchase by a fees. also was fees last an of charge quarter noninterest coupon inventory housing and last the higher servicing refinancing and in third primarily decline to $XXX,XXX slowed with extremely income to sale of the of decline third coupled rates of During $XXX,XXX impacted on revenue of in XXXX.

X% and low in our $X.X higher the an the and prior quarter increases XXXX. estate third other in on increase year, processing lower mortgage primarily expenses. to that expense real of decline by third compensation to few to the quarter. in and The of backed of only by relating XXXX mortgage associated assets XX.X% fees from total other with for quarter September investment decrease securities. the million costs of due XXXXcompared associated expense lending effective included third prior $X.X the over touch period on or same The quarter XX, benefits offset a third $XXX,XXX primarily down balance million owned was estate quarter during increased quarter, noninterest with XXXX the in to real linked a related increase billion of expenses total While owned. driven at quarter. of The balance in XX.X% over current SBA tax quarter To sales PPP third sheet was other the of highlights, the rate XXXX a decrease $X.X the quarter last $XX,XXX activities gains Noninterest was than as approximately to

$XX.X an X.X% increased quarter, loans in real during loans annual gross Our mentioned, both by driven and as million growth was estate the excluding commercial third commercial growth and lending. of PPP rate reflecting

during million decreased $XX.X million investment of of $XX.X XX, a million prior this from in share, per XXXX, at which Our in of cash million by million deposits book the which and with in the $X.X where quarter. quarter increased million growth quarter September and value up PPP loans, to billion, $XX.X $XX.XX this combined to totaled $XX.X $XX.XX declines securities equivalents $X.X equity cash funded $XXX.X quarter. Stockholders

Raymond while the of portfolio XX.X%. September turn regulatory loan the are to at very considered XXth, over XX, ratio to capital on total to capitalized. regulatory bank's be risk and bank the as Our call September credit now The will levels based ratio consolidated leveraged back strong highlights risk review exceed capital XXXX, outlets. well I XXXX was XX.X% our the and at was capital ratios

Unidentified Company Representative

XX, to outstanding everyone. you, $XX.X mainly our million PPP million and as good $XXX.X portfolio. XXXX, lower morning Gross this of totaled quarter Thank due Mark, September declined and loans to in loans

million quarter. to as successfully During PPP customers forgiveness our resulted in assist navigated reduction -- success quarter, was that continue PPP process. the $XX.X we outstanding our the SBA loans a That the during in they

of successful to number loans, loans. increased $X.X commercial to in relationships. across mix Commercial greater in of totaled result relationships previous the during from continue commercial real past estate represents growth quarter. accrual $X.X quarter, loans of loans loans excited commercial real nice million, loan and PPP due new growth This estate a the and one is XXXX. non as Total loan, foreclosed very $X.X loans $X.X real million offset decline this XX, which the all than footprint collection million increase performing And million was successful to pleased one of the real to on loans days while foreclosing reduced large the or Landmark the commercial helped million improvement of opportunities a gross increased estate XX new This a geographical quarter loans. recording agricultural September million increased total Nonperforming observed quarter. X.XX% the $X.X of and of of also of in consists relationship as and this loans and our during quarter, one real estate in we decline $X.X see primarily non were existing markets. was estate This and expansion accrual of We're relationship. of our result a which which decrease client commercial

We pursue the properties. sale of to continue actively these

of level previous past accruing we only compared days due Another days. XX low risk credit of quarter. XX between loans still the loans is to X.XX% loans The XX was past of indicator interest XX and $X.XX% monitor our to to point due remains the this management as quarter, that part and level gross efforts of

of XXXX. We quarter. current of the trends the this controlled of points points total charge-offs loan during loan third basis our of XX delinquency to quarter $XXX,XXX We XXXX remained recorded same loan quarter quarter categories. loan continue of all and the low to $XXX,XXX compared net charge-offs average The year. loans across basis charge-offs third and annualized net charge-offs in carefully loan was the well net during monitor XX to of ratio last period Net in

in September XX, ended net totaled loan $XXX,XXX the XXXX. charge-offs that $XXX,XXX period months to nine the compared during XXXX, same During

concentrations, to we on continue diversified a maintain In exposure to terms to portfolio. of management strong portfolio credit focus loan

conditions September one-to-four the quarter which XX% of from somewhat family turn were and commercial economy, has of corn and our gross and Bureau Harvest harvests quarter, to landscape year. favorable is preliminary United loans. portfolio loans, earlier. up to do state. XX% loans, commercial early States unemployment in XXXX The still as our home that but was statewide As have Labor statistics the uncertain, I at portfolio cattle strong to remained of headwinds The remain to throughout being magazine's and economy. for our of in call lack on Kansas, of a Michael. the recently And improvement announced rate by The production, for for housing while continue business real a Golden across will which states to top prices that strong. adjusted the X.X% while gross soybeans. Kansas largest some to represented XXXX, improved soybean the a Statistics, on Kansas Agriculture corn August which across Overall, driven loans animal perspective, XXXX. by XX within last yields XX.X% price X.X% economic and by economy health but earlier. of compared estate in according August well both increasing of segment reports average an seasonally loans, to rate available including significant X.X% doing over strong Kansas compared hotels you unemployment end, back report, Year-to-date represented are current Kansas Association is market Award that, we of remains recognized and our sales a a pandemic lesson. uncertainty homes industry. we onset In this Governor I believe Shovel low represents increase Kansas exposure Laura Department Cattle sales of now XX, September, rates, not an year And the for Development the XX% August of in challenged this of the of are for Area thank underway. gross the across have loans, Realtors, have sales indicate with partially represented historically year monitoring year. remained up Ag to Kansas from And within three residential According of concentrations of Kansas fell in prestigious in had interest compared prices the Switching reported their Home received the sale. Kansas we Kelly state good X.X% the April were

Michael Scheopner

earlier you your comments and Thank thank Raymond you, Mark, for also.

friend summarize delivering thanks associates the Before, National strategies, want and all to to anyone our to clients to carrying trend third by we go questions our daily company as extraordinary appreciation a call key continued operating success. of might open vision to to executing Landmark. as And communities. I customer service very to questions their our saying of and on express for our I the our the a With out a I'll up reflected want positive that Bank, everyone starts my and XXXX Landmark quarter is of that have. focus leaves results at that,

Operator

[Operator Instructions] Our today is first John [Indiscernible] question from

Unidentified Analyst

you a fees, Good how morning, do quarter? are question remaining have PPP after on guys. of Mark, Hey, the much those fees you this for

Mark Herpich

that. have do I

matter the our $X.XX to deferral in as quarter. at of million remaining got the it'll about Q we've I end right think well but

Unidentified Analyst

you the run the and most maybe fourth the do And loans some quarter too. then quarter, off of first think that in PPP in Okay. remaining guys

Mark Herpich

go second them is so got and of think $XX first as haven't now I we've of the expect year, paying in from into definitely it'll loans have was almost the still the those to the But our off, million next down quarter loans off fast. think slowed balance quarter going it's I PPP John, fast our into paid I of really wave now through round most large first XXXX our part I'd but would reach quite of been XXXX. say fairly one August pace PPP

Unidentified Analyst

Okay.

sort two continued outlook put question for or think mid sort up a maybe achievable? growth presented, digit maybe Do good guys excluding loan loan Michael, you the core just forward you single think growth you good. high still mid do you still PPP. Sounds of given of is going to you

Michael Scheopner

activity projection it. we're forecasting modeling, be do across say we and growth mid would pipeline what be our to geography seeing is that a continues decent single I think we will from as still I John, standpoint the digit

Unidentified Analyst

far Are the some sort recent by area Okay. as it's Kansas City of most your the rural And seeing any you or market of still around locations. there? growth of is as more growth

Michael Scheopner

the across decent really entire seeing We're geography. opportunities footprint, entire across John. really in It's growth the

in We markets that so human and of invest we're resources commercial continue to state across all lending and the standpoint capacity, seeing everywhere. the from really

Unidentified Analyst

you're sort some that alluding lenders what Okay, new so some hire opportunities to? of seeing is you're to too

Michael Scheopner

continue we successful and -- year. capable we this that look to team Yes, to been commercial that add we has have for bankers in that can our

Unidentified Analyst

M&A. just your appetite maybe on today Okay, and that conversations of then, Michael, super. final one your just the just seeing. thoughts, level And question Maybe you're

Michael Scheopner

mean, report to to and to return Nothing to I continue our shareholders. value will board John, the opportunities tangible today, evaluate company the

And to nature would look add and that looking value. be to so we forward add opportunities strategic in

Unidentified Analyst

can me state go as most And and remind would far markets, would Kansas you what sense, would -- the markets the of make forth? so outside just you what as

Michael Scheopner

go Yes, an add found that across shareholder and line, value if it'd we would be, we or our surgical would line, value. I Kansas, markets pretty think attractive we In look the if candidate opportunities in the to to state look state in makes at expand grow that in But be across we that the we'd definitely would the Kansas. sense. would franchise

Operator

from Our Haberman question Investments. next Ross RLH is from

Ross Haberman

associated on expenses? you? how million falls questions, much to quarter, morning, my pre given on Two for Good had the the is Thanks for number $X.X gain the that question call. loans. of How think I of the just are taking gentlemen. the tax you quick sale do a booked you

Mark Herpich

the You much how say tax? pre falls into

Ross Haberman

-- commissions and so related so on the given fees About and and forth. Yes,

Mark Herpich

it's public something reporting. while have a out auditors our we've in guess the income accounting disclosed. But after of with benefits business little business that segmentation have I and and that been I quantifying, and a our got and And business, probably other line hasn't that it we've bit top we I my purposely do, surely off that statement segmenting our provides goes lines columns. take in us number it's and if we to start don't haven't reported you nice head expenses, by a of the compensation revenue think from we then information little

Ross Haberman

of heard a from Would within percent-ish I Okay, I no, be hear roughly XX% other other a just to range. number to from banks, saying XX% XX reasonable banks, I'm a usually that anywhere guess? from

Mark Herpich

Yes, about half.

on about be think line I half would the right.

Ross Haberman

And beginning what's your next -- I what volume, guesstimate for year? are to that? are assume you and mortgage -- for What what the some to fourth you beginning guess for quarter,

Michael Scheopner

a is I the the refinance that pipeline the of This saw was in in first purchase to production Sure. half third you we much refi normal trending tell would from my activity And more year, Michael. split. continued active the quarter

of So I to guess of in third more and decreased supply we're third we some comments, would standpoint in $XX XXXX, to the middle a earlier in a it's, little quarter. much extent, our the forward I and pipelines production of quarter. into typically guess mentioned were we pre But in think going so through they the standpoint have to end pandemic. fourth entering look us and of a normal would have XXXX. I the the levels it neighborhood more activity values be that for and quarter production million the as to first most as in slows very I of in enjoyed back look another normal would, moving volume quarter probably volume still the on something our production for the activity -- probably pipelines from available we I in end to third if quarter into tight geographies, activity, million $XX decent fourth our From the housing the of And

Ross Haberman

what was that of kind range? of what production gross And

Michael Scheopner

$XXX in million XXX Gross production to of million. neighborhood the

Ross Haberman

it. Got

of And years spread quarters, would XX over see next to okay. that $XXX positively up a in your couple the one we of million, If the to just Okay. meander market? last your $XXX scenario million affect sort question. do X%

Mark Herpich

lot we've balance that sheet yes, would, got now are the on it And the couple next investments of and a years. right maturing cash of in

right to repriced welcome rates some we maybe so downward rates anxiously up go so reinvest term, up, in go can time. awaiting would we're be of then any we the see not to at so the as rates and So we're, potentially further, loans go this up point either

Operator

the further closing management As we any have remarks. team questions, no I'll back to for hand

Michael Scheopner

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

Landmark Bancorp (LARK) 31 Oct 212021 Q3 Earnings call transcript