LARK - Earnings call transcript Q2 2022

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Michael Scheopner

Thank you for joining our call today to discuss Landmark's earnings and results of operations for the Second Quarter and Year-To-Date 2022.

Joining the call with me today to discuss various aspects of our second quarter performance is Mark Herpich, Chief Financial Officer of the company; and the company's Chief Credit Officer, Raymond McLanahan.

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.

Additional information on these factors is included from time to time in our 10-K and 10-Q filings, which can be obtained by contacting the company or the SEC.

Bancshares, the comment our related on pending of into want performance, to get acquisition briefly to our Freedom I specifics financial regarding I the Before Inc. recent announcement

has this opportunity We are been strong presence to transaction its expand bank commercial allows with $XXX total since total in The Freedom loans approximately Overland the market. Kansas Kansas and to Bank our a and Park, approximately agreement City $XXX in the of formation expected deposits is very Freedom of in fourth has million. Freedom. us metro about excited transaction million completed this this of an be quarter year. excellent

we million strong $XX quarter. at $X.X increased than Credit mortgage second We Compared income income said, loan and saw by residential have equity diluted net Freedom's excited per income, million, during to continuing XXXX, we're loans XXXX loan average and join of continued X.XX%. to commitments Freedom was to with I almost of XXXX. its gross growth quarter the quarter, Year-to-date during the our more was quarter $X community for XXXX. net $X.XX. X.XX% increased of of fees service basis very reported forward on million team loans. totaled average strong Landmark on look XX, share losses The return it charges quality and this The of serves. net customers total the gains sale the assets and along $X.X first on on to employees As remain higher and while year-to-date X%. earnings XXXX, interest June in million a the earnings grew allowance net second to Bank's return community resulted fully totaled and interest increased banking

XX.X%. that Board X.XX% a cash meet $X.XX well Our deposits and as of capital with continue of in XXXX. capital be us risk needs XX, management declared practices, of liquidity financial to assets in businesses paid and equity total of and XXXX, dividend loans of of XXth our Directors to shareholders We strong, and the believe to remained This to strength August pleased to to position formation share August consecutive families markets. record our liquidity the I'm since report Landmark's to the per represents company's cash quarterly XX, XXXX. of dividend positions has

of turn purchased of also will quarter the We will I you. with during Mark our Herpich, second shares financial call now XX,XXX over review the XXXX. to who treasury stock results the CFO,

Mark Herpich

everyone. Thanks, good Michael, morning and to,

in discuss already million to we XXXX, to income the provision a the in of incurred to first loss in result results. quarter of of merger-related Michael Also, current the in quarter losses loss of Freedom XXXX, our credit aspects of no $X.X recently the alluded quarter comprising by our of loan like loan in of with made XXXX second allowance of announced now second various mainly first quarter was for Bancshares. associated quarter. As was lower financial I'd Net has performance our XXXX to $XXX,XXX our the XXXX, comparison costs $XXX,XXX acquisition provision while $XXX,XXX

basis X.XX% in quarter quarter In $XXXXXX slightly Landmark's excess increased Interest increase of quarter X.XX% loan in lower advantage second strong. or points and equivalent quarter offset take growth resulted current to to income in of resulted $X.X on the average from in commercial totaling XXXX. interest quarter lower prior in investment with points to quarter interest-bearing equivalent investment into quarter, The basis low growth second securities rising growth the X.XX% quarter XXXX, to in basis $XXX,XXX to on total margin quarter points income investment the the of securities in portfolio interest-bearing on on PPP, balances the on due and higher and increased first this on the expense million and yield due Excluding in Interest basis net but higher year agreements balances decline non-interest in was Paycheck XXXX, quarter in balances quarter to in mainly higher increased the quarter and this to and to higher average slight quarter increased, period second expense deploying the rates investment decline on in income, the $X.XX the very losses XXXX. in this interest Interest costs. repurchase quarter million income average costs the this compared our have by primarily yields. of and XXXX interest XX loss of also the of quarter compared expense. of to increased deposits non-interest of XXXX. also declined tax compared no declined gross second quarter was Protection average the $X.X on in the estate The second an tax second net second rates. the due XXXX, to interest first of by $XX.X $XXXXXX quarter interest a estate, on at items, Loan analysis Program, this compared reserve this deposits residential in securities, interest to year. and combined from At from XXXX. due of $XX our $XX,XXX loans commercial XXXX, balances ratio $XXX,XXX real showed in in totaled reduction quarter, XX first the X.XX%. yield by million, allowance quarter compared of last investments these short-term two to rate interest the second the second but by of economic This loans to balances. of environment, fees totaled of the quarter increased quarter due in The compared first by XX. made to income the cash quarter declined growth last remained XX interest and investment income in loan net growth PPP quarter, results current prior in mostly credit of growth loan real X.XX% on on XXXX, was strong loans X% on compared same Based was million, June XX, a XXXX, to The interest loan our loans X.XX% for the statement deposits. totaled as of portfolio the quarter with to environment. Interest to the along loan which offset the X.X% provision last this growth June year.

fees over declining in decrease by residential year second mainly we million $X.X non-interest due is evolves, continue the quarter outlook year $XXX,XXX income mainly interest the and our allowance extremely refinancing inventories gains economic income XXXX, for million gains $X.X a provisioning our with residential prior first have activity coupled in first increase XXXX, $X.X and on compared increase rates the in an an lower in slowed mortgage strong. As $XXX,XXX and of of quarter comparison compared as sales was to in was that million to service loans. to of year the loans decline charges on of will comparison Higher and in to increasing the due of adjust of bank sales The to to purchase this credit loss increase housing Non-interest $XXX,XXX quarter. this while quarter to totaled mortgage prior mortgage activities accordingly. The originated. when

Non-interest did quarter than originations the period these of totaled million, XXXX expense we the and in and $XXX,XXX due mortgages our an growth prior lower same over keep of these see loan we are in for However, second the was increase last $X.X $XXX,XXX rate normally quarter, adjustable of rates or loans higher year. to portfolio.

other in of rate excluding annualized securities investment the decreased XXXX quarter, XXXX. to growth in of down loan XXXX second effect contract previously other this second data million decline tax driven costs noninterest technology in Lower of compensation, completion, rate was and XX.X% million, expense. Deposits – from increased growth quarter new the PPP processing by processing, growth previously the in As million, Bancshares of reductions for the partially mentioned the main growth representing quarter first costs to by the expense of year $XX.X or gross second quarter mentioned. XX.X% lower quarter vendor our X.X% to non-interest and the during quarter of $XXX,XXX resulted over loans effective funded very costs from primarily in expense million offset while was reduced a current in and $XX.X cash with non-interest with merger-related loans decreases expense. amortization of cash of decrease Freedom of as expense quarter $X.X non-interest amortization this in strong acquisition. our data were acquisition the an equivalents Compared was activities, from in non-interest while along lending billion, the The the mentioned. the in by resulted XX.X%. the Loan expense related These quarter, XXXX, before, resulted first during mortgage the increase $XX.X $X.X in

due fair Our to totaled equity the new higher securities, June June treasury impacted in XXXX, XXXX plenty loan-to-deposit were and Stockholders fund book to million of a $XXX.X $XX.XX value which ratio our investment value book stock, and our loan to opportunities decrease at is the XX% of XX, remains in us low decline per rates. The to interest and at decreased the growth. share. by purchase of giving decreased value company's XX,

June are XX.X%. and bank's capital considered be exceed was regulatory ratio was at risk-based XX and consolidated well the The while very capitalized. levels of June to capital Our strong ratios XX, regulatory leverage XXXX, ratio XX.X% bank the as

the outlook. Raymond and call our loan highlights Now, portfolio risk to to review over of let me turn credit

Raymond McLanahan

good morning you, Thank Mark, and everyone. to

growth stated loan excellent. XX, quarter. outstanding an the this quarter or $XXX.X $XX.X earlier, million from June previous loans million, was totaled been increase has as of XXXX Gross As of

outstanding at quarter loans to million This end $X.X the quarter's declined $XXX,XXX. PPP

of our up up remain XX.X%. One-to-four me loan loans, growth was commercial commercial and family and -- $XX.X up these experienced commercial We million, Excluding almost our commercial family million We estate solid estate real our excuse annualized real $XX million, commercial on commercial quarter. estate, focused $XX was growing in our estate $XX.X million real commercial this and an rate portfolios. actually loans was residential loan one-to-four portfolio or portfolio real grew at core portfolios. by

on book noted balance greater origination our we also has adjustable As have before, mortgages, in resulted rate rates higher sheet. of which

competition markets. We continue of strong in our all loan to see opportunities for quality

we book. we grow the believe continue talent to right of and our navigate However, have available loan to these mix challenges to tools and

XX, Turning credit loans strong. quality totaled the was non-accrual or loans portfolio actively loans of remains from pursue XXXX. $X.X Non-performing the $X.X quarter greater to past continue Credit X.XX% as at real which quality. these properties. accruing gross foreclosed we primarily the million days of than million XX unchanged and June within estate and Total consist loans prior of sale due to of

Kansas part XXXX. on gross $XX,XXX of of XX compared during recorded indicator you loan during quarter the of from charge-offs between second to numbers, and maintaining quarter of solid past still quality $XXX,XXX due of can loans of metrics. of And remain last focused these asset XX tell net X.XX% XX efforts we loan days Because as and required that allowance We loan focus $XX,XXX of at this credit interest home the level Mark the we loans. recoveries is our quarter. no to for our unemployment our loan And pre-pandemic as is quarter X.XX% preliminary of compared lower in as REALTORS rate in reported last low for USDA loans management level this than reserve half and strong on quality, Association landscape Kansas this were at short losses. looking by year asset was The as strong Labor of The ag continue gross year, of according remains across provision over to of second pointed short level and This out, The XX.X% the soil majority for Kansas adjusted XX.X% accruing the XX net of increased between XXXX loans June only Kansas in reported last net topsoil the Kansas have year. monitor X.X%. conditions the rate Another is remains monitor charge-offs risk due we is days. very past to was quarter period state. Bureau Statistics. of XX while important our crop compared the markets, fell economic is was XXXX X.X% the sales supplies same healthy. state, The dry volumes a current ago, seasonally The moisture of conditions of X.X%. state. Since across or June to of the rated in the And prices in Kansas unemployment the economy actually the

However, despite conditions, corn and between be excellent. the of dry majority fair to soybeans the to continue rated

City. States now investment the jobs. this Additionally, one impact everyone automotive Kansas City is of $X costs. build X,XXX to in but Michael. largest private our continues in Kansas in will higher outside Eastern of largest metro Laura technology is Governor, tech area. our Panasonic of manufacturing expected prices, to And over electric commodity as This investment that the state's turn back to the also near billion both to the excited We're expertise. States Kansas that, month, our reportedly terms and region with and Kansas is The the coupled we ag see a come, history nucleus United third plans monitor expand City higher engineering Kelly manufacturing in with market call of the the investment is the presence of Energy create United and on I new fastest-growing inflation prices, vehicle This Kansas battery facilities in economy input kind announced its in to

Michael Scheopner

Thank Raymond, want comments to I thank for Mark also his and you, earlier.

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

Michael Scheopner

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

Landmark Bancorp (LARK) 27 Jul 222022 Q2 Earnings call transcript