EX-99.1 2 a06-16687_1ex99d1.htm EX-99

Exhibit 99.1

 

PRESS RELEASE

 

Contacts:

Patrick L. Alexander

President and Chief Executive Officer

Mark A. Herpich

 Chief Financial Officer

(785) 565-2000

 

FOR IMMEDIATE RELEASE

July 25, 2006

 

Landmark Bancorp, Inc. Announces Record Earnings for the Quarter and Six Months Ended June 30, 2006 and Approves Cash Dividend

 

(Manhattan, KS, July 25, 2006) Landmark Bancorp, Inc. (Nasdaq: LARK), a bank holding company based in Manhattan, Kansas, reported diluted earnings per share for the quarter ended June 30, 2006 of $0.71 versus $0.43 for the quarter ended June 30, 2005. Net earnings for the quarter ended June 30, 2006 were $1.6 million, an increase of $646,000 compared to the quarter ended June 30, 2005. Diluted earnings per share for the six months ended June 30, 2006 were $1.35 versus $0.79 for the six months ended June 30, 2005. Net earnings for the six months ended June 30, 2006 were $3.0 million, an increase of $1.3 million compared to the six months ended June 30, 2005. Additionally, the Board of Directors declared a cash dividend of 17 cents per share to shareholders of record as of August 2, 2006, payable August 14, 2006.

 

Patrick Alexander, President and CEO, commented, “We are pleased to announce record earnings for the second quarter of 2006. Our improved earnings are attributed primarily to our acquisition of First Manhattan Bancorporation which closed on January 1, 2006, and the sale of our previous headquarters which occurred in April 2006. Furthermore, we have seen a continued improvement in our net interest margin, increasing from 3.10% during the second quarter of 2005 to 3.39% for the second quarter of 2006. The acquisition has allowed for continued growth in non-interest income areas such as fees and service charges and gains on sale of loans. At the same time we have been able to realize significant cost savings associated with the acquisition during the first half of 2006. Our annualized return on average assets increased to 1.07% for the second quarter of 2006 compared to 0.85% for 2005, while our annualized return on average equity improved to 14.05% for the quarter ended June 30, 2006 compared to 8.99% for 2005. We have made significant progress consolidating our personnel, operations and facilities which culminated with the sale of our previous headquarters located at 800 Poyntz Avenue during April 2006. Accordingly, the gain on sale of $630,000 on this building is included in our second quarter results. In addition, we took steps to reposition our investment portfolio by selling some relatively short term, lower yielding investments at a loss of $444,000 in the second quarter and purchasing longer term, higher yielding investments. We believe this

 


 

portfolio restructuring better positions the company for future period earnings and reduces our interest rate risk position.”

 

Alexander further commented, “We continue to be excited about our acquisition of First Manhattan Bancorporation, the holding company of First Savings Bank, F.S.B. This transaction has significantly enhanced our market share in the Manhattan/Junction City market at a time when the economy in the area is experiencing significant growth due to the announced expansion of Fort Riley, a military base located between Junction City and Manhattan. This acquisition also provides an entry into the dynamic Lawrence, Kansas market and further complements our franchise footprint across the state of Kansas. We believe that these developments are positioning our Company for a very positive outlook for growth in assets and earnings.”

 

Net interest income for the second quarter of 2006 increased $1.3 million to $4.5 million compared to the second quarter of 2005, an increase of 41.2%. This increase was due primarily to the higher level of interest earning assets obtained in the acquisition of First Savings Bank on January 1, 2006, and an improvement in the net interest margin to 3.39% for the quarter ended June 30, 2006 from 3.10% for the quarter ended June 30, 2005. Total non-interest income increased to $1.9 million for the quarter ended June 30, 2006 from $1.3 million for the quarter ended June 30, 2005, an increase of $664,000. This improvement was the result of a $117,000, or 56.9%, increase of gains on sale of loans, and an increase in fees and service charges of $236,000, or 26.4%, both of which are attributable to volume increases associated with the First Savings Bank acquisition. Additionally, total non-interest income included $682,000 in gains recognized with the sale of other assets, primarily the 800 Poyntz facility during the second quarter of 2006, which was offset by $444,000 in losses on sale of investments. Total non-interest expense for the quarter ended June 30, 2006 increased $1.2 million, or 40.1%, compared to the quarter ended June 30, 2005, resulting primarily from the impact of the acquisition of First Savings Bank on January 1, 2006 and the late August 2005 acquisition of two branches in Great Bend, Kansas. The impact of the acquisitions includes increases in compensation and benefits, occupancy and equipment, and amortization of acquired intangibles.

 

Net interest income for the six months ended June 30, 2006 increased $2.9 million to $9.2 million compared to the six months ended June 30, 2005, an increase of 45.2%. This increase was due primarily to the higher level of interest earning assets obtained in the acquisition of First Savings Bank on January 1, 2006, and an improvement in the net interest margin to 3.42% for 2006 from 3.09% for 2005. Total non-interest income increased approximately $1.3 million, or 55.4%, for the six months ended June 30, 2006, as compared to 2005. The increase was due to the $728,000 gain associated with the sale of other assets, primarily the 800 Poyntz facility, and increased fees and service charges of $466,000 and an increase of $215,000 in gains on sale of loans. Offsetting these increases were the losses on the sale of investments totaling $300,000 during the six months ended June 30, 2006 compared to a gain of $41,000 for 2005. Total non-interest expense for the six months ended June 30, 2006 increased approximately $2.5 million, or 43.1% compared to 2005, resulting primarily from the impact of the acquisition of First Savings Bank on January 1, 2006 and the late August 2005 acquisition of two branches in Great Bend, Kansas. The impact of the acquisitions includes increases in compensation and benefits, occupancy and equipment, and amortization of acquired intangibles.

 


 

Landmark Bancorp’s total assets increased to $593.6 million at June 30, 2006, compared to $465.1 million at December 31, 2005. Net loans receivable were $397.1 million at June 30, 2006, compared to $275.7 million at December 31, 2005. At June 30, 2006, the allowance for loan losses was $4.0 million, or 1.0% of gross loans outstanding, compared to $3.2 million, or 1.1% of gross loans outstanding at December 31, 2005. As of June 30, 2006, $4.9 million in loans were on non-accrual status, or 1.2% of total loans, compared to a balance of $3.3 million in loans on non-accrual status, or 1.2% of total loans, as of December 31, 2005. This increase was primarily related to a $1.2 million commercial loan past due for payments in excess of 90 days at June 30, 2006. Management does not anticipate any significant loss exposure on this loan. Residential home loans comprised 40.5% of the $4.9 million non-accrual balance at June 30, 2006. In the event of foreclosure, the Company has historically incurred minimal losses on these residential home loans based upon collateral values.

 

Landmark Bancorp consummated the acquisition of First Manhattan Bancorporation on January 1, 2006, and accordingly the results of operations presented for the quarter and six months ended June 30, 2006 include the accounts and results of First Manhattan Bancorporation which are not included in the results for the corresponding quarter and six months ended June 30, 2005. Landmark Bancorp, Inc. is the holding company for Landmark National Bank. Landmark National Bank has branches in Manhattan (2), Auburn, Dodge City (2), Fort Scott, Garden City, Great Bend (2), Hoisington, Junction City, LaCrosse, Lawrence, Louisburg, Osage City, Osawatomie, Paola, Topeka and Wamego, Kansas.

 

Special Note Concerning Forward-Looking Statements

 

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this press release, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

 

A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) the strength of the local and national economy; (ii) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (iii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (iv) changes in interest rates and prepayment rates of the Company’s assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi)  the economic impact of armed conflict or terrorist acts involving the United States; (vii) the loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of acquisitions including this year’s acquisition of First Manhattan Bancorporation; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.

 


 

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited):

 

 

 

At June 30,

 

At December 31,

 

 

 

2006

 

2005

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

13,832,885

 

$

21,490,512

 

Investment securities available for sale

 

134,557,744

 

140,130,512

 

Loans receivable, net (1)

 

397,090,304

 

275,729,066

 

Premises and equipment, net

 

12,992,315

 

8,412,235

 

Goodwill

 

13,009,167

 

7,535,584

 

Other intangible assets, net

 

4,512,120

 

2,418,213

 

Other assets

 

17,582,041

 

9,393,839

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

593,576,576

 

$

465,109,961

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

429,796,665

 

$

331,272,731

 

Other borrowings

 

110,869,548

 

85,258,318

 

Other liabilities

 

7,223,297

 

4,506,305

 

 

 

 

 

 

 

Total liabilities

 

547,889,510

 

421,037,354

 

 

 

 

 

 

 

Stockholders’ equity

 

45,687,066

 

44,072,607

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

593,576,576

 

$

465,109,961

 

 

(1)          Loans receivable are presented after adjustments for undisbursed loan funds, unearned fees and discounts and the allowance for loan losses. The allowance for loan losses was $4,048,624 and $3,151,373 at June 30, 2006 and December 31, 2005, respectively.

 


 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (unaudited):

 

 

 

Six months ended June 30,

 

Three months ended June 30,

 

 

 

2006

 

2005

 

2006

 

2005

 

Interest income:

 

 

 

 

 

 

 

 

 

Loans

 

$

13,511,515

 

$

8,390,492

 

$

6,860,807

 

$

4,288,778

 

Investment securities

 

2,870,664

 

2,158,512

 

1,455,327

 

1,121,711

 

Other

 

101,394

 

53,245

 

30,108

 

40,175

 

Total interest income

 

16,483,573

 

10,602,249

 

8,346,242

 

5,450,664

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

5,043,714

 

2,515,497

 

2,616,379

 

1,355,432

 

Borrowed funds

 

2,247,585

 

1,755,610

 

1,182,976

 

874,884

 

Total interest expense

 

7,291,299

 

4,271,107

 

3,799,355

 

2,230,316

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

9,192,274

 

6,331,142

 

4,546,887

 

3,220,348

 

Provision for loan losses

 

75,000

 

225,000

 

15,000

 

105,000

 

Net interest income after provision for loan losses

 

9,117,274

 

6,106,142

 

4,531,887

 

3,115,348

 

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Fees and service charges

 

2,135,335

 

1,668,954

 

1,128,463

 

892,928

 

Gains on sale of loans

 

586,364

 

371,394

 

322,983

 

205,818

 

Gains (losses) on sale of investments, net

 

(300,256

)

40,540

 

(443,797

)

40,540

 

Gains on sale of other assets

 

728,453

 

17,211

 

681,630

 

—

 

Bank owned life insurance income

 

157,654

 

41,920

 

112,300

 

20,287

 

Other

 

325,316

 

197,416

 

139,746

 

117,447

 

Total non-interest income

 

3,632,866

 

2,337,435

 

1,941,325

 

1,277,020

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

4,248,576

 

2,962,862

 

2,112,612

 

1,505,144

 

Occupancy and equipment

 

1,396,022

 

974,342

 

687,102

 

484,108

 

Amortization of intangibles

 

524,172

 

182,962

 

259,679

 

86,932

 

Professional fees

 

210,726

 

185,056

 

126,349

 

98,913

 

Data processing

 

348,990

 

270,233

 

187,543

 

141,237

 

Advertising

 

218,737

 

181,847

 

111,219

 

97,007

 

Other

 

1,506,785

 

1,151,869

 

732,650

 

597,588

 

Total non-interest expense

 

8,454,008

 

5,909,171

 

4,217,154

 

3,010,929

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

4,296,132

 

2,534,406

 

2,256,058

 

1,381,439

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

1,279,128

 

781,366

 

659,968

 

431,775

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

3,017,004

 

$

1,753,040

 

$

1,596,090

 

$

949,664

 

 

 

 

 

 

 

 

 

 

 

Net earnings per share (2)

 

 

 

 

 

 

 

 

 

Basic

 

$

1.35

 

$

0.79

 

$

0.72

 

$

0.43

 

Diluted

 

1.35

 

0.79

 

0.71

 

0.43

 

 

 

 

 

 

 

 

 

 

 

Book value per share (2)

 

$

20.49

 

$

19.47

 

$

20.49

 

$

19.47

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding at end of period

 

2,229,258

 

2,226,192

 

2,229,258

 

2,226,192

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic

 

2,228,761

 

2,217,025

 

2,228,928

 

2,217,921

 

Weighted average common shares outstanding - diluted

 

2,238,537

 

2,229,419

 

2,241,290

 

2,229,625

 

 

(2)          Net earnings per share and book value per share at or for the periods ended June 30, 2005 have been adjusted to give effect to the 5% stock dividend paid during December 2005.

 


 

OTHER DATA (unaudited):

 

 

 

Six months ended June 30,

 

Three months ended June 30,

 

 

 

2006

 

2005

 

2006

 

2005

 

Return on average assets (3)

 

1.02

%

0.80

%

1.07

%

0.85

%

Return on average equity (3)

 

13.54

%

8.35

%

14.05

%

8.99

%

Equity to total assets

 

7.70

%

9.70

%

7.70

%

9.70

%

Net yield on interest earning assets (3)

 

3.42

%

3.09

%

3.39

%

3.10

%

 

(3)          Information for the six and three months ended is annualized.