Landmark Q2 Profit Jumps 47 Percent

Key Points

• - Landmark Bancorp’s net earnings (GAAP) grew 46.7% year over year to $4.4 million for Q2 2025.

• - Loan growth remained strong and net interest income rose 24.7% in Q2 2025 compared to Q2 2024.

• - Non-performing loans increased quarter over quarter, rising from 1.24% to 1.52% of gross loans for Q2 2025 versus Q1 2025.

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Landmark Bancorp (NASDAQ:LARK), a regional bank serving communities across Kansas and the Kansas City metropolitan area, reported its financial results for the second quarter of 2025 on July 24, 2025. Key announcements included net income of $4.4 million and diluted earnings per share (EPS) of $0.75 (GAAP), compared to $3.0 million and $0.52, respectively, in the prior year’s second quarter. However, both metrics declined modestly from the highs reached in Q1 2025. Landmark does not have consensus analyst estimates, so there is no direct comparison to forecasts. Overall, the quarter maintained strong year-over-year momentum in loan growth and net interest income, but trends in deposits and asset quality introduced new areas for close monitoring.

Business Overview and Recent Focus

Landmark Bancorp operates as a community-oriented bank focused on serving both retail and business clients throughout Kansas and in the Kansas City metro area. Its mix of products includes residential, commercial real estate, commercial, agricultural, and consumer loans. The company supports this lending activity through a variety of deposit products and services offered at 29 branches and a loan production office.

Recently, Landmark Bancorp has emphasized expanding its loan portfolio, especially in more profitable areas like commercial, commercial real estate, and agricultural lending. Management is targeting diversification both by geography and loan type to balance income growth with risk exposure. The acquisition of a Kansas City-based bank has further supported ambitions in new markets. Key success factors include prudent risk management, maintaining stable credit quality, and navigating the regulatory landscape as a federally supervised financial holding company.

Quarterly Highlights and Financial Performance

Landmark’s net interest income rose to $13.7 million, up from $10.97 million in Q2 2024 and $13.1 million in Q1 2025. Net interest income is the spread between the interest earned on assets such as loans and the interest paid on liabilities like deposits. This increase was primarily driven by continued growth in the loan portfolio and a higher net interest margin of 3.83%, up from 3.25% in Q2 2024.

The loan portfolio expanded by $42.9 million during the quarter, driven by growth in one-to-four family residential real estate loans (up $21.5 million), commercial real estate loans (up $10.9 million), and commercial loans (up $13.4 million). As of June 30, 2025, total gross loans stood at $1.12 billion, with management noting that loan demand remained "strong," especially in commercial and mortgage segments. This expansion continues to align with the bank’s focus on higher-yielding lending businesses.

On the funding side, deposit balances were $1.27 billion as of quarter end. This figure represents a decline of $61.9 million compared to the previous quarter, although deposits increased $23.4 million versus the same quarter last year. Management identified the drop as mainly due to outflows in money market and checking accounts and a shift toward certificates of deposit. To support loan growth amid these outflows, total borrowings increased by $105.9 million, resulting in a loan-to-deposit ratio of 86.6%, up from 79.5% in Q1 2025.

Non-interest income, which includes revenue streams like fees, service charges, and gains from the sale of loans, totaled $3.63 million. Operating expenses remained well-managed, with non-interest expenses reaching $11.0 million. The efficiency ratio, a non-GAAP measure of expenses divided by revenues, improved to 62.8%. Lower efficiency ratios (non-GAAP) typically signal better cost control relative to income, with improvement seen both sequentially and year-over-year: 62.8% in Q2 2025, compared to 64.1% in Q1 2025 and 67.9% in Q2 2024.

Asset quality was a developing theme during the period. Non-performing loans (NPLs) grew to $17.0 million, or 1.52% of gross loans, up from $13.3 million and 1.24% in Q1 2025. However, early-stage delinquencies improved, declining sharply from the prior period. Management recorded a $1.0 million provision for credit losses (GAAP), reflecting both the growth in the loan book and heightened reserves for individually evaluated non-accrual loans. Net loan charge-offs, indicating loans unlikely to be collected, remained minimal at $40,000.

Capital strength and book value showed continued progress. Equity to assets increased to 9.13%, up from 9.04% in the previous quarter, while tangible book value per share (non-GAAP) improved to $19.66. Landmark also reduced the size of unrealized losses in its investment securities, benefiting tangible equity.

In accordance with its consistent dividend track record, the company declared a quarterly dividend of $0.21 per share, up from $0.20 per share in Q2 2024.

Looking Ahead

Landmark Bancorp did not provide formal financial guidance for the coming quarter or the remainder of fiscal 2025. Management reiterated its focus on growing higher-yielding loans, maintaining expense control, and upholding credit discipline. Ongoing developments in deposit balances, asset mix, and credit quality will be closely watched in the months ahead.

Shareholders can expect management to continue monitoring deposit trends and asset quality metrics. Attention will likely remain centered on the bank’s mix of funding sources, the trajectory of non-performing loans, and the competitive landscape in its regional markets. Ongoing dividend payments signal a commitment to shareholder returns. The quarterly dividend was maintained at $0.21 per share.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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