Landmark Bancorp (NASDAQ:LARK) reported record revenue and higher profitability for the second quarter of 2026, as growth in net interest income and gains on loan sales supported quarterly net income of $5.4 million.
Revenue reached a record $19.2 million, while earnings per share rose to $0.88, President and CEO Abigail Wendel said on the company’s earnings call. Return on average assets improved to 1.35%, and return on average equity increased to 13.23%.
Income Growth and Margin Trends
Net income increased from $5.1 million in the first quarter. Chief Financial Officer Mark Herpich said the improvement was driven mainly by continued net interest income growth and higher gain-on-sale-of-loans income.
Net interest income totaled $15.1 million, up $57,000 from the prior quarter and $1.4 million from the year-earlier period. Higher investment portfolio yields and lower funding costs contributed to the quarterly increase.
Interest income from investments rose $124,000 sequentially to $3.1 million, as investment yields increased to 3.66% from 3.55%. The company’s tax-equivalent net interest margin was 4.22%, down 2 basis points from the first quarter but up 39 basis points from the second quarter of 2025.
Herpich said the margin decline partly reflected the increase in nonaccrual loans during the quarter. Still, he said he was “cautiously optimistic” that Landmark could sustain its margin around the 4.20% level through the remainder of the year, assuming the Federal Reserve does not change rates.
He also cited the potential to reinvest investment portfolio cash flows at higher yields. The investment portfolio had a 4.2-year average duration and projected 12-month cash flows of $78.6 million, with securities rolling off at yields below 3%, compared with mid-4% yields on new investments, according to management.
Noninterest income totaled $4.1 million, rising $331,000 from the first quarter and $469,000 year over year. The sequential increase was primarily driven by a $356,000 increase in gains on loans sold into the secondary market.
Loan Growth and Deposit Mix
Gross loans, including net deferred fees and loans in process, increased $4.4 million during the quarter to approximately $1.1 billion. Growth in construction and land development loans, commercial loans, and agricultural loans was partially offset by a decline in one-to-four-family residential real estate balances.
Construction and land development loans rose $4.5 million, commercial loans increased $2.8 million, and agricultural loans rose $1.5 million. Residential real estate loans declined $4.5 million. Excluding the residential portfolio decline, Chief Credit Officer Raymond McLanahan said the loan portfolio grew at a 4% annualized rate from the first quarter.
Wendel said the company’s commercial lending teams continued to identify opportunities to add new customers and deepen existing relationships. She said Landmark is adding commercial lenders across its footprint and has promoted an internal candidate to lead commercial banking in Central, Western and Southeastern Kansas.
Management expressed cautious optimism for loan growth in the second half, while noting continued competition for both customers and banking talent. Wendel said the company has deliberately allowed some residential mortgage balances to decline, leaving more capacity for commercial lending opportunities.
Total deposits declined $17.7 million from the first quarter to $1.3 billion, primarily because brokered deposits fell. Certificates of deposit declined $33.5 million, including a $28.8 million reduction in brokered CDs, as Landmark used Federal Home Loan Bank borrowings more heavily.
Core deposits, excluding brokered deposits, increased $11 million during the quarter. Noninterest-bearing deposits rose $12.8 million, while money market and checking balances grew $6.7 million. Noninterest-bearing deposits represented 29.2% of total deposits as of June 30.
The total cost of deposits improved to 1.3%, while the average rate on interest-bearing deposits declined 8 basis points from the first quarter to 1.82%. Total borrowings increased $15.7 million as the company shifted away from brokered deposits and toward lower-cost short-term borrowing sources.
Credit Quality and Expenses
Nonperforming loans increased $2.7 million during the quarter to $13.1 million, or 1.18% of gross loans, from $10.4 million, or 0.94%, at the end of the first quarter. McLanahan said the increase was largely attributable to two borrower relationships moving to nonaccrual status.
During the question-and-answer session, McLanahan said one relationship involved an agricultural borrower and the other involved a commercial borrower. Both had been on management’s radar, he said, and the company was working toward resolution. He said management was not seeing potential exposure from those credits at that time.
Loans delinquent 30 to 89 days but still accruing interest declined to $6.3 million, or 0.57% of gross loans, from $7.4 million, or 0.68%, in the prior quarter.
- Net charge-offs were $452,000, compared with $349,000 in the first quarter.
- Annualized net charge-offs equaled 0.17% of average loans, up from 0.13% in the previous quarter.
- The allowance for credit losses was $12.7 million, or 1.15% of gross loans, unchanged from the first quarter.
- Landmark recorded a $500,000 provision for credit losses during the quarter.
Noninterest expense totaled $12 million, increasing $63,000 from the prior quarter. Professional fees rose $487,000, primarily related to forensic accounting and one-time legal costs connected with previously disclosed fraudulent activity by a nonexecutive officer, as well as higher talent recruitment and development costs.
The company said the prior quarter included $433,000 in fraud losses, which reduced other expenses in the second quarter. The recorded fraud loss excludes any potential insurance recoveries, Herpich said.
Capital and Dividend
Stockholders’ equity increased $5.2 million during the quarter to $166.9 million. Book value per share rose to $27.35 as of June 30 from $26.50 at March 31, while tangible book value per share increased to $21.76. Tangible common equity to assets rose to 8.44%.
Landmark’s board declared a quarterly cash dividend of $0.21 per share, payable Aug. 27, 2026, to shareholders of record on Aug. 13. Wendel said the payment will mark the company’s 100th consecutive quarterly cash dividend since the holding company’s formation in 2001.
Looking ahead, Wendel said Landmark will focus on strengthening customer relationships, developing employees, improving operational efficiency and pursuing growth opportunities consistent with its long-term strategy.
About Landmark Bancorp (NASDAQ:LARK)
Landmark Bancorp, Inc is the bank holding company for Landmark Community Bank, a community?focused financial institution. The company provides a full range of deposit and lending products through its subsidiary, including checking and savings accounts, certificates of deposit, residential mortgages, home equity lines of credit and small business loans. Landmark Bancorp emphasizes personalized service, leveraging local decision-making to meet the unique needs of individuals and local enterprises.
In addition to traditional deposit and lending services, Landmark Bancorp offers comprehensive cash-management and treasury solutions for commercial clients.
