Landmark Bancorp Q4 Earnings Rise Y/y On Strong Margins

Shares of Landmark Bancorp, Inc. LARK have gained 3.2% since reporting results for the fourth quarter of 2025. This compares with the S&P 500 index’s 0.4% decline over the same time frame. Over the past month, the stock has risen 8.5% compared with the S&P 500’s 0.8% return.

Landmark Bancorp reported net earnings of $4.7 million for the fourth quarter of 2025 compared with $3.3 million in the same quarter a year earlier, reflecting solid profitability growth. Diluted earnings per share were 77 cents, up from 54 cents in the fourth quarter of 2024 but slightly below 81 cents in the preceding quarter.

Total interest income for the quarter increased to $20.8 million from $19 million a year ago, driven primarily by higher loan yields. Net interest income rose 19.3% year over year to $14.8 million, benefiting from asset repricing and lower funding costs. For 2025, net earnings totaled $18.8 million, up 44.4% from $13 million in 2024, while diluted EPS increased to $3.07 from $2.15 in the prior year, underscoring the company’s improved earnings power.

Other Key Business Metrics

Profitability ratios showed notable improvement from the year-ago levels. Return on average assets was 1.17% for both the fourth quarter and 2025 compared with 0.83% in the corresponding periods of 2024. Return on average equity rose to 11.88% for the quarter and 12.68% for 2025 compared with 9.54% and 10.01%, respectively, a year earlier. The net interest margin expanded to 4.03% in the fourth quarter from 3.51% in the year-ago quarter, reflecting higher earning asset yields and lower deposit costs. The efficiency ratio improved to 62.8% from 70% a year earlier, indicating better expense leverage.

Balance sheet trends were mixed but generally supportive. Period-end loans totaled $1.1 billion as of Dec. 31, 2025, modestly lower than the prior quarter but up from $1.05 billion at the end of 2024. Average loans for the year grew 11.5% year over year, driven mainly by commercial real estate and residential mortgage activity. Total deposits increased 4.5% from a year earlier to $1.4 billion, with growth concentrated in money market and checking accounts. Asset quality metrics improved, as non-performing loans declined to $10 million, or 0.90% of gross loans, from $13.1 million, or 1.25%, at the end of 2024.

Management Commentary

Management characterized the quarter as a strong close to a year of sustained revenue growth and profitability gains. The company highlighted four consecutive quarters of net interest income expansion and emphasized pricing discipline on deposits as a key contributor to margin improvement. Executives also pointed to investments in personnel and operational capabilities during 2025, while maintaining expense control. Management noted that capital levels remain well above regulatory “well-capitalized” thresholds, with tangible common equity to assets exceeding 8% by 2025 year-end, reinforcing balance sheet strength.

Factors Influencing Headline Numbers

The primary driver of earnings growth was higher net interest income, supported by rising loan yields and declining funding costs. The average rate on interest-bearing deposits fell in the quarter, helping offset modest declines in average loan balances. Non-interest income declined sequentially due to a loss on the sale of lower-yielding investment securities, which management described as part of a broader strategy to reposition the securities portfolio for improved future returns.

On the expense side, non-interest expenses increased year over year due to higher compensation, professional fees and a valuation allowance on repossessed assets, partially tempering operating leverage gains.

Credit costs moderated in the fourth quarter. Provision for credit losses was $500,000, down from $1.5 million in the year-ago quarter. Net charge-offs were significantly lower than the elevated levels recorded earlier in 2025, when a single commercial credit was resolved.

Other Developments

The board declared a quarterly cash dividend of 21 cents per share, payable in February 2026, extending the company’s long-standing record of regular dividend payments. Management did not disclose any additional corporate actions beyond routine balance sheet management and ongoing portfolio repositioning during the period.

Management indicated an intention to continue investing in talent and customer-facing capabilities while pursuing disciplined loan growth and maintaining strong credit oversight. The company suggested a focus on building upon the operational and financial foundation established in 2025, rather than signaling a material shift in strategy.

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