Landmark Bancorp Hits Record Revenue Amid Fraud Case, Shifting Loans

MANHATTAN, KS – April 29, 2026 – Landmark Bancorp, Inc. (Nasdaq: LARK) announced a robust start to 2026, posting record quarterly revenue and a 6.7% year-over-year increase in earnings per share. The strong performance, which propelled net earnings to $5.1 million, prompted the board to declare a quarterly cash dividend of $0.21 per share.

However, beneath the surface of these positive headline figures, the Manhattan-based community bank is navigating a complex landscape of internal challenges and shifting market dynamics. The quarter's results were marked by the financial impact of an internal fraud case, a strategic pivot in its loan portfolio toward commercial real estate, and a slight uptick in loan delinquencies, painting a picture of a financial institution successfully managing growth while actively addressing emerging risks.

Navigating the Interest Rate Maze

A key driver of Landmark's first-quarter success was its impressive management of interest margins in a challenging economic climate. The bank's net interest margin (NIM) expanded significantly to 4.24%, a 48-basis-point increase from the same period last year. This was achieved by securing higher yields on its earning assets while simultaneously reducing its funding costs. Total deposit costs fell to an average of 1.38%, a notable 21-basis-point improvement year-over-year.

This performance is particularly noteworthy given the broader monetary environment. With the Federal Reserve holding the federal funds rate steady at a multi-year low of 3.50%-3.75% for its third consecutive meeting, competition for stable, low-cost deposits has intensified across the banking sector. Landmark's ability to lower its costs in this environment points to an effective balance sheet strategy. The bank has focused on growing its core customer deposits—the stable base of checking, savings, and money market accounts from local clients—while reducing its reliance on more volatile and expensive brokered deposits.

This strategic shift away from brokered funds aligns with a broader industry trend and regulatory caution, as such deposits are often viewed as less stable and potentially riskier. By cultivating its core deposit base, Landmark strengthens its funding foundation and enhances its resilience.

“We are off to a strong start in 2026, with record total revenue of $18.8 million for the quarter and net earnings exceeding $5.0 million,” said Abby Wendel, President and Chief Executive Officer, in the company’s press release. She attributed the results to “disciplined execution across the organization” driven by solid net interest income growth and prudent expense management.

Growth and Governance: A Delicate Balance

While celebrating record revenue, Landmark also disclosed a blemish on its otherwise strong quarter. The bank recognized a $433,000 fraud loss related to what it described as “previously disclosed fraudulent activity by a non-executive officer.” This material event, confirmed in an 8-K filing with the SEC, contributed to a $604,000 year-over-year increase in the 'other expense' category. The reported loss does not include any potential insurance recoveries the bank may receive in the future.

This incident casts a spotlight on the critical importance of internal controls and governance, even as the bank pursues growth. In her statement, Wendel emphasized the bank's ongoing focus on these areas. “As momentum builds, we remain focused on strengthening risk oversight and thoughtfully reinforcing our balance sheet and capital position,” she stated, signaling that the institution is taking steps to bolster its defenses.

Beyond the fraud loss, non-interest expenses rose 10.6% compared to the prior year, driven by strategic investments. The bank incurred higher costs for occupancy, equipment, and data processing related to a significant upgrade of its core branch operating systems. These investments are part of what Wendel described as efforts to “modernize how we deliver banking services across our footprint” and better meet evolving customer needs.

A Shifting Loan Book and Emerging Risks

Landmark's balance sheet also reveals a strategic shift in its lending focus. The bank's total gross loans decreased slightly to $1.1 billion, driven by paydowns in agriculture loans (down $16.2 million) and one-to-four family residential real estate (down $7.0 million). In their place, the bank grew its commercial real estate (CRE) portfolio by $13.6 million.

This pivot comes at a time when the broader CRE market is facing significant headwinds. Sustained higher interest rates have increased borrowing costs and put downward pressure on property valuations, raising concerns about refinancing risk and potential defaults across the sector. Some industry analyses suggest a growing percentage of CRE loans nationwide are linked to distressed assets.

Against this backdrop, Landmark's asset quality metrics warrant close observation. Non-performing loans increased to $10.4 million, or 0.94% of gross loans, up from 0.90% in the prior quarter. More notably, loans 30-89 days delinquent—an early indicator of potential stress—nearly doubled to $7.4 million. In response, the bank recorded a $500,000 provision for credit losses, matching the provision from the previous quarter and reinforcing its allowance for credit losses, which now stands at 1.15% of total gross loans.

Capital Strength and Shareholder Returns

Despite the emerging risks, Landmark's overall financial position remains solid. The bank's capital base continued to grow, with the tangible common equity to tangible assets ratio—a key measure of a bank's ability to absorb potential losses—improving to 8.11%. Book value per share also edged up to $26.50.

The declaration of a $0.21 per share dividend, payable on May 28, 2026, serves as a direct signal of the board's confidence in the bank's earnings power and capital adequacy. It provides a tangible return to shareholders even as the bank invests in technology and navigates a complex risk environment. Interested parties will have an opportunity to probe these results further when Landmark hosts its earnings conference call on April 30, 2026.