Executive Summary

Q2 2025 diluted EPS was $0.75, down from $0.81 in Q1 2025 and up from $0.52 in Q2 2024; net income was $4.4M, with ROAA 1.11%, ROAE 12.25%, and efficiency ratio 62.8% .
Strong loan growth (+$42.9M; +16.0% annualized) and net interest margin expansion (+7 bps to 3.83%) drove revenue; non-interest income rose sequentially, while deposits fell $61.9M largely on a quarter-end brokered deposit decline offset by increased borrowings .
Credit quality was stable overall, but non-performing loans increased to $17.0M (1.52% of loans); management recorded a $1.0M provision and noted one ~$2.6M office CRE loan placed on nonaccrual was brought current just after quarter end .
Board declared a $0.21 per-share dividend (96th consecutive quarterly cash dividend), reinforcing capital return amid operating momentum; near-term stock catalysts include sustained margin expansion vs. deposit gathering progress and NPL trajectory .

What Went Well and What Went Wrong

What Went Well

Loan demand remained strong across residential mortgage (+$21.5M), commercial (+$13.4M), and CRE (+$10.9M); total gross loans exceeded $1.1B .
Net interest margin expanded 7 bps Q/Q to 3.83% and 62 bps Y/Y; net interest income rose 4.3% Q/Q and 24.7% Y/Y on higher loan balances and lower deposit costs .
Non-interest income increased $268K Q/Q, driven by higher gains on mortgage sales (+$178K) and higher fees (+$88K); expenses remained well controlled with lower professional fees .
Management tone: “continued strong net earnings…growth in loans and net interest income…credit quality remained solid overall” — Abby Wendel, CEO .

What Went Wrong

Period-end deposits declined $61.9M (driven by money market/checking and non-interest-bearing demand) due to brokered deposit reduction; borrowings increased $105.9M to fund assets .
Non-performing loans rose to $17.0M (1.52% of loans) from $13.3M (1.24%) in Q1; provision for credit losses of $1.0M recorded to reflect loan growth and reserves on individually evaluated loans .
Data processing expense increased $233K Q/Q due to added services and account growth; captive insurance subsidiary losses contributed to higher “other” non-interest expense .

Financial Results

Income Statement Summary vs Prior Periods and Estimates

Metric	Q2 2024	Q1 2025	Q2 2025
Diluted EPS ($)	$0.52	$0.81	$0.75
Net Interest Income ($USD Millions)	$10.974	$13.119	$13.683
Provision for Credit Losses ($USD Millions)	$0.000	$0.000	$1.000
Non-Interest Income ($USD Millions)	$3.720	$3.358	$3.626
Efficiency Ratio (%)	67.9%	64.1%	62.8%
ROAA (%)	0.78%	1.21%	1.11%
ROAE (%)	9.72%	13.71%	12.25%
“Revenue” (SPGI: NII after provision + Non-Interest) ($USD Millions)	$14.694*	$16.477*	$16.309*

Values with asterisks were retrieved from S&P Global.
S&P Global disclaimer: Values retrieved from S&P Global.

Note: Wall Street consensus estimates (EPS, revenue) were unavailable via S&P Global for LARK this quarter; therefore no beat/miss vs consensus is provided.

Margin and Cost Metrics

Metric	Q2 2024	Q1 2025	Q2 2025
Net Interest Margin (tax-equivalent) (%)	3.21%	3.76%	3.83%
Avg Rate on Interest-Bearing Deposits (%)	2.44%	2.17%	2.14%
Total Cost of Interest-Bearing Liabilities (%)	2.78%	2.38%	2.41%

Balance Sheet and Credit KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
Gross Loans ($USD Millions)	$980.575	$1,074.924	$1,117.784
Deposits ($USD Millions)	$1,250.482	$1,335.822	$1,273.901
Loan-to-Deposit Ratio (%)	77.50%	79.48%	86.62%
NPLs ($USD Millions)	$5.007	$13.280	$16.984
NPLs / Gross Loans (%)	0.51%	1.24%	1.52%
Allowance for Credit Losses ($USD Millions)	$10.903	$12.802	$13.762
ACL / Gross Loans (%)	1.11%	1.19%	1.23%
Net Charge-offs ($USD Millions)	($0.052) (recoveries)	$0.023	$0.040

Loan Category Breakdown (End-of-Period Balances)

Category ($USD Millions)	Q1 2025	Q2 2025	Change Q/Q
1–4 Family Residential Real Estate	$355.632	$377.133	+$21.501
Commercial	$190.881	$204.303	+$13.422
Commercial Real Estate	$359.579	$370.455	+$10.876

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q3 2025 payment	$0.21 (Q1 2025 declared)	$0.21 payable 8/27/2025; record 8/13/2025	Maintained
Revenue, Margins, OpEx, OI&E, Tax Rate	FY/Q3 2025	Not provided	Not provided	N/A

No formal quantitative guidance ranges were provided; management reiterated focus on deposit gathering initiatives and maintaining solid credit quality .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Deposit strategy & brokered funding	Q4: Deposits +$53.3M; reduced borrowings . Q1: Deposits +$7.1M; seasonal mix shifts .	Quarter-end brokered deposits declined; FHLB/FRB capacity ~$150M; ICS Promontory funding; one-day $40M swing at 6/30 .	Active funding management; near-term volatility; initiatives to gather branch deposits .
Loan growth	Q4: +$50.5M; broad-based . Q1: +$22.6M (annualized 8.7%) .	+$42.9M (16% annualized) led by residential, commercial, CRE .	Strong and accelerating sequential growth.
Margin trajectory	Q4 NIM 3.51% (+21 bps) . Q1 NIM 3.76% (+25 bps) .	NIM 3.83% (+7 bps); deposit rates -3 bps; borrowed funds -11 bps .	Continued expansion.
Credit quality / NPLs	Q4 ACL 1.22%; NPLs $13.1M (1.25%) . Q1 NPLs $13.3M (1.24%); loans 30–89 DPD $10.0M .	NPLs $17.0M (1.52%); provision $1.0M; two CRE nonaccruals; ~$2.6M brought current post-Q2 .	Elevated NPLs; mitigating resolution post-quarter.
Capital & liquidity	Q4 leverage and risk-based ratios well-capitalized . Q1 equity to assets 9.04% .	Equity to assets 9.13%; book value $25.66; regulatory ratios strong (leverage 9.2%, TRBC 13.6%) .	Improving capital metrics.
Kansas macro environment	—	State unemployment ~3.8%; housing mixed (sales -2.5% Y/Y; median price +5.6%) .	Neutral-to-stable macro.
Technology / AI references	—	AI mentioned in risk disclosures (cyber and vendor implementations) .	Monitoring risk environment.

Management Commentary

“Continued strong net earnings…driven by growth in loans and net interest income…Non-interest income increased…expenses were well controlled…Credit quality remained solid…Provision for credit losses of $1.0M…to reflect the growth in loans and higher reserves against individually evaluated loans on non-accrual.” — Abby Wendel, CEO .
“Net interest margin increased to 3.83%…interest income on loans increased $791,000…average loan balances increased $33.3M…average rate on interest-bearing deposits decreased 3 bps to 2.14%…other borrowed funds declined 11 bps to 4.98%.” — Mark Herpich, CFO .
“We have big initiatives to gather more deposits primarily through the branch network…we fully plan to engage our teams in that work.” — Abby Wendel .
“Two commercial real estate credits were placed on nonaccrual…one ~$2.6M office building was brought current just after quarter end.” — Raymond McLanahan, CCO .

Q&A Highlights

Reserve adequacy and NPL trajectory: Management affirmed they are adequately provisioned; $1.0M provision largely reflects loan growth; the $2.6M nonaccrual was brought current shortly after quarter end, supporting an improving trend into Q3 .
Deposits and funding strategy: Period-end deposits dipped; management highlighted branch-based deposit initiatives and noted ~$150M combined capacity at FHLB/FRB; participation in ICS Promontory brokered funding; a one-day bid miss caused a ~$40M quarter-end swing to FHLB borrowings .
Strategic focus: Sustain high-quality loan demand while strengthening deposit base and efficiency improvements across operations .

Estimates Context

S&P Global revenue actuals (defined as net interest income after provision plus non-interest income) were: Q2 2024 $14.694M*, Q1 2025 $16.477M*, Q2 2025 $16.309M*. Consensus means and EPS estimates were unavailable for LARK this quarter via S&P Global.
Values with asterisks were retrieved from S&P Global.
S&P Global disclaimer: Values retrieved from S&P Global.

Key Takeaways for Investors

Margin expansion remains intact (+7 bps Q/Q to 3.83%) amid disciplined deposit pricing and improving loan yields, supporting core earnings power .
Robust loan growth (+$42.9M Q/Q) across residential, commercial, and CRE segments should sustain net interest income momentum; watch loan-to-deposit ratio now at 86.6% .
Credit metrics warrant monitoring: NPLs rose to 1.52% of loans, but a key ~$2.6M exposure was brought current post-quarter; ACL coverage increased to 1.23% .
Funding mix is a tactical lever: quarter-end brokered deposit decline drove higher borrowings; management indicates ample FHLB/FRB capacity and branch-led deposit initiatives for H2 2025 — a near-term narrative driver .
Operating efficiency improved (62.8% vs 64.1% Q/Q; 67.9% Y/Y), aided by lower professional fees; continued scalability of fee income and mortgage sale gains can further support non-interest revenue .
Capital position strengthened (equity/asset ratio 9.13%; book value $25.66), underpinning dividend continuity ($0.21/share) and flexibility for growth .
With consensus estimates unavailable this quarter, the stock’s near-term setup hinges on visible margin trajectory and deposit gathering execution vs. resolution of NPLs; any updates on brokered funding stability and investment cash flows paying down borrowings could be incremental positives .

LANDMARK BANCORP INC (LARK)·Q2 2025 Earnings Summary