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A Message to the Shareholders

Landmark Community Bank’s board of directors has recently decided to suspend dividend payments, according to Sandy Insalaco, Chairman of the Board.

“The nation, our Commonwealth, and our community are currently facing a critical health crisis and economic crisis,” said Mr. Insalaco. “I know we will overcome these challenges together and emerge stronger as a bank and a nation. With that thought we must continue to be proactive and forward looking in our actions.”

Over the past two years, Landmark Community Bank has undergone a strategic transformation that has strengthened its balance sheet and placed Landmark Community Bank in the top tier of most financial measures of security and strength. These results have positioned it well to support its customers.

Thomas V. Amico, President/CEO stated, “To continue this momentum during these times, the board of directors of Landmark Community Bank has taken a bold step to suspend our quarterly dividend payments. This will allow us to retain capital and redirect it into the communities we serve. We believe this action is in line with our commitment to grow and strengthen our bank as we support one another through this pandemic and challenging economic environment.”

Landmark Community Bank was founded in 2001 to provide local, personalized service and a full range of banking products to residents of Northeastern Pennsylvania. Today, Landmark Community Bank has branches in six locations and assets in excess of $325 million.

The following Notice of Change of Location relates to the proxy statement (the “Proxy Statement”) of Landmark Bancorp, Inc. (the “Company”), dated March 12, 2020, furnished to shareholders of the Company in connection with the solicitation of proxies by the Board of Directors of the Company for use at the Annual Meeting of Shareholders to be held on April 16, 2020.

Notice of Change of Location of Annual Meeting of Shareholders

To be held on April 16, 2020

Dear Shareholders of Landmark Bancorp, Inc.:

Due to the emerging public health impact of the coronavirus outbreak (COVID-19) and to support the health and well-being of our shareholders and team members, NOTICE IS HEREBY GIVEN that the location of the Annual Meeting of Shareholders of Landmark Bancorp, Inc. (the “Company”) has been changed. As previously announced, the annual meeting will be held on Thursday, April 16, 2020 at 4:00 p.m., local time. In light of public health concerns regarding the coronavirus outbreak, the annual meeting will be held in a virtual meeting format only at www.meetingcenter.io/209440405. You will not be able to attend the annual meeting physically.

As described in the proxy statement for the annual meeting previously distributed, you are entitled to participate in and vote at the annual meeting if you were a shareholder as of the close of business on February 26, 2020, the record date, or hold a legal proxy for the meeting provided by your bank, broker, or nominee. You will be able to attend and participate in the annual meeting online, vote your shares electronically and submit your questions prior to and during the meeting by visiting: www.meetingcenter.io/209440405 on Thursday, April 16, 2020 at 4:00 p.m., EST. The password for the meeting is LDKB2020. There is no physical location for the annual meeting. Whether or not you plan to attend the annual meeting, we urge you to vote and submit your proxy in advance of the annual meeting by one of the methods described in the proxy statement for the annual meeting. The proxy card included with the proxy statement previously distributed will not be updated to reflect the change in location and may continue to be used to vote your shares in connection with the annual meeting.

If you are a registered shareholder (i.e., you hold your shares through our transfer agent, Computershare), you do not need to register to attend the Annual Meeting virtually on the Internet. Please follow the instructions on the notice or proxy card that you received. If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the Annual Meeting virtually on the Internet. To register to attend the Annual Meeting online by webcast you must submit proof of your proxy power (legal proxy) reflecting your Landmark Bancorp, Inc. holdings along with your name and email address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on April 13, 2020.

By Order of the Board of Directors,

Santo A. Insalaco
Chairman of the Board
Pittston, Pennsylvania

A Letter from the President & CEO

Dear Shareholders

Landmark Bancorp, Inc. reported significantly improved operating results for the last quarter of 2019 as well as for the entire 2019 financial year. Significant changes in the balance sheet occurred during the year as management continued implementing the strategic course established by the Board of Directors. Management sold the remaining credit card balances in February 2019 and almost all of the previously purchased manufactured home loan portfolio in June 2019. The sale of these high‐risk low‐return loan portfolios and management’s efforts to collect and liquidate collateral on problem loans dramatically improved the bank’s credit quality metrics and profitability. The asset quality improvement is directly correlated to reduced loan loss provision expense and other collection expenses including legal expenses on non‐performing legacy loans and assets.

Landmark finished 2019 with net income of just over $1 million or $0.45 a share compared to a $451 thousand loss in 2018. Net income for the fourth quarter was $211 thousand compared to $1.2 million loss for the fourth quarter of 2018. We continue to deliver much improved performance and are well positioned to act upon opportunities for future growth.

2019 net interest income of $9.79 million decreased $1.40 million or 12.47% compared to 2018. The sale of the highyield low return loans as delineated above contributed to the decline in net interest income but eliminated associated risks and expenses due to exorbitant legacy non‐performing assets. The provision for credit losses was a reduction of expense of $81 thousand in the fourth quarter of 2019, compared with an expense of $1.94 million for the fourth quarter of 2018 and a reduction of expense of $11 thousand in the third quarter of 2019. Year to date, the provision for credit losses was a reduction of expense of $79 thousand for the full year ending December 31, 2019 compared with an expense of $2.3 million in 2018. The lower reserves in 2019 are a direct result of the improved credit quality in the loan portfolio that is due to the sale of the legacy purchased manufactured home loan portfolio; and credit card portfolio, as well as the higher‐caliber credit quality of the remainder of the loan portfolio. In 2019, Landmark’s total delinquencies decreased by $4.0 million from $5.0 million at year end 2018 equating to a reduced delinquency percentage from 1.95% to .40%, which includes all non‐accrual loans. The continued improvement in our Texas ratio will put things into perspective as this ratio is used to measure a bank’s credit risk in its loan portfolio. In 2016, our Texas ratio was 32.4%. At year‐end 2018, it was 14.3%. At year‐end 2019, it was 5.21%. As of January 31, 2020, it was 4.20% and is anticipated to be under 4% by the end of the first quarter 2020. These results happen with precise teamwork and a disciplined credit culture.

Non‐interest income was $1.7 million compared to $1.2 million in the previous year or an increase of 44.7%. Noninterest income was $237 thousand in the fourth quarter of 2019 compared to $272 thousand in the year earlier quarter. Management sold the remaining credit card loans in February of 2019. Balances at the time of the sale were approximately $1.4 million and a $200 thousand gain was recognized on the sale. Most of the manufactured home loan portfolio was sold, except for the retention of some non‐accrual loans. The net loan balances sold totaled $10.3 million and recognized $187 thousand gain on the sale. Investments were also sold throughout the year as management repositioned the portfolio to align with the Bancorp’s tax position. Net gains on the investment sale totaling $153 thousand were recognized in 2019. Mortgage banking revenues were down annually from a year earlier, but the trends are much improved in recent months due to new leadership in the mortgage area. A portion of this decline in revenues is related to the decision to portfolio some of the mortgages rather than brokering them. Service charges on deposit accounts have increased $18 thousand from last year; LCB Advisor income increased $19 thousand; there was an additional $265 thousand in other commercial income resulting from a new more sophisticated product line to better compete in the market place; and a $274 thousand reduction in credit card fee and interchange income due to the sale of the credit card portfolio.

Noninterest expenses were $10.4 million for 2019 compared to $10.8 million for 2018, or a $440 thousand, 41 bps, decline year over year. The increase in salaries and employee benefits in the current year is primarily related to the opening of the new branch in Clarks Summit and fully staffing each branch with a branch manager. Professional fees have declined $166 thousand from the year‐end 2018 and is a direct result of lower related legal fees. The reduction in FDIC insurance is related to credits received for small, federally insured banks due to the FDIC fund reaching and exceeding its statutorily required minimum reserve ratio. There was also a year over year reduction due to lower assessments as a result of the much‐improved asset quality position of the bank as well as the end of the FICO assessment for all financial institutions.

Landmark Bancorp, Inc. had total assets of $326.8 million at December 31, 2019 compared with $335.6 million a year earlier. Investment securities finished the year at $59.3 million an increase of $2 million from 2018. Net Loans fell $4.7 million to $244.6 million at December 31, 2019 from $249.3 million a year earlier. As previously stated, the remaining credit card portfolio was sold in 2019 and represented cards issued to Bank customers with approximately $1.4 million in balances at the time of the sale. Most of the purchased manufactured home loan portfolio was also sold in 2019 and consisted of significant net loan balances of approximately $10.3 million. Total deposits were $278.3 million for the recent year‐end, a decline of 3.8% from year end 2018. The contraction of the balance sheet provided management the opportunity to reduce reliance on higher cost of funds, namely time deposits, which have been reduced by $16.5 million or 14.4% from the prior year. The reduction in time deposits that occurred in the past six (6) months totaled $15.3 million as outlined below exhibiting the acceleration of our retail strategic plan to pierce the market via relationship banking. Noninterest bearing DDA’s have increased $4.2 million to $58.8 million at December 31, 2019.

As stated in our message to our shareholders, Landmark Bancorp, Inc. has reached the position to grow the bank in a prudent methodical persistent process. The following results in depository and lending activities will bear out the success of our strategic plan. With the skilled and disciplined branch managers and lending staffs, all Landmark Community Bank core deposit segments and lending sectors have realized positive trends while still improving our overall asset quality metrics as delineated above.

DepositsJun‐19Dec‐19in dollars6 month % change
Non‐interest‐bearing demand deposits$58,461,550$58,749,612$288,0620.49%
Interest bearing deposits$114,118,664$121,449,321$7,330,6566.42%
Time deposits$113,452,247$98,081,611$(15,370,636)‐13.55%
Total$286,032,461$278,280,544$(7,751,918)‐2.71%
LoansJun‐19Dec‐19in dollars6 month % change
Commercial loans$186,313,744$190,091,941$3,778,1972.03%
Mortgage loans$19,178,697$24,154,922$4,976,22525.95%
Consumer loans$5,635,384$6,236,126$600,74210.66%
Dealer loans$25,664,897$26,709,973$1,045,0754.07%
Leases$668,589$466,041$(202,548)‐30.29%
Total$237,461,312$247,659,003$10,197,6904.29%

Total shareholders’ equity was $33.4 million at December 31, 2019 an increase of $1.2 million from $32.1 million at December 31, 2018, representing 10.2% and 9.57% of total assets, respectively. The company completed a $6 million private placement offering of its common stock in 2018. The net realized gain on the company’s investment portfolio increased from a $357 thousand loss in 2018 to a $345 thousand gain in 2019, which represents a $702 thousand increase in capital from the same period last year. These unrealized gains and losses are excluded from the bank’s regulatory capital ratios and the bank remains well capitalized at December 31, 2019. Thank you once again for the opportunity to provide highlights of our most recent accomplishments and significant progress. Please continue to follow us on Facebook, Instagram, Twitter and YouTube for all the latest news at Landmark. We invite you to take a close look at what we have to offer and discover the difference at Landmark Community Bank. Please refer to the bank’s website, www.lcbbbank.com, for additional metrics and information on 2019’s financial results.

Thank you for your continued support,

Tom
Thomas V Amico
President & CEO

Landmark Bancorp, Inc. Reports Completion of Private Placement Stock Offering

Pittston, PA (December 19, 2018) Landmark Bancorp, Inc., the parent company of Landmark Community Bank, announced that, as of December 17, 2018, it has completed the private placement offering of approximately $6 million of its common stock. Landmark commenced the common stock offering on October 1, 2018, at $15.44 per share. All shares of common stock offered in the private placement were sold out.

Thomas V. Amico, President and Chief Executive Officer of Landmark, stated, “We are very pleased with the overwhelming demand we experienced for our common stock offering and the validation of our community bank business model. The fact that all of the shares of common stock were sold is a testament to the community’s faith in our Board, management team, business plan and the long-term goals of the bank.”

The net proceeds, after deducting offering expense, will be used for general corporate purposes including, but not limited to, continuing to meet regulatory capital requirements, increasing the regulatory lending ability of the bank, and redeeming the 1,500 shares of issued and outstanding Series A Preferred Stock for $1.5 million upon receipt of regulatory approval.

“On behalf of Landmark, I want to thank everyone who purchased common stock in the private placement, which includes both longtime shareholders and new investors,” Mr. Amico continued. “The new capital will assist us to execute on our strategic rebranding and provide us with a solid foundation to grow.”

Computershare is the transfer agent and registrar for Landmark Community Bank and maintains shareholder records for the company.

Please contact Computershare at:

Computershare
C/O Shareholder Services
P.O. Box 505000
Louisville, KY 40233-5000

By Overnight Delivery
462 South 4th Street
Suite 1600
Louisville, KY 40202

PH: 800-368-5948
Website

Your account may be managed online via Investor Relations at info@rtco.com, a cost-free web tool for shareholders, where you will be able to view your account details, update your account information and process various transactions.

A Warning About Forward-Looking Statements

In addition to historical information, this document may contain forward-looking statements. Examples of forward-looking statements include, but are not limited to, (a) projections or statements regarding future earnings, expenses, net interest income, other income, earnings or loss per share, asset mix and quality, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of management or the Board of Directors, and (c) statements of assumptions, such as economic conditions in the Corporation’s market areas. Such forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “intends”, “will”, “should”, “anticipates”, or the negative of any of the foregoing or other variations thereon or comparable terminology, or by discussion of strategy. Forward-looking statements are subject to certain risks and uncertainties such as local economic conditions, competitive factors, and regulatory limitations. Actual results may differ materially from those projected in the forward-looking statements. We caution readers not to place undue reliance on these forward-looking statements. They only reflect management’s analysis as of this date. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: the effects of new laws and regulations, including the impact of the Tax Cut and Jobs Act and Dodd-Frank Wall Street Reform and Consumer Protection Act; effects of short- and long-term federal budget and tax negotiations and their effect on economic and business conditions; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating locally, regionally, nationally and internationally ,together with such competitors offering banking products and services by mail, telephone, computer and the internet; technological changes; the interruption or breach in security of our information systems and other technological risks and attacks resulting in failures or disruptions in customer account management, general ledger processing and loan or deposit updates and potential impacts resulting therefrom including additional costs, reputational damage, regulatory penalties, and financial losses; ineffectiveness of the business strategy due to changes in current or future market conditions; the effects of economic deterioration on current customers, specifically the effect of the economy on loan customers’ ability to repay loans; the effects of competition, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products and services; interest rate movements; difficulties in integrating distinct business operations, including information technology difficulties; disruption from the transaction making it more difficult to maintain relationships with customers and employees, and challenges in establishing and maintaining operations in new markets; volatilities in the securities markets; slow economic conditions; and acts of war or terrorism. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances.

Dear loyal Landmark customers,

  In an effort to protect our customers and employees by participating in the recommended social distancing, effective Tuesday, March 17, 2020 all banking transactions will be handled solely through our drive-through facilities. Our hours of operations remain the same for the convenience of our customers.

  Customers are also strongly encouraged to take advantage of our self-service banking options, including Online Banking, Mobile Banking and Telephone Banking (1-866-255-4188). These 24/7 services allow you to view account information, transfer funds, pay bills, deposit checks (mobile), as well as, find the nearest ATM.

  We will continue to refer to the Centers for Disease Control and Prevention, the World Health Organization, and other public health agencies to determine the safest course of action as the situation evolves.

  Sincerely,

  Thomas V. Amico, President/CEO