INVESTOR RELATIONS

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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.

A Letter from the President

Dear Shareholders

Landmark Bancorp Inc.’s operating results in the second quarter of 2020 reflect the continued progression and productive performance despite the unparalleled operating and economic challenges posed by the COVID‐19 pandemic. The Company’s consistent and continual improvement in performance demonstrates the quality of our disciplined business approach and the effectiveness of our team’s relentless execution of that strategy in our marketplace.

Net income for the second quarter was $434,000. It is notable that the year to date net income of $654,000 increased 16.9% compared to $560,000 for the same period in 2019. As delineated below, this increase in our profitability movement is in the face of the sizable increase in the provision for loan losses due to uncertain economic conditions attributable to the COVID‐19 pandemic.

 6/30/2020
Second Quarter
3/31/2020
First Quarter
Reduction in Relative Qtrly Profitability%
Provision for Loan losses$210,000$136,000$74,00054.4%
 6/30/2020 YTD6/30/2019 YTDReduction in Relative YTD Profitability%
Provision for Loan losses$346,000$12,000$334,0002,783.3%

Net interest income of $2.57 million increased $70,000 or 2.8 % compared to the second quarter of 2019 despite the declining interest rates during this past quarter. This significant trend is a direct consequence of the exceptional execution by our retail personnel and leadership. Further analytical trends relating to net interest income is extremely encouraging to meet significant profitability expectations in the short term as well as long term for Landmark Community Bank.

 6/30/2020
Second Quarter
3/31/2020
First Quarter
$ Variance%
Net Interest Income$2,567,000$2,364,000$203,0008.6%
 6/30/2020
Year to Date
6/30/2019
Year to Date
$ Variance%
Net Interest Income$4,931,000$5,049,000$(118,000)‐2.3%

Net interest income at June 30, 2019 includes $385,000 related to interest income on purchased manufacturing housing loans which were sold at the end of June 2019.

As detailed below, we have made significant strides in improving non‐interest expense during the past 12 months. As we continue to prudently grow in retail lending as well as in the investment portfolio, non‐interest expense will continue to improve as trends indicate during following time periods.

 6/30/2020
Second Quarter
3/31/2020
First Quarter
$ Improvement%
Non‐interest expense$2,331,000$2,511,000$(180,000)‐7.2%
 6/30/2020
Year to Date
6/30/2019
Year to Date
$ Improvement%
Non‐interest expense$4,842,000$5,322,000$(480,000)‐9.0%

Although total deposits have declined slightly from the previous year, it is essential to note the change in the deposit mix. Noninterest bearing demand deposit accounts have increased over $28 million or 48.1% while more costly time deposit accounts have declined $29 million or 25.9%. The diligent efforts by our retail and commercial lending personnel working in concert to restructure the portfolio is reflected below and is considerably reducing our cost of funds as stressed earlier. The progress in our net interest income for this second quarter of 2020 is the keystone to improve profitability.

 6/30/2020
Balances
6/302019
Balances
$ Variances
Year to Date
%
Year to Date
Demand deposit accounts$86,571,000$58,462,000$28,109,00048.1%
Interest bearing accounts$115,273,000$114,119,000$1,154,0001.0%
Time deposits$84,067,000$113,452,000$(29,385,000)‐25.9%
Totals$285,911,000$286,033,000$(122,000)0.04%

Landmark Bancorp Inc. has clearly attained a financial position to grow our bank that will result in improved metrics and profitability. The following financial results in all aspects of lending will bear out the success of our strategic plan. With the skillful and disciplined retail and commercial lending staffs, almost all Landmark Community Bank lending sectors have realized volume increases while still improving asset quality metrics.

 6/30/2020
Outstanding's
6/302019
Outstanding's
$ Variances
Annual
%
Annual
Commercial Loans$222,292,849$186,313,744$35,979,10519.3%
Dealer loans$26,894,685$25,664,897$1,229,7884.8%
Mortgage Loans$25,058,857$19,178,697$5,880,16030.7%
Consumer Loans$7,975,569$5,635,384$2,340,18541.5%
Leases$293,896$668,589$(374,693)(56.0%)
Totals$282,515,856$237,461,311$45,054,54519.0%

From a credit quality perspective, loans classified as nonaccrual and total delinquencies, including non‐accruals, greater than 30 days were reduced as detailed below:

 6/30/2020As a % of total loans6/30/2019As a % of total loans
Nonaccruals$543,0480.19%$1,734,6770.73%
Delinquencies,
(including nonaccruals, greater than 30 days)
$645,9240.23%$1,988,7200.84%

Landmark’s second quarter delinquency ratio of .23% is significantly lower than that of our local and national peer groups whose delinquency ratios at March 31, 2020 were 1.47% and 1.53%, respectively.

The Texas ratio is a measure of the bank’s credit risk in its portfolio and the ultimate impact on earnings. At the end of this quarter, Landmark’s Texas ratio was 3.88% compared to 8.88% as of June 30,2019. The change in Landmark’s current Texas ratio reinforces our improved position due to the exceptional credit quality assets on our balance sheet which, in turn, will also assure increased long‐term profitability.

Landmark Community Bank remains well capitalized with Tier 1 capital of 10.13% at June 30, 2020 compared to 9.49% at June 30, 2019.

As a community bank, it is incumbent upon us to give back to the community by serving our new and existing clients, especially in a time of need. As COVID‐19 challenged the physical well‐being and economic health of the members our community, we launched a comprehensive set of financial support initiatives to help our employees along with the individuals, businesses and communities we serve to help withstand the extraordinary pressures caused by the health crisis. Landmark assisted by issuing SBA Paycheck Protection Program loans in an expeditiously and compassionate manner for existing and first‐time customers. Specifically, 412 loans were granted for an aggregate amount of $35,986,350 to business owners in the communities we serve. For our consumer clients, we have offered payment deferrals on personal loans, auto loans, and residential mortgage products, as well as offering special rates and discounts on our mortgage Loans and lines of credits. The bank is waiving other fees to help customers manage costs and will allow customers to withdraw from a CD, without a fee, if they need funds for living expenses.

As we approach the second half of 2020, we remain focused on the health and welfare of our employees, customers, shareholders, and the communities we serve. Our board of directors and executive management team will continue to approach this heath and financial crisis in a considerate, disciplined, and trusting fashion. We believe Landmark Community Bank has prepared itself to withstand the challenges and the adverse influence of the COVID‐19 pandemic. With improved capital and liquidity, our experienced and skilled management team is well prepared to effectively navigate fluidly through changing financial and medical environments. We look forward to providing updates on our progress in the third and fourth quarters.

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 2020’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.