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A Letter from the President & CEO

Dear Shareholder

Landmark Bancorp Inc.’s operating results in the third quarter reflect the continued progression and productive performance by our Company. The Company’s consistent improvement and performance demonstrates the quality of our disciplined business strategy and the effectiveness of our team in executing that strategy in our marketplace. Net income for the third quarter was $287,128. It’s noteworthy that the year to date net income of $847,353 increased 13.79% compared to $744,668 for the same period in 2018.

Net interest income of $2.32 million decreased $458,000, or 16.5% compared to the third quarter of 2018. The credit card and manufactured home loan portfolios sold in late 2018 and throughout 2019 contributed to the decline in net interest income but eliminated associated risks and expenses as illustrated by the following results:

 Income Statement
9/30/2019
Income Statement
9/30/2018
Financial ImpactAnnual $ ImprovementAnnual % Improvement
Total improvement$1,014,97733.9%
Provision expense plus net charge‐offs$ (23,185)$ 329,062reduced expense$ 352,247‐107.0%
Non‐interest expense 2,539,346 2,956,860reduced expense417,514‐14.1%
Non‐interest income 540,397 295,181increased income245,21683.1%

Total deposits were $273,935,000 for the recent quarter, a decline of 4.23% from June 30, 2019. The decline is a direct result of a reduction in assets as well as a restructuring of the deposit portfolio to increase core deposits, reduce the amount of time deposits and, ultimately, reduce the cost of funds. The diligent efforts by our branch and commercial lending personnel to restructure the portfolio is reflected below and will ultimately reduce our cost of funds:

 Balances    Quarterly              .        
Totals$273,934,715$286,032,461$‐12,097,746‐4.2%
9/30/20196/30/2019$ Variances %
Demand deposit accounts$ 60,576,676$ 58,461,550$ 2,115,1263.6%
Interest bearing accounts106,619,057114,118,664‐7,499,607‐6.6%
Time deposits106,738,982113,452,247‐6,713,265‐5.9%

It should be noted that a decline in public funds MMDA balances was $6.9 MM, of which half is a seasonal fluctuation.

Landmark Bancorp Inc has now reached the position to grow the bank in a prudent, methodical and persistent process. The following quarterly results in all aspects of lending will bear out the success of our strategic plan. With the skillful and disciplined lending staff, almost all Landmark Community Bank lending sectors have realized volume increases while still improving asset quality metrics:

 Outstanding's Quarterly 
Totals$245,148,073$237,461,312$7,686,7613.2%
9/30/20196/30/2019$ Variances%
Commercial Loans$190,711,291$186,313,744$ 4,397,5472.4%
Dealer Loans26,161,25325,664,897496,3561.9%
Mortgage Loans21,295,52219,178,6972,116,82511.0%
Consumer Loans6,409,0205,635,385773,63513.7%
Leases570,987668,589‐97,602‐14.6%

From a credit quality perspective, loans classified as nonaccrual totaled $1,558,824, or .64% of total loans outstanding at September 30, 2019 compared with $5,032,889, or 1.97 % at a year earlier. Total delinquencies, including non‐accruals, greater than 30 days were reduced to .77% at September 30, 2019 compared with 2.37%, a year earlier. Landmark’s third quarter delinquency ratio of .77% is significantly lower than that of our local and national peer groups whose delinquency ratios at June 30, 2019 are 1.06% and 1.24%, respectively. Management also has sale agreements on two non‐accrual relationships amounting to approximately $550,000 with anticipated closings in the fourth quarter. In addition, there is other real estate owned in the amount of $305,000 that management also anticipates selling in the fourth quarter. In aggregate, Landmark’s nonperforming assets would be accordingly reduced by $855,000 by 2019‐year end with these closings.

As you are aware, the Texas ratio is used to measure a bank’s credit risk in its portfolio and the ultimate impact on earnings. At the end of this quarter, our Texas ratio was 7.94% compared to 19.31% as of September 30, 2018. Based upon the anticipated closings on non‐performing assets as mentioned above, the Texas ratio is anticipated to be below 6% by the end of 2019. The disciplined asset management approach will continue to result in a reduction in non‐interest expense and further drive long term profitability.

It’s vital to recognize that Landmark Community Bank remains well capitalized with Tier 1 capital 9.84% at September 30, 2019 compared to 8.66% at September 30, 2018.

Thank you once again for the opportunity to provide highlights of our most recent accomplishments and continued progress. Please continue to follow us on Facebook, Instagram, Twitter and YouTube for all the latest news and events 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 for additional metrics and information on the 3rd quarter 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.