**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K**

| **x**      |   | **ANNUAL  REPORT PURSUANT TO SECTION 13 OR 15(d) OF  THE SECURITIES AND EXCHANGE ACT OF 1934**     |
|------------|--------|----------------------------------------------------------------------------------------------------|
| ** ** |   | ** **                                                                                         |
| ** ** |   | **For  fiscal year ended December 31, 2006**                                                       |
| ** ** |   | ** **                                                                                         |
| ** ** |   | **OR**                                                                                             |
| ** ** |   | ** **                                                                                         |
| **o**      |   | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES AND EXCHANGE ACT OF 1934** |

 

**For transition period from                to                    **

**Commission File Number 0-33203**

**LANDMARKBANCORP, INC.**

(Exact name of Registrant as specified in its charter)

| **Delaware**                              |   | **43-1930755**                           |
|-------------------------------------------|--------|------------------------------------------|
| (State or other  jurisdiction             |   | (I.R.S. Employer  Identification Number) |
| of incorporation  or organization)        |   |                                     |
|                                      |   |                                     |
| **701  Poyntz Avenue, Manhattan, Kansas** |   | **66505**                                |
| (Address of  principal executive offices) |   | (Zip Code)                               |

 

**(785) 565-2000**

(Registrant’stelephone number, including area code)

Securitiesregistered pursuant to Section 12(b) of the Act:
|                         | ** ** | Name of Each Exchange   |
|-------------------------|------------|-------------------------|
| **Title of Each Class** | ** ** | **on which Registered** |
| None                    |       | None                    |

 

Securitiesregistered pursuant to Section 12(g) of the Act:

# **Common Stock, par value $0.01 per share**

**Preferred Share Purchase Rights**

(Title of Class)
| Indicate by check mark if the registrant is  a well-known seasoned issuer, as defined in Rule 405 of the Securities |
|---------------------------------------------------------------------------------------------------------------------|
| Act.                                                                                                                | Yes o          No  x |

 
| Indicate by check mark if  the registrant is not required to file reports pursuant to Section 13 or  Section 15(d) of the |
|---------------------------------------------------------------------------------------------------------------------------|
| Exchange Act.                                                                                                             | Yes o          No  x |

 
| Indicate by check mark  whether the Registrant (1) has filed all reports to be filed by Section 13 or  15(d) of the Securities and Exchange Act 0f 1934 during the preceding 12  months (or for such shorter period that the Registrant was required to file  such reports), and (2) has been subject to such filing requirements for the  past 90 days. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                     | Yes x          No  o |

 

Indicate by check mark if disclosure of delinquentfilers pursuant to Item 405 of Regulation S-K is not contained herein, and willnot be contained, to the best of Registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this 10-K orany amendment to this form 10-K. o

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” inRule 12b-2 of the Exchange Act.
| Large accelerated filer  o |   | Accelerated filer  o |   | Non-accelerated filer  x |
|---------------------------------|--------|---------------------------|--------|-------------------------------|

 
| Indicate by check mark  whether the registrant is a shell company (as defined in Exchange Act  Rule 12b-2). |
|------------------------------------------------------------------------------------------------------------------|
|                                                                                                             | Yes o          No  x |

 

Theaggregate market value of the voting and non-voting common equity held bynon-affiliates of the registrant, based on the last sales price quoted on theNasdaq Global Market on June 30, 2006, the last business day of the registrant’smost recently completed second fiscal quarter, was approximately $44.6million*.  At March 15, 2007, the totalnumber of shares of common stock outstanding was 2,333,405.

Documentsincorporated by Reference:

Portionsof the 2006 Annual Report to Stockholders for the fiscal year ended December31, 2006, are incorporated by reference into Parts I and II hereof, to theextent indicated herein.  Portions of theProxy Statement for the Annual Meeting of Stockholders to be held May 23, 2007,are incorporated by reference in Part III hereof, to the extent indicatedherein.

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*              Based on the last reported priceof actual transactions in Registrant’s common stock on June 30, 2006, andreports of beneficial ownership prepared by all directors, executive officersand beneficial owners of more than 5% of the outstanding shares of common stockof Registrant; however, such determination of shares owned by affiliates doesnot constitute an admission of affiliate status or beneficial interest inshares of common stock of Registrant.

**LANDMARK BANCORP, INC.**

 

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2006 Form 10-KAnnual Report

Table of Contents

**PART I**
| ITEM 1.    |   | BUSINESS                                                                                                            |   |   |
|------------|--------|---------------------------------------------------------------------------------------------------------------------|--------|--------|
|       |   |                                                                                                                |   |   |
| ITEM  1A.  |   | RISK  FACTORS                                                                                                       |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 1B.   |   | UNRESOLVED STAFF  COMMENTS                                                                                          |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 2.    |   | PROPERTIES                                                                                                          |   |   |
|       |   |                                                                                                                |   |   |
| ITEM  3.   |   | LEGAL  PROCEEDINGS                                                                                                  |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 4.    |   | SUBMISSION  OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 5.    |   | MARKET FOR  THE COMPANY’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES  OF EQUITY SECURITIES |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 6.    |   | SELECTED FINANCIAL DATA                                                                                             |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 7.    |   | MANAGEMENT’S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                         |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 7A.   |   | QUANTITATIVE  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                         |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 8.    |   | FINANCIAL STATEMENTS  AND SUPPLEMENTAL DATA                                                                         |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 9.    |   | CHANGES IN  AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                               |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 9A.   |   | CONTROLS AND PROCEDURES                                                                                             |   |   |
|       |   |                                                                                                                |   |   |
| ITEM  9B.  |   | OTHER  INFORMATION                                                                                                  |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 10.   |   | DIRECTORS,  EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                             |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 11.   |   | EXECUTIVE  COMPENSATION                                                                                             |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 12.   |   | SECURITY  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                                     |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 13.   |   | CERTAIN  RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE                                           |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 14.   |   | PRINCIPAL  ACCOUNTANT FEES AND SERVICES                                                                             |   |   |
|       |   |                                                                                                                |   |   |
| ITEM 15.   |   | EXHIBITS AND  FINANCIAL STATEMENT SCHEDULES                                                                         |   |   |
|       |   |                                                                                                                |   |   |
| SIGNATURES |   |                                                                                                                |   |   |

 

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**PART I.**

**ITEM 1.  BUSINESS**

**The Company**

LandmarkBancorp, Inc. (the “Company”) is a bank holding company incorporated under thelaws of the State of Delaware. Currently, the Company’s business consists solely of the ownership ofLandmark National Bank (the “Bank”), which is a wholly-owned subsidiary of theCompany.  As of December 31, 2006, theCompany had $590.6 million in consolidated total assets.

TheCompany is headquartered in Manhattan, Kansas and has expanded its geographicpresence through acquisitions in the past several years.  Effective January 1, 2006, the Companycompleted the acquisition of First Manhattan Bancorporation, Inc. (“FMB”), theholding company for First Savings Bank F.S.B. In conjunction with the transaction, FMB was merged into the Bank (the “2006Acquisition”). In August 2005, the Company acquired 2 branches in Great Bend,Kansas. Effective April 1, 2004, the Company acquired First Kansas FinancialCorporation (“First Kansas”), the holding company for First Kansas FederalSavings Association (“First Kansas Federal”). In conjunction with the transaction, First Kansas was merged into theBank (the “2004 Acquisition”).  EffectiveOctober 9, 2001, Landmark Bancshares, Inc., the holding company for LandmarkFederal Savings Bank, and MNB Bancshares, Inc., the holding company forSecurity National Bank, completed their merger into Landmark Merger Company,which immediately changed its name to Landmark Bancorp, Inc. (the “2001 Merger”).  In addition, Landmark Federal Savings Bankmerged with Security National Bank and the resulting bank changed its name toLandmark National Bank.

As abank holding company, the Company is subject to regulation by the Board ofGovernors of the Federal Reserve System (the “Federal Reserve”).  The Company is also subject to variousreporting requirements of the Securities and Exchange Commission (the “SEC”).

Pursuantto the 2006 Acquisition, the 2004 Acquisition and the 2001 Merger, the Banksucceeded to all of the assets and liabilities of FMB, First Savings BankF.S.B., First Kansas, First Kansas Federal, Landmark Federal Savings Bank andSecurity National Bank.  The Bank isprincipally engaged in the business of attracting deposits from the generalpublic and using such deposits, together with borrowings and other funds, tooriginate consumer, commercial, multi-family, and one-to-four familyresidential mortgage loans in the Bank’s principal market areas, as describedbelow.  Since the 2001 Merger, the Bankhas focused on originating greater numbers and amounts of consumer, commercial,and agricultural loans.  Additionally,greater emphasis has been placed on diversification of the deposit mix throughexpansion of core deposit accounts such as checking, savings, and money marketaccounts.  The Bank has also diversifiedits geographical markets as a result of the 2006 Acquisition, the 2004Acquisition and the 2001 Merger.  TheCompany’s main office is in Manhattan, Kansas with branch offices in central,eastern and southwestern Kansas.  TheCompany continues to 

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exploreopportunities to expand its banking markets through mergers and acquisitions,as well as branching opportunities.

Theresults of operations of the Bank and the Company are dependent primarily uponnet interest income and, to a lesser extent, upon other income derived fromloan servicing fees and customer deposit services.  Additional expenses of the Bank includegeneral and administrative expenses such as salaries, employee benefits,federal deposit insurance premiums, data processing, occupancy and relatedexpenses.

Depositsof the Bank are insured by the Deposit Insurance Fund (the “DIF”) of theFederal Deposit Insurance Corporation (the “FDIC”) up to the maximum amountallowable under applicable federal law and regulation.  The Bank is regulated by the Office of theComptroller of the Currency (the “OCC”), as the chartering authority fornational banks, and the FDIC, as the administrator of the DIF.  The Bank is also subject to regulation by theBoard of Governors of the Federal Reserve System with respect to reservesrequired to be maintained against deposits and certain other matters.  The Bank is a member of the Federal ReserveBank of Kansas City and the Federal Home Loan Bank (the “FHLB”) of Topeka.

TheCompany’s executive office and the Bank’s main office are located at 701 PoyntzAvenue, Manhattan, Kansas 66502.  Thetelephone number is (785) 565-2000.

**MarketArea**

TheBank’s primary deposit gathering and lending markets are geographicallydiversified with locations in eastern, central, and southwestern Kansas.  The primary industries within theserespective markets are also diverse and dependent upon a wide array of industryand governmental activity for their economic base.  A brief description of these three geographicareas and the communities which the Bank serves within these communities issummarized below.

Shawnee,Douglas, Miami, Osage, and Bourbon counties are located in eastern Kansas andencompass the Bank locations in Topeka, Auburn, Lawrence, Paola, Louisburg,Osawatomie, Osage City, and Fort Scott. Shawnee County’s market, which encompasses the Bank locations in Topekaand Auburn, is strongly influenced by the State of Kansas, City of Topeka, tworegional hospitals and several major private firms and publicinstitutions.  The Bank’s Lawrencelocation is located in Douglas County and is significantly impacted by theUniversity of Kansas, the largest university in Kansas.  The communities of Paola, Louisburg, andOsawatomie, located within Miami County, are influenced by the high growth ofthe Kansas City market resulting in housing growth and small private industriesand business.  Additionally, theOsawatomie State Hospital is a major government employer within the county.  Bourbon and Osage Counties are primarilyagricultural with small private industries and business firms, while BourbonCounty is also influenced by a regional hospital and Fort Scott CommunityCollege.

Banklocations within central Kansas include the communities of Manhattan withinRiley County, Wamego which is located within Pottawatomie County, Junction Citywhich is located 

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in Geary County,Great Bend and Hoisington within Barton County, and LaCrosse located in RushCounty.  The Riley, Pottawatomie andGeary County economies are significantly impacted by employment at Fort RileyMilitary Base and Kansas State University, the second largest university inKansas, which is located in Manhattan. Several private industries and businesses are also located within thesecounties.  Agriculture, oil, and gas arethe predominant industries in Barton County. Additionally manufacturing and service industries also play a key rolewithin this central Kansas market. LaCrosse, located within Rush County, is primarily an agriculturalcommunity with an emphasis on crop and livestock production.

Thecounties of Ford and Finney were founded on agriculture, which continues toplay a major role in the economy. Predominant activities involve crop production, feed lot operations, andfood processing.   Dodge City is known asthe “Cowboy Capital of the World” and maintains a significant tourismindustry.  Both Dodge City and GardenCity are recognized as regional commercial centers within the state with smallbusiness, manufacturing, retail, and service industries having a significantinfluence upon the local economies. Additionally, each community has a community college which also attractsa number of individuals from the surrounding area to live within the communityto participate in educational programs and pursue a degree.

**Competition**

TheCompany faces strong competition both in attracting deposits and making realestate, commercial and other loans.  Itsmost direct competition for deposits comes from commercial banks and othersavings institutions located in its principal market areas, including manylarge financial institutions which have greater financial and marketingresources available to them.  The abilityof the Company to attract and retain deposits generally depends on its abilityto provide a rate of return, liquidity and risk comparable to that offered bycompeting investment opportunities.  TheCompany competes for loans principally through the interest rates and loan feesit charges and the efficiency and quality of services it providesborrowers.  Additionally, competition mayincrease as a result of the continuing reduction on restrictions on theinterstate operations of financial institutions.  The financial services industry is alsolikely to become more competitive as further technological advances enable morecompanies to provide financial services. These technological advances may diminish the importance of depositoryinstitutions and other financial intermediaries in the transfer of fundsbetween parties.

**Employees**

At December 31, 2006, the Bank had a total of 207employees (194 full time equivalent employees). The Company has no direct employees. Employees are provided with a comprehensive benefits program, includingbasic and major medical insurance, life and disability insurance, sick leave, anda 401(k) profit sharing plan.  Employeesare not represented by any union or collective bargaining group and the Bankconsiders its employee relations to be good.

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# **Lending Activities**

***General*.** The Bank strives to provide each market area it serves a full range of financialproducts and services to small and medium sized businesses and toconsumers.  The Bank targetsowner-operated businesses and utilizes Small Business Administration and FarmServices Administration lending as a part of its product mix.  Each market has an established loan committeewhich has authority to approve credits, within established guidelines.  Concentrations in excess of those guidelinesmust be approved by either a corporate loan committee comprised of the Bank’sChief Executive Officer, the Credit Risk Manager, and three other seniorcommercial lenders or the bank’s board of directors.  When lending to an entity, the Bank generallyobtains a guaranty from the principals of the entity.  The loan mix is subject to the discretion ofthe Bank’s board of directors and the demands of the local marketplace.

Residentialloans are priced and originated following underwriting standards that areconsistent with guidelines established by the major buyers in the secondarymarket.  Commercial and consumer loansgenerally are issued at or above the national prime rate.  While the origination of one to four familyresidential loans continues to be a key component of our business, the majorityof these loans are sold in the secondary market.  The Bank is focusing on the generation ofcommercial and consumer loans to grow and diversify the loan portfolio.  The Bank has no potential negativeamortization loans.  The following is abrief description of each major category of the Bank’s lending activity.

***Commercial Lending***.  Loans in this category include loans toservice, retail, wholesale and light manufacturing businesses, includingagricultural operations.  Commercialloans are made based on the financial strength and repayment ability of theborrower, as well as the collateral securing the loans.  The Bank targets owner-operated businesses asits customers and makes lending decisions based upon a cash flow analysis ofthe borrower as well as a collateral analysis. Accounts receivable loans and loans for inventory purchases aregenerally on a one-year renewable term and loans for equipment generally have aterm of seven years or less.  The Bankgenerally takes a blanket security interest in all assets of the borrower.  Equipment loans are generally limited to 75%of the cost or appraised value of the equipment.  Inventory loans are generally limited to 50%of the value of the inventory, and accounts receivable loans are generallylimited to 75% of a predetermined eligible base.

The Bank alsoprovides short-term credit for operating loans and intermediate term loans forfarm product, livestock and machinery purchases and other agriculturalimprovements.  Farm product loans havegenerally a one-year term and machinery and equipment and breeding livestockloans generally have five to seven year terms. Extension of credit is based upon the borrower’s ability to repay, aswell as the existence of federal guarantees and crop insurance coverage.  These loans are generally secured by ablanket lien on livestock, equipment, feed, hay, grain and growing crops.  Equipment and breeding livestock loans aregenerally limited to 75% of appraised value.

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***Real Estate Lending***.  Commercial, residential, construction andmulti-family real estate loans represent the largest class of loans of theBank.  Generally, residential loansretained in portfolio are variable rate with adjustment periods of five yearsor less and amortization periods of either 15 or 30 years.  Commercial real estate loans, includingagricultural real estate, generally have amortization periods of 15 or 20years.  The Bank has a security interestin the borrower’s real estate.  The Bankalso generates long term fixed rate residential real estate loans which aresold in the secondary market.  Commercialreal estate, construction and multi-family loans are generally limited, bypolicy, to 80% of the appraised value of the property.  Commercial real estate, includingagricultural real estate loans, are also supported by an analysis demonstratingthe borrower’s ability to repay. Residential loans that exceed 80% of the appraised value of the realestate generally are required, by policy, to be supported by private mortgageinsurance, although on occasion the Bank will retain non-conforming residentialloans to known customers at premium pricing.

***Consumer and Other Lending***.  Loans classified as consumer and other loansinclude automobile, boat, student loans, home improvement and home equityloans, the latter two secured principally through second mortgages.  With the exception of home improvement loansand home equity loans, the Bank generally takes a purchase money securityinterest in collateral for which it provides the original financing.  The terms of the loans typically range fromone to five years, depending upon the use of the proceeds, and generally rangefrom 75% to 90% of the value of the collateral. The majority of these loans are installment loans with fixed interestrates.  Home improvement and home equityloans are generally secured by a second mortgage on the borrowers personalresidence and, when combined with the first mortgage, limited to 80% of thevalue of the property unless further protected by private mortgageinsurance.  The home improvement loansare generally made for terms of five to seven years with fixed interestrates.  The home equity loans aregenerally made for terms of ten years on a revolving basis with the interestrates adjusting monthly tied to the national prime interest rate.

**Loan Origination and Processing**

Loanoriginations are derived from a number of sources.  Residential loan originations result fromreal estate broker referrals, direct solicitation by the Bank’s loan officers,present depositors and borrowers, referrals from builders and attorneys, walkin customers and, in some instances, other lenders. Consumer and commercialreal estate loan originations emanate from many of the same sources.Residential loan applications are underwritten and closed based upon standardswhich generally meet secondary market guidelines.  The average loan is less than $500,000.

Theloan underwriting procedures followed by the Bank conform to regulatoryspecifications and are designed to assess both the borrower’s ability to makeprincipal and interest payments and the value of any assets or property servingas collateral for the loan.  Generally,as part of the process, a loan officer meets with each applicant to obtain theappropriate employment and financial information as well as any other requiredloan information.  The Bank then obtainsreports with respect to the borrower’s credit record, and 

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orders, on realestate loans, and reviews an appraisal of any collateral for the loan (preparedfor the Bank through an independent appraiser).

Loan applicants are notified promptly of the decision of the Bank.  Prior to closing any long-term loan, theborrower must provide proof of fire and casualty insurance on the propertyserving as collateral, and such insurance must be maintained during the fullterm of the loan.  Title insurance isrequired on loans collateralized by real property.

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**SUPERVISIONAND REGULATION**

# **General**

Financialinstitutions, their holding companies and their affiliates are extensivelyregulated under federal and state law. As a result, the growth and earnings performance of the Company may beaffected not only by management decisions and general economic conditions, butalso by the requirements of federal and state statutes and by the regulationsand policies of various bank regulatory authorities, including the OCC, theBoard of Governors of the Federal Reserve System (the ”Federal Reserve”)and the FDIC.  Furthermore, taxation lawsadministered by the Internal Revenue Service and state taxing authorities andsecurities laws administered by the Securities and Exchange Commission (the ”SEC”)and state securities authorities have an impact on the business of the Company.The effect of these statutes, regulations and regulatory policies may besignificant, and cannot be predicted with a high degree of certainty.

Federaland state laws and regulations generally applicable to financial institutionsregulate, among other things, the scope of business, the kinds and amounts ofinvestments, reserve requirements, capital levels relative to operations, thenature and amount of collateral for loans, the establishment of branches,mergers and consolidations and the payment of dividends. This system ofsupervision and regulation establishes a comprehensive framework for therespective operations of the Company and its subsidiaries and is intended primarilyfor the protection of the FDIC-insured deposits and depositors of the Bank,rather than shareholders.

The following is a summary of the material elements ofthe regulatory framework that applies to the Company and its subsidiaries.  It does not describe all of the statutes,regulations and regulatory policies that apply, nor does it restate all of therequirements of those statutes, regulations and regulatory policies that aredescribed. As such, the following is qualified in its entirety by reference toapplicable law.  Any change in applicablestatutes, regulations or regulatory policies may have a material effect on thebusiness of the Company and its subsidiaries.

**The Company**

***General.**** *The Company, as the soleshareholder of the Bank, is a bank holding company.  As a bank holding company, the Company isregistered with, and is subject to regulation by, the Federal Reserve under theBank Holding Company Act of 1956, as amended (the “BHCA”).  In accordance with Federal Reserve policy,the Company is expected to act as a source of financial strength to the Bankand to commit resources to support the Bank in circumstances where the Companymight not otherwise do so.  Under theBHCA, the Company is subject to periodic examination by the Federal Reserve.  The Company is also required to file with theFederal Reserve periodic reports of the Company’s operations and suchadditional information regarding the Company and its subsidiaries as theFederal Reserve may require.

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***Acquisitions, Activities and Change in Control.* **The primary purpose of a bank holding company isto control and manage banks.****The BHCAgenerally requires the prior approval of the Federal Reserve for any mergerinvolving a bank holding company or any acquisition by a bank holding company ofanother bank or bank holding company. Subject to certain conditions (including deposit concentration limitsestablished by the BHCA), the Federal Reserve may allow a bank holding companyto acquire banks located in any state of the United States. In approvinginterstate acquisitions, the Federal Reserve is required to give effect toapplicable state law limitations on the aggregate amount of deposits that maybe held by the acquiring bank holding company and its insured depositoryinstitution affiliates in the state in which the target bank is located(provided that those limits do not discriminate against out-of-state depositoryinstitutions or their holding companies) and state laws that require that thetarget bank have been in existence for a minimum period of time (not to exceedfive years) before being acquired by an out-of-state bank holding company.

The BHCA generally prohibits theCompany from acquiring direct or indirect ownership or control of more than 5%of the voting shares of any company that is not a bank and from engaging in anybusiness other than that of banking, managing and controlling banks orfurnishing services to banks and their subsidiaries.  This general prohibition is subject to anumber of exceptions. The principal exception allows bank holding companies toengage in, and to own shares of companies engaged in, certain businesses foundby the Federal Reserve to be “so closely related to banking ... as to be aproper incident thereto.”  This authoritywould permit the Company to engage in a variety of banking-related businesses,including the operation of a thrift, consumer finance, equipment leasing, theoperation of a computer service bureau (including software development), andmortgage banking and brokerage. The BHCA generally does not place territorialrestrictions on the domestic activities of non-bank subsidiaries of bankholding companies.

Additionally, bank holdingcompanies that meet certain eligibility requirements prescribed by the BHCA andelect to operate as financial holding companies may engage in, or own shares incompanies engaged in, a wider range of nonbanking activities, includingsecurities and insurance underwriting and sales, merchant banking and any otheractivity that the Federal Reserve, in consultation with the Secretary of theTreasury, determines by regulation or order is financial in nature, incidentalto any such financial activity or complementary to any such financial activityand does not pose a substantial risk to the safety or soundness of depositoryinstitutions or the financial system generally. As of the date of this filing, the Company has not applied forapproval to operate as a financial holding company.

Federallaw also prohibits any person or company from acquiring “control” of anFDIC-insured depository institution or its holding company without prior noticeto the appropriate federal bank regulator. “Control” is conclusively presumed to exist upon the acquisition of 25%or more of the outstanding voting securities of a bank or bank holding company,but may arise under certain circumstances at 10% ownership.

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***Capital Requirements.***  Bank holding companies are required tomaintain minimum levels of capital in accordance with Federal Reserve capitaladequacy guidelines.  If capital levelsfall below the minimum required levels, a bank holding company, among otherthings, may be denied approval to acquire or establish additional banks ornon-bank businesses.

The Federal Reserve’s capitalguidelines establish the following minimum regulatory capital requirements forbank holding companies: (i) a risk-based requirement expressed as a percentageof total assets weighted according to risk; and (ii) a leverage requirementexpressed as a percentage of total assets. The risk-based requirement consists of a minimum ratio of total capitalto total risk-weighted assets of 8% and a minimum ratio of Tier 1 capital tototal risk-weighted assets of 4%.  Theleverage requirement consists of a minimum ratio of Tier 1 capital to totalassets of 3% for the most highly rated companies, with a minimum requirement of4% for all others.  For purposes of thesecapital standards, Tier 1 capital consists primarily of permanent stockholders’equity less intangible assets (other than certain loan servicing rights andpurchased credit card relationships). Total capital consists primarily of Tier1 capital plus certain other debt and equity instruments that do not qualify asTier 1 capital and a portion of the company’s allowance for loan and leaselosses.

Therisk-based and leverage standards described above are minimum requirements.Higher capital levels will be required if warranted by the particularcircumstances or risk profiles of individual banking organizations. Forexample, the Federal Reserve’s capital guidelines contemplate that additionalcapital may be required to take adequate account of, among other things,interest rate risk, or the risks posed by concentrations of credit,nontraditional activities or securities trading activities.  Further, any banking organizationexperiencing or anticipating significant growth would be expected to maintaincapital ratios, including tangible capital positions (*i.e.*,Tier 1 capital less all intangible assets), well above the minimum levels.  As of December 31, 2006, the Company hadregulatory capital in excess of the Federal Reserve’s minimum requirements.

***Dividend Payments.**** *The Company’s ability to paydividends to its stockholders may be affected by both general corporate lawconsiderations and policies of the Federal Reserve applicable to bank holdingcompanies*.* As a Delaware corporation, the Company is subject to the limitations ofthe Delaware General Corporation Law (the ”DGCL”). The DGCL allows theCompany to pay dividends only out of its surplus (as defined and computed inaccordance with the provisions of the DGCL) or if the Company has no suchsurplus, out of its net profits for the fiscal year in which the dividend isdeclared and/or the preceding fiscal year. Additionally, policies of theFederal Reserve caution that a bank holding company should not pay cashdividends unless its net income available to common stockholders over the pastyear has been sufficient to fully fund the dividends and the prospective rateof earnings retention appears consistent with its capital needs, asset quality,and overall financial condition.  TheFederal Reserve also possesses enforcement powers over bank holding companiesand their non-bank subsidiaries to prevent or remedy actions that represent unsafeor unsound practices or violations of applicable statutes and regulations.  Among these powers is the ability toproscribe the payment of dividends by banks and bank holding companies.

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***Federal Securities Regulation.***  The Company’s common stock is registered withthe SEC under the Securities Exchange Act of 1934, as amended (the ”ExchangeAct”).  Consequently, the Company issubject to the information, proxy solicitation, and other restrictions andrequirements of the SEC under the Exchange Act.

**The Bank**

***General.***  The Bank is a national bank, chartered by theOCC under the National Bank Act. The deposit accounts of the Bank are insured by the DIF.  The Bank is a member of the Federal ReserveSystem and the Federal Home Loan Bank System. As a national bank, the Bank is subject to the examination, supervision,reporting and enforcement requirements of the OCC, the chartering authority fornational banks.  The FDIC, asadministrator of the DIF, also has regulatory authority over the Bank.

***Deposit Insurance.*** As an FDIC-insuredinstitution, the Bank is required to pay deposit insurance premium assessmentsto the FDIC. The FDIC has adopted a risk-based assessment system under whichinsured depository institutions are assigned to one of four risk assessmentcategories based upon their respective levels of capital, supervisoryevaluations and other financial factors. Institutions that are well-capitalizedand exhibit minimal or no supervisory weaknesses pay the lowest premium whileinstitutions that are less than adequately capitalized and considered ofsubstantial supervisory concern pay the highest premium. An institution’srisk-classification is determined by the FDIC.

Forthe past several years, FDIC insurance assessments ranged from 0% to 0.27% oftotal deposits. Pursuant to regulatory amendments adopted by the FDIC,effective January 1, 2007, insurance assessments will range from 0.05% to 0.43%of total deposits (unless subsequently adjusted by the FDIC). FDIC-insuredinstitutions that were in existence as of December 31, 1996, and paid an FDIC-insuranceassessment prior to that date (“eligible institutions”), as well as successorsto eligible institutions, will be entitled to a credit that may be applied tooffset insurance premium assessments due for assessment periods beginning onand after January 1, 2007. The amount of an eligible institution’s assessmentcredit will be equal to the institution’s pro rata share (based on itsassessment base as of December 31, 1996, as compared to the aggregateassessment base of all eligible institutions as of December 31, 1996) of theaggregate amount the FDIC would have collected if it had imposed an assessmentof 10.5 basis points on the combined assessment base of all institutionsinsured by the FDIC as of December 31, 2001. Subject to certain statutory limitations,an institution’s assessment credit may be applied to offset the full amount ofpremiums assessed in 2007, but may not be applied to more than 90% of thepremiums assessed in 2008, 2009 or 2010. The FDIC will track the amount of aninstitution’s assessment credit and automatically apply it to the institution’spremium assessment to the maximum extent permitted by federal law.

***FICO Assessments.***   The Financing Corporation (“FICO”)is a mixed-ownership governmental corporation chartered by the former FederalHome Loan Bank Board pursuant to the Federal Savings and Loan Insurance CorporationRecapitalization Act of 1987 to function as a financing vehicle for therecapitalization of the former Federal Savings and Loan Insurance

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Corporation.  FICO issued 30-year non-callable bonds ofapproximately $8.2 billion that mature by 2019. Since 1996, federal legislation has required that all FDIC-insureddepository institutions pay assessments to cover interest payments on FICO’soutstanding obligations.  These FICOassessments are in addition to amounts assessed by the FDIC for depositinsurance.  During the year endedDecember 31, 2006, the FICO assessment rate was approximately 0.01% ofdeposits.

***Supervisory Assessments.***  National banks are required topay supervisory assessments to the OCC to fund the operations of the OCC.  The amount of the assessment is calculatedusing a formula that takes into account the bank’s size and its supervisorycondition.** **Duringthe year ended December 31, 2006, the Bank paid supervisory assessments to theOCC totaling $134,000.

***Capital Requirements.* **Banks are generally required to maintain capitallevels in excess of other businesses. The OCC has established the followingminimum capital standards for national banks, such as the Bank: (i) a leveragerequirement consisting of a minimum ratio of Tier 1 capital to total assets of3% for the most highly-rated banks with a minimum requirement of at least 4%for all others; and (ii) a risk-based capital requirement consisting of a minimumratio of total capital to total risk-weighted assets of 8% and a minimum ratioof Tier 1 capital to total risk-weighted assets of 4%.  In general, the components of Tier 1 capitaland total capital are the same as those for bank holding companies discussedabove.

The capital requirementsdescribed above are minimum requirements. Higher capital levels will be required if warranted by the particularcircumstances or risk profiles of individual institutions.  For example, regulations of the OCC provide thatadditional capital may be required to take adequate account of, among otherthings, interest rate risk or the risks posed by concentrations of credit,nontraditional activities or securities trading activities.

Further, federal law and regulations provide variousincentives for financial institutions to maintain regulatory capital at levelsin excess of minimum regulatory requirements. For example, a financialinstitution that is “well-capitalized” may qualify for exemptions from priornotice or application requirements otherwise applicable to certain types ofactivities and may qualify for expedited processing of other required noticesor applications. Additionally, one of the criteria that determines a bankholding company’s eligibility to operate as a financial holding company is arequirement that all of its financial institution subsidiaries be “well-capitalized.”  Under the regulations of the OCC, in order tobe “well-capitalized” a financial institution must maintain a ratio of totalcapital to total risk-weighted assets of 10% or greater, a ratio of Tier 1capital to total risk-weighted assets of 6% or greater and a ratio of Tier 1capital to total assets of 5% or greater.

Federal law alsoprovides the federal banking regulators with broad power to take promptcorrective action to resolve the problems of undercapitalizedinstitutions.  The extent of theregulators’ powers depends on whether the institution in question is “adequatelycapitalized,” “undercapitalized,” “significantly undercapitalized” or “criticallyundercapitalized,” in each case as defined by regulation.  Depending upon the capital category to whichan institution is assigned, the regulators’ corrective powers include: (i)requiring the institution to submit a 

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capital restoration plan;(ii) limiting the institution’s asset growth and restricting its activities;(iii) requiring the institution to issue additional capital stock (includingadditional voting stock) or to be acquired; (iv) restricting transactionsbetween the institution and its affiliates; (v) restricting the interest ratethe institution may pay on deposits; (vi) ordering a new election of directorsof the institution; (vii) requiring that senior executive officers or directorsbe dismissed; (viii) prohibiting the institution from accepting deposits fromcorrespondent banks; (ix) requiring the institution to divest certainsubsidiaries; (x) prohibiting the payment of principal or interest onsubordinated debt; and (xi) ultimately, appointing a receiver for the institution.

As of December 31, 2006: (i) the Bank was not subjectto a directive from the OCC to increase its capital to an amount in excess of the minimum regulatory capitalrequirements; (ii) the Bank exceeded its minimum regulatory capitalrequirements under OCC capital adequacy guidelines; and (iii) the Bank was “well-capitalized,”as defined by OCC regulations.

***Dividends.***  The primary source of funds for the Companyis dividends from the Bank. Under the National Bank Act, a national bank maypay dividends out of its undivided profits in such amounts and at such times asthe bank’s board of directors deems prudent. Without prior OCC approval, however, a national bank may not paydividends in any calendar year that, in the aggregate, exceed the bank’syear-to-date net income plus the bank’s retained net income for the twopreceding years.

The payment of dividends by anyfinancial institution is affected by the requirement to maintain adequatecapital pursuant to applicable capital adequacy guidelines and regulations, anda financial institution generally is prohibited from paying any dividends if,following payment thereof, the institution would be undercapitalized.  As described above, the Bank exceeded itsminimum capital requirements under applicable guidelines as of December 31,2006.  As of December 31, 2006,approximately $122,000 was available to be paid as dividends by the Bank.  Notwithstanding the availability of funds fordividends, however, the OCC may prohibit the payment of any dividends by theBank if the OCC determines such payment would constitute an unsafe or unsoundpractice.

***Insider Transactions.* **The Bank is subject to certain restrictionsimposed by federal law on extensions of credit to the Company, on investmentsin the stock or other securities of the Company and the acceptance of the stockor other securities of the Company as collateral for loans made by the Bank.Certain limitations and reporting requirements are also placed on extensions ofcredit by the Bank to its directors and officers, to the directors and officersof the Company, to principal shareholders of the Company, and to “relatedinterests” of such directors, officers and principal shareholders.  In addition, federal law and regulations mayaffect the terms upon which any person who is a director or officer of theCompany or the Bank or a principal shareholder of the Company may obtain creditfrom banks with which the Bank maintains correspondent relationships.

***Safety and Soundness Standards.***  Thefederal banking agencies have adopted guidelines that establish operational andmanagerial standards to promote the safety and soundness of federally insureddepository institutions.  The guidelinesset forth standards for internal controls, information 

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systems, internal audit systems,loan documentation, credit underwriting, interest rate exposure, asset growth,compensation, fees and benefits, asset quality and earnings.

In general, the safety andsoundness guidelines prescribe the goals to be achieved in each area, and eachinstitution is responsible for establishing its own procedures to achieve thosegoals.  If an institution fails to complywith any of the standards set forth in the guidelines, the institution’sprimary federal regulator may require the institution to submit a plan forachieving and maintaining compliance. If an institution fails to submit anacceptable compliance plan, or fails in any material respect to implement acompliance plan that has been accepted by its primary federal regulator, theregulator is required to issue an order directing the institution to cure thedeficiency. Until the deficiency cited in the regulator’s order is cured, theregulator may restrict the institution’s rate of growth, require theinstitution to increase its capital, restrict the rates the institution pays ondeposits or require the institution to take any action the regulator deemsappropriate under the circumstances. Noncompliance with the standardsestablished by the safety and soundness guidelines may also constitute groundsfor other enforcement action by the federal banking regulators, including ceaseand desist orders and civil money penalty assessments.

***Branching Authority.*** National banks headquartered inKansas, such as the Bank, have the same branching rights in Kansas as bankschartered under Kansas law, subject to OCC approval.  Kansas law grants Kansas-chartered banks theauthority to establish branches anywhere in the State of Kansas, subject toreceipt of all required regulatory approvals.

Federal law permits state and national banks to mergewith banks in other states subject to: (i) regulatory approval; (ii)federal and state deposit concentration limits; and (iii) state law limitationsrequiring the merging bank to have been in existence for a minimum period of time(not to exceed five years) prior to the merger. The establishment of new interstate branches or the acquisition ofindividual branches of a bank in another state (rather than the acquisition ofan out-of-state bank in its entirety) is permitted only in those states thelaws of which expressly authorize such expansion.

***Financial Subsidiaries. ***UnderFederal law and OCC regulations, national banks are authorized to engage,through “financial subsidiaries,” in any activity that is permissible for afinancial holding company and any activity that the Secretary of the Treasury,in consultation with the Federal Reserve, determines is financial in nature orincidental to any such financial activity, except: (i) insurance underwriting,(ii) real estate development or real estate investment activities (unlessotherwise permitted by law), (iii) insurance company portfolio investments and(iv) merchant banking.  The authority ofa national bank to invest in a financial subsidiary is subject to a number ofconditions, including, among other things, requirements that the bank must bewell-managed and well-capitalized (after deducting from capital the bank’soutstanding investments in financial subsidiaries).  The Bank has not applied for approval toestablish any financial subsidiaries.

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***Federal Reserve System.***  Federal Reserveregulations, as presently in effect, require depository institutions tomaintain non-interest earning reserves against their transaction accounts(primarily NOW and regular checking accounts), as follows: for transactionaccounts aggregating $45.8 million or less, the reserve requirement is 3% oftotal transaction accounts; and for transaction accounts aggregating in excessof $45.8 million, the reserve requirement is $1.119 million plus 10% of the aggregateamount of total transaction accounts in excess of $45.8 million.  The first $8.5 million of otherwisereservable balances are exempted from the reserve requirements.  These reserve requirements are subject toannual adjustment by the Federal Reserve. The Bank is in compliance with theforegoing requirements.

**Company Website**

The Company maintains a corporate website atwww.landmarkbancorpinc.com.  The Companymakes available free of charge on or through its website the annual report onForm 10K, quarterly reports on Form 10-Q, current reports on Form 8-K andamendments to those reports filed or furnished pursuant to Section 13(a) or15(d) of the Exchange Act as soon as reasonably practicable after the Companyelectronically files such material with, or furnish it to, the SEC.  Many of the Company’s policies, including itscode of ethics, committee charters and other investor information are availableon the web site. The Company will also provide copies of its filings free ofcharge upon written request to our Corporate Secretary at the address listed onthe front of this Form 10-K.

**STATISTICALDATA**

The Company has a fiscal year ending on December31.  The information presented in thisannual report on Form 10-K presents information on behalf of the Company as ofand for the year ended December 31, 2006.

The statistical data required by Guide 3 of the Guidesfor Preparation and Filing of Reports and Registration Statements under theExchange Act  is set forth in thefollowing pages.  This data should be readin conjunction with the consolidated financial statements, related notes and “Management’sDiscussion and Analysis of Financial Condition and Results of Operations” asset forth in the Company’s 2006 Annual Report to Stockholders (attached heretoas Exhibit 13.1).  All dollars in thetables are expressed in thousands.

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**I.              Distribution of Assets,Liabilities, and Stockholders’ Equity; Interest Rates and InterestDifferentials**

Theaverage balance sheets are incorporated by reference from the Company’s 2006Annual Report to Stockholders (attached as Exhibit 13.1).  The following table describes the extent towhich changes in interest income and interest expense for major components ofinterest-earning assets and interest-bearing liabilities affected the Company’sinterest income and expense during the periods indicated.  The table distinguishes between (i) changesattributable to rate (changes in rate multiplied by prior volume), (ii) changesattributable to volume (changes in volume multiplied by prior rate), and (iii)net change (the sum of the previous columns). The net changes attributable to the combined effect of volume and rate,which cannot be segregated, have been allocated proportionately to the changedue to volume and the change due to rate.
| ** **            | ** ** | **Years Ended**                                   | ** ** | **Years Ended**                                   | ** ** |
|-----------------------|------------|--------------------------------------------------------|------------|--------------------------------------------------------|------------|
| ** **            | ** ** | **December 2006 vs December 2005** | ** ** | **December 2005 vs December 2004** | ** ** |
| ** **            | ** ** | **Increase/(Decrease) Attributable to**      | ** ** | **Increase/(Decrease) Attributable to**      | ** ** |
| ** **            | ** ** | **Volume**                                             | ** ** | **Rate**                                               | ** ** | **Net** | ** ** | **Volume** | ** ** | **Rate** | ** ** | **Net** | ** ** |
| ** **            | ** ** | **(Dollars in thousands)**                   | ** ** | **(Dollars in thousands)**                   | ** ** |
| Interest  income:     |       |                                                   |       |                                                   |       |   |   |   |   |   |   |   |   |
| Investment securities |       | $                                                      | 81         |                                                   | $          | 1,190 |   | $ | 1,271 |   | $ | 87 |   | $ | 467 |   | $ | 554 |   |
| Loans                 |       | 8,231                                                  |       | 2,769                                                  |       | 11,000 |   | 497 |   | 1,124 |   | 1,621 |   |
| Total                 |       | 8,312                                                  |       | 3,959                                                  |       | 12,271 |   | 584 |   | 1,591 |   | 2,175 |   |
| Interest  expense:    |       |                                                   |       |                                                   |       |   |   |   |   |   |   |   |   |
| Deposits              |       | $                                                      | 2,523      |                                                   | $          | 2,853 |   | $ | 5,376 |   | $ | 115 |   | $ | 1,511 |   | $ | 1,626 |   |
| Other borrowings      |       | 631                                                    |       | 675                                                    |       | 1,306 |   | 323 |   | 8 |   | 331 |   |
| Total                 |       | 3,154                                                  |       | 3,528                                                  |       | 6,682 |   | 438 |   | 1,519 |   | 1,957 |   |
| Net interest income   |       | $                                                      | 5,158      |                                                   | $          | 431 |   | $ | 5,589 |   | $ | 146 |   | $ | 72 |   | $ | 218 |   |

 

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**II.  Investment Portfolio**

***InvestmentSecurities****.*  The following table sets forth the carryingvalue of the Company’s investment securities at the dates indicated.  None of the investment securities held as ofDecember 31, 2006 was issued by an individual issuer in excess of 10% of theCompany’s stockholders’ equity, excluding the securities of U.S. government and federal agency obligations.
| ** **                                 | ** ** | **At  December 31,**            | ** ** |
|--------------------------------------------|------------|--------------------------------------|------------|
| ** **                                 | ** ** | **2006**                             | ** ** | **2005** | ** ** | **2004** | ** ** |
| ** **                                 | ** ** | **(Dollars in thousands)** | ** ** |
|                                       |       |                                 |       |   |   |   |   |
| Investment Securities  Available-for-Sale: |       |                                 |       |   |   |   |   |
| U.S. agency securities                     |       | 46,632                               |       | $ | 43,628 |   | $ | 33,465 |   |
| Municipal obligations                      |       | 55,064                               |       | 32,380 |   | 14,015 |   |
| Mortgage-backed  securities                |       | 32,224                               |       | 52,893 |   | 74,504 |   |
| FHLB stock                                 |       | 6,747                                |       | 5,655 |   | 5,413 |   |
| Common stock                               |       | 716                                  |       | 775 |   | 710 |   |
| FRB stock                                  |       | 1,741                                |       | 1,348 |   | 1,341 |   |
| Corporate bonds                            |       | 2,531                                |       | 3,035 |   | 1,763 |   |
| Other  investments                         |       | 229                                  |       | 417 |   | 2,393 |   |
| Total                                      |       | $                                    | 145,884    |   | $ | 140,131 |   | $ | 133,604 |   |
|                                            |            |                                      |            |  |  |  |  |  |  |  |

 

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The following table sets forth certain information regarding thecarrying values, weighted average yields, and maturities of the Company’sinvestment securities portfolio as of December 31, 2006.  Yields on tax-exempt obligations have notbeen computed on a tax equivalent basis. The table includes scheduled principal payments and estimatedprepayments.
| ** **                             | ** ** | **As of December 31, 2006** | ** ** |
|----------------------------------------|------------|-------------------------------------------------|------------|
| ** **                             | ** ** | **One Year or Less**             | ** ** | **One to Five Years** | ** ** | **Five to Ten Years** | ** ** | **More than Ten Years** | ** ** | **Total Investment  Securities** | ** ** |
| ** **                             | ** ** | **Carrying  Value**                             | ** ** | **Average  Yield** | ** ** | **Carrying  Value** | ** ** | **Average  Yield** | ** ** | **Carrying  Value** | ** ** | **Average  Yield** | ** ** | **Carrying  Value** | ** ** | **Average  Yield** | ** ** | **Carrying  Value** | ** ** | **Average  Yield** | ** ** |
| ** **                             | ** ** | **(Dollars in thousands)**            | ** ** |
|                                   |       |                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment Securities:                 |       |                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. government and agency obligations |       | $                                               | 3,248      |   | 3.91 | % | $ | 42,384 |   | 4.50 | % | $ | 1,000 |   | 5.51 | % | $ | — |   | — | % | $ | 46,632 |   | 4.48 | % |
| Municipal obligations                  |       | 10,340                                          |       | 5.99 |   | 11,702 |   | 4.73 |   | 4,181 |   | 4.13 |   | 6,001 |   | 4.65 |   | 32,224 |   | 5.04 |   |
| Mortgage-backed securities             |       | 2,491                                           |       | 5.86 |   | 3,231 |   | 4.16 |   | 24,696 |   | 3.92 |   | 24,646 |   | 4.02 |   | 55,064 |   | 4.06 |   |
| Corporate bonds                        |       | 23                                              |       | 7.54 |   | 2,009 |   | 7.55 |   | 500 |   | 8.12 |   | — |   | — |   | 2,531 |   | 7.66 |   |
| Total                                  |       | $                                               | 16,102     |   | 5.39 | % | $ | 59,326 |   | 4.63 | % | $ | 30,377 |   | 4.01 | % | $ | 30,647 |   | 4.15 | % | $ | 136,451 |   | 4.60 | % |

 

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**II.****                                     LoanPortfolio**

***LoanPortfolio Composition****.*  The following table sets forth thecomposition of the loan portfolio by type of loan at the dates indicated.
| ** **                           | ** ** | **2006**                             | ** ** | **2005**          | ** ** | **2004**   | ** ** | **2003**          | ** ** | **2002**   | ** ** |
|--------------------------------------|------------|--------------------------------------|------------|-------------------|------------|------------|------------|-------------------|------------|------------|------------|
| ** **                           | ** ** | ** **                           | ** ** | **Percent**       | ** ** | ** ** | ** ** | **Percent**       | ** ** | ** ** | ** ** | **Percent** | ** ** | ** ** | ** ** | **Percent** | ** ** | ** ** | ** ** | **Percent** | ** ** |
| ** **                           | ** ** | **Amount**                           | ** ** | **of Total** | ** ** | **Amount** | ** ** | **of Total** | ** ** | **Amount** | ** ** | **of Total** | ** ** | **Amount** | ** ** | **of Total** | ** ** | **Amount** | ** ** | **of Total** | ** ** |
| ** **                           | ** ** | **(Dollars in thousands)** | ** ** |
| Real estate  loans:                  |       |                                 |       |              |       |       |       |              |       |       |       |   |   |   |   |   |   |   |   |   |   |
| Residential one-to-four family (1)   |       | $                                    | 152,664    |              | 40.1       | %          | $          | 116,098           |       | 42.1       | %          | $ | 131,923 |   | 47.4 | % | $ | 82,828 |   | 38.5 | % | $ | 106,341 |   | 46.4 | % |
| Commercial                           |       | 98,314                               |       | 25.8              |       | 78,085     |       | 28.3              |       | 77,208     |       | 27.7 |   | 65,729 |   | 30.6 |   | 62,207 |   | 27.2 |   |
| Construction                         |       | 33,600                               |       | 8.8               |       | 12,356     |       | 4.5               |       | 11,234     |       | 4.0 |   | 9,171 |   | 4.3 |   | 89,659 |   | 3.9 |   |
| Commercial loans                     |       | 90,758                               |       | 23.9              |       | 63,494     |       | 23.0              |       | 51,826     |       | 18.6 |   | 50,054 |   | 23.3 |   | 41,809 |   | 18.2 |   |
| Consumer loans                       |       | 9,596                                |       | 2.5               |       | 8,842      |       | 3.2               |       | 9,015      |       | 3.2 |   | 9,567 |   | 4.4 |   | 12,810 |   | 5.6 |   |
| Gross loans                          |       | 384,932                              |       | 101.1             |       | 278,875    |       | 101.1             |       | 281,206    |       | 101.1 |   | 217,349 |   | 101.1 |   | 232,136 |   | 101.3 |   |
|                                 |       |                                 |       |              |       |       |       |              |       |       |       |   |   |   |   |   |   |   |   |   |   |
| Less:                                |       |                                 |       |              |       |       |       |              |       |       |       |   |   |   |   |   |   |   |   |   |   |
| Deferred fees & loans in process |       | 214                                  |       | 0.0               |       | (5         | )          | 0.0               |       | 52         |       | 0.0 |   | 3 |   | 0.0 |   | 459 |   | 0.1 |   |
| Allowance for loan losses            |       | 4,030                                |       | 1.1               |       | 3,151      |       | 1.1               |       | 2,894      |       | 1.1 |   | 2,316 |   | 1.1 |   | 2,565 |   | 1.2 |   |
| Total loans                          |       | $                                    | 380,688    |              | 100.0      | %          | $          | 275,729           |       | 100.0      | %          | $ | 278,260 |   | 100.0 | % | $ | 215,030 |   | 100.0 | % | $ | 229,112 |   | 100.0 | % |

 

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(1)                                  Includes loans held for sale.

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Thefollowing table sets forth the contractual maturities of loans at December 31,2006. The table does not include unscheduled prepayments.
|                                         | ** ** | **Less than**                   | ** ** | ** **         | ** ** | **Over**         | ** ** | ** ** | ** ** |
|-----------------------------------------|------------|--------------------------------------|------------|--------------------|------------|------------------|------------|------------|------------|
| ** **                              | ** ** | **1 year**                      | ** ** | **2-5 years** | ** ** | **5 years** | ** ** | **Total**  | ** ** |
| ** **                              | ** ** | **(Dollars in thousands)** | ** ** |
| Real estate loans:                      |       |                                 |       |               |       |             |       |       |       |
| Residential one-to-fourfamily           |       | $                                    | 19,528     |               | $          | 60,356           |       | $          | 72,780     |   | $ | 152,664 |   |
| Commercial                              |       | 27,554                               |       | 33,300             |       | 37,460           |       | 98,314     |       |
| Construction                            |       | 32,159                               |       | 1,441              |       | —           |       | 33,600     |       |
| Commercial                              |       | 57,228                               |       | 30,804             |       | 2,726            |       | 90,758     |       |
| Consumer                                |       | 4,116                                |       | 5,338              |       | 142              |       | 9,596      |       |
| Gross loans                             |       | $                                    | 140,585    |               | $          | 131,239          |       | $          | 113,108    |   | $ | 384,932 |   |
| Deferred loan fees andloans in  process |       |                                 |       |               |       |             |       | 214        |       |
| Allowance for loan losses               |       |                                 |       |               |       |             |       | 4,030      |       |
| Loans, net                              |       |                                 |       |               |       |             |       | $          | 380,688    |   |
|                                    |       |                                 |       |               |       |             |       |       |       |

 

The following table sets forth, at December 31, 2006, the dollar amountof all loans due after December 31, 2007 and whether such loans had fixedinterest rates or adjustable interest rates:
|                                | ** ** | **Fixed**                            | ** ** | **Adjustable** | ** ** | **Total** | ** ** |
|--------------------------------|------------|--------------------------------------|------------|----------------|------------|-----------|------------|
| ** **                     | ** ** | **(Dollars in thousands)** | ** ** |
| Real estate loans:             |       |                                 |       |           |       |      |       |
| Residential one-to-four family |       | $                                    | 35,468     |           | $          | 97,668    |       | $ | 133,136 |   |
| Commercial                     |       | 11,046                               |       | 59,714         |       | 70,760    |       |
| Construction                   |       | 75                                   |       | 1,366          |       | 1,441     |       |
| Commercial                     |       | 17,597                               |       | 15,933         |       | 33,530    |       |
| Consumer                       |       | 5,057                                |       | 423            |       | 5,480     |       |
| Gross loans                    |       | $                                    | 69,243     |           | $          | 175,104   |       | $ | 244,347 |   |

 

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***NonperformingAssets****.* The followingtable sets forth information with respect to nonperforming assets, includingnon-accrual loans and real estate acquired through foreclosure or by deed inlieu of foreclosure (“real estate owned”). Under the original terms of the Company’s non-accrual loans at December31, 2006, interest earned on such loans for the year period ended December 31,2006 would not have been significantly different than reported.
| ** **                                         | ** ** | **At December 31,**        | ** ** |
|----------------------------------------------------|------------|--------------------------------------|------------|
| ** **                                         | ** ** | **2006**                             | ** ** | **2005** | ** ** | **2004** | ** ** | **2003** | ** ** | **2002** | ** ** |
| ** **                                         | ** ** | **(Dollars in thousands)** | ** ** |
| Total non-accrual loans                            |       | $                                    | 3,567      |   | $ | 3,332 |   | $ | 1,145 |   | $ | 1,205 |   | $ | 925 |   |
| Accruing loans over 90 days past due               |       | —                               |       | — |   | — |   | — |   | — |   |
| Real estate owned                                  |       | 456                                  |       | 749 |   | 479 |   | 281 |   | 402 |   |
| Total nonperforming assets                         |       | $                                    | 4,023      |   | $ | 4,081 |   | $ | 1,624 |   | $ | 1,486 |   | $ | 1,327 |   |
| Total nonperforming loans to total loans, net      |       | 0.9                                  | %          | 1.2 | % | 0.4 | % | 0.6 | % | 0.4 | % |
| Total nonperforming assets to total assets         |       | 0.7                                  | %          | 0.9 | % | 0.4 | % | 0.5 | % | 0.4 | % |
| Allowance for loan losses to non- performing loans |       | 113.0                                | %          | 94.6 | % | 252.8 | % | 192.2 | % | 277.3 | % |
|                                               |       |                                 |       |   |   |   |   |   |   |   |   |

 

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**IV.           Summary of Loan Loss Experience**

Thefollowing table sets forth information with respect to the Company’s allowancefor loan losses at the dates indicated:
|                                                                     | ** ** | **At December 31,**        | ** ** |
|---------------------------------------------------------------------|------------|--------------------------------------|------------|
| ** **                                                          | ** ** | **2006**                             | ** ** | **2005** | ** ** | **2004** | ** ** | **2003** | ** ** | **2002** | ** ** |
| ** **                                                          | ** ** | **(Dollars in thousands)** | ** ** |
|                                                                |       |                                 |       |   |   |   |   |   |   |   |   |
| Total loans  outstanding                                            |       | $                                    | 380,688    |   | $ | 275,729 |   | $ | 278,260 |   | $ | 215,030 |   | $ | 229,112 |   |
|                                                                |       |                                 |       |   |   |   |   |   |   |   |   |
| Average loans  outstanding                                          |       | $                                    | 393,709    |   | $ | 275,308 |   | $ | 266,938 |   | $ | 217,327 |   | $ | 233,311 |   |
|                                                                |       |                                 |       |   |   |   |   |   |   |   |   |
| Allowance  balances (at beginning of year)                          |       | 3,151                                |       | 2,894 |   | 2,316 |   | 2,565 |   | 2,640 |   |
| Provision  (credit):                                                |       |                                 |       |   |   |   |   |   |   |   |   |
| Real estate                                                         |       | —                               |       | — |   | — |   | — |   | — |   |
| Commercial and consumer                                             |       | 235                                  |       | 385 |   | 460 |   | 240 |   | 182 |   |
|                                                                |       | 235                                  |       | 385 |   | 460 |   | 240 |   | 182 |   |
| Allowance of  merged bank:                                          |       |                                 |       |   |   |   |   |   |   |   |   |
| Real estate                                                         |       | 445                                  |       | — |   | 320 |   | — |   | — |   |
| Commercial and consumer                                             |       | 446                                  |       | — |   | 32 |   | — |   | — |   |
|                                                                |       | 891                                  |       | — |   | 352 |   | — |   | — |   |
| Charge-offs:                                                        |       |                                 |       |   |   |   |   |   |   |   |   |
| Real estate                                                         |       | (78                                  | )          | (25 | ) | (63 | ) | (30 | ) | (17 | ) |
| Commercial and consumer                                             |       | (261                                 | )          | (198 | ) | (232 | ) | (524 | ) | (302 | ) |
|                                                                |       | (339                                 | )          | (223 | ) | (295 | ) | (554 | ) | (319 | ) |
| Recoveries:                                                         |       |                                 |       |   |   |   |   |   |   |   |   |
| Real estate                                                         |       | 6                                    |       | 5 |   | 16 |   | — |   | 30 |   |
| Commercial and consumer                                             |       | 86                                   |       | 90 |   | 44 |   | 65 |   | 32 |   |
|                                                                |       | 92                                   |       | 95 |   | 60 |   | 65 |   | 62 |   |
| Net charge-offs                                                     |       | (247                                 | )          | (128 | ) | (235 | ) | (489 | ) | (257 | ) |
|                                                                |       |                                 |       |   |   |   |   |   |   |   |   |
| Allowance  balance (at end of year)                                 |       | $                                    | 4,030      |   | $ | 3,151 |   | $ | 2,894 |   | $ | 2,316 |   | $ | 2,565 |   |
| Allowance for  loan losses as a percent of total loans outstanding. |       | 1.05                                 | %          | 1.14 | % | 1.04 | % | 1.07 | % | 1.12 | % |
| Net loans charged off  as a percent of average loans outstanding    |       | 0.06                                 | %          | 0.05 | % | 0.09 | % | 0.23 | % | 0.11 | % |

 

21

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The distribution of the Company’s allowance forlosses on loans at the dates indicated and the percent of loans in eachcategory to total loans is summarized in the following table.  This allocation reflects management’sjudgment as to risks inherent in the types of loans indicated, but the generalallowance included in the table are not restricted and are available to absorball loan losses.  The amount allocated inthe following table to any category should not be interpreted as an indicationof expected actual charge-offs in that category.
| ** **               | ** ** | **At December 31,**        | ** ** |
|--------------------------|------------|--------------------------------------|------------|
| ** **               | ** ** | **2006**                             | ** ** | **2005** | ** ** | **2004** | ** ** | **2003** | ** ** | **2002** | ** ** |
| ** **               | ** ** | **(Dollars in thousands)** | ** ** |
| ** **               | ** ** | **Amount**                           | ** ** | **%** | ** ** | **Amount** | ** ** | **%** | ** ** | **Amount** | ** ** | **%** | ** ** | **Amount** | ** ** | **%** | ** ** | **Amount** | ** ** | **%** | ** ** |
| Real estate              |       | $                                    | 1,633      |   | 73.9 | % | $ | 1,260 |   | 74.0 | % | $ | 1,158 |   | 78.4 | % | $ | 910 |   | 72.6 | % | $ | 1,026 |   | 76.5 | % |
| Commercial and  consumer |       | 2,397                                |       | 26.1 |   | 1,891 |   | 26.0 |   | 1,736 |   | 21.6 |   | 1,406 |   | 27.4 |   | 1,539 |   | 23.5 |   |
| Total                    |       | $                                    | 4,030      |   | 100.0 | % | $ | 3,151 |   | 100.0 | % | $ | 2,894 |   | 100.0 | % | $ | 2,316 |   | 100.0 | % | $ | 2,565 |   | 100.0 | % |

 

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**V.****                                    Deposits**

As of December 31,2006, the aggregate amount outstanding of jumbo certificates of deposit(amounts of $100,000 or more) was $57.6 million.  The following table presents the maturitiesof these time certificates of deposit at December 31, 2006:
| (Dollars in thousands) | ** ** | ** ** | ** ** |
|----------------------------------|------------|------------|------------|
|                             |       |       |       |
| 3 months or less                 |       | $          | 23,864     |   |
| Over 3 months through 6 months   |       | 14,798     |       |
| Over 6 months through 12 months  |       | 13,371     |       |
| Over 12 months                   |       | 5,526      |       |
| Total                            |       | $          | 57,559     |   |

 

**VI.****                                Returnon Equity and Assets**
|                          | ** ** | **At or for the years ended  December 31,** | ** ** |
|--------------------------|------------|---------------------------------------------------------------------------|------------|
| ** **               | ** ** | **2006**                                                                  | ** ** | **2005** | ** ** | **2004** | ** ** | **2003** | ** ** | **2002** | ** ** |
|                     |       |                                                                      |       |   |   |   |   |   |   |   |   |
| Return on average assets |       | 1.01                                                                      | %          | 0.87 | % | 0.98 | % | 1.46 | % | 1.35 | % |
| Return on average equity |       | 13.01                                                                     |       | 9.04 |   | 9.98 |   | 11.53 |   | 11.31 |   |
| Equity to total assets   |       | 8.34                                                                      |       | 9.48 |   | 9.54 |   | 12.74 |   | 12.03 |   |
| Dividend  payout ratio   |       | 26.27                                                                     |       | 37.14 |   | 33.33 |   | 27.63 |   | 27.57 |   |

 

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**ITEM 1A.****                                            RISKFACTORS**

In addition to theother information in this Annual Report on Form 10-K, stockholders orprospective investors should carefully consider the following risk factors:

**Our business is concentrated in and dependent upon the continued growthand welfare of the markets in which we operate, including eastern, central andsouthwestern Kansas.**

We operate primarily in eastern, central and southwestern Kansas, andas a result, our financial condition, results of operations and cash flows aresubject to changes in the economic conditions in those areas.  Although each market we operate in isgeographically and economically diverse, our success depends upon thebusiness activity, population, income levels, deposits and real estate activityin each of these markets.  Although ourcustomers’ business and financial interests may extend well beyond our marketarea, adverse economic conditions that affect our specific market area couldreduce our growth rate, affect the ability of our customers to repay theirloans to us and generally affect our financial condition and results ofoperations. Because of our geographic concentration, we are less able thanother regional or national financial institutions to diversify our credit risksacross multiple markets.

**We mayexperience difficulties in managing our growth and our growth strategy involvesrisks that may negatively impact our net income.**

As part of our general strategy, we may acquire banks and relatedbusinesses that we believe provide a strategic fit with our business.  We have recently acquired a number of localbanks and, to the extent that we continue to grow through future acquisitions,we cannot assure you that we will be able to adequately and profitably managethis growth. Acquiring other banks and businesses will involve risks commonlyassociated with acquisitions, including:

·                                          potentialexposure to unknown or contingent liabilities of banks and businesses weacquire;

·                                          exposureto potential asset quality issues of the acquired bank or related business;

·                                          difficultyand expense of integrating the operations and personnel of banks and businesseswe acquire;

·                                          potentialdisruption to our business;

·                                          potentialdiversion of our management’s time and attention; and

·                                          thepossible loss of key employees and customers of the banks and businesses weacquire.

In addition to acquisitions, we may expand into additional communitiesor attempt to strengthen our position in our current markets by undertakingadditional branch openings.  We believethat it generally takes several years for new banking facilities to firstachieve operational profitability, due to the impact of organization andoverhead expenses and the start-up phase of generating loans and deposits.  To the extent that we undertake additionalbranch openings, we are likely to continue to experience the effects of higheroperating expenses relative to operating income from the new operations, whichmay have an adverse effect on our levels of reported net income, return onaverage equity and return on average assets.

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**We face intense competition in all phases of our business from otherbanks and financial institutions.**

The banking andfinancial services business in our market is highly competitive.  Our competitors include large regional banks,local community banks, savings and loan associations, securities and brokeragecompanies, mortgage companies, insurance companies, finance companies, moneymarket mutual funds, credit unions and other non-bank financial serviceproviders, many of which have greater financial, marketing and technologicalresources than us.  Increased competitionin our market may result in a decrease in the amounts of our loans anddeposits, reduced spreads between loan rates and deposit rates or loan termsthat are more favorable to the borrower. Any of these results could have a material adverse effect on our abilityto grow and remain profitable.  Ifincreased competition causes us to significantly discount the interest rates weoffer on loans or increase the amount we pay on deposits, our net interestincome could be adversely impacted.  Ifincreased competition causes us to relax****ourunderwriting standards, we could be exposed to higher losses from lendingactivities.  Additionally, many of ourcompetitors are much larger in total assets and capitalization, have greateraccess to capital markets and offer a broader range of financial services thanwe can offer.

**Interestrates and other conditions impact our results of operations.**

Our profitability is in part a function of the spreadbetween the interest rates earned on investments and loans and the interestrates paid on deposits and other interest-bearing liabilities.  Like most banking institutions, our netinterest spread and margin will be affected by general economic conditions andother factors, including fiscal and monetary policies of the federalgovernment, that influence market interest rates and our ability to respond tochanges in such rates.  At any giventime, our assets and liabilities will be such that they are affecteddifferently by a given change in interest rates.  As a result, an increase or decrease inrates, the length of loan terms or the mix of adjustable and fixed rate loansin our portfolio could have a positive or negative effect on our net income,capital and liquidity.  We measureinterest rate risk under various rate scenarios and using specific criteria andassumptions.  A summary of this process,along with the results of our net interest income simulations is presented inthe section entitled “Management’s Discussion and Analysis of FinancialConditions and Results of Operations” included in our 2006 Annual Report toStockholders.  Although we believe ourcurrent level of interest rate sensitivity is reasonable and effectivelymanaged, significant fluctuations in interest rates may have an adverse effecton our business, financial condition and results of operations.

**We must effectively manage our credit risk.**

There are risks inherent in making any loan,including risks inherent in dealing with individual borrowers, risks ofnonpayment, risks resulting from uncertainties as to the future value ofcollateral and risks resulting from changes in economic and industryconditions.  We attempt to minimize ourcredit risk through prudent loan application approval procedures, carefulmonitoring of the concentration of our loans within specific industries andperiodic independent reviews of outstanding loans by our credit reviewdepartment.  However, we cannot assureyou that such approval and monitoring procedures will reduce these creditrisks.  Most of our loans are commercial,real estate, or consumer loans, each of which is subject to distinct types ofrisk.  To reduce the lending risks weface, we generally take a

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security interest in borrowers’ property forall three types of loans.  In addition,we sell certain residential real estate loans to third parties.  Nevertheless, the risk of non-payment isinherent in all three types of loans and if we are unable to collect amountsowed, it may materially affect our operations and financial performance.

For a more complete discussion of our lendingactivities see Part 1 of Item 1 of this Annual Report on Form 10-K.

**Our loan portfolio has a large concentration of real estate loans,which involve risks specific to real estate value.**

Real estate lending (including commercial, construction, andresidential) is a large portion of our loan portfolio. These categories were $283.2million, or approximately 73.9% of our total loan portfolio as of December 31,2006.  The market value of realestate can fluctuate significantly in a short period of time as a result ofmarket conditions in the geographic area in which the real estate is located. Although a significant portion of such loansare secured by real estate as a secondary form of collateral, adversedevelopments affecting real estate values in one or more of our markets couldincrease the credit risk associated with our loan portfolio.  Additionally, real estate lending typicallyinvolves higher loan principalamounts and the repayment of the loans generally is dependent, in large part, on sufficient income from theproperties securing the loans to cover operating expenses and debt service. Economic events or governmentalregulations outside of thecontrol of the borrower or lender could negatively impact the future cash flow and market values of theaffected properties.

If the loans that are collateralized by real estate become troubledduring a time when market conditions are declining or have declined, then we maynot be able to realize the amount of security that we anticipated at the timeof originating the loan, which could cause us to increase our provision forloan losses and adversely affect our operating results and financial condition.

**Our concentration of one- to four-family residential mortgage loans mayresult in lower yields and profitability.**

One-to-four familyresidential mortgage loans comprised $151.3 million, or 39.5%, of our loanportfolio at December 31, 2006, and are secured primarily by properties locatedin the state of Kansas.  Ourconcentration of these loans results in lower yields relative to other loancategories within our loan portfolio. While these loans generally possess higher yields than investmentsecurities, their repayment characteristics are not as well defined and theygenerally possess a higher degree of interest rate risk versus other loans andinvestment securities within our portfolio. This increased interest rate risk is due to the repayment and prepaymentoptions inherent in residential mortgage loans which are exercised by borrowersbased upon the overall level of interest rates. These residential mortgage loans are generally made on the basis of theborrower’s ability to make repayments from his or her employment and the valueof the property securing the loan.  Thus,as a result, repayment of these loans is also subject to general economic andemployment conditions within the communities and surrounding areas where the propertyis located.

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**Commercial and industrial loans make up a significant portion of ourloan portfolio.**

Commercial and industrial loans were $90.8 million, or approximately23.7% of our total loan portfolio as of December 31, 2006.  Our commercial loans are primarily made basedon the identified cash flow of the borrower and secondarily on the underlyingcollateral provided by the borrower. Most often, this collateral is accounts receivable, inventory, ormachinery.  Credit support provided bythe borrower for most of these loans and the probability of repayment is basedon the liquidation of the pledged collateral and enforcement of a personalguarantee, if any exists.  As a result,in the case of loans secured by accounts receivable, the availability of fundsfor the repayment of these loans may be substantially dependent on the abilityof the borrower to collect amounts due from its customers.  The collateral securing other loans maydepreciate over time, may be difficult to appraise and may fluctuate in valuebased on the success of the business.

**Our agricultural loans involve a greater degree of risk than otherloans, and the ability of the borrower to repay may be affected by many factorsoutside of the borrower’s control.**

At December 31,2006, agricultural realestate loans totaled $7.0 million,or 1.8%, of our total loan portfolio. Agricultural real estate lendinginvolves a greater degree of risk and typically involves larger loans to single borrowers than lending on single-family residences. Payments on agriculturalreal estate loans are dependent on the profitable operation or management of the farm property securing theloan. The success of the farmmay be affected by many factors outside the control of the farm borrower, including adverse weatherconditions that prevent the planting of a crop or limit crop yields (such as hail, drought and floods), loss of livestock due to disease or otherfactors, declines in market prices for agricultural products (both domestically and internationally) and theimpact of government regulations(including changes in price supports, subsidies and environmental regulations). In addition, manyfarms are dependent on a limited numberof key individuals whose injury or death may significantly affect the successful operation of the farm. If the cashflow from a farming operation is diminished,the borrower’s ability to repaythe loan may be impaired. The primarycrops in our market areas are wheat, corn and soybean.  Accordingly, adverse circumstances affecting wheat, corn andsoybean crops could have an adverse effect on our agricultural real estate loan portfolio.

We also originate agricultural operating loans. At December 31,2006, these loans totaled $26.2 million, or 6.8%, of ourtotal loan portfolio. As withagricultural real estate loans, the repayment of operating loans is dependent on the successful operation ormanagement of the farm property.

Likewise, agricultural operating loans involve a greater degree of riskthanlending onresidential properties, particularly in the case of loans that are unsecured or secured by rapidly depreciatingassets such as farm equipment, livestock or crops.  We generally secure agricultural operatingloans with a blanket lien on livestock, equipment, food, hay, grain and crops.  Nevertheless, any repossessed collateral for a defaulted loan may notprovide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihoodof damage, loss or depreciation.

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**Our allowance for loan losses may prove to be insufficient to absorb probablelosses in our loan portfolio.**

We established our allowance for loan losses and maintain it at a levelconsidered adequate by management to absorb probable loan losses that areinherent in the portfolio.  Additionally,our Board of Directors regularly monitors the adequacy of our allowance forloan loses.  The amount of future loanlosses is susceptible to changes in economic, operating and other conditions,including changes in interest rates, which may be beyond our control, and suchlosses may exceed current estimates.  AtDecember 31, 2006, our allowance for loan losses as a percentage of totalloans was 1.1% and as a percentage of total non-performing loans wasapproximately 113.0%.  Althoughmanagement believes that the allowance for loan losses is adequate to absorblosses on any existing loans that may become uncollectible, we cannot predictloan losses with certainty nor can we assure you that our allowance for loanlosses will prove sufficient to cover actual loan losses in the future.  Loan losses in excess of our reserves mayadversely affect our business, financial condition and results of operations.

**Ourcontinued pace of growth may require us to raise additional capital in thefuture, but that capital may not be available when it is needed.**

Weare required by federal and state regulatory authorities to maintain adequatelevels of capital to support our operations. We anticipate that our existing capital resources will satisfy ourcapital requirements for the foreseeable future.  However, we may at some point need to raiseadditional capital to support continuing growth.  Our ability to raise additional capital isparticularly important to our strategy of continual growth throughacquisitions.  Our ability to raiseadditional capital, if needed, will depend on conditions in the capital marketsat that time, which are outside our control, and on our financialperformance.  Accordingly, we cannotassure you of our ability to raise additional capital if needed on termsacceptable to us.  If we cannot raiseadditional capital when needed, our ability to further expand our operationsthrough internal growth and acquisitions could be materially impaired.

**Our community banking strategy relies heavily on our management team,and the unexpected loss of key managers may adversely affect our operations.**

Much of our success to date has been influenced strongly by our abilityto attract and to retain senior management experienced in banking and financialservices and familiar with the communities in our market area.  Our ability to retain executive officers, thecurrent management teams, branch managers and loan officers of our operatingsubsidiaries will continue to be important to the successful implementation ofour strategy.  It is also critical, as wegrow, to be able to attract and retain qualified additional management and loanofficers with the appropriate level of experience and knowledge about ourmarket area to implement our community-based operating strategy.  The unexpected loss of services of any keymanagement personnel, or the inability to recruit and retain qualifiedpersonnel in the future, could have an adverse effect on our business,financial condition and results of operations.

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**Governmentregulation can result in limitations on our operations.**

We operate in a highly regulated environment and are subject tosupervision and regulation by a number of governmental regulatory agencies,including the Board of Governors of the Federal Reserve System, the FDIC andthe  OCC. Regulations adopted by these agencies, which are generally intended toprovide protection for depositors and customers rather than for the benefit ofstockholders, govern a comprehensive range of matters relating to ownership andcontrol of our shares, our acquisition of other companies and businesses,permissible activities for us to engage in, maintenance of adequate capitallevels and other aspects of our operations. These bank regulators possess broadauthority to prevent or remedy unsafe or unsound practices or violations oflaw. The laws and regulations applicable to the banking industry could changeat any time and we cannot predict the effects of these changes on our businessand profitability. Increased regulation could increase our cost of complianceand adversely affect profitability.  Forexample, new legislation or regulation may limit the manner in which we mayconduct our business, including our ability to offer new products, obtainfinancing, attract deposits, make loans and achieve satisfactory interestspreads.

**We have a continuing need fortechnological change and we may not have the resources to effectively implementnew technology.**

The financial services industry is undergoing rapidtechnological changes with frequent introductions of new technology-drivenproducts and services.  In addition tobetter serving customers, the effective use of technology increases efficiencyand enables financial institutions to reduce costs.  Our future success will depend in part uponour ability to address the needs of our customers by using technology toprovide products and services that will satisfy customer demands forconvenience as well as to create additional efficiencies in our operations aswe continue to grow and expand our market area. Many of our larger competitors have substantially greater resources toinvest in technological improvements.  Asa result, they may be able to offer additional or superior products to thosethat we will be able to offer, which would put us at a competitivedisadvantage.  Accordingly, we cannotprovide you with assurance that we will be able to effectively implement newtechnology-driven products and services or be successful in marketingsuch products and services to our customers.

**There is a limited trading marketfor our common shares, and you may not be able to resell your shares at orabove the price you paid for them.**

Although our common shares are listed for tradingon the Nasdaq Global Market under the symbol “LARK”, the trading in our commonshares has substantially less liquidity than many other publicly tradedcompanies.  A public trading markethaving the desired characteristics of depth, liquidity and orderliness dependson the presence in the market of willing buyers and sellers of our commonshares at any given time.  This presencedepends on the individual decisions of investors and general economic andmarket conditions over which we have no control.  We cannot assure you that volume of tradingin our common shares will increase in the future.

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**System failure or breaches of our network security could subject us toincreased operating costs as well as litigation and other liabilities.**

The computer systems and networkinfrastructure we use could be vulnerable to unforeseen problems.  Our operations are dependent upon our abilityto protect our computer equipment against damage from physical theft, fire,power loss, telecommunications failure or a similar catastrophic event, as wellas from security breaches, denial of service attacks, viruses, worms and otherdisruptive problems caused by hackers. Any damage or failure that causes an interruption in our operationscould have a material adverse effect on our financial condition and results ofoperations.  Computer break-ins, phishingand other disruptions could also jeopardize the security of information storedin and transmitted through our computer systems and network infrastructure,which may result in significant liability to us and may cause existing andpotential customers to refrain from doing business with us.  Although we, with the help of third-partyservice providers, intend to continue to implement security technology andestablish operational procedures to prevent such damage, there can be noassurance that these security measures will be successful. In addition, advancesin computer capabilities, new discoveries in the field of cryptography or otherdevelopments could result in a compromise or breach of the algorithms we andour third-party service providers use to encrypt and protect customertransaction data.  A failure of suchsecurity measures could have a material adverse effect on our financialcondition and results of operations.

**We are subject to certain operational risks,including, but not limited to, customer or employee fraud and data processingsystem failures and errors.**

Employeeerrors and misconduct could subject us to financial losses or regulatorysanctions and seriously harm our reputation. Misconduct by our employees couldinclude hiding unauthorized activities from us, improper or unauthorized activitieson behalf of our customers or improper use of confidential information. It isnot always possible to prevent employee errors and misconduct, and theprecautions we take to prevent and detect this activity may not be effective inall cases. Employee errors could also subject us to financial claims fornegligence.

We maintain a system of internal controls andinsurance coverage to mitigate against operational risks, including dataprocessing system failures and errors and customer or employee fraud. Shouldour internal controls fail to prevent or detect an occurrence, or if anyresulting loss is not insured or exceeds applicable insurance limits, it couldhave a material adverse effect on our business, financial condition and resultsof operations.

**Failure to pay interest on our debt may adverselyimpact our ability to pay dividends.**

$16.5 million of subordinated debentures are held by two businesstrusts that we control.  Interestpayments on the debentures must be paid before we pay dividends on our capitalstock, including our common stock.  Wehave the right to defer interest payments on the debentures for up to 20consecutive quarters.  However, if weelect to defer interest payments, all deferred interest must be paid before wemay pay dividends on our capital stock. Deferral of interest payments could also cause a decline in the marketprice of our common stock.

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** **
| **ITEM 1B.** | **UNRESOLVED STAFF COMMENTS** |
|--------------|-------------------------------|

 

None
| **ITEM 2.** | **PROPERTIES** |
|-------------|----------------|

 

The Company,including the acquisition of FMB on January 1, 2006, owns its main office inManhattan and fifteen branch offices and leases 4 branch offices.  The Company also leases a parking lot for oneof the branch offices owned.
| **ITEM 3.** | **LEGAL PROCEEDINGS** |
|-------------|-----------------------|

 

There are nopending legal proceedings to which the Company or the Bank is a party, otherthan ordinary routine litigation incidental to the Bank’s business.  While the ultimate outcome of current legalproceedings cannot be predicted with certainty, it is the opinion of managementthat the resolution of these legal actions should not have a material effect onthe Company’s consolidated financial position or results of operations.
| **ITEM 4.** | **SUBMISSION OF MATTERS TO A VOTE  OF SECURITY HOLDERS** |
|-------------|----------------------------------------------------------|

 

No matter wassubmitted to a vote of security holders during the quarter ended December 31,2006

**PART II.**
| **ITEM 5.** | **MARKET FOR THE COMPANY’S COMMON  STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES** |
|-------------|------------------------------------------------------------------------------------------------------------------------|

 

The Companyincorporates by reference the information called for by Item 5 of this Form10-K from the section captioned “Stock Price Information” of the Company’s 2006Annual Report to Stockholders for the year ended December 31, 2006 (attached asExhibit 13.1).

The followingtable provides information about purchases by the Company and its affiliatedpurchasers during the quarter ended December 31, 2006, of equity securitiesthat are registered by the Company pursuant to Section 12 of the Exchange Act:

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| **Period**           | ** ** | **Total  Number  Of Shares**

**Purchased** | ** ** | **Average  Price Paid  per Share** | ** ** | **Total Number of  Shares Purchased  as Part of a  Publicly  Announced Plan (1)** | ** ** | **Maximum Number  (or Approximate  Dollar Value) of  Shares that May  Yet Be Purchased  Under the Plans (1)** | ** ** |
|----------------------|------------|--------------------------------------------------|------------|----------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
|                 |       |                                             |       |                                         |       |                                                                                                                      |       |                                                                                                                                                                 |       |
| October 1-31,  2006  |       | —                                           |       | —                                       |       | —                                                                                                                    |       | 77,036                                                                                                                                                               |       |
| November 1-30,  2006 |       | —                                           |       | —                                       |       | —                                                                                                                    |       | 77,036                                                                                                                                                               |       |
| December 1-31,  2006 |       | 5,000                                            |       | 27.70                                        |       | 5,000                                                                                                                     |       | 72,036                                                                                                                                                               |       |
| Total                |       | 5,000                                            |       | 27.70                                        |       | 5,000                                                                                                                     |       | 72,036                                                                                                                                                               |       |

 

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(1)                                  InNovember 2004, our Board of Directors approved the repurchase by us of up to5%, or 101,700 shares, of our common stock. Unless terminated earlier by resolution of the Board of Directors, thecurrent repurchase program will expire when we have repurchased all sharesauthorized for repurchase thereunder.
| **ITEM 6.** | **SELECTED FINANCIAL DATA** |
|-------------|-----------------------------|

 

The Companyincorporates by reference the information called for by Item 6 of this Form10-K from the sections entitled “Selected Financial and Other Data” and “Management’sDiscussion and Analysis of Financial Condition and Results of Operations” ofthe Company’s 2006 Annual Report to Stockholders for the year ended December31, 2006 (attached as Exhibit 13.1).
| **ITEM 7.** | **MANAGEMENT’S DISCUSSION AND  ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** |
|-------------|-------------------------------------------------------------------------------------------------|

 

The Companyincorporates by reference the information called for by Item 7 of this Form10-K from the section entitled “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations” of the Company’s 2006 AnnualReport to Stockholders for the year ended December 31, 2006 (attached asExhibit 13.1).
| **ITEM 7A.** | **QUANTITATIVE AND QUALITATIVE  DISCLOSURES ABOUT MARKET RISK** |
|--------------|-----------------------------------------------------------------|

 

The Companyincorporates by reference the information called for by Item 7A of this Form10-K from the section entitled “Quantitative and Qualitative Disclosures AboutMarket Risk” of the Company’s 2006 Annual Report to stockholders for the yearended December 31, 2006 (attached as Exhibit 13.1).
| **ITEM 8.** | **FINANCIAL STATEMENTS AND  SUPPLEMENTAL DATA** |
|-------------|-------------------------------------------------|

 

The Companyincorporates by reference the information called for by Item 8 of this Form10-K from the Financial Statements set forth in the Company’s 2006 AnnualReport to Stockholders for the year ended December 31, 2006 (attached asExhibit 13.1).

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** **
| **ITEM 9.** | **CHANGES IN AND DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE** |
|-------------|-------------------------------------------------------------------------------------------|

 

None.
| **ITEM 9A.** | **CONTROLS AND PROCEDURES** |
|--------------|-----------------------------|

 

An evaluation wasperformed under the supervision and with the participation of the Company’smanagement, including the Chief Executive Officer and Chief Financial Officer,of the effectiveness of the design and operation of the Company’s disclosurecontrols and procedures (as defined in Rule 13a-15(e) promulgated underthe Securities and Exchange Act of 1934, as amended) as of December 31,2006. Based on that evaluation, the Company’s management, including the ChiefExecutive Officer and Chief Financial Officer, concluded that the Company’sdisclosure controls and procedures were effective.

There were nochanges in the Company’s internal controls over financial reporting during thequarter ended December 31, 2006 that materially affected or were likely tomaterially affect the Company’s internal control over financial reporting.
| **ITEM 9B.** | **OTHER INFORMATION** |
|--------------|-----------------------|

 

None.

**PART III.**
| **ITEM 10.** | **DIRECTORS, EXECUTIVE OFFICERS  AND CORPORATE GOVERNANCE** |
|--------------|-------------------------------------------------------------|

 

**Directors**

TheCompany incorporates by reference the information called for by Item 10 of thisForm 10-K regarding directors of the Company from the sections entitled “Electionof Directors” and “Corporate Governance and the Board of Directors” of theCompany’s Proxy Statement for the annual meeting of stockholders to be held May23, 2007 (the “2007 Proxy Statement”).

Section 16(a) ofthe Exchange Act requires that the Company’s executive officers, directors andpersons who own more than 10% of their Company’s common stock file reports ofownership and changes in ownership with the SEC and with the exchange on whichthe Company’s shares of common stock are traded.  Such persons are also required to furnish theCompany with copies of all Section 16(a) forms they file.  Based solely on the Company’s review of thecopies of such forms, the Company is not aware that any of its directors andexecutive officers or 10% stockholders failed to comply with the filingrequirements of Section 16(a) during 2006.

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The executiveofficers of the Company, each of whom is also currently an executive officer ofthe Bank and both of whom serve at the discretion of the Board of Directors,are identified below:
| **Name**              | ** ** | **Age** | ** ** | **Positions with the Company**                                    |
|-----------------------|------------|---------|------------|-------------------------------------------------------------------|
|                  |       |    |       |                                                              |
| Patrick L.  Alexander |       | 54      |       | President and Chief Executive Officer                             |
|                  |       |    |       |                                                              |
| Mark A. Herpich       |       | 39      |       | Vice President, Secretary, Chief Financial Officer and  Treasurer |

 

The executiveofficers of the Bank are identified below:
| **Name**              | ** ** | **Age** | ** ** | **Positions  with the Bank**                         |
|-----------------------|------------|---------|------------|------------------------------------------------------|
|                  |       |    |       |                                                 |
| Patrick L.  Alexander |       | 54      |       | President and Chief Executive Officer                |
|                  |       |    |       |                                                 |
| Mark A. Herpich       |       | 39      |       | Executive Vice President and Chief Financial Officer |
|                  |       |    |       |                                                 |
| Michael E.  Scheopner |       | 45      |       | Executive Vice President, Credit Risk Manager        |
|                  |       |    |       |                                                 |
| Dean R. Thibault      |       | 55      |       | Executive Vice President, Commercial Banking         |
|                  |       |    |       |                                                 |
| Larry R. Heyka        |       | 60      |       | Market President, Manhattan                          |
|                  |       |    |       |                                                 |
| Mark J. Oliphant      |       | 54      |       | Market President, Dodge City                         |

 

**ITEM 11.****                                              EXECUTIVECOMPENSATION**

The Companyincorporates by reference the information called for by Item 11 of this Form10-K from the sections entitled “Corporate Governance and the Board ofDirectors,” “Compensation Discussion and Analysis” and “Executive Compensation”of the 2007 Proxy Statement.

**ITEM 12.****                                              SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**

The Companyincorporates by reference the information called for by Item 12 of this Form10-K from the section entitled “Security Ownership of Certain Beneficial Owners”of the 2007 Proxy Statement.

34

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**EquityCompensation Plan Information**

The table below setsforth the following information as of December 31, 2006 for (i) allcompensation plans previously approved by the Company’s shareholders and (ii)all compensation plans not previously approved by the Company’s shareholders:

(a)          thenumber of securities to be issued upon the exercise of outstanding options,warrants and rights; 

(b)         theweighted-average exercise price of such outstanding options, warrants andrights; 

(c)          otherthan securities to be issued upon the exercise of such outstanding options,warrants and rights, the number of securities remaining available for futureissuance under the plans. 

**EQUITYCOMPENSATION PLAN INFORMATION**
| **Plan category**                                      | ** ** | **Number of securities to be  issued upon exercise of  outstanding options (1)** | ** ** | **Weighted-average  exercise  price of outstanding  options** | ** ** | **Number of securities  remaining available for  future issuance (1)** | ** ** |
|-------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------|------------|
| Equity  compensation plans approved by security holders     |       | 220,745                                                                                                                       |       | $                                                                       | 25.46      |                                                                                                 | 171,593    |   |
| Equity  compensation plans not approved by security holders |       | - 0 -                                                                                                                         |       | - 0 -                                                                   |       | - 0 -                                                                                                |       |
| **Total**                                                   |       | 220,745                                                                                                                       |       | $                                                                       | 25.46      |                                                                                                 | 171,593    |   |

 

----

(1) Does not includeoptions assumed by the Company in 2001 in connection with the merger ofLandmark Bancshares, Inc. and MNB Bancshares, Inc. with and into theCompany.  At the time of the merger,there were options issued under the previous companies’ plans, each of whichwas approved by stockholders of the respective company at the time of theiradoption.  All of the options grantedunder these plans fully vested at the time of the merger and no additionaloptions were available for grant after the merger.  As of December 31, 2006, there wereoptions outstanding for an aggregate of 25,481 shares of the Company’s commonstock under the prior plans with a weighted average exercise price of $13.12.

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**ITEM 13.****                                              CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE**

The Companyincorporates by reference the information called for by Item 13 of this Form10-K from the sections entitled “Transactions with Directors, Officers andAssociates” and “Corporate Governance and Board of Directors” of the 2007 ProxyStatement.

**ITEM 14.**                                              **PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The Company incorporatesby reference the information called for by Item 14 of this Form 10-K from thesection entitled “Independent Public Accountants” of the 2007 Proxy Statement.

**PART IV**

**ITEM 15.****                                              EXHIBITSAND FINANCIAL STATEMENT SCHEDULES**

ITEM 15(a)1 and2.  Financial Statements and Schedules

LANDMARK BANCORP, INC.AND SUBSIDIARIES

LIST OF FINANCIALSTATEMENTS

The followingaudited Consolidated Financial Statements of the Company and its subsidiariesand related notes and auditors’ report are incorporated by reference from theCompany’s 2006 Annual Report to Stockholders (attached as Exhibit 13.1).

Reportof Independent Registered Public Accounting Firm

Consolidated Balance Sheets – December 31, 2006 and2005

Consolidated Statements of Earnings – Years endedDecember 31, 2006, 2005 and 2004

Consolidated Statements of Stockholders’ Equity andComprehensive Income – Years ended December 31, 2006, 2005 and 2004

Consolidated Statements of Cash Flows – Years endedDecember 31, 2006, 2005 and 2004

Notesto Consolidated Financial Statements

All schedules areomitted because they are not required or are not applicable or the requiredinformation is shown in the financial statements incorporated by reference or notesthereto.

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Item 15(a)3.                                   Exhibits

The exhibitsrequired by Item 601 of Regulation S-K are included with this Form 10-K and arelisted on the “Index to Exhibits” immediately following the signature page.

Upon writtenrequest to the President of the Company, P.O. Box 308, Manhattan, Kansas66505-0308, copies of the exhibits listed above are available to stockholdersof the Company by specifically identifying each exhibit desired in therequest.  The Company’s filings with theSecurities and Exchange Commission are also available via the Internet atwww.sec.gov, www.banklandmark.com or www.landmarkbancorpinc.com .

37

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**SIGNATURES**

Pursuant to therequirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, theRegistrant has duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

**LANDMARK BANCORP, INC.**

(Registrant)
| By:    | /s/ Patrick L. Alexander              |   | By:                                        | /s/ Mark A. Herpich |   |
|--------|---------------------------------------|--------|--------------------------------------------|---------------------|--------|
|   | Patrick L. Alexander                  |   | Mark A. Herpich                            |
|   | President and Chief Executive Officer |   | Principal Financial and Accounting Officer |

 

Pursuant to therequirements of the Securities Exchange Act of 1934, this report has beensigned below by the following persons on behalf of the Registrant and in thecapacities and on the dates indicated.
| **SIGNATURE**                        |   |           |   | **TITLE**                                       |
|--------------------------------------|--------|----------------|--------|-------------------------------------------------|
|                                 |   |           |   |                                            |
|   /s/ Patrick L. Alexander |   | March 29, 2007 |   | President, Chief Executive Officer and Director |
|   Patrick L. Alexander     |   | Date           |   |                                            |
|                                 |   |           |   |                                            |
|   /s/ Larry L. Schugart    |   | March 29, 2007 |   | Chairman of the Board, Director                 |
|   Larry L. Schugart        |   | Date           |   |                                            |
|                                 |   |           |   |                                            |
|   /s/ Richard A. Ball      |   | March 29, 2007 |   | Director                                        |
|   Richard A. Ball          |   | Date           |   |                                            |
|                                 |   |           |   |                                            |
|   /s/ Brent A. Bowman      |   | March 29, 2007 |   | Director                                        |
|   Brent A. Bowman          |   | Date           |   |                                            |
|                                 |   |           |   |                                            |
|   /s/ Joseph L. Downey     |   | March 29, 2007 |   | Director                                        |
|   Joseph L. Downey         |   | Date           |   |                                            |
|                                 |   |           |   |                                            |
|   /s/ Jim W. Lewis         |   | March 29, 2007 |   | Director                                        |
|   Jim W. Lewis             |   | Date           |   |                                            |
|                                 |   |           |   |                                            |
|   /s/ Jerry R. Pettle      |   | March 29, 2007 |   | Director                                        |
|   Jerry R. Pettle          |   | Date           |   |                                            |
|                                 |   |           |   |                                            |
|   /s/ Susan E. Roepke      |   | March 29, 2007 |   | Director                                        |
|   Susan E. Roepke          |   | Date           |   |                                            |
|                                 |   |           |   |                                            |
|   /s/ C. Duane Ross        |   | March 29, 2007 |   | Director                                        |
|   C. Duane Ross            |   | Date           |   |                                            |
|                                 |   |           |   |                                            |
|   /s/ David H. Snapp       |   | March 29, 2007 |   | Director                                        |
|   David H. Snapp           |   | Date           |   |                                            |

 

38

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INDEX TO EXHIBITS
| Exhibit Number | ** ** | **Description**                                                                           | ** ** | **Incorporated by reference to**                                                                                                                                                | ** ** | **Attached  hereto** |
|----------------|------------|-------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------|
| 3.1            |       | Amended and Restated Certificate of Incorporation                                         |       | the registrant’s transition report on Form 10-K for  the transition period ending December 31, 2001, filed with the Commission on  March 24, 2002 (SEC file no. 000-33203) |       |                 |
| 3.2            |       | Bylaws                                                                                    |       | the registrant’s Form S-4, as amended, filed with  the Commission on June 7, 2001 (SEC file no. 333-62466)                                                                 |       |                 |
| 4.1            |       | Form of stock certificate                                                                 |       | the registrant’s Form S-4, as amended, filed with  the Commission on June 7, 2001 (SEC file no. 333-62466)                                                                 |       |                 |
| 10.1           |       | Form of employment agreement between Larry Schugart  and the Company                      |       | the registrant’s Form S-4, as amended, filed with  the Commission on June 7, 2001 (SEC file no. 333-62466)                                                                 |       |                 |
| 10.2           |       | Form of employment agreement between Patrick L.  Alexander and the Company                |       | the registrant’s Form S-4, as amended, filed with  the Commission on June 7, 2001 (SEC file no. 333-62466)                                                                 |       |                 |
| 10.3           |       | Form of employment agreement between Mark A. Herpich  and the Company                     |       | the registrant’s Form S-4, as amended, filed with  the Commission on June 7, 2001 (SEC file no. 333-62466)                                                                 |       |                 |
| 10.4           |       | Form of employment agreement between Michael E.  Scheopner and the Company                |       | the registrant’s Form S-4, as amended, filed with  the Commission on June 7, 2001 (SEC file no. 333-62466)                                                                 |       |                 |
| 10.5           |       | Form of employment agreement between Dean R.  Thibault and the Company                    |       | the registrant’s Form S-4, as amended, filed with  the Commission on June 7, 2001 (SEC file no. 333-62466)                                                                 |       |                 |
| 10.6           |       | Rights Agreement between the Company and Landmark  National Bank                          |       | the registrant’s Form 8-K filed with the Commission  on January 22, 2002 (SEC file no. 000-33203)                                                                          |       |                 |
| 10.7           |       | Indenture dated as of December 19, 2003 between the  Company and Wilmington Trust Company |       | the registrant’s report on Form 10-K for the period  ending December 31, 2003, filed with the Commission on March 30, 2004 (SEC  file no. 000-33203)                       |       |                 |
| 10.8           |       | Form of employment agreement between Mark J.  Oliphant and the Company                    |       | the registrant’s Form 8-K filed with the Commission  on March 9, 2005 (SEC file no. 000-33203)                                                                             |       |                 |
| 10.9           |       | Form of 2001 Landmark Bancorp, Inc. Stock Incentive  Plan Option Grant Agreement          |       | the registrant’s report on Form 10-K for the period  ending December 31, 2004, filed with the Commission on March 30, 2005 (SEC  file no. 000-33203)                       |       |                 |

 

39

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| 10.10 |   | Landmark Bancorp, Inc. Bonus/Profit Sharing Plan                                                                                                    |   |                                                                                                                                                      |   | X      |
|-------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
| 10.11 |   | Form of Landmark Bancorp, Inc. Deferred Compensation  Agreements                                                                                    |   | the registrant’s report on Form 10-K for the period  ending December 31, 2004, filed with the Commission on March 30, 2005 (SEC  file no. 000-33203) |   |   |
| 10.12 |   | Summary of director’s fees                                                                                                                     |   |                                                                                                                                                      |   | X      |
| 10.13 |   | Indenture dated as of December 30, 2005 between the  Company and Wilmington Trust Company                                                           |   | the registrant’s report on Form 10-K for the period  ending December 31, 2005, filed with the Commission on March 29, 2006 (SEC  file no. 000-33203) |   |   |
| 13.1  |   | 2006 Annual Report to Stockholders                                                                                                                  |   |                                                                                                                                                      |   | X      |
| 21.1  |   | Subsidiaries of the Company                                                                                                                         |   |                                                                                                                                                      |   | X      |
| 23.1  |   | Consent of KPMG LLP                                                                                                                                 |   |                                                                                                                                                      |   | X      |
| 31.1  |   | Certification of Chief Executive Officer Pursuant to  Rule 13a-14(a)/15d-14(a)                                                                      |   |                                                                                                                                                      |   | X      |
| 31.2  |   | Certification of Chief Financial Officer Pursuant to  Rule 13a-14(a)/15d-14(a)                                                                      |   |                                                                                                                                                      |   | X      |
| 32.1  |   | Certification of Chief Executive Officer Pursuant to  18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002 |   |                                                                                                                                                      |   | X      |
| 32.2  |   | Certification of Chief Financial Officer Pursuant to  18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002 |   |                                                                                                                                                      |   | X      |

 

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