**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C.  20549**

 

**FORM 10-Q**

 

| **ý**                                                                                                                                                                                                                              | **QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT OF 1934**  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|
| **For  the quarterly period ended March 31, 2004**                                                                                                                                                                                      |
|                                                                                                                                                                                                                                    |                                                                                           |
| **OR**                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                    |                                                                                           |
| **o**                                                                                                                                                                                                                                   | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE ACT OF 1934** |
| **For  transition period from                    to                  ** |
|                                                                                                                                                                                                                                    |                                                                                           |
| **Commission  File Number 0-33203**                                                                                                                                                                                                     |

 

**LANDMARK BANCORP, INC.**

(Exact name of Registrantas specified in its charter)

 

| **Delaware**                                                     |   | **43-1930755**                           |
|------------------------------------------------------------------|--------|------------------------------------------|
| (State or other  jurisdiction  of incorporation or organization) |   | (I.R.S. Employer  Identification Number) |

 

**800 Poyntz Avenue, Manhattan, Kansas        66502**

(Address of principalexecutive offices)   (Zip Code)

 

**(785) 565-2000**

(Registrant’s telephonenumber, including area code)

 

Indicate by check mark whether the Registrant (1) hasfiled all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the Registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days.  Yes ý  No   o  

 

Indicate by checkmark whether the Registrant is an accelerated filer (as defined by Rule 12b-2of the Exchange Act).  Yes   o    No ý

 

Indicate the number of shares outstanding of each ofthe Registrant’s classes of common stock as of the latest practicabledate:  As of May 5, 2004, the Registranthad outstanding 2,091,307 shares of its common stock, $.01 par value per share.

 

 

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**LANDMARK BANCORP, INC.**

**Form 10-Q Quarterly Report**

 

**Table of Contents**

 
| PART I                    |                                                                                         |
|---------------------------|----------------------------------------------------------------------------------------------|
|                      |                                                                                         |   |
| Item 1.                   | Financial Statements and Related Notes                                                       |   |
| Item  2.                  | Management’s Discussion and Analysis of  Financial  Condition and Results of Operations |   |
| Item  3.                  | Quantitative  and Qualitative Disclosures about Market Risk                                  |   |
| Item  4.                  | Controls  and Procedures                                                                     |   |
|                      |                                                                                         |   |
| PART II                   |                                                                                         |
|                      |                                                                                         |   |
| Item 1.                   | Legal  Proceedings                                                                           |   |
| Item  2.                  | Changes in Securities, Use of  Proceeds and Issuer  Purchases of Equity Securities           |   |
| Item  3.                  | Defaults  Upon Senior Securities                                                             |   |
| Item 4.                   | Submission of Matters to  a Vote of  Security Holders                                        |   |
| Item  5.                  | Other  Information                                                                           |   |
| Item  6.                  | Exhibits  and Reports on Form 8-K                                                            |   |
|                      |                                                                                         |   |
| Form  10-Q Signature Page |                                                                                         |

 

1

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**LANDMARK BANCORP, INC. AND SUBSIDIARY**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

 
|                                                                                                       |   | **March 31,  2004** |        | **December 31,  2003** |   |
|------------------------------------------------------------------------------------------------------------|--------|---------------------|-------------|------------------------|--------|
|                                                                                                       |   | **(Unaudited)**     |        |                   |   |
| **ASSETS**                                                                                                 |   |                |        |                   |   |
| Cash and cash equivalents                                                                                  |   | $                   | 5,044,196   |                   | $      | 7,708,115 |   |
| Investment securities available for sale                                                                   |   | 100,606,310         |        | 99,746,365             |   |
| Loans, net                                                                                                 |   | 211,064,556         |        | 214,295,940            |   |
| Loans held for sale                                                                                        |   | 1,666,338           |        | 734,456                |   |
| Premises and equipment, net                                                                                |   | 3,667,031           |        | 3,631,102              |   |
| Goodwill                                                                                                   |   | 1,971,178           |        | 1,971,178              |   |
| Other intangible assets, net                                                                               |   | 937,859             |        | 959,532                |   |
| Accrued interest and other assets                                                                          |   | 5,629,500           |        | 4,999,601              |   |
|                                                                                                       |   |                |        |                   |   |
| Total assets                                                                                               |   | $                   | 330,586,968 |                   | $      | 334,046,289 |   |
|                                                                                                       |   |                |        |                   |   |
| **LIABILITIES  AND STOCKHOLDERS’ EQUITY**                                                             |   |                |        |                   |   |
| Liabilities:                                                                                               |   |                |        |                   |   |
| Deposits                                                                                                   |   | $                   | 251,368,202 |                   | $      | 253,108,220 |   |
| Federal Home Loan Bank borrowings                                                                          |   | 23,047,912          |        | 25,257,104             |   |
| Other borrowings                                                                                           |   | 8,498,000           |        | 8,498,000              |   |
| Accrued expenses, taxes and other liabilities                                                              |   | 4,545,451           |        | 4,610,862              |   |
| Total liabilities                                                                                          |   | 287,459,565         |        | 291,474,186            |   |
|                                                                                                       |   |                |        |                   |   |
| Stockholders’ equity:                                                                                 |   |                |        |                   |   |
| Common stock, $0.01 par, 3,000,000 shares authorized, issued 2,230,435  and 2,207,807 shares, respectively |   | 22,304              |        | 22,078                 |   |
| Additional paid-in capital                                                                                 |   | 19,654,363          |        | 19,332,130             |   |
| Retained earnings                                                                                          |   | 25,805,547          |        | 25,213,188             |   |
| Accumulated other comprehensive income                                                                     |   | 1,022,639           |        | 796,932                |   |
| Treasury stock, at cost; 139,128 and 119,657 shares, respectively                                          |   | (3,377,450          | )           | (2,792,225             | )      |
| Total stockholders’ equity                                                                            |   | 43,127,403          |        | 42,572,103             |   |
|                                                                                                       |   |                |        |                   |   |
| Total liabilities and stockholders’ equity                                                            |   | $                   | 330,586,968 |                   | $      | 334,046,289 |   |

 

*Seeaccompanying notes to condensed consolidated financial statements.*

 

2

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**LANDMARK BANCORP, INC. AND SUBSIDIARY**

# **CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS**

**(Unaudited)**

 
|                                                |   | **Three Months Ended March 31,** |      |
|-----------------------------------------------------|--------|----------------------------------|-----------|
|                                                |   | **2004**                         |      | **2003** |   |
| Interest income:                                    |   |                             |      |   |   |
| Loans                                               |   | $                                | 3,227,509 |   | $ | 3,819,834 |   |
| Investment securities                               |   | 811,325                          |      | 809,811 |   |
| Other                                               |   | 8,332                            |      | 5,520 |   |
| Total interest income                               |   | 4,047,166                        |      | 4,635,165 |   |
|                                                |   |                             |      |   |   |
| Interest expense:                                   |   |                             |      |   |   |
| Deposits                                            |   | 932,801                          |      | 1,248,897 |   |
| Borrowed funds                                      |   | 349,444                          |      | 300,521 |   |
| Total interest expense                              |   | 1,282,245                        |      | 1,549,418 |   |
|                                                |   |                             |      |   |   |
| Net interest income                                 |   | 2,764,921                        |      | 3,085,747 |   |
|                                                |   |                             |      |   |   |
| Provision for loan losses                           |   | 60,000                           |      | 60,000 |   |
|                                                |   |                             |      |   |   |
| Net interest income after provision for loan losses |   | 2,704,921                        |      | 3,025,747 |   |
|                                                |   |                             |      |   |   |
| Non-interest income:                                |   |                             |      |   |   |
| Fees and service charges                            |   | 532,735                          |      | 611,997 |   |
| Gains on sale of loans                              |   | 234,885                          |      | 634,507 |   |
| Gains on sale of investments                        |   | 97,687                           |      | 25,682 |   |
| Other                                               |   | 81,501                           |      | 69,042 |   |
| Total non-interest income                           |   | 946,808                          |      | 1,341,228 |   |
|                                                |   |                             |      |   |   |
| Non-interest expense:                               |   |                             |      |   |   |
| Compensation and benefits                           |   | 1,217,804                        |      | 1,213,100 |   |
| Occupancy and equipment                             |   | 319,046                          |      | 312,377 |   |
| Professional fees                                   |   | 78,694                           |      | 122,779 |   |
| Amortization                                        |   | 75,147                           |      | 111,319 |   |
| Data processing                                     |   | 78,865                           |      | 80,079 |   |
| Other                                               |   | 487,765                          |      | 513,536 |   |
| Total non-interest expense                          |   | 2,257,321                        |      | 2,353,190 |   |
|                                                |   |                             |      |   |   |
| Earnings before income taxes                        |   | 1,394,408                        |      | 2,013,785 |   |
|                                                |   |                             |      |   |   |
| Income tax expense                                  |   | 445,647                          |      | 690,252 |   |
|                                                |   |                             |      |   |   |
| Net earnings                                        |   | $                                | 948,761   |   | $ | 1,323,533 |   |
|                                                |   |                             |      |   |   |
| Earnings per share:                                 |   |                             |      |   |   |
| Basic                                               |   | $                                | 0.45      |   | $ | 0.63 |   |
| Diluted                                             |   | $                                | 0.45      |   | $ | 0.62 |   |
|                                                |   |                             |      |   |   |
| Dividends per share                                 |   | $                                | 0.17      |   | $ | 0.1524 |   |

 

*Seeaccompanying notes to condensed consolidated financial statements.*

 

3

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**LANDMARK BANCORP, INC. AND SUBSIDIARY**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

 
|                                                                           |   | **Three Months Ended March 31,** |      |
|--------------------------------------------------------------------------------|--------|----------------------------------|-----------|
|                                                                           |   | **2004**                         |      | **2003** |   |
|                                                                           |   |                             |      |   |   |
| Net cash used in operating activities                                          |   | $                                | (534,156  | ) | $ | (481,971 | ) |
|                                                                           |   |                             |      |   |   |
| INVESTING ACTIVITIES                                                           |   |                             |      |   |   |
| Net decrease in loans                                                          |   | 3,028,649                        |      | 5,384,675 |   |
| Maturities and prepayments of investments available for sale                   |   | 5,597,814                        |      | 9,400,731 |   |
| Purchase of investment securities available for sale                           |   | (6,264,643                       | )         | (11,743,301 | ) |
| Proceeds from sale of investment securities available for sale                 |   | 173,916                          |      | 58,000 |   |
| Payments received and proceeds from sale of foreclosed assets                  |   | 64,215                           |      | 179,120 |   |
| Purchases of premises and equipment, net                                       |   | (161,336                         | )         | (121,605 | ) |
| Net cash provided by investing activities                                      |   | 2,438,615                        |      | 3,157,620 |   |
|                                                                           |   |                             |      |   |   |
| FINANCING ACTIVITIES                                                           |   |                             |      |   |   |
| Net decrease in deposits                                                       |   | (1,740,018                       | )         | (5,441,628 | ) |
| Federal Home Loan Bank borrowings                                              |   | 4,100,000                        |      | 14,950,000 |   |
| Federal Home Loan Bank repayments                                              |   | (6,309,192                       | )         | (15,544,906 | ) |
| Purchase of 19,471 and 34,841 shares of treasury stock                         |   | (585,225                         | )         | (831,036 | ) |
| Issuance of 22,628 and 18,556 shares of common stock under stock option  plans |   | 322,459                          |      | 259,561 |   |
| Payment of dividends                                                           |   | (356,402                         | )         | (322,530 | ) |
| Net cash used in financing activities                                          |   | (4,568,378                       | )         | (6,930,539 | ) |
| Net decrease in cash                                                           |   | (2,663,919                       | )         | (4,254,890 | ) |
| Cash and cash equivalents at beginning of period                               |   | 7,708,115                        |      | 11,448,684 |   |
| Cash and cash equivalents at end of period                                     |   | $                                | 5,044,196 |   | $ | 7,193,794 |   |
|                                                                           |   |                             |      |   |   |
| Supplemental disclosure of cash flow information:                              |   |                             |      |   |   |
| Cash paid during period for interest                                           |   | $                                | 1,231,000 |   | $ | 1,557,000 |   |
| Cash paid during period for taxes                                              |   | $                                | 400,000   |   | $ | 825,000 |   |
|                                                                           |   |                             |      |   |   |
| Supplemental schedule of non-cash investing activities:                        |   |                             |      |   |   |
| Transfer of loans to real estate owned                                         |   | $                                | 59,000    |   | $ | 26,000 |   |

 

*Seeaccompanying notes to condensed consolidated financial statements.*

 

4

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**LANDMARK BANCORP, INC. ANDSUBSIDIARY**

**NOTES TO CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS**

 

**1.****            ****Interim Financial Statements**

 

The condensed consolidatedfinancial statements of Landmark Bancorp, Inc. (the “Company”) and subsidiaryhave been prepared in accordance with the instructions to Form 10-Q.  To the extent that information and footnotesrequired by accounting principles generally accepted in the United States ofAmerica for complete financial statements are contained in or consistent withthe consolidated audited financial statements incorporated by reference in theCompany’s Form 10-K for the year ended December 31, 2003, such information andfootnotes have not been duplicated herein. In the opinion of management, all adjustments, consisting of normalrecurring accruals, considered necessary for a fair presentation of financialstatements have been reflected herein. The December 31, 2003, condensed consolidated balance sheet has beenderived from the audited consolidated balance sheet as of that date.  The results of the interim period endedMarch 31, 2004, are not necessarily indicative of the results expected for theyear ending December 31, 2004.

 

**2.****            ****Earnings Per Share**

 

Basic earnings per sharehave been computed based upon the weighted average number of common sharesoutstanding during each period.  Dilutedearnings per share include the effect of all potential common sharesoutstanding during each period. Earnings and dividends per share for all periods presented have beenadjusted to give effect to the 5% stock dividend paid by the Company in December2003.

 

The shares used in thecalculation of basic and diluted income per share are shown below:

 
|                                                |   | **Three  Months Ended March 31,** |   |
|-----------------------------------------------------|--------|-----------------------------------|--------|
|                                                |   | **2004**                          |   | **2003** |   |
| Weighted average  common shares outstanding (basic) |   | 2,090,676                         |   | 2,086,774 |   |
| Dilutive stock  options                             |   | 18,146                            |   | 33,578 |   |
| Weighted average  common shares (diluted)           |   | 2,108,820                         |   | 2,120,352 |   |

 

**3.****            ****Comprehensive Income**

 

The Company’s only componentof other comprehensive income is the unrealized holding gains on available forsale securities.

 
|                                                                       |   | **Three  Months Ended March 31,** |      |
|----------------------------------------------------------------------------|--------|-----------------------------------|-----------|
|                                                                       |   | **2004**                          |      | **2003** |   |
| Net earnings                                                               |   | $                                 | 948,761   |   | $ | 1,323,533 |   |
|                                                                       |   |                              |      |   |   |
| Unrealized  holding gains (losses)                                         |   | 461,729                           |      | (313,050 | ) |
|  Less reclassification adjustment for gains  included in net earnings |   | 97,687                            |      | 25,682 |   |
| Net unrealized  gains (losses) on securities                               |   | 364,042                           |      | (338,732 | ) |
| Income tax  expense (benefit)                                              |   | 138,335                           |      | (128,718 | ) |
| Total  comprehensive income                                                |   | $                                 | 1,174,468 |   | $ | 1,113,519 |   |

 

5

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**4.****           ****Stock Based Compensation**

 

The Company utilizes the fair value recognitionprovisions of SFAS Statement No. 123, “Accountingfor Stock-Based Compensation.” SFAS No. 123 establishes a fair-value method of accounting for employeestock options or similar equity instruments. The fair value of stock-basedawards to employees is calculated through the use of option pricing models,even though such models were developed to estimate the fair value of freelytradable, fully transferable options without vesting restrictions, whichsignificantly differ from the Company’s stock option awards. These models alsorequire subjective assumptions, including future stock price volatility andexpected time to exercise, which greatly affect the calculated values. TheCompany uses the Black-Scholes option pricing model to estimate the grant datefair value of its stock options. The fair value is recognized as additionalcompensation expense over the option vesting period, which is typically fiveyears.

 

**5.****            ****Intangible Assets**

 

Thefollowing table presents information about the Company’s intangible assets,which are being amortized in accordance with SFAS No. 142:

 

 
|                         |   | **March 31,  2004**         |      | **December  31, 2003**        |   |
|------------------------------|--------|-----------------------------|-----------|-------------------------------|--------|
|                         |   | **Gross  Carrying  Amount** |      | **Accumulated  Amortization** |   | **Gross  Carrying  Amount** |   | **Accumulated  Amortization** |   |
| Amortized intangible assets: |   |                        |      |                          |   |   |   |   |   |
| Core deposit  premium        |   | $                           | 780,000   |                          | $      | (326,182 | ) | $ | 780,000 |   | $ | (297,818 | ) |
| Mortgage  servicing rights   |   | 747,982                     |      | (263,941                      | )      | 727,158 |   | (249,808 | ) |
| Total                        |   | $                           | 1,527,982 |                          | $      | (590,123 | ) | $ | 1,507,158 |   | $ | (547,626 | ) |

 

Aggregateamortization expense for the three months ended March 31, 2004, and March 31,2003, was $75,000 and $111,000, respectively. The following is estimated amortization expense for the years endingDecember 31,:

 

| **Year** |   | **Amount** |    |
|----------|--------|------------|---------|
| 2004     |   | $          | 254,000 |   |
| 2005     |   | 240,000    |    |
| 2006     |   | 226,000    |    |
| 2007     |   | 112,000    |    |
| 2008     |   | 53,000     |    |
|          |        |            |         |  |

 

# **6.**            Recent Accounting Pronouncements

# ** **

In March 2004, theSecurities and Exchange Commission staff issued Staff Accounting Bulletin No.105, “Application of Accounting Principles to Loan Commitments” (SAB 105).  SAB 105 provides additional guidance indetermining the fair market value of mortgage loan commitments.  The new guidance prohibits the inclusion ofthe expected cash flows related to the associated servicing of the loan whendetermining the fair value of the loan commitment.  This change in accounting tends to reduce the fair market valueof the loan commitment and defers the income recognition resulting from thevaluation of the commitment.  SAB 105 iseffective for loan commitments accounted for as derivatives and entered into onor after April 1, 2004, at which time the Company will begin excluding theseexpected cash flows in its determination of fair value.  The Company does not believe that the effectof the change will be material to its financial statements.

 

6

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**7.****            ****Subsequent Event**

 

On April 1, 2004, theCompany acquired all of the outstanding stock of First Kansas FinancialCorporation (First Kansas) at a cost of $19.00 per share in cash.  First Kansas was a single thrift holding companybased in Osawatomie, Kansas.  At March31, 2004, First Kansas had total assets of approximately $150.0 million,including net loans and deposits of $73.2 million and $83.8 million,respectively.  The acquisition of FirstKansas by the Company will be accounted for using the purchase method ofaccounting.  All financial informationpresented as of March 31, 2004, reflects only the operations of LandmarkBancorp, Inc.  The result of operationsfor First Kansas will be reported by the Company beginning April 1, 2004.  On a proforma basis, assuming theacquisition of First Kansas consummated on April 1, 2004, had occurred on March31, 2004, Landmark Bancorp’s total assets would have been $479.9 million.

 

7

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**ITEM 2****.  MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

*General.*  Landmark Bancorp, Inc. is aone-bank holding company incorporated under the laws of the State of Delawareand is engaged in the banking business through its wholly-owned subsidiary,Landmark National Bank.  LandmarkBancorp is listed on the Nasdaq Stock Market under the symbol “LARK”.  Landmark National Bank is dedicated to providingquality financial and banking services to its local communities.  Landmark National Bank originates commercialreal estate and non-real estate loans, one-to-four family residential mortgageloans, consumer loans, multi-family residential mortgage loans, and home equityloans.  On April 1, 2004, we completedthe cash acquisition of First Kansas Financial Corporation (First Kansas),which had total assets of approximately $150.0 million.

 

Our results of operationsdepend primarily on net interest income, which is the difference betweeninterest income from interest-earning assets and interest expense oninterest-bearing liabilities.  Netinterest income is affected by regulatory, economic and competitive factorsthat influence interest rates, loan demand and deposit flows.  In addition, we are subject to interest raterisk to the degree that our interest-earning assets mature or reprice atdifferent times, or at different speeds, than our interest-bearingliabilities.  Our results of operationsare also affected by non-interest income, such as service charges, loan feesand gains and losses from the sale of newly originated loans andinvestments.  Our principal operatingexpenses, aside from interest expense, consist of compensation and employeebenefits, occupancy costs, federal deposit insurance costs, data processingexpenses and provision for loan losses.

 

We are significantlyimpacted by prevailing economic conditions including federal monetary andfiscal policies and federal regulations of financial institutions.  Deposit balances are influenced by numerousfactors such as competing personal investments, the level of personal incomeand the personal rate of savings within our market areas.  Factors influencing lending activitiesinclude the demand for housing and the interest rate pricing competition fromother lending institutions.

 

Our accounting principlesand the methods of applying these principles conform with accounting principlesgenerally accepted in the United States and with general practices within thebanking industry.  Critical accountingpolicies relate to loans and related earnings, investment securities and incometaxes.  A description of these policies,which significantly affect the determination of our financial position, resultsof operations and cash flows, are summarized in Note 2, Summary of SignificantAccounting Policies in the Notes included in our Annual Report on Form 10-K forthe year ended December 31, 2003.

 

*Summary of Results*.  Netearnings for the three months ended March 31, 2004, decreased $375,000, or28.3%, to $949,000 as compared to the three months ended March 31, 2003.  This decline in net earnings was generallyattributable to decreased gains on sale of loans and a decline in our netinterest margin which was offset by reductions in non-interest expense.

 

The three months ended March31, 2004, resulted in diluted earnings per share of $0.45 compared to $0.62 forthe same period in 2003.  Return onaverage assets for the three months ended March 31, 2004, was 1.15% compared to1.61% for the same period in 2003. Return on average stockholders’ equity was 8.88% for the three monthsended March 31, 2004, compared to 12.91% for the same period in 2003.

 

We continued our stockrepurchase program during the first quarter of 2004, resulting in therepurchase of an additional 19,471 shares. As of March 31, 2004, we held 139,128 shares as treasury stock at anaverage cost per share of $24.28.

 

8

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The following tablesummarizes net income and key performance measures for the two periodspresented.

 
|                          |   | **Three  Months Ended March 31,** |    |
|-------------------------------|--------|-----------------------------------|---------|
|                          |   | **2004**                          |    | **2003** |   |
| Net earnings                  |   | $                                 | 948,761 |   | $ | 1,323,533 |   |
| Basic earnings  per share     |   | $                                 | 0.45    |   | $ | 0.63 |   |
| Diluted earnings  per share   |   | $                                 | 0.45    |   | $ | 0.62 |   |
| Earnings ratios:              |   |                              |    |   |   |
| Return on  average assets (1) |   | 1.15                              | %       | 1.61 | % |
| Return on average  equity (1) |   | 8.88                              | %       | 12.91 | % |
| Dividend payout  ratio        |   | 37.78                             | %       | 25.40 | % |
| Net interest  margin (1)      |   | 3.53                              | %       | 3.97 | % |

 

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(1) The ratio has been annualized and is notnecessarily indicative of the results for the entire year.

 

*Interest Income.* Interest income for the three months ended March 31, 2004, decreased$588,000, or 12.7%, to $4.0 million from $4.6 million for the three monthsended March 31, 2003.  This decrease wasprimarily related to the decrease in rates as our interest earning assetsrepriced during 2003 and the first quarter of 2004.  Average loans for the quarter ended March 31, 2004, were lower at$212.4 million, compared to $227.0 million for the quarter ended March 31,2003.  The decline was primarily theresult of refinancings and paydowns in our residential mortgage portfolio.  Offsetting the decline attributable to lowerloans outstanding was an increase in average investment securities from $89.3million for the quarter ended March 31, 2003, to $99.3 million for the quarterended March 31, 2004.

 

*Interest Expense*. Interest expense during the three months ended March 31, 2004, decreased$267,000, or 17.2%, as compared to the same period of 2003.  For the three months ended March 31, 2004,interest expense on deposits decreased $316,000, or 25.3%, and interest expenseon borrowings, consisting primarily of advances from the Federal Home Loan Bankof Topeka, increased $49,000, or 16.3%, during this time period.  The $8.2 million in trust preferred securitiesthat we issued in mid-December 2003 resulted in additional interest expenseduring the first quarter of 2004.

 

*Net Interest Income.* Netinterest income decreased to $2.8 million, or by 10.4%, for the three monthsended March 31, 2004, compared to $3.1 million for the three months ended March31, 2003.  Average earning assets duringthe first three months of 2004 totaled $315.2 million, versus $315.4 millionduring the first three months of 2003. The net interest margin for the three months ended March 31, 2004, was3.53%, down from 3.97% for the three months ended March 31, 2003.  The decline in our net interest margin isprimarily a result of a continued reduction in loans arising from payoffs andrefinancings in the one-to-four family residential loan portfolio exceeding ourability to generate new commercial and consumer loans.  Also contributing to the decline in our netinterest margin was the continued low interest rate environment during thefirst quarter of 2004 in which our assets have continued to repricedownward.  We have not been able tototally compensate for this continued asset repricing due to the fact thatdeposit liabilities have already been priced lower with little room left forcontinued downward adjustments.

 

*Provision for Loan Losses.*  Theprovision for loan losses remained at $60,000 for the three months ended March31, 2004, compared to the three months ended March 31, 2003.  Our continuous review of the loan portfolioprompted no change in our provision during the past year.  One measure of the adequacy of the allowancefor estimated losses on loans is the ratio of the allowance to the total loanportfolio.  At March 31, 2004, theallowance for loan losses was $2.4 million, or 1.1% of gross loans outstanding,compared to $2.3 million, or 1.1% of gross loans outstanding, at December 31,2003.

 

9

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*Non-interest Income.* Non-interest income decreased $394,000, or 29.4%, for the three monthsended March 31, 2004, to $947,000 from $1.3 million for the three months endedMarch 31, 2003.  The decrease innon-interest income reflected a decline of 63.0% in gains on sale of loans from$635,000 for the three months ended March 31, 2003, to $235,000 for the threemonths ended March 31, 2004, as residential mortgage financing activitydropped.  Also contributing to thedecrease in non-interest income were decreased fees and service charges from$612,000 for the three months ended March 31, 2003, to $533,000 for the threemonths ended March 31, 2004, relating primarily to lower loan fees.  Mortgage refinancings and prepayments weremuch lower during the first quarter of 2004 as compared to the same period of2003.  Mortgage refinancing activity isexpected to continue to diminish during 2004 as many mortgage holders havealready taken advantage of the low interest rates favorable for mortgage loanrefinancing.

 

Partially offsetting thesedecreases in non-interest income was an increase in gains on sale ofinvestments of $72,000 for the three months ended March 31, 2004 as compared tothe same period of 2003.  This increasein gains on sale of investments resulted from equity security sales from ourholding company’s investment portfolio. We periodically sell equity securities based on performance and otherindicators, and we could sell additional equity securities in futureperiods.  Our equity securitiesportfolio was $489,000, including unrealized gains of $285,000, at March 31,2004.  We estimate that gains on sale ofinvestments during the second quarter 2004 will continue, however, it is likelythat they will be at a level less than the amount realized during the firstquarter.

 
|                           |   | **Three  Months Ended March 31,** |    |
|--------------------------------|--------|-----------------------------------|---------|
|                           |   | **2004**                          |    | **2003** |   |
| Non-interest income:           |   |                              |    |   |   |
| Fees and service  charges      |   | $                                 | 532,735 |   | $ | 611,997 |   |
| Gains on sales  of loans       |   | 234,885                           |    | 634,507 |   |
| Gains on sales  of investments |   | 97,687                            |    | 25,682 |   |
| Other                          |   | 81,501                            |    | 69,042 |   |
| Total  non-interest income     |   | $                                 | 946,808 |   | $ | 1,341,228 |   |

 

*Non-interestExpense.*  Non-interest expense decreased $96,000, or4.1%, to $2.3 million for the three months ended March 31, 2004, compared tothe same period in 2003.  The decreasewas primarily related to a decrease of $44,000 in professional fees, a $36,000decrease in amortization expense, and a $26,000 decrease in other non-interestexpense for the three months ended March 31, 2004, compared to the three monthsended March 31, 2003.  Professional feeswere higher for the three months ended March 31, 2003, as approximately $25,000in legal fees had been incurred related to securing our “Landmark” tradename.  Amortization expense decreased asprepayment speeds on our mortgage servicing portfolio have diminished whileother non-interest expense decreased due to reduced expenses relating tostationery, printing and office supplies.

 
|                       |   | **Three Months Ended March 31,** |      |
|----------------------------|--------|----------------------------------|-----------|
|                       |   | **2004**                         |      | **2003** |   |
| Non-interest expense:      |   |                             |      |   |   |
| Compensation and benefits  |   | $                                | 1,217,804 |   | $ | 1,213,100 |   |
| Occupancy and equipment    |   | 319,046                          |      | 312,377 |   |
| Professional fees          |   | 78,694                           |      | 122,779 |   |
| Amortization               |   | 75,147                           |      | 111,319 |   |
| Data processing            |   | 78,865                           |      | 80,079 |   |
| Other                      |   | 487,765                          |      | 513,536 |   |
| Total non-interest expense |   | $                                | 2,257,321 |   | $ | 2,353,190 |   |

 

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*Income Tax Expense*. Income tax expense decreased $245,000, or 35.4%, from $690,000 for thethree months ended March 31, 2003, to $446,000 for the three months ended March31, 2004.  This decrease in income taxexpense resulted primarily from a decrease in taxable income.  In addition, the effective tax rate for thefirst quarter of 2004 decreased to 32.0% compared to 34.3% for the firstquarter of 2003.  The reduction in theeffective tax rate for the first quarter of 2004 as compared to the firstquarter of 2003 resulted primarily from the revised projections related toinvestment tax credits.

 

*Asset Quality and Distribution.* Total assets declined to $330.6 million at March 31, 2004, compared to$334.0 million at December 31, 2003. Our primary ongoing sources of funds are deposits, proceeds from principaland interest payments on loans and investment securities and proceeds from thesale of mortgage loans and investment securities.  While maturities and scheduled amortization of loans are apredictable source of funds, deposit flows and mortgage prepayments are greatlyinfluenced by general interest rates, economic conditions, competition, and therestructuring of the financial services industry.

 

Net loans, excluding loansheld for sale, decreased $3.2 million during the three months ended March 31,2004.  This decline was primarily theresult of refinancings and paydowns in our residential mortgage portfolio.  Our loan portfolio composition continues todiversify as a result of paydowns and our planned expansion of commerciallending activities.  This is evidencedby our one-to-four family residential real estate loans comprising 37.9% oftotal loans as of December 31, 2003, and 36.0% of total loans as of March 31,2004.

 

Our primary investingactivities are the origination of mortgage, consumer, and commercial loans andthe purchase of investment and mortgage-backed securities.  Generally, we originate fixed-rate,residential mortgage loans with maturities in excess of ten years for sale inthe secondary market.  We do notoriginate and warehouse these fixed-rate residential loans for resale in orderto speculate on interest rates.

 

The allowance for losses onloans is established through a provision for losses on loans based on ourevaluation of the risk inherent in the loan portfolio and changes in the natureand volume of its loan activity.  Suchevaluation, which includes a review of all loans with respect to which fullcollectibility may not be reasonably assured, considers the fair value of theunderlying collateral, economic conditions, historical loan loss experience,level of classified loans and other factors that warrant recognition inproviding for an adequate allowance for losses on loans.

 

We believe that the qualityof the loan portfolio continues to be strong as evidenced by our low levels ofpast due and non-accrual loans.  Loanspast due more than one month and less than 90 days as of March 31, 2004,totaled $2.1 million, as compared to $2.3 million at December 31, 2003.  As of March 31, 2004, loans with a balanceof $1.6 million were on non-accrual status, or 0.72% of total loans, comparedto a balance of $1.2 million loans on non-accrual status, or 0.55% of totalloans, as of December 31, 2003.  Inaddition, the ratio of non-performing assets as a percentage of total assetsincreased from 0.45% as of December 31, 2003, to 0.59% as of March 31,2004.  While the non-accrual loans andnon-performing asset ratios have increased, the majority of the increaseoccurred in the one-to-four family residential loan portfolio.  Residential home loans comprised 87.7% ofthe $1.6 million non-accrual balance at March 31, 2004.  These loans have been underwritten accordingto our residential lending policies and are well secured by real estatecollateral, and in many instances, private mortgage insurance or governmentguarantees.  We have historicallyincurred minimal losses on mortgage loans based upon collateral values andunderlying insurance or guarantees.  Weare aggressively pursuing collection activity of these loans which shouldenable the collection of principal.

 

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A slowdown in economicactivity beginning in 2001 severely impacted several major industries as wellas the economy as a whole.  While we arepleased that there appear to be numerous indications of emerging strength inthe economy, we still have a concern for the outlook of the economy for theremainder of 2004.  The strengtheningmay not be sustainable and consumer confidence may be slow to respond to thepositive effects, if any, on the economy. These events could adversely affect cash flows for both commercial andindividual borrowers, as a result of which, we could experience increases inproblem assets, delinquencies and losses on loans.  Many financial institutions have experienced an increase innon-performing assets during the recent difficult economic period, as evenwell-established business borrowers developed cash flow, profitability andother business-related problems.  Webelieve that the allowance for losses on loans at March 31, 2004, was adequate.  While we believe that we use the best informationavailable to determine the allowance for losses on loans, unforeseen marketconditions could result in adjustment to the allowance for losses onloans.  In addition, net earnings couldbe significantly affected if circumstances differ substantially from theassumptions used in establishing the allowance for losses on loans.

 

*Liability Distribution.* Total deposits decreased $1.7 million to $251.4 million at March 31,2004, from $253.1 million at December 31, 2003.  Borrowings decreased $2.3 million to $31.5 million at March 31,2004, from $33.8 million at December 31, 2003.

 

Non-interest bearing demandaccounts at March 31, 2004, were $23.9 million, or 9.5% of deposits, comparedto $20.5 million, or 8.1% of deposits, at December 31, 2003.  Money market and NOW demand accountsdecreased to $74.5 million at March 31, 2004, from $77.0 million at December31, 2003, and were 29.4% of total deposits while savings accounts increased to$15.7 million from $14.8 million during the same period.  Certificates of deposit decreased to $137.3million at March 31, 2004, from $140.8 million at December 31, 2003.  The reduction of certificates of deposit isreflective of our excess liquidity position in that we were not bidding aggressivelyon public deposits during the past three months.

 

Certificates of deposit atMarch 31, 2004, which were scheduled to mature in one year or less, totaled$81.1 million.  Historically, maturingdeposits have generally remained with our bank and we believe that a significantportion of the deposits maturing in one year or less will remain with us uponmaturity.

 

*Contractual Obligations andCommercial Commitments.*  Thefollowing table presents our contractual obligations, defined as operatinglease obligations and principal payments due on non-deposit obligations withmaturities in excess of one year as of March 31, 2004, for the periodsindicated.

 
| **Contractual Cash  Obligations** |   | **Total**  | ** ** | **One Year  and Less** | ** ** | **One to  Three Years** | ** ** | **Four to  Five Years** | ** ** | **More than  Five Years** | ** ** |
|-----------------------------------|--------|------------|------------|------------------------|------------|-------------------------|------------|-------------------------|------------|---------------------------|------------|
|                              |   |       |       |                   |       |                    |       |                    |       |                      |       |
| Operating leases                  |   | $          | 103,391    |                   | $          | 100,191                 |       | $                       | 3,200      |                      | $          | — |   | $ | — |   |
| Service  contracts                |   | 2,420,000  |       | 660,000                |       | 1,760,000               |       | —                  |       | —                    |       |
| FHLB advances                     |   | 23,047,912 |       | 6,000,000              |       | 6,000,000               |       | 4,000,000               |       | 7,047,912                 |       |
| Other borrowings                  |   | 8,248,000  |       | —                 |       | —                  |       | —                  |       | 8,248,000                 |       |
|                              |   |       |       |                   |       |                    |       |                    |       |                      |       |
| Total  contractual obligations    |   | $          | 33,819,303 |                   | $          | 6,760,191               |       | $                       | 7,763,200  |                      | $          | 4,000,000 |   | $ | 15,295,912 |   |

 

*Liquidity.*  Our most liquid assets arecash and cash equivalents and investment securities available for sale.  The level of these assets is dependent onthe operating, financing, lending and investing activities during any givenperiod.  These liquid assets totaled$105.7 million at March 31, 2004, and $107.5 million at December 31, 2003.  During periods in which we are not able tooriginate a sufficient amount of loans and/or

 

12

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periods of high principal prepayments, weincrease our liquid assets by investing in short-term U. S. Government andagency securities or high-grade municipal securities.

 

Liquidity management is botha daily and long-term function of our strategy.  Excess funds are generally invested in short-terminvestments.  In the event we requirefunds beyond our ability to generate them internally, additional funds aregenerally available through the use of Federal Home Loan Bank advances, a lineof credit with the Federal Home Loan Bank or through sales of securities.  At March 31, 2004, we had outstandingFederal Home Loan Bank advances of $23.0 million and no borrowings outstandingon our line of credit with the Federal Home Loan Bank.  At March 31, 2004, our total borrowingcapacity with the Federal Home Loan Bank was $58.6 million.  We also had other borrowings of $8.2 millionat March 31, 2004, which included $8.2 million of subordinated debentures and$250,000 in repurchase agreements.  Wehave obtained a $9.0 million loan commitment from an unrelated financialinstitution to provide financing for the First Kansas acquisition.  On April 1, 2004, we borrowed $7.0 millionon this loan to consummate the acquisition of First Kansas.

 

At March 31, 2004, we hadoutstanding loan commitments, excluding standby letters of credit, of $32.1million.  We anticipate that sufficientfunds will be available to meet current loan commitments.  These commitments consist of letters ofcredit, unfunded lines of credit and commitments to finance real estate loans.

 

*Capital.*  The Federal Reserve Board hasestablished capital requirements for bank holding companies which generallyparallel the capital requirements for national banks under the Office of theComptroller of the Currency regulations. The regulations provide that such standards will generally be applied ona consolidated (rather than a bank-only) basis in the case of a bank holdingcompany with more than $150 million in total consolidated assets.

 

AtMarch 31, 2004, we continued to maintain a sound leverage ratio of 14.5% and atotal risk based capital ratio of 23.4%. As shown by the following table, our capital exceeded the minimum capitalrequirements at March 31, 2004 (dollars in thousands):

 
|                      |   | **Actual  Amount** |   | **Actual  Percent** |   | **Required  Percent** |   | **Required  Amount** |   |
|---------------------------|--------|--------------------|--------|---------------------|--------|-----------------------|--------|----------------------|--------|
| Leverage                  |   | $                  | 47,879 |                | 14.5   | %                     | 4.0    | %                    | $      | 13,224 |   |
| Tier 1 Capital            |   | $                  | 47,879 |                | 22.3   | %                     | 4.0    | %                    | $      | 8,593 |   |
| Total Risk Based  Capital |   | $                  | 50,237 |                | 23.4   | %                     | 8.0    | %                    | $      | 17,186 |   |

 

AtMarch 31, 2004, our subsidiary bank continued to maintain a sound leverageratio of 10.7% and a total risk based capital ratio of 17.7%.  As shown by the following table, our bank’scapital exceeded the minimum capital requirements at March 31, 2004 (dollars inthousands):

 
|                      |   | **Actual  Amount** |   | **Actual  Percent** |   | **Required  Percent** |   | **Required  Amount** |   |
|---------------------------|--------|--------------------|--------|---------------------|--------|-----------------------|--------|----------------------|--------|
| Leverage                  |   | $                  | 35,387 |                | 10.7   | %                     | 4.0    | %                    | $      | 13,258 |   |
| Tier 1 Capital            |   | $                  | 35,387 |                | 16.6   | %                     | 4.0    | %                    | $      | 8,540 |   |
| Total Risk Based  Capital |   | $                  | 37,745 |                | 17.7   | %                     | 8.0    | %                    | $      | 17,081 |   |

 

Banksand bank holding companies are generally expected to operate at or above theminimum capital requirements.  The aboveratios are well in excess of regulatory minimums and should allow us to operatewithout capital adequacy concerns.  TheFederal Deposit Insurance Corporation Improvement Act of 1991 establishes abank rating system based on the capital levels of banks.  As of March 31, 2004, we were rated “wellcapitalized”, which is the highest rating available under this capital-basedrating system.

 

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During December 2003, we issued $8.2 million in trust preferredsecurities.  In accordance with currentregulatory capital guidelines, this amount has been included in our Tier 1capital ratios as of March 31, 2004. Cash distributions on the securities are payable quarterly, aredeductible for income tax purposes and are included in interest expense in theconsolidated financial statements.

 

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**ITEM 3****. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK**

 

*Quantitative and QualitativeDisclosures About Market Risk*.  Our assets and liabilities are principally financial in natureand the resulting net interest income thereon is subject to changes in marketinterest rates and the mix of various assets and liabilities.  Interest rates in the financial marketsaffect our decision on pricing our assets and liabilities which impacts netinterest income, a significant cash flow source for us.  As a result, a substantial portion of ourrisk management activities relates to managing interest rate risk.

 

OurAsset/Liability Management Committee monitors the interest rate sensitivity ofour balance sheet using earnings simulation models and interest sensitivity GAPanalysis.  We have set policy limits ofinterest rate risk to be assumed in the normal course of business and monitorsuch limits through our simulation process.

 

Wehave been successful in meeting the interest rate sensitivity objectives setforth in our policy.  Simulation modelsare prepared to determine the impact on net interest income for the comingtwelve months, including one using rates at December 31, 2003, and forecastingvolumes for the twelve-month projection. This position is then subjected to a shift in interest rates of 100 and200 basis points rising and 100 basis points falling with an impact to our netinterest income on a one year horizon as follows:

 
| **Scenario**             |   | **$ change  in net interest income** |    | **% of net  interest income** |   |
|--------------------------|--------|--------------------------------------|---------|-------------------------------|--------|
| 100 basis point  rising  |   | $                                    | 297,471 |                          | 2.6    | % |
| 200 basis point  rising  |   | 580,195                              |    | 5.0                           | %      |
| 100 basis point  falling |   | (273,293                             | )       | (2.3                          | )%     |
|                          |        |                                      |         |                               |        |  |

 

We believe that no significant changes in ourinterest rate sensitivity position have occurred since December 31, 2003.  We also believe we are appropriatelypositioned for future interest rate movements, although we may experience somefluctuations in net interest income due to short-term timing differencesbetween the repricing of assets and liabilities.

 

*Safe Harbor Statement Under the Private SecuritiesLitigation Reform Act of 1995 - Forward-Looking Statements.*** **This document (including information incorporated by reference)contains, and future oral and written statements of the Company and itsmanagement may contain, forward-looking statements, within the meaning of suchterm in the Private Securities Litigation Reform Act of 1995, with respect tothe financial condition, results of operations, plans, objectives, futureperformance and business of the Company. Forward-looking statements, which may be based upon beliefs,expectations and assumptions of the Company’s management and on informationcurrently available to management, are generally identifiable by the use ofwords such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,”“may,” “will,” “would,” “could,” “should” or other similar expressions.  Additionally, all statements in thisdocument, including forward-looking statements, speak only as of the date theyare made, and the Company undertakes no obligation to update any statement inlight of new information or future events.

 

Ourability to predict results or the actual effect of future plans or strategiesis inherently uncertain.  Factors whichcould have a material adverse effect on our operations and future prospectsinclude, but are not limited to, the following:

 

•              The strength of the United States economy in generaland the strength of the local economies in which we conduct our operationswhich may be less favorable than expected and may result in, among otherthings, a deterioration in the credit quality and value of our assets.

 

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•              The economic impact of past and future terroristattacks, acts of war or threats thereof, and the response of the United Statesto any such threats and attacks.

 

•              The effects of, and changes in, federal, state andlocal laws, regulations and policies affecting banking, securities, insuranceand monetary and financial matters.

 

•              The effects of changes in interest rates (includingthe effects of changes in the rate of prepayments our assets) and the policiesof the Board of Governors of the Federal Reserve System.

 

•              Our ability to compete with other financialinstitutions as effectively as we currently intend due to increases incompetitive pressures in the financial services sector.

 

•              Our inability to obtain new customers and to retainexisting customers.

 

•              The timely development and acceptance of productsand services, including products and services offered through alternativedelivery channels such as the Internet.

 

•              Technological changes implemented by us and by otherparties, including third party vendors, which may be more difficult or moreexpensive than anticipated or which may have unforeseen consequences to us andour customers.

 

•              Our ability to develop and maintain secure andreliable electronic systems.

 

•              Our ability to retain key executives and employeesand the difficulty that we may experience in replacing key executives andemployees in an effective manner.

 

•              Consumer spending and saving habits which may changein a manner that affects our business adversely.

 

•              Business combinations and the integration ofacquired businesses which may be more difficult or expensive than expected.

 

•              The costs, effects and outcomes of existing orfuture litigation.

 

•              Changes in accounting policies and practices, as maybe adopted by state and federal regulatory agencies and the FinancialAccounting Standards Board.

 

•              Our ability to manage the risks associated with theforegoing as well as anticipated.

 

These risks anduncertainties should be considered in evaluating forward-looking statements andundue reliance should not be placed on such statements.  Additional information concerning us and ourbusiness, including other factors that could materially affect our financialresults, is included in our filings with the Securities and ExchangeCommission.

 

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**ITEM 4****.  CONTROLS AND PROCEDURES**

 

Anevaluation was performed under the supervision and with the participation ofour management, including the Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of the design and operation of our disclosurecontrols and procedures (as defined in Rule 13a-15(e) promulgated under theSecurities and Exchange Act of 1934, as amended) as of March 31, 2004.  Based on that evaluation, our management,including the Chief Executive Officer and Chief Financial Officer, concludedthat our disclosure controls and procedures were effective.  There have been no significant changes inour internal controls or in other factors that could significantly affectinternal controls.

 

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**LANDMARK BANCORP, INC. ANDSUBSIDIARY**

**PART II****– OTHERINFORMATION**

 

**ITEM 1.  LEGAL PROCEEDINGS.**

 

There are no materialpending legal proceedings to which the Company or its subsidiaries is a partyother than ordinary routine litigation incidental to their respectivebusinesses.

 

**ITEM 2.  CHANGES IN SECURITIES, USE OF PROCEEDS ANDISSUER PURCHASES OF EQUITY SECURITIES.**

 

The following table providesinformation about purchases by the Company and its affiliated purchasers duringthe quarter ended March 31, 2004, of equity securities that are registered bythe Company pursuant to Section 12 of the Exchange Act:

 
| **Period**           |   | **Total  Number  of Shares  Purchased(1)** |   | **Average  Price Paid  per Share** |   | **Total  Number of  Shares Purchased   as Part of a  Publicly  Announced Plan(2)** |   | **Maximum  Number  (or Approximate  Dollar Value) of  Shares that May  Yet Be Purchased  Under the Plan** |   |
|----------------------|--------|--------------------------------------------|--------|------------------------------------|--------|------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|--------|
|                 |   |                                       |   |                               |   |                                                                               |   |                                                                                                      |   |
| January 1-31,  2004  |   | —                                     |   | —                             |   | —                                                                             |   | 77,888                                                                                                    |   |
| February 1-29,  2004 |   | 8,775                                      |   | $                                  | 30.12  |                                                                               | 8,775  |                                                                                                      | 69,113 |   |
| March 1-31, 2004     |   | 10,696                                     |   | $                                  | 30.00  |                                                                               | 10,696 |                                                                                                      | 58,417 |   |
| Total                |   | 19,471                                     |   | $                                  | 30.06  |                                                                               | 19,471 |                                                                                                      | 58,417 |   |

 

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(1)   We repurchased an aggregate of42,383 shares of our common stock pursuant to the repurchase program that wepublicly announced in November 2003 (the Program).

(2)   Our Board of Directors approvedthe repurchase by us up to an aggregate of 100,800 shares of our common stockpursuant to the Program.  Unlessterminated earlier by resolution of the Board of Directors, the Program willexpire when we have repurchased all shares authorized for repurchasethereunder.

 

**ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.**

 

None

 

**ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITYHOLDERS.**

 

None

 

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**ITEM 5****.  OTHER INFORMATION.**

 

None

 

**ITEM 6****.  EXHIBITS ANDREPORTS ON FORM 8-K.**

 
| A.     |   | Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                                                |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                |
|   |   | Exhibit 31.1                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Certificate of Chief  Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                |
|   |   | Exhibit 31.2                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Certificate of Chief  Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                |
|   |   | Exhibit 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 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                |
|   |   | Exhibit 32.2                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 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 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                |
|   |
| B.     |   | Reports on Form 8-K                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   | A report on Form 8-K was  filed on April 30, 2004, to report pursuant to Item 12 that the Company had  issued a press release announcing earnings for the three months ended March  31, 2004, and the declaration of a cash dividend to stockholders.                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   | A report on Form 8-K was  filed on April 1, 2004, to report pursuant to Item 2 that the Company had  issued a press release announcing the acquisition of First Kansas Financial  Corporation.  On May 10, 2004, the  Company amended this report on Form 8-K/A to report First Kansas Financial  Corporation’s historical financial statements and pro forma financial  information for the combined companies as of March 31, 2004. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   | A report on Form 8-K was  filed on February 6, 2004, to report under Item 12 that the Company had  issued a press release announcing earnings for the three months ended and  year ended December 31, 2003.                                                                                                                                                                                                                                     |

 

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** **

**SIGNATURE****S**

 

Pursuant to the requirementsof the Securities Exchange Act of 1934, the Registrant has duly caused thisreport to be signed on its behalf by the undersigned thereunto duly authorized.

 
|                     | LANDMARK BANCORP, INC.                                            |
|--------------------------|-------------------------------------------------------------------|
|                     |                                                              |
|                     |                                                              |
| Date:  May 14, 2004 | /s/ Patrick L. Alexander                                          |   |
|                     | Patrick L. Alexander                                              |
|                     | President and Chief  Executive Officer                            |
|                     |                                                              |
|                     |                                                              |
| Date:  May 14, 2004 | /s/ Mark A. Herpich                                               |   |
|                     | Mark A. Herpich                                                   |
|                     | Vice President, Secretary, Treasurer  and Chief Financial Officer |

 

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