Hello, everyone, and welcome to the Landmark Bancorp Q1 Earnings Call. My name is Seth, and I'll be the operator for your call today. [Operator Instructions] I will now hand the floor over to Michael Scheopner, President and Chief Executive Officer. Please go ahead.

Thank you, and good morning. Thank you for joining our call today to discuss Landmark's earnings and results of operations for the first quarter ending 2022. Joining the call with me to discuss various aspects of our first quarter performance is Mark Herpich, Chief Financial Officer of the company; and the company's Chief Credit Officer, Raymond McLanahan. Before we get started, I would like to remind our listeners that some of the information we will be providing today falls under the guidelines for forward-looking statements as defined by the Securities and Exchange Commission. As part of these guidelines, I must point out that any statements made during this presentation that discuss our hopes, beliefs, expectations or predictions of the future are forward-looking statements, and our actual results could differ materially from those expressed. Additional information on these factors is included from time to time in our 10-K and 10-Q filings, which can be obtained by contacting the company or the SEC. Landmark reported net earnings of $3.1 million during the first quarter of 2022 compared to $5.4 million during the first quarter of last year. The decline in net earnings in the first quarter of this year compared to the same quarter last year, resulting from decreased mortgage banking activity, lower interest income on loans, partly a result of a decrease in Paycheck Protection Program loans and lower gains on sales of investment securities. Earnings per share on a fully diluted basis for the first quarter 2022 was $0.62. The return on average assets for the first quarter was 0.97%. The return on average equity for the first quarter was 9.59%, and our efficiency ratio was 71.9%. During the first quarter 2022, total gross loans declined 4.4%, mainly due to lower PPP loans, coupled with decreased lines of credit utilization…

Thanks, Michael, and good morning to everyone. Michael has already alluded to our financial performance in 2022. And now I'd like to talk further about our first quarter 2020 results. Net income of $3.1 million in the first quarter of 2022 was lower by $2.2 million, mainly due to a decline in gains on sales of loans, lower net interest income and lower gains on sales of investment securities. In the first quarter of 2022, net interest income totaled $8.6 million, a decrease of $946,000 or 9.9% in comparison to the same period last year. While on a linked quarter basis, net interest income was down by $491,000. The decline in net interest income from the first quarter last year as well as the fourth quarter of 2021 was mainly the result of decreased interest this quarter on Paycheck Protection Program, or PPP and other commercial-related loans, but partly offset by lower deposit costs. Interest on PPP loans in the first quarter of 2022 declined by $636,000 compared to the first quarter last year, while the PPP balance interest on the PPP balance loans declined by $112.1 million over the same period. The average tax equivalent yield on the loan portfolio has declined this quarter to 4.59% compared to 4.67% in the same period last year and 4.81% last quarter. Interest income on investment securities increased to $186,000 this quarter compared to the same period last year due to a growth in average investment balances of $120.4 million, but offset by lower yields. The yield on investment securities declined from 2.37% in the first quarter 2021 to 1.83% in the current quarter, which was an increase from 1.77% in the fourth quarter of 2021. The investment portfolio growth in the first quarter of 2022 resulted from deploying excess cash balances…

Thank you, Mark, and good morning to everyone. Gross loans outstanding as of March 31, 2022, totaled $633.5 million and declined $28.8 million this quarter, mainly due to lower PPP loans in our portfolio. Additionally, we experienced declines in our agricultural loan portfolio and our commercial loan portfolio. During the current quarter, SBA PPP loans outstanding declined $12 million and ended at $5.2 million. During the first quarter, our core portfolio, excluding PPP loans, decreased $16.9 million or an annualized rate of 10.7%. This decline was mostly due to an $11.8 million decrease in our agricultural loan portfolio, resulting primarily from decreased line usage. We believe this decrease in line usage is due to strong cash positions among our ag borrowers as well as a slightly slower start to the planting season. While our other commercial-related loans declined $8.9 million compared to the prior quarter, these loans are still 4.8% higher than in the same quarter last year. We remain focused on growing our commercial and commercial real estate portfolios. Competition for quality opportunities is present in all of our markets. However, we believe we have the right mix of talent and tools available to navigate any challenges. We believe that despite a rising rate environment, we will continue to see growth opportunities within our mortgage 1-4 family portfolio. We continue to see consumer demand for our portfolio [ 71 ARM ] product as an alternative to conventional 30-year fixed rate mortgage loan products. Turning to credit quality. Credit quality within the portfolio continues to improve. Nonperforming loans, which primarily consist of nonaccrual loans and accruing loans greater than 90 days past due, totaled $4.7 million or 0.74% of gross loans as of March 31, 2022. This represents a decline of $554,000 from the previous quarter and is largely due…

Thanks, Raymond. And Mark, thank you for your comments earlier. Before we go to questions, I do want to summarize by saying our first quarter of 2022 reflected a continued trend of positive operating results for Landmark. I want to express my thanks and appreciation to all of the associates at Landmark National Bank. Their daily focus on executing our strategies, delivering extraordinary service to our clients and communities and carrying out our company vision that everyone starts as a customer and leaves as a friend is a key to our success. With that, I'll open the call up to questions that anyone might have.

[Operator Instructions] The first question today comes from John Rodis.

Glad to see things are going well for you guys. Just curious on the securities portfolio. What sort of yields were you getting on new purchases during the quarter?

It kind of fluctuated quite a bit from the beginning of the quarter to the end of the quarter, John, but towards the end, we were getting yields in the mid-2s and probably averaged closer to the 2% range over the course of the quarter. And now we're starting to get even better than that since quarter end.

Would you expect to continue adding to that portfolio sort of in a meaningful way? Or obviously, I think that I'm sure some of it depends on what sort of loan growth you see, too.

Yes. You're exactly right. We're balancing those 2 components, but I would expect to see still some meaningful growth in the investment portfolio. We're still sitting on some excess cash at this point in time as we kind of manage or evaluate our runoff potential in deposit totals, which we haven't seen really any yet to the contrary, we continue to see deposit growth. But the level of cash that we have currently sitting on the balance sheet of $106 million at quarter end as still too high for us, and we know that the interest rates are moving up to continue to systematically keep putting money into the investment portfolio and still not sure if we're ready to go long yet on investments, but staying so that if we can reinvest in a couple of years as well, if rates continue to go up, but we'll be mindful of keeping cash for loan growth as well.

Maybe just to follow up on the loan growth. Michael, just sort of even though loans were down a little bit, excluding PPP in the quarter, your thoughts for the growth outlook for the remainder of the year?

We're still seeing Jonathan, we're still seeing good pipeline activity really across the franchise and getting a chance to look at some new deals. I would say that as we continue to look at what our projections are, our loan growth projections would still near kind of what we budgeted from the standpoint of mid-single-digit loan growth for the year. Really the impact, as we noted in the comments during the call, really year-to-date has been more of a function of decreased line utilization versus an erosion in the portfolio.

Okay. And what about paydowns? I mean I guess that's part of the lower utilization, but how paydowns trended in the last few quarters?

Really just really the agribusiness decrease in the agribusiness portfolio has been probably the most impactful. Everything else has been pretty much from a trend line standpoint, nothing out of the ordinary.

[Operator Instructions] As we have no further questions on the call, I will hand the floor back to Michael.

Okay. Thank you, and I do want to thank everyone for participating in today's earnings call. I truly appreciate your continued support and the confidence that you have in the company, and I look forward to sharing news related to our second quarter 2022 results at our next earnings conference call. Thank you.

This concludes today's call. Thank you all very much for joining. You may now disconnect your lines.