69  LANDMARK BANCORP, INC. AND SUBSIDIARY  Notes to Consolidated Financial Statements  (1) Summary of Significant Accounting Policies  Loans and Allowance for Loan Losses.   Loans receivable that management has the intent and ability to hold for  the foreseeable future or until maturity or pay-off are reported at their outstanding principal balances, net of undisbursed  loan proceeds, the allowance for loan losses, and any deferred fees or costs on originated loans. Origination fees received  on loans held in portfolio and the estimated direct costs of origination are deferred and amortized to interest income using  the interest method.  Other investments included in the Company’s investment portfolio are investments acquired for regulatory  purposes and borrowing availability and are accounted for at cost. The cost of such investments represents their redemption  value as such investments do not have a readily determinable fair value.  The Company performs quarterly reviews of the investment portfolio to determine if investment securities have any  declines in fair value which might be considered other-than-temporary. The initial review begins with all securities in an  unrealized loss position. The Company’s assessment of other-than-temporary impairment is based on its judgment of the  specific facts and circumstances impacting each individual security at the time such assessments are made. The Company  reviews and considers all factual information, including expected cash flows, the structure of the security, the credit quality  of the underlying assets and the current and anticipated market conditions. Any credit-related impairment on debt securities  is recorded through a charge to earnings. If an equity security is determined to be other-than-temporarily impaired, the  entire impairment is recorded through a charge to earnings.  Investment Securities. The Company has classified its investment securities portfolio as available-for-sale, with  the exception of certain investments held for regulatory purposes. The Company carries its available-for-sale investment  securities at fair value and employs valuation techniques which utilize quoted prices or observable inputs when those inputs  are available. These observable inputs reflect assumptions that market participants use in pricing the security, developed  based on market data obtained from sources independent of the Company. When such information is not available, the  Company employs valuation techniques which utilize unobservable inputs, or those which reflect the Company’s own  assumptions, based on the best information available in the circumstances. These valuation methods typically involve  estimated cash flows and other financial modeling techniques. Changes in underlying factors, assumptions, estimates, or  other inputs to the valuation techniques could have a material impact on the Company’s future financial condition and  results of operations. Fair value measurements are classified as Level 1 (quoted prices), Level 2 (based on observable  inputs) or Level 3 (based on significant unobservable inputs) and are discussed in more detail in Note 12 to the consolidated  financial statements. Available-for-sale securities are recorded at fair value with unrealized gains and losses excluded from  earnings and reported as a separate component of stockholders’ equity, net of taxes, until realized. Purchase premiums and  discounts on investment securities are amortized/accreted into interest income over the estimated lives of the securities using  the interest method. Realized gains and losses on sales of available-for-sale securities are recorded on a trade date basis and  are calculated using the specific identification method. Cash and cash equivalents. Cash and cash equivalents include cash on hand and amounts due from banks with  original maturities of fewer than 90 days.  Subsequent Events. The Company evaluates subsequent events and transactions that occur after the balance sheet  date up to the date that financial statements are filed for potential recognition or disclosure. Any material events that occur  between the balance sheet date and filing date are disclosed as subsequent events while the consolidated financial statements  are adjusted to reflect any conditions that exist at the balance sheet date.  Principles of Consolidation. The accompanying consolidated financial statements include the accounts of  Landmark Bancorp, Inc. (the “Company”) and its wholly owned subsidiary, Landmark National Bank (the “Bank”). All  intercompany balances and transactions have been eliminated in consolidation. The Bank, considered a single operating  segment, is principally engaged in the business of attracting deposits from the general public and using such deposits,  together with borrowings and other funds, to originate one-to-four family residential real estate, construction and land,  commercial real estate, commercial, agriculture, municipal and consumer loans. 