LINKBANCORP, Inc. Announces Second Quarter 2024 Earnings

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July 29, 2024 4:40 PM EDT

HARRISBURG, Pa., July 29, 2024 /PRNewswire/ -- LINKBANCORP, Inc. (NASDAQ: LNKB) (the "Company"), the parent company of LINKBANK (the "Bank") reported net income of $5.8 million, or $0.16 per diluted share, for the quarter ended June 30, 2024.  Excluding expenses associated with the sale of its New Jersey branches and additional branch consolidations, adjusted earnings were $6.3 million1, or $0.171 per diluted share for the second quarter of 2024.

Second Quarter 2024 Highlights

  • Total loans2 increased $63.6 million, or 11.4% annualized from $2.25 billion at March 31, 2024 to $2.31 billion at June 30, 2024, led by strong growth of $28.5 million in commercial & industrial loans over the period.
  • Total deposits2 increased $71.3 million, or 12.0% annualized from $2.39 billion at March 31, 2024 to $2.46 billion at June 30, 2024, including growth of $38.4 million in noninterest bearing demand account balances at quarter end.
  • Noninterest expense decreased $350 thousand quarter over quarter to $18.9 million in the second quarter of 2024. Excluding merger expenses and costs associated with the Branch Sale and branch consolidations, adjusted noninterest expense was $18.3 million in the second quarter of 2024, a $925 thousand decrease compared to $19.2 million in the first quarter of 2024.1
  • Net interest income before provision for credit losses was $24.5 million for the second quarter of 2024 compared to $24.9 million in the first quarter of 2024, and was impacted by a quarter-over-quarter decline in purchase accounting accretion as well as increased funding costs due to continued competition for deposits to support quality loan growth and maintain prudent on-balance sheet liquidity. Net interest margin was 3.83% for the second quarter of 2024 compared to 4.03% for the first quarter of 2024.
  • Non-performing assets were $10.6 million, representing 0.37% of total assets at June 30, 2024, compared to $6.7 million, representing 0.24% of total assets at March 31, 2024. The allowance for credit losses-loans was 1.20% of total loans held for investment at June 30, 2024, compared to 1.06% at March 31, 2024. The allowance was impacted by the reclassification of loans related to the Branch Sale as assets held for sale, offset by net loan growth in the quarter, as well as a loan acquired in the merger with Partners Bancorp (the "Partners Merger") which experienced credit deterioration that was present at the time of the merger and required a day one purchase accounting adjustment that increased the allowance for credit losses by $2.3 million and increased goodwill by $1.8 million.
  • On May 9, 2024, the Company announced that LINBANK had entered into a definitive purchase and assumption agreement for the sale of the Bank's banking operations and three branches in New Jersey, including related loans and deposits (the "Branch Sale"). The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in the second half of 2024.

As a result of the Branch Sale announcement, associated assets and liabilities were reclassified as held for sale, impacting the Company's allowance for credit losses and purchase accounting amortization related to the loans held for sale. 

"We are pleased by the consistent improvement in performance achieved through the hard work and dedication of all of our teams, evidenced by the results of the second quarter of 2024, including increased profitability metrics and strong commercial loan and core deposit growth," said Andrew Samuel, Chief Executive Officer of LINKBANCORP.  "The consolidation of three client solution centers was completed during the quarter and we remain on target to conclude the pending sale of the New Jersey operations in the second half of the year."  He continued, "We continue to be very focused on achieving further improvements in profitability and customer experience to meet our goals for the second half of the year."

1 See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure.

2 Total loans and total deposits include balances held for sale in the Branch Sale of $116.2 million and  $96.8 million at June 30, 2024.  These balances in the first quarter of 2024 were $115.9 million and $105.6 million respectively at March 31, 2024.

Income Statement

Net interest income before the provision for credit losses for the second quarter of 2024 was $24.5 million compared to $24.9 million in the first quarter of 2024. Net interest margin was 3.83% for the second quarter of 2024 compared to 4.03% for the first quarter of 2024.  For the second quarter of 2024, net interest income was impacted by the amortization of purchase accounting adjustments, as interest income from purchase accounting accretion during this period was approximately $568 thousand less than purchase accounting accretion recognized in the first quarter of 2024.  Cost of funds increased to 2.43% for the second quarter of 2024 compared to 2.33% for the first quarter of 2024, reflecting continued pressure from competition for deposits in the Bank's markets.    

Noninterest income increased quarter-over-quarter to $1.9 million for the second quarter of 2024 compared to $1.7 million for the first quarter of 2024, and included an $85 thousand increase in service charges on deposit accounts.

Noninterest expense for the second quarter of 2024 was $18.9 million compared to $19.3 million for the first quarter of 2024.  Excluding one-time merger expenses and costs associated with the Branch Sale and branch consolidations of $631 thousand in the second quarter of 2024 and $56 thousand in the first quarter of 2024, noninterest expense decreased by $925 thousand to $18.3 million in the second quarter of 2024 from $19.2 million in the first quarter1.  This improvement was largely driven by a $1.2 million decrease in salaries and employee benefits following the reduction in headcount relating to the Partners Merger.

Income tax expense was $1.6 million for the second quarter of 2024, reflecting an effective tax rate of 22.0%.

Balance Sheet

Total assets were $2.86 billion at June 30, 2024 compared to $2.79 billion at March 31, 2024 and $1.31 billion at June 30, 2023.  Deposits and net loans as of June 30, 2024 totaled $2.36 billion and $2.17 billion, respectively, compared to deposits and net loans of $2.28 billion and $2.11 billion, respectively, at March 31, 2024 and $1.03 billion and $959.3 million, respectively, at June 30, 2023.  Deposits and net loans exclude balances held for sale in the Branch Sale of $96.8 million and $116.2 million, respectively, at June 30, 2024, which are reflected in liabilities held for sale and assets held for sale.  These balances were $105.6 million and $115.9 million respectively at March 31, 2024. 

Including loans held for sale, total loans increased $63.6 million, from $2.25 billion at March 31, 2024 to $2.31 billion at June 30, 2024, led by strong growth of $28.5 million in commercial & industrial loans over the period.  Total commercial loan commitments for the second quarter of 2024 were $117.9 million with funded balances of $81.8 million. The average commercial loan commitment originated during the second quarter of 2024 totaled approximately $771 thousand with an average outstanding funded balance of $534 thousand.

Including deposits held for sale, total deposits at June 30, 2024 totaled $2.46 billion, an increase of $71.3 million from $2.39 billion at March 31, 2024.  This increase included growth of $38.4 million in noninterest bearing demand accounts and $31.2 million in interest bearing demand, money market and savings account balances.

The Company maintains strong on-balance sheet liquidity, as cash and cash equivalents increased to $181.7 million at June 30, 2024 compared to $172.3 million at March 31, 2024.

Shareholders' equity increased from $268.2 million at March 31, 2024 to $271.4 million at June 30, 2024 primarily as a result of a $3.1 million increase in retained earnings.  Book value per share increased to $7.27 at June 30, 2024 compared to $7.18 at March 31, 2024.  Tangible book value per share increased to $5.07 at June 30, 2024 compared to $5.00 at March 31, 20241.

1 See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure.

Asset Quality

In the second quarter of 2024, the Company did not record a provision for credit losses, compared to a $40 thousand provision for credit losses in the first quarter of 2024.  Additional provision was not required due in part to reclassification of loans related to the Branch Sale as assets held for sale, offset by net loan growth in the quarter, as well as an increase in the allowance through an adjustment to goodwill related to purchase accounting described below.

As of June 30, 2024, the Company's non-performing assets were $10.6 million, representing 0.37% of total assets, compared to $6.7 million, representing 0.24% of total assets at March 31, 2024.  The increase relates primarily to a single loan for a commercial property acquired in the Partners Merger with an outstanding principal balance of approximately $3.9 million at June 30, 2024.  Loans 30-89 days past due at June 30, 2024 were $5.15 million, representing 0.24% of total loans, an improvement compared to $15.3 million or 0.72% of loans at March 31, 2024.

The allowance for credit losses-loans was $26.3 million, or 1.20% of total loans held for investment at June 30, 2024, compared to $23.8 million, or 1.06% of total loans held for investment at March 31, 2024.  The increase was driven primarily by  a specific allowance related to a loan acquired in the Partners Merger as described above, which experienced credit deterioration that was present at the time of the merger and required a day one purchase accounting adjustment that increased the allowance for credit losses by $2.3 million and increased goodwill by $1.8 million. The allowance for credit losses-loans to nonperforming assets was 248.26% at June 30, 2024, compared to 357.18% at March 31, 2024.

Capital

The Bank's regulatory capital ratios were well in excess of regulatory minimums to be considered "well capitalized" as of June 30, 2024. The Bank's Total Capital Ratio and Tier 1 Capital Ratio were 11.09% and 10.30% respectively, at June 30, 2024, compared to 10.62% and 9.92%, respectively, at December 31, 2023 and 11.04% and 10.24%, respectively, at March 31, 2023. The Company's ratio of Tangible Common Equity to Tangible Assets was 6.82%1 at March 31, 2024.

1 See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure.

ABOUT LINKBANCORP, Inc.

LINKBANCORP, Inc. was formed in 2018 with a mission to positively impact lives through community banking. Its subsidiary bank, LINKBANK, is a Pennsylvania state-chartered bank serving individuals, families, nonprofits and business clients throughout Pennsylvania, Maryland, Delaware, Virginia, and New Jersey through 26 client solutions centers and www.linkbank.com. LINKBANCORP, Inc. common stock is traded on the Nasdaq Capital Market under the symbol "LNKB". For further company information, visit ir.linkbancorp.com.

Forward Looking Statements

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of current or historical fact and involve substantial risks and uncertainties. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "may," "will," "should," and other similar expressions can be used to identify forward-looking statements. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to the following: costs or difficulties associated with newly developed or acquired operations; risks related to the integration of the merger with Partners; the timing and receipt of regulatory approvals to complete the Branch Sale; changes in general economic trends, including inflation and changes in interest rates; increased competition; changes in consumer demand for financial services; our ability to control costs and expenses; adverse developments in borrower industries and, in particular, declines in real estate values; changes in and compliance with federal and state laws that regulate our business and capital levels; our ability to raise capital as needed; and the effects of any cybersecurity breaches. The Company does not undertake, and specifically disclaims, any obligation to publicly revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements, except as required by law. Accordingly, you should not place undue reliance on forward-looking statements. 

Given that the Company's merger with Partners Bancorp ("Partners") was completed on November 30, 2023 (the "Partners Merger"), reported results prior to the fourth quarter of 2023 included in the following tables reflect legacy LINKBANCORP results only.

LB-E
LB-D

 

LINKBANCORP, Inc. and Subsidiaries

Consolidated Balance Sheet (Unaudited)





June 30, 2024


March 31, 2024


December 31, 2023


September 30, 2023


June 30, 2023

(In Thousands, except share and per share data)











ASSETS











Noninterest-bearing cash equivalents


$          14,516


$          13,552


$               13,089


$                   5,447


$            4,736

Interest-bearing deposits with other institutions


167,141


158,731


67,101


62,532


118,438

Cash and cash equivalents


181,657


172,283


80,190


67,979


123,174

Certificates of deposit with other banks


—


—


—


249


498

Securities available for sale, at fair value


140,121


133,949


115,490


78,779


83,620

Securities held to maturity, net of allowance for credit losses


35,343


36,109


36,223


37,266


38,220

Loans receivable, gross


2,193,197


2,129,919


2,128,284


978,912


969,533

Allowance for credit losses - loans


(26,288)


(23,842)


(23,767)


(9,964)


(10,228)

Loans receivable, net


2,166,909


2,106,077


2,104,517


968,948


959,305

Investments in restricted bank stock


4,928


4,286


3,965


3,107


5,544

Premises and equipment, net


18,364


20,102


20,130


6,414


6,292

Right-of-Use Asset – premises


13,970


14,577


15,497


9,727


9,896

Bank-owned life insurance


49,616


49,230


48,847


24,732


24,554

Goodwill and other intangible assets


82,129


81,494


82,701


36,715


36,774

Deferred tax asset


22,024


22,717


24,153


6,880


6,571

Assets held for sale


118,362


118,115


115,499


—


—

Accrued interest receivable and other assets


25,170


26,730


22,113


14,899


14,024

TOTAL ASSETS


$    2,858,593


$    2,785,669


$          2,669,325


$            1,255,695


$     1,308,472

LIABILITIES











Deposits:











Demand, noninterest bearing


$       661,292


$       618,277


$             624,780


$               210,404


$        240,729

Interest bearing


1,699,220


1,662,124


1,574,019


831,368


794,113

Total deposits


2,360,512


2,280,401


2,198,799


1,041,772


1,034,842

Long-term borrowings


40,000


40,000


—


—


74,899

Short-term borrowings


—


—


10,000


15,000


—

Note payable


578


584


590


—


—

Subordinated debt


61,706


61,573


61,444


40,354


40,398

Lease liabilities


14,746


15,357


16,361


9,728


9,896

Liabilities held for sale


96,916


105,716


99,777


—


—

Accrued interest payable and other liabilities


12,726


13,795


16,558


7,490


5,985

TOTAL LIABILITIES


2,587,184


2,517,426


2,403,529


1,114,344


1,166,020

SHAREHOLDERS' EQUITY











Preferred stock


—


—


—


—


—

Common stock


370


369


369


162


162

Surplus


263,795


263,577


263,310


127,856


127,818

Retained earnings


10,826


7,724


4,843


19,062


19,039

Accumulated other comprehensive loss


(3,582)


(3,427)


(3,209)


(5,729)


(4,567)

        Total equity attributable to parent


271,409


268,243


265,313


141,351


142,452

        Noncontrolling interest in consolidated subsidiary


—


—


483


—


—

TOTAL SHAREHOLDERS' EQUITY


271,409


268,243


265,796


141,351


142,452

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$   2,858,593


$    2,785,669


$         2,669,325


$           1,255,695


$     1,308,472

Common shares outstanding


37,356,278


37,348,151


37,340,700


16,235,871


16,228,440

 

LINKBANCORP, Inc. and Subsidiaries

Consolidated Statements of Operations (Unaudited)





























Three Months Ended



Six Months Ended



6/30/2024


3/31/2024


6/30/2023




6/30/2024


6/30/2023

(In Thousands, except share and per share data)













INTEREST AND DIVIDEND INCOME













Loans receivable, including fees


$        36,112


$            36,125


$            12,499




$         72,237


$            24,261

Other


3,337


2,650


1,827




5,987


3,055

Total interest and dividend income


39,449


38,775


14,326




78,224


27,316

INTEREST EXPENSE













Deposits


13,071


11,847


5,242




24,918


9,759

Other Borrowings


932


1,086


558




2,018


645

Subordinated Debt


962


958


437




1,920


869

Total interest expense


14,965


13,891


6,237




28,856


11,273

NET INTEREST INCOME BEFORE
   PROVISION FOR (CREDIT TO) CREDIT LOSSES


24,484


24,884


8,089




49,368


16,043

Provision for (credit to) credit losses


—


40


(493)




40


(200)

NET INTEREST INCOME AFTER
   PROVISION FOR CREDIT LOSSES


24,484


24,844


8,582




49,328


16,243

NONINTEREST INCOME













Service charges on deposit accounts


865


780


197




1,645


396

Bank-owned life insurance


386


383


170




769


310

Net realized gains (losses) on the sale of debt securities


4


—


—




4


(2,370)

Gain on sale of loans


12


50


296




62


296

Other


591


516


223




1,107


401

Total noninterest income


1,858


1,729


886




3,587


(967)

NONINTEREST EXPENSE













Salaries and employee benefits


9,941


11,118


4,037




21,059


8,157

Occupancy


1,559


1,578


696




3,137


1,403

Equipment and data processing


1,824


1,826


893




3,650


1,586

Professional fees


788


748


418




1,536


799

FDIC insurance


545


352


184




897


343

Bank Shares Tax


760


591


278




1,351


556

Intangible amortization


1,204


1,207


59




2,411


120

Merger & restructuring expenses


631


56


315




687


902

Advertising


241


234


104




475


191

Other


1,407


1,540


832




2,947


1,496

Total noninterest expense


18,900


19,250


7,816




38,150


15,553

Income (loss) before income tax expense (benefit) 


7,442


7,323


1,652




14,765


(277)

Income tax expense (benefit) 


1,638


1,597


305




3,235


(70)

NET  INCOME (LOSS)


$         5,804


$             5,726


$             1,347




$       11,530


$              (207)














EARNINGS (LOSS) PER SHARE, BASIC


$           0.16


$               0.15


$               0.08




$           0.31


$             (0.01)

 EARNINGS (LOSS) PER SHARE, DILUTED


$           0.16


$               0.15


$               0.08




$           0.31


$             (0.01)

WEIGHTED-AVERAGE COMMON SHARES
   OUTSTANDING,













BASIC


36,970,768


36,962,005


16,228,069




36,966,371


15,856,574

DILUTED


37,040,748


37,045,230


16,228,069




37,042,895


15,856,574

 

LINKBANCORP, Inc. and Subsidiaries

Financial Highlights (Unaudited)












For the Three Months Ended


For the Six Months Ended

('Dollars In Thousands, except per share data)

6/30/2024


3/31/2024


6/30/2023


6/30/2024


6/30/2023

Operating Highlights










Net Income (loss)

$           5,804


$                  5,726


$                  1,347


$            11,530


$                  (207)

Net Interest Income

24,484


24,884


8,089


49,368


16,043

Provision for (credit to) Credit Losses

-


40


(493)


40


(200)

Non-Interest Income

1,858


1,729


886


3,587


(967)

Non-Interest Expense

18,900


19,250


7,816


38,150


15,553

Earnings (loss) per Share, Basic

0.16


0.15


0.08


0.31


(0.01)

Adjusted Earnings per Share, Basic (2)

0.17


0.16


0.10


0.33


0.15

Earnings (loss) per Share, Diluted

0.16


0.15


0.08


0.31


(0.01)

Adjusted Earnings per Share, Diluted (2)

0.17


0.16


0.10


0.33


0.15











Selected Operating Ratios










Net Interest Margin

3.83 %


4.03 %


2.81 %


3.92 %


2.86 %

Annualized Return on Assets ("ROA")

0.84 %


0.86 %


0.43 %


0.85 %


-0.03 %

Adjusted ROA2

0.91 %


0.86 %


0.51 %


0.89 %


0.39 %

Annualized Return on Equity ("ROE")

8.65 %


8.63 %


3.81 %


8.61 %


-0.30 %

Adjusted ROE2

9.39 %


8.70 %


4.51 %


9.04 %


3.42 %

Efficiency Ratio

71.75 %


72.33 %


87.09 %


72.04 %


103.16 %

Adjusted Efficiency Ratio3

69.34 %


72.12 %


83.58 %


70.75 %


83.98 %

Noninterest Income to Avg. Assets

0.27 %


0.26 %


0.28 %


0.26 %


-0.16 %

Noninterest Expense to Avg. Assets

2.73 %


2.88 %


2.51 %


2.80 %


2.56 %






















6/30/2024


3/31/2024


12/31/2023


9/30/2023


6/30/2023

Financial Condition Data










Total Assets

$    2,858,593


$           2,785,669


$           2,669,325


$       1,255,695


$          1,308,472

Loans Receivable, Net

2,166,909


2,106,077


2,104,517


968,948


959,305











     Noninterest-bearing Deposits

661,292


618,277


624,780


210,404


240,729

     Interest-bearing Deposits

1,699,220


1,662,124


1,574,019


831,368


794,113

Total Deposits

2,360,512


2,280,401


2,198,799


1,041,772


1,034,842











Selected Balance Sheet Ratios










Total Capital Ratio1

11.09 %


11.04 %


10.62 %


12.92 %


12.88 %

Tier 1 Capital Ratio1

10.30 %


10.24 %


9.92 %


12.37 %


12.29 %

Common Equity Tier 1 Capital Ratio1

10.30 %


10.24 %


9.92 %


12.37 %


12.29 %

Leverage Ratio1

9.17 %


9.23 %


14.13 %


10.71 %


10.41 %

Tangible Common Equity to Tangible Assets4

6.82 %


6.91 %


7.08 %


8.58 %


8.31 %

Tangible Book Value per Share5

$             5.07


$                    5.00


$                    4.90


$                6.44


$                   6.51











Asset Quality Data










Non-performing Assets

$         10,589


$                  6,675


$                  7,250


$              2,958


$                 2,856

Non-performing Assets to Total Assets

0.37 %


0.24 %


0.27 %


0.24 %


0.22 %

Non-performing Loans to Total Loans

0.48 %


0.31 %


0.34 %


0.30 %


0.29 %

Allowance for Credit Losses - Loans ("ACLL")

$         26,288


$                23,842


$                23,767


$              9,964


$               10,228

ACLL to Total Loans6

1.20 %


1.06 %


1.06 %


1.02 %


1.05 %

ACLL to Nonperforming Assets

248.26 %


357.18 %


327.82 %


336.85 %


358.12 %

Net (recoveries) chargeoffs

$               (20)


$                       70


$                     195


$                 (12)


$                     (97)











(1) - These capital ratios have been calculated using bank-level capital

(2) - This is a non-GAAP financial measure.  See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures at the

end of this release.

(3) - The efficiency ratio, as adjusted represents noninterest expense divided by the sum of net interest income and noninterest income, excluding gains or losses from

securities sales and merger related expenses.  This is a non-GAAP financial measure.  See our reconciliation of non-GAAP financial measures to their most directly

comparable GAAP financial measures at the end of this release.

(4) - We calculate tangible common equity as total shareholders' equity less goodwill and other intangibles, and we calculate tangible assets as total assets less

goodwill and other intangibles.  This is a non-GAAP financial measure.  See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP

financial measures at the end of this release.

(5) - We calculate tangible book value per common share as total shareholders' equity less goodwill and other intangibles, divided by the outstanding number of shares

of our common stock at the end of the relevant period.  Tangible book value per common share is a non-GAAP financial measure, and, as we calculate tangible book

value per common share, the most directly comparable GAAP financial measure is book value per common share.  See our reconciliation of non-GAAP financial

measures to their most directly comparable GAAP financial measures at the end of this release.

(6) - The historical ratios have not been recast for the reclassification of loans held for sale.





 

LINKBANCORP, Inc. and Subsidiaries

Net Interest Margin - Quarter-To-Date (Unaudited)
















For the Three Months Ended June 30,



2024


2023

(Dollars in thousands)


Avg Bal


Interest (2)


Yield/Rate


Avg Bal


Interest (2)


Yield/Rate

Int. Earn. Cash


$        121,340


$      1,395


4.62 %


$          66,149


$        708


4.29 %

Securities













Taxable (1)


125,885


1,592


5.09 %


86,366


822


3.82 %

Tax-Exempt


41,776


443


4.26 %


39,139


378


3.87 %

Total Securities


167,661


2,035


4.88 %


125,505


1,200


3.84 %

Total Cash Equiv. and Investments


289,001


3,430


4.77 %


191,654


1,908


3.99 %

Total Loans (3)(4)


2,280,041


36,112


6.37 %


963,824


12,499


5.20 %

Total Earning Assets


2,569,042


39,542


6.19 %


1,155,478


14,407


5.00 %

Other Assets


212,097






95,531





Total Assets


$     2,781,139






$     1,251,009





Interest bearing demand(5)


$        446,109


$      2,457


2.22 %


$        243,539


$     1,261


2.08 %

Money market demand(5)


581,223


3,271


2.26 %


244,355


1,589


2.61 %

Time deposits(5)


642,919


7,343


4.59 %


299,398


2,392


3.20 %

Total Borrowings


151,596


1,894


5.02 %


95,792


995


4.17 %

Total Interest-Bearing Liabilities


1,821,847


14,965


3.30 %


883,084


6,237


2.83 %

Non Interest-Bearing Deposits(5)


657,939






209,072





Total Cost of Funds


$     2,479,786


$    14,965


2.43 %


$     1,092,156


$     6,237


2.29 %

Other Liabilities


31,519






17,073





Total Liabilities


$     2,511,305






$     1,109,229





Shareholders' Equity


$        269,834






$        141,780





Total Liabilities & Shareholders' Equity


$     2,781,139






$     1,251,009





Net Interest Income/Spread (FTE)




24,577


2.89 %




8,170


2.17 %

Tax-Equivalent Basis Adjustment




(93)






(81)



Net Interest Income




$    24,484






$     8,089



Net Interest Margin






3.83 %






2.81 %


(1) Taxable income on securities includes income from available for sale securities and income from certificates of deposits with other banks.

(2) Income stated on a tax equivalent basis which is a non-GAAP measure and reconciled to GAAP at the bottom of the table

(3) Includes the balances of nonaccrual loans

(4) Includes the balances of loans held for sale

(5) Includes the balances of deposits held for sale

 

LINKBANCORP, Inc. and Subsidiaries

Net Interest Margin - Linked Quarter-To-Date (Unaudited)
















For the Three Months Ended



June 30, 2024


March 31, 2024

(Dollars in thousands)


Avg Bal


Interest (2)


Yield/Rate


Avg Bal


Interest (2)


Yield/Rate

Int. Earn. Cash


$        121,340


$      1,395


4.62 %


$          82,420


$         898


4.38 %

Securities













Taxable (1)


125,885


1,592


5.09 %


114,896


1,391


4.87 %

Tax-Exempt


41,776


443


4.26 %


42,984


457


4.28 %

Total Securities


167,661


2,035


4.88 %


157,880


1,848


4.71 %

Total Cash Equiv. and Investments


289,001


3,430


4.77 %


240,300


2,746


4.60 %

Total Loans (3)(4)


2,280,041


36,112


6.37 %


2,240,714


36,125


6.48 %

Total Earning Assets


2,569,042


39,542


6.19 %


2,481,014


38,871


6.30 %

Other Assets


212,097






210,826





Total Assets


$     2,781,139






$     2,691,840





Interest bearing demand(5)


$        446,109


$      2,457


2.22 %


$        424,781


$      1,942


1.84 %

Money market demand(5)


581,223


3,271


2.26 %


587,455


3,174


2.17 %

Time deposits(5)


642,919


7,343


4.59 %


608,192


6,731


4.45 %

Total Borrowings


151,596


1,894


5.02 %


140,621


2,044


5.85 %

Total Interest-Bearing Liabilities


1,821,847


14,965


3.30 %


1,761,049


13,891


3.17 %

Non Interest-Bearing Deposits(5)


657,939






632,637





Total Cost of Funds


$     2,479,786


$    14,965


2.43 %


$     2,393,686


$    13,891


2.33 %

Other Liabilities


31,519






31,359





Total Liabilities


$     2,511,305






$     2,425,045





Shareholders' Equity


$        269,834






$        266,795





Total Liabilities & Shareholders' Equity


$     2,781,139






$     2,691,840





Net Interest Income/Spread (FTE)




24,577


2.89 %




24,980


3.13 %

Tax-Equivalent Basis Adjustment




(93)






(96)



Net Interest Income




$    24,484






$    24,884



Net Interest Margin






3.83 %






4.03 %


(1) Taxable income on securities includes income from available for sale securities and income from certificates of deposits with other banks.

(2) Income stated on a tax equivalent basis which is a non-GAAP measure and reconciled to GAAP at the bottom of the table

(3) Includes the balances of nonaccrual loans

(4) Includes the balances of loans held for sale

(5) Includes the balances of deposits held for sale

 

LINKBANCORP, Inc. and Subsidiaries

Net Interest Margin - Year-To-Date (Unaudited)
















For the Six Months Ended June 30,



2024


2023

(Dollars in thousands)


Avg Bal


Interest (2)


Yield/Rate


Avg Bal


Interest (2)


Yield/Rate

Int. Earn. Cash


$        102,471


$      2,293


4.50 %


$         55,618


$        983


3.56 %

Securities













Taxable (1)


121,333


2,983


4.94 %


84,101


1,475


3.54 %

Tax-Exempt


42,344


900


4.27 %


38,774


756


3.93 %

Total Securities


163,677


3,883


4.77 %


122,875


2,231


3.66 %

Total Cash Equiv. and Investments


266,148


6,176


4.67 %


178,493


3,214


3.63 %

Total Loans (3)(4)


2,263,595


72,237


6.42 %


952,142


24,261


5.14 %

Total Earning Assets


2,529,743


78,413


6.23 %


1,130,635


27,475


4.90 %

Other Assets


211,138






93,481





Total Assets


$     2,740,881






$    1,224,116





Interest bearing demand(5)


$        437,011


$      4,400


2.02 %


$       246,235


$     2,449


2.01 %

Money market demand(5)


584,121


6,445


2.22 %


245,747


2,939


2.41 %

Time deposits(5)


628,616


14,073


4.50 %


295,440


4,371


2.98 %

Total Borrowings


144,509


3,938


5.48 %


76,820


1,514


3.97 %

Total Interest-Bearing Liabilities


1,794,257


28,856


3.23 %


864,242


11,273


2.63 %

Non Interest-Bearing Deposits(5)


646,728






202,610





Total Cost of Funds


$     2,440,985


$    28,856


2.38 %


$    1,066,852


$   11,273


2.13 %

Other Liabilities


31,360






16,905





Total Liabilities


$     2,472,345






$    1,083,757





Shareholders' Equity


$        268,536






$       140,359





Total Liabilities & Shareholders' Equity


$     2,740,881






$    1,224,116





Net Interest Income/Spread (FTE)




49,557


3.00 %




16,202


2.27 %

Tax-Equivalent Basis  Adjustment




(189)






(159)



Net Interest Income




$    49,368






$   16,043



Net Interest Margin






3.92 %






2.86 %


(1) Taxable income on securities includes income from available for sale securities and income from certificates of deposits with other banks.

(2) Income stated on a tax equivalent basis which is a non-GAAP measure and reconciled to GAAP at the bottom of the table

(3) Includes the balances of nonaccrual loans

(4) Includes the balances of loans held for sale

(5) Includes the balances of deposits held for sale

 

LINKBANCORP, Inc. and Subsidiaries

Loans Receivable Detail (Unaudited)












(In Thousands)


June 30, 2024


March 31, 2024


December 31,  2023


September 30, 2023


June 30, 2023

 Agriculture and farmland loans 


$           66,937


$         67,359


$           65,861


$           50,584


$           50,552

 Construction loans 


201,174


194,391


178,483


65,836


75,628

 Commercial & industrial loans 


247,190


218,724


238,343


115,572


104,869

 Commercial real estate loans 











      Multifamily 


199,740


190,146


180,788


111,853


113,254

      Owner occupied 


492,065


489,467


501,732


160,929


154,520

      Non-owner occupied 


610,649


589,731


580,972


257,344


254,691

 Residential real estate loans 











      First liens 


400,098


403,300


402,433


172,481


170,271

      Second liens and lines of credit 


71,168


71,060


70,747


27,870


30,148

 Consumer and other loans 


15,514


16,810


16,756


11,869


11,308

 Municipal loans 


4,362


4,473


5,244


4,137


3,929



2,308,897


2,245,461


2,241,359


978,475


969,170

Deferred costs


478


356


174


437


363

Total loans receivable


2,309,375


2,245,817


2,241,533


978,912


969,533

Less: Loans held for sale


116,178


115,898


113,249


-


-

Loans Held for Investment


$     2,193,197


$    2,129,919


$     2,128,284


$         978,912


$         969,533

 

LINKBANCORP, Inc. and Subsidiaries



Investments in Securities Detail (Unaudited)














June 30, 2024



(In Thousands)


Amortized
Cost


Net
Unrealized
Gains
(Losses)


Fair
Value



Available for Sale:









US Government Agency securities


$     12,841


$                  115


$     12,956



US Government Treasury securities


3,979


(2)


3,977



Obligations of state and political subdivisions


49,242


(3,826)


45,416



Mortgage-backed securities in government-sponsored entities


80,363


(3,130)


77,233



Other securities


550


(11)


539





$   146,975


$              (6,854)


$   140,121














 Amortized
Cost 


 Net Unrealized
Gains (Losses) 


 Fair Value 


Allowance for
Credit Losses 

Held to Maturity:









Corporate debentures


$     15,000


$              (1,794)


$     13,206


$            (502)

Structured mortgage-backed securities


20,845


(843)


20,002


-



$     35,845


$              (2,637)


$     33,208


$            (502)












December 31, 2023



(In Thousands)


Amortized
Cost


Net
Unrealized
Gains
(Losses)


Fair
Value



Available for Sale:









US Government Agency securities


$     12,711


$                  274


$     12,985



US Government Treasury securities


4,925


17


4,942



Obligations of state and political subdivisions


49,640


(2,595)


47,045



Mortgage-backed securities in government-sponsored entities


50,795


(2,614)


48,181



Other securities


2,301


36


2,337





$   120,372


$             (4,882)


$   115,490














Amortized
Cost


Net Unrealized
Gains (Losses)


Fair Value


Allowance for
Credit Losses

Held to Maturity:









Corporate debentures


$     15,000


$             (1,592)


$     13,408


$            (512)

Structured mortgage-backed securities


21,735


(907)


20,828


-



$     36,735


$             (2,499)


$     34,236


$            (512)

 

LINKBANCORP, Inc. and Subsidiaries

Deposits Detail (Unaudited)












(In Thousands)


June 30, 2024


March 31, 2024


December 31, 2023


September 30, 2023


June 30, 2023

Demand, noninterest-bearing


$        692,095


$       653,719


$        655,953


$       210,404


$       240,729

Demand, interest-bearing


488,043


447,412


438,765


273,673


237,114

Money market and savings


582,561


591,982


577,448


258,334


254,632

Time deposits, $250 and over


156,621


147,898


134,324


51,563


57,194

Time deposits, other


393,603


398,365


372,572


172,798


185,121

Brokered deposits


144,429


146,653


119,411


75,000


60,052



2,457,352


2,386,029


2,298,473


1,041,772


1,034,842

Less: Deposits held for sale


96,840


105,628


99,674


—


—

Total deposits  


$     2,360,512


$    2,280,401


$     2,198,799


$   1,041,772


$    1,034,842























Average Deposits Detail, for the Three Months Ended (Unaudited)












(In Thousands)


June 30, 2024


March 31, 2024


December 31, 2023


September 30, 2023


June 30, 2023

Demand, noninterest-bearing


$        657,939


$       632,637


$        371,051


$      209,054


$       209,072

Demand, interest-bearing


446,109


424,781


328,342


254,725


243,539

Money market and savings


581,223


587,455


367,821


254,849


244,355

Time deposits


547,582


518,929


317,747


236,869


236,059

Brokered deposits


95,337


89,263


30,832


28,705


63,339

Total deposits  


$     2,328,190


$   2,253,065


$     1,415,793


$     984,202


$      996,364


Balances in table above include deposits held for sale

Appendix A – Reconciliation to Non-GAAP Financial Measures
This document contains supplemental financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Management uses these non-GAAP measures in its analysis of the Company's performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of non-GAAP financial measures that exclude the impact of specified items provide useful supplemental information that is essential to a proper understanding of the Company's financial condition and results. Non-GAAP measures are not formally defined under GAAP, and other entities may use calculation methods that differ from those used by us. As a complement to GAAP financial measures, our management believes these non-GAAP financial measures assist investors in comparing the financial condition and results of operations of financial institutions due to the industry prevalence of such non-GAAP measures. See the tables below for a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures. 

Adjusted Return on Average Assets


For the Three Months Ended


For the Six Months Ended

(Dollars in thousands)

6/30/2024


3/31/2024


6/30/2023


6/30/2024


6/30/2023

Net income (loss)

$       5,804


$       5,726


$       1,347


$     11,530


$        (207)

Average assets

2,781,139


2,691,840


1,251,009


2,740,881


1,224,116

Return on average assets (annualized)

0.84 %


0.86 %


0.43 %


0.85 %


-0.03 %

Net income (loss)

5,804


5,726


1,347


11,530


(207)

Net (gains) losses on sale of securities

(4)


-


-


(4)


2,370

Tax effect at 21%

1


-


-


1


(498)

Merger & restructuring expenses

631


56


315


687


902

Tax effect at 21%

(133)


(12)


(66)


(144)


(189)

Adjusted Net Income (Non-GAAP)

6,299


5,770


1,596


12,070


2,378

Average assets

2,781,139


2,691,840


1,251,009


2,740,881


1,224,116

Adjusted return on average assets (annualized)
(Non-GAAP)

0.91 %


0.86 %


0.51 %


0.89 %


0.39 %

 

Adjusted Return on Average Shareholders' Equity


For the Three Months Ended


For the Six Months Ended

(Dollars in thousands)

6/30/2024


3/31/2024


6/30/2023


6/30/2024


6/30/2023

Net income (loss)

$      5,804


$      5,726


$      1,347


$    11,530


$        (207)

Average shareholders' equity

269,834


266,795


141,780


268,536


140,359

Return on average shareholders' equity (annualized)

8.65 %


8.63 %


3.81 %


8.61 %


-0.30 %

Net income (loss)

5,804


5,726


1,347


11,530


(207)

Net (gains) losses on sale of securities

(4)


-


-


(4)


2,370

Tax effect at 21%

1


-


-


1


(498)

Merger & restructuring expenses

631


56


315


687


902

Tax effect at 21%

(133)


(12)


(66)


(144)


(189)

Adjusted Net Income (Non-GAAP)

6,299


5,770


1,596


12,070


2,378

Average shareholders' equity

269,834


266,795


141,780


268,536


140,359

Adjusted return on average shareholders' equity (annualized)
(Non-GAAP)

9.39 %


8.70 %


4.51 %


9.04 %


3.42 %

 

Adjusted Efficiency Ratio


For the Three Months Ended


For the Six Months Ended

(Dollars in thousands)

6/30/2024


3/31/2024


6/30/2023


6/30/2024


6/30/2023

GAAP-based efficiency ratio

71.75 %


72.33 %


87.09 %


72.04 %


103.16 %

Net interest income 

$    24,484


$    24,884


$      8,089


$    49,368


$    16,043

Noninterest income 

1,858


1,729


886


3,587


(967)

Less: net gains (losses) on sales of securities 

4


-


-


4


(2,370)

Adjusted revenue (Non-GAAP)

26,346


26,613


8,975


52,951


17,446

Total noninterest expense 

18,900


19,250


7,816


38,150


15,553

Less: Merger & restructuring expenses

631


56


315


687


902

Adjusted non-interest expense

18,269


19,194


7,501


37,463


14,651

Efficiency ratio, as adjusted (Non-GAAP)

69.34 %


72.12 %


83.58 %


70.75 %


83.98 %

 

Adjusted Earnings Per Share


For the Three Months Ended


For the Six Months Ended

(Dollars in thousands, except per share data)

6/30/2024


3/31/2024


6/30/2023


6/30/2024


6/30/2023

GAAP-Based Earnings  (Loss) Per Share, Basic

$       0.16


$       0.15


$       0.08


$       0.31


$     (0.01)

GAAP-Based  Earnings (Loss) Per Share, Diluted

$       0.16


$       0.15


$       0.08


$       0.31


$     (0.01)

Net Income (Loss)

$     5,804


$     5,726


$     1,347


$   11,530


$      (207)

Net (gains) losses on sale of securities

(4)


-


-


(4)


2,370

Tax effect at 21%

1


-


-


1


(498)

Merger & restructuring expenses

631


56


315


687


902

 Tax effect at 21% 

(133)


(12)


(66)


(144)


(189)

Adjusted Net Income (Non-GAAP)

6,299


5,770


1,596


12,070


2,378

Adjusted Earnings per Share, Basic (Non-GAAP)

$       0.17


$       0.16


$       0.10


$       0.33


$      0.15

Adjusted Earnings per Share, Diluted (Non-GAAP)

$       0.17


$       0.16


$       0.10


$       0.33


$      0.15

 

Tangible Common Equity and Tangible Book Value



6/30/2024


3/31/2024


12/31/2023


9/30/2023


6/30/2023

Tangible Common Equity


(Dollars in thousands, except for share data)

Total shareholders' equity 


$    271,409


$    268,243


$    265,796


$    141,351


$    142,452

Adjustments:











Goodwill 


(58,806)


(56,968)


(56,968)


(35,842)


(35,842)

Other intangible assets 


(23,323)


(24,526)


(25,733)


(873)


(932)

Tangible common equity (Non-GAAP)


$    189,280


$    186,749


$    183,095


$    104,636


$    105,678

Common shares outstanding 


37,356,278


37,348,151


37,340,700


16,235,871


16,228,440

Book value per common share 


$          7.27


$          7.18


$          7.12


$          8.71


$          8.78

Tangible book value per common share (Non-GAAP)


$          5.07


$          5.00


$          4.90


$          6.44


$          6.51

Tangible Assets











Total assets 


$ 2,858,593


$ 2,785,669


$ 2,669,325


$ 1,255,695


$ 1,308,472

Adjustments:











Goodwill 


(58,806)


(56,968)


(56,968)


(35,842)


(35,842)

Other intangible assets 


(23,323)


(24,526)


(25,733)


(873)


(932)

Tangible assets (Non-GAAP)


$ 2,776,464


$ 2,704,175


$ 2,586,624


$ 1,218,980


$ 1,271,698

Tangible common equity to tangible assets (Non-GAAP)


6.82 %


6.91 %


7.08 %


8.58 %


8.31 %

 

Adjusted Pre-tax, Pre-provision Net Income (Non-GAAP)


For the Three Months Ended


For the Six Months Ended

(Dollars in thousands, except per share data)

6/30/2024


3/31/2024


6/30/2023


6/30/2024


6/30/2023

Net Income (Loss) - GAAP

$      5,804


$      5,726


$      1,347


$    11,530


$        (207)

Net (gains) losses on sale of securities

(4)


-


-


(4)


2,370

Tax effect at 21%

1


-


-


1


(498)

Merger & restructuring expenses

631


56


315


687


902

 Tax effect at 21% 

(133)


(12)


(66)


(144)


(189)

Adjusted Net Income (Non-GAAP)

6,299


5,770


1,596


12,070


2,378

Income tax expense (benefit)

1,638


1,597


305


3,235


(70)

 Provision for (credit to) credit losses

-


40


(493)


40


(200)

Tax effect included in Adjusted Net Income

132


12


66


143


687

Adjusted Pre-tax, Pre-provision Net Income (Non-GAAP)

$      8,069


$      7,419


$      1,474


$    15,488


$      2,795

Contact:
Nicole Davis
Corporate and Investor Relations Officer
717.803.8895
[email protected] 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/linkbancorp-inc-announces-second-quarter-2024-earnings-302209032.html

SOURCE LINKBANCORP, Inc.


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