LINKBANCORP, Inc. Announces Third Quarter 2023 Financial Results

PR Newswire
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HARRISBURG, Pa., Oct. 30, 2023 /PRNewswire/ -- LINKBANCORP, Inc. (NASDAQ: LNKB) (the "Company"), the parent company of LINKBANK (the "Bank") reported net income of $1.24 million, or $0.08 per diluted share, for the quarter ended September 30, 2023. Excluding merger related expenses, adjusted earnings were $1.85 million1, or $0.111 per diluted share for the third quarter of 2023.

(PRNewsfoto/LINKBANCORP, Inc.)
(PRNewsfoto/LINKBANCORP, Inc.)

Third Quarter 2023 Highlights

  • Total deposits grew $6.9 million, or 2.66% annualized during the third quarter of 2023. For the nine months ended September 30, 2023, total deposits grew $95.0 million, or 13.42% annualized, including $17.6 million in growth in noninterest-bearing deposit, representing 12.23% annualized. Estimated uninsured deposits, excluding collateralized public funds and affiliate company accounts, totaled $398.6 million, or 37.8% of total deposits as of September 30, 2023, compared with $378.7 million, or 36.7% of total deposits as of June 30, 2023.

  • Total loans grew $9.4 million during the third quarter of 2023, representing a 3.84% annualized growth rate, driven primarily by commercial and industrial loan activity. For the nine months ended September 30, 2023, total loans grew $51.0 million or 7.35% annualized.

  • Net interest income for the third quarter of 2023 was $8.4 million, compared to $8.1 million for the second quarter of 2023. Net interest margin expanded slightly from 2.81% for the second quarter of 2023 to 2.89% for the third quarter of 2023. The linked quarter increase was primarily due to an increase in average yield on loans outpacing the increase in cost of funds.

  • The Company recorded a $349 thousand negative provision for credit losses for the third quarter of 2023, resulting in an allowance for credit losses of $10.0 million, or 1.02% of total loans at September 30, 2023, determined in accordance with the current expected credit losses ("CECL") accounting standard. The negative provision for credit losses was primarily driven by improvements in external forecast indexes, as well as $12 thousand in net recoveries, offset by loan growth in the period.

  • On October 13, 2023, the Company and Partners Bancorp ("Partners") announced the receipt of FDIC and state regulatory approvals for the pending merger of equals, which is anticipated to close in the fourth quarter of 2023, subject to the approval of the Board of Governors of the Federal Reserve System and other customary closing conditions.

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

"This quarter's core results demonstrate progress in our efforts to position the Company in response to the external environment for continued growth and performance, including stabilization in net interest margin and excellent credit quality," said Andrew Samuel, Chief Executive Officer. "With the anticipated closing of the merger with Partners Bancorp in the fourth quarter, we continue to place an emphasis on initiatives to support a strong balance sheet and core earnings as our teams seek to provide clients with the highest level of service to meet their needs."

Income Statement

Net interest income before the provision for credit losses for the third quarter of 2023 increased to $8.4 million compared to $8.1 million in the second quarter of 2023. Net interest margin was 2.89% for the third quarter of 2023 compared to 2.81% for the second quarter of 2023.  The increase in net interest margin for the current quarter was primarily due to the higher average yield on interest earning assets, which outpaced the increase in the average rate paid on interest bearing liabilities. The overall yield and rate increases were driven by the multiple federal funds rate increases that occurred over the preceding twelve months, coupled with competition for deposits in the market. The average yield on interest-earning assets increased by 13 basis points over the prior quarter, primarily due to the increase in the average yield on loans of 13 basis points to 5.33% during the third quarter.  The increase in the average yield on interest-earning assets was partially offset by a 6 basis points increase in the cost of funds to 2.35%.

The Company's core deposit generation strategies continue to yield positive results, including 88 net new checking accounts opened during the third quarter of 2023 for a total of $17.5 million in new deposits.  Additionally, further momentum in executing the Company's strategies to service the needs of professional services firms resulted in 73 new accounts opened during the quarter, which are generally expected to fund over the course of the fourth quarter.

Noninterest income remained consistent quarter over quarter at $880 thousand for the third quarter of 2023 compared to $886 thousand in income for the second quarter of 2023, primarily due to a decline in gain on sale of loans, offset by a gain related to the settlement of a legal matter.

Noninterest expense for the third quarter of 2023 increased to $8.0 million compared to $7.8 million for the second quarter of 2023. Excluding one time charges relating to the pending merger with Partners of $777 thousand in the third quarter of 2023 and $315 thousand in the second quarter of 2023, adjusted noninterest expense decreased by $284 thousand to $7.2 million1 in the third quarter, impacted primarily by a decrease in recognized external fraud losses.

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

Balance Sheet

Total assets were $1.26 billion at September 30, 2023 compared to $1.31 billion at June 30, 2023 and $1.16 billion at December 31, 2022.  Deposits and net loans as of September 30, 2023 totaled $1.04 billion and $969.0 million, respectively, compared to deposits and net loans of $1.03 billion and $959.3 million, respectively, at June 30, 2023 and $946.8 million and $923.2 million, respectively, at December 31, 2022.

Total loans increased $9.4 million from June 30, 2023 to September 30, 2023, or 3.84% annualized, with the average commercial loan commitment originated during the third quarter of 2023 totaling approximately $565 thousand with an average outstanding balance of $306 thousand.

Cash and cash equivalents decreased to $68.0 million at September 30, 2023 compared to $123.2 million at June 30, 2023, while increasing compared to the $30.0 million balance at December 31, 2022.  In addition to loan growth, this change was primarily a result of the Company decreasing alternative funding by approximately $45.0 million in the third quarter.

Deposits at September 30, 2023 totaled $1.042 billion, an increase of $6.9 million compared to $1.035 billion at June 30, 2023.  Average deposits decreased by $12.2 million during the current quarter, driven by a $33.8 million decrease in average time deposits from $299.4 million for the second quarter of 2023 to $265.6 million for the third quarter of 2023, as the Company allowed certain higher cost deposits to mature.  This decline was offset by increases in average interest-bearing demand and money market deposits as average noninterest-bearing deposits remained flat.

Shareholders' equity decreased slightly from $142.5 million at June 30, 2023 to $141.4 million at September 30, 2023.  The decrease was primarily attributed to a $1.2 million increase in other comprehensive loss resulting from changes in the interest rate environment.

Asset Quality

In the third quarter of 2023, the Company recorded a negative provision for credit losses, calculated under the CECL model, of $349 thousand, compared to a negative provision for credit losses of $493 thousand in the second quarter.  The negative provision for credit losses included the impact of improvements in external forecast indexes, as well as $12 thousand in net recoveries, offset by loan growth in the period.

Asset quality metrics remain strong. As of September 30, 2023, the Company's non-performing assets were $3.0 million, representing 0.24% of total assets. Non-performing assets at September 30, 2023 excluded purchased with credit deterioration ("PCD") loans with a balance of $2.1 million.  Loans 30-89 days past due at September 30, 2023 were $1.8 million, representing 0.18% of total loans.

The allowance for credit losses-loans was $10.0 million, or 1.02% of total loans at September 30, 2023, compared to the allowance for credit losses-loans of $10.2 million, or 1.05% of total loans at June 30, 2023.  The allowance for credit losses-loans to nonperforming assets was 336.85% at September 30, 2023, compared to 358.12% at June 30, 2023.

Capital

The Bank's regulatory capital ratios are well in excess of regulatory minimums to be considered "well capitalized" as of September 30, 2023. The Bank's Total Capital Ratio and Tier 1 Capital Ratio was 12.92% and 12.37%, respectively, at September 30, 2023, compared to 12.88% and 12.29%, respectively, at June 30, 2023 and 12.89% and 12.41%, respectively, at December 31, 2022. The Company's ratio of Tangible Common Equity to Tangible Assets was 8.58%1 at September 30, 2023.

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 Central and Southeastern Pennsylvania through 10 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 proposed merger with Partners; 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 the COVID-19 pandemic and actions taken by governments, businesses and individuals in response. 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.

LB-E
LB-D

LINKBANCORP, Inc. and Subsidiaries

Consolidated Balance Sheet (Unaudited)

























September 30,
2023


June 30,
2023


March 31,
2023


December 31,
2022


September 30,
2022

(In Thousands, except share and per share data)











ASSETS











Noninterest-bearing cash equivalents


$                5,447


$                4,736


$                   4,545


$                4,209


$              8,711

Interest-bearing deposits with other institutions


62,532


118,438


47,190


25,802


66,085

      Cash and cash equivalents


67,979


123,174


51,735


30,011


74,796

Certificates of deposit with other banks


249


498


745


5,623


8,358

Securities available for sale, at fair value


78,779


83,620


86,804


78,813


78,698

Securities held to maturity, net of allowance for credit
losses


37,266


38,220


38,986


31,822


32,571

Loans receivable, gross


978,912


969,533


945,371


927,871


863,969

Allowance for credit losses - loans


(9,964)


(10,228)


(10,526)


(4,666)


(4,569)

Loans receivable, net


968,948


959,305


934,845


923,205


859,400

Investments in restricted bank stock


3,107


5,544


4,134


3,377


3,327

Premises and equipment, net


6,414


6,292


6,497


6,743


9,087

Right-of-use asset – premises


9,727


9,896


10,058


10,219


8,920

Bank-owned life insurance


24,732


24,554


24,384


19,244


19,127

Goodwill and other intangible assets


36,715


36,774


36,833


36,894


36,955

Deferred tax asset


6,880


6,571


6,749


5,619


6,378

Accrued interest receivable and other assets


14,899


14,024


12,188


12,084


7,256

TOTAL ASSETS


$         1,255,695


$        1,308,472


$           1,213,958


$        1,163,654


$       1,144,873

LIABILITIES











Deposits:











      Demand, noninterest bearing


$            210,404


$            240,729


$              204,495


$            192,773


$          184,857

      Interest bearing


831,368


794,113


780,003


753,999


766,853

Total deposits


1,041,772


1,034,842


984,498


946,772


951,710

Other Borrowings


15,000


74,899


31,250


20,938


—

Subordinated Debt


40,354


40,398


40,441


40,484


40,526

Operating Lease Liabilities


9,728


9,896


10,058


10,219


8,921

Accrued interest payable and other liabilities


7,490


5,985


6,130


6,688


6,774

TOTAL LIABILITIES


1,114,344


1,166,020


1,072,377


1,025,101


1,007,931

SHAREHOLDERS' EQUITY











Preferred stock


—


—


—


—


—

Common stock


162


162


250


149


149

Surplus


127,856


127,818


127,659


117,709


117,698

Retained earnings


19,062


19,039


18,911


27,100


27,525

Accumulated other comprehensive loss


(5,729)


(4,567)


(5,239)


(6,405)


(8,430)

TOTAL SHAREHOLDERS' EQUITY


141,351


142,452


141,581


138,553


136,942

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$         1,255,695


$        1,308,472


$           1,213,958


$        1,163,654


$       1,144,873

Common shares outstanding


16,235,871


16,228,440


16,221,692


14,939,640


14,939,640

 

LINKBANCORP, Inc. and Subsidiaries

Consolidated Statements of Operations (Unaudited)



























Three Months Ended


Nine Months Ended



9/30/2023


6/30/2023


9/30/2022



9/30/2023


9/30/2022

(In Thousands, except share and per share data)












INTEREST AND DIVIDEND INCOME












Loans receivable, including fees


$          13,068


$          12,499


$            9,410



$          37,330


$          25,287

Other


1,710


1,827


1,170



4,765


2,771

Total interest and dividend income


14,778


14,326


10,580



42,095


28,058

INTEREST EXPENSE












Deposits


5,434


5,242


1,389



15,193


2,872

Other Borrowings


550


558


82



1,196


106

Subordinated Debt


442


437


439



1,311


1,080

Total interest expense


6,426


6,237


1,910



17,700


4,058

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


8,352


8,089


8,670



24,395


24,000

(Credit to) provision for credit losses


(349)


(493)


515



(549)


1,190

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


8,701


8,582


8,155



24,944


22,810

NONINTEREST INCOME












Service charges on deposit accounts


198


197


216



593


644

Bank-owned life insurance


177


170


156



488


381

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


—


—


—



(2,370)


13

Gain on sale of loans


—


296


420



296


753

Other


505


223


249



905


658

Total noninterest income


880


886


1,041



(88)


2,449

NONINTEREST EXPENSE












Salaries and employee benefits


4,193


4,037


4,234



12,350


11,612

Occupancy


701


696


596



2,104


1,503

Equipment and data processing


934


893


666



2,519


1,858

Professional fees


363


418


330



1,162


865

FDIC insurance


276


184


141



619


483

Bank Shares Tax


278


278


201



834


585

Merger & system conversion related expenses


777


315


—



1,679


—

Other


472


995


877



2,280


2,481

Total noninterest expense


7,994


7,816


7,045



23,547


19,387

Income before income tax expense 


1,587


1,652


2,151



1,309


5,872

Income tax expense 


347


305


379



276


970

NET  INCOME


$             1,240


$            1,347


$            1,772



$            1,033


$            4,902













EARNINGS PER SHARE, BASIC


$               0.08


$              0.08


$              0.17



$              0.06


$              0.49

 EARNINGS PER SHARE, DILUTED


$               0.08


$              0.08


$              0.17



$              0.06


$              0.48

WEIGHTED-AVERAGE COMMON SHARES
   OUTSTANDING,












BASIC


16,235,144


16,228,069


10,590,079



15,984,151


10,087,341

DILUTED


16,235,144


16,228,069


10,590,079



15,984,151


10,136,457

 

LINKBANCORP, Inc. and Subsidiaries

Financial Highlights (Unaudited)












For the Three Months Ended


For the Nine Months Ended

('Dollars In Thousands)

9/30/2023


6/30/2023


9/30/2022


9/30/2023


9/30/2022

Operating Highlights










Net Income 

$             1,240


$                  1,347


$                  1,772


$               1,033


$                 4,902

Net Interest Income

8,352


8,089


8,670


24,395


24,000

(Credit to) provision for Credit Losses

(349)


(493)


515


(549)


1,190

Non-Interest Income

880


886


1,041


(88)


2,449

Non-Interest Expense

7,994


7,816


7,045


23,547


19,387

Earnings per Share, Basic

0.08


0.08


0.17


0.06


0.49

Adjusted Earnings per Share, Basic (2)

0.11


0.10


0.17


0.26


0.48

Earnings per Share, Diluted

0.08


0.08


0.17


0.06


0.48

Adjusted Earnings per Share, Diluted (2)

0.11


0.10


0.17


0.26


0.48











Selected Operating Ratios










Net Interest Margin

2.89 %


2.81 %


3.51 %


2.88 %


3.40 %

Annualized Return on Assets ("ROA")

0.39 %


0.43 %


0.65 %


0.11 %


0.63 %

Adjusted ROA2

0.59 %


0.51 %


0.65 %


0.46 %


0.63 %

Annualized Return on Equity ("ROE")

3.46 %


3.81 %


6.48 %


0.98 %


7.68 %

Adjusted ROE2

5.17 %


4.51 %


6.48 %


4.00 %


7.66 %

Efficiency Ratio

86.59 %


87.09 %


72.55 %


96.87 %


73.30 %

Adjusted Efficiency Ratio3

78.17 %


83.58 %


72.55 %


81.97 %


73.34 %

Noninterest Income to Avg. Assets

0.28 %


0.29 %


0.38 %


-0.01 %


0.32 %

Noninterest Expense to Avg. Assets

2.54 %


2.52 %


2.60 %


2.56 %


2.51 %






















9/30/2023


6/30/2023


3/31/2023


12/31/2022


9/30/2022

Financial Condition Data










Total Assets

$       1,255,695


$            1,308,472


$            1,213,958


$         1,163,654


$           1,144,873

Loans Receivable, Net

968,948


959,305


934,845


923,205


859,400











     Noninterest-bearing Deposits

210,404


240,729


204,495


192,773


184,857

     Interest-bearing Deposits

831,368


794,113


780,003


753,999


766,853

Total Deposits

1,041,772


1,034,842


984,498


946,772


951,710











Selected Balance Sheet Ratios










Total Capital Ratio1

12.92 %


12.88 %


13.53 %


12.89 %


11.55 %

Tier 1 Capital Ratio1

12.37 %


12.29 %


12.32 %


12.41 %


11.04 %

Common Equity Tier 1 Capital Ratio1

12.37 %


12.29 %


12.32 %


12.41 %


11.04 %

Leverage Ratio1

10.71 %


10.41 %


10.78 %


10.93 %


9.74 %

Tangible Common Equity to Tangible Assets4

8.58 %


8.31 %


8.90 %


9.02 %


9.02 %

Tangible Book Value per Share5

$                6.44


$                     6.51


$                     6.46


$                 6.80


$                   6.69











Asset Quality Data










Non-performing Assets

$              2,958


$                   2,856


$                   2,398


$               2,500


$                 1,979

Non-performing Assets to Total Assets

0.24 %


0.22 %


0.20 %


0.21 %


0.17 %

Non-performing Loans to Total Loans

0.30 %


0.29 %


0.25 %


0.27 %


0.23 %

Allowance for Credit Losses - Loans ("ACLL")

$             9,964


$                 10,228


$                 10,526


$               4,666


$                 4,569

ACLL to Total Loans

1.02 %


1.05 %


1.11 %


0.50 %


0.53 %

ACLL to Nonperforming Assets

336.85 %


358.12 %


438.95 %


186.64 %


230.87 %

Net chargeoffs (recoveries)

$                 (12)


$                       (97)


$                         (2)


$                   (60)


$                   (164)











(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.

 

LINKBANCORP, Inc. and Subsidiaries

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
















For the Three Months Ended September 30,



2023


2022

(Dollars in thousands)


Avg Bal


Interest (2)


Yield/Rate


Avg Bal


Interest (2)


Yield/Rate

Int. Earn. Cash


$                 55,514


$                      577


4.12 %


$                 30,630


$                      157


2.03 %

Securities













Taxable (1)


82,499


833


4.01 %


86,330


745


3.42 %

Tax-Exempt


38,589


378


3.89 %


39,258


339


3.43 %

Total Securities


121,088


1,211


3.97 %


125,588


1,084


3.42 %

Total Cash Equiv. and Investments


176,602


1,788


4.02 %


156,218


1,241


3.15 %

Total Loans (3)


971,877


13,068


5.33 %


824,309


9,410


4.53 %

Total Earning Assets


1,148,479


14,856


5.13 %


980,527


10,651


4.31 %

Other Assets


97,995






93,116





Total Assets


$           1,246,474






$           1,073,643





Interest bearing demand


$              254,725


$                   1,490


2.32 %


$              278,637


$                      400


0.57 %

Money market demand


254,849


1,827


2.84 %


244,107


568


0.92 %

Time deposits


265,573


2,117


3.16 %


205,792


421


0.81 %

Total Borrowings


102,669


992


3.83 %


52,562


521


3.93 %

Total Interest-Bearing Liabilities


877,816


6,426


2.90 %


781,098


1,910


0.97 %

Non Int. Bearing Deposits


209,054






170,863





Total Cost of Funds


$           1,086,870


$                   6,426


2.35 %


$              951,961


$                   1,910


0.80 %

Other Liabilities


17,230






13,243





Total Liabilities


$           1,104,100






$              965,204





Shareholders' Equity


$              142,374






$              108,439





Total Liabilities & Shareholders' Equity


$           1,246,474






$           1,073,643





Net Interest Income/Spread (FTE)




8,430


2.23 %




8,741


3.34 %

Tax-Equivalent Basis Adjustment




(78)






(71)



Net Interest Income




$                   8,352






$                   8,670



Net Interest Margin






2.89 %






3.51 %

(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

 

LINKBANCORP, Inc. and Subsidiaries

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
















For the Three Months Ended



September 30, 2023


June 30, 2023

(Dollars in thousands)


Avg Bal


Interest (2)


Yield/Rate


Avg Bal


Interest (2)


Yield/Rate

Int. Earn. Cash


$                  55,514


$               577


4.12 %


$           66,149


$               708


4.29 %

Securities













Taxable (1)


82,499


833


4.01 %


86,366


822


3.82 %

Tax-Exempt


38,589


378


3.89 %


39,139


378


3.87 %

Total Securities


121,088


1,211


3.97 %


125,505


1,200


3.84 %

Total Cash Equiv. and Investments


176,602


1,788


4.02 %


191,654


1,908


3.99 %

Total Loans (3)


971,877


13,068


5.33 %


963,824


12,499


5.20 %

Total Earning Assets


1,148,479


14,856


5.13 %


1,155,478


14,407


5.00 %

Other Assets


97,995






95,531





Total Assets


$             1,246,474






$      1,251,009





Interest bearing demand


$                254,725


$           1,490


2.32 %


$         243,539


$            1,261


2.08 %

Money market demand


254,849


1,827


2.84 %


244,355


1,589


2.61 %

Time deposits


265,573


2,117


3.16 %


299,398


2,392


3.20 %

Total Borrowings


102,669


992


3.83 %


95,792


995


4.17 %

Total Interest-Bearing Liabilities


877,816


6,426


2.90 %


883,084


6,237


2.83 %

Non Int Bearing Deposits


209,054






209,072





Total Cost of Funds


$             1,086,870


$           6,426


2.35 %


$      1,092,156


$            6,237


2.29 %

Other Liabilities


17,230






17,073





Total Liabilities


$             1,104,100






$      1,109,229





Shareholders' Equity


$                142,374






$         141,780





Total Liabilities & Shareholders' Equity


$             1,246,474






$      1,251,009





Net Interest Income/Spread (FTE)




8,430


2.23 %




8,170


2.17 %

Tax-Equivalent Basis Adjustment




(78)






(81)



Net Interest Income




$           8,352






$            8,089



Net Interest Margin






2.89 %






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

 

LINKBANCORP, Inc. and Subsidiaries

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
















For the Nine Months Ended September 30,



2023


2022

(Dollars in thousands)


Avg Bal


Interest (2)


Yield/Rate


Avg Bal


Interest (2)


Yield/Rate

Int. Earn. Cash


$                 51,547


$                   1,561


4.05 %


$                 50,254


$                      306


0.81 %

Securities













Taxable (1)


83,343


2,309


3.70 %


86,590


1,608


2.48 %

Tax-Exempt


38,617


1,133


3.92 %


41,438


1,085


3.50 %

Total Securities


121,960


3,442


3.77 %


128,028


2,693


2.81 %

Total Cash Equiv. and Investments


173,507


5,003


3.86 %


178,282


2,999


2.25 %

Total Loans (3)


958,839


37,330


5.21 %


765,267


25,287


4.42 %

Total Earning Assets


1,132,346


42,333


5.00 %


943,549


28,286


4.01 %

Other Assets


95,406






90,970





Total Assets


$           1,227,752






$           1,034,519





Interest bearing demand


$              251,058


$                   3,938


2.10 %


$              269,282


$                      905


0.45 %

Money market demand


248,921


4,766


2.56 %


228,105


945


0.55 %

Time deposits


283,851


6,489


3.06 %


203,947


1,022


0.67 %

Total Borrowings


81,873


2,507


4.09 %


84,382


1,186


1.88 %

Total Interest-Bearing Liabilities


865,703


17,700


2.73 %


785,716


4,058


0.69 %

Non Int Bearing Deposits


203,415






151,941





Total Cost of Funds


$           1,069,118


$                 17,700


2.21 %


$              937,657


$                   4,058


0.58 %

Other Liabilities


17,033






11,517





Total Liabilities


$           1,086,151






$              949,174





Shareholders' Equity


$              141,601






$                85,345





Total Liabilities & Shareholders' Equity


$           1,227,752






$           1,034,519





Net Interest Income/Spread (FTE)




24,633


2.27 %




24,228


3.32 %

Tax-Equivalent Basis  Adjustment




(238)






(228)



Net Interest Income




$                 24,395






$                 24,000



Net Interest Margin






2.88 %






3.40 %

(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

 

LINKBANCORP, Inc. and Subsidiaries

Loans Receivable Detail (Unaudited)












(In Thousands)


September 30,
2023


June 30,
2023


March 31,
2023


December 31,
2022


September 30,
2022

 Agriculture and farmland loans 


$          50,584


$          50,552


$          53,301


$          55,746


$          53,570

 Construction loans 


65,836


75,628


67,934


57,713


49,311

 Commercial & industrial loans 


115,572


104,869


99,356


104,755


98,475

 Commercial real estate loans 











      Multifamily 


111,853


113,254


111,461


105,390


95,537

      Owner occupied 


161,751


154,520


151,407


139,554


114,863

      Non-owner occupied 


256,522


254,691


249,638


245,274


233,887

 Residential real estate loans 











      First liens 


172,481


170,271


166,478


168,084


166,388

      Second liens and lines of credit 


27,870


30,148


30,720


35,576


34,620

 Consumer and other loans 


11,869


11,308


10,472


10,057


11,929

 Municipal loans 


4,137


3,929


4,292


5,466


5,404



978,475


969,170


945,059


927,615


863,984

Deferred costs (fees)


437


363


312


256


(15)

Total loans receivable


$       978,912


$       969,533


$       945,371


$       927,871


$       863,969

 

LINKBANCORP, Inc. and Subsidiaries



Investments in Securities Detail (Unaudited)














September 30, 2023



(In Thousands)


Amortized
Cost


Net
Unrealized
Losses


Fair
Value



Available for Sale:









U.S. government agency securities


$         2,000


$                  (18)


$         1,982



Small Business Administration loan pools


693


(14)


679



Obligations of state and political subdivisions


45,614


(5,935)


39,679



Mortgage-backed securities in government-sponsored entities


40,987


(4,548)


36,439





$       89,294


$          (10,515)


$       78,779














 Amortized
Cost 


 Net
Unrealized
Losses 


Fair 
Value 


 Allowance
for Credit
Losses 

Held to Maturity:









Corporate debentures


$       15,000


$            (1,963)


$       13,037


$             512

Structured mortgage-backed securities


22,778


(1,227)


21,551


-



$       37,778


$            (3,190)


$       34,588


$             512












December 31, 2022



(In Thousands)


Amortized
Cost


Net
Unrealized
Losses


Fair
Value



Available for Sale:









Small Business Administration loan pools


$             858


$                  (15)


$             843



Obligations of state and political subdivisions


44,189


(4,020)


40,169



Mortgage-backed securities in government-sponsored entities


41,873


(4,072)


37,801





$       86,920


$            (8,107)


$       78,813



Held to Maturity:









Corporate debentures


$       14,993


$                (994)


$       13,999



Structured mortgage-backed securities


16,829


(748)


16,081





$       31,822


$            (1,742)


$       30,080



 

LINKBANCORP, Inc. and Subsidiaries

Deposits Detail (Unaudited)












(In Thousands)


September 30,
2023


June 30,
2023


March 31,
2023


December 31,
2022


September 30,
2022

Demand, noninterest-bearing

$         210,404


$         240,729


$         204,495


$         192,773


$         184,857

Demand, interest-bearing


273,673


237,114


250,944


254,478


305,934

Money market and savings


258,334


254,632


241,858


228,048


266,743

Time deposits, $250 and over

51,563


57,194


51,855


46,116


39,123

Time deposits, other


247,798


245,173


235,346


225,357


155,053



$     1,041,772


$     1,034,842


$         984,498


$         946,772


$         951,710























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












(In Thousands)


September 30,
2023


June 30,
2023


March 31,
2023


December 31,
2022


September 30,
2022

Demand, noninterest-bearing

$         209,054


$         209,072


$         192,135


$         199,556


$         170,863

Demand, interest-bearing


254,725


243,539


251,103


278,816


278,637

Money market and savings


254,849


244,355


245,563


245,154


244,107

Time deposits


265,573


299,398


290,605


211,090


205,792



$         984,201


$         996,364


$         979,406


$         934,616


$         899,399

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 Nine Months Ended

(Dollars in thousands)

9/30/2023


6/30/2023


9/30/2022


9/30/2023


9/30/2022

Net income 

$           1,240


$            1,347


$           1,772


$            1,033


$         4,902

Average assets

1,246,474


1,251,009


1,073,643


1,227,752


1,034,519

Return on average assets (annualized)

0.39 %


0.43 %


0.65 %


0.11 %


0.63 %

Net income 

1,240


1,347


1,772


1,033


4,902

Net losses (gains) on sale of securities

-


-


-


2,370


(13)

Tax effect at 21%

-


-


-


(498)


3

Merger & system conversion related expenses

777


315


-


1,679


-

Tax effect at 21%

(163)


(66)


-


(353)


-

Adjusted Net Income (Non-GAAP)

1,854


1,596


1,772


4,231


4,892

Average assets

1,246,474


1,251,009


1,073,643


1,227,752


1,034,519

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

0.59 %


0.51 %


0.65 %


0.46 %


0.63 %

 

Adjusted Return on Average Shareholders' Equity


For the Three Months Ended


For the Nine Months Ended

(Dollars in thousands)

9/30/2023


6/30/2023


9/30/2022


9/30/2023


9/30/2022

Net income 

$         1,240


$         1,347


$     1,772


$       1,033


$       4,902

Average shareholders' equity

142,374


141,780


108,439


141,601


85,345

Return on average shareholders' equity (annualized)

3.46 %


3.81 %


6.48 %


0.98 %


7.68 %

Net  income 

1,240


1,347


1,772


1,033


4,902

Net losses (gains) on sale of securities

-


-


-


2,370


(13)

Tax effect at 21%

-


-


-


(498)


3

Merger & system conversion related expenses

777


315


-


1,679


-

Tax effect at 21%

(163)


(66)


-


(353)


-

Adjusted Net Income (Non-GAAP)

1,854


1,596


1,772


4,231


4,892

Average shareholders' equity

142,374


141,780


108,439


141,601


85,345

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

5.17 %


4.51 %


6.48 %


4.00 %


7.66 %

 

Adjusted Efficiency Ratio


For the Three Months Ended


For the Nine Months Ended

(Dollars in thousands)

9/30/2023


6/30/2023


9/30/2022


9/30/2023


9/30/2022

GAAP-based efficiency ratio

86.59 %


87.09 %


72.55 %


96.87 %


73.30 %

Net interest income 

$           8,352


$           8,089


$     8,670


$              24,395


$     24,000

Noninterest income 

880


886


1,041


(88)


2,449

Less: net gains (losses) on sales of securities 

-


-


-


(2,370)


13

Adjusted revenue (Non-GAAP)

9,232


8,975


9,711


26,677


26,436

Total noninterest expense 

7,994


7,816


7,045


23,547


19,387

Less: Merger & system conversion related expenses

777


315


-


1,679


-

Adjusted non-interest expense

7,217


7,501


7,045


21,868


19,387

Efficiency ratio, as adjusted (Non-GAAP)

78.17 %


83.58 %


72.55 %


81.97 %


73.34 %

 

Adjusted Earnings Per Share


For the Three Months Ended


For the Nine Months Ended

(Dollars in thousands, except per share data)

9/30/2023


6/30/2023


9/30/2022



9/30/2023


9/30/2022

GAAP-Based Earnings Per Share, Basic

$       0.08


$              0.08


$              0.17



$                  0.06


$         0.49

GAAP-Based  Earnings Per Share, Diluted

$       0.08


$              0.08


$              0.17



$                  0.06


$         0.48

Net  Income 

$     1,240


$           1,347


$           1,772



$                1,033


$       4,902

Net losses (gains) on sale of securities

-


-


-



2,370


(13)

Tax effect at 21%

-


-


-



(498)


3

Merger & system conversion related expenses

777


315


-



1,679


-

 Tax effect at 21% 

(163)


(66)


-



(353)


-

Adjusted Net Income (Non-GAAP)

1,854


1,596


1,772



4,231


4,892

Adjusted Earnings per Share, Basic (Non-GAAP)

$       0.11


$              0.10


$              0.17



$                  0.26


$         0.48

Adjusted Earnings per Share, Diluted (Non-GAAP)

$       0.11


$              0.10


$              0.17



$                  0.26


$         0.48

 

Tangible Common Equity and Tangible Book Value



9/30/2023


6/30/2023


3/31/2023


12/31/2022


9/30/2022

Tangible Common Equity


(Dollars in thousands, except for share data)

Total shareholders' equity 


$     141,351


$        142,452


$     141,581


$     138,553


$     136,942

Adjustments:











Goodwill 


(35,842)


(35,842)


(35,842)


(35,842)


(35,842)

Other intangible assets 


(873)


(932)


(991)


(1,052)


(1,113)

Tangible common equity (Non-GAAP)


$     104,636


$        105,678


$     104,748


$     101,659


$       99,987

Common shares outstanding 


16,235,871


16,228,440


16,221,692


14,939,640


14,939,640

Book value per common share 


$           8.71


$              8.78


$           8.73


$           9.27


$           9.17

Tangible book value per common share
(Non-GAAP)


$           6.44


$              6.51


$           6.46


$           6.80


$           6.69

Tangible Assets











Total assets 


$  1,255,695


$     1,308,472


$  1,213,958


$  1,163,654


$  1,144,873

Adjustments:











Goodwill 


(35,842)


(35,842)


(35,842)


(35,842)


(35,842)

Other intangible assets 


(873)


(932)


(991)


(1,052)


(1,113)

Tangible assets (Non-GAAP)


$  1,218,980


$     1,271,698


$  1,177,125


$  1,126,760


$  1,107,918

Tangible common equity to tangible
assets (Non-GAAP)


8.58 %


8.31 %


8.90 %


9.02 %


9.02 %

 

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


For the Three Months Ended


For the Nine Months Ended

(Dollars in thousands, except per share data)

9/30/2023


6/30/2023


9/30/2022


9/30/2023


9/30/2022

Net Income (Loss) - GAAP

$     1,240


$           1,347


$       1,772


$                1,033


$       4,902

Net losses (gains) on sale of securities

-


-


-


2,370


(13)

Tax effect at 21%

-


-


-


(498)


3

Merger & system conversion related expenses

777


315


-


1,679


-

 Tax effect at 21% 

(163)


(66)


-


(353)


-

Adjusted Net Income (Non-GAAP)

1,854


1,596


1,772


4,231


4,892

Income tax expense

347


305


379


276


970

(Credit to) provision for credit losses

(349)


(493)


515


(549)


1,190

Tax effect included in Adjusted Net Income

163


66


-


851


(3)

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

$     2,015


$           1,474


$       2,666


$                4,809


$       7,049

Contact:
Nicole Davis
Corporate and Investor Relations Officer
717.803.8895
IR@LINKBANCORP.COM

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