LINKBANCORP, Inc. Announces Third Quarter 2023 Financial Results

LINKBANCORP, Inc. -1.10% Post

LINKBANCORP, Inc.

LNKB

6.72

6.72

-1.10%

0.00% Post

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.)

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

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/linkbancorp-inc-announces-third-quarter-2023-financial-results-301971900.html

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