HARRISBURG, Pa., April 29, 2024 /PRNewswire/ -- LINKBANCORP, Inc. (NASDAQ:LNKB) (the "Company"), the parent company of LINKBANK (the "Bank") reported net income of $5.73 million, or $0.15 per diluted share, for the quarter ended March 31, 2024. Excluding merger related expenses, adjusted earnings were $5.77 million1, or $0.161 per diluted share for the first quarter of 2024.
First Quarter 2024 Highlights
- Net interest income before provision was $24.9 million for the first quarter of 2024, compared to $14.3 million in the fourth quarter of 2023. Net interest margin grew from 3.55% for the fourth quarter of 2023 to 4.03% for the first quarter of 2024.
- Total deposits increased to $2.39 billion at March 31, 2024 from $2.30 billion at December 31, 2023 and $984.5 million at March 31, 2023. Total loans increased slightly to $2.25 billion at March 31, 2024, compared to $2.24 billion at December 31, 2023 and $945.4 million at March 31, 2023.
- The Company enhanced its on-balance sheet liquidity with cash and cash equivalents at March 31, 2024 of $172.3 million, up from $80.2 million at December 31, 2023 and $51.7 million at March 31, 2023.
- Asset quality remained strong as non-performing assets were $6.7 million, representing 0.25% of total assets at March 31, 2024, compared to $7.3 million, representing 0.27% of total assets at December 31, 2023. The allowance for credit losses-loans was 1.06% of total loans at March 31, 2024, unchanged from December 31, 2023.
Given that the merger with Partners Bancorp ("Partners") was completed on November 30, 2023 (the "Merger"), fourth quarter 2023 results do not represent a full quarter of comparable combined earnings. Reported results prior to the fourth quarter of 2023 reflect legacy LINKBANCORP results only.
"We are very pleased by the strong results of the first quarter of 2024, which represents the first full quarter following completion of our merger with Partners Bancorp," said Andrew Samuel, Chief Executive Officer of LINKBANCORP. "Following a very successful conversion during the fourth quarter, we have continued to make significant progress in integrating our institutions and executing on the actions needed to achieve the operational efficiencies and other benefits of this combination, including recognizing a 14% reduction in headcount since the close of the transaction and positive steps in implementing our bank-wide branch rationalization initiative." He continued, "Loan activity during the quarter was consistent with our expectations and solid deposit growth will support growing loan pipelines."
(1) | See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure. |
Income Statement
Net interest income before the provision for credit losses for the first quarter of 2024 increased to $24.9 million compared to $14.3 million in the fourth quarter of 2023. Net interest margin was 4.03% for the first quarter of 2024 compared to 3.55% for the fourth quarter of 2023. The average yield on interest-earning assets increased by 56 basis points over the prior linked quarter, due to an increase in the average yield on loans of 45 basis points to 6.48% as well as a 61 basis points increase in the average yield on securities to 4.71%. Cost of funds increased slightly to 2.33% for the first quarter of 2024 compared to 2.28% for the fourth quarter of 2023. The increase in net interest income was primarily a result of the Merger, including the lower cost deposits from legacy Partners and the impact of purchase accounting accretion.
Noninterest income increased quarter-over-quarter to $1.7 million for the first quarter of 2024 compared to $1.2 million for the fourth quarter of 2023. This increase was primarily related to a $395 thousand increase in service charges on deposit accounts resulting from the Merger, offset by a decrease in gain on sale of loans.
Noninterest expense for the first quarter of 2024 was $19.3 million compared to $22.3 million for the fourth quarter of 2023. Excluding one-time charges related to the Merger of $56 thousand in the first quarter of 2024 and $9.5 million in the fourth quarter of 2023, noninterest expense increased by $6.4 million to $19.2 million in the first quarter of 2024 from $12.8 million in the fourth quarter1. This increase was primarily due to the increased headcount and infrastructure resulting from the Merger, and amortization of the core deposit intangible assets. Salary and employee benefit expenses for the first quarter of 2024 included costs for personnel retained for post-conversion support through January 2024, as well as increased incentive compensation expense.
Income tax expense was $1.6 million for the first quarter of 2024, reflecting an effective tax rate of 21.8%.
(1) | See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure. |
Balance Sheet
Total assets were $2.78 billion at March 31, 2024 compared to $2.67 billion at December 31, 2023 and $1.21 billion at March 31, 2023. Deposits and net loans as of March 31, 2024 totaled $2.39 billion and $2.22 billion, respectively, compared to deposits and net loans of $2.30 billion and $2.22 billion, respectively, at December 31, 2023 and $984.5 million and $934.8 million, respectively, at March 31, 2023.
Total loans increased $4.3 million during the first quarter of 2024 to $2.25 billion at March 31, 2024, with muted net loan growth reflecting the continued integration following the completion of the Merger and introduction of the Company to new markets. Total commercial loan commitments for the first quarter of 2024 were $77.0 million with funded balances of $45.2 million. The average commercial loan commitment originated during the first quarter of 2024 totaled approximately $664 thousand with an average outstanding funded balance of $390 thousand.
Cash and cash equivalents increased $92.1 million to $172.3 million at March 31, 2024 compared to $80.2 million at December 31, 2023 and $51.7 million at March 31, 2023. The increase was due to deposit growth outpacing net loan growth, as well as an increase in long term FHLB borrowings as the Company took steps to extend the maturity of its liabilities.
Deposits at March 31, 2024 totaled $2.39 billion, an increase of $87.6 million compared to $2.30 billion at December 31, 2023. This increase was driven by significant growth in interest bearing deposits, including a $14.5 million increase in money market and savings accounts and $39.4 million increase in retail time deposits. Additionally, brokered certificates of deposits increased by $27.2 million to $146.7 million at March 31, 2024, as compared to at December 31, 2023, which includes $75 million related to an interest rate swap executed in 2023.
Shareholders' equity increased from $265.8 million at December 31, 2023 to $268.2 million at March 31, 2024 primarily as a result of a $2.9 million increase in retained earnings. Book value per share increased to $7.18 at March 31, 2024 compared to $7.12 at December 31, 2023. Tangible book value per share increased $0.10 to $5.00 at March 31, 2024 compared to $4.90 at December 31, 20231.
(1) | See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure. |
Asset Quality
In the first quarter of 2024, the Company recorded a provision for credit losses of $40 thousand, compared to a $9.8 million provision for credit losses in the fourth quarter of 2023, which included $9.7 million associated with the day one accounting provision required for loans acquired not designated as purchase credit deteriorated in the Merger.
Asset quality metrics remain strong. As of March 31, 2024, the Company's non-performing assets were $6.7 million, representing 0.25% of total assets. Loans 30-89 days past due at March 31, 2024 were $15.3 million, representing 0.68% of total loans.
The allowance for credit losses-loans was $23.8 million, or 1.06% of total loans at March 31, 2024, which remained consistent quarter over quarter with the allowance for credit losses-loans of $23.8 million, or 1.06% of total loans at December 31, 2023. The allowance for credit losses-loans to nonperforming assets was 357.18% at March 31, 2024, compared to 327.82% at December 31, 2023.
Capital
The Bank's regulatory capital ratios were well in excess of regulatory minimums to be considered "well capitalized" as of March 31, 2024. The Bank's Total Capital Ratio and Tier 1 Capital Ratio were 11.04% and 10.24%, respectively, at March 31, 2024, compared to 10.62% and 9.92%, respectively, at December 31, 2023 and 13.53% and 12.32%, respectively, at March 31, 2023. The Company's ratio of Tangible Common Equity to Tangible Assets was 6.91%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 29 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; 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.
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LINKBANCORP, Inc. and Subsidiaries | ||||||||||
Consolidated Balance Sheet (Unaudited) | ||||||||||
March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||
(In Thousands, except share and per share data) | ||||||||||
ASSETS | ||||||||||
Noninterest-bearing cash equivalents | $ 13,552 | $ 13,089 | $ 5,447 | $ 4,736 | $ 4,545 | |||||
Interest-bearing deposits with other institutions | 158,731 | 67,101 | 62,532 | 118,438 | 47,190 | |||||
Cash and cash equivalents | 172,283 | 80,190 | 67,979 | 123,174 | 51,735 | |||||
Certificates of deposit with other banks | — | — | 249 | 498 | 745 | |||||
Securities available for sale, at fair value | 133,949 | 115,490 | 78,779 | 83,620 | 86,804 | |||||
Securities held to maturity, net of allowance for credit losses | 36,109 | 36,223 | 37,266 | 38,220 | 38,986 | |||||
Loans receivable, gross | 2,245,817 | 2,241,533 | 978,912 | 969,533 | 945,371 | |||||
Allowance for credit losses - loans | (23,842) | (23,767) | (9,964) | (10,228) | (10,526) | |||||
Loans receivable, net | 2,221,975 | 2,217,766 | 968,948 | 959,305 | 934,845 | |||||
Investments in restricted bank stock | 4,286 | 3,965 | 3,107 | 5,544 | 4,134 | |||||
Premises and equipment, net | 22,233 | 22,279 | 6,414 | 6,292 | 6,497 | |||||
Right-of-Use Asset – Premises | 14,663 | 15,598 | 9,727 | 9,896 | 10,058 | |||||
Bank-owned life insurance | 49,230 | 48,847 | 24,732 | 24,554 | 24,384 | |||||
Goodwill and other intangible assets | 81,494 | 82,701 | 36,715 | 36,774 | 36,833 | |||||
Deferred tax asset | 23,463 | 24,153 | 6,880 | 6,571 | 6,749 | |||||
Accrued interest receivable and other assets | 24,579 | 22,113 | 14,899 | 14,024 | 12,188 | |||||
TOTAL ASSETS | $ 2,784,264 | $ 2,669,325 | $ 1,255,695 | $ 1,308,472 | $ 1,213,958 | |||||
LIABILITIES | ||||||||||
Deposits: | ||||||||||
Demand, noninterest bearing | $ 653,719 | $ 655,953 | $ 210,404 | $ 240,729 | $ 204,495 | |||||
Interest bearing | 1,732,310 | 1,642,520 | 831,368 | 794,113 | 780,003 | |||||
Total deposits | 2,386,029 | 2,298,473 | 1,041,772 | 1,034,842 | 984,498 | |||||
Other Borrowings | 40,499 | 10,590 | 15,000 | 74,899 | 31,250 | |||||
Subordinated Debt | 61,573 | 61,444 | 40,354 | 40,398 | 40,441 | |||||
Lease liabilities | 15,445 | 16,464 | 9,728 | 9,896 | 10,058 | |||||
Accrued interest payable and other liabilities | 12,475 | 16,558 | 7,490 | 5,985 | 6,130 | |||||
TOTAL LIABILITIES | 2,516,021 | 2,403,529 | 1,114,344 | 1,166,020 | 1,072,377 | |||||
SHAREHOLDERS' EQUITY | ||||||||||
Preferred stock | — | — | — | — | — | |||||
Common stock | 369 | 369 | 162 | 162 | 250 | |||||
Surplus | 263,577 | 263,310 | 127,856 | 127,818 | 127,659 | |||||
Retained earnings | 7,724 | 4,843 | 19,062 | 19,039 | 18,911 | |||||
Accumulated other comprehensive loss | (3,427) | (3,209) | (5,729) | (4,567) | (5,239) | |||||
Total equity attributable to parent | 268,243 | 265,313 | 141,351 | 142,452 | 141,581 | |||||
Noncontrolling interest in consolidated subsidiary | — | 483 | — | — | — | |||||
TOTAL SHAREHOLDERS' EQUITY | 268,243 | 265,796 | 141,351 | 142,452 | 141,581 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 2,784,264 | $ 2,669,325 | $ 1,255,695 | $ 1,308,472 | $ 1,213,958 | |||||
Common shares outstanding | 37,348,151 | 37,340,700 | 16,235,871 | 16,228,440 | 16,221,692 | |||||
LINKBANCORP, Inc. and Subsidiaries | ||||||
Consolidated Statements of Operations (Unaudited) | ||||||
Three Months Ended | ||||||
3/31/2024 | 12/31/2023 | 3/31/2023 | ||||
(In Thousands, except share and per share data) | ||||||
INTEREST AND DIVIDEND INCOME | ||||||
Loans receivable, including fees | $ 36,125 | $ 21,461 | $ 11,762 | |||
Other | 2,650 | 1,642 | 1,228 | |||
Total interest and dividend income | 38,775 | 23,103 | 12,990 | |||
INTEREST EXPENSE | ||||||
Deposits | 11,847 | 7,445 | 4,517 | |||
Other Borrowings | 1,152 | 727 | 87 | |||
Subordinated Debt | 892 | 615 | 432 | |||
Total interest expense | 13,891 | 8,787 | 5,036 | |||
NET INTEREST INCOME BEFORE | 24,884 | 14,316 | 7,954 | |||
Provision for credit losses | 40 | 9,844 | 293 | |||
NET INTEREST INCOME AFTER | 24,844 | 4,472 | 7,661 | |||
NONINTEREST INCOME | ||||||
Service charges on deposit accounts | 780 | 385 | 199 | |||
Bank-owned life insurance | 383 | 250 | 140 | |||
Net realized losses on the sale of debt securities | — | — | (2,370) | |||
Gain on sale of loans | 50 | 166 | — | |||
Other | 516 | 374 | 178 | |||
Total noninterest income | 1,729 | 1,175 | (1,853) | |||
NONINTEREST EXPENSE | ||||||
Salaries and employee benefits | 11,118 | 8,262 | 4,120 | |||
Occupancy | 1,578 | 911 | 707 | |||
Equipment and data processing | 1,826 | 1,201 | 693 | |||
Professional fees | 748 | 536 | 381 | |||
FDIC insurance | 352 | 198 | 159 | |||
Bank Shares Tax | 591 | 323 | 278 | |||
Intangible amortization | 1,206 | 484 | 61 | |||
Merger & system conversion related expenses | 56 | 9,496 | 587 | |||
Other | 1,775 | 874 | 751 | |||
Total noninterest expense | 19,250 | 22,285 | 7,737 | |||
Income (loss) before income tax expense (benefit) | 7,323 | (16,638) | (1,929) | |||
Income tax expense (benefit) | 1,597 | (3,641) | (376) | |||
NET INCOME (LOSS) | $ 5,726 | $ (12,997) | $ (1,553) | |||
EARNINGS (LOSS) PER SHARE, BASIC | $ 0.15 | $ (0.56) | $ (0.10) | |||
EARNINGS (LOSS) PER SHARE, DILUTED | $ 0.15 | $ (0.56) | $ (0.10) | |||
WEIGHTED-AVERAGE COMMON SHARES | ||||||
BASIC | 36,962,005 | 23,063,202 | 15,480,951 | |||
DILUTED | 37,038,230 | 23,063,202 | 15,480,951 | |||
LINKBANCORP, Inc. and Subsidiaries | |||||||||
Financial Highlights (Unaudited) | |||||||||
For the Three Months Ended | |||||||||
('Dollars In Thousands, except per share data) | 3/31/2024 | 12/31/2023 | 3/31/2023 | ||||||
Operating Highlights | |||||||||
Net Income (loss) | $ 5,726 | $ (12,997) | $ (1,553) | ||||||
Net Interest Income | 24,884 | 14,316 | 7,954 | ||||||
Provision for Credit Losses | 40 | 9,844 | 293 | ||||||
Non-Interest Income | 1,729 | 1,175 | (1,853) | ||||||
Non-Interest Expense | 19,250 | 22,285 | 7,737 | ||||||
Earnings (loss) per Share, Basic | 0.15 | (0.56) | (0.10) | ||||||
Adjusted Earnings per Share, Basic (2) | 0.16 | 0.09 | 0.05 | ||||||
Earnings (loss) per Share, Diluted | 0.15 | (0.56) | (0.10) | ||||||
Adjusted Earnings per Share, Diluted (2) | 0.16 | 0.09 | 0.05 | ||||||
Selected Operating Ratios | |||||||||
Net Interest Margin | 4.03 % | 3.55 % | 2.95 % | ||||||
Annualized Return on Assets ("ROA") | 0.86 % | -2.96 % | -0.53 % | ||||||
Adjusted ROA2 | 0.86 % | 0.49 % | 0.27 % | ||||||
Annualized Return on Equity ("ROE") | 8.63 % | -28.24 % | -4.56 % | ||||||
Adjusted ROE2 | 8.70 % | 4.70 % | 2.30 % | ||||||
Efficiency Ratio | 72.33 % | 143.86 % | 126.82 % | ||||||
Adjusted Efficiency Ratio3 | 72.12 % | 82.56 % | 84.41 % | ||||||
Noninterest Income to Avg. Assets | 0.26 % | 0.27 % | -0.63 % | ||||||
Noninterest Expense to Avg. Assets | 2.88 % | 5.08 % | 2.65 % | ||||||
3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||
Financial Condition Data | |||||||||
Total Assets | $ 2,784,264 | $ 2,669,325 | $ 1,255,695 | $ 1,308,472 | $ 1,213,958 | ||||
Loans Receivable, Net | 2,221,975 | 2,217,766 | 968,948 | 959,305 | 934,845 | ||||
Noninterest-bearing Deposits | 653,719 | 655,953 | 210,404 | 240,729 | 204,495 | ||||
Interest-bearing Deposits | 1,732,310 | 1,642,520 | 831,368 | 794,113 | 780,003 | ||||
Total Deposits | 2,386,029 | 2,298,473 | 1,041,772 | 1,034,842 | 984,498 | ||||
Selected Balance Sheet Ratios | |||||||||
Total Capital Ratio1 | 11.04 % | 10.62 % | 12.92 % | 12.88 % | 13.53 % | ||||
Tier 1 Capital Ratio1 | 10.24 % | 9.92 % | 12.37 % | 12.29 % | 12.32 % | ||||
Common Equity Tier 1 Capital Ratio1 | 10.24 % | 9.92 % | 12.37 % | 12.29 % | 12.32 % | ||||
Leverage Ratio1 | 9.23 % | 14.13 % | 10.71 % | 10.41 % | 10.78 % | ||||
Tangible Common Equity to Tangible Assets4 | 6.91 % | 7.08 % | 8.58 % | 8.31 % | 8.90 % | ||||
Tangible Book Value per Share5 | $ 5.00 | $ 4.90 | $ 6.44 | $ 6.51 | $ 6.46 | ||||
Asset Quality Data | |||||||||
Non-performing Assets | $ 6,675 | $ 7,250 | $ 2,958 | $ 2,856 | $ 2,398 | ||||
Non-performing Assets to Total Assets | 0.25 % | 0.27 % | 0.24 % | 0.22 % | 0.20 % | ||||
Non-performing Loans to Total Loans | 0.30 % | 0.32 % | 0.30 % | 0.29 % | 0.25 % | ||||
Allowance for Credit Losses - Loans ("ACLL") | $ 23,842 | $ 23,767 | $ 9,964 | $ 10,228 | $ 10,526 | ||||
ACLL to Total Loans | 1.06 % | 1.06 % | 1.02 % | 1.05 % | 1.11 % | ||||
ACLL to Nonperforming Assets | 357.18 % | 327.82 % | 336.85 % | 358.12 % | 438.95 % | ||||
Net chargeoffs (recoveries) | $ 70 | $ 195 | $ (12) | $ (97) | $ (2) | ||||
(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 March 31, | ||||||||||||
2024 | 2023 | |||||||||||
(Dollars in thousands) | Avg Bal | Interest (2) | Yield/Rate | Avg Bal | Interest (2) | Yield/Rate | ||||||
Int. Earn. Cash | $ 82,420 | $ 898 | 4.38 % | $ 36,470 | $ 275 | 3.06 % | ||||||
Securities | ||||||||||||
Taxable (1) | 114,896 | 1,391 | 4.87 % | 81,899 | 653 | 3.23 % | ||||||
Tax-Exempt | 42,984 | 457 | 4.28 % | 38,368 | 377 | 3.98 % | ||||||
Total Securities | 157,880 | 1,848 | 4.71 % | 120,267 | 1,030 | 3.47 % | ||||||
Total Cash Equiv. and Investments | 240,300 | 2,746 | 4.60 % | 156,737 | 1,305 | 3.38 % | ||||||
Total Loans (3) | 2,240,714 | 36,125 | 6.48 % | 936,510 | 11,762 | 5.09 % | ||||||
Total Earning Assets | 2,481,014 | 38,871 | 6.30 % | 1,093,247 | 13,067 | 4.85 % | ||||||
Other Assets | 210,826 | 90,938 | ||||||||||
Total Assets | $ 2,691,840 | $ 1,184,185 | ||||||||||
Interest bearing demand | $ 424,781 | $ 1,942 | 1.84 % | $ 251,103 | $ 1,188 | 1.92 % | ||||||
Money market demand | 587,455 | 3,174 | 2.17 % | 245,563 | 1,350 | 2.23 % | ||||||
Time deposits | 608,192 | 6,731 | 4.45 % | 290,605 | 1,979 | 2.76 % | ||||||
Total Borrowings | 140,621 | 2,044 | 5.85 % | 49,246 | 519 | 4.27 % | ||||||
Total Interest-Bearing Liabilities | 1,761,049 | 13,891 | 3.17 % | 836,517 | 5,036 | 2.44 % | ||||||
Non Int Bearing Deposits | 632,637 | 192,135 | ||||||||||
Total Cost of Funds | $ 2,393,686 | $ 13,891 | 2.33 % | $ 1,028,652 | $ 5,036 | 1.99 % | ||||||
Other Liabilities | 31,359 | 17,508 | ||||||||||
Total Liabilities | $ 2,425,045 | $ 1,046,160 | ||||||||||
Shareholders' Equity | $ 266,795 | $ 138,025 | ||||||||||
Total Liabilities & Shareholders' Equity | $ 2,691,840 | $ 1,184,185 | ||||||||||
Net Interest Income/Spread (FTE) | 24,980 | 3.13 % | 8,031 | 2.41 % | ||||||||
Tax-Equivalent Basis Adjustment | (96) | (77) | ||||||||||
Net Interest Income | $ 24,884 | $ 7,954 | ||||||||||
Net Interest Margin | 4.03 % | 2.95 % | ||||||||||
(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 | ||||||||||||
March 31, 2024 | December 31, 2023 | |||||||||||
(Dollars in thousands) | Avg Bal | Interest (2) | Yield/Rate | Avg Bal | Interest (2) | Yield/Rate | ||||||
Int. Earn. Cash | $ 82,420 | $ 898 | 4.38 % | $ 63,572 | $ 405 | 2.53 % | ||||||
Securities | ||||||||||||
Taxable (1) | 114,896 | 1,391 | 4.87 % | 88,632 | 951 | 4.26 % | ||||||
Tax-Exempt | 42,984 | 457 | 4.28 % | 38,269 | 362 | 3.75 % | ||||||
Total Securities | 157,880 | 1,848 | 4.71 % | 126,901 | 1,313 | 4.10 % | ||||||
Total Cash Equiv. and Investments | 240,300 | 2,746 | 4.60 % | 190,473 | 1,718 | 3.58 % | ||||||
Total Loans (3) | 2,240,714 | 36,125 | 6.48 % | 1,411,129 | 21,461 | 6.03 % | ||||||
Total Earning Assets | 2,481,014 | 38,871 | 6.30 % | 1,601,602 | 23,179 | 5.74 % | ||||||
Other Assets | 210,826 | 138,537 | ||||||||||
Total Assets | $ 2,691,840 | $ 1,740,139 | ||||||||||
Interest bearing demand | $ 424,781 | $ 1,942 | 1.84 % | $ 328,342 | $ 1,746 | 2.11 % | ||||||
Money market demand | 587,455 | 3,174 | 2.17 % | 367,821 | 2,287 | 2.47 % | ||||||
Time deposits | 608,192 | 6,731 | 4.45 % | 348,580 | 3,412 | 3.88 % | ||||||
Total Borrowings | 140,621 | 2,044 | 5.85 % | 113,492 | 1,342 | 4.69 % | ||||||
Total Interest-Bearing Liabilities | 1,761,049 | 13,891 | 3.17 % | 1,158,235 | 8,787 | 3.01 % | ||||||
Non Int Bearing Deposits | 632,637 | 371,051 | ||||||||||
Total Cost of Funds | $ 2,393,686 | $ 13,891 | 2.33 % | $ 1,529,286 | $ 8,787 | 2.28 % | ||||||
Other Liabilities | 31,359 | 28,244 | ||||||||||
Total Liabilities | $ 2,425,045 | $ 1,557,530 | ||||||||||
Shareholders' Equity | $ 266,795 | $ 182,609 | ||||||||||
Total Liabilities & Shareholders' Equity | $ 2,691,840 | $ 1,740,139 | ||||||||||
Net Interest Income/Spread (FTE) | 24,980 | 3.13 % | 14,392 | 2.73 % | ||||||||
Tax-Equivalent Basis Adjustment | (96) | (76) | ||||||||||
Net Interest Income | $ 24,884 | $ 14,316 | ||||||||||
Net Interest Margin | 4.03 % | 3.55 % | ||||||||||
(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) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||
Agriculture and farmland loans | $ 67,359 | $ 65,861 | $ 50,584 | $ 50,552 | $ 53,301 | |||||
Construction loans | 194,391 | 178,483 | 65,836 | 75,628 | 67,934 | |||||
Commercial & industrial loans | 218,724 | 238,343 | 115,572 | 104,869 | 99,356 | |||||
Commercial real estate loans | ||||||||||
Multifamily | 190,146 | 180,788 | 111,853 | 113,254 | 111,461 | |||||
Owner occupied | 489,467 | 501,732 | 160,929 | 154,520 | 151,407 | |||||
Non-owner occupied | 589,731 | 580,972 | 257,344 | 254,691 | 249,638 | |||||
Residential real estate loans | ||||||||||
First liens | 403,300 | 402,433 | 172,481 | 170,271 | 166,478 | |||||
Second liens and lines of credit | 71,060 | 70,747 | 27,870 | 30,148 | 30,720 | |||||
Consumer and other loans | 16,810 | 16,756 | 11,869 | 11,308 | 10,472 | |||||
Municipal loans | 4,473 | 5,244 | 4,137 | 3,929 | 4,292 | |||||
2,245,461 | 2,241,359 | 978,475 | 969,170 | 945,059 | ||||||
Deferred costs | 356 | 174 | 437 | 363 | 312 | |||||
Total loans receivable | $ 2,245,817 | $ 2,241,533 | $ 978,912 | $ 969,533 | $ 945,371 | |||||
LINKBANCORP, Inc. and Subsidiaries | ||||||||
Investments in Securities Detail (Unaudited) | ||||||||
March 31, 2024 | ||||||||
(In Thousands) | Amortized | Net | Fair | |||||
Available for Sale: | ||||||||
US Government Agency securities | $ 12,743 | $ 106 | $ 12,849 | |||||
US Government Treasury securities | 4,942 | 2 | 4,944 | |||||
Obligations of state and political subdivisions | 49,231 | (3,264) | 45,967 | |||||
Mortgage-backed securities in government-sponsored entities | 71,276 | (3,316) | 67,960 | |||||
Other securities | 2,250 | (21) | 2,229 | |||||
$ 140,442 | $ (6,493) | $ 133,949 | ||||||
Amortized | Net Unrealized Gains | Fair Value | Allowance for | |||||
Held to Maturity: | ||||||||
Corporate debentures | $ 15,000 | $ (1,455) | $ 13,545 | $ (507) | ||||
Structured mortgage-backed securities | 21,616 | (892) | 20,724 | - | ||||
$ 36,616 | $ (2,347) | $ 34,269 | $ (507) | |||||
December 31, 2023 | ||||||||
(In Thousands) | Amortized | Net | Fair | |||||
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 | Net Unrealized Gains | Fair Value | Allowance for | |||||
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) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||
Demand, noninterest-bearing | $ 653,719 | $ 655,953 | $ 210,404 | $ 240,729 | $ 204,495 | |||||
Demand, interest-bearing | 447,412 | 438,765 | 273,673 | 237,114 | 250,944 | |||||
Money market and savings | 591,982 | 577,448 | 258,334 | 254,632 | 241,858 | |||||
Time deposits, $250 and over | 147,898 | 134,324 | 51,563 | 57,194 | 51,855 | |||||
Time deposits, other | 398,365 | 372,572 | 172,798 | 185,121 | 165,310 | |||||
Brokered deposits | 146,653 | 119,411 | 75,000 | 60,052 | 70,036 | |||||
$ 2,386,029 | $ 2,298,473 | $ 1,041,772 | $ 1,034,842 | $ 984,498 | ||||||
Average Deposits Detail, for the Three Months Ended (Unaudited) | ||||||||||
(In Thousands) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||
Demand, noninterest-bearing | $ 632,637 | $ 371,051 | $ 209,054 | $ 209,072 | $ 192,135 | |||||
Demand, interest-bearing | 424,781 | 328,342 | 254,725 | 243,539 | 251,103 | |||||
Money market and savings | 587,455 | 367,821 | 254,849 | 244,355 | 245,563 | |||||
Time deposits | 518,929 | 317,747 | 236,869 | 236,059 | 212,478 | |||||
Brokered deposits | 89,263 | 30,832 | 28,705 | 63,339 | 78,127 | |||||
$ 2,253,065 | $ 1,415,793 | $ 984,202 | $ 996,364 | $ 979,406 | ||||||
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 | |||||
(Dollars in thousands) | 3/31/2024 | 12/31/2023 | 3/31/2023 | ||
Net income (loss) | $ 5,726 | $ (12,997) | $ (1,553) | ||
Average assets | 2,691,840 | 1,740,139 | 1,184,185 | ||
Return on average assets (annualized) | 0.86 % | -2.96 % | -0.53 % | ||
Net income (loss) | 5,726 | (12,997) | (1,553) | ||
Net losses on sale of securities | - | - | 2,370 | ||
Tax effect at 21% | - | - | (498) | ||
Merger & system conversion related expenses | 56 | 9,496 | 587 | ||
Tax effect at 21% | (12) | (1,994) | (123) | ||
Non-purchase credit deteriorated provision for credit losses | - | 9,694 | - | ||
Tax effect at 21% | - | (2,036) | - | ||
Adjusted Net Income (Non-GAAP) | 5,770 | 2,163 | 783 | ||
Average assets | 2,691,840 | 1,740,139 | 1,184,185 | ||
Adjusted return on average assets (annualized) (Non-GAAP) | 0.86 % | 0.49 % | 0.27 % | ||
Adjusted Return on Average Shareholders' Equity | |||||
For the Three Months Ended | |||||
(Dollars in thousands) | 3/31/2024 | 12/31/2023 | 3/31/2023 | ||
Net income (loss) | $ 5,726 | $ (12,997) | $ (1,553) | ||
Average shareholders' equity | 266,795 | 182,609 | 138,025 | ||
Return on average shareholders' equity (annualized) | 8.63 % | -28.24 % | -4.56 % | ||
Net income (loss) | 5,726 | (12,997) | (1,553) | ||
Net losses (gains) on sale of securities | - | - | 2,370 | ||
Tax effect at 21% | - | - | (498) | ||
Merger & system conversion related expenses | 56 | 9,496 | 587 | ||
Tax effect at 21% | (12) | (1,994) | (123) | ||
Non-purchase credit deteriorated provision for credit losses | - | 9,694 | - | ||
Tax effect at 21% | - | (2,036) | - | ||
Adjusted Net Income (Non-GAAP) | 5,770 | 2,163 | 783 | ||
Average shareholders' equity | 266,795 | 182,609 | 138,025 | ||
Adjusted return on average shareholders' equity (annualized) (Non-GAAP) | 8.70 % | 4.70 % | 2.30 % | ||
Adjusted Efficiency Ratio | |||||
For the Three Months Ended | |||||
(Dollars in thousands) | 3/31/2024 | 12/31/2023 | 3/31/2023 | ||
GAAP-based efficiency ratio | 72.33 % | 143.86 % | 126.82 % | ||
Net interest income | $ 24,884 | $ 14,316 | $ 7,954 | ||
Noninterest income | 1,729 | 1,175 | (1,853) | ||
Less: net gains (losses) on sales of securities | - | - | (2,370) | ||
Adjusted revenue (Non-GAAP) | 26,613 | 15,491 | 8,471 | ||
Total noninterest expense | 19,250 | 22,285 | 7,737 | ||
Less: Merger & system conversion related expenses | 56 | 9,496 | 587 | ||
Adjusted non-interest expense | 19,194 | 12,789 | 7,150 | ||
Efficiency ratio, as adjusted (Non-GAAP) | 72.12 % | 82.56 % | 84.41 % | ||
Adjusted Earnings Per Share | |||||
For the Three Months Ended | |||||
(Dollars in thousands, except per share data) | 3/31/2024 | 12/31/2023 | 3/31/2023 | ||
GAAP-Based Earnings (Loss) Per Share, Basic | $ 0.15 | $ (0.56) | $ (0.10) | ||
GAAP-Based Earnings (Loss) Per Share, Diluted | $ 0.15 | $ (0.56) | $ (0.10) | ||
Net Income (Loss) | $ 5,726 | $ (12,997) | $ (1,553) | ||
Net losses on sale of securities | - | - | 2,370 | ||
Tax effect at 21% | - | - | (498) | ||
Merger & system conversion related expenses | 56 | 9,496 | 587 | ||
Tax effect at 21% | (12) | (1,994) | (123) | ||
Non-purchase credit deteriorated provision for credit losses | - | 9,694 | - | ||
Tax effect at 21% | - | (2,036) | - | ||
Adjusted Net Income (Non-GAAP) | 5,770 | 2,163 | 783 | ||
Adjusted Earnings per Share, Basic (Non-GAAP) | $ 0.16 | $ 0.09 | $ 0.05 | ||
Adjusted Earnings per Share, Diluted (Non-GAAP) | $ 0.16 | $ 0.09 | $ 0.05 | ||
Tangible Common Equity and Tangible Book Value | ||||||||||
3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | ||||||
Tangible Common Equity | (Dollars in thousands, except for share data) | |||||||||
Total shareholders' equity | $ 268,243 | $ 265,796 | $ 141,351 | $ 142,452 | $ 141,581 | |||||
Adjustments: | ||||||||||
Goodwill | (56,968) | (56,968) | (35,842) | (35,842) | (35,842) | |||||
Other intangible assets | (24,526) | (25,733) | (873) | (932) | (991) | |||||
Tangible common equity (Non-GAAP) | $ 186,749 | $ 183,095 | $ 104,636 | $ 105,678 | $ 104,748 | |||||
Common shares outstanding | 37,348,151 | 37,340,700 | 16,235,871 | 16,228,440 | 16,221,692 | |||||
Book value per common share | $ 7.18 | $ 7.12 | $ 8.71 | $ 8.78 | $ 8.73 | |||||
Tangible book value per common share | $ 5.00 | $ 4.90 | $ 6.44 | $ 6.51 | $ 6.46 | |||||
Tangible Assets | ||||||||||
Total assets | $ 2,784,264 | $ 2,669,325 | $ 1,255,695 | $ 1,308,472 | $ 1,213,958 | |||||
Adjustments: | ||||||||||
Goodwill | (56,968) | (56,968) | (35,842) | (35,842) | (35,842) | |||||
Other intangible assets | (24,526) | (25,733) | (873) | (932) | (991) | |||||
Tangible assets (Non-GAAP) | $ 2,702,770 | $ 2,586,624 | $ 1,218,980 | $ 1,271,698 | $ 1,177,125 | |||||
Tangible common equity to tangible assets (Non-GAAP) | 6.91 % | 7.08 % | 8.58 % | 8.31 % | 8.90 % | |||||
Adjusted Pre-tax, Pre-provision Net Income (Non-GAAP) | |||||
For the Three Months Ended | |||||
(Dollars in thousands, except per share data) | 3/31/2024 | 12/31/2023 | 3/31/2023 | ||
Net Income (Loss) - GAAP | $ 5,726 | $ (12,997) | $ (1,553) | ||
Net losses on sale of securities | - | - | 2,370 | ||
Tax effect at 21% | - | - | (498) | ||
Merger & system conversion related expenses | 56 | 9,496 | 587 | ||
Tax effect at 21% | (12) | (1,994) | (123) | ||
Adjusted Net Income (Loss) (Non-GAAP) | 5,770 | (5,495) | 783 | ||
Income tax expense (benefit) | 1,597 | (3,641) | (376) | ||
Provision for credit losses | 40 | 9,844 | 293 | ||
Tax effect included in Adjusted Net Income | 12 | 1,994 | 621 | ||
Adjusted Pre-tax, Pre-provision Net Income (Non-GAAP) | $ 7,419 | $ 2,702 | $ 1,321 | ||
Contact:
Nicole Davis
Corporate and Investor Relations Officer
717.803.8895
[email protected]
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SOURCE LINKBANCORP, Inc.