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LINKBANCORP, INC. Announces Sale of New Jersey Operations

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LINKBANCORP, Inc. (NASDAQ: LNKB) announced the sale of its New Jersey operations to American Heritage Federal Credit Union, involving $105 million in deposits and $123 million in loans. The transaction aims to reallocate capital towards core markets and accelerate growth in other regions. Expected to close in the second half of 2024, subject to regulatory approvals.

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The divestiture by LINKBANCORP, Inc. of its New Jersey operations signals a strategic shift in focus towards optimizing existing markets and expanding into new ones that the firm considers more lucrative. By selling off the assets, including $105 million in deposits and $123 million in loans, LINKBANCORP is liquidating investments that may have underperformed or diverged from its core business strategy.

For investors, this sale could be seen as a positive move if it leads to better capital allocation, improved operational efficiencies and enhanced shareholder value. The proceeds from the sale could potentially be used for debt reduction, reinvestment in core operations, or share repurchases, each of which might be favorable for the stock price. However, the immediate impact on the financial statements will depend on the terms of the sale and how it compares to the book value of the sold assets. Moreover, investors should remain cognizant of the execution risks associated with reallocating capital and the ability of management to deliver on growth promises in the targeted Pennsylvania, Northern Virginia and Maryland markets.

The operational efficiency and revenue growth objectives mentioned by Andrew Samuel, CEO, hint at an aim to consolidate LINKBANCORP's market presence in strategically chosen geographies. This reflects an industry trend where regional banks are increasingly focusing on markets with higher growth potential or better synergy with the bank's existing operations. The sale of the New Jersey branches, therefore, positions LINKBANCORP to potentially capture a larger share of the market in Pennsylvania, Northern Virginia and Maryland.

From a market research perspective, these markets offer opportunities owing to their economic vibrancy and demographic trends. A successful pivot hinges on the company's market penetration strategies and the competitive landscape. Investors should watch for LINKBANCORP's future quarterly performance metrics in these regions as a barometer for the success of this strategic realignment. If the company can indeed leverage these markets to drive revenue growth, it could result in a favorable long-term outlook for the stock.

Investors should note the importance of regulatory approvals in such transactions. The required clearance from regulatory authorities can introduce uncertainty, as the timing and conditions imposed can significantly influence the final outcome of the deal. It's imperative for LINKBANCORP to navigate this process efficiently to avoid any adverse impacts on the expected benefits of the divestiture.

Moreover, the engagement of reputed legal counsel like Luse Gorman, PC for LINK and Honigman LLP and The Weber Firm, LLC for American Heritage Federal Credit Union underscores the complexity and legal due diligence necessary for such transactions. For the retail investor, it's important to comprehend that while legal complexities might not be immediately apparent, they have material implications on the execution risk and can affect the projected timelines and financials associated with the divestiture.

CAMP HILL, Pa., May 9, 2024 /PRNewswire/ -- LINKBANCORP, Inc. (NASDAQ: LNKB) ("LINK" or the Company), today announced that its wholly owned subsidiary, LINKBANK, entered into a definite purchase and assumption agreement under which American Heritage Federal Credit Union, based in Philadelphia, Pennsylvania, will acquire LINKBANK's banking operations and 3 branches in New Jersey. The transaction includes approximately $105 million of deposits and $123 million in loans.

The 3 branches were previously part of the Liberty Bell Bank division of The Bank of Delmarva, which merged with LINBANK as part of the Company's recent merger with Partners Bancorp.

Andrew Samuel, CEO, commented, "As we continue to execute on initiatives to achieve the operational efficiencies and revenue growth of the Partners combination, we believe this divestiture will enable us to re-allocate capital toward our core Pennsylvania markets and accelerate growth in the robust Northern Virginia and Maryland markets."

The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in the second half of 2024.

Stephens Inc. served as financial adviser and Luse Gorman, PC provided legal counsel to LINK. Olden Lane Securities, LLC served as financial adviser and Honigman LLP and The Weber Firm, LLC provided legal counsel to American Heritage Federal Credit Union.

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.

Contact:
Andrew Samuel
CEO
717.798.4230
asamuel@linkbank.com

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SOURCE LINKBANCORP, Inc.

FAQ

What did LINKBANCORP, Inc. announce?

LINKBANCORP, Inc. announced the sale of its New Jersey operations to American Heritage Federal Credit Union.

What is the stock symbol of LINKBANCORP, Inc.?

The stock symbol of LINKBANCORP, Inc. is LNKB.

Who will acquire LINKBANK's banking operations in New Jersey?

American Heritage Federal Credit Union, based in Philadelphia, Pennsylvania, will acquire LINKBANK's banking operations in New Jersey.

What is the total value of deposits involved in the transaction?

The transaction includes approximately $105 million of deposits.

When is the transaction expected to close?

The transaction is expected to close in the second half of 2024.

LINKBANCORP, Inc.

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Banks - Regional
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United States of America
CAMP HILL