LINKBANCORP, Inc. Announces Second Quarter 2023 Financial Results
- Total deposits grew 20.5% annualized during Q2 2023. On-balance sheet liquidity increased to $123.2 million. Total loans grew 10.3% annualized. Net interest income was $8.1 million. Negative provision for credit losses of $493 thousand. Merger with Partners Bancorp approved.
- None.
Second Quarter 2023 Highlights
- Total deposits grew
, or$50.3 million 20.5% annualized during the second quarter over the prior quarter end, including an increase in noninterest bearing deposits of , and$36.2 million in interest bearing deposits. Estimated uninsured deposits, excluding collateralized public funds and affiliate company accounts, totaled$14.1 million , or$378.7 million 36.7% of total deposits as of June 30, 2023, compared with , or$387.8 million 39.4% of total deposits as of March 31, 2023. - The Company enhanced its on-balance sheet liquidity, with cash and cash equivalents as of June 30, 2023 of
, up from$123.2 million at March 31, 2023 and$51.7 million at December 31, 2022. Total liquidity, including all available borrowing capacity and brokered deposit availability, together with cash and cash equivalents and unpledged investment securities, totaled approximately$30.0 million as of June 30, 2023.$507.4 million - Total loans grew
during the second quarter, representing a$24.2 million 10.3% annualized growth rate, driven primarily by commercial and industrial and commercial real estate loan activity. - Net interest income for the second quarter of 2023 was
, compared to$8.1 million for the first quarter of 2023. Net interest margin was$8.0 million 2.81% for the second quarter of 2023, compared to2.95% for the first quarter of 2023. The linked quarter decrease was primarily due to higher interest expense on deposits continuing to outpace the increase in interest income from loans. - The Company recorded a
negative provision for credit losses for the second quarter of 2023, resulting in an allowance for credit losses of$493 thousand , or$10.2 million 1.05% of total loans at June 30, 2023. The negative provision for credit losses was primarily driven by refinement of the population of loans individually assessed for impairment under the current expected credit losses ("CECL") accounting standard, improvements in internal credit metrics and external forecast indexes, as well as in net recoveries, offset by loan growth in the period.$97 thousand - On June 22, 2023, shareholders of the Company and Partners Bancorp ("Partners"), each approved the merger of Partners with and into the Company, with the Company as the surviving corporation pursuant to the Agreement and Plan of Merger, dated as of February 22, 2023. The merger is expected to close in the third or fourth quarter of 2023, subject to regulatory approvals and certain other customary closing conditions.
1 | See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure. |
"We are pleased to report results that evidence continued balance sheet strength, including increased on-balance sheet liquidity, a growing core deposit base, and excellent credit quality." said Andrew Samuel, Chief Executive Officer. "Although significant uncertainty remains in the external environment, we are optimistic that the pace of margin compression will continue to stabilize. Our teams are highly focused on providing superior service to meet our clients' needs and we believe the Company is well positioned to successfully navigate through this climate."
Income Statement
Net interest income before the provision for credit losses for the second quarter of 2023 increased to
During the second quarter, the Company continued to recognize results from its increased internal focus and strategy on core deposit generation, including 123 net new checking accounts opened for a total of
Noninterest income (expense) improved from a
Noninterest expense for the second quarter of 2023 increased to
Balance Sheet
Total assets were
Total loans increased
The Company has proactively taken additional steps during the quarter to enhance its on-balance sheet liquidity. Cash and cash equivalents increased to
Deposits at June 30, 2023 totaled
Shareholders' equity increased from
Asset Quality
In the second quarter of 2023, the Company recorded a negative provision for credit losses, calculated under the CECL model, of
Asset quality metrics remain strong. As of June 30, 2023, the Company's non-performing assets were
The allowance for credit losses-loans was
The Company's risk management function incorporates extensive diversification, monitoring and hold limits with respect to the commercial real estate loan portfolio and management closely monitors concentration reports and related analyses. The commercial real estate loan portfolio is well-diversified, with limited exposure to higher risk segments such as hotels and retail. Management believes that the office space portfolio, which includes medical and mixed-use space, and does not involve properties in major metropolitan business districts, is stable and does not pose excessive risk. Specifically, at June 30, 2023, the Company had 68 loans related to office space, with an average loan size of
Capital
The Bank's regulatory capital ratios are well in excess of regulatory minimums to be considered "well capitalized" as of June 30, 2023. The Bank's Total Capital Ratio and Tier 1 Capital Ratio was
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
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.
2 | See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure. |
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LINKBANCORP, Inc. and Subsidiaries | ||||||||||
Consolidated Balance Sheet (Unaudited) | ||||||||||
June 30, 2023 | March 31, 2023 | December 31, | September 30, | June 30, 2022 | ||||||
(In Thousands, except share and per share data) | ||||||||||
ASSETS | ||||||||||
Noninterest-bearing cash equivalents | $ 4,736 | $ 4,545 | $ 4,209 | $ 8,711 | $ 7,563 | |||||
Interest-bearing deposits with other institutions | 118,438 | 47,190 | 25,802 | 66,085 | 55,433 | |||||
Cash and cash equivalents | $ 123,174 | $ 51,735 | $ 30,011 | $ 74,796 | $ 62,996 | |||||
Certificates of deposit with other banks | 498 | 745 | 5,623 | 8,358 | 11,088 | |||||
Securities available for sale, at fair value | 83,620 | 86,804 | 78,813 | 78,698 | 85,756 | |||||
Securities held to maturity, net of allowance for credit losses | 38,220 | 38,986 | 31,822 | 32,571 | 28,816 | |||||
Loans receivable, gross | 969,533 | 945,371 | 927,871 | 863,969 | 790,406 | |||||
Allowance for credit losses - loans | (10,228) | (10,526) | (4,666) | (4,569) | (3,890) | |||||
Loans receivable, net | 959,305 | 934,845 | 923,205 | 859,400 | 786,516 | |||||
Investments in restricted bank stock | 5,544 | 4,134 | 3,377 | 3,327 | 2,567 | |||||
Premises and equipment, net | 6,292 | 6,497 | 6,743 | 9,087 | 7,915 | |||||
Right-of-Use Asset – Premises | 9,896 | 10,058 | 10,219 | 8,920 | 4,513 | |||||
Bank-owned life insurance | 24,554 | 24,384 | 19,244 | 19,127 | 19,012 | |||||
Goodwill and other intangible assets | 36,774 | 36,833 | 36,894 | 36,955 | 37,020 | |||||
Deferred tax asset | 6,571 | 6,749 | 5,619 | 6,378 | 5,777 | |||||
Accrued interest receivable and other assets | 14,024 | 12,188 | 12,084 | 7,256 | 7,909 | |||||
TOTAL ASSETS | $ 1,308,472 | $ 1,213,958 | $ 1,163,654 | $ 1,144,873 | $ 1,059,885 | |||||
LIABILITIES | ||||||||||
Deposits: | ||||||||||
Demand, noninterest bearing | $ 240,729 | $ 204,495 | $ 192,773 | $ 184,857 | $ 184,345 | |||||
Interest bearing | 794,113 | 780,003 | 753,999 | 766,853 | 718,028 | |||||
Total deposits | 1,034,842 | 984,498 | 946,772 | 951,710 | 902,373 | |||||
Other Borrowings | 74,899 | 31,250 | 20,938 | — | 1,639 | |||||
Subordinated Debt | 40,398 | 40,441 | 40,484 | 40,526 | 40,585 | |||||
Operating Lease Liabilities | 9,896 | 10,058 | 10,219 | 8,921 | 4,513 | |||||
Accrued interest payable and other liabilities | 5,985 | 6,130 | 6,688 | 6,774 | 6,004 | |||||
TOTAL LIABILITIES | 1,166,020 | 1,072,377 | 1,025,101 | 1,007,931 | 955,114 | |||||
SHAREHOLDERS' EQUITY | ||||||||||
Preferred stock | — | — | — | — | — | |||||
Common stock | 162 | 250 | 149 | 149 | 99 | |||||
Surplus | 127,818 | 127,659 | 117,709 | 117,698 | 83,070 | |||||
Retained earnings | 19,039 | 18,911 | 27,100 | 27,525 | 26,491 | |||||
Accumulated other comprehensive (loss) income | (4,567) | (5,239) | (6,405) | (8,430) | (4,889) | |||||
TOTAL SHAREHOLDERS' EQUITY | 142,452 | 141,581 | 138,553 | 136,942 | 104,771 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,308,472 | $ 1,213,958 | $ 1,163,654 | $ 1,144,873 | $ 1,059,885 | |||||
Common shares outstanding | 16,228,440 | 16,221,692 | 14,939,640 | 14,939,640 | 9,838,435 |
LINKBANCORP, Inc. and Subsidiaries | ||||||||||||
Consolidated Statements of Operations (Unaudited) | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
6/30/2023 | 3/31/2023 | 6/30/2022 | 6/30/2023 | 6/30/2022 | ||||||||
(In Thousands, except share and per share data) | ||||||||||||
INTEREST AND DIVIDEND INCOME | ||||||||||||
Loans receivable, including fees | $ 12,499 | $ 11,762 | $ 8,114 | $ 24,261 | $ 15,877 | |||||||
Other | 1,827 | 1,228 | 981 | 3,055 | 1,600 | |||||||
Total interest and dividend income | 14,326 | 12,990 | 9,095 | 27,316 | 17,477 | |||||||
INTEREST EXPENSE | ||||||||||||
Deposits | 5,242 | 4,517 | 818 | 9,759 | 1,483 | |||||||
Other Borrowings | 558 | 87 | 2 | 645 | 35 | |||||||
Subordinated Debt | 437 | 432 | 422 | 869 | 629 | |||||||
Total interest expense | 6,237 | 5,036 | 1,242 | 11,273 | 2,147 | |||||||
NET INTEREST INCOME BEFORE (CREDIT TO) | 8,089 | 7,954 | 7,853 | 16,043 | 15,330 | |||||||
(Recovery of) provision for credit losses | (493) | 293 | 395 | (200) | 675 | |||||||
NET INTEREST INCOME AFTER (CREDIT TO) | 8,582 | 7,661 | 7,458 | 16,243 | 14,655 | |||||||
NONINTEREST INCOME | ||||||||||||
Service charges on deposit accounts | 197 | 199 | 218 | 396 | 428 | |||||||
Bank-owned life insurance | 170 | 140 | 114 | 310 | 224 | |||||||
Net realized (losses) gains on the sale of debt securities | — | (2,370) | — | (2,370) | 13 | |||||||
Gain on sale of loans | 296 | — | 153 | 296 | 333 | |||||||
Other | 223 | 178 | 211 | 401 | 409 | |||||||
Total noninterest income | 886 | (1,853) | 696 | (967) | 1,407 | |||||||
NONINTEREST EXPENSE | ||||||||||||
Salaries and employee benefits | 4,037 | 4,120 | 3,722 | 8,157 | 7,378 | |||||||
Occupancy | 696 | 707 | 433 | 1,403 | 906 | |||||||
Equipment and data processing | 893 | 693 | 595 | 1,586 | 1,192 | |||||||
Professional fees | 418 | 381 | 307 | 799 | 535 | |||||||
FDIC insurance | 184 | 159 | 138 | 343 | 342 | |||||||
Bank Shares Tax | 278 | 278 | 201 | 556 | 384 | |||||||
Merger & system conversion related expenses | 315 | 587 | — | 902 | — | |||||||
Other | 995 | 812 | 846 | 1,807 | 1,603 | |||||||
Total noninterest expense | 7,816 | 7,737 | 6,242 | 15,553 | 12,340 | |||||||
Income (loss) before income tax expense (benefit) | 1,652 | (1,929) | 1,912 | (277) | 3,722 | |||||||
Income tax expense (benefit) | 305 | (376) | 306 | (70) | 592 | |||||||
NET INCOME (LOSS) | $ 1,347 | $ (1,553) | $ 1,606 | $ (207) | $ 3,130 | |||||||
EARNINGS (LOSS) PER SHARE, BASIC | $ 0.08 | $ (0.10) | $ 0.16 | $ (0.01) | $ 0.32 | |||||||
EARNINGS (LOSS) PER SHARE, DILUTED | $ 0.08 | $ (0.10) | $ 0.16 | $ (0.01) | $ 0.31 | |||||||
WEIGHTED-AVERAGE COMMON SHARES | ||||||||||||
BASIC | 16,228,069 | 15,480,951 | 9,836,984 | 15,856,574 | 9,831,739 | |||||||
DILUTED | 16,228,069 | 15,480,951 | 9,913,477 | 15,856,574 | 9,983,742 |
LINKBANCORP, Inc. and Subsidiaries | |||||||||
Financial Highlights (Unaudited) | |||||||||
For the Three Months Ended | For the Six Months Ended | ||||||||
('Dollars In Thousands) | 6/30/2023 | 3/31/2023 | 6/30/2022 | 6/30/2023 | 6/30/2022 | ||||
Operating Highlights | |||||||||
Net Income (loss) | $ 1,347 | $ (1,553) | $ 1,606 | $ (207) | $ 3,130 | ||||
Net Interest Income | 8,089 | 7,954 | 7,853 | 16,043 | 15,330 | ||||
Provision for (credit to) Credit Losses | (493) | 293 | 395 | (200) | 675 | ||||
Non-Interest Income | 886 | (1,853) | 696 | (967) | 1,407 | ||||
Non-Interest Expense | 7,816 | 7,737 | 6,242 | 15,553 | 12,340 | ||||
Earnings (loss) per Share, Basic | 0.08 | (0.10) | 0.16 | (0.01) | 0.32 | ||||
Adjusted Earnings per Share, Basic (2) | 0.10 | 0.05 | 0.16 | 0.15 | 0.32 | ||||
Earnings (loss) per Share, Diluted | 0.08 | (0.10) | 0.16 | (0.01) | 0.31 | ||||
Adjusted Earnings per Share, Diluted (2) | 0.10 | 0.05 | 0.16 | 0.15 | 0.31 | ||||
Selected Operating Ratios | |||||||||
Net Interest Margin | 2.81 % | 2.95 % | 3.38 % | 2.86 % | 3.39 % | ||||
Annualized Return on Assets ("ROA") | 0.43 % | -0.53 % | 0.63 % | -0.03 % | 0.63 % | ||||
Adjusted ROA2 | 0.51 % | 0.27 % | 0.63 % | 0.39 % | 0.63 % | ||||
Annualized Return on Equity ("ROE") | 3.81 % | -4.56 % | 6.13 % | -0.30 % | 12.31 % | ||||
Adjusted ROE2 | 4.51 % | 2.30 % | 6.13 % | 3.42 % | 12.27 % | ||||
Efficiency Ratio | 87.09 % | 126.82 % | 73.01 % | 103.16 % | 73.73 % | ||||
Adjusted Efficiency Ratio3 | 83.58 % | 84.41 % | 73.01 % | 83.98 % | 73.79 % | ||||
Noninterest Income to Avg. Assets | 0.28 % | -0.59 % | 0.27 % | -0.16 % | 0.28 % | ||||
Noninterest Expense to Avg. Assets | 2.51 % | 2.59 % | 2.45 % | 2.56 % | 2.49 % | ||||
6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | |||||
Financial Condition Data | |||||||||
Total Assets | $ 1,308,472 | $ 1,213,958 | $ 1,163,654 | $ 1,144,873 | $ 1,059,885 | ||||
Loans Receivable, Net | 959,305 | 934,845 | 923,205 | 859,400 | 786,516 | ||||
Noninterest-bearing Deposits | 240,729 | 204,495 | 192,773 | 184,857 | 184,345 | ||||
Interest-bearing Deposits | 794,113 | 780,003 | 753,999 | 766,853 | 718,028 | ||||
Total Deposits | 1,034,842 | 984,498 | 946,772 | 951,710 | 902,373 | ||||
Selected Balance Sheet Ratios | |||||||||
Total Capital Ratio1 | 13.55 % | 13.53 % | 12.89 % | 11.55 % | 12.42 % | ||||
Tier 1 Capital Ratio1 | 12.94 % | 12.32 % | 12.41 % | 11.04 % | 11.94 % | ||||
Common Equity Tier 1 Capital Ratio1 | 12.94 % | 12.32 % | 12.41 % | 11.04 % | 11.94 % | ||||
Leverage Ratio1 | 10.41 % | 10.78 % | 10.93 % | 9.74 % | 10.10 % | ||||
Tangible Common Equity to Tangible Assets4 | 8.31 % | 8.90 % | 9.02 % | 9.02 % | 6.62 % | ||||
Tangible Book Value per Share5 | $ 6.51 | $ 6.46 | $ 6.80 | $ 6.69 | $ 6.89 | ||||
Asset Quality Data | |||||||||
Non-performing Assets | $ 2,856 | $ 2,398 | $ 2,500 | $ 1,979 | $ 1,494 | ||||
Non-performing Assets to Total Assets | 0.22 % | 0.20 % | 0.21 % | 0.17 % | 0.14 % | ||||
Non-performing Loans to Total Loans | 0.29 % | 0.25 % | 0.27 % | 0.23 % | 0.19 % | ||||
Allowance for Credit Losses - Loans ("ACLL") | $ 10,228 | $ 10,526 | $ 4,666 | $ 4,569 | $ 3,890 | ||||
ACLL to Total Loans | 1.05 % | 1.11 % | 0.50 % | 0.53 % | 0.49 % | ||||
ACLL to Nonperforming Assets | 358.12 % | 438.95 % | 186.64 % | 230.87 % | 260.37 % | ||||
Net chargeoffs (recoveries) | $ (97) | $ (2) | $ (60) | $ (164) | $ (52) | ||||
(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 | |||||||||
(3) - The efficiency ratio, as adjusted represents noninterest expense divided by the sum of net interest income and noninterest income, excluding | |||||||||
(4) - We calculate tangible common equity as total shareholders' equity less goodwill and other intangibles, and we calculate tangible assets as total | |||||||||
(5) - We calculate tangible book value per common share as total shareholders' equity less goodwill and other intangibles, divided by the |
LINKBANCORP, Inc. and Subsidiaries | ||||||||||||
Net Interest Margin - Quarter-To-Date (Unaudited) | ||||||||||||
For the Three Months Ended June 30, | ||||||||||||
2023 | 2022 | |||||||||||
(Dollars in thousands) | Avg Bal | Interest (2) | Yield/Rate | Avg Bal | Interest (2) | Yield/Rate | ||||||
Int. Earn. Cash | $ 66,149 | $ 708 | 4.29 % | $ 60,718 | $ 97 | 0.64 % | ||||||
Securities | ||||||||||||
Taxable (1) | 86,366 | 822 | 3.82 % | 74,105 | 587 | 3.18 % | ||||||
Tax-Exempt | 39,139 | 378 | 3.87 % | 45,030 | 377 | 3.36 % | ||||||
Total Securities | 125,505 | 1,200 | 3.84 % | 119,135 | 964 | 3.25 % | ||||||
Total Cash Equiv. and Investments | 191,654 | 1,908 | 3.99 % | 179,853 | 1,061 | 2.37 % | ||||||
Total Loans (3) | 963,824 | 12,499 | 5.20 % | 751,347 | 8,114 | 4.33 % | ||||||
Total Earning Assets | 1,155,478 | 14,407 | 5.00 % | 931,200 | 9,175 | 3.95 % | ||||||
Other Assets | 95,531 | 90,361 | ||||||||||
Total Assets | $ 1,251,009 | $ 1,021,561 | ||||||||||
Interest bearing demand | $ 243,539 | $ 1,261 | 2.08 % | $ 270,844 | $ 260 | 0.39 % | ||||||
Money market demand | 244,355 | 1,589 | 2.61 % | 224,483 | 238 | 0.43 % | ||||||
Time deposits | 299,398 | 2,392 | 3.20 % | 211,033 | 320 | 0.61 % | ||||||
Total Borrowings | 95,792 | 995 | 4.17 % | 46,961 | 424 | 3.62 % | ||||||
Total Interest-Bearing Liabilities | 883,084 | 6,237 | 2.83 % | 753,321 | 1,242 | 0.66 % | ||||||
Non Int Bearing Deposits | 209,072 | 152,691 | ||||||||||
Total Cost of Funds | $ 1,092,156 | $ 6,237 | 2.29 % | $ 906,012 | $ 1,242 | 0.55 % | ||||||
Other Liabilities | 17,073 | 10,489 | ||||||||||
Total Liabilities | $ 1,109,229 | $ 916,501 | ||||||||||
Shareholders' Equity | $ 141,780 | $ 105,060 | ||||||||||
Total Liabilities & Shareholders' Equity | $ 1,251,009 | $ 1,021,561 | ||||||||||
Net Interest Income/Spread (FTE) | 8,170 | 2.17 % | 7,933 | 3.29 % | ||||||||
Tax-Equivalent Basis Adjustment | (81) | (80) | ||||||||||
Net Interest Income | $ 8,089 | $ 7,853 | ||||||||||
Net Interest Margin | 2.81 % | 3.38 % | ||||||||||
(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 | ||||||||||||
June 30, 2023 | March 31, 2023 | |||||||||||
(Dollars in thousands) | Avg Bal | Interest (2) | Yield/Rate | Avg Bal | Interest (2) | Yield/Rate | ||||||
Int. Earn. Cash | $ 66,149 | $ 708 | 4.29 % | $ 36,470 | $ 275 | 3.06 % | ||||||
Securities | ||||||||||||
Taxable (1) | 86,366 | 822 | 3.82 % | 81,899 | 653 | 3.23 % | ||||||
Tax-Exempt | 39,139 | 378 | 3.87 % | 38,368 | 377 | 3.98 % | ||||||
Total Securities | 125,505 | 1,200 | 3.84 % | 120,267 | 1,030 | 3.47 % | ||||||
Total Cash Equiv. and Investments | 191,654 | 1,908 | 3.99 % | 156,737 | 1,305 | 3.38 % | ||||||
Total Loans (3) | 963,824 | 12,499 | 5.20 % | 936,510 | 11,762 | 5.09 % | ||||||
Total Earning Assets | 1,155,478 | 14,407 | 5.00 % | 1,093,247 | 13,067 | 4.85 % | ||||||
Other Assets | 95,531 | 90,938 | ||||||||||
Total Assets | $ 1,251,009 | $ 1,184,185 | ||||||||||
Interest bearing demand | $ 243,539 | $ 1,261 | 2.08 % | $ 251,103 | $ 1,188 | 1.92 % | ||||||
Money market demand | 244,355 | 1,589 | 2.61 % | 245,563 | 1,350 | 2.23 % | ||||||
Time deposits | 299,398 | 2,392 | 3.20 % | 290,605 | 1,979 | 2.76 % | ||||||
Total Borrowings | 95,792 | 995 | 4.17 % | 49,246 | 519 | 4.27 % | ||||||
Total Interest-Bearing Liabilities | 883,084 | 6,237 | 2.83 % | 836,517 | 5,036 | 2.44 % | ||||||
Non Int Bearing Deposits | 209,072 | 192,135 | ||||||||||
Total Cost of Funds | $ 1,092,156 | $ 6,237 | 2.29 % | $ 1,028,652 | $ 5,036 | 1.99 % | ||||||
Other Liabilities | 17,073 | 17,508 | ||||||||||
Total Liabilities | $ 1,109,229 | $ 1,046,160 | ||||||||||
Shareholders' Equity | $ 141,780 | $ 138,025 | ||||||||||
Total Liabilities & Shareholders' Equity | $ 1,251,009 | $ 1,184,185 | ||||||||||
Net Interest Income/Spread (FTE) | 8,170 | 2.17 % | 8,031 | 2.41 % | ||||||||
Tax-Equivalent Basis Adjustment | (81) | (77) | ||||||||||
Net Interest Income | $ 8,089 | $ 7,954 | ||||||||||
Net Interest Margin | 2.81 % | 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 - Year-To-Date (Unaudited) | ||||||||||||
For the Six Months Ended June 30, | ||||||||||||
2023 | 2022 | |||||||||||
(Dollars in thousands) | Avg Bal | Interest (2) | Yield/Rate | Avg Bal | Interest (2) | Yield/Rate | ||||||
Int. Earn. Cash | $ 55,618 | $ 983 | 3.56 % | $ 60,229 | $ 149 | 0.50 % | ||||||
Securities | ||||||||||||
Taxable (1) | 84,101 | 1,475 | 3.54 % | 70,674 | 863 | 2.46 % | ||||||
Tax-Exempt | 38,774 | 756 | 3.93 % | 45,030 | 746 | 3.34 % | ||||||
Total Securities | 122,875 | 2,231 | 3.66 % | 115,704 | 1,609 | 2.80 % | ||||||
Total Cash Equiv. and Investments | 178,493 | 3,214 | 3.63 % | 175,933 | 1,758 | 2.02 % | ||||||
Total Loans (3) | 952,142 | 24,261 | 5.14 % | 735,256 | 15,877 | 4.35 % | ||||||
Total Earning Assets | 1,130,635 | 27,475 | 4.90 % | 911,189 | 17,635 | 3.90 % | ||||||
Other Assets | 93,481 | 88,189 | ||||||||||
Total Assets | $ 1,224,116 | $ 999,378 | ||||||||||
Interest bearing demand | $ 246,235 | $ 2,449 | 2.01 % | $ 264,527 | $ 505 | 0.38 % | ||||||
Money market demand | 245,747 | 2,939 | 2.41 % | 219,972 | 377 | 0.35 % | ||||||
Time deposits | 295,440 | 4,371 | 2.98 % | 203,009 | 601 | 0.60 % | ||||||
Total Borrowings | 76,820 | 1,514 | 3.97 % | 52,433 | 665 | 2.56 % | ||||||
Total Interest-Bearing Liabilities | 864,242 | 11,273 | 2.63 % | 739,941 | 2,148 | 0.59 % | ||||||
Non Int Bearing Deposits | 202,610 | 142,323 | ||||||||||
Total Cost of Funds | $ 1,066,852 | $ 11,273 | 2.13 % | $ 882,264 | $ 2,148 | 0.49 % | ||||||
Other Liabilities | 16,905 | 10,347 | ||||||||||
Total Liabilities | $ 1,083,757 | $ 892,611 | ||||||||||
Shareholders' Equity | $ 140,359 | $ 106,767 | ||||||||||
Total Liabilities & Shareholders' Equity | $ 1,224,116 | $ 999,378 | ||||||||||
Net Interest Income/Spread (FTE) | 16,202 | 2.27 % | 15,487 | 3.31 % | ||||||||
Tax-Equivalent Basis Adjustment | (159) | (157) | ||||||||||
Net Interest Income | $ 16,043 | $ 15,330 | ||||||||||
Net Interest Margin | 2.86 % | 3.39 % | ||||||||||
(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) | June 30, | March 31, | December 31, | September 30, | June 30, | |||||
Agriculture and farmland loans | $ 50,552 | $ 53,301 | $ 55,746 | $ 53,570 | $ 45,424 | |||||
Construction loans | 75,628 | 67,934 | 57,713 | 49,311 | 36,135 | |||||
Commercial & industrial loans | 104,869 | 99,356 | 104,755 | 98,475 | 90,979 | |||||
Commercial real estate loans | ||||||||||
Multifamily | 113,254 | 111,461 | 105,390 | 95,537 | 78,082 | |||||
Owner occupied | 154,520 | 151,407 | 139,554 | 114,863 | 164,937 | |||||
Non-owner occupied | 254,691 | 249,638 | 245,274 | 233,887 | 165,893 | |||||
Residential real estate loans | ||||||||||
First liens | 170,271 | 166,478 | 168,084 | 166,388 | 158,774 | |||||
Second liens and lines of credit | 30,148 | 30,720 | 35,576 | 34,620 | 35,454 | |||||
Consumer and other loans | 11,308 | 10,472 | 10,057 | 11,929 | 8,689 | |||||
Municipal loans | 3,929 | 4,292 | 5,466 | 5,404 | 5,814 | |||||
969,170 | 945,059 | 927,615 | 863,984 | 790,181 | ||||||
Deferred costs (fees) | 363 | 312 | 256 | (15) | 225 | |||||
Total loans receivable | $ 969,533 | $ 945,371 | $ 927,871 | $ 863,969 |
LINKBANCORP, Inc. and Subsidiaries | ||||||||
Investments in Securities Detail (Unaudited) | ||||||||
June 30, 2023 | ||||||||
(In Thousands) | Amortized | Net | Fair | |||||
Available for Sale: | ||||||||
$ 2,000 | $ (19) | $ 1,981 | ||||||
Small Business Administration loan pools | 726 | (15) | 711 | |||||
Obligations of state and political subdivisions | 45,651 | (3,721) | 41,930 | |||||
Mortgage-backed securities in government-sponsored entities | 42,946 | (3,948) | 38,998 | |||||
$ 91,323 | $ (7,703) | $ 83,620 | ||||||
Amortized | Net | Fair Value | Allowance for | |||||
Held to Maturity: | ||||||||
Corporate debentures | $ 15,000 | $ (1,782) | $ 13,218 | $ 586 | ||||
Structured mortgage-backed securities | 23,806 | (966) | 22,840 | - | ||||
$ 38,806 | $ (2,748) | $ 36,058 | $ 586 | |||||
December 31, 2022 | ||||||||
(In Thousands) | Amortized | Net | Fair | |||||
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) | June 30, 2023 | March 31, | December 31, | September | June 30, | |||||
Demand, noninterest-bearing | $ 240,729 | $ 204,495 | $ 192,773 | $ 184,857 | $ 184,345 | |||||
Demand, interest-bearing | 237,114 | 250,944 | 254,478 | 305,934 | 269,493 | |||||
Money market and savings | 254,632 | 241,858 | 228,048 | 266,743 | 235,411 | |||||
Time deposits, | 57,194 | 51,855 | 46,116 | 39,123 | 55,507 | |||||
Time deposits, other | 245,173 | 235,346 | 225,357 | 155,053 | 157,617 | |||||
$ 1,034,842 | $ 984,498 | $ 946,772 | $ 951,710 | $ 902,373 | ||||||
Average Deposits Detail, for the Three Months Ended (Unaudited) | ||||||||||
(In Thousands) | June 30, 2023 | March 31, | December 31, | September | June 30, | |||||
Demand, noninterest-bearing | $ 209,072 | $ 192,135 | $ 199,556 | $ 170,863 | $ 152,691 | |||||
Demand, interest-bearing | 243,539 | 251,103 | 278,816 | 278,637 | 270,844 | |||||
Money market and savings | 244,355 | 245,563 | 245,154 | 244,107 | 224,483 | |||||
Time deposits | 299,398 | 290,605 | 211,090 | 205,792 | 211,033 | |||||
$ 996,364 | $ 979,406 | $ 934,616 | $ 899,399 | $ 859,051 |
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
Adjusted Return on Average Assets | |||||||||
For the Three Months Ended | For the Six Months Ended | ||||||||
(Dollars in thousands) | 6/30/2023 | 3/31/2023 | 6/30/2022 | 6/30/2023 | 6/30/2022 | ||||
Net income (loss) | $ 1,347 | $ (1,553) | $ 1,606 | $ (207) | $ 3,130 | ||||
Average assets | 1,251,009 | 1,184,185 | 1,021,561 | 1,224,116 | 999,378 | ||||
Return on average assets (annualized) | 0.43 % | -0.53 % | 0.63 % | -0.03 % | 0.63 % | ||||
Net income (loss) | 1,347 | (1,553) | 1,606 | (207) | 3,130 | ||||
Net losses (gains) on sale of securities | - | 2,370 | - | 2,370 | (13) | ||||
Tax effect at | - | (498) | - | (498) | 3 | ||||
Merger & system conversion related expenses | 315 | 587 | - | 902 | - | ||||
Tax effect at | (66) | (123) | - | (189) | - | ||||
Adjusted Net Income (Non-GAAP) | 1,596 | 783 | 1,606 | 2,378 | 3,120 | ||||
Average assets | 1,251,009 | 1,184,185 | 1,021,561 | 1,224,116 | 999,378 | ||||
Adjusted return on average assets (annualized) | 0.51 % | 0.27 % | 0.63 % | 0.39 % | 0.63 % |
Adjusted Return on Average Shareholders' Equity | |||||||||
For the Three Months Ended | For the Six Months Ended | ||||||||
(Dollars in thousands) | 6/30/2023 | 3/31/2023 | 6/30/2022 | 6/30/2023 | 6/30/2022 | ||||
Net income (loss) | $ 1,347 | $ (1,553) | $ 1,606 | $ (207) | $ 3,130 | ||||
Average shareholders' equity | 141,780 | 138,025 | 105,060 | 140,359 | 51,257 | ||||
Return on average shareholders' equity (annualized) | 3.81 % | -4.56 % | 6.13 % | -0.30 % | 12.31 % | ||||
Net income (loss) | 1,347 | (1,553) | 1,606 | (207) | 3,130 | ||||
Net losses (gains) on sale of securities | - | 2,370 | - | 2,370 | (13) | ||||
Tax effect at | - | (498) | - | (498) | 3 | ||||
Merger & system conversion related expenses | 315 | 587 | - | 902 | - | ||||
Tax effect at | (66) | (123) | - | (189) | - | ||||
Adjusted Net Income (Non-GAAP) | 1,596 | 783 | 1,606 | 2,378 | 3,120 | ||||
Average shareholders' equity | 141,780 | 138,025 | 105,060 | 140,359 | 51,257 | ||||
Adjusted return on average shareholders' equity (annualized) | 4.51 % | 2.30 % | 6.13 % | 3.42 % | 12.27 % |
Adjusted Efficiency Ratio | |||||||||
For the Three Months Ended | For the Six Months Ended | ||||||||
(Dollars in thousands) | 6/30/2023 | 3/31/2023 | 6/30/2022 | 6/30/2023 | 6/30/2022 | ||||
GAAP-based efficiency ratio | 87.09 % | 126.82 % | 73.01 % | 103.16 % | 73.73 % | ||||
Net interest income | $ 8,089 | $ 7,954 | $ 7,853 | $ 16,043 | $ 15,330 | ||||
Noninterest income | 886 | (1,853) | 696 | (967) | 1,407 | ||||
Less: net gains (losses) on sales of securities | - | (2,370) | - | (2,370) | 13 | ||||
Adjusted revenue (Non-GAAP) | 8,975 | 8,471 | 8,549 | 17,446 | 16,724 | ||||
Total noninterest expense | 7,816 | 7,737 | 6,242 | 15,553 | 12,340 | ||||
Less: Merger & system conversion related expenses | 315 | 587 | - | 902 | - | ||||
Adjusted non-interest expense | 7,501 | 7,150 | 6,242 | 14,651 | 12,340 | ||||
Efficiency ratio, as adjusted (Non-GAAP) | 83.58 % | 84.41 % | 73.01 % | 83.98 % | 73.79 % |
Tangible Common Equity and Tangible Book Value | ||||||||||
6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | ||||||
Tangible Common Equity | (Dollars in thousands, except for share data) | |||||||||
Total shareholders' equity | $ 142,452 | $ 141,581 | $ 138,553 | $ 136,942 | $ 104,771 | |||||
Adjustments: | ||||||||||
Goodwill | (35,842) | (35,842) | (35,842) | (35,842) | (35,842) | |||||
Other intangible assets | (932) | (991) | (1,052) | (1,113) | (1,178) | |||||
Tangible common equity (Non-GAAP) | $ 105,678 | $ 104,748 | $ 101,659 | $ 99,987 | $ 67,751 | |||||
Common shares outstanding | 16,228,440 | 16,221,692 | 14,939,640 | 14,939,640 | 9,838,435 | |||||
Book value per common share | $ 8.78 | $ 8.73 | $ 9.27 | $ 9.17 | $ 10.65 | |||||
Tangible book value per common share | $ 6.51 | $ 6.46 | $ 6.80 | $ 6.69 | $ 6.89 | |||||
Tangible Assets | ||||||||||
Total assets | $ 1,308,472 | $ 1,213,958 | $ 1,163,654 | $ 1,144,873 | $ 1,059,885 | |||||
Adjustments: | ||||||||||
Goodwill | (35,842) | (35,842) | (35,842) | (35,842) | (35,842) | |||||
Other intangible assets | (932) | (991) | (1,052) | (1,113) | (1,178) | |||||
Tangible assets (Non-GAAP) | $ 1,271,698 | $ 1,177,125 | $ 1,126,760 | $ 1,107,918 | $ 1,022,865 | |||||
Tangible common equity to tangible assets (Non-GAAP) | 8.31 % | 8.90 % | 9.02 % | 9.02 % | 6.62 % |
Adjusted Earnings Per Share | |||||||||
For the Three Months Ended | For the Six Months Ended | ||||||||
(Dollars in thousands, except per share data) | 6/30/2023 | 3/31/2023 | 6/30/2022 | 6/30/2023 | 6/30/2022 | ||||
GAAP-Based Earnings (Loss) Per Share, Basic | $ 0.08 | $ (0.10) | $ 0.16 | $ (0.01) | $ 0.32 | ||||
GAAP-Based Earnings (Loss) Per Share, Diluted | $ 0.08 | $ (0.10) | $ 0.16 | $ (0.01) | $ 0.31 | ||||
Net Income (Loss) | $ 1,347 | $ (1,553) | $ 1,606 | $ (207) | $ 3,130 | ||||
Net losses (gains) on sale of securities | - | 2,370 | - | 2,370 | (13) | ||||
Tax effect at | - | (498) | - | (498) | 3 | ||||
Merger & system conversion related expenses | 315 | 587 | - | 902 | - | ||||
Tax effect at | (66) | (123) | - | (189) | - | ||||
Adjusted Net Income (Non-GAAP) | 1,596 | 783 | 1,606 | 2,378 | 3,120 | ||||
Adjusted Earnings per Share, Basic (Non-GAAP) | $ 0.10 | $ 0.05 | $ 0.16 | $ 0.15 | $ 0.32 | ||||
Adjusted Earnings per Share, Diluted (Non-GAAP) | $ 0.10 | $ 0.05 | $ 0.16 | $ 0.15 | $ 0.31 |
Adjusted Pre-tax, Pre-provision Net Income (Non-GAAP) | |||||||||
For the Three Months Ended | For the Six Months Ended | ||||||||
(Dollars in thousands, except per share data) | 6/30/2023 | 3/31/2023 | 6/30/2022 | 6/30/2023 | 6/30/2022 | ||||
Net Income (Loss) - GAAP | $ 1,347 | $ (1,553) | $ 1,606 | $ (207) | $ 3,130 | ||||
Net losses (gains) on sale of securities | - | 2,370 | - | 2,370 | (13) | ||||
Tax effect at | - | (498) | - | (498) | 3 | ||||
Merger & system conversion related expenses | 315 | 587 | - | 902 | - | ||||
Tax effect at | (66) | (123) | - | (189) | - | ||||
Adjusted Net Income (Non-GAAP) | 1,596 | 783 | 1,606 | 2,378 | 3,120 | ||||
Income tax expense (benefit) | 305 | (376) | 306 | (70) | 592 | ||||
Provision for (credit to) credit losses | (493) | 293 | 395 | (200) | 675 | ||||
Tax effect included in Adjusted Net Income | 66 | 621 | - | 687 | (3) | ||||
Adjusted Pre-tax, Pre-provision Net Income (Non-GAAP) | $ 1,474 | $ 1,321 | $ 2,307 | $ 2,795 | $ 4,384 |
Contact:
Nicole Ulmer
Corporate and Investor Relations Officer
717.803.8895
IR@LINKBANCORP.COM
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