8-K
LINKBANCORP, Inc. (LNKB)
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): January 29, 2024 |
|---|
LINKBANCORP, Inc.
(Exact name of Registrant as Specified in Its Charter)
| Pennsylvania | 001-41505 | 82-5130531 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| 1250 Camp Hill Bypass, Suite 202 | ||
| Camp Hill, Pennsylvania | 17011 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
| Registrant’s Telephone Number, Including Area Code: 855 569-2265 | ||
| --- | ||
| Not Applicable | ||
| --- |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.01 | LNKB | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On January 29, 2024, LINKBANCORP, Inc. (the “Company”) issued a press release reporting its financial results at and for the three and twelve months ended December 31, 2023.
A copy of the press release is attached as Exhibit 99.1 to this report and is being furnished to the Securities and Exchange Commission and shall not be deemed filed for any purpose.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On January 25, 2024, Director Jeffrey F. Turner advised the Boards of Directors of the Company and LINKBANK (the "Bank") that he would be retiring as a director of the Company and the Bank effective as of January 31, 2024. Mr. Turner did not cite any disagreement with the Company or the Bank in connection with his retirement.
Item 9.01 Financial Statements and Exhibits.
| (a) | Financial statements of businesses acquired. None. |
|---|---|
| (b) | Pro forma financial information. None. |
| (c) | Shell company transactions. None. |
| (d) | Exhibits. |
| 99.1 Press release dated January 29, 2024 | |
| 104 Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| LINKBANCORP, INC. | |||
|---|---|---|---|
| Date: | January 29, 2024 | By: | /s/ Carl D. Lundblad |
| Carl D. Lundblad<br>President |
EX-99.1
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
Nicole Davis
Corporate and Investor Relations Officer
717.803.8895
IR@LINKBANCORP.COM
LINKBANCORP, Inc. Announces Fourth Quarter 2023 and Full Year 2023 Financial Results
January 29, 2024 – HARRISBURG, PA -- LINKBANCORP, Inc. (NASDAQ: LNKB) (the “Company”), the parent company of LINKBANK (the “Bank”) reported financial results for the fourth quarter and year ended December 31, 2023 that were significantly impacted by one-time costs related to the merger with Partners Bancorp (“Partners”) that was successfully completed on November 30, 2023 (the “Merger”). For the quarter ended December 31, 2023, the Company recognized a net loss of $13.2 million, or $0.57 per diluted share, and for the year ended December 31, 2023, the Company recognized a net loss of $12.2 million, or $0.68 per diluted share.
Fourth quarter 2023 results include the impact of the Partners Merger and include $19.2 million pre-tax ($15.2 million after tax) of primarily merger-related expenses and initial non-purchase credit deteriorated (non-PCD) provision. Excluding these expenses, earnings for the fourth quarter 2023 would have been $2.0 million1, or $0.091 per diluted share. Similarly, results for the year ended December 31, 2023 include $20.9 million pre-tax ($16.5 million after tax) of primarily merger related expenses and initial non-purchase credit deteriorated (non-PCD) provision. Excluding these and other non-recurring expenses, earnings for the year ended December 31, 2023 would have been $6.2 million1, or $0.351 per diluted share.
1 See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure.
Reported results prior to the fourth quarter of 2023 reflect legacy LINKBANCORP results only.
Fourth Quarter 2023 Highlights
• The Company successfully completed a transformational merger of equals with Partners Bancorp, the parent company of The Bank of Delmarva and Virginia Partners Bank, which closed on November 30, 2023. Both The Bank of Delmarva and Virginia Partners Bank were merged into LINKBANK. The conversion to LINKBANK’s core operating system was successfully completed on December 4, 2023.
• Total assets increased to $2.66 billion at December 31, 2023, compared to $1.26 billion at September 30, 2023 and $1.16 billion at December 31, 2022.
• Total deposits increased to $2.30 billion at December 31, 2023 from $1.04 billion at September 30, 2023 and $946.8 million at December 31, 2022.
• Total loans increased to $2.24 billion at December 31, 2023 compared to $978.9 million at September 30, 2023 and $927.9 million at December 31, 2022.
• Net interest margin expanded from 2.89% for the third quarter of 2023 to 3.55% for the fourth quarter of 2023.
The fourth quarter results do not represent a full quarter of comparable combined earnings given the Merger with Partners was completed on November 30, 2023.
"2023 was a transformational year for LINKBANCORP. Our merger with Partners Bancorp established a premier Mid-Atlantic community banking franchise committed to positively impacting communities across the markets we serve,” said Andrew Samuel, Chief Executive Officer of LINKBANCORP. "We believe our increased scale and presence in growing and diverse markets will drive profitable growth and shareholder value. Promptly after the closing of the merger, we successfully converted legacy Bank of Delmarva and Virginia Partners Bank accounts to LINKBANK’s core system. Additionally, we have right-sized our pro forma organizational structure and commenced various cost-saving initiatives that we expect will ensure we achieve the projected benefits of the merger. While merger-related expenses and accounting adjustments negatively impacted fourth quarter and 2023 earnings, we are pleased with our core operating results. We are very grateful to each of our employees who have
performed at a high level during this period, providing exceptional service to clients and their colleagues as together we navigated these critical transitions.”
Merger with Partners Bancorp
Partners Bancorp merged with and into LINKBANCORP and The Bank of Delmarva and Virginia Partners Bank each merged with and into LINKBANK, effective November 30, 2023. The acquisition method of accounting was used to account for the transaction with the Company as the acquirer. The Company recorded the assets and liabilities of Partners at their respective fair values as of November 30, 2023. The transaction was valued at approximately $135.8 million and expanded LINKBANK’s footprint into Maryland, Delaware, Virginia and New Jersey.
As a result of the Merger, the Company added $1.50 billion in assets, $123.4 million in investment securities, $1.24 billion in loans, $1.30 billion in deposits, $54.7 million in FHLB advances and $21.1 million in subordinated debt. The excess of the merger consideration over the fair value of net Partners assets acquired resulted in goodwill of $21.0 million. Subsequent to the Merger but prior to year-end, the Company sold a substantial portion of the acquired available-for-sale securities portfolio for net proceeds of $87.4 million and used approximately $54.7 million of the proceeds to reduce FHLB borrowings assumed in the Merger. The Merger resulted in dilution in the Company’s tangible book value per share which was $4.901at December 31, 2023 compared to $6.441 at September 30, 2023. The principal cause of the dilution was net fair value discount adjustments of approximately $64.5 million to the acquired loan portfolio due to increasing interest rates in the last 12-24 months. The loan fair value adjustments will accrete back through income as the loans mature, which management anticipates will lead to earnings per share and capital accretion in future periods.
The Company's tangible common equity ratio at December 31, 2023 was 7.09%1. The Bank's Tier 1 and Total Risk-Based Capital Ratios at December 31, 2023 were 10.05% and 10.75%, respectively.
The Company incurred expenses of $19.2 million and $20.9 million for the three and twelve months ended December 31, 2023, respectively, related to Merger costs and an increased allowance for credit losses related to the acquisition of Partners loans.
1 See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure.
The Company's financial results for any periods ended prior to November 30, 2023 reflect LINKBANCORP results only on a standalone basis. As a result of this factor and the Merger-related expenses incurred, the Company's financial results for the fourth quarter of 2023 may not be directly comparable to prior reported periods.
Income Statement
Net interest income before the provision for credit losses for the fourth quarter of 2023 increased to $14.3 million compared to $8.4 million in the third quarter of 2023. Net interest margin was 3.55% for the fourth quarter of 2023 compared to 2.89% for the third quarter of 2023. The average yield on interest-earning assets increased by 61 basis points over the prior quarter, due to an increase in the average yield on loans of 70 basis points to 6.03%. Also contributing to expansion of net interest margin during the fourth quarter was a seven basis points decrease in the cost of funds to 2.28%. The increase in net interest income was primarily a result of the legacy Partners portfolio, which maintained a lower cost of deposits, coupled with the higher average yield on interest earning assets across the portfolio and the impact of purchase accounting accretion. In addition, proceeds from the sale of a substantial portion of the available-for-sale securities acquired in the Merger were used to pay off FHLB borrowings assumed in the Merger, contributing to further margin expansion.
Noninterest income increased quarter over quarter to $1.3 million for the fourth quarter of 2023 compared to $880 thousand for the third quarter of 2023. This increase was primarily related to a $187 thousand increase in service charges on deposit accounts related to the increased size of the customer base in connection with the Merger.
Noninterest expense for the fourth quarter of 2023 increased to $22.3 million compared to $8.0 million for the third quarter of 2023.Excluding one-time charges related to the Merger of $9.5 million in the fourth quarter of 2023 and $777 thousand in the third quarter of 2023, noninterest expense increased by $5.6 million to $12.8 million in the fourth quarter from $8.8 million in the third quarter. This increase was primarily due to the increased headcount and infrastructure resulting from the Merger, including additional branches, amortization of intangible assets, processing fees, and an increased incentive compensation accrual.
Balance Sheet
Total assets were $2.66 billion at December 31, 2023 compared to $1.26 billion at September 30, 2023 and $1.16 billion at December 31, 2022. Deposits and net loans as of December 31, 2023 totaled $2.30 billion and $2.22 billion, respectively, compared to deposits and net loans of $1.04 billion and $968.9 million, respectively, at September 30, 2023 and $946.8 million and $923.2 million, respectively, at December 31, 2022.
Total loans increased $1.26 billion during the fourth quarter of 2023 to $2.24 billion at December 31, 2023 and included $1.24 billion of loans acquired through the Merger. Excluding the newly acquired loans, loans increased $18.3 million or 7.38% annualized led by originated commercial loan growth, with the average commercial loan commitment originated during the fourth quarter of 2023 totaling approximately $628 thousand.
Year-over-year, loans increased $1.31 billion and included $1.24 billion of loans acquired through the Merger. Excluding the newly acquired loans, loans increased $69.3 million, or 7.5% during 2023.
Cash and cash equivalents increased to $77.7 million at December 31, 2023 compared to $68.0 million at September 30, 2023, while increasing $47.7 million compared to the $30.0 million balance at December 31, 2022.
Deposits at December 31, 2023 totaled $2.30 billion, an increase of $1.26 billion compared to $1.04 billion at September 30, 2023. The Merger added $1.30 billion of total deposits, including $969.5 million of transaction deposits (defined as total deposits less time deposits) and $330.3 million of time deposits on November 30, 2023. Noninterest bearing deposits totaled $656.0 million at December 31, 2023, representing 28.5% of total deposits, compared to $210.4 million, representing 20.2% of total deposits at September 30, 2023.
Shareholders’ equity increased from $141.4 million at September 30, 2023 to $265.6 million at December 31, 2023 primarily as a result of the completion of the Merger. The Merger resulted in dilution in the Company’s tangible book value per share which was $4.901 at December 31, 2023 compared to $6.441 at September 30, 2023. The principal cause of the dilution was fair value discount adjustments of approximately $64.5 million to the acquired loan portfolio due to increasing interest rates in the last 12-24 months. The loan fair value adjustments will accrete
back through income as the loans mature and are expected to result in earnings per share and capital accretion over future periods.
Asset Quality
In the fourth quarter of 2023, the Company recorded a provision for credit losses, calculated under the CECL model, of $9.8 million, compared to a negative provision for credit losses of $349 thousand in the third quarter of 2023. The provision for the fourth quarter included $9.7 million associated with day one accounting provision required for non-purchase credit deteriorated loans acquired in the Merger.
Asset quality metrics remain strong. As of December 31, 2023, the Company’s non-performing assets were $9.0 million, representing 0.34% of total assets. Loans 30-89 days past due at December 31, 2023 were $4.7 million, representing 0.21% of total loans.
The allowance for credit losses-loans was $23.8 million, or 1.06% of total loans at December 31, 2023, compared to the allowance for credit losses-loans of $10.0 million, or 1.02% of total loans, at September 30, 2023. The allowance for credit losses-loans to nonperforming assets was 263.55% at December 31, 2023, compared to 336.85% at September 30, 2023.
Capital
The Bank’s regulatory capital ratios were well in excess of regulatory minimums to be considered “well capitalized” as of December 31, 2023. The Bank’s Total Capital Ratio and Tier 1 Capital Ratio was 10.75% and 10.05%, respectively, at December 31, 2023, compared to 12.92% and 12.37%, respectively, at September 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 7.09%1 at December 31, 2023.
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.
LB-E
LB-D
| LINKBANCORP, Inc. and Subsidiaries | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Consolidated Balance Sheet (Unaudited) | ||||||||||||||||
| December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | ||||||||||||
| (In Thousands, except share and per share data) | ||||||||||||||||
| ASSETS | ||||||||||||||||
| Noninterest-bearing cash equivalents | $ | 11,663 | $ | 5,447 | $ | 4,736 | $ | 4,545 | $ | 4,209 | ||||||
| Interest-bearing deposits with other institutions | 66,000 | 62,532 | 118,438 | 47,190 | 25,802 | |||||||||||
| Cash and cash equivalents | 77,663 | 67,979 | 123,174 | 51,735 | 30,011 | |||||||||||
| Certificates of deposit with other banks | — | 249 | 498 | 745 | 5,623 | |||||||||||
| Securities available for sale, at fair value | 115,490 | 78,779 | 83,620 | 86,804 | 78,813 | |||||||||||
| Securities held to maturity, net of allowance for credit losses | 36,223 | 37,266 | 38,220 | 38,986 | 31,822 | |||||||||||
| Loans receivable, gross | 2,241,533 | 978,912 | 969,533 | 945,371 | 927,871 | |||||||||||
| Allowance for credit losses - loans | (23,767 | ) | (9,964 | ) | (10,228 | ) | (10,526 | ) | (4,666 | ) | ||||||
| Loans receivable, net | 2,217,766 | 968,948 | 959,305 | 934,845 | 923,205 | |||||||||||
| Investments in restricted bank stock | 5,066 | 3,107 | 5,544 | 4,134 | 3,377 | |||||||||||
| Premises and equipment, net | 22,507 | 6,414 | 6,292 | 6,497 | 6,743 | |||||||||||
| Right-of-use asset – premises | 15,597 | 9,727 | 9,896 | 10,058 | 10,219 | |||||||||||
| Bank-owned life insurance | 48,847 | 24,732 | 24,554 | 24,384 | 19,244 | |||||||||||
| Goodwill | 56,838 | 35,842 | 35,842 | 35,842 | 35,842 | |||||||||||
| Other intangible assets, net | 25,733 | 873 | 932 | 991 | 1,052 | |||||||||||
| Deferred tax asset | 20,682 | 6,880 | 6,571 | 6,749 | 5,619 | |||||||||||
| Accrued interest receivable and other assets | 22,023 | 14,899 | 14,024 | 12,188 | 12,084 | |||||||||||
| TOTAL ASSETS | $ | 2,664,436 | $ | 1,255,695 | $ | 1,308,472 | $ | 1,213,958 | $ | 1,163,654 | ||||||
| LIABILITIES | ||||||||||||||||
| Deposits: | ||||||||||||||||
| Demand, noninterest bearing | $ | 655,953 | $ | 210,404 | $ | 240,729 | $ | 204,495 | $ | 192,773 | ||||||
| Interest bearing | 1,642,520 | 831,368 | 794,113 | 780,003 | 753,999 | |||||||||||
| Total deposits | 2,298,473 | 1,041,772 | 1,034,842 | 984,498 | 946,772 | |||||||||||
| Other Borrowings | 10,500 | 15,000 | 74,899 | 31,250 | 20,938 | |||||||||||
| Subordinated Debt | 61,444 | 40,354 | 40,398 | 40,441 | 40,484 | |||||||||||
| Lease Liabilities | 16,464 | 9,728 | 9,896 | 10,058 | 10,219 | |||||||||||
| Accrued interest payable and other liabilities | 11,952 | 7,490 | 5,985 | 6,130 | 6,688 | |||||||||||
| TOTAL LIABILITIES | 2,398,833 | 1,114,344 | 1,166,020 | 1,072,377 | 1,025,101 | |||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||||||
| Preferred stock | — | — | — | — | — | |||||||||||
| Common stock | 373 | 162 | 162 | 250 | 149 | |||||||||||
| Surplus | 263,306 | 127,856 | 127,818 | 127,659 | 117,709 | |||||||||||
| Retained earnings | 4,650 | 19,062 | 19,039 | 18,911 | 27,100 | |||||||||||
| Accumulated other comprehensive loss | (3,209 | ) | (5,729 | ) | (4,567 | ) | (5,239 | ) | (6,405 | ) | ||||||
| Total equity attributable to parent | 265,120 | 141,351 | 142,452 | 141,581 | 138,553 | |||||||||||
| Noncontrolling interest in consolidated subsidiary | 483 | — | — | — | — | |||||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 265,603 | 141,351 | 142,452 | 141,581 | 138,553 | |||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,664,436 | $ | 1,255,695 | $ | 1,308,472 | $ | 1,213,958 | $ | 1,163,654 | ||||||
| Common shares outstanding | 37,340,700 | 16,235,871 | 16,228,440 | 16,221,692 | 14,939,640 | |||||||||||
| LINKBANCORP, Inc. and Subsidiaries | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| Consolidated Statements of Operations (Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| 12/31/2023 | 9/30/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||||
| (In Thousands, except share and per share data) | ||||||||||||||||
| INTEREST AND DIVIDEND INCOME | ||||||||||||||||
| Loans receivable, including fees | $ | 21,461 | $ | 13,068 | $ | 11,109 | $ | 58,791 | $ | 36,396 | ||||||
| Other | 1,642 | 1,710 | 1,097 | 6,407 | 3,868 | |||||||||||
| Total interest and dividend income | 23,103 | 14,778 | 12,206 | 65,198 | 40,264 | |||||||||||
| INTEREST EXPENSE | ||||||||||||||||
| Deposits | 7,445 | 5,434 | 2,465 | 22,638 | 5,337 | |||||||||||
| Other Borrowings | 727 | 550 | 335 | 1,923 | 441 | |||||||||||
| Subordinated Debt | 615 | 442 | 421 | 1,926 | 1,501 | |||||||||||
| Total interest expense | 8,787 | 6,426 | 3,221 | 26,487 | 7,279 | |||||||||||
| NET INTEREST INCOME BEFORE PROVISION FOR <br> (CREDIT TO) CREDIT LOSSES | 14,316 | 8,352 | 8,985 | 38,711 | 32,985 | |||||||||||
| Provision for (credit to) for credit losses | 9,844 | (349 | ) | 100 | 9,295 | 1,290 | ||||||||||
| NET INTEREST INCOME AFTER PROVISION FOR<br> (CREDIT TO) CREDIT LOSSES | 4,472 | 8,701 | 8,885 | 29,416 | 31,695 | |||||||||||
| NONINTEREST INCOME | ||||||||||||||||
| Service charges on deposit accounts | 385 | 198 | 188 | 978 | 832 | |||||||||||
| Bank-owned life insurance | 250 | 177 | 116 | 738 | 497 | |||||||||||
| Net realized (losses) gains on the sale of debt securities | — | — | — | (2,370 | ) | 13 | ||||||||||
| Gain on sale of loans | 166 | — | — | 465 | 753 | |||||||||||
| Other | 374 | 505 | 204 | 1,276 | 862 | |||||||||||
| Total noninterest income | 1,175 | 880 | 508 | 1,087 | 2,957 | |||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||
| Salaries and employee benefits | 8,262 | 4,193 | 4,612 | 20,612 | 16,224 | |||||||||||
| Occupancy | 911 | 701 | 616 | 3,015 | 2,119 | |||||||||||
| Equipment and data processing | 1,201 | 934 | 751 | 3,720 | 2,609 | |||||||||||
| Professional fees | 536 | 363 | 371 | 1,698 | 1,236 | |||||||||||
| FDIC insurance | 198 | 276 | 157 | 817 | 640 | |||||||||||
| Bank Shares Tax | 323 | 278 | 201 | 1,158 | 786 | |||||||||||
| Merger & system conversion related expenses | 9,496 | 777 | 973 | 11,176 | 973 | |||||||||||
| Other | 1,358 | 472 | 764 | 3,636 | 3,245 | |||||||||||
| Total noninterest expense | 22,285 | 7,994 | 8,445 | 45,832 | 27,832 | |||||||||||
| Income before income tax (benefit) expense | (16,638 | ) | 1,587 | 948 | (15,329 | ) | 6,820 | |||||||||
| Income tax (benefit) expense | (3,448 | ) | 347 | 252 | (3,168 | ) | 1,222 | |||||||||
| NET (LOSS) INCOME | $ | (13,190 | ) | $ | 1,240 | $ | 696 | $ | (12,161 | ) | $ | 5,598 | ||||
| (LOSS) EARNINGS PER SHARE, BASIC | $ | (0.57 | ) | $ | 0.08 | $ | 0.05 | $ | (0.68 | ) | $ | 0.49 | ||||
| (LOSS) EARNINGS PER SHARE, DILUTED | $ | (0.57 | ) | $ | 0.08 | $ | 0.05 | $ | (0.68 | ) | $ | 0.49 | ||||
| WEIGHTED-AVERAGE COMMON SHARES<br> OUTSTANDING, | ||||||||||||||||
| BASIC | 23,063,202 | 16,235,144 | 14,939,640 | 17,753,914 | 11,310,386 | |||||||||||
| DILUTED | 23,063,202 | 16,235,144 | 14,939,640 | 17,753,914 | 11,310,386 | |||||||||||
| LINKBANCORP, Inc. and Subsidiaries | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| Financial Highlights (Unaudited) | ||||||||||||||||
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
| ('Dollars In Thousands) | 12/31/2023 | 9/30/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | |||||||||||
| Operating Highlights | ||||||||||||||||
| Net (Loss) Income | $ | (13,190 | ) | $ | 1,240 | $ | 696 | $ | (12,161 | ) | $ | 5,598 | ||||
| Net Interest Income | 14,316 | 8,352 | 8,985 | 38,711 | 32,985 | |||||||||||
| Provision for (Credit to) Credit Losses | 9,844 | (349 | ) | 100 | 9,295 | 1,290 | ||||||||||
| Non-Interest Income | 1,175 | 880 | 508 | 1,087 | 2,957 | |||||||||||
| Non-Interest Expense | 22,285 | 7,994 | 8,445 | 45,832 | 27,832 | |||||||||||
| (Loss) Earnings per Share, Basic | (0.57 | ) | 0.08 | 0.05 | (0.68 | ) | 0.49 | |||||||||
| Adjusted Earnings per Share, Basic (2) | 0.09 | 0.11 | 0.10 | 0.35 | 0.56 | |||||||||||
| (Loss) Earnings per Share, Diluted | (0.57 | ) | 0.08 | 0.05 | (0.68 | ) | 0.49 | |||||||||
| Adjusted Earnings per Share, Diluted (2) | 0.09 | 0.11 | 0.10 | 0.35 | 0.56 | |||||||||||
| Selected Operating Ratios | ||||||||||||||||
| Net Interest Margin | 3.55 | % | 2.89 | % | 3.36 | % | 3.09 | % | 3.39 | % | ||||||
| Annualized Return on Assets ("ROA") | -3.01 | % | 0.39 | % | 0.24 | % | -0.90 | % | 0.53 | % | ||||||
| Adjusted ROA2 | 0.45 | % | 0.59 | % | 0.50 | % | 0.46 | % | 0.60 | % | ||||||
| Annualized Return on Equity ("ROE") | -28.66 | % | 3.46 | % | 2.02 | % | -8.00 | % | 5.22 | % | ||||||
| Adjusted ROE2 | 4.28 | % | 5.17 | % | 4.24 | % | 4.08 | % | 5.93 | % | ||||||
| Efficiency Ratio | 143.86 | % | 86.59 | % | 88.96 | % | 115.16 | % | 77.44 | % | ||||||
| Adjusted Efficiency Ratio3 | 82.56 | % | 78.17 | % | 78.71 | % | 82.19 | % | 74.76 | % | ||||||
| Noninterest Income to Avg. Assets | 0.27 | % | 0.28 | % | 0.17 | % | 0.08 | % | 0.28 | % | ||||||
| Noninterest Expense to Avg. Assets | 5.08 | % | 2.54 | % | 2.90 | % | 3.38 | % | 2.63 | % | ||||||
| 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | ||||||||||||
| Financial Condition Data | ||||||||||||||||
| Total Assets | $ | 2,664,436 | $ | 1,255,695 | $ | 1,308,472 | $ | 1,213,958 | $ | 1,163,654 | ||||||
| Loans Receivable, Net | 2,217,766 | 968,948 | 959,305 | 934,845 | 923,205 | |||||||||||
| Noninterest-bearing Deposits | 655,953 | 210,404 | 240,729 | 204,495 | 192,773 | |||||||||||
| Interest-bearing Deposits | 1,642,520 | 831,368 | 794,113 | 780,003 | 753,999 | |||||||||||
| Total Deposits | 2,298,473 | 1,041,772 | 1,034,842 | 984,498 | 946,772 | |||||||||||
| Selected Balance Sheet Ratios | ||||||||||||||||
| Total Capital Ratio1 | 10.75 | % | 12.92 | % | 13.55 | % | 13.53 | % | 12.89 | % | ||||||
| Tier 1 Capital Ratio1 | 10.05 | % | 12.37 | % | 12.94 | % | 12.32 | % | 12.41 | % | ||||||
| Common Equity Tier 1 Capital Ratio1 | 10.05 | % | 12.37 | % | 12.94 | % | 12.32 | % | 12.41 | % | ||||||
| Leverage Ratio1 | 14.26 | % | 10.71 | % | 10.41 | % | 10.78 | % | 10.93 | % | ||||||
| Tangible Common Equity to Tangible Assets4 | 7.09 | % | 8.58 | % | 8.38 | % | 8.90 | % | 9.02 | % | ||||||
| Tangible Book Value per Share5 | $ | 4.90 | $ | 6.44 | $ | 6.51 | $ | 6.46 | $ | 6.80 | ||||||
| Asset Quality Data | ||||||||||||||||
| Non-performing Assets | $ | 9,018 | $ | 2,958 | $ | 2,856 | $ | 2,398 | $ | 2,500 | ||||||
| Non-performing Assets to Total Assets | 0.34 | % | 0.24 | % | 0.22 | % | 0.20 | % | 0.21 | % | ||||||
| Non-performing Loans to Total Loans | 0.40 | % | 0.30 | % | 0.29 | % | 0.25 | % | 0.27 | % | ||||||
| Allowance for Credit Losses - Loans ("ACLL") | $ | 23,767 | $ | 9,964 | $ | 10,228 | $ | 10,526 | $ | 4,666 | ||||||
| ACLL to Total Loans | 1.06 | % | 1.02 | % | 1.05 | % | 1.11 | % | 0.50 | % | ||||||
| ACLL to Nonperforming Assets | 263.55 | % | 336.85 | % | 358.12 | % | 438.95 | % | 186.64 | % | ||||||
| Net chargeoffs (recoveries) | $ | 195 | $ | (12 | ) | $ | (97 | ) | $ | (2 | ) | $ | (60 | ) | ||
| (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 December 31, | ||||||||||||||||
| 2023 | 2022 | |||||||||||||||
| (Dollars in thousands) | Avg Bal | Interest (2) | Yield/Rate | Avg Bal | Interest (2) | Yield/Rate | ||||||||||
| Int. Earn. Cash | $ | 63,572 | $ | 405 | 2.53 | % | $ | 42,925 | $ | 227 | 2.10 | % | ||||
| Securities | ||||||||||||||||
| Taxable (1) | 88,632 | 951 | 4.26 | % | 80,842 | 567 | 2.78 | % | ||||||||
| Tax-Exempt | 38,269 | 362 | 3.75 | % | 37,169 | 384 | 4.10 | % | ||||||||
| Total Securities | 126,901 | 1,313 | 4.10 | % | 118,011 | 951 | 3.20 | % | ||||||||
| Total Cash Equiv. and Investments | 190,473 | 1,718 | 3.58 | % | 160,936 | 1,178 | 2.90 | % | ||||||||
| Total Loans (3) | 1,411,129 | 21,461 | 6.03 | % | 899,028 | 11,109 | 4.90 | % | ||||||||
| Total Earning Assets | 1,601,602 | 23,179 | 5.74 | % | 1,059,964 | 12,287 | 4.60 | % | ||||||||
| Other Assets | 138,537 | 94,628 | ||||||||||||||
| Total Assets | $ | 1,740,139 | $ | 1,154,592 | ||||||||||||
| Interest bearing demand | $ | 328,342 | $ | 1,746 | 2.11 | % | $ | 278,816 | $ | 808 | 1.15 | % | ||||
| Money market demand | 367,821 | 2,287 | 2.47 | % | 245,154 | 966 | 1.56 | % | ||||||||
| Time deposits | 348,580 | 3,412 | 3.88 | % | 211,090 | 691 | 1.30 | % | ||||||||
| Total Borrowings | 113,492 | 1,342 | 4.69 | % | 68,160 | 756 | 4.40 | % | ||||||||
| Total Interest-Bearing Liabilities | 1,158,235 | 8,787 | 3.01 | % | 803,220 | 3,221 | 1.59 | % | ||||||||
| Non Int. Bearing Deposits | 371,051 | 199,556 | ||||||||||||||
| Total Cost of Funds | $ | 1,529,286 | $ | 8,787 | 2.28 | % | $ | 1,002,776 | $ | 3,221 | 1.27 | % | ||||
| Other Liabilities | 28,244 | 14,864 | ||||||||||||||
| Total Liabilities | $ | 1,557,530 | $ | 1,017,640 | ||||||||||||
| Shareholders' Equity | $ | 182,609 | $ | 136,952 | ||||||||||||
| Total Liabilities & Shareholders' Equity | $ | 1,740,139 | $ | 1,154,592 | ||||||||||||
| Net Interest Income/Spread (FTE) | 14,392 | 2.73 | % | 9,066 | 3.01 | % | ||||||||||
| Tax-Equivalent Basis Adjustment | (76 | ) | (81 | ) | ||||||||||||
| Net Interest Income | $ | 14,316 | $ | 8,985 | ||||||||||||
| Net Interest Margin | 3.55 | % | 3.36 | % | ||||||||||||
| (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 | ||||||||||||||||
| December 31, 2023 | September 30, 2023 | |||||||||||||||
| (Dollars in thousands) | Avg Bal | Interest (2) | Yield/Rate | Avg Bal | Interest (2) | Yield/Rate | ||||||||||
| Int. Earn. Cash | $ | 63,572 | $ | 405 | 2.53 | % | $ | 55,514 | $ | 577 | 4.12 | % | ||||
| Securities | ||||||||||||||||
| Taxable (1) | 88,632 | 951 | 4.26 | % | 82,499 | 833 | 4.01 | % | ||||||||
| Tax-Exempt | 38,269 | 362 | 3.75 | % | 38,589 | 378 | 3.89 | % | ||||||||
| Total Securities | 126,901 | 1,313 | 4.10 | % | 121,088 | 1,211 | 3.97 | % | ||||||||
| Total Cash Equiv. and Investments | 190,473 | 1,718 | 3.58 | % | 176,602 | 1,788 | 4.02 | % | ||||||||
| Total Loans (3) | 1,411,129 | 21,461 | 6.03 | % | 971,877 | 13,068 | 5.33 | % | ||||||||
| Total Earning Assets | 1,601,546 | 23,179 | 5.74 | % | 1,148,479 | 14,856 | 5.13 | % | ||||||||
| Other Assets | 138,537 | 97,995 | ||||||||||||||
| Total Assets | $ | 1,740,139 | $ | 1,246,474 | ||||||||||||
| Interest bearing demand | $ | 328,342 | $ | 1,746 | 2.11 | % | $ | 254,725 | $ | 1,490 | 2.32 | % | ||||
| Money market demand | 367,821 | 2,287 | 2.47 | % | 254,849 | 1,827 | 2.84 | % | ||||||||
| Time deposits | 348,580 | 3,412 | 3.88 | % | 265,573 | 2,117 | 3.16 | % | ||||||||
| Total Borrowings | 113,492 | 1,342 | 4.69 | % | 102,669 | 992 | 3.83 | % | ||||||||
| Total Interest-Bearing Liabilities | 1,158,235 | 8,787 | 3.01 | % | 877,816 | 6,426 | 2.90 | % | ||||||||
| Non Int Bearing Deposits | 371,051 | 209,054 | ||||||||||||||
| Total Cost of Funds | $ | 1,529,286 | $ | 8,787 | 2.28 | % | $ | 1,086,870 | $ | 6,426 | 2.35 | % | ||||
| Other Liabilities | 28,244 | 17,230 | ||||||||||||||
| Total Liabilities | $ | 1,557,530 | $ | 1,104,100 | ||||||||||||
| Shareholders' Equity | $ | 182,609 | $ | 142,374 | ||||||||||||
| Total Liabilities & Shareholders' Equity | $ | 1,740,139 | $ | 1,246,474 | ||||||||||||
| Net Interest Income/Spread (FTE) | 14,392 | 2.73 | % | 8,430 | 2.23 | % | ||||||||||
| Tax-Equivalent Basis Adjustment | (76 | ) | (78 | ) | ||||||||||||
| Net Interest Income | $ | 14,316 | $ | 8,352 | ||||||||||||
| Net Interest Margin | 3.55 | % | 2.89 | % | ||||||||||||
| (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 Year Ended December 31, | ||||||||||||||||
| 2023 | 2022 | |||||||||||||||
| (Dollars in thousands) | Avg Bal | Interest (2) | Yield/Rate | Avg Bal | Interest (2) | Yield/Rate | ||||||||||
| Int. Earn. Cash | $ | 55,501 | $ | 1,966 | 3.54 | % | $ | 56,783 | $ | 533 | 0.94 | % | ||||
| Securities | ||||||||||||||||
| Taxable (1) | 84,860 | 3,260 | 3.84 | % | 78,629 | 2,175 | 2.77 | % | ||||||||
| Tax-Exempt | 38,591 | 1,495 | 3.87 | % | 40,388 | 1,468 | 3.63 | % | ||||||||
| Total Securities | 123,451 | 4,755 | 3.85 | % | 119,017 | 3,643 | 3.06 | % | ||||||||
| Total Cash Equiv. and Investments | 178,952 | 6,721 | 3.76 | % | 175,800 | 4,176 | 2.38 | % | ||||||||
| Total Loans (3) | 1,071,864 | 58,791 | 5.48 | % | 795,908 | 36,396 | 4.57 | % | ||||||||
| Total Earning Assets | 1,250,816 | 65,512 | 5.24 | % | 971,708 | 40,572 | 4.18 | % | ||||||||
| Other Assets | 106,267 | 88,485 | ||||||||||||||
| Total Assets | $ | 1,357,083 | $ | 1,060,193 | ||||||||||||
| Interest bearing demand | $ | 269,615 | $ | 5,684 | 2.11 | % | $ | 271,681 | $ | 1,713 | 0.63 | % | ||||
| Money market demand | 278,418 | 7,053 | 2.53 | % | 229,979 | 1,911 | 0.83 | % | ||||||||
| Time deposits | 301,101 | 9,901 | 3.29 | % | 205,636 | 1,713 | 0.83 | % | ||||||||
| Total Borrowings | 90,468 | 3,849 | 4.25 | % | 55,980 | 1,942 | 3.47 | % | ||||||||
| Total Interest-Bearing Liabilities | 939,602 | 26,487 | 2.82 | % | 763,276 | 7,279 | 0.95 | % | ||||||||
| Non Int Bearing Deposits | 245,703 | 173,938 | ||||||||||||||
| Total Cost of Funds | $ | 1,185,305 | $ | 26,487 | 2.23 | % | $ | 937,214 | $ | 7,279 | 0.78 | % | ||||
| Other Liabilities | 19,850 | 15,806 | ||||||||||||||
| Total Liabilities | $ | 1,205,155 | $ | 953,020 | ||||||||||||
| Shareholders' Equity | $ | 151,927 | $ | 107,173 | ||||||||||||
| Total Liabilities & Shareholders' Equity | $ | 1,357,083 | $ | 1,060,193 | ||||||||||||
| Net Interest Income/Spread (FTE) | 39,025 | 2.42 | % | 33,293 | 3.22 | % | ||||||||||
| Tax-Equivalent Basis Adjustment | (314 | ) | (308 | ) | ||||||||||||
| Net Interest Income | $ | 38,711 | $ | 32,985 | ||||||||||||
| Net Interest Margin | 3.09 | % | 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) | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | |||||||||||
| Agriculture and farmland loans | $ | 66,573 | $ | 50,584 | $ | 50,552 | $ | 53,301 | $ | 55,746 | ||||||
| Construction loans | 178,500 | 65,836 | 75,628 | 67,934 | 57,713 | |||||||||||
| Commercial & industrial loans | 238,258 | 115,572 | 104,869 | 99,356 | 104,755 | |||||||||||
| Commercial real estate loans | ||||||||||||||||
| Multifamily | 180,535 | 111,853 | 113,254 | 111,461 | 105,390 | |||||||||||
| Owner occupied | 501,788 | 161,751 | 154,520 | 151,407 | 139,554 | |||||||||||
| Non-owner occupied | 568,714 | 256,522 | 254,691 | 249,638 | 245,274 | |||||||||||
| Residential real estate loans | ||||||||||||||||
| First liens | 414,263 | 172,481 | 170,271 | 166,478 | 168,084 | |||||||||||
| Second liens and lines of credit | 70,724 | 27,870 | 30,148 | 30,720 | 35,576 | |||||||||||
| Consumer and other loans | 16,760 | 11,869 | 11,308 | 10,472 | 10,057 | |||||||||||
| Municipal loans | 5,244 | 4,137 | 3,929 | 4,292 | 5,466 | |||||||||||
| 2,241,359 | 978,475 | 969,170 | 945,059 | 927,615 | ||||||||||||
| Deferred costs (fees) | 174 | 437 | 363 | 312 | 256 | |||||||||||
| Total loans receivable | $ | 2,241,533 | $ | 978,912 | $ | 969,533 | $ | 945,371 | $ | 927,871 | ||||||
| LINKBANCORP, Inc. and Subsidiaries | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| Investments in Securities Detail (Unaudited) | ||||||||||||||||
| December 31, 2023 | ||||||||||||||||
| (In Thousands) | Amortized<br>Cost | Net<br>Unrealized<br>Gains (Losses) | Fair<br>Value | |||||||||||||
| Available for Sale: | ||||||||||||||||
| U.S. government agency securities | $ | 12,711 | $ | 274 | $ | 12,985 | ||||||||||
| U.S. 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<br>Cost | Net Unrealized Losses | Fair Value | Allowance for Credit Losses | |||||||||||||
| 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 | ) | |||||||
| December 31, 2022 | ||||||||||||||||
| (In Thousands) | Amortized<br>Cost | Net<br>Unrealized<br>Losses | Fair<br>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 | ||||||||||
| LINKBANCORP, Inc. and Subsidiaries | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| Deposits Detail (Unaudited) | ||||||||||||||||
| (In Thousands) | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | ||||||||||||
| Demand, noninterest-bearing | 655,953 | $ | 210,404 | $ | 240,729 | $ | 204,495 | $ | 192,773 | |||||||
| Demand, interest-bearing | 438,765 | 273,673 | 237,114 | 250,944 | 254,478 | |||||||||||
| Money market and savings | 577,448 | 258,334 | 254,632 | 241,858 | 228,048 | |||||||||||
| Time deposits, 250 and over | 135,050 | 51,563 | 57,194 | 51,855 | 46,116 | |||||||||||
| Time deposits, other | 491,257 | 247,798 | 245,173 | 235,346 | 225,357 | |||||||||||
| 2,298,473 | $ | 1,041,772 | $ | 1,034,842 | $ | 984,498 | $ | 946,772 | ||||||||
| Average Deposits Detail, for the Three Months Ended (Unaudited) | ||||||||||||||||
| (In Thousands) | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | ||||||||||||
| Demand, noninterest-bearing | 371,051 | $ | 209,054 | $ | 209,072 | $ | 192,135 | $ | 199,556 | |||||||
| Demand, interest-bearing | 328,342 | 254,725 | 243,539 | 251,103 | 278,816 | |||||||||||
| Money market and savings | 367,821 | 254,849 | 244,355 | 245,563 | 245,154 | |||||||||||
| Time deposits | 348,580 | 265,573 | 299,398 | 290,605 | 211,090 | |||||||||||
| 1,415,794 | $ | 984,201 | $ | 996,364 | $ | 979,406 | $ | 934,616 |
All values are in US Dollars.
Merger with Partners Bancorp
The following table provides a summary of the assets acquired, liabilities assumed, and associated preliminary fair value adjustments by the Company as of the merger date. As provided for under Generally Accepted Accounting Principles, management has up to 12 months following the date of the merger to finalize the fair value adjustments.
| (Unaudited)<br>(Dollars in thousands, except per share information) | Partners Bancorp | Fair Value Adjustment | As Recorded by LINKBANCORP, Inc. | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Assets acquired | |||||||||
| Cash and cash equivalents | $ | 34,586 | $ | - | $ | 34,586 | |||
| Federal funds sold | 7,159 | - | 7,159 | ||||||
| Securities available for sale, at fair value | 124,361 | (921 | ) | 123,440 | |||||
| Loans held for sale | 201 | - | 201 | ||||||
| Loans | 1,308,978 | (64,460 | ) | 1,244,518 | |||||
| Allowance for credit losses - loans | (16,124 | ) | 11,821 | (4,303 | ) | ||||
| Loans receivable, net | 1,292,854 | (52,639 | ) | 1,240,215 | |||||
| Restricted stock | 10,536 | - | 10,536 | ||||||
| Premises and equipment | 12,458 | 4,191 | 16,649 | ||||||
| Accrued interest receivable | 4,787 | - | 4,787 | ||||||
| Core deposit intangibles | - | 25,344 | 25,344 | ||||||
| Deferred tax asset | 8,766 | 5,063 | 13,829 | ||||||
| Right-of-use-asset -- premises | 6,042 | - | 6,042 | ||||||
| Other assets | 22,986 | (2,122 | ) | 20,864 | |||||
| Total assets acquired | $ | 1,524,736 | $ | (21,084 | ) | $ | 1,503,652 | ||
| Liabilities assumed | |||||||||
| Deposits | $ | 1,303,462 | $ | (3,595 | ) | $ | 1,299,867 | ||
| Borrowings | 55,292 | - | 55,292 | ||||||
| Subordinated debt | 22,257 | (1,179 | ) | 21,078 | |||||
| Accrued interest payable | 2,056 | - | 2,056 | ||||||
| Operating lease liabilities | 6,908 | - | 6,908 | ||||||
| Other liabilities | 1,643 | 2,025 | 3,668 | ||||||
| Total liabilities assumed | $ | 1,391,618 | $ | (2,749 | ) | $ | 1,388,869 | ||
| Net assets acquired | $ | 114,783 | |||||||
| Consideration paid | |||||||||
| Common stock consideration: | |||||||||
| Common shares of Partners Bancorp | 17,985,577 | ||||||||
| Exchange ratio | 1.15 | ||||||||
| LINKBANCORP, Inc. common stock issued | 20,683,185 | ||||||||
| LINKBANCORP, Inc. stock price on acquisition date | $ | 6.47 | |||||||
| Purchase price assigned to Partners Bancorp common shares | 133,820 | ||||||||
| Restricted stock consideration | |||||||||
| Partners Bancorp restricted stock shares | 297,726 | ||||||||
| LINKBANCORP, Inc. stock price on acquisition date | $ | 6.47 | |||||||
| Total purchase price assigned to Partners Bancorp restricted shares | 1,926 | ||||||||
| Cash paid in exchange for Partners Bancorp stock options | 33 | ||||||||
| Total consideration | $ | 135,779 | |||||||
| Goodwill | $ | 20,996 |
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 Year Ended | ||||||||||||||
| (Dollars in thousands) | 12/31/2023 | 9/30/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||
| Net (loss) income | $ | (13,190 | ) | $ | 1,240 | $ | 696 | $ | (12,161 | ) | $ | 5,598 | |||
| Average assets | 1,740,139 | 1,246,474 | 1,154,592 | 1,357,083 | 1,060,193 | ||||||||||
| Return on average assets (annualized) | -3.01 | % | 0.39 | % | 0.24 | % | -0.90 | % | 0.53 | % | |||||
| Net (loss) income | (13,190 | ) | 1,240 | 696 | (12,161 | ) | 5,598 | ||||||||
| Net losses (gains) on sale of securities | - | - | - | 2,370 | (13 | ) | |||||||||
| Tax effect at 21% | - | - | - | (498 | ) | 3 | |||||||||
| Merger & system conversion related expenses | 9,496 | 777 | 973 | 11,176 | 973 | ||||||||||
| Tax effect at 21% | (1,994 | ) | (163 | ) | (204 | ) | (2,347 | ) | (204 | ) | |||||
| Non-purchase credit deteriorated provision for credit losses | 9,694 | - | - | 9,694 | - | ||||||||||
| Tax effect at 21% | (2,036 | ) | - | - | (2,036 | ) | - | ||||||||
| Adjusted Net Income (Non-GAAP) | 1,970 | 1,854 | 1,465 | 6,198 | 6,357 | ||||||||||
| Average assets | 1,740,139 | 1,246,474 | 1,154,592 | 1,357,083 | 1,060,193 | ||||||||||
| Adjusted return on average assets (annualized) <br>(Non-GAAP) | 0.45 | % | 0.59 | % | 0.50 | % | 0.46 | % | 0.60 | % | |||||
| Adjusted Return on Average Shareholders' Equity | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| For the Three Months Ended | For the Year Ended | ||||||||||||||
| (Dollars in thousands) | 12/31/2023 | 9/30/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||
| Net (loss) income | $ | (13,190 | ) | $ | 1,240 | $ | 696 | $ | (12,161 | ) | $ | 5,598 | |||
| Average shareholders' equity | 182,609 | 142,374 | 136,952 | 151,927 | 107,173 | ||||||||||
| Return on average shareholders' equity (annualized) | -28.66 | % | 3.46 | % | 2.02 | % | -8.00 | % | 5.22 | % | |||||
| Net (loss) income | (13,190 | ) | 1,240 | 696 | (12,161 | ) | 5,598 | ||||||||
| Net losses (gains) on sale of securities | - | - | - | 2,370 | (13 | ) | |||||||||
| Tax effect at 21% | - | - | - | (498 | ) | 3 | |||||||||
| Merger & system conversion related expenses | 9,496 | 777 | 973 | 11,176 | 973 | ||||||||||
| Tax effect at 21% | (1,994 | ) | (163 | ) | (204 | ) | (2,347 | ) | (204 | ) | |||||
| Non-purchase credit deteriorated provision for credit losses | 9,694 | - | - | 9,694 | - | ||||||||||
| Tax effect at 21% | (2,036 | ) | - | - | (2,036 | ) | - | ||||||||
| Adjusted Net Income (Non-GAAP) | 1,970 | 1,854 | 1,465 | 6,198 | 6,357 | ||||||||||
| Average shareholders' equity | 182,609 | 142,374 | 136,952 | 151,927 | 107,173 | ||||||||||
| Adjusted return on average shareholders' equity (annualized) <br>(Non-GAAP) | 4.28 | % | 5.17 | % | 4.24 | % | 4.08 | % | 5.93 | % | |||||
| Adjusted Efficiency Ratio | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| For the Three Months Ended | For the Year Ended | ||||||||||||||
| (Dollars in thousands) | 12/31/2023 | 9/30/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||
| GAAP-based efficiency ratio | 143.86 | % | 86.59 | % | 88.96 | % | 115.16 | % | 77.44 | % | |||||
| Net interest income | $ | 14,316 | $ | 8,352 | $ | 8,985 | $ | 38,711 | $ | 32,985 | |||||
| Noninterest income | 1,175 | 880 | 508 | 1,087 | 2,957 | ||||||||||
| Less: net gains (losses) on sales of securities | - | - | - | (2,370 | ) | 13 | |||||||||
| Adjusted revenue (Non-GAAP) | 15,491 | 9,232 | 9,493 | 42,168 | 35,929 | ||||||||||
| Total noninterest expense | 22,285 | 7,994 | 8,445 | 45,832 | 27,832 | ||||||||||
| Less: Merger & system conversion related expenses | 9,496 | 777 | 973 | 11,176 | 973 | ||||||||||
| Adjusted non-interest expense | 12,789 | 7,217 | 7,472 | 34,656 | 26,859 | ||||||||||
| Efficiency ratio, as adjusted (Non-GAAP) | 82.56 | % | 78.17 | % | 78.71 | % | 82.19 | % | 74.76 | % | |||||
| Tangible Common Equity and Tangible Book Value | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (Dollars in thousands, except for share data) | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | ||||||||||
| Tangible Common Equity | |||||||||||||||
| Total shareholders’ equity | $ | 265,603 | $ | 141,351 | $ | 142,452 | $ | 141,581 | $ | 138,553 | |||||
| Adjustments: | |||||||||||||||
| Goodwill | (56,838 | ) | (35,842 | ) | (35,842 | ) | (35,842 | ) | (35,842 | ) | |||||
| Other intangible assets | (25,733 | ) | (873 | ) | (932 | ) | (991 | ) | (1,052 | ) | |||||
| Tangible common equity (Non-GAAP) | $ | 183,032 | $ | 104,636 | $ | 105,678 | $ | 104,748 | $ | 101,659 | |||||
| Common shares outstanding | 37,340,700 | 16,235,871 | 16,228,440 | 16,221,692 | 14,939,640 | ||||||||||
| Book value per common share | $ | 7.11 | $ | 8.71 | $ | 8.78 | $ | 8.73 | $ | 9.27 | |||||
| Tangible book value per common share <br>(Non-GAAP) | $ | 4.90 | $ | 6.44 | $ | 6.51 | $ | 6.46 | $ | 6.80 | |||||
| Tangible Assets | |||||||||||||||
| Total assets | $ | 2,664,436 | $ | 1,255,695 | $ | 1,308,472 | $ | 1,213,958 | $ | 1,163,654 | |||||
| Adjustments: | |||||||||||||||
| Goodwill | (56,838 | ) | (35,842 | ) | (35,842 | ) | (35,842 | ) | (35,842 | ) | |||||
| Other intangible assets | (25,733 | ) | (873 | ) | (932 | ) | (991 | ) | (1,052 | ) | |||||
| Tangible assets (Non-GAAP) | $ | 2,581,865 | $ | 1,218,980 | $ | 1,271,698 | $ | 1,177,125 | $ | 1,126,760 | |||||
| Tangible common equity to tangible assets (Non-GAAP) | 7.09 | % | 8.58 | % | 8.31 | % | 8.90 | % | 9.02 | % | |||||
| Adjusted Earnings Per Share | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| For the Three Months Ended | For the Year Ended | ||||||||||||||
| (Dollars in thousands, except per share data) | 12/31/2023 | 9/30/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||
| GAAP-Based (Loss) Earnings Per Share, Basic | $ | (0.57 | ) | $ | 0.08 | $ | 0.05 | $ | (0.68 | ) | $ | 0.49 | |||
| GAAP-Based (Loss) Earnings Per Share, Diluted | $ | (0.57 | ) | $ | 0.08 | $ | 0.05 | $ | (0.68 | ) | $ | 0.49 | |||
| Net (Loss) Income | $ | (13,190 | ) | $ | 1,240 | $ | 696 | $ | (12,161 | ) | $ | 5,598 | |||
| Net losses (gains) on sale of securities | - | - | - | 2,370 | (13 | ) | |||||||||
| Tax effect at 21% | - | - | - | (498 | ) | 3 | |||||||||
| Merger & system conversion related expenses | 9,496 | 777 | 973 | 11,176 | 973 | ||||||||||
| Tax effect at 21% | (1,994 | ) | (163 | ) | (204 | ) | (2,347 | ) | (204 | ) | |||||
| Non-purchase credit deteriorated provision for credit losses | 9,694 | - | - | 9,694 | - | ||||||||||
| Tax effect at 21% | (2,036 | ) | - | - | (2,036 | ) | - | ||||||||
| Adjusted Net Income (Non-GAAP) | 1,970 | 1,854 | 1,465 | 6,198 | 6,357 | ||||||||||
| Adjusted Earnings per Share, Basic (Non-GAAP) | $ | 0.09 | $ | 0.11 | $ | 0.10 | $ | 0.35 | $ | 0.56 | |||||
| Adjusted Earnings per Share, Diluted (Non-GAAP) | $ | 0.09 | $ | 0.11 | $ | 0.10 | $ | 0.35 | $ | 0.56 | |||||
| Adjusted Pre-tax, Pre-provision Net Income (Non-GAAP) | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| For the Three Months Ended | For the Year Ended | ||||||||||||||
| (Dollars in thousands, except per share data) | 12/31/2023 | 9/30/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | ||||||||||
| Net (Loss) Income - GAAP | $ | (13,190 | ) | $ | 1,240 | $ | 696 | $ | (12,161 | ) | $ | 5,598 | |||
| Net losses (gains) on sale of securities | - | - | - | 2,370 | (13 | ) | |||||||||
| Tax effect at 21% | - | - | - | (498 | ) | 3 | |||||||||
| Merger & system conversion related expenses | 9,496 | 777 | 973 | 11,176 | 973 | ||||||||||
| Tax effect at 21% | (1,994 | ) | (163 | ) | (204 | ) | (2,347 | ) | (204 | ) | |||||
| Adjusted Net Income (Non-GAAP) | (5,688 | ) | 1,854 | 1,465 | (1,460 | ) | 6,357 | ||||||||
| Income tax (benefit) expense | (3,448 | ) | 347 | 252 | (3,168 | ) | 1,222 | ||||||||
| Provision for (credit to) credit losses | 9,844 | (349 | ) | 100 | 9,295 | 1,290 | |||||||||
| Tax effect included in Adjusted Net Income | 1,994 | 163 | 204 | 2,845 | 201 | ||||||||||
| Adjusted Pre-tax, Pre-provision Net Income (Non-GAAP) | $ | 2,702 | $ | 2,015 | $ | 2,021 | $ | 7,512 | $ | 9,070 |