8-K
LINKBANCORP, Inc. (LNKB)
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): July 31, 2023 |
|---|
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 July 31, 2023, LINKBANCORP, Inc. (the “Company”) issued a press release reporting its financial results at and for the three and six months ended June 30, 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 July 27, 2023, Director Timothy J. Allison 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 July 31, 2023. Mr. Allison 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 July 31, 2023 | |
| 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: | July 31, 2023 | By: | /s/ Carl D. Lundblad |
| Carl D. Lundblad<br>President |
EX-99.1
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
Nicole Ulmer
Corporate and Investor Relations Officer
717.803.8895
IR@LINKBANCORP.COM
LINKBANCORP, Inc. Announces Second Quarter 2023 Financial Results
July 31, 2023 – HARRISBURG, PA -- LINKBANCORP, Inc. (NASDAQ: LNKB) (the “Company”), the parent company of LINKBANK (the “Bank”) reported net income of $1.35 million, or $0.08 per diluted share, for the quarter ended June 30, 2023. Excluding merger related expenses, adjusted earnings were $1.60 million1, or $0.101 per diluted share for the second quarter of 2023.
Second Quarter 2023 Highlights
• Total deposits grew $50.3 million, or 20.5% annualized during the second quarter over the prior quarter end, including an increase in noninterest bearing deposits of $36.2 million, and $14.1 million in interest bearing deposits. Estimated uninsured deposits, excluding collateralized public funds and affiliate company accounts, totaled $378.7 million, or 36.7% of total deposits as of June 30, 2023, compared with $387.8 million, or 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 $123.2 million, up from $51.7 million at March 31, 2023 and $30.0 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 $507.4 million as of June 30, 2023.
1 See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure.
• Total loans grew $24.2 million during the second quarter, representing a 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 $8.1 million, compared to $8.0 million for the first quarter of 2023. Net interest margin was 2.81% for the second quarter of 2023, compared to 2.95% 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 $493 thousand negative provision for credit losses for the second quarter of 2023, resulting in an allowance for credit losses of $10.2 million, or 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 $97 thousand in net recoveries, offset by loan growth in the period.
• 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.
“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 $8.1 million compared to $8.0 million in the first quarter of 2023. Net interest margin was 2.81% for the second quarter of 2023 compared to 2.95% for the first quarter of 2023. The decrease in net interest margin for the current quarter was due to the higher average rate paid on interest-bearing liabilities, which outpaced the increase in the average yield on interest earning assets. The overall rate and yield increases were driven by the multiple federal funds rate increases that occurred over the preceding twelve months, coupled with competition for deposits in the market. The rate of increase in the cost of funds moderated to 30 basis points in the second quarter of 2023, primarily resulting from strong growth in the average balance of non-interest bearing deposits, which increased approximately $17.0 million to $209.1 million, compared to $192.1 million for the first quarter. The 30 basis points increase in the cost of funds to 2.29% during the second quarter of 2023 was partially offset by a 15 basis point increase in the average yield on interest-earning assets to 5.00%. The increase in the average yield on interest-earning assets was primarily due to the increase in the average yield on loans of 11 basis points to 5.20% during the second quarter of 2023.
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 $38 million in new deposits. Additionally, further momentum in executing the Company’s strategies to service the needs of professional services firms resulted in 58 new accounts opened during the quarter, which are expected to fund over the course of the third quarter. As a result of these positive trends, the Company expects to allow higher cost brokered deposits to mature, replaced by core accounts at a lower cost, contributing to further stabilization in net interest margin.
Noninterest income (expense) improved from a $1.9 million expense in the first quarter of 2023, driven by recognition of a loss upon the sale of debt securities of $2.37 million, to $886 thousand in income in the second quarter of 2023. Excluding the first quarter loss on the sale of debt securities, adjusted noninterest income for the second quarter of 2023 increased $369 thousand to $886 thousand, primarily due to gains on the sale of Small Business Administration (“SBA”) loans of $296 thousand and $57 thousand in commercial loan-related interest rate swap fees.
Noninterest expense for the second quarter of 2023 increased to $7.8 million compared to $7.7 million for the first quarter of 2023. Excluding one time charges relating to the pending merger with Partners Bancorp of $587 thousand in the first quarter of 2023 and $315 thousand in the second quarter of 2023, adjusted noninterest expense increased by $351 thousand in the second quarter, impacted by increased equipment and data processing expense as the Company continues to enhance its technology platform, as well as elevated accrual of fraud and operating losses.
Balance Sheet
Total assets were $1.31 billion at June 30, 2023 compared to $1.21 billion at March 31, 2023 and $1.06 billion at June 30, 2022. Deposits and net loans as of June 30, 2023 totaled $1.03 billion and $959.3 million, respectively, compared to deposits and net loans of $984.5 million and
2 See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure.
$934.8 million, respectively, at March 31, 2023 and $902.4 million and $786.5 million, respectively, at June 30, 2022.
Total loans increased $24.2 million from March 31, 2023 to June 30, 2023, or 10.25% annualized, with the average commercial loan commitment originated during the second quarter of 2023 totaling approximately $500,000.
The Company has proactively taken additional steps during the quarter to enhance its on-balance sheet liquidity. Cash and cash equivalents increased to $123.2 million at June 30, 2023 compared to $51.7 million at March 31, 2023 and $30.0 million at December 31, 2022. In addition to growth in core deposits, this position was supported by an additional $43.7 million in borrowings related to $75.0 million in wholesale funding in connection with the execution of a pay-fixed/receive-floating interest rate swap. The interest rate swap has a fixed rate of 3.28%, a maturity of five years and is designated against either a mix of one-month FHLB advances or brokered certificates of deposits. Classified as a cash flow hedge, the market fluctuations will not impact future earnings, but will impact accumulated other comprehensive loss.
Deposits at June 30, 2023 totaled $1.03 billion, an increase of $50.3 million compared to $984.5 million at March 31, 2023. Average deposits increased by $17.0 million during the quarter, or 6.9% annualized, driven by a 35.3% increase in average noninterest bearing deposits from $192.1 million for the first quarter of 2023 to $209.1 million for the second quarter of 2023.
Shareholders’ equity increased from $141.6 million at March 31, 2023 to $142.5 million at June 30, 2023. The increase included an increase in retained earnings due to net income for the current quarter, and a decrease in other comprehensive loss resulting from changes in the interest rate environment, offset by dividends paid of $1.2 million.
Asset Quality
In the second quarter of 2023, the Company recorded a negative provision for credit losses, calculated under the CECL model, of $493 thousand, compared to a provision for credit losses of $293 thousand in the first quarter. The negative provision for credit losses included the impact of reductions in the allowance for credit losses due to refinement of the population of loans individually assessed for impairment under CECL, improvements in internal credit metrics and external forecast indexes, as well as $97 thousand in net recoveries, offset by loan growth in the period.
Asset quality metrics remain strong. As of June 30, 2023, the Company’s non-performing assets were $2.9 million, representing 0.22% of total assets. Non-performing assets at June 30, 2023 excluded purchased with credit deterioration (“PCD”) loans with a balance of $2.1 million. Loans 30-89 days past due at June 30, 2023 were $1.8 million, representing 0.18% of total loans.
The allowance for credit losses-loans was $10.2 million, or 1.05% of total loans at June 30, 2023, compared to the allowance for credit losses-loans of $10.5 million, or 1.11% of total loans, at March 31, 2023. The allowance for credit losses-loans to nonperforming assets was 358.12% at June 30, 2023, compared to 438.95% at March 31, 2023.
2 See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure.
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 $1.8 million and total current outstanding balances of $103.0 million. The largest exposure relating to office space is $8.8 million for a construction loan that will constitute owner-occupied real estate upon completion. Eighty-four percent (84%) of office space loans are guaranteed by high-quality principals and no office loans are past due 30 days or greater.
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 13.55% and 12.94% , respectively, at June 30, 2023, compared to 13.53% and 12.32%, respectively, at March 31, 2023 and 12.89% and 12.41%, respectively, at December 31, 2022. The Company’s ratio of Tangible Common Equity to Tangible Assets was 8.31%[1]at June 30, 2023.
2 See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure.
ABOUT LINKBANCORP, Inc.
LINKBANCORP, Inc. was formed in 2018 with a mission to positively impact lives through community banking. Its subsidiary bank, LINKBANK, is a Pennsylvania state-chartered bank serving individuals, families, nonprofits and business clients throughout Central and Southeastern Pennsylvania through 10 client solutions centers and www.linkbank.com. LINKBANCORP, Inc. common stock is traded on the Nasdaq Capital Market under the symbol “LNKB”. For further company information, visit ir.linkbancorp.com.
Forward Looking Statements
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of current or historical fact and involve substantial risks and uncertainties. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "may," "will," "should," and other similar expressions can be used to identify forward-looking statements. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to the following: costs or difficulties associated with newly developed or acquired operations; risks related to the proposed merger with Partners; changes in general economic trends, including inflation and changes in interest rates; increased competition; changes in consumer demand for financial services; our ability to control costs and expenses; adverse developments in borrower industries and, in particular, declines in real estate values; changes in and compliance with federal and state laws that regulate our business and capital levels; our ability to raise capital as needed; and the effects of the COVID-19 pandemic and actions taken by governments, businesses and individuals in response. The Company does not undertake, and specifically disclaims, any obligation to publicly revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements, except as required by law. Accordingly, you should not place undue reliance on forward-looking statements.
| LINKBANCORP, Inc. and Subsidiaries | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Consolidated Balance Sheet (Unaudited) | ||||||||||||||||
| June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | 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)<br> PROVISION FOR CREDIT LOSSES | 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)<br> PROVISION FOR CREDIT LOSSES | 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<br> OUTSTANDING, | ||||||||||||||||
| 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 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 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 | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| Loans Receivable Detail (Unaudited) | ||||||||||||||||
| (In Thousands) | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | |||||||||||
| 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 | $ | 790,406 | ||||||
| LINKBANCORP, Inc. and Subsidiaries | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | |||||||||
| Investments in Securities Detail (Unaudited) | ||||||||||||||||
| June 30, 2023 | ||||||||||||||||
| (In Thousands) | Amortized<br>Cost | Net<br>Unrealized<br>Losses | Fair<br>Value | |||||||||||||
| Available for Sale: | ||||||||||||||||
| U.S. government agency securities | $ | 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<br>Cost | Net Unrealized Losses | Fair Value | ||||||||||||||
| Held to Maturity: | ||||||||||||||||
| Corporate debentures | $ | 15,000 | $ | (1,782 | ) | $ | 13,218 | |||||||||
| Structured mortgage-backed securities | 23,806 | (966 | ) | 22,840 | ||||||||||||
| $ | 38,806 | $ | (2,748 | ) | $ | 36,058 | ||||||||||
| 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) | March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | ||||||||||||
| 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, 250 and over | 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) | March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | ||||||||||||
| 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 |
All values are in US Dollars.
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 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 21% | - | (498 | ) | - | (498 | ) | 3 | ||||||||
| Merger & system conversion related expenses | 315 | 587 | - | 902 | - | ||||||||||
| Tax effect at 21% | (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) <br>(Non-GAAP) | 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 21% | - | (498 | ) | - | (498 | ) | 3 | ||||||||
| Merger & system conversion related expenses | 315 | 587 | - | 902 | - | ||||||||||
| Tax effect at 21% | (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) <br>(Non-GAAP) | 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 <br>(Non-GAAP) | $ | 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 21% | - | (498 | ) | - | (498 | ) | 3 | ||||||||
| Merger & system conversion related expenses | 315 | 587 | - | 902 | - | ||||||||||
| Tax effect at 21% | (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 21% | - | (498 | ) | - | (498 | ) | 3 | ||||||||
| Merger & system conversion related expenses | 315 | 587 | - | 902 | - | ||||||||||
| Tax effect at 21% | (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 |