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LINKBANCORP, Inc. Announces Full Year 2021 and Fourth Quarter Financial Results And Dividend

02/15/2022

HARRISBURG, Pa., Feb. 15, 2022  -- LINKBANCORP, Inc. (OTC Pink:  LNKB) (the "Company"), the parent company of The Gratz Bank, including its LINKBANK division (the "Bank") reported net income of $788 thousand or $0.08 per diluted share for the fourth quarter of 2021 and $289 thousand or $0.04 per diluted share for the year ended December 31, 2021.1  These results include merger related expenses of $616 thousand for the fourth quarter and $4.6 million for 2021, relating to the merger with GNB Financial Services, Inc.

On February 15, 2022, the Company's Board of Directors declared a quarterly cash dividend of $0.075 per share of common stock to shareholders of record on February 28, 2022, which is expected to be paid on March 15, 2022.

Fourth Quarter Highlights

  • Successful integration and conversion of The Gratz Bank
  • Net interest income increased 141% compared to 4th quarter 2020
  • Linked quarter organic loan growth of $63.2 million, exclusive of PPP loans, representing an annualized growth rate of 40.4%
  • NPAs/Assets at December 31, 2021 was 0.15%

Andrew Samuel, Chief Executive Officer, commented, "The fourth quarter began with the successful integration and systems conversion relating to our combination with GNB Financial Services, Inc. and concluded with strong growth in quality commercial loans."  He continued, "This represents the first full quarter since the effective date of the merger and confirms the value of this combination.  We expect the first quarter of 2022 will provide a clear view of the trajectory of earnings growth, further fueled by recent additions to our team in the York, Lancaster and Delaware Valley markets."

Total assets were $932.8 million at December 31, 2021 compared to $979.2 million at September 30, 2021 and $430.5 million at December 31, 2020.  Deposits and net loans as of December 31, 2021 totaled $771.7 million and $711.7 million, respectively, compared to deposits and net loans of  $802.6 million and $665.1 million, respectively, at September 30, 2021 and $375.1 million and $233.8 million, respectively, at December 31, 2020.  The $46.6 million increase in net loans from the linked quarter includes the impact of loans under the U.S. Small Business Administration Paycheck Protection Program (PPP), which declined $16.6 million to $23.8 million at December 31, 2021.  The decline in deposits over the linked quarter was driven primarily by the nonrenewal of $20 million in maturing brokered deposits and seasonality in certain larger deposit accounts.  The Company continues to experience strong growth in new demand deposit accounts, particularly in response to initiatives to service professional services firms within our markets.     

As of December 31, 2021, the Company's non-performing assets were $1.4 million, representing 0.15% of total assets.  Non-performing assets at December 31, 2021 exclude purchased credit impaired loans with a balance of $5.5 million, inclusive of $3.9 million in loans held for sale.  The allowance for loan losses measured 0.43% of total loans, or approximately 0.96% of the non-purchased portfolio, at December 31, 2021. The total reserve when including the allowance for loan losses and the credit fair value adjustment made to loans acquired in the merger totaled $10.2 million or approximately 1.41% of total gross loans at December 31, 2021.  

Net interest income for the full year of 2021 increased 39.2% to $16.1 million compared to $11.6 million in 2020 as a result of average balance sheet growth and beginning to transition the mix of interest-earning assets from lower yielding investments into higher yielding organic loan growth.  Non-interest income increased from $1.8 million in 2020 to $2.1 million in 2021.

Noninterest expense for 2021 totaled $17.5 million, compared to $8.3 million in 2020, with the increase including merger-related expenses of $4.6 million, an increased expense base from a larger combined company, and investments the Company made to grow its commercial banking team and enhance the infrastructure to execute on its organic and strategic growth plans. 

Shareholders' equity increased to $109.7 million at December 31, 2021 compared to $50.7 million at December 31, 2020 with the increase primarily the result of the merger. 

ABOUT LINKBANCORP, Inc.

LINKBANCORP, Inc. was formed in 2018 with a mission to positively impact lives through community banking. Its subsidiary bank, The Gratz Bank, is a Pennsylvania state-chartered bank serving individuals, families, nonprofits and business clients throughout Central and Southeastern Pennsylvania through 10 client solutions centers of The Gratz Bank and LINKBANK, a division of The Gratz Bank.  LINKBANCORP, Inc. common stock is traded over the counter (OTC Pink) 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. Such forward-looking statements about LINKBANCORP (together with its bank subsidiary unless the context otherwise requires, "LINK") involve substantial risks and uncertainties. Statements other than statements of current or historical fact, including statements regarding LINK's future financial condition, results of operations, business plans, liquidity, cash flows, projected costs, and the impact of any laws or regulations applicable to LINK, are forward-looking statements. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "may," "will," "should," and other similar expressions are intended to identify these 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: (1) costs or difficulties related to integration following the merger; (2) the risk that the anticipated benefits, cost savings and any other savings from the transaction may not be fully realized or may take longer than expected to realize; (3) changes to interest rates; (4) the ability to control costs and expenses; (5) general economic conditions, including inflation; (6) adverse developments in borrower industries and, in particular, declines in real estate values; (7)LINK's ability to maintain compliance with federal and state laws that regulate its business and capital levels; (8) LINK's ability to raise capital as needed by its business; (9) the duration and scope of the coronavirus disease 2019 ("COVID-19") pandemic and its impact on levels of consumer confidence; (10) actions governments, businesses and individuals take in response to the COVID-19 pandemic; (11) the impact of the COVID-19 pandemic and actions taken in response to the pandemic on global and regional economies and economic activity, and (12) the pace of recovery when the COVID-19 pandemic subsides. LINK does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. You are cautioned not to place undue reliance on these forward-looking statements. 

1 Due to the merger of LINKBANCORP, Inc. and GNB Financial Services, Inc. effective September 18, 2021, all periods prior to such date represent the results of GNB Financial Services, Inc. as the accounting acquirer in the merger.

Contact:
Nicole Ulmer
Corporate and Investor Relations Officer
717.803.8895
IR@linkbancorp.com

LINKBANCORP, Inc. and Subsidiary

Consolidated Balance Sheet (Unaudited)

















December 31, 2021


September 30, 2021


December 31, 2020

(In Thousands, except share and per share data)







ASSETS







Noninterest-bearing cash equivalents


$             8,620


$            17,073


$             5,709

Interest-bearing deposits with other institutions


13,970


86,471


27,453

Cash and cash equivalents


22,590


103,544


33,162

Certificates of deposit with other banks


12,828


13,077


17,051

Securities available for sale, at fair value


103,783


122,748


125,447

Loans held for sale


3,860



Loans receivable, net of allowance for loan losses of $3,106 at December 31, 2021, $3,335 at September 30, 2021, and $2,789 at December 31, 2020


711,664


665,063


233,795

Investments in restricted bank stock


2,685


3,586


2,268

Premises and equipment, net


5,289


5,250


3,428

Right-of-Use Asset – Premises


4,680


4,748


370

Bank-owned life insurance


18,787


13,683


8,941

Goodwill and other intangible assets


37,152


36,890


2,785

Deferred tax asset


4,675


4,382


986

Accrued interest receivable and other assets


4,770


6,198


2,297

TOTAL ASSETS


$         932,763


$          979,169


$         430,530

LIABILITIES







Deposits:







Demand, noninterest bearing


$         129,243


$          175,609


$           66,573

Interest bearing


642,422


626,986


308,551

Total deposits


771,665


802,595


375,124

Other Borrowings


19,814


33,034


1,120

Subordinated Debt


20,696


20,740


Operating Lease Liabilities


4,680


4,748


370

Accrued interest payable and other liabilities


6,285


8,091


3,242

TOTAL LIABILITIES


823,140


869,208


379,856

SHAREHOLDERS' EQUITY







Preferred stock (At December 31, 2021 and September 30, 2021:  $0.00 par value; 5,000,000 shares authorized; no shares issued and outstanding. At December 31, 2020: no shares authorized)




Common stock (At December 31, 2021:  $0.01 par value; 25,000,000 shares authorized; 9,826,447 shares issued and outstanding. At September 30, 2021:  $0.01 par value; 25,000,000 shares authorized; 9,814,447 shares issued and outstanding. At December 31, 2020:  $0.01 par value; 14,612,800 shares authorized; 5,715,950 shares issued and 5,691,686 shares outstanding)


99


98


57

Surplus


82,910


82,771


21,604

Retained earnings


24,836


24,785


26,009

Accumulated other comprehensive income


1,778


2,307


3,192

Treasury stock (0, 0, and 3,321 shares at December 31, 2021, September 30, 2021 and December 31, 2020, respectively




(188)

TOTAL SHAREHOLDERS' EQUITY


109,623


109,961


50,674

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$         932,763


$          979,169


$         430,530

 

LINKBANCORP, Inc. and Subsidiary

Consolidated Statements of Operations (Unaudited)

























Three Months Ended


Twelve Months Ended December 31,



12/31/2021


9/30/2021


12/31/2020


2021


2020

(In Thousands, except share and per share data)











INTEREST AND DIVIDEND INCOME











Loans receivable, including fees


$         7,286


$       3,267


$       2,924


$     15,924


$     11,494

Other


651


636


645


2,572


2,797

Total interest and dividend income


7,937


3,903


3,569


18,496


14,291

INTEREST EXPENSE











Deposits


621


504


619


2,091


2,658

Other Borrowings


25


14


10


50


59

Subordinated Debt


212


37



249


Total interest expense


858


555


629


2,390


2,717

NET INTEREST INCOME BEFORE PROVISION FOR

   LOAN LOSSES


7,079


3,348


2,940


16,106


11,574

Provision for loan losses


100


457


46


648


184

NET INTEREST INCOME AFTER PROVISION FOR

   LOAN LOSSES


6,979


2,891


2,894


15,458


11,390

NONINTEREST INCOME











Service charges on deposit accounts


216


177


238


733


743

Bank-owned life insurance


77


54


49


253


186

Net realized gains on the sales of debt securities, available for sale


74




74


110

Gain on sale of secondary market mortgage loans


0


53


62


316


358

Other


214


87


235


763


357

Total noninterest income


581


371


584


2,139


1,754

NONINTEREST EXPENSE











Salaries and employee benefits


3,602


1,151


1,279


6,999


4,544

Occupancy


406


232


7


913


447

Equipment and data processing


537


335


620


1,340


1,188

Professional fees


421


75


237


685


538

FDIC insurance


81


90


25


231


73

Bank Shares Tax


174


87


73


434


294

Merger Related Expenses


616


3,864



4,584


0

Other


957


767


151


2,311


1,222

Total noninterest expense


6,794


6,601


2,392


17,497


8,306

Income (Loss) before income tax (benefit) expense


766


(3,339)


1,086


100


4,838

Income tax (benefit) expense


(22)


(542)


132


(189)


645

NET INCOME (LOSS)


$            788


$     (2,797)


$          954


$          289


$       4,193












EARNINGS (LOSS) PER SHARE, BASIC


$           0.08


$       (0.45)


$         0.17


$         0.04


$         0.74

EARNINGS (LOSS) PER SHARE, DILUTED


$           0.08


$       (0.45)


$         0.17


$         0.04


$         0.74

WEIGHTED-AVERAGE COMMON SHARES

   OUTSTANDING,











BASIC


9,822,273


6,274,250


5,691,686


6,879,658


5,691,686

DILUTED


10,178,487


6,274,250


5,691,686


7,250,463


5,691,686












 

LINKBANCORP, Inc. and Subsidiary

Financial Highlights (Unaudited)








As Of or For the Three Months Ended

('Dollars In Thousands)


12/31/2021


9/30/2021

Operating Highlights





Net Income (Loss)


$        788


$   (2,797)

Net Interest Income


7,079


3,348

Provision for Loan Losses


100


457

Non-Interest Income


581


371

Non-Interest Expense


6,794


6,601






Financial Condition Data





Total Assets


$ 932,763


$ 979,169

Loans Held for Investment, Net


711,664


665,063






     Noninterest-bearing Deposits


129,243


175,609

     Interst-bearing Deposits


642,422


626,986

Total Deposits


771,665


802,595






Selected Ratios





Net Interest Margin


3.30%


2.72%

Annualized Return on Average Assets


0.33%


-2.14%

Annualized Return on Average Equity


2.87%


-14.12%






Capital Ratios (Bank-Level)





Total Capital Ratio


11.50%


11.78%

Tier 1 Capital Ratio


11.02%


11.27%

Common Equity Tier 1 Capital Ratio


11.02%


11.27%

Leverage Ratio


8.85%


17.80%






Asset Quality Data





Non-performing Assets


$     1,410


563

Non-performing Assets to Total Assets


0.15%


0.06%

Non-performing Loans to Total Loans


0.20%


0.08%

Allowance for Loan Losses ("AFLL")


$     3,106


$     3,335

AFLL to Total Loans


0.43%


0.50%

 

SOURCE LINKBANCORP, Inc.

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