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LINKBANCORP, Inc. Announces Second Quarter 2022 Financial Results

August 1, 2022

HARRISBURG, Pa., Aug. 1, 2022 /PRNewswire/ -- LINKBANCORP, Inc. (OTC Pink:  LNKB) (the "Company"), the parent company of The Gratz Bank, including its LINKBANK division (the "Bank") reported net income of $1.606 million, or $0.16 per diluted share, for the quarter ended June 30, 2022.

 

Second Quarter Highlights

  • Net loans, exclusive of SBA PPP loans, grew $61.5 million during the second quarter,  representing a 34% annualized growth rate
  • Noninterest bearing deposits grew $19.1 million since March 31, 2022 or 46% annualized
  • Net interest income increased to $7.85 million, an increase of $376 thousand over the linked quarter, including the impact of additional interest expense for subordinated notes issued April 8, 2022

Andrew Samuel, Chief Executive Officer, commented, "Every region of the Bank contributed to the tremendous growth in both quality commercial loans and low-cost deposits this quarter, including our new team members in the Delaware Valley Region. This is an incredible accomplishment by our teams and confirms the quality of talent we have been able to attract."  He continued, "With this momentum, we look forward to a strong second half of 2022 as we continue to welcome new clients and expand our impact in the communities we serve."

Total assets were $1.060 billion at June 30, 2022 compared to $1.036 billion at March 31, 2022 and $932.8 million at December 31, 2021.  Deposits and net loans as of June 30, 2022 totaled $902.4 million and $786.5 million, respectively, compared to deposits and net loans of  $862.2 million and $727.6 million, respectively, at March 31, 2022 and $771.7 million and $711.7 million, respectively, at December 31, 2021.  The loan growth from March 31, 2022 includes $61.5 million in primarily commercial organic loan growth including the impact of forgiven loans under the U.S. Small Business Administration (SBA) Paycheck Protection Program (PPP), which declined $8.1 million to $2.5 million at June 30, 2022.  The $40.2 million increase in deposits from March 31, 2022 included a $19.1 million increase in noninterest bearing demand accounts, reflecting a continuing focus on growing low-cost transaction accounts. 

As of June 30, 2022, the Company's non-performing assets were $1.5 million, representing 0.14% of total assets. Non-performing assets at June 30, 2022 excluded purchased credit impaired loans with a balance of $6.5 million.  The allowance for loan losses measured 0.49% of total loans, or approximately 0.89% of the non-purchased portfolio, at June 30, 2022. The total reserve when including the allowance for loan losses and the credit fair value adjustment made to loans acquired in the GNB Financial merger totaled $10.0 million or approximately 1.26% of the combined portfolio at June 30, 2022.

Net interest income before the provision for loan losses for the second quarter of 2022 increased to $7.9 million compared to $7.5 million in the first quarter of 2022 primarily as a result of average loan growth and the impact of recent interest rate increases, offset by the additional interest expense of subordinated notes issued early in the quarter.  Net interest income does not include recognition of any fees from SBA PPP loans, which were included in purchase accounting adjustments in connection with the GNB Financial merger.  Net interest margin remained relatively steady at 3.38% for the second quarter of 2022 as compared to 3.40% for the first quarter of 2022 and is anticipated to experience modest expansion in the current rising interest rate environment given the Company's asset-sensitive balance sheet.  

Noninterest income experienced a slight decrease from $711 thousand in the first quarter of 2022 to $696 thousand in the second quarter of 2022, and noninterest expense for the second quarter of 2022 was generally stable at $6.2 million, compared to $6.1 million for the first quarter of 2022. 

Shareholders' equity decreased from $106.3 million at March 31, 2022 to $104.8 million at June 30, 2022 due to a $2.6 million increase in accumulated other comprehensive (loss) income as a result of an increased unrealized losses on available-for-sale securities due to the increase in market interest rates.  The unrealized loss was partially offset by net income less dividends declared. 

The Bank's regulatory capital ratios were further strengthened during the quarter, reflecting the additional $15 million in capital contributed to the Bank following completion of the Company's $20.0 million private placement of Fixed-to-Floating Rate Subordinated Notes due 2032 on April 8, 2022.

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. 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; 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. 

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

 

LINKBANCORP, Inc. and Subsidiary

Consolidated Balance Sheet (Unaudited)





















June 30, 2022


March 31, 2022


December 31, 2021


June 30, 2021

(In Thousands, except share and per share data)









ASSETS









Noninterest-bearing cash equivalents


$                 7,563


$                 6,425


$                          8,620


$                 6,079

Interest-bearing deposits with other institutions


55,433


102,704


13,970


18,913

Cash and cash equivalents


62,996


109,129


22,590


24,992

Certificates of deposit with other banks


11,088


12,828


12,828


14,570

Securities available for sale, at fair value


85,756


93,202


103,783


126,410

Securities held to maturity


28,816


5,000



Loans held for sale



4,074


3,860


Loans receivable, net of allowance for loan losses of $3,890 at June 30, 2022, $3,443 at
March 31, 2022, $3,152 at December 31, 2021, and $2,878 at June 30, 2021


786,516


727,618


711,664


246,185

Investments in restricted bank stock


2,567


3,612


2,685


2,569

Premises and equipment, net


7,915


5,253


5,289


3,212

Right-of-Use Asset – Premises


4,513


4,605


4,680


342

Bank-owned life insurance


19,012


18,898


18,787


8,846

Goodwill and other intangible assets


37,020


37,085


37,152


2,482

Deferred tax asset


5,777


5,092


4,038


160

Accrued interest receivable and other assets


7,909


9,280


5,407


2,402

TOTAL ASSETS


$        1,059,885


$          1,035,676


$                      932,763


$             432,170

LIABILITIES









Deposits:









Demand, noninterest bearing


$             184,345


$             165,228


$                      129,243


$               74,664

Interest bearing


718,028


696,942


642,422


301,636

Total deposits


902,373


862,170


771,665


376,300

Other Borrowings


1,639


36,117


19,814


282

Subordinated Debt


40,585


20,653


20,696


Operating Lease Liabilities


4,513


4,606


4,680


342

Accrued interest payable and other liabilities


6,004


5,790


6,285


3,170

TOTAL LIABILITIES


955,114


929,336


823,140


380,094

SHAREHOLDERS' EQUITY









Preferred stock





Common stock


101


99


99


57

Surplus


83,068


82,930


82,910


21,604

Retained earnings


26,491


25,623


24,836


27,823

Accumulated other comprehensive (loss) income


(4,889)


(2,312)


1,778


2,780

Treasury stock





(188)

TOTAL SHAREHOLDERS' EQUITY


104,771


106,340


109,623


52,076

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$          1,059,885


$          1,035,676


$                      932,763


$             432,170

 

LINKBANCORP, Inc. and Subsidiary





Consolidated Statements of Operations (Unaudited)































Three Months Ended


Six Months Ended



6/30/2022


3/31/2022


6/30/2021



6/30/2022


6/30/2021

(In Thousands, except share and per share data)












INTEREST AND DIVIDEND INCOME












Loans receivable, including fees


$             8,114


$             7,763


$             2,695



$           15,877


$             5,371

Other


981


619


638



1,600


1,286

Total interest and dividend income


9,095


8,382


3,333



17,477


6,657

INTEREST EXPENSE












Deposits


818


665


462



1,483


966

Other Borrowings


2


33


4



35


11

Subordinated Debt


422


207




629


Total interest expense


1,242


905


466



2,147


977

NET INTEREST INCOME BEFORE PROVISION FOR
   LOAN LOSSES


7,853


7,477


2,867



15,330


5,680

Provision for loan losses


395


280


44



675


91

NET INTEREST INCOME AFTER PROVISION FOR
   LOAN LOSSES


7,458


7,197


2,823



14,655


5,589

NONINTEREST INCOME












Service charges on deposit accounts


218


210


147



428


341

Bank-owned life insurance


114


110


50



224


95

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


0


13




13


Gain on sale of loans


153


180


81



333


271

Other


211


198


366



409


507

Total noninterest income


696


711


644



1,407


1,214

NONINTEREST EXPENSE












Salaries and employee benefits


3,722


3,656


1,143



7,378


2,246

Occupancy


433


473


113



906


275

Equipment and data processing


595


597


230



1,192


468

Professional fees


307


228


(21)



535


250

FDIC insurance


138


204


29



342


59

Bank Shares Tax


201


183


86



384


173

Other


846


757


512



1,603


659

Total noninterest expense


6,242


6,098


2,092



12,340


4,130

Income (Loss) before income tax (benefit) expense


1,912


1,810


1,375



3,722


2,673

Income tax (benefit) expense


306


286


202



592


375

NET INCOME (LOSS)


$             1,606


$             1,524


$             1,173



$             3,130


$             2,298













EARNINGS (LOSS) PER SHARE, BASIC


$               0.16


$               0.16


$               0.21



$               0.32


$               0.40

EARNINGS (LOSS) PER SHARE, DILUTED


$               0.16


$               0.15


$               0.21



$               0.31


$               0.40

WEIGHTED-AVERAGE COMMON SHARES
   OUTSTANDING,












BASIC


9,836,984


9,826,435


5,691,686



9,831,739


5,691,686

DILUTED


9,913,477


10,053,684


5,691,686



9,983,742


5,691,686

 

LINKBANCORP, Inc. and Subsidiary



Financial Highlights (Unaudited)












For the Three Months Ended


For the Six Months Ended

('Dollars In Thousands)


6/30/2022


3/31/2022


6/30/2022

Operating Highlights







Net Income (Loss)


$                1,606


$                1,524


$                3,130

Net Interest Income


7,853


7,477


15,330

Provision for Loan Losses


395


280


675

Non-Interest Income


696


711


1,407

Non-Interest Expense


6,242


6,098


12,340








Selected Ratios







Net Interest Margin


3.38 %


3.40 %


3.39 %

Annualized Return on Assets


0.63 %


0.63 %


0.63 %

Annualized Return on Equity


6.13 %


5.72 %


5.91 %










6/30/2022


3/31/2022


12/31/2021

Financial Condition Data







Total Assets


$         1,059,885


$         1,035,676


$            932,763

Loans Held for Investment, Net


786,516


727,618


711,664








     Noninterest-bearing Deposits


184,345


165,228


129,243

     Interst-bearing Deposits


718,028


696,942


642,422

Total Deposits


902,373


862,170


771,665








Capital Ratios (Bank-Level)







Total Capital Ratio


12.42 %


11.14 %


11.50 %

Tier 1 Capital Ratio


11.94 %


10.67 %


11.02 %

Common Equity Tier 1 Capital Ratio


11.94 %


10.67 %


11.02 %

Leverage Ratio


10.10 %


8.71 %


8.85 %








Asset Quality Data







Non-performing Assets


$                1,494


$                1,246


$                1,410

Non-performing Assets to Total Assets


0.14 %


0.12 %


0.15 %

Non-performing Loans to Total Loans


0.19 %


0.17 %


0.20 %

Allowance for Loan Losses ("AFLL")


$                3,890


$                3,443


$                3,152

AFLL to Total Loans


0.49 %


0.47 %


0.44 %

AFLL to Nonperforming Assets


260.37 %


276.32 %


223.55 %








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.

 

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SOURCE LINKBANCORP, INC.

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