LINKBANCORP, Inc. Announces Second Quarter 2022 Financial Results
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 | 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 | 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 | 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 | |||||||||||
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.