LINKBANCORP(LNKB) - 2024 Q3 - Quarterly Report

Financial Performance - Net interest income rose by $16.6 million, or 199.1%, to $25.0 million for the three months ended September 30, 2024, compared to $8.4 million for the same period in 2023[33]. - Net income for the three months ended September 30, 2024, was $7,095,000, a significant increase from $1,240,000 in the same period last year, representing a growth of 471%[73]. - Net income for the nine months ended September 30, 2023, was $18,625,000, compared to $1,033,000 for the same period in 2022, representing a significant increase[78]. - Total interest and dividend income for the three months ended September 30, 2024, was $40,194,000, compared to $14,778,000 for the same period in 2023, marking an increase of 171%[73]. - Noninterest income totaled $2,680,000 for the three months ended September 30, 2024, compared to $880,000 in the same period last year, an increase of 204%[73]. - Total noninterest expense increased to $18,452,000 for the three months ended September 30, 2024, from $7,994,000 in the same period last year, representing a rise of 131%[73]. - The company reported a total comprehensive income for the three months ended September 30, 2024, was $8,454,000, significantly higher than $78,000 in the same period last year[74]. Asset and Deposit Growth - Deposits increased by $173.9 million, or 7.9%, to $2.37 billion at September 30, 2024, compared to $2.20 billion at December 31, 2023[22]. - Total assets as of September 30, 2024, were $2,764.544 million, compared to $1,227.289 million as of the same date in 2023[39]. - Total loans increased by $87.1 million, or 4.09%, to $2.22 billion at September 30, 2024, from $2.13 billion at December 31, 2023[19]. - The Company has estimated uninsured deposits of $844.0 million, or 34.22% of total deposits, at September 30, 2024[22]. - Total deposits increased to $2.373 billion as of September 30, 2024, compared to $2.199 billion at the end of 2023[98]. Credit Losses and Allowance - The allowance for credit losses increased by $2.8 million from $23.8 million at December 31, 2023, to $26.5 million at September 30, 2024[20]. - The company reported a provision for credit losses attributed to an increase in specific reserves at September 30, 2024, compared to September 30, 2023[39]. - The total allowance for credit losses increased to $26,542,000 as of September 30, 2024, from $26,289,000 at the beginning of the period, reflecting a provision for losses of $225,000 during the three months[184]. - The allowance for credit losses for off-balance sheet instruments was $1,857 thousand as of September 30, 2024, down from $2,189 thousand at December 31, 2023[221]. Mergers and Acquisitions - The Company completed a purchase and assumption agreement with American Heritage Federal Credit Union for its New Jersey operations[16]. - The Partners Merger was completed on November 30, 2023, with LINKBANCORP as the surviving corporation, issuing 20.7 million common shares to Partners shareholders, representing approximately 55.4% of post-merger outstanding shares[93]. - Total consideration in the Partners Merger amounted to $135.779 million, with net assets acquired valued at $112.815 million[94]. - The company completed the Partners Merger, resulting in increased salaries and employee benefits expense of $18.6 million due to a rise in the number of employees[39]. Liquidity and Borrowing Capacity - The company has available borrowing capacity at the FHLB and lines of credit with multiple financial institutions providing an additional $77 million of liquidity as of September 30, 2024[41]. - The company maintains sufficient liquidity to fund operations and loan demand, with liquidity management being a daily and long-term function[40]. - The company has $40,000 in long-term FHLB Advances as of September 30, 2024, with a fixed rate of 4.827% maturing on February 20, 2026[211]. - The company has a remaining available capacity with FHLB of approximately $742.8 million as of September 30, 2024[211]. Stock and Dividends - The company declared dividends of $0.075 per share, totaling $2,774,000[73]. - The company declared dividends of $0.075 per share, totaling $1,217,000[76]. - The company recognized stock-based compensation expense of $187 thousand for the three months ended September 30, 2024, compared to $10 thousand for the same period in 2023[219]. - The Company has 1,537,484 outstanding stock purchase warrants with a strike price of $10, which have not been exercised since their issuance[219]. Loan Portfolio and Credit Quality - The total loan portfolio increased to $2,189,326,000 in September 2024 from $2,104,517,000 in December 2023, reflecting a growth of approximately 4%[181]. - The grading analysis of loans indicates a significant portion classified as "Pass," reflecting the borrowers' ability to meet obligations[168]. - The company has identified potential weaknesses in some loans, categorized as "Special Mention," which could lead to future risks[168]. - The allowance for credit losses related to nonaccrual loans was $4,882,000, indicating a significant level of potential risk[165].