LINKBANCORP(LNKB) - 2025 Q1 - Quarterly Report

Financial Performance - Net income for the three months ended March 31, 2025, was $15.3 million, a $9.6 million increase from the same period in 2024, with diluted earnings per share rising to $0.41 from $0.15 [156]. - The increase in net income was primarily due to an increase in other income of $11.5 million from the sale of New Jersey solutions centers [180]. - Net income for the three months ended March 31, 2025, was $15.3 million, or $0.41 per diluted share, an increase of $9.6 million compared to $5.7 million, or $0.15 per diluted share, for the same period in 2024 [179]. Asset and Liability Management - Total assets decreased by $17.3 million, or 0.60%, to $2.86 billion as of March 31, 2025, primarily due to the completion of the New Jersey Branch Sale [155]. - Total assets increased to $2.85 billion as of March 31, 2025, compared to $2.69 billion as of March 31, 2024 [186]. - Long-term borrowings consisted of $40 million in long-term FHLB advances as of March 31, 2025, with short-term FHLB advances at $0 [173]. - The company has estimated uninsured deposits of $840.6 million, or 34.5% of total deposits, as of March 31, 2025 [172]. - The company has $103.6 million in brokered deposits, which represent 24.8% of total deposits [198]. Loan and Deposit Growth - Total loans increased by $18.3 million, or 0.81%, to $2.27 billion as of March 31, 2025, with notable growth in commercial loans [160]. - Total deposits increased by $73.1 million, or 3.1%, to $2.43 billion at March 31, 2025, from $2.36 billion at December 31, 2024 [168]. - Demand deposits rose by $39.4 million, primarily due to new accounts, contributing approximately $22.2 million at March 31, 2025 [170]. - Commercial real estate loans increased by $16.8 million during the first three months of 2025, primarily due to new loan originations [161]. Income and Expense Analysis - Net interest income before provision for credit losses increased by $947 thousand, or 3.81%, for the three months ended March 31, 2025, with a net interest margin of 3.94% [156]. - Non-interest income increased by $11.5 million to $13.3 million for the three months ended March 31, 2025, primarily due to a gain on the sale of New Jersey solutions centers of $11.1 million [192]. - Non-interest expense rose by $408 thousand, or 2.1%, to $19.7 million for the three months ended March 31, 2025, compared to $19.3 million for the same period in 2024 [193]. - Interest expense increased by $420 thousand, or 3.0%, to $14.3 million for the three months ended March 31, 2025, compared to $13.9 million for the same period in 2024 [188]. Credit Quality and Allowance for Losses - The allowance for credit losses increased by $184 thousand to $26.6 million, driven by a provision for credit losses of $265 thousand during the three months ended March 31, 2025 [163]. - As of March 31, 2025, non-performing loans totaled $26.0 million, representing 1.15% of total gross loans, up from $17.2 million or 0.76% at December 31, 2024 [164]. - The allowance for credit losses for loans was $26.6 million at March 31, 2025, maintaining 1.17% of total gross loans, compared to $26.4 million at December 31, 2024 [164]. - The allowance for credit losses as of March 31, 2025, is estimated at $30.3 million, which could increase by approximately $3.7 million or 13.9% under adverse economic conditions [205]. - An immediate increase of 25% in the projected U.S. civilian unemployment rate could lead to a significant increase in the allowance for credit losses [205]. Regulatory Compliance and Capital Position - The company met the capital requirements to be considered "well capitalized" as of March 31, 2025, and December 31, 2024 [201]. - Non-owner-occupied commercial real estate loans represented 331.85% of total risk-based capital at March 31, 2025, down from 365.65% at December 31, 2024 [166]. - The effective tax rate for the three months ended March 31, 2025, was 20.1%, compared to 21.8% for the same period in 2024 [194]. Liquidity Position - The company maintains additional liquidity sources, including $77.0 million from correspondent banks and $23.9 million from the Federal Reserve Bank's Discount Window, totaling $836.6 million in available liquidity [199][201]. - The company actively seeks to maintain its status as a sound and profitable financial institution in accordance with regulatory standards [201]. - Management's evaluation of the allowance for credit losses is based on historical experience and forecasts, which may be subject to significant change [203]. - The company has off-balance sheet arrangements that are detailed in the notes to the unaudited Consolidated Financial Statements [202].