HARRISBURG, Pa., April 29, 2024 /PRNewswire/ -- LINKBANCORP, Inc. (NASDAQ:LNKB) (the "Company"), the parent company of LINKBANK (the "Bank") reported net income of $5.73 million, or $0.15 per diluted share, for the quarter ended March 31, 2024.  Excluding merger related expenses, adjusted earnings were $5.77 million1, or $0.161 per diluted share for the first quarter of 2024. First Quarter 2024 Highlights Net interest income before provision was $24.9 million for the first quarter of 2024, compared to $14.3 million in the fourth quarter of 2023. Net interest margin grew from 3.55% for the fourth quarter of 2023 to 4.03% for the first quarter of 2024. Total deposits increased to $2.39 billion at March 31, 2024 from $2.30 billion at December 31, 2023 and $984.5 million at March 31, 2023. Total loans increased slightly to $2.25 billion at March 31, 2024, compared to $2.24 billion at December 31, 2023 and $945.4 million at March 31, 2023. The Company enhanced its on-balance sheet liquidity with cash and cash equivalents at March 31, 2024 of $172.3 million, up from $80.2 million at December 31, 2023 and $51.7 million at March 31, 2023. Asset quality remained strong as non-performing assets were $6.7 million, representing 0.25% of total assets at March 31, 2024, compared to $7.3 million, representing 0.27% of total assets at December 31, 2023. The allowance for credit losses-loans was 1.06% of total loans at March 31, 2024, unchanged from December 31, 2023. Given that the merger with Partners Bancorp ("Partners") was completed on November 30, 2023 (the "Merger"), fourth quarter 2023 results do not represent a full quarter of comparable combined earnings.  Reported results prior to the fourth quarter of 2023 reflect legacy LINKBANCORP results only. "We are very pleased by the strong results of the first quarter of 2024, which represents the first full quarter following completion of our merger with Partners Bancorp," said Andrew Samuel, Chief Executive Officer of LINKBANCORP.  "Following a very successful conversion during the fourth quarter, we have continued to make significant progress in integrating our institutions and executing on the actions needed to achieve the operational efficiencies and other benefits of this combination, including recognizing a 14% reduction in headcount since the close of the transaction and positive steps in implementing our bank-wide branch rationalization initiative."  He continued, "Loan activity during the quarter was consistent with our expectations and solid deposit growth will support growing loan pipelines."   (1) See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure.   Income StatementNet interest income before the provision for credit losses for the first quarter of 2024 increased to $24.9 million compared to $14.3 million in the fourth quarter of 2023. Net interest margin was 4.03% for the first quarter of 2024 compared to 3.55% for the fourth quarter of 2023.  The average yield on interest-earning assets increased by 56 basis points over the prior linked quarter, due to an increase in the average yield on loans of 45 basis points to 6.48% as well as a 61 basis points increase in the average yield on securities to 4.71%.  Cost of funds increased slightly to 2.33% for the first quarter of 2024 compared to 2.28% for the fourth quarter of 2023.  The increase in net interest income was primarily a result of the Merger, including the lower cost deposits from legacy Partners and the impact of purchase accounting accretion. Noninterest income increased quarter-over-quarter to $1.7 million for the first quarter of 2024 compared to $1.2 million for the fourth quarter of 2023.  This increase was primarily related to a $395 thousand increase in service charges on deposit accounts resulting from the Merger, offset by a decrease in gain on sale of loans.   Noninterest expense for the first quarter of 2024 was $19.3 million compared to $22.3 million for the fourth quarter of 2023.  Excluding one-time charges related to the Merger of $56 thousand in the first quarter of 2024 and $9.5 million in the fourth quarter of 2023, noninterest expense increased by $6.4 million to $19.2 million in the first quarter of 2024 from $12.8 million in the fourth quarter1.  This increase was primarily due to the increased headcount and infrastructure resulting from the Merger, and amortization of the core deposit intangible assets.  Salary and employee benefit expenses for the first quarter of 2024 included costs for personnel retained for post-conversion support through January 2024, as well as increased incentive compensation expense.  Income tax expense was $1.6 million for the first quarter of 2024, reflecting an effective tax rate of 21.8%. (1) See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure. Balance SheetTotal assets were $2.78 billion at March 31, 2024 compared to $2.67 billion at December 31, 2023 and $1.21 billion at March 31, 2023.  Deposits and net loans as of March 31, 2024 totaled $2.39 billion and $2.22 billion, respectively, compared to deposits and net loans of $2.30 billion and $2.22 billion, respectively, at December 31, 2023 and $984.5 million and $934.8 million, respectively, at March 31, 2023. Total loans increased $4.3 million during the first quarter of 2024 to $2.25 billion at March 31, 2024, with muted net loan growth reflecting the continued integration following the completion of the Merger and introduction of the Company to new markets.  Total commercial loan commitments for the first quarter of 2024 were $77.0 million with funded balances of $45.2 million.  The average commercial loan commitment originated during the first quarter of 2024 totaled approximately $664 thousand with an average outstanding funded balance of $390 thousand. Cash and cash equivalents increased $92.1 million to $172.3 million at March 31, 2024 compared to $80.2 million at December 31, 2023 and $51.7 million at March 31, 2023.  The increase was due to deposit growth outpacing net loan growth, as well as an increase in long term FHLB borrowings as the Company took steps to extend the maturity of its liabilities. Deposits at March 31, 2024 totaled $2.39 billion, an increase of $87.6 million compared to $2.30 billion at December 31, 2023. This increase was driven by significant growth in interest bearing deposits, including a $14.5 million increase in money market and savings accounts and $39.4 million increase in retail time deposits.  Additionally, brokered certificates of deposits increased by $27.2 million to $146.7 million at March 31, 2024, as compared to at December 31, 2023, which includes $75 million related to an interest rate swap executed in 2023.   Shareholders' equity increased from $265.8 million at December 31, 2023 to $268.2 million at March 31, 2024 primarily as a result of a $2.9 million increase in retained earnings.  Book value per share increased to $7.18 at March 31, 2024 compared to $7.12 at December 31, 2023.  Tangible book value per share increased $0.10 to $5.00 at March 31, 2024 compared to $4.90 at December 31, 20231. (1) See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure. Asset QualityIn the first quarter of 2024, the Company recorded a provision for credit losses of $40 thousand, compared to a $9.8 million provision for credit losses in the fourth quarter of 2023, which included $9.7 million associated with the day one accounting provision required for loans acquired not designated as purchase credit deteriorated in the Merger. Asset quality metrics remain strong. As of March 31, 2024, the Company's non-performing assets were $6.7 million, representing 0.25% of total assets.  Loans 30-89 days past due at March 31, 2024 were $15.3 million, representing 0.68% of total loans.   The allowance for credit losses-loans was $23.8 million, or 1.06% of total loans at March 31, 2024, which remained consistent quarter over quarter with the allowance for credit losses-loans of $23.8 million, or 1.06% of total loans at December 31, 2023.  The allowance for credit losses-loans to nonperforming assets was 357.18% at March 31, 2024, compared to 327.82% at December 31, 2023. CapitalThe Bank's regulatory capital ratios were well in excess of regulatory minimums to be considered "well capitalized" as of March 31, 2024. The Bank's Total Capital Ratio and Tier 1 Capital Ratio were 11.04% and 10.24%, respectively, at March 31, 2024, compared to 10.62% and 9.92%, respectively, at December 31, 2023 and 13.53% and 12.32%, respectively, at March 31, 2023. The Company's ratio of Tangible Common Equity to Tangible Assets was 6.91%1 at March 31, 2024. (1) See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure. ABOUT LINKBANCORP, Inc.LINKBANCORP, Inc. was formed in 2018 with a mission to positively impact lives through community banking. Its subsidiary bank, LINKBANK, is a Pennsylvania state-chartered bank serving individuals, families, nonprofits and business clients throughout Pennsylvania, Maryland, Delaware, Virginia, and New Jersey through 29 client solutions centers and www.linkbank.com. LINKBANCORP, Inc. common stock is traded on the Nasdaq Capital Market under the symbol "LNKB". For further company information, visit ir.linkbancorp.com. Forward Looking StatementsThis 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; risks related to the integration of the merger with Partners; 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 any cybersecurity breaches. 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.  LB-ELB-D LINKBANCORP, Inc. and Subsidiaries Consolidated Balance Sheet (Unaudited) March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 (In Thousands, except share and per share data) ASSETS Noninterest-bearing cash equivalents $             13,552 $                  13,089 $                    5,447 $             4,736 $                 4,545 Interest-bearing deposits with other institutions 158,731 67,101 62,532 118,438 47,190 Cash and cash equivalents 172,283 80,190 67,979 123,174 51,735 Certificates of deposit with other banks — — 249 498 745 Securities available for sale, at fair value 133,949 115,490 78,779 83,620 86,804 Securities held to maturity, net of allowance for credit losses 36,109 36,223 37,266 38,220 38,986 Loans receivable, gross 2,245,817 2,241,533 978,912 969,533 945,371 Allowance for credit losses - loans (23,842) (23,767) (9,964) (10,228) (10,526) Loans receivable, net 2,221,975 2,217,766 968,948 959,305 934,845 Investments in restricted bank stock 4,286 3,965 3,107 5,544 4,134 Premises and equipment, net 22,233 22,279 6,414 6,292 6,497 Right-of-Use Asset – Premises 14,663 15,598 9,727 9,896 10,058 Bank-owned life insurance 49,230 48,847 24,732 24,554 24,384 Goodwill and other intangible assets 81,494 82,701 36,715 36,774 36,833 Deferred tax asset 23,463 24,153 6,880 6,571 6,749 Accrued interest receivable and other assets 24,579 22,113 14,899 14,024 12,188 TOTAL ASSETS $        2,784,264 $             2,669,325 $             1,255,695 $      1,308,472 $          1,213,958 LIABILITIES Deposits: Demand, noninterest bearing $           653,719 $                655,953 $                210,404 $         240,729 $             204,495 Interest bearing 1,732,310 1,642,520 831,368 794,113 780,003 Total deposits 2,386,029 2,298,473 1,041,772 1,034,842 984,498 Other Borrowings 40,499 10,590 15,000 74,899 31,250 Subordinated Debt 61,573 61,444 40,354 40,398 40,441 Lease liabilities 15,445 16,464 9,728 9,896 10,058 Accrued interest payable and other liabilities 12,475 16,558 7,490 5,985 6,130 TOTAL LIABILITIES 2,516,021 2,403,529 1,114,344 1,166,020 1,072,377 SHAREHOLDERS' EQUITY Preferred stock — — — — — Common stock 369 369 162 162 250 Surplus 263,577 263,310 127,856 127,818 127,659 Retained earnings 7,724 4,843 19,062 19,039 18,911 Accumulated other comprehensive loss (3,427) (3,209) (5,729) (4,567) (5,239)           Total equity attributable to parent 268,243 265,313 141,351 142,452 141,581          Noncontrolling interest in consolidated subsidiary — 483 — — — TOTAL SHAREHOLDERS' EQUITY 268,243 265,796 141,351 142,452 141,581 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $        2,784,264 $             2,669,325 $             1,255,695 $      1,308,472 $          1,213,958 Common shares outstanding 37,348,151 37,340,700 16,235,871 16,228,440 16,221,692   LINKBANCORP, Inc. and Subsidiaries Consolidated Statements of Operations (Unaudited) Three Months Ended 3/31/2024 12/31/2023 3/31/2023 (In Thousands, except share and per share data) INTEREST AND DIVIDEND INCOME Loans receivable, including fees $           36,125 $           21,461 $           11,762 Other 2,650 1,642 1,228 Total interest and dividend income 38,775 23,103 12,990 INTEREST EXPENSE Deposits 11,847 7,445 4,517 Other Borrowings 1,152 727 87 Subordinated Debt 892 615 432 Total interest expense 13,891 8,787 5,036 NET INTEREST INCOME BEFORE    PROVISION FOR CREDIT LOSSES 24,884 14,316 7,954 Provision for credit losses 40 9,844 293 NET INTEREST INCOME AFTER   PROVISION FOR CREDIT LOSSES 24,844 4,472 7,661 NONINTEREST INCOME Service charges on deposit accounts 780 385 199 Bank-owned life insurance 383 250 140 Net realized losses on the sale of debt securities — — (2,370) Gain on sale of loans 50 166 — Other 516 374 178 Total noninterest income 1,729 1,175 (1,853) NONINTEREST EXPENSE Salaries and employee benefits 11,118 8,262 4,120 Occupancy 1,578 911 707 Equipment and data processing 1,826 1,201 693 Professional fees 748 536 381 FDIC insurance 352 198 159 Bank Shares Tax 591 323 278 Intangible amortization 1,206 484 61 Merger & system conversion related expenses 56 9,496 587 Other 1,775 874 751 Total noninterest expense 19,250 22,285 7,737 Income (loss) before income tax expense (benefit) 7,323 (16,638) (1,929) Income tax expense (benefit) 1,597 (3,641) (376) NET  INCOME (LOSS) $             5,726 $         (12,997) $           (1,553) EARNINGS (LOSS) PER SHARE, BASIC $               0.15 $             (0.56) $             (0.10)  EARNINGS (LOSS) PER SHARE, DILUTED $               0.15 $             (0.56) $             (0.10) WEIGHTED-AVERAGE COMMON SHARES   OUTSTANDING, BASIC 36,962,005 23,063,202 15,480,951 DILUTED 37,038,230 23,063,202 15,480,951   LINKBANCORP, Inc. and Subsidiaries Financial Highlights (Unaudited) For the Three Months Ended ('Dollars In Thousands, except per share data) 3/31/2024 12/31/2023 3/31/2023 Operating Highlights Net Income (loss) $                 5,726 $              (12,997) $            (1,553) Net Interest Income 24,884 14,316 7,954 Provision for Credit Losses 40 9,844 293 Non-Interest Income 1,729 1,175 (1,853) Non-Interest Expense 19,250