LINKBANCORP, Inc. Announces Strong Second Quarter 2025 Earnings and Declares Dividend
HARRISBURG, Pa., July 28, 2025 /PRNewswire/ -- LINKBANCORP, Inc. (NASDAQ:LNKB) (the "Company"), the parent company of LINKBANK (the "Bank"), reported net income of $7.4 million, or $0.20 per diluted share, for the quarter ended June 30, 2025, compared to net income of $15.3 million, or $0.41 per diluted share, for the quarter ended March 31, 2025. Excluding the sale of branches, merger and restructuring related income and expenses, adjusted earnings were $7.4 million1, or $0.201 per diluted share for both the first and second quarter of 2025.
Additionally, the Company announced that the Board of Directors declared a quarterly cash dividend of $0.075 per share of common stock which is expected to be paid on September 15, 2025 to shareholders of record on August 29, 2025.
Second Quarter 2025 Highlights
Stable, strong core earnings. Annualized return on average assets was 1.05% for the second quarter of 2025, compared to 2.19% for the first quarter of 2025 and 0.84% for the second quarter of 2024. Adjusted return on average assets was 1.05%1 for the second quarter of 2025, compared to 1.05%1 for the first quarter of 2025 and 0.91%1 for the second quarter of 2024.
Robust balance sheet growth. Total loans at June 30, 2025 were $2.36 billion, compared to $2.27 billion at March 31, 2025 and $2.35 billion at December 31, 2024, representing a quarterly increase of $82.7 million or 14.58% annualized and a year-to-date increase of $107.0 million2 or 9.19% annualized excluding the impact of the sale of banking operations and branches in New Jersey, including related loans and deposits (the "Branch Sale"). Total deposits at June 30, 2025 were $2.46 billion compared to $2.43 billion at March 31, 2025 and $2.45 billion at December 31, 2024, representing a quarterly increase of $22.7 million, or 3.74% annualized and a year-to-date increase of $89.36 million2 or 7.34% excluding the impact of the Branch Sale.
Improving credit quality. The Company's non-performing assets declined by $4.2 million to $21.9 million, representing 0.76% of total assets at June 30, 2025, compared to $26.0 million, representing 0.91% of total assets at March 31, 2025. This decrease was driven by resolutions to several loan relationships including a purchased credit deteriorated loan that was resolved at an amount greater than its purchase date fair value. The successful resolutions have decreased specific reserve needs by $2.5 million while enhancing the ratio of the allowance for credit losses-loans to nonperforming assets to 112.68% at June 30, 2025, compared to 102.22% at March 31, 2025.
Disciplined expense management. GAAP noninterest expense for the second quarter of 2025 was $18.1 million with an efficiency ratio of 64.79%, compared to $19.7 million of GAAP noninterest expense with an efficiency ratio of 50.29% for the first quarter of 2025. Excluding non-core operating expenses, the adjusted noninterest expense decreased $697 thousand1 quarter over quarter from $18.7 million1 for the quarter ended March 31, 2025 to $18.0 million1 for the quarter ended June 30, 2025. The Company's adjusted efficiency ratio improved to 64.73%1 for the quarter ended June 30, 2025 compared to 66.96%1 for the quarter ended March 31, 2025.
1 See Appendix A, Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure.
2 See Loan and Deposit Tables for Branch Sale Reconciliation.
"We are pleased to report another quarter of strong core earnings, combined with exceptional loan and deposit growth throughout our entire footprint," said Andrew Samuel, Chief Executive Officer of LINKBANCORP. "We remain focused on improving operating efficiency and expanding noninterest income to support our core business and enabling us to deliver sustainable long-term value to our shareholders."
Income StatementNet interest income before the provision for credit losses for the second quarter of 2025 was $24.9 million compared to $25.8 million in the first quarter of 2025 and $24.5 million for the second quarter of 2024. Net interest margin was 3.80% for the second quarter of 2025 compared to 3.94% for the first quarter of 2025. Net interest income was impacted by a linked quarter decline in purchase accounting accretion, together with a decrease in the average balances of loans and deposits due to the March 31, 2025 completion of the Branch Sale. Interest income from purchase accounting accretion during the current quarter was approximately $922 thousand less than that recognized in the first quarter of 2025. Cost of funds increased to 2.31% for the second quarter of 2025, compared to 2.29% for the first quarter of 2025, reflecting the lower cost of deposits included in the Branch Sale as well as continued competition for deposits in the Bank's markets.
Noninterest income decreased quarter-over-quarter to $2.9 million for the second quarter of 2025 compared to $13.3 million for the first quarter of 2025 due to the $11.1 million pre-tax gain from the Branch Sale in the first quarter. Excluding the gain on sale of the New Jersey branches, noninterest income grew by $769 thousand quarter-over-quarter, including increases in swap fee income and interchange income. Year-over-year, noninterest income increased $1.1 million from $1.9 million for the second quarter of 2024.
Noninterest expense for the second quarter of 2025 was $18.1 million compared to $19.7 million for the first quarter of 2025 and $18.9 million for the second quarter of 2024. Excluding non-core operating costs totaling $16 thousand in the second quarter of 2025, $912 thousand in the first quarter of 2025 and $631 thousand in the second quarter of 2024, adjusted noninterest expense decreased $697 thousand1 from $18.7 million1 for the first quarter of 2025 to $18.0 million1 for the second quarter of 2025 while decreasing $220 thousand1 year-over-year from $18.3 million1 for the second quarter of 2024. Adjusted non-interest expense for the first quarter of 2025 excludes expenses related to the reduction of the size of the Board of Directors included in other noninterest expense, as well as bonus accruals related to the completion of the Branch Sale included in salaries and employee benefits expense, and other merger and restructuring costs.
Income tax expense was $2.1 million for the second quarter of 2025, reflecting an effective tax rate of 22.0% compared to $3.9 million for the first quarter of 2025, reflecting an effective tax rate of 20.1% and $1.6 million for the second quarter of 2024, reflecting an effective tax rate of 22.0%, respectively. The tax rate increased quarter-over-quarter due to a state income tax apportionment adjustment in the first quarter of 2025.
1 See Appendix A, Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure.
Balance SheetTotal assets were $2.89 billion at June 30, 2025 compared to $2.86 billion at March 31, 2025 and $2.88 billion at December 31, 2024. Deposits and net loans as of June 30, 2025 totaled $2.46 billion and $2.33 billion, respectively, compared to deposits and net loans of $2.43 billion and $2.25 billion, respectively at March 31, 2025 and $2.36 billion and $2.23 billion, respectively, at December 31, 2024. Deposits and net loans exclude recorded balances held for sale in the Branch Sale of $93.6 million and $91.8 million, respectively, at December 31, 2024, which are reflected within liabilities held for sale and assets held for sale.
Total loans at June 30, 2025 were $2.36 billion, compared to $2.27 billion at March 31, 2025, representing an increase of $82.7 million. Year-to-date, total loans have increased $107.0 million2 from December 31, 2024, excluding the impact of the Branch Sale, or 9.19% annualized. Total commercial loan commitments originated in the second quarter of 2025 were $154.6 million with funded balances of $137.1 million. The average commercial loan commitment originated during the second quarter of 2025 totaled approximately $985 thousand with an average outstanding funded balance of $873 thousand.
Total deposits at June 30, 2025 were $2.46 billion compared to $2.43 billion at March 31, 2025, representing an increase of $22.7 million. Year-to-date, total deposits have increased $89.4 million2 from December 31, 2024, excluding the impact of the Branch Sale, or 7.34% annualized. Noninterest bearing deposits totaled $646.7 million at June 30, 2025, generally flat from March 31, 2025. Brokered deposits decreased $28.6 million from $103.6 million at March 31, 2025 to $75.0 million at June 30, 2025. Excluding the $28.6 million change in brokered deposits and the impact from the Branch Sale, deposits increased $118.0 million2 year-to-date representing an annualized growth rate of 10.1%.
The Company continues to maintain strong on-balance sheet liquidity, as cash and cash equivalents were $155.1 million at June 30, 2025 compared to $220.2 million at March 31, 2025 and $166.1 million at December 31, 2024.
Shareholders' equity increased to $298.0 million at June 30, 2025 from $294.1 million at March 31, 2025 primarily as a result of a $4.6 million increase in retained earnings. Book value per share increased to $7.96 at June 30, 2025 compared to $7.87 at March 31, 2025. Tangible book value per share increased to $5.921 at June 30, 2025 compared to $5.801 at March 31, 2025 and $5.071 at June 30, 2024, representing 17% growth year over year.
1 See Appendix A, Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP measure.
2 See Loan and Deposit Tables for Branch Sale Reconciliation.
Asset QualityThe Company recorded a $344 thousand provision for credit losses during the second quarter of 2025, after recording a $228 thousand provision for credit losses in the first quarter of 2025. The increase in provision was primarily related to commercial loan growth during the second quarter of 2025.
As of June 30, 2025, the Company's non-performing assets declined by $4.2 million to $21.9 million, representing 0.76% of total assets, compared to $26.0 million, representing 0.91% of total assets at March 31, 2025. This improvement was driven largely by the favorable resolution of a purchased credit deteriorated (PCD) loan above its purchase date fair value.
Loans 30-89 days past due at June 30, 2025 were $14.5 million, representing 0.62% of total loans compared to $12.7 million or 0.56% of total loans at March 31, 2025 and $2.9 million or 0.13% of total loans at December 31, 2024.
The allowance for credit losses for loans was $24.7 million, or 1.05% of total loans held for investment at June 30, 2025, compared to $26.6 million, or 1.17% of total loans held for investment at March 31, 2025. Due to the resolution of certain nonperforming loans resulting in the improvement in nonperforming assets noted above, the required specific reserve on loans decreased by $2.5 million from March 31, 2025 to June 30, 2025. The ratio of the allowance for credit losses for loans to nonperforming assets increased to 112.68% at June 30, 2025, compared to 102.22% at March 31, 2025.
Net charge-offs continue to improve as the Company recorded $40 thousand in net charge-offs during the second quarter of 2025 compared to $81 thousand for the first quarter of 2025 and $252 thousand in the fourth quarter of 2024.
CapitalThe Bank's regulatory capital ratios were well in excess of regulatory minimums to be considered "well capitalized" as of June 30, 2025. The Bank's Total Capital Ratio and Tier 1 Capital Ratio were 12.43% and 11.51% respectively, at June 30, 2025, compared to 12.61% and 11.71%, respectively, at March 31, 2025 and 11.09% and 10.30%, respectively, at June 30, 2024. The Company's ratio of Tangible Common Equity to Tangible Assets was 7.89%1 at June 30, 2025 compared to 7.78%1 at March 31, 2025.
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 and Virginia, through 24 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; changes in general economic trends, including inflation, tariffs 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)
June 30, 2025
March 31, 2025
December 31, 2024
September 30, 2024
June 30, 2024
(In Thousands, except share and per share data)
ASSETS
Noninterest-bearing cash equivalents
$ 15,319
$ 14,830
$ 13,834
$ 15,295
$ 14,516
Interest-bearing deposits with other institutions
139,764
205,352
152,266
175,937
167,141
Cash and cash equivalents
155,083
220,182
166,100
191,232
181,657
Securities available for sale, at fair value
169,569
159,183
145,590
149,315
140,121
Securities held to maturity, net of allowance for credit losses
26,809
27,662
31,508
34,155
35,343
Loans receivable, gross
2,356,609
2,273,941
2,255,749
2,215,868
2,193,197
Allowance for credit losses - loans
(24,651)
(26,619)
(26,435)
(26,542)
(26,288)
Loans receivable, net
2,331,958
2,247,322
2,229,314
2,189,326
2,166,909
Investments in restricted bank stock
4,821
4,780
5,209
4,904
4,928
Premises and equipment, net
15,861
17,920
18,029
17,623
18,364
Right-of-Use Asset, premises
15,410
14,537
14,913
14,150
13,970
Bank-owned life insurance
52,943
52,507
52,079
51,646
49,616
Goodwill and other intangible assets
76,296
77,379
79,761
80,924
82,129
Deferred tax asset
16,474
16,729
18,866
21,662
22,024
Assets held for sale
—
—
94,146
104,660
118,362
Accrued interest receivable and other assets
21,330
23,288
23,263
20,344
25,170
TOTAL ASSETS
$ 2,886,554
$ 2,861,489
$ 2,878,778
$ 2,879,941
$ 2,858,593
LIABILITIES
Deposits:
Demand, noninterest bearing
$ 646,654
$ 646,002
$ 658,646
$ 658,473
$ 661,292
Interest bearing
1,809,755
1,787,692
1,701,936
1,714,179
1,699,220
Total deposits
2,456,409
2,433,694
2,360,582
2,372,652
2,360,512
Long-term borrowings
40,000
40,000
40,000
40,000
40,000
Short-term borrowings
—
—
10,000
—
—
Note payable
—
559
565
572
578
Subordinated debt
62,279
62,129
61,984
61,843
61,706
Lease liabilities
15,740
15,284
15,666
14,911
14,746
Liabilities held for sale
—
—
93,777
94,228
96,916
Accrued interest payable and other liabilities
14,128
15,757
15,983
18,382
12,726
TOTAL LIABILITIES
2,588,556
2,567,423
2,598,557
2,602,588
2,587,184
SHAREHOLDERS' EQUITY
Preferred stock
—
—
—
—
—
Common stock
370
370
370
370
370
Surplus
265,293
264,871
264,449
264,059
263,795
Retained earnings
37,107
32,507
19,947
15,147
10,826
Accumulated other comprehensive loss
(4,772)
(3,682)
(4,545)
(2,223)
(3,582)
TOTAL SHAREHOLDERS' EQUITY
297,998
294,066
280,221
277,353
271,409
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 2,886,554
$ 2,861,489
$ 2,878,778
$ 2,879,941
$ 2,858,593
Common shares outstanding
37,441,879
37,377,342
37,370,917
37,361,560
37,356,278
LINKBANCORP, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
Three Months Ended
Six Months Ended
6/30/2025
3/31/2025
6/30/2024
6/30/2025
6/30/2024
(In Thousands, except share and per share data)
INTEREST AND DIVIDEND INCOME
Loans receivable, including fees
$ 36,032
$ 37,041
$ 36,112
$ 73,073
$ 72,237
Other
3,294
3,101
3,337
6,395
5,987
Total interest and dividend income
39,326
40,142
39,449
79,468
78,224
INTEREST EXPENSE
Deposits
12,467
12,357
13,071
24,824
24,918
Other Borrowings
931
986
932
1,917
2,018
Subordinated Debt
979
968
962
1,947
1,920
Total interest expense
14,377
14,311
14,965
28,688
28,856
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES
24,949
25,831
24,484
50,780
49,368
Provision for credit losses
344
228
—
572
40
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES
24,605
25,603
24,484
50,208
49,328
NONINTEREST INCOME
Service charges on deposit accounts
1,056
1,061
865
2,117
1,645
Bank-owned life insurance
436
428
386
864
769
Net realized gains (losses) on the sale of debt securities
—
—
4
—
4
Gain on sale of loans
128
77
12
205
62
Gain on sale of branches
—
11,093
—
11,093
—
Other
1,313
598
591
1,911
1,107
Total noninterest income
2,933
13,257
1,858
16,190
3,587
NONINTEREST EXPENSE
Salaries and employee benefits
10,252
11,156
9,941
21,408
21,059
Occupancy
1,308
1,464
1,559
2,772
3,137
Equipment and data processing
2,052
2,043
1,824
4,095
3,650
Professional fees
728
487
788
1,215
1,536
FDIC insurance and supervisory fees
537
599
545
1,136
897
Bank Shares Tax
(82)
614
760
532
1,351
Intangible amortization
1,083
1,084
1,204
2,167
2,411
Merger & restructuring expenses
16
41
631
57
687
Advertising
176
144
241
320
475
Other
1,995
2,026
1,407
4,021
2,947
Total noninterest expense
18,065
19,658
18,900
37,723
38,150
Income before income tax expense
9,473
19,202
7,442
28,675
14,765
Income tax expense
2,086
3,859
1,638
5,945
3,235
NET INCOME
$ 7,387
$ 15,343
$ 5,804
$ 22,730
$ 11,530
EARNINGS PER SHARE, BASIC
$ 0.20
$ 0.41
$ 0.16
$ 0.61
$ 0.31
EARNINGS PER SHARE, DILUTED
$ 0.20
$ 0.41
$ 0.16
$ 0.61
$ 0.31
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING,
BASIC
37,136,851
37,105,480
36,970,768
37,122,883
36,966,371
DILUTED
37,244,008
37,221,939
37,040,748
37,231,839
37,042,895
LINKBANCORP, Inc. and Subsidiaries
Financial Highlights (Unaudited)
For the Three Months Ended
For the Six Months Ended
(Dollars In Thousands, except per share data)
6/30/2025
3/31/2025
6/30/2024
6/30/2025
6/30/2024
Operating Highlights
Net Income
$ 7,387
$ 15,343
$ 5,804
$ 22,730
$ 11,530
Net Interest Income
24,949
25,831
24,484
50,780
49,368
Provision for Credit Losses
344
228
—
572
40
Non-Interest Income
2,933
13,257
1,858
16,190
3,587
Non-Interest Expense
18,065
19,658
18,900
37,723
38,150
Earnings per Share, Basic
0.20
0.41
0.16
0.61
0.31
Adjusted Earnings per Share, Basic (2)
0.20
0.20
0.17
0.40
0.33
Earnings per Share, Diluted
0.20
0.41
0.16
0.61
0.31
Adjusted Earnings per Share, Diluted (2)
0.20
0.20
0.17
0.40
0.33
Selected Operating Ratios
Net Interest Margin
3.80 %
3.94 %
3.83 %
3.87 %
3.92 %
Annualized Return on Assets ("ROA")
1.05 %
2.19 %
0.84 %
1.62 %
0.85 %
Adjusted ROA2
1.05 %
1.05 %
0.91 %
1.05 %
0.89 %
Annualized Return on Equity ("ROE")
10.04 %
21.90 %
8.65 %
15.83 %
8.63 %
Adjusted ROE2
10.06 %
10.56 %
9.39 %
10.31 %
9.04 %
Efficiency Ratio
64.79 %
50.29 %
71.75 %
56.33 %
72.04 %
Adjusted Efficiency Ratio3
64.73 %
66.96 %
69.36 %
65.85 %
70.75 %
Noninterest Income to Avg. Assets
0.42 %
1.89 %
0.27 %
1.15 %
0.26 %
Noninterest Expense to Avg. Assets
2.57 %
2.80 %
2.73 %
2.68 %
2.80 %
