Executive Summary

Q2 2024 GAAP diluted EPS was $0.16; adjusted diluted EPS was $0.17, with net interest income at $24.5M and noninterest income at $1.9M, driving total revenue of ~$26.35M .
External consensus pointed to $0.18 EPS and ~$27.79M revenue; LNKB missed EPS by $0.01 and revenue by ~$1.45M; S&P Global consensus was unavailable for this period .
Net interest margin compressed to 3.83% (from 4.03% in Q1), reflecting higher funding costs and lower purchase accounting accretion; cost of funds rose to 2.43% (from 2.33%) .
Loans grew $63.6M QoQ to $2.31B (C&I +$28.5M) and deposits grew $71.3M to $2.46B, with noninterest-bearing deposits +$38.4M, strengthening liquidity (cash & equivalents $181.7M) .
Asset quality mixed: nonperforming assets rose to $10.6M (0.37% of assets), largely due to a single acquired loan; ACL rose to 1.20% of loans, supported by a specific allowance and purchase accounting adjustments .

What Went Well and What Went Wrong

What Went Well
- Strong core growth: total loans +$63.6M QoQ to $2.31B led by C&I +$28.5M; total deposits +$71.3M QoQ to $2.46B, with $38.4M growth in noninterest-bearing demand accounts .
- Operating efficiency improved: noninterest expense fell $350K QoQ to $18.9M; adjusted noninterest expense down $925K QoQ to $18.3M due to headcount reductions post-Partners merger .
- Management execution on footprint: consolidation of three client solution centers completed and NJ branch sale progressing to close in H2 2024; CEO: “We are pleased by the consistent improvement… strong commercial loan and core deposit growth” .
What Went Wrong
- Margin pressure: net interest margin fell to 3.83% (from 4.03%); funding costs rose to 2.43% (from 2.33%) amid deposit competition; purchase accounting accretion declined ~$568K QoQ .
- Asset quality normalization: nonperforming assets increased to $10.6M (0.37% of assets) from $6.7M, driven primarily by a single acquired commercial property loan (~$3.9M) .
- External estimates miss: EPS of $0.17 (adjusted) vs $0.18 external consensus, and revenue ~$26.35M vs ~$27.79M external consensus; S&P Global consensus was unavailable .

Financial Results

Metric	Q2 2023	Q1 2024	Q2 2024
Net Interest Income ($USD Millions)	$8.09	$24.88	$24.48
Noninterest Income ($USD Millions)	$0.89	$1.73	$1.86
Total Revenue (NII + Noninterest) ($USD Millions)	$8.98	$26.61	$26.35
Noninterest Expense ($USD Millions)	$7.82	$19.25	$18.90
Diluted EPS (GAAP) ($USD)	$0.08	$0.15	$0.16
Adjusted Diluted EPS ($USD)	$0.10	$0.16	$0.17
Net Interest Margin (%)	2.81%	4.03%	3.83%
Efficiency Ratio (%)	87.09%	72.33%	71.75%
Annualized ROA (%)	0.43%	0.86%	0.84%
Annualized ROE (%)	3.81%	8.63%	8.65%

Segment and portfolio detail (loans):

Loan Category ($USD Millions)	Mar 31, 2024	Jun 30, 2024
Agriculture & Farmland	$67.36	$66.94
Construction	$194.39	$201.17
Commercial & Industrial	$218.72	$247.19
CRE – Multifamily	$190.15	$199.74
CRE – Owner Occupied	$489.47	$492.07
CRE – Non-Owner Occupied	$589.73	$610.65
Residential – First Liens	$403.30	$400.10
Residential – Seconds/LOC	$71.06	$71.17
Consumer & Other	$16.81	$15.51
Municipal	$4.47	$4.36
Total Loans Receivable	$2,309.38 (gross incl. held-for-sale)	$2,309.38

Key KPIs and balance sheet:

KPI	Mar 31, 2024	Jun 30, 2024
Total Assets ($USD Millions)	$2,785.67	$2,858.59
Total Deposits ($USD Millions)	$2,280.40	$2,360.51
Noninterest-Bearing Deposits ($USD Millions)	$618.28	$661.29
Cash & Cash Equivalents ($USD Millions)	$172.28	$181.66
Cost of Funds (%)	2.33%	2.43%
Nonperforming Assets ($USD Millions)	$6.68	$10.59
ACL to Total Loans (%)	1.06%	1.20%
ACL / NPA (%)	357.18%	248.26%
Tangible Book Value per Share ($)	$5.00	$5.07
TCE / TA (%)	6.91%	6.82%

External consensus comparison (S&P Global unavailable):

Metric	Q2 2024 Actual	External Consensus	Surprise
EPS (Adjusted, $USD)	$0.17	$0.18	-$0.01
Revenue ($USD Millions)	~$26.35	~$27.79	-$1.45

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Loan growth	FY 2024	Not disclosed	5% – 10% (excl. held-for-sale loans)	New/Updated
Loan-to-deposit ratio	FY 2024	Not disclosed	90% – 95%	New/Updated
Net Interest Margin	FY 2024	Not disclosed	3.90% – 3.95% (assumes no rate cuts)	New/Updated
ROA goal	FY 2024	Not disclosed	1.15%	New/Updated
Noninterest expense / avg assets	FY 2024	Not disclosed	2.60% – 2.65%	New/Updated
Effective tax rate	FY 2024	Not disclosed	~22%	Maintained/Specified
Dividend	Ongoing	$0.075/sh committed since GNBF merger	$0.075/sh committed	Maintained

Earnings Call Themes & Trends

Note: A Q2 2024 earnings call transcript was not available in our document catalog; themes reflect company press releases and investor presentation.

Topic	Q-2 (Q4 2023)	Q-1 (Q1 2024)	Current (Q2 2024)	Trend
Purchase accounting accretion	Supported NIM expansion post-merger	Continued benefit; NIM 4.03%	Accretion down ~$568K QoQ; NIM to 3.83%	Moderating tailwind
Deposit costs/competition	Cost of funds 2.28%	Cost of funds 2.33%	Cost of funds 2.43%	Increasing pressure
Branch optimization	Integrations post-merger	Branch rationalization started	3 client centers consolidated; NJ sale expected H2 2024	Execution ongoing
Asset quality	NPA 0.34% of assets	NPA 0.25%	NPA 0.37% (single acquired loan)	Slight deterioration
Capital & liquidity	TBVPS $4.90	TBVPS $5.00; cash $172.3M	TBVPS $5.07; cash $181.7M	Improving
Loan growth engine	Post-merger origination growth	Pipelines building; modest net growth	Total loans +$63.6M; C&I +$28.5M	Strengthening

Management Commentary

CEO Andrew Samuel: “We are pleased by the consistent improvement in performance… evidenced by increased profitability metrics and strong commercial loan and core deposit growth. The consolidation of three client solution centers was completed… we remain on target to conclude the pending sale of the New Jersey operations in the second half of the year” .
Income statement drivers: “Net interest income impacted by amortization of purchase accounting adjustments… purchase accounting accretion was approximately $568 thousand less than in Q1; cost of funds increased to 2.43% due to competition for deposits” .
Asset quality: “Increase in NPAs relates primarily to a single loan for a commercial property acquired in the Partners Merger… required a day one purchase accounting adjustment increasing ACL by $2.3M and goodwill by $1.8M” .

Q&A Highlights

A Q2 2024 earnings call transcript was not available; no Q&A themes to report. We reviewed press releases and the investor presentation for qualitative context .

Estimates Context

S&P Global consensus data was unavailable for Q2 2024 (request limit reached).
External sources indicated consensus EPS of $0.18 and revenue of ~$27.79M; LNKB delivered $0.17 (adjusted) and ~$26.35M, representing modest misses. The shortfall vs consensus reflects lower purchase accounting accretion and higher funding costs compressing NIM, partly offset by strong deposit and loan growth .

Key Takeaways for Investors

Margin normalization is underway: expect NIM to be driven by deposit mix, competitive funding environment, and fading purchase accounting accretion; management’s FY NIM outlook is 3.90%–3.95% (assumes no rate cuts) .
Core growth intact: robust C&I origination and deposit inflows underpin balance sheet expansion, with targeted 2024 loan growth of 5%–10% and loan-to-deposit ratio 90%–95% .
Efficiency gains are progressing: adjusted noninterest expense down QoQ; consolidation efforts should support the guided noninterest expense-to-average-assets of 2.60%–2.65% .
Asset quality watch-list: NPAs increased due to a single acquired credit; ACL coverage improved to 1.20%. Monitor resolution of the acquired loan and branch-sale-driven reclassifications .
Liquidity and capital provide flexibility: cash & equivalents rose to $181.7M; TBVPS improved to $5.07; regulatory ratios remain well above “well-capitalized” thresholds .
Near-term trading: modest estimate miss and NIM compression could cap near-term upside; catalysts include NJ branch sale closing and delivery on FY guidance (NIM, ROA 1.15%) .
Medium-term thesis: execution on branch-lite strategy, deposit franchise depth (notably noninterest-bearing and professional services deposits), and disciplined risk/capital management support earnings durability and TBV compounding .

Additional Context: Prior Two Quarters

Q1 2024: Net interest income $24.9M; NIM 4.03%; noninterest expense $19.3M; GAAP EPS $0.15; adjusted EPS $0.16; cash & equivalents $172.3M; NPAs $6.7M (0.25% of assets); ACL 1.06% .
Q4 2023: NIM 3.55%; GAAP loss due to merger-related expenses; TBVPS diluted to $4.90; strong step-up in assets, loans, deposits post-Partners merger .

LINKBANCORP, Inc. (LNKB)·Q2 2024 Earnings Summary