Sign in

You're signed outSign in or to get full access.

LI

LINKBANCORP, Inc. (LNKB)·Q4 2024 Earnings Summary

Executive Summary

  • Record quarter: Net income $7.58M and diluted EPS $0.20; adjusted diluted EPS $0.21. Net interest margin expanded to 3.85%, and efficiency ratio improved to 65.04% .
  • Balance sheet steady with total deposits $2.361B and net loans $2.229B; average deposits rose $26.9M QoQ; noninterest-bearing deposits were 28.0% of total .
  • 2025 outlook introduced: loan growth 7–10%, NIM 3.90–4.00%, loan-to-deposit ratio 90–95%, noninterest expense/avg assets 2.50–2.55%, effective tax rate 22%; branch sale expected to add ~$9M after tax in Q1 2025; quarterly dividend $0.075 maintained .
  • Estimates: S&P Global consensus data was unavailable; external coverage indicates LNKB beat EPS (~5%) and revenue (~1.34%), but we do not rely on this for official comparisons .

What Went Well and What Went Wrong

What Went Well

  • Margin expansion and cost control: NIM rose to 3.85% (from 3.82%), cost of funds fell to 2.32%, and efficiency ratio improved to 65.04% QoQ .
  • Deposit franchise and liquidity: Average deposits grew $26.9M QoQ; noninterest-bearing deposits were 28.0% of total; cash and equivalents increased to $166.1M YoY .
  • Management execution: “Our teams have continued to focus on reducing costs, generating additional fee income and growing interest income with solid growth in quality loans and core deposits throughout the year,” said CEO Andrew Samuel .

What Went Wrong

  • Asset quality mixed: Non-performing assets were $17.17M (0.60% of assets), flat QoQ; loans 30–89 days past due rose to $4.6M (0.21% of loans) vs $2.7M in Q3 .
  • Noninterest income dipped: $2.59M in Q4 vs $2.68M in Q3, with lower swap fees and gain on sale of loans .
  • Slight total deposit decline QoQ: Total deposits decreased $12.5M to $2.45B including held-for-sale balances (ex-branch sale), though average deposits increased .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Adjusted Revenue (Non-GAAP) ($USD Millions)$26.346 $27.661 $28.139
Net Interest Income ($USD Millions)$24.484 $24.981 $25.545
Noninterest Income ($USD Millions)$1.858 $2.680 $2.594
Diluted EPS ($USD)$0.16 $0.19 $0.20
Adjusted Diluted EPS ($USD)$0.17 $0.19 $0.21
Net Interest Margin %3.83% 3.82% 3.85%
Efficiency Ratio %71.75% 66.71% 65.04%

YoY snapshot (Q4 2023 vs Q4 2024):

  • Net income (loss): $(12.997)M vs $7.584M
  • NIM: 3.55% vs 3.85%

Segment/Portfolio Breakdown (Loans Held for Investment)

Loan Category ($USD Thousands)Q2 2024Q3 2024Q4 2024
Commercial & Industrial247,190 241,597 252,163
CRE – Non-owner occupied610,649 626,030 658,615
CRE – Owner occupied492,065 500,643 493,906
CRE – Multifamily199,740 212,444 217,331
Residential 1st liens400,098 400,869 399,476
Residential 2nd/LOC71,168 73,591 78,410
Agriculture & Farmland66,937 65,166 67,741
Consumer & Other15,514 17,498 17,087
Municipal4,362 4,296 3,886
Loans HFI Total$2,193,197 $2,215,868 $2,255,749

KPIs

KPIQ2 2024Q3 2024Q4 2024
Total Deposits ($USD Millions)$2,280.401 $2,372.652 $2,360.582
Average Deposits ($USD Millions)$2,328.190 $2,351.093 $2,377.956
Noninterest-Bearing Deposits ($USD Millions)$661.292 $658.473 $686.510
Noninterest-Bearing as % of Total——28.0%
Cost of Funds %2.43% 2.42% 2.32%
ROA % (annualized)0.84% 1.00% 1.06%
Allowance for Credit Losses – Loans ($USD Thousands)26,288 26,542 26,435
Non-performing Assets ($USD Thousands)10,589 17,378 17,171
Tangible Book Value per Share ($USD)$5.07 $5.26 $5.36

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Loan Growth (ex-HFS)FY 2025N/A7%–10%Introduced
Net Interest MarginFY 2025N/A3.90%–4.00%Introduced
Loan-to-Deposit RatioFY 2025N/A90%–95%Introduced
Noninterest Expense / Avg AssetsFY 2025N/A2.50%–2.55%Introduced
Effective Tax RateFY 2025N/A~22%Introduced
Branch Sale Net Gain (after tax)Q1 2025N/A~$9MIntroduced; subject to closing
Quarterly DividendOngoing$0.075$0.075Maintained

Earnings Call Themes & Trends

Note: A Q4 2024 earnings call transcript was not available in our document set; themes are drawn from the earnings press releases and investor presentation.

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Margin & Funding CostsNIM 3.83% (Q2); 3.82% (Q3). Cost of funds rose QoQ in Q2 to 2.43%; eased to 2.42% in Q3 NIM 3.85%; cost of funds down to 2.32% Improving margin; easing funding costs
Deposit FranchiseQ2/Q3 deposit growth; noninterest-bearing up $38.4M in Q2; total deposits up $9.3M in Q3 Average deposits +$26.9M QoQ; noninterest-bearing 28.0% Stable franchise; mix supportive
Asset QualityNPAs up to $10.6M (Q2) and $17.4M (Q3) on acquired CRE loan; ACL ~1.20% NPAs $17.17M (0.60% of assets); ACL 1.17% Mixed; stable NPAs QoQ, modest ACL downtick
Branch Portfolio OptimizationAnnounced NJ branch sale in May 2024; expected close Q4 2024/Q1 2025 FDIC approval; closing expected Q1 2025; ~$9M after-tax gain planned Event catalyst imminent
Cost DisciplineAdjusted noninterest expense fell in Q2; continued efficiency gains in Q3 Efficiency ratio improved to 65.04%; adjusted 64.84% Sustained improvement

Management Commentary

  • “We are very pleased to announce record earnings for both the fourth quarter and the full year 2024… reducing costs, generating additional fee income and growing interest income with solid growth in quality loans and core deposits throughout the year.” — Andrew Samuel, CEO .
  • Balance sheet priorities: average deposits increased and liquidity strengthened (cash and equivalents $166.1M); focus on operational efficiency and earnings growth into 2025 .
  • Strategic portfolio actions: branch sale approvals secured; transaction expected to close Q1 2025 subject to customary conditions .

Q&A Highlights

  • A Q4 2024 earnings call transcript was not available in our document catalog; no Q&A details could be extracted. We rely on prepared remarks across the press release and investor presentation for commentary –.

Estimates Context

  • S&P Global Wall Street consensus (EPS and revenue) was unavailable at time of analysis due to access limits; therefore official estimate comparisons are not included.
  • External coverage indicates LNKB delivered an EPS beat of ~5% and revenue beat of ~1.34% in Q4 2024; we do not use these figures for definitive comparisons but note them for context .

Key Takeaways for Investors

  • Earnings quality improving: margin expansion and cost of funds reduction drove incremental NII and a better efficiency ratio; maintain focus on spread dynamics amid rate moves .
  • Deposit mix supportive: 28% noninterest-bearing and rising average deposits underpin funding stability; watch for mix shifts as rates evolve .
  • Asset quality stable but watchlist-worthy: NPAs flat QoQ and delinquency uptick; ACL modestly lower—monitor the acquired CRE exposure cited in prior quarters .
  • Near-term catalyst: NJ branch sale expected closing (regulatory approvals received) with ~$9M after-tax gain—could boost Q1 2025 results and capital ratios .
  • 2025 guidance sets a higher bar: NIM of 3.90–4.00% and 7–10% loan growth with self-funded deposits imply disciplined execution; efficiency targets require continued expense control .
  • Capital and liquidity adequate: TCE/TA 7.16% and $166.1M cash; dividend maintained at $0.075, signaling confidence in earnings trajectory .
  • Tactical positioning: Favor near-term on expected branch-sale gain and margin trajectory; medium term depends on sustained deposit growth, asset quality containment, and delivery vs guidance .