LINKBANCORP, Inc. Announces Third Quarter 2022 Financial Results and Quarterly Dividend

HARRISBURG, Pa., Oct. 31, 2022 /PRNewswire/ -- LINKBANCORP, Inc. (NASDAQ: LNKB) (the "Company"), the parent company of The Gratz Bank, including its LINKBANK division (the "Bank") reported net income of $1.8 million, or $0.17 per diluted share, for the quarter ended September 30, 2022, compared to net income of $1.6 million, or $0.16 per diluted share, for the quarter ended June 30, 2022 .

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 December 15, 2022 to shareholders of record on November 30, 2022 .

Third Quarter 2022 Highlights

• The Company completed its initial public offering ("IPO") and its common stock began trading on the Nasdaq Capital Market under the symbol "LNKB." Net proceeds to the Company were $34.7 million .
• Net loans grew $72.9 million during the third quarter, representing a 40% annualized growth rate.
• Total deposits grew $49.3 million during the third quarter, representing a 23% annualized growth rate.
• Net interest income increased $817 thousand to $8.7 million, a 10.4% increase over the linked quarter with net interest margin expanding 13 basis points to 3.51% for the third quarter of 2022.

Andrew Samuel, Chief Executive Officer, commented, "We are very pleased with not only the strong loan growth achieved by our commercial lending teams during the third quarter, but also the high quality credits represented across all regions. Accompanied by continued growth in core deposits, we have good momentum to finish the year strong and further build operating leverage to progress toward our profitability targets." He continued, "The additional capital provided by our successful IPO will support the Company's continuing growth strategy and ensures that LINKBANCORP is well-positioned as we navigate an uncertain economic outlook."

Income Statement

Net interest income before the provision for loan losses for the third quarter of 2022 increased to $8.7 million compared to $7.9 million in the second quarter of 2022 primarily as a result of average loan growth and the impact of the continued rising interest rate environment. Net interest margin expanded to 3.51% for the third quarter of 2022 as compared to 3.38% for the second quarter of 2022 despite a mild increase in funding costs, as the Bank's cost of deposits increased 23 basis points from 0.38% for the second quarter of 2022 to 0.61% for the third quarter of 2022. Net interest margin is anticipated to remain relatively stable with modest expansion in the near term.

Noninterest income increased from $696 thousand in the second quarter of 2022 to $1.0 million in the third quarter of 2022, primarily driven by gains on sale of Small Business Administration ("SBA") loans. Noninterest expense for the third quarter of 2022 increased $803 thousand to $7.0 million compared to $6.2 million for the second quarter of 2022. The increase included a $512 thousand increase in salaries and employee benefits as well as a $163 thousand increase in occupancy expense. The higher salaries and employee benefits were primarily a result of vacant positions filled late in the second quarter, several mid-year promotions, and an increase in incentive compensation accrual due to strong performance for the quarter. Increased occupancy costs related to the relocation of the Company's operations and corporate center. The Bank has received all required approvals to legally change its name to LINKBANK effective November 4, 2022, thereafter eliminating costs associated with operating under multiple tradenames.

Balance Sheet

Total assets were $1.145 billion at September 30, 2022 compared to $1.060 billion at June 30, 2022 and $932.8 million at December 31, 2021 . Deposits and net loans as of September 30, 2022 totaled $951.7 million and $859.4 million, respectively, compared to deposits and net loans of $902.4 million and $786.5 million, respectively, at June 30, 2022 and $771.7 million and $711.7 million, respectively, at December 31, 2021 . The loan growth from June 30, 2022 represents $73.6 million in primarily organic loan growth including the impact of forgiven loans under the SBA Paycheck Protection Program (PPP), which declined $1.6 million to $933 thousand at September 30, 2022. Loan growth was well diversified, with the average commercial loan size originated during the third quarter of approximately $725,000 . The $49.3 million increase in deposits from June 30, 2022 included a $37.0 million increase in demand accounts and a $31.3 million increase in money market and savings accounts, offset by declines in time deposits.

Shareholders' equity increased from $104.8 million at June 30, 2022 to $136.9 million at September 30, 2022 due primarily to IPO proceeds and net income, offset by a $3.5 million increase in accumulated other comprehensive loss as a result of increased unrealized losses on available-for-sale securities due to the increase in market interest rates and dividends declared.

Asset Quality

The provision for loan losses was $515 thousand for the three months ended September 30, 2022, an increase of $120 thousand compared to the prior quarter, related primarily to organic loan growth. The allowance for loan losses measured 0.53% of total loans, or approximately 0.89% of the non-purchased portfolio, at September 30, 2022, compared to 0.49% of total loans, or approximately 0.89% of the non-purchased portfolio, at June 30, 2022 . The total of the allowance for loan losses and the credit fair value adjustment made to loans acquired in the GNB Financial merger equaled $10.1 million or approximately 1.17% of the combined portfolio at September 30, 2022 . The allowance for loan losses and the related provision reflects the Company's continued application of the incurred loss method for estimating credit losses. The Company will adopt the current expected credit losses ("CECL") accounting standard, as required, effective January 1, 2023 .

As of September 30, 2022, the Company's non-performing assets were $2.0 million, representing 0.17% of total assets. Non-performing assets at September 30, 2022 excluded purchased credit impaired loans with a balance of $4.8 million .

Regulatory Capital

The Bank's regulatory capital ratios are in excess of regulatory minimums to be considered "well capitalized" as of September 30, 2022 and are expected to be further strengthened during the fourth quarter, reflecting an additional $20 million in capital contributed to the Bank in October 2022 from the net proceeds of the Company's IPO.

ABOUT LINKBANCORP, Inc.

LINKBANCORP, Inc. was formed in 2018 with a mission to positively impact lives through community banking. Its subsidiary bank, The Gratz Bank, is a Pennsylvania state-chartered bank serving individuals, families, nonprofits and business clients throughout Central and Southeastern Pennsylvania through 10 client solutions centers of The Gratz Bank and LINKBANK, a division of The Gratz Bank. 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 Statements

This 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 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 the COVID-19 pandemic and actions taken by governments, businesses and individuals in response. 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.

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LINKBANCORP, Inc. and Subsidiaries
Consolidated Balance Sheet (Unaudited)
		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021
(In Thousands, except share and per share data)
ASSETS
Noninterest-bearing cash equivalents		$ 8,711		$ 7,563		$ 6,425		$ 8,620		$ 17,073
Interest-bearing deposits with other institutions		66,085		55,433		102,704		13,970		86,471
Cash and cash equivalents		$ 74,796		$ 62,996		$ 109,129		$ 22,590		$ 103,544
Certificates of deposit with other banks		8,358		11,088		12,828		12,828		13,077
Securities available for sale, at fair value		78,698		85,756		93,202		103,783		122,748
Securities held to maturity		32,571		28,816		5,000		-		-
Loans held for sale		-		-		4,074		3,860		-
Loans receivable, gross		863,969		790,406		731,061		714,816		668,398
Allowance for Loan Losses		(4,569)		(3,890)		(3,443)		(3,152)		(3,335)
Loans receivable, net		859,400		786,516		727,618		711,664		665,063
Investments in restricted bank stock		3,327		2,567		3,612		2,685		3,586
Premises and equipment, net		9,087		7,915		5,253		5,289		5,250
Right-of-Use Asset - Premises		8,920		4,513		4,605		4,680		4,748
Bank-owned life insurance		19,127		19,012		18,898		18,787		13,683
Goodwill and other intangible assets		36,955		37,020		37,085		37,152		36,890
Deferred tax asset		6,378		5,777		5,092		4,038		4,382
Accrued interest receivable and other assets		7,256		7,909		9,280		5,407		6,198
TOTAL ASSETS		$ 1,144,873		$ 1,059,885		$ 1,035,676		$ 932,763		$ 979,169
LIABILITIES
Deposits:
Demand, noninterest bearing		$ 184,857		$ 184,345		$ 165,228		$ 129,243		$ 175,609
Interest bearing		766,853		718,028		696,942		642,422		626,986
Total deposits		951,710		902,373		862,170		771,665		802,595
Other Borrowings		-		1,639		36,117		19,814		33,034
Subordinated Debt		40,526		40,585		20,653		20,696		20,740
Operating Lease Liabilities		8,921		4,513		4,606		4,680		4,748
Accrued interest payable and other liabilities		6,774		6,004		5,790		6,285		8,091
TOTAL LIABILITIES		1,007,931		955,114		929,336		823,140		869,208
SHAREHOLDERS' EQUITY
Preferred stock		-		-		-		-		-
Common stock		149		99		99		99		98
Surplus		117,698		83,070		82,930		82,910		82,771
Retained earnings		27,525		26,491		25,623		24,836		24,785
Accumulated other comprehensive (loss) income		(8,430)		(4,889)		(2,312)		1,778		2,307
TOTAL SHAREHOLDERS' EQUITY		136,942		104,771		106,340		109,623		109,961
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$ 1,144,873		$ 1,059,885		$ 1,035,676		$ 932,763		$ 979,169
Common shares outstanding		14,939,640		9,838,435		9,826,435		9,826,435		9,814,447

LINKBANCORP, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
		Three Months Ended							Nine Months Ended
		9/30/2022		6/30/2022		9/30/2021				9/30/2022		9/30/2021
(In Thousands, except share and per share data)
INTEREST AND DIVIDEND INCOME
Loans receivable, including fees		$ 9,410		$ 8,114		$ 3,267				$ 25,287		$ 8,638
Other		1,170		981		636				2,771		1,921
Total interest and dividend income		10,580		9,095		3,903				28,058		10,559
INTEREST EXPENSE
Deposits		1,389		818		504				2,872		1,470
Other Borrowings		82		2		14				106		25
Subordinated Debt		439		422		37				1,080		37
Total interest expense		1,910		1,242		555				4,058		1,532
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES		8,670		7,853		3,348				24,000		9,027
Provision for loan losses		515		395		457				1,190		548
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		8,155		7,458		2,891				22,810		8,479
NONINTEREST INCOME
Service charges on deposit accounts		216		218		177				644		517
Bank-owned life insurance		156		114		54				381		176
Net realized gains on the sales of debt securities, available for sale		-		-		-				13		-
Gain on sale of loans		420		153		53				753		316
Other		249		211		87				658		549
Total noninterest income		1,041		696		371				2,449		1,558
NONINTEREST EXPENSE
Salaries and employee benefits		4,234		3,722		1,151				11,612		3,397
Occupancy		596		433		232				1,503		507
Equipment and data processing		666		595		335				1,858		803
Professional fees		330		307		75				865		264
FDIC insurance		141		138		90				483		150
Bank Shares Tax		201		201		87				585		260
Merger Related Expenses		-		-		3,864				-		3,968
Other		877		846		767				2,481		1,354
Total noninterest expense		7,045		6,242		6,601				19,387		10,703
Income (Loss) before income tax (benefit) expense		2,151		1,912		(3,339)				5,872		(666)
Income tax (benefit) expense		379		306		(542)				970		(167)
NET INCOME (LOSS)		$ 1,772		$ 1,606		$ (2,797)				$ 4,902		$ (499)
EARNINGS (LOSS) PER SHARE, BASIC		$ 0.17		$ 0.16		$ (0.45)				$ 0.49		$ (0.08)
EARNINGS (LOSS) PER SHARE, DILUTED		$ 0.17		$ 0.16		$ (0.45)				$ 0.48		$ (0.08)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING,
BASIC		10,590,079		9,836,984		6,274,250				10,087,341		5,888,008
DILUTED		10,590,079		9,913,477		6,274,250				10,136,457		5,888,008

LINKBANCORP, Inc. and Subsidiaries
Financial Highlights (Unaudited)
		For the Three Months Ended				For the Nine Months Ended
('Dollars In Thousands)		9/30/2022		6/30/2022		9/30/2022		9/30/2021
Operating Highlights
Net Income (Loss)		$ 1,772		$ 1,606		$ 4,902		$ (499)
Net Interest Income		8,670		7,853		24,000		9,027
Provision for Loan Losses		515		395		1,190		548
Non-Interest Income		1,041		696		2,449		1,558
Non-Interest Expense		7,045		6,242		19,387		10,703
Selected Operating Ratios
Net Interest Margin		3.51 %		3.38 %		3.40 %		2.73 %
Annualized Return on Assets ("ROA")		0.65 %		0.63 %		0.63 %		-0.14 %
Adjusted ROA2		0.65 %		0.63 %		0.63 %		0.76 %
Annualized Return on Equity ("ROE")		6.48 %		6.13 %		7.68 %		-1.26 %
Adjusted ROE2		6.48 %		6.13 %		7.66 %		6.68 %
Efficiency Ratio		72.55 %		73.01 %		73.30 %		101.11 %
Adjusted Efficiency Ratio3		72.55 %		73.01 %		73.34 %		63.63 %
Noninterest Income to Avg. Assets		0.38 %		0.27 %		0.32 %		0.45 %
Noninterest Expense to Avg. Assets		2.60 %		2.42 %		2.51 %		3.09 %
		9/30/2022		6/30/2022		3/31/2022		12/31/2021
Financial Condition Data
Total Assets		$ 1,144,873		$ 1,059,885		$ 1,035,676		$ 932,763
Loans Receivable, Net		859,400		786,516		727,618		711,664
Noninterest-bearing Deposits		184,857		184,345		165,228		129,243
Interest-bearing Deposits		766,853		718,028		696,942		642,422
Total Deposits		951,710		902,373		862,170		771,665
Selected Balance Sheet Ratios
Total Capital Ratio1		11.55 %		12.42 %		11.14 %		11.50 %
Tier 1 Capital Ratio1		11.04 %		11.94 %		10.67 %		11.02 %
Common Equity Tier 1 Capital Ratio1		11.04 %		11.94 %		10.67 %		11.02 %
Leverage Ratio1		9.74 %		10.10 %		8.71 %		8.85 %
Tangible Common Equity to Tangible Assets4		9.02 %		6.62 %		6.94 %		8.09 %
Tangible Book Value per Share5		$ 6.69		$ 6.89		$ 7.05		$ 7.38
Asset Quality Data
Non-performing Assets		$ 1,979		$ 1,494		$ 1,246		$ 1,396
Non-performing Assets to Total Assets		0.17 %		0.14 %		0.12 %		0.15 %
Non-performing Loans to Total Loans		0.23 %		0.19 %		0.17 %		0.20 %
Allowance for Loan Losses ("AFLL")		$ 4,569		$ 3,890		$ 3,443		$ 3,152
AFLL to Total Loans		0.53 %		0.49 %		0.47 %		0.44 %
AFLL to Nonperforming Assets		230.87 %		260.37 %		276.32 %		225.79 %

(1) - These capital ratios have been calculated using bank-level capital
(2) - This is a non-GAAP financial measure. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures at the end of this release.
(3) - The efficiency ratio, as adjusted represents noninterest expense divided by the sum of net interest income and noninterest income, excluding gains or losses from securities sales and merger related expenses. This is a non-GAAP financial measure. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures at the end of this release.
(4) - We calculate tangible common equity as total shareholders' equity less goodwill and other intangibles, and we calculate tangible assets as total assets less goodwill and other intangibles. This is a non-GAAP financial measure. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures at the end of this release.
(5) - We calculate tangible book value per common share as total shareholders' equity less goodwill and other intangibles, divided by the outstanding number of shares of our common stock at the end of the relevant period. Tangible book value per common share is a non-GAAP financial measure, and, as we calculate tangible book value per common share, the most directly comparable GAAP financial measure is book value per common share. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures at the end of this release.

LINKBANCORP, Inc. and Subsidiaries
Net Interest Margin - Quarter-To-Date (Unaudited)
		For the Three Months Ended September 30,
		2022						2021
(Dollars in thousands)		Avg Bal		Interest		Yield/Rate		Avg Bal		Interest		Yield/Rate
Int. Earn. Cash		$ 30,630		$ 157		2.03 %		$ 53,214		$ 134		1.00 %
Securities
Taxable (1)		86,330		745		3.42 %		72,386		202		1.11 %
Tax-Exempt		39,258		339		3.43 %		48,298		380		3.12 %
Total Securities		125,588		1,084		3.42 %		120,684		582		1.91 %
Total Cash Equiv. and Investments		156,218		1,241		3.15 %		173,898		716		1.63 %
Total Loans		824,309		9,410		4.53 %		313,636		3,267		4.13 %
Total Earning Assets		980,527		10,651		4.31 %		487,534		3,983		3.24 %
Other Assets		93,116						30,471
Total Assets		$ 1,073,643						$ 518,005
Interest bearing demand		$ 278,637		$ 400		0.57 %		$ 168,662		$ 264		0.62 %
Money market demand		244,107		568		0.92 %		96,450		37		0.15 %
Time deposits		205,792		421		0.81 %		71,219		203		1.13 %
Total Borrowings		52,562		521		3.93 %		8,172		51		2.48 %
Total Interest-Bearing Liabilities		781,098		1,910		0.97 %		344,503		555		0.64 %
Non Int Bearing Deposits		170,863						90,429
Total Cost of Funds		$ 951,961		$ 1,910		0.80 %		$ 434,932		$ 555		0.51 %
Other Liabilities		13,243						4,459
Total Liabilities		$ 965,204						$ 439,391
Shareholders' Equity		$ 108,439						$ 78,614
Total Liabilities & Shareholders' Equity		$ 1,073,643						$ 518,005
Net Interest Income/Spread (FTE)				8,741		3.34 %				3,428		2.60 %
Tax-Equivalent Basis Adjustment				(71)						(80)
Net Interest Income				$ 8,670						$ 3,348
Net Interest Margin						3.51 %						2.72 %
(1) Taxable income on securities includes income from available for sale securities and income from certificates of deposits with other banks.

LINKBANCORP, Inc. and Subsidiaries
Net Interest Margin - Year-To-Date (Unaudited)
		For the Nine Months Ended September 30,
		2022						2021
(Dollars in thousands)		Avg Bal		Interest		Yield/Rate		Avg Bal		Interest		Yield/Rate
Int. Earn. Cash		$ 50,254		$ 306		0.81 %		$ 51,665		$ 366		0.95 %
Securities
Taxable (1)		86,590		1,608		2.48 %		81,654		649		1.06 %
Tax-Exempt		41,438		1,085		3.50 %		46,548		1,147		3.29 %
Total Securities		128,028		2,693		2.81 %		128,202		1,796		1.87 %
Total Cash Equiv. and Investments		178,282		2,999		2.25 %		179,867		2,162		1.61 %
Total Loans		765,267		25,287		4.42 %		262,051		8,638		4.41 %
Total Earning Assets		943,549		28,286		4.01 %		441,918		10,800		3.27 %
Other Assets		90,970						21,729
Total Assets		$ 1,034,519						$ 463,647
Interest bearing demand		$ 269,282		$ 905		0.45 %		$ 162,587		$ 800		0.66 %
Money market demand		228,105		945		0.55 %		79,637		73		0.12 %
Time deposits		203,947		1,022		0.67 %		83,495		597		0.96 %
Total Borrowings		84,382		1,186		1.88 %		2,236		62		3.71 %
Total Interest-Bearing Liabilities		785,716		4,058		0.69 %		327,955		1,532		0.62 %
Non Int Bearing Deposits		151,941						78,770
Total Cost of Funds		$ 937,657		$ 4,058		0.58 %		$ 406,725		$ 1,532		0.50 %
Other Liabilities		11,517						4,151
Total Liabilities		$ 949,174						$ 410,876
Shareholders' Equity		$ 85,345						$ 52,771
Total Liabilities & Shareholders' Equity		$ 1,034,519						$ 463,647
Net Interest Income/Spread (FTE)				24,228		3.32 %				9,268		2.65 %
Tax-Equivalent Basis Adjustment				(228)						(241)
Net Interest Income				$ 24,000						$ 9,027
Net Interest Margin						3.40 %						2.73 %
(1) Taxable income on securities includes income from available for sale securities and income from certificates of deposits with other banks.

LINKBANCORP, Inc. and Subsidiaries
Loans Receivable Detail (Unaudited)
(In Thousands)		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021
Agriculture loans		$ 13,977		$ 7,710		$ 8,111		$ 9,341		$ 8,873
Commercial loans		97,542		88,452		94,114		98,604		83,742
Paycheck Protection Program ("PPP") loans		933		2,527		10,586		23,774		39,794
Commercial real estate loans		482,367		435,588		353,559		338,749		309,079
Residential real estate loans		251,832		241,401		252,158		231,302		216,524
Consumer and other loans		11,929		8,689		6,359		7,087		4,309
Municipal loans		5,404		5,814		6,193		6,182		6,351
		863,984		790,181		731,080		715,039		668,672
Deferred costs (fees)		(15)		225		(19)		(223)		(274)
Total loans receivable		$ 863,969		$ 790,406		$ 731,061		$ 714,816		$ 668,398

LINKBANCORP, Inc. and Subsidiaries
Investments in Securities Detail (Unaudited)
		September 30, 2022
(In Thousands)		Amortized Cost		Net Unrealized Losses		Fair Value
Available for Sale:
Small Business Administration loan pools		$ 914		$ (13)		$ 901
Obligations of state and political subdivisions		44,352		(6,005)		38,347
Mortgage-backed securities in government-sponsored entities		44,102		(4,652)		39,450
		$ 89,368		$ (10,670)		$ 78,698
Held to Maturity:
Corporate debentures		$ 14,993		$ (883)		$ 14,110
Structured mortgage-backed securities		17,578		(773)		16,805
		$ 32,571		$ (1,656)		$ 30,915

LINKBANCORP, Inc. and Subsidiaries
Deposits Detail (Unaudited)
(In Thousands)		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021
Demand, noninterest-bearing		$ 184,857		$ 184,345		$ 165,228		$ 129,243		$ 175,609
Demand, interest-bearing		305,934		269,493		269,222		256,258		217,857
Money market and savings		266,743		235,411		224,673		205,843		207,460
Time deposits, $250 and over		39,123		55,507		55,514		56,266		55,844
Time deposits, other		155,053		157,617		147,533		124,055		145,825
		$951,710		$ 902,373		$ 862,170		$ 771,665		$ 802,595

Non-GAAP Financial Measure Reconciliation

This document contains supplemental financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Management uses these non-GAAP measures in its analysis of the Company's performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of non-GAAP financial measures that exclude the impact of specified items provide useful supplemental information that is essential to a proper understanding of the Company's financial condition and results. Non-GAAP measures are not formally defined under GAAP, and other entities may use calculation methods that differ from those used by us. As a complement to GAAP financial measures, our management believes these non-GAAP financial measures assist investors in comparing the financial condition and results of operations of financial institutions due to the industry prevalence of such non-GAAP measures. See the tables below for a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures.

Adjusted Return on Average Assets
	For the Three Months Ended				For the Nine Months Ended
(Dollars in thousands)	9/30/2022		6/30/2022		9/30/2022		9/30/2021
Net income (loss)	$ 1,772		$ 1,606		$ 4,902		$ (499)
Average assets	1,073,643		1,021,561		1,034,519		463,647
Return on average assets (annualized)	0.65 %		0.63 %		0.63 %		-0.14 %
Net income (loss)	1,772		1,606		4,902		(499)
Net gains on sale of securities	-		-		(13)		-
Tax effect at 21%	-		-		3		-
Merger Expenses	-		-		-		3,968
Tax effect at 21%	-		-		-		(833)
Adjusted Net Income	1,772		1,606		4,892		2,636
Average assets	1,073,643		1,021,561		1,034,519		463,647
Adjusted return on average assets (annualized)	0.65 %		0.63 %		0.63 %		0.76 %

Adjusted Return on Average Shareholders' Equity
	For the Three Months Ended				For the Nine Months Ended
(Dollars in thousands)	9/30/2022		6/30/2022		9/30/2022		9/30/2021
Net income (loss)	$ 1,772		$ 1,606		$ 4,902		$ (499)
Average shareholders' equity	108,439		105,060		85,345		52,771
Return on average shareholders' equity (annualized)	6.48 %		6.13 %		7.68 %		-1.26 %
Net income (loss)	1,772		1,606		4,902		(499)
Net gains on sale of securities	-		-		(13)		-
Tax effect at 21%	-		-		3		-
Merger Expenses	-		-		-		3,968
Tax effect at 21%	-		-		-		(833)
Adjusted Net Income	1,772		1,606		4,892		2,636
Average shareholders' equity	108,439		105,060		85,345		52,771
Adjusted return on average shareholders' equity (annualized)	6.48 %		6.13 %		7.66 %		6.68 %

Adjusted Efficiency Ratio
	For the Three Months Ended				For the Nine Months Ended
(Dollars in thousands)	9/30/2022		6/30/2022		9/30/2022		9/30/2021
GAAP-based efficiency ratio	72.55 %		73.01 %		73.30 %		101.11 %
Net interest income	$ 8,670		$ 7,853		$ 24,000		$ 9,027
Noninterest income	1,041		696		2,449		1,558
Less: net gains on sales of securities	-		-		13		-
Adjusted revenue	9,711		8,549		26,436		10,585
Total noninterest expense	7,045		6,242		19,387		10,703
Less: Merger expenses	-		-		-		3,968
Adjusted non-interest expense	7,045		6,242		19,387		6,735
Efficiency ratio, as adjusted	72.55 %		73.01 %		73.34 %		63.63 %

Tangible Common Equity and Tangible Book Value
		9/30/2022		6/30/2022		3/31/2022		12/31/2021
Tangible Common Equity		(Dollars in thousands, except for share data)
Total shareholders' equity		$ 136,942		$ 104,771		$ 106,340		$ 109,623
Adjustments:
Goodwill		(35,842)		(35,842)		(35,842)		(35,842)
Other intangible assets		(1,113)		(1,178)		(1,243)		(1,310)
Tangible common equity		$ 99,987		$ 67,751		$ 69,255		$ 72,471
Common shares outstanding		14,939,640		9,838,435		9,826,435		9,826,435
Book value per common share		$ 9.17		$ 10.65		$ 10.82		$ 11.16
Tangible book value per common share		$ 6.69		$ 6.89		$ 7.05		$ 7.38
Tangible Assets
Total assets		$ 1,144,873		$ 1,059,885		$ 1,035,676		$ 932,763
Adjustments:
Goodwill		(35,842)		(35,842)		(35,842)		(35,842)
Other intangible assets		(1,113)		(1,178)		(1,243)		(1,310)
Tangible assets		$ 1,107,918		$ 1,022,865		$ 998,591		$ 895,611
Tangible common equity to tangible assets		9.02 %		6.62 %		6.94 %		8.09 %

Contact:
Nicole Ulmer
Corporate and Investor Relations Officer
717.803.8895
[email protected]

SOURCE LINKBANCORP, Inc.