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Introduction & Market Context
LINKBANCORP Inc. (NASDAQ:LNKB), a Mid-Atlantic community bank with $2.89 billion in assets, presented its second quarter 2025 results on July 28, 2025. The bank, which operates across Pennsylvania, Maryland, Delaware, and Virginia, reported net income of $7.39 million and earnings per diluted share of $0.20. The company continues to execute its branch-lite strategy while maintaining strong capital ratios and a well-balanced loan portfolio.
LINKBANCORP’s stock closed at $7.32 on July 28, 2025, down slightly by 0.27%. The company maintains a market capitalization of approximately $274.8 million and offers a dividend yield of 4.09%.
Quarterly Performance Highlights
For the second quarter of 2025, LINKBANCORP delivered solid financial results with a return on assets (ROA) of 1.05%, return on equity (ROE) of 10.04%, and return on tangible common equity (ROTCE) of 13.57%. The bank reported net interest income of $24.9 million and noninterest income of $2.9 million.
As shown in the following chart of key financial metrics for Q2 2025:
The bank’s tangible book value per share increased from $5.80 to $5.92 during the quarter. Total (EPA:TTEF) deposits stood at $2.46 billion, while total loans increased by $82.7 million over the quarter to $2.36 billion.
LINKBANCORP’s revenue and earnings trends show consistent performance over recent quarters, with adjusted pre-tax pre-provision net income reaching $9.83 million in Q2 2025:
Strategic Initiatives
LINKBANCORP continues to execute its branch-lite strategy, which relies on organic growth and strategically located regional Client Solutions Centers without traditional teller lines. The company maintained 24 client solutions centers at the end of Q2 2025, having completed the sale of its New Jersey operations on March 31, 2025, which resulted in an after-tax gain of $8.7 million.
The bank is targeting average deposits per Client Solutions Center of greater than $120 million, with current levels at $99,225 per center in Q2 2025, showing steady progress toward this goal:
LINKBANCORP’s growth strategy has been impressive, with total assets expanding from $234 million in 2018-2019 to $2.89 billion in 2025. This growth has been achieved through a combination of strategic acquisitions and organic expansion:
Detailed Financial Analysis
Net Interest Margin and Funding Costs
The bank’s net interest margin was 3.80% in Q2 2025, a slight decrease from 3.94% in the previous quarter. This compression was partly due to the cost of deposits increasing slightly from 2.10% in Q1 2025 to 2.14% in Q2 2025, while the yield on loans decreased from 6.39% to 6.22% during the same period.
The following chart illustrates these trends:
Deposit Franchise
LINKBANCORP maintains a valuable core deposit franchise with 26.3% of total deposits being noninterest bearing. The deposit composition as of June 30, 2025, shows a well-diversified funding base:
Total deposits were $2.46 billion at the end of Q2 2025. Excluding the $28.6 million change in brokered deposits and the impact from the Branch Sale, total deposits have increased $118.0 million year-to-date, representing an annualized growth rate of 10.1%.
Loan Portfolio
The bank maintains a well-balanced loan portfolio with an average yield on loans of 6.22%. Commercial real estate loans represent the largest segment at 59% of the portfolio (including multifamily, owner-occupied, and non-owner occupied), while residential loans account for 21%.
The following chart shows the loan portfolio composition as of June 30, 2025:
Total commercial loan commitments for Q2 2025 were $154.6 million with funded balances of $137.1 million. The average commercial loan commitment originated during the quarter was approximately $985,000.
Regional Focus
LINKBANCORP operates across several key markets in the Mid-Atlantic region. In Pennsylvania, the bank maintains eight client solution centers and two loan production offices, serving high-growth regions including the Delaware Valley and diverse Central Pennsylvania communities:
The bank’s Maryland and Delaware operations include twelve client solution centers and one loan production office, with a strong presence in the Central and Delmarva regions:
In Virginia, LINKBANCORP operates four client solution centers in the Northern Virginia and Fredericksburg regions:
Asset Quality
Asset quality remains strong, with the allowance for credit losses to total loans ratio stable at 1.09% from Q1 to Q2 2025. Net charge-offs increased to $401,000 in Q2 2025 from $81,000 in Q1 2025, but remain at manageable levels relative to the size of the loan portfolio.
Forward-Looking Statements
LINKBANCORP’s outlook for 2025 includes targeted loan growth of 5-8% (excluding the impact from the branch sale) and a targeted loan-to-deposit ratio of 90-95%. The bank expects its net interest margin to range between 3.9-3.95%, and is targeting a 1.10% core operating ROA. The effective tax rate is projected to be approximately 22%.
Management highlighted several investment rationales, including the bank’s seasoned executive team, strong funding franchise, focused organic growth strategy, nimble and innovative technology approach, opportunistic M&A strategy, disciplined underwriting, and strong alignment with shareholder returns.
With a solid capital position, including a Bank Tier 1 Leverage ratio of 10.34% and Total Risk Based Capital ratio of 12.43%, LINKBANCORP is well-positioned to continue executing its growth strategy while maintaining its quarterly dividend of $0.075 per share.
Full presentation:
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