Thanks to a single deal, Linkbancorp went this year from doing business in one state to doing business in five.
That deal was the bank’s merger this fall with Maryland-based Partners Bancorp.
The all-stock deal closed at the end of November, followed by a bankwide conversion to the Linkbank brand over the first weekend in December, according to Andrew Samuel, CEO of Linkbancorp, based in Camp Hill.
While Linkbank now competes in a bigger territory — including a lucrative market in the D.C. suburbs — it has no plans to lose focus on its home turf, Samuel said in an interview with biznewsPA.
“We’re headquartered here. Our corporate offices are here. Southcentral Pennsylvania is an extremely important market for us,” he said.
Nonetheless, he said there is a lot of upside in the bank’s new markets of Annapolis, suburban Baltimore and Northern Virginia.
“Those are all markets that will contribute heavily to our franchise as we go forward,” he said.
What’s the opportunity: The deal offers several, according to Samuel.
They include growth opportunities for Linkbank managers, who now oversee larger departments in areas such as lending and regulatory compliance, he said.
The bank also is picking up relatively lower-cost deposits — in particular from Partners subsidiary The Bank of Delmarva — at a time when interest rates have been rising.
“We’re excited about having that be part of our combined balance sheet,” Samuel said,
Banks use deposits as a main source of funding for loans, so higher deposit costs eat into profits.
Linkbancorp saw loan revenue rise for the first nine months of 2023. But it was offset by higher deposit costs.
Net income at Linkbancorp was over $1.2 million for the third quarter of 2023, down from $1.8 million for the year-ago quarter, according to its most-recent quarterly report.
The combination: It produces a bank with 31 branches.
Linkbank, founded in 2018, brings 10 branches in Central and southeastern Pennsylvania to the mix.
Partners adds 21 branches in Delaware, Maryland, New Jersey and Virginia that had operated under four brands: Bank of Delmarva, Liberty Bell Bank, Maryland Partners Bank and Virginia Partners Bank.
While Samuel leads the institution, several former Partners execs are heading up regional markets.
Partners chair Jeffrey Turner, meanwhile, is now vice chair of the Linkbancorp board.
Are there any cuts: Less than 50 people are expected to lose their jobs with the combined company, which employs about 310 people overall, Samuel said.
The bank is working with the affected employees on outplacement and transition services, Samuel said, noting that most are staying on into the first quarter.
What about 2024: Samuel is optimistic about the year ahead.
He expects interest rates to stabilize where they are and for the bank’s income to rebound.
“As a combined company, we have a chance to do some special things and we’re looking forward to enhanced earnings as we go forward,” he said.
While the bank is focused on organic growth, he did not rule out additional acquisitions.
“We like this $3 billion Mid-Atlantic franchise we have. It has a lot of embedded opportunities. We’ll focus on that and if in the process something comes up that makes sense, we’d look at it,” he said.
Partners is the second transaction for Linkbancorp. In 2021, the company merged with GNB Financial Services, the Gratz-based parent of The Gratz National Bank.
