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.
