2023 Community Bank Case Study Competition Journal

THIRD PLACE: Messiah University

Loan Portfolio Composition In its three years of operation, LINKBANK has drastically increased their amount of loans YoY. In 2020, the total aggregate loans came in at $236,840M, while in 2021 they were $715,039M, and finally in 2022 a total of $927,615M. With 2021 being when the merger with Gratz Bank occurred, Gratz was the larger bank, so they came with a larger loan portfolio than what LINK had at that time. In 2021, it was expected to see an increase in commercial and commercial

expense, unrealized losses from these securities can ruin a bank during a liquidity crisis. Unrealized gains from AFS securities were $2,904M, ($1,716M), and ($10,346M) in 2020 2022. The unrealized loss in 2022 looks large; however, this is typical for the banking industry in 2022 because of the Fed’s hawkish monetary policy. The unrealized loss is much less concerning when the bank’s liquidity position is considered because these losses would only be realized during an event where liquidity is highly stressed.

real estate loans mainly due to LINK’s business model and their urge to obtain commercial clients within the community. There was also a notable increase in residential real estate and that came along with the merger of Gratz National Bank, where the makeup of their loans was primarily consumer mortgages and HELOCs. The commercial loans that

Figure 1

$0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 $1,000,000

2018

2019

2020

2021

2022

Figure 2

Loan Portfolio, Year End December 31, 2020 Loan Portfolio, Year End December 31, 2021 Loan Portfolio, Year End December 31, 2022

Agriculture

Agriculture

Agriculture

Commercial

Commercial

Commercial

Commercial Real Estate Residential Real Estate Consumer & Other

Commercial Real Estate Residential Real Estate Consumer & Other

PPP

Real Estate

Commercial Residential Real Estate Real Estate Municipal

Municipal

Municipal

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