Parke Bank: PARKE BANCORP, INC. ANNOUNCES FOURTH QUARTER 2024 EARNINGS

Highlights: Net Income: $7.4 million for Q4 2024, decreased 1.5% from Q3 2024 Revenue: $34.5 million for Q4 2024, increased 4.4% over Q3 2024 Total Assets: $2.14 billion , increased 5.9% from December 31, 2023 Total Loans: $ 1.87 billion , increased 4.5% from December 31, 2023 Total Deposits: $1.63 billion , increased 5.0% from December 31, 2023 WASHINGTON TOWNSHIP, N.J. , Jan. 24, 2025 /PRNewswire/ -- Parke Bancorp, Inc. ("Parke Bancorp" or the "Company") (NASDAQ: "PKBK"), the parent company of Parke Bank (the "Bank"), announced its operating results for the quarter and fiscal year ended December 31, 2024. Highlights for the fourth quarter and year ended December 31, 2024: Net income available to common shareholders was $7.4 million , or $0.62 per basic common share and $0.61 per diluted common share, for the three months ended December 31, 2024, a decrease of $0.8 million , or 9.5%, compared to net income available to common shareholders of $8.2 million , or $0.68 per basic common share and $0.67 per diluted common share, for the same quarter in 2023. The decrease is primarily driven by an increase in provision for credit losses, lower non-interest income, and an increase in non-interest expense. Net interest income increased 0.7% to $15.6 million for the three months ended December 31, 2024, compared to $15.5 million for the same period in 2023. Provision for credit losses was an increase of $0.6 million , to $0.2 million , for the three months ended December 31, 2024, compared to a recovery of $0.4 million for the same period in 2023. Non-interest income decreased $0.3 million , or 23.1%, to $1.1 million for the three months ended December 31, 2024, compared to $1.5 million for the same period in 2023. Non-interest expense increased $0.6 million , or 9.0%, to $6.9 million for the three months ended December 31, 2024, compared to $6.3 million for the same period in 2023. Net income available to common shareholders was $27.5 million , or $2.30 per basic common share and $2.27 per diluted common share, for the fiscal year ended December 31, 2024, a decrease of $0.9 million , or 3.3%, compared to net income available to common shareholders of $28.4 million , or $2.38 per basic common share and $2.35 per diluted common share, for the fiscal year ended December 31 , 2023. The decrease was primarily due to a decrease in net interest income, an increase in the provision for credit losses, and a decrease in non-interest income, partially offset by a decrease in non-interest expense. Net interest income decreased 8.6% to $58.7 million for the fiscal year ended December 31, 2024, compared to $64.2 million for the fiscal year ended December 31, 2023 . Provision for credit losses increased $2.8 million to $0.7 million for the fiscal year ended December 31, 2024, compared to a recovery of $2.1 million for the fiscal year ended December 31, 2023 . Non-interest income decreased $2.4 million , or 35.7%, to $4.3 million for the fiscal year ended December 31, 2024 , compared to $6.7 million for the fiscal year ended December 31, 2023 . Non-interest expense decreased $9.3 million , or 26.3%, to $26.0 million , for the fiscal year ended December 31, 2024, compared to $35.3 million for the fiscal year ended December 31 , 2023. The decrease in non-interest expense in 2024 was primarily due to the recognition of a one-time $9.5 million contingent loss in 2023. The following is a recap of the significant items that impacted the fourth quarter of 2024 and the fiscal year ended December 31, 2024 : Interest income increased $3.0 million for the fourth quarter of 2024 compared to the fourth quarter of 2023, primarily due to an increase in interest and fees on loans of $2.4 million to $30.9 million , due to higher average outstanding loan balances and higher interest rates. Additionally, during the fourth quarter of 2024, interest earned on average deposits held at the Federal Reserve Bank ("FRB") increased to $2.2 million from $1.5 million in the fourth quarter of 2023, due to higher cash balances held at the FRB. For the year ended December 31, 2024, interest income increased $12.4 million from the fiscal year ended December 31, 2023 , primarily driven by an increase in interest and fees on loans of $11.8 million , due to higher average outstanding loan balances and higher interest rates, as well as an increase in interest earned on average deposits held at the FRB of $0.6 million . Interest expense increased $2.9 million for the three months ended December 31, 2024, compared to the same period in 2023, primarily due to higher market interest rates, as well as a change in the deposit mix with a reduction in non-interest bearing demand deposits and an increase in interest-bearing deposits. For the year ended December 31, 2024, interest expense increased $17.9 million compared to the fiscal year ended December 31, 2023 , primarily due to higher market interest rates, as well as a change in the deposit mix with a reduction in non-interest bearing demand deposits and an increase in interest-bearing deposits. The provision for credit losses increased $0.6 million for the three months ended December 31, 2024, compared to the same period in 2023, as a result of an increase in outstanding loan balances, partially offset by a decrease in vintage and qualitative loss rates. For the year ended December 31, 2024, the provision for credit losses increased $2.8 million from the fiscal year ended December 31, 2023 due to an increase in outstanding loan balances, partially offset by a decrease in vintage and qualitative loss rates. Non-interest income decreased $0.3 million for the three months ended December 31, 2024 compared to the same period in 2023, primarily as a result of a decrease in service fees on deposit accounts of $0.4 million , and a decrease in bank owned life insurance income of $0.1 million , partially offset by an increase in other income of $0.2 million . For the year ended December 31, 2024 , non-interest income decreased $2.4 million compared to the fiscal year ended December 31, 2023 , primarily driven by a decrease in service fees on deposit accounts of $2.5 million . The decrease in service fees on deposit accounts during the year ended December 31, 2024 , was primarily attributable to a decrease in fees from our cannabis related businesses deposit accounts. Non-interest expense increased $0.6 million for the three months ended December 31, 2024 compared to the same period in 2023, primarily driven by an increase in professional services of $0.5 million , and compensation and benefits of $0.4 million , partially offset by a decrease in OREO expense of $0.2 million , and a decrease in other operating expense of $0.2 million . For the fiscal year ended December 31, 2024, non-interest expense decreased $9.3 million , mainly due to the contingent loss in 2023 referred to above, and a decrease in other operating expense of $0.6 million , partially offset by an increase in compensation and benefits of $0.4 million , and an increase in professional services of $0.4 million . The increase in compensation and benefits during the year ended December 31, 2024 , was primarily due to a $0.4 million increase in salaries, and a $0.2 million decrease in deferred loan origination costs attributable to a reduction in the number of loans originated, partially offset by a $0.2 million decrease in SERP expense. Income tax expense decreased $0.7 million for the three months ended December 31, 2024 compared to the same period in 2023. For the year ended December 31, 2024 , income tax expense decreased $0.4 million compared to the fiscal year ended December 31 , 2023. The effective tax rate for the fourth quarter of 2024 and the year ended December 31, 2024 was 23.9% and 24.2%, respectively, compared to 26.8% and 24.5% for the same periods in 2023. December 31, 2024 discussion of financial condition Total assets increased to $2.14 billion at December 31, 2024, from $2.02 billion at December 31, 2023 , an increase of $118.7 million , or 5.9%. Cash and cash equivalents totaled $221.5 million at December 31, 2024, as compared to $180.4 million at December 31 , 2023. The investment securities portfolio decreased to $14.8 million at December 31, 2024, from $16.4 million at December 31, 2023 , a decrease of $1.6 million , or 9.9%, primarily due to pay downs of securities. Gross loans increased to $1.87 billion at December 31, 2024, from $1.79 billion at December 31, 2023 , an increase of $80.8 million or 4.5%. The increase in loans was primarily due to an increase in the multi-family loan portfolio of $71.5 million , and an increase in the CRE owner occupied portfolio balance of $18.2 million , partially offset by a decrease in the construction portfolio balance of $17.9 million . Nonperforming loans at December 31, 2024 increased to $11.8 million , representing 0.63% of total loans, an increase of $4.5 million , from $7.3 million of nonperforming loans at December 31 , 2023. The increase was primarily driven by a $1.6 million increase in the residential 1 to 4 family investment portfolio, a $1.6 million increase in the residential 1 to 4 family portfolio, and a $2.1 million increase in the CRE non-owner occupied portfolio, partially offset by a $0.7 million decrease in the CRE owner-occupied portfolio. OREO at December 31, 2024 was $1.6 million , which was unchanged from $1.6 million at December 31, 2023 . Nonperforming assets (consisting of nonperforming loans and OREO) represented 0.62% and 0.44% of total assets at December 31, 2024 and December 31, 2023 , respectively. Loans past due 30 to 89 days were $1.4 million at December 31, 2024, a decrease of $2.5 million from December 31, 2023 . The allowance for credit losses was $32.6 million at December 31, 2024, as compared to $32.1 million at December 31, 2023 . The ratio of the allowance for credit losses to total loans was 1.74% and 1.80% at December 31, 2024 and at December 31, 2023 , respectively.