PARKE BANCORP, INC. ANNOUNCES FIRST QUARTER 2024 EARNINGS
Highlights: |
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Net Income: |
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Revenue: |
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Total Assets: |
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Total Loans: |
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Total Deposits: |
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Highlights for the three months ended
- Net income available to common shareholders was
$6.1 million , or$0.51 per basic common share and$0.51 per diluted common share, for the three months endedMarch 31, 2024 , a decrease of$5.0 million , or 44.8%, compared to net income available to common shareholders of$11.1 million , or$0.93 per basic common share and$0.92 per diluted common share, for the three months endedMarch 31, 2023 . The decrease was primarily due to lower net interest income, an increase in the provision for credit losses, and lower non-interest income. - Net interest income decreased 18.0% to
$14.1 million for the three months endedMarch 31, 2024 , compared to$17.1 million for the same period in 2023. - Provision for credit losses was
$0.2 million for the three months endedMarch 31, 2024 , compared to a recovery for credit losses of$2.4 million for the same period in 2023. - Non-interest income decreased
$0.7 million , or 40.4%, to$1.1 million for the three months endedMarch 31, 2024 , compared to$1.8 million for the same period in 2023. - Non-interest expense decreased
$0.2 million , or 3.3%, to$6.5 million for the three months endedMarch 31, 2024 , compared to$6.8 million for the same period in 2023.
The following is a recap of the significant items that impacted the three months ended
Interest income increased
Interest expense increased
The provision for credit losses was
Non-interest income decreased
Non-interest expense decreased
Income tax expense decreased
- Total assets decreased to
$2.01 billion atMarch 31, 2024 , from$2.02 billion atDecember 31, 2023 , a decrease of$14.4 million , or 0.71%, primarily due to a decrease in cash and cash equivalents, net loans, and other assets. - Cash and cash equivalents totaled
$171.1 million atMarch 31, 2024 , as compared to$180.4 million atDecember 31, 2023 . The decrease in cash and cash equivalents was primarily due to a decrease in borrowings, partially offset by an increase in deposits. - The investment securities portfolio decreased to
$15.9 million atMarch 31, 2024 , from$16.4 million atDecember 31, 2023 , a decrease of$0.5 million , or 2.9%, primarily due to pay downs of securities. - Gross loans decreased
$1.8 million or 0.1%, to$1.79 billion atMarch 31, 2024 . - Nonperforming loans at
March 31, 2024 decreased to$7.0 million , representing 0.39% of total loans, a decrease of$0.3 million , or 3.8%, from$7.3 million of nonperforming loans atDecember 31, 2023 . Other Real Estate Owned ("OREO") atMarch 31, 2024 was$1.6 million , unchanged fromDecember 31, 2023 . Nonperforming assets (consisting of nonperforming loans and OREO) represented 0.42% and 0.44% of total assets atMarch 31, 2024 andDecember 31, 2023 , respectively. Loans past due 30 to 89 days were$1.1 million atMarch 31, 2024 , an increase of$0.9 million fromDecember 31, 2023 . - The allowance for credit losses was
$31.9 million atMarch 31, 2024 , as compared to$32.1 million atDecember 31, 2023 . The ratio of the allowance for credit losses to total loans was 1.79% and 1.80% atMarch 31, 2024 and atDecember 31, 2023 , respectively. The ratio of allowance for credit losses to non-performing loans was 456.8% atMarch 31, 2024 , compared to 442.5%, atDecember 31, 2023 . - Other assets decreased
$2.1 million during the three months endedMarch 31, 2024 , to$8.4 million atMarch 31, 2024 from$10.5 million atDecember 31, 2023 , primarily driven by a decrease of$2.0 million in prepaid taxes. - Total deposits were
$1.56 billion atMarch 31, 2024 , up from$1.55 billion atDecember 31, 2023 , an increase of$10.9 million or 0.7% compared toDecember 31, 2023 . The increase in deposits was attributed to an increase in money market deposits of$77.0 million , and an increase in interest demand deposits of$4.3 million , partially offset by a decrease in non-interest demand deposits of$35.8 million , a decrease in time deposits of$23.3 million , and a decrease in savings deposits of$11.4 million . - Total borrowings decreased
$30.0 million during the three months endedMarch 31, 2024 , to$138.2 million atMarch 31, 2024 from$168.1 million atDecember 31, 2023 , driven by$30.0 million of FHLBNY term borrowing maturities. - Total equity increased to
$288.4 million atMarch 31, 2024 , up from$284.3 million atDecember 31, 2023 , an increase of$4.1 million , or 1.4%, primarily due to the retention of earnings, partially offset by the payment of$2.2 million of cash dividends. Tangible book value per common share atMarch 31, 2024 was$24.08 , compared to$23.75 atDecember 31, 2023 .
CEO outlook and commentary
"Economic turmoil and interest rate confusion continued in the first quarter of 2024. Subsequent to previous Fed comments indicating lowering interest rates in 2024, based on their belief that inflation was coming under control, reports came out indicating inflation is still higher than expected. It now appears that the Feds will need to push back their projected rate cuts. Increased funding costs continued to outpace the increase in the loan portfolio yield in the 1st quarter, reducing net interest income. Slow loan growth continued in the 1st quarter of 2024 as it was difficult to qualify new projects due to higher debt service caused by higher interest rates. However, we are seeing more activity in potential borrowers adjusting to the higher interest rates and beginning to pursue financing. We believe that there is potential to increase the rate of growth of our loan portfolio, although caution is still warranted."
"Continued tight control of our expenses combined with an anticipated improved net interest margin supports projected profitability. The market turmoil dictates continued strength of our Allowance for Credit Losses, which is 1.79%. We are well structured with strong capital and reserves, allowing us to continue to be aware of opportunities in the market, and if positive, move forward while maintaining a safe and sound bank."
Forward Looking Statement Disclaimer
This release may contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties which may cause actual results to differ materially from those currently anticipated due to a number of factors; our ability to maintain a strong capital base, strong earning and strict cost controls; our ability to generate strong revenues with increased interest income and net interest income;; our ability to continue the financial strength and growth of our Company and
(PKBK-ER)
Financial Supplement:
Table 1: Condensed Consolidated Balance Sheets (Unaudited) |
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Condensed Consolidated Balance Sheets |
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2024 |
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2023 |
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(Dollars in thousands) |
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Assets |
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Cash and cash equivalents |
$ 171,093 |
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$ 180,376 |
Investment securities |
15,911 |
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16,387 |
Loans, net of unearned income |
1,785,542 |
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1,787,340 |
Less: Allowance for credit losses |
(31,918) |
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(32,131) |
Net loans |
1,753,624 |
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1,755,210 |
Premises and equipment, net |
5,501 |
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5,579 |
Bank owned life insurance (BOLI) |
28,575 |
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28,415 |
Other assets |
34,369 |
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37,534 |
Total assets |
$ 2,009,073 |
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$ 2,023,500 |
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Liabilities and Equity |
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Non-interest bearing deposits |
$ 196,388 |
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$ 232,189 |
Interest bearing deposits |
1,367,316 |
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1,320,638 |
FHLBNY borrowings |
95,000 |
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125,000 |
Subordinated debentures |
43,158 |
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43,111 |
Other liabilities |
18,825 |
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18,245 |
Total liabilities |
1,720,687 |
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1,739,183 |
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Total shareholders' equity |
288,386 |
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284,317 |
Total equity |
288,386 |
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284,317 |
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Total liabilities and equity |
$ 2,009,073 |
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$ 2,023,500 |
Table 2: Consolidated Income Statements (Unaudited) |
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For the three months ended |
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2024 |
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2023 |
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(Dollars in thousands, |
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Interest income: |
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Interest and fees on loans |
$ 28,083 |
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$ 24,545 |
Interest and dividends on investments |
249 |
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210 |
Interest on deposits with banks |
1,145 |
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1,269 |
Total interest income |
29,477 |
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26,024 |
Interest expense: |
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Interest on deposits |
13,457 |
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7,582 |
Interest on borrowings |
1,966 |
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1,293 |
Total interest expense |
15,423 |
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8,875 |
Net interest income |
14,054 |
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17,149 |
Provision for (recovery of) credit losses |
204 |
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(2,400) |
Net interest income after provision for (recovery of) credit losses |
13,850 |
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19,549 |
Non-interest income |
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Service fees on deposit accounts |
379 |
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1,215 |
Other loan fees |
238 |
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178 |
Bank owned life insurance income |
160 |
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143 |
Other |
285 |
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246 |
Total non-interest income |
1,062 |
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1,782 |
Non-interest expense |
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Compensation and benefits |
3,218 |
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3,641 |
Professional services |
445 |
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593 |
Occupancy and equipment |
641 |
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644 |
Data processing |
366 |
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301 |
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331 |
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225 |
OREO expense |
353 |
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172 |
Other operating expense |
1,181 |
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1,185 |
Total non-interest expense |
6,535 |
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6,761 |
Income before income tax expense |
8,377 |
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14,570 |
Income tax expense |
2,226 |
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3,440 |
Net income attributable to Company |
6,151 |
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11,130 |
Less: Preferred stock dividend |
(6) |
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(7) |
Net income available to common shareholders |
$ 6,145 |
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$ 11,123 |
Earnings per common share |
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Basic |
$ 0.51 |
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$ 0.93 |
Diluted |
$ 0.51 |
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$ 0.92 |
Weighted average common shares outstanding |
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Basic |
11,958,776 |
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11,944,163 |
Diluted |
12,165,772 |
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12,160,793 |
Table 3: Operating Ratios |
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Three months ended |
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2024 |
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2023 |
Return on average assets |
1.27 % |
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2.31 % |
Return on average common equity |
8.60 % |
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16.65 % |
Interest rate spread |
2.24 % |
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2.87 % |
Net interest margin |
3.21 % |
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3.65 % |
Efficiency ratio* |
43.23 % |
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35.71 % |
* Efficiency ratio is calculated using non-interest expense divided by the sum of net interest income and non-interest income. |
Table 4: Asset Quality Data |
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2024 |
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2023 |
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(Amounts in thousands except ratio data) |
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Allowance for credit losses on loans |
$ 31,918 |
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$ 32,131 |
Allowance for credit losses to total loans |
1.79 % |
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1.80 % |
Allowance for credit losses to non-accrual loans |
456.75 % |
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442.51 % |
Non-accrual loans |
$ 6,988 |
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$ 7,261 |
OREO |
$ 1,550 |
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$ 1,550 |
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