[☐] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File No. 000-51338 PARKE BANCORP, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [☒] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2021 or (Exact name of registrant as specified in its charter) New Jersey 65-1241959 (State or ...

Financial Performance - Net income available to common shareholders for Q1 2021 increased by $2.2 million, or 30.8%, to $9.4 million compared to $7.2 million in Q1 2020[131] - Earnings per share for Q1 2021 were $0.79 per basic common share and $0.78 per diluted common share, up from $0.61 and $0.60 respectively in Q1 2020[131] - Net interest income for Q1 2021 increased by $1.6 million, or 10.6%, to $16.8 million compared to $15.2 million in Q1 2020[132] - Non-interest income for Q1 2021 was $2.2 million, an increase of $1.2 million compared to $1.0 million in Q1 2020[134] - Non-interest expense increased by $0.9 million to $5.8 million in Q1 2021 from $4.9 million in Q1 2020[135] - Income tax expense for Q1 2021 was $3.2 million on income before taxes of $12.8 million, resulting in an effective tax rate of 25.4%[136] - Cash provided by operating activities was $11.1 million for the three months ended March 31, 2021, compared to $9.4 million for the same period in the prior year[189] - Cash provided by financing activities was $13.2 million for the three months ended March 31, 2021, down from $127.8 million in the same period last year[191] Assets and Liabilities - Total assets as of March 31, 2021, were $2.10 billion, with total equity of $209.9 million[125] - Total assets increased to $2.10 billion, up $24.8 million or 1.2% from December 31, 2020[142] - Total liabilities rose to $1.89 billion, an increase of $17.5 million or 0.9% from $1.88 billion at December 31, 2020[143] - Total deposits increased by $138.3 million or 8.7% to $1.73 billion at March 31, 2021, compared to $1.59 billion at December 31, 2020[143] - Cash and cash equivalents increased by $45.8 million or 10.0% to $504.4 million at March 31, 2021[145] - Total equity rose to $209.9 million, an increase of $7.3 million or 3.6% from December 31, 2020[159] - Total borrowings decreased by $123.0 million to $144.2 million at March 31, 2021, primarily due to repayments of advances from the Federal Reserve[158] Loan Performance - Provision for loan losses decreased by $0.9 million to $0.5 million in Q1 2021, down from $1.4 million in Q1 2020[133] - As of March 31, 2021, the allowance for loan losses was $30.2 million, an increase from $29.7 million at December 31, 2020, with a ratio of 1.95% to total loans[170] - Delinquent loans totaled $7.6 million, or 0.5% of total loans at March 31, 2021, a decrease of $3.9 million from December 31, 2020[176] - The company recorded a loan loss provision of $0.5 million during the three months ended March 31, 2021, compared to $1.4 million during the same period in 2020[171] - At March 31, 2021, loans delinquent 90 days or more and not accruing interest totaled $7.2 million, a decrease from $8.7 million at December 31, 2020[176] - The ratio of the allowance for loan losses to non-performing assets increased to 412.8% at March 31, 2021, compared to 334.9% at December 31, 2020[170] Capital and Regulatory Compliance - The Company and the Bank were both considered "well capitalized" as of March 31, 2021[194] - Tier 1 leverage ratio for the Company was 10.75% and for Parke Bank was 12.14% as of March 31, 2021[197] - The Company issued $30 million in subordinated notes in July 2020, structured to qualify as Tier 2 capital[198] - The Company has adopted the optional community bank leverage ratio framework effective January 1, 2020, simplifying capital requirements[195] Risk Factors - The company is exposed to risks related to the COVID-19 pandemic, which may impact demand for products and services, loan delinquencies, and overall financial performance[127] - The company participates in the SBA Paycheck Protection Program, which exposes it to potential litigation risks related to loan processing[129] Other Information - The company originated approximately $117.1 million of SBA PPP loans, with $93.4 million outstanding as of March 31, 2021[152] - Total investment securities decreased to $19.1 million, a decline of $2.0 million or 9.5% from December 31, 2020[146] - The investment securities portfolio classified as available for sale was $17.9 million at March 31, 2021[187] - Other Real Estate Owned (OREO) at March 31, 2021 was $0.1 million, down from $4.0 million at December 31, 2020[182] - The allowance for loan and lease losses is based on periodic evaluations and is subject to significant estimates and judgments[207] - There were no changes in the Company's internal control over financial reporting that materially affected its effectiveness during the last quarter[214]

Financial Performance - Net income available to common shareholders decreased by 4.8% to $28.4 million for 2020, down from $29.8 million in 2019[152] - Net interest income rose by 10.1% to $62.6 million in 2020, compared to $56.9 million in 2019, driven by loan portfolio growth[153] - Non-interest income increased by $344,000 to $4.2 million in 2020, primarily due to an increase in fee income from commercial deposit accounts[161] - Total non-interest expense rose by $2.3 million to $20.3 million in 2020, primarily due to increased compensation and benefits[163] - The effective income tax rate increased to 25.7% in 2020 from 24.4% in 2019[164] - Net interest income for the three months ended December 31, 2020, was $17.115 million, an increase from $15.440 million for the previous quarter, reflecting a growth of about 10.8%[212] - Net income for the three months ended December 31, 2020, was $8.132 million, up from $6.543 million in the previous quarter, representing an increase of about 24.3%[212] - Basic net income per common share for the three months ended December 31, 2020, was $0.69, compared to $0.55 for the previous quarter, marking an increase of approximately 25.5%[212] Asset and Liability Management - Total assets increased by 23.6% to $2.08 billion as of December 31, 2020, compared to the previous year[149] - Total liabilities rose by $374.0 million, or 24.9%, to $1.88 billion, driven mainly by an increase in total deposits, which grew by $253.2 million, or 18.9%, to $1.59 billion[166] - Total equity increased by $23.2 million to $202.6 million, reflecting a retention of earnings during the period[167] - Cash and cash equivalents surged by $267.0 million, or 139.3%, to $458.6 million, largely due to deposits from the medical-use cannabis businesses[170] - Loans, net of unearned income, increased to $1.57 billion, up from $1.42 billion, driven by the growth of the commercial loan portfolio related to the Paycheck Protection Program[172] - Total borrowings increased by $119.2 million to $267.2 million, primarily due to the Federal Reserve's Paycheck Protection Program Liquidity Facility[175] Loan Loss Provisions - Provision for loan losses increased to $7.6 million in 2020, up from $2.7 million in 2019, reflecting economic uncertainties related to COVID-19[158] - The allowance for loan losses rose by $7.9 million, or 36.2%, to $29.7 million, influenced by economic conditions related to the COVID-19 pandemic[173] - Provision for loan losses for the three months ended December 31, 2020, was $1.850 million, compared to $2.400 million in the prior quarter, showing a reduction of approximately 22.9%[212] - The allowance for loan and lease losses is based on periodic evaluations and is subject to significant estimates, which may change based on loan portfolio performance and economic conditions[204] Capital Position - The risk-based tier 1 capital ratio was 17.0% at December 31, 2020, indicating a strong capital position[149] - The ratio of rate-sensitive assets to rate-sensitive liabilities was 140.9% as of December 31, 2020, indicating a strong position in managing interest rate sensitivity[190] Market and Economic Conditions - The net interest margin decreased to 3.31% in 2020 from 3.75% in 2019, influenced by changes in interest rates and asset composition[155] - Total deposits from the medical-use cannabis industries increased to $259.4 million, up from $129.2 million, reflecting a significant growth in this sector[166] - The company maintains that off-balance sheet risk is not material to its financial condition or results of operations[195] - The fair value of available-for-sale securities is provided by independent third-party valuation services, ensuring accurate market-based measurements[207] - The implementation of the Current Expected Credit Loss (CECL) standard may require the company to increase its allowance for loan losses significantly after December 15, 2022[210] Commitments and Credit - The Company had unused loan commitments of $144.6 million at December 31, 2020, with expectations that many will expire without being drawn upon[182] - As of December 31, 2020, unused commitments to extend credit amounted to approximately $144.6 million, down from $205.1 million as of December 31, 2019, representing a decrease of about 29.4%[195] - Standby letters of credit with customers decreased to $1.7 million at December 31, 2020, from $20.8 million at December 31, 2019, indicating a decline of approximately 91.8%[196]