Parke Bancorp(PKBK) - 2024 Q3 - Quarterly Report

Financial Performance - Net income available to common shareholders for Q3 2024 increased by 634.1% to $7.5 million compared to $1.0 million in Q3 2023[98] - Net income for the nine months ended September 30, 2024, decreased by 0.8% to $20.1 million, primarily due to a $5.6 million decrease in net interest income[105] - Net interest income for Q3 2024 decreased by 6.1% to $14.7 million, primarily due to a $4.0 million increase in interest expense[99] - Net interest income for the nine months ended September 30, 2024, decreased by 11.5% to $43.1 million, with interest expense increasing by 44.5%[106] - Non-interest income for Q3 2024 decreased by 50% to $0.9 million, primarily due to a $0.7 million decrease in deposit service fees[102] - Non-interest income for the nine months ended September 30, 2024, decreased by 39.3% to $3.2 million, primarily due to a $2.1 million decrease in deposit service fees[108] - Non-interest expense for Q3 2024 decreased by 59.8% to $6.4 million, primarily due to a non-recurring $9.5 million loss in Q3 2023[103] - The net interest margin for the nine months ended September 30, 2024, was 2.97%, compared to 3.21% in the same period of 2023[112][114] Balance Sheet and Asset Management - Total assets as of September 30, 2024, were $2.07 billion, with total equity of $296.5 million[97] - Total assets increased by $41.9 million (2.1%) to $2.07 billion at September 30, 2024, driven by growth in loans receivable and FHLBNY restricted stock[115] - Loans increased by $52.6 million (2.9%) to $1.84 billion, primarily due to growth in construction, multi-family, and CRE owner portfolios[115][118] - Loans receivable increased by $52.6 million (2.9%) to $1.84 billion at September 30, 2024, driven by growth in construction, CRE-owner occupied, and Residential - Multifamily loan portfolios[126] - Cash and cash equivalents decreased by $7.9 million (4.4%) to $172.4 million, primarily due to loan growth[115][118] - Cash and cash equivalents decreased by $7.9 million (4.4%) to $172.4 million at September 30, 2024, primarily due to an increase in loans[119] - Investment securities declined by $1.1 million (6.8%) to $15.3 million, reflecting a reduction in the portfolio[115][118] - Total investment securities decreased by $1.1 million (6.8%) to $15.3 million at September 30, 2024, attributed to normal pay downs[120] Liabilities and Equity - Total liabilities rose by $29.8 million (1.7%) to $1.77 billion, mainly due to a $6.1 million increase in deposits and a $20.1 million increase in borrowings[116][118] - Total equity grew by $12.1 million (4.3%) to $296.5 million, driven by retained earnings, partially offset by $6.4 million in cash dividends and $2.0 million in stock repurchases[117][118] - Total equity increased by $12.1 million (4.3%) to $296.5 million at September 30, 2024, primarily due to the retention of earnings[130] - Interest-bearing deposits increased by $85.8 million (6.9%) to $1.33 billion, with brokered certificates of deposit growing by $58.5 million (49.2%)[112][116] - FHLBNY borrowings rose by $20.0 million (16.0%) to $145.0 million, contributing to the increase in total liabilities[116][118] - Total deposits increased by $6.1 million (0.4%) to $1.56 billion at September 30, 2024, primarily due to increases in brokered time deposits and time deposits[127] - Total borrowings increased by $20.0 million to $188.3 million at September 30, 2024, due to an increase in FHLBNY advances[129] Credit Losses and Allowances - Provision for credit losses in Q3 2024 was a recovery of $0.1 million, compared to a provision of $0.3 million in Q3 2023[100] - Provision for credit losses for the nine months ended September 30, 2024, was $0.5 million, compared to a recovery of $1.6 million in the same period of 2023[107] - The company's allowance for credit losses is based on periodic evaluations of loan and lease portfolios, broken down by vintage, and includes both specific and general components[143] - The specific allowance is calculated for loans and leases that do not share similar risk characteristics, including collateral-dependent loans[143] - The general allowance covers loans and leases with expected credit losses that are not yet individually identifiable[143] - The allowance calculation process is influenced by loan portfolio performance, borrower financial strength, industry outlook, and economic conditions[144] Cash Flow Activities - Cash provided by operating activities increased to $26.6 million in the nine months ended September 30, 2024, compared to $14.0 million in the prior year[135] - Cash used in investing activities increased to $52.3 million in the nine months ended September 30, 2024, primarily due to higher loan origination[136] - Cash provided by financing activities was $17.7 million in the nine months ended September 30, 2024, compared to cash used in financing activities of $21.4 million in the prior year[137] Capital and Share Repurchases - The Company and the Bank were both considered "well capitalized" with Tier 1 leverage ratios of 15.46% and 16.91%, respectively, at September 30, 2024[140] - The company repurchased 100,000 shares of its common stock during the quarter ended September 30, 2024, at an average price of $20.10 per share[152] - The company announced a share repurchase program for up to approximately 5% of its outstanding shares of common stock on August 2, 2024[152] Legal Matters - The company is defending a legal matter involving alleged damages of approximately $1.7 million related to the Absecon Gardens Condominium project[147]