Parke Bancorp(PKBK) - 2025 Q1 - Quarterly Report

Financial Performance - For the first quarter of 2025, net income available to common shareholders increased by $1.6 million, or 26.5%, to $7.8 million compared to $6.1 million in the same period last year[90]. - Net interest income for the first quarter of 2025 was $16.6 million, an increase of $2.5 million, or 18.2%, from $14.1 million in the first quarter of 2024[91]. - Non-interest income decreased by $0.2 million to $0.8 million for the first quarter of 2025, primarily due to a decline in service fees on deposit accounts[93]. - Non-interest expense remained unchanged at $6.5 million for the first quarter of 2025 compared to the same period in 2024[94]. - The effective tax rate for the first quarter of 2025 was 24.5%, compared to 26.6% in the same period of 2024[94]. - Cash provided by operating activities was $7.0 million for the three months ended March 31, 2025, down from $8.4 million in the prior year[118]. Asset and Liability Management - Total assets as of March 31, 2025, were $2.14 billion, with total equity of $305.9 million[89]. - Total assets decreased by $0.4 million, or 0.02%, to $2.14 billion as of March 31, 2025, primarily due to a $12.5 million decrease in cash and cash equivalents[99]. - Total liabilities decreased by $6.3 million, or 0.3%, to $1.84 billion, mainly due to a $40.0 million reduction in FHLBNY borrowings[100]. - Total equity increased by $5.9 million, or 2.0%, to $305.9 million, primarily due to retained earnings, despite $2.1 million in cash dividends paid[101]. - Total deposits rose by $35.6 million, or 2.2%, to $1.67 billion, with significant increases in money market deposits[110]. - Cash and cash equivalents decreased by $12.5 million, or 5.6%, to $209.0 million, attributed to increased loans and decreased borrowings[102]. - Total borrowings decreased to $148.3 million, down from $188.3 million, primarily due to a $40.0 million reduction in FHLBNY advances[112]. Loan and Credit Quality - Interest income increased by $4.4 million, or 14.8%, primarily due to a $3.4 million increase in interest and fees on loans, attributed to higher loan balances and market interest rates[91]. - The provision for credit losses for the first quarter of 2025 was $0.6 million, up from $0.2 million in the same period of 2024, reflecting an increase in the commercial loan portfolio[92]. - The average yield on loans increased to 6.80% in the first quarter of 2025 from 6.30% in the same period of 2024[97]. - The net interest margin improved to 3.21% for the first quarter of 2025, up from 2.97% in the same period of 2024[97]. - Loans receivable increased by $15.0 million, or 0.8%, to $1.88 billion, driven by growth in commercial owner-occupied and non-owner-occupied portfolios[109]. - The allowance for credit losses is based on evaluations of loan and lease portfolios, with significant reliance on historical data and qualitative factors[127]. - The determination of the allowance for credit losses requires significant judgment and may lead to future earnings adjustments if actual outcomes differ from estimates[128]. Capital Adequacy - The Company and Parke Bank reported Tier 1 leverage ratios of 14.99% and 16.36%, respectively, as of March 31, 2025, indicating strong capital adequacy[124]. - The Company has maintained its status as "well capitalized" under federal banking regulations as of March 31, 2025[124]. - Total equity increased by $5.9 million to $319.3 million as of March 31, 2025, driven by net income of $7.8 million after dividends of $2.1 million[122]. Legal and Regulatory Matters - The Company is currently involved in a legal matter with Absecon Gardens Condominium Association, with claimed damages totaling approximately $1.7 million[131]. - Management believes that no material losses are anticipated from various contingent liabilities and legal actions outstanding[133]. - The Company has not experienced any changes in internal control over financial reporting that materially affect its operations during the last fiscal quarter[130]. - The Company’s accounting policies require management to make estimates and assumptions that could significantly impact reported financial results[125]. - The Company actively reviews its capital strategies to align with business risks and growth opportunities[121].