Parke Bancorp(US:PKBK)2023-03-15 20:07Financial Performance - Net income available to common shareholders for 2022 was $41.8 million, representing a 2.6% increase from $40.7 million in 2021[141]. - Net income for 2022 was $41,823,000, a 2.1% increase from $40,975,000 in 2021[250]. - The Company reported net income available to common shareholders of $41.796 million for 2022, an increase from $40.732 million in 2021, resulting in basic earnings per common share of $3.51 for 2022 compared to $3.43 for 2021[291]. - Comprehensive income attributable to the Company rose from $40,542 thousand in 2021 to $41,052 thousand in 2022, an increase of approximately 1.3%[246]. - Earnings per common share (basic) increased from $3.43 in 2021 to $3.51 in 2022, a rise of about 2.3%[245]. Asset and Liability Overview - Total assets as of December 31, 2022, were $1.98 billion, with total liabilities of $1.72 billion and total shareholders' equity of $266.0 million[139]. - Total assets decreased by $151.5 million, or 7.1%, to $1.98 billion at December 31, 2022, primarily due to a $414.4 million decrease in cash and cash equivalents[159]. - Total liabilities decreased by $185.2 million, or 9.7%, to $1.72 billion at December 31, 2022, primarily due to a decrease in total deposits[160]. - Total shareholders' equity increased by $33.7 million, or 14.5%, to $266.0 million at December 31, 2022, mainly due to retained earnings[170]. Loan Portfolio - Total loans outstanding increased by $266.6 million, or 18.0%, to $1.75 billion at December 31, 2022, driven by increases in residential loans, commercial non-owner occupied loans, and construction loans[166]. - The company’s loan portfolio totaled $1.8 billion as of December 31, 2022, with an allowance for loan losses (ALL) of $31.8 million, representing approximately 1.76% of the loan portfolio[221]. - Net loans increased from $1,455,002 thousand in 2021 to $1,719,614 thousand in 2022, representing a growth of about 18.2%[244]. - The total current loans as of December 31, 2022, were $1,734,958 thousand, indicating a healthy loan portfolio[305]. Interest Income and Expenses - Net interest income increased by $4.2 million, or 6.1%, to $73.3 million in 2022 compared to $69.1 million in 2021[142]. - Interest income for 2022 rose to $87.5 million, a 6.6% increase from $82.1 million in 2021, primarily due to higher average outstanding loan balances and interest rates[142]. - Total interest-bearing deposits amounted to $1.18 billion in 2022, with an interest expense of $14.2 million, a 9.3% increase from $13.0 million in 2021[145]. - The net interest margin improved to 3.77% in 2022 from 3.35% in 2021, reflecting better interest income management[145]. Non-Interest Income and Expenses - Non-interest income decreased by $0.4 million to $8.4 million in 2022, primarily due to a decline in fee income from commercial deposit accounts[154]. - Non-interest expense increased by $1.3 million to $23.8 million in 2022, primarily due to a $1.4 million increase in other operating expenses and a $1.1 million increase in compensation and benefits[157]. - Total non-interest income decreased from $8,799 thousand in 2021 to $8,382 thousand in 2022, a decline of approximately 4.7%[245]. - Total non-interest expense increased from $22,503 thousand in 2021 to $23,833 thousand in 2022, an increase of about 5.9%[245]. Capital Adequacy - The risk-based tier 1 capital ratio was 19.3% at December 31, 2022, indicating strong capital adequacy[139]. - The allowance for loan losses increased by $2.0 million to $31.8 million, or 6.7%, at December 31, 2022, due to provisions related to the growing loan portfolio[167]. - The allowance for loan losses increased from $29,845 thousand in 2021 to $31,845 thousand in 2022, reflecting a rise of about 6.7%[244]. Cash Flow and Liquidity - Net cash provided by operating activities rose to $43,450,000 in 2022, compared to $38,641,000 in 2021, reflecting improved operational efficiency[250]. - Total cash and cash equivalents decreased to $182,150,000 at the end of 2022 from $596,553,000 at the end of 2021, indicating liquidity challenges[250]. - The company reported a net decrease in noninterest-bearing deposits of $(201,264,000) in 2022, contrasting with an increase of $124,950,000 in 2021, suggesting shifts in customer deposit behavior[250]. Investment Securities - The Company recognized a net unrealized loss of $1.039 million on investment securities for the year ended December 31, 2022, compared to a loss of $294,000 in 2021[290]. - The total available for sale securities decreased from $13.351 million in 2021 to $9.366 million in 2022, with a significant unrealized loss of $712,000[298]. - The company’s held to maturity securities also saw a decline in fair value from $10.025 million in 2021 to $7.805 million in 2022, with unrealized losses totaling $1.629 million[299]. Risk Management - Management evaluates qualitative risk factors affecting the loan portfolio on a quarterly basis, considering factors such as asset quality, loan volume, and economic trends[221]. - The qualitative adjustments within the ALL were identified as critical audit matters due to their high degree of subjectivity, requiring significant auditor judgment[222]. - The company maintains the ALLL at a level deemed appropriate to absorb estimated probable credit losses incurred in the loan portfolios[306]. Regulatory Compliance and Auditing - The company concluded that its internal control over financial reporting was effective as of December 31, 2022[212]. - The audits were conducted in accordance with PCAOB standards, ensuring reasonable assurance that the financial statements are free of material misstatement[218]. - The Company did not recognize any interest or penalties related to income tax during the years ended December 31, 2022, and 2021, and has no accrual for uncertain tax positions as of December 31, 2022[286].