Parke Bancorp(PKBK) - 2024 Q1 - Quarterly Report

Financial Performance - For Q1 2024, net income available to common shareholders decreased by $5.0 million, or 44.8%, to $6.1 million compared to $11.1 million in Q1 2023[92]. - Net interest income for Q1 2024 was $14.1 million, a decrease of $3.0 million, or 18.1%, from $17.1 million in Q1 2023, primarily due to a $6.5 million increase in interest expense[94]. - Non-interest income decreased by $0.7 million to $1.1 million in Q1 2024, primarily due to a decrease in service fees on deposit accounts[96]. - Non-interest expense decreased by $0.2 million, or 3.4%, to $6.5 million in Q1 2024, mainly due to lower compensation and benefits[97]. - Income tax expense for Q1 2024 was $2.2 million on income before taxes of $8.4 million, resulting in an effective tax rate of 26.6%[98]. - The Company reported net income of $6.2 million for the period, net of common and preferred stock dividends of $2.2 million[126]. Asset and Liability Management - Total assets as of March 31, 2024, were $2.01 billion, with total equity of $288.4 million[91]. - Total assets decreased by $14.4 million, or 0.7%, to $2.01 billion as of March 31, 2024, primarily due to a decrease in cash and cash equivalents[104]. - Total liabilities decreased by $18.5 million, or 1.1%, to $1.72 billion, mainly due to a $30 million decrease in borrowings[105]. - Total deposits increased by $10.9 million, or 0.7%, to $1.56 billion, driven by an increase in money market balances[115]. - Cash and cash equivalents decreased by $9.3 million, or 5.1%, to $171.1 million, primarily due to repayment of borrowings[107]. - Total borrowings decreased to $138.2 million at March 31, 2024, from $168.1 million at December 31, 2023, a decrease of $30.0 million in FHLBNY advances[117]. Loan Portfolio - Loans receivable slightly decreased to $1.786 billion from $1.787 billion, with a notable decrease in construction and commercial non-owner occupied loans[114]. - The residential multifamily loan portfolio increased by 24.7% compared to the previous quarter[114]. - Total outstanding loan commitments were $112.8 million at March 31, 2024, with funding requirements expected to be met through normal deposit growth[122]. Cash Flow - Cash provided by operating activities was $8.4 million for the three months ended March 31, 2024, compared to $10.5 million for the same period in 2023[123]. - Cash provided by investing activities was $3.6 million for the three months ended March 31, 2024, compared to cash used of $14.4 million in the same period last year[124]. - Cash used in financing activities decreased to $21.2 million for the three months ended March 31, 2024, from $32.3 million in the same period in 2023[125]. Capital and Regulatory Compliance - The Company and the Bank were both considered "well capitalized" under capital rules as of March 31, 2024[128]. - Total equity increased to $288.4 million at March 31, 2024, from $284.3 million at December 31, 2023, an increase of $4.1 million, or 1.4%[118]. - Estimated uninsured deposits decreased by $21.5 million, or 3.5%, to $601.4 million[116]. - Cash position was $171.1 million at March 31, 2024, with liquidity primarily supported by core deposits and interest-bearing accounts[119]. Interest Rate Environment - The Federal Reserve has raised the Fed Funds rate by 525 basis points since March 2022, impacting interest expenses significantly[83]. - The interest rate spread decreased to 1.90% from 2.87% year-over-year[102]. - Interest income increased by $3.5 million, or 13.3%, in Q1 2024, driven by higher loan balances and market interest rates[94].