Parke Bancorp(PKBK) - 2021 Q1 - Quarterly Report

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]