0001315399FALSE00013153992024-01-242024-01-24


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) January 24, 2024
PARKE BANCORP, INC.
(Exact name of registrant as specified in its charter)
New Jersey0-51338  65-1241959
(State or other jurisdiction(Commission(IRS Employer
of incorporation)File Number) Identification No.)
601 Delsea Drive, Washington Township, New Jersey
08080
(Address of principal executive offices)  (Zip Code)
Registrant’s telephone number, including area code: (856) 256-2500

Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, Par Value $0.10 per share PKBKThe Nasdaq Stock Market, LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


PARKE BANCORP, INC.
INFORMATION TO BE INCLUDED IN THE REPORT

Section 2 - Financial Information

Item 2.02 Results of Operations and Financial Condition.

On January 24, 2024, Parke Bancorp, Inc. issued a press release to report earnings for the quarter and year ended December 31, 2023. A copy of the press release is furnished with this Current Report as Exhibit 99.1 hereto and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

Exhibit No.Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PARKE BANCORP, INC.
Date: January 24, 2024By/s/ Jonathan D. Hill
Jonathan D. Hill
Senior Vice President and Chief Financial Officer
(Duly Authorized Representative)














untitleda32.jpg

Parke Bancorp, Inc.
601 Delsea Drive,
Washington Township, NJ 08080

Contact:
Vito S. Pantilione, President and CEO
Jonathan D. Hill, Senior Vice President and CFO
(856) 256-2500

PARKE BANCORP, INC. ANNOUNCES FOURTH QUARTER 2023 EARNINGS

Highlights:
Net Income:
$8.2 million for Q4 2023
Revenue:$31.8 million for Q4 2023
Total Assets:
$2.02 billion, increased 1.9% from December 31, 2022
Total Loans:
$1.79 billion, increased 2.0% from December 31, 2022
Total Deposits:
$1.55 billion, decreased 1.5% from December 31, 2022
                  
WASHINGTON TOWNSHIP, NJ, January 24, 2024 - Parke Bancorp, Inc. (“Parke Bancorp” or the "Company") (NASDAQ: “PKBK”), the parent company of Parke Bank (the "Bank"), announced its operating results for the quarter ended December 31, 2023.
Highlights for the fourth quarter and year ended December 31, 2023:
•Net income available to common shareholders was $8.2 million, or $0.68 per basic common share and $0.67 per diluted common share, for the three months ended December 31, 2023, a decrease of $2.3 million, or 21.8%, compared to net income available to common shareholders of $10.4 million, or $0.88 per basic common share and $0.86 per diluted common share, for the same quarter in 2022. The decrease is primarily driven by lower net interest income, partially offset by a decrease in the provision for credit losses.

•Net interest income decreased 18.0% to $15.5 million for the three months ended December 31, 2023, compared to $18.9 million for the same period in 2022.

•Provision for credit losses was a recovery of $0.5 million for the three months ended December 31, 2023, compared to a provision of $0.9 million for the same period in 2022.

•Non-interest income decreased $0.3 million, or 18.0%, to $1.5 million for the three months ended December 31, 2023, compared to $1.8 million for the same period in 2022.

•Non-interest expense increased $0.1 million, or 2.2%, to $6.3 million for the three months ended December 31, 2023, compared to $6.2 million for the same period in 2022.

•Net income available to common shareholders was $28.4 million, or $2.38 per basic common share and $2.35 per diluted common share, for the fiscal year ended December 31, 2023, a decrease of $13.4 million, or 32.0%, compared to net income available to common shareholders of $41.8 million, or $3.51 per basic














common share and $3.44 per diluted common share, for the fiscal year ended December 31, 2022. The decrease was primarily due to a $11.4 million increase in non-interest expenses resulting from the one-time
recognition of a $9.5 million contingent loss previously disclosed by the Company in the third quarter as well as an increase in compensation and benefits expense, lower net interest income, and lower non-interest income, partially offset by lower provision for credit losses.

•Net interest income decreased 12.4% to $64.2 million for the fiscal year ended December 31, 2023, compared to $73.3 million for the same period in 2022.

•Provision for credit losses decreased $3.9 million to a recovery of $2.1 million for the fiscal year ended December 31, 2023, compared to a provision of $1.8 million for the same period in 2022.

•Non-interest expense increased $11.4 million, or 48.0%, to $35.3 million, for the fiscal year ended December 31, 2023, compared to $23.8 million for the same period in 2022. The increase in non-interest expense in 2023 was primarily due to the recognition of the $9.5 million contingent loss referred to above.

The following is a recap of the significant items that impacted the fourth quarter of 2023 and the year ended December 31, 2023:
Interest income increased $5.3 million for the fourth quarter of 2023 compared to the same period in 2022, primarily due to an increase in interest and fees on loans of $5.1 million to $28.5 million, due to higher average outstanding loan balances and higher interest rates. Additionally, interest earned on average deposits held at the Federal Reserve Bank ("FRB") increased to $1.5 million from $1.4 million, due to higher interest rates paid on such deposits. For the year ended December 31, 2023, interest income increased $25.2 million from the same period in 2022, primarily driven by an increase in interest and fees on loans of $23.2 million, due to higher average outstanding loan balances and higher interest rates, as well as an increase in interest earned on average deposits held at the FRB of $1.8 million.

Interest expense increased $8.7 million for the three months ended December 31, 2023, compared to the same period in 2022, primarily due to higher market interest rates, as well as a change in the deposit mix with a reduction in non-interest bearing demand deposits and an increase in brokered deposits. For the year ended December 31, 2023, interest expense increased $34.3 million, primarily due to higher market interest rates, as well as a change in the deposit mix with a reduction in non-interest bearing demand deposits and an increase in brokered deposits.

The provision for credit losses decreased $1.3 million for the three months ended December 31, 2023, compared to the same period in 2022, as a result of a decrease in vintage loss rates partially offset by an increase in outstanding loan balances. For the year ended December 31, 2023, the provision for credit losses decreased $3.9 million from the same period in 2022 due to a decrease in vintage loss rates and a change in the loan portfolio mix, partially offset by an increase in outstanding loan balances.

Non-interest income decreased $0.3 million for the three months ended December 31, 2023 compared to the same period in 2022, primarily as a result of a decrease in service fees on deposit accounts of $0.4 million, partially offset by an increase in income on Bank Owned Life Insurance of $0.1 million. For the year ended December 31, 2023, non-interest income decreased $1.7 million, primarily driven by a decrease in service fees on deposit accounts of $1.1 million, a decrease in loan fees of $0.5 million, and a decrease in the net gain on OREO of $0.3 million, partially offset by an increase in Bank Owned Life Insurance Income of $0.2 million. The decrease in service fees on deposit accounts was primarily attributable to a decline in fees from our cannabis related businesses deposit accounts.

Non-interest expense increased $0.1 million for the three months ended December 31, 2023 compared to the same period in 2022, primarily driven by an increase in OREO expense of $0.1 million. For the twelve months ended December 31, 2023, non-interest expense increased $11.4 million, mainly due to a $9.1 million increase in other operating expenses resulting from the recognition of the previously mentioned $9.5 million contingent loss, an increase in compensation and benefits of $1.5 million, an increase in OREO expense of $0.4 million,














an increase in FDIC insurance and other assessments of $0.2 million, and an increase in data processing of $0.1 million. The increase in compensation and benefits was primarily due to a $0.5 increase in salaries, and a $0.9 million decrease in deferred loan origination costs, attributable to a reduction in the number of loans originated.

Income tax expense decreased $0.3 million for the fourth quarter of 2022 and decreased $5.0 million for the quarter and fiscal year ended December 31, 2023, respectively, compared to the same periods in 2022. The effective tax rate for the fourth quarter of 2023 and the year ended December 31, 2023 was 26.8% and 24.5%, respectively, compared to 23.8% and 25.4% for the same periods in 2022.

December 31, 2023 discussion of financial condition
•Total assets increased to $2.02 billion at December 31, 2023, from $1.98 billion at December 31, 2022, an increase of $38.6 million, or 1.9%.
•Cash and cash equivalents totaled $180.4 million at December 31, 2023, as compared to $182.2 million at December 31, 2022.
•The investment securities portfolio decreased to $16.4 million at December 31, 2023, from $18.7 million at December 31, 2022, a decrease of $2.4 million, or 12.6%, primarily due to pay downs of securities.
•Gross loans increased to $1.79 billion at December 31, 2023, from $1.75 billion at December 31, 2022, an increase of $35.9 million or 2.0%. The increase in loans was primarily due to an increase in residential 1 to 4 family investment portfolio of $41.8 million; commercial owner occupied of $16.4 million; commercial non-owner occupied of $12.2 million, and residential 1 to 4 family of $11.1 million, partially offset by a decrease in construction other of $27.8 million.
•Nonperforming loans at December 31, 2023 decreased to $7.3 million, representing 0.41% of total loans, a decrease of $9.0 million, from $16.3 million of nonperforming loans at December 31, 2022. The decrease was driven by two commercial real estate non-owner occupied loans that migrated to performing status during the year. OREO at December 31, 2023 was $1.6 million, which was unchanged from $1.6 million at December 31, 2022. Nonperforming assets (consisting of nonperforming loans and OREO) represented 0.44% and 0.90% of total assets at December 31, 2023 and December 31, 2022, respectively. Loans past due 30 to 89 days were $3.9 million at December 31, 2023, an increase of $3.5 million from December 31, 2022.
•The allowance for credit losses was $32.1 million at December 31, 2023, as compared to $31.8 million at December 31, 2022. The ratio of the allowance for credit losses to total loans was 1.80% and 1.82% at December 31, 2023 and at December 31, 2022, respectively. The ratio of allowance for credit losses to non-performing loans was 442.5% at December 31, 2023, compared to 195.7%, at December 31, 2022.
•Total deposits were $1.55 billion at December 31, 2023, down from $1.58 billion at December 31, 2022, a decrease of $23.2 million or 1.5% compared to December 31, 2022. The decrease in deposits was attributed to a decrease in non-interest demand deposits of $120.4 million, savings deposits of $105.1 million, and interest checking of $20.1 million, partially offset by an increase in money market and time deposit balances of $222.4 million. Brokered deposits, included in the above balances, increased $82.7 million, to $223.4 million at December 31, 2023, from $140.8 million at December 31, 2022. Deposits from our cannabis related businesses decreased $80.7 million to $96.7 million at December 31, 2023, compared to $177.3 million at December 31, 2022, due to increased competition for such deposits, and consolidation within the cannabis industry.

•Total borrowings increased $42.0 million during the twelve months ended December 31, 2023, to $168.1 million at December 31, 2023 from $126.1 million at December 31, 2022, driven by an increase of $41.9 million in Federal Home Loan Bank of New York ("FHLBNY") advances.
.














•Total equity increased to $284.3 million at December 31, 2023, up from $266.0 million at December 31, 2022, an increase of $18.3 million, or 6.9%, primarily due to the retention of earnings, partially offset by the payment of $8.6 million of cash dividends.

CEO outlook and commentary
Vito S. Pantilione, President and Chief Executive Officer of Parke Bancorp, Inc. and Parke Bank, provided the following statement:

"2023 was a challenging year for the country, our region and the banking industry. Inflation remained high, although some relief was experienced in the 4th quarter and interest rates remained high after an unprecedented 550 basis point increase over the last 18 months. There were also bank failures in 2023. World military conflicts continue to grow creating concern for the many innocent lives being lost and the uncertainty of the effect these wars are having on the world economy, including the United States. The concern over the future of our economy is growing, which some interpret as being confirmed by Fed statements indicating the possibility of lowering interest rates in 2024."
"The challenges in 2023 were compounded for our Company with the booking of a $9.5 million contingent loss. We previously reported the $9.5 million theft by one of our armored car courier companies and, are aggressively pursuing multiple avenues of restitution, including existing insurance policies."
"Maintaining deposits remained challenging in 2023, triggering higher rates and the offering of special deposit programs. This caused a substantial increase in our interest expense as rates continued to climb. If interest rates do moderate in 2024, we anticipate seeing a lower cost of funding and stronger deposits. Loan growth was less than projected, again due to higher interest rates and difficulties in the real estate industry. It became more difficult to qualify new loan requests with the higher debt service. Increased rents did not keep pace with the rising debt service cost. We have, however, seen an increase in loan activity in the beginning of 2024 due to the anticipated interest rate cuts."
"Although 2023 had many challenges as mentioned above, our Company generated a Return On Average Assets of 1.45% and a Return On Average Equity over 10%. The probability of a volatile, and potentially worsening, economy and market still exists. We continue to be well structured to face these challenges with strong capital, strong asset quality and strong reserves. This enables our company to move forward with a focus on growth and continued profitability, although with caution. The Board and Management of our company are committed to supporting the confidence and investment of our shareholders."

Forward Looking Statement Disclaimer

This release may contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties which may cause actual results to differ materially from those currently anticipated due to a number of factors; our ability to maintain strong capital, strong asset quality and strong reserves; our ability to recover or partially offset any losses resulting from loss of stored or missing cash; our ability to generate strong revenues with increased interest income and net interest income;; our ability to continue the financial strength and growth of our Company and Parke Bank; our ability to continue to increase shareholders’ equity, good credit quality; our ability to be well structured to face challenging economic conditions; our ability to ensure that our loan loss provision is well positioned for the future; our ability to continue to reduce our nonperforming loans and delinquencies and the expenses associated with them; our ability to realize a high recovery rate on disposition of troubled assets; our ability to continue to pay a dividend in the future; our ability to enhance shareholder value in the future; our ability to continue growing our Company, our earnings and shareholders’ equity; and our ability to continue to grow our loan portfolio; the possibility of additional corrective actions or limitations on the operations of Parke Bancorp, Inc. and Parke Bank being imposed by banking regulators, therefore, readers should not place undue reliance on any forward-looking statements. Parke Bancorp, Inc. does not undertake, and specifically disclaims, any obligations to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such circumstance.

(PKBK-ER)














Financial Supplement:

Table 1: Condensed Consolidated Balance Sheets (Unaudited)
Parke Bancorp, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
December 31,December 31,
20232022
 (Dollars in thousands)
Assets
Cash and cash equivalents$180,376 $182,150 
Investment securities16,387 18,744 
Loans, net of unearned income1,787,340 1,751,459 
Less: Allowance for credit losses(32,131)(31,845)
Net loans 1,755,209 1,719,614 
Premises and equipment, net5,579 5,958 
Bank owned life insurance (BOLI)28,415 28,145 
Other assets37,534 30,304 
   Total assets$2,023,500 $1,984,915 
Liabilities and Equity
Non-interest bearing deposits$232,189 $352,546 
Interest bearing deposits1,320,638 1,223,436 
FHLBNY borrowings125,000 83,150 
Subordinated debentures43,111 42,921 
Other liabilities18,245 16,828 
   Total liabilities1,739,183 1,718,881 
Total shareholders’ equity 284,317 266,034 
   Total equity284,317 266,034 
   Total liabilities and equity$2,023,500 $1,984,915 






















Table 2: Consolidated Income Statements (Unaudited)
 
For the three months ended December 31,
For the twelve months ended December 31,
 2023202220232022
 (Dollars in thousands, except share data)
Interest income:
Interest and fees on loans$28,459 $23,389 $106,061 $82,900 
Interest and dividends on investments303 207 1,048 772 
Interest on deposits with banks1,537 1,407 5,595 3,811 
Total interest income30,299 25,003 112,704 87,483 
Interest expense:
Interest on deposits13,214 5,178 41,259 11,071 
Interest on borrowings1,570 909 7,231 3,085 
Total interest expense14,784 6,087 48,490 14,156 
Net interest income15,515 18,916 64,214 73,327 
(Recovery of) provision for credit losses(451)850 (2,051)1,800 
Net interest income after (recovery of) provision for credit losses15,966 18,066 66,265 71,527 
Non-interest income  
Service fees on deposit accounts724 1,165 3,872 4,927 
Gain on sale of SBA loans— — — 98 
Other loan fees239 241 851 1,379 
Bank owned life insurance income294 144 737 568 
Net gain on sale and valuation adjustment of OREO— — 38 328 
Other223 255 1,194 1,082 
Total non-interest income1,480 1,805 6,692 8,382 
Non-interest expense  
Compensation and benefits2,925 2,871 12,340 10,835 
Professional services583 579 2,328 2,249 
Occupancy and equipment666 631 2,604 2,522 
Data processing348 308 1,385 1,293 
FDIC insurance and other assessments332 239 1,292 1,050 
OREO expense229 89 839 493 
Other operating expense1,204 1,434 14,479 5,391 
Total non-interest expense6,287 6,151 35,267 23,833 
Income before income tax expense11,159 13,720 37,690 56,076 
Income tax expense2,986 3,266 9,228 14,253 
Net income attributable to Company8,173 10,454 28,462 41,823 
Less: Preferred stock dividend (6)(7)(26)(27)
Net income available to common shareholders$8,167 $10,447 $28,436 $41,796 
Earnings per common share  
Basic$0.68 $0.88 $2.38 $3.51 
Diluted$0.67 $0.86 $2.35 $3.44 
Weighted average common shares outstanding  
Basic11,947,530 11,934,021 11,945,740 11,918,319 
Diluted12,133,511 12,166,044 12,137,052 12,175,440 















Table 3: Operating Ratios
Three months endedTwelve months ended
December 31,December 31,
2023202220232022
Return on average assets1.64 %2.13 %1.45 %2.10 %
Return on average common equity11.50 %15.77 %10.21 %16.72 %
Interest rate spread2.17 %3.33 %2.42 %3.08 %
Net interest margin3.17 %3.91 %3.34 %3.77 %
Efficiency ratio*36.99 %29.68 %48.34 %29.17 %
* Efficiency ratio is calculated using non-interest expense divided by the sum of net interest income and non-interest income.

Table 4: Asset Quality Data
December 31,December 31,
20232022
(Amounts in thousands except ratio data)
Allowance for credit losses$32,131 $31,845 
Allowance for credit losses to total loans1.80 %1.82 %
Allowance for credit losses to non-accrual loans442.51 %195.66 %
Non-accrual loans$7,261 $16,276 
OREO$1,550 $1,550 


v3.23.4
Cover
Jan. 24, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jan. 24, 2024
Entity Registrant Name PARKE BANCORP, INC.
Entity Incorporation, State or Country Code NJ
Entity File Number 0-51338
Entity Tax Identification Number 65-1241959
Entity Address, Address Line One 601 Delsea Drive
Entity Address, City or Town Washington Township
Entity Address, State or Province NJ
Entity Address, Postal Zip Code 08080
City Area Code 856
Local Phone Number 256-2500
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, Par Value $0.10 per share
Trading Symbol PKBK
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001315399
Amendment Flag false
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