0001315399FALSE00013153992024-04-012024-06-30


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) July 19, 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 July 19, 2024, Parke Bancorp, Inc. issued a press release to report earnings for the three and six months ended June 30, 2024. 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 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: July 19, 2024By/s/ Jonathan D. Hill
Jonathan D. Hill
Senior Vice President and Chief Financial Officer
(Duly Authorized Representative)














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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 SECOND QUARTER 2024 EARNINGS

Highlights:
Net Income:
$6.5 million for Q2 2024, increased 5.0% over Q1 2024
Revenue:$31.4 million for Q2 2024, increased 8.8% over Q1 2024
Total Assets:
$2.03 billion, increased 0.2% over December 31, 2023
Total Loans:
$1.81 billion, increased 1.0% over December 31, 2023
Total Deposits:
$1.50 billion, decreased 3.6% from December 31, 2023
                  
WASHINGTON TOWNSHIP, NJ, July 19, 2024 - Parke Bancorp, Inc. (“Parke Bancorp” or the "Company") (NASDAQ: “PKBK”), the parent company of Parke Bank, announced its operating results for the three and six months ended June 30, 2024.
Highlights for the three and six months ended June 30, 2024:
•Net income available to common shareholders was $6.5 million, or $0.54 per basic common share and $0.53 per diluted common share, for the three months ended June 30, 2024, a decrease of $1.7 million, or 20.6%, compared to net income available to common shareholders of $8.1 million, or $0.68 per basic common share and $0.67 per diluted common share, for the three months ended June 30, 2023. The decrease was primarily due to higher interest expense and lower non-interest income.

•Net interest income decreased $1.6 million, or 9.8%, to $14.3 million for the three months ended June 30, 2024, compared to $15.9 million for the same period in 2023.

•Provision for credit losses was $0.5 million for the three months ended June 30, 2024, compared to a provision for credit losses of $0.5 million for the same period in 2023.

•Non-interest income decreased $0.4 million, or 24.7%, to $1.2 million for the three months ended June 30, 2024, compared to $1.6 million for the same period in 2023.

•Non-interest expense decreased $0.2 million, or 2.2%, to $6.2 million for the three months ended June 30, 2024, compared to $6.4 million for the same period in 2023.

•Net income available to common shareholders was $12.6 million, or $1.05 per basic common share and $1.04 per diluted common share, for the six months ended June 30, 2024, a decrease of $6.7 million, or 34.6%, compared to net income available to common shareholders of $19.2 million, or $1.61 per basic common share and $1.59 per diluted common share, for the same period in 2023. The decrease is primarily














due to increased interest expense on deposits, an increase in the provision for credit losses, and a decrease in non-interest income.

•Net interest income decreased $4.6 million, or 14.1%, to $28.4 million for the six months ended June 30, 2024, compared to $33.0 million for the same period in 2023.

•The provision for credit losses increased $2.6 million, or 136.2%, to $0.7 million for the six months ended June 30, 2024, compared to a recovery of provision for credit losses of $1.9 million for the same period in 2023.

•Non-interest income decreased $1.1 million, or 33.0%, to $2.3 million for the six months ended June 30, 2024, compared to $3.4 million for the same period in 2023.

The following is a recap of the significant items that impacted the three and six months ended June 30, 2024:
Interest income increased $2.9 million for the second quarter of 2024 compared to the same period in 2023, primarily due to an increase in interest and fees on loans of $3.0 million, or 11.5%, to $28.7 million, primarily driven by higher market interest rates. This was partially offset by a decrease in interest earned on average deposits held at the Federal Reserve Bank ("FRB") of $0.1 million during the three months ended June 30, 2024, due to lower average balances being held on deposit. For the six months ended June 30, 2024, interest income increased $6.4 million from the same period in 2023, primarily due to an increase in interest and fees on loans of $6.5 million, or 12.9%, to $56.8 million, primarily driven due to an increase in average outstanding loan balances, and higher market interest rates. This was partially offset by a decrease in interest earned on average deposits held at the FRB of $0.2 million during the six months ended June 30, 2024, due to lower average balances held on deposit.

Interest expense increased $4.5 million, or 39.3%, to $15.9 million for the three months ended June 30, 2024, compared to the same period in 2023, primarily due to higher market interest rates, combined with changes in the mix of deposits and borrowings. For the six months ended June 30, 2024, interest expense increased $11.0 million, or 54.4%, to $31.3 million, primarily due to higher market interest rates, combined with changes in the mix of deposits and borrowings.

The provision for credit losses was $0.5 million for the three months ended June 30, 2024, compared to a provision of $0.5 million for the same period in 2023. The provision expense for the three months ended June 30, 2024, was primarily driven by an increase in the construction loan portfolio balance from the quarter ended March 31, 2024, which carries a higher loss factor than the other loan portfolios. The provision for credit losses for the six months ended June 30, 2024, increased $2.6 million, or 136.2%, to $0.7 million, compared to a recovery of $1.9 million for the same period in 2023. The increase was primarily driven by an increase in the outstanding loan balance of $17.8 million from the balance at December 31, 2023, specifically in the construction 1 - 4 family, and multi-family portfolio's. The provision recovery of $1.9 million during the same period in 2023 was primarily related to decreases in loss factors related to the construction, commercial owner occupied, and residential 1 to 4 family investment portfolios.

Non-interest income decreased $0.4 million, or 24.7%, for the three months ended June 30, 2024 compared to the same period in 2023, primarily as a result of a decrease in service fees on deposit accounts of $0.6 million, partially offset by an increase in other income of $0.2 million. For the six months ended June 30, 2024, non-interest income decreased $1.1 million, or 33.0%, to $2.3 million, compared to the same period in 2023. The decrease was primarily driven by a decrease in service fees on deposit accounts of $1.4 million, partially offset by an increase in other income of $0.3 million.

Non-interest expense decreased $0.2 million, or 2.2%, for the three months ended June 30, 2024, compared to the same period in 2023, primarily driven by a decrease in other operating expenses of $0.2 million, and a decrease in data processing expenses of $0.1 million, partially offset by an increase in compensation and benefit expense of $0.1 million. For the six months ended June 30, 2024, non-interest expense decreased $0.4 million, or 2.7%, to $12.8 million, compared to the same period in 2023. The decrease in non-interest expense was primarily due to a decrease in compensation and benefits of $0.3 million, and a decrease in other operating














expense of $0.3 million, partially offset by an increase in other real estate owned ("OREO") expense of $0.2 million.

Income tax expense decreased $0.1 million for the three months ended June 30, 2024 compared to the same period in 2023. For the six months ended June 30, 2024, income tax expense decreased $1.3 million, compared to the same period in 2023. The effective tax rate for the three and six months ended June 30, 2024 was 26.6% and 26.6%, respectively, compared to 23.2% and 23.5% for the same periods in 2023.

June 30, 2024 discussion of financial condition
•Total assets increased to $2.03 billion at June 30, 2024, from $2.02 billion at December 31, 2023, an increase of $3.6 million, or 0.18%, primarily due to an increase in net loans, partially offset by a decrease in cash and cash equivalents.
•Cash and cash equivalents totaled $167.7 million at June 30, 2024, as compared to $180.4 million at December 31, 2023. The decrease in cash and cash equivalents was primarily due to a decrease in deposits, and an increase in loan balance, partially offset by an increase in borrowings.
•The investment securities portfolio decreased to $15.5 million at June 30, 2024, from $16.4 million at December 31, 2023, a decrease of $0.9 million, or 5.4%, primarily due to pay downs of securities.
•Gross loans increased $17.8 million or 1.0%, to $1.8 billion at June 30, 2024.
•Nonperforming loans at June 30, 2024 decreased to $7.0 million, representing 0.39% of total loans, a decrease of $0.3 million, or 3.8%, from $7.3 million of nonperforming loans at December 31, 2023. OREO at June 30, 2024 was $1.6 million, unchanged from December 31, 2023. Nonperforming assets (consisting of nonperforming loans and OREO) represented 0.42% and 0.44% of total assets at June 30, 2024 and December 31, 2023, respectively. Loans past due 30 to 89 days were $5.1 million at June 30, 2024, an increase of $4.9 million from December 31, 2023, and increased mainly due to one commercial non-occupied loan with a principal balance of $3.8 million which became delinquent during the quarter ended June 30, 2024.
•The allowance for credit losses was $32.4 million at June 30, 2024, as compared to $32.1 million at December 31, 2023. The ratio of the allowance for credit losses to total loans was 1.80% at June 30, 2024 and at December 31, 2023. The ratio of allowance for credit losses to non-performing loans was 464.3% at June 30, 2024, compared to 442.5%, at December 31, 2023.
•Total deposits were $1.50 billion at June 30, 2024, down from $1.55 billion at December 31, 2023, a decrease of $56.4 million or 3.6% compared to December 31, 2023. The decrease in deposits was primarily driven by a decrease in non-interest demand deposits of $33.4 million, a decrease in savings deposits of $16.4 million, and a decrease in time deposits of $44.7 million, partially offset by an increase in money market deposits of $42.8 million.

•Total borrowings increased $50.1 million during the six months ended June 30, 2024, to $218.2 million at June 30, 2024 from $168.1 million at December 31, 2023, primarily due to $50.0 million of FHLBNY term borrowings.
.
•Total equity increased to $292.8 million at June 30, 2024, up from $284.3 million at December 31, 2023, an increase of $8.5 million, or 3.0%, primarily due to the retention of earnings, partially offset by the payment of $4.3 million of cash dividends. Tangible book value per common share at June 30, 2024 was $24.46, compared to $23.75 at December 31, 2023.

















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

"The continued surprising strength in the economy has caused the current interest rate environment to remain “higher for longer” which puts continued pressure on banks in the battle for deposits and the cost of funding. The increased cost of funding continues to outpace the yield of our loan portfolio, negatively affecting our Net Interest Income. Some people still believe that interest rates will be lowered in 2024, by possibly 25 to 50 basis points instead of the initial belief that rates will be reduced 150 basis points in 2024. The upcoming presidential election combined with the continued wars in Ukraine and Israel makes future projections very difficult. As reported in the 1st quarter of 2024, we are still seeing increased activity for loan requests. There are more projects being presented for our consideration even with the higher interest rates, which forms the basis for our cautious optimism for increasing loan portfolio growth."

"We remain focused on controlling our expenses while supporting a strong Allowance for Credit Losses at 1.8%, which provides the foundation of generating a quality return to our investors."


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 a strong capital base, strong earning and strict cost controls; 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 loan portfolio; our ability to continue to increase shareholders’ equity, maintain strong reserves and good credit quality; our ability to provide a quality return to our investors; our ability to ensure that our loan loss provision is well positioned for the future; our ability to react quickly to any increase in loan delinquencies; our ability to face current challenges in the market; our ability to be well positioned to take advantage of opportunities; our ability to continue to reduce our nonperforming loans and delinquencies and the expenses associated with them; our ability to increase the rate of growth of our loan portfolio; our ability to continue to improve net interest margin; 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 the Company. and Parke Bank being imposed by banking regulators, therefore, readers should not place undue reliance on any forward-looking statements. The Company 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
June 30,December 31,
20242023
 (Dollars in thousands)
Assets
Cash and cash equivalents$167,678 $180,376 
Investment securities15,509 16,387 
Loans, net of unearned income1,805,141 1,787,340 
Less: Allowance for credit losses(32,425)(32,131)
Net loans 1,772,716 1,755,210 
Premises and equipment, net5,441 5,579 
Bank owned life insurance (BOLI)28,738 28,415 
Other assets37,056 37,534 
   Total assets$2,027,138 $2,023,500 
Liabilities and Equity
Non-interest bearing deposits$198,761 $232,189 
Interest bearing deposits1,297,680 1,320,638 
FHLBNY borrowings175,000 125,000 
Subordinated debentures43,206 43,111 
Other liabilities19,691 18,245 
   Total liabilities1,734,338 1,739,183 
   Total shareholders’ equity 292,800 284,317 
   Total liabilities and equity$2,027,138 $2,023,500 






















Table 2: Consolidated Income Statements (Unaudited)
 
For the three months ended June 30,
For the six months ended June 30,
 2024202320242023
 (Dollars in thousands, except per share data)
Interest income:
Interest and fees on loans$28,732 $25,763 $56,815 $50,307 
Interest and dividends on investments248 227 497 437 
Interest on deposits with banks1,209 1,277 2,354 2,547 
Total interest income30,189 27,267 59,666 53,291 
Interest expense:
Interest on deposits13,684 9,079 27,141 16,661 
Interest on borrowings2,193 2,321 4,159 3,615 
Total interest expense15,877 11,400 31,300 20,276 
Net interest income14,312 15,867 28,366 33,015 
Provision for (recovery of) credit losses483 500 687 (1,900)
Net interest income after provision for (recovery of) credit losses13,829 15,367 27,679 34,915 
Non-interest income  
Service fees on deposit accounts359 931 738 2,146 
Gain on sale of SBA loans25 — 25 — 
Other loan fees163 241 402 419 
Bank owned life insurance income162 147 322 290 
Other492 277 776 523 
Total non-interest income1,201 1,596 2,263 3,378 
Non-interest expense  
Compensation and benefits3,070 2,940 6,289 6,581 
Professional services551 494 996 1,087 
Occupancy and equipment672 645 1,313 1,290 
Data processing264 367 629 668 
FDIC insurance and other assessments322 347 653 573 
OREO expense236 198 589 370 
Other operating expense1,120 1,381 2,301 2,562 
Total non-interest expense6,235 6,372 12,770 13,131 
Income before income tax expense8,795 10,591 17,172 25,162 
Income tax expense2,340 2,461 4,566 5,902 
Net income attributable to Company6,455 8,130 12,606 19,260 
Less: Preferred stock dividend (5)(7)(11)(14)
Net income available to common shareholders$6,450 $8,123 $12,595 $19,246 
Earnings per common share  
Basic$0.54 $0.68 $1.05 $1.61 
Diluted$0.53 $0.67 $1.04 $1.59 
Weighted average common shares outstanding  
Basic11,958,776 11,945,424 11,960,487 11,944,794 
Diluted12,119,359 12,119,004 12,125,546 12,139,899 

















Table 3: Operating Ratios (unaudited)
Three months endedSix months ended
June 30,June 30,
2024202320242023
Return on average assets1.34 %1.67 %1.31 %1.99 %
Return on average common equity8.88 %11.74 %8.72 %14.15 %
Interest rate spread1.95 %2.45 %1.92 %2.66 %
Net interest margin3.03 %3.34 %3.00 %3.49 %
Efficiency ratio*40.19 %36.49 %41.69 %36.08 %
*     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 (unaudited)
June 30,December 31,
20242023
(Amounts in thousands except ratio data)
Allowance for credit losses on loans$32,425 $32,131 
Allowance for credit losses to total loans1.80 %1.80 %
Allowance for credit losses to non-accrual loans464.34 %442.51 %
Non-accrual loans$6,983 $7,261 
OREO$1,558 $1,550 



















v3.24.2
Cover
 3 Months Ended
Jun. 30, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 19, 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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