Exhibit 99

 

LOGO

Parke Bancorp, Inc.

601 Delsea Drive,

Washington Township, NJ 08080

Contact:

Vito S. Pantilione, President and CEO

John F. Hawkins, Senior Vice President and CFO

(856) 256-2500

 

 

 

PARKE BANCORP, INC. ANNOUNCES THIRD QUARTER 2019 EARNINGS

WASHINGTON TOWNSHIP, NJ, October 23, 2019—Parke Bancorp, Inc. (“Parke Bancorp”) (NASDAQ: “PKBK”), the parent company of Parke Bank, announced its operating results for the quarter and year to date periods ended September 30, 2019.

Highlights for the third quarter and year to date September 30, 2019:

 

   

Net income available to common shareholders increased $1.7 million, or 27.1%, to $7.8 million, or $0.72 per basic common share and $0.71 per diluted common share for the third quarter of 2019, compared to net income available to common shareholders of $6.1 million, or $0.60 per basic common share and $0.56 per diluted common share for the same quarter in 2018.

 

   

Net interest income increased 18.0% to $14.5 million for the third quarter of 2019, compared to $12.3 million for the same quarter of 2018.

 

   

Net income available to common shareholders increased $4.7 million or 26.8%, to $22.3 million or $2.07 per basic common share and $2.04 per diluted common share for the year to date September 30, 2019, compared to net income available to common shareholders of $17.6 million, or $1.88 per basic common share and $1.65 per diluted common share for the year to date September 30, 2018.

 

   

Net interest income increased 21.0% to $42.2 million for the year to date September 30, 2019, compared to $34.9 million for the same period in 2018.

The following is a recap of the significant items that impacted the third quarter and the year to date September 30, 2019 period:

Interest income increased $4.4 million and $14.2 million for the third quarter and year to date September 30, 2019 periods, respectively, compared to the same periods in 2018 primarily due to higher loan volumes and higher yields on loans. Also contributing were $676,000 and $1.8 million increases in interest income for the third quarter and the year to date September 30, 2019, respectively, from federal funds sold and deposits with banks. Interest expense increased $2.2 million and $6.9 million for the third quarter of 2019 and the year to date September 30, 2019, respectively, compared to the same periods in 2018, primarily due to higher deposit volumes and interest rates.

The provision for loan and lease losses increased $300,000 for the third quarter of 2019 and increased $850,000 for the year to date September 30, 2019 compared to the same periods in 2018. The increase in the provision was primarily due to increased loan volumes.


For the third quarter of 2019, non-interest income increased $201,000 compared to the same period of 2018. The increase was primarily attributable to increased fee income from deposit accounts and increase in the gain on sale of SBA loans. For the year to date September 30, 2019 period, non-interest income increased $373,000, primarily due to increased fee income from deposit accounts and a decreased net loss on sale of OREO, partially offset by a decrease in the gain on sale of SBA loans and a decrease in loan fees.

Non-interest expense increased $531,000 and $1.3 million for the third quarter and the year to date September 30, 2019, respectively, compared to the same periods of 2018, primarily due to an increase in compensation, professional service, and data processing cost reflecting the growth of the business.

Income tax expense decreased $64,000 for the third quarter of 2019, and increased $1.0 million for the year to date September 30, 2019, compared to the same periods in 2018. The effective tax rate for both the quarter and year to date September 30, 2019 was 24.5%, compared to 29.6% and 26.0% for the same periods in 2018.

September 30, 2019 discussion of financial condition

 

   

Total assets increased to $1.60 billion at September 30, 2019, from $1.47 billion at December 31, 2018, an increase of $131.1 million or 8.9% primarily due to an increase in loans.

 

   

Cash and cash equivalents totaled $151.7 million at September 30, 2019 as compared to $154.5 million at December 31, 2018.

 

   

The investment securities portfolio decreased to $29.3 million at September 30, 2019, from $32.4 million at December 31, 2018, a decrease of $3.1 million or 9.6% primarily due to the payoffs of securities.

 

   

Gross loans increased to $1.38 billion at September 30, 2019, from $1.24 billion at December 31, 2018, an increase of $134.8 million or 10.9%.

 

   

Nonperforming loans at September 30, 2019 increased to $5.7 million, representing 0.42% of total loans, an increase of $2.7 million, or 86.6%, from $3.1 million of nonperforming loans at December 31, 2018. OREO at September 30, 2019 was $5.8 million, an increase of $725,000 compared to $5.1 million at December 31, 2018 primarily due to loans transferred into OREO, and partially offset by the sale and valuation adjustment of OREO assets. Nonperforming assets (consisting of nonperforming loans and OREO) represented 0.7% of total assets at September 30, 2019, as compared to 0.6% of total assets at December 31, 2018. Loans past due 30 to 89 days were $66,000 at September 30, 2019, a decrease of $231,000 from December 31, 2018.

 

   

The allowance for loan losses was $21.1 million at September 30, 2019, as compared to $19.1 million at December 31, 2018. The ratio of the allowance for loan losses to total loans was 1.54% at September 30, 2019 and at December 31, 2018. The ratio of allowance for loan losses to non-performing loans was 369.7% at September 30, 2019, compared to 622.3%, at December 31, 2018.

 

   

Total deposits were $1.29 billion at September 30, 2019, up from $1.18 billion at December 31, 2018, an increase of $109.2 million or 9.2% compared to December 31, 2018. Deposits growth was primarily due to an increase in time deposits.

 

   

Total borrowings were $118.1 million at September 30, 2019, unchanged from December 31, 2018.

 

   

Total equity increased to $173.5 million at September 30, 2019, up from $155.0 million at December 31, 2018, an increase of $18.5 million or 12.0% primarily due to the retention of earnings.

CEO outlook and commentary

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

“At the end of the second quarter of 2019, we discussed how the Federal Reserve Board was backing off interest rate increases due to the slowing global economy. Here we are in the third quarter of 2019 and the Federal Reserve Board has lowered interest rates 50 basis points and there is a general consensus that at least an additional 25 basis point reduction will be made prior to year end. The volatility in interest rates makes it difficult to strategically identify the future economy as it affects the banking industry. We are proud that the Company generates strong


earnings as we continue to enjoy increased asset, loan and deposit growth. Our assets increased 8.9% from the 2018 year end to $1.6 billion and loans grew 10.9% from the year ended 2018 to $1.4 billion at September 30, 2019. Our deposits grew 9.2% from the year ended 2018 to $1.3 billion at September 30, 2019. These factors, combined with our consistent tight control of our expenses, supported a 27.1% increase in net income from the third quarter of 2018 as compared to the third quarter of 2019. Our 2019 year to date income grew 26.8% to $22.3 million compared to the same period in 2018. We are also proud that Parke Bank was named to the Sandler O’Neill 2019 Bank & Thrift SM-All Stars, for the second year in a row. This award is given to the top 30 small cap banks in the country.”

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 continue to generate strong net earnings; 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 take advantage of opportunities in the improving economy and banking environment; 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 and support our profitability; our ability to prudently expand our operations in our market and in new markets; our ability to tightly control expenses; and our ability to continue to grow our loan portfolio, 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.


Financial Supplement:

Table 1: Condensed Balance Sheet (Unaudited)

 

Parke Bancorp, Inc. and Subsidiaries  
Consolidated Balance Sheets  
     September 30,     December 31,  
     2019     2018  
     (Amounts in thousands, except share data)  

Assets

    

Cash and cash equivalents

   $ 151,680     $ 154,471  

Investment securities

     29,284       32,391  

Loans held for sale

     148       419  

Loans, net of unearned income

     1,376,242       1,241,157  

Less: Allowance for loan and lease losses

     (21,146     (19,075
  

 

 

   

 

 

 

Net loans and leases

     1,355,096       1,222,082  

Premises and equipment, net

     6,776       6,783  

Bank owned life insurance (BOLI)

     26,259       25,809  

Other assets

     29,244       25,443  
  

 

 

   

 

 

 

Total assets

   $ 1,598,487     $ 1,467,398  
  

 

 

   

 

 

 

Liabilities

    

Noninterest-bearing deposits

   $ 329,356     $ 360,329  

Interest-bearing deposits

     963,692       823,544  

FHLBNY borrowings

     104,650       104,650  

Subordinated debentures

     13,403       13,403  

Other liabilities

     13,842       10,476  
  

 

 

   

 

 

 

Total liabilities

   $ 1,424,943     $ 1,312,402  
  

 

 

   

 

 

 

Total shareholders’ equity

     171,749       153,557  

Noncontrolling interest in consolidated subsidiaries

     1,795       1,439  
  

 

 

   

 

 

 

Total equity

     173,544       154,996  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 1,598,487     $ 1,467,398  
  

 

 

   

 

 

 


Table 2: Consolidated Income Statement (Unaudited)

 

     For three months ended
September 30,
     For nine months ended
September 30,
 
     2019      2018      2019     2018  
     (Amounts in thousands except share data)  

Interest income:

          

Interest and fees on loans

   $ 19,113      $ 15,337      $ 55,077     $ 42,593  

Interest and dividends on investments

     284        333        889       1,014  

Interests on federal funds sold and deposits with banks

     1,021        345        2,633       798  
  

 

 

    

 

 

    

 

 

   

 

 

 

Total interest income

     20,418        16,015        58,599       44,405  
  

 

 

    

 

 

    

 

 

   

 

 

 

Interest expense:

          

Interest on deposits

     4,915        3,051        13,398       7,624  

Interest on borrowings

     1,012        686        2,987       1,882  
  

 

 

    

 

 

    

 

 

   

 

 

 

Total interest expense

     5,927        3,737        16,385       9,506  
  

 

 

    

 

 

    

 

 

   

 

 

 

Net interest income

     14,491        12,278        42,214       34,899  

Provision for loan losses

     900        600        2,050       1,200  
  

 

 

    

 

 

    

 

 

   

 

 

 

Net interest income after provision for loan losses

     13,591        11,678        40,164       33,699  
  

 

 

    

 

 

    

 

 

   

 

 

 

Noninterest income:

          

Gain on sale of SBA loans

     76        13        116       227  

Loan fees

     263        277        739       837  

Bank owned life insurance income

     153        155        450       458  

Service fees on deposit accounts

     529        420        1,397       1,105  

Gain (loss) on sale and valuation adjustments of OREO

     196        150        (147     (359

Other

     73        74        420       334  
  

 

 

    

 

 

    

 

 

   

 

 

 

Total noninterest income

     1,290        1,089        2,975       2,602  
  

 

 

    

 

 

    

 

 

   

 

 

 

Noninterest expense:

          

Compensation and benefits

     2,235        2,048        6,695       5,955  

Professional services

     583        258        1,495       1,050  

Occupancy and equipment

     413        444        1,357       1,284  

Data processing

     262        213        730       604  

FDIC insurance and other assessments

     9        122        70       291  

OREO expense

     110        146        302       480  

Other operating expense

     853        703        2,493       2,159  
  

 

 

    

 

 

    

 

 

   

 

 

 

Total noninterest expense

     4,465        3,934        13,142       11,823  
  

 

 

    

 

 

    

 

 

   

 

 

 

Income before income tax expense

     10,416        8,833        29,997       24,478  

Income tax expense

     2,551        2,615        7,348       6,373  
  

 

 

    

 

 

    

 

 

   

 

 

 

Net income attributable to Company and noncontrolling interest

     7,865        6,218        22,649       18,105  

Less: Net income attributable to noncontrolling interest

     101        92        356       108  
  

 

 

    

 

 

    

 

 

   

 

 

 

Net income attributable to Company

     7,764        6,126        22,293       17,997  

Less: Preferred stock dividend and discount accretion

     8        22        16       429  
  

 

 

    

 

 

    

 

 

   

 

 

 

Net income available to common shareholders

   $ 7,756      $ 6,104      $ 22,277     $ 17,568  
  

 

 

    

 

 

    

 

 

   

 

 

 

Earnings per common share:

          

Basic

   $ 0.72      $ 0.60      $ 2.07     $ 1.88  
  

 

 

    

 

 

    

 

 

   

 

 

 

Diluted

   $ 0.71      $ 0.56      $ 2.04     $ 1.65  
  

 

 

    

 

 

    

 

 

   

 

 

 

Weighted average shares outstanding:

          

Basic

     10,770,009        10,168,991        10,758,811       9,350,068  

Diluted

     10,921,518        10,920,025        10,917,547       10,912,879  


Table 3: Operating Ratios

 

     Three months ended     Nine months ended  
     September 30,     September 30,  
     2019     2018     2019     2018  

Return on average assets

     1.91     1.88     1.94     1.96

Return on average common equity

     18.16     17.15     18.24     17.93

Interest rate spread

     2.95     3.47     3.09     3.61

Net interest margin

     3.67     3.88     3.77     3.94

Efficiency ratio

     28.29     29.43     29.08     31.53

Table 4: Asset Quality Data

 

     September 30,     December 31,  
     2019     2018  
     (Amounts in thousands except ratio data)  

Allowance for loan losses

   $ 21,146     $ 19,075  

Allowance for loan losses to total loans

     1.54     1.54

Allowance for loan losses to non-accrual loans

     369.7     622.3

Non-accrual loans

   $ 5,720     $ 3,065  

OREO

   $ 5,849     $ 5,124  

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