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 FOURTH QUARTER EARNINGS AND RECORD 2019 YEARLY EARNINGS

Highlights:

Net Income for the year: $29.8 million, increased 22.3% over 2018

Total Assets:                                    $1.68 billion, increased 14.6% over 2018

Total Loans:                                    $1.42 billion, increased 14.4% over 2018

Total Deposits:                                $1.34 billion, increased 13.1% over 2018

 

 

 

WASHINGTON TOWNSHIP, NJ, January 22, 2020 - Parke Bancorp, Inc. (“Parke Bancorp”) (NASDAQ: “PKBK”), the parent company of Parke Bank, announced its operating results for the quarter and year ended December 31, 2019.

Highlights for the fourth quarter and year ended December 31, 2019:

 

   

Net income available to common shareholders increased $0.7 million, or 10.7%, to $7.5 million, or $0.70 per basic common share and $0.69 per diluted common share for the fourth quarter of 2019, compared to net income available to common shareholders of $6.8 million, or $0.65 per basic common share and $0.63 per diluted common share for the same quarter in 2018.

 

   

Net interest income increased 11.1% to $14.7 million for the fourth quarter of 2019, compared to $13.2 million for the same quarter of 2018.

 

   

Net income available to common shareholders increased $5.4 million or 22.3%, to $29.8 million or $2.77 per basic common share and $2.73 per diluted common share for the year ended December 31, 2019, compared to net income available to common shareholders of $24.4 million, or $2.53 per basic common share and $2.28 per diluted common share for the year ended December 31, 2018.

 

   

Net interest income increased 18.3% to $56.9 million for the year ended December 31, 2019, compared to $48.1 million for the same period in 2018.

The following is a recap of the significant items that impacted the fourth quarter and the year ended December 31, 2019 period:

Interest income increased $3.5 million and $17.7 million for the fourth quarter and year ended December 31, 2019 periods, respectively, compared to the same periods in 2018 primarily due to higher loan volumes and higher yields on loans. In addition, a $1.8 million increase in interest income from federal funds sold and deposits with banks also contributed to the increase in interest income for 2019. Interest expense increased $2.0 million and $8.9 million for the fourth quarter of 2019 and the year ended December 31, 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 $50,000 for the fourth quarter of 2019 and increased $900,000 for the year ended December 31, 2019 compared to the same periods in 2018. The increase in the provision was primarily due to increased loan volumes.

For the fourth quarter of 2019 and the year ended December 31, 2019, non-interest income increased $59,000 and $432,000, respectively, compared to the same periods of 2018, with the increase primarily attributable to increased fee income from deposit accounts and decreased net losses on sale of OREO, partially offset by decrease in gains on the sale of SBA loans and decrease in income from loan fees.

Non-interest expense increased $338,000 and $1.7 million for the fourth quarter and the year ended December 31, 2019, respectively, compared to the same periods of 2018, primarily due to an increase in compensation, professional services, data processing cost, partially offset by decrease in deposits insurance assessment fees. The increases in non-interest expenses for the quarter and the year mainly reflect the growth of the business.

Income tax expense increased $433,000 for the fourth quarter of 2019, and increased $1.4 million for the year ended December 31, 2019, compared to the same periods in 2018. The effective tax rates for the quarter and year ended December 31, 2019 were 24.2% and 24.4%, respectively, compared to 22.4% and 25.1% for the same periods in 2018.

December 31, 2019 discussion of financial condition

 

   

Total assets increased to $1.68 billion at December 31, 2019, from $1.47 billion at December 31, 2018, an increase of $213.8 million or 14.6% primarily due to increase in loans and increase in cash deposits with the Federal Reserve Bank.

 

   

Cash and cash equivalents totaled $191.6 million at December 31, 2019 as compared to $154.5 million at December 31, 2018.

 

   

The investment securities portfolio decreased to $27.8 million at December 31, 2019, from $32.4 million at December 31, 2018, a decrease of $4.6 million or 14.2% primarily due to payoffs of securities.

 

   

Gross loans increased to $1.42 billion at December 31, 2019, from $1.24 billion at December 31, 2018, an increase of $179.4 million or 14.4%.

 

   

Nonperforming loans at December 31, 2019 increased to $5.3 million, representing 0.38% of total loans, an increase of $2.3 million, or 74.5%, from $3.1 million of nonperforming loans at December 31, 2018. OREO at December 31, 2019 was $4.7 million, a decrease of $397,000 compared to $5.1 million at December 31, 2018 primarily due to sale and valuation adjustments of OREO assets, and partially offset by the loan transferred into OREO. Nonperforming assets (consisting of nonperforming loans and OREO) represented 0.6% of total assets at December 31, 2019 and December 31, 2018, respectively. Loans past due 30 to 89 days were $2.0 million at December 31, 2019, an increase of $1.7 million from December 31, 2018.

 

   

The allowance for loan losses was $21.8 million at December 31, 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 December 31, 2019 and at December 31, 2018. The ratio of allowance for loan losses to non-performing loans was 407.8% at December 31, 2019, compared to 622.3%, at December 31, 2018.

 

   

Total deposits were $1.34 billion at December 31, 2019, up from $1.18 billion at December 31, 2018, an increase of $155.3 million or 13.1% compared to December 31, 2018. Deposits growth was primarily due to an increase in time deposits.

 

   

Total borrowings were $148.1 million at December 31, 2019 as compared to $118.1 million at December 31, 2018. The increase in borrowings was primarily due to the increase in advances from FHLBNY.

 

   

Total equity increased to $179.4 million at December 31, 2019, up from $155.0 million at December 31, 2018, an increase of $24.4 million or 15.8% 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:

2019 was a great year for Parke Bancorp and our shareholders. We generated record earnings of close to $30.0 million. Our company’s assets grew over 15% with the continued strength of our loan portfolio growth. The growth of our deposit base kept pace with our loan portfolio expansion, growing over 13%. The financial strength of the Company was supported by close to a 16% growth in our total equity. Management and staff continue to work hard and efficiently keeping our very important cost efficiency ratio below 30%, one of the best in the banking industry.

The economy remained strong in 2019 with unemployment continuing at record lows while inflation remains under control and GDP growth. This was accomplished while the global economy falters, again providing confidence in the strength of the United States economy. 2020, although an election year which could pose uncertainty, looks like it could be another good year. The strength of the economy appears to have supported the Feds putting on hold any additional interest rate adjustments at the end of 2019, with no indication of any planned increases. Our company is again well positioned to take advantage of market opportunities with strong earnings, strong equity and an expanding market share.

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

 

     December 31,
2019
    December 31,
2018
 
     (Amounts in thousands, except share data)  
Assets     

Cash and cash equivalents

   $ 191,607     $ 154,471  

Investment securities

     27,780       32,391  

Loans held for sale

     190       419  

Loans, net of unearned income

     1,420,749       1,241,157  

Less: Allowance for loan losses

     (21,811     (19,075
  

 

 

   

 

 

 

Net loans

     1,398,938       1,222,082  

Premises and equipment, net

     6,946       6,783  

Bank owned life insurance (BOLI)

     26,410       25,809  

Other assets

     29,289       25,443  
  

 

 

   

 

 

 

Total assets

   $ 1,681,160     $ 1,467,398  
  

 

 

   

 

 

 
Liabilities     

Noninterest-bearing deposits

   $ 259,269     $ 360,329  

Interest-bearing deposits

     1,079,950       823,544  

FHLBNY borrowings

     134,650       104,650  

Subordinated debentures

     13,403       13,403  

Other liabilities

     14,464       10,476  
  

 

 

   

 

 

 

Total liabilities

   $ 1,501,736     $ 1,312,402  
  

 

 

   

 

 

 

Total shareholders’ equity

     177,605       153,557  

Noncontrolling interest in consolidated subsidiaries

     1,819       1,439  
  

 

 

   

 

 

 

Total equity

     179,424       154,996  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 1,681,160     $ 1,467,398  
  

 

 

   

 

 

 


Table 2: Consolidated Income Statement (Unaudited)

 

     For three months ended
December 31,
    For the year ended December 31,  
     2019     2018     2019     2018  
     (Amounts in thousands except share data)  

Interest income:

        

Interest and fees on loans

     20,095       16,546       75,172       59,139  

Interest and dividends on investments

     272       328       1,161       1,342  

Interest on federal funds sold and deposits with banks

     574       595       3,207       1,393  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total interest income

     20,941       17,469       79,540       61,874  
  

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense:

        

Interest on deposits

     5,289       3,447       18,687       11,071  

Interest on borrowings

     981       818       3,968       2,700  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total interest expense

     6,270       4,265       22,655       13,771  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     14,671       13,204       56,885       48,103  

Provision for loan losses

     650       600       2,700       1,800  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses

     14,021       12,604       54,185       46,303  
  

 

 

   

 

 

   

 

 

   

 

 

 

Noninterest income:

        

Gain on sale of SBA loans

           151       116       378  

Loan fees

     243       284       982       1,121  

Bank owned life insurance income

     151       155       601       613  

Service fees on deposit accounts

     524       377       1,921       1,482  

Net loss on sale and valuation adjustments of OREO

     (99     (331     (246     (690

Other

     45       169       465       503  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total noninterest income

     864       805       3,839       3,407  
  

 

 

   

 

 

   

 

 

   

 

 

 

Noninterest expense:

        

Compensation and benefits

     2,493       2,296       9,188       8,251  

Professional services

     451       369       1,946       1,419  

Occupancy and equipment

     436       391       1,793       1,675  

Data processing

     316       231       1,046       835  

FDIC insurance and other assessments

     (14     129       56       420  

OREO expense

     113       131       415       611  

Other operating expense

     1,015       925       3,508       3,084  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total noninterest expense

     4,810       4,472       17,952       16,295  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax expense

     10,075       8,937       40,072       33,415  

Income tax expense

     2,437       2,004       9,785       8,377  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Company and noncontrolling interest

     7,638       6,933       30,287       25,038  

Less: Net income attributable to noncontrolling interest

     (90     (106     (446     (214
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Company

     7,548       6,827       29,841       24,824  

Less: Preferred stock dividend and discount accretion

     (8     (17     (24     (446
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income available to common shareholders

   $ 7,540     $ 6,810     $ 29,817     $ 24,378  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share:

        

Basic

   $ 0.70     $ 0.65     $ 2.77     $ 2.53  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.69     $ 0.63     $ 2.73     $ 2.28  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding:

        

Basic

     10,771,089       10,458,554       10,761,906       9,629,467  

Diluted

     10,923,988       10,906,729       10,919,166       10,911,344  


Table 3: Operating Ratios

 

     Three months ended     For the year ended  
     December 31,     December 31,  
     2019     2018     2019     2018  

Return on average assets

     1.87     1.98     1.94     1.98

Return on average common equity

     17.05     18.16     17.93     17.99

Interest rate spread

     3.13     3.35     3.09     3.54

Net interest margin

     3.69     3.88     3.75     3.92

Efficiency ratio

     30.96     31.92     29.56     31.63

 

*

Return on the average assets is calculated using net income attributable to Company and noncontrolling interest dividing average assets

Table 4: Asset Quality Data

 

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

Allowance for loan losses

   $ 21,811     $ 19,075  

Allowance for loan losses to total loans

     1.54     1.54

Allowance for loan losses to non-accrual loans

     407.8     622.3

Non-accrual loans

   $ 5,348     $ 3,065  

OREO

   $ 4,727     $ 5,124  

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