WASHINGTON TOWNSHIP, N.J., July 19, 2018 /PRNewswire/ -- Parke Bancorp, Inc. ("Parke Bancorp") (NASDAQ: "PKBK"), the parent company of Parke Bank, announced its operating results for the quarter ended June 30, 2018.
Highlights for the second quarter and year-to-date June 2018:
The following is a recap of the significant items that impacted the second quarter and the first six months of 2018. Interest income increased $3.1 million and $5.5 million for the second quarter and first six months of 2018, respectively, compared to the same periods in 2017 primarily due to higher loan volumes and a higher yield on loans. Interest expense increased $1.3 million and $2.0 million for the second quarter and first six months of 2018 compared to the same periods in 2017, primarily due to higher deposit volumes and rates. The provision for loan losses decreased $800,000 for the second quarter and $900,000 for the first six months of 2018 compared to the same periods of 2017, primarily due to improving credit quality. For the second quarter of 2018, non-interest income increased $58,000 primarily attributable to increased fee income from loan and deposits accounts, partially offset by the increase in expense related to the sale of Other Real Estate Owned ("OREO") during the period. For the six month ended June 30, 2018, non-interest income increased $531,000 primarily due to increased fee income from loan and deposit accounts as well as a $130,000 increase in the gain on the sale of SBA loans. Non-interest expense increased $433,000 for the second quarter and $639,000 for the first six months of 2018 compared to the same periods of 2017, primarily due to an increase in compensation and occupancy costs reflecting the growth of the business. Income tax expense decreased $228,000 for the quarter and $397,000 for the first six months of 2018 due to a lower tax rates compared to the same periods of last year due to the Tax Cuts and Jobs Act enacted in December 2017. The effective tax rates for the quarter and first six months of 2018 were 23.9% and 24.0%, respectively compared to 36.9% and 36.8% for the same periods in 2017.
June 2018 discussion of financial data
CEO outlook and commentary
Vito S. Pantilione, President and Chief Executive Officer of Parke Bancorp and Parke Bank, provided the following statement:
"The economy continues to be strong both nationally and regionally. Unemployment is down to record lows while inflation remains in check. Parke Bank continues to be well positioned for growth in assets and profitability. Our investment in expanding our lending team and footprint has resulted in strong growth of our loan portfolio and interest income. Net income available to common shareholders increased 75% from the 2nd quarter 2017 to 2nd quarter 2018. We also have developed new deposit products that have generated an increase in our non-interest income. Equally important, we continue to improve our asset quality as non-performing loans decreased to $3.2 million at June 30, 2018. All of these factors have combined with our diligent control of our expenses to produce our strong 2nd quarter and year to date results."
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 | |||||
June 30, |
December 31, | ||||
2018 |
2017 | ||||
(Amounts in thousands, except share data) | |||||
Assets |
|||||
Cash and cash equivalents |
110,211 |
42,113 |
|||
Investment securities |
35,321 |
40,259 |
|||
Loans held for sale |
1,839 |
1,541 |
|||
Loans, net of unearned income |
1,101,243 |
1,011,717 |
|||
Less: Allowance for loan and lease losses |
(17,273) |
(16,533) |
|||
Net loans and leases |
1,083,970 |
995,184 |
|||
Premises and equipment, net |
6,964 |
7,025 |
|||
Bank owned life insurance (BOLI) |
25,499 |
25,196 |
|||
Other assets |
25,831 |
26,134 |
|||
Total assets |
1,289,635 |
1,137,452 |
|||
Liabilities |
|||||
Noninterest-bearing deposits |
210,669 |
124,356 |
|||
Interest-bearing deposits |
807,227 |
742,027 |
|||
Federal Home Loan Bank borrowings |
104,650 |
114,650 |
|||
Subordinated debentures |
13,403 |
13,403 |
|||
Other liabilities |
9,044 |
8,236 |
|||
Total liabilities |
1,144,993 |
1,002,672 |
|||
Total shareholders' equity |
143,401 |
134,780 |
|||
Noncontrolling interest in consolidated subsidiaries |
1,241 |
? |
|||
Total equity |
144,642 |
134,780 |
|||
Total liabilities and shareholders' equity |
1,289,635 |
1,137,452 |
Table 2: Consolidated Income Statement (Unaudited)
For the Three Months Ended |
For the Six Months Ended | ||||||||||||||
2018 |
2017 |
2018 |
2017 | ||||||||||||
(in thousands except share data) | |||||||||||||||
Interest income: |
|||||||||||||||
Interest and fees on loans |
$ |
14,243 |
$ |
11,356 |
$ |
27,256 |
$ |
22,006 |
|||||||
Interest and dividends on investments |
332 |
351 |
681 |
725 |
|||||||||||
Interest on federal funds sold and cash equivalents |
305 |
63 |
448 |
135 |
|||||||||||
Total interest income |
14,880 |
11,770 |
28,385 |
22,866 |
|||||||||||
Interest expense: |
|||||||||||||||
Interest on deposits |
2,620 |
1,547 |
4,573 |
3,012 |
|||||||||||
Interest on borrowings |
665 |
420 |
1,196 |
795 |
|||||||||||
Total interest expense |
3,285 |
1,967 |
5,769 |
3,807 |
|||||||||||
Net interest income |
11,595 |
9,803 |
22,616 |
19,059 |
|||||||||||
Provision for loan losses |
200 |
1,000 |
600 |
1,500 |
|||||||||||
Net interest income after provision for loan losses |
11,395 |
8,803 |
22,016 |
17,559 |
|||||||||||
Noninterest income: |
|||||||||||||||
Gain on sale of SBA loans |
36 |
84 |
214 |
84 |
|||||||||||
Loan fees |
409 |
175 |
560 |
241 |
|||||||||||
Gain on Bank Owned Life Insurance |
153 |
163 |
303 |
323 |
|||||||||||
Service fees on deposit accounts |
399 |
99 |
685 |
187 |
|||||||||||
Loss on sale and write-down of real estate owned |
(509) |
(389) |
(509) |
(395) |
|||||||||||
Other |
161 |
459 |
265 |
547 |
|||||||||||
Total noninterest income |
649 |
591 |
1,518 |
987 |
|||||||||||
Noninterest expense: |
|||||||||||||||
Compensation and benefits |
1,953 |
1,692 |
3,907 |
3,593 |
|||||||||||
Professional services |
418 |
382 |
792 |
747 |
|||||||||||
Occupancy and equipment |
419 |
326 |
840 |
669 |
|||||||||||
Data processing |
194 |
186 |
391 |
368 |
|||||||||||
FDIC insurance |
92 |
71 |
169 |
142 |
|||||||||||
OREO expense |
165 |
146 |
334 |
303 |
|||||||||||
Other operating expense |
753 |
758 |
1,456 |
1,428 |
|||||||||||
Total noninterest expense |
3,994 |
3,561 |
7,889 |
7,250 |
|||||||||||
Income before income tax expense |
8,050 |
5,833 |
15,645 |
11,296 |
|||||||||||
Income tax expense |
1,923 |
2,151 |
3,758 |
4,155 |
|||||||||||
Net income attributable to Company and noncontrolling interest |
6,127 |
3,682 |
11,887 |
7,141 |
|||||||||||
Net income attributable to noncontrolling interest |
16 |
17 |
16 |
18 |
|||||||||||
Net income attributable to Company |
6,111 |
3,699 |
11,871 |
7,159 |
|||||||||||
Preferred stock dividend and discount accretion |
168 |
297 |
407 |
596 |
|||||||||||
Net income available to common shareholders |
$ |
5,943 |
$ |
3,402 |
$ |
11,464 |
$ |
6,563 |
|||||||
Earnings per common share: |
|||||||||||||||
Basic |
$ |
0.66 |
$ |
0.41 |
$ |
1.28 |
$ |
0.79 |
|||||||
Diluted |
$ |
0.56 |
$ |
0.34 |
$ |
1.09 |
$ |
0.66 |
|||||||
Weighted average shares outstanding: |
|||||||||||||||
Basic |
9,044,159 |
8,335,041 |
8,933,820 |
8,328,093 |
|||||||||||
Diluted |
10,909,130 |
10,913,227 |
10,909,294 |
10,901,965 |
Table 3: Operating Ratios
Three months ended |
Six months ended | ||||||||||
June 30, |
June 30, | ||||||||||
2018 |
2017 |
2018 |
2017 | ||||||||
Return on average assets |
1.99 |
% |
1.44 |
% |
2.01 |
% |
1.42 |
% | |||
Return on average common equity |
18.49 |
% |
12.13 |
% |
18.37 |
% |
11.94 |
% | |||
Interest rate spread |
3.60 |
% |
3.84 |
% |
3.69 |
% |
3.82 |
% | |||
Net interest margin |
3.92 |
% |
4.00 |
% |
3.97 |
% |
3.97 |
% | |||
Efficiency ratio |
32.62 |
% |
34.26 |
% |
32.69 |
% |
36.17 |
% |
Table 4: Asset Quality Data
June 30, |
December 31, | ||||||
2018 |
2017 | ||||||
(Amounts in thousands except ratio data) | |||||||
Allowance for loan losses |
$ |
17,273 |
$ |
16,533 |
|||
Allowance for loan losses to total loans |
1.57 |
% |
1.63 |
% | |||
Allowance for loan losses to non-accrual loans |
535.4 |
% |
364.7 |
% | |||
Non-accrual loans |
3,226 |
4,534 |
|||||
OREO |
6,158 |
7,248 |
SOURCE Parke Bancorp, Inc.
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