PR Newswire
WASHINGTON TOWNSHIP, N.J., Jan. 24, 2019
WASHINGTON TOWNSHIP, N.J., Jan. 24, 2019 /PRNewswire/ -- 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, 2018.
Highlights for the fourth quarter and year ended December 31, 2018:
The following is a recap of the significant items that impacted the fourth quarter and the year ended December 31, 2018 period:
Interest income increased $4.5 million and $13.2 million for the fourth quarter and the year ended December 31, 2018, respectively, compared to the same periods in 2017 primarily due to higher loan volumes and a higher yield on loans. Interest expense increased $1.9 million and $5.5 million for the fourth quarter of 2018 and the year ended December 31, 2018, respectively, compared to the same periods in 2017, primarily due to higher deposit volumes and rates.
The provision for loan losses increased $0.1 million for the fourth quarter of 2018 and decreased $0.7 million for the year ended December 31, 2018 compared to the same periods of 2017. The decrease in the provision year over year is primarily due to improving credit quality.
For the fourth quarter of 2018, non-interest income increased $0.2 million compared to the fourth quarter of 2017, with the increase primarily attributable to increased gains on the sale of SBA loans and increased fee incomes from deposit accounts and loan fee accounts, partially offset by increase in losses related to the sale of Other Real Estate Owned ("OREO"). For the year ended December 31, 2018, non-interest income increased $1.8 million primarily due to increased fee incomes from deposit and loan accounts as well as decrease in losses related to the sale of OREO.
Non-interest expense increased $42,000 for the fourth quarter of 2018 compared to the same period of 2017. For the year ended December 31, 2018, non-interest expense increased $1.0 million compared to 2017, primarily due to an increase in compensation and occupancy costs reflecting the growth of the business. The less-than-proportional increase in non-interest expense for the quarter and the year when compared with the increases in interest income for the same periods in 2018 reflected an increase in the operating efficiency of the Company.
Income tax expense decreased $3.8 million for the fourth quarter of 2018, and decreased $4.0 million for the year ended December 31, 2018, compared to the same periods of last year. The decrease in income tax expenses reflected the combined effects of increased income for the quarter and the year ended December 31, 2018, and the impact of the Tax Cuts and Jobs Act. The effective tax rates for the quarter and year ended December 31, 2018 were 22.4% and 25.1%, respectively, compared to 91.5% and 51.1% for the same periods in 2017. The tax provisions of the fourth quarter and the year ended December 2017 included a non recurring charge off of the Company's deferred tax assets due to the Tax Cuts and Jobs Act.
December 31, 2018 discussion of financial condition
CEO outlook and commentary
Vito S. Pantilione, President and Chief Executive Officer of Parke Bancorp and Parke Bank, provided the following statement:
"On January 29, 1999, Parke Bank opened for business in a trailer with $8 million in assets and 10 employees. Twenty years later we have over $1.4 billion in assets with nearly 100 employees in seven full-service branches. What a great way to celebrate our 20th anniversary by reporting record earnings to our shareholders. The Company generated over $24 million, or $2.28 per diluted common share, in net income in 2018, an increase of 127% over last year. Our strong net income was supported by robust growth in our assets, loans and deposits while maintaining very strict controls of our expenses. Net interest income increased to $48.1 million in 2018 primarily due to the growth in income from our loan portfolio, which increased $228.3 million to $1.24 billion in 2018, a 22.5% increase over 2017. The increase in our loans was supported by our very strong growth in deposits, which was up $318 million to $1.18 billion, a 36.6% increase compared to 2017. Equally important is the growth in our Company's shareholders' equity, which increased to $154 million, a 13.9% increase over 2017.
The strong economy and low unemployment is expected to continue in 2019 providing continued growth potential in the banking industry and the Company. Recent Federal Reserve comments suggests that a pause or slowing of anticipated interest rate increases may be warranted due to the economy metrics, including inflation that appears to be under control. We will continue to "block and tackle", the basics of hard work in moving forward. Our Board of Directors continued their commitment to our shareholders approving an increase in our cash dividends in 2018 to 14 cents per share. Our Company is well positioned to take advantage of the many opportunities in the market."
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, | December 31, | ||||
2018 | 2017 | ||||
(Amounts in thousands, except share data) | |||||
Assets | |||||
Cash and cash equivalents | 154,471 | 42,113 | |||
Investment securities | 32,391 | 40,259 | |||
Loans held for sale | 419 | 1,541 | |||
Loans, net of unearned income | 1,241,157 | 1,011,717 | |||
Less: Allowance for loan and lease losses | (19,075) | (16,533) | |||
Net loans and leases | 1,222,082 | 995,184 | |||
Premises and equipment, net | 6,783 | 7,025 | |||
Bank owned life insurance (BOLI) | 25,809 | 25,196 | |||
Other assets | 25,443 | 26,134 | |||
Total assets | 1,467,398 | 1,137,452 | |||
Liabilities | |||||
Noninterest-bearing deposits | 360,329 | 124,356 | |||
Interest-bearing deposits | 823,544 | 742,027 | |||
Federal Home Loan Bank borrowings | 104,650 | 114,650 | |||
Subordinated debentures | 13,403 | 13,403 | |||
Other liabilities | 10,476 | 8,236 | |||
Total liabilities | 1,312,402 | 1,002,672 | |||
Total shareholders' equity | 153,557 | 134,780 | |||
Noncontrolling interest in consolidated subsidiaries | 1,439 | — | |||
Total equity | 154,996 | 134,780 | |||
Total liabilities and shareholders' equity | 1,467,398 | 1,137,452 |
Table 2: Consolidated Income Statement (Unaudited)
For three months ended | For the year ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands except share data) | |||||||||||||||
Interest income: | |||||||||||||||
Interest and fees on loans | $ | 16,546 | $ | 12,438 | $ | 59,139 | $ | 46,847 | |||||||
Interest and dividends on investments | 328 | 356 | 1,342 | 1,429 | |||||||||||
Interest on federal funds sold and cash equivalents | 592 | 159 | 1,383 | 379 | |||||||||||
Total interest income | 17,466 | 12,953 | 61,864 | 48,655 | |||||||||||
Interest expense: | |||||||||||||||
Interest on deposits | 3,447 | 1,799 | 11,071 | 6,478 | |||||||||||
Interest on borrowings | 818 | 526 | 2,700 | 1,802 | |||||||||||
Total interest expense | 4,265 | 2,325 | 13,771 | 8,280 | |||||||||||
Net interest income | 13,201 | 10,628 | 48,093 | 40,375 | |||||||||||
Provision for loan losses | 600 | 500 | 1,800 | 2,500 | |||||||||||
Net interest income after provision for loan losses | 12,601 | 10,128 | 46,293 | 37,875 | |||||||||||
Noninterest income: | |||||||||||||||
Gain on sale of SBA loans | 151 | 42 | 378 | 477 | |||||||||||
Loan fees | 284 | 191 | 1,121 | 654 | |||||||||||
Bank owned life insurance income | 155 | 163 | 613 | 652 | |||||||||||
Service fees on deposit accounts | 377 | 122 | 1,482 | 416 | |||||||||||
Loss on sale and valuation adjustments of OREO | (331) | (69) | (690) | (1,421) | |||||||||||
Other | 172 | 193 | 513 | 867 | |||||||||||
Total noninterest income | 808 | 642 | 3,417 | 1,645 | |||||||||||
Noninterest expense: | |||||||||||||||
Compensation and benefits | 2,296 | 2,092 | 8,251 | 7,362 | |||||||||||
Professional services | 369 | 422 | 1,419 | 1,573 | |||||||||||
Occupancy and equipment | 391 | 398 | 1,675 | 1,443 | |||||||||||
Data processing | 231 | 204 | 835 | 736 | |||||||||||
FDIC insurance and other assessments | 129 | 78 | 420 | 296 | |||||||||||
OREO expense | 131 | 169 | 611 | 625 | |||||||||||
Other operating expense | 925 | 1,067 | 3,084 | 3,258 | |||||||||||
Total noninterest expense | 4,472 | 4,430 | 16,295 | 15,293 | |||||||||||
Income before income tax expense | 8,937 | 6,340 | 33,415 | 24,227 | |||||||||||
Income tax expense | 2,004 | 5,799 | 8,377 | 12,389 | |||||||||||
Net income attributable to Company and | 6,933 | 541 | 25,038 | 11,838 | |||||||||||
Net income (loss) attributable to noncontrolling | 106 | (10) | 214 | (32) | |||||||||||
Net income attributable to Company | 6,827 | 551 | 24,824 | 11,870 | |||||||||||
Preferred stock dividend and discount accretion | (17) | (226) | (446) | (1,119) | |||||||||||
Net income available to common shareholders | $ | 6,810 | $ | 325 | $ | 24,378 | $ | 10,751 | |||||||
Earnings per common share: | |||||||||||||||
Basic | $ | 0.65 | $ | 0.04 | $ | 2.53 | $ | 1.28 | |||||||
Diluted | $ | 0.63 | $ | 0.04 | $ | 2.28 | $ | 1.13 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 10,458,554 | 8,617,135 | 9,629,467 | 8,423,532 | |||||||||||
Diluted | 10,906,729 | 8,716,196 | 10,911,344 | 10,515,599 |
Table 3: Operating Ratios
Three months ended | For the year ended | ||||||
December 31, | December 31, | ||||||
2018 | 2017 | 2018 | 2017 | ||||
Return on average assets | 1.95% | 0.20% | 1.96% | 1.13% | |||
Return on average common equity | 18.16% | 1.08% | 17.99% | 9.40% | |||
Interest rate spread | 3.35% | 3.72% | 3.54% | 3.83% | |||
Net interest margin | 3.88% | 3.93% | 3.92% | 4.00% | |||
Efficiency ratio | 31.92% | 39.31% | 31.63% | 36.39% |
Table 4: Asset Quality Data
December 31, | December 31, | ||||||
2018 | 2017 | ||||||
(Amounts in thousands except ratio data) | |||||||
Allowance for loan losses | $ | 19,075 | $ | 16,533 | |||
Allowance for loan losses to total loans | 1.54% | 1.63% | |||||
Allowance for loan losses to non-accrual loans | 622.3% | 364.7% | |||||
Non-accrual loans | $ | 3,065 | $ | 4,534 | |||
OREO | $ | 5,124 | $ | 7,248 |
View original content:http://www.prnewswire.com/news-releases/parke-bancorp-inc-announces-record-2018-earnings-300784004.html
SOURCE Parke Bancorp, Inc.
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