Parke Bancorp Reports Strong Third Quarter Earnings, driven by Net Interest Income and Contingent Loss Recovery

Strategic Insights -

Parke Bancorp, the parent company of Parke Bank, announced its operating results for the three and nine months ended September 30, 2024, showing significant gains in net income available to common shareholders. The company's net income available to common shareholders was $7.5 million, or $0.63 per basic common share and $0.62 per diluted common share, for the three months ended September 30, 2024, a substantial increase of $6.5 million, or 634.1%, compared to the same period in 2023. This growth was largely driven by the non-recurring $9.5 million contingent loss disclosed in Q3 2023, partially offset by a $1.0 million decrease in net interest income and a $0.9 million decrease in non-interest income.

Key Takeaways:

  • Net income available to common shareholders was $7.5 million, or $0.63 per basic common share and $0.62 per diluted common share, for the three months ended September 30, 2024, an increase of $6.5 million, or 634.1%, compared to the same period in 2023.
  • Net interest income decreased $1.0 million, or 6.1%, to $14.7 million for the three months ended September 30, 2024, compared to $15.7 million for the same period in 2023.
  • Non-interest income decreased $0.9 million, or 50.9%, to $0.9 million for the three months ended September 30, 2024, compared to $1.8 million for the same period in 2023.
  • Non-interest expense decreased $9.5 million, or 59.8%, to $6.4 million for the three months ended September 30, 2024, compared to $15.8 million for the same period in 2023.
  • Net income available to common shareholders was $20.1 million, or $1.68 per basic common share and $1.66 per diluted common share, for the nine months ended September 30, 2024, a decrease of $0.2 million, or 0.8%, compared to the same period in 2023.
  • Interest income increased $9.4 million from the same period in 2023, primarily due to an increase in interest and fees on loans of $9.4 million, or 12.1%, to $87.0 million, primarily driven by an increase in average outstanding loan balances, and higher market interest rates.
  • Interest expense increased $15.0 million, or 44.5%, to $48.7 million for the nine months ended September 30, 2024, primarily due to higher market interest rates, combined with changes in the mix of deposits and borrowings.

Statistics:

  • Net income available to common shareholders: $7.5 million (three months ended September 30, 2024), $20.1 million (nine months ended September 30, 2024)
  • Basic and diluted EPS: $0.63, $1.68 (three and nine months ended September 30, 2024), respectively
  • Net interest income: $14.7 million (three months ended September 30, 2024), $43.1 million (nine months ended September 30, 2024)
  • Non-interest income: $0.9 million (three months ended September 30, 2024), $3.2 million (nine months ended September 30, 2024)
  • Non-interest expense: $6.4 million (three months ended September 30, 2024), $19.1 million (nine months ended September 30, 2024)
  • Interest income: $30.2 million (three months ended September 30, 2024), $87.0 million (nine months ended September 30, 2024)
  • Interest expense: $17.4 million (three months ended September 30, 2024), $48.7 million (nine months ended September 30, 2024)

Sources:

  • Parke Bancorp, Inc. ("Parke Bancorp" or the "Company") (NASDAQ: "PKBK")
  • Parke Bank