Parke Bancorp Inc. Reports Operating Results (10-Q)
Parke Bcp Inc has a market cap of $33.4 million; its shares were traded at around $6.15 with a P/E ratio of 5.9 and P/S ratio of 0.7. Parke Bcp Inc had an annual average earning growth of 6.5% over the past 5 years.
Highlight of Business Operations:OREO at March 31, 2012 was $23.9 million, compared to $19.4 million at December 31, 2011, the largest being a condominium development valued at $12.7 million. This property was sold in 2010 but does not qualify for a sales treatment under GAAP.
Non-interest Income: Non-interest income was $1.1 million for the three months ended March 31, 2012, compared to $2.5 million for the same period last year. There was a $1.6 million decrease in gain on sale of SBA loans as compared to the same period in 2011. The 2011 gain was higher due to a change in the SBA sales agreement; warranty language was removed from the sales agreement and Parke Bancorp was no longer required to defer the recognition of the gain for 90 days. The gain recorded in the 2011 quarter represented loans sold during the quarter ended March 31, 2011 and previously deferred gains of $1.4 million from the quarter ended December 31, 2010.
Management reviews the level of the allowance monthly. Although management used the best information available to establish the allowance for loan losses, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluation. In addition, the Federal Deposit Insurance Corporation and the New Jersey Department of Banking and Insurance, as an integral part of their examination process, periodically review the allowance for loan losses. Such agencies may require us to recognize adjustments to the allowance based on judgments about information available to them at the time of their examination. A large loss could deplete the allowance and require increased provisions to replenish the allowance, which would adversely affect earnings.
Liquidity: Liquidity describes the ability to meet the financial obligations that arise out of the ordinary course of business. Liquidity addresses the Company's ability to meet deposit withdrawals on demand or at contractual maturity, to repay borrowings as they mature, and to fund current and planned expenditures. Liquidity is derived from increased repayment and income from interest-earning assets. The loan to deposit ratio was 94.5% and 98.5% at March 31, 2012 and December 31, 2011, respectively. Funds received from new and existing depositors provided a large source of liquidity for the three month period ended March 31, 2012. The Company seeks to rely primarily on core deposits from customers to provide stable and cost-effective sources of funding to support loan growth. The Company also seeks to augment such deposits with longer term and higher yielding certificates of deposit. To the extent that retail deposits are not adequate to fund customer loan demand, liquidity needs can be met in the short-term funds market. As of March 31, 2012, the Company had a short term line of credit with Atlantic Central Bankers Bank for $3.0 million. There were no outstanding borrowings on this line at March 31, 2012. Longer term funding can be obtained through advances from the FHLB. As of March 31, 2012, the Company maintained lines of credit with the FHLB of $108.7 million, of which $25.6 million was outstanding at March 31, 2012.
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