Parke Bancorp Inc. Reports Operating Results (10-Q)
Parke Bancorp's wholly-owned subsidiary, Parke Bank, is a New Jersey-chartered commercial bank. The Bank provides full-service banking to individuals and small to mid- size businesses in Gloucester, Atlantic and Cape May counties in New Jersey, as well as the Philadelphia area. Parke Bancorp Inc. has a market cap of $32.6 million; its shares were traded at around $8.068 with a P/E ratio of 7 and P/S ratio of 1. Highlight of Business Operations: Total investment securities decreased to $31.6 million at September 30, 2009 ($29.1 million classified as available-for-sale or 92.1%) from $34.4 million at December 31, 2008, a decrease of $2.9 million or 8.2%. The Company received $8.2 million in cash flow from calls, maturities and principal payments, offset by purchases of $3.3 million. In addition, the fair value of the available-for sale portfolio increased by $3.5 million, primarily related to the CDO portfolio. The fair value for previous reporting periods was based on indicative market bids. Due to an illiquid market for this sector of securities, a discounted cash flow methodology was utilized in accordance with FASB ASC Topic 820-10-65, Fair Value Measurements and Disclosures. The methodology assumptions are detailed in Footnote 3.
Delinquent loans increased $31.3 million to $43.3 million or 7.3% of total loans at September 30, 2009 from $12.0 million or 2.2% of total loans at December 30, 2008. Delinquent loan balances by number of days delinquent were: 31 to 59 days --- $9.0 million; 60 to 89 days --- $8.0 million; and 90 days and greater --- $26.3 million. Loans 90 days and more past due are no longer accruing interest.
At September 30, 2009, the Bank’s total deposits increased to $531.2 million from $495.3 million at December 31, 2008, an increase of $35.9 million or 7.2%. Non-interest bearing deposits decreased $1.2 million, or 5.2%, to $21.1 million at September 30, 2009 from $22.3 million at December 31, 2008. NOW and money market accounts increased $22.5 million, or 32.3%, to $92.2 million at September 30, 2009 from $69.7 million at December 31, 2008. Savings accounts increased $64.3 million, or 111.9%, to $121.7 million at September 30, 2009 from $57.4 million at December 31, 2008. Retail certificate of deposits increased $15.7 million, or 9.3%, to $185.5 million at September 30, 2009 from $169.8 million at December 31, 2008. This growth, generated through a successful marketing campaign and a cross selling program to increase core deposits, has allowed us to reduce brokered deposits, which decreased $65.4 million, or 37.2%, to $110.7 million at September 30, 2009 from $176.1 million at December 31, 2008.
General: Net income for the nine months ended September 30, 2009 was $4.4 million, compared to $3.4 million for the same period in 2008. Net income available to common shareholders, which includes the impact of dividends and accretion of discount on preferred stock issued in January 2009, was $3.7 million for the nine month period ended September 30, 2009. The results for the 2009 period were impacted by a provision for loan losses of $3.2 million, a $1.5 million other-than-temporary impairment charge on investment securities, and a special assessment levied on all banks during the 2nd quarter of 2009 by the FDIC of $284,000.
Non-interest Income: Non-interest income decreased $791,000 to a loss of $990,000 for the nine months ended September 30, 2009, from a loss of $199,000 for the nine months ended September 30, 2008. The decrease resulted from the Company recognizing an other-than-temporary impairment charge to non-interest income on CMO’s and a CDO totaling $1.5 million for the nine month period ended September 30, 2009. In addition, during the current quarter, the Company recognized $149,000 in losses related to the sale of foreclosed real estate. This was partially offset by an increase of $153,000 in other miscellaneous income, the majority of which was the reimbursement of legal fees previously charged to expense. The 2008 period included an other-than-temporary impairment charge of $947,000 on FNMA and FHLMC preferred stock.
Non-interest Expense: Non-interest expense increased $1.0 million to $6.3 million for the nine months ended September 30, 2009, from $5.3 million for the nine months ended September 30, 2008. FDIC insurance premiums have increased by $449,000, which includes a special assessment levied on all banks during the 2nd quarter of 2009 by the FDIC. The Company’s assessment amount was $284,000. Compensation and benefits expenses increased $432,000 due to increased staffing, annual merit raises, and higher fringe benefit costs.
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