Highlights: | |
Net Income: | $12.2 million for Q2 2026, increased 3.4% over Q1 2026 |
Revenue: | $39.3 million for Q2 2026, increased 4.1% over Q1 2026 |
Total Assets: | $2.30 billion, increased 4.1% over Q1 2026 |
EPS (diluted): | $1.03 for Q2 2026 compared to $0.99 for Q1 2026 |
NIM: | 4.17% for Q2 2026, flat compared to 4.17% for Q1 2026 |
WASHINGTON TOWNSHIP, NJ, July 22, 2026 /PRNewswire/ -- Parke Bancorp, Inc. ("Parke Bancorp" or the "Company") (NASDAQ: "PKBK"), the parent company of Parke Bank, announced its operating results for the three and six months ended June 30, 2026.
Highlights for the three and six months ended June 30, 2026:
- Net income available to common shareholders was $12.2 million, or $1.04 per basic common share and $1.03 per diluted common share, for the three months ended June 30, 2026, an increase of $4.0 million, or 47.8%, compared to net income available to common shareholders of $8.3 million, or $0.70 per basic common share and $0.69 per diluted common share, for the three months ended June 30, 2025. The increase was primarily due to a $5.1 million increase in net interest income, and a $0.3 million decrease in provision for credit losses, partially offset by a $0.2 million increase in non-interest expense.
- Net interest income increased $5.1 million, or 28.8%, to $23.0 million for the three months ended June 30, 2026, compared to $17.9 million for the same period in 2025.
- The Company recorded a provision for credit losses of $0.7 million for the three months ended June 30, 2026, compared to a provision for credit losses of $1.0 million for the same period in 2025.
- Non-interest income increased by $0.1 million, or 7.5%, to $0.88 million for the three months ended June 30, 2026, compared to $0.82 million for the same period in 2025.
- Non-interest expense increased $0.2 million, or 3.6%, to $6.9 million for the three months ended June 30, 2026, compared to $6.7 million for the same period in 2025.
- Net income available to common shareholders was $24.1 million, or $2.05 per basic common share and $2.02 per diluted common share, for the six months ended June 30, 2026, an increase of $8.0 million, or 50.0%, compared to net income available to common shareholders of $16.1 million, or $1.36 per basic common share and $1.34 per diluted common share, for the same period in 2025. The increase is primarily due to an increase in net interest income of $10.7 million, and a $0.7 million decrease in provision for credit losses, partially offset by a $0.9 million increase in non-interest expense.
- Net-interest income increased $10.7 million, or 30.9%, to $45.1 million for the six months ended June 30, 2026, compared to $34.5 million for the same period in 2025.
- The Company recorded a provision for credit losses of $0.9 million for the six months ended June 30, 2026, compared to a provision for credit losses of $1.6 million for the same period in 2025.
- Non-interest income increased $0.1 million, or 5.7%, to $1.7 million for the six months ended June 30, 2026, compared to $1.6 million for the same period in 2025.
- Non-interest expense increased $0.9 million, or 6.9%, to $14.1 million for the six months ended June 30, 2026, compared to $13.2 million for the same period in 2025.
The following is a recap of the significant items that impacted results of operations for the three and six months ended June 30, 2026:
Interest income increased $3.4 million during the three months ended June 30, 2026 compared to the same period in 2025, primarily due to an increase in interest and fees on loans of $4.2 million, or 12.8%, to $37.0 million, resulting from higher market interest rates and higher average loan portfolio balances. Interest earned on deposits held at the Federal Reserve Bank ("FRB") decreased $0.8 million, or 38.3%, during the three months ended June 30, 2026, due to lower average balances on deposit and a decrease in the interest rate on those deposits. For the six months ended June 30, 2026, interest income increased $6.5 million from the same period in 2025, primarily due to an increase in interest and fees on loans of $8.6 million, or 13.4%, to $72.8 million, primarily due to an increase in average outstanding loan balances, and higher market interest rates. Interest earned on deposits held at the FRB decreased $2.0 million during the six months ended June 30, 2026, due to lower average balances on deposit and a decrease in the interest rate on those deposits.
Interest expense decreased $1.7 million, or 10.0%, to $15.4 million for the three months ended June 30, 2026, compared to the same period in 2025, primarily due to a decrease in interest expense on deposits, due to a decrease in market interest rates, as well as a decrease in interest expense on borrowings. For the six months ended June 30, 2026, interest expense decreased $4.1 million, or 12.1%, to $30.2 million, primarily due to lower market interest rates, combined with changes in the mix of deposits and borrowings.
The Company booked a provision for credit losses of $0.7 million for the three months ended June 30, 2026, compared to a provision for credit losses of $1.0 million for the same period in 2025. The decrease in the provision for credit losses for the three months ended June 30, 2026, was due to a decrease in loan balance during the three months ended June 30, 2026, as compared to an increase in loan balance during the same period in 2025, partially offset by an increase in charge-offs. The provision for credit losses for the six months ended June 30, 2026 decreased $0.7 million, or 44.2%, to $0.9 million, compared to a provision for credit losses of $1.6 million for the same period in 2025. The decrease in the provision for credit losses was primarily due to a decrease in loan balance from December 31, 2025, partially offset by an increase in charge-offs during the six months ended June 30, 2026.
Non-interest income increased $61.0 thousand, or 7.5%, for the three months ended June 30, 2026, compared to the same period in 2025, primarily as a result of an increase in bank owned life insurance ("BOLI") income. For the six months ended June 30, 2026, non-interest income increased $94.0 thousand, primarily driven by a $136.0 thousand increased in BOLI, partially offset by a $54.0 thousand decreased in service fees on deposit accounts.
Non-interest expense increased $0.2 million, or 3.6%, to $6.9 million for the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily driven by an increase in compensation and benefits of $0.3 million, and an increase in other operating expense of $0.1 million, partially offset by a decrease in data processing expense of $0.2 million, compared to the same period in 2025. For the six months ended June 30, 2026, non-interest expense increased $0.9 million, or 6.9%, to $14.1 million, compared to the same period in 2025. The increase in non-interest expense was primarily due to an increase in compensation and benefits of $0.7 million, and an increase in other operating expense of $0.5 million, partially offset by a decrease in data processing expense of $0.3 million, compared to the six months ended June 30, 2025.
Income tax expense increased $1.3 million for the three months ended June 30, 2026, compared to the same period in 2025. For the six months ended June 30, 2026, income tax expense increased $2.5 million, compared to the same period in 2025. The effective tax rate for the three and six months ended June 30, 2026 was 24.9% and 24.4%, respectively, compared to 23.9% and 24.7% for the same period in 2025.
June 30, 2026 discussion of financial condition
- Total assets increased to $2.30 billion at June 30, 2026, from $2.25 billion at December 31, 2025, an increase of $53.6 million, or 2.4%, primarily due to an increase in cash and cash equivalents, and an increase in other real estate owned, partially offset by a decrease in net loans.
- Cash and cash equivalents totaled $204.7 million at June 30, 2026, as compared to $156.9 million at December 31, 2025. The increase in cash and cash equivalents was primarily due to the timing of loan payoffs, which will be redeployed into future loans/investments.
- The investment securities portfolio increased to $14.3 million at June 30, 2026, from $13.5 million at December 31, 2025, an increase of $0.8 million, or 5.7%, primarily due to the purchase of a $1.5 million security classified as held to maturity, offset by pay downs of securities.
- Gross loans decreased $3.9 million or 0.2%, to $2.03 billion at June 30, 2026, compared to gross loans of $2.04 billion at December 31, 2025.
- Nonperforming loans at June 30, 2026 decreased to $5.4 million, or 0.27% of total loans, a decrease of $5.4 million, or 49.8%, from $10.8 million of nonperforming loans at December 31, 2025. OREO at June 30, 2026 was $6.8 million, an increase of $3.9 million from December 31, 2025. Nonperforming assets (consisting of nonperforming loans and OREO) represented 0.53% and 0.61% of total assets at June 30, 2026 and December 31, 2025, respectively. Loans past due 30 to 89 days were $2.1 million at June 30, 2026, a decrease of $1.4 million from December 31, 2025.
- The allowance for credit losses was $34.6 million at June 30, 2026, as compared to $34.6 million at December 31, 2025. The ratio of the allowance for credit losses to total loans was 1.70% at June 30, 2026, and 1.70% at December 31, 2025. The ratio of allowance for credit losses to non-performing loans was 639.4% at June 30, 2026, compared to 321.0%, at December 31, 2025.
- Total deposits were $1.76 billion at June 30, 2026, an increase of $0.9 million or 0.1%, compared to December 31, 2025. The increase in deposits was primarily driven by an increase in interest-bearing deposits of $4.3 million, partially offset by a decrease in non-interest-bearing deposits of $3.3 million.
- Total borrowings increased $34.0 million during the six months ended June 30, 2026, to $177.4 million at June 30, 2026, from $143.4 million at December 31, 2025, due to a $34.0 million increase in outstanding FHLBNY borrowings.
- Total equity increased to $346.9 million at June 30, 2026, up from $324.5 million at December 31, 2025, an increase of $21.6 million, or 6.6%, primarily due to the retention of earnings, partially offset by the payment of $4.5 million of cash dividends.
CEO outlook and commentary
Vito S. Pantilione, President and Chief Executive Officer of Parke Bancorp, Inc. and Parke Bank, provided the following statement:
"Economic volatility continued during the first half of 2026 as geopolitical tensions, persistent inflation concerns, and uncertainty surrounding future monetary policy weighed on financial markets and the broader economy. Developments in the Middle East, including continued tensions affecting the Strait of Hormuz, as well as the ongoing conflict between Russia and Ukraine, have contributed to uncertainty regarding global economic growth, inflation, and interest rate expectations. While increased oil production has helped moderate energy prices, inflation remains a primary concern of the Federal Reserve. As a result, the outlook for interest rates remains uncertain, making economic forecasting particularly challenging. Despite these economic headwinds, Parke Bank delivered strong financial results during the first six months of 2026. Net income increased to $24.1 million for the six months ended June 30, 2026, representing a 50% increase compared to $16.1 million for the same period in 2025. The increase in earnings was driven by the continued strength of our loan portfolio, higher asset yields, and lower funding costs. Net interest margin improved to 4.17% compared to 3.32% for the first six months of 2025, reflecting the Bank's ability to effectively manage its balance sheet in a changing interest rate environment. Profitability metrics also improved significantly. Return on average assets increased to 2.18% from 1.52%, while return on average common equity rose to 14.40% from 10.53% during the same period in 2025. Disciplined expense management continued to contribute to our strong performance. The Bank's efficiency ratio improved to 30.16% compared to 36.60% for the first six months of 2025, demonstrating our ongoing focus on operational efficiency while maintaining a high level of service to our customers."
Forward Looking Statement Disclaimer
This release may contain forward-looking statements which are made in good faith pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, such as statements of the Company's plans, objectives, expectations, estimates and intentions, involve risks and uncertainties and are subject to change based on various important factors (some of which are beyond the Company's control) which may cause actual results to differ materially from those currently anticipated. Such factors include: our ability to maintain a strong capital base, strong earning and strict cost controls; our ability to generate strong revenues with increased interest income and net interest income; our ability to continue the growth and maintain the quality of our loan portfolio; our ability to continue to increase shareholders' equity, maintain strong loan underwriting and allowance for credit losses; our ability to react quickly to any increase in loan delinquencies; our ability to face current challenges in the market; our ability to be well positioned navigate the challenging economic volatility; our ability to continue to reduce our nonperforming loans and delinquencies and the expenses associated with them; our ability to increase the rate of growth of our loan portfolio; our ability to continue to improve net interest margin; our ability to enhance shareholder value in the future; our ability to continue growing our Company, our earnings and shareholders' equity; and the possibility of additional corrective actions or limitations on the operations of the Company. and Parke Bank being imposed by banking regulators. Readers should not place undue reliance on any forward-looking statements. The Company 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.
(PKBK-ER)
Financial Supplement: Table 1: Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
Parke Bancorp, Inc. and Subsidiaries Condensed Consolidated Balance Sheets | ||||||||
June 30, | December 31, | |||||||
2026 | 2025 | |||||||
(Dollars in thousands) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 204,723 | $ | 156,863 | ||||
Investment securities | 14,294 | 13,523 | ||||||
Loans, net of unearned income | 2,031,361 | 2,035,227 | ||||||
Less: Allowance for credit losses | (34,624) | (34,649) | ||||||
Net loans | 1,996,737 | 2,000,578 | ||||||
Premises and equipment, net | 5,534 | 5,506 | ||||||
Bank owned life insurance (BOLI) | 35,790 | 35,320 | ||||||
Other assets | 45,971 | 37,646 | ||||||
Total assets | $ | 2,303,049 | $ | 2,249,436 | ||||
Liabilities and Equity | ||||||||
Non-interest bearing deposits | $ | 193,186 | $ | 196,506 | ||||
Interest bearing deposits | 1,321,800 | 1,346,834 | ||||||
Brokered Deposits | 244,617 | 215,329 | ||||||
FHLBNY borrowings | 164,000 | 130,000 | ||||||
Subordinated debentures | 13,403 | 13,403 | ||||||
Other liabilities | 19,974 | 22,846 | ||||||
Total liabilities | 1,956,980 | 1,924,918 | ||||||
Total shareholders' equity | 346,069 | 324,518 | ||||||
Total liabilities and equity | $ | 2,303,049 | $ | 2,249,436 | ||||
Table 2: Consolidated Income Statements (Unaudited) | ||||||||||||||||
Parke Bancorp, Inc. and Subsidiaries Consolidated Income Statement | ||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||
Interest income: | ||||||||||||||||
Interest and fees on loans | $ | 36,956 | $ | 32,756 | $ | 72,847 | $ | 64,232 | ||||||||
Interest and dividends on investments | 237 | 232 | 459 | 520 | ||||||||||||
Interest on deposits with banks | 1,257 | 2,036 | 2,084 | 4,118 | ||||||||||||
Total interest income | 38,450 | 35,024 | 75,390 | 68,870 | ||||||||||||
Interest expense: | ||||||||||||||||
Interest on deposits | 13,736 | 15,144 | 27,164 | 30,312 | ||||||||||||
Interest on borrowings | 1,705 | 2,009 | 3,085 | 4,080 | ||||||||||||
Total interest expense | 15,441 | 17,153 | 30,249 | 34,392 | ||||||||||||
Net interest income | 23,009 | 17,871 | 45,141 | 34,478 | ||||||||||||
Provision for credit losses | 676 | 984 | 878 | 1,574 | ||||||||||||
Net interest income after provision for credit losses | 22,333 | 16,887 | 44,263 | 32,904 | ||||||||||||
Non-interest income | ||||||||||||||||
Service fees on deposit accounts | 278 | 312 | 566 | 620 | ||||||||||||
Other loan fees | 168 | 145 | 329 | 322 | ||||||||||||
Bank owned life insurance income | 250 | 169 | 470 | 334 | ||||||||||||
Other | 181 | 190 | 366 | 361 | ||||||||||||
Total non-interest income | 877 | 816 | 1,731 | 1,637 | ||||||||||||
Non-interest expense | ||||||||||||||||
Compensation and benefits | 3,560 | 3,264 | 7,264 | 6,555 | ||||||||||||
Professional services | 680 | 652 | 1,278 | 1,366 | ||||||||||||
Occupancy and equipment | 730 | 676 | 1,491 | 1,364 | ||||||||||||
Data processing | 272 | 425 | 588 | 845 | ||||||||||||
FDIC insurance and other assessments | 369 | 384 | 742 | 734 | ||||||||||||
OREO expense | 51 | 100 | 131 | 227 | ||||||||||||
Other operating expense | 1,259 | 1,179 | 2,642 | 2,127 | ||||||||||||
Total non-interest expense | 6,921 | 6,680 | 14,136 | 13,218 | ||||||||||||
Income before income tax expense | 16,289 | 11,023 | 31,858 | 21,323 | ||||||||||||
Income tax expense | 4,048 | 2,740 | 7,773 | 5,262 | ||||||||||||
Net income attributable to Company | 12,241 | 8,283 | 24,085 | 16,061 | ||||||||||||
Less: Preferred stock dividend | (5) | (5) | (10) | (10) | ||||||||||||
Net income available to common shareholders | $ | 12,236 | $ | 8,278 | $ | 24,075 | $ | 16,051 | ||||||||
Earnings per common share | ||||||||||||||||
Basic | $ | 1.04 | $ | 0.70 | $ | 2.05 | $ | 1.36 | ||||||||
Diluted | $ | 1.03 | $ | 0.69 | $ | 2.02 | $ | 1.34 | ||||||||
Weighted average common shares outstanding | ||||||||||||||||
Basic | 11,725,654 | 11,843,328 | 11,716,114 | 11,839,856 | ||||||||||||
Diluted | 11,922,397 | 12,008,224 | 11,913,086 | 12,007,594 | ||||||||||||
Table 3: Operating Ratios (unaudited) | ||||||||||||||||
Three months ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||
Return on average assets | 2.17 | % | 1.56 | % | 2.18 | % | 1.52 | % | ||||||||
Return on average common equity | 14.33 | % | 10.69 | % | 14.40 | % | 10.53 | % | ||||||||
Interest rate spread | 3.36 | % | 2.46 | % | 3.35 | % | 2.35 | % | ||||||||
Net interest margin | 4.17 | % | 3.41 | % | 4.17 | % | 3.32 | % | ||||||||
Efficiency ratio* | 28.98 | % | 35.75 | % | 30.16 | % | 36.60 | % | ||||||||
* Efficiency ratio is calculated using non-interest expense divided by the sum of net interest income and non-interest income. | ||||||||||||||||
Table 4: Asset Quality Data (unaudited) | ||||||||
June 30, | December 31, | |||||||
2026 | 2025 | |||||||
(Amounts in thousands except ratio data) | ||||||||
Allowance for credit losses on loans | $ | 34,624 | $ | 34,649 | ||||
Allowance for credit losses to total loans | 1.70 | % | 1.70 | % | ||||
Allowance for credit losses to non-accrual loans | 639.40 | % | 321.00 | % | ||||
Non-accrual loans | $ | 5,415 | $ | 10,793 | ||||
OREO | $ | 6,762 | $ | 2,862 | ||||
SOURCE Parke Bancorp, Inc.
