Parke Bancorp reports strong Q3 2024 earnings, driven by loan growth and cost management

Parke Bancorp, Inc. reported a significant net income increase of $7.5 million for Q3 2024, a 16.3% rise over Q2 2024 and an impressive 634.1% surge compared to Q3 2023. The surge was primarily due to the absence of a $9.5 million loss recorded in the previous year’s Q3. Revenue also rose to $33.0 million, reflecting a 5.2% increase over Q2, showcasing strong business performance.

CEO Vito S. Pantilione expressed that the company saw positive developments in loan activity, particularly in residential construction. He noted that while the Federal Reserve’s recent 50 basis point rate cut is a positive indicator for inflation management, geopolitical tensions could impact global oil prices and inflation rates, posing future challenges. Pantilione emphasized Parke Bancorp’s strategy to expand its loan portfolio, enter new markets, and add experienced commercial loan officers to sustain its growth trajectory.

Parke Bancorp’s stock is currently trading at $20.19 per share as of October 2024. It remains down from its 52-week high of $22.00 but shows a reasonable valuation with a price-to-earnings ratio of 11.34 and a market capitalization of around $244.22 million. This places the company in a stable financial position despite current market fluctuations.

Asset growth and loan management

As of September 30, 2024, Parke Bancorp’s total assets grew to $2.07 billion, marking a 2.1% increase since December 31, 2023. Gross loans also rose to $1.84 billion, up 2.9% year-to-date. However, the company reported an increase in nonperforming loans, which now stand at $12.2 million, representing a 68% rise. Pantilione reiterated that the bank is closely monitoring asset quality and managing risks through disciplined loan underwriting practices.

Nine-month financial performance shows stability

For the nine months ending September 30, 2024, Parke Bancorp posted a net income of $20.1 million, a slight 0.8% decline from the same period in 2023. The decrease was mainly attributed to lower net interest income and increased provisions for credit losses, which rose to $0.5 million. Despite these challenges, the company continues to demonstrate stable performance with strategic focus areas aimed at mitigating risks and sustaining growth.

CEO’s outlook: balancing growth with caution

Pantilione highlighted that despite economic uncertainties and global conflicts, the bank remains focused on expanding its loan portfolio in stable sectors, particularly residential construction. The company’s strategy includes entering new markets and increasing its team with seasoned loan officers to bolster its growth and profitability. Pantilione’s emphasis on maintaining asset quality and controlling non-interest expenses underscores Parke Bancorp’s cautious yet growth-oriented approach.