Parke Bancorp Inc (PKBK) Announces Q3 2023 Earnings Amidst Challenges
Parke Bancorp Inc (NASDAQ:PKBK) reports a net income of $1.0 million for Q3 2023, a significant decrease from the same period in 2022.
Revenue for Q3 2023 stands at $30.9 million, marking a 6.92% increase over Q2 2023.
Total assets slightly decreased by 0.1% from December 31, 2022, to $1.98 billion.
Total loans increased by 2.8% over December 31, 2022, to $1.80 billion.
Parke Bancorp Inc (NASDAQ:PKBK) released its Q3 2023 earnings report on October 25, 2023. The company reported a net income of $1.0 million, a significant decrease compared to the $10.5 million reported for the same period in 2022. This decrease was primarily due to a $9.3 million increase in other operating expenses resulting from the recognition of a $9.5 million contingent loss related to cash that was stolen from a third-party armored car carrier facility used by the company.
Financial Performance
Despite the challenges, Parke Bancorp Inc (NASDAQ:PKBK) reported a revenue increase of 6.92% over Q2 2023, reaching $30.9 million for Q3 2023. Total assets slightly decreased by 0.1% from December 31, 2022, to $1.98 billion. However, the company saw a 2.8% increase in total loans over December 31, 2022, reaching $1.80 billion. Conversely, total deposits decreased by 2.7% from December 31, 2022, to $1.53 billion.
Key Financial Details
Net interest income decreased by 18.7% to $15.7 million for the three months ended September 30, 2023, compared to $19.3 million for the same period in 2022. The provision for credit losses was $0.3 million for the three months ended September 30, 2023, compared to a provision for credit losses of $0.6 million for the same period in 2022. Non-interest income decreased by $0.2 million, or 9.5%, to $1.8 million for the three months ended September 30, 2023, compared to $2.0 million for the same period in 2022.
CEO's Outlook and Commentary
We previously reported a suspected $9.5 million theft by one of the cash couriers utilized by our bank. We contracted with an outside accounting firm to provide forensic accounting services to confirm the amount stolen. The report was recently completed confirming the $9.5 million theft. Based on that report, we are able to book the loss this quarter. The final report also provides us with the necessary documentation to pursue possible sources for recovery, including insurance policies. We are aggressively pursuing these sources and will book any recovery when received. Although this theft is painful and was unexpected, we are fortunate to have the financial strength and earnings to absorb the loss. The strength of our company is evidenced by a Return on Average Assets of 1.38% and a Return on Average Equity of close to 10%, including this one time charge off." - Vito S. Pantilione, President and Chief Executive Officer of Parke Bancorp, Inc. and Parke Bank
Financial Tables
Parke Bancorp Inc (NASDAQ:PKBK) provided comprehensive financial tables detailing its balance sheets and income statements for the three and nine months ended September 30, 2023, and 2022. The tables also included operating ratios and asset quality data, providing a detailed view of the company's financial performance.
Conclusion
Despite the significant challenges faced in Q3 2023, Parke Bancorp Inc (NASDAQ:PKBK) demonstrated resilience with an increase in revenue and total loans. The company's ability to absorb the unexpected loss from the theft incident showcases its financial strength and stability. However, the decrease in net income and total deposits indicates areas that require attention and improvement.
Explore the complete 8-K earnings release (here) from Parke Bancorp Inc for further details.
This article first appeared on GuruFocus.
