Executive Summary

Q1 2025 delivered solid profitability and operating leverage: net income available to common rose to $7.8M ($0.65 diluted EPS), up 5.1% vs Q4 2024 and 26.5% YoY; net interest income grew 18.2% YoY to $16.6M while the efficiency ratio improved to 37.5% from 40.9% in Q4 and 43.2% in Q1 2024 .
Balance sheet quality strengthened: nonperforming loans fell to $11.1M (0.59% of loans) with ACL coverage of 297.5% of non-accruals; deposits increased 2.2% sequentially to $1.67B, led by $128.4M in money market inflows offset by $88.9M lower brokered time deposits .
Macro tone cautious: management flagged tariff-driven volatility, uncertain rate path, and deposit competition elevating funding costs; Parke cited strong capital/liquidity and majority adjustable-rate loans to manage rate swings .
Dividend cadence maintained: $0.18 per share cash dividends declared March 19 (payable Apr 18) and June 20 (payable Jul 18), reinforcing capital strength and shareholder returns .

What Went Well and What Went Wrong

What Went Well

Operating leverage and efficiency: Net interest income +18.2% YoY; efficiency ratio improved to 37.5% (vs 43.2% in Q1 2024), driven by higher loan yields and tight expense control .
Deposit growth and funding mix: Total deposits +2.2% QoQ to $1.67B as money market balances rose $128.4M, reducing reliance on brokered time deposits (-$88.9M) .
Asset quality stabilization: NPLs decreased to $11.1M (0.59% of loans); ACL coverage of non-accruals improved to 297.5% .
Management quote: “ParkeBank is well positioned to navigate the challenging economic volatility with tight control of our expenses, strong capital, and management of our asset quality.” .

What Went Wrong

Non-interest income softness: Down 22.7% YoY to $0.8M, mainly lower service fees on deposit accounts .
Higher funding costs: Interest expense +11.8% YoY to $17.2M amid mix shifts and elevated rates; deposit competition raising cost of funds and compressing NIM structurally, per management .
Provision build: Provision for credit losses increased to $0.6M (vs $0.2M in Q1 2024), reflecting loan growth in commercial portfolios partially offset by improved construction portfolio factors .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$33.0	$34.5	$34.7
Net Interest Income ($USD Millions)	$14.723	$15.619	$16.607
Provision for Credit Losses ($USD Millions)	$(0.141)	$0.182	$0.590
Non-Interest Income ($USD Millions)	$0.901	$1.138	$0.821
Non-Interest Expense ($USD Millions)	$6.365	$6.850	$6.538
Pre-Tax Income ($USD Millions)	$9.400	$9.725	$10.300
Net Income to Company ($USD Millions)	$7.508	$7.398	$7.778
Net Income to Common ($USD Millions)	$7.503	$7.393	$7.773
EPS - Diluted ($USD)	$0.62	$0.61	$0.65
Net Interest Margin (%)	2.97%	3.02%	3.21%
Efficiency Ratio (%)	40.74%	40.88%	37.51%

KPIs and Balance Sheet

KPI	Q3 2024	Q4 2024	Q1 2025
Total Assets ($USD Billions)	$2.065	$2.142	$2.142
Gross Loans ($USD Billions)	$1.840	$1.868	$1.883
Total Deposits ($USD Billions)	$1.560	$1.631	$1.667
FHLBNY Borrowings ($USD Millions)	$145.0	$145.0	$105.0
Total Borrowings ($USD Millions)	$188.3	$188.3	$148.3
Total Shareholders’ Equity ($USD Millions)	$296.460	$300.073	$305.942
Nonperforming Loans ($USD Millions)	$12.201	$11.782	$11.122
NPLs / Total Loans (%)	0.66%	0.63%	0.59%
ACL / Total Loans (%)	1.76%	1.74%	1.76%
ACL / Non-Accrual Loans (%)	264.88%	276.46%	297.53%
Loans past due 30–89 days ($USD Millions)	$1.2	$1.4	$3.1
Effective Tax Rate (%)	20.1%	23.9%	24.5%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share ($)	Q2 2025	N/A	$0.18 (payable Apr 18, 2025)	Initiated/maintained quarterly cadence
Dividend per share ($)	Q3 2025	Prior cadence	$0.18 (payable Jul 18, 2025)	Maintained
Operating guidance (revenue, margins, OpEx, OI&E, tax rate)	FY/Q2 onward	Not provided	Not provided	Maintained “no formal guidance” stance; commentary on macro and cost control

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
Tariffs/macro volatility	Fed cut 50 bps; geopolitical risk (Israel/Iran/Russia/Ukraine) noted; slower-than-expected 2024 rate reductions; deposit mix pressures	Tariff implementation/90-day pause; recession debates; uncertain rate path; Parke highlights strong capital/liquidity and cost controls	Elevated uncertainty
Deposit competition/cost of funds	Interest expense elevated; deposit mix moved to interest-bearing; competition compressing NIM	“War for deposits” in competitive market raising cost of funding and reducing NIM	Persistent pressure
AI/technology initiatives	Not emphasized	Upgrading data processing and using AI tools to capture more “digital wallet” deposits	Initiating investment
Regional expansion	Exploring new markets; adding commercial loan officers	Opened loan production office in South Carolina; leverages existing client relationships	Expanding footprint
Regulatory/BSA compliance	Continued regulatory pressure; cost focus	BSA compliance costs “at times exceeded 10% of operating expenses”; investment in upgraded technology/staff	Ongoing burden; mitigations underway
Asset quality	NPLs increased vs 2023; ACL ~1.76%	NPLs down QoQ; ACL coverage of non-accruals improved to ~298%	Improving

Management Commentary

“Net Income was $7.8 million… The growth in our loan portfolio combined with higher market rates… helped to support our higher interest income… Our Efficiency Ratio improved to 37.1%… Total deposits increased 2.2% to $1.67 billion, and gross loans increased 0.8% to $1.88 billion.” .
“ParkeBank is well positioned to navigate the challenging economic volatility with tight control of our expenses, strong capital, and management of our asset quality.” .
“We continue to invest in upgrading our data processing system… utilizing AI tools… to obtain more of the market’s digital wallet… opened a loan production office in South Carolina… growth of our loan portfolio includes continued focus on asset quality.” .
“One of the biggest factors in our expenses… is the cost of regulatory compliance… BSA… at times exceeded 10% of our operating expenses.” .
“We are prepared for another roller coaster ride… very strong capital and tiered liquidity… majority of our loan portfolio are adjustable rate mortgages.” .

Q&A Highlights

Tariff risk preparedness: When asked about additional steps in case tariffs cause greater economic turmoil, management emphasized strong capital, tiered liquidity to respond to faster rate cuts or rate increases, and the adjustable-rate nature of the loan book .
Note: No dedicated Q1 2025 earnings call transcript was available; limited Q&A occurred at the April 22, 2025 Annual Meeting webcast .

Estimates Context

Consensus estimates: S&P Global consensus for EPS and revenue in Q1 2025 were not available for PKBK; we therefore cannot compute beat/miss vs Street. Values retrieved from S&P Global.*
Actuals used herein are from company filings and press materials; revenue $34.7M, diluted EPS $0.65 .

Metric	Q1 2025 Consensus (S&P Global)	Q1 2025 Actual	Surprise
EPS (Primary)	N/A*	$0.65	N/A*
Revenue ($USD Millions)	N/A*	$34.7	N/A*

*Values retrieved from S&P Global.

Where estimates may need to adjust: Continued NIM recovery (3.21%), deposit growth, and lower NPLs could support upward bias to forward run-rate NII/earnings, tempered by deposit competition and softer non-interest income until fee trends stabilize .

Key Takeaways for Investors

Positive operating momentum: Sequential and YoY EPS/NII growth alongside a 370 bps improvement in efficiency ratio vs Q1 2024 indicates better throughput and cost discipline .
Funding mix improvement: Deposits +2.2% QoQ with a pivot toward money markets and away from brokered time deposits, reducing reliance on more expensive funding .
Asset quality resilient: NPLs down to 0.59% of loans and ACL coverage ~298% of non-accruals, providing ample loss absorption capacity .
Macro and regulatory watch-items: Management highlights tariff uncertainty, deposit wars, and heavy BSA compliance burden (>10% of operating expenses) as key headwinds to watch .
Strategic expansion and tech enablement: New South Carolina loan production office and AI-driven data processing upgrades aim to support loan and deposit growth in 2025 .
Dividend-supported return profile: $0.18/share declared in March and June suggests continued capital strength while preserving flexibility if conditions change .
Near-term trading lens: Narrative centers on efficiency gains/NIM stabilization vs funding cost pressure and non-interest income softness; monitor deposit pricing, fee trajectory, and asset quality metrics for confirmation of trend sustainability .

PARKE BANCORP, INC. (PKBK)·Q1 2025 Earnings Summary