PARKE BANCORP, INC. (PKBK)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered solid sequential and year-over-year growth: net income available to common shareholders rose to $8.28M (+6.5% q/q; +28.3% y/y) and diluted EPS was $0.69 (+6.2% q/q; +30.2% y/y), driven by higher net interest income as loan balances and rates increased .
• Total “revenue” (interest income + non-interest income) reached $35.8M (+3.4% q/q), with net interest margin improving to 3.41% and the efficiency ratio strengthening to 35.75% from 40.19% a year ago .
• Balance sheet trends were favorable: loans grew 3.6% since year-end to $1.93B, deposits rose 3.8% to $1.69B, borrowings fell $44.9M, and equity increased to $312.2M, while NPLs declined to $11.2M (0.58% of loans) but 30–89 day past due loans rose to $16.9M due to a single borrower .
• No formal guidance was provided; the Board declared a $0.18 per share cash dividend (paid July 18, 2025), and management emphasized disciplined expense control and readiness to navigate macro volatility (tariffs, rate path, geopolitics) .

What Went Well and What Went Wrong

What Went Well

• Net interest income rose 24.9% y/y to $17.87M as loan yields and average balances increased; interest income climbed $4.8M y/y in Q2, including +$4.0M from loans .
• Operating efficiency improved: efficiency ratio at 35.75% (vs. 40.19% in Q2’24), with management highlighting “continued tight control of our expenses” .
• Funding mix improved: deposits up $62.4M qtd (3.8%) with a $199.6M increase in money market deposits, offsetting $124.1M reduction in brokered time deposits; borrowings fell $44.9M .

Quote: “The growth of our net income was supported by increased interest income due to the growth of our loan portfolio, in addition to continued tight control of our expenses” .

What Went Wrong

• Provision for credit losses increased to $1.0M (vs. $0.5M in Q2’24), driven by growth in construction (+$37.4M) and commercial non-owner occupied (+$24.5M) portfolios q/q .
• Non-interest income declined 32% y/y to $0.82M due to prior-year legal settlements/insurance proceeds that did not recur .
• Early-stage delinquencies (30–89 days) rose to $16.9M from $3.1M at 3/31/25, largely attributable to one commercial borrower (substandard at quarter-end), a watch item for asset quality monitoring .

Financial Results

Segment/Portfolio Movements (QoQ, Q2 2025):

Funding Mix (H1 2025):

Guidance Changes

No formal quantitative revenue/EPS/margin guidance was issued; management reiterated emphasis on expense discipline, liquidity, and asset quality amid macro volatility .

Earnings Call Themes & Trends

No Q2 2025 earnings call transcript was found; themes below reflect management’s press-release commentary across quarters.

Management Commentary

• “Parke Bank experienced continued good financial results in the second quarter of 2025… supported by increased interest income due to the growth of our loan portfolio, in addition to continued tight control of our expenses. We had an efficiency ratio of 36.60% as of June 30, 2025, compared to 41.69% as of June 30, 2024.”
• “Market volatility continues in 2025 as President Trump’s tariffs are negotiated… [and] the disagreement between the Federal Reserve Board and the Administration with respect to reducing short term interest rates.”
• “2025 started off with… sweeping economic changes… Parke Bank had good financial results in the first quarter of 2025… Efficiency Ratio improved to 37.1% compared to 43.2%… deposits increased 2.2%… gross loans increased 0.8%.”
• “Although we are disappointed with the higher than anticipated interest expense negatively affecting our net interest income [in 2024]… Asset Quality remains an important focus… Our net income, tight control of our expenses and… equity exceeding $300 million puts us in a good position to take advantage of opportunities.”

Q&A Highlights

No Q2 2025 earnings call transcript was available; therefore Q&A highlights and any management clarifications from a call cannot be provided for this period [List: earnings-call-transcript returned none].

Estimates Context

Wall Street consensus (S&P Global) coverage appears limited; Q2 2025 EPS and revenue consensus means were unavailable. Actuals: diluted EPS $0.69; “revenue” $35.8M (interest income + non-interest income). Values retrieved from S&P Global.*

*Values retrieved from S&P Global.

Implication: With no consensus benchmarks, price reaction will hinge on reported NIM/efficiency improvements, loan/deposit mix, and credit trends rather than a headline “beat/miss.”

Key Takeaways for Investors

• Sequential and y/y acceleration: net income $8.28M and EPS $0.69 reflect strengthening NIM and operating efficiency; momentum is supported by loan growth and deposit mix shift away from brokered time deposits .
• Efficiency ratio trajectory is positive (35.75% in Q2 vs 37.51% in Q1 and 40.19% y/y), reinforcing expense discipline as a key lever for earnings resilience .
• Watch credit: provision rose to $1.0M on portfolio mix changes; early-stage delinquencies jumped to $16.9M due to a single borrower—monitor migration and resolution in H2 2025 despite strong reserve coverage (ACL/NPLs >300%) .
• Funding and liquidity: deposits up $62.4M, borrowings down $44.9M, cash $184.3M; funding mix improved via money market inflows, lowering reliance on brokered time deposits .
• Macro sensitivity: management cites tariff negotiations and rate path uncertainty; NIM gains could persist if funding costs normalize faster than asset yields compress, but tariff-driven cost pressures in construction could weigh on loan performance .
• Dividend continuity: $0.18/share cash dividend paid July 18, signaling confidence in capital and earnings stability, though management notes dividends may be adjusted subject to conditions .
• Near-term trading lens: absent Street estimates, look for updates on the single substandard commercial exposure, NIM progression, and deposit mix in Q3; medium-term thesis hinges on disciplined costs, measured loan growth, and stable asset quality in a volatile macro backdrop .