Parke Bancorp, Inc. (PKBK): BCG Matrix [11-2024 Updated]
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Parke Bancorp, Inc. (PKBK) Bundle
In the dynamic world of banking, understanding the strategic positioning of a company like Parke Bancorp, Inc. (PKBK) is essential for investors and analysts. Utilizing the Boston Consulting Group Matrix, we can categorize PKBK’s business segments into Stars, Cash Cows, Dogs, and Question Marks, revealing the strengths and weaknesses that shape its financial landscape as of 2024. Discover how the bank's robust loan growth, stable income sources, and areas for improvement create a complex yet fascinating picture of its current operations.
Background of Parke Bancorp, Inc. (PKBK)
Parke Bancorp, Inc. is a bank holding company incorporated in January 2005 under the laws of the State of New Jersey. The company is headquartered in Sewell, New Jersey, and serves as the parent company of Parke Bank, which commenced operations in January 1999. The Bank is chartered by the New Jersey Department of Banking and Insurance, and its deposits are insured by the Federal Deposit Insurance Corporation (FDIC).
Through its subsidiaries, Parke Bancorp provides a range of commercial and retail banking services, primarily focused on loans and deposits. The company targets small to mid-sized businesses and individual consumers, offering products that include residential real estate mortgages, commercial mortgages, and construction loans. As of September 30, 2024, Parke Bancorp reported total assets of approximately $2.07 billion and total equity of $296.5 million.
Parke Bank operates several branches across Southern New Jersey and Philadelphia, Pennsylvania, with additional loan offices in Philadelphia. The company emphasizes customer service and aims to build long-term relationships with clients, which it believes contributes to customer loyalty and stable funding through core deposits.
As of September 30, 2024, Parke Bancorp had total deposits of $1.56 billion, reflecting a modest increase from the previous period. The increase was primarily attributed to higher brokered time deposits. The company's financial performance is largely dependent on net interest income, which is the difference between interest earned on loans and investments and interest paid on deposits and borrowings.
In recent months, the company has experienced growth in its loan portfolio, particularly in the construction and multi-family residential sectors. Loans receivable increased by $52.6 million, or 2.9%, during the first nine months of 2024. The bank's operational focus remains on expanding its lending footprint while managing risk and maintaining a strong capital position.
Parke Bancorp, Inc. (PKBK) - BCG Matrix: Stars
Strong Growth in Loan Portfolio
The loan portfolio of Parke Bancorp, Inc. has shown strong growth, reaching $1.84 billion as of September 30, 2024, up from $1.79 billion as of December 31, 2023. This increase of $52.6 million, or 2.9%, indicates a robust demand for lending services.
Increase in Construction and Real Estate Loans
There has been a notable increase in construction and real estate loans, highlighting a growing demand in these sectors. Specifically, construction loans rose to $176.5 million as of September 30, 2024, a significant increase of 12.0% from $157.6 million at the end of 2023.
Positive Net Income
For the nine months ended September 30, 2024, Parke Bancorp reported a positive net income of $20.1 million. This represents a slight decrease of 0.8% compared to $20.3 million for the same period in 2023. Earnings per share for this period were $1.68 for basic and $1.66 for diluted shares.
Enhanced Market Position
Parke Bancorp has enhanced its market position due to a strong focus on customer loyalty and service. This approach has contributed to a stable customer base, which is crucial for maintaining high market share in a competitive environment.
Equity Growth
Total equity increased to $296.5 million as of September 30, 2024, marking a 4.3% rise from $284.3 million at December 31, 2023. This growth in equity reflects the retention of earnings and strategic financial management.
| Financial Metric | September 30, 2024 | December 31, 2023 | Change | % Change |
|---|---|---|---|---|
| Loan Portfolio | $1.84 billion | $1.79 billion | $52.6 million | 2.9% |
| Construction Loans | $176.5 million | $157.6 million | $18.9 million | 12.0% |
| Net Income (9 months) | $20.1 million | $20.3 million | $(0.2 million) | (0.8%) |
| Total Equity | $296.5 million | $284.3 million | $12.1 million | 4.3% |
Parke Bancorp, Inc. (PKBK) - BCG Matrix: Cash Cows
Established base in commercial and industrial loans, contributing stable income.
As of September 30, 2024, Parke Bancorp's total loans amounted to $1.84 billion, reflecting a growth of $52.6 million, or 2.9%, from December 31, 2023. The commercial and industrial loans specifically stood at $34.8 million, accounting for 1.9% of the total loan portfolio.
Consistent net interest income, demonstrating effective asset management.
For the nine months ended September 30, 2024, net interest income was reported at $43.1 million, a decrease of $5.6 million or 11.5% compared to the same period in the previous year. Interest income rose to $91.8 million, marking an increase of $9.4 million or 11.4%.
Total deposits stable at $1.56 billion, supporting loan growth.
Parke Bancorp reported total deposits of $1.56 billion as of September 30, 2024, a slight increase of $6.1 million, or 0.4%, from December 31, 2023. This stability in deposits is crucial for supporting ongoing loan growth.
Continued dividends on common stock, reflecting financial health and shareholder value.
In the nine months ending September 30, 2024, Parke Bancorp paid $6.4 million in cash dividends, demonstrating its commitment to returning value to shareholders while maintaining financial health.
Low non-performing loan ratio, maintaining strong asset quality.
The company's non-performing loan ratio remains low, with total past due loans at $13.3 million, indicating strong asset quality. This reflects effective risk management strategies in maintaining loan performance.
| Financial Metric | September 30, 2024 | December 31, 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Loans | $1,839,929,000 | $1,787,340,000 | $52,589,000 | 2.9% |
| Net Interest Income | $43,100,000 | $48,700,000 | ($5,600,000) | (11.5%) |
| Total Deposits | $1,558,883,000 | $1,552,827,000 | $6,056,000 | 0.4% |
| Cash Dividends Paid | $6,400,000 | N/A | N/A | N/A |
| Total Past Due Loans | $13,289,000 | N/A | N/A | N/A |
Parke Bancorp, Inc. (PKBK) - BCG Matrix: Dogs
Residential and consumer loan segments showing minimal growth
The residential and consumer loan segments of Parke Bancorp are currently demonstrating minimal growth. As of September 30, 2024, the total loans receivable stood at approximately $1.84 billion, reflecting a modest increase of $52.6 million or 2.9% from December 31, 2023. The consumer loan segment specifically accounted for only $5.0 million, which represented a decrease of 8.7% compared to the previous period.
Decline in non-interest-bearing deposits, indicating potential liquidity concerns
There has been a noticeable decline in non-interest-bearing deposits, which decreased by $33.7 million or 14.5%, from $232.2 million at December 31, 2023, to $198.5 million at September 30, 2024. This may indicate potential liquidity concerns for the bank, as non-interest-bearing deposits are typically a more stable source of funding.
High reliance on brokered deposits, which can be costly
Parke Bancorp exhibits a high reliance on brokered deposits, which amounted to $198.7 million as of September 30, 2024. This reflects a decrease of $24.7 million, or 11.1%, from the previous period. Brokered deposits can be more expensive than traditional deposits, further straining the bank's profitability.
Decrease in certain time deposit accounts, reflecting competitive pressures
Time deposits increased overall by $69.8 million or 11.5%, but there were significant decreases in specific categories. For instance, fifteen-month and twenty-one month certificates of deposit saw declines of $120.3 million and $52.9 million, respectively. This trend indicates competitive pressures in the market, affecting the bank's ability to attract stable funding sources.
Limited growth in higher-risk loan categories, such as construction
The construction loan segment, which is typically higher-risk, has shown limited growth with balances of $176.5 million as of September 30, 2024, reflecting an increase of only $18.9 million or 12.0%. This modest growth may not be sufficient to offset the risks associated with this category, especially in a volatile economic environment.
| Category | September 30, 2024 | December 31, 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Non-interest-bearing deposits | $198,499 | $232,189 | ($33,690) | (14.5%) |
| Brokered deposits | $198,707 | $223,429 | ($24,722) | (11.1%) |
| Consumer loans | $5,029 | $5,509 | ($480) | (8.7%) |
| Construction loans | $176,534 | $157,556 | $18,978 | 12.0% |
Parke Bancorp, Inc. (PKBK) - BCG Matrix: Question Marks
Potential for growth in multifamily residential loans, with a 32.9% increase year-over-year.
The residential multifamily loan portfolio of Parke Bancorp showed significant growth, with an increase of 32.9% year-over-year, reflecting robust demand in this segment. As of September 30, 2024, the outstanding balance for residential multifamily loans was $137.3 million, up from $103.3 million at December 31, 2023.
Need for strategic initiatives to enhance non-interest income streams.
Non-interest income for the nine months ended September 30, 2024, was $3.2 million, a decrease of 39.3% compared to $5.2 million during the same period in 2023. This decline was primarily due to a significant drop in service fees on deposit accounts, particularly from cannabis-related businesses.
Exploration of new markets or products to diversify loan offerings.
Parke Bancorp has been expanding its lending footprint beyond Southern New Jersey and Philadelphia, venturing into new markets including New York and South Carolina. The total loans receivable increased to $1.84 billion as of September 30, 2024, from $1.79 billion at December 31, 2023, indicating a strategic push to diversify its loan offerings.
Uncertainty around economic conditions affecting loan demand and performance.
The economic landscape presents uncertainties that may impact loan demand. The provision for credit losses was reported at $0.5 million for the nine months ended September 30, 2024, a notable increase from a recovery of $1.6 million during the same period in the previous year. This shift indicates potential risks associated with economic conditions.
Investment in technology and infrastructure to improve operational efficiency and customer experience.
Parke Bancorp has been focusing on enhancing its technology and infrastructure. As part of its strategic initiatives, the bank aims to improve operational efficiency and customer experience, which are crucial for converting its question mark products into stars.
| Financial Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Income Available to Common Shareholders | $7.5 million | $1.0 million | 634.1% |
| Net Interest Income | $14.7 million | $15.7 million | -6.1% |
| Non-Interest Income | $0.9 million | $1.8 million | -50% |
| Total Loans Receivable | $1.84 billion | $1.79 billion | 2.9% |
| Residential Multifamily Loans | $137.3 million | $103.3 million | 32.9% |
| Provision for Credit Losses | $0.5 million | Recovery of $1.6 million | N/A |
In summary, Parke Bancorp, Inc. (PKBK) navigates a diverse portfolio within the BCG Matrix framework. The company boasts Stars in its loan growth and market position, while its Cash Cows ensure steady income from established commercial loans. However, challenges persist in the Dogs segment, particularly with stagnant residential loans and liquidity concerns. Meanwhile, the Question Marks reveal potential growth areas that require strategic focus, particularly in multifamily residential loans and technology investments. By leveraging its strengths and addressing weaknesses, Parke Bancorp can enhance its overall market standing and drive future growth.
Updated on 16 Nov 2024
Resources:
- Parke Bancorp, Inc. (PKBK) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Parke Bancorp, Inc. (PKBK)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Parke Bancorp, Inc. (PKBK)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.