FOR FURTHER INFORMATION CONTACT:
Vito S. Pantilione, President and CEO
Robert A. Kuehl, Senior Vice President, CFO
Washington Township, New Jersey — January 22, 2007 — Parke Bancorp Inc. (Nasdaq: “PKBK”), announced today record earnings of $1.2 million for the fourth quarter of 2006 and $4.6 million for the full year ended December 31, 2006, which represented increases of $241 thousand (24.9%) and $1.1 million (32.3%), respectively from the comparable periods of 2005. The 2006 results equated to earnings per share on a fully diluted basis of $0.37 and $1.40 for the fourth quarter and full year, respectively, as compared to earnings per share of $0.30 and $1.10 for comparable periods of 2005. Return on average assets and return on average equity amounted to 1.41% and 15.68%, respectively for the full year ended December 31, 2006.
Total assets of $359.7 million at December 31, 2006, increased $61.8 million, or 20.8%, from $297.8 million at December 31, 2005. The increase was driven primarily by continued strong loan growth as total loans amounted to $310.6 million at December 31, 2006, as compared to total loans of $259.0 million at December 31, 2005, reflecting loan growth of $51.5 million, or 19.9%. Investment securities grew by $4.0 million, or 16.5%, from $24.4 million at December 31, 2005, to $28.5 million at December 31, 2006. The allowance for loan losses was $4.5 million and amounted to 1.45% of total loans at December 31, 2006.
Total deposits of $289.9 million at December 31, 2006, increased $57.9 million, or 24.9%, from $232.1 million at December 31, 2005. Borrowings amounted to $34.9 million at December 31, 2006, and declined slightly from the level at December 31, 2005. Total capital at December 31, 2006, of $30.7 million, which was reduced by $563 thousand due to the December 2006 special cash dividend payment, reflected an increase of $3.5 million, or 12.9%, as compared to $27.2 million at December 31, 2005.
Net interest income of $13.5 million for the year ended December 31, 2006, was $2.8 million, or 26.3%, above the prior year’s level primarily due to the increased growth in the commercial loan portfolio. Interest income, which amounted to $25.5 million, increased by $8.1 million, or 47.0%, due to an increase in average interest-earning assets of $71.5 million year-over-year coupled with an increase in the level of market interest rates during 2006.
Interest expense amounted to $12.0 million and increased $5.3 million, or 79.9%, resulting from increased average interest-bearing liabilities of $64.0 million year-over-year coupled with an increase in the interest rates paid for both deposits and borrowed funds and a greater concentration of higher cost time deposits within the retail deposit base. The net interest margin of 4.25% for the full year 2006 declined by 9 basis points from the level of 4.34% in 2005 due primarily to a greater reliance on higher cost time deposits to fund the loan growth in 2006.
Non-interest expense amounted to $5.8 million for the full year 2006, which represented an increase of $1.3 million, or 28.2%, above the level of 2005. This increase was mainly attributable to the additional staffing costs and associated expenses for the new retail branch facility in Philadelphia and the new loan production office in Millville, New Jersey.
Vito S. Pantilione, President and Chief Executive Officer stated, “I am extremely pleased with the Company’s record earnings for 2006 and in particular the significant growth in earnings above last year. We were able to accomplish this despite the ongoing margin compression experienced by the banking industry and the softening of the real estate market. In addition to our continued strong loan growth and emphasis on expense management, we established a retail banking presence this past summer within the attractive Philadelphia market, opened a new loan production office in Millville, New Jersey and paid out our first cash dividend in December.”
Parke Bancorp, Inc. was incorporated in January 2005 while Parke Bank commenced operations in January 1999. Parke Bancorp maintains its principal office at 601 Delsea Drive, Washington Township, New Jersey. It conducts its business through branch locations in Northfield, New Jersey, two branch offices in Washington Township, New Jersey and its newest branch facility in Philadelphia on 1610 Spruce Street. In addition, Parke Bank opened a new loan production office in Millville, New Jersey in 2006. Parke Bank is a full service commercial bank, with an emphasis on providing personal and business financial services to individuals and small to mid-sized businesses primarily in Gloucester, Atlantic and Cape May counties in New Jersey and the Philadelphia area in Pennsylvania. Parke Bank’s deposits are insured up to the maximum legal amount by the Federal Deposit Insurance Corporation (FDIC). Parke Bancorp’s common stock is traded on the NASDAQ Capital Market under the symbol “PKBK.”
This release may contain forward-looking statements. We caution that such statements may be subject to a number of uncertainties and actual results could differ materially and, therefore, readers should not place undue reliance on any forward-looking statements. Parke Bancorp, Inc. does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.