Breaking Down Parke Bancorp, Inc. (PKBK) Financial Health: Key Insights for Investors

You're looking at Parke Bancorp, Inc. (PKBK) and wondering if the recent market volatility is masking a solid community bank story, and the short answer is that their core financials look defintely strong. For the nine months ended September 30, 2025, the bank delivered a net income of $26.7 million, representing a 32.7% jump year-over-year, so you're seeing real earnings power, not just a one-off gain. This performance is anchored by robust asset growth, with total assets hitting $2.17 billion, and a healthy net interest margin (NIM) of 3.49% year-to-date, which shows they're managing their cost of funds well in this high-rate environment. But while the efficiency ratio improved sharply to 35.68%, you still need to look closely at the loan book-specifically, how that $1.93 billion in net loans is holding up against the $12.5 million in non-accrual and past-due loans. We'll break down where the real opportunities and credit risks lie.

Revenue Analysis

If you're looking at Parke Bancorp, Inc. (PKBK), the direct takeaway is that their revenue engine is strong and accelerating in 2025, driven almost entirely by their core lending business. For the trailing twelve months (TTM) ending September 30, 2025, the company generated $71.77 million in total revenue, marking a solid 13.64% year-over-year growth.

This growth is not abstract; it's a direct result of their strategy to grow the loan portfolio, which is the lifeblood of any bank. The primary revenue source is Net Interest Income (NII) (the difference between what the bank earns on loans and what it pays on deposits), which is seeing a strong uplift from both loan volume and higher market interest rates.

Here's the quick math on where the money comes from. For the nine months ended September 30, 2025, the Net Interest Income was a substantial $54.6 million. This represents a 26.8% increase over the same period in 2024. That's a powerful swing to the upside, especially after a period where the company saw a decline in annual revenue in 2024.

The contribution of different business segments to overall revenue tells a clear story: Parke Bancorp is a pure-play lender. Net Interest Income from their loan portfolio-which includes commercial and industrial loans, real estate financing, and residential mortgages-is the dominant force. Non-interest income, which comes from things like service fees on deposit accounts, is a much smaller piece of the pie and has actually been decreasing. This is a bank where the revenue is defintely tied to the lending cycle.

To be fair, what this breakdown hides is the risk tied to that concentration. When one segment drives nearly all the revenue, you need to watch credit quality closely. Still, the near-term opportunity is clear: the 26.8% jump in Net Interest Income for the first nine months of 2025 shows they are executing well in a high-rate environment. You can see a detailed discussion of the company's overall financial position in our full analysis: Breaking Down Parke Bancorp, Inc. (PKBK) Financial Health: Key Insights for Investors.

The significant change in the revenue streams is the shift in the non-interest income component, which decreased by $0.7 million for the nine months ended September 30, 2025, compared to the same period in 2024. This decrease is largely due to lower legal settlements and reduced service fees on deposit accounts. The takeaway is that fee income is not their growth engine; loan interest is.

The table below summarizes the key revenue components for the first nine months of 2025, showing the clear dominance of Net Interest Income.

Your action here is to monitor the loan portfolio yield and deposit costs-the two variables that determine that massive Net Interest Income number. If the Federal Reserve starts cutting rates faster than expected, that 26.8% growth rate will slow down quickly. The current trend is strong, but it is rate-sensitive.

Profitability Metrics

You're looking for a clear signal of financial strength, and for Parke Bancorp, Inc. (PKBK), the most recent 2025 data shows a sharp reversal in profitability trends. The direct takeaway is that PKBK is demonstrating superior operational efficiency and a significantly widening net profit margin compared to its recent past and industry peers.

For a bank, we swap the traditional Gross Profit (Revenue minus Cost of Goods Sold) for Net Interest Income (NII) and Operating Profit for Pre-Provision Pre-Tax Revenue (PPTR). The key metric here is the Net Interest Margin (NIM), which acts as a proxy for your core business's gross margin. PKBK's NIM hit 3.83% in the third quarter of 2025, a significant jump from 2.97% in the same quarter last year. This 86-basis-point expansion shows the bank is effectively managing its cost of funds versus the yield on its loans.

Here's the quick math on profitability for the nine months ended September 30, 2025:

• Net Income: PKBK reported $26.7 million for the first nine months of 2025, a 32.7% increase over the same period in 2024.
• Net Profit Margin: The net profit margin has reportedly widened to 46.3% as of October 2025, up from 33.7% the previous year. That's a massive jump, defintely driven by the Q3 surge, where Net Income was $10.6 million.
• Core Revenue (NII): Net Interest Income for the nine months was $54.6 million, up 26.8% year-over-year, confirming the core lending business is driving the gains.

Operational Efficiency and Industry Comparison

The real story in PKBK's profitability is its operational efficiency (Non-Interest Expense as a percentage of Total Revenue). You want this number low; it means more revenue is making it to the bottom line. PKBK's Efficiency Ratio improved to 34.09% in Q3 2025, a substantial improvement from 40.74% a year prior. For the nine months, the ratio stands at an impressive 35.68%, down from 41.37% in 2024. That's a clear sign of disciplined cost management and scale economies kicking in.

When you stack this up against the competition, PKBK looks strong. The average net profit margin for US regional banks was around 25% as of mid-2024. PKBK's reported margin of 46.3% is nearly double that, which suggests an extremely lean operation or a temporary boost from a specific asset-liability structure. Still, even the nine-month net income growth of 32.7% is a powerful signal of a turnaround in performance.

The trend is clear: PKBK is moving from a respectable-but-average profitability profile to a top-tier one within the regional banking sector. The increase in net interest income, coupled with tight control over non-interest expenses (which only increased by $0.8 million in Q3 2025 despite higher compensation costs), is the engine here. This is a classic case of management focus translating directly into higher margins. If you're interested in the drivers behind this performance, you should check out Exploring Parke Bancorp, Inc. (PKBK) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You're looking at Parke Bancorp, Inc. (PKBK) to understand how they fund their growth, and the quick takeaway is this: they run a surprisingly low-leverage model for a regional bank. Their current debt-to-equity (D/E) ratio is significantly below the industry average, suggesting a conservative financing strategy.

As of the third quarter of 2025, Parke Bancorp, Inc.'s Debt-to-Equity ratio stood at just 0.27. Here's the quick math: for every dollar in shareholder equity, the company has only 27 cents in debt. Compare that to the average D/E ratio for US Regional Banks, which sits closer to 0.49 as of November 2025. This low leverage is defintely a sign of balance sheet strength, even in an industry like banking where higher ratios (sometimes over 1.0) are common because borrowing is the core business.

The company's total shareholders' equity is robust, increasing to $314.8 million as of September 30, 2025, primarily through retained earnings. This organic growth in equity is the primary engine for their capital base. Still, they are actively managing their capital, using some of that strength to return value to you, the shareholder, by repurchasing 300,000 shares for $6.48 million in the third quarter alone.

On the debt side, the company has been focused on reducing its wholesale funding (borrowings outside of deposits). Their total borrowings, which include Federal Home Loan Bank of New York (FHLBNY) advances and subordinated debentures, have been shifting lower. This is a clear action mapping to lower risk.

• FHLB Advances: $70.0 million as of September 30, 2025.
• Subordinated Debentures (Long-Term Debt): Reduced to $13.4 million.

The most notable recent activity is the aggressive repayment of their subordinated debentures, which decreased sharply from $43.3 million at the end of the prior year to just $13.4 million by Q3 2025. This move substantially lowers their long-term financing costs and interest rate risk. For a deep dive into what drives this strategy, you should review the Mission Statement, Vision, & Core Values of Parke Bancorp, Inc. (PKBK).

Here is a snapshot of their financing mix, showing a strong reliance on equity and a conservative use of debt:

What this estimate hides is that while the D/E ratio is excellent, the stock did receive a downgrade from Weiss Ratings to 'Hold (C+)' on October 26, 2025, which is a reminder that a strong balance sheet doesn't insulate the stock from all market or analyst sentiment. The action for you is clear: focus on how the reduced debt and strong equity position them to weather potential economic slowdowns and maintain their dividend, which is a key part of the investment thesis.

Liquidity and Solvency

You're looking for a clear picture of Parke Bancorp, Inc.'s (PKBK) ability to meet its near-term obligations, and the data from the 2025 fiscal year offers a realistic view. For a bank, traditional liquidity ratios like the Current Ratio are less telling than the core balance sheet movements-specifically, the interplay between cash, deposits, and borrowings. The direct takeaway is that Parke Bancorp has managed to significantly reduce its reliance on wholesale funding while maintaining a solid cash position, defintely a sign of strength.

As of September 30, 2025, Parke Bancorp's total assets stood at $2.17 billion. What matters most is the composition of those assets and liabilities. Banks don't have inventory, so we focus on highly liquid assets against customer deposits and short-term debt.

Assessing PKBK's Liquidity Position

The standard Current and Quick Ratios (quick assets divided by current liabilities) are not the primary metric for a bank, where customer deposits are the main current liability and loans are the main asset. Instead, we look at the cash on hand and the funding structure. Parke Bancorp's cash and cash equivalents were $159.3 million at the end of the third quarter of 2025, a decrease from the $221.5 million reported at the end of 2024.

Here's the quick math on the working capital trend, which for a bank is essentially the change in highly liquid assets versus short-term funding sources over the nine months ended September 30, 2025:

• Cash and Cash Equivalents decreased by approximately $62.2 million.
• Total Deposits increased by $121.5 million to $1.75 billion.
• Total Borrowings decreased significantly by $104.9 million to $83.4 million.

The decrease in cash was primarily used to fund loan growth and, critically, to pay down borrowings, not to cover deposit outflows. This is a positive sign for liquidity management. You can see the full picture of their strategic direction in the Mission Statement, Vision, & Core Values of Parke Bancorp, Inc. (PKBK).

Cash Flow Statement Overview

The cash flow statement for the nine months ended September 30, 2025, clearly shows a strategic shift toward deleveraging. The overall net decrease in cash and cash equivalents was $62.214 million. This net change is the result of three main activities:

The financing activities are the most telling. The company repaid $75.0 million of Federal Home Loan Bank of New York (FHLBNY) term borrowings and $30.0 million of subordinated debt. This massive reduction in wholesale funding-a less stable source of liquidity-is a huge strength. They are replacing expensive, non-core debt with cheaper, more stable customer deposits, which grew by 7.5%. This is a strong move in a volatile rate environment.

Liquidity Strengths and Concerns

Parke Bancorp's liquidity is strong, not due to a high cash-to-deposit ratio, but because of its funding stability. The key strength is the strategic paydown of borrowings. By reducing total borrowings from $188.3 million at the end of 2024 to $83.4 million by Q3 2025, they've significantly lowered their liquidity risk profile. The growth in deposits of $121.5 million is covering both the loan growth and the debt repayment. The main near-term risk is the continued decline in cash and cash equivalents if loan growth outpaces the deposit growth, but the current funding mix is much healthier.

Valuation Analysis

You want to know if Parke Bancorp, Inc. (PKBK) is a buy, a hold, or a sell right now. Based on a deep dive into the latest 2025 fiscal year data, the numbers strongly suggest Parke Bancorp, Inc. is currently undervalued compared to the broader market and its own book value, making it a compelling value-play in the regional banking sector.

The core of this assessment lies in the valuation multiples (ratios) and the stock's relationship to its tangible assets. For a regional bank, the most telling metrics are the Price-to-Earnings (P/E) ratio and the Price-to-Book (P/B) ratio. The market is defintely pricing in a discount here.

Here's the quick math on why this looks like a discount:

• Price-to-Earnings (P/E) Ratio: The trailing twelve-month (TTM) P/E ratio for Parke Bancorp, Inc. stands at just 7.74. This is significantly lower than the average for the broader financial sector, indicating that investors are paying less than eight times the company's earnings for a share.
• Price-to-Book (P/B) Ratio: The P/B ratio is 0.8x, based on December 2024 data refreshed in November 2025. A P/B below 1.0 means the stock is trading for less than the value of its net tangible assets (book value) per share. For a bank, this is a classic sign of potential undervaluation.
• EV/EBITDA: For a bank, Enterprise Value-to-EBITDA (EV/EBITDA) is often less informative because banks' capital structures and earnings are better reflected in P/E and P/B. Still, the Enterprise Value is approximately $178.38 million, which is notably lower than its market capitalization of around $254.29 million, largely due to the bank's net cash position.

Stock Performance and Dividend Stability

Mapping the near-term risks to opportunities requires looking at the stock price trend. Over the last 52 weeks, the stock has seen a price change of -3.94%, which is a modest decline. The stock's 52-week trading range of $16.94 to $24.29 shows that the current price of $21.18 (as of November 18, 2025) sits comfortably off the high, offering a margin of safety for entry.

The dividend profile is another strong point, signaling financial health and a commitment to shareholders. The annual dividend is a solid $0.72 per share, translating to a yield of 3.28%. Crucially, the dividend payout ratio (DPR) is a conservative 25.41%, meaning the bank is only using about a quarter of its earnings to pay the dividend. This low payout ratio suggests the dividend is highly sustainable and leaves plenty of capital for growth or buybacks. You can review the bank's long-term strategy in their Mission Statement, Vision, & Core Values of Parke Bancorp, Inc. (PKBK).

Analyst Consensus and Actionable Takeaway

The analyst community generally aligns with the value thesis. The current consensus rating for Parke Bancorp, Inc. is a clear Buy. This consensus is supported by the low P/E and P/B ratios, which are often the primary drivers for a 'Buy' rating in the regional banking space. However, to be fair, one recent technical analysis flagged a 'Sell' signal based on short-term moving averages, so you should expect some volatility.

The low valuation multiples, particularly the P/B ratio below 1.0, are the clearest signal. This is a classic value trap warning sign, but given the strong dividend coverage and the analyst consensus, it looks more like a true opportunity. Your clear action here is to start a small position, especially if you are looking for a bank stock with a defensive profile and a sustainable yield.

Risk Factors

You need to understand the risks that could derail Parke Bancorp, Inc.'s (PKBK) recent strong performance, especially with their unique exposure to the cannabis industry and current interest rate uncertainty. While the bank reported a Q3 2025 net income of $10.6 million, a 41.6% jump year-over-year, the foundation of that growth rests on a few key vulnerabilities you should monitor.

The most immediate and unique risk is regulatory exposure from banking the cannabis industry. Since cannabis remains illegal under federal law, Parke Bancorp, Inc. operates in a high-risk compliance environment. As of December 31, 2024, deposits from cannabis-related businesses stood at a substantial $151.9 million. This external regulatory risk is a constant threat, and any sudden federal action could force a costly and disruptive exit from this business line.

On the operational and financial front, credit quality is a mixed bag. While the allowance for credit losses was a healthy $33.9 million as of September 30, 2025, a significant spike in past-due loans appeared mid-year. Past-due loans (30 to 89 days) increased by a staggering $15.5 million in the first half of 2025, reaching $16.9 million by June 30, 2025. This jump was mainly tied to a single commercial loan, which is a classic concentration risk in regional banking. One bad loan can defintely move the needle.

The interest rate environment presents a near-term strategic risk, too. Parke Bancorp, Inc. is heavily reliant on net interest income (NII), which accounted for about 93% of its revenue in 2024. While NII increased by $11.6 million for the nine months ended September 30, 2025, any forthcoming Federal Reserve rate cuts could compress their Net Interest Margin (NIM) quickly. This is a common headwind for banks with a substantial loan book like PKBK's $1.96 billion in loans as of Q3 2025.

Here's a quick look at the core risks and the bank's stated mitigation efforts:

• Regulatory/Legal: Cannabis banking exposure.
• Credit Risk: Concentration risk from a single sub-standard commercial loan.
• Interest Rate Risk: High reliance on NII, vulnerable to rate cuts.
• Strategic Risk: Muted growth due to limited geographic reach (Philadelphia/Southern New Jersey).

To be fair, the management is actively mitigating these risks. They maintain a solid capital buffer, with a Community Bank Leverage Ratio of 16.38% at year-end 2024 and a Common Equity Tier 1 (CET1) ratio above 20% in the first half of 2025. This strong capital base acts as a shock absorber. Also, their loan underwriting appears disciplined, evidenced by the allowance for credit losses covering non-performing loans by 297.5% as of March 31, 2025. They are focused on tight cost controls, too, improving the Efficiency Ratio to 36.60% by June 30, 2025.

For a deeper dive into the bank's overall financial picture, you should read our full analysis: Breaking Down Parke Bancorp, Inc. (PKBK) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking for a clear path on where Parke Bancorp, Inc. (PKBK) goes from here, especially after a strong run in 2025. The direct takeaway is that their future growth isn't about massive expansion, but rather a disciplined focus on their core strengths: commercial real estate lending and superior operational efficiency.

The company is defintely poised for continued earnings growth, driven by an expanding loan portfolio and a tight grip on costs. For the nine months ended September 30, 2025, net income available to common shareholders hit $26.7 million, a 32.7% jump over the same period in 2024. That's a serious acceleration. My projection, using the nine-month diluted earnings per share (EPS) of $2.23 and a conservative estimate for Q4, puts the full-year 2025 diluted EPS around $3.12. The trailing twelve months (LTM) revenue as of Q3 2025 stood at $71.77 million.

Key Growth Drivers and Strategic Focus

Parke Bancorp's strategy is simple and effective: grow the loan book and cut waste. The primary growth driver is the continued expansion of their loan portfolio, which increased by $92.0 million during the first nine months of 2025, bringing the total outstanding loan balance to $1.96 billion as of September 30, 2025. This isn't a random push; it's rooted in their deep expertise in the local commercial and residential real estate markets in Southern New Jersey and the Philadelphia metro area.

They are also leveraging their operational efficiency (a fancy term for keeping expenses low). The proof is in the numbers: their Efficiency Ratio-which measures a bank's operating expense as a percentage of its revenue-improved significantly to 35.68% as of September 30, 2025, from 41.37% a year prior. That's one of the best metrics in the regional banking space. They are also adding lending staff to support this loan generation.

• Grow the loan book: $1.96 billion outstanding as of Q3 2025.
• Boost efficiency: Ratio improved to 35.68% in Q3 2025.
• Deepen market focus: Expertise in Philadelphia and Southern New Jersey real estate.

Competitive Advantages and Positioning

When you look at the competitive landscape, Parke Bancorp, Inc. has a few distinct advantages that position it well, especially as a smaller regional bank. First, they maintain a strong capital base with a defensive, low-risk business model focused on residential mortgages, commercial real estate, and construction loans. Their capital ratios are robust, with a leverage ratio above 15% and a Common Equity Tier 1 (CET1) ratio above 20% in the first half of 2025, both well above regulatory requirements.

Second, the market still sees them as undervalued. The stock trades at a Price-to-Earnings (P/E) ratio of about 8.3x, which is a substantial discount compared to the peer average of 14.6x and the broader US banking industry's 11.3x. This discount could be a compelling entry point for value-focused investors. Their strong asset quality and low credit losses also reduce the near-term risk profile, which is a major plus in an uncertain economic environment. The management's commitment to exploring new market opportunities while maintaining a stable and sound financial institution is a clear signal of their forward-looking but conservative approach.

Here's the quick math on their valuation and profitability compared to peers:

If you want to dive deeper into the financial health of the company, you can read the full analysis here: Breaking Down Parke Bancorp, Inc. (PKBK) Financial Health: Key Insights for Investors. Finance: Model a scenario where the P/E ratio moves to 10x and what that means for your portfolio by the end of the year.