Parke Bancorp, Inc. · NASDAQ:PKBK
Parke Bancorp — Debt Investor Presentation (July 2020)
26 slides from Parke Bancorp's debt investor presentation, Jul 15, 2020
Slide 1: Confidential Investor Presentation: Subordinated Debt Offering June 2020
EXHIBIT 99.2 Confidential Investor Presentation Subordinated Debt Offering June 2020 A Return to Better BankingEXHIBIT 99.2 Confidential Investor Presentation Subordinated Debt Offering June 2020 A Return to Better Banking
Slide 2: Offering Disclaimer
Offering Disclaimer This Confidential Subordinated Note Issuance Investor Presentation (this “Confidential Investor Presentation”) is confidential and does not constitute or form part of any offer to sell, or a solicitation of an offer to purchase, any securities of Parke Bancorp, Inc. or any of its
Slide 3: Terms of the Proposed Subordinated Debt Offering
Terms of the Proposed Subordinated Debt Offering Issuer Parke Bancorp, Inc. Subordinated Notes due 2030 Security $[30] million Amount 1 A- by Egan-Jones Ratings Company Security Rating Regulation D Private Placement Issuance Type Fixed-to-Floating Rate (Fixed during First Five Years) Offering Struct
Slide 4: Key Investment Highlights
Key Investment Highlights 21-year old community bank headquartered in New Jersey operating in the greater Philadelphia market Reached profitability 18 months after founding and has been profitable every year since (even throughout the Great Recession) • Outstanding performer with LTM ROAA of 1.84%¹
Slide 5: Franchise Overview
Franchise Overview Community Focused Banking Institution Stretching from South Jersey to Philadelphia Company Background and Financial Snapshot Geographic Presence Background § Successful 21 year operating history, established in 1999 § Headquartered in Sewell, New Jersey § Publicly traded on the NA
Slide 6: Management Team
Management Team Experienced Team with Strong Ties to the Community Years of Experience: 45 Years at Parke: 21 Vito Pantilione Mr. Vito S. Pantilione has been President, Chief Executive Officer and Director of Parke Bancorp, Inc. since formation in 2005. Mr. Pantilione serves as the President, Chief
Slide 7: Ownership
Ownership Substantial Insider Ownership Aligns Management with Stakeholders Individual Insiders Ownership Summary Shares Market Outstanding Value Rank Institutional Holder Position (%) ($000) Celestino R. Pennoni 1 358,657 3.03% $4,817 Independent Chairman of the Board Jeffrey H. Kripitz 2 341,700 2
Slide 8: Our Markets
Our Markets Strong Relationships Allow for Consistent Customer Base Highlights Philadelphia South Jersey § Over 90% of franchise deposits are in high growth, or stable, markets § Parke Bancorp holds a Top 25 market share rank in all county markets County Proj. Household Income Change ('20-'25) % of
Slide 9: Long History of Performance
Long History of Performance PKBK Has Historically Maintained Strong Earnings and Managed Well Through Difficult Times Return on Average Assets (ROAA) 2.01% 1.98% 1.94% 1.53% 1.41% 1.41% 1.40% 1.35% 1.23% 1.12%¹ 1.09% 1.07% 1.04% 0.94% 0.79% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 10: Consistent History of Growth
Consistent History of Growth Current Success is Attributed to Disciplined Organic Growth Total Assets ($M) Net Loans and Leases ($M) $1,816 $1,445 $1,399 $1,681 $1,223 $1,467 $997 $1,137 $836 $1,016 2016 2017 2018 2019 2020Q1 2016 2017 2018 2019 2020Q1 Total Deposits ($M) Total Equity ($M) $1,469 $1
Slide 11: Loan Portfolio by Segment
Loan Portfolio by Segment Select Loan Portfolio Metrics Total Loan Portfolio Construction & Development Portfolio Outstanding Percentage Outstanding Percentage Sector Balance ($000) of Total (%) Loan Type Balance ($000) of C&D (%) Non-Owner Occupied 1-4 Residential 373,567 25.44% Residential Housing
Slide 12: Retail Industry Exposure
Retail Industry Exposure Top 25 Credits Deposit Outstanding Unfunded Committed Contract Deferral Relationship Date Property Type Balance Commitment Balance LTV Yes / No > $500k? 5/11/2007 163,050 SF shopping center located in Northfield, New Jersey $5,910,648 $5,910,648 77% Yes ü 8/14/2018 57,496 SF
Slide 13: Hotel Industry Exposure
Hotel Industry Exposure All Credits Deposit Contract Outstanding Unfunded Committed Deferral Relationship Date Property Type Hotel Flag Balance Commitment Balance LTV Yes / No > $500k? 9/28/2017 89-guestroom hotel in Jersey City, New Jersey. Holiday Inn Express $13,382,200 $13,382,200 54% Yes 9/28/2
Slide 14: Deposit Composition
Deposit Composition Stable Funding Base Historical Core Deposit Trends Jumbo 10.7% 12.6% Non-Core 15.7% 15.9% 17.1% Time Non- Interest 7% Bearing 89.3% 87.5% 84.3% 84.1% Core 82.9% 24% Total Deposits: 2016Y 2017Y 2018Y 2019Y 2020Q1 $1.5 Billion 39% Historical Cost of Deposits Retail Time Total Depos
Slide 15: Cannabis Business Source of Funds
Cannabis Business Source of Funds • The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) published guidelines in 2014 for financial institutions servicing state legal cannabis businesses. A financial institution that provides services to cannabis-related businesses c
Slide 16: Key Profitability Metrics
Key Profitability Metrics Success Maintaining Strong Profitability Metrics Noninterest Income / Operating Revenue (%) Net Interest Margin (%) 4.00% 3.96% 11.29% 3.92% 3.75% 3.64% 7.85% 7.15% 6.81% 6.70% 2016 2017 2018 2019 2020LTM 2016 2017 2018 2019 2020LTM ROAA and ROAE¹ (%) Efficiency Ratio (%) R
Slide 17: Asset Quality
Asset Quality Historical Ratios Have Remained Low Through Q1 2020 Non-Performing Assets (NPAs) Trend NPAs ($M) NPA Excl Restructured/ Assets (%) $58 $51 $48 $47 $45 3.25% $41 $34 $33 $32 2.63% $30 $30 $28 $29 $27 $27 $27 $26 2.29% 2.15% 1.99% 1.65% 1.20% 1.04% 0.94% 0.73% 0.60% 0.82% 0.72% 0.60% 0.5
Slide 18: Regulatory Capital Trends
Regulatory Capital Trends Bank Level PKBK Objective Has Been to Maintain Excess Capital Holding Company Tangible Common Equity / Tangible Assets (%) Tier 1 Leverage Ratio (%) 15.29 15.25 14.31 13.99 13.76 12.96 12.15 12.10 11.85 11.87 11.32 11.32 10.80 10.81 10.82 10.54 10.53 10.45 10.38 10.08 Well
Slide 19: Illustrative Impact of the Subordinated Debt Offering
Illustrative Impact of the Subordinated Debt Offering As of 3/31/2020 Pro Forma Regulatory Capital 1 Pro Forma Holding Company 18.83% 16.58% 15.26% 15.33% 14.18% 14.11% 10.82% 10.65% 10.08% 9.92% TCE / TA Leverage Ratio CET 1 Ratio Tier 1 Ratio Total Capital Ratio Bank Level 18.53% 17.28% 17.17% 16.
Slide 20: Illustrative Impact of the Subordinated Debt Offering (Cont'd)
Illustrative Impact of the Subordinated Debt Offering (Cont’d) Double Leverage and Interest Coverage $ in thousands Assumptions % of Subordinated Debt Downstreamed to Bank 90% Subordinated Debt Issuance Net Proceeds Amount $29,075 Interest Rate 6.50% For the Twelve Months Ended 12/31/2017 12/31/2018
Slide 21: Appendix
AppendixAppendix
Slide 22: Credit Ratings Summary
Credit Ratings Summary (as of June 15, 2020) Issuer Parke Bancorp, Inc. 1,2 A- Subordinated Debt 1) A rating is not a recommendation to buy, sell or hold securities. Ratings may be subject to revision or withdrawal at any time by the assigning rating organization. Each rating organization has its ow
Slide 23: Securities Portfolio Composition
Securities Portfolio Composition § Approximately $274 million of cash and equivalents Corporate Municipal st as of May 31 1.8% 4.3% Floating MBS 0.1% § Approximately $27.2 million in securities, primarily concentrated in fixed Mortgage-Backed Securities § Weighted average yield of 2.6% § Average bas
Slide 24: Historical Income Statement
Historical Income Statement For the Year Ended December 31, ($000) 2015Y 2016Y 2017Y 2018Y 2019Y 3/31/20 LTM Interest Income 39,410 42,202 48,655 61,874 79,540 82,740 Interest Expense 5,812 6,764 8,280 13,771 22,655 24,088 Net Interest Income 33,598 35,438 40,375 48,103 56,885 58,652 Provision for L
Slide 25: Historical Balance Sheet
Historical Balance Sheet For the Year Ended December 31, ($000) 2015Y 2016Y 2017Y 2018Y 2019Y 3/31/20 LTM Cash and Cash Equivalents 27,429 70,720 42,113 154,471 191,607 283,191 Total Securities 49,537 51,736 46,431 38,249 35,220 34,643 Total Cash & Securities 76,966 122,456 88,544 192,720 226,827 31
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation For the Year Ended December 31, ($000) 2015Y 2016Y 2017Y 2018Y 2019Y 3/31/20 LTM Total Common Equity 92,040 107,134 118,809 152,333 177,105 182,989 Goodwill 0 0 0 0 0 0 Other Intangibles 0 0 0 0 0 0 Less: Total Intangible Assets 0 0 0 0 0 0 Tangible Common Equity 92,040 107,1
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