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What changed in PARKE BANCORP, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PARKE BANCORP, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+148 added−152 removedSource: 10-K (2025-03-12) vs 10-K (2024-03-13)

Top changes in PARKE BANCORP, INC.'s 2024 10-K

148 paragraphs added · 152 removed · 126 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

54 edited+7 added−4 removed143 unchanged
Biggest changeThe Bank’s CDARS ™ and ICS ™ deposits included within the brokered deposit total amounted to $216.9 million and $106.6 million at December 31, 2023 and 2022, respectively. 2023 Average Balance Yield/Rate Percent of Total ( Dollars in thousands) NOWs $ 86,932 1.58% 5.79 % Money markets 403,292 4.25% 26.84 % Savings 127,442 1.17% 8.48 % Time deposits 498,089 3.06% 33.15 % Brokered CDs 121,702 4.97% 8.10 % Total interest-bearing deposits 1,237,457 3.33% Non-interest bearing demand deposits 265,148 17.65 % Total deposits $ 1,502,605 100.00 % Uninsured deposits at the end of the period $ 601,456 2022 Average Balance Yield/Rate Percent of Total ( Dollars in thousands) NOWs $ 92,535 0.45% 5.75 % Money markets 352,339 1.11% 21.89 % Savings 195,029 0.46% 12.12 % Time deposits 514,421 0.95% 31.96 % Brokered CDs 26,785 3.48% 1.66 % Total interest-bearing deposits 1,181,109 0.94% Non-interest bearing demand deposits 428,549 26.62 % Total deposits $ 1,609,658 100.00 % Uninsured deposits at the end of the period $ 622,966 8 The following table indicates the amount of the Company’s certificates of deposit of $250,000 or more, and the portion that are in excess of the Federal Deposit Insurance ("FDIC") limit, by time remaining until maturity as of December 31, 2023.
Biggest changeThe following table sets forth information regarding deposit categories of the Bank. 2024 Average Balance Yield/Rate Percent of Total ( Dollars in thousands) NOWs $ 63,871 0.97% 4.22 % Money markets 583,158 4.77% 38.52 % Savings 66,369 1.13% 4.38 % Time deposits 442,664 4.31% 29.24 % Brokered CDs 170,454 5.30% 11.26 % Total interest-bearing deposits 1,326,516 4.32% Non-interest bearing demand deposits 187,588 12.38 % Total deposits $ 1,514,104 100.00 % Uninsured deposits at the end of the period $ 642,730 2023 Average Balance Yield/Rate Percent of Total ( Dollars in thousands) NOWs $ 86,932 1.58% 5.79 % Money markets 403,292 4.25% 26.84 % Savings 127,442 1.17% 8.48 % Time deposits 498,089 3.06% 33.15 % Brokered CDs 121,702 4.97% 8.10 % Total interest-bearing deposits 1,237,457 3.33% Non-interest bearing demand deposits 265,148 17.65 % Total deposits $ 1,502,605 100.00 % Uninsured deposits at the end of the period $ 601,456 The following table indicates the amount of the Company’s certificates of deposit of $250,000 or more, and the portion that are in excess of the Federal Deposit Insurance ("FDIC") limit, by time remaining until maturity as of December 31, 2024.
Cannabis Related Business In the State of New Jersey, cannabis is legal for recreational use. Once enacted, the new law legalized and regulated cannabis use and possession for adults 21 years and older. The law also clarified marijuana and cannabis use and possession penalties for individuals younger than 21 years old.
Cannabis Related Business In the State of New Jersey, cannabis is legal for recreational use. Once enacted, the law legalized and regulated cannabis use and possession for adults 21 years and older. The law also clarified marijuana and cannabis use and possession penalties for individuals younger than 21 years old.
Under the terms of the Consent Orders, the Bank and/or its Board of Directors is required to take certain actions which include, but are not limited to: • Increase supervision and direction of the Bank’s BSA compliance program and assume full responsibility for the approval and implementation of sound BSA policies and procedures; • Creation of a compliance committee of the Board of Directors of the Bank with the responsibility of overseeing compliance with the Orders, BSA and the BSA compliance program; • Designate a qualified individual(s) acceptable to the FDIC and the NJDOBI as a BSA Officer; • Review and improve the Bank’s BSA compliance program, BSA risk assessment, system of BSA internal controls, and customer due diligence policies; 9 • Develop, adopt and implement effective training programs for the Board and management on all relevant aspects of laws, regulations and policies relating to BSA and ensure that an adequate number of qualified staff have been retained for the Bank’s BSA Department; • Ensure the Bank’s adherence to a written program of policies and procedures to provide for BSA compliance and the appropriate identification and monitoring of transactions that pose greater than normal risk for BSA compliance; • Development and implementation of a customer due diligence program to enhance customer due diligence and risk assessment processes; • Review and improve policies and procedures for monitoring and reporting suspicious activity; • Conduct independent testing for compliance with BSA by either a qualified outside party or Bank personnel who are independent of the BSA function and are qualified to perform such testing; and • Hire a qualified firm acceptable to the FDIC and the NJDOBI to conduct a look back review of accounts and transaction activity for the time period beginning January 1, 2019, through the effective date of the Orders.
Under the terms of the Consent Orders, the Bank and/or its Board of Directors is required to take certain actions which include, but are not limited to: • Increase supervision and direction of the Bank’s BSA compliance program and assume full responsibility for the approval and implementation of sound BSA policies and procedures; • Creation of a compliance committee of the Board of Directors of the Bank with the responsibility of overseeing compliance with the Orders, BSA and the BSA compliance program; • Designate a qualified individual(s) acceptable to the FDIC and the NJDOBI as a BSA Officer; • Review and improve the Bank’s BSA compliance program, BSA risk assessment, system of BSA internal controls, and customer due diligence policies; • Develop, adopt and implement effective training programs for the Board and management on all relevant aspects of laws, regulations and policies relating to BSA and ensure that an adequate number of qualified staff have been retained for the Bank’s BSA Department; • Ensure the Bank’s adherence to a written program of policies and procedures to provide for BSA compliance and the appropriate identification and monitoring of transactions that pose greater than normal risk for BSA compliance; • Development and implementation of a customer due diligence program to enhance customer due diligence and risk assessment processes; • Review and improve policies and procedures for monitoring and reporting suspicious activity; • Conduct independent testing for compliance with BSA by either a qualified outside party or Bank personnel who are independent of the BSA function and are qualified to perform such testing; and • Hire a qualified firm acceptable to the FDIC and the NJDOBI to conduct a look back review of accounts and transaction activity for the time period beginning January 1, 2019, through the effective date of the Orders.
The guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, is based upon the principles that a banking organization’s incentive compensation arrangements should (i) provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage risks, (ii) be compatible with effective internal controls and risk management, and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors.
The guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, is based upon the principles that a banking organization’s incentive compensation arrangements should (i) provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage risks, (ii) be compatible with effective internal controls and risk 15 management, and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors.
Banks that are less than well capitalized or are not in one of the two highest examination rating categories may not accept brokered deposits absent a waiver from the FDIC and may not pay interest on brokered deposits that they are permitted to accept at a rate that is more than 75 basis points greater than the average national rate paid on deposits of similar size and maturity.
Banks that are less than well capitalized or are not in one of the two highest examination rating categories may not accept brokered deposits absent a waiver from the FDIC and may not pay interest on brokered deposits that they are permitted to accept at a rate that is more than 75 basis points greater than the average national rate paid on deposits of similar size and 9 maturity.
As a result, repayment of such loans may be subject to a greater extent than residential real estate loans to adverse conditions in the real estate market or the economy. The Bank seeks to reduce the risks associated with commercial mortgage lending by generally lending in its primary market area and obtaining periodic financial statements and tax returns from borrowers.
As a result, repayment of such loans may be subject to a greater extent than residential real estate loans to adverse conditions in the real estate market or the economy. 4 The Bank seeks to reduce the risks associated with commercial mortgage lending by generally lending in its primary market area and obtaining periodic financial statements and tax returns from borrowers.
In addition, it is the policy 10 of the Federal Reserve that a bank holding company should stand ready to use available resources to provide adequate capital to its subsidiary banks during periods of financial stress or adversity and should maintain the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks.
In addition, it is the policy of the Federal Reserve that a bank holding company should stand ready to use available resources to provide adequate capital to its subsidiary banks during periods of financial stress or adversity and should maintain the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks.
Scheduled loan principal repayments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are significantly influenced by general interest rates and market conditions. 7 Deposits. The Bank offers individuals and businesses a wide variety of accounts, including checking, savings, money market accounts, individual retirement accounts and certificates of deposit.
Scheduled loan principal repayments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are significantly influenced by general interest rates and market conditions. Deposits. The Bank offers individuals and businesses a wide variety of accounts, including checking, savings, money market accounts, individual retirement accounts and certificates of deposit.
Home equity loans (closed-end and lines of credit) are typically made up to 80% of the appraised or assessed value of the property securing the loan in each case, less the amount of any existing prior liens 4 on the property, and generally have maximum terms of ten years.
Home equity loans (closed-end and lines of credit) are typically made up to 80% of the appraised or assessed value of the property securing the loan in each case, less the amount of any existing prior liens on the property, and generally have maximum terms of ten years.
The Bank provides interim real estate acquisition development and construction loans to builders and developers. Construction loans to provide interim financing on the property are based on acceptable percentages of the appraised value of the property securing the loan in each case. Construction loan funds are disbursed periodically at pre-specified stages of 3 completion.
The Bank provides interim real estate acquisition development and construction loans to builders and developers. Construction loans to provide interim financing on the property are based on acceptable percentages of the appraised value of the property securing the loan in each case. Construction loan funds are disbursed periodically at pre-specified stages of completion.
Finally, if the Bank does not maintain the capital conservation buffer required by applicable regulatory capital rules, 11 its ability to pay dividends or other capital distributions to the Company will be limited. See “- Regulation of the Bank - Regulatory Capital Requirements.” Federal Securities Law.
Finally, if the Bank does not maintain the capital conservation buffer required by applicable regulatory capital rules, its ability to pay dividends or other capital distributions to the Company will be limited. See “- Regulation of the Bank - Regulatory Capital Requirements.” Federal Securities Law.
Federal regulations generally require that the Bank disclose its privacy policy, including identifying with whom it shares a customer’s “non-public personal information,” to customers at the time of 13 establishing the customer relationship and annually thereafter.
Federal regulations generally require that the Bank disclose its privacy policy, including identifying with whom it shares a customer’s “non-public personal information,” to customers at the time of establishing the customer relationship and annually thereafter.
These activities include securities underwriting and dealing, insurance agency and underwriting, and making merchant banking investments. The Company has not submitted notice to the Federal Reserve of its intent to be deemed a financial holding company. Regulatory Capital Requirements.
These activities include securities underwriting and dealing, insurance agency and underwriting, and making merchant banking investments. The Company has not submitted notice to the Federal Reserve of its intent to be deemed a financial holding company. 11 Regulatory Capital Requirements.
Real estate acquired by the Bank as a result of foreclosure or by deed in lieu of foreclosure is classified as real estate owned until such time as it is sold. When real estate owned is acquired, it is recorded at its fair value less 5 disposal costs.
Real estate acquired by the Bank as a result of foreclosure or by deed in lieu of foreclosure is classified as real estate owned until such time as it is sold. When real estate owned is acquired, it is recorded at its fair value less disposal costs.
This increased credit risk is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the mobility of collateral, the effects of general economic conditions and the increased difficulty of evaluating and monitoring these types of loans.
This increased credit risk is a result of several factors, including the concentration of principal in a limited 3 number of loans and borrowers, the mobility of collateral, the effects of general economic conditions and the increased difficulty of evaluating and monitoring these types of loans.
The Bank establishes policies and methods to determine concentrations of credit risk and to maintain discipline in lending practices with a focus on portfolio diversification. The Bank limits on loans to one borrower, one industry as well as product concentrations.
The Bank establishes policies and methods to determine concentrations of credit risk and to maintain discipline in lending practices with a focus on portfolio diversification. The Bank places limits on loans to one borrower; one industry; as well as product concentrations.
The regulations of the FDIC and the NJDOBI affect virtually all activities of the Bank, including the minimum level of capital the Bank must maintain, the ability of the Bank to pay dividends, the ability of the Bank to expand through new branches or acquisitions and various other matters.
The regulations of the FDIC and the NJDOBI affect virtually all activities of the Bank, including the minimum level of capital the Bank must maintain, the ability of 12 the Bank to pay dividends, the ability of the Bank to expand through new branches or acquisitions and various other matters.
Thus, there can be no assurance that charge-offs in future periods will not exceed the allowance for credit losses or that additional increases in the allowance for credit losses will not be required. Allocation of Allowance for Credit Losses on Loans.
Thus, there can be no assurance that charge-offs in future periods will not exceed the allowance for credit losses or that additional increases in the allowance for credit losses will not be required. 6 Allocation of Allowance for Credit Losses on Loans.
The Company will evaluate the impact of the 14 proposal’s potential changes to the regulations implementing the CRA and their impact to our financial condition and/or results of operations, which cannot be predicted at this time.
The Company will evaluate the impact of the proposal’s potential changes to the regulations implementing the CRA and their impact to our financial condition and/or results of operations, which cannot be predicted at this time.
In accordance with accounting guidance, the Company classifies the majority of its portfolio of investment securities as “available for sale” with the remainder, which are a mix of municipal bonds and mortgage-backed-securities held for Community Reinvestment Act purposes, as “held to maturity.” At December 31, 2023, the Bank’s investment policy allowed investments in instruments such as: (i) U.S.
In accordance with accounting guidance, the Company classifies the majority of its portfolio of investment securities as “available for sale” with the remainder, which are a mix of municipal bonds and mortgage-backed-securities held for Community Reinvestment Act purposes, as “held to maturity.” At December 31, 2024, the Bank’s investment policy allowed investments in instruments such as: (i) U.S.
At December 31, 2023, the Bank was in compliance with this requirement. Community Reinvestment Act and Fair Lending Laws. Under the Community Reinvestment Act, every insured depository institution, including the Bank, has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods.
At December 31, 2024, the Bank was in compliance with this requirement. Community Reinvestment Act and Fair Lending Laws. Under the Community Reinvestment Act, every insured depository institution, including the Bank, has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods.
As of December 31, 2023, the Bank was in compliance with all regulatory capital standards and qualified as “well capitalized.” See Note 13 of Notes to Consolidated Financial Statements. Bank Secrecy Act / Anti-Money Laundering Laws. The Bank is subject to the Bank Secrecy Act and other anti-money laundering laws and regulations, including the USA PATRIOT Act of 2001.
As of December 31, 2024, the Bank was in compliance with all regulatory capital standards and qualified as “well capitalized.” See Note 13 of Notes to Consolidated Financial Statements. Bank Secrecy Act / Anti-Money Laundering Laws. The Bank is subject to the Bank Secrecy Act and other anti-money laundering laws and regulations, including the USA PATRIOT Act of 2001.
Under applicable federal statute, the federal bank regulatory agencies are required to take “prompt corrective action” with respect to institutions that do not meet specified minimum capital requirements. For these purposes, the statute establishes five capital categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.
Prompt Corrective Regulatory Action . Under applicable federal statute, the federal bank regulatory agencies are required to take “prompt corrective action” with respect to institutions that do not meet specified minimum capital requirements. For these purposes, the statute establishes five capital categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.
Management also periodically performs valuations of real estate owned and establishes allowances to reduce book values of the properties to their net realizable values when necessary. Any write-down of real estate owned is charged to operations. Real estate owned at December 31, 2023 and December 31, 2022, was $1.6 million.
Management also periodically performs valuations of real estate owned and establishes allowances to reduce book values of the properties to their net realizable values when necessary. Any write-down of real estate owned is charged to operations. Real estate owned at December 31, 2024 and December 31, 2023, was $1.6 million.
At December 31, 2023, this loan was current and performing in accordance with the terms of the loan agreement. The size of loans which the Bank can offer to potential borrowers is less than the size of loans which many of the Bank’s competitors with larger capitalization are able to offer.
At December 31, 2024, this loan was current and performing in accordance with the terms of the loan agreement. The size of loans which the Bank can offer to potential borrowers is less than the size of loans which many of the Bank’s competitors with larger capitalization are able to offer.
Real estate owned consisted of two commercial owner occupied properties as of December 31, 2023. Allowance for Credit Losses. It is the policy of management to estimate for possible losses on all loans in its portfolio, whether classified or not.
Real estate owned consisted of two commercial owner occupied properties as of December 31, 2024. Allowance for Credit Losses. It is the policy of management to estimate for possible losses on all loans in its portfolio, whether classified or not.
At December 31, 2023, the Bank's loan portfolio consists of residential, commercial real estate loans, construction loans, commercial and industry loans as well as consumer loans. Non-Performing and Problem Assets Non-Performing Assets. Non-accrual loans are loans on which the accrual of interest has ceased.
At December 31, 2024, the Bank's loan portfolio consists of residential, commercial real estate loans, construction loans, commercial and industry loans as well as consumer loans. Non-Performing and Problem Assets Non-Performing Assets. Non-accrual loans are loans on which the accrual of interest has ceased.
Loan Maturity. The following table sets forth the contractual maturity of certain loan categories and the dollar amount of loans in certain loan categories due after December 31, 2023, which have predetermined interest rates and which have floating or adjustable interest rates at December 31, 2023.
The following table sets forth the contractual maturity of certain loan categories and the dollar amount of loans in certain loan categories due after December 31, 2024, which have predetermined interest rates and which have floating or adjustable interest rates at December 31, 2024.
It is also the Bank’s general policy to obtain personal guarantees from the principals of the borrowers and assignments of all leases related to the collateral. Our commercial real estate mortgage portfolio was $511.7 million at December 31, 2023. Within the portfolio, we designate certain sectors of loans as high risk to monitor more closely, given the current economic conditions.
It is also the Bank’s general policy to obtain personal guarantees from the principals of the borrowers and assignments of all leases related to the collateral. Our commercial real estate mortgage portfolio was $531.7 million at December 31, 2024. Within the portfolio, we designate certain sectors of loans as high risk to monitor more closely, given the current economic conditions.
At December 31, 2023, the high risk sectors consisted of office, hotel, retail, and restaurant loans. All of these sectors combined represent 11.5% of total loan receivable, with no individual sector higher than 3.6%. Residential Real Estate Mortgage Loans. The Bank originates adjustable and fixed-rate residential mortgage loans.
At December 31, 2024, the high risk sectors consisted of office, hotel, retail, and restaurant loans. All of these sectors combined represent 11.5% of total loan receivable, with no individual sector higher than 3.9%. Residential Real Estate Mortgage Loans. The Bank originates adjustable and fixed-rate residential mortgage loans.
Personnel At December 31, 2023, the Bank had 101 full-time and 5 part-time employees. Regulation Set forth below is a brief description of certain laws that relate to the regulation of the Bank and the Company. The description does not purport to be complete and is qualified in its entirety by reference to applicable laws and regulations.
Personnel At December 31, 2024, the Bank had 99 full-time and 9 part-time employees. Regulation Set forth below is a brief description of certain laws that relate to the regulation of the Bank and the Company. The description does not purport to be complete and is qualified in its entirety by reference to applicable laws and regulations.
At December 31, 2023, the Bank’s loan to one borrower limit was approximately $53.8 million and the Bank had no borrowers with loan balances in excess of this amount. At December 31, 2023, the Bank’s largest loan to one borrower was a commercial owner occupied real estate loan with a balance of $21.5 million that was secured by the property.
At December 31, 2024, the Bank’s loan to one borrower limit was approximately $56.2 million and the Bank had no borrowers with loan balances in excess of this amount. At December 31, 2024, the Bank’s largest loan to one borrower was a commercial owner occupied real estate loan with a balance of $21.0 million that was secured by the property.
Total deposits were $1.55 billion at December 31, 2023. Deposits are obtained primarily from communities that the Bank serves, however, the Bank held brokered deposits of $223.4 million and $140.8 million at December 31, 2023, and 2022, respectively. At December 31, 2023, the Bank held brokered deposit balances in NOW, money market, and time deposit categories.
Total deposits were $1.63 billion at December 31, 2024. Deposits are obtained primarily from communities that the Bank serves, however, the Bank held brokered deposits of $215.7 million and $223.4 million at December 31, 2024, and 2023, respectively. At December 31, 2024, the Bank held brokered deposit balances in money market, and time deposit categories.
At December 31, 2023 and 2022, deposit balances from cannabis customers were approximately $96.7 million and $177.3 million, or 6.2% and 11.3% of total deposits, respectively, with two customers accounting for 60.6% and 36.9% of the total at December 31, 2023 and 2022.
At December 31, 2024 and 2023, deposit balances from cannabis customers were approximately $151.9 million and $96.7 million, or 9.3% and 6.2% of total deposits, respectively, with two customers accounting for 59.4% and 60.6% of the total at December 31, 2024 and 2023.
Brokered deposits are a more volatile source of funding than core deposits and do not increase the deposit franchise of the Bank. In a rising rate environment, the Bank may be unwilling or unable to pay a competitive rate.
Brokered deposits do not increase the deposit franchise of the Bank, and in a rising rate environment, the Bank may be unwilling or unable to pay a competitive rate.
The foregoing summary description of the Consent Orders is not complete and is qualified by reference to the full text of the Consent Orders, copies of which are filed as Exhibits 99.1 and 99.2 to this Annual Report on Form 10-K.
The Consent Orders do not require the Bank to pay any civil money penalty or require additional capital. 10 The foregoing summary description of the Consent Orders is not complete and is qualified by reference to the full text of the Consent Orders, copies of which are filed as Exhibits 99.1 and 99.2 to this Annual Report on Form 10-K.
Treasury obligations, (ii) U.S. government agency or government-sponsored agency obligations, (iii) local municipal obligations, (iv) mortgage-backed securities, (v) certificates of deposit, and (vi) investment grade corporate bonds, trust preferred securities and mutual funds. The Board of Directors may authorize additional investments. At December 31, 2023, no one issuer of investment securities represented 10% or more of the Company’s stockholders’ equity.
Treasury obligations, (ii) U.S. government agency or government-sponsored agency obligations, (iii) local municipal obligations, (iv) mortgage-backed securities, (v) certificates of deposit, and (vi) investment grade corporate bonds, trust preferred securities and mutual funds. The Board of Directors may authorize additional investments.
Investors are encouraged to access these reports and other information about our business on our website. At December 31, 2023, we had total assets of $2.02 billion, including loans of $1.79 billion, total deposits of $1.55 billion and total equity of $284.3 million.
Investors are encouraged to access these reports and other information about our business on our website. At December 31, 2024, we had total assets of $2.14 billion, including loans of $1.87 billion, total deposits of $1.63 billion and total equity of $300.1 million.
A decline in local economic conditions could adversely affect the values of such real estate. Consequently, a decline in local economic conditions may have a greater effect on the Bank’s earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are more geographically diverse.
Consequently, a decline in local economic conditions may have a greater effect on the Bank’s earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are more geographically diverse. Competition The Bank faces significant competition, both in making loans and attracting deposits.
As of December 31, 2023, there was $15.4 million in loans which were not then on non-accrual status or modified but where there is a potential weakness or pose unwarranted financial risk to the Bank, even though the asset value is not currently impaired.
There were no loans included in individually evaluated loans at December 31, 2024 and 2023, respectively, that had been modified to borrowers in financial distress. 5 As of December 31, 2024, there was $21.8 million in loans which were not then on non-accrual status or modified but where there is a potential weakness or pose unwarranted financial risk to the Bank, even though the asset value is not currently impaired.
December 31, 2023 December 31, 2022 Amount % of Loans to total Loans Net charge off/(recovery) Net charge off to average loans outstanding Amount % of Loans to total Loans Net charge off/(recovery) Net charge off to average loans outstanding (Dollars in thousands) Commercial and Industrial $ 926 2.0 % $ (15) — % $ 390 1.8 % $ (14) — % Construction 3,347 8.8 — — % 2,581 11.0 (100) (0.01) % Real Estate Mortgage: Commercial – Owner Occupied 1,795 7.9 (3) — % 2,298 7.2 (18) — % Commercial – Non-owner Occupied 7,108 20.7 — — % 9,709 21.6 — — % Residential – 1 to 4 Family 9,061 25.2 — — % 6,076 25.3 (68) — % Residential - 1 to 4 Family Investment 8,783 29.3 9,381 27.2 Residential – Multifamily 1,049 5.8 — — % 1,347 5.5 — — % Consumer 62 0.3 — — % 63 0.4 — — % Total allowance for credit losses $ 32,131 100.0 % $ (18) — % $ 31,845 100.0 % $ (200) (0.01) % Period-end loans outstanding (net of deferred costs/fees) $ 1,787,340 $ 1,751,459 Average loans outstanding $ 1,782,055 $ 1,580,318 Total non-accrual loans $7,238 $16,276 Allowance as a percentage of period end loans 1.80 % 1.82 % Non-accrual loans as a percentage of period end loans 0.40 % 0.93 % Allowance as a percentage of non-performing loans 443.92 % 195.66 % 6 Investment Activities General .
December 31, 2024 December 31, 2023 Amount % of Loans to total Loans Net charge off/(recovery) Net charge off to average loans outstanding Amount % of Loans to total Loans Net charge off/(recovery) Net charge off to average loans outstanding (Dollars in thousands) Commercial and Industrial $ 1,097 1.9 % $ (28) — % $ 926 2.0 % $ (15) — % Construction 3,037 8.0 — — % 3,347 8.8 — — % Real Estate Mortgage: Commercial – Owner Occupied 1,871 8.6 (1) — % 1,795 7.9 (3) — % Commercial – Non-owner Occupied 6,300 19.7 — — % 7,108 20.7 — — % Residential – 1 to 4 Family 9,166 24.0 — — % 9,061 25.2 — — % Residential - 1 to 4 Family Investment 8,832 28.1 8,783 29.3 Residential – Multifamily 2,203 9.4 — — % 1,049 5.8 — — % Consumer 67 0.3 (53) — % 62 0.3 — — % Total allowance for credit losses $ 32,573 100.0 % $ (82) — % $ 32,131 100.0 % $ (18) — % Period-end loans outstanding (net of deferred costs/fees) $ 1,868,153 $ 1,787,340 Average loans outstanding $ 1,810,931 $ 1,782,055 Total non-accrual loans $11,773 $7,238 Allowance as a percentage of period end loans 1.74 % 1.80 % Non-accrual loans as a percentage of period end loans 0.63 % 0.40 % Allowance as a percentage of non-performing loans 276.68 % 443.92 % Investment Activities General .
Investment Portfolio Maturities. The following table sets forth information regarding the scheduled maturities, amortized costs, estimated fair values, and weighted average yields for the Bank’s investment securities portfolio at December 31, 2023, by contractual maturity.
At December 31, 2024, no one issuer of investment securities represented 10% or more of the Company’s stockholders’ equity. 7 Investment Portfolio Maturities. The following table sets forth information regarding the scheduled maturities, amortized costs, estimated fair values, and weighted average yields for the Bank’s investment securities portfolio at December 31, 2024, by contractual maturity.
Competition The Bank faces significant competition, both in making loans and attracting deposits. The Bank’s competition in both areas comes principally from other commercial banks, thrift and savings institutions, including savings and loan associations and credit unions, and other types of financial institutions, including brokerage firms and credit card companies.
The Bank’s competition in both areas comes principally from other commercial banks, thrift and savings institutions, including savings and loan associations and credit unions, and other types of financial institutions, including brokerage firms and credit card companies. The Bank faces additional competition for deposits from short-term money market mutual funds and other corporate and government securities funds.
The Basel III Capital Rules apply to all depository institutions as well as to all top-tier bank and savings and loan holding companies that are not subject to the Federal Reserve Small Bank Holding Company Policy Statement. 12 Under the Basel III Capital Rules, banks are required to meet four minimum capital standards: (1) a “Tier 1” or “core” capital leverage ratio equal to at least 4% of total adjusted assets; (2) a common equity Tier 1 capital ratio equal to 4.5% of risk-weighted assets; (3) a Tier 1 risk-based ratio equal to 6% of risk-weighted assets; and (4) a total capital ratio equal to 8% of total risk-weighted assets.
Under the Basel III Capital Rules, banks are required to meet four minimum capital standards: (1) a “Tier 1” or “core” capital leverage ratio equal to at least 4% of total adjusted assets; (2) a common equity Tier 1 capital ratio equal to 4.5% of risk-weighted assets; (3) a Tier 1 risk-based ratio equal to 6% of risk-weighted assets; and (4) a total capital ratio equal to 8% of total risk-weighted assets.
Maturity Period Certificates of Deposit Portion in Excess of FDIC Insurance Limit ( Dollars in thousands) Within three months $ 34,533 $ 11,533 Over three through six months 33,060 12,060 Over six through twelve months 15,438 5,438 Over twelve months 10,665 7,165 Total $ 93,696 $ 36,196 Under FDIC regulations, insured banks that are well capitalized with examination ratings in one of the two highest categories are permitted to accept brokered deposits and are not restricted as to the rates that can be paid on such deposits.
Maturity Period Certificates of Deposit Portion in Excess of FDIC Insurance Limit ( Dollars in thousands) Within three months $ 58,381 $ 39,381 Over three through six months 37,624 12,874 Over six through twelve months 37,705 24,955 Over twelve months 2,650 1,400 Total $ 136,360 $ 78,610 Under FDIC regulations, insured banks that are well capitalized with examination ratings in one of the two highest categories are permitted to accept brokered deposits and are not restricted as to the rates that can be paid on such deposits.
Market Area Substantially all of the Bank’s business is with customers in its market areas of Southern New Jersey, the Philadelphia area of Pennsylvania, and New York, New York. We have carefully expanded our lending footprint in other areas also. Most of 1 the Bank’s customers are individuals and small to medium-sized businesses which are dependent upon the regional economy.
Market Area Substantially all of the Bank’s business is with customers in its market areas of Southern New Jersey, the Philadelphia area of Pennsylvania, and New York, New York. We have carefully expanded our lending footprint in other areas, including 1 adding lending capabilities in South Carolina.
The Bank faces additional competition for deposits from short-term money market mutual funds and other corporate and government securities funds. Most of the Bank’s competitors, whether traditional or nontraditional financial institutions, have a longer history and significantly greater financial and marketing resources than does the Bank.
Most of the Bank’s competitors, whether traditional or nontraditional financial institutions, have a longer history and significantly greater financial and marketing resources than does the Bank.
Adverse changes in economic and business conditions in the Bank’s markets could adversely affect the Bank’s borrowers, their ability to repay their loans and to borrow additional funds, and consequently the Bank’s financial condition and performance. Additionally, most of the Bank’s loans are secured by real estate located in Southern New Jersey and the Philadelphia area.
Most of the Bank’s customers are individuals and small to medium-sized businesses which are dependent upon the regional economy. Adverse changes in economic and business conditions in the Bank’s markets could adversely affect the Bank’s borrowers, their ability to repay their loans and to borrow additional funds, and consequently the Bank’s financial condition and performance.
The Bank is also subject to certain restrictions under Sections 22(g) and 22(h) of the Federal Reserve Act on extensions of credit to the executive officers, directors, principal shareholders of the Bank and the Company, as well as to entities controlled by such persons.
Section 23B and Regulation W also require a bank’s transactions with affiliates to be on terms substantially the same, or at least as favorable to the bank, as those prevailing at the time for comparable transactions with non-affiliated companies. 14 The Bank is also subject to certain restrictions under Sections 22(g) and 22(h) of the Federal Reserve Act on extensions of credit to the executive officers, directors, principal shareholders of the Bank and the Company, as well as to entities controlled by such persons.
Lending Activities Our lending relationships are primarily with small to mid-sized businesses and individual consumers residing primarily in and around southern New Jersey, southeastern Pennsylvania, and the Brooklyn and Bronx sections of New York, New York. 2 We focus our lending efforts primarily in four lending areas: residential mortgage loans, commercial mortgage loans, commercial and industrial loans, and construction loans.
At December 31, 2024 and 2023, the Bank had cannabis-related loans in the amounts of $43.4 million and $27.1 million, respectively. 2 Lending Activities Our lending relationships are primarily with small to mid-sized businesses and individual consumers residing primarily in and around southern New Jersey, southeastern Pennsylvania, and the Brooklyn and Bronx sections of New York, New York.
The Consent Orders do not otherwise impact the Bank’s business activities outside of BSA. The Consent Orders do not require the Bank to pay any civil money penalty or require additional capital.
The Consent Orders do not otherwise impact the Bank’s business activities outside of BSA.
The capital buffer requirement effectively raises the minimum required risk-based capital ratios to 7% for Common Equity Tier 1 Capital, 8.5% for Tier 1 Capital and 10.5% for Total Capital on a fully phased-in basis.
The capital buffer requirement effectively raises the minimum required risk-based capital ratios to 7% for Common Equity Tier 1 Capital, 8.5% for Tier 1 Capital and 10.5% for Total Capital on a fully phased-in basis. 13 In assessing an institution’s capital adequacy, the FDIC takes into consideration not only these numeric factors but also qualitative factors, and has the authority to establish higher capital requirements for individual institutions where necessary.
At December 31, 2023 One Year or Less After One Through Five Years After Five Years Through Ten Years After Ten Years Total Investment Securities Amortized Cost Amortized Cost Amortized Cost Amortized Cost Amortized Cost Fair Value (Dollars in thousands) Securities Held to Maturity : State and political subdivisions $ — $ 1,412 $ — $ 2,474 $ 3,886 $ 3,540 Yield — % 4.76 % — % 1.91 % 2.93 % Residential mortgage-backed securities — — — 5,406 5,406 4,352 Yield — % — % — % 1.92 % 1.92 % Total securities held to maturity — 1,412 — 7,880 9,292 7,892 Weighted Average Yield — % 4.76 % — % 1.91 % 2.34 % Securities Available for Sale : Residential mortgage-backed securities — 2,996 1,008 3,635 7,639 7,095 Yield — % 2.22 % 2.29 % 2.70 % 2.45 % Total securities available for sale — 2,996 1,008 3,635 7,639 7,095 Weighted Average Yield — % 2.22 % 2.29 % 2.70 % 2.45 % Total Investment Securities $ — $ 4,408 $ 1,008 $ 11,515 $ 16,931 $ 14,987 Total Weighted Average Yield — % 2.93 % 2.29 % 2.17 % 2.39 % Yields are calculated on a weighted average basis using the investments amortized cost and respective average yields for each investment category.
At December 31, 2024 One Year or Less After One Through Five Years After Five Years Through Ten Years After Ten Years Total Investment Securities Amortized Cost Amortized Cost Amortized Cost Amortized Cost Amortized Cost Fair Value (Dollars in thousands) Securities Held to Maturity : State and political subdivisions $ — $ 1,481 $ 1,507 $ 965 $ 3,953 $ 3,441 Yield — % 4.76 % 1.90 % 1.93 % 2.96 % Residential mortgage-backed securities — — — 5,256 5,256 4,051 Yield — % — % — % 1.91 % 1.91 % Total securities held to maturity — 1,481 1,507 6,221 9,209 7,492 Weighted Average Yield — % 4.76 % 1.90 % 1.92 % 2.36 % Securities Available for Sale : Residential mortgage-backed securities — 2,117 727 3,161 6,005 5,551 Yield — % 2.24 % 1.99 % 2.69 % 2.43 % Total securities available for sale — 2,117 727 3,161 6,005 5,551 Weighted Average Yield — % 2.24 % 1.99 % 2.69 % 2.43 % Total Investment Securities $ — $ 3,598 $ 2,234 $ 9,382 $ 15,214 $ 13,043 Total Weighted Average Yield — % 3.14 % 1.93 % 2.19 % 2.39 % Yields are calculated on a weighted average basis using the investments amortized cost and respective average yields for each investment category.
Total non-performing loans, which include non-accrual loans, were $7.2 million and $21.7 million at December 31, 2023 and 2022, respectively. Included in individually evaluated loans at December 31, 2023 and 2022 were zero and $5.5 million, respectively, of loans modified to borrowers in financial distress.
Total non-performing loans, which include non-accrual loans, were $12.2 million and $7.2 million at December 31, 2024 and 2023, respectively.
Removed
At December 31, 2023 and 2022, the Bank had cannabis-related loans in the amounts of $27.1 million and $3.8 million, respectively.
Added
Additionally, most of the Bank’s loans are secured by real estate located in Southern New Jersey and the Philadelphia area. A decline in local economic conditions could adversely affect the values of such real estate.
Removed
Due within one year or less Due after one through five years Due after five through fifteen years Due after fifteen years Total ( Dollars in thousands) Commercial and Industrial $ 16,240 $ 9,524 $ 9,687 $ — $ 35,451 Construction 143,889 13,344 323 — 157,556 Commercial Real Estate Mortgage: Commercial - Owner Occupied 5,035 31,448 103,558 1,701 141,742 Commercial - Non-Owner Occupied 28,071 100,409 241,429 — 369,909 Residential - 1 to 4 family 2,189 43,718 89,886 313,889 449,682 Residential - 1 to 4 family investment — — 10,514 513,653 524,167 Residential - multifamily 1,951 17,158 84,215 — 103,324 Consumer — 220 2,276 3,013 5,509 Total $ 197,375 $ 215,821 $ 541,888 $ 832,256 $ 1,787,340 Loans at fixed interest rates $ 9,342 $ 38,680 $ 54,560 $ 28,445 $ 131,027 Loans at floating/variable interest rates 188,033 177,141 487,328 803,811 1,656,313 Total $ 197,375 $ 215,821 $ 541,888 $ 832,256 $ 1,787,340 Commercial and Industrial Loans.
Added
We focus our lending efforts primarily in four lending areas: residential mortgage loans, commercial mortgage loans, commercial and industrial loans, and construction loans. Loan Maturity.
Removed
In assessing an institution’s capital adequacy, the FDIC takes into consideration not only these numeric factors but also qualitative factors, and has the authority to establish higher capital requirements for individual institutions where necessary. Prompt Corrective Regulatory Action .
Added
Due within one year or less Due after one through five years Due after five through fifteen years Due after fifteen years Total ( Dollars in thousands) Commercial and Industrial $ 20,040 $ 10,790 $ 4,551 $ — $ 35,381 Construction 137,534 11,497 315 — 149,346 Commercial Real Estate Mortgage: Commercial - Owner Occupied 5,812 84,613 68,273 1,743 160,441 Commercial - Non-Owner Occupied 41,084 243,195 87,019 — 371,298 Residential - 1 to 4 family 3,725 93,731 33,283 317,141 447,880 Residential - 1 to 4 family investment — — 8,615 515,552 524,167 Residential - multifamily 1,842 76,860 96,054 — 174,756 Consumer 20 396 3,833 635 4,884 Total $ 210,057 $ 521,082 $ 301,943 $ 835,071 $ 1,868,153 The following table presents the distribution of those loans that mature in more than one year between predetermined rates and floating or adjustable rates as of December 31, 2024.
Removed
Section 23B and Regulation W also require a bank’s transactions with affiliates to be on terms substantially the same, or at least as favorable to the bank, as those prevailing at the time for comparable transactions with non-affiliated companies.
Added
Predetermined Rates Floating or Adjustable Rates Total (Dollars in thousand) Commercial and Industrial $ 311 $ 15,030 $ 15,341 Construction — 11,813 11,813 Commercial Real Estate Mortgage: Commercial - Owner Occupied 15,991 138,638 154,629 Commercial - Non-Owner Occupied 18,178 312,036 330,214 Residential - 1 to 4 family 34,288 409,884 444,172 Residential - 1 to 4 family investment 12,302 511,847 524,149 Residential - multifamily 4,176 168,738 172,914 Consumer 4,855 9 4,864 Total $ 90,101 $ 1,567,995 $ 1,658,096 Commercial and Industrial Loans.
Added
The Bank’s CDARS ™ and ICS ™ deposits included within the brokered deposit total amounted to $13.5 million and $216.9 million at December 31, 2024 and 2023, respectively. Additionally, we have access to other brokered deposit funding sources that we utilize as a source of additional 8 liquidity.
Added
In addition to IntraFi, we utilize Wells Fargo, Piper Sandler, and Stonecastle to obtain brokered deposits, and as of December 31, 2024, the Company had $202.2 million sourced from these broker relationships.
Added
The Basel III Capital Rules apply to all depository institutions as well as to all top-tier bank and savings and loan holding companies that are not subject to the Federal Reserve Small Bank Holding Company Policy Statement.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changePursuant to the Plan, the Information Technology Administrator and Senior\Compliance Management identify information owners for sensitive customer information and create an incident 15 response team.
Biggest changeThe Plan requires all employees to have a working knowledge of the Company’s Information Security Program and Incident Response Policies. Pursuant to the Plan, the Information Technology Administrator and Senior\Compliance Management identify information owners for sensitive customer information and create an incident response team.
During the fiscal year ended December 31, 2023, the risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected the Company, its business strategy, results of operations, or financial condition. 16
During the fiscal year ended December 31, 2024, the risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected the Company, its business strategy, results of operations, or financial condition.
The documentation of the suspected or actual incident includes the following: a. Identify the nature and scope of the incident. b. Identify the information systems affected. c. Identify the types of customer information potentially affected.
The documentation of the suspected or actual incident includes the following: a. Identify the nature and scope of the incident. b. Identify the information systems affected. c.
Once the Department Manager has determined that unauthorized access, manipulation of data or theft of any item identified under GLBA Inventory and Asset Classification has occurred, Senior Management, the Compliance Officer and the Information Technology Administrator must be contacted immediately.
Identify the types of customer information potentially affected. 16 Once the Department Manager has determined that unauthorized access, manipulation of data or theft of any item identified under GLBA Inventory and Asset Classification has occurred, Senior Management, the Compliance Officer and the Information Technology Administrator must be contacted immediately.
Removed
The Company has adopted an Incident Response Plan (the “Plan”) to monitor, detect, mitigate and remediate cybersecurity incidents. The Plan requires all employees to have a working knowledge of the Company’s Information Security Program and Incident Response Policies.
Added
Our IT department performs annual risk assessments to evaluate the effectiveness of the controls to support the requirements under Gramm-Leach Bliley Act ("GLBA"), and Federal Institutions Examination Council ("FFIEC") Guidance on Securing Customer Information.
Added
The focus areas include: • technology systems used for information that is collected, processed, and stored; • assessing internal and external cybersecurity threats and vulnerabilities; • performing regular penetration and controls testing; • evaluation and assessment of impact should the information or systems become compromised; • evaluation for the effectiveness of the governance structure for Information security risk management.
Added
Internal and external Penetration Testing is performed annually. Tests are conducted or reviewed by independent third parties or qualified Associates independent of those that develop or maintain the security program. Testing is performed annually by third party auditors contracted through the company's IT department.
Added
Management reviews test results promptly and ensures that appropriate steps are taken to address adverse test results. Remediation efforts are organized and made available to the Committee as well as for review by third party auditors and examiners. The Company has adopted an Incident Response Plan (the “Plan”) to monitor, detect, mitigate and remediate cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeJimmy Leeds Road Galloway Township, NJ 08205 Collingswood Branch 2016 Owned 1150 Haddon Avenue Collingswood, NJ 08108 Arch Street Branch 2016 Leased 1032 Arch Street Philadelphia, PA 19108 Philadelphia Lending Office 2023 Leased 1817 E. Venango St. Philadelphia, PA 19108
Biggest changeJimmy Leeds Road Galloway Township, NJ 08205 Collingswood Branch 2016 Owned 1150 Haddon Avenue Collingswood, NJ 08108 Arch Street Branch 2016 Leased 1032 Arch Street Philadelphia, PA 19108 Philadelphia Lending Office 2023 Leased 1817 E. Venango St. Philadelphia, PA 19108 17

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Removed
Item 3. Legal Proceedings. Absecon Gardens Condominium Association v. Parke Bank Matter Absecon Gardens Condominium Association v. Parke Bank, One Mechanic Street, et al, Superior Court of New Jersey, Law Division, Atlantic County, Docket No. ATL-L-2321-21. The Company is the successor to the interests of the developer of the Absecon Gardens Condominium project in Absecon NJ.
Added
Item 3. Legal Proceedings. Information regarding legal proceedings is included in Note 14, Commitments and Contingencies, to the Consolidated Financial Statements under Part II, Item 8, "Financial Statement and Supplementary Data. Item 4. Mine Safety Disclosures. Not Applicable. Part II
Removed
Some of the unit owners have suggested that the Company is responsible for contributions and/or repair for alleged damages purportedly relating to construction. The owners filed a Complaint, alleging that the damages total approximately $1.7 million.
Removed
The matter is in the early stages of discovery so it is difficult to determine whether that amount accurately reflects the claimed damages, or whether the Company is in any way culpable for the damages. At this time it is too early to predict whether an unfavorable outcome will result. The Company is vigorously defending this matter. See "Note 15.
Removed
Commitments and Contingencies" in the Notes to the Consolidated Financial Statements. 17 Mori Restaurant LLC v. Parke Bank Matter On May 20, 2014, Parke Bank (the "Bank") loaned Voorhees Diner Corporation ("VDC") the original principal sum of $1,000,000.00 for purposes of tenant fit out, and operation, of the Voorhees Diner situated at 320 Route 73, Voorhees, New Jersey 08043.
Removed
VDC leased the Diner property under that certain Lease with Mori Restaurant LLC ("Mori") dated May 20, 2014. In connection with the loan from the Bank and as security therefor, VDC pledged its leasehold interest to the Bank. On March 6, 2015, the loan was modified, and the principal amount of the loan was increased to $1,400,000.00.
Removed
On January 8, 2020, the Bank declared VDC in default of its loan obligations. Judgment was entered against VDC and in favor of the Bank, and the court appointed Alan I. Gould, Esquire, as the Receiver for the Voorhees Diner Corporation. Mr. Gould subsequently caused VDC's leasehold interest in the Diner property to be sold at sheriffs sale.
Removed
The Bank's REO subsidiary, 320 Route 73 LLC, was the successful bidder and took title thereto. Mori Restaurant has filed counterclaims against 320 Route 73 LLC and the Bank for rent allegedly accruing due during the period that the Receiver was in possession of the premises.
Removed
As to all of Mori Restaurant’s claims, the Bank defendants’ primary, but not exclusive, defense in this matter is that, pursuant to that certain Fee Owner Consent executed by and between Mori Restaurant and the Bank, in November 2014, the lease between VDC and Mori Restaurant was terminated as a matter of law and neither the Bank nor 320 Route 73 LLC have liability to Mori Restaurant under the lease or otherwise.
Removed
The Bank believes this suit is without merit, denies any and all liability and intends to vigorously defend against this matter.
Removed
Other than the foregoing, neither the Company nor the Bank are involved in any other pending legal proceedings, other than routine legal matters occurring in the ordinary course of business, which in the aggregate involve amounts which are believed by management to be immaterial to the consolidated financial condition or results of operations of the Company. Item 4.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 18 PART II Item 5. Market for Common Equity, Related stockholder Matters and Issuer Purchases of Equity Securities 18 Item 6. [Reserved] 19 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 19 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 29 Item 8. Financial Statements and Supplementary Data 29
Biggest changeItem 4. Mine Safety Disclosures 18 PART II Item 5. Market for Common Equity, Related stockholder Matters and Issuer Purchases of Equity Securities 18 Item 6. [Reserved] 19 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 19

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+2 added−1 removed6 unchanged
Biggest changeThe Company paid quarterly cash dividends of $15 per share on the preferred stock for the years 2023 and 2022. During 2023, preferred stockholders converted 70 shares of preferred shares into 9,628 18 shares of common stock. The preferred stock qualifies, and is accounted, as equity securities and is included in the Company’s Tier I capital since issued.
Biggest changeThe Company paid quarterly cash dividends of $15 per share on the preferred stock for the years 2024 and 2023. During 2024, preferred stockholders converted 50 shares of preferred shares into 6,877 shares of common stock. The preferred stock qualifies, and is accounted, as equity securities and is included in the Company’s Tier I capital since issued.
The New Jersey Department of Banking and Insurance has similar power to issue cease and desist orders to prohibit what might constitute unsafe or unsound practices. The payment of dividends may also be affected by other factors (e.g., the need to maintain adequate capital or to meet loan loss reserve requirements).
The New Jersey Department of Banking and Insurance has similar power to issue cease and desist orders to prohibit 18 what might constitute unsafe or unsound practices. The payment of dividends may also be affected by other factors (e.g., the need to maintain adequate capital or to meet loan loss reserve requirements).
This does not reflect the number of persons or entities who held stock in nominee or "street" name through various brokerage firms. As of March 11, 2024, there were 11,958,321 shares of our common stock issued and outstanding. The Company paid a $0.18 per share quarterly common stock cash dividend during each quarter of 2023.
This does not reflect the number of persons or entities who held stock in nominee or "street" name through various brokerage firms. As of March 11, 2024, there were 11,842,596 shares of our common stock issued and outstanding. The Company paid a $0.18 per share quarterly common stock cash dividend during each quarter of 2024.
Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock is listed on the Nasdaq Capital Market under the trading symbol of "PKBK". The number of shareholders of record of common stock as of December 31, 2023, was approximately 238.
Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock is listed on the Nasdaq Capital Market under the trading symbol of "PKBK". The number of shareholders of record of common stock as of December 31, 2024, was approximately 223.
During 2023, the Company paid a total of $8.6 million in common stock cash dividends. The Company also has 375 shares of 6% non-Cumulative Series B Preferred Stock outstanding at December 31, 2023. The preferred stock has a liquidation preference of $1,000 per share.
During 2024, the Company paid a total of $8.6 million in common stock cash dividends. The Company also has 325 shares of 6% non-Cumulative Series B Preferred Stock outstanding at December 31, 2024. The preferred stock has a liquidation preference of $1,000 per share.
The conversion rate and the total number of shares to be issued would be adjusted for future stock dividends, stock splits and other corporate actions. The Company has recorded dividends on preferred stock in the approximate amount of $26,000 and $27,000 for the years ended December 31, 2023 and 2022, respectively.
The conversion rate and the total number of shares to be issued would be adjusted for future stock dividends, stock splits and other corporate actions. The Company has recorded dividends on preferred stock in the approximate amount of $20,250 and $26,000 for the years ended December 31, 2024 and 2023, respectively.
Each share of Series B Preferred Stock is convertible, at the option of the holder into approximately 137.6 shares of Common Stock at December 31, 2023. Upon full conversion of the outstanding shares of the Series B Preferred Stock, the Company will issue approximately 51,600 shares of Common Stock assuming that the conversion rate does not change.
Each share of Series B Preferred Stock is convertible, at the option of the holder into approximately 137.6 shares of Common Stock at December 31, 2024. Upon full conversion of the outstanding shares of the Series B Preferred Stock, the Company will issue approximately 44,720 shares of Common Stock assuming that the conversion rate does not change.
Shareholders may also contact Computershare at 1-800-942-5909 and www.computershare.com.
Box 43078, Providence, Rhode Island 02940-3078. Shareholders may also contact Computershare at 1-800-942-5909 and www.computershare.com.
Removed
There were no repurchases of the Company’s Common Stock during the twelve months ended December 31, 2023. Shareholders wishing to change the name, address or ownership of the Company’s stock, report lost certificates or consolidate accounts are asked to contact the Company’s Transfer Agent and Registrar directly: Computershare Investor Services ("Computershare"), P.O. Box 43078, Providence, Rhode Island 02940-3078.
Added
Repurchases of the Company's Common Stock during the twelve months ended December 31, 2024 totaled 200,000 shares at an average price of $21.28. Set forth below is information regarding the Company's stock repurchases during the fiscal year ended December 31, 2024.
Added
Issuer Purchases of Equity Securities Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Number of Shares that May Yet Be Purchased Under the Program August 1 - 31, 2024 50,001 $ 19.41 50,001 563,095 September 1 - 30, 2024 49,999 20.79 49,999 513,096 October 1 - 31, 2024 16,500 21.26 16,500 496,596 November 1 - 30, 2024 45,088 22.65 45,088 451,508 December 1 - 31, 2024 38,412 22.58 38,412 413,096 Total 200,000 $ 21.28 200,000 Shareholders wishing to change the name, address or ownership of the Company’s stock, report lost certificates or consolidate accounts are asked to contact the Company’s Transfer Agent and Registrar directly: Computershare Investor Services ("Computershare"), P.O.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

58 edited+8 added−10 removed30 unchanged
Biggest changeThe yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense. 20 For the Years Ended December 31, 2023 2022 Average Balance Interest Income/ Expense Yield/ Cost Average Balance Interest Income/ Expense Yield/ Cost ( Dollars in thousands) Assets Loans (1) (2) $ 1,782,055 $ 106,061 5.95 % $ 1,580,318 $ 82,900 5.25 % Investment securities 25,168 1,048 4.16 % 25,922 772 2.98 % Deposits with banks 114,880 5,595 4.87 % 338,277 3,811 1.13 % Total interest-earning assets 1,922,103 $ 112,704 5.86 % 1,944,517 $ 87,483 4.50 % Non-interest earning assets 78,253 79,869 Allowance for credit losses (31,965) (30,449) Total assets $ 1,968,391 $ 1,993,937 Liabilities and Equity Interest bearing deposits NOWs $ 86,932 $ 1,377 1.58 % $ 92,535 $ 417 0.45 % Money markets 403,292 17,120 4.25 % 352,339 3,927 1.11 % Savings 127,442 1,486 1.17 % 195,029 905 0.46 % Time deposits 498,089 15,232 3.06 % 514,421 4,890 0.95 % Brokered certificates of deposit 121,702 6,044 4.97 % 26,785 932 3.48 % Total interest-bearing deposits 1,237,457 41,259 3.33 % 1,181,109 11,071 0.94 % Borrowings 170,093 7,231 4.25 % 119,422 3,085 2.58 % Total interest-bearing liabilities 1,407,550 $ 48,490 3.44 % 1,300,531 $ 14,156 1.09 % Non-interest bearing deposits 265,148 428,549 Other liabilities 16,802 14,389 Total liabilities 1,689,500 1,743,469 Equity 278,891 250,468 Total liabilities and equity $ 1,968,391 $ 1,993,937 Net interest income $ 64,214 $ 73,327 Interest rate spread 2.42 % 3.41 % Net interest margin 3.34 % 3.77 % (1) Interest income includes $3.8 million and $5.0 million of net fee income for the years ended 2023 and 2022, respectively.
Biggest changeThe yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense. 20 For the Years Ended December 31, 2024 2023 Average Balance Interest Income/ Expense Yield/ Cost Average Balance Interest Income/ Expense Yield/ Cost ( Dollars in thousands) Assets Loans (1) (2) $ 1,810,931 $ 117,834 6.51 % $ 1,782,055 $ 106,061 5.95 % Investment securities 23,679 1,042 4.40 % 25,168 1,048 4.16 % Deposits with banks 124,037 6,237 5.03 % 114,880 5,595 4.87 % Total interest-earning assets 1,958,647 $ 125,113 6.39 % 1,922,103 $ 112,704 5.86 % Non-interest earning assets 65,939 78,253 Allowance for credit losses (32,321) (31,965) Total assets $ 1,992,265 $ 1,968,391 Liabilities and Equity Interest bearing deposits NOWs $ 63,871 $ 618 0.97 % $ 86,932 $ 1,377 1.58 % Money markets 583,158 27,812 4.77 % 403,292 17,120 4.25 % Savings 66,369 750 1.13 % 127,442 1,486 1.17 % Time deposits 442,664 19,099 4.31 % 498,089 15,232 3.06 % Brokered certificates of deposit 170,454 9,033 5.30 % 121,702 6,044 4.97 % Total interest-bearing deposits 1,326,516 57,312 4.32 % 1,237,457 41,259 3.33 % Borrowings 165,753 9,093 5.49 % 170,093 7,231 4.25 % Total interest-bearing liabilities 1,492,269 $ 66,405 4.45 % 1,407,550 $ 48,490 3.44 % Non-interest bearing deposits 187,588 265,148 Other liabilities 18,261 16,802 Total liabilities 1,698,118 1,689,500 Equity 294,147 278,891 Total liabilities and equity $ 1,992,265 $ 1,968,391 Net interest income $ 58,708 $ 64,214 Interest rate spread 1.94 % 2.42 % Net interest margin 3.00 % 3.34 % (1) Interest income includes $3.6 million and $3.8 million of net fee income for the years ended 2024 and 2023, respectively.
The asset mix of the balance sheet is continually evaluated in terms of several variables: yield, credit quality, appropriate funding sources and liquidity. Management of the liability mix of the balance sheet focuses on expanding the various funding sources. 26 In theory, interest rate risk can be diminished by maintaining a nominal level of interest rate sensitivity.
The asset mix of the balance sheet is continually evaluated in terms of several variables: yield, credit quality, appropriate funding sources and liquidity. Management of the liability mix of the balance sheet focuses on expanding the various funding sources. In theory, interest rate risk can be diminished by maintaining a nominal level of interest rate sensitivity.
The Company's results of operations are dependent primarily on its net interest income, which is the difference between the interest income earned on its interest earning-assets and the 19 interest expense paid on its interest-bearing liabilities. In our operations, we have three major lines of lending: residential real estate mortgage, commercial real estate mortgage, and construction lending.
The Company's results of operations are dependent primarily on its net interest income, which is the difference between the interest income earned on its interest earning-assets and the interest expense paid on its interest-bearing liabilities. In our operations, we have three major lines of lending: residential real estate mortgage, commercial real estate mortgage, and construction lending.
Our interest income is primarily generated from our lending and investment activities. Our deposit products include checking, savings, money market accounts, and certificates of deposit. The majority of our deposit accounts are obtained through our retail banking business, which provides us with low cost funding to grow our lending efforts.
Our interest income is primarily generated from our lending and investment activities. Our deposit products include checking, savings, money market accounts, and certificates 19 of deposit. The majority of our deposit accounts are obtained through our retail banking business, which provides us with low cost funding to grow our lending efforts.
In addition, we manage the potential risk in commitments to lend by limiting the total amount of commitments, by monitoring maturity structure of these commitments and by applying the same credit standards for these commitments as for all of our credit activities. 27 For commitments to lend, we generally require collateral or a guarantee.
In addition, we manage the potential risk in commitments to lend by limiting the total amount of commitments, by monitoring maturity structure of these commitments and by applying the same credit standards for these commitments as for all of our credit activities. For commitments to lend, we generally require collateral or a guarantee.
When we make commitments, we are exposed to credit risk. However, the maximum credit risk for these commitments will generally be lower than the contractual amount because a significant portion of these commitments is expected to expire without being used by the customer.
When we make commitments, we are exposed to credit risk. However, the maximum credit risk for 27 these commitments will generally be lower than the contractual amount because a significant portion of these commitments is expected to expire without being used by the customer.
As of December 31, 2023 3 Months or Less Over 3 Months Through 12 Months Over 1 Year Through 3 Years Over 3 Years Through 5 Years Over 5 Years Total (Dollars in thousands) Interest-earning assets: Loans (1) $ 283,271 $ 446,949 $ 785,851 $ 212,231 $ 49,112 $ 1,777,414 Investment securities 8,127 1,442 3,676 4,049 7,272 24,566 Cash and cash equivalents 167,659 — — — — 167,659 Total interest-earning assets $ 459,057 $ 448,391 $ 789,527 $ 216,280 $ 56,384 $ 1,969,639 Interest-bearing liabilities: NOW, Saving and Money market deposits $ 33,543 $ 100,627 $ 345,578 $ 203,450 $ 30,370 $ 713,568 Retail time deposits 153,882 257,720 35,947 2,937 — 450,486 Brokered time deposits 106,692 49,150 742 — — 156,584 Borrowed funds 43,403 — 95,000 — 30,000 168,403 Total interest-bearing liabilities $ 337,520 $ 407,497 $ 477,267 $ 206,387 $ 60,370 $ 1,489,041 Interest rate sensitive gap $ 121,537 $ 40,894 $ 312,260 $ 9,893 $ (3,986) $ 480,598 Cumulative interest rate gap $ 121,537 $ 162,431 $ 474,691 $ 484,584 $ 480,598 $ — Ratio of rate-sensitive assets to rate-sensitive liabilities 136.0 % 110.0 % 165.4 % 104.8 % 93.4 % 132.3 % Cumulative interest sensitivity gap to total assets 6.0 % 8.0 % 23.5 % 23.9 % 23.8 % — (1) Loan balances exclude nonaccruing loans, deferred fees and costs, and loan discounts.
As of December 31, 2024 3 Months or Less Over 3 Months Through 12 Months Over 1 Year Through 3 Years Over 3 Years Through 5 Years Over 5 Years Total (Dollars in thousands) Interest-earning assets: Loans (1) $ 283,271 $ 446,949 $ 785,851 $ 212,231 $ 49,112 $ 1,777,414 Investment securities 8,127 1,442 3,676 4,049 7,272 24,566 Cash and cash equivalents 167,659 — — — — 167,659 Total interest-earning assets $ 459,057 $ 448,391 $ 789,527 $ 216,280 $ 56,384 $ 1,969,639 Interest-bearing liabilities: NOW, Saving and Money market deposits $ 33,543 $ 100,627 $ 345,578 $ 203,450 $ 30,370 $ 713,568 Retail time deposits 153,882 257,720 35,947 2,937 — 450,486 Brokered time deposits 106,692 49,150 742 — — 156,584 Borrowed funds 43,403 — 95,000 — 30,000 168,403 Total interest-bearing liabilities $ 337,520 $ 407,497 $ 477,267 $ 206,387 $ 60,370 $ 1,489,041 Interest rate sensitive gap $ 121,537 $ 40,894 $ 312,260 $ 9,893 $ (3,986) $ 480,598 Cumulative interest rate gap $ 121,537 $ 162,431 $ 474,691 $ 484,584 $ 480,598 $ — Ratio of rate-sensitive assets to rate-sensitive liabilities 136.0 % 110.0 % 165.4 % 104.8 % 93.4 % 132.3 % Cumulative interest sensitivity gap to total assets 5.7 % 7.6 % 22.2 % 22.6 % 22.4 % — (1) Loan balances exclude non-accruing loans, deferred fees and costs, and loan discounts.
The interest rate sensitivity position as of December 31, 2023 is presented in the following table. Assets and liabilities are scheduled based on maturity or re-pricing data except for mortgage loans and mortgage-backed securities, which are based on prevailing prepayment assumptions and expected maturities and deposits which are based on recent retention experience of core deposits.
The interest rate sensitivity position as of December 31, 2024 is presented in the following table. Assets and liabilities are scheduled based on maturity or re-pricing data except for mortgage loans and mortgage-backed securities, which are based on prevailing prepayment assumptions and expected maturities and deposits which are based on recent retention experience of core deposits.
Capital Adequacy Consistent with the goal to operate a sound and profitable financial organization, the Company and Bank actively seeks to maintain their status as well-capitalized in accordance with regulatory standards. As of December 31, 2023, the Company and the Bank exceeded all applicable regulatory capital requirements.
Capital Adequacy Consistent with the goal to operate a sound and profitable financial organization, the Company and Bank actively seeks to maintain their status as well-capitalized in accordance with regulatory standards. As of December 31, 2024, the Company and the Bank exceeded all applicable regulatory capital requirements.
Comparative Average Balances, Yields and Rates The following table presents the average daily balances of assets, liabilities and equity and the respective interest earned or paid on interest-earning assets and interest-bearing liabilities, as well as average annualized rates, for the years ended December 31, 2023 and 2022.
Comparative Average Balances, Yields and Rates The following table presents the average daily balances of assets, liabilities and equity and the respective interest earned or paid on interest-earning assets and interest-bearing liabilities, as well as average annualized rates, for the years ended December 31, 2024 and 2023.
The fee income for the year ended December 31, 2023 from the commercial deposit accounts of depositors who do business in the cannabis industry totaled $3.4 million and is included in service fees on deposit accounts in the accompanying consolidated statements of income. Such deposit fee income totaled $4.4 million during the year ended December 31, 2022.
The fee income for the year ended December 31, 2024 from the commercial deposit accounts of depositors who do business in the cannabis industry totaled $1.1 million and is included in service fees on deposit accounts in the accompanying consolidated statements of income. Such deposit fee income totaled $3.4 million during the year ended December 31, 2023.
At December 31, 2023, we had contractual obligations primarily relating to commitments to extent credits, deposits, secured and unsecured borrowings, and operating leases. We have adequate resources to fund all unfunded commitments to the extent required and meet all contractual obligations as they come due.
At December 31, 2024, we had contractual obligations primarily relating to commitments to extend credits, deposits, secured and unsecured borrowings, and operating leases. We have adequate resources to fund all unfunded commitments to the extent required and meet all contractual obligations as they come due.
At December 31, 2023, our cash position was $180.4 million. We invest cash that is in excess of our immediate operating needs primarily in our interest-bearing account at the Federal Reserve. Our primary source of funding has been deposits. Funds from other operations, financing arrangements, investment securities available-for-sale also provide significant sources of funding.
At December 31, 2024, our cash position was $221.5 million. We invest cash that is in excess of our immediate operating needs primarily in our interest-bearing account at the Federal Reserve. Our primary source of funding has been deposits. Funds from other operations, financing arrangements, investment securities available-for-sale also provide significant sources of funding.
The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. At December 31, 2023 and December 31, 2022, standby letters of credit with customers were $1.5 million and $1.5 million, respectively.
The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. At December 31, 2024 and December 31, 2023, standby letters of credit with customers were $0.6 million and $1.5 million, respectively.
Such commitments have historically been drawn at only a fraction of the total commitment. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The funding requirements for such commitments occur on a measured basis over time and would be funded by normal deposit growth.
Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The funding requirements for such commitments occur on a measured basis over time and would be funded by normal deposit growth.
At December 31, 2023 and December 31, 2022, unused commitments to extend credit amounted to approximately $93.8 million and $159.0 million, respectively. Commitments to fund fixed-rate loans were immaterial at December 31, 2023. Variable-rate commitments are generally issued for less than one year and carry market rates of interest.
At December 31, 2024 and December 31, 2023, unused commitments to extend credit amounted to approximately $122.5 million and $93.8 million, respectively. Commitments to fund fixed-rate loans were immaterial at December 31, 2024. Variable-rate commitments are generally issued for less than one year and carry market rates of interest.
The Company also generates income from loan and deposit fees and other non-interest related activities. The Company's non-interest expense primarily consists of employee compensation, administration, and other operating expenses. As of December 31, 2023, we had total assets of $2.02 billion, total liabilities of $1.74 billion, and total shareholders' equity of $284.3 million.
The Company also generates income from loan and deposit fees and other non-interest related activities. The Company's non-interest expense primarily consists of employee compensation, administration, and other operating expenses. As of December 31, 2024, we had total assets of $2.14 billion, total liabilities of $1.84 billion, and total shareholders' equity of $300.1 million.
The increase in total shareholders' equity was primarily due to the retention of earnings from the period, partially offset by the recognition of $8.6 million of cash dividends. 25 Liquidity and Capital Resources Liquidity is a measure of our ability to generate cash to support asset growth, meet deposit withdrawals, satisfy other contractual obligations, and otherwise operate on an ongoing basis.
The increase in total shareholders' equity was primarily due to the retention of earnings from the period, partially offset by the recognition of $8.6 million of cash dividend, and repurchases of shares of the Company's common stock in the amount of $4.3 million during the year ended December 31, 2024. 25 Liquidity and Capital Resources Liquidity is a measure of our ability to generate cash to support asset growth, meet deposit withdrawals, satisfy other contractual obligations, and otherwise operate on an ongoing basis.
Results of Operations Net Income We recorded net income available to common shareholders of $28.4 million or $2.38 per basic common share and $2.35 per diluted common share, for the year ended December 31, 2023, compared to $41.8 million, or $3.51 per basic common share and $3.44 per diluted common share, for the year ended December 31, 2022, a decrease of $13.4 million or 32.0%.
Results of Operations Net Income We recorded net income available to common shareholders of $27.5 million or $2.30 per basic common share and $2.27 per diluted common share, for the year ended December 31, 2024, compared to $28.4 million, or $2.38 per basic common share and $2.35 per diluted common share, for the year ended December 31, 2023, a decrease of $0.9 million or 3.3%.
We recorded a recovery for credit losses of $2.1 million and a provision for loan losses of $1.8 million in 2023 and 2022, respectively. The (recovery) provision for credit losses as a percentage of interest income was (1.82)% and 2.06% in 2023 and 2022, respectively.
We recorded a provision for credit losses of $0.7 million and a recovery for credit losses of $2.1 million in 2024 and 2023, respectively. The provision (recovery) for credit losses as a percentage of interest income was 0.58% and 1.82% in 2024 and 2023, respectively.
For more information about our provision and allowance for credit losses and our loss experience, see “Risk Management and Asset Quality-Allowance for Credit Losses” and NOTE 4. Loans and Allowance for Credit Losses in the Notes to the Consolidated Financial Statements.
For more information about our provision and allowance for credit losses and our loss experience, see “Risk Management and Asset Quality-Allowance for Credit Losses” and NOTE 4.
Rate/Volume Analysis For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume ( i.e. , changes in volume multiplied by the previous rate) and (ii) changes in rate ( i.e. , changes in rate multiplied by old volume).
We expect net interest income and our net interest margin to fluctuate based on changes in interest rates and changes in the amount and composition of our interest-earning assets and interest-bearing liabilities. 21 Rate/Volume Analysis For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume ( i.e. , changes in volume multiplied by the previous rate) and (ii) changes in rate ( i.e. , changes in rate multiplied by old volume).
Net Interest Income Net interest income decreased $9.1 million, or 12.4%, to $64.2 million for the year ended 2023 compared to $73.3 million for the year ended 2022. The decrease in net interest income was primarily due to an increase in interest expense of $34.3 million, partially offset by an increase in interest income of $25.2 million.
Net Interest Income Net interest income decreased $5.5 million, or 8.6%, to $58.7 million for the year ended 2024 compared to $64.2 million for the year ended 2023. The decrease in net interest income was primarily due to an increase in interest expense of $17.9 million, partially offset by an increase in interest income of $12.4 million.
Our provision for credit losses decreased by $3.9 million in 2023 compared to 2022 primarily as a result of a decrease in vintage loss rates and a change in the loan portfolio mix, partially offset by an increase in outstanding loan balances. Additionally, the provision for unfunded commitments contributed to $461.0 thousand of the decrease.
Our provision for credit losses increased by $2.8 million in 2024 compared to 2023 primarily as a result of an increase in outstanding loan balances, partially offset by a decrease in loss rates. Additionally, the provision for unfunded commitments contributed to $369.0 thousand of the increase.
The decrease in deposits was primarily attributed to a decrease in non-interest bearing demand deposits of $120.4 million, savings of $105.1 million, time deposits of $42.2 million, and interest checking of $20.1 million 24 partially offset by an increase in money market of $218.4 million, and brokered CD balances of $46.2 million.
The increase in deposits was primarily attributed to an increase in time deposits of $108.1 million, and money market deposits of $48.4 million, partially offset by a decrease in non-interest bearing demand deposits of $48.2 million, and savings deposits of $27.6 million.
These evaluations are inherently subjective, as they require material estimates and may be susceptible to significant change. Our allowance for credit losses is comprised of two components, a specific allowance and a general calculation. A specific allowance is calculated for loans and leases that do not share similar risk characteristics with other financial assets, and include collateral dependent loans.
These critical estimates include significant use of our own historical data and other qualitative, and quantitative data. These evaluations are inherently subjective, as they require material estimates and may be susceptible to significant change. Our allowance for credit losses is comprised of two components, a specific allowance and a general calculation.
The measurement of our interest rate sensitivity, or "gap," is one of the principal techniques used in asset/liability management. Interest sensitive gap is the dollar difference between assets and liabilities that are subject to interest-rate pricing within a given time period, including both floating rate or adjustable rate instruments and instruments that are approaching maturity.
Interest sensitive gap is the dollar difference between assets and liabilities that are subject to interest-rate pricing within a given time period, including both floating rate or adjustable rate instruments and instruments that are approaching maturity. 26 Our management and the Board of Directors oversee the asset/liability management function through the asset/liability committee of the Board that meets periodically to monitor and manage the balance sheet, control interest rate exposure, and evaluate our pricing strategies.
Our risk based tier 1 capital ratio was 20.8% at December 31, 2023. In addition, during 2023 we returned $8.6 million of capital to our common shareholders through common stock dividends. Our business operations are subject to risks and uncertainties that could materially affect our operating results.
In addition, during the fiscal year ended December 31, 2024 we returned $8.6 million of capital to our common shareholders through cash dividends, and we repurchased 200,000 common stock shares at a total cost of $4.3 million. Our business operations are subject to risks and uncertainties that could materially affect our operating results.
Total loans outstanding increased $35.9 million at December 31, 2023, primarily due to an increase in residential 1 to 4 family loans of $29.0 million; residential 1 to 4 family investment loans of $24.0 million; and commercial owner occupied loans of $15.7 million; partially offset by a decrease in construction loans of $34.8 million.
Cash and cash equivalents increased $41.2 million, to $221.5 million at December 31, 2024. Total loans outstanding increased $80.8 million at December 31, 2024, primarily due to an increase in residential multi-family loans of $71.4 million, and commercial owner-occupied loans of $18.7 million, partially offset by a decrease in construction loans of $8.2 million.
Interest income for 2023 increased to $112.7 million, an increase of $25.2 million, or 28.8%, from $87.5 million for 2022, primarily due to an increase in interest and fees on loans of $23.2 million, or 27.9%.
Interest income for 2024 increased to $125.1 million, an increase of $12.4 million, or 11.0%, from $112.7 million for 2023, primarily due to an increase in interest and fees on loans of $11.8 million, or 11.1%.
Total liabilities were $1.74 billion at December 31, 2023. This represented a $20.3 million, or 1.2%, increase from $1.72 billion at December 31, 2022. The increase in total liabilities was primarily due to an increase in borrowings, partially offset by a decrease in deposits.
Total liabilities were $1.84 billion at December 31, 2024. This represented a $103.0 million, or 5.9%, increase from $1.74 billion at December 31, 2023. The increase in total liabilities was primarily due to an increase in deposits. Total deposits increased $78.2 million, or 5.0%, to $1.63 billion at December 31, 2024, from $1.55 billion at December 31, 2023.
Non-interest Income The table below shows the components of non-interest income for the years ended December 31, 2023 and 2022. 2023 2022 $ Change % Change ( Dollars in thousands) Service fees on deposit accounts $ 3,872 $ 4,927 $ (1,055) (21.4) % Other Loan fees 851 1,379 (528) (38.3) % Bank owned life insurance income 737 568 169 29.8 % Gain on sale of SBA loans — 98 (98) (100.0) % Gain on sale and valuation adjustments of OREO 38 328 (290) (88.4) % Other 1,194 1,082 112 10.4 % Total non-interest income $ 6,692 $ 8,382 $ (1,690) (20.2) % 22 Non-interest income decreased by $1.7 million to $6.7 million during the year ended December 31, 2023 compared to 2022, primarily due to a decrease in fee income related to commercial deposit accounts and other loan fees, partially offset by an increase in income earned on bank owned life insurance.
Loans and Allowance for Credit Losses in the Notes to the Consolidated Financial Statements. 22 Non-interest Income The table below shows the components of non-interest income for the years ended December 31, 2024 and 2023. 2024 2023 $ Change % Change ( Dollars in thousands) Service fees on deposit accounts $ 1,387 $ 3,872 $ (2,485) (64.2) % Other Loan fees 849 851 (2) (0.2) % Bank owned life insurance income 655 737 (82) (11.1) % Gain on sale of SBA loans 23 — 23 100.0 % Gain on sale and valuation adjustments of OREO — 38 (38) (100.0) % Other 1,387 1,194 193 16.2 % Total non-interest income $ 4,301 $ 6,692 $ (2,391) (35.7) % Non-interest income decreased by $2.4 million to $4.3 million during the year ended December 31, 2024 compared to 2023, primarily due to a decrease in fee income related to cannabis related business deposit fees and other loan fees.
The Company believes that the following discussion addresses the Company’s most critical accounting policies, which are those that are most important to the portrayal of the Company’s financial condition and results of operations and require management’s most difficult, subjective and complex judgments.
The Company believes that the following discussion addresses the Company’s most critical accounting policies, which are those that are most important to the portrayal of the Company’s financial condition and results of operations and require management’s most difficult, subjective and complex judgments. 28 Allowance for Credit Losses : Our allowances for credit losses represents management's best estimate of probable losses inherent in our investment and loan portfolios, excluding those loans accounted for under fair value.
Non-Interest Expense The following table displays the components of non-interest expense for 2023 and 2022. 2023 2022 $ Change % Change ( Dollars in thousands) Compensation and benefits $ 12,340 $ 10,835 $ 1,505 13.9 % Professional services 2,328 2,249 79 3.5 % Occupancy and equipment 2,604 2,522 82 3.3 % Data processing 1,385 1,293 92 7.1 % FDIC insurance and other assessments 1,292 1,050 242 23.0 % OREO expense 839 493 346 70.2 % Other operating expense 14,479 5,391 9,088 168.6 % Total non-interest expense $ 35,267 $ 23,833 $ 11,434 48.0 % Non-interest expense increased $11.4 million to $35.3 million for the year ended December 31, 2023, from $23.8 million for 2022 primarily due to an increase in other operating expense of $9.1 million, an increase in compensation and benefits of $1.5 million, and an increase in OREO expense of $0.3 million.
Non-Interest Expense The following table displays the components of non-interest expense for 2024 and 2023. 2024 2023 $ Change % Change ( Dollars in thousands) Compensation and benefits $ 12,768 $ 12,340 $ 428 3.5 % Professional services 2,730 2,328 402 17.3 % Occupancy and equipment 2,598 2,604 (6) (0.2) % Data processing 1,366 1,385 (19) (1.4) % FDIC insurance and other assessments 1,306 1,292 14 1.1 % OREO expense 835 839 (4) (0.5) % Other operating expense 4,381 14,479 (10,098) (69.7) % Total non-interest expense $ 25,984 $ 35,267 $ (9,283) (26.3) % Non-interest expense decreased $9.3 million to $26.0 million for the year ended December 31, 2024, from $35.3 million for 2023 primarily due to a decrease in other operating expense of $10.1 million, partially offset by an increase in compensation and benefits of $0.4 million, and an increase in professional services of $0.4 million.
The increase in compensation and benefits was primarily due to a $0.5 million increase in salaries, and a $0.9 million decrease in deferred loan origination costs, attributable to a reduction in the number of loans originated. The increase in OREO expense is due to higher costs to maintain the Company's OREO inventory.
The increase in compensation and benefits during the year ended December 31, 2024, was primarily due to a $0.4 million increase in salaries, and a $0.2 million decrease in deferred loan origination costs attributable to a reduction in the number of loans originated, partially offset by a $0.2 million decrease in SERP expense.
Borrowings At December 31, 2023, total borrowings increased $42.0 million to $168.1 million at December 31, 2023, from $126.1 million at December 31, 2022. The increase in borrowings was primarily due to an increase in FHLBNY advances of $41.9 million.
The increase in borrowings was primarily due to an increase in FHLBNY advances of $20.0 million. Equity Total shareholders’ equity increased to $300.1 million at December 31, 2024, from $284.3 million at December 31, 2023, an increase of $15.8 million or 5.5%.
In addition, a decrease in non-interest bearing demand balances and an increase in brokered deposit balances contributed to the increase in interest expense during the 2023 fiscal year..
The increase in interest expense was primarily due to an increase in market interest rates on deposit accounts at the Bank, as well as a change in the deposit mix. In addition, a decrease in non-interest bearing demand balances and an increase in interest-bearing deposit balances contributed to the increase in interest expense during the 2024 fiscal year..
Financial Condition General At December 31, 2023, the Company’s total assets were $2.02 billion, an increase of $38.6 million or 1.9%, from December 31, 2022. The increase in total assets was primarily attributable to an increase in loans, restricted stock, and other assets. Cash and cash equivalents decreased $1.8 million, to $180.4 million at December 31, 2023.
The effective income tax rates for 2024 and 2023 were 24.2% and 24.5%, respectively. Financial Condition General At December 31, 2024, the Company’s total assets were $2.14 billion, an increase of $118.7 million or 5.9%, from December 31, 2023. The increase in total assets was primarily attributable to an increase in cash and cash equivalents and total loans outstanding.
Investment securities Total investment securities decreased to $16.4 million at December 31, 2023, from $18.7 million at December 31, 2022, a decrease of $2.4 million or 12.6%. The decrease was primarily due to pay downs of $2.5 million, partially offset by a $0.1 million valuation increase.
The increase was mainly due to an increase in deposits and borrowings, partially offset by an increase in loans. Investment securities Total investment securities decreased to $14.8 million at December 31, 2024, from $16.4 million at December 31, 2023, a decrease of $1.6 million or 9.9%.
The increase was primarily due to an increase in residential 1 - 4 family of $29.0 million; residential 1 to 4 family investment of $24.0 million; and commercial owner-occupied loans of $15.7 million; partially offset by a decrease of $34.8 million in construction loans.
The increase was primarily due to an increase in residential multi-family loans of $71.4 million, and commercial owner-occupied loans of $18.7 million, partially offset by a decrease in construction loans of $8.2 million. Allowance for credit losses Allowance for credit losses increased $0.4 million, to $32.6 million, or 1.38%, at December 31, 2024, from $32.1 million at December 31, 2023.
Allowance for credit losses Allowance for credit losses increased $0.3 million, to $32.1 million, or 0.90%, at December 31, 2023, from $31.8 million at December 31, 2022. The increase was primarily due to an increase in the portfolio balance, net of a decrease in historical loss rates.
The increase was primarily due to an increase in the portfolio balance, partially offset by a decrease in historical loss rates. Deposits At December 31, 2024, the Bank’s total deposits increased to $1.63 billion from $1.55 billion at December 31, 2023, an increase of $78.2 million, or 5.0%.
Our determination of the allowance for credit losses is based on periodic evaluations of the loan and lease portfolios and other relevant factors, broken down into vintage based on year of origination. These critical estimates include significant use of our 28 own historical data and other qualitative, and quantitative data.
Refer to Note 1 in the Notes to the Consolidated Financial Statements for further information. Our determination of the allowance for credit losses is based on periodic evaluations of the loan and lease portfolios and other relevant factors, broken down into vintage based on year of origination.
To the extent actual outcomes differ from our estimates, additional provision for loan and lease losses may be required that would reduce future earnings.
This range was deemed immaterial to the overall ACL reserve balance. The process of determining the level of the allowance for credit losses requires a high degree of judgment. To the extent actual outcomes differ from our estimates, additional provision for loan and lease losses may be required that would reduce future earnings. Item 7A.
The Bank joined the IntraFi network to secure an additional alternative funding source. IntraFi provides the Bank an additional source of external funds through their weekly CDARS® settlement process, as well as their ICS® money market product. While deposit accounts comprise the vast majority of our funding needs, we maintain secured borrowing lines with the FHLBNY.
The Bank joined the IntraFi network to secure an additional alternative funding source. IntraFi provides the Bank an additional source of external funds through their weekly CDARS® settlement process, as well as their ICS® money market product. As of December 31, 2024, the Company has $13.5 million of brokered deposits from IntraFi.
The increase in other operating expense was primarily driven from a one-time recognition of a $9.5 million contingent loss related to cash that was stolen from a third-party armored car carrier facility that was used by the Company.
The decrease in other operating expense was primarily driven from the recognition of a one-time contingent loss during 2023 of $9.5 million.
The following table presents certain key condensed balance sheet data as of December 31, 2023 and December 31, 2022: December 31, 2023 December 31, 2022 $ Change % Change ( Dollars in thousands) Cash and cash equivalents $ 180,376 $ 182,150 $ (1,774) (1.0) % Investment securities 16,387 18,744 (2,357) (12.6) % Loans, net of unearned income 1,787,340 1,751,459 35,881 2.0 % Allowance for credit losses (32,131) (31,845) (286) 0.9 % Total assets 2,023,500 1,984,915 38,585 1.9 % Total deposits 1,552,827 1,575,981 (23,154) (1.5) % FHLBNY borrowings 125,000 83,150 41,850 50.3 % Subordinated debt 43,111 42,921 190 0.4 % Total liabilities 1,739,183 1,718,881 20,302 1.2 % Total equity 284,317 266,034 18,283 6.9 % Total liabilities and equity 2,023,500 1,984,915 38,585 1.9 % Cash and cash equivalents Cash and cash equivalents decreased $1.8 million to $180.4 million at December 31, 2023, from $182.2 million at December 31, 2022, a decrease of 1.0%.
The following table presents certain key condensed balance sheet data as of December 31, 2024 and December 31, 2023: December 31, 2024 December 31, 2023 $ Change % Change ( Dollars in thousands) Cash and cash equivalents $ 221,527 $ 180,376 $ 41,151 22.8 % Investment securities 14,760 16,387 (1,627) (9.9) % Loans, net of unearned income 1,868,153 1,787,340 80,813 4.5 % Allowance for credit losses (32,573) (31,845) (728) 2.3 % Total assets 2,142,236 2,023,500 118,736 5.9 % Total deposits 1,631,050 1,552,827 78,223 5.0 % FHLBNY borrowings 145,000 125,000 20,000 16.0 % Subordinated debt 43,300 43,111 189 0.4 % Total liabilities 1,842,163 1,739,183 102,980 5.9 % Total equity 300,073 284,317 15,756 5.5 % Total liabilities and equity 2,142,236 2,023,500 118,736 5.9 % Cash and cash equivalents Cash and cash equivalents increased $41.2 million to $221.5 million at December 31, 2024, from $180.4 million at December 31, 2023, an increase of 22.8%.
Key reserve assumptions and estimation processes react to and are influenced by observed changes in loan portfolio performance experience, the financial strength of the borrower, projected industry outlook, and economic conditions. The process of determining the level of the allowance for credit losses requires a high degree of judgment.
Key reserve assumptions and estimation processes react to and are influenced by observed changes in loan portfolio performance experience, the financial strength of the borrower, projected industry outlook, and economic conditions. One key assumption in the vintage model is the underlying prepayment speeds, which is derived by the average loan life within the various pools.
These available for sale securities are readily marketable and are available to meet our additional liquidity needs. At December 31, 2023, the Company's investment securities portfolio classified as available for sale was $7.1 million. We had unused loan commitments of $93.8 million at December 31, 2023. Our loan commitments are normally originated with the full amount of collateral.
At December 31, 2024, the Company's investment securities portfolio classified as available for sale was $5.6 million. We had unused loan commitments of $122.5 million at December 31, 2024. Our loan commitments are normally originated with the full amount of collateral. Such commitments have historically been drawn at only a fraction of the total commitment.
Total borrowings were $168.1 million at December 31, 2023, an increase of $42.0 million, compared to December 31, 2022, primarily due to an increase in FHLB advances of $41.9 million. Total equity was $284.3 million and $266.0 million at December 31, 2023 and December 31, 2022, respectively, an increase of $18.3 million from December 31, 2022.
Deposits from the cannabis industries increased to $151.9 million at December 31, 2024, from $96.7 million at December 31, 2023. Total borrowings were $188.3 million at December 31, 2024, an increase of $20.2 million, compared to December 31, 2023, primarily due to an increase in FHLB advances of $20.0 million.
Interest and fees on loans increased during the year ended December 31, 2023, due to higher average outstanding loan balances and higher market interest rates, and an increase in interest earned on average deposits held at the Federal Reserve Bank ("FRB") of $1.8 million, due to higher interest rates paid on deposits, partially offset by a decrease in the average balance of $225.1 million.
Interest and fees on loans increased during the year ended December 31, 2024, due to higher average outstanding loan balances and higher market interest rates. Interest expense increased to $66.4 million for 2024, from $48.5 million for 2023, an increase of $17.9 million, or 36.9%.
Total deposits decreased $23.2 million, or 1.5%, to $1.55 billion at December 31, 2023, from $1.58 billion at December 31, 2022. Deposits from the cannabis industries decreased to $96.7 million at December 31, 2023, from 23 $177.3 million at December 31, 2022.
Deposits from the cannabis businesses increased to $151.9 million at December 31, 2024, from $96.7 million at December 31, 2023, an increase of $55.2 million. Borrowings At December 31, 2024, total borrowings increased $20.2 million to $188.3 million at December 31, 2024, from $168.1 million at December 31, 2023.
A loan is considered to be collateral dependent when foreclosure of the underlying collateral is probable.
A specific allowance is calculated for loans and leases that do not share similar risk characteristics with other financial assets, and include collateral dependent loans. A loan is considered to be collateral dependent when foreclosure of the underlying collateral is probable.
Equity Total shareholders’ equity increased to $284.3 million at December 31, 2023, from $266.0 million at December 31, 2022, an increase of $18.3 million or 6.9%.
Total equity was $300.1 million and $284.3 million at December 31, 2024 and December 31, 2023, respectively, an increase of $15.8 million from December 31, 2023.
For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to the change due to volume and the change due to rate. 21 Years ended December 31, 2023 vs 2022 Variance due to change in Average Volume Average Rate Net Increase/ (Decrease) ( Dollars in thousands) Interest Income: Loans (net of deferred costs/fees) $ 10,583 $ 12,578 $ 23,161 Investment securities (22) 298 276 Deposits with banks (2,517) 4,301 1,784 Total interest income 8,044 17,177 25,221 Interest Expense: NOWs (25) 985 960 Money markets 568 12,625 13,193 Savings (314) 895 581 Time deposits (155) 10,497 10,342 Brokered CDs 3,303 1,809 5,112 Borrowed funds 1,309 2,837 4,146 Total interest expense 4,686 29,648 34,334 Net interest income $ 3,358 $ (12,471) $ (9,113) Provision for credit losses Our provision for credit losses in each period is driven by net charge-offs and changes to the allowance for credit losses.
Years ended December 31, 2024 vs 2023 Variance due to change in Average Volume Average Rate Net Increase/ (Decrease) ( Dollars in thousands) Interest Income: Loans (net of deferred costs/fees) $ 1,719 $ 10,054 $ 11,773 Investment securities (62) 56 (6) Deposits with banks 446 196 642 Total interest income 2,103 10,306 12,409 Interest Expense: NOWs (365) (394) (759) Money markets 7,635 3,056 10,691 Savings (712) (24) (736) Time deposits (1,695) 5,562 3,867 Brokered CDs 2,421 568 2,989 Borrowed funds (185) 2,048 1,863 Total interest expense 7,099 10,816 17,915 Net interest income $ (4,996) $ (510) $ (5,506) Provision for credit losses Our provision for credit losses in each period is driven by net charge-offs and changes to the allowance for credit losses.
At December 31, 2023, the Company had a $944.4 million line of credit from the FHLBNY, of which $125.0 million was outstanding, $50.0 million was a letter of credit to secure public deposits, and $769.4 million was unused. Our investment portfolio primarily consists of mortgage-backed available for sale securities issued by US government agency and government sponsored entities.
At December 31, 2024, the Company had a $740.5 million line of credit from the FHLBNY, of which $145.0 million was outstanding, $50.0 million was a letter of credit to secure public deposits, and $545.5 million was unused. As of December 31, 2024, the Company had a borrowing capacity through the FRB discount window of $252.0 million.
Loans, net unearned income Loans receivable increased to $1.79 billion at December 31, 2023, from $1.75 billion at December 31, 2022.
The decrease was primarily due to pay downs of $1.8 million, partially offset by a $0.1 million valuation increase. 24 Loans, net unearned income Loans receivable increased to $1.87 billion at December 31, 2024, from $1.79 billion at December 31, 2023.
Income Tax Income tax expense decreased $5.0 million to $9.2 million on income before taxes of $37.7 million for 2023, compared to income tax expense of $14.3 million on income before taxes of $56.1 million for 2022. The effective income tax rates for 2023 and 2022 were 24.5% and 25.4%, respectively.
The increase in professional fees of $0.4 million was primarily due to a $0.7 million increase in consulting fees attributed to our Bank Secrecy Act compliance, partially offset by a decrease of $0.3 million decrease in legal expense. 23 Income Tax Income tax expense decreased $0.4 million to $8.8 million on income before taxes of $36.3 million for 2024, compared to income tax expense of $9.2 million on income before taxes of $37.7 million for 2023.
In 2023, net income available to common shareholders decreased 32.0% over the previous year primarily due to a $11.4 million increase in non-interest expenses, primarily due to a one-time recognition of a $9.5 million contingent loss related to cash that was stolen from a third-party armored car carrier facility that was used by the Company.
Net income available to common shareholders for 2024 was $27.5 million. In 2024, net income available to common shareholders decreased 3.3% over the previous year primarily due to a decrease in net interest income, an increase in the provision for credit losses, and a decrease in non-interest income, partially offset by a decrease in non-interest expense.
Removed
Net income available to common shareholders for 2023 was $28.4 million.
Added
At December 31, 2024, total assets increased 5.9% and total equity increased 5.5%, compared to December 31, 2023. Our risk based tier 1 capital ratio was 21.2% at December 31, 2024.
Removed
In addition, non-interest expense increased due to an increase in compensation and benefits expense, lower net interest income, and lower non-interest income, partially offset by lower provision for credit losses. At December 31, 2023, total assets increased 1.9% and total equity increased 6.9%, compared to December 31, 2022.
Added
For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to the change due to volume and the change due to rate.
Removed
Interest expense increased to $48.5 million for 2023, from $14.2 million for 2022, an increase of $34.3 million, or 242.5%. The increase in interest expense was primarily due to an increase in market interest rates on deposit accounts at the Bank, as well as a change in the deposit mix.
Added
Additionally, we have access to other brokered deposit funding sources that we utilize as a source of additional liquidity. In addition to IntraFi, we utilize Wells Fargo, Piper Sandler, and Stonecastle to obtain brokered deposits, and as of December 31, 2024, the Company had $202.2 million sourced from these broker relationships.
Removed
We expect net interest income and our net interest margin to fluctuate based on changes in interest rates and changes in the amount and composition of our interest-earning assets and interest-bearing liabilities.
Added
While deposit accounts comprise the vast majority of our funding needs, we maintain secured borrowing lines with the FHLBNY and the Federal Reserve Bank ("FRB"). During 2024, the Company reallocated a portion of its eligible collateral from the FHLBNY to the FRB discount window in order to diversify its borrowing capabilities.
Removed
In 2023, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses , and subsequent related updates, using the modified retrospective approach for all financial assets measured at amortized cost, including loans and held-to-maturity debt securities, and unfunded commitments.
Added
There were no outstanding balances with the FRB as of December 31, 2024. Our investment portfolio primarily consists of mortgage-backed available for sale securities issued by US government agency and government sponsored entities. These available for sale securities are readily marketable and are available to meet our additional liquidity needs.
Removed
On January 1, 2023, the Company recorded a cumulative effect decrease to retained earnings of $2.1 million, net of tax, of which $1.9 million related to loans, and $960.0 thousand related to unfunded commitments. There were no such charges for securities held by the Company at the date of adoption.
Added
The measurement of our interest rate sensitivity, or "gap," is one of the principal techniques used in asset/liability management.
Removed
Deposits At December 31, 2023, the Bank’s total deposits decreased to $1.55 billion from $1.58 billion at December 31, 2022, a decrease of $23.2 million, or 1.5%.
Added
To provide a sensitivity of the impact to the ACL estimate, management adjusted the average lives of the vintage pools, by both increasing and decreasing the prepayment speeds by 20%, which provided an estimated range of impact between $0.9 million for a lower prepayment speed and $(1.2) million for a higher prepayment speed.
Removed
Deposits from the cannabis businesses decreased to $96.7 million at December 31, 2023, from $177.3 million at December 31, 2022, a decrease of $80.6 million. The decrease in such deposits is primarily attributable to increased competition from other banks, and the consolidation of the cannabis industry. The Bank expects this trend to continue in the foreseeable future.
Added
Quantitative and Qualitative Disclosures About Market Risk. Not applicable
Removed
Our management and the Board of Directors oversee the asset/liability management function through the asset/liability committee of the Board that meets periodically to monitor and manage the balance sheet, control interest rate exposure, and evaluate our pricing strategies.
Removed
Allowance for Credit Losses : Our allowances for credit losses represents management's best estimate of probable losses inherent in our investment and loan portfolios, excluding those loans accounted for under fair value. Refer to N ote 1 in the Notes t o the Consolidated Financial Statements for further information.

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