What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-12 compared with 2024-03-13 · 218 added, 249 removed, 1147 unchanged (29% of the section changed)

Financial Statements and Supplementary Data.

Report On Management’s Assessment Of Internal Control Over Financial Reporting

To The Shareholders Of Parke Bancorp, Inc.

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a- 15(f).

The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorization of management and directors of the Company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Under supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Based on our evaluation under the framework in Internal Control - Integrated Framework, management concluded that our internal control over financial reporting was effective as of December 31, 2023.

March 13, 2024

Pantilione /s/ Jonathan D.

Pantilione Jonathan D.

President and Chief Executive Officer Senior Vice President and Chief Financial Officer

Report of Independent Registered Public Accounting Firm

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Parke Bancorp, Inc.

We have audited the accompanying consolidated balance sheets of Parke Bancorp, Inc.

and subsidiaries (the “Company”) as of December 31, 2024 and 2023;

2 unchanged sentences

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As discussed in Note 1 to the financial statements, the Company changed its method of accounting for credit losses effective January 1, 2023, due to the adoption of Accounting Standards Codification (ASC) Topic 326, Financial Instruments – Credit Losses.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 12, 2025, expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

Basis for Opinion

5 unchanged sentences

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

8 unchanged sentences

Allowance for Credit Losses (ACL) – Qualitative Adjustments

Description of the Matter

The Company’s loan portfolio totaled $1.9 billion as of December 31, 2024, and the associated ACL was $32.6 million.

As discussed in Notes 1 and 4 to the financial statements, determining the amount of the ACL requires significant judgment about the expected future losses, which is based on a base loss projection determined through a historical vintage loss rate analysis, which is then adjusted for current qualitative conditions and reasonable and supportable forecasts.

As discussed in Notes 1 and 4 to the financial statements, the calculation of the ACL requires significant judgment about the expected future losses, which is based on a base loss projection determined through a historical vintage loss rate analysis, which is then adjusted for current qualitative conditions and reasonable and supportable forecasts.

Management applies these qualitative adjustments to the base loss projection to reflect changes in the current and forecasted environment, both internal and external, that are different from the conditions that existed during the historical loss calculation period.

3 unchanged sentences

Auditing these complex judgments and assumptions involved especially challenging auditor judgment due to the nature of audit evidence and the nature and extent of effort required to address these matters.

How We Addressed the Matter in Our Audit

The primary procedures we performed to address this critical audit matter included:

- Testing the design, implementation, and operating effectiveness of internal controls over the

calculation of the allowance for credit losses, including the qualitative factor adjustments.

- Testing the completeness and accuracy of the significant data points that management uses in

their evaluation of the qualitative adjustments.

- Testing the anchoring calculation that management completes to properly align the magnitude

of the adjustments with the Company's historical loss data.

- Evaluating the directional consistency and reasonableness of management's conclusions

regarding basis points applied (whether positive or negative) based on the trends identified in

the underlying data.

- Testing the mathematical accuracy of the application of the qualitative adjustments to the loan

segments within the ACL calculation.

– Testing the design, implementation, and operating effectiveness of internal controls over the calculation of the allowance for credit losses, including the qualitative factor adjustments.

– Testing the completeness and accuracy of the significant data points that management uses in their evaluation of the qualitative adjustments.

– Testing the anchoring calculation that management completes to properly align the magnitude of the adjustments with the Company's historical loss data.

– Evaluating the directional consistency and reasonableness of management's conclusions regarding basis points applied (whether positive or negative) based on the trends identified in the underlying data.

– Testing the mathematical accuracy of the application of the qualitative adjustments to the loan segments within the ACL calculation.

We have served as the Company’s auditor since 2022.

13 unchanged sentences

Investment securities available for sale, at fair value 5,551 7,095

Investment securities held to maturity, net of allowance for credit losses of $ 0 at December 31, 2023 (fair value of $ 7,892 at December 31,

2023 and $ 7,805 at December 31, 2022)

Investment securities held to maturity, net of allowance for credit losses of $ 0 at

December 31, 2024 and 2023 (fair value of $ 7,492 at December 31, 2024 and $ 7,892 at December 31, 2023)

Total investment securities 14,760 16,387

8 unchanged sentences

Other real estate owned (OREO) 1,562 1,550

Other 10,531 5,363

Other assets 7,030 10,531

$ 2,142,236 $ 2,023,500

15 unchanged sentences

Shareholders' Equity

Preferred stock, 1,000,000 shares authorized, $ 1,000 liquidation value Series B non-cumulative convertible;

375 shares and 445 shares outstanding at December 31, 2023 and 2022, respectively

Preferred stock, 1,000,000 shares authorized, $ 1,000 liquidation value Series B

non-cumulative convertible;

325 shares and 375 shares outstanding at December

31, 2024 and 2023, respectively

Common stock, $ 0.10 par value;

authorized 15,000,000 shares;

12,240,821 shares and 12,225,097 shares at December 31, 2023 and 2022, respectively

12,313,489 shares and 12,240,821 shares at December 31, 2024 and 2023,

Additional paid-in capital 137,784 136,700

1 unchanged sentence

Accumulated other comprehensive loss ( 337 ) ( 404 )

Treasury stock, 284,522 shares at December 31, 2023 and 2022, at cost

Treasury stock, 484,522 shares and 284,522 shares at December 31, 2024 and

2023, respectively, at cost

( 7,277 ) ( 3,015 )

18 unchanged sentences

Net interest income 58,708 64,214

(Recovery of) provision for credit losses ( 2,051 ) 1,800

Net interest income after (recovery of) provision for credit losses 66,265 71,527

Provision for (recovery of) credit losses 728 ( 2,051 )

Net interest income after provision for (recovery of) credit losses 57,980 66,265

Non-interest income

34 unchanged sentences

Net income $ 27,512 $ 28,462

Unrealized gains (losses) on investment securities, net of reclassification into income:

Unrealized gains (losses) on available for sale securities 165 ( 1,039 )

Tax impact on unrealized (loss) gain ( 43 ) 268

Total other comprehensive gain (loss) 122 ( 771 )

Unrealized gains on investment securities, net of reclassification into income:

Unrealized gains on available for sale securities 90 165

Tax impact on unrealized gain ( 23 ) ( 43 )

Total other comprehensive gain 67 122

Comprehensive income attributable to the Company $ 27,579 $ 28,584

10 unchanged sentences

Balance, December 31, 2022 445 $ 445 12,225,097 $ 1,223 $ 136,201 $ 131,706 $ ( 526 ) $ ( 3,015 ) $ 266,034

Cumulative effect of adoption of ASU 2016-13 — — — — — ( 2,102 ) — — ( 2,102 )

Net income — — — — — 28,462 — — 28,462

Stock compensation issued/exercised — — 6,096 — 33 — — — 33

Other comprehensive loss — — — — — — ( 771 ) — ( 771 )

Preferred stock shares conversion ( 70 ) ( 70 ) 9,628 1 69 — — — —

Other comprehensive gain — — — — — — 122 — 122

Stock compensation expense — — — — 397 — — — 397

4 unchanged sentences

Balance, December 31, 2023 375 $ 375 12,240,821 $ 1,224 $ 136,700 $ 149,437 $ ( 404 ) $ ( 3,015 ) $ 284,317

Cumulative effect of adoption of ASU 2016-13 — — — — — ( 2,102 ) — — ( 2,102 )

Net income — — — — — 27,512 — — 27,512

1 unchanged sentence

Preferred stock shares conversion ( 50 ) ( 50 ) 6,877 — 49 — — — ( 1 )

Treasury stock purchase ( 200,000 shares)

— — — — — — — ( 4,262 ) ( 4,262 )

Other comprehensive gain — — — — — — 67 — 67

15 unchanged sentences

Depreciation and amortization 571 464

(Recovery of) provision for credit losses ( 2,051 ) 1,800

Provision for (recovery of) credit losses 728 ( 2,051 )

Increase in value of bank-owned life insurance ( 655 ) ( 736 )

5 unchanged sentences

Stock based compensation 336 397

Decrease (increase) in deferred income tax 595 ( 1,325 )

Decrease in deferred income tax 126 595

Net changes in:

Increase in accrued interest receivable and other assets ( 4,955 ) ( 727 )

Decrease (increase) in accrued interest receivable and other assets 2,385 ( 4,955 )

Increase in accrued interest payable and other accrued liabilities 4,200 917

4 unchanged sentences

Net increase in loans ( 80,731 ) ( 35,986 )

Sales (purchases) of bank premises and equipment 105 ( 150 )

(Purchases) sales of bank premises and equipment ( 119 ) 105

Proceeds from sale of OREO, net — 161

6 unchanged sentences

Proceeds from exercise of stock options 706 33

Net proceeds from issuance of subordinate debt — —

Earnings distribution from non-controlling interest — —

(Decrease) increase in FHLBNY short-term borrowings ( 53,150 ) 63,150

Increase (decrease) in FHLBNY long-term borrowings 95,000 ( 58,150 )

Net decrease in other borrowed funds — —

Treasury stock purchase ( 4,262 ) —

Conversion of Series B preferred stock ( 1 ) —

Increase (decrease) in FHLBNY short-term borrowings 95,000 ( 53,150 )

(Decrease) increase in FHLBNY long-term borrowings ( 75,000 ) 95,000

Net decrease in noninterest-bearing deposits ( 48,152 ) ( 120,357 )

Net increase in interest-bearing deposits 126,375 97,203

Net cash provided by (used in) financing activities 10,100 ( 194,909 )

Decrease in cash and cash equivalents ( 1,774 ) ( 414,403 )

Net cash provided by financing activities 86,064 10,100

Increase (decrease) in cash and cash equivalents 41,151 ( 1,774 )

Cash and Cash Equivalents, January 1, 180,376 182,150

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(i) the experience, ability and effectiveness of the Bank's lending management and staff;

(ii) the effectiveness of the Bank's lending policies, procedures and internal controls;(iii) volume and severity of loan credit quality;

(ii) the effectiveness of the Bank's lending policies, procedures and internal controls;

(iii) volume and severity of loan credit quality;

(iv) nature and volume of portfolio and term of loans (v) the composition and concentrations of credit;

(vi) the effectiveness of the internal loan review system;

and (vii) national and local economic trends and conditions, and industry conditions.

(vi) the effectiveness of the internal loan review system;(vii) national and local economic trends and conditions, and industry conditions;

and (viii) the valuation of loan collateral assessed by regional home valuation indexes.

Management evaluates the degree of risk that each one of these components has on the quality of the loan portfolio on a quarterly basis.

3 unchanged sentences

When a loan is placed on non-accrual status, any outstanding accrued interest is generally reversed against interest income.

Accrued interest receivable, including loan and investment security, at December 31, 2024 and 2023 was $ 9.7 million and $ 8.6 million, respectively.

The process of determining the level of the allowance for credit losses requires a high degree of estimate and judgment.

6 unchanged sentences

Individually Assessed Loans and Leases :

ASC 326 provides that a loan or lease is measured individually if it does not share similar risk characteristics with other financial assets.

For Parke, loans and leases which are identified to be individually assessed under CECL typically are those that are on non-accrual at the reporting date, and include collateral dependent loans.

A loan or lease is measured individually if it does not share similar risk characteristics with other financial assets.

For Parke, loans and leases which are identified to be individually assessed under the Current Expected Credit Loss ("CECL") model typically are those that are on non-accrual at the reporting date, and include collateral dependent loans.

Collateral Dependent Loans

2 unchanged sentences

Allowance for Credit Losses on Held to Maturity Securities :

We follow Accounting Standards Codification (ASC) 326-20, Financial Instruments - Credit Loss - Measured at Amortized Cost , to measure expected credit losses on held-to-maturity debt securities on a collective basis by security investment grade.

Parke measures expected credit losses on held-to-maturity debt securities on a collective basis by security investment grade.

The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

5 unchanged sentences

Accrued interest receivable on held-to-maturity debt securities is excluded from the estimate of credit losses and is included in Accrued interest receivable on the Consolidated Statements of Financial Condition.

At December 31, 2024 and 2023, accrued interest receivable on held-to-maturity debt securities was $ 12.7 thousand and $ 12.9 thousand, respectively.

Allowance for Credit Losses on Available for Sale Securities :

We follow ASC 326-30, Financial Instruments - Credit Loss - Available-for-Sale Debt Securities , which provides guidance related to the recognition of and expanded disclosure requirements for expected credit losses on available-for-sale debt securities.

For available-for-sale debt securities in an unrealized loss position, the Company first evaluates whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis.

3 unchanged sentences

If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance is recorded, limited to the fair value of the security.

Accrued interest receivable on available-for-sale securities is excluded from the estimate of credit losses and is included in Accrued interest receivable on the Consolidated Statements of Financial Condition.

At December 31, 2024 and 2023, accrued interest receivable on available-for-sale securities was $ 13.9 thousand and $ 17.5 thousand, respectively.

Charge-Offs :

3 unchanged sentences

Loans to general building contractors, general merchandise stores, restaurants, motels, warehouse space, and real estate ventures (including construction loans) constitute a majority of commercial loans.

concentrations of credit by type of loan are set forth in Note 4.

The concentrations of credit by type of loan are set forth in Note 4.

Generally, loans are collateralized by assets of the borrower and are expected to be repaid from the borrower’s cash flow or proceeds from the sale of selected assets of the borrower.

5 unchanged sentences

Holding costs are charged to expense.

Gains and losses on sales are recognized in noninterest income as they occur.

The OREO balance is included in other assets on the balance sheets.

Gains and losses on sales are recognized in non-interest income as they occur.

Bank-owned life insurance (“BOLI”):

Policies insure the lives of officers and team members of the Company and name the Company as beneficiary.

Non-interest income is generated tax free (subject to certain limitations) from the increase in value of the policies’ underlying investments made by the insurance company.

Cash proceeds received from the settlement of the BOLI policies are generally tax-free and can be used to partially offset costs associated with employee compensation and benefit programs.

Interest Rate Risk :

23 unchanged sentences

Account services include fees for event-driven services and fees for periodic account maintenance activities.

Our obligation for event-driven services is satisfied at the time of the event when the service is delivered, while our obligation for maintenance services is satisfied over the course of each month.

Our obligation for event-driven services is satisfied at the time of the event when the service is delivered, while our obligation

for maintenance services is satisfied over the course of each month.

Our obligation for overdraft services is satisfied at the time of the overdraft.

7 unchanged sentences

Realization refers to the incremental benefit achieved through the reduction in future taxes payable or refunds receivable.

We establish a valuation allowance for tax assets when it is more likely than not that they will not be realized, based

upon all available evidence.

We establish a valuation allowance for tax assets when it is more likely than not that they will not be realized, based upon all available evidence.

Realization of deferred tax assets is dependent on generating sufficient taxable income in the future.

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The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period.

Our most significant estimates pertain to our allowances for loan and lease losses, fair value measurements, individually evaluated loans, the carrying value of OREO, and the valuation of deferred income taxes.

Our most significant estimates pertain to our allowances for credit losses, fair value measurements, individually evaluated loans, the carrying value of OREO, and the valuation of deferred income taxes.

Actual results may differ from the estimates and the differences may be material to the consolidated financial statements.

2 unchanged sentences

Through its community banking segment, the Company provides a broad range of retail and community banking services.

The accounting policies of the community banking segment are the same as those described in the summary of significant accounting policies.

The Company's chief operating decision maker ("CODM") is the President, Chief Executive Officer and Director, who decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

The following table presents segment profit and significant expenses.

Community Banking Segment

(Dollars in thousands)

December 31, 2024 December 31, 2023

Total interest income $ 125,113 $ 112,704

Total interest expense 66,405 48,490

Provision for credit losses 728 - 2051

Net interest income after provision for credit losses 57,980 66,265

Total non-interest income 4,301 6,692

Total non-interest expense 25,984 35,267

Income before income tax expense 36,297 37,690

Income tax expense 8,785 9,228

Net income attributable to the Company $ 27,512 $ 28,462

Reconciliation of profit or loss

Adjustments and reconciling items — —

Consolidated net income $ 27,512 $ 28,462

Other Comprehensive Income :

Comprehensive income consists of net income and other gains and losses affecting shareholders' equity that, under GAAP, are excluded from net income, including unrealized gains and losses on available for sale securities.

For year 2023 and 2022, we did not reclassify any amounts from accumulated other comprehensive income (loss) to income.

The following table provides the components of other comprehensive income, reclassifications to net income and the related tax effect for the year ended December 31, 2023 and 2022:

For the years ended December 31, 2024 and 2023, we did not reclassify any amounts from accumulated other comprehensive income to income.

The following table provides the components of other comprehensive income, reclassifications to net income and the related tax effect for the years ended December 31, 2024 and 2023:

Year ended December 31, 2024 2023

1 unchanged sentence

Investment securities:

Net unrealized gain (loss) $ 165 $ ( 1,039 )

Tax effect related to the unrealized (gain) loss ( 43 ) 268

Net unrealized gain $ 90 $ 165

Tax effect related to the unrealized gain ( 23 ) ( 43 )

Accumulated other comprehensive income $ 67 $ 122

1 unchanged sentence

Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period.

Diluted earnings per common share considers common stock equivalents (when dilutive) outstanding during the period such as options outstanding and

convertible preferred stock.

Diluted earnings per common share considers common stock equivalents (when dilutive) outstanding during the period such as options outstanding and convertible preferred stock.

To the extent that stock equivalents are anti-dilutive, they have been excluded from the earnings per share calculation.

Earnings per common share have been computed based on the following for 2023 and 2022:

Earnings per common share have been computed based on the following for the years ended December 31, 2024 and 2023:

(Dollars in thousands, except per share data)

11 unchanged sentences

Diluted earnings per common share $ 2.27 $ 2.35

For 2023 and 2022, there were 330,536 and 125,938 weighted average option shares outstanding, respectively, that were not included in the computation of diluted EPS because these shares were anti-dilutive.

Contingent loss :

Included in other operating expense is the 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.

For the years ended December 31, 2024 and 2023, there were 283,441 and 330,536 weighted average option shares outstanding, respectively, that were not included in the computation of diluted EPS because these shares were anti-dilutive.

Statement of Cash Flows :

2 unchanged sentences

Recently Issued Accounting Pronouncements :

ASU 2020-04, Reference Rate Reform (Topic 848):

In March 2020, the FASB issued ASU No.

2020.-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

The amendments provide optional guidance to entities for a limited period of time to ease the transition in accounting for and recognizing the effects of reference rate reform on financial reporting.

Under the guidance, modifications of contracts due to reference rate reform will not require contract remeasurement or reassessment of a previous accounting determination.

For hedge accounting, modification of critical terms of the hedge due to changes in reference rate reform will not affect hedge accounting or dedesignate the hedging relationship.

The guidance also provides specific expedients for fair value hedges, cash flow hedges, and excluded components.

Further, the guidance provides a none-time election to sell or transfer held to maturity debt securities that are affected by the reference rate change.

The guidance is effective upon issuance through December 31, 2022.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 , which extends the sunset (or expiration) date of Accounting Standards Codification (ASC) Topic 848 to December 31, 2024.

This gives reporting entities two additional years to apply the accounting relief provided under ASC Topic 848 for matters related to reference rate reform.

ASU 2022-06 is effective for all reporting entities immediately upon issuance and must be applied on a prospective basis.

The Company does not expect the application of this guidance to have a material impact on the Consolidated Financial Statements.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures:

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The amendments further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The amendments are effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025.

Early adoption is permitted and should be applied either prospectively or retrospectively.

The Company does not expect the application of this guidance to have a material impact on

the Consolidated Financial Statements.

Accounting Pronouncements Adopted in 2024

In June 2016, the Financial Accounting Standard Board (FASB) issued accounting standards update ("ASU") 2016-13, Financial Instruments-Credit Losses.

ASU 2016-13 (Topic 326) , replaces the incurred loss impairment methodology in current GAAP with a CECL methodology and requires consideration of a broader range of information to determine credit loss estimates.

Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance for credit losses.

The ASU was amended in some aspects by subsequent Accounting Standards Updates.

This guidance became effective on January 1, 2023 for the Company.

Results and disclosures for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

The Company adopted this guidance, 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.

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.

The following table illustrates the impact of adopting ASC 326:

(Amounts in thousands) January 1, 2023

Assets Pre-adoption Adoption Impact As Reported

Commercial and Industrial $ 390 $ 168 $ 558

Construction 2,581 1,899 4,480

Commercial - Owner Occupied 2,298 ( 171 ) 2,127

Commercial - Non-owner Occupied 9,709 ( 951 ) 8,758

Residential - 1 to 4 Family 6,076 1,782 7,858

Residential - 1 to 4 Family Investment 9,381 ( 794 ) 8,587

Residential - Multifamily 1,347 ( 128 ) 1,219

Consumer 63 53 116

Total ACL on loans 31,845 1,858 33,703

Deferred Tax Assets 9,184 716 9,900

ACL for unfunded commitments — 960 960

Retained Earnings $ 131,706 $ ( 2,102 ) $ 129,604

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures:

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The amendments are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

Adoption is required retrospectively to all prior periods presented in the financial statements.

The implementation of this guidance did not have a material impact on the Consolidated Financial Statements.

Cash and Due from Banks

1 unchanged sentence

Management is responsible for assessing the credit risk of its correspondent banks.

At December 31, 2023 and 2022, the vast majority of the Company's cash deposits with other banks were due from the Federal Reserve Bank of Philadelphia and the Federal Home Loan Bank of New York.

At December 31, 2024 and 2023, the vast majority of the Company's cash

deposits with other banks were due from the Federal Reserve Bank of Philadelphia and the Federal Home Loan Bank of New York.

Investment Securities

11 unchanged sentences

As of December 31, 2023 Amortized

losses Fair value

losses Fair value Credit Losses

( Dollars in thousands)

Available for sale:

Corporate debt obligations $ 500 $ — $ — $ 500

Residential mortgage-backed securities $ 7,639 $ 3 $ 547 $ 7,095 $ —

19 unchanged sentences

Expected maturities may differ from contractual maturities because the issuers of certain debt securities have the right to call or prepay their obligations without any penalty.

During the year ending December 31, 2023 and 2022, the Company did not sell any investment securities.

During the year ended December 31, 2024 and 2023, the Company did not sell any investment securities.

The following tables show the gross unrealized losses and fair value of the Company's available for sale securities which are aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2024 and December 31, 2023.

17 unchanged sentences

Total available for sale $ 25 $ — $ 6,870 $ 547 $ 6,895 $ 547

Held to maturity:

States and political subdivisions $ — $ — $ 1,943 $ 533 $ 1,943 $ 533

Residential mortgage-backed securities — — 4,460 1,096 4,460 1,096

Total held to maturity $ — $ — $ 6,403 $ 1,629 $ 6,403 $ 1,629

The Company’s unrealized loss for the available for sale securities is comprised of 8 securities in the less than 12 months loss position and 14 securities in the 12 months or greater loss position at December 31, 2024.

1 unchanged sentence

The unrealized losses associated with those mortgage-backed securities are generally driven by changes in interest rates and not due to credit losses given the explicit or implicit guarantees provided by the U.S.

The states and political subdivisions securities shown in the 2022 table that had unrealized losses were issued by a school district, and therefore the loss is attributed to changes in interest rates and not due to credit losses.

Additionally, these securities are classified as held to maturity.

Because the Company does not intend to sell the securities and it is not more likely than not that the Company will be required to sell these investments before recovery of their amortized cost basis, the Company does not consider the unrealized loss in these securities to be a credit loss at December 31, 2024.

68 unchanged sentences

December 31, 2023

(amounts in thousands) Total Nonaccrual Loans Past Due Over 90 Days Still Accruing

(amounts in thousands) Nonaccrual with no ACL Nonaccrual with ACL Total Nonaccrual Loans Past Due Over 90 Days Still Accruing Total Nonperforming

Commercial and Industrial $ 277 $ 435 $ 712 $ — $ 712

9 unchanged sentences

We maintain the ACL at a level that we believe to be appropriate to absorb estimated credit losses in the loan portfolios as of the balance sheet date.

We established our allowance in accordance with guidance provided in Accounting Standard Codification ("ASC") - Financial Instruments - Credit Losses ("ASC 326").

The following tables present the information regarding the allowance for credit losses and associated loan data by portfolio segment under the CECL model in accordance with ASC 326:

The following tables present the information regarding the allowance for credit losses and associated loan data by portfolio segment under the CECL model:

Twelve Months Ended December 31, 2024

2 unchanged sentences

December 31, 2023 $ 926 $ 3,347 $ 1,795 $ 7,108 $ 9,061 $ 8,783 $ 1,049 $ 62 $ 32,131

Impact of adoption ASC 326 168 1,899 ( 171 ) ( 951 ) 1,782 ( 794 ) ( 128 ) 53 1,858

Charge-offs — — — — — — — ( 21 ) ( 21 )

2 unchanged sentences

Ending Balance December 31 2024 $ 1,097 $ 3,037 $ 1,871 $ 6,300 $ 9,166 $ 8,832 $ 2,203 $ 67 $ 32,573

The increase in allowance for credit losses for construction is due to an increase in the vintage loss rate upon the implementation of CECL, partially offset by a decrease in loan balance during the year.

The increase in the allowance for credit losses for residential 1 to 4 family is due to an increase in the vintage loss rate upon the implementation of CECL, as well as an increase in loan balance during the year.

The decrease in allowance for credit losses for residential 1 to 4 family investment, and residential multifamily is due to lower vintage loss rates upon the implementation of CECL, partially offset by increases in loan balances during the year.

The decrease in allowance for credit losses for commercial non-owner occupied is due to lower vintage loss rates upon the implementation of CECL, a decrease in loan balance, and a decrease in loss rates due to a decrease in non-performing loans.

The following tables present the information regarding the allowance for loan losses and associated loan data by portfolio

segment under the incurred loss model:

The increase in allowance for credit losses for residential multifamily is primarily due to an increase in the loan balance during the year, as well as an increase in the qualitative factor due to the increased volume of the portfolio.

The decrease in construction is due to a decrease in the loan balance during the year, as well as a decrease in the qualitative factor due to the decrease in volume, as well as a decrease in the vintage loss factor due to amortization of prior year losses.

The decrease in commercial non-owner occupied is due to a decrease in the qualitative factor due to a reduction in the problem loan balance, and a decrease in the vintage loss factor due to the amortization of prior year losses.

Twelve Months Ended December 31, 2023

2 unchanged sentences

December 31, 2022 $ 390 $ 2,581 $ 2,298 $ 9,709 $ 6,076 $ 9,381 $ 1,347 $ 63 $ 31,845

Impact of adoption ASC 326 168 1,899 ( 171 ) ( 951 ) 1,782 ( 794 ) ( 128 ) 53 1,858

Charge-offs — — — — — — — — —

2 unchanged sentences

Ending Balance December 31 2023 $ 926 $ 3,347 $ 1,795 $ 7,108 $ 9,061 $ 8,783 $ 1,049 $ 62 $ 32,131

Allowance for loan losses

Individually evaluated for impairment $ — $ — $ 31 $ 500 $ 18 $ — $ — $ — $ 549

Collectively evaluated for impairment 390 2,581 2,267 9,209 6,058 9,381 1,347 63 31,296

Balance at December 31, 2022 $ 390 $ 2,581 $ 2,298 $ 9,709 $ 6,076 $ 9,381 $ 1,347 $ 63 $ 31,845

Individually evaluated for impairment $ — $ 1,091 $ 587 $ 19,568 $ 417 $ — $ — $ 70 $ 21,733

Collectively evaluated for impairment 32,383 191,266 125,363 357,884 444,403 476,210 95,556 6,661 1,729,726

Balance at December 31, 2022 $ 32,383 $ 192,357 $ 125,950 $ 377,452 $ 444,820 $ 476,210 $ 95,556 $ 6,731 $ 1,751,459

Collateral-Dependent Loans

37 unchanged sentences

Borrowers in this category require constant monitoring, are considered work-out loans and present the potential for future loss to the Bank.

The following tables provide an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for credit losses, as of December 31, 2023 under the current expected credit loss model.

The following tables provide an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for credit losses, as of December 31, 2024 and 2023.

(Dollars in thousands) Term Loans Amortized Cost Basis by Origination Year Revolving Loans at Amortized Cost Basis

49 unchanged sentences

Current period gross charge-offs $ — $ — $ — $ — $ — $ 21 $ — $ 21

An analysis of the credit risk profile by internally assigned grades under the incurred loss model as of December 31, 2022 is as follows:

December 31, 2022 Pass OAEM Substandard Doubtful Total

(Dollars in thousands)

Commercial and Industrial $ 32,383 $ — $ — $ — $ 32,383

Construction 191,266 — 1,091 — 192,357

Real Estate Mortgage:

Commercial – Owner Occupied 122,523 3,027 400 — 125,950

Commercial – Non-owner Occupied 362,899 — 14,553 — 377,452

Residential – 1 to 4 Family 920,868 — 162 — 921,030

Residential – Multifamily 95,556 — — — 95,556

Consumer 6,661 — 70 — 6,731

Total $ 1,732,156 $ 3,027 $ 16,276 $ — $ 1,751,459

Modifications to Borrowers Experiencing Financial Difficulty

At December 31, 2023, the Company did not make any modifications to borrowers experiencing financial difficulty.

The following table provides detail on impaired loans and the associated ALLL at December 31, 2022:

December 31, 2022 Recorded

Investment Unpaid

Balance Related

(Dollars in thousands)

With no related allowance recorded:

Total Loan Receivable $ 176,434 $ 192,338 $ 443,151 $ 228,189 $ 115,219 $ 522,571 $ 190,251 $ 1,868,153

(Dollars in thousands) Term Loans Amortized Cost Basis by Origination Year Revolving Loans at Amortized Cost Basis

As of December 31, 2023

2023 2022 2021 2020 2019 Prior Total

Commercial and Industrial

Construction 1,091 5,808 —

Real Estate Mortgage:

Commercial – Owner Occupied — — —

Commercial – Non-owner Occupied 11,116 11,116 —

Residential – 1 to 4 Family 162 162 —

Residential – Multifamily — — —

Consumer 70 70 —

Pass $ 4,724 $ 1,269 $ 87 $ 759 $ 598 $ 7,154 $ 20,148 $ 34,739

OAEM — — — — — — — —

Substandard — 435 — — — — 277 712

Doubtful — — — — — — — —

$ 4,724 $ 1,704 $ 87 $ 759 $ 598 $ 7,154 $ 20,425 $ 35,451

With an allowance recorded:

Commercial and Industrial — — —

Construction — — —

Real Estate Mortgage:

Commercial – Owner Occupied 587 587 31

Commercial – Non-owner Occupied 8,452 8,452 500

Residential – 1 to 4 Family 255 255 18

Residential – Multifamily — — —

Consumer — — —

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

Pass $ 323 $ 3,335 $ 4,499 $ 195 $ — $ — $ 148,113 $ 156,465

OAEM — — — — — — — —

Substandard — — — — — 1,091 — 1,091

Doubtful — — — — — — — —

$ 323 $ 3,335 $ 4,499 $ 195 $ — $ 1,091 $ 148,113 $ 157,556

Commercial and Industrial — — —

Construction 1,091 5,808 —

Real Estate Mortgage:

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

Commercial – Owner Occupied

Commercial – Non-owner Occupied 19,568 19,568 500

Residential – 1 to 4 Family 417 417 18

Residential – Multifamily — — —

Consumer 70 70 —

Pass $ 19,842 $ 36,030 $ 21,536 $ 7,104 $ 8,346 $ 45,249 $ 2,518 $ 140,625

OAEM — — — — — — — —

Substandard — — — — — 1,117 — 1,117

Doubtful — — — — — — — —

$ 19,842 $ 36,030 $ 21,536 $ 7,104 $ 8,346 $ 46,366 $ 2,518 $ 141,742

The following table presents by loan portfolio class, the average recorded investment and interest income recognized on impaired loans for the year ended December 31, 2022:

Investment Interest

(Dollars in thousands)

Commercial and Industrial $ 114 $ —

Construction 1,129 —

Real Estate Mortgage:

Commercial – Owner Occupied 1,772 31

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

Commercial – Non-owner Occupied

Pass $ 19,123 $ 93,805 $ 37,002 $ 33,316 $ 54,484 $ 112,471 $ 1,180 $ 351,381

OAEM — — — — — 15,421 — 15,421

Substandard — — — 250 2,586 271 — 3,107

Doubtful — — — — — — — —

$ 19,123 $ 93,805 $ 37,002 $ 33,566 $ 57,070 $ 128,163 $ 1,180 $ 369,909

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

Residential – 1 to 4 Family

Performing $ 58,358 $ 117,044 $ 61,580 $ 33,037 $ 25,623 $ 148,124 $ 4,705 $ 448,471

Nonperforming 155 — — 285 771 — — 1,211

$ 58,513 $ 117,044 $ 61,580 $ 33,322 $ 26,394 $ 148,124 $ 4,705 $ 449,682

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

Residential – 1 to 4 Family Investment

Performing $ 87,734 $ 138,884 $ 116,487 $ 50,119 $ 54,576 $ 76,367 $ — $ 524,167

Nonperforming — — — — — — — —

$ 87,734 $ 138,884 $ 116,487 $ 50,119 $ 54,576 $ 76,367 $ — $ 524,167

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

Residential – Multifamily

Consumer 42 1

Total $ 14,706 $ 697

At December 31, 2022, we reported performing TDR loans (not reported as non-accrual loans) of $ 5.5 million.

Non-performing TDRs were zero at December 31, 2022.

There were no new loans modified as a TDR and no additional commitments to lend additional funds to debtors whose loans have been modified in TDRs for the year ended December 31, 2022.

Pass $ 2,292 $ 23,030 $ 27,006 $ 12,159 $ 9,989 $ 28,848 $ — $ 103,324

OAEM — — — — — — — $ —

Substandard — — — — — — — $ —

Doubtful — — — — — — — —

$ 2,292 $ 23,030 $ 27,006 $ 12,159 $ 9,989 $ 28,848 $ — $ 103,324

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

Performing $ — $ — $ — $ — $ — $ 5,493 $ 16 $ 5,509

Nonperforming — — — — — — — —

$ — $ — $ — $ — $ — $ 5,493 $ 16 $ 5,509

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

Total Loan Receivable $ 192,551 $ 413,832 $ 268,197 $ 137,224 $ 156,973 $ 441,606 $ 176,957 $ 1,787,340

Modifications to Borrowers Experiencing Financial Difficulty

At December 31, 2024 and 2023, the Company did not make any modifications to borrowers experiencing financial difficulty.

At December 31, 2024 and 2023, there was $ 4.9 million and $ 1.2 million, respectively, of residential real estate loans where the Company was actively pursuing foreclosure.

Loans to Related Parties :

7 unchanged sentences

Pledged Loans:

At December 31, 2023 and 2022, approximately $ 1.3 billion and $ 923.0 million, respectively, of unpaid principal balance of loans were pledged to the FHLBNY on borrowings (Note 7).

At December 31, 2024 and 2023, approximately $ 740.5 million and $ 1.3 billion, respectively, of unpaid principal balance of loans were pledged to the FHLBNY on borrowings (Note 7).

This pledge consists of a blanket lien on residential mortgages and certain qualifying commercial real estate loans.

At December 31, 2024, approximately $ 361.0 million of unpaid principal balance of loans were pledged to the FRB on borrowings.

There were no loans pledged as of December 31, 2023.

Concentrations of Credit :

3 unchanged sentences

Our loan portfolio consists of residential, commercial real estate loans, construction loans, commercial and industry loans as well as consumer loans.

Other real estate owned (OREO) at December 31, 2023 was $ 1.6 million, compared to $ 1.6 million at December 31, 2022.

Other real estate owned (OREO) at December 31, 2024 and 2023 was $ 1.6 million.

The real estate owned at December 31, 2024, consisted of two properties.

During 2023, the Company disposed of $ 161.0 thousand of OREO, recognizing a gain of $ 38.0 thousand, compared to $ 2.4 million of OREO sold in 2022, recognizing a gain of $ 328.0 thousand.

During the year ended December 31, 2024, the Company did not dispose of any OREO properties, compared to $ 161.0 thousand of OREO sold during the year ended December 31, 2023, recognizing a gain of $ 38.0 thousand.

The Company did no t write-down any OREO property during 2024 or 2023.

5 unchanged sentences

Real estate acquired in settlement of loans — 123

Capital improvements to existing OREO properties 12 —

Sales of OREO, net — ( 161 )

26 unchanged sentences

Rate Amount Weighted

(Dollars in thousands, except rates)

(Dollars in thousands)

Borrowed funds:

8 unchanged sentences

At December 31, 2024, the Company had a $ 740.5 million line of credit from the FHLBNY, of which $ 145.0 million, as detailed above, was outstanding, $ 50.0 million was a letter of credit to secure public deposits, and $ 545.5 million was unused.

At December 31, 2024, the Company had a $ 252.0 million line of credit from the FRB, with no balances outstanding.

Subordinated Debentures – Capital Trusts :

14 unchanged sentences

The debentures are the sole asset of the Trust.

The terms of the junior subordinated debentures are the same as the terms of the capital securities.

The terms of the

junior subordinated debentures are the same as the terms of the capital securities.

The Company has also fully and unconditionally guaranteed the obligations of the Trust under the capital securities.

13 unchanged sentences

Subordinated Debentures – Notes :

On July 15, 2020, Parke Bancorp, Inc.

(the “Company”) issued and sold $ 30 million in aggregate principal amount of its 6.50 % Fixed-to-Floating Rate Subordinated Notes due 2030 (the “Notes”) to certain qualified

institutional buyers and accredited investors (the “Purchasers”).

On July 15, 2020, the Company issued and sold $ 30 million in aggregate principal amount of its 6.50 % Fixed-to-Floating Rate Subordinated Notes due 2030 (the “Notes”) to certain qualified institutional buyers and accredited investors (the “Purchasers”).

The Notes were offered and sold by the Company to eligible purchasers in a private offering in reliance on the exemption from the registration requirements of Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and the provisions of Regulation D promulgated thereunder (the “Private Placement”).

4 unchanged sentences

Any redemption of the Notes will be subject to prior regulatory approval to the extent required.

There were approximately $ 948,000 in costs associated with the issuance of this debt.

There were approximately $ 948,000 in costs associated with the issuance of this debt, of which $ 102.7 thousand is unamortized as of December 31, 2024.

Premises and Equipment

18 unchanged sentences

Total operating lease expense consists of operating lease cost, which is recognized on a straight-line basis over the lease term, and variable lease cost, which is recognized based on actual amounts incurred.

The following table presents information about our operating leases at the year ended December 31, 2023.

The components of the Company's ongoing operating lease cost were as follows:

Twelve Months Ended

(Dollars in thousands)

Lease Cost $ 409 $ 405

Sublease income ( 219 ) ( 217 )

Net lease cost $ 190 $ 188

The following table presents information about our operating leases during the year ended December 31, 2024.

Dollars in thousands 2024

Lease right of use assets (ROU) $ 2,212

1 unchanged sentence

The following table presents future undiscounted cash flows on our operating leases:

Years Ending December 31, (Dollars in thousands)

Years Ended December 31, (Dollars in thousands)

Thereafter 25,712

3 unchanged sentences

Common Stock Dividend :

The Company paid a $ 0.18 per share dividend each quarter 2023.

During 2023, the Company paid a total of $ 8.6 million in common stock cash dividends.

The Company paid a $ 0.16 per share quarterly dividend for the first and second quarters, and a $ 0.18 per share quarterly dividend for the third and fourth quarters of 2022.

During 2022, the Company paid a total of $ 7.9 million in common stock cash dividends.

The Company paid a $ 0.18 per share dividend each quarter of 2024, and 2023, respectively.

During the year ended December 31, 2024, the Company paid a total of $ 8.6 million in common stock cash dividends.

During the year ended December 31, 2023, the Company paid a total of $ 8.6 million in common stock cash dividends.

The timing and amount of future dividends will be within the discretion of the Board of Directors and will depend on the consolidated earnings, financial condition, liquidity, and capital requirements of the Company and its subsidiaries, applicable governmental regulations and policies, and other factors deemed relevant by the Board.

Treasury Stock :

No treasury stock was repurchased during 2023 and 2022.

During the year ended December 31, 2024, the Company repurchased 200,000 shares of its outstanding common stock for $ 4.3 million at an average price of $ 21.28 per share.

No treasury stock was repurchased during the year ended December 31, 2023.

Stock Options :

After shareholder approval in 2020, the 2020 Equity Incentive Plan (the “2020 Plan”) became effective.

The 2020 Equity Incentive Plan (the “2020 Plan”) became effective after shareholder approval in 2020.

In addition, the Company also has the 2015 Equity Incentive Plan (the “2015 Plan”).

4 unchanged sentences

At December 31, 2024, there were 458,750 shares remaining for future option grants, and 48,482 shares remaining for future restricted stock awards under the plan.

During 2022, options to purchase 202,500 shares of common stock at $ 21.66 per share were awarded and will expire no later than ten years following the grant date.

During the year ended December 31, 2024, options to purchase 20,000 shares of commons stock at $ 19.03 per share were awarded and will expire no later than ten years following the grant date.

The options granted vest over a five-year service period, with 20 % of the awards vesting on each anniversary of the date of grant.

The fair value of the options granted, as computed using the Black-Sholes option-pricing model, was determined to be $ 4.34 per option based upon the following underlying assumptions:

a risk-free interest rate, expected option life, expected stock price volatility, and dividend yield of 3.25 %, 6.5 years, 27.07 %, and 2.95 %.

respectively.

a risk-free interest rate, expected option life, expected stock price volatility, and dividend yield of 3.82 %, 6.5 years, 29.29 %, and 3.78 %, respectively.

The risk-free interest rate was based on the U.S.

3 unchanged sentences

The dividend yield was calculated using the previous four quarter payment history.

The Company did not grant any options in 2023.

The Company did not grant any options during the year ended December 31, 2023.

Compensation expense for stock options was $ 335.8 thousand, and $ 397.8 thousand at December 31, 2024 and 2023, respectively.

A summary of stock options at December 31, 2023 and 2022 was as follows:

A summary of stock options at December 31, 2024 was as follows:

December 31, 2024

33 unchanged sentences

During 2024, preferred stockholders converted 50 shares of preferred shares into 6,877 shares of common stock, respectively.

There were no preferred shares converted to common stock during 2022.

During 2023, preferred stockholders converted 70 shares of preferred shares into 9,628 shares of common stock, respectively.

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.

The Company paid quarterly cash dividends of $ 15 per share on the preferred stock for year 2023.

The Company paid quarterly cash dividends of $ 15 per share on the preferred stock for year 2024 and 2023.

The preferred stock qualifies for and is accounted for as equity securities and is included in the Company’s Tier I capital since issued.

12 unchanged sentences

Deferred Loan Fees 1,411 1,322

Nonaccrued interest 58 67

Non-accrued interest 44 58

Non-qualified stock options and restricted stock 376 318

1 unchanged sentence

Unrealized loss on securities 117 140

Lease liability 2,212 2,455

PPP Deferred Loan Fees — 1

Other 269 210

13,278 13,853

4 unchanged sentences

Partnership income ( 54 ) ( 58 )

Right of use asset ( 2,212 ) ( 2,455 )

Deferred loan costs ( 1,711 ) ( 1,869 )

6 unchanged sentences

State income taxes, net of Federal tax benefit 1,776 1,557

Non-controlling interest — —

Tax exempt income ( 20 ) ( 20 )

26 unchanged sentences

The discount rate used in determining the actuarial present value of the projected benefit obligation was 5.5 % for 2024 and 2023.

Annual benefit

payments are estimated at $ 525,696 for 2024, $ 812,346 for 2025, $ 812,346 for 2026, $ 812,346 for 2027, $ 812,346 for 2028 and $ 4.9 million thereafter.

Annual benefit payments are estimated at $ 525,696 for 2025, $ 812,346 for 2026, $ 812,346 for 2027, $ 812,346 for 2028, $ 812,346 for 2029 and $ 4.6 million thereafter.

The Company has a 401(k) Plan covering substantially all employees.

62 unchanged sentences

As of December 31, 2024 and 2023, standby letters of credit with customers were $ 0.6 million and $ 1.5 million, respectively.

On January 1, 2023, upon the adoption of ASU 2016-13, we recognized $ 1.0 million cumulative effect decrease to retained earnings for the allowance for credit losses of unfunded lending commitments.

At December 31, 2023 and December 31, 2022, the allowance for credit losses of unfunded lending commitments was $ 0.5 million and zero , respectively.

A provision recovery for unfunded lending commitments of $ 0.5 million was recognized during the year ended December 31, 2023, while there was no provision expense recognized in during the year ended December 31, 2022.

At December 31, 2024 and December 31, 2023, the allowance for credit losses of unfunded lending commitments was $ 0.9 million and $ 0.5 million, respectively.

A provision expense for unfunded lending commitments of $ 0.4 million was recognized during the year ended December 31, 2024, while there was $ 0.5 million provision recovery recognized during the year ended December 31, 2023.

The Company also has entered into an employment contract with the President of the Company, which provides for continued payment of certain employment salary and benefits prior to the expiration date of the agreement and in the event of a change in control, as defined.

20 unchanged sentences

The owners filed a Complaint, alleging that the damages total approximately $ 1.7 million.

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.

The matter is in 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.

Commitments and Contingencies" in the Notes to the Consolidated Financial Statements.

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 $ 1.0 million for purposes of tenant fit out, and operation, of the Voorhees Diner situated at 320 Route 73, Voorhees, New Jersey 08043.

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.

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 $ 1.4 million.

On March 6, 2015, the loan was modified, and the principal amount of the loan was increased to $ 1,400,000.00 .

On January 8, 2020, the Bank declared VDC in default of its loan obligations.

4 unchanged sentences

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.

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.

The Bank believes this suit is without merit, denies any and all liability and intends to vigorously defend against this matter.

In the normal course of business, there are outstanding various contingent liabilities such as claims and legal action, which are not reflected in the financial statements.

In the opinion of management, no material losses are anticipated as a result of these actions or claims.

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.

Fair Value Measurements

41 unchanged sentences

As of December 31, 2023

Corporate debt obligations $ — $ 500 $ — $ 500

Residential mortgage-backed securities $ — $ 7,095 $ — $ 7,095

Collateralized mortgage-backed securities — — — —

Total $ — $ 7,095 $ — $ 7,095

16 unchanged sentences

All properties have an independent third-party full appraisal to determine the fair value, less cost to sell (a range of 5 % to 10 %) and other costs, such as unpaid real estate taxes, that have been identified.

The appraisal will be based on an "as-is" valuation and will follow a reasonable valuation method that addresses the direct sales comparison, income, and cost approaches to market value, reconciles those approaches, and explains

the elimination of each approach not used.

Appraisals are updated every 12 months or sooner if we have identified possible further deterioration in value.

63 unchanged sentences

Amortization of subordinate debt issuance costs 190 190

(Increase) decrease in other assets — ( 2 )

Increase in accrued interest payable and other accrued

(Decrease) increase in accrued interest payable and other accrued

liabilities ( 27 ) 12

1 unchanged sentence

Cash Flows from Financing Activities

Purchase of treasury stock ( 4,262 ) —

Proceeds from exercise of stock options 706 33

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data