Earnings down, workers out at South Jersey bank companies
Two South Jersey bank companies have reported a sharp drop in annual earnings, while a third has announced layoffs.
Net income fell by 32 percent at Parke Bancorp Inc. and by 13 percent at 1st Colonial Bancorp Inc., with top executives at each firm describing 2023 as a “challenging year.”
Also, TD Bank announced plans to trim 54 workers from its statewide workforce through April 30. The bank cut 88 positions across New Jersey in August 2023.
TD on Thursday said it reviews operations "on an ongoing basis to successfully manage in an evolving competitive environment."
The Cherry Hill-based bank noted affected workers will have access to outplacement services and the opportunity to be considered for other jobs at the bank.
Both Parke Bancorp and 1st Colonial cited the impact of inflation and higher interest rates.
But Parke Bancorp, based in Washington Township, also noted the impact of a $9.5 million theft from an armored car services used by the bank for cannabis-related business accounts.
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And it reported a $1.1 million decrease in service fees attributable primarily to cannabis-related accounts.
Rising interest rates hurt the home-loan business, both banks said.
“Mortgage activity continues to be impacted by higher interest rates and a lack of inventory in the purchase market,” said Mount Laurel-based 1st Colonial.
It said income from the origination and sales of home loans fell last year by 22 percent, or $328,000, to $1.2 million.
However, President and CEO Robert White noted 1st Colonial's earnings dip followed a record year in 2022. Even with the decline, 2023 results were the second best in the company's history, he said.
"1st Colonial is in very strong position," said White, noting the bank has no plans to cut jobs.
Vito Pantilione, Parke Bancorp’s president and CEO said loan growth fell short of projections "due to higher interest rates and difficulties in the real estate industry. It became more difficult to qualify new loan requests with the higher debt service.”
"Maintaining deposits remained challenging in 2023, triggering higher rates and the offering of special deposit programs,” he added. “This caused a substantial increase in our interest expense as rates continued to climb.”
Both companies expressed confidence in their firms’ underlying strengths, and Pantilione noted loan activity rose in January "due to the anticipated interest rate cuts."
"If interest rates do moderate in 2024, we anticipate seeing a lower cost of funding and stronger deposits," he said.
Lower earnings also were reported by Princeton Bancorp Inc. in Mercer County, which recently announced plans to buy the Mount Laurel-based operator of Cornerstone Bank.
Princeton Bancorp had annual net income of $25.8 million, or $4.03 per diluted common share, compared to $26.5 million, or $4.11 per share, for 2022.
Fourth-quarter net income dropped to $5.3 million, compared to $7.6 million a year earlier.
The 29-branch firm ended 2023 with assets of $1.92 billion.
It ended the year with assets of $2.02 billion, up 1.9 percent from Dec. 31, 2022.
1st Colonial Community Bank has offices in Collingswood, Westville and Limerick, Pennsylvania.
Its parent firm reported year-end assets of $825.6 million, up by 6 percent from Dec. 31, 2022.
Parke Bank has two offices each in Washington Township and Philadelphia, as well as individual offices in Collingswood and Galloway.
Its parent firm said annual net income available to common shareholders dropped to $28.4 million, or $2.35 per diluted common share. That compared to 2022 results of $41.8 million, or $3.44 per share, for the year ended Dec. 31, 2022.
Jim Walsh is a senior reporter for the Courier-Post, Burlington County Times and The Daily Journal. Email: Jwalsh@cpsj.com.
This article originally appeared on Cherry Hill Courier-Post: Parke Bancorp, 1st Colonial cite impact of inflation, interest rates
