Summary
- Parke Bank has been hit hard by investors during the pandemic, dropping almost 60%.
- As expected, loan quality during the pandemic is a problem but I don’t believe it belies this big of a selloff.
- The bank appears to be navigating through the situation reasonably well, so I am satisfied holding the stock and picked up some more last month.
Parke Bancorp, Inc. (PKBK) is the holding company for Parke Bank, which operates from its corporate headquarters in Washington Township, New Jersey and 7 branch offices in Washington Township, New Jersey, Northfield, New Jersey, Galloway Township, New Jersey, Collingswood, New Jersey, Center City Philadelphia, and Chinatown in Philadelphia. Parke Bank opened in 1999 but restructured in 2005 to become the subsidiary of Parke Bancorp.
On January 29, I published a Seeking Alpha article on PKBK that argued that the bank was solid and performing well, but there were several issues that pointed to an overvaluation. My conclusion stated the following:
I am dropping my rating on PKBK from Bullish to Neutral. The two dollar drop after a solid quarter worries me so I would be comfortable selling now with a double digit gain if I had a better investment lined up. Unfortunately, I don’t; so I will probably hold on for a couple more quarters as I don’t see a lot of downside.
I am proud of the first two sentences as I gave everyone an out to sell. But the third sentence was off as the price has declined almost 60% since that article. So for those of us that are holding a large loss, what do we do now?
Table 1 has the financials for the second quarter of 2020, which were released on July 27.
