Hello, and welcome to the annual meeting of shareholders of Parke Bancorp, Inc. Please note that today's meeting is being recorded. During the meeting, we'll have a question and answer session. You can submit questions or comments at any time by clicking on the Q&A tab. It's now my pleasure to turn today's meeting over to Daniel J. Dalton, Chairman of the Board of Directors of the company. Mr. Dalton, the floor is yours.
Thank you. The meeting will now come to order. Welcome to the virtual annual meeting of shareholders of Parke Bancorp, Inc. I am Daniel J. Dalton, Chairman of the board of directors of the company, and I will act as Chairman of the meeting. Any questions from shareholders attending via the website will be addressed while the voting is underway. Linda A. Kaiser, Corporate Secretary of the company, will act as Secretary of the meeting. I would like to introduce members of your board of directors present today who are also participating in the meeting by remote communications. Arret Dobson, Fred Choate, Jack Sheppard, Jeffrey Kripitz, Dr. Edward Infantolino, Betty Milavsky, and President Vito Pantilione. The Board of Directors has previously appointed Jonathan D. Hill as the Inspector of Elections to act at this meeting and any adjournaments.
The oath of the Inspector of Elections will be attached to the minutes of the meeting. We posted the meeting procedures and rules for conduct of the annual meeting on the meeting webpage for your review. In order to conduct an orderly meeting, we ask you to please follow these rules. The company has prepared a list of shareholders entitled to vote at the annual meeting as of the close of business on March 11th, 2026, the record date for voting. The records of the company show that there were 11,730,950 shares of common stock outstanding on the record date entitled to vote at this meeting.
We have previously received an affidavit that the notice of meeting and a form of proxy were mailed on or about March 20th, 2026 to each holder of record on the close of business on March 11th, 2026. A copy of the affidavit will be attached to the minutes of this meeting. The company has delivered to the Inspector of Election the list of shareholders and all proxies that have been received. The Secretary has informed me that more than a majority of the shares entitled to vote at the meeting are present online or by proxy. The Inspector of Election is making an exact count and will submit a formal report on the number of shares present during the course of the meeting. A quorum is declared present, subject to the confirmation of that fact by the Inspector of Election's report.
In order to save time at this meeting, we have arranged the proceedings so that the votes will be taken at this time, and while the inspector is counting the ballots, we will continue with other business. If you have already voted by proxy, by mail, by telephone, or by internet, you need not vote online at this meeting. Shareholders participating in the webcast may vote on the web page as indicated by Vote Here and selecting the Vote Now button. Now, I would like to officially open the polls. At this time, no additional proxies may be voted. The voting on the meeting webpage will close a few minutes after we have discussed the proposals to be voted on today, and those electronically attending the meeting have had the opportunity to vote on the matters.
The first item of business to be acted upon at the meeting, as stated in the notice of the annual meeting, is the election of directors as follows: Vito S. Pantilione, Dr. Edward Infantolino, Elizabeth A. Milavsky, each to serve for a three-year term expiring in 2029 and until their successors have been elected and qualified. Under the company's bylaws, no nominations may be made at the meeting. Therefore, I declare nominations to be closed. The vote will now be taken on the election of directors. Remember, if you have already voted by proxy, you do not need to vote today unless you want to change your vote. In order to vote today, please press the Vote Now button on our meeting webpage and follow the directions. At this time, while the online voting is underway, we will take questions from the meeting participants through our meeting webpage.
If you have a question regarding proposal 1, please click on the question button and send in your question electronically. The next item of business on the agenda is the ratification of the appointment of S.R. Snodgrass, P.C. as the company's independent auditor for the fiscal year ending December 31st, 2026. The vote will now be taken on this proposal. Remember, if you have already voted by proxy, you do not need to vote today unless you want to change your vote. In order to vote today, please press the Vote Now button on our meeting webpage and follow the directions. At this time, while the online voting is underway, we will take questions from meeting participants regarding proposal 2 through our meeting webpage. If you have a question, please click on the Question button and send in your question electronically.
We will now give everyone an opportunity to vote and submit any questions. Seeing that everyone has had an opportunity to vote, I declare the vote polls closed on proposal 2. The next item of business on the agenda is the approval of an advisory non-binding proposal regarding our executive compensation. The vote will now be taken on this proposal. Remember, if you have already voted by proxy, you do not need to vote today unless you want to change your vote. In order to vote today, please press the Vote Now button on our meeting webpage and follow the directions. At this time, while the online voting is underway, we will take questions from meeting participants regarding proposal 3 through our meeting webpage. If you have a question, please click on the Question button and send in your question electronically.
We will now give everyone an opportunity to vote and submit any questions. Seeing that everyone has had an opportunity to vote, I declare the polls closed on proposal 3. The last item on the agenda is whether the advisory vote on executive compensation should occur every 1, 2 , or 3 years. As we indicated in our proxy statement, the board believes that a vote once every three years will allow shareholders the time needed to properly assess the impact of changes made in the company's executive compensation program in response to shareholder votes on executive compensation. We also note that we incur costs to have an additional item on the agenda. In the interest of saving costs, the board recommends the non-binding vote on executive compensation occur once every three years. The vote will now be taken on proposal 4.
You may vote for 1, 2, or 3 years, or abstain. Remember, if you have already voted by proxy, you do not need to vote today unless you want to change your vote. In order to vote today, please press the Vote Now button on our meeting webpage and follow the directions. At this time, while the online voting is underway, we will take questions from meeting participants regarding Proposal Four through our meeting webpage. If you have a question, please click on the Question button and send in your question electronically. We will now give everyone an opportunity to vote and submit any questions. Seeing that everyone has had an opportunity to vote, I declare the polls closed on Proposal Four. While the Inspector of Elections is counting the votes, our President and Chief Executive Officer, Mr. Vito S. Pantilione.
Vito Pantilione will report on the affairs of the company for the fiscal year ended December 31st, 2025.
Thank you, Mr. Chairman, and good morning, and welcome to our annual shareholder meeting. 2025 was a pretty good year for Parke Bank, and we're gonna talk a little bit about some of the highlights. I'm also gonna discuss our first quarter financials for 2026 and what we see for our company down the road in the near future. I know many of you already know our senior management team, but there are some new people in attendance today. Welcome. I want to take a couple of minutes to introduce our team who played a very important role in our bank's financial performance in 2025. I'm gonna start off with Ralph, and we call him Guy Gallo. Guy is our Executive Vice President and our Chief Operating Officer. Guy has many responsibilities, and that includes IT, asset quality, human resources, internal audit, and our retail branches.
Just in case that isn't enough, Guy is also our liaison with our banking regulators. Boy, that's a full-time job by itself with the ever-changing regulatory environment. I'm gonna touch base on that in a few minutes. Next is Dee Calvello. Dee has been an integral part of our company since we were in formation in 1998. Dee's a Senior Vice President and our Chief Administrative Officer. Dee does a great job in this position because since she started working when the bank first opened, she has worked or run every department in the bank, except maybe accounting. Dee is also responsible for our construction lending department, our loan administration department, and as our Chief Administrative Officer, she works with other members of our senior management team, making sure that we have a cohesive and collective effort in managing the bank and addressing issues when they arise.
It includes working with our BSA, and that stands for the Bank Secrecy Act department, in addressing the many challenges of the BSA regulatory environment. Next up is Nick Pantilione. Nick is a Senior Vice President and our Chief Lending Officer. Nick spearheaded our strong loan growth in 2025, and Nick continues to build our lending staff, not only in our region, but also developing our loan production office in South Carolina. In fact, I just read today that South Carolina was again the number one state for the most people moving into the state in the country. Nick's responsible to work with our lenders to ensure that they are active in the market, identify any challenges that they may be facing with competition, and monitoring their loan production. Nick individually has the largest book of loan business in the bank.
Nick also heads up our marketing department, and that's very important in generating deposits. Deposits are very important in supporting our loan growth. Jonathan Hill is next. Jon is a Senior Vice President and our Chief Financial Officer. Jon's been with us as CFO for a little over two years, and he and his staff have implemented many improvements supporting accounting and financial reporting, as well as financial operations and strategy. Jon's leadership was critical in establishing our liquidity management plan, as well as the enhancement of our forecasting and budgeting processes, and this is very important to our company. Financial reporting is constantly changing, and that's not only audit and regulatory requirements, but also SEC reporting requirements. Jon and his staff do a great job on staying on top of these changes and making sure we are accurate and compliant. Next is Ralph Bonadies.
Ralph is a Senior Vice President and our Chief Risk Officer. As I reported last year, Ralph stepped up and became our BSA officer when our then BSA officer left the bank unexpectedly. BSA continues to be a very important focus of the banking regulators and Parke Bank. In addition to his Chief Risk Officer responsibilities, Ralph works with our BSA staff and our BSA consultants to make sure that we have the policies and procedures in place, and that our employees are following those procedures to ensure that we have a strong and effective BSA platform that's in compliance with all regulatory requirements. BSA department is the largest department in our bank. Next is James, and we call him JB Meadows. JB is a Senior Vice President and our Chief Credit Officer.
JB has been in this position for about two years, and he's really doing a great job in enhancing our credit department's ability to promptly analyze and evaluate not only new loans being generated by our lending staff, but also conducting an internal review of our existing loan portfolio. JB is also responsible for our bank's credit policies, proposing changes where necessary, and making sure that our policies are being followed. JB was a prominent loan officer in the region, and that includes being a loan officer with Parke Bank for a period of time before being promoted to our chief credit officer position. JB maintains a strong relationship with his loan contacts and introduces them to our lending officers who work with them processing new loan requests, and that's very important in supporting our loan growth. Last, but certainly not least, is Linda Kaiser.
Linda is a Senior Vice President and our Corporate Secretary. Linda is semi-retired, but continues to be responsible for our Bank and Bancorp board meetings. Boy, that includes all the various filing and reporting responsibilities that go along with that position. She's also responsible for taking the minutes for these meetings. Bank and Bancorp minutes are very complex and important. The regulatory requirements are very explicit on the level of robust minutes that are required. We're lucky that Linda continues to take that responsibility. She does a really great job. Linda also works on various bank issues, including participating in senior management meetings, and as always, bailing me out of jams that I always seem to be getting into. 2025 was a pretty interesting year.
A new president, Donald Trump, was sworn in for the second time, this time as the 47th president of our country. The president immediately began signing executive orders covering all areas of the country and the world. Many of these orders reversed Biden administration's directives, and that includes opening the renewed development and production of oil and natural gas. There was also a refocus of the banking regulatory agencies back to the safety and soundness of banks and not the ancillary areas that have previously put undue pressure and requirements and expenses on banks, and that's especially community banks. Margin pressure and deposit competition continued to be a challenge in the banking industry in 2025. Once again, that includes community banks. Cybersecurity is always going to be a critical risk to all industries, and that includes banks. AI expands into more and more businesses, and that includes Parke Bank.
We are in the process of installing an AI program to help streamline and expedite processing of BSA requirements. We are cautiously optimistic that we're going to see this program meet our expectations and reduce costs. We can't lose sight of the risks that go with AI. The economy in 2025 experienced slow, although stable, growth as relating to credit demand. There are a lot of conflicting opinions on where the Fed should be with interest rates in 2025, and unfortunately, that continues in 2026, not only adds to the difficulty of forecasting and bank product pricing. Regulatory burden was again a concern for community banks in 2025, although it didn't rank as high as previous years.
That's because the administrative directives and regulatory statements indicate that the examination process will return to the primary responsibility of safety and soundness, which I just mentioned, as well as streamlining the examination process. Boy, we can only hope. When you take a look at Parke Bank in 2025, our total assets grew 5%, $2.25 billion. This growth was primarily supported by an 8.9% growth in loans. That went to $2.04 billion. 7.8% Growth in deposits to $1.8 billion. That growth in deposits helped support our loan growth. Very important number to our company and to our shareholders is the bank's net income. That grew 37.3%, $37.8 million in 2025. That's up from $27.5 million, 2024.
Earnings per common share was $3.20, and per diluted common share was $3.16 in 2025. Our return on average assets improved to 1.77%. That's up from 1.38%. Our return on average common equity improved to 12.07%, and that's up from 9.36%. Once again, my favorite ratio is the efficiency ratio. Our efficiency ratio was 35.03%. That's a 15% improvement from 41.24% in 2024. The reason this ratio is my favorite is because it measures the level of efficiency and cost controls that a bank operates. Parke Bank continues to have one of the best efficiency ratios in the community banking industry.
You got to keep in mind that the lower the ratio, the better for this efficiency ratio. Shareholder equity increased $324.5 million. 8% increase from 2024. Capital remains king in banking, and we are at a Tier 1 leverage ratio of 15.61% as of December 31st, 2025. That's a little less than 16.38% in 2024, and that's due to the repayment of our sub-debt, and that's saving us a considerable amount of interest expense. Our Tier 1 leverage ratio is more than triple the regulatory definition of a well-capitalized bank, and that's 5%. We continue to focus on asset quality in a volatile economy, but we maintain an allowance for credit losses of 1.7%. That's just a little less than 1.74% in 2024.
Let's take a minute to look at our first quarter results for 2026, and we're going to compare these numbers to the first quarter of 2025. Total assets increased 3.3% to $2.21 billion. Total gross loans increased 8.3%, $2.04 billion. Deposits experienced a little slower growth, evidencing the fierce competition for deposits. Deposits grew 1.9% from the first quarter of 2025 to $1.7 billion in the first quarter of 2026.
We're very pleased to report that our net income grew 52.3% from the first quarter of 2025 to the first quarter of 2026 to $11.8 million. This growth in our net income was partially supported by the increased yield on our growing loan portfolio, and that combined with our continued tight control of expenses. Efficiency ratio of 31.39% in the first quarter of 2026. That's better than the 37.51% in the first quarter of 2025. Return on average assets improved 48%- 0.19%. Our return on average equity improved 39.7%- 14.47%. Our net interest margin improved 29.9%- 4.17%.
2026 had started out with a lot of concerns over the interest rate battle, and it's the Federal Reserve with lower rates before the new Fed Chairman, Kevin Warsh, not sure I'm pronouncing that right, is confirmed and takes office. I think that's just starting now for the confirmation hearings. Warsh comes in with a lot of experience, including previously being a Fed Governor. He's also considered a moderate, not quick to overreact in raising or lowering interest rates. Clearly, the direction of interest rates is a major concern for the economy and certainly for the banking industry. In my opinion, the important factor is consistency. No major rate swings either way. As the Russia-Ukraine war continues, and in some instances worsens, the United States and Israel made a preemptive strike on Iran.
Epic Fury, and that's what they named it, and it's been a major offensive with the United States and Israel bombing more than 10,000 military sites in Iran. This conflict has so many ramifications, and certainly not the least of which is our men and women put in harm's way protecting our country. Rising oil and gas prices are also a major problem, and this is made worse by Iran attempting, and in some instances, succeeding to close the Strait of Hormuz, closed, it's opened, it depends on what day it is. That's a major oil and natural gas waterway where over one-fifth of the world's supply passes through it. Boy, that's making inflation a challenge once again. This affects consumers' wallets. Consumers' wallets account for two-thirds of the U.S. economy, with reduced spending being a real possibility.
These risks could be greatly reduced if this is a short conflict, and nobody knows how short it's going to be. I read an interesting article in a PCBB daily banking industry newsletter. Say that fast three times. They discussed the massive use of GPS systems in this country. Going up to take an exit ramp, and it's closed. That calm, maddening voice comes on and says, "Recalculating." The destination is the same, but you will need to get there by a different route. In banking, growth, profitability, safety, and soundness is the destination. You may need to recalculate and take different routes to get to your goals due to the changes in the economy and the market. Parke Bank is structured to be nimble and be able to move quickly and take different routes as the market changes.
Our strong capital, earnings, and tight control of expenses supports our ability to navigate Parke Bank through possible challenging times, as well, though, as being able to take advantage of opportunities in the market if and when they may occur. I want to again thank everyone for taking time out of their busy schedules to join us this morning. Our board, management, and staff are committed to continue working hard to support your trust and investment in Parke Bank. In fact, some of you may have already seen our press release today. I'm happy to report that our board of directors approved an increase to our quarterly cash dividend to $0.20 per share, takes effect in the second quarter 2026. I'm just going to check to see if we have any questions that we need to.
Well, it looks like we only had one question, and that was in regard to cash dividends. We already addressed that. Thanks again. Chairman?
Thanks, Vito. The Inspector of Election has completed the count. I will now read the report. Report of the Inspector of Elections confirms that a quorum is and has been in attendance at this meeting for all purposes. The report shows that Vito S. Pantilione, Dr. Edward Infantolino, and Elizabeth A. Milavsky have been elected to serve for a three-year term expiring in 2029 and until their successors are qualified and elected. The report also shows that more than a majority of the shares present have voted in favor of proposal 2, ratification of the appointment of S.R. Snodgrass, P.C., as the company's independent auditor for the fiscal year ending December 31st, 2026. Proposal 3, the advisory non-binding proposal regarding our executive compensation.
The report also shows that a plurality of votes cast regarding proposal 4 were voted in favor of holding advisory votes on executive compensation every year. The report of the Inspector of Elections has been accepted and approved and will be attached to the minutes of the meeting. There being no further business to come before the meeting, a motion to adjourn is in order. Mr. Choate has moved that the meeting be adjourned. Mr. Dobson has seconded the motion. Those in favor signify by saying "aye." Those opposed say "no." The motion is carried, and the meeting is adjourned. Thank you for attending online. We look forward to seeing you next year.
This concludes the meeting. You may now disconnect.