3rd Quarter 2022 Shareholder Newsletter

James Wagner

Thank you.

The approaching holiday season provides the opportunity to reflect and be thankful for those who have supported Parkside in achieving our goals. We value our partnership with you, thank you for your support, and look forward to working with you in 2023 and beyond. 

From our family to yours – we wish you a safe and happy holiday season.  
As always, should you have any questions or comments, please feel free to contact us.


James C. Wagner,
Parkside Financial Bank & Trust | Chief Executive Officer 

Updates from Parkside

After two years of COVID, I expected a somewhat monotonous 2022. I was undoubtedly wrong. There is a war in Europe creating economic havoc, inflation at levels not seen since the early 1980s, an incredibly tight labor market, massive interest rate increases, and a bond-based bear market combined with a stock-based bear market. I’m pleased to announce that Parkside is having a record hiring, growth, and earnings year despite current fiscal conditions.

3rd Quarter Performance

2022 continues to be a very strong year with our third quarter performance exceeding expectations. Year-to-date revenue of $25.9 million is an increase of $4.4 million from the first nine months of 2021, and well above our budgeted revenue. We are spending some of this extra revenue, investing in future growth. Year-to-date overhead of $18.6 million is also up from last year, reflecting a $3.6 million increase over the same period in 2021.

Personnel expense makes up a vast majority of the year-over-year increase in overhead as we continue to invest heavily, building our calling and support staff per our strategic plan. At our 2022 shareholder meeting, we shared with you our intention to invest in new employees in all areas, setting us up to achieve rapid growth in future years. We thought it would take the better part of two years, through year-end 2023, to accomplish this goal. We are fortunate enough to have accelerated most of those additions into 2022.

One item of note on our financial statements: One may wonder why the Stockholders Equity account is down $6.6 million when we earned $5.7 million so far this year. Some of the decrease is due to the shareholder dividends and stock repurchase earlier this year. However, most of the decrease is because of the temporary decline in the value of our bond portfolio due to interest rate increases. It reflected changes in the value of our bonds as an adjustment to the equity. Since the value changes are temporary, we excluded them from regulatory capital calculations. The bank capital is materially above well capitalized levels in all regulatory measures.


Bank Division Update

The banking division is having an exceptional year. Excellent year-over-year loan growth of $104 million, equally strong client deposit growth of over $100 million, and a very favorable deposit mix (meaning low-cost deposits) are driving YTD net interest income to an all-time high. Increases in interest rates by the Federal Reserve are helping as well, providing an additional tailwind to an already strong growth year. Asset quality remains very good with no loan charge-offs and $183 thousand in recoveries through September 30th. Year-to-date banking division net income of $6.7 million reflects a $1.5 million, or 29%, increase over the same period last year.

The effect of this year’s strong loan and deposit growth should continue driving much better than expected banking division revenue and net income through year-end. The extra volume is also setting us up well for 2023, helping offset what I expect to be less of a tailwind from the Fed. With interest rates already at 15+/- year highs, I expect the Fed to pause their rate increases for most of 2023. I also expect clients to aggressively manage their extra cash, moving money into higher rate deposits and/or using their extra cash to pay down lines of credit, as is typically done when interest rates materially increase. The exceptional 2022 banking division growth should help shield us from some effects of the market reaction. 


Trust & Family Office Division Update

The Trust & Family Office (“TFO”) division is also having a good year. However, very little of that success is showing up in the financial statements. Our main objectives in 2022 were to rebuild TFO after the departure of several RMs during COVID, build a best-in-class fiduciary division within TFO, and open TFO in Denver all while taking great care of existing clients and adding a record number of new clients. All the above has been accomplished, except for creating a TFO presence in Denver—stay tuned.

While the Fed interest rate increases are augmenting the banking division success, the opposite is happening in TFO. Year-to-date TFO division revenue is up $279 thousand from last year. That it’s up at all is an accomplishment. We added approximately $700 thousand in new client revenue so far this year, most of which has been offset by the worst combined stock and bond bear markets in over four decades. As of the end of September, the stock and bond bear markets are reducing monthly reoccurring revenue by approximately $90 thousand.

As Ronald Reagan said after the 1987 crash, “markets go up and markets go down”. In the long run, markets go up. That’s why we keep building TFO for the long run. Through September 30, we’ve added eight employees in TFO, a 25% increase from year-end 2022. Our in-house legal, tax, investment, and estate expertise are all more robust than ever. We are staffed to manage hundreds of millions more in fiduciary assets. Our Family Office practice has more relationship management and support capabilities than ever before. We are set up for growth and success, even if the markets aren’t ready to help us just yet.


Our Growing Team

We continue to invest in growing our team, adding ten new employees in Q3 2022.
Parkside most recently welcomed these exceptional team members:

Amanda Behnken
Loan Coordinator
Amanda joins us from Dieterich Bank, where she was a Commercial Portfolio Manager and Loan Assistant for the last 2 years. She received her Bachelor of Art degree in Accounting from Lindenwood University in 2019. Her banking experience, combined with her eagerness to learn and grow, makes her a wonderful addition to our Loan Coordinator team.
Kim Bremer
Trust & Family Office Coordinator
Kim has worked in banking over the last 11 years and most recently as a Private Wealth Advisor Associate with U.S. Bank. She started her banking career as a Personal Banker and Branch Manager before moving to the private wealth division in 2016. Kim’s experience and drive are a welcome addition to our growing Trust & Family Office Coordinator team.
Kayla Hartwig Executive Administrative Assistant
Kayla has worked as an Executive Assistant in the financial services industry for 8 years and as an Operations and Account Associate for several years prior to that. She graduated from Mizzou in 2008 with her Bachelor of Science in Business Administration and received her FPQP® certification in 2022. We are excited to have Kayla join our growing team, supporting both Curt Searcy and Justin Meyer within our Trust & Family Office division.
Austin Laslo
Trust & Family Office Analyst
Austin Laslo holds his Bachelor of Science degree in Finance from Missouri State University and his Certified Financial Planner (CFP®) certification. The last few years, he worked as a Client Service Specialist with Burke, Knoebber, Kohn & Associates. His knowledge, skills, and experience are a welcome addition to the team and the TFO division.
Jamie Maurer
Trust & Family Office Operations Specialist
Jamie has worked in elementary education as a librarian and preschool teacher for the last 7 years prior to joining Parkside. Prior to that, she held positions as an office manager and administrative assistant for several firms. Her eagerness to learn something new and challenge herself makes her a welcome addition to the Trust & Family Office Operations team.
Senior Vice President - Trust & Family Office Advisor
With over thirty years of diverse financial services experience, Allen’s extensive knowledge affords his clients unique insight and solutions to their most complex financial problems. Prior to joining Parkside, Allen served as Senior Vice President and Managing Director in the Private Wealth Management group of U.S. Bank. He earned his Bachelor of Science in Business Administration and Economics from Regis College and his Master of Business Administration, with an emphasis in Economics, from St. Louis University.
Samantha Peterson
Human Resources Generalist
While new to the finance industry, Samantha joins us with over 8 years of experience working in the Human Resources profession. Her most recent experience was with The Watering Bowl, where she worked as their Human Resources Manager. She has hands on experience in all HR-related areas, holds her SHRM-CP certification, and has a Bachelor of Science in Sociology. We are excited to have Samantha join our growing Human Resources team.
Ashley Przada Assistant Vice President - BSA & Compliance Officer
Ashley has been in the financial services industry for over ten years and most recently worked as a Senior Operational Risk Manager for Citi Bank. Prior to her role in Operational Risk Management, Ashley worked as a Quality Assurance Auditor. She has experience with internal control testing, banking regulations, root cause analysis, third party risk management, determining customer impact, monitoring ongoing issues, ensuring processes are up to date and efficient, and risk analysis. Ashley received her Bachelor of Science degree in Human Resource Management from Lindenwood University. We are excited to have Ashley as our BSA Officer and oversee compliance within our bank.
Alexandra Schenk Assistant Vice President - Director of Communications & Marketing
While new to the finance industry, Alex joins us with over 8 years of marketing experience in the professional services industry. She has a demonstrated history of creative brand development, social media engagement, digital marketing, content creation, strategic planning, and event and project management. She earned her Bachelor of Science in Marketing and International Business, and Minor in Studio Art with a Photography & Graphic Design/Illustration Concentration from Indiana University – Bloomington. We are excited to welcome Alex as our head of marketing and to lead our growing marketing team.
Hannah Wilkerson
Loan Operations Specialist
Hannah joins us from CNB St. Louis Bank, where she worked as a Loan Documentation Specialist for the last several years. She is a 2019 graduate from Illinois State University with a Bachelor of Science in Finance. Her documentation and community banking experience, as well as her education, make her a perfect fit for our growing loan department.

Financial Information

Investments are not insured by the FDIC or any federal government agency, provide no bank guarantee, are not a deposit and may lose value. *The Company is aware of the following recent transactions in the Company’s stock. No assurances can be given that such information reflects all transactions in the Company’s stock during the period or that such transactions accurately and completely reflect the value of the Company’s stock. Such information is provided for convenience and should not be relied upon. The Company does not make a market in or otherwise trade in its stock. However, the Company can assist in the settlement of transactions in its stock between buyers and sellers who have independently negotiated the terms of their transactions.

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