Overall, 2023 was another solid year for the Company, as we strategically positioned ourselves for continued rapid growth in net income starting in 2024, building on our foundation from 2022. Last year, we made our biggest annual investment in personnel to date, which demonstrated our commitment to building a talented and dedicated team. Our commitment to building out our infrastructure will ensure we are prepared to capitalize on opportunities as they arise.
To accommodate our growth in personnel, we’ve spent the last seven months remodeling the recently vacated fifth floor of our building. This space will be a welcome addition for client meetings and will house many of our operations and corporate services team members. We can’t wait for you to see it this spring when we hold our Open House.
I am also pleased to report we are seeing payoffs from our strategic investments in personnel and systems. We ended 2023 well positioned for a material increase in our financial performance for years to come. For starters, we are budgeting a 15% + increase in 2024 net income.
In 2023, Parkside Financial, Inc. earned a consolidated net income of $6 million, right in line with budget. Operating income was an impressive $12.7 million—$1.7 million higher than budget—marking our second-best year ever.
The year saw unprecedented growth in the Trust & Family Office (TFO) revenue, coupled with robust banking service charges and fee income, contributing to noninterest income of $11.3 million, representing an all-time high. Net interest income increased $4.7 million, or 17%. We successfully stabilized the net interest margin, reaching our targeted range of 3.75-4.00% by year-end 2023.
We ended the year with total assets of $952 million, having spent much of December above $1 billion. Year-end Trust & Family Office assets under management exceeded $2 billion.
We purchased 20,000 shares in the Parkside Financial, Inc. stock buyback program. We demonstrated our commitment to shareholder value by increasing dividends for the tenth consecutive year and paying a dividend of $1.15 per share.
Our commercial bank continues to exhibit consistently strong growth, with both loans and client deposits growing in a very competitive environment. We are experiencing well-diversified loan growth in St. Louis, Denver, and our New Hampshire Search Fund practice, as well as across diverse industries and asset classes. The extra capacity created with new lender additions in the last couple of years is augmenting the consistent growth generated by our legacy lending teams.
In 2023, commercial loans increased from $122 million, or 19%, to $752 million. This is the third year in a row of impressive loan growth. Client deposits ended the year at $714 million, $47 million more than budget.
Reserve for Loan Losses:
Loan loss reserves ended the year at $12.4 million, or 1.65% of total loans. Notably, because of our strong core performance, we could absorb the $1.8 million loan write-off we recorded earlier in 2023 and more than replenished our reserves by year end.
Trust & Family Office
Our Trust & Family Office added a record amount of new business in 2023, further solidifying our position as a trusted partner for our clients. For the year, TFO revenue increased $1.3 million, or 18%, to $8.9 million, which was $50 thousand more than budget.
Assets under management grew from $1.6 billion at the beginning of 2023 to $2.2 billion at year-end. We ended 2023 with annualized recurring revenue in excess of $9.5 million, setting us up for a strong start to 2024.
Our Growing Team
In 2023, Parkside witnessed its most significant expansion in the workforce since its inception. A total of 19 new employees joined our ranks, with eight supporting growth in our banking sector, five enhancing corporate services, and another six strengthening our Trust & Family Office.
Our Trust & Family Office also added a Rocky Mountain Division in our Denver office, and our Commercial Banking division grew with the addition of our Search Fund Lending Team in New Hampshire.
Parkside most recently welcomed these exceptional employees in Q4 2023:
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