First Half of 2024 Shareholder Newsletter
Letter from the CEO
Dear Shareholders,
I hope this letter finds you doing well and enjoying a great summer.
The first half of 2024 has been a very eventful and exciting time here at Parkside. We remain highly focused on rapid growth within both our Banking division and our Trust & Family Office division. The success of our recent stock offering will bolster our ability to achieve our longer-term, aggressive growth plans, and set us up for significant net income improvement in the future.We are pleased with and extremely proud of the market acceptance of our stock offering. Interest in the offering exceeded the $25 million maximum by over $4 million. We managed to introduce some buyers and sellers, but still had to scale back a few purchases. We had a total of 157 buyers, of which 94 are new Parkside shareholders and 63 are existing Parkside shareholders. We now have a total of 370 shareholders across 17 states. For those of you who are new, welcome to the Parkside family!In the coming months, we will be implementing a new tool to assist us with managing our investor relations. We have partnered with My Private Shares, an online service that allows buyers and sellers of Parkside Financial, Inc. to communicate with one another regarding potential stock transactions. This will replace Banclist, which some of you are familiar with. Separate correspondence regarding this transition will be coming soon.I enjoyed speaking with many of you during the stock offering process and seeing some of you at our annual shareholders’ meeting.Should you have questions or comments, please contact me or any member of our outstanding Parkside team.Thank you, everyone, for your support!Sincerely,
James C. Wagner
Chief Executive Officer | Parkside Financial Bank & Trust
First Half of 2024 | Highlights
Parkside officially crossed over the $1 billion asset mark during the first half of 2024. Total assets were $1.04 billion as of June 30, 2024, an increase of $70 million over June 2023. The increase in assets was driven by strong loan growth of $122 million in our Banking division, partially offset by a $56 million decline in cash and investments as those assets were utilized to fund the 18% growth in loans.
While reaching the $1 billion asset mark brings some additional regulatory and reporting requirements we must adhere to going forward, the growth in assets is consistent with our longer-term plan and a testament to the outstanding work our expanded team has achieved.
As we discussed at our recent annual shareholders’ meeting and in the offering materials, our revenue continues to grow nicely, a direct result of the large investment we have made in personnel over the last two years:
- Banking division – YTD revenue increased $2.7 million, or 16%, to $19.0 million compared to $16.3 million in the same period last year.
- Trust & Family Office division – YTD revenue increased $1.1 million, or 27%, to $5.2 million compared to $4.1 million in the same period last year.
We have successfully accomplished our hiring objectives, adding 37 new team members over the last 30 months, bringing our current staffing level to 113. As we have shared with you in the past, these investments are an intentional part of our growth strategy and correlate directly to net income of $3.3 million, a slight decline of $166,000 for the first six months of 2024, compared to the same period last year.
With revenue continuing to increase while overhead growth slows, we expect material improvements in our bottom line starting immediately, resulting in an expected 25+% increase in calendar year 2024 net income compared to 2023. We also expect ongoing substantial net income increases for years to come, consistent with the information we published in the stock offering materials.
Parkside Financial Bank & Trust’s capital levels remain strong. The total risk-based capital ratio was 13.0% as of June 30, 2024, well above the 10.5% FDIC requirement. Similarly, the leverage ratio was 11.3% as of June 30, 2024, far exceeding the 5.0% FDIC requirement.
Banking Division
Our Banking division continues to experience substantial growth.
Total outstanding loans were $809 million as of June 30, 2024, reflecting year-to-date loan growth of $57 million, or 8%, and growth of $122 million, or 18%, from June of last year. Our expanded lending teams are continuing to see multiple new deal opportunities from different industries and asset classes across the Denver, St. Louis, and New Hampshire teams.
We have continued to see robust growth in client deposits, which were $700 million as of June 30, 2024, up nearly $108 million, or 18%, from June of last year. You will recall during the uncertainty experienced in the banking industry in early 2023, we added over $100 million in wholesale on-balance-sheet liquidity as a precaution. Most of that wholesale liquidity has now run off and returned to more normalized funding levels. Commensurate with our increased client deposits, we have seen a 26% increase in banking fee income for the first half of 2024.
We have continued to invest and implement value-added technology. During May, we successfully migrated our consumer clients to the Banno online banking platform and our business clients to the Banno interface. In the coming months, we will be preparing for conversion to the Banno Business and Treasury Management online platforms.
Trust & Family Office Division
Our Trust & Family Office (TFO) division continues to successfully grow managed assets, which reached $2.4 billion as of June 30, 2024, representing a 27% increase from June of last year. This growth is commensurate with the expansion of our team, new products being offered, and deployment of technology that is expected to bring efficiency and enhanced client service.
We are pleased to report we have now established a meaningful presence in our Denver TFO office, adding two exceptionally talented relationship managers and one support team member in the past nine months, bringing our Denver TFO team to a total of four. These new relationship managers, along with our existing TFO relationship managers and support teams, are expected to materially contribute to TFO’s future profitability. To that end, we have successfully reduced TFO’s year-to-date net loss by 25%, as compared to the same period last year.
Parkside Private Funds Series (“PPFS”) has closed its first fund, Parkside Real Estate Fund I, which aggregated nearly $43.0 million, and recently formed a second fund, Parkside Mezzanine Capital Fund I, which is targeted to exceed $30 million. As a reminder, PPFS was created to make owning a diversified pool of sector specific private placement investments easier and more efficient, simplifying the financial lives of investors. Parkside Mezzanine Capital Fund I is targeting investments in funds that provide financing in the form of debt and/or equity investments to companies within the United States. Please stay tuned for more information on this exciting new fund opportunity, which will launch this Fall.
In Closing
With the completion of our capital raise, we are highly focused on deploying that capital through ongoing growth opportunities while balancing risk. The excitement generated in the marketplace has provided great momentum for us. Our sales teams had the opportunity to speak with many individuals throughout the offering process. We expect continued business opportunities to come from those conversations regardless of whether those individuals chose to participate in the offering.
I believe we have arrived at the place where the steps we have taken to build our teams and infrastructure support will begin adding meaningful shareholder value in the immediate future and beyond.
We sincerely appreciate your ongoing commitment and support of Parkside!
Our Growing Team
We are thrilled to continue expanding our team!
Parkside most recently welcomed these exceptional employees in Q1 and Q2 2024:
|
Katie Adams
|
Trust & Family Office Coordinator |
|---|---|
|
Mayda Bell
|
Trust & Family Office Operations Specialist |
|
Melissa Boss
|
Vice President | Bank Operations Manager |
|
Rene Brooks
|
Commercial Credit Analyst |
| ThanhThanh Nguyen | Customer Service Representative |
| Chantelle Paul | Trust & Family Office Coordinator |
| Ben Reznik | Trust & Family Office Advisor |
| Tristan Sobey | Trust & Family Office Analyst/Coordinator |
| Jesse Wise | Vice President | CRA Officer |
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.