UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                        COMMISSION FILE NUMBER 000-20867

                   For the fiscal year ended December 31, 2002

                               PARK BANCORP, INC.
             (Exact name of registrant as specified in its charter)

                                    DELAWARE
                            (State of incorporation)

                                   36-4082530
                        (IRS Employer Identification No.)

                   5400 SOUTH PULASKI ROAD, CHICAGO, ILLINOIS
                    (Address of Principal Executive Offices)

                                      60632
                                   (ZIP Code)

                                 (773) 582-8616
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:
                                      NONE

           Securities registered pursuant to Section 12(g) of the Act:
                     COMMON STOCK, $.01, PAR VALUE PER SHARE
                              (Title of each class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

                                Yes _X_    No ___

Indicate by check mark if disclosure of delinquent filers pursuant to item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /x/

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).

                                Yes _X_    No ___

The aggregate market value of common stock of the Registrant held by
non-affiliates was approximately $18,019,000 as of June 30, 2002.

As of March 12, 2003, the Registrant had outstanding 1,198,095 shares of common
stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

Selected portions of the definitive Proxy Statement for the Registrant's Annual
Meeting of Stockholders to be held on April 29, 2003 are incorporated into Part
III.


                                       1.
<PAGE>


                                     PART I

ITEM 1.       BUSINESS

GENERAL

Park Bancorp, Inc. ("the Company") is a bank holding company engaged in the
business of banking through its wholly owned subsidiary, Park Federal Savings
Bank ("the Bank"), and real estate development through its wholly owned
subsidiary, PBI Development Corporation ("PBI"). The Bank is engaged in the
business of retail banking, with operations conducted through its main office
and two branch offices located in Chicago and Westmont, Illinois. The Bank also
has two wholly owned subsidiaries, GPS Development Corp. ("GPS"), an Illinois
corporation that participates in residential real estate development projects,
and GPS Corporation, an Illinois corporation that conducts limited insurance
activities.

The Bank attracts retail deposits from the general public in the areas
surrounding its offices and invests those deposits, together with funds
generated from operations and other borrowings, primarily in fixed-rate,
one-to-four-family residential mortgage loans and securities. The Bank invests,
on a limited basis, in multi-family mortgage, commercial real estate,
construction, land, and consumer loans. The Bank's revenues are derived
principally from interest on its loans and securities. The Bank's primary
sources of funds are deposits, advances from the Federal Home Loan Bank
("FHLB"), securities sold under repurchase agreements, and principal and
interest payments on loans and securities.

MARKET AREA AND COMPETITION

The Bank is a community-oriented savings bank. The Bank's primary deposit
gathering area is concentrated in the communities surrounding its offices, while
its lending activities primarily include areas throughout Cook, DuPage, and Will
Counties.

The Bank's market area is both an urban and suburban area with the manufacturing
industry as the major industrial group, followed by the services sector, and
then the wholesale/retail sector. The Bank's Chicago offices are located in
diverse communities, which have a high percentage of customers of various ethnic
backgrounds. Management of the Bank believes that its urban communities are
stable, residential neighborhoods of predominantly one-to-four-family residences
and low to middle income families. The Bank's Westmont office is located in
DuPage County, which consists predominantly of middle to upper income families.

The Bank does not formally track real estate values or construction starts in
its primary market areas; however, the officers and directors of the Bank
maintain relationships with area contractors and real estate agents, which
enable them to continually monitor the trends in housing construction and real
estate sales in the Bank's primary market areas. In addition, the Bank obtains
information on real estate sales on a periodic basis through public records.
Management is not aware of any material adverse trends in real estate values in
its market area.


                                       2.
<PAGE>


The Bank's competition for loans comes principally from savings institutions,
mortgage banking companies, and commercial banks. Its most direct competition
for deposits has historically come from savings institutions, commercial banks,
and credit unions. In addition, the Bank faces increasing competition for
deposits and other financial products from nonbank institutions such as
brokerage firms and insurance companies in such areas as short-term money market
funds, mutual funds, and annuities.

LENDING ACTIVITIES

GENERAL. The Bank's loan portfolio consists primarily of conventional first
mortgage loans secured by one-to-four-family residences. At December 31, 2002,
the Bank had total gross loans outstanding of $154.3 million, of which $96.4
million were one-to-four-family residential mortgage loans, or 62.46% of the
Bank's total gross loans. The remainder of the portfolio consists of $18.0
million of multi-family mortgage loans, or 11.65% of total gross loans; $9.6
million of commercial real estate loans, or 6.23% of total gross loans; $11.2
million of construction and land loans, or 7.23% of total gross loans; and of
$19.1 million consumer and other loans, or 12.43% of total gross loans. The Bank
had no loans held for sale at December 31, 2002.

Loan Approval Procedures and Authority. The Board of Directors establishes the
lending policies of the Bank and delegates lending authority and responsibility
to the Executive Committee, a management committee of the Bank. All real estate
loans must be approved by the Executive Committee. The maximum loan amount is
$500,000 unless approved by the Board of Directors. Pursuant to Office of Thrift
Supervision ("OTS") regulations, loans to one borrower cannot exceed 15% of the
Bank's unimpaired capital and surplus without regulatory notification. The Bank
has no loans to one borrower that are in excess of regulatory limits.

All table amounts throughout the Form 10-K are in thousands except share and per
share data.



                                       3.
<PAGE>


The following table sets forth the composition of the Bank's loan portfolio in
dollar amounts and as a percentage of the portfolio at the dates indicated.

<TABLE>
<CAPTION>
                             -------------------------------------------------------At December 31,------------------------------
                             --------2002--------      --------2001---------      --------2000--------        -------1999--------
                             ----------------------------------------------------------------------------------------------------
                                        Percent                    Percent                   Percent                    Percent
                               Amount  of Total          Amount   of Total         Amount   of Total          Amount   of Total
                               ------  --------          ------   --------         ------   --------          ------   --------
<S>                        <C>            <C>        <C>             <C>        <C>            <C>       <C>             <C>
Real estate
    Residential
       One-to-four-
         family            $   96,351     62.46%     $   87,620      63.00%     $  71,375      70.23%    $    66,826     75.03%
       Multi-family            17,977     11.65          17,279      12.43         10,924      10.75           9,847     11.05
    Commercial                  9,607      6.23           8,548       6.15          5,316       5.23           3,756      4.22
    Construction and
      land                     11,159      7.23          10,668       7.67          9,130       8.98           6,076      6.82
Consumer and other             19,166     12.43          14,947      10.75          4,882       4.81           2,561      2.88
                           ----------   -------      ----------   --------      ---------    -------     -----------   -------

    Total loans, gross        154,260    100.00%        139,062     100.00%       101,627     100.00%         89,066    100.00%
                                         =======                   ========                   =======                   =======

Undisbursed portion
  of loans                     (5,226)                   (3,329)                   (3,763)                   (1,543)
Deferred loan
  origination fees
  and unamortized
  premiums                       (467)                     (445)                     (347)                      (331)
Allowance for
  loan losses                    (574)                     (500)                     (500)                      (500)
                           ----------                ----------                 ---------                -----------

    Total loans, net       $  147,993                $  134,788                 $  97,017                $    86,692
                           ==========                ==========                 =========                ===========
</TABLE>


[WIDE TABLE CONTINUED FROM ABOVE]

<TABLE>
<CAPTION>
                           -----At December 31,---
                           ---------1998----------
                           -----------------------
                                          Percent
                               Amount    of Total
                               ------    --------
<S>                        <C>             <C>
Real estate
    Residential
       One-to-four-
         family            $   60,103      77.51%
       Multi-family             9,947      12.83
    Commercial                  3,200       4.12
    Construction and
      land                      1,963       2.53
Consumer and other              2,333       3.01
                           ----------   --------

    Total loans, gross         77,546     100.00%
                                           ======

Undisbursed portion
  of loans                       (910)
Deferred loan
  origination fees
  and unamortized
  premiums                       (360)
Allowance for
  loan losses                    (500)
                           ----------

    Total loans, net       $   75,776
                           ==========
</TABLE>


                                       4.
<PAGE>


LOAN MATURITY. The following table shows the contractual maturity of the Bank's
gross loans at December 31, 2002. The table does not include the effect of
possible prepayments.

<TABLE>
<CAPTION>
                                     -----------------Real Estate Loans----------------
                                      One-to-                              Construction   Consumer        Total
                                       Four-       Multi-                       and          and          Loans
                                      Family       Family      Commercial      Land         Other       Receivable
                                     --------     ---------    ---------    ---------    ----------     ----------
<S>                                  <C>          <C>          <C>          <C>          <C>            <C>
Amounts due
    One year or less                 $    499     $      --    $     423    $   7,383    $    6,224     $   14,529
    After one year
       More than one year
         to three years                   305           996        1,149        3,746         2,311          8,507
       More than three years
         to five years                    881         7,664          913           30        10,378         19,866
       More than five years
         to ten years                   3,785         2,562        3,530           --           116          9,993
       More than ten years
         to twenty years               30,925         6,218        3,592           --           137         40,872
       More than twenty years          59,956           537           --           --            --         60,493
                                     --------     ---------    ---------    ---------    ----------     ----------

          Total due after
            December 31, 2003          95,852        17,977        9,184        3,776        12,942        139,731
                                     --------     ---------    ---------    ---------    ----------     ----------

              Gross loans
                receivable           $ 96,351     $  17,977    $   9,607    $  11,159    $   19,166     $  154,260
                                     ========     =========    =========    =========    ==========     ==========
</TABLE>

The following table sets forth at December 31, 2002 the dollar amount of total
gross loans receivable contractually due after December 31, 2003 and whether
such loans have fixed interest rates or adjustable interest rates.

                                       ---Due After December 31, 2003--
                                       --------------------------------
                                         Fixed   Adjustable     Total
                                       --------   --------     --------
    Real estate loans
       Residential
           One-to-four-family          $ 90,286   $  5,566     $ 95,852
           Multi-family                  17,598        379       17,977
        Commercial                        9,184         --        9,184
        Construction and land             3,776         --        3,776
     Consumer and other                  11,438      1,504       12,942
                                       --------   --------     --------

        Total gross loans receivable   $132,282   $  7,449     $139,731
                                       ========   ========     ========

ORIGINATION AND PURCHASE OF LOANS. The Bank's mortgage lending activities are
conducted through its home office and two branch offices. Although the Bank
offers adjustable-rate mortgage loans, the substantial majority of the Bank's
loan originations are fixed-rate mortgage loans. While the Bank retains for its
portfolio all of the mortgage loans that it originates, the Bank may, in the
future, sell mortgage loans that it originates depending on market conditions
and the financial condition of the Bank. The Bank has purchased loans or
participated in loans originated by other institutions based upon the Bank's
investment needs and market opportunities.


                                       5.
<PAGE>


The following table sets forth the Bank's loan originations, purchases, and
principal repayments for the periods indicated:

                                               For the Year Ended December 31,
                                             ----------------------------------
                                               2002        2001          2000
                                             ----------------------------------

     Beginning balance, net                  $134,788     $ 97,017     $ 86,692
        Loans originated
            One-to-four-family                 30,553       31,585       11,039
            Multi-family                        4,860        8,728        2,710
            Commercial                          3,393        3,354        6,062
            Construction and land               9,832        7,113       10,032
            Consumer and other                  2,570          616        1,316
                                             --------     --------     --------
               Total loans originated          51,208       51,396       31,159
        Loans purchased                        16,238       10,144          656
                                             --------     --------     --------
                                               67,446       61,540       31,815

     Principal payments                       (52,270)     (24,203)     (19,270)
     Change in allowance for loan losses          (74)          --           --
     Change in undisbursed loans               (1,897)         434       (2,220)
                                             --------     --------     --------

        Ending balance, net                  $147,993     $134,788     $ 97,017
                                             ========     ========     ========

One-to-Four-Family Mortgage Lending. The Bank offers mortgage loans secured by
one-to-four-family residences located in the Bank's primary market area. Loan
applications are obtained by the Bank's loan officers through their contacts
with the local real estate industry, customers, and members of the local
communities. The Bank's policy is to originate one-to-four-family residential
mortgage loans in amounts up to 80% of the lower of the appraised value or the
selling price of the property securing the loan and up to 95% of the appraised
value or selling price if private mortgage insurance is obtained. The
residential mortgage loans originated by the Bank are for maturity terms of up
to 30 years.

The Bank offers adjustable rate mortgage ("ARM") loans as a means of reducing
its exposure to changes in interest rates. However, the volume and types of ARM
loans originated by the Bank have been affected by such market factors as the
level of interest rates, competition, consumer preferences, and the availability
of funds. In recent years, the Bank has not originated a significant amount of
ARM loans as compared to its originations of fixed-rate loans. ARM loans pose
credit risks different from the risks inherent in fixed rate loans, primarily
because as interest rates rise, the underlying payments of the borrower rise,
thereby increasing the potential for default. The ARM loans currently offered by
the Bank do not provide for initial deep discount "teaser" interest rates.
Although the Bank will continue to offer ARM loans, there can be no assurance
that in the future the Bank will be able to originate a sufficient volume of ARM
loans to constitute a significant portion of the Bank's loan portfolio.

Multi-Family Lending. The Bank originates multi-family mortgage loans secured by
properties located in the Bank's primary market area. The amount of multi-family
loans originated by the Bank depends upon market conditions.


                                       6.
<PAGE>


Pursuant to the Bank's current underwriting policies, a multi-family mortgage
loan may be made in an amount up to 80% of the appraised value of the underlying
property. In addition, the Bank generally requires a debt service ratio of 120%.
Properties securing a multi-family loan are appraised by an independent
appraiser. Title and property insurance are required on all multi-family loans.

The Bank's underwriting policies require that the borrower be able to
demonstrate strong management skills and the ability to maintain the property
for current rental income. The borrower is required to present evidence of the
ability to repay the mortgage and a satisfactory credit history. In making its
assessment of the creditworthiness of the borrower, the Bank reviews the
financial statements and the employment and credit history of the borrower as
well as other related documentation. Loans secured by multi-family residential
properties generally involve a greater degree of risk than one-to-four-family
residential mortgage loans. Because payments on loans secured by multi-family
properties are often dependent on successful operation or management of the
properties, repayment of such loans may be subject to a greater extent to
adverse conditions in the real estate market or the economy. The Bank seeks to
minimize these risks through its underwriting policies, which require such loans
to be qualified at origination on the basis of the property's income and debt
coverage ratio.

Commercial Real Estate Lending. The Bank originates commercial real estate loans
that are generally secured by properties used for business purposes such as
small office buildings or retail facilities located in its primary market areas.
The Bank's underwriting procedures provide that commercial real estate loans may
be made in amounts up to the lesser of 80% of the appraised value of the
property or the sales price. The Bank has generally required that the properties
securing commercial real estate loans have debt service coverage ratios of 120%.

Loans secured by commercial real estate properties are generally larger and
involve a greater degree of risk than one-to-four-family residential mortgage
loans. Because payments on loans secured by commercial real estate properties
are often dependent on successful operation or management of the properties,
repayment of such loans is subject to adverse conditions in the real estate
market or the economy. The Bank seeks to minimize these risks through its
underwriting standards, which require such loans to be qualified on the basis of
the property's income and debt service ratio.

Construction and Land Lending. The Bank originates construction and land loans
in its primary market areas. The Bank's construction loans primarily are made to
finance development of one-to-four-family residential properties. These loans
are generally fixed-rate loans with maturities of one year or less. The Bank's
policies provide that construction loans may be made in amounts up to 80% of the
appraised value of the property for construction of one-to-four-family
residences. The Bank requires an independent appraisal of the property. Loan
proceeds are disbursed in increments as construction progresses and as regular
inspections warrant. Land loans generally do not exceed 75% of the actual cost
or current appraised value of the property, whichever is less.


                                       7.
<PAGE>


Construction lending may be viewed as involving a greater degree of risk than
one-to-four-family mortgage lending. The repayment of the construction loan is,
to a great degree, dependent upon the successful and timely completion of the
construction of the subject property. Construction delays or the financial
impairment of the builder may further impair the borrower's ability to repay the
loan.

Consumer and Other Lending. The Bank's consumer and other loans generally
consist of automobile loans, second mortgage loans, loans secured by deposits,
commercial lines of credit secured by real estate, and loans and participations
purchased.

The Bank purchases one-to-four-family mortgage loans and loan participations
from other financial institutions in its primary market area. At December 31,
2002, the Bank had $15.2 million in purchased mortgage loans and loan
participations serviced by others, totaling 9.9% of the total loan portfolio at
that date, primarily secured by one-to-four-family residences. The Bank may
purchase loans to supplement reduced loan demand as needed and must meet the
same underwriting criteria as loans originated by the Bank.

Delinquencies and Classified Assets. The Board of Directors and management
perform a monthly review of all loans sixty days or more past due. The
procedures taken by the Bank with respect to delinquencies vary depending on the
nature of the loan and period of delinquency. The Bank sends the borrower a
written notice of nonpayment after the loan is first past due. If the loan is
not brought current and it becomes necessary to take legal action, which occurs
after a loan is delinquent at least 60 days, the Bank may commence foreclosure
proceedings. If a foreclosure action is instituted and the loan is not brought
current, paid in full, or refinanced before the foreclosure sale, the real
property securing the loan is foreclosed upon and sold.

Federal regulations and the Bank's Classification of Assets Policy require that
the Bank utilize an internal asset classification system as a means of reporting
problem and potential problem assets. The Bank currently classifies problem and
potential problem assets as "Substandard," "Doubtful," or "Loss" assets,
depending upon the severity of the delinquency status or repayment capacity of
the borrower. The likelihood of collection on the loan declines with each
classification, and assets classified as "Loss" are those considered
"uncollectible" and of such little value that their continuance as assets
without the establishment of a specific loss allowance is not warranted. Assets
that do not currently expose the Bank to sufficient risk to warrant
classification in one of the aforementioned categories but possess weaknesses
are designated "Special Mention."

The Bank's Executive Committee reviews and classifies the Bank's assets monthly
and reports the results of its review to the Board of Directors. The Bank
classifies assets in accordance with the management guidelines described above.
At December 31, 2002, the Bank had $77,000 of assets classified as "Special
Mention," $158,000 of assets classified as "Substandard", and $55,000 of assets
classified as "Doubtful", no assets were classified as "Loss."


                                       8.
<PAGE>


NON-ACCRUAL AND PAST-DUE LOANS. The following table sets forth information
regarding nonaccrual loans, troubled-debt restructurings, and other real estate
owned ("REO"). It is the policy of the Bank to cease accruing interest on loans
90 days or more past due. For the years ended December 31 presented below, the
amount of interest income that would have been recognized on nonaccrual loans is
immaterial to the financial statements.

<TABLE>
<CAPTION>
                                         -------------------At December 31,----------------
                                          2002        2001       2000       1999      1998
                                         -------     -------    -------    ------    ------
<S>                                      <C>         <C>        <C>        <C>       <C>
Nonaccrual loans
     Residential real estate
         One-to-four-family              $   235     $   122    $   457    $   --    $  188
         Multi-family                         --          --         --        --        --
     Commercial                               --          --         --        --        --
     Construction and land                    --          --         --        --        --
     Consumer and other                       --          --          1        63        --
                                         -------     -------    -------    ------    ------
Total nonaccrual loans                       235         122        458        63       188
REO                                           55          --         --        --        --
                                         -------     -------    -------    ------    ------

Total nonperforming assets               $   290     $   122    $   458    $   63    $  188
                                         =======     =======    =======    ======    ======
</TABLE>

At December 31, 2002, there were five loans totaling $425,000 that were 60 to 89
days delinquent.

<TABLE>
<CAPTION>
                                         -------------------At December 31,----------------
                                          2002        2001       2000       1999      1998
                                         -------     -------    -------    ------    ------
<S>                                      <C>         <C>        <C>        <C>       <C>
Allowance for loan losses as a
  percent of gross loans receivable         0.37%       0.36%      0.49%     0.56%     0.64%

Allowance for loan losses as a per-
   cent of total nonperforming loans      244.26      409.84     109.17    793.65    265.96

Nonperforming loans as a percent of
  gross loans receivable(1)                 0.15        0.09       0.45      0.07      0.24

Nonperforming assets as a percentage
  of total assets(1)                        0.12        0.05       0.19      0.03      0.09
</TABLE>

(1)Nonperforming assets consist of nonperforming loans and REO. Nonperforming
   loans consist of all loans 90 days or more past due.

ALLOWANCE FOR LOAN LOSSES. The allowance for loan losses is established through
a provision for loan losses based on management's evaluation of the risks
inherent in the loan portfolio, its classifications of individual loans, and the
general economy. The allowance for loan losses is maintained at an amount
management considers adequate to cover losses on loans receivable that are
deemed probable and estimable. The allowance is based upon a number of factors,
including current economic conditions, actual loss experience, and industry
trends. In addition, various regulatory agencies, as an integral part of their
examination process, periodically review the Bank's allowance for loan losses.
Such agencies may require the Bank to make additional provisions for loan losses
based upon information available at the time of the review. The Bank will
continue to monitor and modify the allowance for loan losses as conditions
dictate.


                                       9.
<PAGE>


The following table sets forth activity in the Bank's allowance for loan losses
for the years set forth in the table.

<TABLE>
<CAPTION>
                                          2002          2001           2000           1999            1998
                                      -----------    -----------     -----------    -----------    -----------
<S>                                   <C>            <C>             <C>            <C>            <C>
Balance at beginning of year          $       500    $       500     $       500    $       500    $       500
Provision for loan losses                     120             --              --             --             --
Charge-offs
    One-to-four-family                        (19)            --              --             --             --
    Consumer and other                        (27)            --              --             --             --
                                      -----------    -----------     -----------    -----------    -----------
       Total                                  574             --              --             --             --
Recoveries                                      -             --              --             --             --
                                      -----------    -----------     -----------    -----------    -----------

Balance at end of year                $       574    $       500     $       500    $       500    $       500
                                      ===========    ===========     ===========    ===========    ===========

Net charge-offs to average
  gross loans outstanding                    0.03%            --%             --%            --%            --%
</TABLE>


                                      10.
<PAGE>


The following table sets forth the amount of the Bank's allowance for loan
losses, the percent of allowance for loan losses to total allowance, and the
percent of gross loans to total gross loans in each of the categories listed at
the dates indicated.

<TABLE>
<CAPTION>
                             -------------------------------At December 31,------------------------------
                                                            ---------------

                             ----------------2002-----------------   ---------------2001-----------------
                                             ----                                   ----
                                                        Percent of                             Percent of
                                                          Gross                                  Gross
                                                         Loans in                               Loans in
                                                           Each                                   Each
                                         Percent of      Category               Percent of      Category
                                          Allowance      to Total                Allowance      to Total
                                          to Total        Gross                  to Total        Gross
                                Amount    Allowance       Loans      Amount      Allowance       Loans
                              ---------------------------------------------------------------------------
<S>                              <C>        <C>           <C>         <C>          <C>           <C>
One-to-four-family               $241       41.99%        62.46%      $190         38.00%        63.00%
Multi-family                       90       15.68         11.65         60         12.00         12.43
Commercial                         48        8.36          6.23         59         11.80          6.15
Construction and land              57        9.93          7.23         57         11.40          7.67
Consumer and other                138       24.04         12.43         69         13.80         10.75
Unallocated                        --          --            --         65         13.00            --
                                 ----      ------       -------       ----       -------       -------

   Total allowance for loan
     losses                      $574      100.00%       100.00%      $500        100.00%       100.00%
                                 ====      ======       =======       ====       =======       =======
</TABLE>


[WIDE TABLE CONTINUED FROM ABOVE]

<TABLE>
<CAPTION>
                             ------------------------------At December 31,---------------------------
                                                           ---------------

                             ------------2000------------------   -------------1999------------------
                                         ----                                  ----
                                                     Percent of                            Percent of
                                                       Gross                                  Gross
                                                      Loans in                              Loans in
                                                        Each                                  Each
                                     Percent of       Category             Percent of       Category
                                      Allowance       to Total              Allowance       to Total
                                      to Total         Gross                 to Total        Gross
                             Amount   Allowance        Loans      Amount     Allowance       Loans
                             ------------------------------------------------------------------------
<S>                           <C>       <C>            <C>         <C>          <C>          <C>
One-to-four-family            $177       35.40%        70.23%      $267         53.40%       75.03%
Multi-family                    55       11.00         10.75         98         19.60        11.05
Commercial                      60       12.00          5.23         38          7.60         4.22
Construction and land           54       10.80          8.98         61         12.20         6.82
Consumer and other              49        9.80          4.81         11          2.20         2.88
Unallocated                    105       21.00            --         25          5.00           --
                              ----      ------       -------       ----       -------       ------

   Total allowance for loan
     losses                   $500      100.00%       100.00%      $500        100.00%      100.00%
                              ====      ======       =======       ====       =======       ======
</TABLE>


[WIDE TABLE CONTINUED FROM ABOVE]

<TABLE>
<CAPTION>
                             -------At December 31,----------
                                    ---------------

                             ------------1998----------------
                                         ----
                                                   Percent of
                                                      Gross
                                                    Loans in
                                                      Each
                                     Percent of     Category
                                      Allowance     to Total
                                      to Total        Gross
                             Amount   Allowance       Loans
                             --------------------------------
<S>                           <C>        <C>          <C>
One-to-four-family            $301       60.20%       77.51%
Multi-family                    99       19.80        12.83
Commercial                      32        6.40         4.12
Construction and land           20        4.00         2.53
Consumer and other              11        2.20         3.01
Unallocated                     37        7.40           --
                              ----      ------       ------

   Total allowance for loan
     losses                   $500      100.00%      100.00%
                              ====      ======       ======
</TABLE>


                                      11.
<PAGE>


INVESTMENT ACTIVITIES

The investment policies of the Company and the Bank as established by the Board
of Directors attempt to provide and maintain liquidity, generate a favorable
return on investments without incurring undue interest rate and credit risk, and
complement the Bank's lending activities. The policies provide the authority to
invest in United States Treasury and federal agency securities, mortgage-backed
securities, corporate bonds, municipal securities, and equity securities.

Investments in mortgage-backed securities involve a risk that actual prepayments
will be greater than estimated prepayments over the life of the security, which
may require adjustments to the amortization of any premium or accretion of any
discount relating to such instruments, thereby reducing or increasing,
respectively, the net yield on such securities. There is also reinvestment risk
associated with the cash flows from such securities. In addition, the market
value of debt securities may be adversely affected by changes in interest rates.

The following table sets forth information regarding the carrying amount and
fair values of the Company's securities at the dates indicated.

<TABLE>
<CAPTION>
                                    ------------------------------At December 31,-------------------------------
                                                                  ---------------
                                    -----------2002--------   ----------2001--------    ----------2000----------
                                               ----                     ----                      ----
                                      Carrying       Fair       Carrying       Fair       Carrying        Fair
                                       Amount        Value       Amount        Value       Amount         Value
---------------------------------------------------------------------------------------------------------------
<S>                                 <C>          <C>          <C>          <C>          <C>          <C>
Available-for-sale
    U.S. government agency notes    $        --  $       --   $   29,627   $   29,627   $  103,691   $  103,691
    Corporate bonds                      18,080      18,080       15,052       15,052           --           --
    Mortgage-backed securities
       FNMA (1)                          16,220      16,220        5,156        5,156        7,842        7,842
       FHLMC (2)                         17,750      17,750        8,641        8,641       10,771       10,771
    Municipal securities                  1,259       1,259        1,415        1,415        1,036        1,036
    Equity securities                     7,804       7,804        5,813        5,813        1,880        1,880
                                    -----------  ----------   ----------   ----------   ----------   ----------

       Total available-for-sale     $    61,113  $   61,113   $   65,704   $   65,704   $  125,220   $  125,220
                                    ===========  ==========   ==========   ==========   ==========   ==========
</TABLE>

(1)  Federal National Mortgage Association.

(2)  Federal Home Loan Mortgage Corporation.





                                      12.
<PAGE>


The table below sets forth certain information regarding the carrying amount,
weighted average yields, and contractual maturities of the Company's securities
and mortgage-backed securities as of December 31, 2002. All of the Company's
securities are classified as available-for-sale. Equity securities have no
stated maturity and are included in the total column only.

<TABLE>
<CAPTION>
                        ---------------------------------------------At December 31, 2002-------------------------------------------
                                                                     --------------------
                                                  More than One        More than Five          More than
                          One Year or Less     Year to Five Years    Years to Ten Years        Ten Years               Total
                        --------------------  --------------------  --------------------  --------------------  --------------------

                                    Weighted              Weighted              Weighted              Weighted              Weighted
                        Carrying     Average  Carrying     Average  Carrying     Average  Carrying     Average  Carrying     Average
                         Amount      Yield     Amount      Yield     Amount      Yield     Amount      Yield     Amount      Yield
------------------------------------------------------------------------------------------------------------------------------------
Securities
<S>                      <C>         <C>       <C>         <C>        <C>        <C>       <C>         <C>        <C>        <C>
 Corporates              $    --         --%   $18,080       4.83%   $    --         --%   $    --         --%   $18,080       4.83%
 Municipal securities         --         --         --         --        608       4.15        651       5.18      1,259       4.68
 Equity securities            --         --         --         --         --         --         --         --      7,804       2.76
                         -------    -------    -------    -------    -------    -------    -------    -------    -------    -------

   Total securities      $    --         --%   $18,080       4.83%   $   608       4.15%   $   651       5.18%   $27,143       4.23%
                         =======    =======    =======    =======    =======    =======    =======    =======    =======    =======


Mortgage-backed
  securities
   FNMA                  $   168       6.14%   $ 1,221       5.82%   $   564       6.07%   $14,267       4.83%   $16,220       4.96%
   FHLMC                      --         --      5,108       5.42      1,790       5.29     10,852       4.31     17,750       4.73
                         -------    -------    -------    -------    -------    -------    -------    -------    -------    -------

   Total mortgage-
    backed securities    $   168       6.14%   $ 6,329       5.50%   $ 2,354       5.48%   $25,119       4.61%   $33,970       4.84%
                         =======    =======    =======    =======    =======    =======    =======    =======    =======    =======
</TABLE>


                                      13.
<PAGE>


SOURCES OF FUNDS

GENERAL. Deposits, loan payments, cash flows generated from operations, and FHLB
advances are the primary sources of the funds used in lending, investing, and
for other general purposes.

DEPOSITS. The Bank offers a variety of deposit accounts with a range of interest
rates and terms. The Bank's deposits consist of passbook savings, NOW accounts,
money market accounts, and certificates of deposit. The flow of deposits is
influenced significantly by general economic conditions, changes in money market
rates, prevailing interest rates, and competition. At December 31, 2002, the
Bank had $81.1 million of certificate accounts maturing in a year or less. The
Bank's deposits are obtained predominantly from the areas surrounding its
banking offices. The Bank relies primarily on customer service and competitive
rates to attract and retain these deposits.

The following table presents the deposit activity of the Bank for the years
indicated:

                                            ------Years Ended December 31,------
                                                  ------------------------
                                               2002         2001         2000
                                               ----         ----         ----

  Net deposits (withdrawals)                $  (4,443)   $   9,145    $  (3,820)
  Interest credited on deposit accounts         5,337        5,956        6,118
                                            ---------    ---------    ---------

      Total increase in deposit accounts    $     894    $  15,101    $   2,298
                                            =========    =========    =========

At December 31, 2002, the Bank had $16.0 million in certificate accounts in
amounts of $100,000 or more maturing as follows:

                                                           Weighted
                                                            Average
          Maturity Period                     Amount         Rate
          ---------------                   -----------    --------
     Three months or less                   $     3,036        3.69%
     Over three through six months                2,207        3.24
     Over six through twelve months               7,022        3.42
     Over twelve months                           3,693        4.24
                                            -----------    --------

         Total                              $    15,958        3.64%
                                            ===========    ========


                                      14.
<PAGE>


The following table sets forth the distribution of the Bank's deposit accounts
for the years indicated.

<TABLE>
<CAPTION>
                                         ---------------------------------December 31,---------------------------------
                                                                          ------------
                                         ---------2002---------      ---------2001---------      --------2000----------
                                                  ----                        ----                       ----
                                                      Percent of                  Percent of                  Percent of
                                          Amount         Total        Amount         Total        Amount         Total
                                         --------      --------      --------      --------      --------      --------
<S>                                      <C>              <C>        <C>              <C>        <C>              <C>
Passbook accounts                        $ 34,626         21.12%     $ 33,543         20.57%     $ 32,416         21.91%
Money market savings accounts               8,576          5.23         7,901          4.85         6,548          4.42
NOW accounts                                8,804          5.37         8,316          5.10         8,167          5.52
Non-interest-bearing accounts               4,478          2.73         4,915          3.01         3,904          2.64
                                         --------      --------      --------      --------      --------      --------
     Total transaction accounts            56,484         34.45        54,675         33.53        51,035         34.49

Certificate accounts
     1.00% to 1.99%                         7,299          4.45            --            --            --            --
     2.00% to 2.99%                        32,619         19.89         8,951          5.49            --            --
     3.00% to 3.99%                        47,111         28.73        14,499          8.89         1,016           .69
     4.00% to 4.99%                        13,528          8.25        22,167         13.59         5,418          3.66
     5.00% to 5.99%                         3,753          2.29        33,750         20.70        34,886         23.58
     6.00% to 6.99%                         3,174          1.94        28,019         17.18        52,976         35.80
     7.00% to 7.99%                            --            --         1,013          0.62         2,642          1.78
                                         --------      --------      --------      --------      --------      --------

         Total certificate accounts       107,484         65.55       108,399         66.47        96,938         65.51
                                         --------      --------      --------      --------      --------      --------

              Total deposits             $163,968        100.00%     $163,074        100.00%     $147,973        100.00%
                                         ========      ========      ========      ========      ========      ========
</TABLE>

The following table presents, by various rate categories, the amount of
certificate accounts outstanding at the dates indicated and the periods to
maturity of the certificate accounts outstanding at December 31, 2002.

<TABLE>
<CAPTION>
                        -------------------------Period to Maturity from December 31, 2002--------------------------
                                                 -----------------------------------------
                        Less than       1 to          2 to          3 to          4 to        More than
                         1 Year        2 Years       3 Years       4 Years       5 Years       5 Years       Total
                        --------      --------      --------      --------      --------      --------      --------
Certificate accounts
<S>                     <C>           <C>           <C>           <C>           <C>           <C>           <C>
1.00% to 1.99%          $  6,037      $  1,262      $     --      $     --      $     --      $     --      $  7,299
2.00% to 2.99%            29,346         2,988           262            --            23            --        32,619
3.00% to 3.99%            37,776         3,997         4,425            43           846            24        47,111
4.00% to 4.99%             5,642         1,965         1,938           575         3,400             8        13,528
5.00% to 5.99%             1,881         1,379           296            48           149            --         3,753
6.00% to 6.99%               425         1,292           268            12         1,177            --         3,174
                        --------      --------      --------      --------      --------      --------      --------
   Total                $ 81,107      $ 12,883      $  7,189      $    678      $  5,595      $     32      $107,484
                        ========      ========      ========      ========      ========      ========      ========
</TABLE>


                                      15.
<PAGE>


BORROWINGS. Although deposits are the Bank's primary source of funds, the Bank's
policy has been to utilize borrowings, such as advances from the FHLB.

The Bank obtains advances from the FHLB upon the security of its capital stock
in the FHLB of Chicago and certain of its mortgage loans. Such advances are made
pursuant to several different credit programs, each of which has its own
interest rate and range of maturities. The maximum amount that the FHLB will
advance to member institutions fluctuates in accordance with the policies of the
OTS and the FHLB. There were $43.7 million of FHLB advances outstanding at
December 31, 2002, which carry interest rates ranging from 1.44% to 6.28% and
mature on various dates, with $32.0 million subject to certain call options by
the FHLB.

The Company's borrowings also include collateralized borrowings through
securities sold under repurchase agreements. The Company maintains physical
control over the securities.

Information concerning securities sold under agreements to repurchase is
summarized as follows:
                                                        2002         2001
                                                        ----         ----

   Balance at year end                               $ 10,599     $ 10,658
   Maximum month-end balance during the year           10,775       18,686
   Average balance during the year                     10,509       13,878
   Average interest rate at year end                     3.24%        4.42%
   Average interest rate during the year                 3.81         5.59

SUBSIDIARY ACTIVITIES

The Company engages in the business of purchasing unimproved land for
development into residential subdivisions of primarily single-family lots
through their wholly owned subsidiaries, PBI and GPS. The Company has been
engaged in this activity since 1985 and, since that time, has developed and sold
over 600 units in five different subdivisions in the Chicago metropolitan area.
PBI and GPS provide all of the capital for a project in exchange for an
ownership interest that entitles them to a percentage of the profit or loss
generated by the joint venture. PBI and GPS have an interest in the net profit
of each joint venture with the percentage based upon a number of factors,
including characteristics of the venture, the perceived risks involved, and the
time to completion. The net profit distributions are defined in the joint
venture agreement as the gross profits from sales, less all expenses, loan
repayments, capital contributions, and an agreed-upon rate of return to PBI and
GPS on such capital contribution.

During 2001, GPS was involved in the Prairie Ridge development, located in
Naperville, Illinois. This project consisted of 88 single-family lots. As of
December 31, 2001, all 88 lots were sold. PBI was involved in the Prairie Trail
South development located in Batavia, Illinois. The project consisted of 96
single-family lots. As of December 31, 2001, all 96 lots were sold.

Real estate development activities involve risks that could have an adverse
effect on the profitability of the Bank. PBI and GPS incur substantial costs to
acquire, improve, and market the land prior to commencement of construction.
There are negative cash flows in the early stages of the project as development
costs are incurred. Positive cash flows do not occur until sales of the lots are
closed. During the construction phase, a number of factors could result in cost
overruns, which could decrease or possibly eliminate the potential profit from
the project. In addition, the profit potential on any given project may cease if
the project is not completed, the underlying value of the project or the general
market area declines, the project is not sold or is sold over a longer period of
time than


                                      16.
<PAGE>


initially contemplated, or a combination of these factors occurs. Additionally,
the ability to generate income from such projects is dependent, in part, on the
economy of the metropolitan Chicago area. Although the economy has been stable
in recent years, there can be no assurance that it will continue to be
favorable. For the years ended December 31, 2002, 2001, and 2000, gains on the
sales of real estate held for development totaled $0, $13,000, and $318,000,
respectively.

EMPLOYEES

At December 31, 2002, the Company had 52 full-time equivalent employees. None of
the Company's employees are represented by any collective bargaining group.
Management considers its relationship with employees to be excellent.

REGULATION

The Bank is subject to extensive regulation, examination, and supervision by the
OTS, as its chartering agency, and the Federal Deposit Insurance Corporation
("FDIC"), as the deposit insurer. The Bank's deposit accounts are insured up to
applicable limits by the FDIC. The Bank must file reports with the OTS and the
FDIC concerning its activities and financial condition in addition to obtaining
regulatory approvals prior to establishing branches or entering into certain
transactions such as mergers with or acquisitions of other financial
institutions. The Bank is required to provide notice to the OTS before making
certain dividend payments. Periodic examinations by the OTS and the FDIC test
the Bank's compliance with various regulatory requirements. The regulators may
require the Bank to take certain actions or refrain from engaging in certain
activities, if the Bank fails to meet certain regulatory requirements. The
Company, as a savings bank holding company, is also required to file certain
reports and otherwise comply with the rules and regulations of the OTS and the
Securities and Exchange Commission ("SEC") under the federal securities laws.
This regulation and supervision establish a comprehensive framework of
activities in which a depository institution and its holding company can engage
and are intended for the protection of the insurance fund and depositors, rather
than the stockholders of the Company. The regulatory authorities have extensive
discretion in connection with their supervisory and enforcement activities and
examination policies, including policies with respect to the classification of
assets, the maintenance of capital levels, and the establishment of adequate
loan loss allowances for regulatory purposes. Any change in the regulatory
structure, the applicable statutes, regulations or policies, whether by the OTS,
the FDIC, the SEC, or the Congress, could have a material impact on the Company
and the Bank and their operations.

RECENT FEDERAL LEGISLATIVE INITIATIVES. PATRIOT ACT OF 2001. The Patriot Act of
2001, enacted in response to the September 11, 2001 terrorists attacks, requires
bank regulators to consider a financial institution's compliance with the Bank
Secrecy Act ("BSA") when reviewing applications from financial institutions.
Under the BSA, a financial institution is required to have systems in place to
detect certain transactions, based on the size and nature of the transaction.
Financial institutions are generally required to report cash transactions
involving more than $10,000 to the United States Treasury. In addition,
financial institutions are required to file suspicious activity reports for
transactions that involve more than $5,000 and which the financial institution
knows, suspects, or has reason to suspect involves illegal funds; is designed to
evade the requirements of the BSA; or has no lawful purpose. The Bank's
compliance with the BSA therefore will be considered by its federal regulators
when reviewing applications submitted by the Bank.

IMPACT OF SARBANES-OXLEY ACT. On July 30, 2002, President Bush signed the
Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"). This legislation impacts
corporate governance of public companies,


                                      17.
<PAGE>


affecting their officers and directors, their audit committees, their
relationships with their accountants, and the audit function itself. Certain
provisions of the Sarbanes-Oxley Act became effective on July 30, 2002. Others
will become effective as the SEC adopts appropriate rules.

The Sarbanes-Oxley Act implements a broad range of corporate governance and
accounting measures for public companies designed to promote honesty and
transparency in corporate America and better protect investors from corporate
wrongdoing. The Sarbanes-Oxley Act's principal legislation includes:

     o    the creation of an independent accounting oversight board to oversee
          the audit of public companies and auditors who perform such audits;

     o    auditor independence provisions which restrict non-audit services that
          independent accountants may provide to their audit clients;

     o    additional corporate governance and responsibility measures, including

          (i)   requiring the chief executive officer and chief financial
                officer to certify financial statements;

          (ii)  prohibiting trading of securities by officers and directors
                during periods in which certain employee benefit plans are
                prohibited from trading;

          (iii) requiring a company's chief executive officer and chief
                financial officer to forfeit salary and bonuses, including
                profits on the sale of company securities, in certain
                situations; and

          (iv)  protecting whistleblowers and informants;

     o    expansion of the power of the audit committee, including the
          requirements that the audit committee

          (i)   have direct control of the engagement of the outside auditor,

          (ii)  be able to hire and fire the auditor, and

          (iii) approve all non-audit services;

     o    expansion of disclosure requirements, including accelerated reporting
          of stock transactions by insiders and the prohibition of most loans to
          directors and executive officers of non-financial institutions;

     o    mandatory disclosure by analysts of potential conflicts of interest;
          and

     o    a range of enhanced penalties for fraud and other violations.

Senior management, the audit committee, and the board of directors have taken
steps necessary to implement policies and procedures to comply with applicable
requirements of the Sarbanes-Oxley Act.


ITEM 2. PROPERTIES

The Company is located and conducts its business at the Bank's main office at
5400 South Pulaski Road, Chicago, Illinois 60632. In addition to the main
office, the Bank has branch locations at 2740 West 55th Street, Chicago,
Illinois 60632 and 21 East Ogden Avenue, Westmont, Illinois 60559. The Company
owns all three of its offices. The Company believes that the current facilities
are adequate


                                      18.
<PAGE>


to meet its present and immediately foreseeable needs. Subsequent to December
31, 2002, the Company purchased property, for a price of $130,000 near the 55th
Street location for future expansion.


ITEM 3. LEGAL PROCEEDINGS

The Company and the Bank are not involved in any pending proceedings other than
the legal proceedings occurring in the ordinary course of business. Such legal
proceedings in the aggregate are believed by management to be immaterial to the
Company's financial condition and results of operations.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of stockholders during the fourth quarter of
the year ended December 31, 2002.


                                     PART II


ITEM 5. MARKET FOR COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

The Company's common stock is traded on the NASDAQ National Market under the
symbol "PFED" and has 787 stockholders as of December 31, 2002. The table below
shows the reported high and low sales price of the common stock and dividends
declared during the periods indicated in 2002 and 2001.

                     -----------2002------------  -------------2001------------
                                ----                          ----
                                        Dividends                      Dividends
                       High      Low    Declared    High       Low     Declared
                       ----      ---    --------    ----       ---     --------

   First quarter     $ 19.25   $ 17.71   $ 0.12   $ 15.75    $ 13.38    $ 0.12
   Second quarter      23.10     18.50     0.12     19.37      15.43      0.12
   Third quarter       23.00     20.86     0.15     19.90      17.06      0.12
   Fourth quarter      23.76     22.00     0.15     18.12      17.20      0.12


                                      19.
<PAGE>


ITEM 6. SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The following tables set forth selected historical financial and other data of
the Company for the periods and at the dates indicated. The information should
be read in conjunction with the Consolidated Financial Statements and Notes
thereto of the Company contained elsewhere herein.

SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                            ---------At or for the year ended December 31,-------
                                                     -------------------------------------
                                               2002       2001       2000       1999       1998
                                               ----       ----       ----       ----       ----
<S>                                         <C>        <C>        <C>        <C>        <C>
Total assets                                $ 251,532  $ 243,448  $ 235,183  $ 226,027  $ 203,788
Cash and cash equivalents                      23,998     27,909      4,066      4,024     10,709
Securities available-for-sale                  61,113     65,704    125,220    124,359    108,506
Loans receivable, net(1)                      147,993    134,788     97,017     86,692     75,776
Deposits                                      163,968    163,074    147,973    145,675    148,350
Securities sold under repurchase
  agreements                                   10,599     10,658     18,686     13,185      6,418
FHLB advances                                  43,663     39,000     36,000     36,000     10,000
Stockholders' equity                           29,894     27,278     29,279     27,358     37,023

Interest income                                14,675     16,519     16,006     14,920     13,792
Interest expense                                7,541     10,107      9,873      8,171      7,410
Net interest income                             7,134      6,412      6,133      6,749      6,382
Provision for loan losses                         120          -          -          -          -
Noninterest income                              1,154        777        723      2,045      1,151
Noninterest expense                             4,967      4,754      4,497      4,702      4,252
Income tax expense                              1,036        831        802      1,385      1,130
Net income                                      2,165      1,604      1,557      2,707      2,151

<CAPTION>

SELECTED FINANCIAL RATIOS AND OTHER DATA
                                            ---------At or for the year ended December 31,-------
                                                     -------------------------------------
                                               2002       2001       2000       1999       1998
                                               ----       ----       ----       ----       ----
<S>                                              <C>        <C>        <C>        <C>        <C>
PERFORMANCE RATIOS:
     Return on average assets                    0.88%      0.65%      0.68%      1.23%      1.09%
     Return on average equity                    7.64       5.58       5.86       7.87       5.59
     Average equity to average assets           11.53      11.67      11.64      15.61      19.52
     Dividend payout ratio                      27.85      38.09      44.64      34.28         --
     Net interest rate spread(2)                 2.74       2.18       2.30       2.56       2.52
     Net interest margin(3)                      3.04       2.68       2.80       3.20       3.39
     Efficiency ratio(4)                        59.93      66.12      65.59      53.47      56.44
     Noninterest expense to average assets       2.02       1.93       1.97       2.13       2.16

ASSET QUALITY RATIOS:
     Nonperforming loans as a
       percent of gross loans receivable(5)      0.15       0.09%      0.45%      0.07%      0.24%
     Nonperforming assets as a
       percentage of total assets(5)             0.12       0.05       0.19       0.03       0.09
     Allowance for loan losses as a
       percent of gross loans receivable         0.37       0.38       0.49       0.56       0.64
     Allowance for loan losses as a
       percent of nonperforming loans(5)       244.26     409.84     109.17     793.65     265.96
</TABLE>


                                      20.
<PAGE>


<TABLE>
<CAPTION>
                                            ---------At or for the year ended December 31,-------
                                                     -------------------------------------
                                               2002       2001       2000       1999       1998
                                               ----       ----       ----       ----       ----
<S>                                              <C>        <C>        <C>        <C>        <C>
OTHER DATA:
     Number of full service offices              3          3          3          3          3
</TABLE>

(1)  The allowance for loan losses was $574 for the year ended December 31, 2002
     and $500 for the years ended December 31, 2001, 2000, 1999, and 1998.

(2)  The net interest rate spread represents the difference between the weighted
     average yield on interest-earning assets and the weighted average cost of
     interest-bearing liabilities.

(3)  The net interest margin represents net interest income as a percent of
     average interest-earning assets.

(4)  The efficiency ratio represents noninterest expense as a percent of net
     interest income before the provision for loan losses and noninterest
     income.

(5)  Nonperforming assets consist of nonperforming loans and REO. Nonperforming
     loans consist of all loans 90 days or more past due and all other
     nonaccrual loans.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

GENERAL

The primary business of the Company is the ownership of the Bank. The Company's
results of operations are dependent primarily on net interest income, which is
the difference between the interest income earned on interest-earning assets,
such as loans and securities, and the interest expense on interest-bearing
liabilities, such as deposits and borrowings. The Company also generates
noninterest income such as income from real estate development activities and
service fees. Noninterest expense consists of employee compensation and
benefits, occupancy and equipment expense, and other operating expenses. The
Company's results of operations are also significantly affected by general
economic and competitive conditions, particularly changes in market interest
rates, government policies, and actions of regulatory agencies.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report contains certain forward-looking statements within the meaning of
Section 27a of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Reform Act of
1995, as amended, and is including this statement for purposes of these safe
harbor provisions. Forward-looking statements, which are based on certain
assumptions and describe future plans, strategies and expectations of the
Company, are generally identifiable by use of the words "believe," "expect,"
"intend," "anticipate," "estimate," "project," or similar expressions. The
Company's ability to predict results or the actual effect of future plans or
strategies is inherently uncertain. Factors that could have a material adverse
effect on the operations and


                                      21.
<PAGE>


future prospects of the Company and its wholly owned subsidiaries include, but
are not limited to, changes in: interest rates; the economic health of the local
real estate market; general economic conditions; legislative/regulatory
provisions; monetary and fiscal policies of the U.S. Government, including
policies of the U.S. Treasury and the Federal Reserve Board; the quality or
composition of the loan and securities portfolios; demand for loan products;
deposit flows; competition; demand for financial services in the Company's
market area; and accounting principles, policies, and guidelines. These risks
and uncertainties should be considered in evaluating forward-looking statements
and undue reliance should not be placed on such statements.








                                      22.
<PAGE>


AVERAGE STATEMENT OF FINANCIAL CONDITION

The following table sets forth certain information relating to the Company's
Average Statement of Financial Condition and reflects the average yield on
assets and average cost of liabilities for the years ended December 31, 2002,
2001, and 2000. The yields and costs are derived by dividing interest income or
expense by the average balance of assets or liabilities, respectively, for the
years shown. Average balances are derived from average month-end balances.
Management does not believe that the use of average monthly balances instead of
average daily balances has caused any material differences in the information
presented. Average balances of loans receivable include loans on which the Bank
has discontinued accruing interest. Loan yields include fees that are considered
adjustments to yields.

<TABLE>
<CAPTION>
                                                     ----------------------------Year Ended December 31,----------------------------
                                                                                 -----------------------
                                                     ----------------2002----------------      ---------------2001-----------------
                                                                     ----                                     ----
                                                                                  Average                                   Average
                                                      Average                      Yield/       Average                      Yield/
                                                      Balance      Interest        Cost         Balance      Interest        Cost
                                                     --------      --------      --------      --------      --------      --------
<S>                                                  <C>           <C>               <C>       <C>           <C>               <C>
ASSETS
  Interest-earnings assets
    Securities, net(1)                               $ 41,513      $  2,129          5.13%     $ 88,751      $  6,153          6.93%
    Loans receivable(2)                               145,447        10,742          7.39       114,218         8,868          7.76
    Mortgage-backed securities, net(1)                 23,034         1,235          5.36        16,660           993          5.96
    Interest-earning deposits and other investments    24,547           569          2.31        19,914           505          2.54
                                                     --------      --------                    --------      --------
      Total interest-earning assets                   234,541        14,675          6.26       239,543        16,519          6.90
  Non-interest-earning assets                          11,363                                     6,946
                                                     --------                                  --------

    Total assets                                     $245,904                                  $246,489
                                                     ========                                  ========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Interest-bearing liabilities
    Passbook accounts                                $ 34,530           506          1.47      $ 32,528           648          1.99
    Money market savings accounts                       8,153           153          1.88         7,425           242          3.26
    NOW accounts                                       12,780            53           .41        12,234            85           .69
    Certificate accounts                              107,739         4,408          4.09       110,671         6,366          5.75
                                                     --------      --------                    --------      --------
      Total deposits                                  163,202         5,120          3.14       162,858         7,341          4.51
    FHLB advances and other borrowings                 50,966         2,421          4.75        51,109         2,766          5.41
                                                     --------      --------                    --------      --------
      Total interest-bearing liabilities              214,168         7,541          3.52       213,967        10,107          4.72
                                                                   --------                                  --------
  Non-interest-bearing liabilities                      3,385                                     3,761
                                                     --------                                  --------
    Total liabilities                                 217,553                                   217,728
  Stockholders' equity                                 28,351                                    28,761
                                                     --------                                  --------

    Total liabilities and stockholders' equity       $245,904                                  $246,489
                                                     ========                                  ========
  Net interest income                                              $  7,134                                  $  6,412
                                                                   ========                                  ========
  Net interest rate spread(3)                                                        2.74%                                     2.18%
  Net interest margin(4)                                                             3.04%                                     2.68%
  Ratio of average interest-earning assets to
    average interest-bearing liabilities               109.51%                                   111.95%
</TABLE>


[WIDE TABLE CONTINUED FROM ABOVE]

<TABLE>
<CAPTION>
                                                     ------Year Ended December 31,------
                                                           -----------------------
                                                     ---------------2000-----------------
                                                                    ----
                                                                                  Average
                                                      Average                      Yield/
                                                      Balance      Interest        Cost
                                                     --------      --------      --------
<S>                                                  <C>           <C>               <C>
ASSETS
  Interest-earnings assets
    Securities, net(1)                               $102,271      $  7,569          7.40%
    Loans receivable(2)                                90,801         6,973          7.68
    Mortgage-backed securities, net(1)                 20,839         1,332          6.39
    Interest-earning deposits and other investments     4,936           132          2.67
                                                     --------      --------
      Total interest-earning assets                   218,847        16,006          7.31
  Non-interest-earning assets                           9,435
                                                     --------

    Total assets                                     $228,282
                                                     ========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Interest-bearing liabilities
    Passbook accounts                                $ 32,369           752          2.32
    Money market savings accounts                       6,495           258          3.97
    NOW accounts                                       10,459           104           .99
    Certificate accounts                               96,727         5,554          5.74
                                                     --------      --------
      Total deposits                                  146,050         6,668          4.57
    FHLB advances and other borrowings                 51,055         3,205          6.28
                                                     --------      --------
      Total interest-bearing liabilities              197,105         9,873          5.01
                                                                   --------
  Non-interest-bearing liabilities                      4,613
                                                     --------
    Total liabilities                                 201,718
  Stockholders' equity                                 26,564
                                                     --------

    Total liabilities and stockholders' equity       $228,282
                                                     ========
  Net interest income                                              $  6,133
                                                                   ========
  Net interest rate spread(3)                                                        2.30%
  Net interest margin(4)                                                             2.80%
  Ratio of average interest-earning assets to
    average interest-bearing liabilities               111.03%
</TABLE>

(1) Includes unamortized discounts and premiums.
(2) Amount is net of deferred loan origination fees, undisbursed loan funds,
    unamortized discounts, and allowance for loan losses and includes
    non-performing loans.
(3) Net interest rate spread represents the difference between the yield on
    average interest-earning assets and the average cost of interest-bearing
    liabilities.
(4) Net interest margin represents net interest income divided by average
    interest-earning assets.


                                      23.
<PAGE>


RATE/VOLUME ANALYSIS

The following table presents the extent to which changes in interest rates and
changes in the volume of interest-earning assets and interest-bearing
liabilities have affected interest income and interest expense during the years
indicated. Information is provided in each category with respect to: (i) changes
attributable to changes in volume (changes in volume multiplied by prior rate);
(ii) changes attributable to changes in rate (changes in rate multiplied by
prior volume); and (iii) the net change. The changes attributable to the
combined impact of volume and rate have been allocated proportionately to the
changes due to volume and the changes due to rate.

<TABLE>
<CAPTION>
                                    ------2002 Compared to 2001------    ------2001 Compared to 2000------
                                          ---------------------                ---------------------
                                        Increase (Decrease) Due to           Increase (Decrease) Due to
                                        --------------------------           --------------------------
                                      Volume       Rate         Net        Volume        Rate        Net
                                    --------    --------    ---------    ---------    --------    --------
<S>                                 <C>         <C>         <C>          <C>          <C>         <C>
INTEREST EARNED ON
    Securities, net                 $ (2,423)   $ (1,319)   $  (3,742)   $    (958)   $   (458)   $ (1,416)
    Loans receivable, net              2,308        (434)       1,874        1,817          78       1,895
    Mortgage-backed securities,
      net                                342        (100)         242         (254)        (85)       (339)
    Interest-earning deposits
      and other investments              107        (325)        (218)         380          (7)        373
                                    --------    --------    ---------    ---------    --------    --------
       Total interest-earning
         assets                          334      (2,178)      (1,844)         985        (472)        513
                                    --------    --------    ---------    ---------    --------    --------

INTEREST EXPENSE ON
    Passbook savings accounts             29        (171)        (142)           4        (108)       (104)
    Money market savings accounts         14        (103)         (89)          34         (50)        (16)
    NOW accounts                           2         (34)         (32)          16         (35)        (19)
    Certificate accounts                (120)     (1,839)      (1,959)         802          10         812
    FHLB advances and other
      borrowings                          (7)       (337)        (344)           3        (442)       (439)
                                    --------    --------    ---------    ---------    --------    --------
       Total interest-bearing
         liabilities                     (82)     (2,484)      (2,566)         859        (625)        234
                                    --------    --------    ---------    ---------    --------    --------

Change in net interest income       $    416    $    306    $     722    $     126    $    153    $    279
                                    ========    ========    =========    =========    ========    ========
</TABLE>

COMPARISON OF FINANCIAL CONDITION AT DECEMBER 31, 2002 AND DECEMBER 31, 2001

Total assets at December 31, 2002 were $251.5 million compared to $243.4 million
at December 31, 2001, an increase of $8.1 million. Cash and cash equivalents
decreased $3.9 million to $24.0 million at December 31, 2002, primarily as a
result of loan demand during 2002. During 2002, loans increased by $13.2 million
to $148.0 million, primarily as a result of the purchase of $16.2 million of
loan participations in 2002. In addition, the continued low level of market
rates of interest resulted in high volumes of loan originations and
refinancings.

The allowance for loan losses was $574,000 and $500,000 at December 31, 2002 and
2001, respectively. There were no impaired loans at either date. Nonaccrual
loans were $235,000 at December 31, 2002 compared to $122,000 at the prior
year-end. Losses, if any, on nonaccrual loans are not expected to be
significant. During 2002, loans totaling $46,000 were charged-off, no loans were
charged-off in 2001.


                                      24.
<PAGE>


Total liabilities at December 31, 2002 were $221.6 million compared to $216.2
million at December 31, 2001, an increase of $5.4 million. Deposits increased
$894,000, primarily due to interest crediting. In addition, the Company
increased Federal Home Loan Bank advances by $4.7 million to fund the increased
loan demand experienced during 2002.

Stockholders' equity at December 31, 2002 was $29.9 million compared to $27.3
million at December 31, 2001, an increase of $2.6 million, primarily due to net
income of $2.2 million, the increase in fair value of securities classified as
available-for-sale of $924,000, net of deferred taxes. These increases were
offset by the purchase of 23,300 shares of treasury stock for $472,000 and cash
dividends of $603,000.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

General
-------

Net income increased to $2.2 million in 2002 from $1.6 million in 2001. The
increase is primarily due to increases in the Company's net interest income and
noninterest income, partially offset by increases in noninterest expense, which
is more fully discussed below.

Net Interest Income
-------------------

Interest income in 2002 was $14.7 million compared to $16.5 million in 2001, a
decrease of 11.2%. The decrease in interest income was primarily due to a
decrease of $40.9 million in the average balance of securities and
mortgage-backed securities due to calls and maturities, offset by an increase in
the average balance of loans receivable of $31.2 million . In addition, there
was a 64 basis point decrease in the average yield on earning assets due to a
decreasing rate environment, which resulted in refinancings of mortgage loans at
lower rates and repayment of mortgage-backed securities.

Interest expense in 2002 was $7.5 million compared to $10.1 million in 2001, a
decrease of 25.4%. The decrease in interest expense is due to a decrease in the
average rate paid on deposits and borrowings of 120 basis points. At December
31, 2001, the Company had $88.4 million, or 81.5%, of certificates of deposit
scheduled to mature during 2002. The majority of these certificates of deposit
were renewed at lower rates throughout the year.

Net interest income in 2002 was $7.1 million compared to $6.4 million in 2001,
an increase of 11.3%. The increase was primarily due to an increase in the net
interest rate spread to 2.74% in 2002 from 2.18% in 2001 and an increase in the
net interest margin to 3.04% in 2002 from 2.68% in 2001.

Provision for Loan Losses
-------------------------

Management establishes provisions for loan losses, which are charged to
operations, at a level management believes is appropriate to absorb probable
incurred credit losses in the loan portfolio. In evaluating the level of the
allowance for loan losses, management considers historical loss experience, the
types of loans and the amount of loans in the loan portfolio, adverse situations
that may affect the borrower's ability to repay, the estimated value of any


                                      25.
<PAGE>


underlying collateral, peer group information, and prevailing economic
conditions. This evaluation is inherently subjective, as it requires estimates
that are susceptible to significant revision as more information becomes
available or as future events change. There was a $120,000 provision for losses
on loans provided in 2002 and no provision was provided in 2001. The increased
provision for loan losses is reflective of the increase in net charge-offs to
$46,000 in 2002 compared to none in prior year. In addition, nonperforming loans
increased to $235,000 at December 31, 2002, from $122,000 at December 31, 2001.

Management believes that its assessment of the allowance for loan losses is
adequate, given the trends in loan delinquencies and historical loss experience
of the portfolio and current economic conditions.

Management assesses the allowance for loan losses on a quarterly basis and makes
provisions for loan losses as necessary in order to maintain the adequacy of the
allowance. While management uses available information to recognize losses on
loans, future loan loss provisions may be necessary based on changes in economic
conditions. In addition, various regulatory agencies, as an integral part of
their examination process, periodically review the allowance for loan losses and
may require us to recognize additional provisions based on their judgment of
information available to them at the time of their examination. The allowance
for loan losses as of December 31, 2002 is maintained at a level that represents
management's best estimate of inherent losses in the loan portfolio, and such
losses were both probable and reasonably estimable.

Noninterest Income
------------------

Noninterest income in 2002 was $1.2 million compared to $777,000 in 2001. The
increase was primarily attributable to $272,000 of income generated from
bank-owned life insurance. In addition, the Company realized net gains on the
sale of securities of $346,000 in 2002 compared to $325,000 in 2001. The Company
sold real estate held for expansion during 2002 with a resultant gain of
$126,000.

Noninterest Expense
-------------------

Noninterest expense in 2002 was $5.0 million compared to $4.8 million in 2001.
The increase was primarily a result of occupancy and equipment expenses
increased due to depreciation expense associated with hardware and software
upgrades and capital expenditures.

Income Taxes
------------

Income tax expense was $1.0 million in 2002 compared to $831,000 in 2001. The
increase in income tax expense was primarily due to an increase in pre-tax
income in 2002. The effective tax rate was 32.4% for the year ended December 31,
2002 compared to 34.1% for the prior year. The decrease in the effective tax
rate was primarily a result of an increase in tax exempt income related to the
cash surrender value of life insurance.


                                      26.
<PAGE>


COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

General
-------

Net income remained at $1.6 million for both 2001 and 2000. This is primarily
due to increases in the Company's net interest income, partially offset by
increases in noninterest expense, which is more fully discussed below.

Net Interest Income
-------------------

Interest income in 2001 was $16.5 million compared to $16.0 million in 2000. The
increase in interest income was primarily due to an increase in the average
balance of loans receivable of $23.4 million, partially offset by a $17.7
million decrease in the average balance of securities and mortgage-backed
securities due to calls and maturities. This was partially offset by a 41 basis
point decrease in the average yield on earning assets due to a decreasing rate
environment.

Interest expense in 2001 was $10.1 million compared to $9.9 million in 2000. The
increase in interest expense is due to an increase in the average balance of
deposits of $16.8 million, partially offset by a decrease in the average rate
paid on deposits and borrowings of 29 basis points.

Net interest income in 2001 was $6.4 million compared to $6.1 million in 2000.
The increase was primarily due to the increased volume of earning assets, which
was partially offset by a decrease in the net interest rate spread to 2.18% in
2001 from 2.30% in 2000 and a decrease in the net interest margin to 2.68% in
2001 from 2.80% in 2000.

Provision for Loan Losses
-------------------------

Management establishes provisions for loan losses, which are charged to
operations, at a level management believes is appropriate to absorb probable
incurred credit losses in the loan portfolio. In evaluating the level of the
allowance for loan losses, management considers historical loss experience, the
types of loans and the amount of loans in the loan portfolio, adverse situations
that may affect the borrower's ability to repay, the estimated value of any
underlying collateral, peer group information, and prevailing economic
conditions. This evaluation is inherently subjective, as it requires estimates
that are susceptible to significant revision as more information becomes
available or as future events change. There was no provision for losses on loans
in 2001 and 2000. The lack of provision is indicative of management's assessment
that the allowance for loan losses is adequate, given the trends in loan
delinquencies and historical loss experience of the portfolio and current
economic conditions.

Management assesses the allowance for loan losses on a quarterly basis and makes
provisions for loan losses as necessary in order to maintain the adequacy of the
allowance. While management uses available information to recognize losses on
loans, future loan loss provisions may be necessary based on changes in economic
conditions. In addition, various regulatory agencies, as an integral part of
their examination process, periodically review the allowance for loan losses and
may require us to recognize additional provisions based on their judgment of
information available to them at the time of their examination. The allowance
for loan losses as


                                      27.
<PAGE>


of December 31, 2001 is maintained at a level that represents management's best
estimate of inherent losses in the loan portfolio, and such losses were both
probable and reasonably estimable.

Noninterest Income
------------------

Noninterest income in 2001 was $777,000 compared to $723,000 in 2000. The
increase was primarily attributable to an increase in service fee income as a
result of an increase in the average balance of deposits. In addition, the
Company realized net gains on the sale of securities of $325,000 in 2001
compared to $76,000 in 2000. This was partially offset by gains of $13,000 on
real estate held for development in 2001 compared to gains of $318,000 in 2000.
The Company completed the sale of lots in the two real estate development
projects during 2001. Although management continues to seek opportunities for
new real estate development projects, there can be no assurance that any new
projects will be entered into during 2002.

Noninterest Expense
-------------------

Noninterest expense in 2001 was $4.8 million compared to $4.5 million in 2000,
an increase of 6.7%. The increase was primarily a result of increased
compensation and benefits of $157,000 due to normal cost-of-living adjustments
and increased health insurance costs. Legal fees also increased by approximately
$64,000 as a result of fees associated with the repurchase of shares of Company
stock from two large stockholders and regulatory filings. In addition, data
processing fees increased due to yearly contractual escalations. Occupancy and
equipment expenses increased due to depreciation expense associated with
hardware and software upgrades and capital expenditures throughout 2001.

Income Taxes
------------

Income tax expense was $831,000 in 2001 compared to $802,000 in 2000. The
increase in income tax expense was due to an increase in pre-tax income in 2001.
Federal income tax expense was approximately 34% of pre-tax income for both
years.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of funds are deposits, principal and interest
payments on loans and securities, proceeds from maturities and calls of
securities, FHLB advances, and securities sold under repurchase agreements.
While maturities and scheduled amortization of loans and securities are
predictable sources of funds, deposit flows and mortgage prepayments are greatly
influenced by general interest rates, economic conditions, and competition. The
Bank maintains a liquidity ratio substantially above the regulatory requirement.
This requirement, which may be varied at the direction of the OTS depending upon
economic conditions and deposit flows, is based upon a percentage of deposits
and short-term borrowings. The required ratio is currently 4.0%. The Bank's
average regulatory liquidity ratios were 27.26%, 41.36%, and 59.67% for the
years ended December 31, 2002, 2001, and 2000, respectively.

The Company's cash flows are comprised of three primary classifications: cash
flows from operating activities, investing activities, and financing activities.
Cash flows provided by operating activities were $1.6 million, $3.0 million, and
$1.0 million in 2002, 2001, and 2000,


                                      28.
<PAGE>


respectively. Net cash from investing activities consisted primarily of
disbursements for loan originations and the purchase of securities, offset by
principal collections on loans, proceeds from maturing securities and paydowns
on mortgage-backed securities, and the investment in and proceeds from the sale
of real estate held for development. Net cash from financing activities
consisted primarily of the activity in deposit accounts, FHLB borrowings, and
securities sold under repurchase agreements in addition to the purchase of
treasury stock. The net cash from financing activities was $4.6 million, $3.5
million, and $3.6 million in 2002, 2001, and 2000, respectively.

At December 31, 2002, the Bank exceeded all of its regulatory capital
requirements with a Tier 1 (core) capital level of $22.7 million, or 9.3% of
adjusted total assets, which is above the required level of $9.8 million, or 4%;
and total risk-based capital of $23.3 million, or 16.4% of risk-weighted assets,
which is above the required level of $11.3 million, or 8%.

The Bank's most liquid assets are cash and short-term investments. The levels of
these assets are dependent on the Bank's operating, financing, lending, and
investing activities during any given period. At December 31, 2002, cash and
short-term investments totaled $24.0 million. The Bank has other sources of
liquidity if a need for additional funds arises, including the repayment of
loans and mortgage-backed securities. The Bank may also utilize FHLB advances or
the sale of securities available-for-sale as a source of funds.

At December 31, 2002, the Bank had outstanding commitments to originate mortgage
loans of $1.7 million, as compared to $3.4 million in 2001. The Bank anticipates
that it will have sufficient funds available to meet its current loan
origination commitments. Certificate accounts that are scheduled to mature in
less than one year from December 31, 2002 totaled $81.1 million. Management
expects that a substantial portion of the maturing certificate accounts will be
renewed at the Bank. However, if these deposits are not retained, the Bank may
utilize FHLB advances or raise interest rates on deposits to attract new
accounts, which may result in higher levels of interest expense.

Subsequent to December 31, 2002, the Company entered into a $1.8 million
contract to reconstruct the 55th Street branch office.

The following tables disclose contractual obligations and commercial commitments
of the Company as of December 31, 2002:

<TABLE>
<CAPTION>
                                        Less Than                               After
                               Total      1 Year      1-3 Years   4-5 Years    5 Years
                             --------    --------     --------    --------    --------
<S>                          <C>         <C>          <C>         <C>         <C>
   Securities sold under
     agreements to
     repurchase              $ 10,599    $  7,499     $  3,100    $      -    $      -
   FHLB advances               43,663      12,663        7,000      12,000      12,000
                             --------    --------     --------    --------    --------
   Total contractual
     cash obligations        $ 54,262    $ 20,162     $ 10,100    $ 12,000    $ 12,000
                             ========    ========     ========    ========    ========
</TABLE>


                                      29.
<PAGE>


<TABLE>
<CAPTION>
                                        Total
                                       Amounts    Less Than                              Over
                                      Committed    1 Year      1-3 Years   4-5 Years    5 Years
                                      --------    --------     --------    --------    --------
<S>                                   <C>         <C>          <C>         <C>         <C>
     Standby letters
       of credit                      $  1,527    $      -     $    967    $    560    $      -
     Loans in process                    5,226       5,226            -           -           -
  Loan commitments                       1,683       1,683            -           -           -
                                      --------    --------     --------    --------    --------
        Total  commitments            $  8,436    $  6,909     $    967    $    560    $      -
                                      ========    ========     ========    ========    ========
</TABLE>

IMPACT OF INFLATION AND CHANGING PRICES

The impact of inflation is reflected in the increased cost of operations. Unlike
industrial companies, nearly all of the assets and liabilities of the Company
are monetary in nature. As a result, interest rates have a greater impact on the
Company's performance than do the effects of general levels of inflation.
Interest rates do not necessarily move in the same direction or to the same
extent as the price of goods and services.


ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Bank's interest rate sensitivity is monitored by management through the use
of a model that estimates the change in net portfolio value ("NPV") over a range
of interest rate scenarios. NPV is the present value of expected cash flows from
assets, liabilities, and off-balance-sheet contracts. An NPV Ratio, in any
interest rate scenario, is defined as the NPV in that scenario divided by the
market value of assets in the same scenario. The Sensitivity Measure is the
decline in the NPV Ratio, in basis points, caused by a 2% increase or decrease
in rates, whichever produces a larger decline. The higher an institution's
Sensitivity Measure is, the greater its exposure to interest rate risk is
considered to be. The OTS has incorporated an interest rate risk component into
its regulatory capital rule. Under the rule, an institution whose sensitivity
measure exceeds 2% would be required to deduct an interest rate risk component
in calculating its total capital for purposes of the risk-based capital
requirement. As of December 31, 2002, the Bank's sensitivity measure, as
measured by the OTS, resulting from a 200 basis point increase in interest rates
was (22)% and would result in a $6.4 million decrease in the NPV of the Bank.
Accordingly, increases in interest rates would be expected to have a negative
impact on the Bank's operating results. The NPV Ratio sensitivity measure is
below the threshold at which the Bank could be required to hold additional
risk-based capital under OTS regulations.

Certain shortcomings are inherent in the methodology used in the above interest
rate risk measurements. Modeling changes in NPV require the making of certain
assumptions that may tend to oversimplify the manner in which actual yields and
costs respond to changes in market interest rates. First, the models assume that
the composition of the Bank's interest sensitive assets and liabilities existing
at the beginning of a period remain constant over the period being


                                      30.
<PAGE>


measured. Second, the models assume that a particular change in interest rates
is reflected uniformly across the yield curve regardless of the duration to
maturity or repricing of specific assets and liabilities. Third, the model does
not take into account the impact of the Bank's business or strategic plans on
the structure of interest-earning assets and interest-bearing liabilities.
Accordingly, although the NPV measurement provides an indication of the Bank's
interest rate risk exposure at a particular point in time, such measurement is
not intended to and does not provide a precise forecast of the effect of changes
in market interest rates on the Bank's net interest income and will differ from
actual results. The results of this modeling are monitored by management and
presented to the Board of Directors quarterly.

The following tables show the NPV and projected change in the NPV of the Bank at
December 31, 2002 and 2001 assuming an instantaneous and sustained change in
market interest rates of 100, 200, and 300 basis points.

             INTEREST RATE SENSITIVITY OF NET PORTFOLIO VALUE (NPV)
                                DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                                                                       NPV as a % of
                           --------------Net Portfolio Value------------    -----------PV of Assets---------
                                         -------------------                           ------------
       Change in Rates       $ Amount         $ Change       % Change          NPV Ratio         Change
       ---------------       --------         --------       --------          ---------         ------

<S>       <C>              <C>             <C>                 <C>                <C>           <C>
          + 300 bp         $    18,310     $  (10,895)         (37)%              7.62%         (374) bp
          + 200 bp              22,792         (6,413)         (22)               9.25          (212) bp
          + 100 bp              26,937         (2,268)          (8)              10.67           (70) bp
              0 bp              29,205              -            -               11.36                 -
          - 100 bp              29,361            158            1               11.31            (6) bp
          - 200 bp                 N/A            N/A          N/A                 N/A               N/A
          - 300 bp                 N/A            N/A          N/A                 N/A               N/A

<CAPTION>

                                DECEMBER 31, 2001
                                                                                       NPV as a % of
                           --------------Net Portfolio Value------------    -----------PV of Assets---------
                                         -------------------                           ------------
       Change in Rates       $ Amount         $ Change       % Change          NPV Ratio         Change
       ---------------       --------         --------       --------          ---------         ------
<S>       <C>              <C>             <C>                 <C>                <C>           <C>
          + 300 bp         $    10,026     $  (15,867)         (61)%              4.47%         (614) bp
          + 200 bp              15,512        (10,381)         (40)               6.71          (390) bp
          + 100 bp              20,952         (4,941)         (19)               8.81          (180) bp
              0 bp              25,893              -            -               10.61                 -
          - 100 bp              28,202          2,309            9               11.37             76 bp
          - 200 bp                 N/A            N/A          N/A                 N/A               N/A
          - 300 bp                 N/A            N/A          N/A                 N/A               N/A
</TABLE>

On December 31, 2002 and 2001, the yield on the three month Treasury bill was
below 2.00%. As a result, the net portfolio value analysis was unable to produce
results for the minus 200 and minus 300 basis point scenarios.

The Bank and the Company do not maintain any securities for trading purposes.
The Bank and the Company do not currently engage in trading activities or use
derivative instruments in a material amount to control interest rate risk. In
addition, interest rate risk is the most significant market risk affecting the
Bank and the Company. Other types of market risk, such as foreign


                                      31.
<PAGE>


currency exchange risk and commodity price risk, do not arise in the normal
course of the Company's business activities and operations.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Financial Information on page F-1.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

Not applicable.


                                    PART III


ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

(a)    Directors. The information required in response to this item regarding
       directors of the Company will be contained in the Company's definitive
       Proxy Statement ("the Proxy Statement") for its Annual Meeting of
       Stockholders to be held on April 23, 2002 under the caption "Election of
       Directors - Information with Respect to the Nominees, Continuing
       Directors and Certain Executive Officers" and is incorporated herein by
       reference.

(b)    Executive Officers of the Company. The information required in response
       to this item regarding executive officers of the Company will be
       contained in the Proxy Statement under the caption "Election of Directors
       - Information with Respect to the Nominees, Continuing Directors and
       Certain Executive Officers".


ITEM 11. EXECUTIVE COMPENSATION

The information required in response to this item will be contained in the Proxy
Statement under the captions "Election of Directors - Directors' Compensation"
and "Executive Compensation" and is incorporated herein by reference.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required in response to this item will be contained in the Proxy
Statement under the captions "Security Ownership of Certain Beneficial Owners",
"Election of Directors - Information with Respect to the Nominees, Continuing
Directors, and Certain Executive Officers" and "Equity Compensation Plan
Information" and is incorporated herein by reference.


                                      32.
<PAGE>


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required in response to this item will be contained in the Proxy
Statement under the caption "Election of Directors - Transactions with Certain
Related Persons" and is incorporated herein by reference.


ITEM 14. CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, we carried out an
evaluation, under the supervision and with the participation of management,
including our Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 13a-15. Based upon, and as of the date
of that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are effective, in all
material respects, in timely alerting them to material information relating to
our Company (and its consolidated subsidiaries) required to be included in the
periodic reports we are required to file and submit to the SEC under the
Exchange Act.

There have been no significant changes to our internal controls or in other
factors that could significantly affect these internal controls subsequent to
the date the internal controls were not recently evaluated. There were no
significant deficiencies or material weaknesses identified in the evaluation
and, therefore, no corrective actions were taken.


                                     PART IV


ITEM 15.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
               FORM 8-K

(a)  Documents filed as part of this report:

     1, 2 Financial Statements and Schedules

          See Index to Financial Information on page F-1.

     3    Exhibits

          See Exhibit Index on page i.

(b) Reports on Form 8-K

       No reports on Form 8-K were filed by the Company during the fourth
quarter of 2002.


                                      33.
<PAGE>


                                  EXHIBIT INDEX

                               Park Bancorp, Inc.

                         Form 10-K for Fiscal Year Ended
                                December 31, 2002

3.1      Certificate of Incorporation of Park Bancorp, Inc. ("Park Bancorp")
         (incorporated by reference to Exhibit 3.1 to Park Bancorp's
         Registration Statement No. 333-4380)

3.2      Bylaws of Park Bancorp, Inc. (incorporated by reference to Exhibit 3.2
         to Park Bancorp's Registration Statement No. 333-4380)

3.3      Federal Stock Charter and Bylaws of Park Federal Savings Bank
         (incorporated by reference to Exhibit 2.1 to Park Bancorp's
         Registration Statement No. 333-4380)

4.0      Stock Certificate of Park Bancorp, Inc. (incorporated by reference to
         Exhibit 4.0 to Park Bancorp's Registration Statement No. 333-4380)

10.1*    Form of Park Federal Savings Bank Employee Stock Ownership Plan
         (incorporated by reference to Exhibit 10.1 to Park Bancorp's
         Registration Statement No. 333-4380)

10.2*    ESOP Loan Commitment Letter and ESOP Loan Documents (incorporated by
         reference to Exhibit 10.2 to Park Bancorp's Registration Statement No.
         333-4380)

10.3*    Form of Employment Agreements between Park Federal Savings Bank and
         Park Bancorp, Inc. and certain executive officers (incorporated by
         reference to Exhibit 10.3 to Park Bancorp's Registration Statement No.
         333-4380)

10.4*    Form of Proposed Park Federal Savings Bank Employee Severance
         Compensation Plan (incorporated by reference to Exhibit 10.4 to Park
         Bancorp's Registration Statement No. 333-4380)

10.5*    Park Federal Savings Bank Supplemental Executive Retirement Plan
         (incorporated by reference to Exhibit 10.5 to Park Bancorp's
         Registration Statement No. 333-4380)

10.6*    Park Bancorp, Inc. 1997 Stock-Based Incentive Plan (incorporated by
         reference to Exhibit 99.1 to Park Bancorp's Registration Statement No.
         333-33103)

21.0     Subsidiaries of Registrant (incorporated by reference to Exhibit 21.0
         to the Park Bancorp, Inc. Annual Report on Form 10-K for the year ended
         December 31, 1997)

23.0     Consent of Independent Auditors

99.1     Certification of Chief Executive Officer pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002

99.2     Certification of Chief Financial Officer pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002

-----------
*   Management contract or compensatory plan or arrangement required to be filed
    as an exhibit to this Form 10-K pursuant to Item 14(c) of Form 10-K.


                                      34.
<PAGE>


                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on the 21st day of March
2003.

                                                       PARK BANCORP, INC.



                                                    By: /s/ David A. Remijas
                                                        -----------------------
                                                        David A. Remijas
                                                         Chairman of the Board,
                                                         President, and
                                                         Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1933, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
        Name                               Title                               Date
        ----                               -----                               ----
<S>                             <C>                                       <C>
/s/ David A. Remijas            Chairman of the Board,                    March 21, 2003
---------------------------     President, and Chief Executive
David A. Remijas                Officer (principal executive officer)


/s/ Steven J. Pokrak            Treasurer, Chief Financial                March 21, 2003
---------------------------     Officer (principal financial
Steven J. Pokrak                and accounting officer), and
                                Corporate Secretary


/s/ Richard J. Remijas, Jr.     Executive Vice President, Chief           March 21, 2003
---------------------------     Operating Officer, and Director
Richard J. Remijas, Jr.


/s/ Robert W. Krug              Director                                  March 21, 2003
---------------------------
Robert W. Krug


/s/ John J. Murphy              Director                                  March 21, 2003
---------------------------
John J. Murphy


/s/Victor H. Reyes              Director                                  March 21, 2003
---------------------------
Victor H. Reyes


/s/ Paul Shukis                 Director                                  March 21, 2003
---------------------------
Paul Shukis
</TABLE>


                                      35.
<PAGE>


                         CONSENT OF INDEPENDENT AUDITORS



We consent to the incorporation by reference of our report dated January 24,
2003 with respect to the 2002 consolidated financial statements of Park Bancorp,
Inc., included in this annual report on Form 10-K, in the Registration Statement
on Form S-8 (File No. 333-33103) pertaining to the Park Bancorp, Inc. 1997
Stock-Based Incentive Plan.



                                                   Crowe, Chizek and Company LLP

Oak Brook, Illinois
March 21, 2003







                                      36.
<PAGE>


                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, David A. Remijas, certify that:

1.   I have reviewed this Annual Report on Form 10-K of Park Bancorp, Inc.;

2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent functions):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and


                                      37.
<PAGE>


     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     annual report whether there were significant changes in internal controls
     or in other factors that could significantly affect internal controls
     subsequent to the date of our most recent evaluation, including any
     corrective actions with regard to significant deficiencies and material
     weaknesses.


Dated:  March 21, 2003                                   /S/ David A. Remijas
                                                         -----------------------
                                                         David A. Remijas
                                                         Chief Executive Officer







                                      38.
<PAGE>


                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002



I, Steven J. Pokrak, certify that:

1.   I have reviewed this Annual Report on Form 10-K of Park Bancorp, Inc.;

2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent functions):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and


                                      39.
<PAGE>


     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     annual report whether there were significant changes in internal controls
     or in other factors that could significantly affect internal controls
     subsequent to the date of our most recent evaluation, including any
     corrective actions with regard to significant deficiencies and material
     weaknesses.


Dated:  March 21, 2003                                   /S/ Steven J. Pokrak
                                                         -----------------------
                                                         Steven J. Pokrak
                                                         Chief Financial Officer







                                      40.
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                                Chicago, Illinois

                        CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000






                         INDEX TO FINANCIAL INFORMATION






REPORT OF INDEPENDENT AUDITORS.............................................. F-2


CONSOLIDATED FINANCIAL STATEMENTS

     CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION......................... F-3

     CONSOLIDATED STATEMENTS OF INCOME...................................... F-4

     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY........................ F-5

     CONSOLIDATED STATEMENTS OF CASH FLOWS.................................. F-7

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS............................. F-9








                                      F-1
<PAGE>


                         REPORT OF INDEPENDENT AUDITORS



Board of Directors
Park Bancorp, Inc.
Chicago, Illinois


We have audited the accompanying consolidated statements of financial condition
of Park Bancorp, Inc. and Subsidiaries as of December 31, 2002 and 2001, and the
related consolidated statements of income, stockholders' equity, and cash flows
for each of the three years in the period ended December 31, 2002. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Park Bancorp, Inc.
and Subsidiaries as of December 31, 2002 and 2001, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2002 in conformity with accounting principles generally accepted in
the United States of America.




                                                   Crowe, Chizek and Company LLP

Oak Brook, Illinois
January 24, 2003


                                      F-2
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                           December 31, 2002 and 2001
                 (In thousands, except share and per share data)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                 2002          2001
                                                                              ---------     ---------
<S>                                                                           <C>           <C>
ASSETS
Cash and due from banks                                                       $   3,226     $     905
Federal funds sold                                                               16,310        22,777
Interest-bearing deposits with other financial institutions                       4,462         4,227
                                                                              ---------     ---------
    Total cash and cash equivalents                                              23,998        27,909
Time deposits with other financial institutions                                   1,117            --
Securities available-for-sale                                                    61,113        65,704
Loans receivable, net                                                           147,993       134,788
Federal Home Loan Bank stock                                                      7,327         5,133
Premises and equipment, net                                                       2,703         2,712
Accrued interest receivable                                                       1,195         1,659
Bank-owned life insurance                                                         5,381         5,109
Other assets                                                                        705           434
                                                                              ---------     ---------

    Total assets                                                              $ 251,532     $ 243,448
                                                                              =========     =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
    Deposits
       Non-interest-bearing                                                   $   4,478     $   4,915
       Interest-bearing                                                         159,490       158,159
                                                                              ---------     ---------
          Total deposits                                                        163,968       163,074

    Securities sold under repurchase agreements                                  10,599        10,658
    Advances from borrowers for taxes and insurance                               1,969         2,027
    Federal Home Loan Bank advances                                              43,663        39,000
    Accrued interest payable                                                        396           830
    Other liabilities                                                             1,043           581
                                                                              ---------     ---------
       Total liabilities                                                        221,638       216,170

Stockholders' equity
    Preferred stock, $.01 par value per share, authorized
      1,000,000 shares; none issued and outstanding                                  --            --
    Common stock, $.01 par value per share;
      authorized, 9,000,000 shares; issued, 2,719,131 and 2,701,441 shares           27            27
    Additional paid-in capital                                                   27,050        26,600
    Retained earnings                                                            27,407        25,845
    Treasury stock, 1,493,836 and 1,470,536 shares, at cost                     (24,491)      (24,019)
    Unearned ESOP shares                                                           (979)       (1,131)
    Accumulated other comprehensive income (loss)                                   880           (44)
                                                                              ---------     ---------
       Total stockholders' equity                                                29,894        27,278
                                                                              ---------     ---------

          Total liabilities and stockholders' equity                          $ 251,532     $ 243,448
                                                                              =========     =========
</TABLE>

--------------------------------------------------------------------------------
          See accompanying notes to consolidated financial statements.


                                      F-3
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                  Years ended December 31, 2002, 2001, and 2000
                 (In thousands, except share and per share data)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                     2002       2001       2000
                                                                   -------    -------    -------
<S>                                                                <C>        <C>        <C>
Interest income
    Loans receivable                                               $10,742    $ 8,868    $ 6,973
    Securities                                                       3,646      7,146      8,901
    Interest-bearing deposits with other financial institutions        287        505        132
                                                                   -------    -------    -------
                                                                    14,675     16,519     16,006
Interest expense
    Deposits                                                         5,120      7,341      6,668
    Federal Home Loan Bank advances and other borrowings             2,421      2,766      3,205
                                                                   -------    -------    -------
                                                                     7,541     10,107      9,873
                                                                   -------    -------    -------

NET INTEREST INCOME                                                  7,134      6,412      6,133

Provision for loan losses                                              120         --         --
                                                                   -------    -------    -------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                  7,014      6,412      6,133

Noninterest income
    Gains on sales of securities                                       346        325         76
    Gains on sales of real estate held for development                  --         13        318
    Service fee income                                                 276        308        227
    Gain on sale of real estate held for expansion                     126         --         --
    Earnings on bank-owned life insurance                              303          9         --
    Other operating income                                             103        122        102
                                                                   -------    -------    -------
                                                                     1,154        777        723

Noninterest expense
    Compensation and benefits                                        3,086      3,091      2,934
    Occupancy and equipment                                            682        556        492
    Federal deposit insurance premiums                                  93         88         85
    Data processing services                                           212        174        143
    Advertising                                                        126         94        175
    Other operating expenses                                           768        751        668
                                                                   -------    -------    -------
                                                                     4,967      4,754      4,497
                                                                   -------    -------    -------

INCOME BEFORE INCOME TAXES                                           3,201      2,435      2,359

Income tax expense                                                   1,036        831        802
                                                                   -------    -------    -------

NET INCOME                                                         $ 2,165    $ 1,604    $ 1,557
                                                                   =======    =======    =======

Basic earnings per share                                           $  1.92    $  1.26    $  1.04
                                                                   =======    =======    =======

Diluted earnings per share                                         $  1.84    $  1.25    $  1.04
                                                                   =======    =======    =======
</TABLE>

--------------------------------------------------------------------------------
          See accompanying notes to consolidated financial statements.


                                      F-4
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  Years ended December 31, 2002, 2001, and 2000
                 (In thousands, except share and per share data)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                        Additional                                  Unearned       Unearned
                                            Common       Paid-in      Retained       Treasury         ESOP           MRP
                                            Stock        Capital      Earnings        Stock          Shares         Shares
                                          --------      --------      --------       --------       --------       --------
<S>                                       <C>           <C>           <C>            <C>            <C>            <C>
Balance at January 1, 2000                $     27      $ 26,436      $ 23,990       $(14,294)      $ (1,456)      $   (550)

Comprehensive income
    Net income                                  --            --         1,557             --             --             --
    Change in fair value of
      securities available-for-sale,
      net                                       --            --            --             --             --             --


       Total comprehensive
         income

Cash dividends declared
  ($.48 per share)                              --            --          (695)            --             --             --

Purchase of 266,500 shares of
  treasury stock at cost                        --            --            --         (3,662)            --             --

ESOP shares released                            --            50            --             --            166             --

MRP shares earned                               --            --            --             --             --            327
                                          --------      --------      --------       --------       --------       --------

Balance at December 31, 2000                    27        26,486        24,852        (17,956)        (1,290)          (223)

Comprehensive income
    Net income                                  --            --         1,604             --             --             --
    Change in fair value of
      securities available-for-sale,
      net                                       --            --            --             --             --             --

       Total comprehensive
         income
</TABLE>


[WIDE TABLE CONTINUED FROM ABOVE

<TABLE>
<CAPTION>
                                          Accumulated
                                            Other         Total
                                        Comprehensive  Stockholders'  Comprehensive
                                        Income (Loss)     Equity         Income
                                          --------       --------       --------
<S>                                       <C>            <C>            <C>
Balance at January 1, 2000                $ (6,795)      $ 27,358

Comprehensive income
    Net income                                  --          1,557       $  1,557
    Change in fair value of
      securities available-for-sale,
      net                                    4,178          4,178          4,178
                                                                        --------

       Total comprehensive
         income                                                         $  5,735
                                                                        ========
Cash dividends declared
  ($.48 per share)                              --           (695)

Purchase of 266,500 shares of
  treasury stock at cost                        --         (3,662)

ESOP shares released                            --            216

MRP shares earned                               --            327
                                          --------       --------

Balance at December 31, 2000                (2,617)        29,279

Comprehensive income
    Net income                                  --          1,604       $  1,604
    Change in fair value of
      securities available-for-sale,
      net                                    2,573          2,573          2,573
                                                                        --------

       Total comprehensive
         income                                                         $  4,177
                                                                        ========
</TABLE>

--------------------------------------------------------------------------------
                                   (Continued)


                                      F-5
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  Years ended December 31, 2002, 2001, and 2000
                 (In thousands, except share and per share data)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                        Additional                                  Unearned       Unearned
                                           Common        Paid-in      Retained      Treasury         ESOP           MRP
                                           Stock         Capital      Earnings        Stock          Shares         Shares
                                          --------      --------      --------       --------       --------       --------
<S>                                       <C>           <C>           <C>            <C>            <C>            <C>
Cash dividends declared
  ($.48 per share)                        $     --      $     --      $   (611)      $     --       $     --       $     --

Purchase of 343,600 shares of
  treasury stock at cost                        --            --            --         (6,063)            --             --

ESOP shares released                            --           114            --             --            159             --

MRP shares earned                               --            --            --             --             --            223
                                          --------      --------      --------       --------       --------       --------

Balance at December 31, 2001                    27        26,600        25,845        (24,019)        (1,131)            --

Comprehensive income
    Net income                                                           2,165
    Change in fair value of
      securities available-for-sale,
      net                                       --            --            --             --             --             --


       Total comprehensive
         income

Cash dividends declared
  ($.54 per share)                              --            --          (603)            --             --             --

Purchase of 23,300 shares of
  treasury stock at cost                        --            --            --           (472)            --             --

Exercise of 17,690 stock options                --           278            --             --             --             --

ESOP shares released                            --           172            --             --            152             --
                                                        --------      --------       --------       --------       --------

Balance at December 31, 2002              $     27      $ 27,050      $ 27,407       $(24,491)      $   (979)      $     --
                                          ========      ========      ========       ========       ========       ========
</TABLE>


[WIDE TABLE CONTINUED FROM ABOVE

<TABLE>
<CAPTION>
                                         Accumulated
                                            Other         Total
                                        Comprehensive  Stockholders'  Comprehensive
                                        Income (Loss)     Equity         Income
                                          --------       --------       --------
<S>                                       <C>            <C>            <C>
Cash dividends declared
  ($.48 per share)                        $     --       $   (611)

Purchase of 343,600 shares of
  treasury stock at cost                        --         (6,063)

ESOP shares released                            --            273

MRP shares earned                               --            223
                                          --------       --------

Balance at December 31, 2001                   (44)        27,278

Comprehensive income
    Net income                                              2,165       $  2,165
    Change in fair value of
      securities available-for-sale,
      net                                      924            924            924
                                                                        --------

       Total comprehensive
         income                                                         $  3,089
                                                                        ========
Cash dividends declared
  ($.54 per share)                              --           (603)

Purchase of 23,300 shares of
  treasury stock at cost                        --           (472)

Exercise of 17,690 stock options                --            278

ESOP shares released                            --            324
                                          --------       --------

Balance at December 31, 2002              $    880       $ 29,894
                                          ========       ========
</TABLE>

--------------------------------------------------------------------------------
          See accompanying notes to consolidated financial statements.


                                      F-6
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Years ended December 31, 2002, 2001, and 2000
                                 (In thousands)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                 2002         2001         2000
                                                               --------     --------     --------
<S>                                                            <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                                 $  2,165     $  1,604     $  1,557
    Adjustments to reconcile net income to net cash from
      operating activities
       Net premium amortization (discount accretion)                 22            6          (35)
       Dividend reinvestments                                      (161)         (82)          --
       Gains on sales of securities available-for-sale             (346)        (325)         (76)
       Gain on sale of real estate held for expansion              (126)          --           --
       Earnings on bank-owned life insurance, net                  (272)          (9)          --
       Provision for loan losses                                    120           --           --
       Depreciation                                                 296          247          209
       Deferred income tax benefit                                  (37)         (15)         (49)
       Deferred loan fees                                            22           98           17
       Net change in accrued interest receivable                    464        1,065          (38)
       Net change in other assets                                  (271)         (40)         (14)
       Net change in accrued interest payable                      (434)         334          200
       Net change in other liabilities                               34         (207)        (825)
       ESOP expense                                                 324          273          216
       Stock awards earned                                           --          223          327
       FHLB stock dividends                                        (194)        (195)        (138)
       Gains on sales of real estate held for development            --          (13)        (318)
                                                               --------     --------     --------
          Net cash from operating activities                      1,606        2,964        1,033

CASH FLOWS FROM INVESTING ACTIVITIES
    Net change in loans                                         (13,347)     (37,869)     (10,342)
    Maturities and calls of securities available-for-sale        30,610       79,900           --
    Purchases of securities available-for-sale                  (39,000)     (24,643)          --
    Sales of securities available-for-sale                        6,654        1,458          549
    Principal repayments on mortgage-backed securities            8,201        7,100        5,031
    Purchases of Federal Home Loan Bank stock                    (2,000)      (3,000)          --
    Purchase of bank-owned life insurance                            --       (5,100)          --
    Purchase of certificates of deposit                          (1,117)          --           --
    Proceeds from sales of real estate held for development          --          289        1,479
    Proceeds from sales of real estate held for expansion           154           --           --
    Investment in real estate held for development                   --           --       (1,203)
    Expenditures for premises and equipment                        (315)        (734)         (57)
                                                               --------     --------     --------
       Net cash from investing activities                       (10,160)      17,401       (4,543)
</TABLE>

--------------------------------------------------------------------------------
                                  (Continued)


                                      F-7
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Years ended December 31, 2002, 2001, and 2000
                                 (In thousands)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                   2002         2001         2000
                                                                 --------     --------     --------
<S>                                                              <C>          <C>          <C>
CASH FLOWS FROM FINANCING ACTIVITIES
    Net change in deposits                                       $    894     $ 15,101     $  2,298
    Net change in securities sold under repurchase agreements         (59)      (8,028)       5,501
    Net change in advances from borrowers for taxes and
      insurance                                                       (58)         287          147
    Stock options exercised                                           278           --           --
    Dividends paid to stockholders                                   (603)        (819)        (732)
    Purchases of treasury stock                                      (472)      (6,063)      (3,662)
    Federal Home Loan Bank advances                                11,663       27,000           --
    Repayment of Federal Home Loan Bank advances                   (7,000)     (24,000)          --
                                                                 --------     --------     --------
       Net cash from financing activities                           4,643        3,478        3,552
                                                                 --------     --------     --------

Net change in cash and cash equivalents                            (3,911)      23,843           42

Cash and cash equivalents at beginning of year                     27,909        4,066        4,024
                                                                 --------     --------     --------

CASH AND CASH EQUIVALENTS AT END OF YEAR                         $ 23,998     $ 27,909     $  4,066
                                                                 ========     ========     ========

Supplemental disclosures of cash flow information
    Cash paid during the year for
       Interest                                                  $  7,975     $  9,773     $  9,673
       Income taxes                                                   999          916          850
</TABLE>







--------------------------------------------------------------------------------
          See accompanying notes to consolidated financial statements.


                                      F-8
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation: The accompanying consolidated financial statements
include the accounts of Park Bancorp, Inc. ("the Company") and its wholly owned
subsidiaries Park Federal Savings Bank ("the Bank") and PBI Development
Corporation ("PBI"), which conducts real estate development activities. The Bank
has two wholly owned subsidiaries: GPS Corporation, which conducts limited
insurance activities, and GPS Development Corp. ("GPS"), which conducts real
estate development activities. All significant intercompany transactions and
balances are eliminated in consolidation.

Business: The primary business of the Company is the ownership of the Bank.
Through the Bank, the Company is engaged in the business of retail banking, with
operations conducted through its main office and two branches, located in
Chicago and Westmont, Illinois. The Company's revenues primarily arise from
interest income from retail lending activities and investments and revenue
derived from real estate through the development and sales of residential lots
to home builders through PBI and GPS.

Use of Estimates: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
income and expenses during the reporting period. Actual results could differ
from those estimates. The collectibility of loans, fair value of financial
instruments, and status of contingencies are particularly subject to change.

Securities: Securities are classified as available-for-sale when management may
decide to sell those securities in response to changes in market interest rates,
liquidity needs, changes in yields on alternative investments, and for other
reasons. Securities available-for-sale are carried at fair value. Unrealized
gains and losses on securities available-for-sale are included as a separate
component of stockholders' equity, net of deferred income taxes. Realized gains
and losses on disposition are based on the net proceeds and the adjusted
amortized cost of the securities sold, using the specific identification method.
Interest income includes amortization of purchase premium or discount.
Securities are written down to fair value when a decline in fair value is not
temporary.

Federal Home Loan Bank ("FHLB") stock is carried at cost.

Loans Receivable: Loans receivable are stated at unpaid principal balances, less
the allowance for loan losses, deferred loan origination fees, and discounts.


--------------------------------------------------------------------------------
                                  (Continued)


                                      F-9
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


Allowance for Loan Losses: The allowance for loan losses is a valuation
allowance for probable incurred credit losses, increased by the provision for
loan losses and decreased by charge-offs, net of recoveries. Management
estimates the allowance balance required using past loss experience, economic
conditions, information about specific borrower situations including their
financial position and collateral values, and other factors. Allocations of the
allowance may be made for specific loans, but the entire allowance is available
for any loan that, in management's judgment, should be charged off. Loan losses
are charged off against the allowance when management believes that the
uncollectibility of a loan balance is confirmed.

A loan is impaired when full payment under the loan term is not expected.
Impairment is evaluated in total for smaller-balance loans of similar nature
such as residential mortgage, residential construction, and consumer loans and
on an individual basis for other loans. If a loan is impaired, a portion of the
allowance is allocated so that the loan is reported, net, at the present value
of estimated future cash flows using the loan's existing rate or at the fair
value of collateral if repayment is expected solely from the collateral.

Loan Interest Income: Interest on loans is accrued over the term of the loans
based upon the principal outstanding. Management reviews loans delinquent 90
days or more to determine whether the interest accrual should be discontinued.
The carrying values of impaired loans are periodically adjusted to reflect cash
payments, revised estimates of future cash flows, and increases in the present
value of expected cash flows due to the passage of time. Cash payments
representing interest income are reported as such. Other cash payments are
reported as reductions in carrying value, while increases or decreases due to
changes in estimates of future payments and due to the passage of time are
reported as adjustments to the provision for loan losses.

Loan Origination Fees: Loan origination fees, net of certain direct loan
origination costs, are deferred and recognized over the contractual life of the
loan as a yield adjustment.

Real Estate Held for Development: The Company, through PBI and GPS, engages in
the development of residential real estate lots in partnership with local
developers. Since the Company and the Bank provide all of the financing for
these projects, they have been reflected as wholly owned investments in real
estate held for development. Land inventories and real estate projects under
development are valued at the lower of acquisition cost plus development costs
or net realizable value. The cost of each unit sold includes a proportionate
share of the total projected development expense. Holding costs associated with
undeveloped land, completed units, and suspended construction activities are
expensed. General and administrative costs related to the real estate
development projects are expensed when incurred.


--------------------------------------------------------------------------------
                                  (Continued)


                                      F-10
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


Income Recognition on Real Estate: Gains on real estate sales, including those
financed by the Company, are recorded in the period that sales contracts are
closed. Gains on sales are reported net of all related costs.

Premises and Equipment: Premises and equipment are stated at cost less
accumulated depreciation. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets, which range from 3 to 40
years.

Foreclosed Real Estate: Real estate acquired through foreclosure and similar
proceedings is carried at cost (fair value at the date of foreclosure) or at
fair value less estimated costs to sell. Losses on disposition, including
expenses incurred in connection with the disposition, are charged to operations.

Bank-Owned Life Insurance: The Bank has purchased life insurance policies on
certain key executives. Bank-owned life insurance is recorded at its cash
surrender value, or the amount that can be realized.

Repurchase Agreements: Substantially all repurchase agreement liabilities
represent amounts advanced by various customers. Securities are pledged to cover
those liabilities, which are not covered by federal deposit insurance.

Income Taxes: Income tax expense is the total of the current year income tax due
or refundable and the change in deferred tax assets and liabilities. Deferred
tax assets and liabilities are the expected future tax amounts for the temporary
differences between carrying amounts and tax bases of assets and liabilities,
computed using enacted tax rates. A valuation allowance, if needed, reduces
deferred tax assets to the amount expected to be realized.

Employee Stock Ownership Plan: The cost of shares issued to the employee stock
ownership plan ("ESOP") but not yet allocated to participants is presented in
the consolidated balance sheet as a reduction of stockholders' equity.
Compensation expense is recorded based on the market price of the shares as they
are committed to be released for allocation to participant accounts. The
difference between the market price and the cost of shares committed to be
released is recorded as an adjustment to additional paid-in capital. Dividends
on allocated ESOP shares are recorded as a reduction of retained earnings;
dividends on unallocated ESOP shares are reflected as a reduction of debt.

Shares are considered outstanding for earnings per share calculations as they
are committed to be released; unallocated shares are not considered outstanding.


--------------------------------------------------------------------------------
                                  (Continued)


                                      F-11
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Stock Compensation: Employee compensation expense under stock options is
reported using the intrinsic value method. No stock-based compensation cost is
reflected in net income, as all options granted had an exercise plan equal to or
greater than the market price of the underlying common stock at date of grant.
The following table illustrates the effect on net income and earnings per share
if expense was measured using the fair value recognition provisions of FASB
Statement No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION.

                                                 2002        2001        2000
                                               --------    --------    --------

   Net income as reported                      $  2,165    $  1,604    $  1,557
   Deduct:  Stock-based compensation expense
     determined under fair value based method       (36)       (136)       (136)
                                               --------    --------    --------
   Pro forma net income                           2,129       1,468       1,421

   Basic earnings per share as reported            1.92        1.26        1.04
   Pro forma basic earnings per share              1.89        1.15         .96

   Diluted earnings per share as reported          1.84        1.25        1.04
   Pro forma diluted earnings per share            1.81        1.14         .96

Cash Flows: For the purpose of this statement, cash and cash equivalents are
defined to include the Company's cash on hand, demand balances, interest-bearing
deposits with other financial institutions, and investments in certificates of
deposit with maturities of less than three months.

Comprehensive Income (Loss): Comprehensive income (loss) consists of net income
and the unrealized gains and losses on securities available-for-sale, net of
taxes, which is also recognized as a separate component of stockholders' equity.

Earnings Per Share: Basic earnings per share is based on net income divided by
the weighted average number of shares outstanding during the period, including
allocated and committed-to-be-released ESOP shares. Diluted earnings per share
shows the dilutive effect, if any, of additional common shares issuable under
stock options and unearned management recognition plan ("MRP") shares.

Newly Issued But Not Yet Effective Accounting Standards: New accounting
standards on asset retirement obligations, restructuring activities and exit
costs, operating leases, and early extinguishment of debt were issued in 2002.
Management determined that when the new accounting standards are adopted in
2003, they will not have a material impact on the Company's financial condition
or results of operations.


--------------------------------------------------------------------------------
                                  (Continued)


                                      F-12
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loss Contingencies: Loss contingencies, including claims and legal actions
arising in the ordinary course of business, are recorded as liabilities when the
likelihood of loss is probable and an amount or range of loss can be reasonably
estimated. Management does not believe there now are such matters that will have
a material effect on the financial statements.

Fair Values of Financial Instruments: Fair values of financial instruments are
estimated using relevant market information and other assumptions, as more fully
disclosed in a separate footnote. Fair value estimates involve uncertainties and
matters of significant judgment regarding interest rates, credit risk,
prepayments, and other factors, especially in the absence of broad markets for
particular items. Changes in assumptions or in market conditions could
significantly affect the estimates.

Operating Segments: While the chief decision-makers monitor the revenue streams
of the various products and services, the identifiable segments are not material
and operations are managed and financial performance is evaluated on a
company-wide basis. Accordingly, all of the financial service operations are
considered by management to be aggregated in one reportable operating segment.

Reclassifications: Some items in the prior year financial statements were
reclassified to conform to the current year presentation.


NOTE 2 - SECURITIES

Securities available-for-sale are summarized as follows:

                                        --------December 31, 2002----------
                                                -----------------
                                                     Gross         Gross
                                           Fair    Unrealized    Unrealized
                                          Value      Gains         Losses
                                        --------    --------    -----------
     Corporate notes                    $ 18,080    $    950    $         -
     Municipal securities                  1,259          43              -
     Equity securities                     7,804           6            (86)
     Mortgage-backed securities
         FNMA                             16,220         187              -
         FHLMC                            17,750         228             (6)
                                        --------    --------    -----------

                                        $ 61,113    $  1,414    $       (92)
                                        ========    ========    ===========


--------------------------------------------------------------------------------
                                  (Continued)


                                      F-13
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 2 - SECURITIES (Continued)

                                         ---------December 31, 2001---------
                                                  -----------------
                                                        Gross      Gross
                                           Fair      Unrealized  Unrealized
                                           Value        Gains      Losses
                                         --------    --------    --------
     U.S. government agency notes        $ 29,627    $     75    $    (58)
     Corporate notes                       15,052           9        (204)
     Municipal securities                   1,415           -         (62)
     Equity securities                      5,813         131        (158)
     Mortgage-backed securities
         FNMA                               5,156          50           -
         FHLMC                              8,641         150           -
                                         --------    --------    --------

                                         $ 65,704    $    415    $   (482)
                                         ========    ========    ========

Contractual maturities of debt securities available-for-sale at December 31,
2002 were as follows. Securities not due at a single maturity date, primarily
mortgage-backed and equity securities, are shown separately.

                                                                Fair Value
                                                                 --------
     Due within one year                                         $      -
     Due one to five years                                         18,080
     Due five years to ten years                                      608
     Due after ten years                                              651
                                                                 --------
                                                                   19,339
     Equity securities                                              7,804
     Mortgage-backed securities                                    33,970
                                                                 --------

                                                                 $ 61,113
                                                                 ========

Securities with a carrying value of $11,707,000 and $18,940,000 at December 31,
2002 and 2001 were pledged to secure securities sold under repurchase agreements
and public deposits as required or permitted by law.


--------------------------------------------------------------------------------
                                  (Continued)


                                      F-14
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 2 - SECURITIES (Continued)

Sales of securities are summarized as follows:

                                              For the Year Ended
                                       ----------December 31,----------
                                                 ------------
                                         2002        2001         2000
                                         ----        ----         ----

     Proceeds from sales               $  6,654    $  1,458    $    549
     Gross realized gains                   346         325          76


NOTE 3 - LOANS RECEIVABLE

The Company grants mortgages and installment loans to and obtains deposits from
customers located primarily in Cook, DuPage, and Will Counties, Illinois.
Substantially all loans are secured by specific items of collateral, primarily
residential real estate and consumer assets. The Company also develops
residential housing lots in the western suburbs of Chicago for sale to local
home builders.

Loans receivable are summarized as follows at:

                                                    -----December 31,-----
                                                         ------------
                                                      2002         2001
                                                      ----         ----
  Mortgage loans
      Principal balances
           One-to-four-family residential           $  96,351    $  87,620
           Multi-family residential                    17,977       17,279
           Commercial, construction, and land          20,766       19,216
                                                    ---------    ---------
                                                      135,094      124,115
      Undisbursed portion of construction loans        (5,226)      (3,329)
      Net deferred loan origination fees                 (467)        (445)
                                                    ---------    ---------
           Total mortgage loans                       129,401      120,341
  Consumer loans                                        3,990        4,238
  Participations and loans purchased                   15,176       10,709
  Allowance for loan losses                              (574)        (500)
                                                    ---------    ---------

                                                    $ 147,993    $ 134,788
                                                    =========    =========

The Company had no impaired loans in 2002, 2001, or 2000.


--------------------------------------------------------------------------------
                                  (Continued)


                                      F-15
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 3 - LOANS RECEIVABLE (Continued)

Nonperforming loans were as follows:
                                                     -------December 31,-----
                                                            ------------
                                                       2002              2001
                                                       ----              ----

     Loans past due over 90 days still on accrual    $      -    $      -
     Nonaccrual loans                                     235         122

Nonperforming loans and impaired loans are defined differently. Some loans may
be included in both categories, whereas other loans may only be included in one
category.

The Company has granted loans to certain officers, directors, and their related
interests. Related party loans are made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with unrelated persons and do not involve more than
normal risk of collectibility. All such loans are current in their contractual
payments for both principal and interest.

Activity in the loan accounts of officers, directors, and their related
interests follows for the year ended December 31, 2002:

     Balance at beginning of year                                $    235
     Loans originated                                                   -
     Principal repayments                                             (32)
                                                                 --------

         Balance at end of year                                  $    203
                                                                 ========

A summary of activity in the allowance for loan losses follows:

                                           2002        2001        2000
                                           ----        ----        ----

     Beginning balance                   $    500    $    500    $    500
     Provision for loan losses                120           -           -
     Loans charged off                        (46)          -           -
                                         --------    --------    --------

         Ending balance                  $    574    $    500    $    500
                                         ========    ========    ========


                                      F-16
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 4 - PREMISES AND EQUIPMENT

Premises and equipment consist of the following at:

                                                     ----December 31,----
                                                         ------------
                                                       2002        2001
                                                       ----        ----
     Cost
         Land                                        $  1,007    $    850
         Buildings and improvements                     1,943       2,046
         Real estate held for future expansion            212         123
         Furniture and fixtures                         1,520       1,549
                                                     --------    --------
              Total cost                                4,682       4,568
     Less accumulated depreciation                     (1,979)     (1,856)
                                                     --------    --------

                                                     $  2,703    $  2,712
                                                     ========    ========


NOTE 5 - DEPOSITS

Certificate of deposit accounts with balances of $100,000 or more totaled
$15,958,000 at December 31, 2002 and $16,870,000 at December 31, 2001.

At December 31, 2002, scheduled maturities of certificates of deposit are as
follows:

      2003                                           $  81,107
      2004                                              12,883
      2005                                               7,189
      2006                                                 678
      2007 and thereafter                                5,627
                                                     ---------

                                                     $ 107,484
                                                     =========





--------------------------------------------------------------------------------
                                  (Continued)


                                      F-17
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 6 - FHLB ADVANCES

FHLB advances consisted of the following:

<TABLE>
<CAPTION>
                                                            Fixed or
                                               Interest     Variable
    Maturity Date           Call Date            Rate          Rate          2002         2001
    -------------           ---------          --------     --------         ----         ----
<S>                     <C>                      <C>         <C>          <C>          <C>
  August 28, 2002                                5.02        Fixed        $      -     $   5,000
  November 22, 2002                              5.75        Variable            -         2,000
  August 28, 2003       February 28, 2003        6.28        Fixed          10,000        10,000
  October 30, 2003                               1.76        Fixed           1,000             -
  October 31, 2003                               1.44        Fixed           1,000             -
  December 11, 2003                              1.47        Fixed             663             -
  November 15, 2004                              2.14        Fixed           1,000             -
  November 01, 2004                              1.86        Fixed           1,000             -
  November 01, 2004                              2.24        Fixed           1,000             -
  July 05, 2005                                  3.09        Fixed           2,000             -
  October 31, 2005                               2.75        Fixed           1,000             -
  October 31, 2005                               2.36        Fixed           1,000             -
  May 22, 2006          May 22, 2003             4.20        Fixed           5,000         5,000
  July 02, 2007                                  3.38        Variable        2,000             -
  January 15, 2008      January 15, 2003         4.95        Fixed           5,000         5,000
  January 16, 2011      January 16, 2003         4.55        Fixed           8,000         8,000
  July 24, 2011         July 24, 2003            4.25        Fixed           2,000         2,000
  July 24, 2011         July 24, 2004            4.60        Fixed           2,000         2,000
                                                                          --------      --------

                                                                          $ 43,663      $ 39,000
                                                                          ========       =======
</TABLE>

The Company will incur a penalty if the advances are repaid prior to their
maturity dates. Advances totaling $32.0 million are callable in whole or in part
by the FHLB at the call dates indicated and quarterly thereafter.

The Company maintains a collateral pledge agreement covering advances whereby
the Company has agreed to at all times keep on hand, free of all other pledges,
liens, and encumbrances, fully disbursed, whole first mortgages on improved
residential property not more than 90 days delinquent, aggregating no less than
167% of the outstanding advances from the FHLB.

--------------------------------------------------------------------------------
                                  (Continued)


                                      F-18
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 6 - FHLB ADVANCES (Continued)

Maturities over the next five years are:

    2003                                              $ 12,663
    2004                                                 3,000
    2005                                                 4,000
    2006                                                 5,000
    2007                                                 2,000
    Thereafter                                          17,000
                                                      --------

                                                      $ 43,663
                                                      ========


NOTE 7 - EMPLOYEE BENEFIT PLANS

The Bank maintains a 401(k) plan covering substantially all employees. The plan
allows participant salary deferrals into the plan along with a matching
contribution provided by the Bank. Contributions to the 401(k) plan are made at
the discretion of the Board of Directors and charged to expense annually. Total
contributions to the plan were $62,000, $24,000, and $24,000 for 2002, 2001, and
2000.

The Bank maintains a nonqualified supplemental executive retirement plan
("SERP") to provide certain officers and highly compensated employees with
additional retirement benefits. The SERP is designed to restore benefits to
participants in the qualified plan whose retirement benefits were reduced as the
result of changes in the Internal Revenue Code. SERP expense was $79,000 in
2002, $47,000 in 2001, and $44,000 in 2000.

The Bank established an ESOP for the benefit of substantially all employees. The
ESOP borrowed $2,160,990 from the Company and used those funds to acquire
216,099 shares of the Company's stock at $10 per share, the initial public
offering price.

Shares issued to the ESOP are allocated to ESOP participants based on principal
repayments made by the ESOP on the loan from the Company. The loan is secured by
shares purchased with the loan proceeds and will be repaid by the ESOP with
funds from the Bank's discretionary contributions to the ESOP and earnings on
ESOP assets. Principal payments are scheduled to occur over a fifteen-year
period. However, in the event the Bank's contributions exceed the minimum debt
service requirements, additional principal payments will be made.

--------------------------------------------------------------------------------
                                  (Continued)


                                      F-19
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 7 - EMPLOYEE BENEFIT PLANS (Continued)

During 2002, 2001, and 2000, 15,242, 15,910, and 16,579 shares of stock, with an
average fair value of $21.23, $17.19, and $13.05 per share were committed to be
released, resulting in ESOP compensation expense of $324,000, $273,000, and
$216,000. ESOP shares had been reduced by 10,359 and 3,523 as of December 31,
2002 and 2001 because of terminations. Shares held by the ESOP at December 31,
2002 and 2001 are as follows:

                                          2002         2001
                                          ----         ----

  Allocated shares                       102,747       97,864
  Unallocated shares                      97,861      113,103
                                       ---------    ---------

      Total ESOP shares                  200,608      210,967
                                       =========    =========

  Fair value of unallocated shares     $   2,236    $   2,009
                                       =========    =========

The Company adopted a management recognition plan ("MRP") during 1997. The Bank
contributed $1.7 million, allowing the MRP to acquire 108,057 shares of common
stock of the Company at a cost of $15.75 per share. Under the MRP, 92,925 shares
of common stock were awarded to certain employees and directors in 1997, 3,500
shares were awarded in 1998, 9,880 shares were awarded in 1999, and 1,752 shares
were awarded in 2001. The stock awards generally vest over five years.
Compensation expense for the stock awards totaled $0, $223,000, and $327,000 for
the years ended December 31, 2002, 2001, and 2000.

The Company also adopted a stock option plan in 1997 under the terms of which
270,144 shares of the Company's common stock were reserved for issuance. All
options granted become exercisable over a five-year period from the date of
grant. All options granted expire ten years from the date of grant.

--------------------------------------------------------------------------------
                                  (Continued)


                                      F-20
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 7 - EMPLOYEE BENEFIT PLANS (Continued)

A summary of the activity in the plan is as follows:

<TABLE>
<CAPTION>
                         --------2002-----------     --------2001----------     --------2000-----------
                                 ----                        ----                       ----
                                       Weighted                    Weighted                    Weighted
                                       Average                     Average                     Average
                                       Exercise                    Exercise                    Exercise
                          Shares        Price         Shares        Price         Shares        Price
                         --------      --------      --------      --------     ---------      --------
<S>                       <C>          <C>            <C>          <C>            <C>          <C>
Outstanding at
  beginning of year       224,807      $  15.72       229,129      $  15.72       242,636      $  15.72
Granted                        --                          --                          --
Exercised                 (17,690)        15.75            --                          --
Forfeited                      --                      (4,322)        15.75       (13,507)        15.75
                        ---------                    --------                    --------
Outstanding at
  end of year             207,117         15.72       224,807         15.72       229,129         15.72
                         ========                    ========                    ========
Options exercisable
  at year-end             197,589                     172,192                     131,129
</TABLE>

At December 31, 2002, the options have a weighted average remaining life of five
years. The exercise price equaled the market value on the date the options were
granted. Exercise prices range from $15.44 to $15.75.


NOTE 8 - EARNINGS PER SHARE

The following table presents a reconciliation of the components used to compute
basic and diluted earnings per share for 2002, 2001, and 2000:

<TABLE>
<CAPTION>
                                                     2002          2001          2000
                                                  ----------    ----------    ----------
<S>                                               <C>           <C>           <C>
 BASIC EARNINGS PER SHARE
   Net income available to common stockholders    $    2,165    $    1,604    $    1,557
   Weighted average common shares outstanding      1,126,266     1,273,230     1,490,428
                                                  ----------    ----------    ----------

       Basic earnings per share                   $     1.92    $     1.26    $     1.04
                                                  ==========    ==========    ==========

 DILUTED EARNINGS PER SHARE
   Net income available to common stockholders    $    2,165    $    1,604    $    1,557

   Weighted average common shares outstanding      1,126,266     1,273,230     1,490,428
   Dilutive effect of MRP                                 --           426            --
   Dilutive effect of stock options                   50,018        13,483            --
                                                  ----------    ----------    ----------

       Average common shares and dilutive
       potential common shares                     1,176,284     1,287,139     1,490,428
                                                  ==========    ==========    ==========

      Diluted earnings per share                  $     1.84    $     1.25    $     1.04
                                                  ==========    ==========    ==========
</TABLE>

--------------------------------------------------------------------------------
                                  (Continued)


                                      F-21
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 8 - EARNINGS PER SHARE (Continued)

The effects of stock options and MRP shares diluted basic earnings per share in
2002 and 2001 but were not included in the computation of diluted earnings per
share in 2000 because to do so would have been anti-dilutive.


NOTE 9 - REGULATORY CAPITAL

The Bank is subject to regulatory capital requirements administered by federal
regulatory agencies. Capital adequacy guidelines and prompt corrective action
regulations involve quantitative measures of assets, liabilities, and certain
off-balance-sheet items calculated under regulatory accounting practices.
Capital amounts and classifications are also subject to qualitative judgments by
regulators. Failure to meet various capital requirements can initiate regulatory
action.

The prompt corrective action regulations provide five classifications, including
well capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized, and critically undercapitalized, although these terms are not
used to represent overall financial condition. If adequately capitalized,
regulatory approval is required to accept brokered deposits. If
undercapitalized, capital distributions are limited, as is asset growth and
expansion, and plans for capital restoration are required.

At year end, the Bank's actual capital levels and minimum required levels were:

<TABLE>
<CAPTION>
                                                                                                Minimum Required
                                                                                                   to Be Well
                                                                     Minimum Required              Capitalized
                                                                        for Capital          Under Prompt Corrective
                                                 Actual              Adequacy Purposes         Action Regulations
                                                 ------              -----------------         ------------------
                                            Amount      Ratio         Amount     Ratio        Amount      Ratio
                                            ------      -----         ------     -----        ------      -----
<S>                                       <C>           <C>         <C>           <C>        <C>           <C>
   2002
   ----
      Total capital (to risk-
        weighted assets)                  $ 23,278      16.4%       $ 11,337      8.0%       $  14,171     10.0%
      Tier 1 (core) capital (to risk-
        weighted assets)                    22,705      16.0           5,668      4.0            8,503      6.0
      Tier 1 (core) capital (to
        adjusted total assets)              22,705       9.3           9,817      4.0           12,271      5.0

   2001
   ----
      Total capital (to risk-
        weighted assets)                  $ 20,847      16.1%       $ 10,361      8.0%       $  12,951     10.0%
      Tier 1 (core) capital (to risk-
        weighted assets)                    20,347      15.7           5,180      4.0            7,771      6.0
      Tier 1 (core) capital (to
        adjusted total assets)              20,347       8.7           9,401      4.0           11,751      5.0
</TABLE>

--------------------------------------------------------------------------------
                                  (Continued)


                                      F-22
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 9 - REGULATORY CAPITAL (Continued)

The Bank at December 31, 2002 was categorized as well capitalized. Management is
not aware of any conditions or events since the most recent notification that
would change the Bank's category.

Federal regulations require the Qualified Thrift Lender ("QTL") test, which
mandates that approximately 65% of assets be maintained in housing-related
finance and other specified areas. If the QTL test is not met, limits are placed
on growth, branching, new investments, and FHLB advances or the Bank must
convert to a commercial bank charter. Management believes that this test is met.


NOTE 10 - INCOME TAXES

Federal income tax expense consists of the following:

                                           2002        2001        2000
                                           ----        ----        ----

     Currently payable tax               $  1,073    $    846    $    851
     Deferred tax (benefit)                   (37)        (15)        (49)
                                         --------    --------    --------

         Income tax expense              $  1,036    $    831    $    802
                                         ========    ========    ========

Due to interest income earned on certain U.S. government agency securities,
there was no state income tax expense in 2002, 2001, or 2000. The state of
Illinois does not tax interest earned on such securities.

The federal income tax expense differs from the amounts determined by applying
the statutory federal income tax rate of 34% to income before income taxes as a
result of the following items:

<TABLE>
<CAPTION>
                              --------2002---------    ---------2001----------   ---------2000---------
                                      ----                      ----                      ----
                                         Percentage                Percentage                Percentage
                                         of Income                 of Income                 of Income
                                          Before                    Before                    Before
                                          Income                    Income                    Income
                              Amount       Taxes        Amount       Taxes        Amount       Taxes
                             -------      -------      -------      -------      -------      -------
<S>                          <C>             <C>       <C>             <C>       <C>             <C>
  Income tax computed at
    the statutory rate       $ 1,088         34.0%     $   827         34.0%     $   802         34.0%
  ESOP expense                    58          1.8           39          1.6           17           .7
  Tax-exempt income              (19)        (0.6)         (35)        (1.4)         (38)        (1.6)
  Bank-owned life insurance      (92)        (2.9)          (3)        (0.1)          --           --
  Other items, net                 1           .1           --           --           21           .9
                             -------      -------      -------      -------      -------      -------

                             $ 1,036         32.4%     $   831         34.1%     $   802         34.0%
                             =======      =======      =======      =======      =======      =======
</TABLE>

--------------------------------------------------------------------------------
                                  (Continued)


                                      F-23
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 10 - INCOME TAXES (Continued)

Prior to 1996, the Bank had qualified under provisions of the Internal Revenue
Code that allowed it to deduct from taxable income a provision for bad debts
that differs from the provision charged to income in the financial statements.
Retained earnings at December 31, 2002 include approximately $3,298,000 for
which no deferred federal income tax liability has been recorded. Tax
legislation passed in 1996 now requires all thrift institutions to deduct a
provision for bad debts for tax purposes based on the actual loss experience and
recapture the excess bad debt reserve accumulated in tax years after 1997. The
remaining excess amount approximates $203,000 at December 31, 2002. The related
amount of deferred tax liability is approximately $69,000 and will be payable
over the next two years.

Deferred tax assets (liabilities) are comprised of the following at year end:

                                                         2002        2001
                                                         ----        ----

  Deferred loan fees                                   $    159    $    151
  ESOP and Supplemental Retirement Plan expense             154         124
  Unrealized loss on securities available-for-sale            -          23
  Bad debt deduction                                        135          32
  Other                                                      16           -
                                                       --------    --------
                                                            464         330

  Unrealized gain on securities held for sale              (442)          -
  FHLB stock dividends                                     (241)       (146)
  Depreciation                                             (171)       (157)
  Other                                                     (11)          -
                                                       --------    --------
                                                           (865)       (303)
                                                       --------    --------

      Net deferred tax asset (liability)               $   (401)   $     27
                                                       ========    ========


NOTE 11 - COMMITMENTS

The Company is a party to financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of its customers.
These financial instruments consist of standby letters of credit and commitments
to make loans and fund loans in process.

The Company's exposure to credit loss in the event of nonperformance by the
other party to these financial instruments is represented by the contractual
amount of these instruments. The Company follows the same credit policy to make
such commitments as is followed for those loans recorded on the statement of
financial condition.

--------------------------------------------------------------------------------
                                  (Continued)


                                      F-24
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 11 - COMMITMENTS (Continued)

The contractual amount of financial instruments with off-balance-sheet risk is
summarized as follows at year end:
                                                      2002        2001
                                                      ----        ----

     Commitments to make loans (all fixed rate)     $  1,683    $  3,360
     Standby letters of credit                         1,527       2,471
     Loans in process                                  5,226       3,329

The fixed rate loan commitments at December 31, 2002 have terms of up to 60 days
and rates in the range of 5.88% to 6.75%.

Since certain commitments to make loans and fund loans in process may expire
without being used, the amounts above do not necessarily represent future cash
commitments. No losses are anticipated as a result of these transactions.

Interest-bearing deposit accounts in other financial institutions potentially
subject the Company to concentrations of credit risk. At December 31, 2002, the
Company had deposit accounts at the Federal Home Loan Bank of Chicago with
balances totaling approximately $4,462,000. In addition, the Company had federal
funds sold to LaSalle National Bank totaling approximately $16,310,000.


NOTE 12 - FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amount and estimated fair value of financial instruments at year
end is as follows:

<TABLE>
<CAPTION>
                                                    -------------2002----------    ------------2001----------
                                                                 ----                          ----
                                                       Carrying       Estimated        Carrying     Estimated
                                                        Amount       Fair Value         Amount     Fair Value
                                                    -----------     -----------    -----------    -----------
<S>                                                 <C>             <C>            <C>            <C>
 Financial assets
    Cash and cash equivalents                       $    23,998     $    23,998    $    27,909    $    27,909
    Time deposits in other financial institutions         1,117           1,117              -              -
    Securities available-for-sale                        61,113          61,113         65,704         65,704
    Loans receivable, net                               147,993         149,872        134,788        136,381
    FHLB stock                                            7,327           7,327          5,133          5,133
    Accrued interest receivable                           1,195           1,195          1,659          1,659
</TABLE>

--------------------------------------------------------------------------------
                                  (Continued)


                                      F-25
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 12 - FAIR VALUES OF FINANCIAL INSTRUMENTS (Continued)

<TABLE>
<CAPTION>
                                                    -------------2002----------    ------------2001----------
                                                                 ----                          ----
                                                       Carrying       Estimated        Carrying     Estimated
                                                        Amount       Fair Value         Amount     Fair Value
                                                    ------------    ------------   ------------   ------------
<S>                                                 <C>             <C>            <C>            <C>
 Financial liabilities
    Deposits with no fixed maturity dates           $   (56,484)    $   (56,484)   $   (54,675)   $   (54,675)
    Deposits with fixed maturity dates                 (107,484)       (108,997)      (108,399)      (110,139)
    Securities sold under repurchase agreements         (10,599)        (10,599)       (10,658)       (10,658)
    Advances from borrowers for taxes
      and insurance                                      (1,969)         (1,969)        (2,027)        (2,027)
    FHLB advances                                       (43,663)        (44,247)       (39,000)       (38,865)
    Accrued interest payable                               (396)           (396)          (830)          (830)
</TABLE>

The methods and assumptions used to estimate fair value are described as
follows.

Carrying amount is the estimated fair value for cash and cash equivalents, FHLB
stock, accrued interest receivable and payable, demand deposits, short-term
debt, and variable rate loans or deposits that reprice frequently and fully.
Security fair values are based on market prices or dealer quotes and, if no such
information is available, on the rate and term of the security and information
about the issuer. For fixed rate loans or deposits and for variable rate loans
or deposits with infrequent repricing or repricing limits, fair value is based
on discounted cash flows using current market rates applied to the estimated
life and credit risk. Fair values for impaired loans are estimated using
discounted cash flow analysis or underlying collateral values. The fair value of
FHLB advances is based on current rates for similar financing. The fair value of
off-balance-sheet items, based on the current fees or cost that would be charged
to enter into or terminate such arrangements, is immaterial.

Other assets and liabilities of the Company not defined as financial
instruments, such as property and equipment, are not included in the above
disclosures. Also not included are nonfinancial instruments typically not
recognized in financial statements such as the value of core deposits, customer
goodwill, and similar items.

While the above estimates are based on management's judgment of the most
appropriate factors, there is no assurance that if the Company disposed of these
items on December 31, 2002 or December 31, 2001, the fair values would have been
achieved, because the market value may differ depending on the circumstances.
The estimated fair values at December 31, 2002 and December 31, 2001 should not
necessarily be considered to apply at subsequent dates.

--------------------------------------------------------------------------------
                                  (Continued)


                                      F-26
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 13 - OTHER COMPREHENSIVE INCOME

Other comprehensive income components and related taxes were as follows.

<TABLE>
<CAPTION>
                                                          2002       2001       2000
                                                          ----       ----       ----
<S>                                                     <C>        <C>        <C>
 Unrealized holding gains and losses on securities
   available-for-sale                                   $ 1,735    $ 4,223    $ 6,406
 Reclassification adjustments for gains recorded in
   income                                                  (346)      (325)       (76)
                                                        -------    -------    -------
 Net unrealized gains and losses                          1,389      3,898      6,330
 Tax effect                                                (465)    (1,325)    (2,152)
                                                        -------    -------    -------

   Other comprehensive income (loss)                    $   924    $ 2,573    $ 4,178
                                                        =======    =======    =======
</TABLE>


NOTE 14 - PARENT COMPANY FINANCIAL STATEMENTS

Presented below are the condensed statements of financial condition, statements
of income, and statements of cash flows for Park Bancorp, Inc.

                   CONDENSED STATEMENTS OF FINANCIAL CONDITION
                           December 31, 2002 and 2001

                                                         2002       2001
                                                       -------    -------
ASSETS
Cash and cash equivalents                              $ 3,329    $   523
Securities available-for-sale                            1,717      6,150
ESOP loan                                                1,131      1,273
Investment in bank subsidiary                           23,609     20,369
Investment in real estate development subsidiary             1          1
Accrued interest receivable and other assets               108        129
                                                       -------    -------

     Total assets                                      $29,895    $28,445
                                                       =======    =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
     Securities sold under agreements to repurchase    $    --    $   968
     Accrued expenses and other liabilities                  1        199
Stockholders' equity                                    29,894     27,278
                                                       -------    -------

     Total liabilities and stockholders' equity        $29,895    $28,445
                                                       =======    =======

--------------------------------------------------------------------------------
                                  (Continued)


                                      F-27
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 14 - PARENT COMPANY FINANCIAL STATEMENTS (Continued)

                         CONDENSED STATEMENTS OF INCOME
              For the years ended December 31, 2002, 2001, and 2000

<TABLE>
<CAPTION>
                                                         2002        2001        2000
                                                       -------     -------     -------
<S>                                                    <C>         <C>         <C>
Operating income
     Dividends from subsidiaries                       $    --     $ 7,100     $    --
     Gains on sales of securities                          242         325          76
     Interest income
         Securities (including dividends)                  213         625         976
         ESOP loan                                          92         103         113
         Interest-bearing deposits with other
           financial institutions                           31          32          29
                                                       -------     -------     -------
              Total operating income                       578       8,185       1,194

Operating expenses
     Interest on borrowings                                 10         269         637
     Other expenses                                        274         371         311
                                                       -------     -------     -------
         Total operating expenses                          284         640         948
                                                       -------     -------     -------

INCOME BEFORE INCOME TAXES AND EQUITY IN
  UNDISTRIBUTED EARNINGS OF SUBSIDIARIES                   294       7,545         246

Income taxes                                                77         106          40
                                                       -------     -------     -------

INCOME BEFORE EQUITY IN UNDISTRIBUTED EARNINGS
  OF SUBSIDIARIES                                          217       7,439         206

Equity in undistributed (over distributed) earnings
  of bank subsidiary                                     1,956      (5,803)      1,366
Equity in over distributed earnings of
  real estate subsidiary                                    (8)        (32)        (15)
                                                       -------     -------     -------

NET INCOME                                             $ 2,165     $ 1,604     $ 1,557
                                                       =======     =======     =======
</TABLE>

--------------------------------------------------------------------------------
                                  (Continued)


                                      F-28
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 14 - PARENT COMPANY FINANCIAL STATEMENTS (Continued)

                        CONDENSED STATEMENT OF CASH FLOWS
              For the years ended December 31, 2002, 2001, and 2000

<TABLE>
<CAPTION>
                                                                   2002         2001         2000
                                                                 --------     --------     --------
<S>                                                              <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                                   $  2,165     $  1,604     $  1,557
    Adjustments to reconcile net income to net cash from
      operating activities
       Net discount accretion                                         (39)         (28)         (30)
       Gain on sale of securities available-for-sale                 (242)        (325)         (76)
       Equity in (undistributed) over distributed earnings
         of subsidiaries                                           (1,948)       5,835       (1,351)
       Change in
          Other assets                                                141          238           (8)
          Other liabilities                                           (88)         110         (330)
                                                                 --------     --------     --------
              Net cash from operating activities                      (11)       7,434         (238)

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of securities available-for-sale                        (716)      (1,398)          --
    Sale of securities available-for-sale                           1,495        1,458          549
    Maturities and calls of securities available-for-sale           4,000        9,000           --
    Investment in PBI Development Corporation                          --           --          127
    Payment received on ESOP loan                                     142          142          142
    Capital contribution to subsidiary                                (61)         (81)         (72)
                                                                 --------     --------     --------
       Net cash from investing activities                           4,860        9,121          746

CASH FLOWS FROM FINANCING ACTIVITIES
    Net change in securities sold under repurchase agreements        (968)      (9,692)       4,359
    Purchase of treasury stock                                       (472)      (6,063)      (3,662)
    Dividends paid to stockholders                                   (603)        (819)        (732)
                                                                 --------     --------     --------
       Net cash from financing activities                          (2,043)     (16,574)         (35)
                                                                 --------     --------     --------

Net change in cash and cash equivalents                             2,806          (19)         473

Cash and cash equivalents at beginning of year                        523          542           69
                                                                 --------     --------     --------

CASH AND CASH EQUIVALENTS AT END OF YEAR                         $  3,329     $    523     $    542
                                                                 ========     ========     ========
</TABLE>

--------------------------------------------------------------------------------
                                  (Continued)


                                      F-29
<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2002, 2001, and 2000
          (Table amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------


NOTE 15 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

                                                                       Earnings
                                      Net                 Earnings    Per Share
                       Interest    Interest      Net     Per Share      Fully
                        Income      Income     Income       Basic      Diluted
                       --------    --------    ------    ---------    ---------
2002
----
    First quarter       $3,656      $1,570     $  491     $   .44     $   .43
    Second quarter       3,810       1,888        653         .57         .56
    Third quarter        3,639       1,804        461         .41         .39
    Fourth quarter       3,570       1,872        560         .50         .47

2001
----
    First quarter       $4,062      $1,473     $  330     $   .23     $   .23
    Second quarter       4,340       1,786        511         .37         .37
    Third quarter        4,211       1,602        452         .39         .38
    Fourth quarter       3,906       1,551        311         .27         .27













--------------------------------------------------------------------------------


                                      F-30