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

                   For the fiscal year ended December 31, 2003

                               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 _______ No ___X___

The aggregate market value of the voting stock of the Registrant held by
non-affiliates was approximately $25,648,000 as of June 30, 2003.

As of March 19, 2004, the Registrant had outstanding 1,150,195 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 May 5, 2004., are incorporated by
reference into Part III.


<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") is an Illinois
corporation, which participates in residential real estate development projects.
GPS Corporation is an Illinois corporation, which 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 in Illinois.

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, corporate and government securities 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, 2003,
the Bank had total gross loans outstanding of $161.9 million, of which $100.1
million were one-to-four-family residential mortgage loans, or 61.86% of the
Bank's total gross loans. The remainder of the portfolio consists of $19.2
million of multi-family mortgage loans, or 11.84% of total gross loans; $17.0
million of commercial real estate loans, or 10.50% of total gross loans; $13.0
million of construction and land loans, or 8.04% of total gross loans; and
consumer and other loans of $12.6 million, or 7.76% of total gross loans. The
Bank had no loans held for sale at December 31, 2003.

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,--------------------------------
                                                          ---------------
                           --------2003--------        --------2002---------         --------2001--------
                                   ----                        ----                          ----
                                         Percent                     Percent                      Percent
                           Amount       of Total       Amount       of Total         Amount      of Total
                           ------       --------       ------        --------        ------      --------
<S>                      <C>                <C>       <C>                <C>       <C>             <C>
Real estate
    Residential
       One-to-four-
         family          $ 100,136          61.86%    $  96,351          62.46%    $  87,620       63.00%
       Multi-family         19,167          11.84        17,977          11.65        17,279       12.43
    Commercial              16,998          10.50         9,607           6.23         8,548        6.15
    Construction and
      land                  13,013           8.04        11,159           7.23        10,668        7.67
Consumer and other          12,559           7.76        19,166          12.43        14,947       10.75
                         ---------    -----------     ---------    -----------     ---------   ---------

    Total loans, gross     161,873         100.00%      154,260         100.00%      139,062      100.00%
                                      ===========                  ===========                 =========

Undisbursed portion
  of loans
  funds                     (1,812)                      (5,226)                      (3,329)
Deferred loan
  origination fees
  and unearned
  discounts                   (526)                        (467)                        (445)
Allowance for
  loan losses                 (578)                        (574)                        (500)
                         ---------                    ---------                    ---------

    Total loans, net     $ 158,957                    $ 147,993                    $ 134,788
                         =========                    =========                    =========
</TABLE>


[WIDE TABLE CONTINUED FROM ABOVE]
<TABLE>
<CAPTION>
                             --------------At December 31,----------------
                                           ---------------
                             -------2000---------     ---------1999-------
                                    ----                       ----
                                          Percent                  Percent
                             Amount      of Total     Amount      of Total
                             ------      --------     ------      --------
<S>                        <C>              <C>      <C>              <C>
Real estate
    Residential
       One-to-four-
         family            $  71,375        70.23%   $  66,826        75.03%
       Multi-family           10,924        10.75        9,847        11.05
    Commercial                 5,316         5.23        3,756         4.22
    Construction and
      land                     9,130         8.98        6,076         6.82
Consumer and other             4,882         4.81        2,561         2.88
                           ---------    ---------    ---------     --------

    Total loans, gross       101,627       100.00%      89,066       100.00%

Undisbursed portion
  of loans
  funds                       (3,763)                   (1,543)
Deferred loan
  origination fees
  and unearned
  discounts                     (347)                     (331)
Allowance for
  loan losses                   (500)                     (500)
                           ---------                 ---------

    Total loans, net       $  97,017                 $  86,692
                           =========                 =========
</TABLE>



                                       4.


<PAGE>


LOAN MATURITY. The following table shows the contractual maturity of the Bank's
gross loans at December 31, 2003. The table does not include principal
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                 $    295     $     406    $     374    $  10,621    $    4,248     $   15,944

    After one year
       More than one year
         to three years                   249         2,079        1,066        1,474         2,554          7,422
       More than three years
         to five years                    741         6,905        5,885          828         4,246         18,605
       More than five years
         to ten years                   3,871         4,393        2,833           90           605         11,792
       More than ten years
         to twenty years               36,741         5,384        6,840           --           906         49,871
       More than twenty years          58,239            --           --           --            --         58,239
                                     --------     ---------    ---------    ---------    ----------     ----------

          Total due after
            December 31, 2004          99,841        18,761       16,624        2,392         8,311        145,929
                                     --------     ---------    ---------    ---------    ----------     ----------

              Gross loans
                receivable           $100,136     $  19,167    $  16,998    $  13,013    $   12,559     $  161,873
                                     ========     =========    =========    =========    ==========     ==========
</TABLE>

The following table sets forth at December 31, 2003 the dollar amount of total
gross loans receivable contractually due after December 31, 2004 and whether
such loans have fixed interest rates or adjustable interest rates.

                                          ------Due After December 31, 2004---
                                                ---------------------------
                                              Fixed     Adjustable     Total
                                              -----     ----------     -----
Real estate loans
   Residential
      One-to-four-family                  $   93,874   $    5,967   $   99,841
      Multi-family                            18,575          186       18,761
   Commercial                                 13,915        2,709       16,624
   Construction and land                       2,222          170        2,392
Consumer and other                             5,950        2,361        8,311
                                          ----------   ----------   ----------

   Total gross loans receivable           $  134,536   $   11,393   $  145,929
                                          ==========   ==========   ==========

ORIGINATION AND PURCHASE OF LOANS. The Bank's mortgage lending activities are
conducted through its home office and two branch offices. Although the Bank may
originate 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,
                                              ------------------------------
                                              2003        2002          2001
                                              ----        ----          ----

Beginning balance, net                    $  147,993   $  134,788   $   97,017
   Loans originated
       One-to-four-family                     37,967       30,553       31,585
       Multi-family                            6,907        4,860        8,728
       Commercial real estate                 10,873        3,393        3,354
       Construction and land                   9,405        9,832        7,113
       Consumer and other                      3,373        2,570          616
                                          ----------   ----------   ----------
          Total loans originated              68,525       51,208       51,396
   Loans purchased                             7,605       16,238       10,144
                                          ----------   ----------   ----------
                                              76,130       67,446       61,540

Principal payments                           (68,576)     (52,270)     (24,203)
Change in allowance for loan losses               (4)         (74)          --
Change in undisbursed loan funds               3,414       (1,897)         434
                                          ----------   -----------  ----------

   Ending balance, net                    $  158,957   $  147,993   $  134,788
                                          ==========   ==========   ==========

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. On a limited basis, 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 at least 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 primarily 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 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,
2003, the Bank had $6.8 million in purchased mortgage loans and loan
participations serviced by others, totaling 4.18% 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 has incorporated the OTS internal
asset classifications as a part of its credit monitoring system. 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, 2003, the Bank had $545,000 of assets classified as "Special
Mention" and $76,000 of assets classified as "Doubtful." No assets were
classified as "Substandard" or "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,----------------------------
                                                                   ---------------
                                          2003          2002           2001           2000            1999
                                          ----          ----           ----           ----            ----
<S>                                   <C>            <C>             <C>            <C>            <C>
Nonaccrual loans
     Residential real estate
         One-to-four-family           $       544    $       235     $       122    $       457    $        --
         Multi-family                          --             --              --             --             --
     Commercial                                --             --              --             --             --
     Construction and land                     --             --              --             --             --
     Consumer and other                         1             --              --              1             63
                                      -----------    -----------     -----------    -----------    -----------
Total nonperforming loans                     545            235             122            458             63
REO                                            76             55              --             --             --
                                      -----------    -----------     -----------    -----------    -----------

Total nonperforming assets            $       621    $       290     $       122    $       458    $        63
                                      ===========    ===========     ===========    ===========    ===========
</TABLE>

At December 31, 2003, there were five loans totaling $464,000 that were 60 to 89
days delinquent.

<TABLE>
<CAPTION>
                                      -----------------------------At December 31,----------------------------
                                                                   ---------------
                                          2003            2002          2001          2000            1999
                                          ----            ----          ----          ----            ----
<S>                                   <C>            <C>             <C>            <C>            <C>
Allowance for loan losses as a
  percent of gross loans receivable          0.36%          0.37%           0.36%          0.49%          0.56%

Allowance for loan losses as a per-
   cent of total nonperforming loans       106.06         244.26          409.84         109.17         793.65

Nonperforming loans as a percent of
  gross loans receivable(1)                  0.34           0.15            0.09           0.45           0.07

Nonperforming assets as a percentage
  of total assets(1)                         0.23           0.12            0.05           0.19           0.03
</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>
                                          2003           2002           2001           2000            1999
                                          ----           ----           ----           ----            ----
<S>                                   <C>            <C>             <C>            <C>            <C>
Balance at beginning of year          $       574    $       500     $       500    $       500    $       500
Provision for loan losses                      --            120              --             --             --
Charge-offs
    One-to-four-family                         --            (19)             --             --             --
    Consumer and other                        (22)           (27)             --             --             --
                                      -----------    -----------     -----------    -----------    -----------
       Total                                  552            574              --             --             --
Recoveries                                     26             --              --             --             --
                                      -----------    -----------     -----------    -----------    -----------

Balance at end of year                $       578    $       574     $       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,------------------------------------
                                                                    ---------------
                             ------------2003-------------  ------------2002------------  -------------2001------------
                                         ----                           ----                           ----
                                                 Percent of                     Percent of                     Percent of
                                                    Gross                          Gross                          Gross
                                                  Loans in                       Loans in                       Loans in
                                                    Each                           Each                           Each
                                      Percent of  Category           Percent of  Category          Percent of  Category
                                       Allowance  to Total           Allowance   to Total          Allowance   to Total
                                       to Total    Gross             to Total     Gross             to Total     Gross
                              Amount   Allowance   Loans    Amount   Allowance    Loans    Amount   Allowance    Loans
                              -------------------------------------------------------------------------------------------
<S>                          <C>        <C>        <C>      <C>        <C>        <C>      <C>        <C>        <C>
One-to-four-family           $   200    34.60%     61.86%   $  241     41.99%     62.46%   $  190     38.00%     63.00%
Multi-family                      61    10.55      11.84        90     15.68      11.65        60     12.00      12.43
Commercial                        68    11.76      10.50        48      8.36       6.23        59     11.80       6.15
Construction and land            104    17.99       8.04        57      9.93       7.23        57     11.40       7.67
Consumer and other               145    25.10       7.76       138     24.04      12.43        69     13.80      10.75
Unallocated                        -       --         --        --        --         --        65     13.00         --
                             -------  -------    -------    ------     -----     ------    ------   -------    -------

   Total allowance for loan
     losses                  $   578   100.00%    100.00%   $  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>



                                      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.

All United States government securities held at December 31, 2003 are callable
at the option of the issuer, which also presents prepayment risk to the Company.

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,-------------------------------
                                                                  ---------------
                                    -----------2003--------   ----------2002--------    ----------2001----------
                                               ----                     ----                      ----
                                      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  securities     $    10,023  $   10,023   $       --   $       --   $   29,627   $   29,627
    Corporate bonds                      11,747      11,747       18,080       18,080       15,052       15,052
    Mortgage-backed securities
       FNMA (1)                          28,929      28,929       16,220       16,220        5,156        5,156
       FHLMC (2)                         15,723      15,723       17,750       17,750        8,641        8,641
    Municipal securities                     --          --        1,259        1,259        1,415        1,415
    Equity securities                     5,636       5,636        7,804        7,804        5,813        5,813
                                    -----------  ----------   ----------   ----------   ----------   ----------

       Total available-for-sale     $    72,058  $   72,058   $   61,113   $   61,113   $   65,704   $   65,704
                                    ===========  ==========   ==========   ==========   ==========   ==========
</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, 2003. 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, 2003---------------------
                                                                --------------------
                                                                   More than One         More than Five
                                         One Year or Less       Year to Five Years     Years to Ten Years
                                         ----------------       ------------------     ------------------

                                                  Weighted                Weighted               Weighted
                                      Carrying     Average     Carrying    Average    Carrying    Average
                                       Amount       Yield       Amount      Yield      Amount      Yield
                                       ------       -----       ------      -----      -----       -----
Securities
<S>                                    <C>         <C>         <C>          <C>        <C>         <C>
    U.S. government securities         $     --      --%      $   3,005     3.37%      $   7,018   4.15%
    Corporate notes                          --      --          11,747     5.08              --     --
    Equity securities                        --      --              --      --               --     --
                                      ---------    ----       ---------    ----        ---------   -----

       Total securities               $      --      --%      $  14,752     4.71%      $   7,018   4.15%
                                      =========    ====       =========     ====       =========   =====

Mortgage-backed securities
    FNMA                              $      81    6.00%      $     541     5.83%      $      --     --%
    FHLMC                                     -       -           1,534     4.98             760    5.33
                                      ---------    ----       ---------     ----       ---------   -----

       Total mortgage-
         backed securities            $      81   6.00%       $   2,075     5.20%      $     760   5.33%
                                      =========    ====       =========     ====       =========   =====
</TABLE>

[WIDE TABLE CONTINUED FROM ABOVE]
<TABLE>
<CAPTION>
                                      --------------At December 31, 2003------------
                                                    --------------------
                                               More than
                                               Ten Years                 Total
                                               ---------                 -----

                                                     Weighted               Weighted
                                          Carrying    Average     Carrying   Average
                                           Amount      Yield       Amount     Yield
                                           ------      -----       ------     -----
Securities
<S>                                     <C>            <C>      <C>            <C>
    U.S. government securities          $       --       --%    $   10,023     3.89%
    Corporate notes                             --       --         11,747     5.08
    Equity securities                           --       --          5,636     3.32
                                        ----------    -----     ----------     ----

       Total securities                 $       --       --%    $   27,406     4.28%
                                        ==========    =====     ==========     ====

Mortgage-backed securities
    FNMA                                $   28,307     3.80%    $   28,929     3.85%
    FHLMC                                    13,42     3.71         15,723     3.91
                                        ----------    -----     ----------     ----

       Total mortgage-
         backed securities              $   41,736     3.78%    $   44,652     3.87%
                                        ==========    =====     ==========     ====
</TABLE>

Included in the table above are $10.0 million of FHLB and FHLMC notes that are
callable at the option of the issuing agency. Callable and variable rate FHLB
advances totaled $20.0 million and $2.0 million at December 31, 2003,
respectively. The Company has call risk on both the investing and borrowing
positions. If FHLB advances are called, the Company generally has the ability to
refinance them, although the interest rates on new advances may be higher.



                                      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, 2003, the
Bank had $72.0 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:

<TABLE>
<CAPTION>
                                              ---------Years Ended December 31,--------
                                                       -----------------------
                                                  2003          2002            2001
                                                  ----          ----            ----
<S>                                           <C>            <C>            <C>
Net deposits (withdrawals)                    $     3,073    $    (4,443)   $     9,145
Interest credited on deposit accounts               3,421          5,337          5,956
                                              -----------    -----------    -----------

    Total increase in deposit accounts        $     6,494    $       894    $    15,101
                                              ===========    ===========    ===========
</TABLE>

At December 31, 2003, the Bank had $14.9 million in certificate accounts in
amounts of $100,000 or more maturing as follows:

                                                       Weighted
                                                        Average
     Maturity Period                      Amount         Rate
     ---------------                      ------         ----
Three months or less                    $     2,262      2.35%
Over three through six months                 1,666      2.27
Over six through twelve months                5,259      2.47
Over twelve months                            5,691      3.34
                                        -----------      ----

    Total                               $    14,878      2.76%
                                        ===========      ====



                                      14.

<PAGE>


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

<TABLE>
<CAPTION>
                                      -----------------------------------------December 31,-----------------------------------------
                                                                               ------------
                                      -----------2003------------      ------------2002--------------    -----------2001------------
                                                 ----                              ----                             ----
                                                         Percent of                       Percent of                      Percent of
                                         Amount             Total         Amount             Total          Amount           Total
                                         ------             -----         ------             -----          ------           -----
<S>                                    <C>                  <C>        <C>                   <C>          <C>                 <C>
Passbook accounts $                   $     36,368          21.33%     $     34,626          21.12%       $   33,543          20.57%
Money market savings accounts               11,044           6.48             8,576           5.23             7,901           4.85
NOW accounts                                10,258           6.02             8,804           5.37             8,316           5.10
Non-interest-bearing accounts                6,099           3.58             4,478           2.73             4,915           3.01
                                      ------------       --------      ------------       --------      ------------       --------
     Total transaction accounts             63,769          37.41            56,484          34.45            54,675          33.53
Certificate accounts
     1.00% to 1.99%                         46,429          27.24             7,299           4.45                --             --
     2.00% to 2.99%                         33,470          19.63            32,619          19.89             8,951           5.49
     3.00% to 3.99%                         13,744           8.06            47,111          28.73            14,499           8.89
     4.00% to 4.99%                          8,191           4.81            13,528           8.25            22,167          13.59
     5.00% to 5.99%                          1,933           1.13             3,753           2.29            33,750          20.70
     6.00% to 6.99%                          2,926           1.72             3,174           1.94            28,019          17.18
     7.00% to 7.99%                             --             --                --             --             1,013           0.62
                                      ------------       --------      ------------       --------      ------------       --------

         Total certificate accounts        106,693          62.59           107,484          65.55           108,399          65.51
                                      ------------       --------      ------------       --------      ------------       --------

              Total deposits          $    170,462         100.00%     $    163,968         100.00%     $    163,074         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, 2003.

<TABLE>
<CAPTION>
                                        --------------------Period to Maturity from December 31, 2003----------------
                                                            -----------------------------------------
                                         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
                                          ------        -------      -------      -------      -------      -------        -----
<S>                                     <C>          <C>          <C>           <C>          <C>          <C>          <C>
Certificate accounts
    1.00% to 1.99%                      $   42,049   $    4,380   $       --    $      --    $       --   $       --   $    46,429
    2.00% to 2.99%                          21,197       10,891        1,050           23           309           --        33,470
    3.00% to 3.99%                           3,988        5,073          230          975         3,423           55        13,744
    4.00% to 4.99%                           1,946        1,877          585        3,456           323            4         8,191
    5.00% to 5.99%                           1,430          304           47          152             -            -         1,933
    6.00% to 6.99%                           1,378          275           13        1,260             -            -         2,926
                                        ----------   ----------   ----------    ---------    ----------   ----------    ----------

       Total                            $   71,988   $   22,800   $    1,925    $   5,866    $    4,055   $       59    $  106,693
                                        ==========   ==========   ==========    =========    ==========   ==========    ==========
</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 $55.2 million of FHLB advances outstanding at
December 31, 2003, which carry interest rates ranging from 1.34% to 4.95% and
mature on various dates, 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:
                                                        2003           2002
                                                        ----           ----

Balance at year end                                 $    6,904     $    10,599
Maximum month-end balance during the year               10,789          10,775
Average balance during the year                          9,006          10,509
Average interest rate at year end                         2.93%           3.24%
Average interest rate during the year                     2.93            3.81

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 of the joint venture 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 have been 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 have been 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



                                      16.

<PAGE>


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 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. There were no gains or losses on the sales of real estate held for
development for the years ended December 31, 2003 and 2002; and there was a
$13,000 gain in 2001.

EMPLOYEES

At December 31, 2003, the Company had 54 full-time equivalent employees. None of
the Company's employees are represented by any collective bargaining group.
Management considers its relationship with the employees to be excellent.

REGULATION

The Bank is subject to 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 also required to either provide notice or apply to the
OTS before making dividend payments. Periodic examinations by the OTS and the
FDIC test the Bank's compliance with various regulations, including, among
others, those dealing with capital adequacy, safety and soundness and consumer
protection. 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 primarily 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 and the establishment of
adequate loan loss allowances for regulatory purposes. Any change in the
regulatory structure or 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



                                      17.

<PAGE>


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 involve illegal funds, are
designed to evade the requirements of the BSA, or have 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 THE GRAMM-LEACH-BLILEY ACT. In 1999, the Gramm-Leach-Bliley Act ("the
GLB Act") was enacted, which, among other things, established a comprehensive
framework to permit affiliations among commercial banks, insurance companies,
and securities firms. The GLB Act significantly reforms various aspects of the
financial services business, including but not limited to: (i) establishing a
new framework under which bank holding companies and, subject to numerous
restrictions, banks can own securities firms, insurance companies, and other
financial companies; (ii) subjecting banks to the same securities regulation as
other providers of securities products; and (iii) prohibiting new unitary
savings and loan holding companies from engaging in nonfinancial activities or
affiliating with nonfinancial entities. The GLB Act restricts the powers of new
unitary savings and loan association holding companies. Unitary savings and loan
holding companies in existence or with applications filed with the OTS on or
before May 4, 1999, such as the Company, retain their authority under the prior
law. All other unitary savings and loan holding companies are limited to
financially related activities permissible for bank holding companies, as
defined under the GLB Act. The GLB Act also prohibits non-financial companies
from acquiring grandfathered unitary savings and loan association holding
companies.

The provisions in the GLB Act permitting full affiliations between bank holding
companies or banks and other financial companies do not increase our authority
to affiliate with securities firms, insurance companies, or other financial
companies. As a unitary savings and loan holding company, the Company was
generally permitted to have such affiliations prior to the enactment of the GLB
Act. It is expected, however, that these provisions will benefit the Company's
competitors.

The GLB Act imposes new requirements on financial institutions with respect to
customer privacy by generally prohibiting disclosure of customer information to
non-affiliated third parties unless the customer has been given the opportunity
to object and has not objected to such disclosure. Financial institutions are
further required to disclose their privacy policies to customers annually. Final
regulations implementing customer privacy restrictions under the GLB Act have
been promulgated by the OTS and the other federal bank regulators. Compliance
with such privacy regulations was voluntary until July 2001.

The Company does not believe that the GLB Act will have a material adverse
affect upon its operations in the near term. However, to the extent the GLB Act
permits banks, securities firms, and insurance companies to affiliate, the
financial services industry may experience further consolidation. This could
result in a growing number of larger financial institutions that offer a wider
variety of financial services than the Company currently offers and that can
aggressively compete in the markets the Company currently serves.


                                      18.


<PAGE>


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 to meet its present and immediately foreseeable needs. The Bank
recently purchased property, for a price of $428,000, near the 55th Street
location for possible 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 business, 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, 2003.



                                      19.

<PAGE>


                                     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 729 stockholders as of December 31, 2003. The table below
shows the reported high and low sales price of the common stock and dividends
declared during the periods indicated in 2003 and 2002.

<TABLE>
<CAPTION>
                                 ----------------2003----------------  ----------------2002----------------
                                                 ----                                  ----
                                                           Dividends                            Dividends
                                     High         Low      Declared       High         Low      Declared
                                     ----         ---      --------       ----         ---      --------
<S>                              <C>         <C>         <C>         <C>           <C>         <C>
First quarter                    $   26.14   $   22.85   $    0.15   $    19.25    $  17.71    $   0.12
Second quarter                       28.45       24.90        0.15        23.10       18.50        0.12
Third quarter                        28.10       25.80        0.15        23.00       20.86        0.15
Fourth quarter                       29.79       26.58        0.15        23.76       22.00        0.15
</TABLE>

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,------------------
                                                                  -------------------------------------
                                                   2003            2002           2001           2000            1999
                                                   ----            ----           ----           ----            ----
<S>                                            <C>             <C>            <C>            <C>             <C>
Total assets                                   $   266,063     $  251,532     $  243,448     $   235,183     $  226,027
Cash and cash equivalents                           11,081         23,998         27,909           4,066          4,024
Securities available-for-sale                       72,058         61,113         65,704         125,220        124,359
Loans receivable, net(1)                           158,957        147,993        134,788          97,017         86,692
Deposits                                           170,462        163,968        163,074         147,973        145,675
Securities sold under repurchase
  agreements                                         6,904         10,599         10,658          18,686         13,185
FHLB advances                                       55,175         43,663         39,000          36,000         36,000
Stockholders' equity                                29,540         29,894         27,278          29,279         27,358

Interest income                                     13,653         14,675         16,519          16,006         14,920
Interest expense                                     5,972          7,541         10,107           9,873          8,171
Net interest income                                  7,681          7,134          6,412           6,133          6,749
Provision for loan losses                                -            120              -               -              -
Noninterest income                                   1,090          1,154            777             723          2,045
Noninterest expense                                  5,380          4,967          4,754           4,497          4,702
Income tax expense                                   1,141          1,036            831             802          1,385
Net income                                           2,250          2,165          1,604           1,557          2,707
</TABLE>


                                      20.


<PAGE>


SELECTED FINANCIAL RATIOS AND OTHER DATA

<TABLE>
<CAPTION>
                                                      ------------At or for the Year Ended December 31,-----------
                                                                  -------------------------------------
                                                      2003           2002         2001         2000         1999
                                                      ----           ----         ----         ----         ----
<S>                                                    <C>           <C>           <C>         <C>           <C>
PERFORMANCE RATIOS:
     Return on average assets                          0.85%         0.88%         0.65%       0.68%         1.23%
     Return on average equity                          7.61          7.64          5.58        5.86          7.87
     Average equity to average assets                 11.23         11.53         11.67       11.64         15.61
     Dividend payout ratio                            28.98         27.85         38.09       44.64         34.28
     Net interest rate spread(2)                       2.86          2.74          2.18        2.30          2.56
     Net interest margin(3)                            3.07          3.04          2.68        2.80          3.20
     Efficiency ratio(4)                              61.34         59.93         66.12       65.59         53.47
     Noninterest expense to average assets             2.04          2.02          1.93        1.97          2.13

ASSET QUALITY RATIOS:
     Nonperforming loans as a
       percent of gross loans receivable(5)            0.34%         0.15%         0.09%       0.45%         0.07%
     Nonperforming assets as a
       percentage of total assets(5)                   0.23          0.12          0.05        0.19          0.03
     Allowance for loan losses as a
      percent of gross loans receivable                0.36          0.37          0.38        0.49          0.56
     Allowance for loan losses as a
       percent of nonperforming loans(5)             106.06        244.26        409.84      109.17        793.65

OTHER DATA:
     Number of full service offices                    3             3             3           3             3
</TABLE>

(1)  The allowance for loan losses at December 31, 2003 and 2002 was $578 and
     $574, respectively, and $500 for the years ended December 31, 2001, 2000,
     and 1999.

(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.


                                      21.

<PAGE>


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 are 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 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, 2003,
2002, and 2001. 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, which are
considered adjustments to yields.

<TABLE>
<CAPTION>
                                                     --------------------------Year Ended December 31,-----------------------------
                                                                               -----------------------
                                                     ------------------2003---------------     ------------------2002---------------
                                                                       ----                                      ----
                                                                                   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)                              $    37,478     $  1,681        4.49%     $    41,513    $   2,411        5.81%
     Loans receivable(2)                                 151,866       10,239        6.74          145,447       10,742        7.39
     Mortgage-backed securities, net(1)                   38,367        1,481        3.86           23,034        1,235        5.36
     Interest-earning deposits and other investments      22,171          252        1.14           24,547          287        1.17
                                                     -----------     --------                  -----------    ---------
       Total interest-earning assets                     249,882       13,653        5.46          234,541       14,675        6.26
   Non-interest-earning assets                            13,504                                    11,363
                                                     -----------                               -----------

     Total assets                                    $   263,386                               $   245,904
                                                     ===========                               ===========


LIABILITIES AND STOCKHOLDERS' EQUITY
   Interest-bearing liabilities
     Passbook accounts                               $    36,091          340        0.94      $    34,530          506        1.47
     Money market savings accounts                         9,907          153        1.54            8,153          153        1.88
     NOW accounts                                         15,671           50        0.32           12,780           53         .41
     Certificate accounts                                109,752        3,260        2.97          107,739        4,408        4.09
                                                     -----------     --------                  -----------    ---------
       Total deposits                                    171,421        3,803        2.22          163,202        5,120        3.14
     FHLB advances and other borrowings                   58,285        2,169        3.72           50,966        2,421        4.75
                                                     -----------     --------                  -----------    ---------
       Total interest-bearing liabilities                229,706        5,972        2.60          214,168        7,541        3.52
                                                                     --------                                 ---------
   Non-interest-bearing liabilities                        4,102                                     3,385
                                                     -----------                               -----------
     Total liabilities                                   233,808                                   217,553
   Stockholders' equity                                   29,578                                    28,351
                                                     -----------                               -----------

     Total liabilities and stockholders' equity      $   263,386                               $   245,904
                                                     ===========                               ===========

   Net interest income                                               $  7,681                                 $   7,134
                                                                     ========                                 =========

   Net interest rate spread(3)                                                       2.86%                                     2.74%
   Net interest margin(4)                                                            3.07%                                     3.04%
   Ratio of average interest-earning assets to
     average interest-bearing liabilities                 108.78%                                   109.51%
</TABLE>

[WIDE TABLE CONTINUED FROM ABOVE]
<TABLE>
<CAPTION>
                                                       --------Year Ended December 31,-------
                                                                 -----------------------
                                                       -----------------2001-----------------
                                                                        ----
                                                                                      Average
                                                         Average                      Yield/
                                                         Balance      Interest         Cost
                                                         -------      --------         ----
<S>                                                    <C>           <C>               <C>
ASSETS
   Interest-earnings assets
     Securities, net(1)                                $    88,751   $    6,153        6.93%
     Loans receivable(2)                                   114,218        8,868        7.76
     Mortgage-backed securities, net(1)                     16,660          993        5.96
     Interest-earning deposits and other investments        19,914          505        2.54
                                                       -----------    ---------
       Total interest-earning assets                       239,543       16,519        6.90
   Non-interest-earning assets                               6,946
                                                       -----------

     Total assets                                      $   246,489
                                                       ===========


LIABILITIES AND STOCKHOLDERS' EQUITY
   Interest-bearing liabilities
     Passbook accounts                                 $    32,528          648        1.99
     Money market savings accounts                           7,425          242        3.26
     NOW accounts                                           12,234           85         .69
     Certificate accounts                                  110,671        6,366        5.75
                                                       -----------    ---------
       Total deposits                                      162,858        7,341        4.51
     FHLB advances and other borrowings                     51,109        2,766        5.41
                                                       -----------    ---------
       Total interest-bearing liabilities                  213,967       10,107        4.72
                                                                      ---------
   Non-interest-bearing liabilities                          3,761
                                                       -----------
     Total liabilities                                     217,728
   Stockholders' equity                                     28,761
                                                       -----------

     Total liabilities and stockholders' equity        $   246,489
                                                       ===========
   Net interest income                                                $   6,412
                                                                      =========
   Net interest rate spread(3)                                                         2.18%
   Net interest margin(4)                                                              2.68%
   Ratio of average interest-earning assets to
     average interest-bearing liabilities                   111.95%
</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>
                                    -------2003 Compared to 2002-------    --------2002 Compared to 2001------
                                           ---------------------                   ---------------------
                                        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                 $    (181)   $     (549)  $     (730)  $   (2,423)  $   (1,319)  $   (3,742)
    Loans receivable, net                 433          (936)        (503)       2,308         (434)       1,874
    Mortgage-backed securities,
      net                                 592          (346)         246          342         (100)         242
    Interest-earning deposits
      and other investments               (27)           (8)         (35)         107         (325)        (218)
                                    ---------    ----------   ----------   ----------   ----------   ----------
       Total interest-earning
         assets                           817        (1,839)      (1,022)         334       (2,178)      (1,844)
                                    ---------    ----------   ----------   ----------   ----------   ----------

INTEREST EXPENSE ON
    Passbook savings accounts              15          (181)        (166)          29         (171)        (142)
    Money market savings accounts          27           (27)          --           14         (103)         (89)
    NOW accounts                            9           (12)          (3)           2          (34)         (32)
    Certificate accounts                   59        (1,207)      (1,148)        (120)      (1,839)      (1,959)
    FHLB advances and other
      borrowings                          273          (525)        (252)          (7)        (337)        (344)
                                    ---------    ----------   ----------   -----------  ----------   ----------
       Total interest-bearing
         liabilities                      383        (1,952)      (1,569)         (82)      (2,484)      (2,566)
                                    ---------    ----------   ----------   -----------  ----------   ----------

Change in net interest income       $     434    $      113   $      547   $      416   $      306   $      722
                                    =========    ==========   ==========   ==========   ==========   ==========
</TABLE>


COMPARISON OF FINANCIAL CONDITION AT DECEMBER 31, 2003 AND DECEMBER 31, 2002

Total assets at December 31, 2003 were $266.1 million compared to $251.5 million
at December 31, 2001 an increase of $14.6 million. Cash and cash equivalents
decreased $12.9 million to $11.1 million at December 31, 2003, primarily as a
result of loan demand during 2003. During 2003, loans increased by $11.0 million
to $159.0 million, primarily as a result of a decreasing interest rate
environment resulting in high volumes of loan originations and refinancings. In
addition, the Company purchased $7.6 million of loan participations in 2003.

The allowance for loan losses was $578,000 and $574,000 for the years December
31, 2003 and 2002, respectively. There were no impaired loans at either date.
Nonaccrual loans were $545,000 at December 31, 2003 compared to $235,000 at the
prior year end. Losses, if any, on nonaccrual loans are not expected to be
significant. Loans totaling $22,000 and $46,000 were


                                      24.

<PAGE>


charged off during 2003 and 2002, respectively. Recoveries totaled $26,000 in
2003, there were no recoveries in 2002.

Total liabilities at December 31, 2003 were $236.5 million compared to $221.6
million at December 31, 2002, an increase of $14.9 million. Deposits increased
$6.5 million, the change was due to an increase in checking, money market, and
passbook accounts. In addition, the Company increased FHLB advances by $11.5
million. These increases were partially offset by a decrease in securities sold
under repurchase agreements of $3.7 million. The increase in borrowings was used
to fund the increased loan demand that was experienced in 2003.

Stockholders' equity at December 31, 2003 was $29.5 million compared to $29.9
million at December 31, 2002, a decrease of $354,000. The decrease in
stockholders' equity from December 31, 2002 was attributable to the repurchase
of 87,107 shares of treasury stock at an average price of $25.72, cash dividends
paid of $652,000, and unrealized losses on securities available for sale of
$323,000 offset by net income of $2.3 million and exercised options of 14,007
shares at $15.74.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

General
-------

Net income increased to $2.3 million in 2003. The increase is primarily due to
increases in the Company's net interest income, partially offset by an increase
in noninterest expense.

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

Interest income in 2003 was $13.7 million compared to $14.7 million in 2002, a
decrease of 6.96%. The decrease in interest income was primarily due to an
increase in the average balance of loans receivable and mortgage-backed
securities of $21.8 million, partially offset by a $6.4 million decrease in the
average balance of securities, interest-earning deposits, and other investments
due to calls and maturities. The average yield on earning assets decreased 80
basis points due to a decreasing rate environment.

Interest expense in 2003 was $6.0 million compared to $7.5 million in 2002, a
decrease of 20.8%. The decrease in interest expense is due to an increase in the
average balance of deposits and other borrowings of $15.5 million, offset by a
decrease in the average rate paid on deposits and borrowings of 92 basis points.

Net interest income in 2003 was $7.7 million compared to $7.0 million in 2002,
an increase of 7.67%. The increase was primarily due to an increase in the net
interest rate spread from 2.74% in 2002 to 2.86% in 2003 and an increase in the
net interest margin from 3.04% in 2002 to 3.07% in 2003.

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,


                                      25.

<PAGE>


adverse situations that may affect the borrower's ability to repay, 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 provided in 2003, and a $120,000 provision for losses on loans was
provided in 2002. 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 of December 31, 2003 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 2003 was $1.1 million compared to $1.2 million in 2002.
The decrease was primarily attributable to a gain on the sale of real estate
held for expansion of $126,000 in 2002, with no gains or losses recognized in
2003.

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

Noninterest expense in 2003 was $5.4 million compared to $5.0 million in 2002,
an increase of 8.31%. The increase was primarily a result of increased
compensation and benefits of $312,000 due to normal cost-of-living adjustments
and increased health insurance costs.

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

Income tax expense was $1.1 million in 2003 compared to $1.0 million in 2002.
The increase in income tax expense was primarily due to an increase in pre-tax
income in 2003. The effective tax rate was 33.6% for the year ended December 31,
2003 compared to 32.4% for the prior year.

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.



                                      26.

<PAGE>

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
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 the 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


                                      27.

<PAGE>


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.

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 48.12%, 27.26%, and 41.36%, for the
years ended December 31, 2003, 2002, and 2001, 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 $1.5 million, $1.6 million, and
$3.0 million in 2003, 2002, and 2001, 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


                                      28.

<PAGE>


net cash from financing activities was $11.8 million, $4.6 million, and $3.5
million in 2003, 2002, and 2001, respectively.

At December 31, 2003, the Bank exceeded all of its regulatory capital
requirements with a Tier 1 (core) capital level of $24.8 million, or 9.5% of
adjusted total assets, which is above the required level of $10.5 million, or
4%; and total risk-based capital of $25.4 million, or 16.0% of risk-weighted
assets, which is above the required level of $12.7 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, 2003, cash and
short-term investments totaled $11.1 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.

CRITICAL ACCOUNTING POLICIES

At December 31, 2003 the Company had no accounting policies that were determined
to be critical. However, the following policy may impact the results of future
operations of the company.

Allowance for Loan Losses: The allowance for loan losses represents management's
estimate of probable credit losses inherent in the loan portfolio. Estimating
the amount of the allowance for loan losses requires significant judgment and
the use of estimates related to the amount and timing of expected future cash
flows on impaired loans, estimated losses on pools of homogeneous loans, both of
which may be susceptible to significant change. The loan portfolio also
represents the largest asset type on the consolidated balance sheet. Loan losses
are charged off against the allowance, while recoveries of amounts previously
charged off are credited to the allowance. A provision for loan losses is
charged to operations based on management's periodic evaluation of the factors
previously mentioned, as well as other pertinent factors.

There are many factors affecting the allowance for loan losses; some
quantitative, while others require qualitative judgment. Although management
believes its process for determining the allowance adequately considers all
potential factors that could potentially result in credit losses, the process
includes subjective elements and may be susceptible to significant change. To
the extent actual outcomes differ from management estimates, additional
provisions for credit losses could be required that could adversely affect
earnings or financial position in future periods.

COMMITMENTS

At December 31, 2003, the Bank had outstanding commitments to originate loans of
$1.8 million, as compared to $1.7 million in 2002. 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, 2003 totaled $72.0 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


                                      29.

<PAGE>


advances or raise interest rates on deposits to attract new accounts, which may
result in higher levels of interest expense.

The following tables disclose contractual obligations and commercial commitments
of the Company as of December 31, 2003:

<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                     $     6,904    $     6,904     $        --    $        --    $        --
FHLB advances                         55,175          8,000          29,414          7,761         10,000
                                 -----------    -----------     -----------    -----------    -----------
Total contractual
  cash obligations               $    62,079    $    14,904     $    29,414    $     7,761    $    10,000
                                 ===========    ===========     ===========    ===========    ===========

                                     Total
                                    Amounts       Less Than                                       Over
                                   Committed       1 Year        1 - 3 Years    4 - 5 Years      5 Years
                                   ---------       ------        -----------    -----------      -------

Letters of credit                $     1,527    $       967     $        --    $       560    $        --
Loans in process                       1,812          1,812              --             --             --
Commitments to make
     loans (all fixed rate)            1,763          1,763              --             --             --
                                 -----------    -----------     -----------    -----------    -----------
Total commercial
  commitments                    $     5,102    $     4,542     $        --    $       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


                                      30.

<PAGE>


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, 2003, the Bank's sensitivity
measure, as measured by the OTS, resulting from a 200 basis point increase in
interest rates was (32)% and would result in a $9.9 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 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, 2003 and 2002 assuming an instantaneous and sustained change in
market interest rates of 100, 200, and 300 basis points.

<TABLE>
<CAPTION>
                         INTEREST RATE SENSITIVITY OF NET PORTFOLIO VALUE (NPV)
                                          DECEMBER 31, 2003

                                                                                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>
   + 300 bp         $    16,153     $  (15,808)         (49)%              6.44%         (527) bp
   + 200 bp              21,665        (10,296)         (32)               8.39          (332) bp
   + 100 bp              27,162         (4,799)         (15)              10.22          (149) bp
       0 bp              31,961              -            -               11.71                 -
   - 100 bp              33,942          1,981            6               12.23             52 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>



                                      31.
<PAGE>

<TABLE>
<CAPTION>
                                          DECEMBER 31, 2002

                                                                                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>
   + 300 bp         $    18,310     $  (10,895)         (37)%              7.62%         (374) bp
   + 200 bp              22,792         (6,413)         (22)               9.25          (211) bp
   + 100 bp              26,937         (2,268)          (8)              10.67           (69) bp
       0 bp              29,205              -            -               11.36                 -
   - 100 bp              29,361            156            1               11.31            (5) 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>

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

The Bank has experienced a significant increase in interest rate risk since
1998, primarily as a result of investing in callable fixed rate U.S. Government
Agency securities with maturities exceeding ten years. Management is currently
evaluating various alternatives to reduce interest rate risk. The Company has no
plans in the foreseeable future to purchase callable securities.


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 May 5, 2004 under the caption "Election of
       Directors - Information with Respect to the Nominees, Continuing
       Directors and Certain Executive Officers" and is incorporated herein by
       reference.


                                      32.
<PAGE>


(b)    Executive Officers of the Company. The information required in response
       to this item regarding executive officers of the Company is contained in
       Part I of this report and is incorporated herein by reference.


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"
and "Election of Directors - Information with Respect to the Nominees,
Continuing Directors and Certain Executive Officers" and is incorporated herein
by reference.


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

Management, including the Chief Executive Officer and Chief Financial Officer,
have conducted an evaluation of the effectiveness of disclosure controls and
procedures, pursuant to Exchange Act Rule 13a-15(b), as of December 31, 2003.
Based on that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that the Company's disclosure controls and procedures are
effective and that no changes are required at this time.

In connection with the evaluation by management, including the Chief Executive
Officer and Chief Financial Officer, of the Company's internal control over
financial reporting, pursuant to Exchange Act Rule 13a-15(d), no changes during
the quarter ended December 31, 2003 were identified that have materially
affected or are reasonably likely to materially affect the Company's internal
control over financial reporting.


                                      33.

<PAGE>


                                     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

       On October 28, 2003, the Company filed a report on Form 8-K announcing
the third quarter results.




                                      34.

<PAGE>


                                  EXHIBIT INDEX

                               Park Bancorp, Inc.

                         Form 10-K for Fiscal Year Ended
                                December 31, 2003

 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)

 4.1     Stock Certificate of Park Bancorp, Inc. (incorporated by reference to
         Exhibit 4.1 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)

10.7*    Park Bancorp, Inc. 2003 Incentive Plan (incorporated by reference to
         Appendix A of Park Bancorp, Inc. Proxy Statement for the Annual Meeting
         of Stockholders in 2003)

23.0     Consent of Independent Auditors

31.1     Rule 13(a)-14(a) Certification (Chief Executive Officer)

31.2     Rule 13(a)-14(a) Certification (Chief Financial Officer)

32.1     Section 1350 Certification (Chief Executive Officer)

32.2     Section 1350 Certification (Chief Financial Officer)

-----------
*   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.



                                      35.

<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 30th day of March,
2004.

                                  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 30, 2004
---------------------------------
David A. Remijas                        President, and Chief Executive
                                        Officer (principal executive officer)

/s/ Steven J. Pokrak                    Treasurer , Chief Financial                     March 30, 2004
---------------------------------
Steven J. Pokrak                        Officer (principal financial
                                        and accounting officer), and
                                        Corporate Secretary

/s/ Richard J. Remijas, Jr.             Executive Vice President, Chief                 March 30, 2004
---------------------------------
Richard J. Remijas, Jr.                 Operating Officer, Corporate
                                        Secretary, and Director

/s/ Robert W. Krug                      Director                                        March 30, 2004
---------------------------------
Robert W. Krug

/s/ John J. Murphy                      Director                                        March 30, 2004
---------------------------------
John J. Murphy

/s/Victor H. Reyes                      Director                                        March 30, 2004
----------------------------------
Victor H. Reyes

/s/ Paul Shukis                         Director                                        March 30, 2004
---------------------------------
Paul Shukis
</TABLE>


                                      36.

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                                Chicago, Illinois

                        CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001






                         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, 2003 and 2002, and the
related consolidated statements of income, stockholders' equity, and cash flows
for each of the three years in the period ended December 31, 2003. 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, 2003 and 2002, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2003 in conformity with accounting principles generally accepted in
the United States of America.



                                               /s/ Crowe Chizek and Company LLC
                                               --------------------------------
                                               Crowe Chizek and Company LLC

Oak Brook, Illinois
January 23, 2004



                                      F-2


<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                           December 31, 2003 and 2002
                 (In thousands, except share and per share data)

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


<TABLE>
<CAPTION>
                                                                                          2003          2002
                                                                                          ----          ----
<S>                                                                                   <C>           <C>
ASSETS
Cash and due from banks                                                               $     3,719   $     3,226
Federal funds sold                                                                          3,376        16,310
Interest-bearing deposits with other financial institutions                                 3,986         4,462
                                                                                      -----------   -----------
    Total cash and cash equivalents                                                        11,081        23,998
Time deposits with other financial institutions                                             1,151         1,117
Securities available-for-sale                                                              72,058        61,113
Loans receivable, net of allowance of $578 and $574                                       158,957       147,993
Federal Home Loan Bank stock                                                               10,109         7,327
Premises and equipment, net                                                                 4,627         2,558
Accrued interest receivable                                                                 1,244         1,195
Bank-owned life insurance                                                                   5,627         5,381
Other assets                                                                                1,209           850
                                                                                      -----------   -----------

    Total assets                                                                      $   266,063   $   251,532
                                                                                      ===========   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
    Deposits
       Non-interest-bearing                                                           $     6,099   $     4,478
       Interest-bearing                                                                   164,363       159,490
                                                                                      -----------   -----------
          Total deposits                                                                  170,462       163,968

    Securities sold under repurchase agreements                                             6,904        10,599
    Advances from borrowers for taxes and insurance                                         2,081         1,969
    Federal Home Loan Bank advances                                                        55,175        43,663
    Accrued interest payable                                                                  364           396
    Other liabilities                                                                       1,537         1,043
                                                                                      -----------   -----------
       Total liabilities                                                                  236,523       221,638

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, 2,733,138 and 2,719,131 shares                     27            27
    Additional paid-in capital                                                             27,515        27,050
    Retained earnings                                                                      29,005        27,407
    Treasury stock, 1,580,943 and 1,493,836 shares, at cost                               (26,731)      (24,491)
    Unearned ESOP shares                                                                     (833)         (979)
    Accumulated other comprehensive income                                                    557           880
                                                                                      -----------   -----------
       Total stockholders' equity                                                          29,540        29,894
                                                                                      -----------   -----------

          Total liabilities and stockholders' equity                                  $   266,063   $   251,532
                                                                                      ===========   ===========
</TABLE>

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


                                       F-3

<PAGE>

                       PARK BANCORP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                  Years ended December 31, 2003, 2002, and 2001
                 (In thousands, except share and per share data)

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

<TABLE>
<CAPTION>
                                                                               2003         2002         2001
                                                                               ----         ----         ----
<S>                                                                        <C>           <C>         <C>
Interest income
    Loans receivable                                                       $   10,239   $   10,742   $    8,868
    Securities                                                                  3,162        3,646        7,146
    Interest-bearing deposits with other financial institutions                   252          287          505
                                                                           ----------   ----------   ----------
                                                                               13,653       14,675       16,519
Interest expense
    Deposits                                                                    3,803        5,120        7,341
    Federal Home Loan Bank advances and other borrowings                        2,169        2,421        2,766
                                                                           ----------   ----------   ----------
                                                                                5,972        7,541       10,107
                                                                           ----------   ----------   ----------

NET INTEREST INCOME                                                             7,681        7,134        6,412

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

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                             7,681        7,014        6,412

Noninterest income
    Gains on sales of securities                                                  297          346          325
    Gains on sales of real estate held for development                             --           --           13
    Service fee income                                                            342          276          308
    Gain on sale of real estate held for expansion                                  -          126            -
    Earnings on bank-owned life insurance                                         282          303            9
    Other operating income                                                        169          103          122
                                                                           ----------   ----------   ----------
                                                                                1,090        1,154          777

Noninterest expense
    Compensation and benefits                                                   3,448        3,086        3,091
    Occupancy and equipment                                                       617          682          556
    Federal deposit insurance premiums                                             92           93           88
    Data processing services                                                      214          212          174
    Advertising                                                                    98          126           94
    Other operating expenses                                                      911          768          751
                                                                           ----------   ----------   ----------
                                                                                5,380        4,967        4,754
                                                                           ----------   ----------   ----------

INCOME BEFORE INCOME TAXES                                                      3,391        3,201        2,435

Income tax expense                                                              1,141        1,036          831
                                                                           ----------   ----------   ----------

NET INCOME                                                                 $    2,250   $    2,165   $    1,604
                                                                           ==========   ==========   ==========

Basic earnings per share                                                   $     2.06   $     1.92   $     1.26
                                                                           ==========   ==========   ==========

Diluted earnings per share                                                 $     1.91   $     1.84   $     1.25
                                                                           ==========   ==========   ==========
</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, 2003, 2002, and 2001
                 (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, 2001    $       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

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
</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, 2001      $   (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
                                                              =========

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
                                                              =========
</TABLE>


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


                                      F-5

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  Years ended December 31, 2003, 2002, and 2001
                 (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
  ($.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)           --

Comprehensive income
    Net income                        --            --          2,250            --            --            --
    Change in fair value of
      securities available-
      for-sale, net                   --            --             --            --            --            --


       Total comprehensive
         income                       --            --             --            --            --            --

Cash dividends declared
  ($.60 per share)                    --            --           (652)           --            --            --

Purchase of 87,107 shares of
  treasury stock at cost              --            --             --        (2,240)           --            --

Exercise of 14,007 stock
  options                             --           221             --            --            --            --

ESOP shares released                  --           244             --            --           146            --
                              ----------    ----------     ----------    ----------    ----------    ----------


Balance at December 31, 2003  $       27    $   27,515     $   29,005    $  (26,731)   $     (833)   $       --
                              ==========    ==========     ==========    ==========    ==========    ==========
</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
  ($.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

Comprehensive income
    Net income                         --          2,250       $   2,250
    Change in fair value of
      securities available-
      for-sale, net                  (323)          (323)           (323)
                                                               ---------

       Total comprehensive
         income                        --             --       $   1,927
                                                               =========
Cash dividends declared
  ($.60 per share)                     --           (652)

Purchase of 87,107 shares of
  treasury stock at cost               --         (2,240)

Exercise of 14,007 stock
  options                              --            221

ESOP shares released                   --            390
                               ----------    -----------


Balance at December 31, 2003   $      557    $    29,540
                               ==========    ===========
</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, 2003, 2002, and 2001
                                 (In thousands)

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

<TABLE>
<CAPTION>
                                                                               2003         2002        2001
                                                                               ----         ----        ----
<S>                                                                        <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                                             $    2,250   $    2,165   $    1,604
    Adjustments to reconcile net income to net cash from
      operating activities
       Net premium amortization                                                   156           22            6
       Interest credited on time deposits                                         (34)         (17)          --
       Dividend reinvestments                                                    (137)        (161)         (82)
       Gains on sales of securities available-for-sale                           (297)        (346)        (325)
       Gain on sale of real estate held for expansion                              --         (126)          --
       Earnings on bank-owned life insurance, net                                (246)        (272)          (9)
       Provision for loan losses                                                   --          120           --
       Depreciation                                                               283          296          247
       Deferred income tax (benefit)                                               27          (37)         (15)
       Deferred loan fees                                                          59           22           98
       Net change in accrued interest receivable                                  (49)         464        1,065
       Net change in other assets                                                (386)        (271)         (40)
       Net change in accrued interest payable                                     (32)        (434)         334
       Net change in other liabilities                                             83           34         (207)
       ESOP expense                                                               390          324          273
       Stock awards earned                                                         --           --          223
       FHLB stock dividends                                                      (607)        (194)        (195)
       Gains on sales of real estate held for development                          --           --          (13)
                                                                           ----------   ----------   ----------
          Net cash from operating activities                                    1,460        1,589        2,964

CASH FLOWS FROM INVESTING ACTIVITIES
    Net change in loans                                                        (3,418)       2,891      (27,725)
    Loans purchased                                                            (7,605)     (16,238)     (10,144)
    Maturities and calls of securities available-for-sale                       4,000       30,610       79,900
    Purchases of securities available-for-sale                                (43,705)     (39,000)     (24,643)
    Sales of securities available-for-sale                                     10,481        6,654        1,458
    Principal repayments on mortgage-backed securities                         18,079        8,201        7,100
    Purchases of Federal Home Loan Bank stock                                  (4,175)      (2,000)      (3,000)
    Sales of Federal Home Loan Bank stock                                       2,000           --           --
    Purchase of bank-owned life insurance                                          --           --       (5,100)
    Purchase of time deposits                                                      --       (1,100)          --
    Proceeds from sales of real estate held for development                        --           --          289
    Proceeds from sales of real estate held for expansion                          --          154           --
    Expenditures for premises and equipment                                    (1,786)        (315)        (734)
                                                                           ----------   ----------   ----------
       Net cash from investing activities                                     (26,129)     (10,143)      17,401
</TABLE>


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


                                       F-7

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Years ended December 31, 2003, 2002, and 2001
                                 (In thousands)

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

<TABLE>
<CAPTION>
                                                                               2003         2002        2001
                                                                               ----         ----        ----
CASH FLOWS FROM FINANCING ACTIVITIES
<S>                                                                        <C>          <C>          <C>
    Net change in deposits                                                 $    6,494   $      894   $   15,101
    Net change in securities sold under repurchase agreements                  (3,695)         (59)      (8,028)
    Net change in advances from borrowers for taxes and
      insurance                                                                   112          (58)         287
    Stock options exercised                                                       221          278           --
    Dividends paid to stockholders                                               (652)        (603)        (819)
    Purchases of treasury stock                                                (2,240)        (472)      (6,063)
    Federal Home Loan Bank advances                                            26,175       11,663       27,000
    Repayment of Federal Home Loan Bank advances                              (14,663)      (7,000)     (24,000)
                                                                           ----------   ----------   ----------
       Net cash from financing activities                                      11,752        4,643        3,478
                                                                           ----------   ----------   ----------

Net change in cash and cash equivalents                                       (12,917)      (3,911)      23,843

Cash and cash equivalents at beginning of year                                 23,998       27,909        4,066
                                                                           ----------   ----------   ----------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                   $   11,081   $   23,998   $   27,909
                                                                           ==========   ==========   ==========

Supplemental disclosures of cash flow information
    Cash paid during the year for
       Interest                                                            $    5,923   $    7,975   $    9,773
       Income taxes                                                             1,167          999          916
</TABLE>


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

          See accompanying notes to consolidated financial statements.


                                       F-8


<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (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, 2003, 2002, and 2001
          (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, 2003, 2002, and 2001
          (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 in which the 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, 2003, 2002, and 2001
          (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 were measured using the fair value recognition provisions of FASB
Statement No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION.

<TABLE>
<CAPTION>
                                                                    2003           2002            2001
                                                                    ----           ----            ----
<S>                                                             <C>            <C>            <C>
Net income as reported                                          $    2,250     $    2,165     $     1,604
Deduct:  Stock-based compensation expense
  determined under fair value based method                             (15)           (36)           (136)
                                                                ----------     ----------     -----------

Pro forma net income                                            $    2,235     $    2,129     $     1,468
                                                                ==========     ==========     ===========

Basic earnings per share as reported                            $     2.06     $     1.92     $      1.26
Pro forma basic earnings per share                                    2.05           1.89            1.15

Diluted earnings per share as reported                          $     1.91     $     1.84     $      1.25
Pro forma diluted earnings per share                                  1.90           1.81            1.14
</TABLE>

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.


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


                                      F-12

<PAGE>
                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (Table amounts in thousands, except share and per share data)

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Adoption of New Accounting Standards: During 2003, the Company adopted FASB
Statement No.149, AMENDMENT OF STATEMENT ON DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES; FASB Statement No. 150, ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS
WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITIES; FASB Statement No. 132
(revised 2003), EMPLOYERS' DISCLOSURES ABOUT PENSIONS AND OTHER POSTRETIREMENT
BENEFITS; FASB Interpretation No. 45, GUARANTOR'S ACCOUNTING AND DISCLOSURE
REQUIREMENTS FOR GUARANTEES; and FASB Interpretation No. 46, CONSOLIDATION OF
VARIABLE INTEREST ENTITIES.

Adoption of these new standards did not materially affect the Company's
operating results or financial condition.

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.


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


                                      F-13

<PAGE>
                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (Table amounts in thousands, except share and per share data)

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

NOTE 2 - SECURITIES

Securities available-for-sale are summarized as follows:

                                    -----------December 31, 2003--------------
                                               -----------------
                                                     Gross            Gross
                                      Fair        Unrealized       Unrealized
                                      Value          Gains           Losses
                                      -----          -----           ------
Corporate notes                     $    11,747    $       674    $        --
Government securities                    10,023             44            (22)
Equity securities                         5,636            120            (31)
Mortgage-backed securities
    FNMA                                 28,929             80            (20)
    FHLMC                                15,723             41            (42)
                                    -----------    -----------    -----------

                                    $    72,058    $       959    $      (115)
                                    ===========    ===========    ===========

Securities with unrealized losses at year-end 2003 not recognized in income are
as follows:

<TABLE>
<CAPTION>
                                        Less than 12 Months        12 Months or More           Total
                                        -------------------        -----------------           -----
                                      Fair       Unrealized     Fair       Unrealized      Fair      Unrealized
                                      Value         Loss        Value         Loss         Value        Loss
---------------------------------------------------------------------------------------------------------------
<S>                                <C>           <C>          <C>          <C>         <C>           <C>
Government securities              $   1,978     $     (22)   $      --    $      --   $    1,978    $     (22)
Equity securities                      4,521           (25)         394           (6)       4,915          (31)
Mortgage-backed securities
     FNMA                              6,439           (20)          --           --        6,439          (20)
     FHLMC                             8,000           (35)         976           (7)       8,976          (42)
                                   ---------     ---------    ---------    ---------   ----------    ---------

Total temporarily
  impaired                         $  20,938     $    (102)   $   1,370    $     (13)  $   22,308    $    (115)
                                   =========     =========    =========    =========   ==========    =========
</TABLE>

Unrealized losses on the above-named securities have not been recognized into
income because the issuers of these securities are of high credit quality,
management has the intent and ability to hold these securities for the
foreseeable future, and the decline in fair value is largely due to increased
market interest rates. The Company's management believes that the fair value of
these securities will recover in the future.


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


                                      F-14

<PAGE>
                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (Table amounts in thousands, except share and per share data)

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

NOTE 2 - SECURITIES (Continued)

                                     -----------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)
                                     ===========    ===========    ===========

Contractual maturities of debt securities available-for-sale at December 31,
2003 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                                                    14,752
Due five years to ten years                                               7,018
Due after ten years                                                          --
                                                                    -----------
                                                                         21,770
Equity securities                                                         5,636
Mortgage-backed securities                                               44,652
                                                                    -----------

                                                                    $    72,058
                                                                    ===========

Securities with a carrying value of $7,503,000 and $11,707,000 at December 31,
2003 and 2002, respectively, were pledged to secure securities sold under
repurchase agreements and public deposits as required or permitted by law.


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


                                      F-15

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (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,-------------
                                          2003          2002            2001
                                          ----          ----            ----

Proceeds from sales                   $    10,481    $     6,654    $     1,458
Gross realized gains                          305            346            325
Gross realized losses                           8             --             --


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,-------
                                                            ------------
                                                       2003              2002
                                                       ----              ----
Mortgage loans
    Principal balances
         One-to-four-family residential            $    100,136    $     96,351
         Multi-family residential                        19,167          17,977
         Commercial, construction, and land              30,011          20,766
                                                   ------------    ------------
                                                        149,314         135,094
    Undisbursed portion of construction loans            (1,812)         (5,226)
    Net deferred loan origination fees                     (526)           (467)
                                                   ------------    ------------
         Total mortgage loans                           146,976         129,401
Consumer loans                                            5,796           3,990
Participations and loans purchased                        6,763          15,176
Allowance for loan losses                                  (578)           (574)
                                                   ------------    ------------

                                                   $    158,957    $    147,993
                                                   ============    ============

The Company had no impaired loans in 2003, 2002, or 2001.


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


                                      F-16

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (Table amounts in thousands, except share and per share data)

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

NOTE 3 - LOANS RECEIVABLE (Continued)

Nonperforming loans were as follows:

                                                      ---December 31,---
                                                         ------------
                                                    2003              2002
                                                    ----              ----

Loans past due over 90 days still on accrual       $   --           $   --
Nonaccrual loans                                      545              235

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. 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, 2003:

Balance at beginning of year                             $       203
Loans originated                                                 634
Principal repayments                                             (33)
                                                         -----------

    Balance at end of year                               $       804
                                                         ===========

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

                                        2003            2002             2001
                                        ----            ----             ----

Beginning balance                     $       574    $       500    $       500
Provision for loan losses                      --            120             --
Recoveries                                     26             --             --
Loans charged off                             (22)           (46)            --
                                      -----------    -----------    -----------


    Ending balance                    $       578    $       574    $       500
                                      ===========    ===========    ===========


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


                                      F-17

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (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,-------
                                                         ------------
                                                    2003             2002
                                                    ----             ----
Cost
    Land                                         $       944    $       862
    Buildings and improvements                         3,488          1,943
    Real estate held for future expansion                428            212
    Furniture and fixtures                             1,937          1,520
                                                 -----------    -----------
         Total cost                                    6,797          4,537
Less accumulated depreciation                         (2,170)        (1,979)
                                                 -----------    -----------

                                                 $     4,627    $     2,558
                                                 ===========    ===========


NOTE 5 - DEPOSITS

Certificate of deposit accounts with balances of $100,000 or more totaled
$14,878,000 at December 31, 2003 and $15,958,000 at December 31, 2002.

At December 31, 2003, scheduled maturities of certificates of deposit are as
follows:

         2004                                             $     71,988
         2005                                                   22,800
         2006                                                    1,925
         2007                                                    5,866
         2008 and thereafter                                     4,114
                                                          ------------

                                                          $    106,693
                                                          ============


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


                                      F-18

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (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              2003             2002
    -------------                ---------            ----          ----              ----             ----
<S>                        <C>                        <C>          <C>             <C>             <C>
August 28, 2003                                       6.28         Fixed           $      --       $    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
February 06, 2004                                     1.34         Fixed               1,000                --
September 02, 2004                                    1.46         Fixed               2,000                --
November 01, 2004                                     1.52         Fixed               2,000                --
November 01, 2004                                     2.24         Fixed               1,000             1,000
November 01, 2004                                     1.86         Fixed               1,000             1,000
November 15, 2004                                     2.14         Fixed               1,000             1,000
February 07, 2005                                     1.89         Fixed               1,039                --
March 03, 2005                                        1.71         Fixed                 897                --
March 17, 2005                                        1.79         Fixed               1,420                --
April 01, 2005                                        1.35         Fixed               1,612                --
July 05, 2005                                         3.90         Fixed               2,000             2,000
August 05, 2005                                       2.07         Fixed               2,552                --
September 06, 2005                                    2.25         Fixed               2,273                --
October 31, 2005                                      2.75         Fixed               1,000             1,000
October 31, 2005                                      2.36         Fixed               1,000             1,000
December 22, 2005                                     2.02         Fixed               1,952                --
May 08, 2006                                          1.96         Fixed               2,669                --
May 22, 2006               February 22, 2004          4.20         Fixed               5,000             5,000
May 30, 2006                                          2.06         Fixed               2,000                --
October 02, 2006                                      2.26         Fixed               2,000                --
October 30, 2006                                      2.78         Fixed               2,000                --
July 02, 2007                                         3.17         Variable            2,000             2,000
October 09, 2007                                      3.12         Fixed                 761                --
January 15, 2008           April 15, 2004             4.95         Fixed               5,000             5,000
January 18, 2011           April 16, 2004             4.55         Fixed               8,000             8,000
July 25, 2011                                         4.25         Fixed                  --             2,000
July 25, 2011              July 24, 2004              4.60         Fixed               2,000             2,000
                                                                                  ----------       -----------

                                                                                  $   55,175       $    43,663
                                                                                  ==========       ===========
</TABLE>


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


                                      F-19

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (Table amounts in thousands, except share and per share data)

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

NOTE 6 - FHLB ADVANCES (Continued)

The Company will incur a penalty if the advances are repaid prior to their
maturity dates. Advances totaling $20.0 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
149% of the outstanding advances from the FHLB.

Maturities over the next five years are:

           2004                                   $     8,000
           2005                                        15,745
           2006                                        13,669
           2007                                         2,761
           2008                                         5,000
           Thereafter                                  10,000
                                                  -----------

                                                  $    55,175
                                                  ===========


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 $71,000, $62,000, and $24,000 for 2003, 2002, and
2001, respectively.

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 $97,000,
$79,000, and $24,000 for 2003, 2002, and 2001, respectively.

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.


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


                                      F-20

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (Table amounts in thousands, except share and per share data)

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

NOTE 7 - EMPLOYEE BENEFIT PLANS (Continued)

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.

During 2003, 2002, and 2001, 14,573, 15,242, and 15,910 shares of stock, with an
average fair value of $26.80, $21.23, and $17.19 per share were committed to be
released, resulting in ESOP compensation expense of $390,000, $324,000, and
$273,000, respectively. ESOP shares had been reduced by 152 and 10,359 as of
December 31, 2003 and 2002, respectively, because of terminations. Shares held
by the ESOP at December 31, 2003 and 2002 are as follows:

                                                 2003            2002
                                                 ----            ----

Allocated shares                                  120,932         102,747
Unallocated shares                                 83,288          97,861
                                             ------------    ------------

    Total ESOP shares                             204,220         200,608
                                             ============    ============

Fair value of unallocated shares             $      2,420    $      2,236
                                             ============    ============

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. There was
no compensation expense for the stock awards in the years ended December 31,
2003 and 2002. Compensation expense for the stock awards was $223,000 for the
year ended December 31, 2001.

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-21

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (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>
                            ------------2003-----------   -----------2002----------    ---------2001-----------
                                        ----                         ----                       ----
                                             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             207,117     $  15.72         224,807    $   15.72        229,129     $   15.72
Granted                          45,337        22.95              --           --             --            --
Exercised                       (14,007)       15.74         (17,690)       15.75             --            --
Forfeited                            --                           --           -          (4,322)        15.75
                            -----------                 ------------                ------------
Outstanding at
  end of year                   238,447        17.09         207,117        15.72        224,807         15.72
                            ===========                 ============                ============
Options exercisable
  at year end                   188,346                      197,589                     172,192
</TABLE>

At December 31, 2003, 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 $22.95.

The Company adopted an Incentive Compensation Plan during 2003 under the terms
of which 100,000 shares of the Company's common stock were reserved for
issuance. Of the shares authorized for issuance under the plan, up to 40,000 may
be issued with respect to awards of restricted stock and restricted units and up
to 40,000 may be issued pursuant to stock options under which the exercise price
was less than the fair market value (but not less than 50% of the fair market
value) of a share of common stock on the date the award was granted. In
addition, as required by Code Section 162(m), the plan includes a limit of
50,000 shares of common stock as the maximum number of shares that may be
subject to awards made to any one individual.


NOTE 8 - EARNINGS PER SHARE

The following table presents a reconciliation of the components used to compute
basic and diluted earnings per share for 2003, 2002, and 2001:

<TABLE>
<CAPTION>
                                                                 2003            2002             2001
                                                                 ----            ----             ----
<S>                                                         <C>              <C>             <C>
BASIC EARNINGS PER SHARE
   Net income available to common stockholders              $       2,250    $       2,165   $       1,604
   Weighted average common shares outstanding                   1,091,205        1,126,266       1,273,230
                                                            -------------    -------------   -------------

      Basic earnings per share                              $        2.06    $       1.92    $        1.26
                                                            =============    ============    =============
</TABLE>


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


                                      F-22

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (Table amounts in thousands, except share and per share data)

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

NOTE 8 - EARNINGS PER SHARE (Continued)

<TABLE>
<CAPTION>
                                                                 2003            2002             2001
                                                                 ----            ----             ----
<S>                                                         <C>              <C>             <C>
DILUTED EARNINGS PER SHARE
   Net income available to common stockholders              $       2,250    $       2,165   $       1,604
   Weighted average common shares outstanding                   1,091,205        1,126,266       1,273,230
   Dilutive effect of MRP                                              --               --             426
   Dilutive effect of stock options                                84,468           50,018          13,483
                                                            -------------    -------------   -------------
      Average common shares and dilutive
        potential common shares                                 1,175,673        1,176,284       1,287,139
                                                            =============    =============   =============

      Diluted earnings per share                            $        1.91    $       1.84    $        1.25
                                                            =============    ============    =============
</TABLE>


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>
2003
----
   Total capital (to risk-
     weighted assets)                 $ 25,406       16.0%      $ 12,713         8.0%      $  15,892     10.0%
   Tier 1 (core) capital (to risk-
     weighted assets)                   24,828       15.6          6,357         4.0           9,535      6.0
   Tier 1 (core) capital (to
     adjusted total assets)             24,828        9.5         10,490         4.0          13,113      5.0
</TABLE>


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


                                      F-23

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (Table amounts in thousands, except share and per share data)

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

NOTE 9 - REGULATORY CAPITAL (Continued)

<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
</TABLE>

The Bank at December 31, 2003 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:

                                      2003           2002            2001
                                      ----           ----            ----

Currently payable tax              $     1,114    $     1,073    $       846
Deferred tax (benefit)                      27            (37)           (15)
                                   -----------    -----------    -----------

    Income tax expense             $     1,141    $     1,036    $       831
                                   ===========    ===========    ===========

Due to interest income earned on certain U.S. government agency securities,
there was no state income tax expense in 2003, 2002, or 2001. The state of
Illinois does not tax interest earned on such securities.


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


                                      F-24

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (Table amounts in thousands, except share and per share data)

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

NOTE 10 - INCOME TAXES (Continued)

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>
                                ------------2003---------  -----------2002---------   -----------2001-----------
                                            ----                      ----                       ----
                                              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             $     1,153     34.0%     $     1,088        34.0%   $       827        34.0%
ESOP expense                              83      2.4               58         1.8             39         1.6
Tax-exempt income                        (12)    (0.4)             (19)       (0.6)           (32)       (1.3)
Bank-owned life insurance                (84)    (2.5)             (92)       (2.9)            (3)       (0.1)
Other items, net                           1       .1                1          .1             --          --
                                 -----------   ------      -----------   ---------    -----------    --------

                                 $     1,141     33.6%     $     1,036        32.4%   $       831        34.2%
                                 ===========   ======      ===========   =========    ===========    ========
</TABLE>

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, 2003 include approximately $3,298,000 for
which no deferred federal income tax liability has been recorded. The amount of
deferred tax liabilities related to this approximates $1,121,000.

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

                                                       2003             2002
                                                       ----             ----

Deferred loan fees                                  $       179    $       159
ESOP and Supplemental Retirement Plan expense               189            154
Bad debt deduction                                          197            135
Other                                                        --             16
                                                    -----------    -----------
                                                            565            464

Unrealized gain on securities held for sale                (287)          (442)
FHLB stock dividends                                       (362)          (241)
Depreciation                                               (171)          (171)
Other                                                       (18)           (11)
                                                    -----------    -----------
                                                           (838)          (865)
                                                    -----------    -----------

    Net deferred tax asset (liability)              $      (273)   $      (401)
                                                    ===========    ===========


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


                                      F-25

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (Table amounts in thousands, except share and per share data)

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

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.

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

                                                      2003             2002
                                                      ----             ----

Commitments to make loans (all fixed rate)         $     1,763    $     1,683
Letters of credit                                        1,527          1,527
Loans in process                                         1,812          5,226

The fixed rate loan commitments at December 31, 2003 have terms of up to 60 days
and rates in the range of 4.50% to 8.00%.

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, 2003, the
Company had deposit accounts at the Federal Home Loan Bank of Chicago with
balances totaling approximately $3,986,000. In addition, the Company had federal
funds sold to LaSalle Bank, N.A. totaling approximately $3,376,000.


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


                                      F-26

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (Table amounts in thousands, except share and per share data)

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

NOTE 12 - FAIR VALUES OF FINANCIAL INSTRUMENTS

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

<TABLE>
<CAPTION>
                                                 ---------------2003------------  ------------2002------------
                                                                ----                          ----
                                                      Carrying       Estimated        Carrying     Estimated
                                                       Amount       Fair Value         Amount     Fair Value
                                                       ------       ----------         ------     ----------
<S>                                                <C>             <C>            <C>            <C>
Financial assets
   Cash and cash equivalents                       $    11,081     $    11,081    $    23,998    $    23,998
   Time deposits in other financial institutions         1,151           1,151          1,117          1,117
   Securities available-for-sale                        72,058          72,058         61,113         61,113
   Loans receivable, net                               158,957         161,036        147,993        149,872
   FHLB stock                                           10,109          10,109          7,327          7,327
   Accrued interest receivable                           1,244           1,244          1,195          1,195

Financial liabilities
   Deposits with no fixed maturity dates           $   (63,769)    $   (63,769)   $   (56,484)   $   (56,484)
   Deposits with fixed maturity dates                 (106,693)       (107,814)      (107,484)      (108,997)
   Securities sold under repurchase agreements          (6,904)         (6,904)       (10,599)       (10,599)
   Advances from borrowers for taxes
     and insurance                                      (2,081)         (2,081)        (1,969)        (1,969)
   FHLB advances                                       (55,175)        (57,028)       (43,663)       (44,247)
   Accrued interest payable                               (364)           (364)          (396)          (396)
</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.


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


                                      F-27

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (Table amounts in thousands, except share and per share data)

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

NOTE 12 - FAIR VALUES OF FINANCIAL INSTRUMENTS (Continued)

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, 2003 or December 31, 2002, the fair values would have been
achieved, because the market value may differ depending on the circumstances.
The estimated fair values at December 31, 2003 and December 31, 2002 should not
necessarily be considered to apply at subsequent dates.


NOTE 13 - OTHER COMPREHENSIVE INCOME

Other comprehensive income components and related taxes were as follows.

<TABLE>
<CAPTION>
                                                                       2003           2002          2001
                                                                       ----           ----          ----
<S>                                                                 <C>           <C>           <C>
Unrealized holding gains and losses on securities
  available-for-sale                                                $     (181)   $    1,735    $    4,223
Reclassification adjustments for gains recorded in
  income                                                                  (297)         (346)         (325)
                                                                    ----------    ----------    ----------
Net unrealized gains and losses                                           (478)        1,389         3,898
Tax effect                                                                 155          (465)       (1,325)
                                                                    ----------    ----------    ----------

  Other comprehensive income (loss)                                 $     (323)   $      924    $    2,573
                                                                    ==========    ==========    ==========
</TABLE>


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


                                      F-28

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (Table amounts in thousands, except share and per share data)

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

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, 2003 and 2002

                                                       2003            2002
                                                       ----            ----
ASSETS
Cash and cash equivalents                           $     1,598    $     3,329
Securities available-for-sale                             1,115          1,717
Loans receivable, net                                        78             --
ESOP loan                                                   990          1,131
Investment in bank subsidiary                            25,871         23,609
Investment in real estate development subsidiary              1              1
Accrued interest receivable and other assets                 63            108
                                                    -----------    -----------

     Total assets                                   $    29,716    $    29,895
                                                    ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
     Accrued expenses and other liabilities         $       176    $         1
Stockholders' equity                                     29,540         29,894
                                                    -----------    -----------

     Total liabilities and stockholders' equity     $    29,716    $    29,895
                                                    ===========    ===========


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


                                      F-29

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (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, 2003, 2002, and 2001

<TABLE>
<CAPTION>
                                                                         2003           2002            2001
                                                                         ----           ----            ----
<S>                                                                  <C>            <C>            <C>
Operating income
     Dividends from subsidiaries                                     $        --    $        --    $     7,100
     Gains on sales of securities                                            113            242            325
     Interest income
         Securities (including dividends)                                     80            213            625
         Loans                                                                17             --             --
         ESOP loan                                                            82             92            103
         Interest-bearing deposits with other
           financial institutions                                             15             31             32
                                                                     -----------    -----------    -----------
              Total operating income                                         307            578          8,185

Operating expenses
     Interest on borrowings                                                   --             10            269
     Other expenses                                                          306            274            371
                                                                     -----------    -----------    -----------
         Total operating expenses                                            306            284            640
                                                                     -----------    -----------    -----------


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

Income taxes                                                                 (14)            77            106
                                                                     -----------    -----------    -----------


INCOME BEFORE EQUITY IN UNDISTRIBUTED EARNINGS
  OF SUBSIDIARIES                                                             15            217          7,439

Equity in undistributed (over distributed) earnings
  of bank subsidiary                                                       2,235          1,956         (5,803)
Equity in undistributed (over distributed) earnings of
  real estate subsidiary                                                       -             (8)           (32)
                                                                     -----------    -----------    -----------

NET INCOME                                                           $     2,250    $     2,165    $     1,604
                                                                     ===========    ===========    ===========
</TABLE>


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


                                      F-30

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (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, 2003, 2002, and 2001

<TABLE>
<CAPTION>
                                                                              2003          2002         2001
                                                                              ----          ----         ----
<S>                                                                        <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                                             $    2,250   $    2,165   $    1,604
    Adjustments to reconcile net income to net cash from
      operating activities
       Net discount accretion                                                     (34)         (39)         (28)
       Gain on sale of securities available-for-sale                             (113)        (242)        (325)
       Equity in (undistributed) over distributed earnings
         of subsidiaries                                                       (2,235)      (1,948)       5,835
       Change in
          Other assets                                                            (67)         (27)         238
          Other liabilities                                                       175         (198)         110
                                                                           ----------   ----------   ----------
              Net cash from operating activities                                  (24)        (289)       7,434

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of securities available-for-sale                                    (543)        (716)      (1,398)
    Sale of securities available-for-sale                                       1,444        1,495        1,458
    Maturities and calls of securities available-for-sale                          --        4,000        9,000
    Net change in loans receivable                                                (78)          --           --
    Payment received on ESOP loan                                                 141          142          142
    Capital contribution to subsidiary                                             --          (61)         (81)
                                                                           ----------   ----------   ----------
       Net cash from investing activities                                         964        4,860        9,121

CASH FLOWS FROM FINANCING ACTIVITIES
    Net change in securities sold under repurchase agreements                      --         (968)      (9,692)
    Stock options exercised                                                       221          278           --
    Purchase of treasury stock                                                 (2,240)        (472)      (6,063)
    Dividends paid to stockholders                                               (652)        (603)        (819)
                                                                           ----------   ----------   ----------
       Net cash from financing activities                                      (2,671)      (1,765)     (16,574)
                                                                           ----------   ----------   ----------

Net change in cash and cash equivalents                                        (1,731)       2,806          (19)

Cash and cash equivalents at beginning of year                                  3,329          523          542
                                                                           ----------   ----------   ----------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                   $    1,598   $    3,329   $      523
                                                                           ==========   ==========   ==========
</TABLE>


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


                                      F-31

<PAGE>


                       PARK BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002, and 2001
          (Table amounts in thousands, except share and per share data)

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

NOTE 15 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                       Earnings
                                                          Net                         Earnings         Per Share
                                        Interest       Interest           Net         Per Share          Fully
                                         Income         Income          Income          Basic           Diluted
                                         ------         ------          ------          -----           -------
<S>                                   <C>            <C>             <C>              <C>            <C>
2003
----
     First quarter                    $     3,459    $     1,835     $       489      $   .44        $    .42
     Second quarter                         3,264          1,670             395          .36             .33
     Third quarter                          3,433          1,974             692          .64             .59
     Fourth quarter                         3,497          2,202             674          .62             .57

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
</TABLE>


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