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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.



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FORM 10-Q



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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE
ACTIVITIES OF 1934



For the quarterly period ended
September 30, 2004



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PARK BANCORP, INC.

(Exact name of
registrant as specified in its charter)



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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)



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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 whether the Registrant is an accelerated filer (as defined in Rule 12
b-2 of the Act).    Yes ̈No  x



Indicate the number of shares outstanding of each of the issuers classes of common
stock as of the latest practicable date.



As of October 29, 2004, the
Registrant had outstanding 1,144,195 shares of common stock.



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##### Table of Contents

PARK BANCORP, INC.



Form 10-Q Quarterly
Report



Index



|                               |  |        |  |                                                                                       |  |     
|------------------------------ |  | ------ |  | ------------------------------------------------------------------------------------- |  | ----
|                               |  |        |  |                                                                                       |  | Page
|PART I -
Financial Information |  |       
|                               |  |        | 
|                               |  | Item 1 |  | Financial Statements                                                                  |  | 1   
|                               |  |        | 
|                               |  | Item 2 |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 8   
|                               |  |        | 
|                               |  | Item 3 |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 10  
|                               |  |        | 
|                               |  | Item 4 |  | Controls and Procedures                                                               |  | 11  
|                               | 
|PART II -
Other Information    |  |       
|                               |  |        | 
|                               |  | Item 1 |  | Legal Proceedings                                                                     |  | 12  
|                               |  |        | 
|                               |  | Item 2 |  | Changes in Securities                                                                 |  | 12  
|                               |  |        | 
|                               |  | Item 3 |  | Defaults Upon Senior Securities                                                       |  | 12  
|                               |  |        | 
|                               |  | Item 4 |  | Submission of Matters to a Vote of Securities Holders                                 |  | 12  
|                               |  |        | 
|                               |  | Item 5 |  | Other Information                                                                     |  | 12  
|                               |  |        | 
|                               |  | Item 6 |  | Exhibits and Reports on Form 8-K                                                      |  | 12  
|                               | 
|SIGNATURES                     |  | 13    



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. Park Bancorp, Inc. (the Company)
intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995 as amended and is including this statement for purposes of these safe harbor
provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words such as 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 or investment 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



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##### Table of Contents

PART IFINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS



Park Bancorp,
Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(In thousands of dollars, except share data)

(Unaudited)



|                                                                                                           |  |                   |         |   |                  |   |         |  
|---------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                           |  | September 30,2004 |         |   | December 31,2003 |  
|ASSETS                                                                                                     |  |                   |         |   |                  |   |         |  
|Cash and due from banks                                                                                    |  | $                 | 3,771   |   |                  | $ | 3,719   |  
|Federal funds sold                                                                                         |  |                   | 3,117   |   |                  |   | 3,376   |  
|Interest-bearing deposit accounts in other financial institutions                                          |  |                   | 10,176  |   |                  |   | 3,986   |  
|                                                                                                           |  |                   |         |   |                  |   |         |  
|Total cash and cash equivalents                                                                            |  |                   | 17,064  |   |                  |   | 11,081  |  
|Time deposits with other financial institutions                                                            |  |                   | 1,178   |   |                  |   | 1,151   |  
|Securities available-for-sale                                                                              |  |                   | 58,324  |   |                  |   | 72,058  |  
|Loans receivable, net                                                                                      |  |                   | 167,391 |   |                  |   | 158,957 |  
|Federal Home Loan Bank stock                                                                               |  |                   | 12,607  |   |                  |   | 10,109  |  
|Premises and equipment, net                                                                                |  |                   | 4,775   |   |                  |   | 4,627   |  
|Accrued interest receivable                                                                                |  |                   | 1,162   |   |                  |   | 1,244   |  
|Bank-owned life insurance                                                                                  |  |                   | 5,794   |   |                  |   | 5,627   |  
|Other assets                                                                                               |  |                   | 1,879   |   |                  |   | 1,209   |  
|                                                                                                           |  |                   |         |   |                  |   |         |  
|Total assets                                                                                               |  | $                 | 270,174 |   |                  | $ | 266,063 |  
|                                                                                                           |  |                   |         |   |                  |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                       |  |                   |         |   |                  |   |         |  
|Liabilities                                                                                                |  |                   |         |   |                  |   |         |  
|Deposits                                                                                                   |  |                   |         |   |                  |   |         |  
|Non-interest-bearing                                                                                       |  | $                 | 5,731   |   |                  | $ | 6,099   |  
|Interest-bearing                                                                                           |  |                   | 161,272 |   |                  |   | 164,363 |  
|                                                                                                           |  |                   |         |   |                  |   |         |  
|Total deposits                                                                                             |  |                   | 167,003 |   |                  |   | 170,462 |  
|                                                                                                           |  |                  
|Securities sold under repurchase agreements                                                                |  |                   | 3,944   |   |                  |   | 6,904   |  
|Advances from borrowers for taxes and insurance                                                            |  |                   | 2,789   |   |                  |   | 2,081   |  
|Federal Home Loan Bank advances                                                                            |  |                   | 64,322  |   |                  |   | 55,175  |  
|Accrued interest payable                                                                                   |  |                   | 342     |   |                  |   | 364     |  
|Other liabilities                                                                                          |  |                   | 1,186   |   |                  |   | 1,537   |  
|                                                                                                           |  |                   |         |   |                  |   |         |  
|Total liabilities                                                                                          |  |                   | 239,586 |   |                  |   | 236,523 |  
|                                                                                                           |  |                  
|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 2,734,138 and 2,733,138 shares |  |                   | 27      |   |                  |   | 27      |  
|Additional paid-in capital                                                                                 |  |                   | 27,747  |   |                  |   | 27,515  |  
|Retained earnings                                                                                          |  |                   | 30,330  |   |                  |   | 29,005  |  
|Treasury stock, 1,589,943 and 1,580,943 shares, at cost                                                    |  |                   | (27,005 | ) |                  |   | (26,731 | )
|Unearned ESOP shares                                                                                       |  |                   | (729    | ) |                  |   | (833    | )
|Accumulated other comprehensive income                                                                     |  |                   | 218     |   |                  |   | 557     |  
|                                                                                                           |  |                   |         |   |                  |   |         |  
|Total stockholders equity                                                                                 |  |                   | 30,588  |   |                  |   | 29,540  |  
|                                                                                                           |  |                   |         |   |                  |   |         |  
|Total liabilities and stockholders equity                                                                 |  | $                 | 270,174 |   |                  | $ | 266,063 |  
|                                                                                                           |  |                   |         |   |                  |   |         |  



See notes to
consolidated financial statements.



1



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##### Table of Contents

Park Bancorp, Inc. and Subsidiaries

Consolidated Statements of Income

(In thousands of dollars, except share data)

(Unaudited)



|                                                     |  |                                 |       |                                |   |       |  |      |        |  |   |       
|---------------------------------------------------- |  | ------------------------------- | ----- | ------------------------------ | - | ----- |  | ---- | ------ |  | - | ------
|                                                     |  | Three Months EndedSeptember 30, |       | Nine Months EndedSeptember 30,
|                                                     |  | 2004                            |       | 2003                           |   | 2004  |  | 2003
|Interest income                                      |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Loans receivable                                     |  | $                               | 2,615 |                                | $ | 2,604 |  | $    | 7,792  |  | $ | 7,662 
|Securities                                           |  |                                 | 771   |                                |   | 780   |  |      | 2,351  |  |   | 2,257 
|Other interest-bearing deposits                      |  |                                 | 50    |                                |   | 49    |  |      | 117    |  |   | 237   
|                                                     |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Total                                                |  |                                 | 3,436 |                                |   | 3,433 |  |      | 10,260 |  |   | 10,156
|                                                     |  |                                 |       |                               
|Interest expense                                     |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Deposits                                             |  |                                 | 795   |                                |   | 925   |  |      | 2,347  |  |   | 2,980 
|Federal Home Loan Bank advances and other borrowings |  |                                 | 540   |                                |   | 534   |  |      | 1,533  |  |   | 1,697 
|                                                     |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Total                                                |  |                                 | 1,335 |                                |   | 1,459 |  |      | 3,880  |  |   | 4,677 
|                                                     |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Net interest income                                  |  |                                 | 2,101 |                                |   | 1,974 |  |      | 6,380  |  |   | 5,479 
|                                                     |  |                                 |       |                               
|Provision for loan losses                            |  |                                 |      |                                |   |      |  |      |       |  |   |      
|                                                     |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Net interest income after provision for loan losses  |  |                                 | 2,101 |                                |   | 1,974 |  |      | 6,380  |  |   | 5,479 
|                                                     |  |                                 |       |                               
|Noninterest income                                   |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Gain on sale of real estate held for expansion       |  |                                 | 128   |                                |   |      |  |      | 128    |  |   |      
|Gain on sale of securities available-for-sale        |  |                                 | 66    |                                |   | 65    |  |      | 248    |  |   | 184   
|Service fee income                                   |  |                                 | 87    |                                |   | 105   |  |      | 241    |  |   | 280   
|Earnings on bank-owned life insurance                |  |                                 | 66    |                                |   | 72    |  |      | 200    |  |   | 216   
|Other operating income                               |  |                                 | 13    |                                |   | 132   |  |      | 63     |  |   | 156   
|                                                     |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Total noninterest income                             |  |                                 | 360   |                                |   | 374   |  |      | 880    |  |   | 836   
|                                                     |  |                                 |       |                               
|Noninterest expense                                  |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Compensation and benefits                            |  |                                 | 941   |                                |   | 830   |  |      | 2,721  |  |   | 2,532 
|Occupancy and equipment                              |  |                                 | 227   |                                |   | 260   |  |      | 640    |  |   | 571   
|Other operating expenses                             |  |                                 | 352   |                                |   | 217   |  |      | 1,097  |  |   | 853   
|                                                     |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Total noninterest expense                            |  |                                 | 1,520 |                                |   | 1,307 |  |      | 4,458  |  |   | 3,956 
|                                                     |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Income before income taxes                           |  |                                 | 941   |                                |   | 1,041 |  |      | 2,802  |  |   | 2,359 
|                                                     |  |                                 |       |                               
|Income tax expense                                   |  |                                 | 299   |                                |   | 349   |  |      | 932    |  |   | 783   
|                                                     |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Net income                                           |  | $                               | 642   |                                | $ | 692   |  | $    | 1,870  |  | $ | 1,576 
|                                                     |  |                                 |       |                                |   |       |  |      |        |  |   |       
|Basic earnings per share                             |  | $                               | .60   |                                | $ | .64   |  | $    | 1.75   |  | $ | 1.43  
|Diluted earnings per share                           |  | $                               | .55   |                                | $ | .59   |  | $    | 1.60   |  | $ | 1.34  
|                                                     |  |                                 |       |                               
|Comprehensive income                                 |  | $                               | 848   |                                | $ | 416   |  | $    | 1,531  |  | $ | 1,405 
|                                                     |  |                                 |       |                                |   |       |  |      |        |  |   |       



See notes to
consolidated financial statements.



2



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##### Table of Contents

Park Bancorp, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands of dollars)

(Unaudited)



|                                                                            |  |                                |        |   |      |   |         |  
|--------------------------------------------------------------------------- |  | ------------------------------ | ------ | - | ---- | - | ------- | -
|                                                                            |  | Nine Months EndedSeptember 30, |       
|                                                                            |  | 2004                           |        |   | 2003 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                        |  |                                |        |   |      |   |         |  
|Net income                                                                  |  | $                              | 1,870  |   |      | $ | 1,576   |  
|Adjustments to reconcile net income to net cash from operating activities   |  |                                |        |   |      |   |         |  
|Net premium amortization on securities                                      |  |                                | 108    |   |      |   | 143     |  
|Gain on sale of securities available-for-sale                               |  |                                | (248   | ) |      |   | (184    | )
|Gain on sale of real estate held for expansion                              |  |                                | (128   | ) |      |   |        |  
|Earnings on bank-owned life insurance                                       |  |                                | (200   | ) |      |   | (216    | )
|Depreciation                                                                |  |                                | 315    |   |      |   | 225     |  
|ESOP compensation expense                                                   |  |                                | 321    |   |      |   | 285     |  
|Federal Home Loan Bank stock dividends                                      |  |                                | (498   | ) |      |   | (319    | )
|Net change in:                                                              |  |                                |        |   |      |   |         |  
|Accrued interest receivable                                                 |  |                                | 82     |   |      |   | 46      |  
|Accrued interest payable                                                    |  |                                | (22    | ) |      |   | (203    | )
|Other assets                                                                |  |                                | (1,576 | ) |      |   | (480    | )
|Other liabilities                                                           |  |                                | (351   | ) |      |   | 348     |  
|                                                                            |  |                                |        |   |      |   |         |  
|Net cash from operating activities                                          |  |                                | (327   | ) |      |   | 1,221   |  
|                                                                            |  |                               
|CASH FLOWS FROM INVESTING ACTIVITIES                                        |  |                                |        |   |      |   |         |  
|Purchase of securities available-for-sale                                   |  |                                | (6,643 | ) |      |   | (37,716 | )
|Proceeds from sales, calls, and maturities of securities available-for-sale |  |                                | 9,794  |   |      |   | 9,759   |  
|Principal repayments on mortgage-backed securities                          |  |                                | 11,271 |   |      |   | 13,816  |  
|Net increase in loans                                                       |  |                                | (8,434 | ) |      |   | (7,407  | )
|Proceeds from sale of real estate held for expansion                        |  |                                | 153    |   |      |   |        |  
|Purchase of Federal Home Loan Bank stock                                    |  |                                | (2,000 | ) |      |   | (4,261  | )
|Purchase of premises and equipment                                          |  |                                | (463   | ) |      |   | (681    | )
|                                                                            |  |                                |        |   |      |   |         |  
|Net cash from investing activities                                          |  |                                | 3,678  |   |      |   | (26,490 | )
|                                                                            |  |                               
|CASH FLOWS FROM FINANCING ACTIVITIES                                        |  |                                |        |   |      |   |         |  
|Net change in deposits                                                      |  |                                | (3,459 | ) |      |   | 9,475   |  
|Net change in repurchase agreements                                         |  |                                | (2,960 | ) |      |   | (2,382  | )
|Net change in advances from borrowers for taxes and insurance               |  |                                | 708    |   |      |   | (950    | )
|Proceeds from in Federal Home Loan Bank advances                            |  |                                | 14,147 |   |      |   | 15,850  |  
|Repayments of Federal Home Loan Bank advances                               |  |                                | (5,000 | ) |      |   | (12,000 | )
|Dividends paid                                                              |  |                                | (545   | ) |      |   | (494    | )
|Stock options exercised                                                     |  |                                | 15     |   |      |   | 221     |  
|Purchase of treasury stock                                                  |  |                                | (274   | ) |      |   | (2,164  | )
|                                                                            |  |                                |        |   |      |   |         |  
|Net cash from financing activities                                          |  |                                | 2,632  |   |      |   | 7,556   |  
|                                                                            |  |                                |        |   |      |   |         |  
|Net change in cash and cash equivalents                                     |  |                                | 5,983  |   |      |   | (17,713 | )
|Cash and cash equivalents at beginning of period                            |  |                                | 11,081 |   |      |   | 23,998  |  
|                                                                            |  |                                |        |   |      |   |         |  
|Cash and cash equivalents at end of period                                  |  | $                              | 17,064 |   |      | $ | 6,285   |  
|                                                                            |  |                                |        |   |      |   |         |  
|Supplemental disclosures of cash flow information                           |  |                                |        |   |      |   |         |  
|Cash paid during the nine months for                                        |  |                                |        |   |      |   |         |  
|Interest                                                                    |  | $                              | 3,928  |   |      | $ | 4,714   |  
|Income taxes                                                                |  |                                | 825    |   |      |   | 755     |  



See notes to
consolidated financial statements.



3



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##### Table of Contents

Park Bancorp, Inc.

Consolidated Statements of Stockholders Equity

Nine months ended September 30, 2004 and 2003

(In thousands of dollars, except share data)

(Unaudited)



|                                                                                               |  |             |    |                           |   |                  |  |   |                     |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|---------------------------------------------------------------------------------------------- |  | ----------- | -- | ------------------------- | - | ---------------- |  | - | ------------------- | - |  | ------------- | ---- | - | ------------------------------------------ | - | ------- | ------------------------ |  | - | ---- | - |  | - | ------ | -
|                                                                                               |  | CommonStock |    | Additional Paid-inCapital |   | RetainedEarnings |  |   | Unearned ESOPShares |   |  | TreasuryStock |      |   | AccumulatedOtherComprehensiveIncome (Loss) |   |         | TotalStockholdersEquity | 
|2003                                                                                           |  |             |    |                           |   |                  |  |   |                     |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Balance at January 1, 2003                                                                     |  | $           | 27 |                           | $ | 27,050           |  | $ | 27,407              |   |  | $             | (979 | ) |                                            | $ | (24,491 | )                        |  | $ | 880  |   |  | $ | 29,894 |  
|Comprehensive income                                                                           |  |             |    |                           |   |                  |  |   |                     |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Net income                                                                                     |  |             |   |                           |   |                 |  |   | 1,576               |   |  |               |     |   |                                            |   |        |                          |  |   |     |   |  |   | 1,576  |  
|Change in fair value of securities available-for-sale, net of reclassification and tax effects |  |             |   |                           |   |                 |  |   |                    |   |  |               |     |   |                                            |   |        |                          |  |   | (171 | ) |  |   | (171   | )
|                                                                                               |  |             |    |                           |   |                  |  |   |                     |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Total comprehensive income                                                                     |  |             |    |                           |   |                  |  |   |                     |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   | 1,405  |  
|                                                                                               |  |             |    |                           |   |                  | 
|Exercise of 14,007 stock options                                                               |  |             |   |                           |   | 221              |  |   |                    |   |  |               |     |   |                                            |   |        |                          |  |   |     |   |  |   | 221    |  
|Purchase of 84,307 shares of treasury stock                                                    |  |             |   |                           |   |                 |  |   |                    |   |  |               |     |   |                                            |   | (2,164  | )                        |  |   |     |   |  |   | (2,164 | )
|Dividends declared ($.45 per share)                                                            |  |             |   |                           |   |                 |  |   | (494                | ) |  |               |     |   |                                            |   |        |                          |  |   |     |   |  |   | (494   | )
|ESOP shares earned                                                                             |  |             |   |                           |   | 175              |  |   |                    |   |  |               | 110  |   |                                            |   |        |                          |  |   |     |   |  |   | 285    |  
|                                                                                               |  |             |    |                           |   |                  |  |   |                     |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Balance at September 30, 2003                                                                  |  | $           | 27 |                           | $ | 27,446           |  | $ | 28,489              |   |  | $             | (869 | ) |                                            | $ | (26,655 | )                        |  | $ | 709  |   |  | $ | 29,147 |  
|                                                                                               |  |             |    |                           |   |                  |  |   |                     |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|2004                                                                                           |  |             |    |                           |   |                  |  |   |                     |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Balance at January 1, 2004                                                                     |  | $           | 27 |                           | $ | 27,515           |  | $ | 29,005              |   |  | $             | (833 | ) |                                            | $ | (26,731 | )                        |  | $ | 557  |   |  | $ | 29,540 |  
|Comprehensive income                                                                           |  |             |    |                           |   |                  |  |   |                     |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Net income                                                                                     |  |             |   |                           |   |                 |  |   | 1,870               |   |  |               |     |   |                                            |   |        |                          |  |   |     |   |  |   | 1,870  |  
|Change in fair value of securities available-for-sale, net of reclassification and tax effects |  |             |   |                           |   |                 |  |   |                    |   |  |               |     |   |                                            |   |        |                          |  |   | (339 | ) |  |   | (339   | )
|                                                                                               |  |             |    |                           |   |                  |  |   |                     |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Total comprehensive income                                                                     |  |             |    |                           |   |                  |  |   |                     |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   | 1,531  |  
|                                                                                               |  |             |    |                           |   |                  | 
|Exercise of 1,000 stock options                                                                |  |             |   |                           |   | 15               |  |   |                    |   |  |               |     |   |                                            |   |        |                          |  |   |     |   |  |   | 15     |  
|Purchase of 9,000 shares of treasury stock                                                     |  |             |   |                           |   |                 |  |   |                    |   |  |               |     |   |                                            |   | (274    | )                        |  |   |     |   |  |   | (274   | )
|Dividends declared ($.54 per share)                                                            |  |             |   |                           |   |                 |  |   | (545                | ) |  |               |     |   |                                            |   |        |                          |  |   |     |   |  |   | (545   | )
|ESOP shares earned                                                                             |  |             |   |                           |   | 217              |  |   |                    |   |  |               | 104  |   |                                            |   |        |                          |  |   |     |   |  |   | 321    |  
|                                                                                               |  |             |    |                           |   |                  |  |   |                     |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Balance at September 30, 2004                                                                  |  | $           | 27 |                           | $ | 27,747           |  | $ | 30,330              |   |  | $             | (729 | ) |                                            | $ | (27,005 | )                        |  | $ | 218  |   |  | $ | 30,588 |  
|                                                                                               |  |             |    |                           |   |                  |  |   |                     |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  



See notes to
consolidated financial statements.



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##### Table of Contents

PARK BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2004

(table amounts in thousands of dollars, except share data)



Note 1 - Basis of Presentation



The accompanying unaudited 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 Company
(PBI), and the Banks subsidiaries, GPS Company and GPS Development Company (GPS), as of September 30, 2004 and December 31, 2003 and for the three-month and nine-month periods ended September 30, 2004 and 2003. Significant intercompany
accounts and transactions have been eliminated in consolidation.



The
accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain disclosures required by generally accepted accounting principles are not
included herein. These interim statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Companys 2003 Annual Report on Form 10-K filed with the Securities and Exchange Commission.
The December 31, 2003 balance sheet presented herein has been derived from the audited financial statements included in the Companys 2003 Annual Report on Form 10-K filed with the Securities and Exchange Commission, but does not include all
disclosures required by generally accepted accounting principles.



Interim
statements are subject to possible adjustment in connection with the annual audit of the Company for the year ending December 31, 2004. In the opinion of management of the Company, the accompanying unaudited interim consolidated financial statements
reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the consolidated financial position and consolidated results of operations for the periods presented.



The results of operations for the three-month and nine-month periods ended September 30, 2004
and 2003 are not necessarily indicative of the results to be expected for the full year.



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##### Table of Contents

Note 2  Earnings Per Share



The following table presents a reconciliation of the components used to compute basic and diluted earnings per share for the three-month and
nine-month periods ended September 30, 2004 and 2003.



|                                                           |  |                             |           |                            |   |                             |  |                            |           |  |   |          
|---------------------------------------------------------- |  | --------------------------- | --------- | -------------------------- | - | --------------------------- |  | -------------------------- | --------- |  | - | ---------
|                                                           |  | 2004                        |           | 2003                      
|                                                           |  | Three Months Ended Sept. 30 |           | Nine Months Ended Sept. 30 |   | Three Months Ended Sept. 30 |  | Nine Months Ended Sept. 30
|Net income as reported                                     |  | $                           | 642       |                            | $ | 1,870                       |  | $                          | 692       |  | $ | 1,576    
|Weighted average common shares outstanding                 |  |                             | 1,070,536 |                            |   | 1,069,872                   |  |                            | 1,088,414 |  |   | 1,098,875
|                                                           |  |                             |           |                            |   |                             |  |                            |           |  |   |          
|Basic earnings per share                                   |  | $                           | .60       |                            | $ | 1.75                        |  | $                          | .64       |  | $ | 1.43     
|                                                           |  |                             |           |                            |   |                             |  |                            |           |  |   |          
|Earnings per share assuming dilution                       |  |                             |           |                            |   |                             |  |                            |           |  |   |          
|Net income available to common shareholders                |  | $                           | 642       |                            | $ | 1,870                       |  | $                          | 692       |  | $ | 1,576    
|Weighted average common shares outstanding                 |  |                             | 1,070,536 |                            |   | 1,069,872                   |  |                            | 1,088,414 |  |   | 1,098,875
|                                                           |  |                             |           |                           
|Dilutive effect of stock options                           |  |                             | 96,830    |                            |   | 95,530                      |  |                            | 87,948    |  |   | 81,608   
|                                                           |  |                             |           |                            |   |                             |  |                            |           |  |   |          
|Average common shares and dilutive potential common shares |  |                             | 1,167,366 |                            |   | 1,165,402                   |  |                            | 1,176,362 |  |   | 1,180,483
|                                                           |  |                             |           |                            |   |                             |  |                            |           |  |   |          
|Diluted earnings per share                                 |  | $                           | .55       |                            | $ | 1.60                        |  | $                          | .59       |  | $ | 1.34     
|                                                           |  |                             |           |                            |   |                             |  |                            |           |  |   |          



The following table illustrates the
effect on net income and earnings per share if expense was measured using the fair value recognition of FASB Statement No. 123, Accounting for Stock-Based Compensation.



|                                                                                  |  |        |     |   |        |   |       |        |  |   |        |   |  |   |       |  
|--------------------------------------------------------------------------------- |  | ------ | --- | - | ------ | - | ----- | ------ |  | - | ------ | - |  | - | ----- | -
|                                                                                  |  | 2004   |     |   | 2003   |  
|                                                                                  |  | 3 Mos. |     |   | 9 Mos. |   |       | 3 Mos. |  |   | 9 Mos. |  
|Net income as reported                                                            |  | $      | 642 |   |        | $ | 1,870 |        |  | $ | 692    |   |  | $ | 1,576 |  
|Deduct: Stock-based compensation expense Determined under fair value based method |  |        | (4  | ) |        |   | (12   | )      |  |   | (4     | ) |  |   | (12   | )
|                                                                                  |  |        |     |   |        |   |       |        |  |   |        |   |  |   |       |  
|Pro forma net income                                                              |  |        | 638 |   |        |   | 1,858 |        |  |   | 688    |   |  |   | 1,564 |  
|                                                                                  |  |        |     |  
|Basic earnings per share as reported                                              |  |        | .60 |   |        |   | 1.75  |        |  |   | .64    |   |  |   | 1.43  |  
|Pro forma basic earnings per share                                                |  |        | .60 |   |        |   | 1.74  |        |  |   | .63    |   |  |   | 1.42  |  
|                                                                                  |  |        |     |  
|Diluted earnings per share as reported                                            |  |        | .55 |   |        |   | 1.60  |        |  |   | .59    |   |  |   | 1.34  |  
|Pro forma diluted earnings per share                                              |  |        | .55 |   |        |   | 1.59  |        |  |   | .58    |   |  |   | 1.32  |  



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Note 3  Recently Issued Accounting Guidance



EITF 03-1, Other-Than-Temporary Impairment



In March 2004, the FASB Emerging Issues Task Force (EITF) reached a consensus regarding EITF 03-1, The Meaning of Other-Than-Temporary Impairment and
Its Application to Certain Investments. The consensus claries the meaning of other-than-temporary impairment and its application to investments classified as either available-for-sale or held-to-maturity under SFAS 114, Accounting for
Certain Investments in Debt and Equity Securities,  and investments accounted for under the cost method or the equity method. The recognition and measurement guidance for which the consensus was reached is to be applied to other-than-temporary
impairment evaluations. In September 2004, the Financial Accounting Standards Board (FASB) issued a final FASB Staff Position, FSP EITF Issue 03-01-1, which has delayed the effective date for the measurement and recognition guidance of
EITF 03-01. The comment period is currently open related to this staff position. The implementation date is unknown until further guidance is issued by the FASB. We are currently evaluating the impact of adopting EITF 03-01.



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##### Table of Contents

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The following discussion compares the financial condition of Park Bancorp, Inc. (Company) and its wholly owned subsidiaries, Park Federal Savings Bank (Bank) and PBI
Development Corporation, and the Banks subsidiaries, at September 30, 2004 to its financial condition at December 31, 2003 and the results of operations for the three-month and nine-month periods ended September 30, 2004 to the same periods in
2003. This discussion should be read in conjunction with the interim financial statements and footnotes included herein.



FINANCIAL CONDITION



Total assets at September 30, 2004 were $270.2 million compared to $266.1 million at December 31, 2003, an increase of $4.1 million. During the nine months ended
September 30, 2004, loans receivable increased $8.4 million, cash and cash equivalents increased by $6.0 million and Federal Home Loan Bank stock increased $2.5 million offset by $13.7 million decrease in securities.



The allowance for loan losses was $577,000 and $578,000 at September 30, 2004 and December
31, 2003, respectively. Non-performing assets were $1,228,000 and $545,000 at September 30, 2004 and December 31, 2003, respectively.



Total liabilities at September 30, 2004 were $239.6 million compared to $236.5 million at December 31, 2003, an increase of $3.1 million, primarily due to an increase of
$9.1 million in Federal Home Loan Bank advances offset by $3.0 million decrease in repurchase agreements and a decrease of $3.5 million in deposits. Federal Home Loan Bank advances increased as a result of management taking advantage of low fixed
rate term advances for asset/liability management purposes.



Stockholders
equity at September 30, 2004 was $30.6 million compared to $29.5 million at December 31, 2003. The increase was primarily attributable to the net income of the Company, offset by dividends declared of $545,000, an unrealized loss of $339,000 in
securities available-for-sale and the repurchase of 9,000 shares of common stock at an average price of $30.41.



RESULTS OF OPERATIONS



Net income decreased to $642,000 for the quarter ended September 30, 2004 compared to $692,000 for the same period in 2003. Net income increased to $1.9 million for the nine months ended September 30, 2004 compared to
$1.6 million for the nine months ended September 30, 2003.



Net interest income
increased to $2.1 million for the quarter ended September 30, 2004 compared to $2.0 million for the same period in 2003. Net interest income increased to $6.4 million for the nine months ended September 30, 2004 compared to $5.5 million for the same
period in 2003. The net interest margin increased to 3.31% for the three-month period ended September 30, 2004, from 3.13% for the three-month period ended September 30, 2003. This was largely due to an increase in the spread to 3.16% for the
three-month period ended September 30, 2004, from 2.92% for three-month period ended September 30, 2003. The average yield on earning assets decreased to 5.41% and 5.41% for the three-month and nine-month periods ended September 30, 2004,
respectively, from 5.44% and 5.43% for the three-month and nine-month periods ended September 30, 2003, respectively. The average cost of funds also decreased to 2.25% and 2.20% for the three-month and nine-month periods ended September 30, 2004,
respectively, from 2.52% and 2.72% for the three-month and nine-month periods ended September 30, 2003, respectively.



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,



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##### Table of Contents

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 were no provision for loan losses recorded for the quarters ended September 30,
2004 and 2003. Management believes that its assessment of the allowance for loan losses is appropriate, given 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 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 September 30, 2004 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
estimatible.



Noninterest income decreased to $360,000 for the quarter ended
September 30, 2004 from $374,000 for the quarter ended September 30, 2003.



Noninterest expense increased to $1.5 million for the quarter ended September 30, 2004, compared to $1.3 million for the corresponding three month period in 2003, due to occupancy and equipment costs resulting from placing the new
facilities at the existing 55thStreet location into service.



The Companys federal income tax expense decreased to $299,000 for the three-month
period ended September 30, 2004 from $349,000 for the three-month period ended September 30, 2003. The change in income tax was attributable to the decrease in income before income taxes.



The Company completed the sale of 3.5 acres in Naperville, Illinois in October 2004 for a sales price of $1.4 million. The cost of the land
was $437,000 and previously reported under other assets. The gain after taxes was $625,000.



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s liquidity ratio was 45%
at September 30, 2004.



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 ($327,000) and $1.2 million in 2004 and 2003, respectively. Net cash from investing
activities consisted primarily of disbursements for loan originations and the purchase of securities, offset by principal collections on loans, and proceeds from maturing securities and paydowns on mortgage-backed securities. The net cash from
investing activities were $3.7 million and $(26.5) million in 2004 and 2003, respectively. Net cash from financing activities consisted primarily of the activity in deposit accounts, FHLB borrowings, and securities sold under repurchase agreements
in addition to the purchase of treasury stock. The net cash from financing activities was $2.6 million and $7.6 million in 2004 and 2003, respectively.



At September 30, 2004, the Bank exceeded all of its regulatory capital requirements with a Tier 1 (core) capital level of $ 27.3 million, or 10.2% of adjusted total
assets, which is above the required level of $10.7 million, or 4.0%; and total risk-based capital of $27.8 million, or 16.7% of risk-weighted assets, which is above the required level of $13.4 million, or 8.0%. The Bank at September 30, 2004 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.



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At September 30, 2004, the Bank had outstanding commitments to originate mortgage loans of $3.2 million, and $560,000 in
standby letters of credit. 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 September 30, 2004 totaled
$73.0 million. Management expects that a substantial portion of the maturing certificate accounts will be renewed at the Bank. However, if a substantial portion of these deposits is not retained, the Bank may utilize FHLB advances or raise interest
rates on deposits to attract new accounts, which may result in higher levels of interest expense.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



The Banks interest rate sensitivity is monitored by management through the use of a model that estimates the change in net portfolio value (NPV) over a range of interest rate scenarios. NPV is the present value
of expected cash flows from assets, liabilities, and off-balance-sheet contracts. An NPV ratio, in any interest rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario. The Sensitivity Measure
is the decline in the NPV ratio, in basis points, caused by a 2% increase or decrease in rates, whichever produces a larger decline. The higher an institutions Sensitivity Measure is, the greater its exposure to interest rate risk is
considered to be. The OTS has incorporated an interest rate risk component into its regulatory capital rule. Under the rule, an institution whose sensitivity measure exceeds 2% would be required to deduct an interest rate risk component in
calculating its total capital for purposes of the risk-based capital requirement. As of June 30, 2004, the Banks most recent sensitivity measure, as measured by the OTS, resulting from a 200 basis point increase in interest rates was (28)% and
would result in a $9.9 million reduction 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 remains 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 table shows the NPV and projected change in the NPV of the Bank at June 30, 2004, assuming an instantaneous and sustained change in market interest rates of
100, 200, and 300 basis points.



Interest Rate Sensitivity of
Net Portfolio Value (NPV)



|                |  |                     |        |          |                            |         |          |  |     |           |  |       |        |  |         
|--------------- |  | ------------------- | ------ | -------- | -------------------------- | ------- | -------- |  | --- | --------- |  | ----- | ------ |  | --------
|                |  | Net Portfolio Value |        |          | NPV as a % of PV of Assets
|Change in Rates |  | $ Amount            |        | $ Change |                            |         | % Change |  |     | NPV Ratio |  |       | Change
|+ 300 bp        |  | $                   | 20,452 |          | $                          | (14,998 | )        |  | (42 | )%        |  | 7.95  | %      |  | (479) bp
|+ 200 bp        |  |                     | 25,575 |          |                            | (9,875  | )        |  | (28 | )         |  | 9.68  |        |  | (306) bp
|+ 100 bp        |  |                     | 30,755 |          |                            | (4,695  | )        |  | (13 | )         |  | 11.33 |        |  | (141) bp
|0 bp            |  |                     | 35,450 |          |                            |        |          |  |    |           |  | 12.74 |        |  |        
|- 100 bp        |  |                     | 37,935 |          |                            | 2,485   |          |  | 7   |           |  | 13.39 |        |  | + 65 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     



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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.



Management has not yet completed the computation of NPV as of September 30, 2004 but estimates that the results would not be materially different than those presented
above.



ITEM 4. CONTROLS AND PROCEDURES



As of September
30, 2004, the Companys Chief Executive Officer and Chief Financial Officer carried out an evaluation, with the participation of other members of management as they deemed appropriate, of the effectiveness of the design and operation of the
Companys disclosure controls and procedures as contemplated by Exchange Act Rule 13a-14. Based upon and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure
controls and procedures are effective, in all materials respects, in timely alerting them to material information relating to the Company (and its consolidated subsidiaries) that is required to be included in the periodic reports the Company is
required to file and submit to the SEC under the Exchange Act.



There were no
significant changes to the Companys internal controls or in other factors that could significantly affect these internal controls subsequent to the date the Company carried out its evaluation of its internal controls. There were no significant
deficiencies or material weaknesses identified in the evaluation and therefore, no corrective actions were taken.



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##### Table of Contents

PART II  OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS.



None



ITEM 2. CHANGES IN SECURITIES.



The Company purchased 2,000 shares of treasury stock at a price of $30.86 under the September 2003 re-purchase plan.



ITEM 3. DEFAULTS UPON SENIOR SECURITIES.



None



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



None.



ITEM 5. OTHER INFORMATION.



None



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.



| | (a) | Exhibits
| | --- | --------



31.1 Certification Pursuant to 18 U.S.C. Section 1350, as adopted to Section 906 of the Sarbanes-Oxley Act of 2002 from the Companys Chief Executive Officer (attached as an exhibit and incorporated herein by
reference.)



31.2 Certification Pursuant to 18 U.S.C. Section
1350, as adopted to Section 906 of the Sarbanes-Oxley Act of 2002 from the Companys Chief Financial Officer (attached as an exhibit and incorporated herein by reference.)



| | (b) | Reports on Form 8-K. On July 30, 2004, the Company filed a report announcing the 2004 second quarter results.
| | --- | -------------------------------------------------------------------------------------------------------------



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SIGNATURES



Pursuant to the requirements 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.



|                        |  |                                      
|----------------------- |  | -------------------------------------
|                        |  | PARK BANCORP, INC.                   
|                        | 
|Date: November 15, 2004 |  | /s/ David A. Remijas                 
|                        |  | David A. Remijas                     
|                        |  | President and Chief Executive Officer
|                        | 
|Date: November 15, 2004 |  | /s/ Steven J. Pokrak                 
|                        |  | Steven J. Pokrak                     
|                        |  | Treasurer and Chief Financial Officer



13