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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarterly period ended March 31, 2005



PARK BANCORP, INC.

(Exact name of registrant as specified in its charter)



0-20867

(Commission File Number)



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)



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 12b-2 of the Act).



Yes ̈No x



As of May 12, 2005, the Registrant had outstanding 1,126,195 shares of common stock.



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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 |  | 7   
|                               |  |                                                                                      
|Item 3                         |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 9   
|                               |  |                                                                                      
|Item 4                         |  | Controls and Procedures                                                               |  | 10  
|                               | 
|PART II - Other Information    |  |                                                                                      
|                               |  |                                                                                      
|Item 1                         |  | Legal Proceedings                                                                     |  | 11  
|                               |  |                                                                                      
|Item 2                         |  | Changes in Securities                                                                 |  | 11  
|                               |  |                                                                                      
|Item 3                         |  | Defaults Upon Senior Securities                                                       |  | 11  
|                               |  |                                                                                      
|Item 4                         |  | Submission of Matters to a Vote of Securities Holders                                 |  | 11  
|                               |  |                                                                                      
|Item 5                         |  | Other Information                                                                     |  | 11  
|                               |  |                                                                                      
|Item 6                         |  | Exhibits and Reports on Form 8-K                                                      |  | 11  
|                               | 
|SIGNATURES                     |  | 12                                                                                   





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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 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.





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ITEM 1  FINANCIAL STATEMENTS



Park
Bancorp, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(In thousands of dollars, except share data)

(Unaudited)



|                                                                                                 |  |               |         |   |                  |   |         |  
|------------------------------------------------------------------------------------------------ |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                 |  | March 31,2005 |         |   | December 31,2004 |  
|ASSETS                                                                                           |  |               |         |   |                  |   |         |  
|Cash and due from banks                                                                          |  | $             | 4,052   |   |                  | $ | 3,340   |  
|Federal funds sold                                                                               |  |               | 2,535   |   |                  |   | 5,419   |  
|Interest-bearing deposit accounts in other financial institutions                                |  |               | 6,543   |   |                  |   | 4,993   |  
|                                                                                                 |  |               |         |   |                  |   |         |  
|Total cash and cash equivalents                                                                  |  |               | 13,130  |   |                  |   | 13,752  |  
|Time deposits with other financial institutions                                                  |  |               | 1,096   |   |                  |   | 1,087   |  
|Securities available-for-sale                                                                    |  |               | 58,856  |   |                  |   | 59,728  |  
|Loans receivable, net                                                                            |  |               | 162,068 |   |                  |   | 167,466 |  
|Federal Home Loan Bank stock                                                                     |  |               | 11,309  |   |                  |   | 11,136  |  
|Premises and equipment, net                                                                      |  |               | 4,895   |   |                  |   | 4,815   |  
|Accrued interest receivable                                                                      |  |               | 1,070   |   |                  |   | 1,185   |  
|Bank-owned life insurance                                                                        |  |               | 5,897   |   |                  |   | 5,848   |  
|Other assets                                                                                     |  |               | 2,724   |   |                  |   | 2,603   |  
|                                                                                                 |  |               |         |   |                  |   |         |  
|Total assets                                                                                     |  | $             | 261,045 |   |                  | $ | 267,620 |  
|                                                                                                 |  |               |         |   |                  |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                             |  |               |         |   |                  |   |         |  
|LIABILITIES                                                                                      |  |               |         |   |                  |   |         |  
|Noninterest bearing deposits                                                                     |  | $             | 5,216   |   |                  | $ | 6,805   |  
|Interest bearing deposits                                                                        |  |               | 156,715 |   |                  |   | 159,320 |  
|                                                                                                 |  |               |         |   |                  |   |         |  
|Total deposits                                                                                   |  |               | 161,931 |   |                  |   | 166,125 |  
|Securities sold under repurchase agreements                                                      |  |               | 3,318   |   |                  |   | 3,369   |  
|Advances from borrowers for taxes and insurance                                                  |  |               | 1,840   |   |                  |   | 2,283   |  
|Federal Home Loan Bank advances                                                                  |  |               | 62,169  |   |                  |   | 63,871  |  
|Accrued interest payable                                                                         |  |               | 427     |   |                  |   | 386     |  
|Other liabilities                                                                                |  |               | 626     |   |                  |   | 679     |  
|                                                                                                 |  |               |         |   |                  |   |         |  
|Total liabilities                                                                                |  |               | 230,311 |   |                  |   | 236,713 |  
|STOCKHOLDERS EQUITY                                                                             |  |               |         |   |                  |   |         |  
|Preferred stock, $.01 par value, 1,000,000 shares authorized; none issued and outstanding        |  |               |        |   |                  |   |        |  
|Common stock, $.01 par value, 9,000,000 shares authorized; issued 2,736,238 and 2,734,138 shares |  |               | 27      |   |                  |   | 27      |  
|Additional paid-in capital                                                                       |  |               | 27,917  |   |                  |   | 27,819  |  
|Retained earnings                                                                                |  |               | 30,904  |   |                  |   | 30,797  |  
|Treasury stock, 1,595,043 and 1,592,043 shares, at cost                                          |  |               | (27,164 | ) |                  |   | (27,070 | )
|Unearned ESOP shares                                                                             |  |               | (661    | ) |                  |   | (694    | )
|Accumulated other comprehensive income (loss)                                                    |  |               | (289    | ) |                  |   | 28      |  
|                                                                                                 |  |               |         |   |                  |   |         |  
|Total stockholders equity                                                                       |  |               | 30,734  |   |                  |   | 30,907  |  
|                                                                                                 |  |               |         |   |                  |   |         |  
|Total liabilities and stockholders equity                                                       |  | $             | 261,045 |   |                  | $ | 267,620 |  
|                                                                                                 |  |               |         |   |                  |   |         |  



See accompanying 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 EndedMarch 31,
|                                                     |  | 2005                        |       | 2004
|Interest income                                      |  |                             |       |      |   |      
|Loans receivable                                     |  | $                           | 2,439 |      | $ | 2,615
|Securities                                           |  |                             | 738   |      |   | 839  
|Other interest-bearing deposits                      |  |                             | 93    |      |   | 28   
|                                                     |  |                             |       |      |   |      
|Total                                                |  |                             | 3,270 |      |   | 3,482
|Interest expense                                     |  |                             |       |      |   |      
|Deposits                                             |  |                             | 856   |      |   | 782  
|Federal Home Loan Bank advances and other borrowings |  |                             | 543   |      |   | 487  
|                                                     |  |                             |       |      |   |      
|Total                                                |  |                             | 1,399 |      |   | 1,269
|                                                     |  |                             |       |      |   |      
|Net interest income                                  |  |                             | 1,871 |      |   | 2,213
|Provision for loan losses                            |  |                             |      |      |   |     
|                                                     |  |                             |       |      |   |      
|Net interest income after provision for loan losses  |  |                             | 1,871 |      |   | 2,213
|Noninterest income                                   |  |                             |       |      |   |      
|Gain on sale of securities                           |  |                             |      |      |   | 128  
|Service fee income                                   |  |                             | 72    |      |   | 77   
|Earnings on bank-owned life insurance                |  |                             | 50    |      |   | 68   
|Other operating income                               |  |                             | 8     |      |   | 43   
|                                                     |  |                             |       |      |   |      
|Total noninterest income                             |  |                             | 130   |      |   | 316  
|Noninterest expense                                  |  |                             |       |      |   |      
|Compensation and benefits                            |  |                             | 993   |      |   | 962  
|Occupancy and equipment expense                      |  |                             | 191   |      |   | 218  
|Other operating expenses                             |  |                             | 361   |      |   | 344  
|                                                     |  |                             |       |      |   |      
|Total noninterest expense                            |  |                             | 1,545 |      |   | 1,524
|                                                     |  |                             |       |      |   |      
|Income before income taxes                           |  |                             | 456   |      |   | 1,005
|Income tax expense                                   |  |                             | 156   |      |   | 341  
|                                                     |  |                             |       |      |   |      
|Net income                                           |  | $                           | 300   |      | $ | 664  
|                                                     |  |                             |       |      |   |      
|Basic earnings per share                             |  | $                           | .28   |      | $ | .62  
|Diluted earnings per share                           |  | $                           | .26   |      | $ | .57  



See accompanying 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)



|                                                                          |  |                             |        |   |      |   |        |  
|------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                          |  | Three Months EndedMarch 31, |       
|                                                                          |  | 2005                        |        |   | 2004 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                      |  |                             |        |   |      |   |        |  
|Net income                                                                |  | $                           | 300    |   |      | $ | 664    |  
|Adjustments to reconcile net income to net cash from operating activities |  |                             |        |   |      |   |        |  
|Net premium amortization on securities                                    |  |                             | 23     |   |      |   | 31     |  
|Gain on sale of securities available-for-sale                             |  |                             |       |   |      |   | (128   | )
|Earnings on bank-owned life insurance, net                                |  |                             | (49    | ) |      |   | (56    | )
|Depreciation                                                              |  |                             | 105    |   |      |   | 105    |  
|ESOP compensation expense                                                 |  |                             | 99     |   |      |   | 106    |  
|FHLB stock dividends                                                      |  |                             | (173   | ) |      |   | (169   | )
|Net change in:                                                            |  |                             |        |   |      |   |        |  
|Accrued interest receivable                                               |  |                             | 115    |   |      |   | 89     |  
|Accrued interest payable                                                  |  |                             | 41     |   |      |   | (1     | )
|Other assets                                                              |  |                             | (130   | ) |      |   | (90    | )
|Other liabilities                                                         |  |                             | (53    | ) |      |   | 619    |  
|                                                                          |  |                             |        |   |      |   |        |  
|Net cash from operating activities                                        |  |                             | 278    |   |      |   | 1,170  |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                      |  |                             |        |   |      |   |        |  
|Net change in loans                                                       |  |                             | 5,398  |   |      |   | (5,583 | )
|Purchase of securities available for sale                                 |  |                             | (1,626 | ) |      |   | (1,990 | )
|Maturities and calls of securities available-for-sale                     |  |                             |       |   |      |   | 5,000  |  
|Principal repayments on mortgage-backed securities                        |  |                             | 2,158  |   |      |   | 2,719  |  
|Purchase of premises and equipment                                        |  |                             | (185   | ) |      |   | (556   | )
|Proceeds from sales of securities available-for-sale                      |  |                             |       |   |      |   | 2,140  |  
|                                                                          |  |                             |        |   |      |   |        |  
|Net cash from investing activities                                        |  |                             | 5,745  |   |      |   | 1,730  |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                      |  |                             |        |   |      |   |        |  
|Net change in deposits                                                    |  |                             | (4,194 | ) |      |   | (1,354 | )
|Net change in repurchase agreements                                       |  |                             | (51    | ) |      |   | (1,017 | )
|Net change in advances from borrowers for taxes and insurance             |  |                             | (443   | ) |      |   | (345   | )
|Federal Home Loan Bank advances                                           |  |                             | 2,615  |   |      |   | 5,251  |  
|Repayments of Federal Home Loan Bank Advances                             |  |                             | (4,317 | ) |      |   | (1,000 | )
|Stock options exercised                                                   |  |                             | 32     |   |      |   |       |  
|Purchase of treasury stock                                                |  |                             | (94    | ) |      |   | (58    | )
|Dividends paid                                                            |  |                             | (193   | ) |      |   | (162   | )
|                                                                          |  |                             |        |   |      |   |        |  
|Net cash from financing activities                                        |  |                             | (6,645 | ) |      |   | 1,315  |  
|                                                                          |  |                             |        |   |      |   |        |  
|Net change in cash and cash equivalents                                   |  |                             | (622   | ) |      |   | 4,215  |  
|Cash and cash equivalents at beginning of period                          |  |                             | 13,752 |   |      |   | 11,081 |  
|                                                                          |  |                             |        |   |      |   |        |  
|Cash and cash equivalents at end of period                                |  | $                           | 13,130 |   |      | $ | 15,296 |  
|                                                                          |  |                             |        |   |      |   |        |  



See accompanying notes
to consolidated financial statements.



3.



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##### Table of Contents

Park Bancorp, Inc. and Subsidiaries

Consolidated Statements of Stockholders Equity

Three months ended March 31, 2005 and 2004

(In thousands of dollars, except share data)

(Unaudited)



|                                                                           |  |             |    |                          |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                            |  |   |      |   |  |   |        |  
|-------------------------------------------------------------------------- |  | ----------- | -- | ------------------------ | - | ---------------- |  | - | ------------- | - |  | ------------------ | ------- | - | ------------------------------------------ | - | ---- | -------------------------- |  | - | ---- | - |  | - | ------ | -
|                                                                           |  | CommonStock |    | AdditionalPaid-inCapital |   | RetainedEarnings |  |   | TreasuryStock |   |  | UnearnedESOPShares |         |   | AccumulatedOtherComprehensiveIncome (Loss) |   |      | TotalStock -holdersEquity | 
|2004                                                                       |  |             |    |                          |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                            |  |   |      |   |  |   |        |  
|Balance at January 1, 2004                                                 |  | $           | 27 |                          | $ | 27,515           |  | $ | 29,005        |   |  | $                  | (26,731 | ) |                                            | $ | (833 | )                          |  | $ | 557  |   |  | $ | 29,540 |  
|Net income                                                                 |  |             |   |                          |   |                 |  |   | 664           |   |  |                    |        |   |                                            |   |     |                            |  |   |     |   |  |   | 664    |  
|Change in fair value of securities available-for-sale, net of income taxes |  |             |   |                          |   |                 |  |   |              |   |  |                    |        |   |                                            |   |     |                            |  |   | 240  |   |  |   | 240    |  
|                                                                           |  |             |    |                          |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                            |  |   |      |   |  |   |        |  
|Total comprehensive income                                                 |  |             |    |                          |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                            |  |   |      |   |  |   | 904    |  
|Purchase of 2,000 shares of treasury stock                                 |  |             |   |                          |   |                 |  |   |              |   |  |                    | (58     | ) |                                            |   |     |                            |  |   |     |   |  |   | (58    | )
|Dividends declared                                                         |  |             |   |                          |   |                 |  |   | (162          | ) |  |                    |        |   |                                            |   |     |                            |  |   |     |   |  |   | (162   | )
|ESOP shares earned                                                         |  |             |   |                          |   | 71               |  |   |              |   |  |                    |        |   |                                            |   | 35   |                            |  |   |     |   |  |   | 106    |  
|                                                                           |  |             |    |                          |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                            |  |   |      |   |  |   |        |  
|Balance at March 31, 2004                                                  |  | $           | 27 |                          | $ | 27,586           |  | $ | 29,507        |   |  | $                  | (26,789 | ) |                                            | $ | (798 | )                          |  | $ | 797  |   |  | $ | 30,330 |  
|                                                                           |  |             |    |                          |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                            |  |   |      |   |  |   |        |  
|2005                                                                       |  |             |    |                          |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                            |  |   |      |   |  |   |        |  
|Balance at January 1, 2005                                                 |  | $           | 27 |                          | $ | 27,819           |  | $ | 30,797        |   |  | $                  | (27,070 | ) |                                            | $ | (694 | )                          |  | $ | 28   |   |  | $ | 30,907 |  
|Net income                                                                 |  |             |   |                          |   |                 |  |   | 300           |   |  |                    |        |   |                                            |   |     |                            |  |   |     |   |  |   | 300    |  
|Change in fair value of securities available-for-sale, net of income taxes |  |             |   |                          |   |                 |  |   |              |   |  |                    |        |   |                                            |   |     |                            |  |   | (317 | ) |  |   | (317   | )
|                                                                           |  |             |    |                          |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                            |  |   |      |   |  |   |        |  
|Total comprehensive loss                                                   |  |             |    |                          |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                            |  |   |      |   |  |   | (17    | )
|Exercise of 2,100 stock options                                            |  |             |   |                          |   | 32               |  |   |              |   |  |                    |        |   |                                            |   |     |                            |  |   |     |   |  |   | 32     |  
|Purchase of 3,000 shares of treasury stock                                 |  |             |   |                          |   |                 |  |   |              |   |  |                    | (94     | ) |                                            |   |     |                            |  |   |     |   |  |   | (94    | )
|Dividends declared                                                         |  |             |   |                          |   |                 |  |   | (193          | ) |  |                    |        |   |                                            |   |     |                            |  |   |     |   |  |   | (193   | )
|ESOP shares earned                                                         |  |             |   |                          |   | 66               |  |   |              |   |  |                    |        |   |                                            |   | 33   |                            |  |   |     |   |  |   | 99     |  
|                                                                           |  |             |    |                          |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                            |  |   |      |   |  |   |        |  
|Balance at March 31, 2005                                                  |  | $           | 27 |                          | $ | 27,917           |  | $ | 30,904        |   |  | $                  | (27,164 | ) |                                            | $ | (661 | )                          |  | $ | (289 | ) |  | $ | 30,734 |  
|                                                                           |  |             |    |                          |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                            |  |   |      |   |  |   |        |  



See accompanying notes
to consolidated financial statements.



4.



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##### Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2005

(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 Corporation (PBI), and the Banks subsidiaries, GPS Corporation and GPS Development Corporation (GPS), as of March 31, 2005
and December 31, 2004 and for the three-month periods ended March 31, 2005 and 2004. 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 accounting principles generally accepted in the United States of America 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 2004 Annual Report on Form 10-K filed with the Securities and Exchange Commission. The December 31, 2004 balance sheet presented herein has been derived from the audited financial
statements included in the Companys 2004 Annual Report on Form 10-K filed with the Securities and Exchange Commission, but does not include all disclosures required by accounting principles generally accepted in the United States of America.



Interim statements are subject to possible adjustment in connection with the
annual audit of the Company for the year ending December 31, 2005. 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 months ended March 31, 2005 and 2004 are not necessarily indicative of the results to be expected for the full year.



5.



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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 periods ended March 31, 2005 and 2004.



|                                                           |  |      |           |      |   |          
|---------------------------------------------------------- |  | ---- | --------- | ---- | - | ---------
|                                                           |  | 2005 |           | 2004
|Basic earnings per share                                   |  |      |           |      |   |          
|Net income as reported                                     |  | $    | 300       |      | $ | 664      
|Weighted average common shares outstanding                 |  |      | 1,074,285 |      |   | 1,068,818
|                                                           |  |      |           |      |   |          
|Basic earnings per share                                   |  | $    | .28       |      | $ | .62      
|                                                           |  |      |           |      |   |          
|Diluted earnings per share                                 |  |      |           |      |   |          
|Net income as reported                                     |  | $    | 300       |      | $ | 664      
|Weighted average common shares outstanding                 |  |      | 1,074,285 |      |   | 1,068,818
|Dilutive effect of stock options                           |  |      | 96,189    |      |   | 103,055  
|                                                           |  |      |           |      |   |          
|Average common shares and dilutive potential common shares |  |      | 1,170,474 |      |   | 1,171,873
|                                                           |  |      |           |      |   |          
|Diluted earnings per share                                 |  | $    | .26       |      | $ | .57      
|                                                           |  |      |           |      |   |          



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 price equal to or greater than the market price of the underlying common stock at date of
grant. The following table illustrates the effect on net income and earnings per share if expense was measured using the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation.



|                                                                                  |  |      |     |   |      |   |     |  
|--------------------------------------------------------------------------------- |  | ---- | --- | - | ---- | - | --- | -
|                                                                                  |  | 2005 |     |   | 2004 |  
|Net income as reported                                                            |  | $    | 300 |   |      | $ | 664 |  
|Deduct: Stock-based compensation expense Determined under fair value based method |  |      | (4  | ) |      |   | (4  | )
|                                                                                  |  |      |     |   |      |   |     |  
|Pro forma net income                                                              |  |      | 296 |   |      |   | 660 |  
|Basic earnings per share as reported                                              |  |      | .28 |   |      |   | .62 |  
|Pro forma basic earnings per share                                                |  |      | .28 |   |      |   | .62 |  
|Diluted earnings per share as reported                                            |  |      | .26 |   |      |   | .57 |  
|Pro forma diluted earnings per share                                              |  |      | .25 |   |      |   | .56 |  



6.



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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. (the Company) and its wholly owned subsidiaries, Park
Federal Savings Bank (the Bank) and PBI Development Corporation, and the Banks subsidiaries, at March 31, 2005 to its financial condition at December 31, 2004 and the results of operations for the three months ended March 31, 2005 to the same
period in 2004. This discussion should be read in conjunction with the interim financial statements and footnotes included herein.



FINANCIAL CONDITION



Total assets at March 31, 2005 were $261.0 million compared to $267.6 million at December 31, 2004, a decrease of $6.6 million. During the three months ended March 31,
2005, loans receivable decreased by $5.4 million and securities decreased $872,000.



The allowance for loan losses was $1.4 million at March 31, 2005 and December 31, 2004. Non-performing assets were $4.9 million and $3.2 million at March 31, 2005 and December 31, 2004, respectively.



Total liabilities at March 31, 2005 were $230.3 million compared to $236.7 million at
December 31, 2004, a decrease of $6.4 million. This was primarily due to a decrease in deposits of $4.2 million and a decrease in Federal Home Loan Bank advances of $1.7 million.



Stockholders equity at March 31, 2005 was $30.7 million compared to $30.9 million at December 31, 2004. The decrease was primarily
attributable to unrealized losses on securities available for sale, dividends paid and the repurchase of 3,000 shares of common stock at an average price of $31.33 offset by net income and the exercise of 2,100 stock options.



RESULTS OF OPERATIONS



Net income decreased to $300,000 for the quarter ended March 31, 2005 from $664,000 for the
quarter ended March 31, 2004.



Net interest income was $1.9 million for the
three months ended March 31, 2005 compared to $2.2 million for the same quarter in 2004. The net interest margin decreased to 3.02% for the 2005 period from 3.53% for the 2004 period. This was largely due to a decrease in the spread to 2.87% for the
2005 period from 3.38% for the 2004 period. The average yield on earning assets decreased to 5.29% for the quarter ended March 31, 2005 from 5.56% for the 2004 period. Interest-bearing assets at March 31, 2005 were $242.4 million compared to $253.5
million at March 31, 2004, a decrease of $11.1 million. The average cost of funds increased to 2.42% for the quarter ended March 31, 2005 from 2.18% for the quarter ended March 31, 2004. Interest-bearing liabilities at March 31, 2005 were $222.2
million compared to $228.4 at March 31, 2004, a decrease of $6.2 million.



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##### Table of Contents

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, 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 provisions for loan losses recorded for the quarters ended March 31, 2005 and 2004.



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 March 31, 2005 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 decreased to $130,000 for the quarter ended March 31, 2005
from $316,000 for the quarter ended March 31, 2004. There was a gain of $128,000 on sale of securities and $33,000 in income from a real estate development subsidiary for the quarter ended March 31, 2004.



Noninterest expense remained at $1.5 million for the quarter ended March 31, 2005 and the
corresponding three month period in 2004.



The Companys federal income
tax expense decreased to $156,000 for the three-month period ended March 31, 2005 from $341,000 for the three-month period ended March 31, 2004. The change in income tax was attributable to the decrease in income before income taxes.



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 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. The Banks liquidity ratio was 37% at March 31, 2005.



The Companys cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net
cash from operating activities were $278,000 and $1.2 million in 2005 and 2004, 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. Net cash from investing activities were $5.7 million and $1.7 million in 2005 and 2004, 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 $(6.6) million and $1.3 million in
2005 and 2004, respectively.



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##### Table of Contents

At March 31, 2005, the Bank exceeded all of its regulatory capital requirements with a Tier 1 (core) capital level of
$28.3 million, or 10.9% of adjusted total assets, which is above the required level of $10.4 million, or 4.0%; and total risk-based capital of $29.6 million, or 18.1% of risk-weighted assets, which is above the required level of $13.1 million, or
8.0%. The Bank at March 31, 2005 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.



At March 31, 2005, the Bank had outstanding commitments of $520,000 to originate mortgage
loans and $960,000 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 March
31, 2005 totaled $71.4 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 which estimates the change in net portfolio value (NPV) over a range of
interest rate scenarios. NPV is the present value of expected cash flows from assets, liabilities, and off-balance-sheet contracts. An NPV Ratio, in any interest rate scenario, is defined as the NPV in that scenario divided by the market value of
assets in the same scenario. The Sensitivity Measure is the decline in the NPV Ratio, in basis points, caused by a 2% increase or decrease in rates, whichever produces a larger decline. The higher an institutions Sensitivity Measure is, the
greater its exposure to interest rate risk is considered to be. The OTS has incorporated an interest rate risk component into its regulatory capital rule. Under the rule, an institution whose sensitivity measure exceeds 2% would be required to
deduct an interest rate risk component in calculating its total capital for purposes of the risk-based capital requirement. As of December 31, 2004, the latest date for which information is available, the Banks sensitivity measure, as measured
by the OTS, resulting from a 200 basis point increase in interest rates was (23)% and would result in a $8.4 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 requires 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.



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##### Table of Contents

The following table shows the NPV and projected change in the NPV of the Bank at December 31, 2004, the latest date for
which information is available, 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 % ofPV of Assets |        
|Change in Rates |  | $ Amount            |        | $ Change |                           |         | % Change |  |     | NPV Ratio |  |       | Change | 
|+ 300 bp        |  | $                   | 23,276 |          | $                         | (13,343 | )        |  | (36 | )%        |  | 9.12  | %      |  | (419 | )bp
|+ 200 bp        |  |                     | 28,233 |          |                           | (8,386  | )        |  | (23 | )         |  | 10.77 |        |  | (254 | )bp
|+ 100 bp        |  |                     | 32,984 |          |                           | (3,635  | )        |  | (10 | )         |  | 12.26 |        |  | (105 | )bp
|0 bp            |  |                     | 36,619 |          |                           |        |          |  |    |           |  | 13.31 |        |  |     |    
|- 100 bp        |  |                     | 38,301 |          |                           | 1,682   |          |  | 5   |           |  | 13.71 |        |  | 40   | 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  |    



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 March 31, 2005
but estimates that the results would not be materially different than those presented above.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------



Management, including the Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of disclosure controls and procedures,
pursuant to Exchange Act Rule 13a-15 (e), as of March 31, 2005. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective and 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 (f), no changes during the quarter ended March 31, 2005 were identified that
have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.



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.
|------- | ----------------------



None



|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 Financial Officer (attached as an exhibit and
incorporated herein by reference.)      



Reports on Form 8-K.
On February 7, 2005, the Company filed a report announcing the 2004 annual and fourth quarter results. On March 24, 2005, the Company filed a report announcing revised 2004 annual and fourth 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: May 13, 2005 |  |  |  | /s/    DAVID A. REMIJAS              
|                   |  |  |  | David A. Remijas                     
|                   |  |  |  | President and Chief Executive Officer



|                   |  |  |  |                                      
|------------------ |  |  |  | -------------------------------------
|                   |  | 
|Date: May 13, 2005 |  |  |  | /s/    STEVEN J. POKRAK              
|                   |  |  |  | Steven J. Pokrak                     
|                   |  |  |  | Treasurer and Chief Financial Officer



12.