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, 2006

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

Indicated by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a
non-accelerated files. See definition of accelerated filer and larger accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated filer      Accelerated
filer      Non-accelerated
filer  X

As of May 5, 2006, the Registrant had outstanding 1,125,275 shares of common stock.



---

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 |  | 10  
|                               |  |                                                                                      
|Item 3                         |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 12  
|                               |  |                                                                                      
|Item 4                         |  | Controls and Procedures                                                               |  | 13  
|                               | 
|PART II - Other Information    |  |                                                                                      
|                               |  |                                                                                      
|Item 1                         |  | Legal Proceedings                                                                     |  | 15  
|                               |  |                                                                                      
|Item 1A                        |  | Risk Factors                                                                          |  | 15  
|                               |  |                                                                                      
|Item 2                         |  | Changes in Securities                                                                 |  | 15  
|                               |  |                                                                                      
|Item 3                         |  | Defaults Upon Senior Securities                                                       |  | 15  
|                               |  |                                                                                      
|Item 4                         |  | Submission of Matters to a Vote of Securities Holders                                 |  | 15  
|                               |  |                                                                                      
|Item 5                         |  | Other Information                                                                     |  | 15  
|                               |  |                                                                                      
|Item 6                         |  | Exhibits                                                                              |  | 15  
|                               | 
|SIGNATURES                     |  | 16                                                                                   

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.



---

ITEM 1  FINANCIAL STATEMENTS

Park Bancorp, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(In thousands of dollars, except share data)

(Unaudited)



|                                                                                          |  |               |         |   |                  |   |         |  
|----------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                          |  | March 31,2006 |         |   | December 31,2005 |  
|ASSETS                                                                                    |  |               |         |   |                  |   |         |  
|Cash and due from banks                                                                   |  | $             | 3,548   |   |                  | $ | 4,530   |  
|Federal funds sold                                                                        |  |               | 3,954   |   |                  |   |        |  
|Interest-bearing deposit accounts in other financial institutions                         |  |               | 1,718   |   |                  |   | 663     |  
|                                                                                          |  |               |         |   |                  |   |         |  
|Total cash and cash equivalents                                                           |  |               | 9,220   |   |                  |   | 5,193   |  
|Securities available-for-sale                                                             |  |               | 47,510  |   |                  |   | 50,137  |  
|Loans receivable, net                                                                     |  |               | 157,223 |   |                  |   | 158,709 |  
|Federal Home Loan Bank stock                                                              |  |               | 9,793   |   |                  |   | 9,793   |  
|Premises and equipment, net                                                               |  |               | 4,867   |   |                  |   | 4,920   |  
|Accrued interest receivable                                                               |  |               | 1,007   |   |                  |   | 1,058   |  
|Bank-owned life insurance                                                                 |  |               | 7,185   |   |                  |   | 7,119   |  
|Real estate owned                                                                         |  |               | 1,066   |   |                  |   | 132     |  
|Other assets                                                                              |  |               | 1,850   |   |                  |   | 2,407   |  
|                                                                                          |  |               |         |   |                  |   |         |  
|Total assets                                                                              |  | $             | 239,721 |   |                  | $ | 239,468 |  
|                                                                                          |  |               |         |   |                  |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                      |  |               |         |   |                  |   |         |  
|LIABILITIES                                                                               |  |               |         |   |                  |   |         |  
|Non-interest bearing deposits                                                             |  | $             | 6,825   |   |                  | $ | 6,525   |  
|Interest bearing deposits                                                                 |  |               | 141,647 |   |                  |   | 142,479 |  
|                                                                                          |  |               |         |   |                  |   |         |  
|Total deposits                                                                            |  |               | 148,472 |   |                  |   | 149,004 |  
|Securities sold under repurchase agreements                                               |  |               | 3,222   |   |                  |   | 3,222   |  
|Advances from borrowers for taxes and insurance                                           |  |               | 1,734   |   |                  |   | 2,200   |  
|Federal Home Loan Bank advances                                                           |  |               | 54,713  |   |                  |   | 53,499  |  
|Accrued interest payable                                                                  |  |               | 580     |   |                  |   | 477     |  
|Other liabilities                                                                         |  |               | 1,161   |   |                  |   | 1,164   |  
|                                                                                          |  |               |         |   |                  |   |         |  
|Total liabilities                                                                         |  |               | 209,882 |   |                  |   | 209,566 |  
|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 2,750,245 shares        |  |               | 27      |   |                  |   | 27      |  
|Additional paid-in capital                                                                |  |               | 28,508  |   |                  |   | 28,424  |  
|Retained earnings                                                                         |  |               | 30,572  |   |                  |   | 30,664  |  
|Treasury stock at cost  1,624,970 shares, at cost                                        |  |               | (28,097 | ) |                  |   | (28,097 | )
|Unearned ESOP shares                                                                      |  |               | (530    | ) |                  |   | (561    | )
|Accumulated other comprehensive loss                                                      |  |               | (641    | ) |                  |   | (555    | )
|                                                                                          |  |               |         |   |                  |   |         |  
|Total stockholders equity                                                                |  |               | 29,839  |   |                  |   | 29,902  |  
|                                                                                          |  |               |         |   |                  |   |         |  
|Total liabilities and stockholders equity                                                |  | $             | 239,721 |   |                  | $ | 239,468 |  
|                                                                                          |  |               |         |   |                  |   |         |  

See accompanying notes to consolidated financial statements.



1.



---

Park Bancorp, Inc. and Subsidiaries

Consolidated Statements of Income

(In thousands of dollars, except share data)

(Unaudited)



|                                                     |  |                             |       |      |   |      
|---------------------------------------------------- |  | --------------------------- | ----- | ---- | - | -----
|                                                     |  | Three MonthsEnded March 31,
|                                                     |  | 2006                        |       | 2005
|Interest income                                      |  |                             |       |      |   |      
|Loans receivable                                     |  | $                           | 2,494 |      | $ | 2,439
|Securities                                           |  |                             | 574   |      |   | 738  
|Other interest-bearing deposits                      |  |                             | 61    |      |   | 93   
|                                                     |  |                             |       |      |   |      
|Total                                                |  |                             | 3,129 |      |   | 3,270
|Interest expense                                     |  |                             |       |      |   |      
|Deposits                                             |  |                             | 992   |      |   | 856  
|Federal Home Loan Bank advances and other borrowings |  |                             | 570   |      |   | 543  
|                                                     |  |                             |       |      |   |      
|Total                                                |  |                             | 1,562 |      |   | 1,399
|                                                     |  |                             |       |      |   |      
|Net interest income                                  |  |                             | 1,567 |      |   | 1,871
|Provision for loan losses                            |  |                             |      |      |   |     
|                                                     |  |                             |       |      |   |      
|Net interest income after provision for loan losses  |  |                             | 1,567 |      |   | 1,871
|Noninterest income                                   |  |                             |       |      |   |      
|Service fee income                                   |  |                             | 64    |      |   | 72   
|Earnings on bank-owned life insurance                |  |                             | 66    |      |   | 49   
|Other operating income                               |  |                             | 101   |      |   | 9    
|                                                     |  |                             |       |      |   |      
|Total noninterest income                             |  |                             | 231   |      |   | 130  
|Noninterest expense                                  |  |                             |       |      |   |      
|Compensation and benefits                            |  |                             | 1,009 |      |   | 993  
|Occupancy and equipment expense                      |  |                             | 243   |      |   | 191  
|Other operating expenses                             |  |                             | 440   |      |   | 361  
|                                                     |  |                             |       |      |   |      
|Total noninterest expense                            |  |                             | 1,692 |      |   | 1,545
|                                                     |  |                             |       |      |   |      
|Income before income taxes                           |  |                             | 106   |      |   | 456  
|Income tax expense                                   |  |                             | 7     |      |   | 156  
|                                                     |  |                             |       |      |   |      
|Net income                                           |  | $                           | 99    |      | $ | 300  
|                                                     |  |                             |       |      |   |      
|Basic earnings per share                             |  | $                           | .09   |      | $ | .28  
|Diluted earnings per share                           |  | $                           | .08   |      | $ | .26  

See accompanying notes to consolidated financial statements.



2.



---

Park Bancorp, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands of dollars)

(Unaudited)



|                                                                          |  |                              |        |   |      |   |        |  
|------------------------------------------------------------------------- |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|                                                                          |  | Three Months Ended March 31, |       
|                                                                          |  | 2006                         |        |   | 2005 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                      |  |                              |        |   |      |   |        |  
|Net income                                                                |  | $                            | 99     |   |      | $ | 300    |  
|Adjustments to reconcile net income to net cash from operating activities |  |                              |        |   |      |   |        |  
|Net premium amortization on securities                                    |  |                              | 23     |   |      |   | 23     |  
|Earnings on bank-owned life insurance, net                                |  |                              | (66    | ) |      |   | (49    | )
|Depreciation                                                              |  |                              | 105    |   |      |   | 105    |  
|Gain on sale of real estate development                                   |  |                              | (83    | ) |      |   |       |  
|ESOP compensation expense                                                 |  |                              | 109    |   |      |   | 99     |  
|Stock option expense                                                      |  |                              | 6      |   |      |   |       |  
|FHLB stock dividends                                                      |  |                              |       |   |      |   | (173   | )
|Net change in:                                                            |  |                              |        |   |      |   |        |  
|Accrued interest receivable                                               |  |                              | 51     |   |      |   | 115    |  
|Accrued interest payable                                                  |  |                              | 103    |   |      |   | 41     |  
|Other assets                                                              |  |                              | (1,015 | ) |      |   | (130   | )
|Other liabilities                                                         |  |                              | (3     | ) |      |   | (53    | )
|                                                                          |  |                              |        |   |      |   |        |  
|Net cash from operating activities                                        |  |                              | (671   | ) |      |   | 278    |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                      |  |                              |        |   |      |   |        |  
|Net change in loans                                                       |  |                              | 1,486  |   |      |   | 5,398  |  
|Purchase of securities available for sale                                 |  |                              | (1,000 | ) |      |   | (1,626 | )
|Maturities and calls of securities available-for-sale                     |  |                              | 2,000  |   |      |   |       |  
|Principal repayments on mortgage-backed securities                        |  |                              | 1,538  |   |      |   | 2,158  |  
|Proceeds from sale of real estate development                             |  |                              | 703    |   |      |   |       |  
|Purchase of premises and equipment                                        |  |                              | (52    | ) |      |   | (185   | )
|                                                                          |  |                              |        |   |      |   |        |  
|Net cash from investing activities                                        |  |                              | 4,675  |   |      |   | 5,745  |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                      |  |                              |        |   |      |   |        |  
|Net change in deposits                                                    |  |                              | (532   | ) |      |   | (4,194 | )
|Net change in repurchase agreements                                       |  |                              |       |   |      |   | (51    | )
|Net change in advances from borrowers for taxes and insurance             |  |                              | (466   | ) |      |   | (443   | )
|Federal Home Loan Bank advances                                           |  |                              | 4,878  |   |      |   | 2,615  |  
|Repayments of Federal Home Loan Bank Advances                             |  |                              | (3,664 | ) |      |   | (4,317 | )
|Stock options exercised                                                   |  |                              |       |   |      |   | 32     |  
|Purchase of treasury stock                                                |  |                              |       |   |      |   | (94    | )
|Dividends paid                                                            |  |                              | (191   | ) |      |   | (193   | )
|                                                                          |  |                              |        |   |      |   |        |  
|Net cash from financing activities                                        |  |                              | 23     |   |      |   | (6,645 | )
|                                                                          |  |                              |        |   |      |   |        |  
|Net change in cash and cash equivalents                                   |  |                              | 4,027  |   |      |   | (622   | )
|Cash and cash equivalents at beginning of period                          |  |                              | 5,193  |   |      |   | 13,752 |  
|                                                                          |  |                              |        |   |      |   |        |  
|Cash and cash equivalents at end of period                                |  | $                            | 9,220  |   |      | $ | 13,130 |  
|                                                                          |  |                              |        |   |      |   |        |  
|Supplemental disclosures of cash flow information                         |  |                              |        |   |      |   |        |  
|Transfer to real estate owned                                             |  | $                            | 934    |   |      |   |       |  

See accompanying notes to consolidated financial statements.



3.



---

Park Bancorp, Inc. and Subsidiaries

Consolidated Statements of Stockholders Equity

Three months ended March 31, 2006 and 2005

(In thousands of dollars, except share data)

(Unaudited)



|                                                                           |  |             |    |                           |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                           |  |   |      |   |  |   |        |  
|-------------------------------------------------------------------------- |  | ----------- | -- | ------------------------- | - | ---------------- |  | - | ------------- | - |  | ------------------ | ------- | - | ------------------------------------------ | - | ---- | ------------------------- |  | - | ---- | - |  | - | ------ | -
|                                                                           |  | CommonStock |    | Additional Paid-inCapital |   | RetainedEarnings |  |   | TreasuryStock |   |  | UnearnedESOPShares |         |   | AccumulatedOtherComprehensiveIncome (Loss) |   |      | TotalStock-holdersEquity | 
|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 |  
|                                                                           |  |             |    |                           |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                           |  |   |      |   |  |   |        |  
|                                                                           |  |             |    |                           |   |                  | 
|2006                                                                       |  |             |    |                           |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                           |  |   |      |   |  |   |        |  
|Balance at January 1, 2006                                                 |  | $           | 27 |                           | $ | 28,424           |  | $ | 30,664        |   |  | $                  | (28,097 | ) |                                            | $ | (561 | )                         |  | $ | (555 | ) |  | $ | 29,902 |  
|Net income                                                                 |  |             |   |                           |   |                 |  |   | 99            |   |  |                    |        |   |                                            |   |     |                           |  |   |     |   |  |   | 99     |  
|Change in fair value of securities available-for-sale, net of income taxes |  |             |   |                           |   |                 |  |   |              |   |  |                    |        |   |                                            |   |     |                           |  |   | (86  | ) |  |   | (86    | )
|                                                                           |  |             |    |                           |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                           |  |   |      |   |  |   |        |  
|Total comprehensive income                                                 |  |             |    |                           |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                           |  |   |      |   |  |   | 13     |  
|                                                                           |  |             |    |                           |   |                  | 
|Stock based compensation                                                   |  |             |    |                           |   | 6                |  |   |               |   |  |                    |         |   |                                            |   |      |                           |  |   |      |   |  |   | 6      |  
|Dividends declared                                                         |  |             |   |                           |   |                 |  |   | (191          | ) |  |                    |        |   |                                            |   |     |                           |  |   |     |   |  |   | (191   | )
|ESOP shares earned                                                         |  |             |   |                           |   | 78               |  |   |              |   |  |                    |        |   |                                            |   | 31   |                           |  |   |     |   |  |   | 109    |  
|                                                                           |  |             |    |                           |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                           |  |   |      |   |  |   |        |  
|                                                                           |  |             |    |                           |   |                  | 
|Balance at March 31, 2006                                                  |  | $           | 27 |                           | $ | 28,508           |  | $ | 30,572        |   |  | $                  | (28,097 | ) |                                            | $ | (530 | )                         |  | $ | (641 | ) |  | $ | 29,839 |  
|                                                                           |  |             |    |                           |   |                  |  |   |               |   |  |                    |         |   |                                            |   |      |                           |  |   |      |   |  |   |        |  

See accompanying notes to consolidated financial statements.



4.



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2006

(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, 2006 and December 31, 2005 and for the three-month periods ended March 31, 2006 and 2005. 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 2005 Annual Report on Form 10-K filed with the Securities and Exchange Commission. The December 31, 2005 balance sheet presented herein has been derived from the audited financial
statements included in the Companys 2005 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, 2006. 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, 2006 and
2005 are not necessarily indicative of the results to be expected for the full year.



5.



---

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, 2006
and 2005.



|                                                           |  |      |           |      |   |          
|---------------------------------------------------------- |  | ---- | --------- | ---- | - | ---------
|                                                           |  | 2006 |           | 2005
|Basic earnings per share                                   |  |      |           |      |   |          
|Net income as reported                                     |  | $    | 99        |      | $ | 300      
|Weighted average common shares outstanding                 |  |      | 1,070,698 |      |   | 1,074,285
|                                                           |  |      |           |      |   |          
|Basic earnings per share                                   |  | $    | .09       |      | $ | .28      
|                                                           |  |      |           |      |   |          
|Diluted earnings per share                                 |  |      |           |      |   |          
|Net income as reported                                     |  | $    | 99        |      | $ | 300      
|Weighted average common shares outstanding                 |  |      | 1,070,698 |      |   | 1,074,285
|Dilutive effect of stock options                           |  |      | 100,553   |      |   | 96,189   
|                                                           |  |      |           |      |   |          
|Average common shares and dilutive potential common shares |  |      | 1,171,251 |      |   | 1,170,474
|                                                           |  |      |           |      |   |          
|Diluted earnings per share                                 |  | $    | .08       |      | $ | .26      
|                                                           |  |      |           |      |   |          



6.



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Note 3  Stock Based Compensation

Prior to 2006, the Company accounted for stock-based awards to employees using the intrinsic value method in accordance with Accounting Principles Board (APB) Opinion
No. 25, Accounting for Stock Issued to Employees. No compensation expense was recognized in the financial statements for employee stock option arrangements, as the Companys stock option plan provides for the issuance of
options at a price of no less than the fair market value at the date of the grant.

Statement of Financial Accounting Standards (Statement)
No. 123, Accounting for Stock-Based Compensation, requires the disclosure of pro forma net income and earnings per share had the Company adopted the fair value method at the grant date of all stock options. Under Statement
No. 123, the fair value of stock-based awards to employees is calculated through the use of option pricing models, even though such models were developed to estimate the fair value of freely tradable, fully transferable options without vesting
restrictions, which differ significantly from the Companys stock option awards. Those models also require subjective assumptions, which affect the calculated values.

In December 2004, the FASB issued Statement 123 (revised 2004), Share-Based Payment. This Statement requires that compensation costs related to share-based payment transactions be recognized in the
financial statements. Measurement of the cost of employee service is based on the grant-date fair value of the equity or liability instruments issued. That cost is recognized over the period during which an employee is required to provide service in
exchange for the award. Additionally, liability awards will be remeasured each reporting period. Statement 123R replaces Statement No. 123, Accounting for Stock-Based Compensation and supersedes APB Opinion 25 Accounting for
Stock Issued to Employees.

The Company adopted Statement 123R on January 1, 2006, which has resulted in an increase in compensation expense of
$6,000 for the first quarter ended March 31, 2006. The Company elected the modified prospective method, under which prior periods are not revised for comparative purposes. If compensation expense for the Companys stock-based awards had
been determined under the requirements of Statement 123R, noninterest expense would have been increased by $6,000 for the first quarter ended March 31, 2005.

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

The Company adopted an Incentive Compensation Plan during 2003 under the terms of which
100,000 shares of the Companys common stock were reserved for issuance. Of the shares authorized for issuance under the plan, up to 40,000 may be issued with respect to awards of restricted stock and restricted units and up to 40,000 may be
issued pursuant to stock options under which the exercise price was less than the fair market value (but not less than 50% of the fair market value) of a share of common stock on the date the award was granted. In addition, as required by Code
Section 162(m), the plan includes a limit of 50,000 shares of common stock as the maximum number of shares that may be subject to awards made to any one individual. At March 31, 2006, no shares have been granted under this plan.



7.



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



|                                     |  |         |  |                              |       |                         |   |          
|------------------------------------ |  | ------- |  | ---------------------------- | ----- | ----------------------- | - | ---------
|                                     |  | 2006    |  |                             
|                                     |  | Shares  |  | WeightedAverageExercisePrice |       | AggregateIntrinsicValue
|Outstanding at beginning of year     |  | 221,340 |  | $                            | 17.20 |                         |   |          
|Granted                              |  |        |  |                              |      |                         |   |          
|Exercised                            |  |        |  |                              |      |                         |   |          
|Forfeited                            |  |        |  |                              |      |                         |   |          
|                                     |  |         |  |                              |       |                         |   |          
|                                     |  |         | 
|Outstanding at end of period         |  | 221,340 |  | $                            | 17.20 |                         | $ | 3,940,000
|                                     |  |         |  |                              |       |                         |   |          
|                                     |  |         | 
|Options exercisable at end of period |  | 203,205 |  | $                            | 16.39 |                         | $ | 3,782,000
|                                     |  |         |  |                              |       |                         |   |          

Options outstanding at March 31, 2006 were as follows:



|                        |  |             |  |                                           |  |                                |  |         |  |                               
|----------------------- |  | ----------- |  | ----------------------------------------- |  | ------------------------------ |  | ------- |  | ------------------------------
|                        |  | Outstanding |  | Exercisable                              
|Range ofExercise Prices |  | Number      |  | Weighted AverageRemainingContractual Life |  | Weighted AverageExercise Price |  | Number  |  | Weighted AverageExercise Price
|$15 - $16               |  | 176,003     |  | 1.2 years                                 |  | $15.72                         |  | 176,003 |  | $15.72                        
|$22 - $23               |  | 45,337      |  | 6.8 years                                 |  | $22.95                         |  | 27,202  |  | $22.95                        
|                        |  |             |  |                                           |  |                                |  |         |  |                               
|Outstanding at year end |  | 221,340     |  |                                           |  |                                |  | 203,205 |  |                               
|                        |  |             |  |                                           |  |                                |  |         |  |                               

A summary of the Companys nonvested shares as of March 31, 2006 and changes during the quarter ended
March 31, 2006 are presented below:



|                               |  |        |   |  |                                     |     
|------------------------------ |  | ------ | - |  | ----------------------------------- | ----
|                               |  | 2006  
|                               |  | Shares |   |  | WeightedAverageGrant-DateFair Value
|Nonvested at beginning of year |  | 27,202 |   |  | $                                   | 2.66
|                               |  |       
|Granted                        |  |       |   |  |                                     |    
|Vested                         |  | (9,067 | ) |  | $                                   | 2.66
|Forfeited                      |  |       |   |  |                                     |    
|                               |  |        |   |  |                                     |     
|                               |  |       
|Nonvested at end of period     |  | 18,135 |   |  | $                                   | 2.66
|                               |  |        |   |  |                                     |     



8.



---

As of March 31, 2006 there was $42,000 of total unrecognized compensation cost related to nonvested share based
compensation arrangements granted under the Plan. The cost is expected to be recognized over 1.8 years. The total fair value of shares vested during the quarters ended March 31, 2005 and 2006 was $6,000.



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



9.



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|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, 2006 to its financial condition at December 31, 2005 and the results of operations for the three months ended March 31, 2006 to the same period in 2005. This discussion should be read in
conjunction with the interim financial statements and footnotes included herein.

FINANCIAL CONDITION

Total assets at March 31, 2006 were $239.7 million compared to $239.5 million at December 31, 2005, an increase of $253,000.

The allowance for loan losses was $1.4 million at March 31, 2006 and $2.4 million at December 31, 2005. Non-performing assets were $4.0 million at
March 31, 2006 and $4.9 million at December 31, 2005, respectively.

Total liabilities at March 31, 2006 were $209.9 million compared to
$209.6 million at December 31, 2005, an increase of $316,000.

Stockholders equity was $29.8 million at
March 31, 2006 and $29.9 million at December 31, 2005.

RESULTS OF OPERATIONS

Net income decreased to $99,000 for the quarter ended March 31, 2006 from $300,000 for the quarter ended March 31, 2005.

Net interest income was $1.6 million for the three months ended March 31, 2006 compared to $1.9 million for the same quarter in 2005. The net
interest margin decreased to 2.85% for the 2006 period from 3.02% for the 2005 period. This was largely due to a decrease in the spread to 2.65% for the 2006 period from 2.87% for the 2005 period. The average yield on earning assets increased to
5.69% for the quarter ended March 31, 2006 from 5.29% for the 2005 period. The average cost of funds increased to 3.04% for the quarter ended March 31, 2006 from 2.42% for the quarter ended March 31, 2005.



10.



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Management establishes provisions for loan losses, which are charged to operations, at a level management believe 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 provision for loan losses recorded for the quarters ended March 31, 2006 and 2005.

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,
2006 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.

Nonperforming assets decreased as a result of foreclosure on a property securing a loan. The loan had a reserve of $926,000 as of December 31, 2005. The property is reported as real estate owned and included in
nonperforming assets in the amount of $931,000 as of March 31, 2006.

Noninterest income increased to $231,000 for the quarter ended March 31,
2006 from $130,000 for the quarter ended March 31, 2005. The real estate development subsidiary realized an $83,000 gain on the sale of a real estate project during the quarter ended March 31, 2006. The earnings on bank owned life
insurance increased as a result of addition insurance policies issued after the quarter ended March 31, 2005.

Noninterest expense increased to $1.7
million for the quarter ended March 31, 2006 from $1.5 million for the corresponding three month period in 2005. The change was due to increases in occupancy and regulatory costs and losses from a limited partnership.

The Companys federal income tax expense was $7,000 for the three-month period ended March 31, 2006 compared to $156,000 for the three-month period ended
March 31, 2005. The change in income tax was attributable to the decrease in income before income taxes and tax credits of $30,000.

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 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, 2006.

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 $(671,000) and $278,000 in 2006 and
2005, 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



11.



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securities. Net cash from investing activities were $4.7 million and $5.7 million in 2006 and 2005, 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 $23,000 and $(6.6) million in 2006
and 2005, respectively.

At March 31, 2006, the Bank exceeded all of its regulatory capital requirements with a Tier 1 (core) capital level of $27.7
million, or 11.6% of adjusted total assets, which is above the required level of $9.5 million, or 4.0%; and total risk-based capital of $28.2 million, or 17.4% of risk-weighted assets, which is above the required level of $13.0 million, or 8.0%. The
Bank at March 31, 2006 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, 2006, the Bank had outstanding commitments to originate mortgage loans of $2.1 million, and $1.4 million 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, 2006 totaled $63.4 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, 2005, 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 (24)% and
would result in a $8.5 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.



12.



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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 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 % of PV of Assets |        
|Change in Rates |  | $ Amount            |        | $ Change |                            |         | % Change |  |     | NPV Ratio |  |       | Change | 
|                |  |                     |        |          |                           
|+ 300 bp        |  | $                   | 22,320 |          | $                          | (12,813 | )        |  | (36 | )%        |  | 9.82  | %      |  | (452 | ) bp
|+ 200 bp        |  |                     | 26,639 |          |                            | (8,494  | )        |  | (24 | )         |  | 11.43 |        |  | (291 | ) bp
|+ 100 bp        |  |                     | 31,080 |          |                            | (4,053  | )        |  | (12 | )         |  | 13.00 |        |  | (134 | ) bp
|0 bp            |  |                     | 35,133 |          |                            |        |          |  |    |           |  | 14.34 |        |  |     |     
|- 100 bp        |  |                     | 37,578 |          |                            | 2,445   |          |  | 7   |           |  | 15.06 |        |  | 72   | bp  
|- 200 bp        |  |                     | 38,255 |          |                            | 3,122   |          |  | 9   |           |  | 15.16 |        |  | 82   | bp  
|- 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, 2006 but estimates that the results would not be materially different than those presented above.



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

The Company maintains disclosure controls
and procedures that are designed to ensure that information required to be disclosed in the Companys reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commissions rules and forms, and that such information is accumulated and communicated to the Companys management, including its Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, the Company carried out an
evaluation, with the participation of management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the disclosure controls and procedures pursuant to the Exchange Act Rule 13a-15(b). Based upon this
evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2006, because of the material weaknesses disclosed in the Companys 2005 Annual
Report on Form 10-K, which is further discussed below.



13.



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A material weakness is significant deficiency (as defined in Public Company Accounting Oversight Board Auditing Standard
No. 2), or a combination of significant deficiencies, that results in there being more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by
management or employees in the normal course of performing their assigned functions.

The Company did not properly apply generally accepted accounting
principles regarding certain transactions. The Company believes it is addressing the deficiency by considering the redesign of the process for identifying and measuring impaired loans. Since the deficiency was identified in March 2006, the Company
has not had sufficient opportunity to remediate this deficiency by March 31, 2006.

In making this assessment, management used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Because of the material weaknesses described above, management believes that, as of March 31, 2006, the Companys
internal control over financial reporting was not effective.



14.



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PART IIOTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None

ITEM 1A. RISK FACTORS

There has been no material changes with respect to the risk factors disclosed in the Companys 2005 Annual Report on Form 10-K.

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.

(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.)



15.



---

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 15, 2006 |  |  |  |  |  | /s/ David A. Remijas                                  
|                   |  |  |  |  |  | David A. Remijas President and Chief Executive Officer
|                   |  |  | 
|Date: May 15, 2006 |  |  |  |  |  | /s/ Steven J. Pokrak                                  
|                   |  |  |  |  |  | Steven J. Pokrak Treasurer and Chief Financial Officer



16.