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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended June 30, 2005



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PARK BANCORP, INC.

(Exact name of registrant as specified in its charter)



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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)



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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.    Yes  x    No ̈



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



As of July 31, 2005, the Registrant had
outstanding 1,120,702 shares of common stock.



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##### Table of Contents

PARK BANCORP, INC.



Form 10-Q Quarterly
Report



Index



|                               |  |        |  |                                                                                       |  |     
|------------------------------ |  | ------ |  | ------------------------------------------------------------------------------------- |  | ----
|                               |  |        |  |                                                                                       |  | Page
|PART I - Financial Information |  |       
|                               |  |        | 
|                               |  | Item 1 |  | Financial Statements                                                                  |  | 1   
|                               |  |        | 
|                               |  | Item 2 |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 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    



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



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##### Table of Contents

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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##### Table of Contents

ITEM 1  FINANCIAL STATEMENTS



Park
Bancorp, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(In thousands of dollars, except share data)

(Unaudited)



|                                                                                                 |  |              |         |   |                  |   |         |  
|------------------------------------------------------------------------------------------------ |  | ------------ | ------- | - | ---------------- | - | ------- | -
|                                                                                                 |  | June 30,2005 |         |   | December 31,2004 |  
|ASSETS                                                                                           |  |              |         |   |                  |   |         |  
|Cash and due from banks                                                                          |  | $            | 4,336   |   |                  | $ | 3,340   |  
|Federal funds sold                                                                               |  |              | 2,092   |   |                  |   | 5,419   |  
|Interest-bearing deposit accounts in other financial institutions                                |  |              | 5,552   |   |                  |   | 4,993   |  
|                                                                                                 |  |              |         |   |                  |   |         |  
|Total cash and cash equivalents                                                                  |  |              | 11,980  |   |                  |   | 13,752  |  
|                                                                                                 |  |             
|Time deposits with other financial institutions                                                  |  |              |        |   |                  |   | 1,087   |  
|Securities available-for-sale                                                                    |  |              | 56,164  |   |                  |   | 59,728  |  
|Loans receivable, net                                                                            |  |              | 164,101 |   |                  |   | 167,466 |  
|Federal Home Loan Bank stock                                                                     |  |              | 9,961   |   |                  |   | 11,136  |  
|Premises and equipment, net                                                                      |  |              | 4,985   |   |                  |   | 4,815   |  
|Accrued interest receivable                                                                      |  |              | 1,055   |   |                  |   | 1,185   |  
|Bank-owned life insurance                                                                        |  |              | 5,985   |   |                  |   | 5,848   |  
|Other assets                                                                                     |  |              | 2,794   |   |                  |   | 2,603   |  
|                                                                                                 |  |              |         |   |                  |   |         |  
|Total assets                                                                                     |  | $            | 257,025 |   |                  | $ | 267,620 |  
|                                                                                                 |  |              |         |   |                  |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                             |  |              |         |   |                  |   |         |  
|LIABILITIES                                                                                      |  |              |         |   |                  |   |         |  
|Noninterest bearing deposits                                                                     |  | $            | 6,860   |   |                  | $ | 6,805   |  
|Interest bearing deposits                                                                        |  |              | 152,965 |   |                  |   | 159,320 |  
|                                                                                                 |  |              |         |   |                  |   |         |  
|Total deposits                                                                                   |  |              | 159,825 |   |                  |   | 166,125 |  
|                                                                                                 |  |             
|Securities sold under repurchase agreements                                                      |  |              | 3,218   |   |                  |   | 3,369   |  
|Advances from borrowers for taxes and insurance                                                  |  |              | 2,255   |   |                  |   | 2,283   |  
|Federal Home Loan Bank advances                                                                  |  |              | 59,756  |   |                  |   | 63,871  |  
|Accrued interest payable                                                                         |  |              | 456     |   |                  |   | 386     |  
|Other liabilities                                                                                |  |              | 908     |   |                  |   | 679     |  
|                                                                                                 |  |              |         |   |                  |   |         |  
|Total liabilities                                                                                |  |              | 226,418 |   |                  |   | 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                                                                       |  |              | 27,985  |   |                  |   | 27,819  |  
|Retained earnings                                                                                |  |              | 31,109  |   |                  |   | 30,797  |  
|Treasury stock, 1,613,443 and 1,592,043 shares, at cost                                          |  |              | (27,750 | ) |                  |   | (27,070 | )
|Unearned ESOP shares                                                                             |  |              | (628    | ) |                  |   | (694    | )
|Accumulated other comprehensive income (loss)                                                    |  |              | (136    | ) |                  |   | 28      |  
|                                                                                                 |  |              |         |   |                  |   |         |  
|Total stockholders equity                                                                       |  |              | 30,607  |   |                  |   | 30,907  |  
|                                                                                                 |  |              |         |   |                  |   |         |  
|Total liabilities and stockholders equity                                                       |  | $            | 257,025 |   |                  | $ | 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 MonthsEnded June 30, |       |      | Six Months Ended June 30,
|                                                     |  | 2005                       |       | 2004 |                           |       | 2005 |  | 2004
|Interest income                                      |  |                            |       |      |                           |       |      |  |      |       |  |   |      
|Loans receivable                                     |  | $                          | 2,618 |      | $                         | 2,562 |      |  | $    | 5,057 |  | $ | 5,177
|Securities                                           |  |                            | 700   |      |                           | 741   |      |  |      | 1,438 |  |   | 1,580
|Other interest-bearing deposits                      |  |                            | 58    |      |                           | 39    |      |  |      | 151   |  |   | 67   
|                                                     |  |                            |       |      |                           |       |      |  |      |       |  |   |      
|Total                                                |  |                            | 3,376 |      |                           | 3,342 |      |  |      | 6,646 |  |   | 6,824
|                                                     |  |                            |       |     
|Interest expense                                     |  |                            |       |      |                           |       |      |  |      |       |  |   |      
|Deposits                                             |  |                            | 862   |      |                           | 770   |      |  |      | 1,718 |  |   | 1,552
|Federal Home Loan Bank advances and other borrowings |  |                            | 585   |      |                           | 506   |      |  |      | 1,128 |  |   | 993  
|                                                     |  |                            |       |      |                           |       |      |  |      |       |  |   |      
|Total                                                |  |                            | 1,447 |      |                           | 1,276 |      |  |      | 2,846 |  |   | 2,545
|                                                     |  |                            |       |      |                           |       |      |  |      |       |  |   |      
|Net interest income                                  |  |                            | 1,929 |      |                           | 2,066 |      |  |      | 3,800 |  |   | 4,279
|                                                     |  |                            |       |     
|Provision for loan losses                            |  |                            |      |      |                           |      |      |  |      |      |  |   |     
|                                                     |  |                            |       |      |                           |       |      |  |      |       |  |   |      
|Net interest income after provision for loan losses  |  |                            | 1,929 |      |                           | 2,066 |      |  |      | 3,800 |  |   | 4,279
|                                                     |  |                            |       |     
|Noninterest income                                   |  |                            |       |      |                           |       |      |  |      |       |  |   |      
|Gain on sale of securities                           |  |                            | 24    |      |                           | 54    |      |  |      | 24    |  |   | 182  
|Service fee income                                   |  |                            | 63    |      |                           | 73    |      |  |      | 135   |  |   | 150  
|Earnings on bank-owned life insurance                |  |                            | 87    |      |                           | 55    |      |  |      | 137   |  |   | 111  
|Other operating income                               |  |                            | 9     |      |                           | 11    |      |  |      | 17    |  |   | 54   
|                                                     |  |                            |       |      |                           |       |      |  |      |       |  |   |      
|Total noninterest income                             |  |                            | 183   |      |                           | 193   |      |  |      | 313   |  |   | 497  
|                                                     |  |                            |       |     
|Noninterest expense                                  |  |                            |       |      |                           |       |      |  |      |       |  |   |      
|Compensation and benefits                            |  |                            | 931   |      |                           | 841   |      |  |      | 1,924 |  |   | 1,803
|Occupancy and equipment expense                      |  |                            | 180   |      |                           | 213   |      |  |      | 371   |  |   | 431  
|Other operating expenses                             |  |                            | 411   |      |                           | 349   |      |  |      | 772   |  |   | 681  
|                                                     |  |                            |       |      |                           |       |      |  |      |       |  |   |      
|Total noninterest expense                            |  |                            | 1,522 |      |                           | 1,403 |      |  |      | 3,067 |  |   | 2,915
|                                                     |  |                            |       |      |                           |       |      |  |      |       |  |   |      
|Income before income taxes                           |  |                            | 590   |      |                           | 856   |      |  |      | 1,046 |  |   | 1,861
|                                                     |  |                            |       |     
|Income tax expense                                   |  |                            | 196   |      |                           | 292   |      |  |      | 352   |  |   | 633  
|                                                     |  |                            |       |      |                           |       |      |  |      |       |  |   |      
|Net income                                           |  | $                          | 394   |      | $                         | 564   |      |  | $    | 694   |  | $ | 1,228
|                                                     |  |                            |       |      |                           |       |      |  |      |       |  |   |      
|Basic earnings per share                             |  | $                          | .37   |      | $                         | .53   |      |  | $    | .65   |  | $ | 1.15 
|Diluted earnings per share                           |  | $                          | .34   |      | $                         | .48   |      |  | $    | .60   |  | $ | 1.05 
|                                                     |  |                            |       |     
|Comprehensive income (loss)                          |  | $                          | 547   |      | $                         | (221  | )    |  | $    | 530   |  | $ | 683  
|                                                     |  |                            |       |      |                           |       |      |  |      |       |  |   |      



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)



|                                                                          |  |                          |         |   |      |   |        |  
|------------------------------------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | ------ | -
|                                                                          |  | Six Months EndedJune 30, |        
|                                                                          |  | 2005                     |         |   | 2004 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                      |  |                          |         |   |      |   |        |  
|Net income                                                                |  | $                        | 694     |   |      | $ | 1,228  |  
|Adjustments to reconcile net income to net cash from operating activities |  |                          |         |   |      |   |        |  
|Net premium amortization on securities                                    |  |                          | 56      |   |      |   | 78     |  
|Gain on sale of securities available-for-sale                             |  |                          | (24     | ) |      |   | (182   | )
|Earnings on bank-owned life insurance, net                                |  |                          | (137    | ) |      |   | (111   | )
|Depreciation                                                              |  |                          | 210     |   |      |   | 210    |  
|ESOP compensation expense                                                 |  |                          | 200     |   |      |   | 216    |  
|FHLB stock dividends                                                      |  |                          | (325    | ) |      |   | (321   | )
|Net change in:                                                            |  |                          |         |   |      |   |        |  
|Accrued interest receivable                                               |  |                          | 130     |   |      |   | 33     |  
|Accrued interest payable                                                  |  |                          | 70      |   |      |   | (18    | )
|Other assets                                                              |  |                          | (106    | ) |      |   | (602   | )
|Other liabilities                                                         |  |                          | 229     |   |      |   | (568   | )
|                                                                          |  |                          |         |   |      |   |        |  
|Net cash from operating activities                                        |  |                          | 997     |   |      |   | (37    | )
|                                                                          |  |                         
|CASH FLOWS FROM INVESTING ACTIVITIES                                      |  |                          |         |   |      |   |        |  
|Net change in loans                                                       |  |                          | 3,365   |   |      |   | (8,835 | )
|Purchase of securities available for sale                                 |  |                          | (2,882  | ) |      |   | (6,534 | )
|Maturities and calls of securities available-for-sale                     |  |                          |        |   |      |   | 5,000  |  
|Principal repayments on mortgage-backed securities                        |  |                          | 5,141   |   |      |   | 7,009  |  
|Maturity of time deposits with other financial institutions               |  |                          | 1,087   |   |      |   |       |  
|Purchase of Federal Home Loan Bank stock                                  |  |                          |        |   |      |   | (2,000 | )
|Sale of Federal Home Loan Bank stock                                      |  |                          | 1,500   |   |      |   |       |  
|Purchase of premises and equipment                                        |  |                          | (380    | ) |      |   | (325   | )
|Proceeds from sales of securities available-for-sale                      |  |                          | 1,024   |   |      |   | 2,141  |  
|                                                                          |  |                          |         |   |      |   |        |  
|Net cash from investing activities                                        |  |                          | 8,855   |   |      |   | (3,544 | )
|                                                                          |  |                         
|CASH FLOWS FROM FINANCING ACTIVITIES                                      |  |                          |         |   |      |   |        |  
|Net change in deposits                                                    |  |                          | (6,300  | ) |      |   | (304   | )
|Net change in repurchase agreements                                       |  |                          | (151    | ) |      |   | (2,959 | )
|Net change in advances from borrowers for taxes and insurance             |  |                          | (28     | ) |      |   | 171    |  
|Federal Home Loan Bank advances                                           |  |                          | 3,814   |   |      |   | 9,067  |  
|Repayments of Federal Home Loan Bank advances                             |  |                          | (7,929  | ) |      |   | (1,000 | )
|Stock options exercised                                                   |  |                          | 32      |   |      |   |       |  
|Purchase of treasury stock                                                |  |                          | (680    | ) |      |   | (212   | )
|Dividends paid                                                            |  |                          | (382    | ) |      |   | (354   | )
|                                                                          |  |                          |         |   |      |   |        |  
|Net cash from financing activities                                        |  |                          | (11,624 | ) |      |   | 4,409  |  
|                                                                          |  |                          |         |   |      |   |        |  
|Net change in cash and cash equivalents                                   |  |                          | (1,772  | ) |      |   | 828    |  
|Cash and cash equivalents at beginning of period                          |  |                          | 13,752  |   |      |   | 11,081 |  
|                                                                          |  |                          |         |   |      |   |        |  
|Cash and cash equivalents at end of period                                |  | $                        | 11,980  |   |      | $ | 11,909 |  
|                                                                          |  |                          |         |   |      |   |        |  



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 Jun 30, 2005 and 2004

(In thousands of dollars, except share data)

(Unaudited)



|                                                                                                             |  |             |    |                          |   |                  |  |   |                    |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|------------------------------------------------------------------------------------------------------------ |  | ----------- | -- | ------------------------ | - | ---------------- |  | - | ------------------ | - |  | ------------- | ---- | - | ------------------------------------------ | - | ------- | ------------------------ |  | - | ---- | - |  | - | ------ | -
|                                                                                                             |  | CommonStock |    | AdditionalPaid-inCapital |   | RetainedEarnings |  |   | UnearnedESOPShares |   |  | TreasuryStock |      |   | AccumulatedOtherComprehensiveIncome (Loss) |   |         | TotalStockholdersEquity | 
|2004                                                                                                         |  |             |    |                          |   |                  |  |   |                    |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Balance at January 1, 2004                                                                                   |  | $           | 27 |                          | $ | 27,515           |  | $ | 29,005             |   |  | $             | (833 | ) |                                            | $ | (26,731 | )                        |  | $ | 557  |   |  | $ | 29,540 |  
|Comprehensive income                                                                                         |  |             |    |                          |   |                  |  |   |                    |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Net income                                                                                                   |  |             |   |                          |   |                 |  |   | 1,228              |   |  |               |     |   |                                            |   |        |                          |  |   |     |   |  |   | 1,228  |  
|Change in fair value of securities classified as available-for-sale, net of reclassification and tax effects |  |             |   |                          |   |                 |  |   |                   |   |  |               |     |   |                                            |   |        |                          |  |   | (545 | ) |  |   | (545   | )
|                                                                                                             |  |             |    |                          |   |                  |  |   |                    |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Total comprehensive income                                                                                   |  |             |    |                          |   |                  |  |   |                    |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   | 683    |  
|                                                                                                             |  |             |    |                          |   |                  | 
|Purchase of 7,000 shares of treasury stock                                                                   |  |             |   |                          |   |                 |  |   |                   |   |  |               |     |   |                                            |   | (212    | )                        |  |   |     |   |  |   | (212   | )
|Dividends paid ($.33 per share)                                                                              |  |             |   |                          |   |                 |  |   | (354               | ) |  |               |     |   |                                            |   |        |                          |  |   |     |   |  |   | (354   | )
|ESOP shares earned                                                                                           |  |             |   |                          |   | 146              |  |   |                   |   |  |               | 70   |   |                                            |   |        |                          |  |   |     |   |  |   | 216    |  
|                                                                                                             |  |             |    |                          |   |                  |  |   |                    |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Balance at June 30, 2004                                                                                     |  | $           | 27 |                          | $ | 27,661           |  | $ | 29,879             |   |  | $             | (763 | ) |                                            | $ | (26,943 | )                        |  | $ | 12   |   |  | $ | 29,873 |  
|                                                                                                             |  |             |    |                          |   |                  |  |   |                    |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|2005                                                                                                         |  |             |    |                          |   |                  |  |   |                    |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Balance at January 1, 2005                                                                                   |  | $           | 27 |                          | $ | 27,819           |  | $ | 30,797             |   |  | $             | (694 | ) |                                            | $ | (27,070 | )                        |  | $ | 28   |   |  | $ | 30,907 |  
|Comprehensive income                                                                                         |  |             |    |                          |   |                  |  |   |                    |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Net income                                                                                                   |  |             |   |                          |   |                 |  |   | 694                |   |  |               |     |   |                                            |   |        |                          |  |   |     |   |  |   | 694    |  
|Change in fair value of securities classified as available-for-sale, net of reclassification and tax effects |  |             |   |                          |   |                 |  |   |                   |   |  |               |     |   |                                            |   |        |                          |  |   | (164 | ) |  |   | (164   | )
|                                                                                                             |  |             |    |                          |   |                  |  |   |                    |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Total comprehensive loss                                                                                     |  |             |    |                          |   |                  |  |   |                    |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   | 530    |  
|                                                                                                             |  |             |    |                          |   |                  | 
|Exercise of 2,100 stock options                                                                              |  |             |   |                          |   | 32               |  |   |                   |   |  |               |     |   |                                            |   |        |                          |  |   |     |   |  |   | 32     |  
|Purchase of 21,400 shares of treasury stock                                                                  |  |             |   |                          |   |                 |  |   |                   |   |  |               |     |   |                                            |   | (680    | )                        |  |   |     |   |  |   | (680   | )
|Dividends paid ($.36 per share)                                                                              |  |             |   |                          |   |                 |  |   | (382               | ) |  |               |     |   |                                            |   |        |                          |  |   |     |   |  |   | (382   | )
|ESOP shares earned                                                                                           |  |             |   |                          |   | 134              |  |   |                   |   |  |               | 66   |   |                                            |   |        |                          |  |   |     |   |  |   | 200    |  
|                                                                                                             |  |             |    |                          |   |                  |  |   |                    |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  
|Balance at June 30, 2005                                                                                     |  | $           | 27 |                          | $ | 27,985           |  | $ | 31,109             |   |  | $             | (628 | ) |                                            | $ | (27,750 | )                        |  | $ | (136 | ) |  | $ | 30,607 |  
|                                                                                                             |  |             |    |                          |   |                  |  |   |                    |   |  |               |      |   |                                            |   |         |                          |  |   |      |   |  |   |        |  



See accompanying notes
to consolidated financial statements.



4.



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##### Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 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 June 30, 2005 and December 31, 2004 and for the three-month and
the six-month periods ended June 30, 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 June 30, 2005 and 2004 are not necessarily indicative of the results to be expected for the full year.



See accompanying notes to consolidated financial statements.



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 and six-month periods ended June
30, 2005 and 2004.



|                                                           |  |                           |           |                         |   |                           |  |                         |           |  |   |          
|---------------------------------------------------------- |  | ------------------------- | --------- | ----------------------- | - | ------------------------- |  | ----------------------- | --------- |  | - | ---------
|                                                           |  | 2005                      |           | 2004                   
|                                                           |  | Three MonthsEnded June 30 |           | Six MonthsEnded June 30 |   | Three MonthsEnded June 30 |  | Six MonthsEnded June 30
|Net income as reported                                     |  | $                         | 394       |                         | $ | 694                       |  | $                       | 564       |  | $ | 1,228    
|Weighted average common shares outstanding                 |  |                           | 1,062,141 |                         |   | 1,068,213                 |  |                         | 1,070,255 |  |   | 1,069,537
|                                                           |  |                           |           |                         |   |                           |  |                         |           |  |   |          
|Basic earnings per share                                   |  | $                         | .37       |                         | $ | .65                       |  | $                       | .53       |  | $ | 1.15     
|                                                           |  |                           |           |                         |   |                           |  |                         |           |  |   |          
|Earnings per share assuming dilution                       |  |                           |           |                         |   |                           |  |                         |           |  |   |          
|Net income available to common Shareholders                |  | $                         | 394       |                         | $ | 694                       |  | $                       | 564       |  | $ | 1,228    
|                                                           |  |                           |           |                        
|Weighted average common shares outstanding                 |  |                           | 1,062,141 |                         |   | 1,068,213                 |  |                         | 1,070,255 |  |   | 1,069,537
|                                                           |  |                           |           |                        
|Dilutive effect of stock options                           |  |                           | 94,607    |                         |   | 95,638                    |  |                         | 105,755   |  |   | 104,392  
|                                                           |  |                           |           |                        
|Average common shares and dilutive potential common shares |  |                           | 1,156,748 |                         |   | 1,163,851                 |  |                         | 1,176,010 |  |   | 1,173,929
|                                                           |  |                           |           |                         |   |                           |  |                         |           |  |   |          
|Diluted earnings per share                                 |  | $                         | .34       |                         | $ | .60                       |  | $                       | .48       |  | $ | 1.05     
|                                                           |  |                           |           |                         |   |                           |  |                         |           |  |   |          



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   |  
|                                                                                  |  | 3 Mos. |     |   | 6 Mos. |   |     | 3 Mos. |  |   | 6 Mos. |  
|Net income as reported                                                            |  | $      | 394 |   |        | $ | 694 |        |  | $ | 564    |   |  | $ | 1,228 |  
|Deduct: Stock-based compensation expense Determined under fair value based method |  |        | (4  | ) |        |   | (8  | )      |  |   | (4     | ) |  |   | (8    | )
|                                                                                  |  |        |     |   |        |   |     |        |  |   |        |   |  |   |       |  
|Pro forma net income                                                              |  |        | 390 |   |        |   | 686 |        |  |   | 560    |   |  |   | 1,220 |  
|                                                                                  |  |        |     |  
|Basic earnings per share as reported                                              |  |        | .37 |   |        |   | .65 |        |  |   | .53    |   |  |   | 1.15  |  
|Pro forma basic earnings per share                                                |  |        | .37 |   |        |   | .64 |        |  |   | .52    |   |  |   | 1.14  |  
|                                                                                  |  |        |     |  
|Diluted earnings per share as reported                                            |  |        | .34 |   |        |   | .60 |        |  |   | .48    |   |  |   | 1.05  |  
|Pro forma diluted earnings per share                                              |  |        | .34 |   |        |   | .59 |        |  |   | .48    |   |  |   | 1.04  |  



See accompanying notes
to consolidated financial statements.



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 June 30, 2005 to its financial condition at December 31, 2004 and the results of operations for the three months ended June 30, 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 June 30, 2005 were $257.0 million compared to $267.6 million at December 31, 2004, a decrease of $10.6 million. During the six months ended June 30, 2005,
loans receivable decreased by $3.4 million securities decreased $3.6 million, FHLB stock decreased $1.2 million, and total cash and cash equivalents decreased $1.8 million.



The allowance for loan losses was $1.4 million at June 30, 2005 and December 31, 2004. Non-performing assets were $4.4 million and $3.1
million at June 30, 2005 and December 31, 2004, respectively.



Total
liabilities at June 30, 2005 were $226.4 million compared to $236.7 million at December 31, 2004, a decrease of $10.3 million. This was primarily due to a decrease in deposits of $6.3 million and a decrease in Federal Home Loan Bank advances of $4.1
million.



Stockholders equity at June 30, 2005 was $30.6 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 21,400 shares of common stock at an average price of $31.78 offset by net
income and the exercise of 2,100 stock options.



RESULTS OF OPERATIONS



Net income decreased to $394,000 for the
quarter ended June 30, 2005 from $564,000 for the quarter ended June 30, 2004. Net income decreased to $694,000 for the six months ended June 30, 2005 from $1.2 million for the six months ended June 30, 2004.



Net interest income was $1.9 million for the three months ended June 30, 2005 compared to
$2.1 million for the same quarter in 2004. Net interest income was $3.8 million for the six months ended June 30, 2005 compared to $4.3 million for the same period in 2004. The net interest margin decreased to 3.22% for the three months ended June
30, 2005 from 3.24% for the 2004 quarter. The net interest margin decreased to 3.12% for the six months ended June 30, 2005 compared to 3.39% for the same period in 2004. The average yield on earning assets increased to 5.63% for the quarter ended
June 30, 2005 from 5.24% for the 2004 quarter. The average yield on earning assets increased to 5.45% for the six months ended June 30, 2005 compared to 5.40% for the same period in 2004. Interest-bearing assets at June 30, 2005 were $240.0 million
compared to $255.0 million at June 30, 2004, a decrease of $15.0 million. The average cost of funds increased to 2.57% for the quarter ended June 30, 2005 from 2.15% for the quarter ended June 30, 2004. The average cost of funds increased to 2.49%
for the six months ended June 30, 2005 compared to 2.17% for the same period in 2004. Interest-bearing liabilities at June 30, 2005 were $225.1 million compared to $237.1 at June 30, 2004, a decrease of $12.0 million.



See notes to consolidated financial statements.



7.



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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 June 30, 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 June 30, 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 $183,000 for the quarter ended June 30, 2005
from $193,000 for the quarter ended June 30, 2004. Noninterest income decreased to $313,000 for the six months ended June 30, 2005 from $497,000 for the same period in 2004. The change was due to a decrease in gains on sale of securities
available-for-sale.



Noninterest expense increased to $1.5 million for the
quarter ended June 30, 2005 compared to $1.4 million for the corresponding three month period in 2004. Noninterest expense increased to $3.1 million for the six months ended June 30, 2005 compared to $2.9 million for the same period in 2004. The
change was due to an increase in compensation expense.



Income tax expense
decreased to $196,000 for the three month period ended June 30, 2005 from $292,000 for the three month period ended June 30, 2004. Income tax expense decreased to $352,000 for the six month period ended June 30, 2005 compared to $633,000 for the
same period in 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 43% at June 30, 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 $997,000 and $(37,000) 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 $8.9 million and $(3.5) 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 $(11.6) million and $4.4 million in 2005 and 2004, respectively.



See notes to consolidated financial statements.



8.



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##### Table of Contents

At June 30, 2005, the Bank exceeded all of its regulatory capital requirements with a Tier 1 (core) capital level of
$27.7 million, or 10.9% of adjusted total assets, which is above the required level of $10.2 million, or 4.0%; and total risk-based capital of $29.0 million, or 17.7% of risk-weighted assets, which is above the required level of $13.2 million, or
8.0%. The Bank at June 30, 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 June 30, 2005, the Bank had outstanding commitments of $1.5 million 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 June
30, 2005 totaled $67.5 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 March 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 (25)% and would result in a $9.2 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.



See notes to consolidated financial statements.



9.



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##### Table of Contents

The following table shows the NPV and projected change in the NPV of the Bank at March 31, 2005, 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        |  | $                   | 22,781 |          | $                          | (14,122) |  | (38) | %         |  | 9.22  | %      |  | (459) | bp
|+ 200 bp        |  |                     | 27,709 |          |                            | (9,194)  |  | (25) |           |  | 10.92 |        |  | (289) | bp
|+ 100 bp        |  |                     | 32,592 |          |                            | (4,311)  |  | (12) |           |  | 12.50 |        |  | (131) | bp
|0 bp            |  |                     | 36,903 |          |                            |         |  |     |           |  | 13.81 |        |  |      |   
|- 100 bp        |  |                     | 39,243 |          |                            | 2,340    |  | 6    |           |  | 14.43 |        |  | 62    | bp
|- 200 bp        |  |                     | 39,685 |          |                            | 2,782    |  | 8    |           |  | 14.42 |        |  | 61    | 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 June 30, 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 June 30, 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 June 30, 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.



See notes to consolidated financial statements.



10.



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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.



The Annual Meeting of shareholders was held on May 4, 2005. John J. Murphy and Victor H. Reyes were elected to three year terms as directors. In addition, the shareholders ratified the appointment of Crowe Chizek and
Company LLC as independent registered public accounting firm of the Company for the fiscal year ending December 31, 2005.



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 May 13, 2005, the Company filed a report announcing the 2005 first quarter results.



See notes to consolidated financial statements.



11.



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##### Table of Contents

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: August 11, 2005 |  | /s/ David A. Remijas                 
|                      |  | David A. Remijas                     
|                      |  | President and Chief Executive Officer
|                      | 
|Date: August 11, 2005 |  | /s/ Steven J. Pokrak                 
|                      |  | Steven J. Pokrak                     
|                      |  | Treasurer and Chief Financial Officer



See notes to
consolidated financial statements.



12.