10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

ANNUAL REPORT

PURSUANT TO SECTIONS 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2007 or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File No. 000-51338

PARKE BANCORP, INC.

(Exact name of Registrant as specified in its Charter)

New Jersey	65-1241959
(State or other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

601 Delsea Drive, Washington Township, New Jersey	08080
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: 856-256-2500

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $0.10 par value	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES o NO x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

YES o NO x

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 o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer  o Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). YES o NO x

The aggregate market value of the voting stock held by non-affiliates of the Registrant, based on the closing price of the Registrant’s common stock as quoted on the Nasdaq Capital Market on June 30, 2007, was approximately $25.4 million.

As of March 14, 2008 there were issued and outstanding 3,231,734 shares of the Registrant’s common stock.

DOCUMENTS INCORPORATED BY REFERENCE

1. Portions of the Annual Report to Shareholders for the Fiscal Year Ended December 31, 2007. (Parts II and IV)

2. Portions of the Proxy Statement for the 2008 Annual Meeting of Shareholders. (Parts II and III)

PARKE BANCORP, INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007

INDEX

PART 1		Page
Item 1.	Business	1
Item 1A.	Risk Factors	19
Item 1B.	Unresolved Staff Comments	21
Item 2.	Properties	21
Item 3.	Legal Proceedings	22
Item 4.	Submission of Matters to a Vote of Security Holders	23
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	23
Item 6.	Selected Financial Data	23
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 8.	Financial Statements and Supplementary Data	24
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	24
Item 9A(T).	Controls and Procedures	24
Item 9B.	Other Information	24
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	25
Item 11.	Executive Compensation	25
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	25
Item 13.	Certain Relationships and Related Transactions, and Director Independence	26
Item 14.	Principal Accountant Fees and Services	26
PART IV
Item 15.	Exhibits and Financial Statement Schedules	26

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PART I

Forward-Looking Statements

Parke Bancorp, Inc. (the “Company”) may from time to time make written or oral “forward-looking statements,” including statements contained in the Company’s filings with the Securities and Exchange Commission (including this Annual Report on Form 10-K and the exhibits hereto), in its reports to shareholders and in other communications by the Company, which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Company’s control). The following factors, among others, could cause the Company’s financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: the strength of the United States economy in general and the strength of the local economies in which the Company’s wholly-owned subsidiary, Parke Bank (the “Bank”), conducts operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System, inflation, interest rates, market and monetary fluctuations; the timely development of and acceptance of new products and services of the Bank and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors’ products and services; the impact of changes in financial services’ laws and regulations (including laws concerning taxes, banking, securities and insurance); technological changes; changes in consumer spending and saving habits; and the success of the Company at managing the risks resulting from these factors.

The Company cautions that the listed factors are not exclusive. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.

Item 1. Business

The Company is a bank holding company incorporated under the laws of the State of New Jersey in January 2005 for the sole purpose of becoming the holding company of the Bank. The Company commenced operations on June 1, 2005, upon completion of the reorganization of the Bank into the holding company form of organization following approval of the reorganization by shareholders of the Bank at its 2005 Annual Meeting of Shareholders. The Company’s business and operations primarily consist of its ownership of the Bank.

The Bank is a commercial bank, which commenced operations on January 28, 1999. The Bank is chartered by the New Jersey Department of Banking and insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company and the Bank maintain their principal offices at 601 Delsea Drive, Washington Township, New Jersey. The Bank also conducts business through offices in Northfield and Washington Township, New Jersey, and in Philadelphia, Pennsylvania. In addition, the Bank opened a new Loan Production Office in Havertown, Pennsylvania in the third quarter of 2007 maintained exclusively for loan production, while a Loan Production Office in Millville, New Jersey was closed during the first quarter of 2008. The Bank is a full service bank, with an emphasis on providing personal and business financial services to individuals and small to mid-sized businesses in Gloucester, Atlantic and Cape May Counties in New Jersey and the Philadelphia area in Pennsylvania. At December 31, 2007,

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the Company had assets of $460.8 million, loans of $408.4 million, deposits of $379.5 million and shareholders’ equity of $36.4 million.

The Bank focuses its commercial loan originations on small and mid-sized business (generally up to $25 million in annual sales). Commercial loan products include residential and commercial real estate construction loans; working capital loans and lines of credit; demand, term and time loans; and equipment, inventory and accounts receivable financing. Residential construction loans in tract development are also included in the commercial loan category. The Bank also offers a range of deposit products to its commercial customers. Commercial customers also have the ability to use overnight depository, ACH activity and wire transfer service, all at reduced rates as well as the new merchant capture electronic check processing service.

The Bank’s retail banking activities emphasize consumer deposit and checking accounts. An extensive range of these services is offered by the Bank to meet the varied needs of its customers in all age groups. In addition to traditional products and services, the Bank offers contemporary products and services, such as debit cards, Internet banking and online bill payment. Retail lending activities by the Bank include residential mortgage loans, home equity lines of credit, fixed rate second mortgages, new and used auto loans and overdraft protection.

Market Area

Substantially all of the Bank’s business is with customers in its market areas of Southern New Jersey and the Philadelphia area of Pennsylvania. Most of the Bank’s customers are individuals and small and medium-sized businesses which are dependent upon the regional economy. Adverse changes in economic and business conditions in the Bank’s markets could adversely affect the Bank’s borrowers, their ability to repay their loan and to borrow additional funds, and consequently the Bank’s financial condition and performance.

Additionally, most of the Bank’s loans are secured by real estate located in Southern New Jersey and the Philadelphia area. A decline in local economic conditions could adversely affect the values of such real estate. Consequently, a decline in local economic conditions may have a greater effect on the Bank’s earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are more geographically diverse.

Competition

The Bank faces significant competition, both in making loans and attracting deposits. The Bank’s competition in both areas comes principally from other commercial banks, thrift and savings institutions, including savings and loan associations and credit unions, and other types of financial institutions, including brokerage firms and credit card companies. The Bank faces additional competition for deposits from short-term money market mutual funds and other corporate and government securities funds.

Most of the Bank’s competitors, whether traditional or nontraditional financial institutions, have a longer history and significantly greater financial and marketing resources than does the Bank. Among the advantages certain of these institutions have over the Bank are their ability to finance wide-ranging and effective advertising campaigns, to access international money markets and to allocate their investment resources to regions of highest yield and demand. Major banks operating in the primary market area offer certain services, such as international banking and trust services, which are not offered directly by the Bank.

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In commercial transactions, the Bank’s legal lending limit to a single borrower enables the Bank to compete effectively for the business of individuals and smaller enterprises. However, the Bank’s legal lending limit is considerably lower than that of various competing institutions, which have substantially greater capitalization. The Bank has a relatively smaller capital base than most other competing institutions which, although above regulatory minimums, may constrain the Bank’s effectiveness in competing for loans.

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Lending Activities

Composition of Loan Portfolio. Set forth below is selected data relating to the composition of the Bank’s loan portfolio by type of loan at the dates indicated. ⁽¹⁾ Except as set forth below, the Bank had no concentrations of loans exceeding 10% of its loans. Refer to pages four through six for descriptions of the loan categories presented.

	At December 31,
	2007				2006				2005				2004				2003
			% Gross				% Gross				% Gross				% Gross				% Gross
	Amount		Loans		Amount		Loans		Amount		Loans		Amount		Loans		Amount		:Loans
	(Amounts in thousands, except percentages)
Commercial	$	14,899	3.7	%	$	13,436	4.3	%	$	11,053	4.3	%	$	9,708	5.1	%	$	8,800	6.0	%
Real estate construction
Residential		2,091	0.5			2,465	0.8			1,174	0.5			1,253	0.7			2,165	1.5
Commercial		106,320	26.0			69,254	22.3			70,157	27.1			37,270	19.8			29,896	20.4
Real estate mortgage
Residential		24,488	6.0			19,727	6.4			17,309	6.7			16,360	8.7			18,013	12.3
Commercial		242,668	59.4			198,668	64.0			154,288	59.6			120,052	63.6			84,054	57.5
Consumer		17,923	4.4			7,005	2.2			5,054	1.8			3,964	2.1			3,406	2.3
Total Loans	$	408,389	100.0	%	$	310,555	100.0	%	$	259,035	100.0	%	$	188,607	100.0	%	$	146,334	100.0	%

(1) Amounts presented include adjustments for related unamortized deferred costs and fees.

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Loan Maturity. The following table sets forth the contractual maturity of certain loan categories at December 31, 2007.

	Due within one year		Due after one through five years		Due after five years		Total
	(Amounts in thousands)
Commercial	$	11,504	$	3,395	$	—	$	14,899
Real estate construction
Residential		1,657		434		—		2,091
Commercial		77,379		9,672		19,269		106,320
Real estate mortgage
Residential		—		33		24,455		24,488
Commercial		71,615		39,205		131,848		242,668
Consumer		13		873		17,037		17,923
Total Loans	$	162,168	$	53,612	$	192,609	$	408,389

The following table sets forth the dollar amount of loans in certain loan categories due one year or more after December 31, 2007, which have predetermined interest rates and which have floating or adjustable interest rates.

	Fixed Rates		Floating or Adjustable Rates		Total
	(Amounts in thousands)
Commercial	$	2,449	$	946	$	3,395
Real estate construction
Residential		—		434		434
Commercial		10,792		18,149		28,941
Real estate mortgage
Residential		15,086		9,402		24,488
Commercial		64,857		106,196		171,053
Consumer		8,232		9,678		17,910
Total Loans	$	101,416	$	144,805	$	246,221

Commercial Loans. The Bank originates secured loans for business purposes. Loans are made to provide working capital to businesses in the form of lines of credit, which may be secured by real estate, accounts receivable, inventory, equipment or other assets. The financial condition and cash flow of commercial borrowers are closely monitored by the submission of corporate financial statements, personal financial statements and income tax returns. The frequency of submissions of required financial information depends on the size and complexity of the credit and the collateral that secures the loan. The Bank’s general policy is to obtain personal guarantees from the principals of the commercial loan borrowers. Such loans are made to businesses located in the Bank’s market area.

Commercial business loans generally involve a greater degree of risk than residential mortgage loans and carry larger loan balances. This increased credit risk is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the mobility of collateral, the effects of general economic conditions and the increased difficulty of evaluating and monitoring these

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types of loans. Unlike residential mortgage loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment and other income and which are secured by real property whose value tends to be more easily ascertainable, commercial business loans typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business. As a result, the availability of funds for the repayment of commercial business loans may be substantially dependent on the success of the business itself and the general economic environment. If the cash flow from business operations is reduced, the borrower’s ability to repay the loan may be impaired.

Real Estate Development and Construction Loans. The Bank has emphasized the origination of construction loans to individuals and real estate developers in its market area. The advantages of construction lending are that the market is typically less competitive than more standard mortgage products, the interest rate typically charged is a variable rate, which permits the Bank to protect against sudden changes in its costs of funds, and the fees or “points” charged by the Bank to its customers can be amortized over the shorter term of a construction loan, typically, one to two years, which permits the Bank to recognize income received over a shorter period of time. The Bank from time to time structures construction loans in excess of the legal lending limit of the Bank, with respect to which the Bank sells participation interests in the construction loans to other lenders, while maintaining and servicing the construction loan.

The Bank provides interim real estate acquisition development and construction loans to builders and developers. Real estate development and construction loans to provide interim financing on the property are based on acceptable percentages of the appraised value of the property securing the loan in each case. Real estate development and construction loan funds are disbursed periodically at pre-specified stages of completion. Interest rates on these loans are generally adjustable. The Bank carefully monitors these loans with on-site inspections and control of disbursements. These loans are generally made on properties located in the Bank’s market area.

Development and construction loans are secured by the properties under development and personal guarantees are typically obtained. Further, to assure that reliance is not placed solely in the value of the underlying property, the Bank considers the financial condition and reputation of the borrower and any guarantors, the amount of the borrower’s equity in the project, independent appraisals, costs estimates and pre-construction sale information.

Loans to residential builders are for the construction of residential homes for which a binding sales contract exists and the prospective buyers have been pre-qualified for permanent mortgage financing. Loans to residential developers are made only to developers with a proven sales record. Generally, these loans are extended only when the borrower provides evidence that the lots under development will be sold to potential buyers satisfactory to the Bank.

The Bank also originates loans to individuals for construction of single family dwellings. These loans are for the construction of the individual’s primary residence. They are typically secured by the property under construction, occasionally include additional collateral (such as second mortgage on the borrower’s present home), and commonly have maturities of six to twelve months.

Construction financing is labor intensive for the Bank, requiring employees of the Bank to expend substantial time and resources in monitoring and servicing each construction loan to completion. Construction financing is generally considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate. Risk of loss on a construction loan is dependent largely upon the accuracy of the initial estimate of the property’s value at completion of construction and development, the accuracy of projections, such as the sales of homes or the future leasing of commercial space, and the

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accuracy of the estimated cost (including interest) of construction. Substantial deviations can occur in such projections. During the construction phase, a number of factors could result in delays and cost overruns. If the estimate of construction costs proves to be inaccurate, the Bank may be required to advance funds beyond the amount originally committed to permit completion of the development. If the estimate of value proves to be inaccurate, the Bank may be confronted, at or prior to the maturity of the loan, with a project having a value which is insufficient to assure full repayment. Also, a construction loan that is in default can cause problems for the Bank such as designating replacement builders for a project, considering alternate uses for the project and site and handling any structural and environmental issues that might arise.

Commercial Real Estate Mortgage Loans. The Bank originates mortgage loans secured by commercial real estate. Such loans are primarily secured by office buildings, retail buildings, warehouses and general purpose business space. Although terms may vary, the Bank’s commercial mortgages generally have maturities of twenty years, but re-price within five years.

Loans secured by commercial real estate are generally larger and involve a greater degree of risk than one- to four-family residential mortgage loans. Of primary concern in commercial and multi-family real estate lending is the borrower’s creditworthiness and the feasibility and cash flow potential of the project. Payments on loans secured by income properties are often dependent on successful operation or management of the properties. As a result, repayment of such loans may be subject to a greater extent than residential real estate loans to adverse conditions in the real estate market or the economy.

The Bank seeks to reduce the risks associated with commercial mortgage lending by generally lending in its primary market area and obtaining periodic financial statements and tax returns from borrowers. It is also the Bank’s general policy to obtain personal guarantees from the principals of the borrowers and assignments of all leases related to the collateral.

Residential Real Estate Mortgage Loans. The Bank originates adjustable and fixed-rate residential mortgage loans. Such mortgage loans are generally originated under terms, conditions and documentation acceptable to the secondary mortgage market. Although the Bank has placed all of these loans into its portfolio, a substantial majority of such loans can be sold in the secondary market or pledged for potential borrowings.

Consumer Loans. The Bank offers a variety of consumer loans. These loans are typically secured by residential real estate or personal property, including automobiles. Home equity loans (closed-end and lines of credit) are typically made up to 80% of the appraised or assessed value of the property securing the loan in each case, less the amount of any existing prior liens on the property, and generally have maximum terms of ten years, although the Bank does offer a 90% loan to value product if certain conditions related to the borrower and property are satisfied. The interest rates on second mortgages are generally fixed, while interest rates on home equity lines of credit are variable.

Loans to One Borrower. Federal regulations limit loans to one borrower in an amount equal to 15% of unimpaired capital and unimpaired surplus. At December 31, 2007, the Bank’s loan to one borrower limit was approximately $8.3 million and the Bank had 21 borrowers with loan balances in excess of $5.0 million. At December 31, 2007, the Bank’s largest loan to one borrower was a loan for commercial real estate, with a balance of $10.1 million and was secured by real estate. This loan balance for one borrower was a temporary occurrence that was subsequently reduced to a $6.4 million loan to one borrower during the first quarter of 2008. At December 31, 2007, this loan was current and performing in accordance with the terms of the loan agreement.

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The size of loans which the Bank can offer to potential borrowers is less than the size of loans which many of the Bank’s competitors with larger capitalization are able to offer. The Bank may engage in loan participations with other banks for loans in excess of the Bank’s legal lending limits. However, no assurance can be given that such participations will be available at all or on terms which are favorable to the Bank and its customers.

Non-Performing and Problem Assets

Non-Performing Assets. Non-accrual loans are those on which the accrual of interest has ceased. Loans are generally placed on non-accrual status if, in the opinion of management, collection is doubtful, or when principal or interest is past due 90 days or more unless the collateral is considered sufficient to cover principal and interest and the loan is in the process of collection. Interest accrued, but not collected at the date a loan is placed on non-accrual status, is reversed and charged against interest income. Subsequent cash receipts are applied either to the outstanding principal or recorded as interest income, depending on management’s assessment of ultimate collectibility of principal and interest. Loans are returned to an accrual status when the borrower’s ability to make periodic principal and interest payments has returned to normal (i.e., brought current with respect to principal or interest or restructured) and the paying capacity of the borrower and/or the underlying collateral is deemed sufficient to cover principal and interest.

Impaired loans are measured based on the present value of expected future discounted cash flows, the market price of the loan or the fair value of the underlying collateral if the loan is collateral dependent. The recognition of interest income on impaired loans is the same as for non-accrual loans discussed above. Total impaired loans, which includes non-accrual loans, were $2.0 million, $2.4 million, $500,000, $241,000, and $1.2 million at December 31 2007, 2006, 2005, 2004, and 2003, respectively.

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The following table sets forth information regarding non-accrual loans at the dates indicated. As of the dates indicated, the Bank did not have any troubled restructurings as defined in Statement of Financial Accounting Standards No. 15.

	At December 31,
	2007			2006			2005			2004			2003
	(Amounts in thousands, except percentages)
Loans accounted for on a non-accrual basis:
Commercial	$	52		$	91		$	50		$	—		$	—
Real estate construction
Residential		—			—			—			241			289
Commercial		325			—			—			—			—
Real estate mortgage
Residential		7			—			20			—			505
Commercial		367			687			1,865			—			—
Consumer		54			11			—			—			—
Total non-accrual loans		805			789			1,935			241			794
Accruing loans delinquent 90 days or more:
Commercial		—			—			—			—			—
Real estate construction
Residential		—			—			—			—			—
Commercial		—			—			—			—			—
Real estate mortgage
Residential		—			—			—			55			—
Commercial		—			267			665			—			—
Consumer		—			—			—			—			—
Total		—			267			665			55			—
Total non-performing loans	$	805		$	1,056		$	2,600		$	296		$	794
Total non-performing loans as a percentage of loans		0.20	%		0.34	%		1.00	%		0.16	%		0.54	%

When a loan is more than 30 days delinquent, the borrower is contacted by mail or phone and payment is requested. If the delinquency continues, subsequent efforts are made to contact the delinquent borrower. In certain instances, the Registrant may modify the loan or grant a limited moratorium on loan payments to enable the borrower to reorganize their financial affairs. If the loan continues in a delinquent status for 90 days or more, the Registrant generally will initiate foreclosure proceedings.

Loans are generally placed on non-accrual status when either principal or interest is 90 days or more past due. Interest accrued and unpaid at the time a loan is placed on non-accrual status is charged against interest income. Such interest, when ultimately collected, is applied either to the outstanding principal or recorded as interest income, depending on management’s assessment of ultimate collectibility of principal and interest. At December 31, 2007, the Bank had $805 thousand of loans that were held on a non-accrual basis. Gross interest income of $ 66,000 would have been recorded during the year ended December 31, 2007 if these loans had been performing in accordance with their terms. Interest income of $96,000 was recorded on these loans during the year ended December 31, 2007. At December 31, 2007, the Bank did not have any loans not classified as non-accrual, 90 days past due or restructured but where

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known information about possible credit problems of borrowers caused management to have serious concerns as to the ability of the borrowers to comply with present loan repayment terms and may result in disclosure as non-accrual, 90 days past due or restructured.

Classified Assets. Federal Regulations provide for a classification system for problem assets of insured institutions. Under this Classification System, problem assets of insured institutions are classified as substandard, doubtful or loss. An asset is considered “substandard” if it involves more than an acceptable level of risk due to a deteriorating financial condition, unfavorable history of the borrower, inadequate payment capacity, insufficient security or other negative factors within the industry, market or management. Substandard loans have clearly defined weaknesses which can jeopardize the timely payments of the loan.

Assets classified as “doubtful” exhibit all of the weakness defined under the Substandard Category but with enough risk to present a high probability of some principal loss on the loan, although not yet fully ascertainable in amount. Assets classified as “loss” are those considered un-collectable or of little value, even though a collection effort may continue after the classification and potential charge-off.

The Bank also internally classifies certain assets as “special mention;” such assets do not demonstrate a current potential for loss but are monitored in response to negative trends which, if not reversed, could lead to a substandard rating in the future.

When an insured institution classifies problem assets as either “substandard” or “doubtful,” it may establish specific allowances for loan losses in an amount deemed prudent by management. When an insured institution classifies problem assets as “loss,” it is required either to establish an allowance for losses equal to 100% of that portion of the assets so classified or to charge off such amount.

At December 31, 2007, the Bank had assets classified as follows:

	Loan Balance
	(Amounts in thousands)
Special mention	$	938
Substandard		1,996
Doubtful		7
Loss		—
	$	2,941

Foreclosed Real Estate. Real estate acquired by the Bank as a result of foreclosure or by deed in lieu of foreclosure is classified as real estate owned until such time as it is sold. When real estate owned is acquired, it is recorded at the lower of the unpaid principal balance of the related loan or its fair value less disposal costs. Any write-down of real estate owned is charged to operations. At December 31, 2006, the Bank had real estate owned totaling $1.25 million. This real estate was sold in the second quarter of 2007 for a gain of $205,000. The Bank did not own foreclosed real estate at December 31, 2007.

Allowance for Losses on Loans and Real Estate Owned. It is the policy of management to provide for losses on unidentified loans in its portfolio in addition to classified loans. A provision for loan losses is charged to operations based on management’s evaluation of the inherent losses that may be incurred in the Bank’s loan portfolio. Management also periodically performs valuations of Real Estate Owned and establishes allowances to reduce book values of the properties to their net realizable values when necessary.

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Management’s judgment as to the level of future losses on existing loans is based on its internal review of the loan portfolio, including an analysis of the borrowers’ current financial position; the level and trends in delinquencies, non-accruals and impaired loans; the consideration of national and local economic conditions and trends; concentrations of credit; the impact of any changes in credit policy; the experience and depth of management and the lending staff; and any trends in loan volume and terms. In determining the collectibility of certain loans, management also considers the fair value of any underlying collateral. However, management’s determination of the appropriate allowance level which is based upon the factors outlined above, which are believed to be reasonable, may or may not prove to be valid. Thus, there can be no assurance that charge-offs in future periods will not exceed the allowance for loan losses or that additional increases in the allowance for loan losses will not be required.

The following table sets forth information with respect to the Bank’s allowance for losses on loans at the dates and for the periods indicated.

	For the Year Ended December 31,
	2007			2006			2005			2004			2003
	(Amounts in thousands, except percentages)
Balance at beginning of the period	$	4,511		$	3,574		$	2,621		$	2,256		$	1,333
Charge-offs:
Commercial		—			—			—			—			—
Real estate construction
Residential		—			—			—			—			—
Commercial		—			—			(227	)		—			—
Real estate mortgage
Residential		—			—			—			(461	)		—
Commercial		(200	)		—			—			—			—
Consumer		—			(3	)		—			—			(1	)
Total charge-offs:		(200	)		(3	)		(227	)		(461	)		(1	)
Recoveries:
Commercial		—			—			—			—			—
Real estate construction
Residential		—			—			—			—			—
Commercial		—			—			—			—			—
Real estate mortgage
Residential		—			—			—			—			—
Commercial		234			—			—			—			—
Consumer		—			—			—			—			1
Total recoveries:		234			—			—			—			1
Net recoveries (charge-offs)		34			(3	)		(227	)		(461	)		—
Provision for loan losses		1,161			940			1,180			825			923
Balance at end of period	$	5,706		$	4,511		$	3,574		$	2,620		$	2,256
Period-end loans outstanding (net of deferred costs/fees)	$	408,389		$	310,555		$	295,035		$	188,607		$	146,344
Average loans outstanding	$	365,884		$	286,691		$	219,217		$	154,794		$	120,797
Allowance as a percentage of period end loans		1.40	%		1.45	%		1.38	%		1.39	%		1.54	%
Net loans charged off as a percentage of average loans outstanding		(0.01	%)		0.00	%		0.10	%		0.30	%		0.00	%

11

Allocation of Allowance for Loan Losses. The following table sets forth the allocation of the Bank’s allowance for loan losses by loan category at the dates indicated. The portion of the loan loss allowance allocated to each loan category does not represent the total available for future losses that may occur within the loan category as the total loan loss allowance is a valuation reserve applicable to the entire loan portfolio.

	At December 31,
	2007				2006				2005				2004				2003
			% Gross				% Gross				% Gross				% Gross				% Gross
	Amount		Loans		Amount		Loans		Amount		Loans		Amount		Loans		Amount		Loans
	(Amounts in thousands, except percentages)
Commercial	$	209	3.7	%	$	188	4.3	%	$	154	4.3	%	$	134	5.1	%	$	135	6.0	%
Real estate construction:
Residential		22	0.5			25	0.8			18	0.5			18	0.7			34	1.5
Commercial		1,489	26.0			847	22.3			969	27.1			519	19.8			460	20.4
Real estate mortgage:
Residential		257	6.0			218	6.4			239	6.7			228	8.7			278	12.3
Commercial		3,568	59.4			3,185	64.0			2,130	59.6			1,667	63.6			1,297	57.5
Consumer		161	4.4			48	2.2			64	1.8			55	2.1			52	2.3
Total Loans	$	5,706	100.0	%	$	4,511	100.0	%	$	3,574	100.0	%	$	2,621	100.0	%	$	2,256	100.0	%

12

Investment Activities

General. The investment policy of the Bank is established by senior management and approved by the Board of Directors. It is based on asset and liability management goals and is designed to provide a portfolio of high quality investments that foster interest income within acceptable interest rate risk and liquidity guidelines. In accordance with SFAS No. 115, the Bank classifies the majority of its portfolio of investment securities as “available for sale” with the remainder, which are municipal bonds, as “held to maturity.” At December 31, 2007, the Bank’s investment policy allowed investments in instruments such as: (i) U.S. Treasury obligations, (ii) U.S. government agency or government-sponsored agency obligations, (iii) local municipal obligations, (iv) mortgage-backed securities, (v) certificates of deposit, and (vi) investment grade corporate bonds, trust preferred securities and mutual funds. The Board of Directors may authorize additional investments.

Composition of Investment Securities Portfolio. The following table sets forth the carrying value of the Bank’s investment securities portfolio at the dates indicated. For additional information, see Note 3 of the Notes to the Consolidated Financial Statements. At December 31, 2007, the Company did not hold investment securities of any one issuer the book value of which exceeds 10% of its stockholders’ equity.

	At December 31,
	2007		2006		2005
	(Amounts in thousands)
Securities Held to Maturity:
Municipals	$	2,456	$	2,431	$	2,406
Securities Available for Sale:
U.S. government-sponsored entity securities		5,499		6,416		6,203
Mortgage-backed securities		17,442		9,909		9,004
Corporate and trust preferred securities		6,841		8,205		6,316
Stock		—		—		500
Total securities available for sale		29,782		24,530		22,023
Total	$	32,238	$	26,961	$	24,429

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Investment Portfolio Maturities. The following table sets forth information regarding the scheduled maturities, carrying values, estimated fair values, and weighted average yields for the Bank’s investments securities portfolio at December 31, 2007 by contractual maturity. The following table does not take into consideration the effects of scheduled repayments or the effects of possible prepayments.

	At December 31, 2007
	Within One Year or Less				One to Five Years				Five to Ten Years				More Than Ten Years				Total Investment Securities
	Carrying Value		Average Yield		Carrying Value		Average Yield		Carrying Value		Average Yield		Carrying Value		Average Yield		Carrying Value		Average Yield			Market Value
	(Amounts in thousands, except yields)
Securities Held to Maturity:
Municipals	$	—	—	%	$	544	2.90	%	$	—	—	%	$	1,912	2.95	%	$	2,456	2.94	%	$	2,410
Total securities held to maturity		—	—			544	2.90			—	—			1,912	2.95			2,456	2.94			2,410
Securities Available for Sale:
U.S. government sponsored entity		500	4.99	%		1,000	4.85	%		2,986	5.42	%		1,000	4.75	%		5,486	5.15	%		5,499
Mortgage-backed securities		—	—			--	--			—	—			17,885	5.16			17,885	5.16			17,442
Corporate		—	—			512	5.75			—	—			6,766	5.52			7,278	5.54			6,481
Total securities available for sale		500	4.99	%		1,512	5.16			2,986	5.42			25,651	5.24			30,649	5.25			29,782
Total	$	500	4.99	%	$	2,056	4.88	%	$	2,986	5.42	%	$	27,563	5.08	%	$	33,105	5.08	%	$	32,192

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Sources of Funds

General. Deposits are the major external source of the Bank’s funds for lending and other investment purposes. In addition to deposits, the Bank derives funds from the amortization, prepayment or sale of loans, maturities of investment securities and operations. Scheduled loan principal repayments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are significantly influenced by general interest rates and market conditions.

Deposits. The Bank offers individuals and businesses a wide variety of accounts, including checking, savings, money market accounts, individual retirement accounts and certificates of deposit. Deposits are obtained primarily from communities that the Bank serves, however, the Bank held brokered deposits of $127.0 million and $87.6 million at December 31, 2007 and 2006, respectively. Brokered deposits are a more volatile source of funding than core deposits and do not increase the deposit franchise of the Bank. In a rising rate environment, the Bank may be unwilling or unable to pay a competitive rate. To the extent that such deposits do not remain with the Bank, they may need to be replaced with borrowings which could increase the Bank’s cost of funds and negatively impact its interest rate spread, financial condition and results of operation. To mitigate the potential negative impact associated with brokered deposits, the Bank joined Promontory Interfinancial Network during 2007 to secure an additional alternative funding source. Promontory, which was founded in part by a former Controller of the Currency and a former Federal Reserve Vice Chairman, provides the Bank an additional source of external funds through their weekly CDARS settlement process. The rates paid are generally less expensive than brokered deposits and can be obtained within one day versus the normal seven to ten days for brokered deposits. At December 31, 2007, the Bank’s CDARS deposits included within the brokered deposit total amounted to $38.1 million.

The following tables detail the average amount, the average rate paid, and the percentage of each category to total deposits for the most recent three years ended December 31.

	December 31, 2007
	Average Balance		Yield/Rate		Percent of Total
	(Amounts in thousands, except percentages)
NOWs	$	8,685	1.90	%	2.6	%
Money markets		26,080	4.36	%	7.7
Savings		27,774	3.74	%	8.2
Time deposits		155,284	5.09	%	46.0
Brokered CDs		100,097	5.17	%	29.7
Total interest-bearing deposits		317,920	4.85	%	94.2
Non-interest bearing demand deposits		19,591			5.8
Total deposits	$	337,511			100.0	%

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	December 31, 2006
	Average Balance		Yield/Rate		Percent of Total
	(Amounts in thousands, except percentages)
NOWs	$	9,911	1.54	%	3.8	%
Money markets		16,657	3.59	%	6.4
Savings		28,991	3.49	%	11.1
Time deposits		111,666	4.49	%	42.6
Brokered CDs		76,374	4.52	%	29.2
Total interest-bearing deposits		243,599	4.20	%	93.1
Non-interest bearing demand deposits		18,174			6.9
Total deposits	$	261,773			100.0	%

	December 31, 2005
	Average Balance		Yield/Rate		Percent of Total
	(Amounts in thousands, except percentages)
NOWs	$	11,023	1.36	%	5.3	%
Money markets		12,706	3.59	%	6.1
Savings		29,200	2.73	%	14.0
Time deposits		77,802	3.31	%	37.3
Brokered CDs		60,785	3.33	%	29.2
Total interest-bearing deposits		191,516	3.03	%	91.9
Non-interest bearing demand deposits		16,946			8.1
Total deposits	$	208,462			100.0	%

The following table indicates the amount of the Bank’s certificates of deposit of $100,000 or more by time remaining until maturity as of December 31, 2007.

Maturity Period	Certificates of Deposit
	(Amounts in thousands)
Within three months	$	19,839
Three through six months		47,678
Six through twelve months		3,166
Over twelve months		1,034
Total	$	71,717

Borrowings. Borrowings consist of reverse repurchase agreements, subordinated debt and advances from the FHLB and other parties. Reverse repurchase agreements were priced at origination and

16

are payable in four years or less. Borrowings from FHLB outstanding during 2007, 2006, and 2005 had maturities of ten years or less and cannot be prepaid without penalty.

The following table sets forth information regarding the Bank’s borrowings:

	December 31,
	2007			2006			2005
	(Amounts in thousands, except rates)
Amount outstanding at year end	$	40,322		$	34,851		$	35,967
Weighted average interest rates at year end		5.43	%		5.50	%		4.80	%
Maximum outstanding at any month end	$	49,209		$	41,092		$	35,967
Average outstanding	$	39,502		$	34,321		$	22,376
Weighted average interest rate during the year		5.51	%		5.22	%		3.90	%

Subsidiary Activity

The largest subsidiary of the Company is the Bank. The Bank has a subsidiary, Parke Capital Markets, a corporation, which was formed in 2001 to generate fee income from capital markets financing activities, which include term financings. Farm Folly, another corporation that is a subsidiary of the Bank, was formed in 2006 for real estate assets associated with a previous loan that were repossessed by the Bank in 2006. At December 31, 2007, there were no assets in the subsidiary resulting from a sale of these repossessed assets during the second quarter of 2007.

Personnel

At December 31, 2007, the Bank had 37 full-time and 11 part-time employees.

Regulation

General. Set forth below is a brief description of certain laws which relate to the regulation of the Bank and the Company. The description does not purport to be complete and is qualified in its entirety by reference to applicable laws and regulations.

Holding Company Regulation

General. The Company is a bank holding company within the meaning of the Bank Holding Company Act of 1956 (the “BHC Act”), and is regulated by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”). The Federal Reserve Board has enforcement authority over the Company and the Company’s non-bank subsidiaries which also permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a serious risk to the subsidiary bank. This regulation and oversight is intended primarily for the protection of the depositors of the Bank and not for shareholders of the Company.

As a bank holding company, the Company is required to file with the Federal Reserve Board an annual report and any additional information as the Federal Reserve Board may require under the BHC Act. The Federal Reserve Board will also examine the Company and its subsidiaries.

Subsidiary banks of a bank holding company are subject to certain restrictions imposed by the BHC Act on extensions of credit to the bank holding company or any of its subsidiaries, on investments in the stock or other securities of the bank holding company or its subsidiaries, and on the taking of such stock or securities as collateral for loans to any borrower. Furthermore, under amendments to the BHC

17

Act and regulations of the Federal Reserve Board, a bank holding company and its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit or provision of credit or providing any property or services. Generally, this provision provides that a bank may not extend credit, lease or sell property, or furnish any service to a customer on the condition that the customer provide additional credit or service to the bank, to the bank holding company, or to any other subsidiary of the bank holding company or on the condition that the customer not obtain other credit or service from a competitor of the bank, the bank holding company, or any subsidiary of the bank.

Extensions of credit by the Bank to executive officers, directors, and principal shareholders of the Bank or any affiliate thereof, including the Company, are subject to Section 22(h) of the Federal Reserve Act, which among other things, generally prohibits loans to any such individual where the aggregate amount exceeds an amount equal to 15% of a bank’s unimpaired capital and surplus, plus an additional 10% of unimpaired capital and surplus in the case of loans that are fully secured by readily marketable collateral.

Federal Securities Law. The Company’s common stock is registered under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the Company is subject to the periodic reporting and other requirements of Section 12(g) of the 1934 Act, as amended.

Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act of 2002 (the “SOX Act”) was enacted to address corporate and accounting fraud. The SEC has promulgated new regulations pursuant to the SOX Act and may continue to propose additional implementing or clarifying regulations as necessary in furtherance of the SOX Act. The passage of the SOX Act by Congress and the implementation of new regulations by the SEC subject publicly-traded companies to additional and more cumbersome reporting, regulations, and disclosure. Compliance with the SOX Act and corresponding regulations may increase the Company’s expenses.

During 2007, the Company evaluated the effectiveness of the internal control over financial reporting based upon the framework in Internal Control- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon the evaluation performed by management in conjunction with an outside consultant, the Company concluded that the internal control over financial reporting (Sarbanes-Oxley Section 404 certification) was effective as of December 31, 2007. This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Regulation of the Bank

The Bank operates in a highly regulated industry. This regulation and supervision establishes a comprehensive framework of activities in which a bank may engage and is intended primarily for the protection of the deposit insurance fund and depositors and not shareholders of the Bank.

Any change in applicable statutory and regulatory requirements, whether by the New Jersey Department of Banking and Insurance, the Federal Deposit Insurance Corporation (the “FDIC”) or the United States Congress, could have a material adverse impact on the Bank, and its operations. The adoption of regulations or the enactment of laws that restrict the operations of the Bank or impose burdensome requirements upon it could reduce its profitability and could impair the value of the Bank’s franchise which could hurt the trading price of the Bank’s stock.

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As a New Jersey-chartered commercial bank, the Bank is subject to the regulation, supervision, and control of the New Jersey Department of Banking and Insurance. As an FDIC-insured institution, the Bank is subject to regulation, supervision and control of the FDIC, an agency of the federal government. The regulations of the FDIC and the New Jersey Department of Banking and Insurance affect virtually all activities of the Bank, including the minimum level of capital the Bank must maintain, the ability of the Bank to pay dividends, the ability of the Bank to expand through new branches or acquisitions and various other matters.

Insurance of Deposits. The Bank’s deposits are insured up to a maximum of $100,000 per depositor under the Deposit Insurance Fund of the FDIC. The FDIC has established a risk-based assessment system for all insured depository institutions. Under the risk-based assessment system, deposit insurance premium rates range from 5-43 basis points. Currently, the Bank’s deposit insurance premium has been assessed at five basis points of deposits.

Pursuant to the Reform Act, the FDIC has determined to maintain the designated reserve ratio at its current 1.25%. The FDIC has also adopted a new risk-based premium system that provides for quarterly assessments based on an insured institution’s ranking in one of four risk categories based on their examination ratings and capital ratios. Beginning in 2007, well-capitalized institutions with the CAMELS ratings of 1 or 2 will be grouped in Risk Category I and will be assessed for deposit insurance at an annual rate of between five and seven basis points with the assessment rate for an individual institution to be determined according to a formula based on a weighted average of the institution’s individual CAMEL component ratings plus either five financial ratios or the average ratings of its long-term debt. Institutions in Risk Categories II, III and IV will be assessed at annual rates of 10, 28 and 43 basis points, respectively.

Capital Adequacy Guidelines. The Bank is subject to risk-based capital guidelines promulgated by the FDIC that are designed to make regulatory capital requirements more sensitive to differences in risk profile among banks, to account for off-balance sheet exposure, and to minimize disincentives for holding liquid assets. Under the guidelines, assets and off-balance sheet items are assigned to broad risk categories, each with appropriate weights. The resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance sheet items.

The minimum ratio of total capital to risk-weighted assets (including certain off-balance sheet activities, such as standby letters of credit) is 8%. At least 4% of the total capital is required to be “Tier I Capital,” consisting of common shareholders’ equity and qualifying preferred stock, less certain goodwill items and other intangible assets. The remainder (“Tier II Capital”) may consist of (a) the allowance for loan losses of up to 1.25% of risk-weighted assets, (b) excess of qualifying preferred stock, (c) hybrid capital instruments, (d) perpetual debt, (e) mandatory convertible securities, and (f) qualifying subordinated debt and intermediate-term preferred stock up to 50% of Tier I capital. Total capital is the sum of Tier I and Tier II capital less reciprocal holdings of other banking organizations, capital instruments, investments in unconsolidated subsidiaries and any other deductions as determined by the FDIC (determined on a case-by-case basis or as a matter of policy after formal rule-making).

In addition to the risk-based capital guidelines, the FDIC has adopted a minimum Tier I capital (leverage) ratio, under which a bank must maintain a minimum level of Tier I capital to average total consolidated assets of at least 3% in the case of a bank that has the highest regulatory examination rating and is not contemplating significant growth or expansion. All other banks are expected to maintain a leverage ratio of at least 100 to 200 basis points above the stated minimum.

At December 31, 2007, the Bank had the requisite capital levels to qualify as “well capitalized.”

19

Item 1A. Risk Factors

The following is a summary of the material risks related to an investment in the Company’s securities.

A significant amount of the Bank’s business is concentrated in real estate development and construction lending.

At December 31, 2007, approximately 26.5% of our loans are commercial and residential real estate development and construction loans, which are secured by the real estate under development. Construction lending involves extensive risks. In addition to the risk that the market values of the real estate securing these loans may deteriorate, these loans are also subject to the development risks that the projects will not be completed in a timely manner or according to original specifications. Real estate development and construction projects that are not completed in a timely manner or according to original specifications are generally less marketable than projects that are fully developed, and the loans underlying such projects may be subject to greater losses in the event that the real estate collateral becomes the source of repayment. Construction projects are commonly underwritten based upon projections, such as the sales of homes or future leasing of commercial spaces, and substantial deviations from such projections can occur. Construction lending is also labor intensive for the Bank, requiring Bank employees to expend substantial time and resources in monitoring and servicing each construction loan to completion. In addition, a construction loan that is in default can create problems for the Bank, such as designating replacement builders for a project, considering alternate users for the project and site and handling any structural or environmental issues that might arise. Such problems and the risks inherent in construction lending may have a material adverse effect on the Company’s earnings and overall financial condition.

Most of the Bank’s loans are secured, in whole or in part, with real estate collateral.

In addition to the financial strength and cash flow characteristics of the borrower in each case, the Bank often secures its loans with real estate collateral. At December 31, 2007, approximately 95% of the Bank’s loans had real estate as a primary, secondary or tertiary component of collateral. The real estate collateral in each case provides an alternate source of repayment in the event of default by the borrower, but such collateral may deteriorate in value during the time the credit is extended. If we are required to liquidate the collateral securing a loan during a period of reduced real estate values to satisfy the debt, our earnings and capital could be adversely affected.

Some of the Bank’s assets are classified as non-performing assets that may lose further value.

The Bank has non-performing assets, which at this time only include non-accruing loans. At December 31, 2007, the Bank’s non-performing loans were 0.20% of outstanding net loans. There is a possibility that the Bank’s earnings could be reduced in the event that the eventual values of these non-performing assets are or become less than the values that we have assigned to them.

The Bank may experience loan losses in excess of its allowance.

The risk of credit losses on loans varies with, among other things, general economic conditions, the type of loan being made, the creditworthiness of the borrower over the term of the loan and, in the case of a collateralized loan, the value and marketability of the collateral for the loan. The Bank’s management maintains an allowance for loan losses based upon, among other things, historical experience, an evaluation of economic conditions and regular reviews of delinquencies and loan portfolio

20

quality. Based upon such factors, management makes various assumptions and judgments about the ultimate collectibility of the loan portfolio and provides an allowance for loan losses based upon a percentage of the outstanding balances and for specific loans when their ultimate collectibility is considered questionable. If the Bank’s management’s assumptions and judgments prove to be incorrect and the allowance for loan losses is inadequate to absorb future losses, or if the bank regulatory authorities require the Bank to increase the allowance for loan losses as a part of their examination process, the Bank’s earnings and capital could be significantly and adversely affected.

As of December 31, 2007, the allowance for loan losses was approximately $5.7 million, which represented 1.40% of outstanding net loans. At such date, we had non-accruing loans totaling $805,000. The Bank actively manages its non-accruing loans in an effort to minimize credit losses. Although the Bank’s management believes that its allowance for loan losses is adequate, there can be no assurance that the allowance will prove sufficient to cover future loan losses. Further, although the Bank’s management uses the best information available to make determinations with respect to the allowance for loan losses, future adjustments may be necessary if economic conditions differ substantially from the assumptions used or adverse developments arise with respect to the Bank’s non-performing or performing loans. Material additions to the Bank’s allowance for loan losses would result in a decrease in the Bank’s net income and capital, and could have a material adverse effect on the Company’s financial condition and results of operations.

The Bank operates in a competitive market.

The Bank operates in a competitive environment, competing for deposits and loans with commercial banks, savings associations and other financial entities. Competition for deposits comes primarily from other commercial banks, savings associations, credit unions, money market and mutual funds and other investment alternatives. Competition for loans comes primarily from other commercial banks, savings associations, mortgage banking firms, credit unions and other financial intermediaries. Many of the financial intermediaries operating in our market area offer certain services, such as trust investment and international banking services, which the Bank does not offer. In addition, banks with a larger capitalization and financial intermediaries not subject to bank regulatory restrictions have larger lending limits and are thereby able to serve the needs of larger customers. Finally, the Bank’s continued growth and profitability will depend upon its ability to attract and retain skilled managerial, marketing and technical personnel. Competition for qualified personnel in the banking industry is intense, and there can be no assurance that the Bank will be successful in attracting and retaining such personnel.

The Bank is dependent on certain key personnel.

The success of the Bank depends, to a great extent, upon the services of Vito S. Pantilione, the Bank’s President and Chief Executive Officer, Robert A. Kuehl, the Bank’s Senior Vice President and Chief Financial Officer, David O. Middlebrook, the Bank’s Senior Vice President and Senior Loan Officer, and Elizabeth A. Milavsky, the Bank’s Senior Vice President of Retail Operations, Human Resources and Compliance. The Bank has been able to retain the services of Mr. Pantilione since its inception and of Mr. Middlebrook since he joined the Bank in 1999. The Bank has needed, from time to time, to recruit personnel to fill vacant positions for experienced lending and credit administration officers. There can be no assurance that the Bank will continue to be successful in recruiting and retaining the necessary personnel for the Bank’s lending, operations, accounting and administrative functions. The Bank’s inability to hire or retain key personnel could have a material adverse effect on the Company’s results of operations.

21

Changes in interest rates affect the Company’s profitability and assets.

The Company derives its income mainly from the difference, or “spread,” between the interest earned by the Bank on loans, securities and other interest-earning assets, and the interest paid by the Bank on deposits, borrowings and other interest-bearing liabilities. If more interest-earning assets than interest-bearing liabilities re-price or mature during a time when interest rates are declining, then the Company’s net interest income may be reduced. If more interest-bearing liabilities than interest-earning assets re-price or mature during a time when interest rates are rising, then the Company’s net interest income may be reduced. At December 31, 2007, the Bank’s total interest-bearing liabilities maturing or re-pricing within one year exceeded interest-earning assets maturing or re-pricing during the same time period by $21.6 million. As a result, the cost on its interest-bearing liabilities should adjust to changes in interest rates at a faster rate than the yield of its interest-earning assets within the one year period. However the initial impact of the recent interest rate decline has resulted in interest sensitive assets re-pricing more quickly than interest sensitive liabilities within a three month period as interest-earning assets maturing or re-pricing within three months at December 31, 2007, exceeded interest-bearing liabilities maturing or re-pricing during the same time period by $135.1 million Therefore, net interest income may be decreased initially when interest rates decline significantly, as they have recently and are expected to continue to decline over the next few months. In addition, the recent overall decline in interest sensitive assets has exceeded the overall decline in interest sensitive liabilities due to competitive pricing by financial institutions on retail deposits and liquidity issues within the credit markets.

The Bank’s management controls a significant percentage of our common stock.

At March 14, 2008, the Company’s and the Bank’s directors and executive officers beneficially owned 1,590,706 shares or exercisable warrants and options, or 49.2%, of our common stock. Because of the large percentage of stock held by the Company’s and the Bank’s directors and executive officers, these persons could influence the outcome of any matter submitted to a vote of our shareholders.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

(a)            Properties

The Company’s and the Bank’s main office is located in Washington Township, Gloucester County, New Jersey, in an office building of approximately 13,000 square feet. The main office facilities include teller windows, a lobby area, drive-through windows, automated teller machine, a night depository, and executive and administrative offices. In December 2002, the Bank executed its lease option to purchase the building for $1.5 million.

The Bank also conducts business from a full-service office in Northfield, New Jersey, a full-service office in Washington Township, Gloucester County, New Jersey, a full-service office in Philadelphia, Pennsylvania, and a loan production office in Havertown Pennsylvania. These offices were opened by the Bank in September 2002, February 2003, August 2006 and October 2007, respectively. The Northfield office, the Philadelphia office and loan production office are leased. The Washington Township office was purchased in February 2003. The Bank closed its loan production office in Millville, New Jersey in January of 2008.

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Management considers the physical condition of all offices to be good and adequate for the conduct of the Bank’s business. At December 31, 2007, net property and equipment totaled approximately $3.2 million.

(b)           Investment Policies.

See “Item 1. Business” above for a general description of the Company’s investment policies, which are implemented by the Bank. The Bank’s investments are primarily acquired to produce income, and to a lesser extent, possible capital gain.

(1) Investments in Real Estate or Interests in Real Estate. See “Item 1. Business - Lending Activities.”

(2) Investments in Real Estate Mortgages. See “Item 1. Business - Lending Activities.”

(3) Investments in Securities of or Interests in Persons Primarily Engaged in Real Estate Activities. See “Item 1. Business - Lending Activities.”

(c) Description of Real Estate and Operating Data.

Not Applicable.

Item 3. Legal Proceedings

On December 27, 2004, Republic First Bank filed an action captioned Republic First Bank v. Parke Bank and Vito S. Pantilione in the Superior Court of New Jersey Law Division, Gloucester County. The Bank believes that the action is without merit and intends to vigorously defend against it. The suit alleges, among other things, fraud, negligent misrepresentation, breach of fiduciary duty and breach of contract in connection with certain loans to two Parke Bank customers in which Republic First Bank became a participant. Republic First Bank is seeking unspecified damages and requesting that a receivership be appointed for certain collateral. The complaint in the action was served on us in January 2005. The Bank paid $100,000 to Republic First in January of 2008 in connection with a settlement between the parties that was reached in December of 2007.

In January, 2007, The Bank reached a final agreement with both Atlantic Central Bankers Bank and New Century Bank in connection with their action filed against the Bank in 2005 alleging breach of participation agreements and fraudulent misrepresentation in connection with the plaintiffs’ participations in loans to the same Parke Bank customers as the First Republic matter discussed above. Their lawsuit against Parke Bank was dismissed in February, 2007. In connection with this settlement, the Bank paid $150,000 and $60,000, respectively to Atlantic Central Bankers Bank and New Century Bank in February and March of 2007, respectively.

On November 4, 2004, Stephen P. Magenta and other parties filed an action captioned Stephen P. Magenta, et. al. v. General Insulation Services, Inc., et. al. in the Superior Court of New Jersey Law Division, Gloucester County, related to the alleged embezzlement of over $1 million by an employee of one of our customers of funds maintained in accounts at the Bank. All but one of the claims against the Bank has been dismissed. The Bank believes that the action is without merit and intends to vigorously defend against it. In addition, the Bank believes that this action is covered by its insurance.

23

Other than the foregoing, at December 31, 2007, the Company was not a party to any material legal proceedings.

Item 4. Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of the security holders during the fourth quarter of fiscal year 2007.

PART II

Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

(a) The information contained under the section captioned “Market Prices and Dividends” in the Company’s 2007 Annual Report is incorporated herein by reference.

(b) Not applicable.

(c) Treasury stock repurchases during the fourth quarter of 2007 for Parke Bancorp, Inc. were as follows:

				Total number of shares	Maximum number of
				Purchased as part of	Shares that may be
	Total number of	Average price		Publicly announced	Purchased under the
Period	shares purchased	paid per share		plans or programs	plans or programs
October, 2007	—	$	—	—	69,286
November, 2007	16,185		14.97	16,185	53,101
December, 2007	5,000		14.21	5,000	48,101
Total	21,185	$	12.66	21,185

On November 9, 2005, the Board of Directors authorized 151,800 shares (adjusted for stock dividends), or approximately 5%, of the issued and outstanding common stock for repurchase by the Company. As of December 31, 2007, the Company has repurchased 110,061 of the authorized shares.

Item 6. Selected Financial Data

The information contained under the section captioned “Selected Financial Data” in the 2007 Annual Report is incorporated herein by reference.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

The information contained in the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The information contained in the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Interest Rate Sensitivity and Liquidity — Rate Sensitivity Analysis” in the Annual Report is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data

The Company’s financial statements listed under Item 15 are incorporated herein by reference.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A (T). Controls and Procedures

(a) Disclosure Controls and Procedures

Based on their evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)), the Company’s principal executive officer and principal financial officer have concluded that as of the end of the period covered by this Annual Report on Form 10-K such disclosure controls and procedures are effective.

(b) Internal Control Over Financial Reporting

1.  Management's Annual Report on Internal Control Over Financial Reporting.

Management’s report on the Company’s internal control over financial reporting appears in the Company’s 2007 Annual Report to Stockholders filed as Exhibit 13 to this Annual Report on Form 10-K. Such report is incorporated herein by reference.

2. Report of Independent Registered Public Accounting Firm

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

3. Changes in internal control over financial reporting.

During the last quarter of the year under report, there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

25

Item 9B. Other Information

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information contained under the headings “Section 16(a) Beneficial Ownership Reporting Compliance” and “Proposal I - Election of Directors” in the Company’s Proxy Statement for its 2008 Annual Meeting of Stockholders (the “Proxy Statement”) is incorporated herein by reference.

The Company has adopted a Code of Ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. A copy of the Code of Ethics will be furnished without charge upon written request to the Chief Financial Officer, Parke Bancorp, Inc., 601 Delsea Drive, Washington Township, New Jersey, 08080.

There have been no material changes to the procedures by which security holders may recommend nominees to the Registrant’s Board of Directors since the date of the Registrant’s last proxy statement mailed to its stockholders.

Item 11. Executive Compensation

The information contained in the section captioned “Executive Compensation” in the Proxy Statement is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters  

(a)             Security Ownership of Certain Beneficial Owners

The information contained in the section captioned “Proposal I – Election of Directors” in the Proxy Statement is incorporated herein by reference.

(b)             Security Ownership of Management

The information contained in the section captioned “Proposal I – Election of Directors” in the Proxy Statement is incorporated herein by reference.

(c)        Management of the Registrant knows of no arrangements, including any pledge by any person of securities of the Registrant, the operation of which may at a subsequent date result in a change in control of the Registrant.

(d) Securities Authorized for Issuance Under Equity Compensation Plans

26

Set forth below is information as of December 31, 2007 with respect to compensation plans under which equity securities of the Registrant are authorized for issuance.

	( a )	( b )	( c )
	Number of Securities to be issued upon exercise of outstanding options	Weighted-average exercise price of outstanding options	Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by shareholders	339,515	$ 12.66	162,457
Total	339,515	$ 12.66	162,457

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information contained in the section captioned “Related Party Transactions” in the Proxy Statement is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

The information contained in the section captioned “Ratification of Appointment of Auditors” in the Proxy Statement is incorporated herein by reference.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) Listed below are all financial statements and exhibits filed as part of this report.

1. The following financial statements and the independent auditors’ report included in the Annual Report are incorporated herein by reference:

• Management’s Report on Internal Controls

• Report of Independent Registered Public Accounting Firm

• Consolidated Balance Sheets as of December 31, 2007 and 2006

• Consolidated Statements of Income For the Years Ended December 31, 2007, 2006 and 2005

27

• Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2007, 2006 and 2005

• Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2006 and 2005

• Notes to Consolidated Financial Statements

2. Schedules omitted as they are not applicable.

3. The following exhibits are included in this Report or incorporated herein by reference:

3(i) Certificate of Incorporation of Parke Bancorp, Inc.*

3(ii) Bylaws of Parke Bancorp, Inc.*

4.1 Specimen stock certificate of Parke Bancorp, Inc.*

4.2 Specimen common stock purchase warrant of Parke Bancorp, Inc.*

10.1 Amended Employment Agreement Between Bancorp, Bank and Vito S. Pantilione***

10.2 Change in Control Agreement Between Bancorp, Bank and Elizabeth Milavsky, Robert Kuehl, Paul Palmieri and David Middlebrook***

10.3 Supplemental Executive Retirement Plan*

10.4 1999 Stock Option Plan*

10.5 2002 Stock Option Plan*

10.6 2003 Stock Option Plan*

10.7 2005 Stock Option Plan**

13 Annual Report to Stockholders for the fiscal year ended December 31, 2007

21 Subsidiaries of the Registrant

23 Consent of McGladrey & Pullen, LLP

31 Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*	Incorporated by reference to the Company’s Registration Statement on Form S-4 filed with the SEC on January 31, 2005.
**	Incorporated by reference to the Company’s Definitive Proxy Statement filed with the SEC on December 20, 2005.
***	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2007.

28

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
	PARKE BANCORP, INC.
Dated: March 28, 2008		/s/ Vito S. Pantilione
	By:	Vito S. Pantilione President, Chief Executive Officer and Director
Pursuant to the requirement of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March 28, 2008.
/s/ Celestino R. Pennoni	/s/ Vito S. Pantilione
Celestino R. Pennoni Chairman	Vito S. Pantilione President, Chief Executive Officer and Director (Principal Executive Officer)
/s/ Fred G. Choate
Fred G. Choate Director	Daniel J. Dalton Director
	/s/ Thomas Hedenberg
Arret F. Dobson Director	Thomas Hedenberg Director
Edward Infantolino Director	Anthony J. Jannetti Director
/s/ Jeffrey H. Krippitz	/s/ Richard Phalines
Jeffrey H. Krippitz Director	Richard Phalines Director
/s/ Jack C. Sheppard, Jr.
Jack C. Sheppard, Jr. Director	Ray H. Tresch Director
/s/Robert A. Kuehl
Robert A. Kuehl Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

29

EX-13

PARKE BANCORP, INC.

2007 ANNUAL REPORT TO SHAREHOLDERS

PARKE BANCORP, INC.

2007 ANNUAL REPORT TO SHAREHOLDERS

TABLE OF CONTENTS

Section One
	Page
Letter to Shareholders	1
Selected Financial Data	3
Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Market Prices and Dividends	17
Section Two
Report of Independent Registered Public Accounting Firm	1
Consolidated Financial Statements	2
Notes to Consolidated Financial Statements	7
Corporate Information	36

_____________________________

Parke Bancorp, Inc. (the “Company”) may from time to time make written or oral “forward-looking statements” including statements contained in this Annual Report and in other communications by the Company which are made in good faith pursuant to the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, such as statements of the Company’s plans, objectives, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Company’s control). The following factors, among others, could cause the Company’s financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements; the strength of the United States economy in general and the strength of the local economies in which the Company’s bank subsidiary, Parke Bank, conducts operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; increased competition from both banks and non-banks; legal and regulatory developments; technological changes; mergers and acquisitions; changes in consumer spending and saving habits; and the success of Parke Bank at managing these risks.

To Our Shareholders:

Parke Bancorp posted another year of record earnings as Net Income improved to $5.9 million, an increase of 28%. Earnings per share increased to $1.63 on a fully diluted basis. This accomplishment becomes even more noteworthy when reviewing the economic turbulence in 2007 and the coinciding decline in profits in the banking industry. Our financial results position the Company as one of the top five banks in the country for return on equity, which was 17.17%, for banks under $1 billion in assets and one of the top two banks under $500 million in assets, while our return on assets was 1.41%. Parke Bancorp’s assets grew to $461 million as of December 31, 2007, a 28% increase from the end of the previous year. The growth of the Company was again supported by a 32% increase in our loan portfolio from $311 million as of the end of 2006 to $408 million at December 31, 2007. The primary source of funding for the loans was an increase in our deposits to $379 million, a 31% increase year over year. Our Company continued to be one of the top banks in the nation in the control of expenses with a cost efficiency ratio of 39%, a clear indication of the hard work and dedication of our employees.

The U. S. economy has recently been rocked with a severe decline in the residential real estate market and the coinciding skyrocketing of residential mortgage foreclosures. The credit markets worldwide experienced billions of dollars in portfolio write downs for their sub prime mortgage investments, further crippling the liquidity and credit availability in the nation. The write downs in turn created a rippling effect through the financial and credit markets causing significant market illiquidity and impediments to economic growth and price stability. While the Treasury Department initiated a stimulus package that Congress approved and the Federal Reserve dramatically reduced fed funds rates by 300 basis points, the illiquidity persists and the number of troubling economic indicators continues to increase.

The combination of the credit market malaise and the numerous negative economic indicators has prompted the Federal Reserve to take corrective monetary action in an attempt to head off a possible recession. Interest rates are expected to further decline in a continued effort to support an economy that many economists believe is already in a recession. Based on the continued illiquidity of the credit markets, the Fed’s move does not yet appear to have stabilized the market. Additional pressure has been added to the credit markets by the recent bailout of Bear Stearns who was acquired by J P Morgan with federal government assistance.

The dramatic reduction in interest rates has negatively impacted the Company’s and much of the banking industry’s spread and net interest margin. The interest rates on a significant segment of our loan portfolio that is prime-based was immediately reduced while the interest rates paid on deposits have declined much more slowly, thereby reducing the Company’s net interest income. We have taken steps to reduce our cost of funds by adding alternative funding sources at very competitive pricing. These moves will hopefully equate to a stabilized interest margin and net interest income but will also be dependent upon the Federal Reserve’s future interest rate adjustments.

1

We opened a new Loan Production Office in 2007 in Havertown, PA to focus on the attractive suburban Philadelphia market. This is a very strong market with a dense high income population and many small to midsize businesses. We are in the process of identifying potential locations in this market area to open a full service branch. The constantly changing dynamics in the banking industry coupled with the currently troubled real estate market and economy makes it very important to carefully and strategically expand our bank’s branch network. We continue to consider attractive retail locations that are either contiguous to or within our existing geographic footprint. Park Bank’s branch network is critical to our success with our Northfield branch, which opened in 2003, surpassing $100 million in deposits and our recently opened Philadelphia branch approaching close to $40 million in deposits in 2007.

The uninterrupted growth and financial strength of Parke Bancorp is dependent on the continued hard work and support of our Board of Directors, the quality and hard work of our staff and the implementation of new products and state of the art technology that provides our customers the best banking services in the industry. We recently implemented branch capture for our retail branches that will add to our efficiency while providing improved funds availability for our retail customers. This technology includes “remote” or “merchant capture” which provides our new and existing customers with the capability of processing their check deposits in their office or store without the need of going to one of our retail branches. The successful implementation and marketing of this new technology will provide us with lower cost funding.

As we approach our 10 year anniversary, 2008 will be our most challenging year. Fortunately, challenges provide opportunity. The continued consolidation in the banking industry combined with many banks in the region experiencing financial uncertainty has provided our Company with new prospects for talented lenders and retail banking personnel. In addition the possibility of accelerated growth exists through a merger or acquisition with an area bank that may view the current banking environment as the time to join a bank with the strength and vision of Parke Bancorp.

We want to thank our shareholders for their continued support during the past year. Despite our strong financial performance during 2007, our stock price was negatively impacted by the overall dismal performance of the banking sector. We are cautiously optimistic that the economic stimulus package recently enacted by Congress combined with the Federal Reserve’s efforts to provide the market with liquidity and lower interest rates will provide the economy with the tools to regain sustained growth. The members of our board, management team and staff will continue to focus on the implementation of our business plan and control costs to further enhance shareholder value.

/s/C.R. “Chuck” Pennoni	/s/Vito S. Pantilione
C.R. “Chuck” Pennoni Chairman	Vito S. Pantilione  President and Chief Executive Officer

2

SELECTED FINANCIAL DATA

(Dollars in thousands, except per share data)

	At or for the Year Ended December 31,
	2007			2006			2005			2004			2003
BALANCE SHEET DATA:	(Amounts in thousands)
Assets	$	460,795		$	359,997		$	297,810		$	224,339		$	174,004
Loan Receivables, Net	$	402,683		$	306,044		$	255,461		$	185,986		$	144,078
Securities-Available for Sale	$	29,782		$	24,530		$	22,023		$	24,043		$	14,323
Securities-Held to Maturity	$	2,456		$	2,431		$	2,406		$	548		$	779
Cash and Cash Equivalents	$	9,178		$	11,261		$	4,380		$	1,802		$	4,267
Deposits	$	379,480		$	289,929		$	232,056		$	179,585		$	142,447
Borrowings	$	40,322		$	34,851		$	35,967		$	20,379		$	10,340
Stockholders' Equity	$	36,417		$	30,709		$	27,193		$	22,829		$	19,993
OPERATIONS DATA:	(Amounts in thousands)
Interest Income	$	33,186		$	25,476		$	17,336		$	11,766		$	9,444
Interest Expense		17,595			12,023			6,684			3,746			3,182
Net Interest Income		15,591			13,453			10,652			8,020			6,262
Provision for Loan Losses		1,161			940			1,180			825			923
Net interest Income after Provision for Loan Losses		14,430			12,513			9,472			7,195			5,339
Non-Interest Income		1,491			857			896			861			799
Non-Interest Expense		6,325			5,827			4,544			3,589			2,837
Income Before Income Taxes		9,596			7,543			5,824			4,467			3,301
Income Tax Expense		3,744			2,919			2,330			1,744			1,279
Net Income	$	5,852		$	4,624		$	3,494		$	2,723		$	2,022
PER SHARE DATA:
Basic Income per Common Share	$	1.85		$	1.49		$	1.18		$	0.95		$	0.73
Diluted Income per Common Share	$	1.63		$	1.27		$	1.00		$	0.79		$	0.65
Book Value/Common Share	$	11.39		$	9.68		$	8.90		$	7.95		$	7.06
Cash Dividends Declared per Share	$	—		$	0.18		$	—		$	—		$	—
PERFORMANCE RATIOS:
Return on Average Assets		1.41	%		1.41	%		1.35	%		1.45	%		1.33	%
Return on Average Equity		17.17	%		15.68	%		13.91	%		13.24	%		10.72	%
Net Interest Margin		3.88	%		4.25	%		4.34	%		4.58	%		4.40	%
Efficiency ratio¹		38.7	%		40.7	%		39.4	%		40.4	%		40.2	%
CAPITAL RATIOS:
Equity to Assets		7.91	%		8.54	%		10.96	%		10.77	%		12.27	%
Dividend Payout ratio		—			12.20	%		—			—			—
Tier 1 Capital (Risk Weighted)²		11.1	%		13.3	%		13.9	%		12.2	%		13.7	%
Total Risk Based Capital²		12.4	%		14.5	%		15.1	%		13.4	%		14.9	%
ASSET QUALITY RATIOS:
Non-Performing Loans/Loans³		0.20	%		0.34	%		1.00	%		0.16	%		0.54	%
Allowance for Loan Losses/Loans³		1.40	%		1.45	%		1.38	%		1.39	%		1.54	%
Allowance for Loan Losses / Non-Performing Loans		709.1	%		571.9	%		137.5	%		886.3	%		192.5	%

____________________________________________________________________________________________

¹ Efficiency ratio for 2007 excludes insurance reimbursements - See Management's Discussion and Analysis

² Ratios are calculated using Parke Bank's Capital

³ Total loans before allowance for loan losses

3

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATION

Forward Looking Statements

The Company may from time to time make written or oral “forward-looking statements”, including statements contained in the Company’s filings with the Securities and Exchange Commission (including the Proxy Statement and the Annual Report on Form 10-K, including the exhibits), in its reports to stockholders and in other communications by the Company, which are made in good faith by the Company.

These forward-looking statements involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations, estimates and intentions, which are subject to change based on various important factors (some of which are beyond the Company’s control). The following factors, among others, could cause the Company’s financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: the strength of the United States economy in general and the strength of the local economies in which the Bank conducts operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System, inflation, interest rates, market and monetary fluctuations; the timely development of and acceptance of new products and services of the Bank and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors’ products and services; the impact of changes in financial services’ laws and regulations (including laws concerning taxes, banking, securities and insurance); technological changes; changes in consumer spending and saving habits; and the success of the Bank at managing the risks resulting from these factors. The Company cautions that the listed factors are not exclusive.

Overview

The Company’s results of operations are dependent primarily on the Bank’s net interest income, which is the difference between the interest income earned on its interest-earning assets, such as loans and securities, and the interest expense paid on its interest-bearing liabilities, such as deposits and borrowings. The Bank also generates non-interest income such as service charges, Bank Owned Life Insurance income and other fees. The Bank’s non-interest expenses primarily consist of employee compensation and benefits, occupancy expenses, marketing expenses, data processing costs and other operating expenses. The Bank is also subject to losses from its loan portfolio if borrowers fail to meet their obligations. The Bank’s results of operations are also significantly affected by general economic and competitive conditions, particularly changes in market interest rates, government policies and actions of regulatory agencies.

The company recorded net income of $5.9 million, or $1.63 per diluted share, $4.6 million, or $1.27 per diluted share, $3.5 million, or $1.00 per diluted share, for 2007, 2006 and 2005, respectively. Pre-tax earnings amounted to $9.6 million for 2007, $7.5 million for 2006 and $5.8 million for 2005.

4

Total assets of $460.8 million at December 31, 2007 increased by $100.8 million, or 28.0%, reflecting continued strong loan growth for the Company. Total loans amounted to $408.4 million at year end 2007 resulting in an increase of $97.8 million, or 31.5%, and investment securities grew by $5.3 million, or 19.6% during the past year. This strong asset growth was funded primarily by deposit growth of $89.6 million, or 30.9% coupled with an increase of $5.6 million, or 15.7%, in borrowings during 2007. The Company continues to expand its balance sheet primarily through the generation of loan growth through its effective business development of new and existing business relationships and the addition of the Philadelphia branch in the previous year. Total capital at December 31, 2007 amounted to $36.4 million and increased $5.7 million, or 18.6%, during the past year.

The principal objective of this financial review is to provide a discussion and an overview of our consolidated financial condition and results of operations. This discussion should be read in conjunction with the accompanying financial statements and related notes as well as statistical information included in the Proxy Statement.

5

Comparative Average Balances, Yields and Rates. The following table sets forth for the periods indicated the Company’s average volume of interest-earning assets and interest-bearing liabilities and average yields and rates. Changes in net interest income from period to period result from increases or decreases in the volume and mix of interest-earning assets and interest-bearing liabilities, increases or decreases in the average rates earned and paid on such assets and liabilities and the availability of particular sources of funds, such as non-interest-bearing deposits.

	For the years ended
	December 31, 2007							December 31, 2006							December 31, 2005
	Average			Income/		Yield/		Average			Income/		Yield/		Average			Income/		Yield/
	Balance			Expense		Rate		Balance			Expense		Rate		Balance			Expense		Rate
Assets	(Amounts in thousands, except percentages)
Loans (net of deferred costs/fees)¹	$	365,884		$	31,232	8.54	%	$	286,691		$	23,993	8.37	%	$	219,217		$	16,108	7.35	%
Investment securities		31,267			1,708	5.46	%		26,774			1,341	5.01	%		24,276			1,159	4.77	%
Federal funds sold and cash equivalents		4,788			246	5.15	%		2,856			142	4.97	%		2,107			69	3.27	%
Total interest-earning assets		401,939		$	33,186	8.26	%		316,321		$	25,476	8.05	%		245,600		$	17,336	7.06	%
Allowance for loan loss		(5,098	)						(4,051	)						(3,009	)
Other assets		18,201							16,267							15,322
Total assets	$	415,042						$	328,537						$	257,913
Liabilities and Shareholders' Equity
NOWs	$	8,685		$	165	1.90	%	$	9,911		$	153	1.54	%	$	11,023		$	150	1.36	%
Money markets		26,080			1,136	4.36	%		16,657			599	3.59	%		12,706			266	3.59	%
Savings		27,774			1,038	3.74	%		28,991			1,012	3.49	%		29,200			797	2.73	%
Time deposits		155,284			7,909	5.09	%		111,666			5,018	4.49	%		77,802			2,572	3.31	%
Brokered CDs		100,097			5,172	5.17	%		76,374			3,450	4.52	%		60,785			2,027	3.33	%
Total interest-bearing deposits		317,920			15,420	4.85	%		243,599			10,232	4.20	%		191,516			5,812	3.03	%
Borrowings		39,502			2,175	5.51	%		34,321			1,791	5.22	%		22,376			872	3.90	%
Total interest-bearing liabilities		357,422		$	17,595	4.92	%		277,920		$	12,023	4.33	%		213,892		$	6,684	3.12	%
Non-interest bearing demand deposits		19,591							18,174							16,946
Other liabilities		3,957							2,957							1,948
Shareholder's equity		34,072							29,486							25,127
Total liabilities and shareholders' equity	$	415,042						$	328,537						$	257,913
Net interest income				$	15,591						$	13,453						$	10,652
Interest rate spread (average yield less average rate)						3.34	%						3.72	%						3.94	%
Net interest margin (net interest income/average interest-earning assets)						3.88	%						4.25	%						4.34	%

¹Non-accrual loans are included in the calculation of average balances.

6

Rate/Volume Analysis. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume (i.e., changes in volume multiplied by the old rate) and (ii) changes in rate (i.e., changes in rate multiplied by old volume). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to the change due to volume and the change due to rate.

	Years ended December 31,
	2007 vs. 2006							2006 vs. 2005
	Variance due to changes in							Variance due to changes in
						Net							Net
	Average		Average			Increase/		Average		Average			Increase/
	Volume		Rate			(Decrease)		Volume		Rate			(Decrease)
	(Amounts in thousands)
Interest Income:
Loans (net of deferred costs/fees)	$	6,627	$	612		$	7,239	$	4,958	$	2,927		$	7,885
Investment securities		225		142			367		119		63			182
Federal funds sold		96		8			104		25		48			73
Total interest income		6,948		762			7,710		5,102		3,038			8,140
Interest Expense:
Deposits		3,309		1,879			5,188		1,581		2,839			4,420
Borrowed funds		270		114			384		465		454			919
Total interest expense		3,579		1,993			5,572		2,046		3,293			5,339
Net interest income	$	3,369	$	(1,231	)	$	2,138	$	3,056	$	(255	)	$	2,801

Critical Accounting Policies

Allowance for Losses on Loans. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses. Loans that are determined to be uncollectible are charged against the allowance account, and subsequent recoveries, if any, are credited to the allowance. When evaluating the adequacy of the allowance, an assessment of the loan portfolio will typically include changes in the composition and volume of the loan portfolio, overall portfolio quality and past loss experience, review of specific problem loans, current economic conditions which may affect borrowers’ ability to repay, and other factors which may warrant current recognition. Such periodic assessments may, in management’s judgment, require the Company to recognize additions or reductions to the allowance.

Operating Results for the Years Ended December 31, 2007, 2006 and 2005

Net Interest Income/Margins. The Company’s primary source of earnings is net interest income, which is the difference between income earned on interest-earning assets, such as loans and investment securities, and interest expense incurred on interest-bearing liabilities, such as deposits and borrowings. The level of net interest income is determined primarily by the average level of balances (“volume”) and the market rates associated with the interest-earning assets and interest-bearing liabilities.

7

Net interest income amounted to $15.6 million for 2007, which represented an increase of $2.1 million, or 15.9%, above the level of $13.5 million in 2006. This was driven mainly by the growth in commercial loans and partially offset by lower yields associated with the 100 basis point decline in the prime rate experienced in the last four months of the year in response to the Federal Reserve lowering the fed funds rate and the generally more costly time deposits. The 2006 results reflected an increase of $2.8 million, or 26.3%, above the level of $10.7 million in 2005 due principally to the growth in average interest-earning assets, primarily loans.

Interest income in 2007 of $33.2 million was $7.7 million, or 30.3%, above the level of 2006 due to an increase in average interest-earning assets of $85.6 million, or 27.1% coupled with a 21 basis point increase on the yield on those assets. This increase in interest-earning assets, which is comprised primarily of loans, occurred despite the 100 basis point decline in the prime rate during the latter part of 2007 as noted above. Interest income in 2006 of $25.5 million, increased by $8.1 million, or 47.0%, due to an increase in average interest-earning assets of $70.7 million year-over-year coupled and an increase in the level of market interest rates during 2006. Average loans, which represented the largest component of the change in average interest-earning assets in both years, increased by $79.2 million, or 27.6%, and by $67.4 million, or 30.8%, during 2007 and 2006, respectively.

Interest expense in 2007 amounted to $17.6 million resulting in an increase of $5.6 million, or 46.4%, above the prior year’s level due to an increase in average interest-bearing liabilities of $79.5 million, or 28.6%, and an increase in the rate paid on those interest-bearing liabilities of 59 basis points from the prior year. Interest rates paid for all retail and brokered deposits increased year over year as rates paid on short term funding remained relatively high compared to the movement of market interest rates. Interest expense of $12.0 million in 2006 increased by $5.3 million, or 79.9%, resulting from increased average interest-bearing liabilities year-over-year of $64.0 million, or 29.9%, coupled with an increase in the interest rates paid for both deposits and borrowed funds and a greater concentration of higher cost time deposits within the retail deposit base. Average interest-bearing deposits amounted to $317.9 million in 2007 and increased by $74.3 million, or 30.5%, from the level of $243.6 million in 2006 which increased by $52.1 million, or 27.2%, from the average in 2005.

The key performance measure for net interest income is the “net interest margin”, which represents net interest income divided by interest-earning assets. The Company’s net interest income is affected by loan and deposit pricing, the mix of earning assets and deposit products and the impact of market interest rates on borrowings. The net interest margin was 3.88% for 2007 as compared to 4.25% for 2006 and 4.34% for 2005. During 2007, the yield on interest-earning assets increased 21 basis points to 8.26%, while the rates paid for interest-bearing liabilities increased by 59 basis points to 4.92%. During 2006, the yield on average interest-earning assets increased 99 basis points to 8.05%, while the cost of interest-bearing liabilities increased by 121 basis points to 4.33%.

Provision for Loan Losses. The provision for loan losses amounted to $1.2 million, $940 thousand and $1.2 million for 2007, 2006 and 2005, respectively. The provision was directly attributable to the growth in loans during all three years and management’s assessment of required allowances within the portfolio. The level of nonaccrual loans amounted to $805 thousand at December 31, 2007; $789 thousand at December 31, 2006 and $1.9 million at December 31, 2005.

Noninterest Income. Noninterest incomeis principally derived from fee income from loan services, service fees on deposits, BOLI (Bank-Owned Life Insurance) income and gains/losses on the sale of investment securities. Noninterest income was $1.5 million in 2007 versus $857 thousand in 2006 and $896 thousand in 2005.

8

Service charges on deposit accounts, which amounted to $160 thousand in 2007, increased by $14 thousand, or 11.0%, from the previous year due to an increase in the number of customers and related transaction accounts. Service charges of $146 thousand in 2006, declined $39 thousand, or 21.01%, from $185 thousand in 2005. The decline in 2006 was primarily attributed to the loss of a large commercial lockbox customer.

Loan fees and BOLI income of $448 thousand in 2007 declined from $588 thousand and $597 thousand in 2006 and 2005, respectively. Loan fees consist of “exit fees” that are charged on construction loans if the builder sells the property prior to the completion of the construction project. Exit fees are intended to discourage construction borrowers from starting projects and “flipping out” of the project or selling before it is completed. These loan fees, which are variable in nature and are dependent upon the borrower, amounted to $265 thousand, $416 thousand and $411 thousand in 2007, 2006 and 2005, respectively. In addition, BOLI income of $183 thousand in 2007 increased modestly from $172 thousand in 2006 after experiencing a slight decline from $186 thousand in 2005 due to the surrender of a life insurance policy.

Other miscellaneous fee income, which includes ATM fees, debit card fees, early CD withdrawal penalties, rental income and other miscellaneous income, amounted to $693 thousand in 2007 and $123 thousand in both 2006 and 2005. The increase of $570 thousand during 2007 from the previous year primarily represented insurance reimbursements associated with repossessed asset expense from previous years.

There was a gain on the sale of other real estate owned during 2007 that amounted to $205 thousand. There was a loss on the sale of securities of $15 thousand in 2007, no gains or losses on the sale of securities during 2006, while the sale of securities amounted to a loss of $9 thousand in 2005.

Noninterest Expense. Noninterest expense, which amounted to $6.3 million, reflected an increase of $498 thousand, or 8.5%, above the level of $5.8 million in 2006. The year over year change was mainly comprised of increases in compensation and benefits, occupancy, equipment costs and other operating expenses, which were primarily related to the continued growth of the Company. Noninterest expense for 2005 amounted to $4.5 million.

Compensation and benefits expense for 2007 of $3.1 million increased $345 thousand, or 12.4% during 2007 and $687 thousand, or 32.9%, during 2006 due to routine salary increases, higher benefits expense and increased staff. The staff increases were primarily associated with the opening of a new branch in center city Philadelphia in the second half of 2006 and a new loan production office in Havertown, Pennsylvania in the fall of 2007. Occupancy, equipment and data processing expense amounted to $1.1 million in 2007 versus $1.0 million in 2006 and $858 thousand in 2005. The resulting $104 thousand increase year over year was primarily related to incremental occupancy and equipment costs associated with the new Philadelphia branch facility and Havertown loan production office and increased costs for data processing related to pricing increases and higher activity levels for deposit and loan operations.

Marketing and business development amounted to $270 thousand, $260 thousand and $287 thousand for 2007, 2006 and 2005, respectively.

9

Professional services amounted to $682 thousand, $681 thousand and $738 thousand in 2007, 2006 and 2005, respectively. The increase in professional expenses associated with Sarbanes Oxley compliance for fiscal year 2007 amounted to $35,000 and was entirely offset by lower legal expenses during the past year. The decline during 2006 was mainly due to the absence of the holding company reorganization expenses of Parke Bancorp, Inc., which occurred in 2005.

Other operating expense of $1.1 million in 2007 increased $35 thousand above the level of $1.1 million recorded in 2006. The increase was associated with higher Federal Deposit Insurance Corporation (FDIC) expense of $70 thousand attributed to an increase in assessment rates for member banks in July of 2007 as well as increases in directors’ fees and travel and entertainment costs. These expenses were partially offset by the lower level of litigation settlement costs in 2007 relative to the previous year. Other operating expenses in 2006 increased by $524 thousand from the 2005 level due to the litigation settlement costs associated with loan participations with other banks in previous years that were subsequently impaired and a more normalized level of loan servicing costs in 2006 relative to 2005. Additionally, increases in shareholder expense, office supplies and travel and entertainment related to the Company’s expansion and growth contributed to the increased expense level in 2006 above the 2005 level.

Income Taxes. Income tax expense amounted to $3.7 million, $2.9 million and $2.3 million for 2007, 2006 and 2005, respectively, resulting in effective tax rates of 39.0%, 38.7% and 40.0% for the respective years.

Financial Condition at December 31, 2007 and December 31, 2006

Total assets at December 31, 2007 amounted to $460.1 million compared to $360.0 million at December 31, 2006, resulting in an increase of $100.8 million, or 28.0%. This increase was driven primarily by loan growth as the Company continued to expand through business development of new and existing business relationships and the added benefit of the Philadelphia retail branch.

Total loans at December 31, 2007 were $408.4 million and represented an increase of $97.8 million, or 31.5% form the level of $310.6 million at December 31, 2006. Growth occurred in all loan categories due to strong business development and the addition of the Philadelphia branch with commercial loan growth of $82.5 million, or 29.3%, representing the majority of the loan growth for 2007. Commercial loans, which are comprised mainly of commercial real estate and construction loans totaled $364.3 million at December 31, 2007. Investment securities amounted to $32.2 million at December 31, 2007 compared to $27.0 million at December 31, 2006. The allowance for loan losses amounted to $5.7 million, or 1.40% of total gross loans at December 31, 2007 and increased by $1.2 million from the level of $4.5 million, or 1.45%, of total gross loans at December 31, 2006 primarily attributable to the loan growth during 2007.

At December 31, 2007, total deposits amounted to $379.5 million resulting in deposit growth of $89.6 million, or 30.9% from the December 31, 2006 level of $289.9 million. Increases in time deposits of $69.3 million and money market accounts of $11.4 million accounted for the majority of the change from year-end 2006 to year-end 2007.

Borrowings, which included Federal Home Loan Bank Advances, repurchase agreements and subordinated debentures amounted to $40.2 million at December 31, 2007, increased by $5.5 million from the level at December 31, 2006 due to an increase in repurchase agreements of $5.0 million and the new issuance of Trust Preferred securities, which were partially offset by a decline of $5.8 million in short term Federal Home Loan Bank Advances.

10

Shareholders’ equity was $36.4 million at December 31, 2007 an increase of $5.7 million, or 18.6%, from $30.7 million at December 31, 2006. Earnings of $5.9 million and the exercise of warrants and stock options accounted for the increase and were partially offset by the purchase of treasury stock and investment portfolio losses and pension liability adjustments included in other comprehensive income.

Loan Quality

The Company attempts to manage the risk characteristics of its loan portfolio through various control processes, such as credit evaluation of borrowers, establishment of lending limits and application of lending procedures, including the holding of adequate collateral and the maintenance of compensating balances. However, the Company seeks to rely primarily on the cash flow of its borrowers as the principal source of repayment. Although credit policies are designed to minimize risk, management recognizes that loan losses will occur and the amount of these losses will fluctuate depending on the risk characteristics of the loan portfolio as well as general and regional economic conditions.

The allowance for loan losses represents a reserve for losses in the loan portfolio. The adequacy of the allowance for loan loss is evaluated periodically based on a review of all significant loans, with a particular emphasis on non-accruing loans; past due and other loans that management believes require special attention.

For significant problem loans, management’s review consists of an evaluation of the financial strengths of the borrower and the guarantor, the related collateral, and the effects of economic conditions. General reserves against the remaining loan portfolio are based on analysis of historical loan loss ratios, loan charge-offs, delinquency trends, previous collection experience, and the risk rating on each individual loan along with an assessment of the effects of external economic conditions.

The Company had approximately $805 thousand in non-accruing loans at December 31, 2007, which amounted to a modest increase from the level of $789 thousand at December 31, 2006. The Company’s Real-Estate Owned (REO), which is included in Other Assets on the Company’s Consolidated Balance Sheets, declined from $1.2 million at December 31, 2006 to zero at December 31, 2007. This reduction was entirely attributed to the sale of the REO property in the second quarter of 2007 that resulted in a pre-tax gain of $205 thousand. Nonperforming loans, as expressed as a percentage of total loans, declined to 0.2% at December 31, 2007 compared to 0.3% at December 31, 2006.

The provision for loan losses is a charge to earnings in the current year to maintain an allowance at a level management has determined to be adequate based upon the factors noted above. The provision for loan losses amounted to $1.2 million, $940 thousand, and $1.2 million for 2007, 2006 and 2005, respectively. Net loan charge-offs amounted to a recovery of $34 thousand in 2007, charge-offs of $3 thousand in 2006 and reflected a decline from charge-offs of $227 thousand in 2005.

At December 31, 2007, the allowance for loan losses was $5.7 million as compared to $4.5 million at December 31, 2006 and $3.6 million at December 31, 2005, which represents increases of $1.2 million and $937 thousand during 2007 and 2006, respectively. The growth in the allowance was primarily driven by the growth in the loan portfolio.

11

The following table summarizes the allowance activities:

	Years ended December 31,
	2007			2006			2005
	(Amounts in thousands, except percentages)
Allowance for loan losses, beginning of year	$	4,511		$	3,574		$	2,621
Loans charged off		(200	)		(3	)		(227	)
Recoveries		234			—			—
Provision for loan losses		1,161			940			1,180
Allowance for loan losses, end of year	$	5,706		$	4,511		$	3,574
Loans (net of deferred costs/fees) period-end balance	$	408,389		$	310,555		$	259,035
Allowance as percentage of period-end loan balance		1.40	%		1.45	%		1.38	%

Management’s judgment as to the level of losses on existing loans is based upon its internal review of the loan portfolio, including an analysis of the borrowers’ current financial position, the consideration of current and anticipated economic conditions and their potential effects on specific borrowers. In determining the collectability of certain loans, management also considers the fair value of any underlying collateral. There can be no assurances that charge-offs in future periods will not exceed the allowance for loan losses or that additional increases in the allowance will not be required. In addition, a separate analysis of the loan loss reserve is conducted quarterly by an independent third party vendor.

Interest Rate Sensitivity and Liquidity

Interest rate sensitivity is an important factor in the management of the composition and maturity configurations of earning assets and funding sources. The primary objective of asset/liability management is to ensure the steady growth of our primary earnings component, net interest income. Net interest income can fluctuate with significant interest rate movements. To lessen the impact of interest rate movements, management endeavors to structure the balance sheet so that re-pricing opportunities exist for both assets and liabilities in roughly equivalent amounts at approximately the same time intervals. Imbalances in these re-pricing opportunities at any point in time constitute interest rate sensitivity.

The measurement of our interest rate sensitivity, or “gap,” is one of the principal techniques used in asset/liability management. Interest sensitive gap is the dollar difference between assets and liabilities that are subject to interest-rate pricing within a given time period, including both floating rate or adjustable rate instruments and instruments that are approaching maturity.

Our management and the Board of Directors oversee the asset/liability management function through the asset/liability committee of the Board and meeting periodically to monitor and manage the balance sheet, control interest rate exposure, and evaluate our pricing strategies. The asset mix of the balance sheet is continually evaluated in terms of several variables: yield, credit quality, appropriate funding sources and liquidity. Management of the liability mix of the balance sheet focuses on expanding the various funding sources.

12

In theory, interest rate risk can be diminished by maintaining a nominal level of interest rate sensitivity. In practice, this is made difficult by a number of factors including cyclical variation in loan demand, different impacts on interest-sensitive assets and liabilities when interest rates change, and the availability of funding sources. Accordingly, we undertake to manage the interest-rate sensitivity gap by adjusting the maturity of and establishing rates on the earning asset portfolio and certain interest-bearing liabilities commensurate with management’s expectations relative to market interest rates. Management generally attempts to maintain a balance between rate-sensitive assets and liabilities as the exposure period is lengthened to minimize our overall interest rate risk.

Rate Sensitivity Analysis. The interest rate sensitivity position as of December 31, 2007 is presented in the table below. Assets and liabilities are scheduled based on maturity or re-pricing data except for mortgage loans and mortgage-backed securities, which are based on prevailing prepayment assumptions and expected maturities and recent retention experience of core deposits. The difference between rate-sensitive assets and rate-sensitive liabilities or the interest rate sensitivity gap, is shown at the bottom of the table. As of December 31, 2007, our interest sensitive liabilities exceeded interest sensitive assets within a one year period by $21.6 million, or 4.7 %, of total assets.

	As of December 31, 2007
				Over 3			Over 1			Over 3			Over 5
				Months			Year			Years			Years
	3 Months			Through			Through 3			Through 5			Through
	of Less			12 Months			Years			Years			30 Years			Total
	(Amounts in thousands, except percentages)
Interest-earning assets:
Loans	$	208,588		$	29,744		$	42,394		$	117,451		$	10,212		$	408,389
Investment securities		500			1,081			4,160			5,404			21,093			32,238
Federal funds sold and cash equivalents		4,554			—			—			—			—			4,554
Total interest-earning assets	$	213,642		$	30,825		$	46,554		$	122,855		$	31,305		$	445,181
Interest-bearing liabilities:
Regular savings deposits	$	4,453		$	4,146		$	5,528		$	11,056		$	5,528		$	30,711
NOW and money market deposits		7,513			8,990			11,988			14,326			2,339			45,156
Retail time deposits		32,133			119,817			3,744			3,039			—			158,733
Brokered time deposits		34,429			51,191			30,979			10,412			—			127,011
Borrowed funds		33			3,349			10,638			12,357			13,945			40,322
Total interest-bearing liabilities:	$	78,561		$	187,493		$	62,877		$	51,190		$	21,812		$	401,933
Interest rate sensitive gap	$	135,081		$	(156,668	)	$	(16,323	)	$	71,665		$	9,493		$	43,248
Cumulative interest rate gap	$	135,081		$	(21,587	)	$	(37,910	)	$	33,755		$	43,248		$	—
Ratio of rate-sensitive assets to rate-sensitive liabilities		271.94	%		16.44	%		74.04	%		240.00	%		143.52	%		110.76	%

13

Liquidity describes our ability to meet the financial obligations that arise out of the ordinary course of business. Liquidity addresses the Company’s ability to meet deposit withdrawals on demand or at contractual maturity, to repay borrowings as they mature, and to fund current and planned expenditures. Liquidity is derived from increased repayment and income from earning-assets. Our loan to deposit ratio was 107.6%, 107.1% and 111.6% at December 31, 2007, December 31, 2006 and December 31, 2005, respectively. Funds received from new and existing depositors provided a large source of liquidity during 2007 and 2006. The Company seeks to rely primarily on core deposits from customers to provide stable and cost-effective sources of funding to support local growth. The Bank also seeks to augment such deposits with longer term and higher yielding certificates of deposit.

Brokered deposits are a more volatile source of funding than core deposits and do not increase the deposit franchise of the Bank. In a rising rate environment, the Bank may be unwilling or unable to pay a competitive rate. To the extent that such deposits do not remain with the Bank, they may need to be replaced with borrowings which could increase the Bank’s cost of funds and negatively impact its interest rate spread, financial condition and results of operation. To mitigate the potential negative impact associated with brokered deposits, the Bank joined Promontory Interfinancial Network during 2007 to secure an additional alternative funding source. Promontory, which was founded in part by a former Controller of the Currency and a former Federal Reserve Vice Chairman, provides the Bank an additional source of external funds through their weekly CDARS settlement process. The rates paid are generally less expensive than brokered deposits and can be obtained within one day versus the normal seven to ten days for brokered deposits. At December 31, 2007, the Bank’s CDARS deposits included within the brokered deposit total amounted to $38.1 million. To the extent that retail deposits are not adequate to fund customer loan demand, liquidity needs can be met in the short-term funds market. Longer term funding requirements can be obtained through advances from the Federal Home Loan Bank (“FHLB”). As of December 31, 2007, the Bank maintained lines of credit with the FHLB totaling $37.4 million.

As of December 31, 2007, the Bank’s investment securities portfolio included $17.5 million of mortgage-backed securities that provide significant cash flow each month. The majority of the investment portfolio is classified as available for sale, is readily marketable, and is available to meet liquidity needs. The Bank’s residential real estate portfolio includes loans, which are underwritten to secondary market criteria, and provide an additional source of liquidity. Presently the mortgage portfolio is pledged to the FHLB as collateral. Management is not aware of any known trends, demands, commitments or uncertainties that are reasonably likely to result in material changes in liquidity.

Off-Balance Sheet Arrangements

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheet. The contract or notional amounts of these instruments reflect the extent of the Bank’s involvement in these particular classes of financial instruments. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as they do for on-balance sheet instruments.

14

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s credit-worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties. As of December 31, 2007, 2006 and 2005, commitments to extend credit amounted to approximately $129.7 million, $117.3 million and $101.8 million, respectively.

Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. As of December 31, 2007, 2006 and 2005, standby letters of credit with customers were $7.3 million, $7.2 million and $4.5 million, respectively.

Loan commitments and standby letters of credit are issued in the ordinary course of business to meet customer needs. Commitments to fund fixed-rate loans were immaterial at December 31, 2007. Variable-rate commitments are generally issued for less than one year and carry market rates of interest. Such instruments are not likely to be affected by annual rate caps triggered by rising interest rates. Management believes that off-balance sheet risk is not material to the results of operations or financial condition.

The following table sets forth information regarding the Bank’s contractual obligations and commitments as of December 31, 2007.

	Payments Due by Period
	(Amounts in thousands)
	Less than						More than
	1 year		1-3 years		4-5 years		5 years		Total
Retail time deposits	$	151,950	$	5,039	$	1,744	$	—	$	158,733
Brokered time deposits		87,230		37,020		2,761		—		127,011
Borrowed funds		3,250		12,000		5,400		19,672		40,322
Operating lease obligations		214		252		221		231		918
Total contractual obligations	$	242,644	$	54,311	$	10,126	$	19,903	$	326,984
	Amount of Commitments Expiring by Period
	Less than						More than
	1 year		1-3 years		4-5 years		5 years		Total
Loan commitments	$	38,879	$	—	$	—	$	—	$	38,879
Lines of credit		61,876		10,573		862		17,490		90,801
Total commitments	$	100,755	$	10,573	$	862	$	17,490	$	129,680

15

Impact of Inflation and Changing Prices

The consolidated financial statements and notes presented elsewhere in this Proxy Statement have been prepared in accordance with generally accepted accounting principles, which require the measurement of financial position and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time and due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike most industrial companies, nearly all of our assets are monetary in nature. As a result, market interest rates have a greater impact on our performance than do the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the price of goods and services.

STOCK PERFORMANCE GRAPH

Set forth below is a performance graph for the Common Stock for the most recent five fiscal years ended December 31. The performance graph compares the cumulative total return on the Company’s Common Stock with (i) the cumulative total return on stocks listed on the NASDAQ Capital Market, and (ii) the cumulative total return of NASDAQ Stocks- Commercial Banks (banks with the same SIC code as the Company) listed on the NASDAQ Capital Market. Comparisons assume the investment of $100 as of November 21, 2002, the date the Company’s common stock became listed for quotation on NASDAQ. The respective cumulative total returns are computed with the reinvestment of dividends at the frequency with which dividends, if applicable, were paid during the period.

There can be no assurance that the Company’s future stock performance will be the same or similar to the historical stock performance shown in the graph below. The Company neither makes nor endorses any predictions as to stock price performance. The Stock Price Performance Graph shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed “filed” under such Acts.

16

       

	Dec-03	Dec-04	Dec-05	Dec-06	Dec-07
Parke Bancorp	-7.1%	24.8%	32.8%	39.2%	56.3%
NASDAQ Composite	2.3%	11.6%	14.0%	25.8%	39.2%
NASDAQ Bank	1.6%	15.4%	13.2%	28.8%	3.2%

MARKET PRICES AND DIVIDENDS

General

The Company’s or the Bank’s common stock has been traded in the over the counter market and listed on the Nasdaq Stock Market under the trading symbol of “PKBK” since it commenced trading upon completion of the Bank’s public offering on November 26, 2002. The following table reflects high and low bid prices as reported on www.nasdaq.com during each quarter of the last two fiscal years. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions. Prices reflect a 10% stock dividend paid in April 2007.

The Stock Price Performance Graph shall not be deemed incorported by reference by any general statement incorporating by reference this Annual Report into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates this information by reference and shall not otherwise be deemed "filed" under such Acts.

17

2007	High		Low
1st Quarter	$	16.72	$	14.69
2nd Quarter	$	17.75	$	15.65
3rd Quarter	$	17.85	$	15.77
4th Quarter	$	17.80	$	14.20
2006	High		Low
1st Quarter	$	21.91	$	14.55
2nd Quarter	$	22.71	$	17.77
3rd Quarter	$	18.93	$	15.73
4th Quarter	$	17.81	$	15.08

The number of stockholders of record of common stock as of March 14, 2008, was approximately 385. This does not reflect the number of persons or entities who held stock in nominee or “street” name through various brokerage firms. At March 14, 2008, there were 3,231,734 shares of our common stock outstanding. The Company paid a one-time special cash dividend of $0.18/share on December 22, 2006 to shareholders of record on December 12, 2006.

Holders of the Company’s common stock are entitled to receive dividends when, and if declared by the Board of Directors out of funds legally available therefore. The timing and amount of future dividends will be within the discretion of the Board of Directors and will depend on the consolidated earnings, financial condition, liquidity, and capital requirements of the Company and its subsidiaries, applicable governmental regulations and policies, and other factors deemed relevant by the Board.

The Company’s ability to pay dividends is substantially dependent upon the dividends it receives from the Bank. Under current regulations, the Bank’s ability to pay dividends is restricted as follows.

Under the New Jersey Banking Act of 1948, a bank may declare and pay dividends only if after payment of the dividend the capital stock of the bank will be unimpaired and either the bank will have a surplus of not less than 50% of its capital stock or the payment of the dividend will not reduce the bank’s surplus.

The Federal Deposit Insurance Act generally prohibits all payments of dividends by any insured bank that is in default of any assessment to the FDIC. Additionally, because the FDIC may prohibit a bank from engaging in unsafe or unsound practices, it is possible that under certain circumstances the FDIC could claim that a dividend payment constitutes an unsafe or unsound practice. The New Jersey Department of Banking and Insurance has similar power to issue cease and desist orders to prohibit what might constitute unsafe or unsound practices. The payment of dividends may also be affected by other factors (e.g., the need to maintain adequate capital or to meet loan loss reserve requirements).

18

MANAGEMENT’S REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a- 15(f). The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorization of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Under supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control- Integrated Framework, management concluded that our internal control over financial reporting was effective as of December 31, 2007.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management’s report in this annual report.

/s/Vito S. Pantilione	/s/Robert A. Kuehl
Vito S. Pantilione President and Chief Executive Officer	Robert A. Kuehl Senior Vice President and Chief Financial Officer

19

McGladrey & Pullen

Certified Public Accountants

Parke Bancorp, Inc. and Subsidiaries

Consolidated Financial Report

December 31, 2007

    McGladrey & Pullen, LLP is a member firm of RSM International –

    an affiliation of separate and independent legal entities.

Parke Bancorp, Inc. and Subsidiaries

Contents

Report of Independent Registered Public Accounting Firm	1
Financial Statements
Consolidated Balance Sheets	2
Consolidated Statements of Income	4
Consolidated Statements of Shareholders’ Equity	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	7

McGladrey & Pullen

Certified Public Accountants

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

Parke Bancorp, Inc.

We have audited the consolidated balance sheets of Parke Bancorp, Inc. and Subsidiaries (the “Company”) as of December 31, 2007 and 2006 and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Parke Bancorp, Inc. and Subsidiaries as of December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles.

We were not engaged to examine management’s assertion about the effectiveness of Parke Bancorp, Inc. and Subsidiaries’ internal control over financial reporting as of December 31, 2007 included in the accompanying Management’s Report on Internal Control Over Financial Reporting and, accordingly we do not express an opinion thereon.

As discussed in Note 1 to the consolidated financial statements, the Company adopted Statement of Financial Standards No. 123R, “Share-Based Payment,” effective January 1, 2006 and Statement of Financial Accounting Standards No. 158, “Employer’s Accounting for Defined Benefit Pension and other Postretirement Plans” in 2006.

/s/McGladrey & Pullen

Blue Bell, Pennsylvania

March 24, 2008

    McGladrey & Pullen, LLP is a member firm of RSM International –

    an affiliation of separate and independent legal entities.

1

Parke Bancorp, Inc. and Subsidiaries

Consolidated Balance Sheets

December 31, 2007 and 2006

(Amounts in thousands, except share data)

		2007			2006
Assets
Cash and due from banks	$	4,624		$	6,184
Federal funds sold and cash equivalents		4,554			5,077
Cash and cash equivalents		9,178			11,261
Investment securities available for sale, at market value		29,782			24,530
Investment securities held to maturity, at amortized cost
(market value 2007 - $2,410; 2006 - $2,426)		2,456			2,431
Total investment securities		32,238			26,961
Restricted stock, at cost		1,473			1,493
Loans		408,389			310,555
Less: allowance for loan losses		(5,706	)		(4,511	)
Total net loans		402,683			306,044
Bank owned life insurance		4,815			4,632
Bank premises and equipment, net		3,217			3,432
Accrued interest receivable		2,633			2,095
Other assets		4,558			4,079
	$	460,795		$	359,997

(continued)

2

Parke Bancorp, Inc. and Subsidiaries

Consolidated Balance Sheets (Continued)

December 31, 2007 and 2006

(Amounts in thousands, except share data)

	2007			2006
Liabilities and Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing demand	$	17,869		$	18,288
Interest-bearing		361,611			271,641
Total deposits		379,480			289,929
Federal Home Loan Bank borrowings		21,919			24,541
Other borrowed funds		5,000			—
Subordinated debentures		13,403			10,310
Accrued interest payable		1,991			1,849
Other accrued liabilities		2,585			2,659
Total liabilities		424,378			329,288
Commitments and Contingencies (Notes 7 and 15)
Shareholders' Equity
Preferred stock,
1,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock,
$.10 par value, 10,000,000 shares authorized; 3,307,569 and 2,884,937 shares issued at December 31, 2007 and 2006, respectively		331			288
Additional paid-in capital		26,798			21,153
Retained earnings		11,897			10,848
Accumulated other comprehensive loss		(790	)		(420	)
Treasury stock (110,061 shares in 2007 and 61,842 shares in 2006), at cost		(1,819	)		(1,160	)
Total shareholders' equity		36,417			30,709
	$	460,795		$	359,997

See Notes to Consolidated Financial Statements.

3

Parke Bancorp, Inc. and Subsidiaries

Consolidated Statement of Income

Years Ended December 31, 2007, 2006 and 2005

(Amounts in thousands, except share data)

	2007			2006		2005
Interest and Dividend Income
Interest and fees on loans	$	31,232		$	23,993	$	16,108
Interest and dividends on securities		1,708			1,341		1,159
Interest on federal funds sold and cash equivalents		246			142		69
Total interest and dividend income		33,186			25,476		17,336
Interest Expense
Interest on deposits		15,420			10,232		5,812
Interest on borrowings		2,175			1,791		872
Total interest expense		17,595			12,023		6,684
Net interest income		15,591			13,453		10,652
Provision for Loan Losses		1,161			940		1,180
Net interest income after provision for loan losses		14,430			12,513		9,472
Noninterest Income
Loan fees		265			416		411
Gain on sale of other real estate owned		205			—		—
Bank owned life insurance income		183			172		186
Service charges on deposit accounts		160			146		185
Net (loss) on the sale of securities		(15	)		—		(9	)
Other miscellaneous fee income		693			123		123
Total noninterest income		1,491			857		896
Noninterest Expense
Compensation and benefits		3,117			2,772		2,085
Occupancy and equipment		745			665		575
Data processing		376			349		283
Marketing and business development		270			260		287
Professional services		682			681		738
Other operating expenses		1,135			1,100		576
Total noninterest expense		6,325			5,827		4,544
Income Before Income Tax Expense		9,596			7,543		5,824
Income Tax Expense		3,744			2,919		2,330
Net income	$	5,852		$	4,624	$	3,494
Net Income Per Common Share:
Basic	$	1.85		$	1.49	$	1.18
Diluted	$	1.63		$	1.27	$	1.00
Weighted Average Shares Outstanding:
Basic		3,156,114			3,094,810		2,967,265
Diluted		3,593,682			3,635,073		3,490,418

See Notes to Consolidated Financial Statements.

4

Parke Bancorp, Inc. and Subsidiaries

Consolidated Statement of Shareholders’ Equity

Years Ended December 31, 2007, 2006 and 2005

(Amounts in thousands, except share data)

									Accumulated
									Other						Total
	Common		Additional			Retained			Comprehensive			Treasury			Shareholders’
	Stock		Paid-In Capital			Earnings			Income (Loss)			Stock			Equity
Balance, December 31, 2004	$	218	$	19,390		$	3,293		$	(71	)	$	—		$	22,830
Stock options and warrants exercised		14		1,121			—			—			—			1,135
Treasury stock purchased (2,380 shares)		—		—			—			—			(51	)		(51	)
Comprehensive income:
Net income		—		—			3,494			—			—			3,494
Change in net unrealized loss on securities available for sale, net of reclassification adjustment and tax effects		—		—			—			(215	)		—			(215	)
Total comprehensive income																3,279
Balance, December 31, 2005	$	232	$	20,511		$	6,787		$	(286	)	$	(51	)	$	27,193
Stock options and warrants exercised		9		657			—			—			—			666
Stock compensation		—		37			—			—			—			37
20% common stock dividend		47		(52	)		—			—			—			(5	)
Treasury stock purchased (59,462 shares)		—		—			—			—			(1,109	)		(1,109	)
Cash dividends paid ($0.18 per share)		—		—			(563	)		—			—			(563	)
Adjustment to initially apply FASB Statement No. 158, net of tax		—		—			—			(207	)		—			(207	)
Net income		—		—			4,624			—			—			4,624
Change in net unrealized loss on securities available for sale, net of tax		—		—			—			73			—			73
Total comprehensive income																4,697
Balance, December 31, 2006	$	288	$	21,153		$	10,848		$	(420	)	$	(1,160	)	$	30,709
Stock options and warrants exercised		14		842			—			—			—			856
Stock compensation		—		33			—			—			—			33
10% common stock dividend		29		4,770			(4,803	)		—			—			(4	)
Treasury stock purchased (42,035 shares)		—		—			—			—			(659	)		(659	)
Net income		—		—			5,852			—			—			5,852
Change in net unrealized loss on securities available for sale, net of reclassification adjustment and tax effects		—		—			—			(307	)		—			(307	)
Pension liability adjustments, net of tax		—		—			—			(63	)		—			(63	)
Total comprehensive income																5,482
Balance, December 31, 2007	$	331	$	26,798		$	11,897		$	(790	)	$	(1,819	)	$	36,417

See Notes to Consolidated Financial Statements.

5

Parke Bancorp, Inc. and Subsidiaries

Consolidated Statement of Cash Flows

Years Ended December 31, 2007, 2006 and 2005

(Amounts in thousands)

	2007			2006			2005
Cash Flows from Operating Activities
Net income	$	5,852		$	4,624		$	3,494
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		301			279			264
Provision for loan losses		1,161			940			1,180
Stock compensation		33			37			—
Bank owned life insurance		(183	)		(172	)		(186	)
Supplemental executive retirement plan		285			230			246
Gain on sale of other real estate owned		(205	)		—			—
Realized losses on sales of securities		15			—			9
Net (accretion) amortization of purchase premiums and discounts on securities		(69	)		(20	)		(73	)
Deferred income tax benefit		(569	)		(531	)		(387	)
Changes in operating assets and liabilities:
Increase in accrued interest receivable and other assets		(1,282	)		(402	)		(745	)
(Decrease) increase in accrued interest payable and other accrued liabilities		(324	)		1,339			1,112
Net cash provided by operating activities		5,015			6,324			4,914
Cash Flows from Investing Activities
Purchases of investment securities held to maturity		—			—			(1,854	)
Purchases of investment securities available for sale		(12,646	)		(5,064	)		(5,559	)
Redemption (purchases) of restricted stock		20			(144	)		(285	)
Proceeds from sales of investment securities available for sale		985			1,000			5,092
Proceeds from maturities of investment securities available for sale		4,050			—			—
Principal payments on mortgage-backed securities		1,877			1,173			2,188
Investment in trust preferred stock		(93	)		—			(310	)
Proceeds from sale of other real estate owned		1,780			—			—
Net increase in loans		(98,200	)		(51,523	)		(70,655	)
Purchases of bank premises and equipment		(86	)		(631	)		(97	)
Net cash used in investing activities		(102,313	)		(55,189	)		(71,480	)
Cash Flows from Financing Activities
Proceeds from exercise of stock options and warrants		856			666			1,135
Purchase of treasury stock		(659	)		(1,109	)		(51	)
Cash dividends paid		(4	)		(568	)		—
Net decrease in Federal Home Loan Bank short term borrowings		(5,862	)		(3,248	)		(1,890	)
Proceeds from Federal Home Loan Bank advances		4,500			8,400			6,250
Payments of Federal Home Loan Bank advances		(1,260	)		(3,285	)		(1,064	)
Net (decrease) increase in other short term borrowings		—			(2,983	)		1,983
Proceeds from other long term borrowings		5,000			—			—
Proceeds from issuance of subordinated debentures		3,093			—			10,310
Net increase in interest-bearing deposits		89,970			57,503			50,513
Net (decrease) increase in noninterest-bearing deposits		(419	)		370			1,958
Net cash provided by financing activities		95,215			55,746			69,144
Increase (decrease) in cash and cash equivalents		(2,083	)		6,881			2,578
Cash and Cash Equivalents, January 1,		11,261			4,380			1,802
Cash and Cash Equivalents, December 31,	$	9,178		$	11,261		$	4,380
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for:
Interest on deposits and borrowed funds	$	17,453		$	11,248		$	5,993
Income taxes	$	4,714		$	3,510		$	2,466

See Notes to Consolidated Financial Statements.

6

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 1. Description of Business and Summary of Significant Accounting Policies

Description of Business: Parke Bancorp, Inc. (the “Company”) is a bank holding company headquartered in Sewell, New Jersey. Through subsidiaries, Parke Bancorp provides individuals, corporations and other businesses, and institutions with commercial and retail banking services, principally loans and deposits. Parke Bancorp was incorporated in January 2005 under the laws of the State of New Jersey for the sole purpose of becoming the holding company of Parke Bank (the “Bank”).

Parke Bank is a commercial bank, which was incorporated on August 25, 1998, and commenced operations on January 28, 1999. The Bank is chartered by the New Jersey Department of Banking and Insurance and insured by the Federal Deposit Insurance Corporation. The Bank maintains its principal office at 601 Delsea Drive, Washington Township, New Jersey, and three additional branch office locations, one at 501 Tilton Road, Northfield, New Jersey, one at 567 Egg Harbor Road, Washington Township, New Jersey, and one at 1610 Spruce Street in Philadelphia, Pennsylvania. In redefining its target market the Bank opened a loan production office in Havertown, Pennsylvania during the third quarter of 2007 and closed the loan production office in Millville, New Jersey during the first quarter of 2008.

The accounting and financial reporting policies of Parke Bancorp and Subsidiaries (the “Company”) conform to accounting principles generally accepted in the United States of America (“GAAP”) and to general practices within the banking industry. The policies that materially affect the determination of financial position, results of operations and cash flows are summarized below.

Principles of Consolidation: The accompanying consolidated financial statements include the accounts of Parke Bancorp, Inc. and its wholly-owned subsidiaries Parke Bank, Parke Capital Markets and Farm Folly, Inc. Parke Capital Trust I, Parke Capital Trust II and Parke Capital Trust III are wholly-owned subsidiaries but are not consolidated because they do not meet the requirements. All significant inter-company balances and transactions have been eliminated.

Investment Securities: Investment securities are classified under one of the following categories: “held to maturity” and accounted for at historical cost, adjusted for accretion of discounts and amortization of premiums; “available for sale” and accounted for at fair market value, with unrealized gains and losses reported as a separate component of shareholders’ equity; or “trading” and accounted for at fair market value, with unrealized gains and losses reported as a component of net income. The Company does not hold trading securities.

At December 31, 2007 and 2006, the Company held investment securities that would be held for indefinite periods of time, including securities that would be used as part of the Company’s asset/liability management strategy and possibly sold in response to changes in interest rates, prepayments and similar factors. These securities are classified as “available for sale” and are carried at fair value, with any temporary unrealized gains or losses reported as a separate component of other comprehensive income, net of the related income tax effect.

Also, at December 31, 2007 and 2006, the Company reported investments in securities that were carried at cost, adjusted for amortization of premium and accretion of discount. The Company has the intent and ability to hold these investment securities to maturity considering all reasonably foreseeable events or conditions. These securities are classified as “held to maturity.”

7

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 1. Description of Business and Summary of Significant Accounting Policies (continued)

Investment Securities (continued): Declines in the fair value of individual available for sale and held to maturity securities below their cost that are other than temporary result in write-downs of the individual securities to their fair value, and the losses are included in noninterest income in the statements of operations. Factors affecting the determination of whether an other-than-temporary impairment has occurred include a downgrading of the security by a rating agency, a significant deterioration in the financial condition of the issuer, the length of time a security has been in a loss position, or that management would not have the intent and ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value.

The amortization of premiums and accretion of discounts over the contractual lives of the related securities are recognized in interest income using the interest method. Gains and losses on the sale of such securities are accounted for using the specific identification method.

Restricted Stock: Restricted stock includes investments in the common stock of the Federal Home Loan Bank of New York (“FHLBNY”) and the Atlantic Central Bankers Bank for which no market exists and, accordingly, is carried at cost.

Loans: The Company makes commercial, real estate and consumer loans to customers. A substantial portion of the loan portfolio is represented by loans in the Southern New Jersey and Philadelphia, Pennsylvania markets. The ability of the Company’s debtors to honor their contracts is dependent upon the real estate and general economic conditions in this area. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal amount, adjusted for charge-offs, the allowance for loan losses and any unamortized deferred fees or costs on originated loans. Interest income on loans is recognized as earned based on contractual interest rates applied to daily principal amounts outstanding.

Loans-Nonaccrual: Loans are placed on nonaccrual status and the accrual of interest income ceases when a default of principal or interest exists for a period of ninety days except when, in management’s judgment, the collection of principal and interest is reasonably anticipated (i.e. the loan is well secured and in the process of collection). Interest receivable on nonaccrual loans previously credited to income is reversed, and subsequently recognized as income only as received if the collection of principal is reasonably assured. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Concentration of Credit Risk: The Company’s loans are generally to diversified customers in Southern New Jersey and the Philadelphia area of Pennsylvania. Loans to general building contractors, general merchandise stores, restaurants, motels, warehouse space, and real estate ventures (including construction loans) constitute a majority of commercial loans. The concentrations of credit by type of loan are set forth in Note 4. Generally, loans are collateralized by assets of the borrower and are expected to be repaid from the borrower’s cash flow or proceeds from the sale of selected assets of the borrower.

Loan Fees: Loan fees and direct costs associated with loan originations are netted and deferred. The deferred amount is recognized as an adjustment to loan interest over the term of the related loans using the interest method. Loan brokerage fees, which represent commissions earned for facilitating loans between borrowers and other companies, are recorded in income as earned.

8

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 1. Description of Business and Summary of Significant Accounting Policies (continued)

Allowance for Loan Losses: The allowance for loan losses is maintained through charges to the provision for loan losses in the Statement of Income as losses are estimated to have occurred. Loans that are determined to be uncollectible are charged against the allowance, and subsequent recoveries, if any, are credited to the allowance. The allowance is an amount that management believes will be adequate to absorb estimated losses relating to specifically identified loans, as well as probable credit losses in the balance of the loan portfolio, based on an evaluation of collectibility of existing loans and prior loss experience. When evaluating the adequacy of the allowance, an assessment of the loan portfolio will typically include changes in the composition and volume of the loan portfolio, overall portfolio quality and past loss experience, review of specific problem loans, current economic conditions which may affect borrowers’ ability to repay, and other factors which may warrant current recognition. Such periodic assessments may, in management’s judgment, require the Company to recognize additions or reductions to the allowance.

Various regulatory agencies periodically review the adequacy of the Company’s allowance for loan losses as an integral part of their examination process. Such agencies may require the Company to recognize additions or reductions to the allowance based on their evaluation of information available to them at the time of their examination. It is reasonably possible that the above factors may change significantly and, therefore, affect management’s determination of the allowance for loan losses in the near term.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Factors considered by management when evaluating impaired loans include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Impairment is measured on a loan by loan basis for commercial loans by either the present value of expected future cash flows discounted at the loans effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately evaluate individual consumer and residential loans for impairment.

Interest Rate Risk: The Company is principally engaged in the business of attracting deposits from the general public and using these deposits, together with other borrowed and brokered funds, to make commercial, commercial mortgage, residential mortgage, and consumer loans, and to invest in overnight and term investment securities. Inherent in such activities is interest rate risk that results from differences in the maturities and re-pricing characteristics of these assets and liabilities. For this reason, management regularly monitors the level of interest rate risk and the potential impact on net income.

9

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 1. Description of Business and Summary of Significant Accounting Policies (continued)

Bank Premises and Equipment: Bank premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed and charged to expense using the straight-line method over the estimated useful lives of the assets, generally three to seven years. Leasehold improvements are amortized to expense over the shorter of the term of the respective lease or the estimated useful life of the improvements, generally terms ranging from ten to forty years.

Income Taxes: Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the difference between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Realization of deferred tax assets is dependent on generating sufficient taxable income in the future.

The Company adopted the Financial Accounting Standards Board Interpretation 48 as of January 1, 2007, as required, and determined that the adoption did not have a material impact on the Company’s financial position or results of operation. The Company did not recognize any interest or penalties related to income tax during the year ended December 31, 2007 and did not accrue interest or penalties as of December 31, 2007. The Company does not have an accrual for uncertain tax positions as of December 31, 2007, as deductions taken and benefits accrued are based on widely understood administrative practices and procedures and are based on clear and unambiguous tax law. Tax returns for all years 2004 and thereafter are subject to further examination by tax authorities.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the allowance for loan losses and the valuation of deferred income taxes.

Segment Reporting: The Company operates one reportable segment of business, “community banking”. Through its community banking segment, the Company provides a broad range of retail and community banking services.

Reclassifications: Certain items in the 2006 and 2005 financial statements have been reclassified to conform to the 2007 presentation.

Comprehensive Income: Comprehensive income consists of net income and other gains and losses affecting shareholders’ equity that, under GAAP, are excluded from net income, including unrealized gains and losses on available for sale securities and gains or losses, prior service costs or credits, and transition assets or obligations associated with pension or other postretirement benefits that have not been recognized as components of net periodic benefit cost.

10

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 1. Description of Business and Summary of Significant Accounting Policies (continued)

Comprehensive Income (continued): At December 31, 2007, 2006 and 2005, accumulated other comprehensive loss consisted of the following:

	2007			2006			2005
	(Amounts in thousands)
Unrealized gains (losses) on available for sale securities (net of tax of $346, $142 and $191)	$	(521	)	$	(213	)	$	(287	)
Minimum pension liability (net of tax of $180 and $138)		(269	)		(207	)		—
	$	(790	)	$	(420	)	$	(287	)

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,” which amends Statement No. 87, “Employers’ Accounting for Pensions,” Statement No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits,” Statement No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions,” Statement No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits,” and other related accounting literature.

Statement No. 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or a liability in the statement of financial position and to recognize changes in that funded status through comprehensive income in the year the changes occur. This Statement also requires an employer to measure the funded status of a plan as of the date of the employer’s year-end statement of financial position. The Company adopted the funded status recognition and related disclosure requirements of Statement No. 158 as of December 31, 2006, and measured the funded status of their defined benefit plans as of that date, which resulted in the Company recording a liability of $344,000 as of December 31, 2006, relating to a Supplemental Executive Retirement Plan (“SERP”) (Note 11). The total unfunded liability as of December 31, 2007 was $450,000. The adoption of Statement No. 158 did not materially affect the Company’s financial position or results of operations.

The components of other comprehensive income and related tax effects relating to the unrealized gains and losses on available for sale securities is as follows:

	2007			2006			2005
	(Amounts in thousands)
Unrealized holding gains (losses) on available for sale securities	$	(524	)	$	121		$	(367	)
Reclassification adjustment for net losses realized in income		15			—			9
Net unrealized gains (losses)		(509	)		121			(358	)
Tax effect		202			(48	)		143
Net-of-tax amount	$	(307	)	$	73		$	(215	)

11

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 1. Description of Business and Summary of Significant Accounting Policies (continued)

Earnings Per Common Share: Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common share considers common stock equivalents (when dilutive) outstanding during the period such as options and warrants outstanding. Both basic and diluted earnings per share computations give retroactive effect to stock dividends declared in 2007 and 2006 (Note 13). Earnings per common share have been computed based on the following for 2007, 2006 and 2005:

	2007	2006	2005
Average number of common shares outstanding	3,156,114	3,094,810	2,967,265
Effect of dilutive options	437,568	540,263	523,153
Average number of common shares outstanding used to calculate diluted earnings per common share	3,593,682	3,635,073	3,490,418

Statement of Cash Flows: Cash and cash equivalents include cash on hand, balances due from banks and federal funds sold. For the purposes of the statement of cash flows, changes in loans and deposits are shown on a net basis.

Stock-Based Employee Compensation: At December 31, 2007 and 2006 the Company had stock-based employee compensation plans, which are described more fully in Note 13. Prior to January 1, 2006 the Company accounted for those plans under the recognition and measurement provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”, and related Interpretations, as permitted by the Financial Accounting Standards Board (“FASB”) Statement No. 123, “Accounting for Stock-Based Compensation”. No stock-based employee compensation cost was recognized in the Statement of Income during the year ended December 31, 2005 as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. Effective January 1, 2006, the Company adopted the fair value recognition provisions of FASB Statement No. 123(R), “Share-Based Payment”, using the modified-prospective-transition method. The following table illustrates the effect on net income and earnings per share for 2005 if the Company had applied the fair value recognition provisions of Statement 123 to stock-based employee compensation. For purposes of this pro forma disclosure, the value of the options is estimated using the Black-Scholes option-pricing model. Both basic and diluted calculations give retroactive effect to stock dividends declared in 2007 and 2006.

12

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 1. Description of Business and Summary of Significant Accounting Policies (continued)

		2005
	(Amounts in thousands, except per share amounts)
Net income, as reported			$	3,494
Deduct total stock-based compensation expense determined under the fair value method for all awards, net of related tax effects				(670	)
Pro forma net income			$	2,824
Earnings per share:
Basic:
As reported			$	1.18
Pro forma			$	0.95
Diluted:
As reported			$	1.00
Pro forma			$	0.81

All outstanding stock options as of January 1, 2006 were fully vested (in prior years, all options vested upon issuance), thus no compensation expense was subsequently recognized for these options. The Company uses the Black-Scholes option pricing model to estimate the fair value of any stock-based awards granted after 2005.

Under the modified prospective transition method, the Company was required to recognize compensation cost for 1) all share-based payments granted prior to, but not vested as of, January 1, 2006 based on the grant date fair value estimated in accordance with the original provisions of SFAS 123; and 2) for all share-based payments granted on or after January 1, 2006 based on the grant date fair value estimated in accordance with SFAS 123R. In accordance with the modified prospective method, the Company did not restate prior period results.

Recently Issued Accounting Pronouncements: In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB No. 109”. FIN No. 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In addition, it provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company adopted FIN No. 48 effective January 1, 2007 and it did not have a material impact on the Company’s financial position, results of operations or cash flows.

13

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 1. Description of Business and Summary of Significant Accounting Policies (continued)

Recently Issued Accounting Pronouncements (continued): In September 2006, FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements”. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principle, and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements, but provides enhanced guidance to other pronouncements that require or permit assets or liabilities to be measured at fair value. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those years. In February 2008, the FASB staff issued FSP 157-2 delaying the effective date of this standard for non-financial assets and non-financial liabilities to be effective for fiscal years beginning after November 15, 2008 (January 1, 2009). The Company is currently assessing the potential effect of SFAS No. 157 on its financial position, results of operations and cash flows.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB statement No. 115”. SFAS No. 159 provides all entities with an option to report selected financial assets and liabilities at fair value. The objective of SFAS No. 159 is to improve financial reporting by providing entities with the opportunity to mitigate volatility in earnings caused by measuring related assets and liabilities differently without having to apply the complex provisions of hedge accounting. This Standard also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFA No. 159 does not eliminate disclosure requirements included in other accounting standards. The Standard is effective for the Company on January 1, 2008. The Company is currently evaluating whether to elect, if at all, this option and the impact of SFAS No. 159 on its financial statements.

Note 2. Cash and Due from Banks

The Company maintains various deposit accounts with other banks to meet normal funds transaction requirements, to satisfy deposit reserve requirements, and to compensate other banks for certain correspondent services. Management is responsible for assessing the credit risk of its correspondent banks. The withdrawal or usage restrictions of these balances did not have a significant impact on the operations of the Company as of December 31, 2007 or 2006, because reserve requirements were covered by vault cash.

14

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 3. Investment Securities

The Company’s investment securities as of December 31, 2007 were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
	(Amounts in thousands)
Available For Sale
U.S. Government sponsored entities	$	5,486	$	13	$	—		$	5,499
Corporates		7,278		17		(454	)		6,841
Mortgage-backed securities		17,885		131		(574	)		17,442
Total securities available for sale	$	30,649	$	161	$	(1,028	)	$	29,782
Held to Maturity
Municipals	$	2,456	$	—	$	(46	)	$	2,410

The Company’s investment securities as of December 31, 2006 were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
	(Amounts in thousands)
Available For Sale
U.S. Government sponsored entities	$	6,485	$	—	$	(69	)	$	6,416
Corporates		8,348		35		(178	)		8,205
Mortgage-backed securities		10,053		34		(178	)		9,909
Total securities available for sale	$	24,886	$	69	$	(425	)	$	24,530
Held to Maturity
Municipals	$	2,431	$	37	$	(42	)	$	2,426

The amortized cost and estimated market value of investment securities at December 31, 2007 by contractual maturities are shown below. Expected maturities may differ from contractual maturities for mortgage-backed securities because the mortgages underlying the securities may be called or prepaid without any penalties; therefore, these securities are not included in the maturity categories in the following maturity summary.

15

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 3. Investment Securities (continued)

	Available For Sale				Held to Maturity
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
	(Amounts in thousands)
Maturing within one year	$	500	$	500	$	—	$	—
Maturing after one year but within five years		1,512		1,509		544		534
Maturing after five years, but within ten years		2,986		2,999		—		—
Maturing after ten years		7,766		7,332		1,912		1,876
		12,764		12,340		2,456		2,410
Mortgage-backed securities		17,885		17,442		—		—
Total securities	$	30,649	$	29,782	$	2,456	$	2,410

Gross realized gains on the sale of investment securities were $54,000 in 2005. Gross realized losses on the sale of investment securities were $15,000 in 2007 and $63,000 in 2005. There were no sales of investment securities in 2006.

As of December 31, 2007, approximately $10.4 million of investment securities are pledged as collateral for borrowed funds (Note 9). In addition, securities with a carrying value of $404,000 were pledged to secure public deposits at December 31, 2007.

As of December 31, 2006, approximately $14.3 million of investment securities are pledged as collateral for borrowed funds (Note 9). In addition, securities with a carrying value of $461,000 were pledged to secure public deposits at December 31, 2006.

The fair value of securities with unrealized losses by length of time that the individual securities have been in a continuous loss position at December 31, 2007, are as follows:

	Continuous Unrealized					Continuous Unrealized
	Losses Existing for Less					Losses Existing for 12
	Than 12 Months					Months or More
	Market		Unrealized			Market		Unrealized
	Value		Losses			Value		Losses
	(Amounts in thousands)
Available For Sale
U.S. Government sponsored entities	$	—	$	—		$	—	$	—
Corporates		953		(45	)		1,853		(409	)
Mortgage-backed securities		3,804		(439	)		4,318		(135	)
		4,757		(484	)		6,171		(544	)
Held to Maturity
Municipals		643		(16	)		1,767		(30	)
Total temporarily impaired securities	$	5,400	$	(500	)	$	7,938	$	(574	)

16

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 3. Investment Securities (continued)

Management does not believe any individual unrealized loss as of December 31, 2007 represents an other-than-temporary impairment. A total of 23 securities are included in the continuous unrealized portion, of which 20 are in the available for sale category. The unrealized losses on these securities are primarily due to changes in general market interest rates. The Company believes it will collect all amounts contractually due on these securities as it has the ability to hold these securities until the fair value is at least equal to the carrying value. Should the impairment become other-than-temporary, the carrying value of the investment will be reduced and the unrealized loss will be recorded in the statement of income.

The fair value of securities with unrealized losses by length of time that the individual securities have been in a continuous loss position at December 31, 2006 are as follows:

	Continuous Unrealized					Continuous Unrealized
	Losses Existing for Less					Losses Existing for 12
	Than 12 Months					Months or More
	Market		Unrealized			Market		Unrealized
	Value		Losses			Value		Losses
	(Amounts in thousands)
Available For Sale
U.S. Government sponsored entities	$	1,498	$	(2	)	$	3,918	$	(67	)
Corporates		746		(3	)		836		(175	)
Mortgage-backed securities		191		(10	)		4,636		(168	)
		2,435		(15	)		9,390		(410	)
Held to Maturity
Municipals		—		—			1,760		(42	)
Total temporarily impaired securities	$	2,435	$	(15	)	$	11,150	$	(452	)

Note 4. Loans

The composition of net loans as of December 31, 2007 and 2006 are as follows:

	2007			2006
	(Amounts in thousands)
Commercial	$	364,267		$	281,819
Residential real estate		26,579			22,192
Consumer		17,923			7,005
Less: net deferred loan fees		(380	)		(461	)
Total loans		408,389			310,555
Less: allowance for loan losses		(5,706	)		(4,511	)
Net loans	$	402,683		$	306,044

At December 31, 2007 and 2006, approximately $27.0 million and $22.9 million, respectively, of residential real estate and consumer loans were pledged to the FHLBNY on borrowings (Note 9).

17

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 5. Loans to Related Parties

In the normal course of business, the Company has granted loans to officers, directors and their affiliates (related parties). In the opinion of management, the terms of these loans, including interest rates and collateral, are similar to those prevailing for comparable transactions with other customers and do not involve more than a normal risk of collectibility.

An analysis of the activity of such related party loans for 2007 and 2006 is as follows:

	2007			2006
	(Amounts in thousands)
Balance, beginning of year	$	20,281		$	12,347
Advances		5,545			10,176
Less: repayments		(8,163	)		(2,242	)
Balance, end of year	$	17,663		$	20,281

Note 6. Allowance for Loan Losses

An analysis of the allowance for loan losses for 2007, 2006 and 2005 is as follows:

	2007			2006			2005
	(Amounts in thousands)
Balance, beginning of year	$	4,511		$	3,574		$	2,621
Provision for loan losses		1,161			940			1,180
Charge offs		(200	)		(3	)		(227	)
Recoveries		234			—			—
Balance, end of year	$	5,706		$	4,511		$	3,574

Information about impaired loans and nonaccrual loans as of and for the years ended December 31, 2007 and 2006 is as follows:

		2007		2006
	(Amounts in thousands)
Impaired loans with a valuation allowance	$	—	$	2,208
Impaired loans without a valuation allowance		1,996		162
Total impaired loans	$	1,996	$	2,370
Related allowance for loan losses for impaired loans	$	—	$	404
Nonaccrual loans	$	805	$	789
Loans past due ninety days or more and still accruing interest	$	—	$	267
Average monthly balance of impaired loans	$	2,441	$	1,255
Interest income recognized on cash basis on impaired loans	$	96	$	72

18

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 6. Allowance for Loan Losses (continued)

Nonaccrual loans and loans past due ninety days or more and still accruing interest are included in impaired loans. Interest income of $66,000, $51,000 and $66,000 would have been recorded on non-accrual loans had those loans paid in accordance with their original terms in 2007, 2006 and 2005, respectively.

Note 7. Bank Premises and Equipment

A summary of the cost and accumulated depreciation and amortization of Bank premises and equipment as of December 31, 2007 and 2006 is as follows:

	2007			2006
	(Amounts in thousands)
Land	$	470		$	470
Building and improvements		3,025			3,007
Furniture and equipment		964			986
Total premises and equipment		4,459			4,463
Less: accumulated depreciation
and amortization		(1,242	)		(1,031	)
Premises and equipment, net	$	3,217		$	3,432

Depreciation and amortization expense was $301,000, $279,000, and $264,000 in 2007, 2006 and 2005, respectively.

The Company has non-cancelable operating lease agreements related to its Northfield and Philadelphia branch offices. The term of the Northfield lease is for 10 years through March 2011 with two 5-year renewal options. The term of the Philadelphia lease is for 10 years through June 2016. The Company is responsible for its pro-rata share of real estate taxes, and all insurance, utilities, maintenance and repair costs for the benefit of the branch offices. The Company also has a month to month lease for a loan production office in Millville, New Jersey. In addition, the Company leases certain computer software under an operating lease expiring 2008. At December 31, 2007, the required future rental payments under these leases are as follows:

Years Ending December 31,	Amounts in thousands
2008	$	214
2009		137
2010		115
2011		126
2012		95
Thereafter		231
Total minimum lease payments:	$	918

Rent expense was approximately $ 234,000 in 2007, $211,000 in 2006 and $155,000 in 2005.

19

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 8. Deposits

Deposits at December 31, 2007 and 2006 consisted of the following:

	2007		2006
		(Amounts in thousands)
Demand deposits, noninterest—bearing	$	17,869	$	18,288
Demand deposits, interest—bearing		12,993		9,834
Money market deposits		32,163		20,738
Savings deposits		30,711		24,633
Time deposits of $100,000 or more		71,717		53,596
Other time deposits		87,016		75,255
Brokered time deposits		127,011		87,585
Total deposits	$	379,480	$	289,929

Scheduled maturities of certificates of deposit at December 31, 2007 are as follows:

Year Ending December 31,	Amounts in Thousands
2008	$	239,180
2009		33,113
2010		8,946
2011		3,637
2012		868
	$	285,744

Deposits from related parties totaled approximately $11,789,000 and $8,229,000 at December 31, 2007 and 2006, respectively.

20

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 9. Borrowings

An analysis of borrowings as of December 31, 2007 and 2006 is as follows:

		2007				2006
				Weighted				Weighted
	Maturity Date			Average				Average
	or Range	Amount		Rate		Amount		Rate
		(Amounts in thousands, except rates)
Borrowed funds:
Federal Home Loan Bank — repurchase agreements	January 2007	$	—	—		$	100	5.39	%
Other repurchase agreements	Five to ten years	$	5,000	4.61	%	$	—	—
Federal Home Loan Bank Advances	Less than one year	$	3,250	4.83	%	$	6,909	5.37	%
	One to three years		12,000	4.96	%		9,250	4.68	%
	Three to five years		5,400	5.10	%		6,900	5.12	%
	Five to ten years		1,269	5.17	%		1,382	5.19	%
	Totals:	$	21,919			$	24,441
Subordinated debentures — capital trusts	November 2035	$	5,155	6.68	%	$	5,155	7.03	%
	November 2035		5,155	6.25	%		5,155	6.25	%
	September 2037		3,093	6.49	%		—
	Totals:	$	13,403			$	10,310

At December 31, 2007, the Company had a $37.4 million line of credit from the FHLBNY, of which $21.9 million was outstanding at December 31, 2007.

Certain investment securities (Note 3), loans (Note 4), and FHLBNY stock are pledged as collateral for borrowings.

Subordinated Debentures – Capital Trusts: On August 23, 2005, Parke Capital Trust I, a Delaware statutory business trust and a wholly-owned Subsidiary of the Company, issued $5,000,000 of variable rate capital trust pass-through securities to investors. The variable interest rate re-prices quarterly at the three-month LIBOR plus 1.66% and was 6.675% at December 31, 2007. Parke Capital Trust I purchased $5,155,000 of variable rate junior subordinated deferrable interest debentures from the Company. The debentures are the sole asset of the Trust. The terms of the junior subordinated debentures are the same as the terms of the capital securities. The Company has also fully and unconditionally guaranteed the obligations of the Trust under the capital securities. The capital securities are redeemable by the Company on or after November 23, 2010, at par, or earlier if the deduction of related interest for federal income taxes is prohibited, classification as Tier 1 Capital is no longer allowed, or certain other contingencies arise. The capital securities must be redeemed upon final maturity of the subordinated debentures on November 23, 2035. Proceeds of approximately $4,200,000 were contributed to paid-in capital at the Bank. The remaining $955,000 was retained at the Company for future use.

21

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 9. Borrowings (continued)

Subordinated Debentures – Capital Trusts (continued): On August 23, 2005, Parke Capital Trust II, a Delaware statutory business trust and a wholly-owned Subsidiary of the Company, issued $5,000,000 of fixed/variable rate capital trust pass-through securities to investors. Currently, the interest rate is fixed at 6.25%. The fixed/variable interest rate re-prices quarterly at the three-month LIBOR plus 1.66% beginning November 23, 2010. Parke Capital Trust II purchased $5,155,000 of variable rate junior subordinated deferrable interest debentures from the Company. The debentures are the sole asset of the Trust. The terms of the junior subordinated debentures are the same as the terms of the capital securities. The Company has also fully and unconditionally guaranteed the obligations of the Trust under the capital securities. The capital securities are redeemable by the Company on or after November 23, 2010, at par, or earlier if the deduction of related interest for federal income taxes is prohibited, classification as Tier 1 Capital is no longer allowed, or certain other contingencies arise. The capital securities must be redeemed upon final maturity of the subordinated debentures on November 23, 2035. Proceeds of approximately $4,200,000 were contributed to paid-in capital at the Bank. The remaining $955,000 was retained at the Company for future use.

On June 21, 2007, Parke Capital Trust III, a Delaware statutory business trust and a wholly-owned Subsidiary of the Company, issued $3,000,000 of variable rate capital trust pass-through securities to investors. The variable interest rate re-prices quarterly at the three-month LIBOR plus 1.50% and was 6.49063% at December 31, 2007. Parke Capital Trust III purchased $3,093,000 of variable rate junior subordinated deferrable interest debentures from the Company. The debentures are the sole asset of the Trust. The terms of the junior subordinated debentures are the same as the terms of the capital securities. The Company has also fully and unconditionally guaranteed the obligations of the Trust under the capital securities. The capital securities are redeemable by the Company on or after December 15, 2012, at par, or earlier if the deduction of related interest for federal income taxes is prohibited, classification as Tier 1 Capital is no longer allowed, or certain other contingencies arise. The capital securities must be redeemed upon final maturity of the subordinated debentures on September 15, 2037. The proceeds were contributed to paid-in capital at the Bank.

Note 10. Income Taxes

The net deferred tax asset, which is included in other assets at December 31, 2007 and 2006, includes the following:

	2007			2006
	(Amounts in thousands)
Deferred tax assets	$	3,126		$	2,279
Deferred tax liabilities		(484	)		(452	)
Net deferred tax asset	$	2,642		$	1,827

22

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 10. Income Taxes (continued)

Income tax expense for 2007, 2006 and 2005 consisted of the following:

	2007			2006			2005
	(Amounts in thousands)
Current tax expense:
Federal	$	3,358		$	2,599		$	2,093
State		955			851			624
		4,313			3,450			2,717
Deferred tax (benefit)		(569	)		(531	)		(387	)
Income tax expense	$	3,744		$	2,919		$	2,330

The components of the net deferred tax asset are as follows:

	2007			2006
	(Amounts in thousands)
Allowance for loan losses	$	2,283		$	1,745
Deferred loan costs		(114	)		(167	)
Securities available for sale		346			142
Minimum pension liability		180			138
Other		(53	)		(31	)
	$	2,642		$	1,827

A reconciliation of the Company’s effective income tax rate with the statutory federal rate for 2007, 2006 and 2005 is as follows:

	2007			2006			2005
	(Amounts in thousands)
Tax expense at statutory rate (35%)	$	3,358		$	2,640		$	2,038
Benefit of income taxed at lower rates (1%)		(96	)		(75	)		(58	)
Permanent differences and other, net		(88	)		(94	)		4
State income taxes, net of Federal tax benefit		570			448			346
	$	3,744		$	2,919		$	2,330

The Company adopted the Financial Accounting Standards Board Interpretation 48 as of January 1, 2007, as required, and determined that the adoption did not have a material impact on the Company’s financial position or results of operation. The Company’s policy is to recognize interest and penalties associated with unrecognized tax liabilities within income tax expense in the Statement of Income. The Company did not recognize any interest or penalties related to income tax during the year ended December 31, 2007 and did not accrue interest or penalties as of December 31, 2007. The Company does not have an accrual for uncertain tax positions as of December 31, 2007, as deductions taken and benefits accrued are based on widely understood administrative practices and procedures and are based on clear and unambiguous tax law. Tax returns for all years 2004 and thereafter are subject to further examination by tax authorities.

23

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 11. Retirement Plans

Supplemental Executive Retirement Plan: The Company has a Supplemental Executive Retirement Plan (“SERP”) covering certain members of management. The net periodic SERP pension cost was approximately $285,000 in 2007, $230,000 in 2006 and $246,000 in 2005. The unfunded benefit obligation, which was included in other accrued liabilities, was approximately $1,569,000 at December 31, 2007 and $1,179,000 at December 31, 2006.

The benefit obligation at December 31, 2007 and December 31, 2006 was calculated as follows:

	2007		2006
	(Amounts in thousands)
Benefit obligation, January 1	$	1,179	$	894
Service cost		180		153
Interest cost		72		53
(Gain) loss		138		79
Benefit obligation, December 31	$	1,569	$	1,179

The net periodic pension cost for 2007 and 2006 was calculated as follows:

	2007		2006
	(Amounts in thousands)
Service cost	$	180	$	153
Interest cost		72		53
(Gain) loss		9		—
Prior service cost recognized		24		24
	$	285	$	230

The discount rate used in determining the actuarial present value of the projected benefit obligation was 5.5% for both 2007 and 2006. The expected rate of compensation increase was 4.0% for both 2007 and 2006.

Simple IRA Plan: The Company had a simple IRA Plan (the “Plan”) covering substantially all employees. The Company was required to contribute 2% of the employees’ eligible salary to the Plan. All Company contributions are immediately vested. Plan expense amounted to approximately $44,000 in 2007, $38,000 in 2006 and $33,000 in 2005.

In January 2008, the Company eliminated the simple IRA Plan and replaced it with a 401K Plan. Under the new Plan, the Company is required to contribute 3% of all qualifying employees’ eligible salary to the Plan.

24

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 12. Regulatory Matters

Capital Ratios: Parke Bancorp (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory - and possibly additional discretionary - actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Parke Bancorp and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as defined). Management believes, as of December 31, 2007 and 2006, that the Bank meet all capital adequacy requirements to which they are subject.

As of December 31, 2007 and 2006, the Bank was categorized as “well-capitalized” under the regulatory framework for prompt corrective action. There are no conditions or events since December 31, 2007 that management believes have changed the Bank’s capital category.

To be categorized as well capitalized, the Bank must maintain minimum total risk based, Tier 1 risk based, and Tier 1 leverage ratios as set forth in the following tables.

									To Be Well-Capitalized
					For Capital				Prompt Under Corrective
	Actual				Adequacy Purposes				Action Provisions
Parke Bank	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2007
(Amounts in thousands)
Total Risk Based Capital	$	55,583	12.39	%	$	35,885	8	%	$	44,856	10	%
(to Risk Weighted Assets)
Tier I Capital	$	49,975	11.14	%	$	17,942	4	%	$	26,913	6	%
(to Risk Weighted Assets)
Tier I Capital	$	49,975	11.19	%	$	17,867	4	%	$	22,334	5	%
(to Average Assets)

25

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 12. Regulatory Matters (continued)

Capital Ratios (continued):

										To Be Well-Capitalized
					For Capital					Prompt Under Corrective
	Actual				Adequacy Purposes					Action Provisions
Parke Bank	Amount		Ratio		Amount		Ratio			Amount		Ratio
As of December 31, 2006
(Amounts in thousands)
Total Risk Based Capital	$	44,405	14.50	%	$	24,499	8		%	$	30,624	10	%
(to Risk Weighted Assets)
Tier I Capital	$	40,569	13.25	%	$	12,249	4	%		$	18,374	6	%
(to Risk Weighted Assets)
Tier I Capital	$	40,569	11.55	%	$	14,054	4	%		$	17,568	5	%
(to Average Assets)

Note 13. Shareholders’ Equity

Reorganization: Parke Bancorp was incorporated in 2005 for the sole purpose of becoming the holding company of the Bank. Parke Bancorp recognized the assets and liabilities transferred at the carrying amounts in the accounts of the Bank as of June 1, 2005, the effective date of the reorganization. The accompanying consolidated financial statements are presented as if the exchange of shares occurred as of January 1, 2005. Pursuant to the Plan of Acquisition, each outstanding share of Parke Bank was converted automatically by operation of law into one share of Parke Bancorp. Parke Bancorp had no activity prior to the completion of this reorganization. Parke Bancorp is authorized to issue 10,000,000 shares of common stock, par value $0.10 per share and 1,000,000 shares of serial preferred stock, par value $0.10 per share. Options and warrants outstanding under the Bank’s various Plans were converted automatically by operation of law into options and warrants to purchase shares of Parke Bancorp on the same terms and conditions.

Common Stock Dividend: In April 2007 and April 2006 the Company paid a 10% and 20% common stock dividend, respectively to shareholders (2007 – 287,249 shares and 2006 – 472,430 shares). All share and per share information has been retroactively adjusted. In December 2006, the Company paid a $.20 cash dividend to shareholders.

Treasury Stock: During 2007 and 2006, the Company repurchased 42,035 and 59,462, respectively, shares of the Company’s common stock.

Stock Options: In 1999, 2002 and 2003, the shareholders approved the Company’s Employee Stock Option Plans and in 2005 the shareholders approved the Company’s Directors and Employee Stock Option Plan (the “Plans”) The Plans are “non-qualified” stock option plans. Reserved for issuance upon the exercise of options granted or to be granted by the Board of Directors is an aggregate of 576,913 shares of common stock. All options issued under the Plans through December 31, 2005 were fully vested upon issuance. All directors and certain officers and employees of the Company have been granted options under the Plans. All stock option amounts and prices included in the following discussions have been adjusted for stock dividends.

26

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 13. Shareholders’ Equity (continued)

Stock Options (continued): Option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of the grant. In 2007, there were no options awarded. Options issued in 2006 generally vest over four to five years. Options awarded prior to December 31, 2005 vested upon issuance. All options issued have 10 year contractual terms.

At December 31, 2007, there were 162,457 shares available for grant under the Plans.

Prior to January 1, 2006, the Company accounted for its Plans in accordance with Accounting Principles Board Opinion No. 25 and related interpretations and the disclosure-only provisions of FASB No. 123. Accordingly, no compensation cost has been recognized for the Plan in 2005. Compensation cost that would have been recognized using the fair value method pursuant to FASB No. 123, if the Bank had so elected, would have been approximately $1,117,000 in 2005. Effective January 1, 2006, the Company adopted FAS 123R. The method of determining pro-forma compensation cost for 2005 and compensation expense in 2006 and 2007 was based on certain assumptions, including the past trading ranges of the Bank’s stock, volatility of 25-33%, expected option lives of 5-7 years, risk-free interest rate of 4-5%, and no expected payment of dividends. Compensation expense recognized during 2007 and 2006 amounted to $33,000 and $37,000, respectively.

The following table summarizes stock option activity for the year ended December 31, 2007. The information presented has been adjusted to account for the 10% stock dividend declared and paid in 2007.

						Weighted
			Weighted			Average
			Average			Remaining
			Exercise			Contractual		Aggregate
Options	Shares		Price			Life		Intrinsic Value
Outstanding at January 1, 2007	383,073			$	12.29
Granted	—			$	—
Exercised	(35,231	)		$	8.95
Expired/terminated	(8,327	)		$	15.22
Outstanding at December 31, 2007	339,515			$	12.66		6.4	$	1,746,000
Exercisable at December 31, 2007	329,615			$	12.52		6.3	$	1,740,000

27

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 13. Shareholders’ Equity (continued)

Stock Options (continued): The following table summarizes stock option activity for the year ended December 31, 2006. The information presented has been adjusted to account for the stock dividends declared and paid in 2007 and 2006.

					Weighted
			Weighted		Average
			Average		Remaining
			Exercise		Contractual		Aggregate
Options	Shares		Price		Life		Intrinsic Value
Outstanding at January 1, 2006	364,065		$	12.03
Granted	19,800		$	17.10
Exercised	(792	)	$	14.58
Expired/terminated	—		$	—
Outstanding at December 31, 2006	383,073		$	12.29		7.3	$	1,365,000
Exercisable at December 31, 2006	368,223		$	12.11		7.2	$	1,378,000

The following table summarizes stock option activity for the year ended December 31, 2005. The information presented has been adjusted to account for the stock dividends declared and paid in 2007 and 2006.

			Weighted
			Average
Options	Shares		Exercise Price
Outstanding at January 1, 2005	176,044			$	7.11
Granted	215,820			$	15.53
Exercised	(475	)		$	8.04
Expired/terminated	(27,324	)		$	8.02
Outstanding at December 31, 2005	364,065			$	12.02
Exercisable at December 31, 2005	364,065			$	12.02

28

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 13. Shareholders’ Equity (continued)

Stock Options (continued): Stock options outstanding and exercisable at December 31, 2007:

Options Outstanding							Options Exercisable
			Weighted-
			Average		Weighted				Weighted
			Remaining		Average				Average
	Number		Contractual		Exercise		Number		Exercise
Range of Exercise Prices	Outstanding		Life		Price		Outstanding		Price
$5.74		55,321		1.4 years	$	5.74		55,321	$	5.74
$5.74 - $8.03		54,370		5.1 years	$	7.34		54,370	$	7.34
$11.36		7,207		6.3 years	$	11.36		7,207	$	11.36
$13.64 - $17.27		222,617		8.0 years	$	15.72		212,717	$	15.65
		339,515		6.4 years	$	12.66		329,615	$	12.52

Stock options outstanding and exercisable at December 31, 2006:

Options Outstanding							Options Exercisable
			Weighted-
			Average		Weighted				Weighted
			Remaining		Average				Average
	Number		Contractual		Exercise		Number		Exercise
Range of Exercise Prices	Outstanding		Life		Price		Outstanding		Price
$5.74		56,628		2.4 years	$	5.74		56,628	$	5.74
$5.74		29,558		5.4 years	$	5.74		29,558	$	5.74
$8.03 - $11.36		62,059		6.6 years	$	8.61		62,059	$	8.61
$13.67 - $17.27		234,828		9.0 years	$	15.68		219,978	$	15.57
		383,073		7.3 years	$	12.30		368,223	$	12.10

The weighted-average grant-date fair value of options granted during the years 2006 and 2005 was $6.67 and $5.17, respectively. The total intrinsic value of options exercised during the years 2007, 2006 and 2005 was $275,000, $3,000 and $140,000, respectively.

29

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 13. Shareholders’ Equity (continued)

Stock Options (continued): A summary of the status of the Company’s nonvested shares as of December 31, 2007 and changes during the year ended December 31, 2007 is as follows:

			Weighted-
			Average Grant-
Nonvested Shares	Shares		Date Fair Value
Nonvested at January 1, 2007	14,850		$	6.67
Granted	—		$	—
Vested	(4,950	)	$	6.67
Forfeited	—		$	—
Nonvested at December 31, 2007	9,900		$	6.67

At December 31, 2007, there was $62,000 of total unrecognized compensation cost relating to nonvested share-based compensation arrangements granted under the Plans. That cost is expected to be recognized over a weighted-average period of 3 years. The total fair value of shares vested during 2007 was $33,000.

Warrants: In connection with the Company’s initial stock offering in 1998, warrants were issued. After stock dividends, these warrants have a current exercise price of $5.75 per share and expire in 2008. During 2007, 2006 and 2005, warrants exercised were 99,153, 103,861 and 134,372 respectively. At December 31, 2007, 495,764 warrants remained unexercised.

Note 14. Other Related Party Transactions

A member of the Board of Directors is a principal of a commercial insurance agency that provides all the insurance coverage for the Company. The cost of the insurance was approximately $95,000 in 2007, $88,000 in 2006 and $98,000 in 2005. An insurance agency owned by another Board Member provides employee benefits (medical insurance, life insurance, and disability insurance). The cost of these employee benefits totaled $357,000 in 2007, $286,000 in 2006 and $284,000 in 2005.

Note 15. Commitments and Contingencies

The Company has entered into an employment contract with the President of the Company, which provides for continued payment of certain employment salaries and benefits in the event of a change in control, as defined.

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheet. The contract or notional amounts of these instruments reflect the extent of the Company’s involvement in these particular classes of financial instruments. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as they do for on-balance sheet instruments.

30

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 15. Commitments and Contingencies (continued)

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit-worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include accounts receivable; inventory; property, plant and equipment and income-producing commercial properties. As of December 31, 2007 and 2006, commitments to extend credit amounted to approximately $129.7 million and $117.3 million, respectively.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. As of December 31, 2007 and 2006, standby letters of credit with customers were $7.3 million and $7.2 million respectively.

Loan commitments and standby letters of credit are issued in the ordinary course of business to meet customer needs. Commitments to fund fixed-rate loans were immaterial at December 31, 2007. Variable-rate commitments are generally issued for less than one year and carry market rates of interest. Such instruments are not likely to be affected by annual rate caps triggered by rising interest rates. Management believes that off-balance sheet risk is not material to the results of operations or financial condition.

In the normal course of business, there are outstanding various contingent liabilities such as claims and legal action, which are not reflected in the financial statements. In the opinion of management, no material losses are anticipated as a result of these actions or claims.

Note 16. Fair Value of Financial Instruments

The Company discloses estimated fair values for its significant financial instruments. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The following methods and assumptions were used to estimate the fair value of each class of significant financial instruments, for which it is practical to estimate that value:

Cash and Cash Equivalents: The carrying amount of cash, due from banks, and federal funds sold approximates fair value.

Investment Securities: The fair value of investment securities is based upon quoted market prices or dealer quotes.

31

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 16. Fair Value of Financial Instruments (continued)

Restricted Stock: The carrying value of restricted stock approximates fair value based on redemption provisions.

Loans: Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as commercial, residential mortgage and other consumer. Each loan category is further segmented into groups by fixed and adjustable rate interest terms and by performing and non-performing categories.

The fair value of performing loans is typically calculated by discounting scheduled cash flows through their estimated maturity, using estimated market discount rates that reflect the credit and interest rate risk inherent in each group of loans. The estimate of maturity is based on contractual maturities for loans within each group, or on the Company’s historical experience with repayments for each loan classification, modified as required by an estimate of the effect of current economic conditions.

Fair value for nonperforming loans is based on the discounted value of expected future cash flows, discounted using a rate commensurate with the risk associated with the likelihood of repayment and/or the fair value of collateral (if repayment of the loan is collateral dependent).

For all loans, assumptions regarding the characteristics and segregation of loans, maturities, credit risk, cash flows, and discount rates are judgmentally determined using specific borrower and other available information.

Accrued Interest Receivable and Payable: The fair value of interest receivable and payable is estimated to approximate the carrying amounts.

Deposits: The fair value of deposits with no stated maturity, such as demand deposits, checking accounts, savings and money market accounts, is equal to the carrying amount. The fair value of certificates of deposit is based on the discounted value of contractual cash flows, where the discount rate is estimated using the rates currently offered for deposits of similar remaining maturities.

Borrowings: The fair value of borrowings is based on the discounted value of estimated cash flows. The discounted rate is estimated using the rates currently offered for similar advances or borrowings.

Off-Balance Sheet Instruments: Since the majority of the Company’s off-balance sheet instruments consist of non fee-producing, variable rate commitments, the Company has determined they do not have a distinguishable fair value.

32

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 16. Fair Value of Financial Instruments (continued)

The following table summarizes carrying amounts and fair values for financial instruments at December 31, 2007:

	Carrying Value		Fair Value
	(Amounts in thousands)
Financial Assets:
Cash and cash equivalents	$	9,178	$	9,178
Investment securities		32,238		32,192
Restricted stock		1,473		1,473
Loans, net		402,683		402,958
Accrued interest receivable		2,633		2,633
Financial Liabilities:
Demand deposits and savings deposits	$	93,736	$	93,736
Time deposits		285,744		287,204
Borrowings		40,322		41,628
Accrued interest payable		1,991		1,991

The following table summarizes carrying amounts and fair values for financial instruments at December 31, 2006:

	Carrying Value		Fair Value
	(Amounts in thousands)
Financial Assets:
Cash and cash equivalents	$	11,261	$	11,261
Investment securities		26,961		26,956
Restricted stock		1,493		1,493
Loans, net		306,044		304,779
Accrued interest receivable		2,095		2,095
Financial Liabilities:
Demand deposits and savings deposits	$	73,493	$	73,493
Time deposits		216,436		219,134
Borrowings		34,851		34,236
Accrued interest payable		1,849		1,849

33

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 17. Quarterly Financial Data (unaudited)

The following represents summarized unaudited quarterly financial data of the Company which, in the opinion of management, reflects adjustments (comprising only normal recurring accruals) necessary for fair presentation.

	Three Months Ended
	December 31,		September 30,		June 30,		March 31,
	(Amounts in thousands, except per share amounts))
2007
Interest income	$	8,647	$	8,962	$	8,158	$	7,419
Interest expense		4,797		4,554		4,364		3,880
Net interest income		3,850		4,408		3,794		3,539
Provision for loan losses		265		186		210		500
Income before income tax expense		2,373		2,683		2,454		2,086
Income tax expense		908		1,055		972		809
Net income		1,465		1,628		1,482		1,277
Net income per common share:
Basic	$	0.45	$	0.52	$	0.47	$	0.41
Diluted	$	0.41	$	0.45	$	0.41	$	0.36
2006
Interest income	$	6,995	$	6,753	$	6,158	$	5,570
Interest expense		3,542		3,241		2,826		2,414
Net interest income		3,453		3,512		3,332		3,156
Provision for loan losses		166		211		328		235
Income before income tax expense		1,860		2,022		1,861		1,800
Income tax expense		649		806		740		724
Net income		1,211		1,216		1,121		1,076
Net income per common share:
Basic	$	0.39	$	0.39	$	0.36	$	0.35
Diluted	$	0.33	$	0.34	$	0.30	$	0.30

34

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Statements

Note 18. Parent Company Only Financial Statements

Condensed financial information of the parent company only is presented in the following two tables:

	December 31,
	2007		2006
	(Amounts in thousands)
Assets:
Cash	$	55	$	70
Investments in subsidiaries		52,366		42,241
Total assets	$	52,421	$	42,311
Liabilities and Shareholders' Equity:
Subordinated debentures	$	13,403	$	10,310
Other liabilities		80		70
Shareholders' equity		38,938		31,931
Total liabilities and shareholders' equity	$	52,421	$	42,311

Statement of Income

	Years ended December 31,
	2007			2006		2005
		(Amounts in thousands)
Income:
Dividends from bank subsidiary	$	950		$	1,875	$	—
Expense:
Interest on subordinated debentures		797			652		214
Other expenses		178			1		—
		975			653		214
Income before income taxes		(25	)		1,222		(214	)
Provision for income taxes (benefit)		—			—		(86	)
Equity in undistributed income of subsidiaries		6,826			4,624		3,623
Net Income	$	6,801		$	5,846	$	3,495

35

CORPORATE INFORMATION PARKE BANCORP, INC 601 Delsea Drive Washington Township, NJ  08080 (856) 256-2500 www.parkebank.com Board of Directors (Parke Bank and Parke Bancorp, Inc.)
Celestino R. (“Chuck”) Pennoni			Thomas Hedenberg
Chairman of the Board of Directors			Vice Chairman of the Board of Directors
Vito S. Pantilione
President, Chief Executive Officer and Director
Fred G. Choate		Daniel J. Dalton			Arret F. Dobson
Director		Director			Director
Edward Infantolino		Anthony J. Jannetti			Jeffrey H. Kripitz
Director		Director			Director
Richard Phalines		Jack C. Sheppard, Jr.			Ray H. Tresch
Director		Director			Director
Victor Fabietti
CPA/Special Consultant to the Board of Directors
	Parke Bancorp Officers
Vito S. Pantilione	Robert A. Kuehl			David O. Middlebrook
President and	Senior Vice President and			Senior Vice President and
Chief Executive Officer	Chief Financial Officer			Corporate Secretary
Transfer Agent & Registrar	Independent Auditors			Special Counsel
Registrar and Transfer Company	McGladrey & Pullen, LLP			Malizia Spidi & Fisch
10 Commerce Dr.	512 Township Line Road			901 New York Avenue, NW
Cranford, NJ  07016	One Valley Square, Suite 250			Suite 210 East
	Blue Bell, PA  19422			Washington, D.C.  20001

36

PARKE BANK
Officers
Vito S. Pantilione		Robert A. Kuehl
President and Chief Executive Officer		Senior Vice President and Chief Financial Officer
David O. Middlebrook		Elizabeth A. Milavsky
Senior Vice President, Senior Loan Officer		Senior Vice President
Paul E. Palmieri		Mary Kay Shea
Senior Vice President, Philadelphia Region		Vice President and Controller
James S. Talarico		Milton H. Witte
Vice President		Vice President
John J. Murphy		Allen M. Bachman
Treasurer		Assistant Vice President
Kathleen A. Conover		Dolores M. Calvello
Assistant Vice President		Assistant Vice President
Gil Eubank		Mark A. Prater
Assistant Vice President		Assistant Vice President
Mary Ann Seal		Evette M. Snyder
Assistant Vice President		Assistant Vice President
	Branches
Northfield Office	Main Office		Kennedy Office
501 Tilton Road	601 Delsea Drive		567 Egg Harbor Road
Northfield, NJ  08225	Washington Township, NJ  08080		Washington Township, NJ  08080
Philadelphia Office		Havertown Loan Production Office
1610 Spruce Street		614 Darby Road – 2nd Floor
Philadelphia, PA  19103		Havertown, PA  19083
(215) 722-1113		(610) 449-4017
PARKE BANK	PARKE CAPITAL MARKETS		PARKE CAPITAL TRUST I
601 Delsea Drive	601 Delsea Drive		PARKE CAPITAL TRUST II
Washington Township, NJ  08080	Washington Township, NJ  08080		PARKE CAPITAL TRUST III
(856) 256-2500	(856) 256-2500		601 Delsea Drive
			Washington Township, NJ  08080
			(856) 256-2500

37

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in Registration Statements No. 333-128202 and No. 333-134249 on Form S-8 and the Registration Statement No. 333-146121 on Form S-3 of Parke Bancorp, Inc. of our report, dated March 24, 2008, relating to our audit of the 2007 consolidated financial statements of Parke Bancorp, Inc., appearing in the Annual Report to Shareholders, which is incorporated in this Annual Report on Form 10-K of Parke Bancorp, Inc. for the year ended December 31, 2007.

Blue Bell, Pennsylvania

March 28, 2008

McGladrey & Pullen, LLP is a member firm of RSM International –

an affiliation of separate and independent legal entities.

EX-31

SECTION 302 CERTIFICATION

I, Vito S. Pantilione, President and Chief Executive Officer, certify that:

1. I have reviewed this annual report on Form 10-K of Parke Bancorp, Inc.;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.         The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)       Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)         Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)        Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.         The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)        Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 28, 2008	By:	/s/ Vito S. Pantilione
		Vito S. Pantilione President and Chief Executive Officer

SECTION 302 CERTIFICATION

I, Robert A. Kuehl, Senior Vice President and Chief Financial Officer, certify that:

1. I have reviewed this annual report on Form 10-K of Parke Bancorp, Inc.;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.         The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)       Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)         Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)        Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.         The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)        Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 28, 2008	By:	/s/ Robert A. Kuehl
		Robert A. Kuehl Senior Vice President and Chief Financial Officer

EX-32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Parke Bancorp, Inc. (the “Company”) for the fiscal year ended December 31, 2007 (the “Report”) as filed with the Securities and Exchange Commission, we, Vito S. Pantilione, President and Chief Executive Officer, and Robert A. Kuehl, Senior Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)        The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)        The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 28, 2008

/s/ Vito S. Pantilione	/s/ Robert A. Kuehl
Vito S. Pantilione	Robert A. Kuehl
President and Chief Executive Officer	Chief Financial Officer