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, 2008 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, 2008, was approximately $24.5 million.

As of March 18, 2009 there were issued and outstanding 4,033,098 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, 2008. (Parts II and IV)

2. Portions of the Proxy Statement for the 2009 Annual Meeting of Shareholders. (Parts II and III)

PARKE BANCORP, INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008

INDEX

PART 1		Page
Item 1.	Business	1
Item 1A.	Risk Factors	23
Item 1B.	Unresolved Staff Comments	23
Item 2.	Property	24
Item 3.	Legal Proceedings	24
Item 4.	Submission of Matters to a Vote of Security Holders	25
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
Item 6.	Selected Financial Data	26
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 8.	Financial Statements and Supplementary Data	27
Item 9.	Changes and Disagreements with Accountants on Accounting and Financial Disclosure	27
Item 9A(T).	Controls and Procedures	27
Item 9B.	Other Information	27
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	28
Item 11.	Executive Compensation	28
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	28
Item 13.	Certain Relationships and Related Transactions, and Director Independence	29
Item 14.	Principal Accountant Fees and Services	29
PART IV
Item 15.	Exhibits and Financial Statement Schedules Signatures	29

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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 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, 2008, the Company had assets of $603.2 million, net loans of $539.9 million, deposits of $495.3 million and shareholders’ equity of $41.5 million.

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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, wire transfer services and merchant capture electronic check processing services.

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 loans 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.

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 five through eight for descriptions of the loan categories presented.

	At December 31,
	2008				2007				2006				2005				2004
	Amount		Percentage		Amount		Percentage		Amount		Percentage		Amount		Percentage		Amount		Percentage
	(Amounts in thousands, except percentages)
Commercial	$	19,935	3.6	%	$	14,899	3.7	%	$	13,436	4.3	%	$	11,053	4.3	%	$	9,708	5.1	%
Real estate construction
Residential		87,327	15.9			2,091	0.5			2,465	0.8			1,174	0.5			1,253	0.7
Commercial		31,582	5.8			106,320	26.0			69,254	22.3			70,157	27.1			37,270	19.8
Real estate mortgage
Residential		90,226	16.5			24,488	6.0			19,727	6.4			17,309	6.7			16,360	8.7
Commercial		308,457	56.3			242,668	59.4			198,668	64.0			154,288	59.6			120,052	63.6
Consumer		10,133	1.9			17,923	4.4			7,005	2.2			5,054	1.8			3,964	2.1
Total Loans	$	547,660	100.00	%	$	408,389	100.0	%	$	310,555	100.0	%	$	259,035	100.0	%	$	188,607	100.0	%

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

The composition of the loan portfolio for 2008 is based on FDIC Call Report classifications, which were expanded in 2008.  The data was not readily available to restate prior years.

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Loan Maturity. The following table sets forth the contractual maturity of certain loan categories at December 31, 2008.

	Due within one year		Due after one through five years		Due after five years		Total
	(Amounts in thousands)
Commercial	$	11,139	$	2,724	$	6,072	$	19,935
Real estate construction
Residential		59,665		14,474		13,188		87,327
Commercial		17,629		7,718		6,235		31,582
Real estate mortgage
Residential		22,792		6,059		61,375		90,226
Commercial		68,629		56,590		183,238		308,457
Consumer		2,006		184		7,943		10,133
Total Loans	$	181,860	$	87,749	$	278,051	$	547,660

The following table sets forth the dollar amount of loans in certain loan categories due one year or more after December 31, 2008, which have predetermined interest rates and which have floating or adjustable interest rates.

	Fixed Rates		Floating or Adjustable Rates		Total
	(Amounts in thousands)
Commercial	$	2,934	$	5,862	$	8,796
Real estate construction
Residential		7,555		20,107		27,662
Commercial		184		13,769		13,953
Real estate mortgage
Residential		35,199		32,235		67,434
Commercial		29,915		209,913		239,828
Consumer		7,709		418		8,127
Total Loans	$	83,496	$	282,304	$	365,800

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 means 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 accuracy of the estimated cost (including interest) of construction. Substantial deviations can occur in

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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, 2008, the Bank’s loan to one borrower limit was approximately $9.5 million and the Bank had no borrowers with loan balances in excess of $9.5 million. At December 31, 2008, the Bank’s largest loan to one borrower was a loan for commercial real estate, with a balance of $8.0 million and was secured by real estate. At December 31, 2008, this loan was current and performing in accordance with the terms of the loan agreement.

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

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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.

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. 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 $10.2 million, $2.0 million, $2.4 million, $500,000 and $241,000 at December 31 2008, 2007, 2006, 2005, and 2004, respectively.

The Company maintains interest reserves for the purpose of making periodic and timely interest payments for borrowers that qualify. Total loans with interest reserves were $120.8 million and $110.5 million at December 31, 2008 and December 31, 2007 respectively. Information for years prior to 2007 is not readily available. Management on a monthly basis reviews loans with interest reserves to assess current and projected performance.

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.

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	At December 31,
	2008			2007			2006			2005			2004
	(Amounts in thousands, except percentages)
Loans accounted for on a non-accrual basis:
Commercial	$	41		$	52		$	91		$	50		$	—
Real Estate Construction
Residential		5,905			—			—			—			241
Commercial		—			325			—			—			—
Real Estate Mortgage
Residential		897			7			—			20			—
Commercial		1,380			367			687			1,865			—
Consumer		—			54			—			—			—
Total non-accrual loans		8,223			805			789			1,935			241
Accruing loans delinquent 90 days or more:
Commercial		—			—			—			—			—
Real Estate Construction
Residential		—			—			—			—			—
Commercial		—			—			—			—			—
Real Estate Mortgage
Residential		—			—			—			—			55
Commercial		—			—			267			655			—
Consumer		—			—			—			—			—
Total		—			—			267			655			55
Total non-performing loans	$	8,223		$	805		$	1,056		$	2,600		$	296
Total non-performing loans as a percentage of loans		1.50	%		0.20	%		0.34	%		1.00	%		0.16	%

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, 2008, the Bank had $8.2 million of loans that were on a non-accrual basis. Gross interest income of $300.0 thousand would have been recorded during the year ended December 31, 2008 if these loans had been performing in accordance with their terms. Interest income of $30.3 thousand was recorded on these loans during the year ended December 31, 2008. At December 31, 2008, the Bank did not have any loans not classified as non-accrual, 90 days past due or restructured but where 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.

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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 that 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, 2008, the Bank had assets classified as follows:

	Loan Balance
	(Amounts in thousands)
Special mention	$	8,942
Substandard		8,515
Doubtful		-
Loss		-
	$	17,457

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, 2008, the Bank had real estate owned totaling $858.9 thousand.

Allowance for Losses on Loans and Real Estate Owned. It is the policy of management to provide for possible losses on classified 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.

Management’s judgment as to the level of probable 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

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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,
	2008			2007			2006			2005			2004
	(Amounts in thousands, except percentages)
Balance at beginning of the period	$	5,706		$	4,511		$	3,574		$	2,621		$	2,256
Charge-offs:
Commercial		—			—			—			—			—
Real estate construction
Residential		—			—			—			—			—
Commercial		—			—			—			(227	)		—
Real estate mortgage
Residential		—			—			—			—			(461	)
Commercial		—			(200	)		—			—			—
Consumer		(5)			—			(3	)		—			—
Total charge-offs:		(5)			(200	)		(3	)		(227	)		(461	)
Recoveries:
Commercial		—			—			—			—			—
Real estate construction
Residential		—			—			—			—			—
Commercial		—			—			—			—			—
Real estate mortgage
Residential		—			—			—			—			—
Commercial		—			234			—			—			—
Consumer		13			—			—			—			—
Total recoveries:		13			234			—			—			—
Net recoveries (charge-offs)		8			34			(3	)		(227	)		(461	)
Provision for loan losses		2,063			1,161			940			1,180			825
Balance at end of period	$	7,777		$	5,706		$	4,511		$	3,574		$	2,620
Period-end loans outstanding (net of deferred costs/fees)	$	547,660		$	408,389		$	310,555		$	295,035		$	188,607
Average loans outstanding	$	476,994		$	365,884		$	286,691		$	219,217		$	154,794
Allowance as a percentage of period end loans		1.42	%		1.40	%		1.45	%		1.38	%		1.39	%
Net loans charged off as a percentage of average loans outstanding		0.00	%		(0.01	)%		0.00	%		0.10	%		0.30	%

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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,
	2008				2007				2006				2005				2004
	Amount		Percentage		Amount		Percentage		Amount		Percentage		Amount		Percentage		Amount		Percentage
	(Amounts in thousands, except percentages)
Commercial	$	283	3.6	%	$	209	3.7	%	$	188	4.3	%	$	154	4.3	%	$	134	5.1	%
Real estate construction:
Residential		1,240	15.9			22	0.4			25	0.8			18	0.5			18	0.7
Commercial		448	5.8			1,489	26.1			847	22.3			969	27.1			519	19.8
Real estate mortgage:
Residential		1,281	16.5			257	4.5			218	6.4			239	6.7			228	8.7
Commercial		4,381	56.3			3,568	62.5			3,185	64.0			2,130	59.6			1,667	63.6
Consumer		144	1.9			161	2.8			48	2.2			64	1.8			55	2.1
Total Allowance	$	7,777	100.0	%	$	5,706	100.0	%	$	4,511	100.0	%	$	3,574	100.0	%	$	2,621	100.0	%

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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, 2008, 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, 2008, 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,
	2008		2007		2006
	(Amounts in thousands)
Securities Held to Maturity:
Municipals	$	2,482	$	2,456	$	2,431
Securities Available for Sale:
U.S. government-sponsored entity securities		2,011		5,499		6,416
Mortgage-backed securities		25,150		17,442		9,909
Corporate and trust preferred securities		4,769		6,841		8,205
Total securities available for sale		31,930		29,782		24,530
Total	$	34,412	$	32,238	$	26,961

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Investment Portfolio Maturities. The following table sets forth information regarding the scheduled maturities, amortized costs, estimated fair values, and weighted average yields for the Bank’s investment securities portfolio at December 31, 2008 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, 2008
	One Year or Less				One to Five Years				Five to Ten Years				More Than Ten Years				Total Investment Securities
	Amort- ized Cost		Average Yield		Amort- ized Cost		Average Yield		Amort- ized Cost		Average Yield		Amort- ized Cost		Average Yield		Amort- ized Cost		Average Yield			Fair Value
	(Amounts in thousands, except yields)
Securities Held to Maturity:
Municipals	$	—	—	%	$	542	2.62	%	$	—	—	%	$	1,940	4.23	%	$	2,482	3.88	%	$	2,324
Total securities held to maturity		—	—			542	2.62			—	—			1,940	4.23			2,482	3.88			2,324
Securities Available for Sale:
U.S. government sponsored entity		—	—	%		—	—	%		1,988	5.12	%		6	3.88	%		1,994	5.12	%		2,011
Mortgage-backed securities		—	—			—	—			—	—			24,960	5.16			24,960	5.16			25,150
Corporate		1,496	5.48			—	—			—	—			7,733	5.90			9,229	5.85			4,769
Total securities available for sale		1,496	5.48			—	—			1,988	5.12			32,699	5.38			36,183	5.37			31,930
Total	$	1,496	5.48	%	$	542	2.62	%	$	1,988	5.12	%	$	34,639	5.32	%	$	38,665	5.28	%	$	34,254

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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 $176.1 million and $127.0 million at December 31, 2008 and 2007, 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 provides the Bank an additional source of external funds through their weekly CDARS settlement process. The rates are comparable to brokered deposits and can be obtained within a shorter period time than brokered deposits. The Bank’s CDARS deposits included within the brokered deposit total amounted to $36.4 million and $38.3 million at December 31, 2008 and December 31, 2007, respectively.

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.

	2008
	Average Balance		Yield/Rate	Percent of Total
	(Amounts in thousands, except percentages)
NOWs	$	11,730	2.35%	2.7	%
Money markets		39,146	3.06%	8.9
Savings		42,683	3.33%	9.7
Time deposits		171,420	4.17%	39.0
Brokered CDs		153,297	4.51%	34.8
Total interest-bearing deposits		418,276	4.05%	95.1
Non-interest bearing demand deposits		21,658		4.9
Total deposits	$	439,934		100.0	%

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	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	%

	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	%

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, 2008.

Maturity Period	Certificates of Deposit
	(Amounts in thousands)
Within three months	$	24,407
Three through six months		37,580
Six through twelve months		8,253
Over twelve months		677
Total	$	70,917

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 are payable in four years or less. Borrowings from the FHLB outstanding during 2008, 2007, and 2006 had maturities of ten years or less and cannot be prepaid without penalty.

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

	December 31,
	2008			2007			2006
	(Amounts in thousands, except rates)
Amount outstanding at year end	$	61,943		$	40,322		$	34,851
Weighted average interest rates at year end		4.05	%		5.43	%		5.50	%
Maximum outstanding at any month end	$	78,244		$	49,209		$	41,092
Average outstanding	$	54,843		$	39,502		$	34,321
Weighted average interest rate during the year		4.25	%		5.51	%		5.22	%

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, a 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, 2008, there were no assets in the subsidiary as a result of the sale of these repossessed assets during the second quarter of 2007. Taylor Glen LLC, another corporation that is a subsidiary of the Bank, was formed in 2008 for real estate assets associated with a previous loan that was repossessed by the Bank in 2008. At December 31, 2008, the subsidiary had a real estate asset that totaled $859,000, and is being reported as other assets in the consolidated financial statements.

Personnel

At December 31, 2008, the Bank had 42 full-time and 9 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.

Emergency Economic Stabilization Act of 2008

In response to recent unprecedented market turmoil, the Emergency Economic Stabilization Act (“EESA”) was enacted on October 3, 2008. EESA authorizes the Secretary of the Treasury to purchase up to $700 billion in troubled assets from financial institutions under the Troubled Asset Relief Program or TARP. Troubled assets include residential or commercial mortgages and related instruments originated prior to March 14, 2008 and any other financial instrument that the Secretary determines, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, the purchase of which is necessary to promote financial stability. If the Secretary exercises his authority under TARP, EESA directs the Secretary of Treasury to establish a program to guarantee troubled assets originated or issued prior to March 14, 2008. The Secretary is authorized to purchase up to $250 billion in troubled assets immediately and up to $350 billion upon certification by the President that such authority is needed. The Secretary’s authority will be increased to $700 billion if the President submits a written report to Congress detailing the Secretary’s plans to use such authority unless Congress passes a joint resolution disapproving such amount within 15 days after receipt of the report. The Secretary’s authority under TARP expires on December 31, 2009 unless the Secretary certifies to Congress that extension is necessary provided that his authority may not be extended beyond October 3, 2010.

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Institutions selling assets under TARP will be required to issue warrants for common or preferred stock or senior debt to the Secretary. If the Secretary purchases troubled assets directly from an institution without a bidding process and acquires a meaningful equity or debt position in the institution as a result or acquires more than $300 million in troubled assets from an institution regardless of method, the institution will be required to meet certain standards for executive compensation and corporate governance, including a prohibition against incentives to take unnecessary and excessive risks, recovery of bonuses paid to senior executives based on materially inaccurate earnings or other statements and a prohibition against agreements for the payment of golden parachutes. Institutions that sell more than $300 million in assets under TARP auctions will not be entitled to a tax deduction for compensation in excess of $500,000 paid to its chief executive or chief financial official or any its other three most highly compensated officers. In addition, any severance paid to such officers for involuntary termination or termination in connection with a bankruptcy or receivership will be subject to the golden parachute rules under the Internal Revenue Code.

EESA increases the maximum deposit insurance amount up to $250,000 until December 31, 2009 and removes the statutory limits on the FDIC’s ability to borrow from the Treasury during this period. The FDIC may not take the temporary increase in deposit insurance coverage into account when setting assessments. EESA allows financial institutions to treat any loss on the preferred stock of the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation as an ordinary loss for tax purposes.

Pursuant to his authority under EESA, the Secretary of the Treasury has created the TARP Capital Purchase Plan under which the Treasury Department will invest up to $250 billion in senior preferred stock of U.S. banks and savings associations or their holding companies. Qualifying financial institutions may issue senior preferred stock with a value equal to not less than 1% of risk-weighted assets and not more than the lesser of $25 billion or 3% of risk-weighted assets. The senior preferred stock will pay dividends at the rate of 5% per annum until the fifth anniversary of the investment and thereafter at the rate of 9% per annum. The senior preferred stock may not be redeemed for three years except with the proceeds from an offering common stock or preferred stock qualifying as Tier 1 capital in an amount equal to not less than 25% of the amount of the senior preferred. After three years, the senior preferred may be redeemed at any time in whole or in part by the financial institution. No dividends may be paid on common stock unless dividends have been paid on the senior preferred stock. Until the third anniversary of the issuance of the senior preferred, the consent of the U.S. Treasury will be required for any increase in the dividends on the common stock or for any stock repurchases unless the senior preferred has been redeemed in its entirety or the Treasury has transferred the senior preferred to third parties. The senior preferred will not have voting rights other than the right to vote as a class on the issuance of any preferred stock ranking senior, any change in its terms or any merger, exchange or similar transaction that would adversely affect its rights. The senior preferred will also have the right to elect two directors if dividends have not been paid for six periods. The senior preferred will be freely transferable and participating institutions will be required to file a shelf registration statement covering the senior preferred. The issuing institution must grant the Treasury piggyback registration rights. Prior to issuance, the financial institution and its senior executive officers must modify or terminate all benefit plans and arrangements to comply with EESA. Senior executives must also waive any claims against the Department of Treasury.

In connection with the issuance of the senior preferred, participating institutions must issue to the Secretary immediately exercisable 10-year warrants to purchase common stock with an aggregate market price equal to 15% of the amount of senior preferred. The exercise price of the warrants will equal the market price of the common stock on the date of the investment. The Secretary may only exercise or transfer one-half of the warrants prior to the earlier of December 31, 2009 or the date the issuing financial institution has received proceeds equal to the senior preferred investment form one or more offerings of

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common or preferred stock qualifying as Tier 1 capital. The Secretary will not exercise voting rights with respect to any shares of common stock acquired through exercise of the warrants. The financial institution must file a shelf registration statement covering the warrants and underlying common stock as soon as practicable after issuance and grant piggyback registration rights. The number of warrants will be reduced by one-half if the financial institution raises capital equal to the amount of the senior preferred through one or more offerings of common stock or preferred stock qualifying a Tier 1 capital. If the financial institution does not have sufficient authorized shares of common stock available to satisfy the warrants or their issuance otherwise requires shareholder approval, the financial institution must call a meeting of shareholders for that purpose as soon as practicable after the date of investment. The exercise price of the warrants will be reduced by 15% for each six months that lapse before shareholder approval subject to a maximum reduction of 45%.

On January 30, 2009, the Company entered into a Letter Agreement and Securities Purchase Agreement (collectively, the “Purchase Agreement”) with the United States Department of the Treasury (“Treasury”) under the TARP Capital Purchase Program, pursuant to which the Company sold (i) 16,288 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the “Series A Preferred Stock”) and (ii) a warrant (the “Warrant”) to purchase 299,779 shares of the Company’s common stock, par value $0.10 per share (the “Common Stock”), for an aggregate purchase price of $16.3 million in cash.

The Series A Preferred Stock will qualify as Tier 1 capital and will pay cumulative dividends at a rate of 5% per annum for the first five years, and 9% per annum thereafter. The Series A Preferred Stock may be redeemed by the Company at anytime without penalty, subject to Treasury’s consultation with the appropriate federal banking agency.

Pursuant to the terms of the Purchase Agreement, the ability of the Company to declare or pay dividends or distributions on, or purchase, redeem or otherwise acquire for consideration, shares of its Junior Stock (as defined below) and Parity Stock (as defined below) will be subject to restrictions, including a restriction against increasing dividends from the last quarterly cash dividend declared on the Common Stock prior to January 9, 2009. The redemption, purchase or other acquisition of trust preferred securities of the Company or its affiliates also will be restricted. These restrictions will terminate on the earlier of (a) the third anniversary of the date of issuance of the Series A Preferred Stock and (b) the date on which the Series A Preferred Stock has been redeemed in whole or Treasury has transferred all of the Series A Preferred Stock to third parties. The restrictions described in this paragraph are set forth in the Purchase Agreement.

In addition, the ability of the Company to declare or pay dividends or distributions on, or repurchase, redeem or otherwise acquire for consideration, shares of its Junior Stock and Parity Stock will be subject to restrictions in the event that the Company fails to declare and pay full dividends (or declare and set aside a sum sufficient for payment thereof) on its Series A Preferred Stock.

“Junior Stock” means the Common Stock and any other class or series of stock of the Company the terms of which expressly provide that it ranks junior to the Series A Preferred Stock as to dividend rights and/or rights on liquidation, dissolution or winding up of the Company. “Parity Stock” means any class or series of stock of the Company the terms of which do not expressly provide that such class or series will rank senior or junior to the Series A Preferred Stock as to dividend rights and/or rights on liquidation, dissolution or winding up of the Company (in each case without regard to whether dividends accrue cumulatively or non-cumulatively).

The Warrant has a 10-year term and is immediately exercisable upon its issuance, with an exercise price, subject to anti-dilution adjustments, equal to $8.15 per share of the Common Stock.

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Treasury has agreed not to exercise voting power with respect to any shares of Common Stock issued upon exercise of the Warrant.

The Series A Preferred Stock and the Warrant were issued in a private placement exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended. Upon the request of Treasury at any time, the Company has agreed to promptly enter into a deposit arrangement pursuant to which the Series A Preferred Stock may be deposited and depositary shares (“Depositary Shares”), representing fractional shares of Series A Preferred Stock, may be issued. The Company has agreed to register the Series A Preferred Stock, the Warrant, the shares of Common Stock underlying the Warrant (the “Warrant Shares”) and Depositary Shares, if any, as soon as practicable after the date of the issuance of the Series A Preferred Stock and the Warrant. Neither the Series A Preferred Stock nor the Warrant will be subject to any contractual restrictions on transfer, except that Treasury may only transfer or exercise an aggregate of one-half of the Warrant Shares prior to the earlier of the redemption of 100% of the shares of Series A Preferred Stock and December 31, 2009.

The Purchase Agreement also subjects the Company to certain of the executive compensation limitations included in the EESA. In this connection, as a condition to the closing of the transaction, the Company’s Senior Executive Officers (as defined in the Purchase Agreement) (the “Senior Executive Officers”), (i) executed a waiver (the “Waiver”) voluntarily waiving any claim against the Treasury or the Company for any changes to such Senior Executive Officer’s compensation or benefits that are required to comply with the regulation issued by the Treasury under the TARP Capital Purchase Program as published in the Federal Register on October 20, 2008 and acknowledging that the regulation may require modification of the compensation, bonus, incentive and other benefit plans, arrangements and policies and agreements (including so-called “golden parachute” agreements) (collectively, “Benefit Plans”) as they relate to the period the Treasury holds any equity or debt securities of the Company acquired through the TARP Capital Purchase Program; and (ii) entered into a letter agreement (the “Letter Agreement”) with the Company amending the Benefit Plans with respect to such Senior Executive Officer as may be necessary, during the period that the Treasury owns any debt or equity securities of the Company acquired pursuant to the Purchase Agreement or the Warrant, as necessary to comply with Section 111(b) of the EESA.

The foregoing description of the TARP, the CPP and securities covered thereby is qualified in its entirety by reference to the Summary of Senior Preferred Terms and other information regarding the TARP and CPP published on the Department’s website at www.treasury.gov and incorporated herein by reference.

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

19

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 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(b) 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 2008, 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, 2008. 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

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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.

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.

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.

Due to recent bank failures, the FDIC has determined that the reserve ratio was 1.01% as of June 30, 2008. In accordance with the Reform Act, the FDIC was required to establish and implement a plan within 90 days to restore the reserve ratio to 1.15% within five years (subject to extension due to extraordinary circumstances). For the quarter beginning January 1, 2009, the FDIC has raised the base annual assessment rate for institutions in Risk Category I to between 12 and 14 basis points while the base annual assessment rates for institutions in Risk Categories II, III and IV have been increased to 17, 35 and 50 basis points, respectively. For the quarter beginning April 1, 2009 the FDIC has set the base annual assessment rate for institutions in Risk Category I at between 12 and 16 basis points and the base annual assessment rates for institutions in Risk Categories II, III and IV at 22, 32 and 45 basis points, respectively. An institution’s assessment rate could be lowered by as much as five basis points based on the ratio of its long-term unsecured debt to deposits or, for smaller institutions, the ratio of certain amounts of Tier 1 capital to deposits. The assessment rate would be adjusted for Risk Category I institutions that have a high level of brokered deposits and have experienced higher levels of asset growth (other than through acquisitions) and could be increased by as much as ten basis points for institutions in Risk Categories II, III and IV whose ratio of brokered deposits to deposits exceeds 10% of assets. Reciprocal deposit arrangements like CDARS would count as brokered deposits for Risk Category II, III and IV institutions but not for institutions in Risk Category I. An institution’s base assessment rate would also be increased if an institution’s ratio of secured liabilities (including FHLB advances and repurchase agreements) to deposits exceeds 25%. The maximum adjustment for secured liabilities for institutions in Risk Categories I, II, III and IV would be 8, 11, 16 and 22.5 basis points, respectively, provided that the adjustment may not increase the base assessment rate by more than 50%. The FDIC has further proposed to collect a special assessment of 20 basis points based on insured deposits as of June 30, 2009. The special assessment would be payable on September 30, 2009.

In addition, all FDIC-insured institutions are required to pay assessments to the FDIC to fund interest payments on bonds issued by the Financing Corporation ("FICO"), an agency of the Federal government established to recapitalize the predecessor to the SAIF.  The FICO assessment rate, which is determined quarterly based upon rates, which are determined quarterly, totaled 2% of insured deposits in fiscal 2008.  These assessments will continue until the FICO bonds mature in 2017.

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Pursuant to EESA, the maximum deposit insurance amount has been increased from $100,000 to $250,000 until December 31, 2009. On October 13, 2008, the FDIC established a Temporary Liquidity Guarantee Program under which the FDIC will fully guarantee all non-interest-bearing transaction accounts and all senior unsecured debt of insured depository institutions or their qualified holding companies issued between October 14, 2008 and June 30, 2009. Senior unsecured debt would include federal funds purchased and certificates of deposit outstanding to the credit of the bank. All eligible institutions participate in the program without cost for the first 30 days of the program. After December 5, 2008, institutions will be assessed at the rate of ten basis points for transaction account balances in excess of $250,000 and at the rate of 75 basis points of the amount of debt issued. Institutions were required to opt out of the Temporary Liquidity Guarantee Program by December 5, 2008 if they do not wish to participate. The Bank did not opt out of either part.

Capital Adequacy Guidelines. Parke Bancorp (on a consolidated basis) and the Bank are 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, 2008, the Parke Bancorp and the Bank had the requisite capital levels to qualify as “well capitalized.”

Item 1A. Risk Factors

This item is not applicable as the Company is a “smaller reporting company.”

Item 1B. Unresolved Staff Comments

None.

22

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.

Management considers the physical condition of all offices to be good and adequate for the conduct of the Bank’s business. At December 31, 2008, net property and equipment totaled approximately $3.0 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

At December 31, 2008, the Company was not a party to any material legal proceedings.

23

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 2008.

24

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 2008 Annual Report is incorporated herein by reference.

(b) Not applicable.

(c) Treasury stock repurchases during the fourth quarter of 2008 for Parke Bancorp, Inc. were as follows:

Period	Total number of shares purchased		Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may be purchased under the plans or programs
October, 2008	-	$	-	-	48,101
November, 2008	-		-	-	48,101
December, 2008	3,700		8.03	3,700	44,401
Total	3,700	$	8.03	3,700

On November 9, 2005, the Board of Directors authorized 174,570 shares (adjusted for stock dividends), or approximately 5%, of the issued and outstanding common stock for repurchase by the Company. As of December 31, 2008, the Company has repurchased 130,270 of the authorized shares. The ability of the Company to repurchase additional shares will be subject to restrictions under the TARP Capital Purchase Program as described in the section captioned “Emergency Economic Stabilization Act of 2008”.

Item 6. Selected Financial Data

The information contained under the section captioned “Selected Financial Data” in the 2008 Annual Report is incorporated herein by reference.

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

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

25

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 financial statements that are contained in the 2008 Annual Report 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.

Item 9B. Other Information

Not applicable.

26

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information contained under the headings “Section 16(a) Beneficial Ownership Reporting Compliance”, “Proposal I - Election of Directors” and “Corporate Governance” in the Company’s Proxy Statement for its 2009 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 sections captioned “Executive Compensation” and “Director 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 “Principal Holders of our Common Stock” in the Proxy Statement is incorporated herein by reference.

(b) Security Ownership of Management

The information contained in the sections captioned “Principal Holders of our Common Stock” and “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

27

Set forth below is information as of December 31, 2008 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	380,323	$10.90	162,457
Total	380,323	$10.90	162,457

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

The information contained in the sections captioned “Related Party Transactions” and “Corporate Governance” in the Proxy Statement is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

The information contained in the section captioned “Proposal II - 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, 2008 and 2007

• Consolidated Statements of Income For the Years Ended December 31, 2008, 2007 and 2006.

28

• Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2008, 2007 and 2006

• Consolidated Statements of Cash Flows for the Years Ended December 31, 2008, 2007 and 2006

• 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:

3.1 Certificate of Incorporation of Parke Bancorp, Inc.*

3.2 Certificate of Amendment setting forth the terms of the Registrant’s Fixed Rate, Cumulative Perpetual Preferred Stock, Series A**

3.3 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.*

4.3 Warrant to Purchase shares of the Registrant’s common stock, dated January 30, 2009.**

4.4 Letter Agreement (including Securities Purchase Agreement Standard Terms attached as Exhibit A) dated January 30, 2009 between the Registrant and the United States Department of the Treasury.**

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

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

10.2 Supplemental Executive Retirement Plan*

10.3 1999 Stock Option Plan*

10.4 2002 Stock Option Plan*

10.5 2003 Stock Option Plan*

10.6 2005 Stock Option Plan***

13 Annual Report to Stockholders for the fiscal year ended December 31, 2008

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 Current Report on Form 8-K filed with the SEC on January 30, 2009.

***	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.

29

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 30, 2009			/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 30, 2009.
/s/ Celestino R. Pennoni				/s/ Vito S. Pantilione
Celestino R. Pennoni				Vito S. Pantilione
Chairman of the Board and Director				President, Chief Executive Office and Director
/s/ Fred G. Choate				/s/ Daniel J. Dalton
Fred G. Choate				Daniel J. Dalton
Director				Director
Arret F. Dobson				Thomas Hedenberg
Director				Director
				/s/ Anthony J. Jannetti
Edward Infantolino				Anthony J. Jannetti
Director				Director
/s/ Jeffrey H. Krippitz				/s/ Richard Phalines
Jeffrey H. Krippitz				Richard Phalines
Director				Director
/s/ Jack C. Sheppard, Jr.				/s/ Ray H. Tresch
Jack C. Sheppard, Jr.				Ray H. Tresch
Director				Director
/s/ F. Steven Meddick
F. Steven Meddick
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Date:	March 30, 2009

EX-13

PARKE BANCORP, INC.

2008 ANNUAL REPORT TO SHAREHOLDERS

PARKE BANCORP, INC.

2008 ANNUAL REPORT TO SHAREHOLDERS

TABLE OF CONTENTS

Section One
	Page
Letter to Shareholders	1
Select 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	38

_____________________________

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 remained very profitable with strong growth in 2008. Earnings of the Company decreased from $5.9 million in 2007 to $4.2 million in 2008, a 27.4% decrease. The decline in earnings was due to the “Other Than Temporary Impairment” (OTTI) write down of two private issue Collateralized Mortgage Obligations (CMO’s) in the aggregate amount of $759 thousand, net of taxes. These two CMO’s continue to make all payments as required. Additionally, we had OTTI write downs on our preferred stock holdings in two Government Sponsored Enterprises, The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). The total write down for all OTTI adjustments in 2008 was $1.4 million, after taxes. The Company’s return on average equity was over 11% for 2008, with Stockholders’ Equity growing 10.7% to over $40 million.

The total assets of the Company grew 30.6% in 2008 from $460.8 million as of December 31, 2007 to $602.0 million as of December 31, 2008. The Company’s loan portfolio grew more than 34% in 2008 from $408.4 million as of December 31, 2007 to $547.7 million as of December 31, 2008, a net increase of $139.3 million. The Company’s deposit base also enjoyed strong growth, with an increase of 30.5% as of December 31, 2008 to $495.3 million from $379.5 million as of December 31, 2007. ParkeBank has maintained a conservative 1.42% allowance for loan loss with $2.1 million added in 2008 due to our continued strong loan growth. The prolonged weakness in the real estate market will continue to challenge the banking industry’s loan portfolios, including ours. We are confident that we have the experience and expertise at ParkeBank to work with our borrowers in satisfactorily resolving many of these challenges.

This past year was a distressing year in the world economy and specifically the banking industry. A number of banks failed while major banks all over the world were kept from failing by the infusion of capital by their government. Great Britain now owns 70% of the Royal Bank of Scotland, which owns Citizens Bank in the United States. Investment banks such as Merrill Lynch were taken over, and others like Lehman Brothers failed, while Wachovia Bank was taken over by Wells Fargo Bank in order to preserve its’ viability. There is a multitude of reasons and blame for these failures and for the economic turmoil. Many “experts” put a major portion of the blame for the current economic problems on the lack of available financing from commercial banks. Additionally, many industry experts have repeatedly expressed the hardship that FASB 157 “fair value accounting” rules have had on the banking industry. Banks are forced to book losses on investments that continue to make their payments under the theory that they are “impaired” because there is no longer a liquid market for these securities, even if the banks are not required to sell these securities.

The government “bailout plan”, TARP, has also become a political sword for our Washington representatives. What is lost in all of the rhetoric is the fact that other than the 7 largest banks in the country, only well run banks with high ratings qualified for the government funding. The new TARP regulations have added additional restrictions and requirements that may hurt a bank’s ability to grow and retain qualified management, which has caused many banks, including ours, to consider returning the TARP funding, although we have not made the decision to do so.

1

The story that is not being printed or headlining TV news programs is that commercial banks are responsible for only 22% of the country’s lending, with the balance provided by insurance companies, conduits, hedge funds and other non-bank sources (shadow banking). We also do not hear about the continued strength of community banks. The vast majority of community banks did not get involved in sub-prime lending or high risk investments and continue to provide funding for quality loans in their communities. ParkeBank is one of those community banks. As a high rated well capitalized bank, the Company qualified and received approximately $16 million of TARP funding. As of December 31, 2008, prior to TARP funding, our capital ratios were very strong. The Bank’s total risk based capital ratio was 11.14%, tier 1 risk based capital was 9.89% and tier 1 leverage capital was 9.46%, all well above the banking regulations definition of “Well Capitalized” of 10%, 6% and 5% respectively. The additional capital that the TARP money provides enables the Company to continue its’ loan growth and to take advantage of opportunities in the market. The potential of this growth needs to be weighed against the negative restrictions and publicity recently levied against TARP recipients.

We are very concerned with the FDIC’s recent proposal to increase our insurance premiums, in addition to a 20% “special assessment”. This is in direct contrast to “Washington’s” repeated statements that banks need to increase lending. The increase in fees, combined with the special assessment is projected to cost ParkeBank an additional $2 million in 2009. This would result in a substantial reduction in our earnings, subsequently our capital and our lending ability.

We celebrated our 10 year anniversary in January of 2009. Ten years ago we started out in a trailer with a little over $8 million in total assets. Today our Bank has over $600 million in total assets and has been a leader in our banking peer group in growth and profitability since we started the Bank. Since then, we opened 4 full service branches, a loan production office and went public. Our shareholders enjoyed very strong growth in our stock price, with four stock dividends issued. Our stock price was over $16.00 per share only 9 months ago but unfortunately has declined to $5.60 per share in February of 2009 in spite of our strong growth, capital and profits. The financial sector has been in a free fall, with strong performance banks like ParkeBank being dragged down with the market.

The Company is in position to take advantage of opportunities that are in the marketplace. We have strengthened our management team, increased our capital and have upgraded our technology. Our online banking, including consumer and business bill pay continues to grow, in addition to expanding our remote banking services, which allows our business customers to make their bank deposits without leaving their office. We have confidence in our country’s ability to rebound from the current economic turbulence and we are structured to not only survive this economic downturn, but to succeed with continued growth and profitability. We appreciate the support of our customers and our shareholders and we will continue with our commitment to provide competitive products to our customers and to maximize shareholder value.

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

2

SELECTED FINANCIAL DATA

(Dollars in thousands, except per share data)

	At or for the Year Ended December 31,
	2008			2007			2006			2005			2004
	(Amounts in thousands)
BALANCE SHEET DATA:
Assets	$	601,952		$	460,795		$	359,997		$	297,810		$	224,339
Loan Receivables, Net	$	539,883		$	402,683		$	306,044		$	255,461		$	185,986
Securities-Available for Sale	$	31,930		$	29,782		$	24,530		$	22,023		$	24,043
Securities-Held to Maturity	$	2,482		$	2,456		$	2,431		$	2,406		$	548
Cash and Cash Equivalents	$	7,270		$	9,178		$	11,261		$	4,380		$	1,802
Deposits	$	495,327		$	379,480		$	289,929		$	232,056		$	179,585
Borrowings1	$	61,943		$	40,322		$	34,851		$	35,967		$	20,379
Stockholders' Equity	$	40,301		$	36,417		$	30,709		$	27,193		$	22,829
OPERATIONS DATA:	(Amounts in thousands)
Interest Income	$	36,909		$	33,186		$	25,476		$	17,336		$	11,766
Interest Expense		19,291			17,595			12,023			6,684			3,746
Net Interest Income		17,618			15,591			13,453			10,652			8,020
Provision for Loan Losses		2,063			1,161			940			1,180			825
Net interest Income after Provision for Loan Losses		15,555			14,430			12,513			9,472			7,195
Non-Interest Income (Loss)		(1,251	)		1,491			857			896			861
Non-Interest Expense		7,209			6,325			5,827			4,544			3,589
Income Before Income Taxes		7,095			9,596			7,543			5,824			4,467
Income Tax Expense		2,848			3,744			2,919			2,330			1,744
Net Income	$	4,247		$	5,852		$	4,624		$	3,494		$	2,723
PER SHARE DATA:
Basic Income per Common Share	$	1.13		$	1.61		$	1.30		$	1.03		$	0.83
Diluted Income per Common Share	$	1.05		$	1.42		$	1.10		$	0.87		$	0.69
Book Value per Common Share	$	10.35		$	11.39		$	9.68		$	8.90		$	7.95
Cash Dividends Declared per Share	$	—		$	—		$	0.18		$	—		$	—
PERFORMANCE RATIOS:
Return on Average Assets		0.79	%		1.41	%		1.41	%		1.35	%		1.45	%
Return on Average Equity		11.03	%		17.17	%		15.68	%		13.91	%		13.24	%
Net Interest Margin		3.36	%		3.88	%		4.25	%		4.33	%		4.58	%
Efficiency ratio2		36.8	%		38.7	%		40.7	%		39.4	%		40.4	%
CAPITAL RATIOS:
Equity to Assets		6.70	%		7.91	%		8.54	%		10.96	%		10.77	%
Dividend Payout ratio		0.00	%		0.00	%		12.20	%		0.00	%		0.00	%
Tier 1 Capital (Risk Weighted)3		9.89	%		11.10	%		13.30	%		13.90	%		12.20	%
Total Risk Based Capital3		11.14	%		12.40	%		14.50	%		15.10	%		13.40	%
ASSET QUALITY RATIOS:
Non-Performing Loans/Loans4		1.50	%		0.20	%		0.34	%		1.00	%		0.16	%
Allowance for Loan Losses/Loans4		1.42	%		1.40	%		1.45	%		1.38	%		1.39	%
Allowance for Loan Losses / Non-Performing Loans		94.6	%		709.1	%		571.9	%		137.5	%		886.3	%

1	Includes subordinated debt
2	Efficiency ratio for 2008 excludes write-down of securities and repossessed asset, 2007 excludes insurance reimbursements - see Management's Discussion and Analysis
3	Ratios are calculated using Parke Bank's Capital
4	Total loans before allowance for loan losses

3

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

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 (BOLI) income and other fees. The Bank’s non-interest expenses primarily consist of employee compensation and benefits, occupancy expenses, marketing expenses, professional services, 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.

Results of Operation. The Company recorded net income of $4.2 million, or $1.05 per diluted share, $5.9 million, or $1.42 per diluted share and $4.6 million, or $1.10 per diluted share, for 2008, 2007 and 2006, respectively. Pre-tax earnings amounted to $7.1 million for 2008, $9.6 million for 2007 and $7.5 million for 2006.

4

Total assets of $602.0 million at December 31, 2008 increased by $141.2 million, or 30.6%, reflecting continued strong loan growth for the Company. Total loans amounted to $547.7 million at year end 2008 resulting in an increase of $139.3 million, or 34.1%, and investment securities grew by $2.1 million, or 7.2% during the past year. This strong asset growth was funded primarily by deposit growth of $115.8 million, or 30.5% coupled with an increase of $21.6 million, or 53.6%, in borrowings during 2008. 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. Total capital at December 31, 2008 amounted to $40.3 million and increased $3.9 million, or 10.7%, 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.

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, 2008							December 31, 2007								December 31, 2006
	Average Balance			Income/ Expense		Yield/ Rate			Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield Rate
	(Amounts in thousands, except percentages)
Assets
Loans (net of deferred costs/fees)¹	$	476,994		$	34,465	7.23	%		$	365,884		$	31,232	8.54	%	$	286,691		$	23,993	8.37	%
Investment securities		39,296			2,250	5.73	%			31,267			1,708	5.46	%		26,774			1,341	5.01	%
Federal funds sold and cash equivalents		7,513			194	2.58	%			4,788			246	5.15	%		2,856			142	4.97	%
Total interest-earning assets		523,802		$	36,909	7.05	%			401,939		$	33,186	8.26	%		316,321		$	25,476	8.05	%
Allowance for loan losses		(6,643	)							(5,098	)						(4,051	)
Other assets		20,330								18,201							16,267
Total assets	$	537,490							$	415,042						$	328,537
Liabilities and Shareholders' Equity
NOWs	$	11,730		$	276	2.35	%		$	8,685		$	165	1.90	%	$	9,911		$	153	1.54	%
Money markets		39,146			1,196	3.06	%			26,080			1,136	4.36	%		16,657			599	3.59	%
Savings		42,683			1,423	3.33	%			27,774			1,038	3.74	%		28,991			1,012	3.49	%
Time deposits		171,420			7,155	4.17	%			155,284			7,909	5.09	%		111,666			5,018	4.49	%
Brokered CDs		153,297			6,909	4.51	%			100,097			5,172	5.17	%		76,374			3,450	4.52	%
Total interest-bearing deposits		418,276			16,959	4.05	%			317,920			15,420	4.85	%		243,599			10,232	4.20	%
Borrowings		54,843			2,332	4.25	%			39,502			2,175	5.51	%		34,321			1,791	5.22	%
Total interest-bearing liabilities		473,119		$	19,291	4.08	%			357,422		$	17,595	4.92	%		277,920		$	12,023	4.33	%
Non-interest bearing demand deposits		21,658								19,591							18,174
Other liabilities		4,205								3,957							2,957
Shareholders' equity		38,508								34,072							29,486
Total liabilities and shareholders' equity	$	537,490							$	415,042						$	328,537
Net interest income				$	17,618							$	15,591						$	13,453
Interest rage spread (average yield less average rate)						2.97	%							3.34	%						3.72	%
Net interest margin (net interest income/average interest-earning assets)						3.36	%							3.88	%						4.25	%

_________

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

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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.

	Year’s ended December 31,
	2008 vs. 2007									2007 vs. 2006
	Variance due to changes in									Variance due to changes in
	Average Volume		Average Rate			Increase/ (Decrease)				Average Volume		Average Rate			Increase/ (Decrease)
	(Amounts in thousands)
Interest Income:
Loans (net of deferred costs/fees)	$	9,484	$	(6,251	)		$	3,233		$	6,627	$	612			$	7,239
Investment securities		439		103				542			225		142				367
Federal funds sold		140		(192	)			(52	)		96		8				104
Total interest income		10,063		(6,340	)			3,723			6,948		762				7,710
Interest Expense:
Deposits		4,755		(3,216	)			1,539			3,309		1,879				5,188
Borrowed funds		844		(687	)			157			270		114				384
Total interest expense		5,599		(3,903	)			1,696			3,579		1,993				5,572
Net interest income	$	4,464	$	(2,437	)		$	2,027		$	3,369	$	(1,231	)		$	2,138

Critical Accounting Policies and Estimates

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.

Valuation of Investment Securities. Available-for-Sale securities are reported at fair market value with unrealized gains and losses reported, net of deferred taxes, as comprehensive income, a component of stockholders’ equity. Although Held to Maturity securities are reported at amortized cost, the valuation of all securities is subject to impairment analysis at each reporting date. Any impairment that is deemed other than temporary is charged to the income statement as a current period charge. The current market volatility may have an impact on the financial condition and the credit ratings of issuers and hence, the ability of issuers to meet their payment obligations. Accordingly, these conditions could adversely impact the credit quality of the securities, and require an adjustment to the carrying value.

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Operating Results for the Years Ended December 31, 2008, 2007 and 2006

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.

Net interest income amounted to $17.6 million for 2008, which represented an increase of $2.0 million, or 13.0%, above the level of $15.6 million in 2007. This was driven mainly by the growth in commercial loans and partially offset by a decline in the net interest margin associated with the 400 basis point decline in the prime rate in 2008 in response to the Federal Reserve lowering the fed funds rate. The 2007 results reflected an increase of $2.1 million, or 15.9%, above the level of $13.5 million in 2006 due principally to the growth in average interest-earning assets, primarily loans.

Interest income in 2008 of $36.9 million was $3.7 million, or 11.2%, above the level of 2007 due to an increase in average interest-earning assets of $121.9 million, or 30.3% offset by a 121 basis point decline on the yield on those assets. Interest income in 2007 of $33.2 million, increased by $7.7 million, or 30.3%, due to an increase in average interest-earning assets of $85.6 million year-over-year coupled with an increase in the level of market interest rates during 2007. Average loans, which represented the largest component of the change in average interest-earning assets in both years, increased by $111.1 million, or 30.4%, and by $79.2 million, or 27.6%, during 2008 and 2007, respectively.

Interest expense in 2008 amounted to $19.3 million resulting in an increase of $1.7 million, or 9.6%, above the prior year’s level due to an increase in average interest-bearing liabilities of $115.7 million, or 32.4%, offset by a decrease in the rate paid on those interest-bearing liabilities of 84 basis points from the prior year. With the exception of NOW accounts, interest rates paid for retail and brokered deposits decreased year over year as overall interest rates declined. Interest expense of $17.6 million in 2007 increased by $5.6 million, or 46.3%, resulting from increased average interest-bearing liabilities year-over-year of $79.5 million, or 28.6%, 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 $418.3 million in 2008 and increased by $100.4 million, or 31.6%, from the level of $317.9 million in 2007 which increased by $74.3 million, or 30.5%, from the average in 2006.

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 3.36% for 2008 as compared to 3.88% for 2007 and 4.25% for 2006.

Provision for Loan Losses. The provision for loan losses amounted to $2.1 million, $1.2 million and $940 thousand for 2008, 2007 and 2006, respectively. The increase in the provision was driven by the credit quality and growth of the loan portfolio. The level of nonaccrual loans amounted to $8.2 million, or 1.5% of total loans, at December 31, 2008 and $805 thousand, or 0.2% of total loans, at December 31, 2007.

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

8

the sale of investment securities. Noninterest income aggregated to a loss of $1.3 million in 2008 versus income of $1.5 million in 2007 and $857 thousand in 2006.

The decline was primarily due to the Other Than Temporary Impairment (OTTI) write down, pre-tax, of two private issue Collateralized Mortgage Obligations (CMO’s) in the aggregate amount of $1.3 million, and OTTI write downs on two Government Sponsored Enterprises, the Federal National Mortgage Association’s (Fannie Mae) and the Federal Home Loan Mortgage Corporation’s (Freddie Mac), preferred stock totaling $989 thousand.

Service charges on deposit accounts, which amounted to $188 thousand in 2008, increased by $28 thousand, or 17.5%, from the previous year due to an increase in the number of customers and related transaction accounts. Service charges of $160 thousand in 2007, increased $14 thousand, or 9.6%, from $146 thousand in 2006.

Loan fees of $569 thousand in 2008 increased from $265 thousand and $416 thousand in 2007 and 2006, 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 are variable in nature and are dependent upon the borrower.

BOLI income of $188 thousand in 2008 increased from $183 thousand in 2007 and $172 thousand in 2006.

Other miscellaneous fee income, which includes ATM fees, debit card fees, early CD withdrawal penalties, rental income and other miscellaneous income, amounted to $83 thousand in 2008, $693 thousand in 2007 and $123 thousand in 2006. The decrease of $610 thousand during 2008 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. There were no gains or losses on sales of assets during 2008.

Noninterest Expense. Noninterest expense, which amounted to $7.2 million, reflected an increase of $884 thousand, or 14.0% above the level of $6.3 million in 2007. The year over year change was the result of a $350 thousand write-off of repossessed collateral in the form of stock holdings in an unrelated bank and increases in compensation and benefits, and other operating expenses, which were primarily related to the continued growth of the Company. Noninterest expense for 2006 amounted to $5.8 million.

Compensation and benefits expense for 2008 of $3.4 million increased $322 thousand, or 10.3% during 2008 and $345 thousand, or 12.4% during 2007 due to routine salary increases, higher benefits expense and increased staff. Occupancy, equipment and data processing expense remained relatively unchanged at approximately $1.0 million in each of the three years from 2006. The $107 thousand increase in 2007 was primarily related to incremental occupancy and equipment costs associated with the new Philadelphia branch facility and Havertown loan production office.

Marketing and business development amounted to $247 thousand, $270 thousand and $260 thousand for 2008, 2007 and 2006, respectively.

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Professional services amounted to $801 thousand, $682 thousand and $681 thousand in 2008, 2007 and 2006, respectively. The $119 thousand increase in 2008 was primarily the result of increased legal cost related to loan matters.

Other operating expense of $1.7 million in 2008 increased $544 thousand above the level of $1.1 million recorded in 2007. The increase was associated with the $350 thousand write-off of repossessed collateral and higher Federal Deposit Insurance Corporation (FDIC) expense of $120 thousand attributed to an increase in assessment rates for member banks as well as increases in directors’ fees.

Income Taxes. Income tax expense amounted to $2.8 million, $3.7 million and $2.9 million for 2008, 2007 and 2006, respectively, resulting in effective tax rates of 40.1%, 39.0% and 38.7% for the respective years.

Financial Condition at December 31, 2008 and December 31, 2007

Total assets at December 31, 2008 amounted to $602.0 million compared to $460.8 million at December 31, 2007, resulting in an increase of $141.2 million, or 30.6%. This increase was driven primarily by loan growth as the Company continued to expand through business development of new and existing business relationships.

Total investments, at carrying value, were $34.4 million at December 31, 2008, compared to $32.2 million at December 31, 2007. The recent volatility in the credit and mortgage markets has impacted the value of some of the Bank’s securities. The Bank recognized Other Than Temporary Impairment (OTTI) write downs, pre-tax, on two private issue Collateralized Mortgage Obligations (CMO’s) in the aggregate amount of $1.3 million, and OTTI write downs on two Government Sponsored Enterprises, the Federal National Mortgage Association’s (Fannie Mae) and the Federal Home Loan Mortgage Corporation’s (Freddie Mac), preferred stock totaling $989 thousand. Net unrealized losses on the total investment portfolio aggregated $4.4 million at December 31, 2008. Management continues to closely monitor the portfolio for credit and impairment issues.

Total loans at December 31, 2008 were $547.7 million and represented an increase of $139.3 million, or 34.1%, from $408.4 million at December 31, 2007. Growth occurred in all loan categories due to strong business development with commercial loan growth of $118.8 million, or 32.6%, representing the majority of the loan growth for 2008. Commercial loans, which are comprised mainly of commercial real estate and construction loans totaled $483.1 million at December 31, 2008. The allowance for loan losses amounted to $7.8 million or 1.42% of total gross loans at December 31, 2008 and increased by $2.1 million from the level of $5.7 million, or 1.40%, of total gross loans at December 31, 2007, attributable to the credit quality and growth of the loan portfolio.

At December 31, 2007, total deposits amounted to $495.3 million for deposit growth of $115.8 million, or 30.5% from the December 31, 2007 level of $379.5 million. Increases in time deposits of $60.2 million, money market accounts of $26.9 million and savings accounts of $26.7 million accounted for the majority of the change from year-end 2007 to year-end 2008.

Borrowings, which included Federal Home Loan Bank advances, repurchase agreements and subordinated debentures amounted to $61.9 million at December 31, 2008, an increase of $21.6 million from the level at December 31, 2007 due to an increase in repurchase agreements of $5.0 million and an increase of $16.6 million in short term Federal Home Loan Bank advances.

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Shareholders’ equity was $40.3 million at December 31, 2008 an increase of $3.9 million, or 10.7%, from $36.4 million at December 31, 2007. Earnings of $4.2 million and the exercise of warrants 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 losses 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. 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. Impairment is measured on a loan by loan basis for commercial loans in order to establish specific reserves 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 .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 $8.2 million in non-accruing loans at December 31, 2008, an increase of $7.4 million from December 31, 2007. The majority of the increase is the result of a $5.2 million multi-family mid-rise and townhouse project going 60 days delinquent at December 31, 2008. The Company’s Real-Estate Owned (REO), which is included in Other Assets on the Company’s Consolidated Balance Sheets, was $859 thousand at December 31, 2008. The balance was zero at December 31, 2007. Nonperforming loans, as expressed as a percentage of total loans, increased to 1.5% at December 31, 2008 compared to 0.2% at December 31, 2007.

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 $2.1 million, $1.2 million, and $940 thousand for 2008, 2007 and 2006, respectively. Net loan charge-offs/recoveries amounted to a recovery of $8 thousand in 2008, a recovery of $34 thousand in 2007 and a charge-off of $3 thousand in 2006.

At December 31, 2008, the allowance for loan losses was $7.8 million as compared to $5.7 million at December 31, 2007 and $4.5 million at December 31, 2006, which represents increases of $2.1 million and $1.2 million during 2008 and 2007, respectively. The growth in the allowance was driven by changes in risks impacting the credit quality and growth of the loan portfolio.

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The following table summarizes the allowance activities:

	Years ended December 31,
	2008			2007			2006
	(Amounts in thousands, except percentages)
Allowance for loan losses, beginning of year	$	5,706		$	4,511		$	3,574
Loans charged off		(5	)		(200	)		(3	)
Recoveries		13			234			—
Provision for loan losses		2,063			1,161			940
Allowance for loan losses, end of year	$	7,777		$	5,706		$	4,511
Loans (net of deferred costs/fees) period-end balance	$	547,660		$	408,389		$	310,555
Allowance as percentage of period-end loan balance		1.42	%		1.40	%		1.45	%

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 collectibility 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 as a source of additional information for management’s consideration.

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 that meets 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.

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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, 2008 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, 2008, our interest sensitive liabilities exceeded interest sensitive assets within a one year period by $54.9 million, or 9.1 %, of total assets.

	As of December 31, 2008
	3 Months or Less			Over 3 Months Through 12 Months			Over 1 Year Through 3 Years			Over 3 Years Through 5 Years			Over 5 Years Through 30 Years			Total
	(Amounts in thousands, except percentages)
Interest-earning assets:
Loans	$	262,611		$	35,399		$	32,163		$	208,203		$	9,284		$	547,660
Investment securities		6,810			10,544			3,779			5,864			7,415			34,412
Federal funds sold and cash equivalents		570			—			—			—			—			570
Total interest-earning assets	$	269,991		$	45,943		$	35,942		$	214,067		$	16,699		$	582,642
Interest-bearing liabilities:
Regular savings deposits	$	8,196		$	7,631		$	10,175		$	20,350		$	11,049		$	57,401
NOW and money market deposits		12,003			14,841			19,788			21,860			1,199			69,691
Retail time deposits		52,785			92,571			19,526			4,945			—			169,827
Brokered time deposits		73,797			70,114			25,944			6,292			—			176,147
Borrowed funds		22,781			16,105			6,645			10,880			5,532			61,943
Total interest-bearing liabilities:	$	169,562		$	201,262		$	82,078		$	64,327		$	17,780		$	535,009
Interest rate sensitive gap	$	100,429		$	(155,319	)	$	(46,136	)	$	149,740		$	(1,081	)	$	47,633
Cumulative interest rate gap	$	100,429		$	(54,890	)	$	(101,026	)	$	48,714		$	47,633
Ratio of rate-sensitive assets to rate-sensitive liabilities		159.23	%		22.83	%		43.79	%		332.78	%		93.92	%		108.90	%

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 110.6% and 107.6% at December 31, 2008 and December 31, 2007 respectively. Funds received from new and existing depositors provided a large source of liquidity during 2008 and 2007. The Company seeks to rely primarily on core deposits from customers to provide stable and cost-effective sources of funding to support loan growth. The Bank also seeks to augment such deposits with longer term and higher yielding certificates of deposit.

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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 provides the Bank an additional source of external funds through their weekly CDARS settlement process. The rates are comparable to brokered deposits and can be obtained within a shorter period time than brokered deposits. The Bank’s CDARS deposits included within the brokered deposit total amounted to $36.4 million and $38.3 million at December 31, 2008 and December 31, 2007, respectively. 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, 2008, the Bank maintained unused lines of credit with the FHLB totaling $46.6 million. In 2008 the Bank established lines of credit with other financial institutions totaling $16.0 million. These lines were not utilized at December 31, 2008.

As of December 31, 2008, the Bank’s investment securities portfolio included $25.0 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 residential mortgage loan portfolio and certain qualifying commercial real estate loans are pledged under a blanket lien 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.

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 the 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, 2008 and 2007, commitments to extend credit amounted to approximately $112.8 million and $129.7 million, respectively.

14

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, 2008 and 2007, standby letters of credit with customers were $10.6 million and $7.3 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, 2008. 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, 2008.

	Payments Due by Period
	(Amounts in thousands)
	Less than 1 year		1-3 years		4-5 years		More than 5 years		Total
Retail time deposits	$	145,356	$	22,768	$	1,703	$	—	$	169,827
Brokered time deposits		143,911		32,236		—		—		176,147
Borrowed funds		30,500		11,900		5,000		14,543		61,943
Operating lease obligations		137		241		161		165		704
Total contractual obligations	$	319,904	$	67,145	$	6,864	$	14,708	$	408,621
	Amount of Commitments Expiring by Period
	Less than 1 Year		1-3 Years		4-5 Years		More than 5 years		Total
Loan commitments	$	27,310	$	—	$	—	$	—	$	27,310
Lines of credit		54,312		6,248		4,327		20,563		85,450
Total commitments	$	81,622	$	6,248	$	4,327	$	20,563	$	112,760

Impact of Inflation and Changing Prices

The consolidated financial statements and notes 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.

15

STOCK PERFORMANCE GRAPH

The following graph compares for fiscal years 2004 through 2008 the yearly change in the cumulative total return to the holders of our common stock with the cumulative total return of the NASDAQ Composite Index, a broad market in which we participate, and the NASDAQ Bank Index (banks with the same SIC code as the Company). The graph depicts the total return on an investment of $100 based on both stock price appreciation and reinvestment of dividends.

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 Total Return 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.

	Period Ending
Index	12/31/03	12/31/04	12/31/05	12/31/06	12/31/07	12/31/08
Parke Bancorp, Inc.	100.00	134.37	143.01	149.81	168.19	83.56
NASDAQ Bank	100.00	110.99	106.18	117.87	91.85	69.88
NASDAQ Composite	100.00	108.59	110.08	120.56	132.39	78.72

16

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 sales prices as reported on www.nasdaq.com during each quarter of the last two fiscal years. Prices reflect a 15% stock dividend paid in April 2008.

2008	High		Low
1st Quarter	$	15.47	$	12.36
2nd Quarter	$	16.34	$	10.00
3rd Quarter	$	12.92	$	8.97
4th Quarter	$	9.48	$	7.25
2007	High		Low
1st Quarter	$	14.54	$	12.77
2nd Quarter	$	15.43	$	13.61
3rd Quarter	$	15.52	$	13.71
4th Quarter	$	15.48	$	12.31

The number of stockholders of record of common stock as of March 18, 2009, was approximately 404. This does not reflect the number of persons or entities who held stock in nominee or “street” name through various brokerage firms. At March 18, 2009, there were 4,033,098 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.

17

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).

The Treasury Capital Purchase Program (CPP), see Note 19 of the Notes to the Consolidated Financial Statements, restricts against increasing dividends from the last quarterly cash dividend declared on the Common Stock prior to January 9, 2009.

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, 2008.

Management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, 2008 has not been attested to by McGladrey & Pullen, LLP the Company’s independent registered public accounting firm as stated in their report which is included herein 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/ F. Steven Meddick
Vito S. Pantilione	F. Steven Meddick
President and Chief Executive Officer	Executive Vice President and Chief Financial Officer

19

Parke Bancorp, Inc. and Subsidiaries

Consolidated Financial Report

December 31, 2008

Parke Bancorp, Inc. and Subsidiaries

Contents

	Page
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

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, 2008 and 2007 and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2008. 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, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, effective January 1, 2008 the Company adopted Statement of Financial Accounting Standards No. 157, “Fair Value Measurements”.

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, 2008 included in the accompanying Management’s Report on Internal Control Over Financial Reporting and, accordingly, we do not express an opinion thereon.

/s/ McGladrey & Pullen, LLP

Blue Bell, Pennsylvania

March 27, 2009

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, 2008 and 2007

(Amounts in thousands, except share data)

	2008			2007
Assets
Cash and due from banks	$	6,700		$	4,624
Federal funds sold and cash equivalents		570			4,554
Cash and cash equivalents		7,270			9,178
Investment securities available for sale, at market value		31,930			29,782
Investment securities held to maturity, at amortized cost
(market value 2008 - $2,324; 2007 - $2,410)		2,482			2,456
Total investment securities		34,412			32,238
Restricted stock, at cost		2,583			1,473
Loans		547,660			408,389
Less: allowance for loan losses		(7,777	)		(5,706	)
Total net loans		539,883			402,683
Bank owned life insurance		5,004			4,815
Bank premises and equipment, net		3,014			3,217
Accrued interest receivable		2,976			2,633
Other assets		6,810			4,558
	$	601,952		$	460,795

(Continued)

2

Parke Bancorp, Inc. and Subsidiaries

Consolidated Balance Sheets (Continued)

December 31, 2008 and 2007

(Amounts in thousands, except share data)

		2008		2007
Liabilities and Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing demand	$	22,261		17,869
Interest-bearing		473,066		361,611
Total deposits		495,327		379,480
Federal Home Loan Bank borrowings		38,540		21,919
Other borrowed funds		10,000		5,000
Subordinated debentures		13,403		13,403
Accrued interest payable		1,563		1,991
Other accrued liabilities		2,818		2,585
Total liabilities		561,651		424,378
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; 4,140,231 and 3,307,569 shares issued and outstanding at December 31, 2008 and 2007, respectively		414		331
Additional paid-in capital		35,656		26,798
Retained earnings		8,870		11,897
Accumulated other comprehensive loss		(2,791	)	(790	)
Treasury stock (130,270 shares in 2008 and 110,061 shares in 2007), at cost		(1,848	)	(1,819	)
Total shareholders' equity		40,301		36,417
	$	601,952		460,795

See Notes to Consolidated Financial Statements.

3

Parke Bancorp, Inc. and Subsidiaries

Consolidated Statements of Income

Years Ended December 31, 2008, 2007 and 2006

(Amounts in thousands, except share data)

	2008			2007			2006
Interest and Dividend Income
Interest and fees on loans	$	34,465		$	31,232		$	23,993
Interest and dividends on securities		2,250			1,708			1,341
Interest on federal funds sold and cash equivalents		194			246			142
Total interest and dividend income		36,909			33,186			25,476
Interest Expense
Interest on deposits		16,959			15,420			10,232
Interest on borrowings		2,332			2,175			1,791
Total interest expense		19,291			17,595			12,023
Net interest income		17,618			15,591			13,453
Provision for Loan Losses		2,063			1,161			940
Net interest income after provision for loan losses		15,555			14,430			12,513
Noninterest Income (loss)
Loan fees		569			265			416
Gain on sale of other real estate owned		—			205			—
Bank owned life insurance income		188			183			172
Service charges on deposit accounts		188			160			146
Net (loss) on the sale of securities		—			(15	)		—
Other than temporary decline in value of investments		(2,279	)		—			—
Other miscellaneous fee income		83			693			123
Total noninterest income (loss)		(1,251	)		1,491			857
Noninterest Expense
Compensation and benefits		3,439			3,117			2,772
Occupancy and equipment		739			745			665
Data processing		304			376			349
Marketing and business development		247			270			260
Professional services		801			682			681
Other operating expenses		1,679			1,135			1,100
Total noninterest expense		7,209			6,325			5,827
Income Before Income Tax Expense		7,095			9,596			7,543
Income Tax Expense		2,848			3,744			2,919
Net income	$	4,247		$	5,852		$	4,624
Net Income Per Common Share:
Basic	$	1.13		$	1.61		$	1.30
Diluted	$	1.05		$	1.42		$	1.10
Weighted Average Shares Outstanding:
Basic		3,746,447			3,629,235			3,568,859
Diluted		4,038,258			4,118,319			4,187,087

See Notes to Consolidated Financial Statements.

4

Parke Bancorp, Inc. and Subsidiaries

Consolidated Statements of Shareholders’ Equity

Years Ended December 31, 2008, 2007 and 2006

(Amounts in thousands, except share amounts)

									Accumulated
			Additional						Other							Total
	Common		Paid-In			Retained			Comprehensive				Treasury			Shareholders’
	Stock		Capital			Earnings			Income (Loss)				Stock			Equity
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	)
Comprehensive income
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	)
Comprehensive income (loss)
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
Stock options and warrants exercised		35		1,647			—				—			—			1,682
Stock compensation		—		(11	)		—				—			—			(11	)
15% common stock dividend		48		7,222			(7,274	)			—			—			(4	)
Treasury stock purchased (3,700 shares)		—		—			—				—			(29	)		(29	)
Comprehensive income (loss)
Net income		—		—			4,247				—			—			4,247
Change in net unrealized loss on securities available for sale, net of reclassification adjustment and tax effects		—		—			—				(2,032	)		—			(2,032	)
Pension liability adjustments, net of tax		—		—			—				31			—			31
Total comprehensive income																	2,246
Balance, December 31, 2008	$	414	$	35,656		$	8,870			$	(2,791	)	$	(1,848	)	$	40,301

See Notes to Consolidated Financial Statements

5

Parke Bancorp, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

Years Ended December 31, 2008, 2007 and 2006

(Amounts in thousands)

	2008			2007			2006
Cash Flows from Operating Activities
Net income	$	4,247		$	5,852		$	4,624
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		306			301			279
Provision for loan losses		2,063			1,161			940
Stock compensation		(11	)		33			37
Bank owned life insurance		(189	)		(183	)		(172	)
Supplemental executive retirement plan		326			285			230
Gain on sale of other real estate owned		—			(205	)		—
Loss on write down of foreclosed asset		350			—			—
Other than temporary decline in value of investments		2,279			—			—
Realized losses on sales of securities		—			15			—
Net accretion of purchase premiums and discounts on securities		(119	)		(69	)		(20	)
Deferred income tax benefit		(1,506	)		(569	)		(531	)
Changes in operating assets and liabilities:
Increase in accrued interest receivable and other assets		(34	)		(1,282	)		(402	)
(Decrease) increase in accrued interest payable and other accrued liabilities		189			(324	)		1,339
Net cash provided by operating activities		7,901			5,015			6,324
Cash Flows from Investing Activities
Purchases of investment securities available for sale		(13,947	)		(12,646	)		(5,064	)
Redemption (purchases) of restricted stock		(1,110	)		20			(144	)
Proceeds from sales of investment securities available for sale		—			985			1,000
Proceeds from maturities of investment securities available for sale		3,500			4,050			—
Principal payments on mortgage-backed securities		2,727			1,877			1,173
Investment in trust preferred stock		—			(93	)		—
Proceeds from sale of other real estate owned		—			1,780			—
Net increase in loans		(140,122	)		(98,200	)		(51,523	)
Purchases of bank premises and equipment		(103	)		(86	)		(631	)
Net cash used in investing activities		(149,055	)		(102,313	)		(55,189	)
Cash Flows from Financing Activities
Proceeds from exercise of stock options and warrants		1,682			856			666
Purchase of treasury stock		(29	)		(659	)		(1,109	)
Cash dividends paid		(4	)		(4	)		(568	)
Net increase (decrease) in Federal Home Loan Bank short term borrowings		11,750			(5,862	)		(3,248	)
Proceeds from Federal Home Loan Bank advances		10,000			4,500			8,400
Payments of Federal Home Loan Bank advances		—			(1,260	)		(3,285	)
Net (decrease) increase in other short term borrowings		—			—			(2,983	)
Proceeds from other long term borrowings		—			5,000			—
Proceeds from issuance of subordinated debentures		—			3,093			.
Net increase in interest-bearing deposits		111,455			89,970			57,503
Net increase (decrease) in noninterest-bearing deposits		4,392			(419	)		370
Net cash provided by financing activities		139,246			95,215			55,746
Increase (decrease) in cash and cash equivalents		(1,908	)		(2,083	)		6,881
Cash and Cash Equivalents, January 1,		9,178			11,261			4,380
Cash and Cash Equivalents, December 31,	$	7,270		$	9,178		$	11,261
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for:
Interest on deposits and borrowed funds	$	19,719		$	17,453		$	11,248
Income taxes	$	3,607		$	4,714		$	3,510
Supplemental Schedule of Noncash Activities
Real estate acquired in settlement of loans	$	859			—			—

See Notes to Consolidated Financial Statements.

6

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial 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, Farm Folly, Inc. and Taylors Glen LLC. 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 under FIN 46R, Consolidation of Variable Interest Entities. 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 within accumulated other comprehensive income, 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, 2008 and 2007, 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, 2008 and 2007, 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

7

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

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

Investment Securities (continued): ability to hold these investment securities to maturity considering all reasonably foreseeable events or conditions. These securities are classified as “held to maturity.”

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 Consolidated Statements of Income. 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

8

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

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

Loan Fees (continued): interest method. Loan brokerage fees, which represent commissions earned for facilitating loans between borrowers and other companies, are recorded in income as earned.

Allowance for Loan Losses: The allowance for loan losses is maintained through charges to the provision for loan losses in the Consolidated Statements 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.

Other Real Estate Owned (OREO): Real estate acquired through foreclosure or other proceedings is carried at estimated fair value less estimated costs of disposal and is included in other assets on the Consolidated Balance Sheets. Costs of improving OREO are capitalized to the extent that the carrying value does not exceed its fair value less estimated selling costs. Holding costs are charged to expense. Gains and losses on sales are recognized in noninterest income as they occur. OREO was $859,000 as of December 31, 2008. There was no OREO as of December 31, 2007.

9

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

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

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.

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 forty 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.

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 (FIN) 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 years ended December 31, 2008 or 2007 and did not accrue interest or penalties. The Company does not have an accrual for uncertain tax positions as of December 31, 2008 or 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 2005 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, other than temporary impairment losses on investment securities 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 2007 and 2006 financial statements have been reclassified to conform to the 2008 presentation.

10

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

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

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.

At December 31, 2008, 2007 and 2006, accumulated other comprehensive loss consisted of the following:

	2008			2007			2006
	(Amounts in thousands)
Unrealized gains (losses) on available for sale securities
(net of tax of $1,701, $346 and $142)	$	(2,552	)	$	(521	)	$	(213	)
Minimum pension liability
(net of tax of $159, $180 and $138)		(239	)		(269	)		(207	)
	$	(2,791	)	$	(790	)	$	(420	)

Financial Accounting Standards Board (“FASB”) Statement No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,” 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 has recorded a liability for the unfunded status of $398,000 and $450,000 as of December 31, 2008 and 2007, respectively, relating to a Supplemental Executive Retirement Plan (“SERP”) (Note 11).

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:

	2008				2007				2006
	(Amounts in thousands)
Unrealized holding gains (losses) on available for sale securities	$	(5,665	)	$		(524	)	$		121
Reclassification adjustment for net losses realized in income		2,279				15				—
Net unrealized gains (losses)		(3,386	)			(509	)			121
Tax effect		1,355				202				(48	)
Net-of-tax amount	$	(2,031	)	$		(307	)	$		73

11

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial 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 2008 and 2007 (Note 13). Earnings per common share have been computed based on the following for 2008, 2007 and 2006:

	2008	2007	2006
Average number of common shares outstanding	3,746,447	3,629,235	3,568,859
Effect of dilutive options	291,811	489,083	618,228
Average number of common shares outstanding used to calculate diluted earnings per common share	4,038,258	4,118,319	4,187,087

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.

Recently Issued Accounting Pronouncements: In September 2006, the Financial Accounting Standards Board (“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 principles, 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. The Company adopted SFAS No. 157 effective January 1, 2008. Adoption of the Statement did not have a material impact on the Company’s financial condition or results of operations.

SFAS No. 157 became effective for fiscal years beginning after November 15, 2007; however, the FASB has deferred the effective date in Statement 157 for nonfinancial assets and nonfinancial liabilities (except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis — at least annually) with the issuance of FASB Staff Position (FSP) FAS 157-2, Effective Date of FASB Statement No. 157 to fiscal years beginning after November 15, 2008. This deferral does not apply to entities that have issued interim or annual financial statements that include application of the measurement and disclosure provisions of Statement 157. This FSP lists examples of items for which deferral would apply, including nonfinancial assets and nonfinancial liabilities initially measured at fair value in a business combination or other new basis event, but not measured at fair value in subsequent periods (nonrecurring fair value measures). The Company has deferred the disclosures related to the fair value of Other Real Estate Owned as of December 31, 2008. The Company does not expect that adoption of the FSP will have a material impact on its statement of financial condition or results of operations.

FSP 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active”, was issued on October 10, 2008 and became effective upon issuance. This FSP applies to

12

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

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

financial assets within the scope of accounting pronouncements that require or permit fair value measurements in accordance with Statement 157 and clarifies the application of Statement 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. This FSP shall be effective upon issuance, including prior periods for which financial statements have not been issued. Revisions resulting from a change in the valuation technique or its application are accounted for as a change in accounting estimate (SFAS Statement No. 154, Accounting Changes and Error Corrections). The disclosure provisions of Statement 154 for a change in accounting estimate are not required for revisions resulting from a change in valuation technique or its application. Adoption of the FSP did not have a material impact on the Company’s statement of financial condition or results of operations.

FSP Emerging Issues Task Force Issue (“EITF”) 99-20-1 Staff Position (FSP) amends the impairment guidance in EITF Issue No. 99-20, “Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets,” to achieve more consistent determination of whether an other-than-temporary impairment has occurred. The FSP also retains and emphasizes the objective of an other-than-temporary impairment assessment and the related disclosure requirements in SFAS Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities, and other related guidance. The objective of an other-than-temporary impairment analysis is to determine whether it is probable that the holder will realize some portion of the unrealized loss on an impaired security. U.S. GAAP indicates that the holder may ultimately realize the unrealized loss on the impaired security because, for example, (a) it is probable that the holder will not collect all of the contractual or estimated cash flows, considering both the timing and amount or (b) the holder lacks the intent and ability to hold the security to recovery. In making its other-than-temporary impairment assessment, the holder should consider all available information relevant to the collectibility of the security, including information about past events, current conditions, and the value of underlying collateral. The EITF became effective for interim and annual reporting periods ending after December 15, 2008, and will be applied prospectively. Retrospective application to a prior interim or annual reporting period is not permitted. Adoption of the FSP did not have a material impact on the Company’s statement of financial condition or results of operations.

SFAS No. 141 (R), Business Combinations is a revision of a previous statement on business combinations. The new standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. This Statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date.

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

13

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

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

requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS 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 adopted SFAS 159 on January 1, 2008 and has not elected the fair value option for any existing financial assets or liabilities and consequently did not have any adoption-related adjustments.

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, 2008 or 2007, because reserve requirements were covered by vault cash.

Note 3. Investment Securities

The Company’s investment securities as of December 31, 2008 were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
	(Amounts in thousands)
Available For Sale
U.S. Government sponsored entities	$	1,994	$	17	$	—		$	2,011
Corporates		9,229		—		(4,460	)		4,769
Mortgage-backed securities		24,960		697		(507	)		25,150
Total securities available for sale	$	36,183	$	714	$	(4,967	)	$	31,930
Held to Maturity
Municipals	$	2,482	$	6	$	(164	)	$	2,324

14

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 3. Investment Securities (continued)

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 amortized cost and estimated market value of investment securities at December 31, 2008 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.

	Available For Sale				Held to Maturity
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
	(Amounts in thousands)
Maturing within one year	$	1,496	$	1,472	$	—	$	—
Maturing after one year but within five years		—		—		542		548
Maturing after five years, but within ten years		1,988		2,004		—		—
Maturing after ten years		5,719		3,304		1,940		1,776
		9,203		6,780		2,482		2,324
Mortgage-backed securities		24,960		25,150		—		—
Total securities	$	34,163	$	31,930	$	2,482	$	2,324

Gross realized losses on the sale of investment securities were $15,000 in 2007. There were no sales of investment securities in 2008 and 2006.

As of December 31, 2008, approximately $15.8 million of investment securities are pledged as collateral for borrowed funds (Note 9). In addition, securities with a carrying value of $10.8 million were pledged to secure public deposits at December 31, 2008.

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.

15

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 3. Investment Securities (continued)

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, 2008, are as follows:

	Continuous Unrealized					Continuous Unrealized
	Losses Existing for Less					Losses Existing for
	Than 12 Months					12 Months or More
	Market		Unrealized			Market		Unrealized
	Value		Losses			Value		Losses
	(Amounts in thousands)
Available For Sale
U.S. Government sponsored entities	$	—	$	—		$	—	$	—
Corporates		4,750		(4,480	)		—		—
Mortgage-backed securities		1,234		(181	)		1,220		(326	)
		5,984		(4,661	)		1,220		(326	)
Held to Maturity
Municipals		1,775		(164	)		—		—
Total temporarily impaired securities	$	7,759	$	(4,825	)	$	1,220	$	(326	)

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near term prospects of the issues and (3) the intent and the ability of the Company to retain its investment in the issues for a period of time sufficient to allow for any anticipated recovery in fair value.

The recent volatility in the credit and mortgage markets has impacted the value of some of the Bank’s securities. The Bank recognized Other Than Temporary Impairment (OTTI) write downs, pre-tax, on two private issue Collateralized Mortgage Obligations (CMO’s) in the aggregate amount of $1.3 million, and OTTI write downs on two Government Sponsored Enterprises, the Federal National Mortgage Association’s (Fannie Mae) and the Federal Home Loan Mortgage Corporation’s (Freddie Mac), preferred stock totaling $989 thousand. Included in unrealized losses is $4.5 million related to the Bank’s investment in Collateralized Debt Obligations. Management continues to closely monitor the portfolio for credit and impairment issues.

Management does not believe any individual unrealized loss as of December 31, 2008 represents an other-than-temporary impairment. A total of 17 securities are included in the continuous unrealized portion, of which 15 are in the available for sale category. 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.

16

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 3. Investment Securities (continued)

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
	Than 12 Months					12 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	)

Note 4. Loans

The composition of net loans as of December 31, 2008 and 2007 are as follows:

	2008				2007
	(Amounts in thousands)
Commercial	$	483,062		$		364,267
Residential real estate		42,971				26,579
Consumer		22,300				17,923
Less: net deferred loan fees		(673	)			(380	)
Total loans		547,660				408,389
Less: allowance for loan losses		(7,777	)			(5,706	)
Net loans	$	539,883		$		402,683

The Company maintains interest reserves for the purpose of making periodic and timely interest payments for borrowers that qualify. Total loans with interest reserves were $120.8 million and $110.5 million at

December 31, 2008 and December 31, 2007 respectively. Management on a monthly basis reviews loans with interest reserves to assess current and projected performance.

At December 31, 2008 and 2007, approximately $134.1 million and $22.9 million, respectively, of loans were pledged to the FHLB of New York on borrowings (Note 9). This pledge consists of a blanket lien on residential mortgages and certain qualifying commercial real estate loans.

17

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial 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 2008 and 2007 is as follows:

	2008			2007
	(Amounts in thousands)
Balance, beginning of year	$	17,663		$	20,281
Advances		5,182			5,545
Less: repayments		(2,345	)		(8,163	)
Balance, end of year	$	20,500		$	17,663

Note 6. Allowance for Loan Losses

An analysis of the allowance for loan losses for 2008, 2007 and 2006 is as follows:

	2008				2007			2006
	(Amounts in thousands)
Balance, beginning of year	$	5,706		$		4,511		$	3,574
Provision for loan losses		2,063				1,161			940
Charge offs		(5	)			(200	)		(3	)
Recoveries		13				234			—
Balance, end of year	$	7,777		$		5,706		$	4,511

Information about impaired loans and nonaccrual loans as of and for the years ended December 31, 2008 and 2007 is as follows:

	2008		2007
	(Amounts in thousands)
Impaired loans with a valuation allowance	$	809	$	—
Impaired loans without a valuation allowance		9,391		1,996
Total impaired loans	$	10,200	$	1,996
Related allowance for loan losses for impaired loans	$	222	$	—
Nonaccrual loans	$	8,223	$	805
Average monthly balance of impaired loans	$	3,280	$	2,441
Interest income recognized on cash basis on impaired loans	$	30	$	96

Interest income of $300,000, $66,000 and $51,000 would have been recorded on non-accrual loans had those loans paid in accordance with their original terms in 2008, 2007 and 2006, respectively.

18

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

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, 2008 and 2007 is as follows:

	2008			2007
	(Amounts in thousands)
Land	$	470		$	470
Building and improvements		3,028			3,025
Furniture and equipment		1,064			964
Total premises and equipment		4,562			4,459
Less: accumulated depreciation
and amortization		(1,548	)		(1,242	)
Premises and equipment, net	$	3,014		$	3,217

Depreciation and amortization expense was $306,000, $301,000, and $279,000 in 2008, 2007 and 2006, 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. At December 31, 2008, the required future rental payments under these leases are as follows:

Years Ending December 31,	Amounts in thousands
2009	$	137
2010		115
2011		126
2012		95
2013		66
Thereafter		165
Total minimum lease payments:	$	704

Rent expense was approximately $185,000 in 2008, $234,000 in 2007 and $211,000 in 2006.

19

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 8. Deposits

Deposits at December 31, 2008 and 2007 consisted of the following:

	2008		2007
	(Amounts in thousands)
Demand deposits, noninterest-bearing	$	22,261	$	17,869
Demand deposits, interest-bearing		10,638		12,993
Money market deposits		59,053		32,163
Savings deposits		57,401		30,711
Time deposits of $100,000 or more		70,917		71,717
Other time deposits		98,910		87,016
Brokered time deposits		176,147		127,011
Total deposits	$	495,327	$	379,480

Scheduled maturities of certificates of deposit at December 31, 2008 are as follows:

Year Ending December 31,	Amounts in Thousands
2009	$	289,267
2010		45,470
2011		9,534
2012		1,029
2013		674
	$	345,974

Deposits from related parties totaled approximately $6,955,000 and $11,789,000 at December 31, 2008 and 2007, respectively.

20

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 9. Borrowings

An analysis of borrowings as of December 31, 2008 and 2007 is as follows:

		2008				2007
				Weighted					Weighted
	Maturity Date or			Average					Average
	Range	Amount		Rate		Amount			Rate
		(Amounts in thousands, except rates)
Borrowed funds:
Federal Home Loan Bank — repurchase agreements	May 2013	$	5,000	2.65%	$		—	—
Other repurchase agreements	Five to ten years	$	5,000	4.91%	$		5,000	4.61%
Federal Home Loan Bank Advances	Less than one year	$	25,500	3.73%	$		3,250	4.83%
	One to three years		11,900	4.19%			12,000	4.96%
	Three to five years		—	—			5,400	5.10%
	Five to ten years		1,140	5.02%			1,269	5.17%
	Totals:	$	38,540		$		21,919
Subordinated debentures — capital trusts	November 2035	$	5,155	3.81%	$		5,155	6.68%
	November 2035		5,155	6.25%			5,155	6.25%
	September 2037		3,093	3.50%			3,093	6.49%
	Totals:	$	13,403		$		13,403

At December 31, 2008, the Company had a $90.2 million line of credit from the FHLB of New York, of which $43.5 million, as detailed above, was outstanding. In 2008 the Bank established lines of credit with other financial institutions totaling $16.0 million. These lines were not utilized at December 31, 2008.

Certain investment securities (Note 3), loans (Note 4), and FHLB of New York 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 3.81% at December 31, 2008. 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

21

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 9. Borrowings (continued)

Subordinated Debentures – Capital Trusts (continued): 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 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 3.50% at December 31, 2008. 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

Income tax expense for 2008, 2007 and 2006 consisted of the following:

	2008			2007			2006
	(Amounts in thousands)
Current tax expense:
Federal	$	3,395		$	3,358		$	2,599
State		1,034			955			851
		4,429			4,313			3,450
Deferred tax (benefit)		(1,581	)		(569	)		(531	)
Income tax expense	$	2,848		$	3,744		$	2,919

22

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 10. Income Taxes (continued)

The components of the net deferred tax asset at December 31, 2008 and 2007 are as follows:

	2008			2007
	(Amounts in thousands)
Deferred tax assets:
Allowance for loan losses	$	3,033		$	2,195
Investment securities available for sale		893			346
Minimum pension liability		976			412
Stock Compensation		23			28
Depreciation		135			83
Other		41			62
OTTI writedown on securities		912			—
		6,013			3,126
Deferred tax liabilities:
Discount accretion		(150	)		(41	)
Deferred loan costs		(459	)		(114	)
BOLI		(393	)		(329	)
		(1,002	)		(484	)
Net deferred tax assets	$	5,011		$	2,642

A reconciliation of the Company’s effective income tax rate with the statutory federal rate for 2008, 2007 and 2006 is as follows:

	2008			2007			2006
	(Amounts in thousands)
At Federal statutory rate	$	2,412		$	3,358		$	2,640
Adjustments resulting from:
State income taxes, net of Federal tax benefit		449			570			448
Other		(13	)		(184	)		(169	)
	$	2,848		$	3,744		$	2,919

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 $326,000 in 2008, $285,000 in 2007 and $230,000 in 2006. The unfunded benefit obligation, which was included in other accrued liabilities, was approximately $1,845,000 at December 31, 2008 and $1,569,000 at December 31, 2007.

23

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 11. Retirement Plans (continued)

The benefit obligation at December 31, 2008 and December 31, 2007 was calculated as follows:

	2008			2007
	(Amounts in thousands)
Benefit obligation, January 1	$	1,569		$	1,179
Service cost		196			180
Interest cost		90			72
(Gain) loss		(10	)		138
Benefit obligation, December 31	$	1,845		$	1,569

The net periodic pension cost for 2008 and 2007 was calculated as follows:

	2008			2007
	(Amounts in thousands)
Service cost	$	196	$		180
Interest cost		90			72
(Gain) loss		16			9
Prior service cost recognized		24			24
	$	326	$		285

The discount rate used in determining the actuarial present value of the projected benefit obligation was 5.5% for both 2008 and 2007. The expected rate of compensation increase was 4.0% for both 2008 and 2007.

Defined Contribution Plans: 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 and $38,000 in 2006.

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. The Plan expense in 2008 was $74,000.

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-

24

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 12. Regulatory Matters (continued)

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, 2008 and 2007, that the Company and the Bank met all capital adequacy requirements to which they are subject.

As of December 31, 2008 and 2007, the Bank was categorized as “well-capitalized” under the regulatory framework for prompt corrective action. Prompt correction action provisions are not applicable to bank holding companies. There are no conditions or events since December 31, 2008 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			Under Prompt Corrective
	Actual			Adequacy Purposes			Action Provisions
Parke Bancorp, Inc.	Amount		Ratio	Amount		Ratio	Amount	Ratio
As of December 31, 2008
(Amounts in thousands except ratios)
Total Risk Based Capital	$	63,609	11.2%	$	45,474	8%	N/A	N/A
(to Risk Weighted Assets)
Tier I Capital	$	56,495	9.9%	$	22,737	4%	N/A	N/A
(to Risk Weighted Assets)
Tier I Capital	$	56,495	9.5%	$	23,761	4%	N/A	N/A
(to Average Assets)

25

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 12. Regulatory Matters (continued)

Capital Ratios (continued):

							To Be Well-Capitalized
				For Capital			Under Prompt Corrective
	Actual			Adequacy Purposes			Action Provisions
Parke Bancorp, Inc.	Amount		Ratio	Amount		Ratio	Amount	Ratio
As of December 31, 2007
(Amounts in thousands except ratios)
Total Risk Based Capital	$	55,198	12.3%	$	35,916	8%	N/A	N/A
(to Risk Weighted Assets)
Tier I Capital	$	49,590	11.1%	$	17,958	4%	N/A	N/A
(to Risk Weighted Assets)
Tier I Capital	$	49,590	11.1%	$	17,872	4%	N/A	N/A
(to Average Assets)

							To Be Well-Capitalized
				For Capital			Under Prompt Corrective
	Actual			Adequacy Purposes			Action Provisions
Parke Bank	Amount		Ratio	Amount		Ratio	Amount		Ratio
As of December 31, 2008
(Amounts in thousands except ratios)
Total Risk Based Capital	$	63,325	11.1%	$	45,474	8%	$	56,843	10%
(to Risk Weighted Assets)
Tier I Capital	$	56,211	9.9%	$	22,737	4%	$	34,106	6%
(to Risk Weighted Assets)
Tier I Capital	$	56,211	9.5%	$	23,761	4%	$	29,701	5%
(to Average Assets)

26

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 12. Regulatory Matters (continued)

Capital Ratios (continued):

							To Be Well-Capitalized
				For Capital			Under Prompt Corrective
	Actual			Adequacy Purposes			Action Provisions
Parke Bank	Amount		Ratio	Amount		Ratio	Amount		Ratio
As of December 31, 2007
(Amounts in thousands except ratios)
Total Risk Based Capital	$	55,583	12.4%	$	35,885	8%	$	44,856	10%
(to Risk Weighted Assets)
Tier I Capital	$	49,975	11.1%	$	17,942	4%	$	26,913	6%
(to Risk Weighted Assets)
Tier I Capital	$	49,975	11.2%	$	17,867	4%	$	22,334	5%
(to Average Assets)

Note 13. Shareholders’ Equity

Common Stock Dividend: In April 2008 and April 2007 the Company paid a 15% and 10% common stock dividend, respectively to shareholders. All share and per share information has been retroactively adjusted.

Treasury Stock: During 2008 and 2007, the Company repurchased 20,209 and 42,035, 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.

Effective January 1, 2006, the Company adopted FAS 123R. Compensation expense 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. Net compensation expense recognized during 2008 and 2007 amounted to $(11,000) and $33,000, respectively.

27

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 13. Shareholders’ Equity (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 2008 and 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, 2008, there were 162,457 shares available for grant under the Plans.

The following table summarizes stock option activity for the year ended December 31, 2008. The information presented has been adjusted to account for the 15% stock dividend declared and paid in 2008.

Options	Shares	Weighted Average Exercise Price	Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at January 1, 2008	390,442	$ 10.69
Granted	-	$        -
Exercised	-	$        -
Expired/terminated	(10,119)	$ 15.02
Outstanding at December 31, 2008	380,323	$ 10.90	5.3	$ -
Exercisable at December 31, 2008	377,161	$ 10.87	5.2	$ -

Stock options outstanding and exercisable at December 31, 2008:

Options Outstanding					Options Exercisable
Range of Exercise Prices	Number Outstanding	Weighted- Average Remaining Contractual Life		Weighted Average Exercise Price	Number Outstanding	Weighted Average Exercise Price
$4.99	63,619	.3	years	4.99	63,619	4.99
$4.99 - $6.98	62,526	4.1	years	6.38	62,526	6.38
$9.88	8,288	5.3	years	9.88	8,288	9.88

$11.86 - $15.02	245,890	6.9	years	13.61	242,728	13.60
	380,323	5.3	years	10.90	377,161	10.87

28

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 13. Shareholders’ Equity (continued)

The weighted-average grant-date fair value of options granted during 2006 was $5.80. The total intrinsic value of options exercised during the years 2007 and 2006 was $275,000 and $3,000, respectively. No options were granted or exercised during 2008.

A summary of the status of the Company’s nonvested shares as of December 31, 2008 and changes during the year ended December 31, 2008 is as follows:

Nonvested Shares	Shares		Weighted- Average Grant- Date Fair Value
Nonvested at January 1, 2008	14,850		$	5.80
Granted	—		$	—
Vested	(4,950	)	$	5.80
Forfeited	—		$	—
Nonvested at December 31, 2008	9,900		$	5.80

At December 31, 2008, there was $15,000 of total unrecognized compensation cost relating to nonvested share-based compensation arrangements granted under the Plans. That cost is expected to be recognized over the next 1 year. The total fair value of shares vested during 2008 was $18,000.

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 $5.00 per share and expire in 2009.

During 2008, 2007 and 2006, warrants exercised were 331,430, 114,037 and 119,440 respectively. At December 31, 2008, 85,566 warrants remained unexercised. In February 2009 82,132 of the remaining warrants were exercised and the balance of 3,434 expired.

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 $92,000 in 2008, $95,000 in 2007 and $88,000 in 2006. 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 $443,000 in 2008, $357,000 in 2007 and $286,000 in 2006.

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

29

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 15. Commitments and Contingencies (continued)

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.

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, 2008 and 2007, commitments to extend credit amounted to approximately $112.8 million and $129.7 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, 2008 and 2007, standby letters of credit with customers were $10.6 million and $7.3 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, 2008. 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

SFAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for such asset or liability in an orderly transaction between market participants on the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and or the risks inherent in the inputs applied in the valuation technique. These inputs can be classified as readily observable, market corroborated, or generally unobservable. The Company utilizes techniques that maximize the use of observable inputs

30

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 16. Fair Value of Financial Instruments (continued)

whenever available and minimize the use of unobservable inputs. The Company is required to provide the following information according to the fair value hierarchy based upon observable inputs used in valuation techniques. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets carried at fair value will be classified and disclosed as follows:

Level 1 Inputs:

1)   Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

2)   Generally, this includes debt and equity securities and derivative contracts that are traded in an active exchange market (i.e. New York Stock Exchange), as well as certain U.S. Treasury and U.S. Government and agency mortgage-backed securities that are highly liquid and are actively traded in over-the-counter markets.

Level 2 Inputs:

1) Quoted prices for similar assets or liabilities in active markets.

2) Quoted prices for identical or similar assets or liabilities in markets that are not active.

3)   Inputs other than quoted prices that are observable, either directly or indirectly, for the term of the asset or liability (e.g., interest rates, yield curves, credit risks, prepayment speeds or volatilities) or “market corroborated inputs.”

4)   Generally, this includes U.S. Government and agency mortgage-backed securities and preferred stocks, corporate debt securities, derivative contracts and loans held for sale.

Level 3 Inputs:

1)   Prices or valuation techniques that require inputs that are both unobservable (i.e. supported by little or no market activity) and that are significant to the fair value of the assets or liabilities.

2)   These assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

3) Generally, this includes trust preferred securities.

The following is a description of the valuation methodologies used for instruments measured at fair value: These valuation methodologies were applied to all of the Company’s financial assets and liabilities carried at fair value effective January 1, 2008.

Securities Available for Sale

The fair value of securities is the market value based on quoted market prices, when available, or market prices provided by recognized broker dealers (Level 1). When listed prices or quotes are not available, fair value is based upon quoted market prices for similar or identical assets or other observable inputs (Level 2) or significant management judgment or estimation based upon unobservable inputs due to limited or no market activity of the instrument (Level 3).

31

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 16. Fair Value of Financial Instruments (continued)

Fair Value on a Recurring Basis

The table below presents the balances of assets and liabilities measured at fair value on a recurring basis.

Financial Assets	Level 1		Level 2		Level 3		Total
	(Amounts in thousands)
Securities available for sale	$	-	$	30,225	$	1,705	$	31,930

The changes in Level 3 assets measured at fair value on a recurring basis are summarized as follows:

	Securities Available for Sale
	(Amounts in thousands)
Beginning balance at January 1, 2008	$	5,735
Total net gains (losses) included in:
Net income		(989	)
Other comprehensive loss		(4,036	)
Purchases, sales, issuances and settlements, net		—
Net transfers in or (out) of Level 3		995
Ending balance December 31, 2008	$	1,705

Fair Value on a Non-recurring Basis

Certain assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment.

Financial Assets	Level 1		Level 2		Level 3		Total
	(Amounts in thousands)
Impaired Loans	$	-	$	-	$	9,978	$	9,978
Repossessed Assets	$	-	$	-	$	113	$	113

Impaired loans, which are measured for impairment in accordance with SFAS No. 114 using the loan’s observable market price or the fair value of the collateral for collateral-dependent loans had a carrying amount of $10,200,000 with a valuation allowance of $222,000, resulting in no additional provisions for the period. Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and client’s business. The valuation allowance for impaired loans is included in the allowance for loan losses in the balance sheets.

Repossessed assets, consisting of stock in an unrelated bank and a mobile home, were recorded based upon Management’s best estimate of fair value. Considering the financial condition, the stock was written

32

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 16. Fair Value of Financial Instruments (continued)

down to $50,000 (lower of cost or market) resulting in a valuation allowance of $450,000 and a charge to current period earnings of $350,000.

The Company discloses estimated fair values for its significant financial instruments in accordance with SFAS 107, “Disclosures about Fair Value of Financial Instruments”. The methodologies for estimating the fair value of financial assets and liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. The methodologies for other financial assets and liabilities are discussed below.

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

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

Loans (other than impaired): 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.

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 market 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 market 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.

33

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 16. Fair Value of Financial Instruments (continued)

The following table summarizes carrying amounts and fair values for financial instruments at December 31, 2008 and 2007.

	2008				2007
	Carrying Value		FairValue		CarryingValue		FairValue
	(Amounts in thousands)
Financial Assets:
Cash and cash equivalents	$	7,270	$	7,270	$	9,178	$	9,178
Investment securities		34,412		34,254		32,238		32,192
Restricted stock		2,583		2,583		1,473		1,473
Loans, net		539,883		552,049		402,683		402,958
Accrued interest receivable		2,976		2,976		2,633		2,633
Financial Liabilities:
Demand deposits and savings deposits	$	149,353	$	149,353	$	93,736	$	93,736
Time deposits		345,974		349,815		285,744		287,204
Borrowings		61,943		64,588		40,322		41,628
Accrued interest payable		1,563		1,563		1,991		1,991

34

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial 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)
2008
Interest income	$	9,817	$	9,255	$	8,949	$	8,888
Interest expense		4,842		4,667		4,825		4,957
Net interest income		4,975		4,588		4,124		3,931
Provision for loan losses		544		595		564		360
Income before income tax expense		1,462		1,950		1,552		2,131
Income tax expense		588		877		551		832
Net income		874		1,073		1,001		1,299
Net income per common share:
Basic	$	0.23	$	0.29	$	0.27	$	0.34
Diluted	$	0.22	$	0.27	$	0.25	$	0.31
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	$	0.39	$	0.45	$	0.41	$	0.36
Diluted	$	0.36	$	0.39	$	0.36	$	0.31

35

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 18. Parent Company Only Financial Statements

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

Balance Sheet

	December 31,
	2008		2007
	(Amounts in thousands)
Assets:
Cash	$	—	$	55
Investments in subsidiaries		53,788		52,366
Other Assets		2		—
Total assets	$	53,790	$	52,421
Liabilities and Shareholders' Equity:
Subordinated debentures	$	13,403	$	13,403
Other liabilities		86		80
Shareholders' equity		40,301		38,938
Total liabilities and shareholders' equity	$	53,790	$	52,421

Statement of Income

		Years ended December 31,
	2008			2007			2006
			(Amounts in thousands)
Income:
Dividends from bank subsidiary	$	1,000		$	950		$	1,875
Expense:
Interest on subordinated debentures		720			797			652
Other expenses		354			178			1
		1,074			975			653
Income before income taxes		(74	)		(25	)		1,222
Provision for income taxes (benefit)		—			—			—
Equity in undistributed income of subsidiaries		4,321			6,826			4,624
Net Income	$	4,247		$	6,801		$	5,846

36

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

________________________________________________________________________________

Note 19. Subsequent Events

On October 3, 2008 Congress passed the Emergency Economic Stabilization Act of 2008 (EESA), which provides the U.S. Secretary of the Treasury with broad authority to implement certain actions to help restore stability and liquidity to the U.S. markets. One of the provisions resulting from the Act is the Treasury Capital Purchase Program (CPP) which provides the direct equity investment of perpetual preferred stock by the U.S. Treasury in qualified financial institutions. This program is voluntary and requires an institution to comply with several restrictions and provisions, including limits on executive compensation, stock redemptions, and declaration of dividends. The CPP provides for a minimum investment of 1% of Risk-Weighted-Assets, with a maximum investment of the lesser of 3% of Risk-Weighted Assets or $25 Billion. The perpetual preferred stock has a dividend rate of 5% per year until the fifth anniversary of the Treasury investment and a dividend of 9%, thereafter. The CPP also requires the Treasury to receive warrants for common stock equal to 15% of the capital invested by the U.S. Treasury. The Company received an investment in perpetual preferred stock of $16,288,000 on January 30, 2009. The Company issued 299,779 common stock warrants to the U.S. Treasury. The warrants are accounted for as equity securities. The warrants have an exercise price of $8.15 per share of common stock.

37

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
Chairman & CEO - Pennoni Associates		Real Estate Developer
Vito S. Pantilione President, Chief Executive and Director
Fred G. Choate Director	Daniel J. Dalton Director		Arret F. Dobson Director
President of Greater Philadelphia Venture Capital Corporation	Vice President with Brown & Brown		Real Estate Developer
Edward Infantolino Director	Anthony J. Jannetti Director		Jeffrey H. Kripitz Director
President of Ocean Internal Medicine Associates, P.A.	President of Anthony J. Jannetti, Inc.		Owner of Jeff Kripitz Agency
Richard Phalines Director	Jack C. Sheppard, Jr. Director		Ray H. Tresch Director
Co-owner of Concord Truss Company	Executive Vice President with Bollinger Insurance		Owner of Redy Mixt Konkrete
In Memoriam
Victor Fabietti CPA/Special Consultant to the Board of Directors
	_______________________
	Parke Bancorp Officers
Vito S. Pantilione President and Chief Executive Officer	F. Steven Meddick Executive Vice President and Chief Financial Officer			David O. Middlebrook Senior Vice President and Corporate Secretary
	________________________
Transfer Agent & Registrar Registrar and Transfer Company 10 Commerce Dr. Cranford, NJ 07016	Independent Auditors McGladrey & Pullen, LLP 512 Township Line Road One Valley Square, Suite 250 Blue Bell, PA 19422			Special Counsel Malizia Spidi & Fisch 901 New York Avenue, N.W. Suite 210 East Washington, D.C. 20001

38

PARKE BANK

Officers
Vito S. Pantilione	F. Steven Meddick
President and Chief Executive Officer	Executive Vice President & Chief Financial Officer
Elizabeth A. Milavsky	David O. Middlebrook
Executive Vice President	Senior Vice President, Senior Loan Officer
Paul E. Palmieri	Daniel Sulpizio
Senior Vice President, Philadelphia Region	Senior Vice President
Allen M. Bachman	Dolores M. Calvello
Vice President	Vice President
John F. Hawkins	Mark A. Prater
Vice President and Controller	Vice President
James S. Talarico	Marlon R. Soriano
Vice President	Vice President
Milton H. Witte	John J. Murphy
Vice President	Treasurer
Kathleen A. Conover	Gil Eubank
Assistant Vice President	Assistant Vice President
Yvonne Johnson	Debra Miller
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
(609) 646-6677	(856) 256-2500		(856) 582-6900
Philadelphia Office		Havertown Loan Production Office
1610 Spruce Street		614 Darby Road – 2nd Floor
Philadelphia, PA 19103		Havertown, PA 19083
(215) 772-1113		(610) 449-4017

PARKE BANK	PARKE CAPITAL MARKETS	PARKE CAPITAL TRUST I
601 Delsea Drive	TAYLOR GLEN LLC	PARKE CAPITAL TRUST II
Washington Township, NJ 08080	601 Delsea Drive	PARKE CAPITAL TRUST III
(856) 256-2500	Washington Township, NJ 08080	601 Delsea Drive
	(856) 256-2500	Washington Township, NJ 08080
		(856) 256-2500

39

EX-21

Exhibit 21

Subsidiaries of the Registrant

Parent

Parke Bancorp, Inc.

	State or Other
	Jurisdiction of	Percentage
Subsidiaries	Incorporation	Ownership
Parke Bank	New Jersey	100%
Parke Capital Trust I	Delaware	100%
Parke Capital Trust II	Delaware	100%
Parke Capital Trust III	Delaware	100%
Subsidiaries of Parke Bank
Parke Capital Markets	New Jersey	100%
Farm Folly, LLC	New Jersey	100%
Taylor Glen LLC	New Jersey	100%

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 Forms S-8 and the Registration Statement No. 333-146121 and 333-157631 on Forms S-3 of Parke Bancorp, Inc. of our report, dated March 27, 2009, relating to our audit of the 2008 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, 2008.

Blue Bell, Pennsylvania

March 27, 2009

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 30, 2009	By:	/s/ Vito S. Pantilione
		Vito S. Pantilione President and Chief Executive Officer

SECTION 302 CERTIFICATION

I, F. Steven Meddick, Executive 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 30, 2009	By:	/s/ F. Steven Meddick
		F. Steven Meddick Executive 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, 2008 (the “Report”) as filed with the Securities and Exchange Commission, we, Vito S. Pantilione, President and Chief Executive Officer, and F. Steven Meddick, Executive 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 30, 2009

/s/ Vito S. Pantilione	/s/ F. Steven Meddick
Vito S. Pantilione	F. Steven Meddick
President and Chief Executive Officer	Chief Financial Officer