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, 2010 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 whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES o 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 NOx

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, 2010, was approximately $41.1 million.

As of March 25, 2011 there were issued and outstanding 4,442,233 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, 2010. (Parts II and IV)

2. Portions of the Proxy Statement for the 2011 Annual Meeting of Shareholders. (Parts II and III)

PARKE BANCORP, INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010

INDEX

PART 1		Page
Item 1.	Business	1
Item 1A.	Risk Factors	22
Item 1B.	Unresolved Staff Comments	22
Item 2.	Properties	22
Item 3.	Legal Proceedings	23
Item 4.	Reserved	23
PART II
Item 5.	Market for Common Equity, Related stockholder Matters and Issuer Purchases of Equity Securities	23
Item 6.	Selected Financial Data	23
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 8.	Financial Statements and Supplementary Data	23
Item 9.	Changes and Disagreements with Accountants on Accounting and Financial Disclosure	23
Item 9A.	Controls and Procedures	23
Item 9B.	Other Information	23
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	25
Item 11.	Executive Compensation	25
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	25
Item 13.	Certain Relationships and Related Transactions, and Director Independence	25
Item 14.	Principal Accountant Fees and Services	25
PART IV
Item 15.	Exhibits and Financial Statement Schedules	25
	Signatures

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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.

PART I

Item 1. Business

General

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, Galloway Township and Washington Township, New Jersey, and in Philadelphia, Pennsylvania. 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, 2010, the Company had assets of $757 million, net loans of $612 million, deposits of $605 million and shareholders’ equity of $71 million.

The Bank focuses its commercial loan originations on small and mid-sized businesses (generally up to $25 million in annual sales).  Commercial loan products include residential and commercial real

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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 5 through 8 for descriptions of the loan categories presented.

	At December 31,
	2010				2009				2008				2007				2006
	Amount		Percentage		Amount		Percentage		Amount		Percentage		Amount		Percentage		Amount		Percentage
	(Amounts in thousands, except percentages)
Commercial	$	25,108	4.0	%	$	20,174	3.3	%	$	19,935	3.6	%	$	14,899	3.7	%	$	13,436	4.3	%
Real estate construction
Residential		38,810	6.2			61,865	10.3			87,327	15.9			2,091	0.5			2,465	0.8
Commercial		57,651	9.2			44,726	7.4			31,582	5.8			106,320	26.0			69,254	22.3
Real estate mortgage
Residential		169,536	27.1			154,385	25.6			90,226	16.5			24,488	6.0			19,727	6.4
Commercial		318,519	50.8			309,226	51.2			308,457	56.3			242,668	59.4			198,668	64.0
Consumer		17,115	2.7			13,025	2.2			10,133	1.9			17,923	4.4			7,005	2.2
Total Loans	$	626,739	100.00	%	$	603,401	100.00	%	$	547,660	100.00	%	$	408,389	100.0	%	$	310,555	100.0	%

_______________

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

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Loan Maturity.The following table sets forth the contractual maturity of certain loan categories at December 31, 2010.

	Due within one year		Due after one through five years		Due after five years		Total
	(Amounts in thousands)
Commercial	$	9,217	$	5,412	$	10,479	$	25,108
Real estate construction
Residential		32,048		5,269		1,493		38,810
Commercial		22,699		25,342		9,610		57,651
Real estate mortgage
Residential		30,601		13,541		125,394		169,536
Commercial		80,594		42,557		195,368		318,519
Consumer		47		1,670		15,398		17,115
Total Loans	$	175,206	$	93,791	$	357,742	$	626,739

The following table sets forth the dollar amount of loans in certain loan categories due one year or more after December 31, 2010, which have predetermined interest rates and which have floating or adjustable interest rates.

	Fixed Rates		Floating or Adjustable Rates		Total
	(Amounts in  thousands)
Commercial	$	5,487	$	10,404	$	15,891
Real estate construction
Residential		1,060		5,702		6,762
Commercial		5,494		29,458		34,952
Real estate mortgage
Residential		58,822		80,113		138,935
Commercial		17,602		220,323		237,925
Consumer		15,322		1,746		17,068
Total Loans	$	103,787	$	347,746	$	451,533

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

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effects of general economic conditions and the increased difficulty of evaluating and monitoring these 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 the value of which 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 a 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,

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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 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 the 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, 2010, the Bank’s loan to one borrower limit was approximately $13.9 million and the Bank had no borrowers with loan balances in excess of $13.9 million. At December 31, 2010, the Bank’s largest loan to one borrower was a loan for commercial real estate, with a balance of $10.9 million and was secured by the real estate. At December 31, 2010, this loan was current and performing in accordance with the terms of the loan agreement.

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

Non-Performing and Problem Assets

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

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 $112.0 million, $50.9 million, $10.2 million, $2.0 million and $2.4 million at December 31 2010, 2009, 2008, 2007, and 2006, respectively. Included in impaired loans at December 31, 2010 were $42.7 million of loans classified as troubled debt restructurings as defined within accounting guidance and regulatory literature. The Company did not have any loans classified as troubled debt restructurings for the years ended December 31, 2009, 2008, 2007 and 2006.

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 $65.6 million and $74.8 million at December 31, 2010 and December 31, 2009, respectively. 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.

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	At December 31,
	2010			2009			2008			2007				2006
	(Amounts in thousands, except percentages)
Loans accounted for on a non-accrual basis:
Commercial	$	—		$	350		$	41		$	52		$	91
Real Estate Construction
Residential		8,546			18,895			5,905			—			—
Commercial		6,701			198			—			325			—
Real Estate Mortgage
Residential		9,415			2,511			897			7			—
Commercial		2,722			3,381			1,380			367			687
Consumer		61			117			—			54			—
Total non-accrual loans		27,445			25,452			8,223			805			778
Accruing loans delinquent 90 days or more:
Commercial		—			—			—			—			—
Real Estate Construction
Residential		—			—			—			—			—
Commercial		—			—			—			—			—
Real Estate Mortgage
Residential		—			—			—			—			—
Commercial		—			—			—			—			267
Consumer		—			—			—			—			—
Total					—			—			—			267
Total non-performing loans	$	27,445		$	25,452		$	8,223		$	805		$	1,045
Total non-performing loans as a percentage of loans		4.4	%		4.2	%		1.50	%		0.20	%		0.34	%

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 Company 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 Company 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, 2010, the Bank had $27.4 million of loans that were on a non-accrual basis. Gross interest income of $670,000 would have been recorded during the year ended December 31, 2010 if these loans had been performing in accordance with their terms. Interest income of $45,000 was recognized on these loans during the year ended December 31, 2010.

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

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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 weaknesses 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. All of the Bank’s loans rated “substandard” and worse are also on non-accrual and deemed impaired.

At December 31, 2010, the Bank had assets classified as follows:

	Loan Balance
	(Amounts in thousands)
Special mention	$	58,557
Substandard		69,379
Doubtful		—
Loss		—
	$	127,936

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 or its fair value less disposal costs. 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. Any write-down of real estate owned is charged to operations. Real estate owned at December 31, 2010 was $16.7 million. The real estate owned consisted of 12 properties, the largest being a condominium development at $7.9 million. This property was sold in 2010 but does not qualify for sales treatment under Generally Accepted Accounting Principles (“GAAP”).

Allowance for Losses on Loans and Real Estate Owned. It is the policy of management to provide for possible losses on all loans in its portfolio, whether classified or not. A provision for loan losses is charged to operations based on management’s evaluation of the inherent losses estimated to have occurred in the Bank’s loan portfolio.

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,
	2010			2009			2008			2007			2006
	(Dollars in thousands)
Balance at beginning of the period	$	12,404		$	7,777		$	5,706		$	4,511		$	3,574
Charge-offs:
Commercial		(615	)		(73	)		—			—			—
Real estate construction
Residential		(3,893	)		(600	)		—			—			—
Commercial		(588	)		—			—			—			—
Real estate mortgage
Residential		(1,315	)		—			—			—			—
Commercial		(189	)		—			—			(200	)		—
Consumer		(16	)		—			(5	)		—			(3	)
Total charge-offs:		(6,616	)		(673	)		(5	)		(200	)		(3	)
Recoveries:
Commercial		—			—			—			—			—
Real estate construction
Residential		—			—			—			—			—
Commercial		—			—			—			—			—
Real estate mortgage
Residential		—			—			—			—			—
Commercial		—			—			—			234			—
Consumer		—			—			13			—			—
Total recoveries:		—			—			13			234			—
Net recoveries (charge-offs)		(6,616	)		(673	)		8			34			(3	)
Provision for loan losses		9,001			5,300			2,063			1,161			940
Balance at end of period	$	14,789		$	12,404		$	7,777		$	5,706		$	4,511
Period-end loans outstanding (net of deferred costs/fees)	$	626,739		$	603,401		$	547,660		$	408,389		$	310,555
Average loans outstanding	$	622,716		$	621,619		$	476,994		$	365,884		$	286,691
Allowance as a percentage of period end loans		2.36	%		2.06	%		1.42	%		1.40	%		1.45	%
Net loans charged off as a percentage of average loans outstanding		1.06	%		0.11	%		0.00	%		( 0.01	)%		0.00	%

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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 and the related percentage of the loans in the portfolio. 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,
	2010				2009				2008				2007				2006
	Amount		Percentage		Amount		Percentage		Amount		Percentage		Amount		Percentage		Amount		Percentage
	(Amounts in thousands, except percentages)
Commercial	$	448	4.0	%	$	415	3.3	%	$	283	3.6	%	$	209	3.7	%	$	188	4.3	%
Real estate construction:
Residential		2,980	6.2			1,272	10.3			1,240	15.9			22	0.4			25	0.8
Commercial		1,576	9.2			919	7.4			448	5.8			1,489	26.1			847	22.3
Real estate mortgage:
Residential		3,220	27.1			3,174	25.6			1,281	16.5			257	4.5			218	6.4
Commercial		6,300	50.8			6,356	51.2			4,381	56.3			3,568	62.5			3,185	64.0
Consumer		130	2.7			268	2.2			144	1.9			161	2.8			48	2.2
Unallocated		135	—			—	—			—	—			—	—			—	—
Total Allowance	$	14,789	100.0	%	$	12,404	100.0	%	$	7,777	100.0	%	$	5,706	100.0	%	$	4,511	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 accounting guidance, 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, 2010, 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, 2010, no one issuer of investment securities represented 10% or more of the Company’s stockholders’ equity.

	At December 31,
	2010		2009		2008
	(Amounts in  thousands)
Securities Held to Maturity:
Municipals	$	1,999	$	2,509	$	2,482
Securities Available for Sale:
U.S. government-sponsored entity securities		2,925		3,232		2,011
Mortgage-backed securities		18,711		23,507		25,150
Corporate and trust preferred securities		6,094		2,681		4,769
Total securities available for sale		27,730		29,420		31,930
Total	$	29,729	$	31,929	$	34,412

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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, 2010 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, 2010
	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	$	—	—	%	$	—	—	%	$	—	—	%	$	1,999	1.92	%	$	1,999	1.92	%	$	2,048
Securities Available for Sale:
U.S. government sponsored entity		—	—	%		1,000	1.75	%		2,000	3.48	%		6	0.00	%		3,006	2.90	%		2,925
Corporate debt obligations		—	—			—	—			—	—			2,000	7.87			2,000	7.87			2,094
Mortgage-backed securities		—	—			—	—			2,107	4.15			15,876	4.81			17,983	4.74			18,711
Collateralized debt obligations		—	—			—	—			—	—			5,562	2.04			5,562	2.04			4,000
Total securities available for sale		—	—			1,000	—			4,107	—			23,444	—			28,551	—			27,730
Total	$	—	—	%	$	1,000	1.75	%	$	4,107	3.82	%	$	25,443	4.22	%	$	30,550	4.09	%	$	29,778

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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 $70.1 million and $96.1 million at December 31, 2010 and 2009, 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 CDARSTM settlement process. The rates are comparable to brokered deposits and can be obtained within a shorter period time than brokered deposits. The Bank’s CDARSTM deposits included within the brokered deposit total amounted to $18.8 million and $5.9 million at December 31, 2010 and December 31, 2009, 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.

	2010
	Average Balance		Yield/Rate		Percent of Total
	(Amounts in thousands, except percentages)
NOWs	$	12,936	1.19	%	2.30	%
Money markets		89,866	1.16	%	15.98
Savings		150,008	1.46	%	26.68
Time deposits		203,238	1.98	%	36.14
Brokered CDs		86,235	2.53	%	15.34
Total interest-bearing deposits		542,283	1.77	%	96.44
Non-interest bearing demand deposits		20,040			3.56
Total deposits	$	562,323			100.0	%

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	2009
	Average Balance		Yield/Rate		Percent of Total
	(Amounts in thousands, except percentages)
NOWs	$	10,945	1.41	%	2.1	%
Money markets		70,533	1.46	%	13.5
Savings		104,586	2.11	%	20.0
Time deposits		181,866	3.14	%	34.6
Brokered CDs		136,168	3.36	%	26.0
Total interest-bearing deposits		504,098	2.71	%	96.2
Non-interest bearing demand deposits		21,488			3.8
Total deposits	$	520,313			100.0	%

	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	%

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, 2010.

Maturity Period	Certificates of Deposit
	(Amounts in thousands)
Within three months	$	51,999
Three through twelve months		43,187
Over twelve months		14,028
Total	$	109,214

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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 2010, 2009, and 2008 had maturities of ten years or less and cannot be prepaid without penalty.

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

	December 31,
	2010			2009			2008
	(Amounts in thousands, except rates)
Amount outstanding at year end	$	75,616		$	67,831		$	61,943
Weighted average interest rates at year end		2.28	%		2.74	%		4.05	%
Maximum outstanding at any month end	$	81,634		$	67,831		$	78,244
Average outstanding	$	66,044		$	58,351		$	54,843
Weighted average interest rate during the year		2.65	%		3.51	%		4.25	%

Subsidiary Activities

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.  44 Business Capital LLC was formed in 2009 for the purpose of originating and servicing Small Business Administration (SBA) loans. The Bank has a 51% ownership interest.

Personnel

At December 31, 2010, the Bank had 53 full-time and 8 part-time employees.

Regulation

General. Set forth below is a brief description of certain laws that 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.

Dodd-Frank Wall Street Reform and Consumer Protection Act

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was signed into law.  The Dodd-Frank Act is intended to effect a fundamental restructuring of federal banking regulation.  Among other things, the Dodd-Frank Act creates a new Financial Stability Oversight Council to identify systemic risks in the financial system and gives federal regulators new authority to take control of and liquidate financial firms.  The Dodd-Frank Act additionally creates a new independent federal regulator to administer federal consumer protection laws. The Dodd-Frank Act is expected to have a significant impact on our business operations as its provisions take effect.  Among the provisions that may affect us are the following:

Holding Company Capital Requirements.  The Dodd-Frank Act requires the Federal Reserve to apply consolidated capital requirements to depository institution holding companies that are no less stringent than those currently applied to depository institutions.  Under these standards, trust preferred securities will be excluded from Tier 1 capital unless such securities were issued prior to May 19, 2010 by

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a bank holding company with less than $15 billion in assets. The Dodd-Frank Act additionally requires capital requirements to be countercyclical so that the required amount of capital increases in times of economic expansion and decreases in times of economic contraction, consistent with safety and soundness.

Deposit Insurance.  The Dodd-Frank Act permanently increases the maximum deposit insurance amount for banks, savings institutions and credit unions to $250,000 per depositor, retroactive to January 1, 2009, and extends unlimited deposit insurance to non-interest bearing transaction accounts through December 31, 2013. The Dodd-Frank Act also broadens the base for FDIC insurance assessments. Assessments will now be based on the average consolidated total assets less tangible equity capital of a financial institution. The Dodd-Frank Act requires the FDIC to increase the reserve ratio of the Deposit Insurance Fund from 1.15% to 1.35% of insured deposits by 2020 and eliminates the requirement that the FDIC pay dividends to insured depository institutions when the reserve ratio exceeds certain thresholds. Effective one year from the date of enactment, the Dodd-Frank Act eliminates the federal statutory prohibition against the payment of interest on business checking accounts.

Corporate Governance.The Dodd-Frank Act will require publicly traded companies to give stockholders a non-binding vote on executive compensation at their first annual meeting taking place six months after the date of enactment and at least every three years thereafter and on so-called “golden parachute” payments in connection with approvals of mergers and acquisitions unless previously voted on by shareholders. The legislation also authorizes the SEC to promulgate rules that would allow stockholders to nominate their own candidates using a company’s proxy materials. Additionally, the Dodd-Frank Act directs the federal banking regulators to promulgate rules prohibiting excessive compensation paid to executives of depository institutions and their holding companies with assets in excess of $1.0 billion, regardless of whether the company is publicly traded or not.  The Dodd-Frank Act gives the SEC authority to prohibit broker discretionary voting on elections of directors and executive compensation matters.

Prohibition Against Charter Conversions of Troubled Institutions.  Effective one year after enactment, the Dodd-Frank Act prohibits a depository institution from converting from a state to federal charter or vice versa while it is the subject of a cease and desist order or other formal enforcement action or a memorandum of understanding with respect to a significant supervisory matter unless the appropriate federal banking agency gives notice of the conversion to the federal or state authority that issued the enforcement action and that agency does not object within 30 days.  The notice must include a plan to address the significant supervisory matter.  The converting institution must also file a copy of the conversion application with its current federal regulator which must notify the resulting federal regulator of any ongoing supervisory or investigative proceedings that are likely to result in an enforcement action and provide access to all supervisory and investigative information relating hereto.

Interstate Branching.  The Dodd-Frank Act authorizes national and state banks to establish branches in other states to the same extent as a bank chartered by that state would be permitted to branch.  Previously, banks could only establish branches in other states if the host state expressly permitted out-of-state banks to establish branches in that state.  Accordingly, banks will be able to enter new markets more freely.

Limits on Derivatives.  Effective 18 months after enactment, the Dodd-Frank Act prohibits state-chartered banks from engaging in derivatives transactions unless the loans to one borrower limits of the state in which the bank is chartered takes into consideration credit exposure to derivatives transactions.  For this purpose, derivative transaction includes any contract, agreement, swap, warrant, note or option

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that is based in whole or in part on the value of, any interest in, or any quantitative measure or the occurrence of any event  relating to, one or more commodities securities, currencies, interest or other rates, indices or other assets.

Transactions with Affiliates and Insiders.  Effective one year from the date of enactment, the Dodd-Frank Act expands the definition of affiliate for purposes of quantitative and qualitative limitations of Section 23A of the Federal Reserve Act to include mutual funds advised by a depository institution or its affiliates.  The Dodd-Frank Act will apply Section 23A and Section 22(h) of the Federal Reserve Act (governing transactions with insiders) to derivative transactions, repurchase agreements and securities lending and borrowing transaction that create credit exposure to an affiliate or an insider. Any such transactions with affiliates must be fully secured. The current exemption from Section 23A for transactions with financial subsidiaries will be eliminated.  The Dodd-Frank Act will additionally prohibit an insured depository institution from purchasing an asset from or selling an asset to an insider unless the transaction is on market terms and, if representing more than 10% of capital, is approved in advance by the disinterested directors.

Debit Card Interchange Fees.  Effective July 21, 2011, the Dodd-Frank Act requires that the amount of any interchange fee charged by a debit card issuer with respect to a debit card transaction must be reasonable and proportional to the cost incurred by the issuer.  Within nine months of enactment, the Federal Reserve Board is required to establish standards for reasonable and proportional fees which may take into account the costs of preventing fraud.  The restrictions on interchange fees, however, do not apply to banks that, together with their affiliates, have assets of less than $10 billion.

Consumer Financial Protection Bureau.  The Dodd-Frank Act creates a new, independent federal agency called the Consumer Financial Protection Bureau (“CFPB”), which is granted broad rulemaking, supervisory and enforcement powers under various federal consumer financial protection laws, including the Equal Credit Opportunity Act, Truth in Lending Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Act, the Consumer Financial Privacy provisions of the Gramm-Leach-Bliley Act and certain other statutes. The CFPB will have examination and primary enforcement authority with respect to depository institutions with $10 billion or more in assets. Smaller institutions will be subject to rules promulgated by the CFPB but will continue to be examined and supervised by federal banking regulators for consumer compliance purposes. The CFPB will have authority to prevent unfair, deceptive or abusive practices in connection with the offering of consumer financial products.  The Dodd-Frank Act authorizes the CFPB to establish certain minimum standards for the origination of residential mortgages including a determination of the borrower’s ability to repay.  In addition, the Dodd-Frank Act will allow borrowers to raise certain defenses to foreclosure if they receive any loan other than a “qualified mortgage” as defined by the CFPB. The Dodd-Frank Act permits states to adopt consumer protection laws and standards that are more stringent than those adopted at the federal level and, in certain circumstances, permits state attorneys general to enforce compliance with both the state and federal laws and regulations.

Holding Company Regulation

General. The Company is a bank holding company within the meaning of the Bank Holding Company Act of 1956 (the “BHC Act”), and is regulated by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”). The Federal Reserve Board has enforcement authority over the Company and the Company’s non-bank subsidiaries which also permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a serious risk to the subsidiary bank. This

18

regulation and oversight is intended primarily for the protection of the depositors of the Bank and not for shareholders of the Company.

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

Subsidiary banks of a bank holding company are subject to certain restrictions imposed by the BHC Act on extensions of credit to the bank holding company or any of its subsidiaries, on investments in the stock or other securities of the bank holding company or its subsidiaries, and on the taking of such stock or securities as collateral for loans to any borrower. Furthermore, under amendments to the BHC Act and regulations of the Federal Reserve Board, a bank holding company and its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit or provision of credit or providing any property or services. Generally, this provision provides that a bank may not extend credit, lease or sell property, or furnish any service to a customer on the condition that the customer provide additional credit or service to the bank, to the bank holding company, or to any other subsidiary of the bank holding company or on the condition that the customer not obtain other credit or service from a competitor of the bank, the bank holding company, or any subsidiary of the bank.

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

Federal Securities Law. The Company’s common stock is registered under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the Company is subject to the periodic reporting and other requirements of Section 12(b) 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 2010, 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, 2010. 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 is not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

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Regulation of the Bank

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

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

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.

Federal Deposit Insurance. The Bank’s deposits are insured to applicable limits by the FDIC.  Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the maximum deposit insurance amount has been permanently increased from $100,000 to $250,000 and unlimited deposit insurance has been extended to non-interest-bearing transaction accounts until December 31, 2012.  Prior to the Dodd-Frank Act, the FDIC had established a Temporary Liquidity Guarantee Program under which, for the payment of an additional assessment by insured banks that did not opt out, the FDIC fully guaranteed all non-interest-bearing transaction accounts until June 30, 2010 (the “Transaction Account Guarantee Program”) and all senior unsecured debt of insured depository institutions or their qualified holding companies issued between October 14, 2008 and October 31, 2009, with the FDIC’s guarantee expiring by December 31, 2012 (the “Debt Guarantee Program”).  The Company and the Bank did not opt out of the Debt Guarantee Program.The Bank did not opt out of the original Transaction Account Guarantee Program or its extension.

The FDIC has adopted a 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. Well-capitalized institutions with the CAMELS ratings of 1 or 2 are grouped in Risk Category I and, until 2009, were assessed for deposit insurance at an annual rate of between five and seven basis points of insured deposits with the assessment rate for an individual institution determined according to a formula based on a weighted average of the institution’s individual CAMELS component ratings plus either five financial ratios or the average ratings of its long-term debt. Institutions in Risk Categories II, III and IV were assessed at annual rates of 10, 28 and 43 basis points, respectively.

Starting in 2009, the FDIC significantly raised the assessment rate in order to restore the reserve ratio of the Deposit Insurance Fund to the statutory minimum of 1.15%.   For the quarter beginning January 1, 2009, the FDIC 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 were increased to 17, 35 and 50 basis points, respectively.  For the quarter beginning April 1, 2009 the FDIC set the base annual assessment rate for institutions in Risk Category I to between 12 and 16 basis points and the base annual assessment rates for institutions in Risk Categories II, III and

20

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 based on the ratio of certain amounts of Tier 1 capital to adjusted assets.  The assessment rate may 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%.  Reciprocal deposit arrangements like CDARS® were treated 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 an institution’s base assessment rate by more than 50%.

The FDIC imposed a special assessment equal to five basis points of assets less Tier 1 capital as of June 30, 2009, payable on September 30, 2009, and reserved the right to impose additional special assessments.  In November, 2009, instead of imposing additional special assessments, the FDIC amended the assessment regulations to require all insured depository institutions to prepay their estimated risk-based assessments for the fourth quarter of 2009, and for all of 2010, 2011 and 2012 on December 30, 2009.  For purposes of estimating the future assessments, each institution’s base assessment rate in effect on September 30, 2009 was used, assuming a 5% annual growth rate in the assessment base and a 3 basis point increase in the assessment rate in 2011 and 2012.  The prepaid assessment will be applied against actual quarterly assessments until exhausted.  Any funds remaining after June 30, 2013 will be returned to the institution.

The Dodd-Frank Act requires the FDIC to take such steps as necessary to increase the reserve ratio of the Deposit Insurance Fund from 1.15% to 1.35% of insured deposits by 2020.  In setting the assessments, the FDIC is required to offset the effect of the higher reserve ratio against insured depository institutions with total consolidated assets of less than $10 billion. The Dodd-Frank Act also broadens the base for FDIC insurance assessments so that assessments will be based on the average consolidated total assets less average tangible equity capital of a financial institution rather than on its insured deposits.  The FDIC has adopted a new restoration plan to increase the reserve ratio to 1.15% by September 30, 2020 with additional rulemaking scheduled for 2011 regarding the method to be used to achieve a 1.35% reserve ratio by that date and offset the effect on institutions with assets less than $10 billion in assets.  Pursuant to the new restoration plan, the FDIC will forgo the 3 basis point increase in assessments scheduled to take effect on January 1, 2011.  The FDIC has proposed new assessment regulations that would redefine the assessment base as average consolidated assets less average tangible equity.  The proposed regulations would use the current assessment rate schedule with modifications to the unsecured debt and brokered deposit adjustments and the elimination of the secured liability adjustment.

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 Federal Savings and Loan Insurance Corporation.  The FICO assessment rates, which are determined quarterly, averaged .0104% of insured deposits on an annualized basis in fiscal year 2009.  These assessments will continue until the FICO bonds mature in 2017.

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-

21

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, 2010, 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.

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 full-service office in Galloway Township, NJ. These offices were opened by the Bank in September 2002, February 2003, August 2006 and May 2010, respectively. The Northfield office and the Philadelphia office are leased. The Washington Township office was purchased in February 2003. Management considers the physical condition of all offices to be good and adequate for the conduct of the Bank’s business. At December 31, 2010, net property and equipment totaled approximately $4.3 million.

22

On January 28, 2011 there was a fire at the Company’s Washington Township branch. The branch is approximately 3.8 miles from the main office located at 601 Delsea Drive, Sewell, NJ. Management does not expect that customers will be adversely impacted due to the proximity of the main office location. The property was insured and the Company should not experience any financial loss due to the fire.

Item 3. Legal Proceedings

At December 31, 2010, the Company was not a party to any material legal proceedings.

Item 4. Reserved

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 2010 Annual Report is incorporated herein by reference.

(b)   Not applicable.

(c)   There were no treasury stock repurchases during the fourth quarter of 2010.

Item 6. Selected Financial Data

The information contained under the section captioned “Selected Financial Data” in the 2010 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

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.

23

Item 9A. 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 2010 Annual Report filed as Exhibit 13 to this Annual Report on Form 10-K. Such report is incorporated herein by reference.

2.  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.

24

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 2011 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.

25

(d)           Securities Authorized for Issuance Under Equity Compensation Plans

Set forth below is information as of December 31, 2010 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	343,611	$11.02	148,181
Total	343,611	$11.02	148,181

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, 2010 and 2009

• Consolidated Statements of Income For the Years Ended December 31, 2010 and 2009.

• Consolidated Statements of Equity for the Years Ended December 31, 2010 and 2009

26

• Consolidated Statements of Cash Flows for the Years Ended December 31, 2010 and 2009

• 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****

10.3 Supplemental Executive Retirement Plan*

10.4 1999 Stock Option Plan*

10.5 2002 Stock Option Plan*

10.6 2003 Stock Option Plan*

10.7 2005 Stock Option Plan***

13 Annual Report to Shareholders for the fiscal year ended December 31, 2010

21 Subsidiaries of the Registrant

23 Consent of McGladrey & Pullen, LLP

31.1 Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32 Certification of CEO & CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

99 Certification of CEO and CFO pursuant to Section 111(b)(4) of EESA

* 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.

27

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 25, 2011			/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 25, 2011.
/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
Fred G. Choate				Daniel J. Dalton
Director				Director
/s/ Arret F. Dobson				/s/ Thomas Hedenberg
Arret F. Dobson				Thomas Hedenberg
Director				Director
/s/ Edward Infantolino				/s/ Anthony J. Jannetti
Edward Infantolino				Anthony J. Jannetti
Director				Director
				/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/ John F. Hawkins
John F. Hawkins
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Date:	March 25, 2011

EX-13

PARKE BANCORP, INC.

2010 ANNUAL REPORT TO SHAREHOLDERS

PARKE BANCORP, INC.

2010 ANNUAL REPORT TO SHAREHOLDERS

TABLE OF CONTENTS
	Page
Section One
Letter to Shareholders...................................................................................................................................................................................................................................	1
Selected Financial Data.................................................................................................................................................................................................................................	3
Management’s Discussion and Analysis of Financial Condition and Results of Operations..................................................................................................	4
Market Prices and Dividends.......................................................................................................................................................................................................................	18
Management’s Report on Internal Control Over Financial Reporting............................................................................................................................................	20
Section Two
Report of Independent Registered Public Accounting Firm...............................................................................................................................................................	1
Consolidated Financial Statements..............................................................................................................................................................................................................	2
Notes to Consolidated Financial Statements............................................................................................................................................................................................	6
Corporate Information.....................................................................................................................................................................................................................................	52

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; the impact of our participation in the Treasury’s capital purchase plan; 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:

We are again proud to report record profits for Parke Bancorp in 2010. Net Income available to common shareholders improved to $6.4 million or a $1.41 per share, a 22% increase over 2009. Although the economic experts declared the end of the “Great Recession”, unemployment remains above 9% and real estate values and activity continued to decline. However, an economic recovery, although slow, appears to be underway. We are beginning to see activity at many projects that were dormant over the last couple of years. Agreements of sale are being executed and many businesses are reporting increased revenues. These are positive signs that point to an economic recovery both regionally and nationally. Unfortunately, there remains a substantial amount of pain that we still must work through. Experiencing the severe cash flow crunch over the last three years, many real estate developments, both residential and commercial, are finding it very difficult to remain solvent. Our non-performing loans increased 3.6% to $27.4 million, $1.9 million over December 31, 2009. We have had some success in disposing of troubled assets since the beginning of 2010, but unfortunately, new loan challenges continue to affect our non-performing loan totals and our 30 to 89 day past due loans. OREO (Other Real Estate Owned) also increased to $16.7 million as of December 31, 2010. The legal process to resolve troubled loans has worsened in the region. There is currently a moratorium on sheriff sales in Philadelphia and a foreclosure, residential and commercial, in New Jersey now averages 849 days. This further exacerbates the efforts of the real estate industry to recover. These troubled properties have to move through the system in order to accelerate the recovery of the real estate industry. We continue to be very aggressive in resolving our non-performing loans and our OREO properties, while maintaining a conservative financial position by increasing our loan loss reserve to 2.36% of total loans.

Total assets increased to $756.9 million from $654.2 million at December 31, 2009, an increase of $102.7 million or 15.7%. This growth was driven by our aggressive marketing plan for retail deposits. Total deposits grew by $84.4 million, a 16.2% increase from December 31, 2009 to $604.7 million. The opening of our new branch in Galloway Township contributed to our retail deposit growth. In less than one year, this branch has generated over $30 million in deposits. Our Northfield branch continues to be our strongest retail branch and is approaching $200 million in deposits. The main office, our Philadelphia office and our Washington Township “Kennedy” (located next to Kennedy hospital) branch also contributed to our strong deposit growth. Unfortunately, our Kennedy branch was destroyed by fire in January 2011. Most importantly no one was injured thanks to the immediate response from the fire and police departments. Everyone is working very hard to get the branch rebuilt and open for business as soon as possible.

The current economy makes it very difficult for businesses to grow and expand their market base. This has had a ripple effect on the availability of quality loans. Depressed real estate values make it very difficult for companies and individuals to utilize their real estate holdings to finance expansion and growth. However, we did increase our loan portfolio to $626.7 million, an increase of $23.3 million. Last year we reported opening a SBA lending subsidiary, 44 Business Capital. Since opening in August of

1

2009, this company has closed over $40 million of SBA 7A loans. We are fortunate to have some of the best SBA lenders and servicing administrators in the industry leading this company. The government’s stimulus program that increased government guarantees to 90% and eliminated borrower fees provided a substantial increase in SBA lending. Although this government incentive has expired, the company continues to grow and generate profits for Parke Bancorp. We have carefully identified expansion plans for 44 Business Capital to increase our market share and lending footprint.

Increased banking regulatory pressure continues to slow down the banking industry recovery. Increased insurance assessment fees and capital requirements, combined with a dramatic increase in reporting requirements has added substantial expenses to a bank’s operating costs while reducing a bank’s ability to increase lending. We have been proactive in adding to our senior management team, which will focus on the increased reporting and regulatory requirements.

2011 will continue to be very challenging for our communities, the economy and the banking industry, but there are clear signs that a recovery is under way. There will be additional troubled projects and challenging loans, however, we now see businesses starting to recover, projects beginning to sell and a renewed positive commitment in consumer spending. These factors will lead the country and our communities back to economic growth and prosperity. Parke Bancorp is positioned to overcome the remaining economic and real estate industries hurdles and take advantage of market opportunities. The success of our new branch and SBA subsidiary, combined with continued critical controls on our expenses supports a bright future for our bank. As always, we continue to appreciate the loyalty of our customers and the commitment of our shareholders. We will continue to work diligently to provide the best products and services to our customers, while enhancing shareholder value.

/s/ C.R. “Chuck” Pennoni                                                                                                              /s/ Vito S. Pantilione

C.R. “Chuck” Pennoni                                                                                                                   Vito S. Pantilione

Chairman                                                                                                                                         President and Chief Executive Officer

2

Selected Financial Data
	At or for the Year Ended December, 31
	2010		2009			2008			2007		2006
Balance Sheet Data: (in thousands)
Assets	$	756,853	$	654,198		$	601,952		$	460,795	$	359,997
Loans Net	$	611,950	$	590,997		$	539,883		$	402,683	$	306,044
Securities Available for Sale	$	27,730	$	29,420		$	31,930		$	29,782	$	24,530
Securities Held to Maturity	$	1,999	$	2,509		$	2,482		$	2,456	$	2,431
Cash and Cash Equivalents	$	57,628	$	4,154		$	7,270		$	9,178	$	11,261
Deposits	$	604,722	$	520,313		$	495,327		$	379,480	$	289,929
Borrowings	$	75,616	$	67,831		$	61,943		$	40,322	$	34,851
Equity	$	70,732	$	61,973		$	40,301		$	36,417	$	30,709
Operational Data: (in thousands)
Interest Income	$	41,636	$	40,395		$	36,909		$	33,186	$	25,476
Interest Expense		11,350		15,734			19,291			17,595		12,023
Net Interest Income		30,286		24,661			17,618			15,591		13,453
Provision for Loan Losses		9,001		5,300			2,063			1,161		940
Net Interest Income after Provision for      Loan Losses		21,285		19,361			15,555			14,430		12,513
Noninterest Income (Loss)		2,757		(540	)		(1,251	)		1,491		857
Noninterest Expense		11,650		8,757			7,209			6,325		5,827
Income Before Income Tax Expense		12,392		10,064			7,095			9,596		7,543
Income Tax Expense		4,895		3,964			2,848			3,744		2,919
Net income attributable to Company      and noncontrolling (minority) interest		7,497		6,100			4,247			5,852		4,624
Net income attributable to      noncontrolling (minority) interest		(157)		—			—			—		—
Preferred Stock Dividend and      Discount Accretion		988		899			—			—		—
Net Income Available to      Common Shareholders	$	6,352	$	5,201		$	4,247		$	5,852	$	4,624
Per Share Data:
Basic Earnings per Common Share	$	1.43	$	1.17		$	1.03		$	1.46	$	1.18
Diluted Earnings per Common Share	$	1.41	$	1.17		$	0.95		$	1.29	$	1.00
Book Value per Common Share	$	12.25	$	10.30		$	9.14		$	9.00	$	7.65
Cash Dividends Declared per Share	$	—	$	—		$	—		$	—	$	0.18
Performance Ratios:
Return on Average Assets		1.05%		0.94%			0.79%			1.41%		1.41%
Return on Average Common Equity		12.19%		11.82%			11.03%			17.17%		15.68%
Net Interest Margin		4.60%		3.97%			3.36%			3.88%		4.25%
Efficiency Ratio		33.26%		33.88%			36.80%			38.70%		40.70%
Capital Ratios:
Equity to Assets		9.35%		9.47%			6.70%			7.91%		8.54%
Dividend Payout Ratio		0.00%		0.00%			0.00%			0.00%		12.20%
Tier 1 Risk-based Capital1		12.93%		13.02%			9.89%			11.10%		13.30%
Total Risk-based Capital1		14.19%		14.27%			11.14%			12.40%		14.50%
Asset Quality Ratios:
Non-Performing Loans/Total Loans		4.38%		4.22%			1.50%			0.20%		0.34%
Allowance for Loan Losses/Total Loans		2.36%		2.06%			1.42%			1.40%		1.45%
Allowance for Loan Losses/      Non-Performing Loans		53.89%		48.74%			94.61%			709.10%		571.90%
1 Capital Ratios for Parke Bank

3

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

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 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 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 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 Company's non-interest expenses primarily consist of employee compensation and benefits, occupancy expenses, marketing expenses, professional services, FDIC insurance assessments, data processing costs and other operating expenses. The Company is also subject to losses from its loan portfolio if borrowers fail to meet their obligations. The Company'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 available to common shareholders of $6.4 million or $1.41 per diluted share and $5.2 million, or $1.17 per diluted share for 2010 and 2009, respectively. Pre-tax earnings amounted to $12.4 million for 2010 and $10.1 million for 2009.

Total assets of $756.9 million at December 31, 2010 represented an increase of $102.7 million, or 15.7% from December 31, 2009. Total loans amounted to $626.7 million at year end 2010 for an increase of $23.3 million, or 3.9% from December 31, 2009. Deposits grew by $84.4 million, an increase of 16.2%. The Company continues to expand its balance sheet primarily through the generation of loan growth

4

through its effective business development of new and existing business relationships. Total capital at December 31, 2010 amounted to $70.7 million and increased $8.8 million, or 14.1%, 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 thereto.

5

Comparative Average Balances, Yields and Rates.The following table sets forth average balance sheets, average yields and costs, and certain other information for the periods indicated. Interest rate spread is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities. Net interest margin is net interest income divided by average earning assets. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, and have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.

	For the Years Ended December 31,
	2010								2009
	Average Balance			Interest Income/ Expense		Yield/ Cost			Average Balance			Interest Income/ Expense		Yield/ Cost
	(amounts in thousands except Yield Cost data)
Assets
Loans	$	622,716		$	39,934		6.41	%	$	587,047		$	38,482		6.56	%
Investment securities		35,565			1,702		4.79	%		34,384			1,912		5.56	%
Federal funds sold and cash equivalents		87			—		0.00	%		188			1		0.53	%
Total interest-earning assets		658,368		$	41,636		6.32	%		621,619		$	40,395		6.50	%
Non-interest earning assets		57,747								33,657
Allowance for loan losses		(14,250	)							(9,616	)
Total assets	$	701,865							$	645,660
Liabilities and Equity
Interest bearing deposits
NOWs	$	12,936			154		1.19	%	$	10,945			154		1.41	%
Money markets		89,866			1,045		1.16	%		70,533			1,033		1.46	%
Savings		150,008			2,190		1.46	%		104,586			2,205		2.11	%
Time deposits		203,238			4,027		1.98	%		181,866			5,711		3.14	%
Brokered certificates of deposit		86,235			2,184		2.53	%		136,168			4,582		3.36	%
Total interest-bearing deposits		542,283			9,600		1.77	%		504,098			13,685		2.71	%
Borrowings		66,044			1,750		2.65	%		58,351			2,049		3.51	%
Total interest-bearing liabilities		608,327		$	11,350		1.87	%		562,449		$	15,734		2.80	%
Non-interest bearing deposits		20,040								20,068
Other liabilities		5,822								4,149
Total liabilities		634,189								586,666
Equity		67,676								58,994
Total liabilities and equity	$	701,865							$	645,660
Net interest income				$	30,286							$	24,661
Interest rate spread							4.45	%							3.70	%
Net interest margin							4.60	%							3.97	%

6

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

	Years ended December 31,
	2010 vs. 2009									2009 vs. 2008
	Variance due to change in									Variance due to change in
	Average Volume			Average Rate			Net Increase/ (Decrease)			Average Volume			Average Rate			Net Increase/ (Decrease)
Interest Income:
Loans (net of deferred costs/fees)	$	2,336		$	(884	)	$	1,452		$	7,585		$	(3,568	)	$	4,017
Investment securities		67			(277	)		(210	)		(284	)		(54	)		(338	)
Federal funds sold		(1	)		—			(1	)		(114	)		(79	)		(193	)
Total interest income		2,402			(1,161	)		1,241			7,187			(3,701	)		3,486
Interest Expense:
Deposits		844			(4,929	)		(4,085	)		2,903			(6,177	)		(3,274	)
Borrowed funds		236			(535	)		(299	)		136			(419	)		(283	)
Total interest expense		1,080			(5,464	)		(4,384	)		3,039			(6,596	)		(3,557	)
Net interest income	$	1,322		$	4,303		$	5,625		$	4,148		$	2,895		$	7,043

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.

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.

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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 shareholders’ 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 credit-related 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.

Operating Results for the Years Ended December 31, 2010 and 2009

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 increased $5.6 million, or 22.8%, to $30.3 million for 2010, from $24.7 million for 2009. We experienced an increase in our  interest rate spread of 75 basis points, to 4.45% for 2010, from 3.70% for last year. Our net interest margin increased 63 basis points, to 4.60% for 2010, from 3.97% for last year. Our ability to lower our cost of deposits, a change in deposit mix to lower cost core deposits and our practice of setting floors on commercial and real estate loans has allowed for this growth in net interest rate margin.

Interest income increased $1.2 million, or 3.1%, to $41.6 million for 2010, from $40.4 million for 2009. The increase is attributable to higher loan volumes, offset somewhat by a lower yield on loans.  Average loans for the year were $622.7 million compared to $587.0 million for last year, while average loan yields were 6.41% for 2010 compared to 6.56% for 2009.

Interest expense decreased $4.4 million, or 27.9%, to $11.3 million for 2010, from $15.7 million for 2009. The decrease is primarily attributable to an increase of core deposits and a decline in the cost of funds. The average rate paid on deposits for 2010 was 1.77% compared to 2.71% for last year. The Bank has been able to re-price deposits due to the current, historically low, rate environment while still maintaining strong deposit growth.

Provision for Loan Losses. We establish provisions for loan losses, which are charged to operations, in order to maintain the allowance for loan losses at a level we consider necessary to absorb credit losses incurred in the loan portfolio that are both probable and reasonably estimable at the balance sheet date. In determining the level of the allowance for loan losses, we consider, among other things, past and current loss experience, evaluations of real estate collateral, current economic conditions, volume and type of lending, adverse situations that may affect a borrower’s ability to repay a loan, the levels of delinquent loans and current local and national industry and economic conditions. The amount of the allowance is based on estimates, and the ultimate losses may vary from such estimates as more information becomes available or conditions change. We assess the allowance for loan losses and make provisions for loan losses on a monthly basis.

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At December 31, 2010, the Company’s allowance for loans losses increased to $14.8 million from $12.4 million at December 31, 2009, an increase of $2.4 million or 19.2%. The allowance for loan loss ratio increased to 2.36% of gross loans at December 31, 2010, from 2.06% of gross loans at December 31, 2009. The allowance for loan losses to non-performing loans coverage ratio increased to 53.9% at December 31, 2010, from 48.7% at December 31, 2009.

We recorded a provision for loan losses of $9.0 million for 2010 compared to $5.3 million for 2009. The increase in the provision for losses over the prior year correlates to the increase in credit deterioration within the loan portfolio and management’s analysis of non-performing loans and credit risk inherent in the portfolio.

Noninterest Income. Noninterest incomeis principally derived from fee income from loan services, service fees on deposits, BOLI (Bank-Owned Life Insurance) income and gains on the sale of loans. Noninterest income totaled $2.8 million in 2010 versus a loss of $540,000 in 2009. The loss in 2009 resulted from the Company recognizing an other-than-temporary impairment charge to non-interest income on investment securities totaling $1.7 million.

The Company recognized $1.8 million in gains from the sale of the guaranteed portion of SBA loans in 2010, compared to a gain of $313,000 in 2009. The increase is attributable to our SBA subsidiary being formed in the 4th quarter of 2009.

Loan fees of $301 thousand in 2010 increased from $241 thousand in 2009. 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 borrowers’ course of action.

BOLI income of $178 thousand in 2010 decreased from $180 thousand in 2009.

Service fees on deposit accounts increased to $252,000 in 2010 from $187,000 in 2009. The increase was attributable to strong growth in retail deposits and an increase in the fee assessed to account holders with non-sufficient funds.

Other miscellaneous fee income, which includes ATM fees, debit card fees, early CD withdrawal penalties, rental income and other miscellaneous income, amounted to $329 thousand in 2010 and $249 thousand in 2009. The majority of the increase is attributable to packaging fee income generated from our SBA joint venture.

Noninterest Expense. Noninterest expense for 2010 was $11.7 million, an increase of $2.9 million or 33.0% above the level of $8.8 million in 2009.

Compensation and benefits expense for 2010 was $5.3 million, an increase of $1.1 million over last year. The increase is attributable to routine salary increases, higher benefits expense and increased staff as a result of the formation of the SBA joint venture and the opening of a new full-service branch.

Professional services in 2010 amounted to $1.2 million, compared to $862 thousand in 2009. The increase was primarily the result of increased legal cost related to loan matters.

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OREO expenses increased to $622,000 in 2010, from $126,000 in 2009. The increase is a related to the carrying costs including property taxes, insurance and maintenance associated with a higher level of real estate properties.

Occupancy and equipment expense was $937 thousand for 2010, an increase of $89 over 2009.  The increase is a result of opening a new full-service branch and the full year of operations of the SBA joint venture.

Other operating expense increased to $2.5 million in 2010, from $1.7 million in 2009. The majority of the increase is related to a $618,000 charge related to the funding of a letter of credit due to a borrower’s nonperformance.

Income Taxes. Income tax expense amounted to $4.9 million for 2010, compared to $4.0 million for 2009, resulting in effective tax rates of 39.5% and 39.4% for the respective years.

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Financial Condition at December 31, 2010 and December 31, 2009

At December 31, 2010, the Company’s total assets increased to $756.9 million from $654.2 million at December 31, 2009, an increase of $102.7 million or 15.7%.

Cash and cash equivalents increased $53.5 million to $57.6 million at December 31, 2010 from $4.1 million at December 31, 2009. The increase is due to an effective deposit promotion and the opening of a full-service branch in Galloway Township, NJ in the second quarter of 2010. The cash will be utilized to fund future loan growth and pay off maturing brokered CDs.

Total investment securities decreased to $29.7 million at December 31, 2010 ($27.7 million classified as available for sale or 93.3%) from $31.9 million at December 31, 2009, a decrease of $2.2 million or 6.9%. The Company received $11.6 million in cash flow from maturities and principal payments, offset by purchases of $5.8 million. In addition, the fair value of the available-for sale portfolio increased by $3.6 million, primarily related to the collateralized debt obligation (“CDO”) portfolio, which reflected lower levels of unrealized losses.

Management evaluates the portfolio for other-than-temporary impairment (“OTTI”) on a quarterly basis. Factors considered in the analysis include, but are not limited to, whether an adverse change in cash flows has occurred, the length of time and the extent to which the fair value has been less than cost, whether the Company intends to sell, or will more likely than not be required to sell the investment before recovery of its amortized cost basis, which may be maturity, credit rating downgrades, the percentage of performing collateral that would need to default or defer to cause a break in yield or a temporary interest shortfall, and management’s assessment of the financial condition of the underlying issuers. For the year ended December 31, 2010, the Company recognized additional credit related OTTI charges (pre-tax) of $124,000 on an existing other-than-temporarily impaired private-label collateralized mortgage obligation (“CMO”).

Total loans increased to $626.7 million at December 31, 2010 from $603.4 million at December 31, 2009, an increase of $23.3 million or 3.9%, consistent with management’s plan for loan growth. In addition, there were $12.9 million of loans held for sale. These loans, the government guaranteed portion of originated SBA loans, were sold during the fourth quarter of 2010, but did not qualify for a sales treatment due to a 90 day warranty period in the sales agreement. The cash received from the sale was recorded as a secured borrowing. The sale of these loans will be recognized in the first quarter of 2011.

OREO at December 31, 2010 was $16.7 million, compared to none at December 31, 2009. The real estate owned consisted of 12 properties, the largest being a condominium development at $7.9 million. This property was sold in 2010 but does not qualify for a sales treatment under Generally Accepted Accounting Principles (GAAP) because of continuing involvement by the Company in the form of financing.

Other assets increased to $13.4 million at December 31, 2010 from $13.2 million at December 31, 2009, an increase of $266,000 or 2.0%.

At December 31, 2010, the Bank’s total deposits increased to $604.7 million from $520.3 million at December 31, 2009, an increase of $84.4 million or 16.2%.  Non-interest bearing deposits increased $1.7 million, or 7.8%, to $23.2 million at December 31, 2010 from $21.5 million at December 31, 2009.  NOW

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and money market accounts increased $13.4 million, or 14.1%, to $108.7 million at December 31, 2010 from $95.3 million at December 31, 2009.  Savings accounts increased $25.0 million, or 17.7%, to $166.7 million at December 31, 2010 from $141.7 million at December 31, 2009.  Retail certificate of deposits increased $70.2 million, or 43.3%, to $236.0 million at December 31, 2010 from $165.8 million at December 31, 2009.  This growth, generated through a successful marketing campaign and a cross selling program to increase core deposits and the opening of the Galloway NJ branch, has allowed us to reduce brokered deposits, which decreased $26.0 million, or 27.0%, to $70.1 million at December 31, 2010 from $96.1 million at December 31, 2009.

Borrowings increased $7.8 million, or 11.5%, to $75.6 million at December 31, 2010 from $67.8 million at December 31, 2009. The increase was due to the cash received from the sale of $11.5 million of SBA loans in the fourth quarter that was recorded as a secured borrowing due to the 90 day warranty period in the sales agreement. This was offset by a $3.7 million reduction in borrowings from the Federal Home Loan Bank due to retail deposit growth.

At December 31, 2010, total equity increased to $70.7 million from $62.0 million at December 31, 2009, an increase of $8.7 million or 14.1%. A $2.0 million favorable change in comprehensive income related to the investment portfolio, and net income represented the majority of the increase.

Asset 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 inherent 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 nonaccrual 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.  Impaired loans would include loans identified as troubled debt restructurings (TDRs). 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.

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The Company maintains interest reserves for the purpose of making periodic and timely interest payments for borrowers that qualify. Management on a monthly basis reviews loans with interest reserves to assess current and projected performance.

Delinquent loans increased $10.5 million to $43.3 million or 6.9% of total loans at December 31, 2010 from $32.8 million or 5.4% of total loans at December 30, 2009. Delinquent loan balances by number of days delinquent were: 31 to 89 days --- $15.8 and 90 days and greater --- $27.5 million. Loans 90 days and more past due are no longer accruing interest.

At December 31, 2010, the Company had $27.5 million in non-performing loans or 4.4% of total loans, an increase from $25.5 million or 4.2% of total loans at December 31, 2009. The three largest relationships in non-performing loans are a $6.1 million residential loan, a $3.2 million residential construction loan, and a $2.4 million residential construction loan.

At December 31, 2010, the Company had $44.2 million in non-performing assets, which includes $27.5 million of non-performing loans and $16.7 of OREO, or 5.8% of total assets, an increase from $25.5 million or 3.9% of total assets at December 31, 2009.

The provision for loan losses is a charge to earnings in the current year to maintain the allowance at a level management has determined to be adequate based upon the factors noted above. The provision for loan losses amounted to $9.0 million for 2010, compared to $5.3 million for 2009. Net loan charge-offs/recoveries consisted of net charge-offs in the amount of $6.6 million in 2010 and net charge-offs of $673,000 in 2009.

At December 31 2010, the Company’s allowance for loans losses increased to $14.8 million from $12.4 million at December 31, 2009, an increase of $2.4 million or 19.2%. The allowance for loan loss ratio increased to 2.36% of gross loans at December 31, 2010, from 2.06% of gross loans at December 31, 2009. The allowance for loan losses to non-performing loans coverage ratio increased to 53.9% at December 31, 2010, from 48.7% at December 31, 2009.

We believe we have appropriately established adequate loss reserves on problem loans that we have identified and to cover credit risks that are inherent in the portfolio as of December 31, 2010. However, we believe that non-performing and delinquent loans will continue to increase as the current recession persists. We are aggressively managing all loan relationships. Credit monitoring and tracking systems have been instituted. Updated appraisals are being obtained, where appropriate, to ensure that collateral values are sufficient to cover outstanding loan balances. Cash flow dependent commercial real estate properties are being visited to inspect current tenant lease status. Where necessary, we will apply our loan work-out experience to protect our collateral position and actively negotiate with borrowers to resolve these non-performing loans.

Income Taxes

The Company accounts for income taxes according to the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates applicable to taxable income for the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is

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recognized in income in the period that includes the enactment date. Valuation reserves are established against certain deferred tax assets when it is more likely than not that the deferred tax assets will not be realized. Increases or decreases in the valuation reserve are charged or credited to the income tax provision.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that ultimately would be sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. The evaluation of a tax position taken is considered by itself and not offset or aggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits would be recognized in income tax expense on the income statement.

For additional information on income taxes, see Note 10 to the Consolidated Financial Statements.

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.

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Rate Sensitivity Analysis.The interest rate sensitivity position as of December 31, 2010 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, 2010, our interest sensitive liabilities exceeded interest sensitive assets within a one year period by $145.9 million, or 20.6%, of total assets.

	As of December 31, 2010
	3 Months or Less			Over 3 Months Through 12 Months				Over 1 Year Through 2 Years				Over 3 Years Through 5 Years		Over 5 Years Through 10 Years		Total
Interest-earning assets:
Loans	$	214,057		$	40,451			$		96,049		$	247,846	$	28,336	$	626,739
Investment securities		6,535			2,094					3,876			7,977		10,068		30,550
Federal funds sold and cash equivalents			56,161			—				—			—		—		56,161
Total interest-earning assets	$	276,753		$	42,545			$		99,925		$	255,823	$	38,404	$	713,450
Interest-bearing liabilities::
Regular savings deposits	$	87,540		$	12,506			$		16,674		$	33,348	$	16,674	$	166,742
NOW and money market deposits		18,824			23,153					30,871			33,355		2,484		108,687
Retail time deposits		109,509			92,976					28,938			4,533		—		235,956
Brokered time deposits		26,316			42,854					849			150		---		70,169
Borrowed funds		15,991			35,516					160			10,546		13,403		75,616
Total interest-bearing liabilities	$	258,180		$	207,005			$		77,492		$	81,932	$	32,561	$	657,170
Interest rate sensitive gap	$	18,573		$	(164,460		)	$	22,433			$	173,891	$	5,843	$	56,280
Cumulative interest rate gap	$	18,573		$	(145,887		)	$	(123,454		)	$	50,437	$	56,280
Ratio of rate-sensitive assets to rate-sensitive liabilities		107.19%			20.55%					128.95%			312.24%		117.94%		108.56%

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 103.6% and 116.2% at December 31, 2010 and December 31, 2009 respectively. Funds received from new and existing depositors provided a large source of liquidity during 2010 and 2009. 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 Inter financial Network 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 $18.8 million and $5.9 million at December 31, 2010 and December 31, 2009, 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, 2010, the Bank maintained unused lines of credit with the FHLB totaling $83.1 million. The Bank established lines of credit with other financial institutions totaling $11.0 million. These lines were not utilized at December 31, 2010.

As of December 31, 2010, the Bank's investment securities portfolio included $15.9 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, 2010

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and 2009, commitments to extend credit amounted to approximately $73.7 million and $59.6 million, respectively.

Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. As of December 31, 2010 and 2009, standby letters of credit with customers were $5.9 million and $8.6 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, 2010. 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, 2010.

	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	$	202,485	$	30,350	$	3,121	$	—	$	235,956
Brokered time deposits		69,170		999		—		—		70,169
Borrowed funds		51,507		9,847		859		13,403		75,616
Operating lease obligations		129		375		82		121		707
Total contractual obligations	$	323,291	$	41,571	$	4,062	$	13,524	$	382,448
	Amount of Commitments Expiring by Period
	Amounts in thousands
	Less than 1 year		1-3 Years		4-5 years		More than 5 years		Total
Loan Commitments	$	20,259	$	—	$	—	$	—	$	20,259
Lines of Credit		29,956		6,220		1,693	$	15,602		53,471
Total Commitments	$	50,215	$	6,220	$	1,693	$	15,602	$	73,730

Impact of Inflation and Changing Prices

The consolidated financial statements and notes have been prepared in accordance with GAAP, 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.

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MARKET PRICES AND DIVIDENDS

General

The Company's common stock is listed on the Nasdaq Capital Market under the trading symbol of "PKBK". 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 10% stock dividend paid in April 2010.

2010	High		Low
1st Quarter	$	8.64	$	7.05
2nd Quarter	$	11.93	$	8.11
3rd Quarter	$	9.50	$	8.30
4th Quarter	$	10.40	$	8.59
2009	High		Low
1st Quarter	$	7.73	$	3.87
2nd Quarter	$	8.95	$	5.55
3rd Quarter	$	9.07	$	7.50
4th Quarter	$	8.46	$	6.82

The number of shareholders of record of common stock as of March 18, 2011, was approximately 366.  This does not reflect the number of persons or entities who held stock in nominee or "street" name through various brokerage firms. At March 25, 2011, there were 4,442,233 shares of our common stock outstanding.

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.

19

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), more fully described in Note 13 of the Notes to the Consolidated Financial Statements, restricts us from increasing dividends from the last quarterly cash dividend declared on the Common Stock prior to January 9, 2009.

20

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, 2010.

March 25, 2011

/s/ Vito S. Pantilione	/s/ John F. Hawkins
Vito S. Pantilione	John F. Hawkins
President and Chief Executive Officer	Senior Vice President and Chief Financial Officer

21 

Parke Bancorp, Inc. and Subsidiaries

Consolidated Financial Report

December 31, 2010

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 .............................................................................................................................................................................................	3
Consolidated Statements of Equity ..............................................................................................................................................................................................	4
Consolidated Statements of Cash Flows .....................................................................................................................................................................................	5
Notes to Consolidated Financial Statements ..............................................................................................................................................................................	6

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, 2010 and 2009 and the related consolidated statements of income, equity, and cash flows for the years there ended.  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.  The Company is not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting. Our audits included consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. 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, 2010 and 2009, and the results of their operations and their cash flows for the years there ended, in conformity with U.S. generally accepted accounting principles.

/s/ McGladrey & Pullen, LLP

Blue Bell, Pennsylvania

March 25, 2011

1

Parke Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31, 2010 and 2009
(in thousands except share data)	December 31,			December 31,
	2010			2009
Assets
Cash and due from financial institutions	$	57,628		$	4,099
Federal funds sold and cash equivalents		—			55
Cash and cash equivalents		57,628			4,154
Investment securities available for sale, at fair value		27,730			29,420
Investment securities held to maturity (fair value of $2,048  at December 31, 2010     and $2,404 at December 31, 2009)		1,999			2,509
Total investment securities		29,729			31,929
Loans held for sale		11,454			—
Loans, net of unearned income		626,739			603,401
Less: Allowance for loan and lease losses		14,789			12,404
Net loans and leases		611,950			590,997
Accrued interest receivable		3,273			2,808
Premises and equipment, net		4,279			2,861
Other real estate owned (OREO)		16,701			—
Restricted stock, at cost		3,040			3,094
Bank owned life insurance (BOLI)		5,362			5,184
Other assets		13,437			13,171
Total Assets	$	756,853		$	654,198
Liabilities and Equity
Liabilities
Deposits
Noninterest-bearing deposits	$	23,168		$	21,488
Interest-bearing deposits		581,554			498,825
Total deposits		604,722			520,313
FHLB borrowings		40,759			44,428
Other borrowed funds		21,454			10,000
Subordinated debentures		13,403			13,403
Accrued interest payable		828			821
Other liabilities		4,955			3,260
Total liabilities		686,121			592,225
Equity
Preferred stock, cumulative perpetual, $1,000 liquidation value; authorized 1,000,000 shares;     Issued: 16,288 shares at December 31, 2010 and December 31, 2009		15,683			15,508
Common stock, $.10 par value; authorized 10,000,000 shares; Issued: 4,653,133 shares at     December 31, 2010; and 4,224,867shares at December 31, 2009		465			421
Additional paid-in capital		41,931			37,020
Retained earnings		15,494			14,071
Accumulated other comprehensive loss		(693	)		(2,867	)
Treasury stock, 210,900 shares at December 31, 2010; and 191,729shares at December 31, 2009, at cost		(2,180	)		(2,180	)
Total shareholders’ equity		70,700			61,973
Noncontrolling (minority) interest in consolidated subsidiaries		32			—
Total equity		70,732			61,973
Total liabilities and equity	$	756,853		$	654,198
See accompanying notes to consolidated financial statements

2

Parke Bancorp, Inc. and Subsidiaries

Consolidated Statements of Income

Years Ended December 31, 2010 and 2009

(in thousands except share data)	2010			2009
Interest income:
Interest and fees on loans	$	39,934		$	38,482
Interest and dividends on investments		1,702			1,912
Interest on federal funds sold and cash equivalents		—			1
Total interest income		41,636			40,395
Interest expense:
Interest on deposits		9,600			13,685
Interest on borrowings		1,750			2,049
Total interest expense		11,350			15,734
Net interest income		30,286			24,661
Provision for loan losses		9,001			5,300
Net interest income after provision for loan losses		21,285			19,361
Noninterest income (loss)
Loan fees		301			241
Net income from BOLI		178			180
Service fees on deposit accounts		252			187
Gain on sale of SBA loans		1,789			313
Other than temporary impairment losses		(124	)		(2,482	)
Portion of loss recognized in other comprehensive income (OCI) (before taxes)		—			753
Net impairment losses recognized in earnings		(124	)		(1,729	)
Gain on sale of real estate owned		32			19
Other		329			249
Total noninterest income (loss)		2,757			(540	)
Noninterest expense
Compensation and benefits		5,250			4,114
Professional services		1,160			862
Occupancy and equipment		937			848
Data processing		344			292
FDIC  insurance		873			835
OREO expense		622			126
Other operating expense		2,464			1,680
Total noninterest expense		11,650			8,757
Income before income tax expense		12,392			10,064
Income tax expense		4,895			3,964
Net income attributable to Company and noncontrolling (minority) interest		7,497			6,100
Net income attributable to noncontrolling (minority) interest		(157	)		—
Net income attributable to Company		7,340			6,100
Preferred stock dividend and discount accretion		988			899
Net income available to common shareholders	$	6,352		$	5,201
Earnings per common share
Basic	$	1.43		$	1.17
Diluted	$	1.41		$	1.17
Weighted average shares outstanding
Basic		4,438,926			4,434,490
Diluted		4,497,217			4,434,490

See accompanying notes to consolidated financial statements

3

Parke Bancorp, Inc. and Subsidiaries
Consolidated Statements of Equity
Years Ended December 31, 2010 and 2009
(in thousands)
	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total Shareholders' Equity			Non- Controlling (Minority) Interest			Total Equity
Balance, December 31, 2008	$	—	$	414	$	35,656	$	8,870		$	(2,791	)	$	(1,848	)	$	40,301		$	—		$	40,301
Stock warrants exercised				7		415								(332	)		90						90
Stock compensation						19											19						19
Comprehensive income (loss):
Net income								6,100									6,100						6,100
Non-credit unrealized losses on debt securities with OTTI, net of taxes											(451	)					(451	)					(451	)
Net unrealized gains on available for sale securities without OTTI, net of taxes											380						380						380
Pension liability adjustments, net of tax											(5	)					(5	)					(5	)
Total comprehensive income																	6,024			—			6,024
Preferred stock issued		15,358				930											16,288						16,288
Dividend on preferred stock (5% annually)								(749	)								(749	)					(749	)
Accretion of discount on preferred stock		150						(150	)								0						0
Balance, December 31, 2009		15,508		421		37,020		14,071			(2,867	)		(2,180	)		61,973			—			61,973
Stock options exercised						32											32						32
Capital contribution by noncontrolling (minority) interest																				196			196
Capital withdrawals by noncontrolling (minority) interest																				(321	)		(321	)
10% common stock dividend				44		4,879		(4,923	)								—						—
Dividends on fractional shares								(6	)								(6	)					(6	)
Comprehensive income (loss):
Net income								7,340									7,340			157			7,497
Non-credit unrealized gains on debt securities with OTTI, net of taxes											124						124						124
Net unrealized gains on available for sale securities without OTTI, net of taxes											2,007						2,007						2,007
Pension liability adjustments, net of taxes											43						43						43
Total comprehensive income																	9,514			157			9,671
Dividend on preferred stock (5% annually)								(813	)								(813	)					(813	)
Accretion of discount on preferred stock		175						(175	)								—						—
Balance, December 31, 2010	$	15,683	$	465	$	41,931	$	15,494		$	(693	)	$	(2,180	)	$	70,700		$	32		$	70,732

See accompanying notes to consolidated financial statements

4

Parke Bancorp, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 2010 and 2009
(in thousands)
	2010			2009
Cash Flows from Operating Activities
Net income	$	7,497		$	6,100
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		348			312
Provision for loan losses		9,001			5,300
Stock compensation		—			19
Bank owned life insurance		(178	)		(180	)
Supplemental executive retirement plan		508			384
Gain on sale of SBA loans		(1,789	)		(313	)
SBA loans originated for sale		(28,392	)		(3,552	)
Proceeds from sale of SBA loans originated for sale		31,386			3,197
Gain on sale of other real estate owned		(32	)		(19	)
Loss on write down of foreclosed assets		—			228
Other than temporary decline in value of investments		124			1,729
Net accretion of purchase premiums and discounts on securities		(194	)		(109	)
Deferred income tax benefit		(1,726	)		(2,825	)
Changes in operating assets and liabilities:
Increase in accrued interest receivable and other assets		995			(3,813	)
Increase in accrued interest payable and other accrued liabilities		(1,478	)		300
Net cash provided by operating activities		16,070			6,758
Cash Flows from Investing Activities
Purchases of investment securities available for sale		(5,753	)		(8,636	)
Purchases of restricted stock		54			(511	)
Proceeds from maturities of investment securities available for sale		3,790			3,500
Principal payments on mortgage-backed securities		7,784			5,880
Proceeds from sale of other real estate owned		758			505
Net increase in loans		(58,745	)		(57,060	)
Purchases of bank premises and equipment		(1,766	)		(159	)
Net cash used in investing activities		(53,878	)		(56,481	)
Cash Flows from Financing Activities
Proceeds from issuance of preferred stock					16,288
Payment of dividend on preferred stock		(813	)		(645	)
Dividends on fractional shares		(6	)		—
Net distribution to non-controlling interest		(125	)		—
Proceeds from exercise of stock options and warrants		32			422
Purchase of treasury stock		—			(332	)
Net increase in secured borrowings		11,454			2,025
Proceeds from other borrowings		—			29,500
Payments of Federal Home Loan Bank advances		(3,669	)		(25,637	)
Net increase in noninterest-bearing deposits		1,680			(773	)
Net increase in interest-bearing deposits		82,729			25,759
Net cash provided by financing activities		91,282			46,607
(Decrease)/increase in cash and cash equivalents		53,474			(3,116	)
Cash and Cash Equivalents, January 1,		4,154			7,270
Cash and Cash Equivalents, December 31,	$	57,628		$	4,154
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for:
Interest on deposits and borrowed funds	$	11,343		$	16,435
Income taxes	$	8,350		$	6,701
Supplemental Schedule of Noncash Activities:
Real estate acquired in settlement of loans	$	16,778		$	430
See accompanying notes to consolidated financial statements

5

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, the Company provides individuals, corporations and other businesses, and institutions with commercial and retail banking services, principally loans and deposits.  The Company 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").

The 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 four additional branch office locations; 501 Tilton Road, Northfield, New Jersey, 567 Egg Harbor Road, Washington Township, New Jersey, 67 East Jimmie Leeds Road, Galloway Township, New Jersey and 1610 Spruce Street in Philadelphia, Pennsylvania.

The accounting and financial reporting policies of the Company and Subsidiaries 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. Also included are the accounts of 44 Business Capital Partners LLC, a joint venture formed in 2009 to originate and service SBA loans. Parke Bank has a 51% ownership interest in the joint venture; the non-controlling interest was not material as of December 31, 2009. 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 for consolidation under applicable accounting guidance.  All significant inter-company balances and transactions have been eliminated.

Investment Securities:  At December 31, 2010 and 2009, 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 other comprehensive income, net of the related income tax effect.

At December 31, 2010 and 2009, the Company also reported investments in securities that were carried at cost, adjusted for amortization of premium and accretion of discount.  The Company has the intent and ability to hold these investment securities to maturity considering all reasonably foreseeable events or conditions.  These securities are classified as “held to maturity.”

Declines in the fair value of individual debt securities below their cost that are deemed to be other-than-temporary result in write-downs of the individual securities to their fair value. Debt securities that are deemed to be other-than-temporarily impaired are reflected in earnings as realized losses to the extent

6

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

impairment is related to credit losses. The amount of the impairment for debt securities related to other factors is recognized in other comprehensive income (loss). In evaluating other-than-temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the reasons for the decline in value, (3) the financial position and access to capital of the issuer, including the current and future impact of any specific events, and (4) for fixed maturity securities, whether the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of the cost basis, which may be maturity.

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. FHLBNY stock has no quoted market value and is subject to redemption restrictions. Management reviews for impairment based on the ultimate recoverability of the cost basis in the stock.The stock’s value is determined by the ultimate recoverability of the par value rather than by recognizing temporary declines. Management considers such criteria as the significance of the decline in net assets, if any, of the FHLBNY, the length of time this situation has persisted, commitments by the FHLBNY to make payments required by law or regulation, the impact of legislative and regulatory changes on the customer base of the FHLBNY and the liquidity position of the FHLBNY.

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.

Troubled Debt Restructurings:  Troubled debt restructurings (TDRs) are loans for which the Company, for legal or economic reasons related to a debtor’s financial difficulties, has granted a concession to the debtor that it otherwise would not have considered. Concessions that result in the categorization of a loan as a troubled debt restructuring include:

•   Reduction (absolute or contingent) of the stated interest rate;

7

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

•   Extension of the maturity date or dates at a stated interest rate lower than the current market rate for new debt with similar risk;

•   Reduction (absolute or contingent) of the face amount or maturity amount of the debt as stated in the instrument or other agreement; or

•   Reduction (absolute or contingent) of accrued interest.

TDRs are reported as impaired loans.

Loans Held for Sale:  Loans held for sale are the guaranteed portion of SBA loans and are reflected at the lower of aggregate cost or fair value. The net amount of loan origination fees on loans sold is included in the carrying value and in the gain or loss on the sale. The Company originates loans to customers under an SBA program that generally provides for SBA guarantees of up to 90 percent of each loan.  When the sale of the guaranteed portion of an SBA loan occurs, the premium received on the sale and the present value of future cash flows of the servicing assets represent gain on the sale and are recognized in income over the estimated life of the loan. Income and fees collected for servicing are credited to noninterest income, net of amortization of the related servicing asset.

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

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

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 or portions thereof 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 collectability 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

8

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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.

The allowance consists of allocated and general components.  The allocated component relates to loans that are classified as impaired including TDRs.  For those loans that are classified impaired, an allowance is established when the discounted cash flows (or collateral value for collateral dependent loans or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers non-classified loans and is based on historical charge-off experience and expected losses given the Company’s internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not reflected in the historical loss or risk rating data.

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 fair value less estimated costs of disposal. Costs of improving OREO are capitalized to the extent that the carrying value does not exceed its fair value less estimated selling costs. Subsequent valuation adjustments, if any, are recognized as a charge against current earnings. Holding costs are charged to expense. Gains and losses on sales are recognized in noninterest income as they occur.

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

9

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that ultimately would be sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more-likely-than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. The evaluation of a tax position taken is considered by itself and not offset or aggregated with other positions. Tax positions that meet the more likely-than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

Interest and penalties associated with unrecognized tax benefits would be recognized in income tax expense on the income statement.

The Company did not recognize any interest or penalties related to income tax during the years ended December 31, 2010 or 2009 and did not accrue interest or penalties.  The Company does not have an accrual for uncertain tax positions as of December 31, 2010 or 2009, 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 2007 and thereafter are subject to further examination by tax authorities, with the exception of the State on New Jersey for which tax returns for all years 2006 and thereafter are subject to further examination.

Use of Estimates:  The preparation of financial statements in conformity with GAAP 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

10

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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 2009 financial statements have been reclassified to conform to the 2010 presentation. Such reclassifications have no impact on prior year earnings.

Comprehensive Income:  Comprehensive income consists of net income and other gains and losses affecting shareholders' equity that, under U.S. Generally Accepted Accounting Principles (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.

The Company recognizes the overfunded or underfunded status of a defined benefit postretirement plan as an asset or a liability in the statement of financial position and changes in that funded status through comprehensive income in the year the changes occur.  The accounting guidance related to compensation-retirement benefits 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 expense for the unfunded status of $509,000 and $384,000 for the years ended December 31, 2010 and 2009, respectively, relating to a Supplemental Executive Retirement Plan ("SERP") (Note 11).

The Company’s comprehensive income is presented in the following table:

	2010			2009
	(amounts in thousands)
Net Income:	$	7,497		$	6,100
Non-credit unrealized gains (losses) on available for sale securities with OTTI		81			(2,482	)
Unrealized gains (losses) on available for sale securities without OTTI		3,346			634
Reclassification adjustment for net losses realized in income		124			1,729
Minimum pension liability		43			(9	)
Tax impact		(1,420	)		52
Comprehensive income		9,671			6,024
Net income attributable to noncontrolling (minority) interest		(157	)		—
Comprehensive income attributable to Company	$	9,514		$	6,024

11

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Accumulated other comprehensive loss consisted of the following at December 31, 2010 and 2009:

	2010			2009
	(amounts in thousands)
Securities
Non-credit unrealized losses on available for sale securities with OTTI	$	(548	)	$	(753	)
Unrealized losses on available for sale securities without OTTI		(273	)		(3,619	)
Minimum pension liability		(201	)		(244	)
Tax impact		329			1,749
	$	(693	)	$	(2,867	)

Earnings Per Common Share:  Basic earnings per common share is computed by dividing net income available to common shareholders 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.  To the extent that stock equivalents are anti-dilutive, they have been excluded from the earnings per share calculation. Both basic and diluted earnings per share computations give retroactive effect to a stock dividend declared and paid in 2010 (Note 13).  Earnings per common share have been computed based on the following for 2010 and 2009:

	2010		2009
Average number of common shares outstanding		4,438,926		4,434,490
Effect of dilutive warrants		58,292		—
Average number of common shares outstanding used to calculate diluted earnings per common share		4,497,217		4,434,490

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

12

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Recently Issued Accounting Pronouncements:

On July 1, 2009, the Accounting Standards Codification (“ASC”) became the Financial Accounting Standards Board’s (“FASB”) officially recognized source of authoritative U.S. generally accepted accounting principles (“GAAP”) applicable to all public and non-public non-governmental entities, superseding existing FASB, AICPA, EITF and related literature. Rules and interpretive releases of the SEC under the authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. All other accounting literature is considered non-authoritative. The switch to the ASC affects the way companies refer to U.S. GAAP in financial statements and accounting policies. Citing particular content in the ASC involves specifying the unique numeric path to the content through the Topic, Subtopic, Section and Paragraph structure.

FASB ACS Topic 820, “Fair Value Measurements and Disclosures.”

New authoritative accounting guidance (Accounting Standards Update No. 2010-6), which became effective January 1, 2010,  provides amendments to ASC Topic 820 that require new disclosures as follows: 1) A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. 2) In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number).

The new authoritative guidance also clarifies existing disclosures as follows:

1)   A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities.

2)   A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3.

These new disclosures and clarifications of existing disclosures were effective for interim and annual reporting periods beginning after December 15, 2009 and did not have a significant impact of the Company’s consolidated financial statements. The disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. See Note 16, “Fair Value”.

FASB ASC Topic 860, "Transfers and Servicing."

New authoritative accounting guidance under ASC Topic 860, "Transfers and Servicing” amends prior accounting guidance to enhance reporting about transfers of financial assets, including securitizations, and where companies have continuing exposure to the risks related to transferred financial assets. The

13

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

new authoritative accounting guidance eliminates the concept of a "qualifying special-purpose entity", expands the definition of “participating entity” and changes the requirements for derecognizing financial assets. The new authoritative accounting guidance also requires additional disclosures about all continuing involvements with transferred financial assets including information about gains and losses resulting from transfers during the period. The new authoritative accounting guidance under ASC Topic 860 was effective January 1, 2010 and accordingly, impacted the manner in which the Company accounts for the sale of the guaranteed portion on SBA loans. As of December 31, 2010, the Company deferred recognizing the sale of $11.5 million of loans with an associated gain of $1.3 million. The cash received from the sales was recorded as a secured borrowing. The sale and the gain will be recognized in the first quarter of 2011.

FASB ASC Topic 310, “Receivables.”

New authoritative accounting guidance (Accounting Standards Update No. 2010-20) under ASC Topic 310, "Receivables", amends the current disclosures required by ASC Topic 310. As a result of these amendments, an entity is required to disaggregate by portfolio segment or class certain existing disclosures and provide certain new disclosures about its financing receivables and related allowance for credit losses. The disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. The expanded new disclosures are incorporated in Note 4, “Loans” and Note 5, “Allowance for Loan Losses” and did not have an impact on the Company’s financial condition or results of operations.

14

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note  2.   Cash and Due from Banks

The Company maintains various deposit accounts with other banks to meet normal funds transaction requirements, to satisfy deposit reserve requirements, and to compensate other banks for certain correspondent services.  Management is responsible for assessing the credit risk of its correspondent banks.  The withdrawal or usage restrictions of these balances did not have a significant impact on the operations of the Company as of December 31, 2010 or 2009, because reserve requirements were covered by vault cash.

Note  3.   Investment Securities

The following is a summary of the Company's investment in available for sale and held to maturity securities as of December 31, 2010 and 2009: 

As of December 31, 2010	Amortized cost			Gross unrealized gains		Gross unrealized losses		Other-than- temporary impairments in OCI		Fair value
Available for sale:	(amounts in thousands)
U.S. Government sponsored entities	$	3,006		$	14	$	95	$	—	$	2,925
Corporate debt obligations		2,000			94		—		—		2,094
Residential mortgage-backed securities	15,938			645		24		—		16,559
Collateralized mortgage obligations	2,045			107		—		—		2,152
Collateralized debt obligations	5,562			—		1,014		548		4,000
Total available for sale	$	28,551		$	860	$	1,133	$	548	$		27,730
Held to maturity:
States and political subdivisions	$		1,999	$	60	$	11	$	—	$	2,048

15

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of December 31, 2009	Amortized cost			Gross unrealized gains		Gross unrealized losses		Other-than- temporary impairments in OCI		Fair value
Available for sale:	(amounts in thousands)
U.S. Government sponsored entities	$	3,273		$	—	$	41	$	—	$	3,232
Corporate debt obligations		2,000			17		47		—		1,970
Residential mortgage-backed securities	19,098			679		79		—		19,698
Collateralized mortgage obligations	3,859			68		50		68		3,809
Collateralized debt obligations	5,562			—		4,166		685		711
Total available for sale	$	33,792		$	764	$	4,383	$	753	$		29,420
Held to maturity:
States and political subdivisions	$		2,509	$	10	$	115	$	—	$	2,404

The amortized cost and fair value of debt securities classified as available for sale and held to maturity, by contractual maturity, as of December 31, 2010, are as follows:

	Amortized Cost		Fair Value
	(amounts in thousands)
Available for sale:
Due within one year	$	—	$	—
Due after one year through five years		1,000		1,014
Due after five years through ten years		2,000		1,905
Due after ten years		7,568		6,100
Residential mortgage-backed securities and collateralized mortgage obligations		17,983		18,711
Total  available for sale	$	28,551	$	27,730

Held to maturity:
Due within one year	$	—	$	—
Due after one year through five years		—		—
Due after five years through ten years		—		—
Due after ten years		1,999		2,048
Total held to maturity	$	1,999	$	2,048

Expected maturities will differ from contractual maturities for mortgage related securities because the issuers of certain debt securities do have the right to call or prepay their obligations without any penalties.

There were no sales of investment securities in 2010 and 2009.

16

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of December 31, 2010 and 2009, approximately $11.4 million and $10.7 million, respectively, of investment securities are pledged as collateral for borrowed funds (Note 9).  In addition, securities with a carrying value of $10.3 million and $16.3 million, respectively, were pledged to secure public deposits at December 31, 2010 and 2009.

The following tables show the gross unrealized losses and fair value of the Company's investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2010 and December 31, 2009:

As of December 31, 2010	Less Than 12 Months				12 Months or Greater				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(amounts in thousands)
Available for sale:
U.S. Government sponsored entities	$	1,905	$	95	$	—	$	—	$	1,905	$	95
Corporate debt obligations		—		—		—		—		—		—
Residential mortgage-backed securities and collateralized mortgage obligations		4,807		24		—		—		4,807		24
Collateralized debt obligations		—		—		3,736		1,014		3,736		1,014
Total available for sale	$	6,712	$	119	$	3,736	$	1,014	$	10,448	$	1,133
Held to maturity:
States and political subdivisions	$	1,229	$	11	$	—	$	—	$	1,229	$	11

17

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

As of December 31, 2009	Less Than 12 Months				12 Months or Greater				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(amounts in thousands)
Available for sale:
U.S. Government sponsored entities	$	3,225	$	41	$	—	$	—	$	3,225	$	41
Corporate debt obligations		—		—		653		47		653		47
Residential mortgage-backed securities and collateralized mortgage obligations		6,289		129		—		—		6,289		129
Collateralized debt obligations		—		—		585		4,166		585		4,166
Total available for sale	$	9,514	$	170	$	1,238	$	4,213	$	10,752	$	4,383
Held to maturity:
States and political subdivisions	$	—	$	—	$	610	$	115	$	610	$	115

U.S. Government Sponsored Entities: The unrealized losses on the Company’s investment in U.S. Government sponsored entities were caused by movement in interest rates. Because the Company does not intend to sell the investment and it is not more likely than not that the Company will be required to sell the investment before recovery of its amortized cost basis, which may be maturity, it does not consider the investment in these securities to be other-than-temporarily impaired at December 31, 2010 or December 31, 2009.

Corporate Debt Obligations:  The Company’s unrealized loss on investments in corporate bonds relates to three trust preferred securities (TruPS) issued by financial institutions, was caused by movement in interest rates. Because the Company does not intend to sell the investment and it is not more likely than not that the Company will be required to sell the investment before recovery of its amortized cost basis, which may be maturity, it does not consider the investment in these securities to be other-than-temporarily impaired at December 31, 2009.

Residential Mortgage-Backed Securities: The unrealized losses on the Company’s investment in mortgage-backed securities were caused by movement in interest rates. The securities were issued by FNMA and FHLMC, government sponsored entities. It is expected that the U.S. government will guarantee all contractual cash flows. Because the Company does not intend to sell the investment and it is not more likely than not that the Company will be required to sell the investment before recovery of its amortized cost basis, which may be maturity, it does not consider the investment in these securities to be other-than-temporarily impaired at December 31, 2010 or December 31, 2009.

Collateralized Debt Obligations:  The Company’s unrealized loss on investments in collateralized debt obligations (CDOs) relates to three securities  issued by financial institutions, totaling $4.8 million. CDOs are pooled securities primarily secured by trust preferred securities (TruPS), subordinated debt and surplus notes issued by small and mid-sized banks and insurance companies. These securities are generally floating rate instruments with 30-year maturities, and are callable at par by the issuer after five years. The current economic downturn has had a significant adverse impact on the financial services

18

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

industry, consequently, TruPS CDOs do not have an active trading market. With the assistance of competent third-party valuation specialists, the Company utilized the following methodology to determine the fair value:

Cash flows were developed based on the estimated speeds at which the trust preferred securities are expected to prepay, the estimated rates at which the trust preferred securities are expected to defer payments, the estimated rates at which the trust preferred securities are expected to default, and the severity of the losses on securities which default. Trust preferred securities generally allow for prepayment by the issuer without a prepayment penalty any time after five years. Due to the lack of new trust preferred issuances and the relatively poor conditions of the financial institution industry, a relatively modest rate of prepayment was assumed going forward. Estimates for conditional default rates (“CDR”) are based on the payment characteristics of the trust preferred securities themselves (e.g. current, deferred, or defaulted) as well as the financial condition of the trust preferred issuers in the pool. Estimates for the near-term rates of deferral and CDR are based on key financial ratios relating to the financial institutions’ capitalization, asset quality, profitability and liquidity. Finally, we consider whether or not the financial institution has received TARP funding, and if it has, the amount. Longer-term rates of deferral and defaults on based on historical averages. The fair value of each bond was assessed by discounting their projected cash flows by a discount rate.  The discount rates were based on the yields of publicly traded TruPS and preferred stock issued by comparably rated banks.  The fair value for previous reporting periods was based on indicative market bids and resulted in much lower values due to the inactive trading market.

The underlying issuers have been analyzed, and projections have been made regarding the future performance, considering factors including defaults and interest deferrals.  The analysis indicates that the Company should expect to receive all contractual cash flows.  Because the Company does not intend to sell the investment and it is not more likely than not that the Company will be required to sell the investment before recovery of its amortized cost basis, which may be maturity, it does not consider these investments to be other-than-temporarily impaired at December 31, 2010 or December 31, 2009.

Other-Than-Temporarily Impaired Debt Securities

We assess whether we intend to sell or it is more likely than not that we will be required to sell a security before recovery of its amortized cost basis less any current-period credit losses. For debt securities that are considered other-than-temporarily impaired and that we do not intend to sell and will not be required to sell prior to recovery of our amortized cost basis, we separate the amount of the impairment into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings and is the difference between the security’s amortized cost basis and the present value of its expected future cash flows. The remaining difference between the security’s fair value and the present value of future expected cash flows is due to factors that are not credit related and is recognized in other comprehensive income.

The present value of expected future cash flows is determined using the best estimate cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate cash flows vary depending on the type of security. The asset-backed

19

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

securities cash flow estimates are based on bond specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds and structural support, including subordination and guarantees. The corporate bond cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or the disposition of assets using bond specific facts and circumstances including timing, security interests and loss severity.

We have a process in place to identify debt securities that could potentially have a credit impairment that is other than temporary.  This process involves monitoring late payments, pricing levels, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit issues.  On a quarterly basis, we review all securities to determine whether an other-than-temporary decline in value exists and whether losses should be recognized. We consider relevant facts and circumstances in evaluating whether a credit or interest rate-related impairment of a security is other than temporary. Relevant facts and circumstances considered include: (1) the extent and length of time the fair value has been below cost; (2) the reasons for the decline in value; (3) the financial position and access to capital of the issuer, including the current and future impact of any specific events and (4) for fixed maturity securities, our intent to sell a security or whether it is more likely than not we will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity and for equity securities, our ability and intent to hold the security for a period of time that allows for the recovery in value.

The following table presents a roll-forward of the credit loss component of the amortized cost of debt securities that we have written down for OTTI and the credit component of the loss that is recognized in earnings. OTTI recognized in earnings for credit-impaired debt securities is presented as additions in two components based upon whether the current period is the first time the debt security was credit-impaired (initial credit impairment) or is not the first time the debt security was credit impaired (subsequent credit impairments). The credit loss component is reduced if we sell, intend to sell or believe we will be required to sell previously credit-impaired debt securities. Additionally, the credit loss component is reduced if we receive cash flows in excess of what we expected to receive over the remaining life of the credit-impaired debt security, the security matures or is fully written down. Changes in the credit loss component of credit-impaired debt securities were as follows for 2010 and 2009.

	2010		2009
	(Amounts in thousands)
Beginning balance	$	4,008	$	2,279
Initial credit impairment		—		1,105
Subsequent credit impairments		124		624
Reductions for amounts recognized in earnings due to intent or requirement to sell		—		—
Reductions for securities sold		—		—
Reductions for securities deemed worthless		1,475		—
Reductions for increases in cash flows expected to be collected		—		—
Ending balance	$	2,657	$	4,008

20

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

A summary of investment gains and losses recognized in income during the years ended December 31, 2010 and 2009 are as follows:

	2010			2009
	(Amounts in thousands)
Available for sale securities:
Realized gains	$	—		$	—
Realized (losses)		—			—
Other than temporary impairment		(124	)		(1,729	)
Total available for sale securities	$	(124	)	$	(1,729	)
Held to maturity securities:
Realized gains	$	—		$	—
Realized (losses)		—			—
Other than temporary impairment		—			—
Total held to maturity securities	$	0		$	0

The Company recognized $124,000 and $1.7 million during 2010 and 2009, respectively, of other-than-temporary impairment losses on available for sale securities, attributable to impairment charges recognized on privately issued CMOs and CDOs.

The impairment charges for the CMOs were recognized in light of significant deterioration of housing values in the residential real estate market, the significant rise in delinquencies and charge-offs of underlying mortgage loans and resulting decline in market value of the securities.

With the assistance of competent third-party valuation specialists, the Company utilized the following methodologies to quantify the other-than-temporary-impairment. The underlying mortgage collateral was analyzed in order to project future cash flows and to calculate the credit component of the OTTI. Four major assumptions were utilized; prepayment (CPR), constant default rate (CDR), loss severity and risk adjusted discount rate. The methodologies for the four assumptions are:

CPR assumptions were based on evaluation of the lifetime conditional prepayment rates; 3 month CPR over the most recent period, past 6 months and past 12 months; estimated prepayment rates provided by the Securities Industry & Financial Markets Association (SIFMA), forecasts from other industry experts, and judgment given recent deterioration in credit conditions and declines in property values. The CRP assumption utilized ranged from 7.73% to 8.51%

CDR estimates were based on the status of the loans – current, 30-59 days delinquent, 60-89 days delinquent, 90+ days delinquent, foreclosure or REO – and proprietary loss migration models (i.e. percentage of 30 day delinquents that will ultimately migrate to default, percentage of 60 day delinquents that will ultimately migrate to default, etc.). The model assumes that the 60 day plus population will move to repossession inventory subject to the loss migration assumptions and liquidate over the next 36 months. Defaults vector from month 37 to month 48 to the month 49 CDR value and ultimately vector to zero over an extended period of time of at least 15 years. The CDR assumption utilized started at a range of 5.58% to 6.23%, and ramped down to a range of 1.80% to 4.14% by month 49.

21

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Loss severity estimates are based on the initial loan to value ratio, the loan’s lien position, private mortgage insurance proceeds available (if any), and the estimated change in the price of the property since origination.  The loss severity assumption is static for twelve months at 50.9% then decreases monthly based on future market appreciation to a floor of 23%.

The risk adjusted discount of 15% was derived based on the spread from the most recent active market indication for either the instrument in question or a proxy of the instrument. The resulting spread was then used in conjunction with the swap curve to discount the expected cash flow stream.

An impairment charge of $978,000 in 2009 on a CDO was driven by the current economic downturn that has had a significant adverse impact on the financial services industry. With the assistance of competent third-party valuation specialists, the Company utilized the following methodology to determine the existence of OTTI:

The aggregated cash flows are primarily dependent on the estimated speeds at which the trust preferred securities are expected to prepay, the estimated rates at which the trust preferred securities are expected to defer payments, the estimated rates at which the trust preferred securities are expected to default, and the severity of the losses on securities which default.

Trust preferred securities generally allow for prepayment by the issuer without a prepayment penalty any time after five years. Due to the lack of new trust preferred issuances and the relatively poor conditions of the financial institution industry, a relatively modest rate of prepayment was assumed going forward.

Estimates for conditional default rates are based on the payment characteristics of the trust preferred securities themselves (e.g. current, deferred, or defaulted) as well as the financial condition of the trust preferred issuers in the pool. Estimates for the near-term rates of deferral and CDR are based on key financial ratios relating to the financial institutions’ capitalization, asset quality, profitability and liquidity. Finally, we consider whether or not the financial institution has received TARP funding, and if it has, the amount. Longer-term rates of deferral and defaults on based on historical averages.

The discount rate estimate, 10.9%, comes from conversations with major financial institutions regarding assumptions they are using for highly rated assets, from opportunistic hedge funds regarding assumptions they are using to bid on lower and unrated assets, and other industry experts.

22

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note  4.   Loans

The composition of loans as of December 31, 2010 and 2009 was as follows:

	2010			2009
	(Amounts in thousands)
Commercial	$	25,108		$	20,174
Real estate construction:
Residential		38,810			61,865
Commercial		57,651			44,726
Real estate mortgage:
Residential		169,536			154,385
Commercial		318,519			309,226
Consumer		17,115			13,025
Total Loans		626,739			603,401
Less: allowance for loan losses		(14,789	)		(12,404	)
Net loans	$	611,950		$	590,997

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 $65.6 million and $74.8 million at December 31, 2010 and December 31, 2009 respectively. On a monthly basis management reviews loans with interest reserves to assess current and projected performance.

At December 31, 2010 and 2009, approximately $170.4 million and $148.5 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.

Loan Origination/Risk Management:  The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and non-performing and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions.

Commercial loans are underwritten after evaluating and understanding the borrower's ability to operate profitably and prudently expand its business. Underwriting standards are designed to promote relationship banking rather than transactional banking. Once it is determined that the borrower's management possesses sound ethics and solid business acumen, the Company's management examines current and projected cash flows to determine the ability of the borrower to repay their obligations as agreed. Commercial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and almost always will incorporate a personal guarantee. In the case of loans

23

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

With respect to construction loans to developers and builders that are secured by non-owner occupied properties, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction loans are underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analysis of absorption and lease rates and financial analysis of the developers and property owners. Construction loans are generally based upon estimates of costs and value associated with the complete project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing.

Commercial real estate loans are subject to underwriting standards and processes similar to commercial loans, in addition to those of real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type and geographic location within our market area. This diversity helps reduce the Company's exposure to adverse economic events that affect any single market or industry. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. The Company also monitors economic conditions and trends affecting market areas it serves. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans. At December 31, 2010, approximately 42.7% of the outstanding principal balance of the Company’s commercial real estate loans were secured by owner-occupied properties.

To monitor and manage consumer loan risk, policies and procedures are developed and modified as needed. This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, minimizes risk. Additionally, trend and outlook reports are reviewed by management on a regular basis. Underwriting standards for home equity loans are heavily influenced by statutory requirements, which include, but are not limited to, a maximum loan-to-value percentage of 80%, collection remedies, the number of such loans a borrower can have at one time and documentation requirements.

The Company maintains an outsourced independent loan review program that reviews and validates the credit risk program on a periodic basis. Results of these reviews are presented to management. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company's policies and procedures.

24

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Concentrations of Credit:  Most of the Company's lending activity occurs within the areas of southern New Jersey and southeastern Pennsylvania, as well as other markets. The majority of the Company's loan portfolio consists of commercial real estate loans. As of December 31, 2010 there were no concentrations of loans related to any single industry in excess of 11% of total loans.

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 collectability.

An analysis of the activity of such related party loans for 2010 and 2009 is as follows:

	2010			2009
	(Amounts in thousands)
Balance, beginning of year	$	23,644		$	20,500
Advances		1,781			3,230
Less: repayments		(1,402	)		(86	)
Balance, end of year	$	24,023		$	23,644

Nonaccrual and Past Due Loans:  Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management's opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

25

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

An age analysis of past due loans at December 31, 2010 is as follows:

	30-59 Days Past Due			60-89 Days Past Due		Greater than 90 Days and Not Accruing		Total Past Due		Current			Total Loans		Loans > 90 Days and Accruing
	(Amounts in thousands)
Commercial	$	212	$	98	$	—	$	310	$	24,798	$	25,108		$	—
Real estate construction:
Residential		1,657		—		8,546		10,203		28,607		38,810			—
Commercial		75		—		6,701		6,776		50,875		57,651			—
Real estate mortgage:
Residential		1,139		2,161		9,415		12,715		156,821		169,536			—
Commercial		4,833		5,670		2,722		13,225		305,294		318,519			—
Consumer		—		—		61		61		17,054		17,115			—
Total	$	7,916	$	7,929	$	27,445	$	43,290	$	583,449	$	626,739		$	—

Impaired Loans: Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collectamounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for other loans. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan's existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Impaired loans, or portions thereof, are charged off when deemed uncollectible. Included in impaired loans at December 31, 2010 were $42.7 million of loans classified as troubled debt restructurings as defined within accounting guidance and regulatory literature. The Company granted a concession, either a reduction in stated interest rate or a period of interest only payments, due to the borrowers’ financial difficulties. These loans were performing according to their modified terms at December 31, 2010.

26

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Impaired loans at December 31, 2010 are set forth in the following table.

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized1
	(Amounts in thousands)
With no related allowance recorded:
Commercial	$	785	$	785	$	—	$	509	$	11
Residential real estate construction		13,180		14,147		—		12,789		106
Commercial real estate construction		18,181		18,770		—		7,845		214
Residential real estate mortgage		8,540		8,637		—		7,881		230
Commercial real estate mortgage		42,303		42,303		—		16,203		1,562
Consumer		61		61		—		31		—
		83,050		84,703		—		45,258		2,123
With an allowance recorded:
Commercial		—		—		—		—		—
Residential real estate construction		6,599		7,820		2,091		6,576		70
Commercial real estate construction		—		—		—		—		—
Residential real estate mortgage		12,946		13,113		562		5,462		389
Commercial real estate mortgage		9,428		9,548		198		4,064		525
Consumer		—		—		—		—		—
		28,973		30,481		2,851		16,102		984
Total:
Commercial		785		785		—		509		11
Residential real estate construction		19,779		21,967		2,091		19,365		176
Commercial real estate construction		18,181		18,770		—		7,845		214
Residential real estate mortgage		21,486		21,750		562		13,343		619
Commercial real estate mortgage		46,371		46,491		198		20,267		2,087
Consumer		61		61		—		31		—
	$	112,023	$	115,184	$	2,851	$	61,360	$	3,107

27

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

1Reflects the interest income recognized on impaired loans, which includes troubled debt restructurings, during 2010. Interest income recognized on a cash basis subsequent to a loan being placed on nonaccrual was $45,000 during 2010.

Information about impaired loans and nonaccrual loans as of and for the year ended December 31, 2009 is as follows:

(Amounts in thousands)
Impaired loans with a valuation allowance	$	22,681
Impaired loans without a valuation allowance		28,208
Total impaired loans	$	50,889
Related allowance for loan losses for impaired loans	$	3,555
Nonaccrual loans	$	25,452
Average monthly balance of impaired loans	$	34,601
Interest income recognized on cash basis on impaired loans	$	10

Credit Quality Indicators: As part of the on-going monitoring of the credit quality of the Company's loan portfolio, management tracks certain credit quality indicators including trends related to the risk grades of loans, the level of classified loans, net charge-offs, non-performing loans (see details above) and the general economic conditions in the region.

The Company utilizes a risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 7. Grade 1 through 4 are considered “Pass”. A description of the general characteristics of the seven risk grades is as follows:

1.   Good:  Borrower exhibits the strongest overall financial condition and represents the most creditworthy profile.

2.   Satisfactory (A):  Borrower reflects a well balanced financial condition, demonstrates a high level of creditworthiness and typically will have a strong banking relationship with Parke Bank.

3.   Satisfactory (B):  Borrower exhibits a balanced financial condition and does not expose the Bank to more than a normal or average overall amount of risk.  Loans are considered fully collectable.

4.   Watch List:  Borrower reflects a fair financial condition, but there exists an overall greater than average risk. Risk is deemed acceptable by virtue of increased monitoring and control over borrowings.  Probability of timely repayment is present.

5.   Other Assets Especially Mentioned (OAEM):  Financial condition is such that assets in this category have a potential weakness or pose unwarranted financial risk to the Bank even though the asset value is not currently impaired.  Asset does not currently warrant adverse classification but if not corrected could weaken and could create future increased risk exposure. Includes loans which require an increased degree of monitoring or servicing as a result of internal or external changes.

6.   Substandard:  This classification represents more severe cases of #5 (OAEM) characteristics that require increased monitoring.  Assets are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Assets are inadequately protected by

28

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

the current net worth and paying capacity of the borrower or of the collateral. Asset has a well defined weakness or weaknesses that impairs the ability to repay debt and jeopardizes the timely liquidation or realization of the collateral at the asset’s net book value.

7.   Doubtful:  Assets which have all the weaknesses inherent in those assets classified #6 (Substandard) but the risks are more severe relative to financial deterioration in capital and/or asset value; accounting/evaluation techniques may be questionable and the overall possibility for collection in full is highly improbable. Borrowers in this category require constant monitoring, are considered work out loans and present the potential for future loss to the bank

An analysis of the credit risk profile by internally assigned grades is as follows:

	Pass		OAEM		Substandard		Doubtful		Total
At December 31, 2010	(Amounts in thousands)
Commercial	$	23,823	$	500	$	785	$	—	$	25,108
Residential real estate construction		12,132		6,899		19,779		—		38,810
Commercial real estate construction		38,570		900		18,181		—		57,651
Residential real estate mortgage		153,142		4,290		12,104		—		169,536
Commercial real estate mortgage		255,577		44,473		18,469		—		318,519
Consumer		15,559		1,495		61		—		17,115
Total	$	498,803	$	58,557	$	69,379	$	—	$	626,739

Note  5.   Allowance for Loan Losses

The allowance for loan losses is a reserve established through a provision for loan losses charged to expense, which represents management's best estimate of probable losses that have been incurred within the existing portfolio of loans. The allowance, in the judgment of management, is necessary to reserve for estimated loan losses and risks inherent in the loan portfolio. The Company's allowance for loan loss methodology includes allowance allocations calculated in accordance with ASC Topic 310, "Receivables" and allowance allocations calculated in accordance with ASC Topic 450, "Contingencies." Accordingly, the methodology is based on historical loss experience by type of credit and internal risk grade, specific homogeneous risk pools and specific loss allocations, with adjustments for current events and conditions. The Company's process for determining the appropriate level of the allowance for loan losses is designed to account for credit deterioration as it occurs. The provision for loan losses reflects loan quality trends, including the levels of and trends related to non-accrual loans, past due loans, potential problem loans, criticized loans and net charge-offs or recoveries, among other factors. The provision for possible loan losses also reflects the totality of actions taken on all loans for a particular period. In other words, the amount of the provision reflects not only the necessary increases in the allowance for loan losses related to newly identified criticized loans, but it also reflects actions taken related to other loans including, among other things, any necessary increases or decreases in required allowances for specific loans or loan pools.

The level of the allowance reflects management's continuing evaluation of industry concentrations, specific credit risks, loan loss experience, current loan portfolio quality, present economic, political and regulatory conditions and unidentified losses inherent in the current loan portfolio. Portions of the

29

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

allowance may be allocated for specific credits; however, the entire allowance is available for any credit that, in management's judgment, should be charged off. While management utilizes its best judgment and information available, the ultimate adequacy of the allowance is dependent upon a variety of factors beyond the Company’s control, including, among other things, the performance of the Company's loan portfolio, the economy, changes in interest rates and the view of the regulatory authorities toward loan classifications.

The Company's allowance for possible loan losses consists of three elements: (i) specific valuation allowances determined in accordance with ASC Topic 310 based on probable losses on specific loans; (ii) historical valuation allowances determined in accordance with ASC Topic 450 based on historical loan loss experience for similar loans with similar characteristics and trends, adjusted, as necessary, to reflect the impact of current conditions; and (iii) general valuation allowances determined in accordance with ASC Topic 450 based on general economic conditions and other qualitative risk factors both internal and external to the Company.

The allowances established for probable losses on specific loans are based on a regular analysis and evaluation of problem loans. Loans are classified based on an internal credit risk grading process that evaluates, among other things: (i) the obligor's ability to repay; (ii) the underlying collateral, if any; and (iii) the economic environment and industry in which the borrower operates. This analysis is performed at the relationship manager level for all commercial loans. When a loan has a grade of 6 or higher, the loan is analyzed to determine whether the loan is impaired and, if impaired, the need to specifically allocate a portion of the allowance for loan losses to the loan. Specific valuation allowances are determined by analyzing the borrower's ability to repay amounts owed, collateral deficiencies, the relative risk grade of the loan and economic conditions affecting the borrower's industry, among other things.

Historical valuation allowances are calculated based on the historical loss experience of specific types of loans. The Company calculates historical loss ratios for pools of similar loans with similar characteristics based on the proportion of actual charge-offs experienced to the total population of loans in the pool. The historical loss ratios are periodically updated based on actual charge-off experience. A historical valuation allowance is established for each pool of similar loans based upon the product of the historical loss ratio and the total dollar amount of the loans in the pool. The Company's pools of similar loans include similarly risk-graded groups of commercial loans, commercial real estate loans, consumer real estate loans and consumer and other loans.

General valuation allowances are based on general economic conditions and other qualitative risk factors both internal and external to the Company. In general, such valuation allowances are determined by evaluating, among other things: (i) the experience, ability and effectiveness of the bank's lending management and staff; (ii) the effectiveness of the Bank's loan policies, procedures and internal controls; (iii) changes in asset quality; (iv) changes in loan portfolio volume; (v) the composition and concentrations of credit; (vi) the impact of competition on loan structuring and pricing; (vii) the effectiveness of the internal loan review function; (viii) the impact of environmental risks on portfolio risks; and (ix) the impact of rising interest rates on portfolio risk. Management evaluates the degree of risk that each one of these components has on the quality of the loan portfolio on a quarterly basis. Each component is determined to have either a high, high-moderate, moderate, low-moderate or low degree of risk. The results are then input into a "general allocation matrix" to determine an appropriate general valuation allowance.

30

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

An analysis of the allowance for loan losses for 2010 is as follows:

	Commercial		Residential Real Estate Construction		Commercial Real Estate Construction			Residential Real Estate Mortgage			Commercial Real Estate Mortgage		Consumer			Unallocated			Total
	(Amounts in thousands)
Allowance for loan Losses:
Beginning balance	$	214	$	4,074	$	498	$		1,451	$		5,975	$	102	$		90	$	12,404
Charge-offs		615		3,893		588			1,315			189		16			—		6,616
Recoveries		—		—		—			—			—		—			—		—
Provisions		849		2,799		1,666			3,084			514		44			45		9,001
Ending balance	$	448	$	2,980	$	1,576	$		3,220	$		6,300	$	130	$		135	$	14,789
Allowance for loan Losses, ending balance:
Individually evaluated for impairment	$	—	$	2,091	$	—	$		562	$		198	$	—	$		—	$	2,851
Collectively evaluated for impairment		448		889		1,576			2,658			6,102		130			135		11,998
Total	$	448	$	2,980	$	1,576	$		3,220	$		6,300	$	130	$		135	$	14,789
Loans, ending balance:
Individually evaluated for impairment	$	785	$	19,779	$	18,181	$		21,486	$		46,371	$	61				$	106,663
Collectively evaluated for impairment		24,323		19,031		39,470			148,050			272,148		17,054					520,076
Total	$	25,108	$	38,810	$	57,651	$		169,536	$		318,519	$	17,115				$	626,739

An analysis of the allowance for loan losses for 2009 is as follows:

(Amounts in thousands)
Balance, beginning of year	$	7,777
Provision for loan losses		5,300
Charge offs		(673	)
Recoveries		—
Balance, end of year	$	12,404

31

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note  6.   Bank Premises and Equipment

A summary of the cost and accumulated depreciation and amortization of Company premises and equipment as of December 31, 2010 and 2009 is as follows:

	2010			2009
	(Amounts in thousands)
Land	$	820		$	470
Building and improvements		4,243			3,028
Furniture and equipment		1,417			1,224
Total premises and equipment		6,480			4,722
Less: accumulated depreciation and amortization		(2,201	)		(1,861	)
Premises and equipment, net	$	4,279		$	2,861

Depreciation and amortization expense was $348,000 and $312,000 in 2010 and 2009, 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, 2010, the required future minimum rental payments under these leases and other equipment operating leases are as follows:

Years Ending December 31,	(Amounts in thousands)
2011	$	129
2012		141
2013		152
2014		82
2015		82
Thereafter		121
Total minimum lease payments	$	707

Rent expense was approximately $129,000 in 2010 and $128,000 in 2009.

Note  7.   OREO

At December 31, 2010 the Company had $16.7 million of OREO. The real estate consisted of 12 commercial properties. The largest property was a partially-constructed condominium project located in Absecon, New Jersey. This property was sold to a developer in the third quarter and financing was provided by the Company. Due to the lack of a sufficient down payment from the buyer, GAAP did not allow for sales treatment. Also included is a country club located in Woodbury, New Jersey at $2.5 million and a condominium project in Wildwood, New Jersey at $1.8 million. During the year the Company disposed of $726,000 of OREO, recognizing a gain of $32,000. There was no OREO at

32

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2009. There was no valuation allowance related to OREO as of December 31, 2010 and 2009. Operating expenses related to OREO, net of related income, for 2010 were $622,000.

33

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note  8.   Deposits

Deposits at December 31, 2010 and 2009 consisted of the following:

	2010		2009
	(Amounts in thousands)
Demand deposits, noninterest-bearing	$	23,168	$	21,488
Demand deposits, interest-bearing		14,065		11,616
Money market deposits		94,622		83,640
Savings deposits		166,742		141,687
Time deposits of $100,000 or more		109,214		71,100
Other time deposits		126,742		94,692
Brokered time deposits		70,169		96,090
Total deposits	$	604,722	$	520,313

Scheduled maturities of certificates of deposit at December 31, 2010 are as follows:

Years Ending December 31,	(Amounts in thousands)
2011	$	271,655
2012		29,938
2013		1,411
2014		1,506
2015		1,615
Thereafter		—
Total	$	306,125

Deposits from related parties totaled approximately $6,849,000 and $6,999,000 at December 31, 2010 and 2009, respectively.

34

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note  9.   Borrowings

An analysis of borrowings as of December 31, 2010 and 2009 is as follows:

		2010			2009
	Maturity Date or Range	Amount		Weighted Average Rate	Amount		Weighted Average Rate
		(Amounts in thousands, except rates)
Borrowed funds:
Federal Home Loan Bank repurchase agreements	May 2013	$	5,000	2.65%	$	5,000	2.65%
Other repurchase agreements	July 2012	$	5,000	4.91%	$	5,000	4.91%
Secured Borrowings	March 31, 2011	$	11,454	0.0%		—	—
Federal Home Loan Bank advances	Less than one year	$	39,900	1.95%	$	8,525	2.71%
	One to three years					34,900	2.08%
	Three to five years					1,003	5.02%
	Five to ten years		859	5.19%		—	—
	Total	$	40,759		$	44,428
Subordinated debentures, capital trusts	November 2035	$	5,155	1.94%	$	5,155	1.93%
	November 2035		5,155	1.94%		5,155	6.25%
	September 2037		3,093	1.80%		3,093	1.75%
	Total	$	13,403		$	13,403

At December 31, 2010, the Company had a $123.9 million line of credit from the FHLB of New York, of which $40.8 million, as detailed above, was outstanding. The Bank has established lines of credit with other financial institutions totaling $11.0 million. These lines were not utilized at December 31, 2010 or 2009.

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 1.94% at December 31, 2010. 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

35

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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 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 variable at 1.94%. The 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 1.80% at December 31, 2010. 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.

36

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 10.  Income Taxes

Income tax expense for 2010 and 2009 consisted of the following:

	2010			2009
	(Amounts in thousands)
Current tax expense:
Federal	$	4,984		$	5,169
State		1,637			1,620
		6,621			6,789
Deferred tax benefit		(1,726	)		(2,825	)
Income tax expense	$	4,895		$	3,964

The components of the net deferred tax asset at December 31, 2010 and 2009 are as follows:

	2010			2009
	(Amounts in thousands)
Deferred tax assets
Allowance for loan losses	$	6,011		$	4,903
Investment securities available for sale		328			1,748
Minimum pension liability		1,900			1,405
Stock compensation		30			29
Depreciation		176			224
Other		-			21
Deferred gain on sale of loans		529			—
Capitalized OREO expense		264			—
OTTI write down on securities		1,300			1,603
		10,538			9,933
Deferred tax liabilities:
Discount accretion		(71	)		(118	)
Deferred loan costs		(633	)		(513	)
BOLI		(515	)		(454	)
		(1,219	)		(1,085	)
Net deferred tax asset	$	9,319		$	8,848

A reconciliation of the Company’s effective income tax rate with the statutory federal rate for 2010 and 2009 is as follows:

	2010			2009
	(Amounts in thousands)
At Federal statutory rate	$	4,337		$	3,422
Adjustments resulting from:
State income taxes, net of Federal tax benefit		751			641
Other		(193	)		(99	)
	$	4,895		$	3,964

37

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Management has evaluated the Company’s tax positions and concluded that the Company has taken no uncertain tax positions that require adjustments to the financial statements. With few exceptions, the Company is no longer subject to income tax examinations by the U.S. federal, or local tax authorities for years before 2007, and by the State of New Jersey for years before 2006.

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 $412,000 in 2010 and $418,000 in 2009.  The unfunded benefit obligation, which was included in other accrued liabilities, was approximately $2,649,000 at December 31, 2010 and $2,237,000 at December 31, 2009.

The benefit obligation at December 31, 2010 and December 31, 2009 was calculated as follows:

	2010		2009
	(amounts in thousands)
Benefit obligation, January 1	$	2,237	$	1,845
Service cost		280		207
Interest cost		130		106
(Gain) loss		2		79
Benefit obligation, December 31	$	2,649	$	2,237

The net periodic pension cost for 2010 and 2009 was calculated as follows:

	2010		2009
	(amounts in thousands)
Service cost	$	280	$	207
Interest cost		130		106
(Gain) loss		2		79
Prior service cost recognized		—		26
	$	412	$	418

The discount rate used in determining the actuarial present value of the projected benefit obligation was 5.5% for both 2010 and 2009.  The expected rate of compensation increase was 4.0% for both 2010 and 2009.

The Company has a 401K Plan covering substantially all employees.  Under the Plan, the Company is required to contribute 3% of all qualifying employees’ eligible salary to the Plan. The Plan expense in 2010 was $86,000 and $74,000 in 2009.

38

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note  12.   Regulatory Matters

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

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as defined).  Management believes, as of December 31, 2010 and 2009, that the Company and the Bank met all capital adequacy requirements to which they are subject.

As of December 31, 2010 and 2009, 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, 2010 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.

39

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

	Actual			For Capital Adequacy Purposes			To be Well- Capitalized Under Prompt Corrective Action Provisions
Parke Bancorp, Inc.	Amount		Ratio	Amount		Ratio	Amount		Ratio
As of December 31, 2010	(amounts in thousands except ratios)
Total Risk Based Capital	$	92,629	14.2%	$	52,183	8%		N/A	N/A
(to Risk Weighted Assets)
Tier 1 Capital	$	84,393	12.9%	$	26,092	4%		N/A	N/A
(to Risk Weighted Assets)
Tier 1 Capital	$	84,393	11.2%	$	30,062	4%		N/A	N/A
(to Average Assets)
As of December 31, 2009
Total Risk Based Capital	$	85,394	14.3%	$	47,892	8%		N/A	N/A
(to Risk Weighted Assets)
Tier 1 Capital	$	77,840	13.7%	$	22,674	4%		N/A	N/A
(to Risk Weighted Assets)
Tier 1 Capital	$	77,840	11.9%	$	26,108	4%		N/A	N/A
(to Average Assets)
Parke Bank
As of December 31, 2010
Total Risk Based Capital	$	92,556	14.2%	$	52,181	8%	$	65,226	10%
(to Risk Weighted Assets)
Tier 1 Capital	$	84,321	12.9%	$	26,091	4%	$	39,136	6%
(to Risk Weighted Assets)
Tier 1 Capital	$	84,321	11.2%	$	30,062	4%	$	37,577	5%
(to Average Assets)
As of December 31, 2009
Total Risk Based Capital	$	85,448	14.3%	$	47,890	8%	$	59,863	10%
(to Risk Weighted Assets)
Tier 1 Capital	$	77,922	13.0%	$	23,945	4%	$	35,918	6%
(to Risk Weighted Assets)
Tier 1 Capital	$	77,922	11.9%	$	26,124	4%	$	32,655	5%
(to Average Assets)

40

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note  13.   Shareholders’ Equity

Common Stock Dividend:  In May 2010 the Company paid a 10% common stock dividend to shareholders (422,359 shares). No dividend was paid during 2009. All share and per share information has been retroactively adjusted to give effect to this stock dividend for the periods presented.

Treasury Stock:  No transactions occurred in 2010 for the repurchase of Company 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 148,181 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.

There were no option awards, and hence no net compensations expenses in 2010. Net compensation expense recognized during 2009 amounted to $19,000. There is no remaining unrecognized compensation expense as of December 31, 2010.

Option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of the grant.  No options were awarded in 2010.  5,907 options were exercised during the year at an average price of $5.33 per option. All options issued have 10 year contractual terms and were fully vested as of December 31, 2010.

At December 31, 2010, there were 148,181 shares available for grant under the Plans.

The following table summarizes stock option activity for the year ended December 31, 2010.

Options	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at January 1, 2010	352,018	$	10.92
Granted	—	$	—
Exercised	5,907	$	5.33
Expired/terminated	2,500	$	11.38
Outstanding at December 31, 2010	343,611	$	11.02	4.3		$	—
Exercisable at December 31, 2010	343,611	$	11.02	4.3		$	—

41

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Stock options outstanding and exercisable at December 31, 2010:

Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price
$4.54	20,855	1.3	$	4.54
$6.35	45,697	2.4	$	6.35
$8.98	9,107	3.3	$	8.98
$10.78	36,976	4.2	$	10.78
$12.58 – 13.65	230,976	5.0	$	12.64
	343,611	4.3	$	11.01

Warrants:  In connection with the Company’s initial stock offering in 1998, warrants were issued, expiring in 2009. Consequently, there are none outstanding at December 31, 2010.

Preferred Stock: 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 for 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 cumulative perpetual preferred stock of $16,288,000 on January 30, 2009.  These proceeds were allocated between the preferred stock and warrants based on relative fair value in accordance with FASB ASC Topic 470, Debt with Conversion and Other Options. The allocation of proceeds resulted in a discount on the preferred stock that will be accreted over five years. The Company issued 329,757 common stock warrants to the U.S. Treasury and $930,000 of those proceeds were allocated to the warrants. The warrants are accounted for as equity securities. The warrants have a contractual life of 10 years and an exercise price of $7.41 per share of common stock.

The 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.  After three years, the preferred stock may be redeemed at any time in whole or in part by the Company.

The Company has recorded dividends in the approximate amount of $813,000 and $749,000 for the years ended December 31, 2010 and 2009. All dividend amounts billed by the U.S. Treasury through

42

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2010 have been paid. The preferred stock qualifies for and is accounted for as equity securities and is included in the Company’s Tier I capital on the date of receipt.

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 $114,000 in 2010 and $116,000 in 2009.  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 $389,000 in 2010 and $470,000 in 2009.

Note  15.   Commitments and Contingencies

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

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

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, 2010 and 2009, commitments to extend credit amounted to approximately $54.9 million and $59.6 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, 2010 and 2009, standby letters of credit with customers were $5.9 million and $8.6 million respectively.

43

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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, 2010.  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

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the Fair Value Measurements and Disclosures Topic 820 of FASB ASC, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company's various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

The fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. In accordance with this guidance, the Company groups its assets and liabilities carried at fair value in three levels 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.

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.

44

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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.”

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.

Fair Value on a Recurring Basis:

The following is a description of the Company’s valuation methodologies for assets carried at fair value. These methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes that its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Investment Securities Available for Sale:

Where quoted prices are available in an active market, securities are classified in Level 1 of the valuation hierarchy. Securities in Level 1 are exchange-traded equities. If quoted market prices are not available for the specific security, then fair values are provided by independent third-party valuations services. These valuations services estimate fair values using pricing models and other accepted valuation methodologies, such as quotes for similar securities and observable yield curves and spreads. As part of the Company’s overall valuation process, management evaluates these third-party methodologies to ensure that they are representative of exit prices in the Company’s principal markets. Securities in Level 2 include U.S. Government agencies, mortgage-backed securities, state and municipal securities and trust preferred securities. Securities in Level 3 include thinly traded collateralized mortgage obligations and collateralized debt obligations.

45

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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
As of December 31, 2010
U.S. Government sponsored entities	$	—	$	2,925	$	—	$	2,925
Corporate debt obligations		—		2,094		—		2,094
Residential mortgage-backed securities		—		16,559		—		16,559
Collateralized mortgage-backed securities				1,592		560		2,152
Collateralized debt obligations		—		—		4,000		4,000
Total	$	—	$	23,170	$	4,560	$	27,730
As of December 31, 2009
U.S. Government sponsored entities	$	—	$	3,232	$	—	$	3,232
Corporate debt obligations		—		1,970		—		1,970
Residential mortgage-backed securities		—		19,698		—		19,698
Collateralized mortgage-backed securities				2,669		1,140		3,809
Collateralized debt obligations		—		—		711		711
Total	$	—	$	27,569	$	1,851	$	29,420

The fair value of securities available for sale 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).

46

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

	Securities Available for Sale
	2010			2009
	(amounts in thousands)
Beginning balance at January 1,	$	1,851		$	1,705
Total net gains (losses) included in:
Net loss		(124	)		(1,729	)
Other comprehensive income (loss)		3,384			(405	)
Purchases, sales, issuances and settlements, net		(551	)		—
Net transfers into Level 3		—			2,280
Ending balance December 31,	$	4,560		$	1,851

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)
As of December 31, 2010
Impaired Loans	$	—	$	—	$	26,122	$	26,122
OREO		—		—		16,701		16,701
As of December 31, 2009
Impaired Loans	$	—	$	—	$	19,126	$	19,126

Impaired loans at fair value, which are measured in accordance with FASB ASC Topic 310 “Receivables”, for impairment represent loans with allocated specific reserves and loans partially charged off, reported net of the related specific reserves, had a carrying amount of $29.0 million and $22.7 million at December 31, 2010 and December 31, 2009 respectively, with a valuation allowance of $2.9 million and $3.6 million at December 31, 2010 and December 31, 2009, respectively. The valuation allowance for impaired loans is included in the allowance for loan losses in the balance sheets.

Other real estate owned (OREO) consists of commercial real estate properties which are recorded at fair value based upon current appraised value less estimated disposition costs, which is adjusted based upon Management’s review and changes in market conditions (level 3 inputs).

Fair Value of Financial Instruments

The Company discloses estimated fair values for its financial instruments in accordance with FASB ASC Topic 825, “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-

47

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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.

Investment Securities:  Fair value of securities available for sale is described above. Fair value of held to maturity securities are based upon quoted market prices for similar assets or liabilities in active markets.

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

Loans Held for Sale:  The carrying value of loans held for sale represents the amount of SAB loans sold that could not be recognized under current accounting guidance. Fair value represents the face amount of the loans.

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 values of FHLB borrowings, other borrowed funds and subordinated debt are 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.

48

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

The following table summarizes carrying amounts and fair values for financial instruments at December 31, 2010 and December 31, 2009:

	December 31, 2010				December 31, 2009
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(amounts in thousands)
Financial Assets:
Cash and cash equivalents	$	57,628	$	57,628	$	4,154	$	4,154
Investment securities (available for sale and held to maturity)		29,729		29,778		31,929		31,824
Restricted stock		3,040		3,040		3,094		3,094
Loans held for sale		11,454		11,454		—		—
Loans, net		611,950		618,721		590,997		585,346
Accrued interest receivable		3,273		3,273		2,808		2,808
Financial Liabilities:
Demand and savings deposits	$	298,598	$	298,598	$	257,566	$	257,566
Time deposits		306,124		307,776		261,882		264,901
Borrowings		75,616		79,029		67,831		68,859
Accrued interest payable		828		828		821		821

49

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)
2010
Interest income	$	10,725	$	10,472	$	10,363	$	10,076
Interest expense		2,779		2,820		2,798		2,953
Net interest income		7,946		7,652		7,565		7,123
Provision for loan losses		2,600		2,100		2,200		2,101
Income before income tax expense		2,799		3,121		3,593		2,879
Income tax expense		1,093		1,180		1,470		1,152
Net income		1,706		1,941		2,123		1,727
Net income available to common shareholders		1,468		1,581		1,757		1,546
Net income per common share:
Basic	$	0.33	$	0.36	$	0.40	$	0.34
Diluted	$	0.33	$	0.35	$	0.39	$	0.34
2009
Interest income	$	10,287	$	10,128	$	10,207	$	9,773
Interest expense		3,299		3,765		4,071		4,599
Net interest income		6,988		6,363		6,136		5,174
Provision for loan losses		2,100		1,450		980		770
Income before income tax expense		2,874		2,762		1,905		2,523
Income tax expense		1,176		1,067		726		995
Net income		1,698		1,695		1,179		1,528
Net income available to common shareholders		1,453		1,450		935		1,363
Net income per common share:
Basic	$	0.33	$	0.33	$	0.21	$	0.30
Diluted	$	0.33	$	0.33	$	0.21	$	0.30

50

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 Sheets	December 31,
	2010		2009
	(Amounts in thousands)
Assets:
Cash	$	144	$	117
Investments in subsidiaries		84,118		75,410
Other assets		5		—
Total assets	$	84,267	$	75,527
Liabilities and Equity:
Subordinated debentures	$	13,403	$	13,403
Other liabilities		164		151
Equity		70,700		61,973
Total liabilities and equity	$	84,267	$	75,527
Statements of Income	Years ended December 31,
	2010		2009
	(Amounts in thousands)
Income:
Dividends from bank subsidiary	$	1,600	$	1,600
Expense:
Interest on subordinated debentures		472		534
Other expenses		285		315
		757		849
Income before income taxes		843		751
Provision for income taxes		—		—
Equity in undistributed income of subsidiaries		6,497		5,349
Net income		7,340		6,100
Preferred stock dividend and discount accretion		988		899
Net income available to common shareholders	$	6,352	$	5,201

51

Parke Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Statements of Cash Flows
	Years ended December 31,
	2010			2009
	(Amounts in thousands)
Cash Flows from Operating Activities
Net income	$	7,340		$	6,100
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries		(6,539	)		(5,349	)
Changes in operating assets and liabilities:
Decrease (increase) in other assets		—			2
Increase in accrued interest payable and other accrued liabilities		13			65
Net cash provided by operating activities		814			818
Cash Flows from Investing Activities
Payments for investments in and advances to subsidiaries		—			(16,434	)
Net cash used in investing activities		—			(16,434	)
Cash Flows from Financing Activities
Proceeds from issuance of preferred stock		—			16,288
Payment of dividend on preferred stock		(813	)		(645	)
		(6	)		—
Proceeds from exercise of stock options and warrants		32			422
Purchase of treasury stock					(332	)
Net cash provided by financing activities		(787	)		15,733
Increase/(decrease) in cash and cash equivalents		27			117
Cash and Cash Equivalents, January 1,		117			—
Cash and Cash Equivalents, December 31,	$	144		$	117

Note  19.  Subsequent Events

On January 28, 2011 there was a fire at the Company’s Kennedy branch, located at 567 Egg Harbor Road, Washington Township, NJ. The branch was approximately 3.8 miles from the main office located at 601 Delsea Drive, Sewell, NJ. Management does not expect that customers will be adversely impacted due to the proximity of the main office location. The property was insured and the Company should not experience any financial loss due to the fire.

Management has evaluated subsequent events through the date of issuance of the financial statements and does not believe any such events warrant recording or disclosure in these financial statements.

52

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
	_______________________
	Parke Bancorp Officers
Vito S. Pantilione President and Chief Executive Officer	John F. Hawkins Senior  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 1227 25th Street, N.W. Suite 200 West Washington, D.C. 20037

53

PARKE BANK

Officers
Vito S. Pantilione	Elizabeth A. Milavsky
President & Chief Executive Officer	Executive Vice President & Chief Operating Officer
John F. Hawkins	Robert Gehring
Senior Vice President & Chief Financial Officer	Senior Vice President & Chief Credit Officer
David O. Middlebrook	Paul E. Palmieri
Senior Vice President & Senior Loan Officer	Senior Vice President, Philadelphia Region
Daniel Sulpizio	Allen M. Bachman
Senior Vice President	Vice President
Dolores M. Calvello	Ralph Gallo
Vice President	Vice President & Chief Workout Officer
Anthony “Nino” Lombardo	Mark A. Prater
Vice President & Controller	Vice President & BSA Officer
Marlon R. Soriano	James S. Talarico
Vice President	Vice President
Milton H. Witte	Evette M. Badecki
Vice President	Assistant Vice President
Kathleen A. Conover	Gil Eubank
Assistant Vice President	Assistant Vice President
Debra Miller	Lisa Perkins
Assistant Vice President	Assistant Vice President
Mary Ann Seal
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		Galloway Township Office
1610 Spruce Street		67 East Jimmie Leeds Road
Philadelphia, PA  19103		Galloway Township, NJ 08205
(215) 772-1113		(609) 748-9700

Parke Bank	44 Business Capital LLC	Parke Capital Trust I
601 Delsea Drive	1787 Sentry Parkway West	Parke Capital Trust II
Washington Township, NJ  08080	Building 16, Suite 210	Parke Capital Trust III
(856) 256-2500	Blue Bell, PA  19422	601 Delsea Drive
www.parkebank.com	(215) 985-4400	Washington Township, NJ 08080
	www.44businesscapital.com	(856) 256-2500

54

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%
44 Business Capital LLC	New Jersey	51%

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 No. 333-157631 on Forms S-3 of Parke Bancorp, Inc. of our report, dated March 25, 2011, relating to our audit of the 2010 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, 2010.

/s/ McGladrey & Pullen, LLP

Blue Bell, Pennsylvania

March 25, 2011

EX-31.1

Exhibit 31.1

CERTIFICATION

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

1. I have reviewed this Form 10-K of Parke Bancorp, Inc. for the year ended December 31, 2010;

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 Rules 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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 (or persons performing the equivalent functions):

(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 25, 2011	/s/ Vito S. Pantilione
		Vito S. Pantilione
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, John F. Hawkins, Senior Vice President and Chief Financial Officer:

1. I have reviewed this Form 10-K of Parke Bancorp, Inc. for the year ended December 31, 2010;

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 Rules 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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 (or persons performing the equivalent functions):

(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 25, 2011	/s/ John F. Hawkins
		John F. Hawkins
		Senior Vice President and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION

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 for the year ended December 31, 2010 (the “Report”) of Parke Bancorp, Inc. (the “Company”) as filed with the Securities and Exchange Commission, we, Vito S. Pantilione, President and Chief Executive Officer, and John F. Hawkins, Senior Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)           The Report fully complies with the requirements of Section 13(a) 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.

/s/ Vito S. Pantilione	/s/ John F. Hawkins
Vito S. Pantilione	John F. Hawkins
President and Chief Executive Officer	Senior Vice President and Chief Financial Officer
(Principal Executive Officer)	(Principal Financial Officer)

March 25, 2011

EX-99

Exhibit 99

EESA §111(b)(4) Certification Following First Fiscal Year

I certify, based on my knowledge, that:

(i)           The compensation committee of Parke Bancorp, Inc., Inc. has discussed, reviewed, and evaluated with senior risk officers at least every six months during any part of the most recently completed fiscal year that was a TARP period, the senior executive officer (SEO) compensation plans and employee compensation plans and the risks these plans pose to Parke Bancorp, Inc.;

(ii)           The compensation committee of Parke Bancorp, Inc. has identified and limited during any part of the most recently completed fiscal year that was a TARP period any features of the SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of Parke Bancorp, Inc. and has identified any features of the employee compensation plans that pose risks to Parke Bancorp, Inc. and has limited those features to ensure that Parke Bancorp, Inc. is not unnecessarily exposed to risks;

(iii)           The compensation committee has reviewed, at least every six months during any part of the most recently completed fiscal year that was a TARP period, the terms of each employee compensation plan and identified the features of the plan that could encourage the manipulation of reported earnings of Parke Bancorp, Inc. to enhance the compensation of an employee and has limited any such features;

(iv)           The compensation committee of Parke Bancorp, Inc. will certify to the reviews of the SEO compensation plans and employee compensation plans required under (i) and (iii) above;

(v)           The compensation committee of Parke Bancorp, Inc. will provide a narrative description of how it limited during any part of the most recently completed fiscal year that included a TARP period the features in

(A) SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of Parke Bancorp, Inc.;

(B) Employee compensation plans that unnecessarily expose Parke Bancorp, Inc. to risks; and

(C) Employee compensation plans that could encourage the manipulation of reported earnings of Parke Bancorp, Inc. to enhance the compensation of an employee;

(vi)           Parke Bancorp, Inc. has required that bonus payments, as defined in the regulations and guidance established under section 111 of EESA (bonus payments), of the SEOs and twenty next most highly compensated employees be subject to a recovery or “clawback” provision during any part of the most recently completed fiscal year that was a TARP period if the bonus payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria;

(vii)           Parke Bancorp, Inc. has prohibited any golden parachute payment, as defined in the regulations and guidance established under section 111 of EESA, to an SEO or any of the next five most highly compensated employees during any part of the most recently completed fiscal year that was a TARP period;

(viii)           Parke Bancorp, Inc. has limited bonus payments to its applicable employees in accordance with section 111 of EESA and the regulations and guidance established thereunder during any part of the most recently completed fiscal year that was a TARP period;

(ix)           The board of directors of Parke Bancorp, Inc. and its employees have complied with the excessive or luxury expenditures policy, as defined in the regulations and guidance established under section 111 of EESA, during any part of the most recently completed fiscal year that was a TARP period; and any expenses that, pursuant to this policy, require approval of the board of directors, a committee of the board of directors, an SEO, or an executive officer with a similar level of responsibility, were properly approved;

(x)           Parke Bancorp, Inc. will permit a non-binding shareholder resolution in compliance with any applicable Federal securities rules and regulations on the disclosures provided under the Federal securities laws related to SEO compensation paid or accrued during any part of the most recently completed fiscal year that was a TARP period;

(xi)           Parke Bancorp, Inc. will disclose the amount, nature, and justification for the offering during any part of the most recently completed fiscal year that was a TARP period, any perquisites, as defined in the regulations and guidance established under section 111 of EESA, whose total value exceeds $25,000 for each employee subject to the bonus payment limitations identified in paragraph (viii);

(xii)           Parke Bancorp, Inc. will disclose whether Parke Bancorp, Inc., the board of directors of Parke Bancorp, Inc., or the compensation committee of Parke Bancorp, Inc. has engaged during any part of the most recently completed fiscal year that was a TARP period a compensation consultant; and the services the compensation consultant or any affiliate of the compensation consultant provided during this period;

(xiii)           Parke Bancorp, Inc. has prohibited the payment of any gross-ups, as defined in the regulations and guidance established under section 111 of EESA, to the SEOs and the next twenty most highly compensated employees during any part of the most recently completed fiscal year that was a TARP period;

(xiv)           Parke Bancorp, Inc. has substantially complied with all other requirements related to employee compensation that are provided in the agreement between Parke Bancorp, Inc. and Treasury, including any amendments;

(xv)           Parke Bancorp, Inc. has submitted to Treasury a complete and accurate list of the SEOs and the twenty most highly compensated employees for the current fiscal year, with the non-SEOs ranked in descending order of level of annual compensation, and with the name, title, and employer of each SEO and most highly compensated employee identified; and

(xvi)           I understand that a knowing and willful false or fraudulent statement made in connection with this certification maybe punished by fine, imprisonment, or both.  [See, for example, 18 U.S.C. 1001]

By:	/s/ Vito S. Pantilione
	Mr. Vito S. Pantilione
	Principal Executive Officer

EESA §111(b)(4) Certification Following First Fiscal Year

I certify, based on my knowledge, that:

(i)           The compensation committee of Parke Bancorp, Inc., Inc. has discussed, reviewed, and evaluated with senior risk officers at least every six months during any part of the most recently completed fiscal year that was a TARP period, the senior executive officer (SEO) compensation plans and employee compensation plans and the risks these plans pose to Parke Bancorp, Inc.;

(ii)           The compensation committee of Parke Bancorp, Inc. has identified and limited during any part of the most recently completed fiscal year that was a TARP period any features of the SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of Parke Bancorp, Inc. and has identified any features of the employee compensation plans that pose risks to Parke Bancorp, Inc. and has limited those features to ensure that Parke Bancorp, Inc. is not unnecessarily exposed to risks;

(iii)           The compensation committee has reviewed, at least every six months during any part of the most recently completed fiscal year that was a TARP period, the terms of each employee compensation plan and identified the features of the plan that could encourage the manipulation of reported earnings of Parke Bancorp, Inc. to enhance the compensation of an employee and has limited any such features;

(iv)           The compensation committee of Parke Bancorp, Inc. will certify to the reviews of the SEO compensation plans and employee compensation plans required under (i) and (iii) above;

(v)           The compensation committee of Parke Bancorp, Inc. will provide a narrative description of how it limited during any part of the most recently completed fiscal year that included a TARP period the features in

(A) SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of Parke Bancorp, Inc.;

(B) Employee compensation plans that unnecessarily expose Parke Bancorp, Inc. to risks; and

(C) Employee compensation plans that could encourage the manipulation of reported earnings of Parke Bancorp, Inc. to enhance the compensation of an employee;

(vi)           Parke Bancorp, Inc. has required that bonus payments, as defined in the regulations and guidance established under section 111 of EESA (bonus payments), of the SEOs and twenty next most highly compensated employees be subject to a recovery or “clawback” provision during any part of the most recently completed fiscal year that was a TARP period if the bonus payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria;

(vii)           Parke Bancorp, Inc. has prohibited any golden parachute payment, as defined in the regulations and guidance established under section 111 of EESA, to an SEO or any of the next five most highly compensated employees during any part of the most recently completed fiscal year that was a TARP period;

(viii)           Parke Bancorp, Inc. has limited bonus payments to its applicable employees in accordance with section 111 of EESA and the regulations and guidance established thereunder during any part of the most recently completed fiscal year that was a TARP period;

(ix)           The board of directors of Parke Bancorp, Inc. and its employees have complied with the excessive or luxury expenditures policy, as defined in the regulations and guidance established under section 111 of EESA, during any part of the most recently completed fiscal year that was a TARP period; and any expenses that, pursuant to this policy, require approval of the board of directors, a committee of the board of directors, an SEO, or an executive officer with a similar level of responsibility, were properly approved;

(x)           Parke Bancorp, Inc. will permit a non-binding shareholder resolution in compliance with any applicable Federal securities rules and regulations on the disclosures provided under the Federal securities laws related to SEO compensation paid or accrued during any part of the most recently completed fiscal year that was a TARP period;

(xi)           Parke Bancorp, Inc. will disclose the amount, nature, and justification for the offering during any part of the most recently completed fiscal year that was a TARP period, any perquisites, as defined in the regulations and guidance established under section 111 of EESA, whose total value exceeds $25,000 for each employee subject to the bonus payment limitations identified in paragraph (viii);

(xii)           Parke Bancorp, Inc. will disclose whether Parke Bancorp, Inc., the board of directors of Parke Bancorp, Inc., or the compensation committee of Parke Bancorp, Inc. has engaged during any part of the most recently completed fiscal year that was a TARP period a compensation consultant; and the services the compensation consultant or any affiliate of the compensation consultant provided during this period;

(xiii)           Parke Bancorp, Inc. has prohibited the payment of any gross-ups, as defined in the regulations and guidance established under section 111 of EESA, to the SEOs and the next twenty most highly compensated employees during any part of the most recently completed fiscal year that was a TARP period;

(xiv)           Parke Bancorp, Inc. has substantially complied with all other requirements related to employee compensation that are provided in the agreement between Parke Bancorp, Inc. and Treasury, including any amendments;

(xv)           Parke Bancorp, Inc. has submitted to Treasury a complete and accurate list of the SEOs and the twenty most highly compensated employees for the current fiscal year, with the non-SEOs ranked in descending order of level of annual compensation, and with the name, title, and employer of each SEO and most highly compensated employee identified; and

(xvi)           I understand that a knowing and willful false or fraudulent statement made in connection with this certification maybe punished by fine, imprisonment, or both.  [See, for example, 18 U.S.C. 1001]

By:	/s/ John F. Hawkins
	Mr. John F. Hawkins
	Principal Financial Officer