<DOCUMENT>
<TYPE>S-4
<SEQUENCE>1
<FILENAME>s4_012805-0343.txt
<DESCRIPTION>FORM
<TEXT>
As Filed with the Securities and Exchange Commission on January 31, 2005
                           Registration No. 333-______

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                       ==================================

                                    FORM S-4
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                       ==================================

                               Parke Bancorp, Inc.
              -----------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

<TABLE>
<CAPTION>

<S>      <C>                      <C>                             <C>

          New Jersey                            6022                       [Applied For]
-------------------------------       ----------------------------    -----------------------
(State or Other Jurisdiction of       (Primary Standard Industrial        (I.R.S. Employer
 Incorporation or Organization)        Classification Code Number)       Identification No.)

</TABLE>

                               Parke Bancorp, Inc.
                                601 Delsea Drive
                      Washington Township, New Jersey 08080
                                 (856) 256-2500
     ----------------------------------------------------------------------
    (Address, Including Zip Code, and Telephone Number, Including Area Code,
                  of Registrant's Principal Executive Offices)

            Vito S. Pantilione, President and Chief Executive Officer
                               Parke Bancorp, Inc.
                                601 Delsea Drive
                      Washington Township, New Jersey 08080
                                 (856) 256-2500
     ----------------------------------------------------------------------
            (Name, Address, Including Zip Code, and Telephone Number,
                   Including Area Code, of Agent for Service)

                                   Copies To:

                               John J. Spidi, Esq.
                           Tiffany A. Hasselman, Esq.
                            Malizia Spidi & Fisch, PC
                            1100 New York Ave., N.W.
                                 Suite 340 West
                             Washington, D.C. 20005
                                 (202) 434-4660

                        =============================

         Approximate Date of Commencement of the Proposed Sale of the Securities
to the  Public:  As soon  as  practicabler]  after  the  effective  date of this
registration statement and the satisfaction or waiver of all other conditions to
the merger described in the proxy statement/prospectus.

         If the  securities  being  registered on this Form are being offered in
connection  with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]

         If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the  Securities  Act,  check the following box and
list the Securities Act registration  statement number of the earlier  effective
registration statement for the same offering. [_]

         If this  Form is a  post-effective  amendment  filed  pursuant  to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act  registration   statement  number  of  the  earlier  effective  registration
statement for the same offering. [_]



<PAGE>

<TABLE>
<CAPTION>


                         CALCULATION OF REGISTRATION FEE

========================== ==================== =========================== =========================  =====================

   Title Of Each Class                               Proposed Maximum           Proposed Maximum
      Of Securities            Amount To Be           Offering Price                Aggregate                Amount Of
     To Be Registered           Registered               Per Unit                Offering Price          Registration Fee
-------------------------- -------------------- --------------------------- -------------------------  ---------------------
<S>                       <C>                         <C>                  <C>                         <C>
Common Stock,
par value $0.10                 2,852,226                   N/A                    $52,851,747               $6,220.65
per share
========================== ==================== =========================== =========================  =====================
</TABLE>


---------------

(1) This  registration  statement  covers  the  maximum  number of shares of the
registrant's  common stock to be issued upon consummation of the  reorganization
of Parke Bank into the holding  company  form of  organization,  pursuant to the
Plan of  Acquisition,  dated January 25, 2005, by and between Parke Bank and the
registrant.

(2) The  registration fee has been computed in accordance with Rule 457(f) under
the  Securities  Act of 1933,  based on $18.53,  the average of the high and low
sales  prices for a share of common stock of Parke Bank as reported on Nasdaq on
January 25, 2005,  multiplied by 2,852,226 the maximum number of shares of Parke
Bank  common  stock to be  exchanged  in the  reorganization,  including  shares
issuable upon the exercise of outstanding stock options and warrants.

         The registrant hereby amends this  registration  statement on such date
or dates as may be necessary to delay its  effective  date until the  registrant
shall file a further amendment which specifically  states that this registration
statement  shall  become  effective  in  accordance  with  Section  8(a)  of the
Securities  Act of  1933  or  until  the  registration  statement  shall  become
effective on such date as the Commission,  acting pursuant to said Section 8(a),
may determine.




<PAGE>

                             [PARKE BANK LETTERHEAD]

March 25, 2005

Dear Fellow Shareholders:

     On behalf of the Board of Directors and management of Parke Bank, we invite
you to attend  our  Annual  Meeting of  Shareholders  to be held at The  Italian
Bistro, 590 Delsea Drive, Washington Township, New Jersey, on April 26, 2005, at
10:00 a.m. The attached  Notice of Annual Meeting and Proxy  Statement  describe
the formal business to be transacted at the Meeting.

     In  addition to the  election  of  directors  and the  ratification  of the
appointment of the independent  auditor,  shareholders will be asked to consider
and vote upon the following item:

o    a  proposal  to  reorganize  the Bank  into  the  holding  company  form of
     ownership by approving a Plan of Acquisition  under which (i) the Bank will
     become a  wholly-owned  subsidiary  of Parke  Bancorp,  Inc.,  a New-Jersey
     corporation  formed for the purpose of becoming the holding company for the
     Bank and (ii)  each  outstanding  share of the Bank  will be  automatically
     converted into one share of Parke Bancorp, Inc.

     Your Board of Directors has unanimously  approved the adoption of a holding
company  structure  for  the  Bank.   Deregulation  in  the  financial  services
industries has created many opportunities for the Bank. In recent years, we have
seen numerous financial institutions form holding companies to take advantage of
these  opportunities.  Although we have no present plans to acquire or establish
other businesses,  upon consummation of the holding company reorganization,  the
Bank will be in a position to take immediate advantage of any such opportunities
that may arise.

     The  Board of  Directors  of the Bank  believes  that the  holding  company
reorganization  is in the best  interests of the  shareholders  and urges you to
vote "FOR" this proposal.  Forming a holding company is an important step in the
continued  growth of our  business  and will  create a more  flexible  corporate
structure,  increase the range of financial activities we can offer, and help us
to respond to future regulatory changes.

     Your percentage stock ownership interest in Parke Bancorp, Inc. will remain
the same as your present interest in the Bank. Each share of common stock of the
Bank will automatically become one share of common stock of Parke Bancorp,  Inc.
Shares of common stock of Parke Bank are traded on the Nasdaq Stock Market under
the symbol "PKBK." After the Reorganization,  Parke Bancorp, Inc.'s common stock
will trade on the Nasdaq Stock Market.

     Approval of the holding company reorganization  requires the favorable vote
of the holders of at least two- thirds of the outstanding shares of common stock
of the Bank.  YOUR VOTE IS VERY  IMPORTANT.  FAILURE  TO VOTE IS  EQUIVALENT  TO
VOTING AGAINST APPROVAL OF THE HOLDING COMPANY REORGANIZATION.

     WHETHER OR NOT YOU PLAN TO ATTEND  THE  MEETING,  PLEASE  SIGN AND DATE THE
     ---------------------------------------------------------------------------
ENCLOSED  PROXY  CARD AND  RETURN  IT IN THE  ACCOMPANYING  POSTAGE-PAID  RETURN
--------------------------------------------------------------------------------
ENVELOPE AS QUICKLY AS POSSIBLE. This will not prevent you from voting in person
-------------------------------
at the  meeting,  but will assure that your vote is counted if you are unable to
attend the meeting.

                                    Sincerely,


                                    Vito S. Pantilione
                                    President and Chief Executive Officer


         THE   SECURITIES   THAT  PARKE   BANCORP,   INC.   WILL  ISSUE  IN  THE
REORGANIZATION  ARE NOT  DEPOSITS  OR SAVINGS  ACCOUNTS  AND ARE NOT  INSURED OR
GUARANTEED  BY  THE  FEDERAL   DEPOSIT   INSURANCE   CORPORATION  OR  ANY  OTHER
GOVERNMENTAL AGENCY.

         NEITHER THE SECURITIES  AND EXCHANGE  COMMISSION,  THE FEDERAL  RESERVE
BOARD,  THE NEW  JERSEY  DEPARTMENT  OF  BANKING  AND  INSURANCE,  NOR ANY STATE
SECURITIES  REGULATOR HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
IF THIS PROSPECTUS IS ACCURATE OR COMPLETE.  ANY  REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

<PAGE>
--------------------------------------------------------------------------------
                                   PARKE BANK
                                601 DELSEA DRIVE
                      WASHINGTON TOWNSHIP, NEW JERSEY 08080
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                          TO BE HELD ON APRIL 26, 2005
--------------------------------------------------------------------------------

NOTICE IS HEREBY GIVEN that the Annual Meeting of  Shareholders  (the "Meeting")
of Parke Bank (the "Bank") will be held at The Italian Bistro, 590 Delsea Drive,
Washington Township, New Jersey, on April 26, 2005, at 10:00 a.m. The Meeting is
for the purpose of considering and acting upon the following matters:

     1.   The  approval  of the Plan of  Acquisition  whereby  the Bank  will be
          reorganized  into the holding  company form of  organization  and will
          become a  wholly-owned  subsidiary of a newly-formed  holding  company
          called Parke Bancorp,  Inc. and each share of common stock of the Bank
          will  automatically  be  converted  into one share of common  stock of
          Parke Bancorp, Inc. (the "Holding Company Reorganization");

     2.   The election of twelve directors of Parke Bank;

     3.   The ratification of the appointment of McGladrey & Pullen,  LLP as the
          Bank's  independent  auditor for the fiscal year ending  December  31,
          2005; and

     4.   To  transact  such other  business  as may  properly  come  before the
          Meeting or any adjournments thereof.

     Action may be taken on any one of the foregoing proposals at the Meeting on
the date specified above, or on any date or dates to which, by original or later
adjournment,  the Meeting may be adjourned.  Pursuant to the Bank's Bylaws,  the
Board of  Directors  has fixed the close of business on March 16,  2005,  as the
record  date  for  determination  of the  shareholders  entitled  to vote at the
Meeting and any adjournments thereof.

     EACH  SHAREHOLDER  HAS THE RIGHT TO  DISSENT  FROM THE  REORGANIZATION  AND
DEMAND  PAYMENT OF THE VALUE OF HIS OR HER SHARES OF THE BANK'S  COMMON STOCK IF
THE  REORGANIZATION  IS COMPLETED.  THE RIGHT OF A  SHAREHOLDER  TO RECEIVE SUCH
PAYMENT IS CONTINGENT UPON STRICT  COMPLIANCE  WITH THE  REQUIREMENTS OF THE NEW
JERSEY BANKING ACT OF 1948. THE FULL TEXT OF THE APPLICABLE  SECTIONS OF THE NEW
JERSEY BANKING ACT OF 1948 IS INCLUDED AS APPENDIX D TO THE PROXY STATEMENT.

     WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,  YOU ARE  REQUESTED TO SIGN,
DATE AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED  POSTAGE-PAID  ENVELOPE.  YOU
MAY  REVOKE  YOUR  PROXY BY  FILING  WITH THE  SECRETARY  OF THE BANK A  WRITTEN
REVOCATION OR A DULY EXECUTED  PROXY BEARING A LATER DATE. IF YOU ARE PRESENT AT
THE MEETING YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON ON EACH MATTER  BROUGHT
BEFORE THE  MEETING.  HOWEVER,  IF YOU ARE A  SHAREHOLDER  WHOSE  SHARES ARE NOT
REGISTERED IN YOUR OWN NAME, YOU WILL NEED  ADDITIONAL  DOCUMENTATION  FROM YOUR
RECORD HOLDER TO VOTE IN PERSON AT THE MEETING.

                                BY ORDER OF THE BOARD OF DIRECTORS


                                David O. Middlebrook
                                Corporate Secretary

Washington Township, New Jersey
March 25, 2005

--------------------------------------------------------------------------------
IMPORTANT:  THE  PROMPT  RETURN OF  PROXIES  WILL SAVE THE BANK THE  EXPENSE  OF
FURTHER  REQUESTS  FOR  PROXIES  IN ORDER TO INSURE A QUORUM AT THE  MEETING.  A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
--------------------------------------------------------------------------------

<PAGE>

                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----
SUMMARY......................................................................1
   The Reorganization........................................................
   Comparison of Shareholders' Rights Before and After the
      Reorganization.........................................................
   Recommendation and Reasons................................................
   Conditions and Regulatory Approvals Required for the Reorganization.......
   Tax Consequences of the Reorganization....................................
   Rights of Dissenting Shareholders.........................................
   Management After the Reorganization.......................................
   Regulation and Supervision After the Reorganization.......................
   Exchange of Stock Certificates............................................

GENERAL INFORMATION..........................................................
   Introduction..............................................................
   Purpose of Meeting........................................................
   Record Date...............................................................
   Quorum....................................................................
   Voting And Revocability of Proxies........................................
   Vote Required for Approval of Proposals I, II and III.....................
   Solicitation of Proxies...................................................
   Shareholder Proposals.....................................................
   Form 10-KSB...............................................................

PROPOSAL I - THE HOLDING COMPANY REORGANIZATION..............................
   General...................................................................
   Reasons for the Reorganization............................................
   Plan of Acquisition.......................................................
   Effective Date............................................................
   Exchange of Stock Certificates............................................
   Tax Consequences..........................................................
   Comparison of Shareholders' Rights........................................
   Accounting Treatment......................................................
   Conditions to the Reorganization..........................................
   Amendment or Termination..................................................
   Federal and State Taxation................................................
   Dissenters' Rights .......................................................

PROPOSAL II - ELECTION OF DIRECTORS..........................................

PROPOSAL III - RATIFICATION OF APPOINTMENT OF AUDITORS.......................

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
   AND RESULTS OF OPERATION..................................................
   Forward Looking Statements................................................
   Overview..................................................................
   Critical Accounting Policies..............................................
   Operating Results for the Nine Months Ended September 30, 2004
       and 2003..............................................................
   Financial Condition at September 30, 2004 and December 31, 2003...........
   Operating Results for the Years Ended December 31, 2003 and 2002..........
   Financial Condition at December 31, 2003 and December 31, 2002............
   Loan Quality..............................................................
   Interest Rate Sensitivity and Liquidity...................................

                                       -i-

<PAGE>



   Off-Balance Sheet Arrangements............................................
   Impact of Inflation and Changing Prices...................................
   Recent Accounting Pronouncements..........................................

MARKET PRICES AND DIVIDENDS..................................................
   General...................................................................
   Dividend Restrictions Imposed on Parke Bancorp, Inc.......................
   Dividend Restrictions Imposed on the Bank.................................

BUSINESS OF PARKE BANCORP, INC...............................................

BUSINESS OF PARKE BANK.......................................................
   General...................................................................
   Market Area...............................................................
   Competition...............................................................
   Lending Activities........................................................
   Non-Performing and Problem Assets.........................................
   Investment Activities.....................................................
   Sources of Funds..........................................................
   Properties................................................................
   Legal Proceedings.........................................................

REGULATION...................................................................
   Regulation of Parke Bank..................................................
   Regulation of Parke Bancorp, Inc..........................................

MANAGEMENT...................................................................
   Directors and Executive Officers..........................................
   Meetings and Committees of the Board of Directors.........................
   Principal Accounting Fees and Services....................................
   Director Nomination Process...............................................
   Shareholder Communications................................................
   Certain Relationships and Related Transactions............................
   Director and Executive Officer Compensation...............................
   Security Ownership of Certain Beneficial Owners and Management............
   Section 16(a) Beneficial Ownership Reporting Compliance...................

DESCRIPTION OF COMMON STOCK OF PARKE BANCORP, INC............................

LEGAL AND TAX OPINIONS.......................................................

EXPERTS......................................................................

INDEX TO FINANCIAL STATEMENTS................................................

APPENDIX A  -  PLAN OF ACQUISITION...........................................A-1
APPENDIX B  -  CERTIFICATE OF INCORPORATION OF PARKE BANCORP, INC............B-1
APPENDIX C  - BYLAWS OF PARKE BANCORP, INC...................................C-1
APPENDIX D  - SECTIONS 140 TO 145 OF THE NEW JERSEY BANKING ACT OF 1948
                    (RIGHTS OF DISSENTING SHAREHOLDERS) .....................D-1

                                      -ii-

<PAGE>
                                     SUMMARY

         The  following  is a summary of certain  information  contained in this
Proxy  Statement.  This summary is not complete and is qualified in its entirety
by the more  detailed  information  appearing  in this Proxy  Statement  and the
appendices hereto. Shareholders should review the entire Proxy Statement and, in
particular, the specific sections referred to in this summary.

PARKE BANK

     Parke Bank (the "Bank") is a New  Jersey-chartered  commercial  bank, which
commenced  operations in January 1999.  The Bank's  deposits are currently  FDIC
insured,  and the Bank is regulated by the New Jersey  Department of Banking and
Insurance and the FDIC.  The Bank  maintains its principal  office at 601 Delsea
Drive,  Washington Township,  New Jersey 08080, and its telephone number at that
address is (856) 256-2500.  It also conducts business through two branch offices
in Northfield and Washington Township,  New Jersey, and a loan production office
in Philadelphia, Pennsylvania.

PARKE BANCORP, INC.

     Parke Bancorp, Inc. is a corporation incorporated in January 2005 under New
Jersey law for the  purpose of becoming a holding  company of Parke Bank.  Parke
Bancorp,  Inc.'s  principal  executive  office is located  at 601 Delsea  Drive,
Washington Township,  New Jersey 08080, and its telephone number at that address
is (856) 256-2500.

     Parke Bancorp, Inc. is currently a non-operating,  shell corporation.  Upon
the  completion  of the  Reorganization,  the Bank  will  become a  wholly-owned
subsidiary of Parke Bancorp, Inc. and each shareholder of the Bank will become a
shareholder of Parke Bancorp,  Inc. with the same respective  ownership interest
therein as presently held in the Bank.  Immediately  after  consummation  of the
Reorganization,  it is expected that Parke Bancorp,  Inc. will not engage in any
business  activity  other  than to hold  all of the  stock  of the  Bank.  It is
anticipated,  however,  that Parke  Bancorp,  Inc.  in the future  will begin to
explore the feasibility of other investment  opportunities,  including  possible
diversification  through  acquisitions and mergers,  although no specific future
plans are being considered at this time.

THE REORGANIZATION

     Under the Plan of Acquisition,  as amended (the "Plan"), attached hereto as
Appendix  A, the Bank  will be  reorganized  into the  holding  company  form of
organization (the "Holding Company Reorganization"or the "Reorganization"). As a
result of the Reorganization, the Bank will become a wholly- owned subsidiary of
Parke Bancorp,  Inc. and each outstanding  share of the Bank's common stock will
be automatically  converted into one share of the common stock of Parke Bancorp,
Inc.

COMPARISON OF SHAREHOLDERS' RIGHTS BEFORE AND AFTER THE REORGANIZATION

     The governing documents of Parke Bancorp, Inc. are substantially  different
from the  current  governing  documents  of the  Bank.  There  are a  number  of
differences  between the Bank's Certificate of Incorporation and the Certificate
of  Incorporation  for Parke  Bancorp,  Inc. In addition,  there are a number of
differences between the Bylaws of the Bank and the Bylaws of Parke Bancorp, Inc.
This means that if the  Reorganization  is  approved  by the  shareholders,  the
rights   of  the   shareholders   will  be   materially   different   after  the
Reorganization.

                                      - 1 -

<PAGE>

     The  Board  of  Directors  of the  Bank  unanimously  approved  the Plan of
Acquisition  and is unanimously in support of the  Certificate of  Incorporation
under which Parke Bancorp,  Inc. was  incorporated and the Bylaws that have been
adopted for Parke Bancorp,  Inc. The Board of Directors believes the differences
in the governing  documents to be in the best interest of  shareholders in order
to take advantage of anti-takeover  protections available to Parke Bancorp, Inc.
under New Jersey law.

RECOMMENDATION AND REASONS FOR THE REORGANIZATION

     The  Board  of  Directors  of  the  Bank  has   unanimously   approved  the
Reorganization  and unanimously  recommends that the  shareholders  vote FOR the
approval and adoption of the Plan. A holding  company  structure  offers certain
advantages  in  comparison  to the Bank's  present  corporate  structure.  These
advantages include increased organizational  flexibility and greater opportunity
to offer financial  services  related to banking.  See "Proposal I - The Holding
Company  Reorganization - Reasons for the Reorganization - Advantages of Holding
Company Structure."

CONDITIONS AND REGULATORY APPROVALS REQUIRED FOR THE REORGANIZATION

     In addition to approval by shareholders  owning at least  two-thirds of the
outstanding voting shares of the Bank, the consummation of the Reorganization is
conditioned  upon the receipt of the  approval of the New Jersey  Department  of
Banking and Insurance and Board of Governors of the Federal Reserve System.  See
"Proposal  I  -  The  Holding  Company   Reorganization   -  Conditions  to  the
Reorganization."

     The directors and executive  officers of Parke Bank as a group beneficially
owned  _______  shares,  or __% of the  outstanding  shares of Parke Bank common
stock,  at the  Record  Date and  intend  to vote  their  shares in favor of the
Reorganization.

TAX CONSEQUENCES OF THE REORGANIZATION

     The Reorganization will qualify as a tax-free  reorganization,  and no gain
or loss will be recognized by the Bank or by Bank shareholders  whose shares are
converted into shares of Parke Bancorp,  Inc. common stock. See "Proposal I -The
Holding Company Reorganization - Tax Consequences."

RIGHTS OF DISSENTING SHAREHOLDERS

     Under the New Jersey Banking Act of 1948,  dissenters'  rights of appraisal
are available to Bank shareholders who follow certain prescribed procedures. See
"Proposal I - The Holding Company Reorganization - Dissenters' Rights."

MANAGEMENT AFTER THE REORGANIZATION

     The  Reorganization  will not result in a change in the  Bank's  directors,
officers, or personnel.  For information with respect to the management of Parke
Bancorp, Inc., see "Parke Bancorp, Inc. - Management."

REGULATION AND SUPERVISION AFTER THE REORGANIZATION

     After the Reorganization,  Parke Bancorp,  Inc. will be regulated as a bank
holding  company by the Federal  Reserve Board.  The Bank, as a  state-chartered
commercial  bank, will continue to be regulated by the New Jersey  Department of
Banking and  Insurance and to have its accounts  insured by the Federal  Deposit
Insurance Corporation (the "FDIC"). See "Regulation."

                                      - 2 -
<PAGE>
     Following the  Reorganization,  Parke Bancorp,  Inc. will become subject to
the periodic and other reporting  requirements of the Securities Exchange Act of
1934, as amended,  and will file such reports with the  Securities  and Exchange
Commission. Currently, Parke Bank files such reports on its behalf with the FDIC
but will no longer do so after the Reorganization.  See "Regulation - Regulation
of Parke Bancorp, Inc. - Federal Securities Laws."

EXCHANGE OF STOCK CERTIFICATES

     The former shareholders of the Bank will be notified of the consummation of
the Reorganization,  and they will receive a letter of transmittal by which they
will  forward  their  stock  certificates  for Parke  Bank  common  stock to the
transfer agent for surrender and exchange for  certificates  representing  Parke
Bancorp,   Inc.  common  stock.   SHAREHOLDERS   SHOULD  NOT  SEND  THEIR  STOCK
CERTIFICATES FOR PARKE BANK COMMON STOCK TO THE BANK, PARKE BANCORP, INC. OR THE
TRANSFER AGENT UNTIL THEY RECEIVE A LETTER OF TRANSMITTAL.

                                      - 3 -

<PAGE>
--------------------------------------------------------------------------------

                               GENERAL INFORMATION

INTRODUCTION

         This Proxy Statement is furnished in connection  with the  solicitation
of proxies by the Board of  Directors  of Parke Bank (the  "Bank") to be used at
the Annual Meeting of Shareholders of the Bank which will be held at The Italian
Bistro, 590 Delsea Drive, Washington Township, New Jersey, on April 26, 2005, at
10:00 a.m. and at any adjournments or postponements thereof (the "Meeting"). The
accompanying  Notice of Annual Meeting,  this Proxy Statement,  and the enclosed
Form of Proxy are being first mailed to shareholders on or about March 25, 2005.

PURPOSE OF MEETING

     At the Meeting, shareholders will consider and vote upon:

o    the  approval  and  adoption  of the Plan of  Acquisition  under  which the
     Reorganization will be effected;

o    the election of twelve directors of the Bank; and

o    the  ratification  of the  appointment  of  McGladrey & Pullen,  LLP as the
     Bank's independent auditor for the fiscal year ending December 31, 2005.

     If there are not sufficient  votes to approve one or more of the proposals,
the Board of  Directors  of the Bank may  adjourn  the  Meeting to allow for the
solicitation  of  additional  proxies.  The  Board  of  Directors  knows  of  no
additional  matters that will be  presented  for  consideration  at the Meeting.
Execution  of  a  proxy,  however,   confers  on  the  designated  proxy  holder
discretionary  authority  to  vote  the  shares  represented  by such  proxy  in
accordance  with their best  judgment on such other  business,  if any, that may
properly come before the Meeting or any adjournment thereof.

RECORD DATE

     Shareholders  of record as of the close of  business on March 16, 2005 (the
"Record  Date"),  are  entitled to one vote for each share of the Bank's  common
stock then held. As of the Record Date, the Bank had _________  shares of common
stock issued and outstanding.

QUORUM

     The  presence  in  person  or by  proxy  of at  least  a  majority  of  the
outstanding  shares of the Bank's common stock  entitled to vote is necessary to
constitute a quorum at the Meeting. With respect to any matter, broker non-votes
(i.e.,  shares for which a broker  indicates  on the proxy that it does not have
discretionary  authority  as to such  shares  to vote  on such  matter)  will be
considered present for purposes of determining  whether a quorum is present.  In
the event there are not sufficient votes for a quorum or to ratify any proposals
at the time of the Meeting,  the Meeting may be adjourned in order to permit the
further solicitation of proxies.

VOTING AND REVOCABILITY OF PROXIES

     Shareholders  who  execute  proxies  retain the right to revoke them at any
time. Unless so revoked,  the shares represented by signed proxies will be voted
at the Meeting and all adjournments thereof. Proxies

                                      - 4 -

<PAGE>
may be revoked by written notice  delivered in person or mailed to the Secretary
of the  Bank at the  address  of the Bank  shown  above  or by the  filing  of a
later-dated  proxy prior to a vote being taken on a  particular  proposal at the
Meeting.  A proxy will not be voted if a  shareholder  attends  the  Meeting and
votes in person.  Proxies  solicited by the Board of Directors  will be voted as
specified  thereon.  Proxies  marked  "abstain"  will have the  effect of a vote
against approval of the holding company reorganization.

     IF NO  SPECIFICATION  IS  MADE,  SIGNED  PROXIES  WILL BE VOTED  (I)  "FOR"
APPROVAL OF THE  REORGANIZATION,  (II) "FOR" THE  NOMINEES  FOR  DIRECTOR AS SET
FORTH HEREIN AND (III) "FOR" THE RATIFICATION OF MCGLADREY & PULLEN,  LLP AS THE
BANK'S  INDEPENDENT  AUDITOR FOR THE FISCAL YEAR ENDING DECEMBER 31, 2005 AT THE
MEETING OR ANY ADJOURNMENT THEREOF. The proxy confers discretionary authority on
the persons  named thereon to vote with respect to the election of any person as
a  director  where the  nominee  is unable to serve,  or for good cause will not
serve, and with respect to matters incident to the conduct of the Meeting.

     The Board of Directors is not aware of any additional  matters that will be
presented  for  consideration  at the Meeting.  Execution  of a proxy,  however,
confers on the designated  proxyholder the  discretionary  authority to vote the
shares  represented by such proxy in accordance with their best judgment on such
other  business,  if any,  that may  properly  come  before  the  Meeting or any
adjournment thereof.

VOTE REQUIRED FOR APPROVAL OF PROPOSALS I, II AND III

     With respect to Proposal I, approval of the holding company reorganization,
a shareholder  may vote "FOR" the proposal,  "AGAINST" the proposal or "ABSTAIN"
from voting on the  proposal.  Approval of Proposal I requires  the  affirmative
vote of at least  two-thirds of the issued and outstanding  shares of the Bank's
common  stock  eligible  to be  voted at the  Meeting.  Abstentions  and  broker
non-votes  will have the effect of a vote  against  Proposal I. As of the Record
Date,  directors and executive  officers of the Bank beneficially  owned ___% of
the Bank's common stock.  These persons have  indicated that they intend to vote
"FOR" the Reorganization.

     With respect to Proposal II, the election of directors,  the proxy provided
by the Board of Directors  allows a shareholder  to vote for the election of the
nominees  proposed by the Board of Directors,  or to withhold  authority to vote
for the nominees being proposed.  Under the Bank's Bylaws, directors are elected
by a plurality of votes cast,  without regard to either (i) broker  non-votes or
(ii) proxies as to which  authority to vote for the nominees  being  proposed is
withheld.

     With  respect to  Proposal  III,  ratification  of the  Bank's  independent
auditor's for the fiscal year ending  December 31, 2005, a shareholder  may vote
"FOR" the  proposal,  "AGAINST"  the  proposal or  "ABSTAIN"  from voting on the
proposal.  Approval of Proposal III requires the affirmative  vote of a majority
of the votes actually cast in person or by proxy at the Meeting. Abstentions and
broker non-votes will have no effect on Proposal III.

     Concerning  any other  matters that may  properly  come before the Meeting,
unless  otherwise  required by law, all such matters  shall be  determined  by a
majority of votes cast  affirmatively or negatively without regard to (i) broker
non-votes or (ii) proxies marked "ABSTAIN" as to that matter.

SOLICITATION OF PROXIES

     The cost of  soliciting  proxies  will be borne by the Bank.  The Bank will
reimburse  brokerage  firms and other  custodians,  nominees and fiduciaries for
reasonable  expenses  incurred  by  them  in  sending  proxy  materials  to  the
beneficial  owners of the Bank's common stock. In addition to  solicitations  by
mail,

                                      - 5 -

<PAGE>

directors,  officers,  and regular  employees  of the Bank may  solicit  proxies
personally  or by telephone  without  additional  compensation.  The Company has
engaged  ___________ to act as a proxy solicitor in connection with the Meeting;
and the anticipated cost of this engagement is approximately $_______.

SHAREHOLDER PROPOSALS

     In order to be considered for inclusion in the Bank's proxy  materials,  or
the proxy  materials of Parke Bancorp,  Inc.  assuming that the holding  company
reorganization  is completed,  for the annual meeting of shareholders to be held
in 2006, all shareholder  proposals must be received at the executive  office of
the Bank, or Parke Bancorp, Inc. at 601 Delsea Drive,  Washington Township,  New
Jersey  08080 by  November  25,  2005.  Shareholder  proposals  must meet  other
applicable  criteria  as set forth in the Bylaws in order to be  considered  for
inclusion in the proxy materials.

     Shareholder  proposals that are not included in the Bank's proxy statement,
or the proxy materials of Parke Bancorp,  Inc. assuming that the holding company
reorganization  is  completed,  for  the  2006  annual  meeting,  will  only  be
considered at such meeting if the shareholder  submits notice of the proposal to
the Bank, or to Parke Bancorp,  Inc., at the above address by February 25, 2006.
Shareholder  proposals must meet other  applicable  criteria as set forth in the
Bylaws in order to be considered at the 2006 annual meeting.

FORM 10-KSB

     A copy of the Bank's Annual Report on Form 10-KSB for the fiscal year ended
December  31, 2004 as filed with the FDIC will be  furnished  without  charge to
shareholders  as of the Record Date upon written  request to the Chief Financial
Officer, Parke Bank, 601 Delsea Drive, Washington Township, New Jersey 08080.

                 PROPOSAL I - THE HOLDING COMPANY REORGANIZATION

GENERAL

     The Reorganization  will be accomplished  pursuant to the Plan, pursuant to
which the Bank will become a wholly-owned  subsidiary of Parke Bancorp,  Inc., a
New Jersey  corporation.  Under the terms of the Plan, each outstanding share of
the Bank's common stock will be converted into one share of Parke Bancorp,  Inc.
common stock,  and the former holders of the Bank's common stock will become the
holders of all of the  outstanding  shares of Parke Bancorp,  Inc. common stock.
Parke Bancorp,  Inc. was  incorporated in January 2005 solely for the purpose of
becoming a bank holding  company and has no prior operating  history.  Following
the Reorganization, it is intended that the Bank will continue its operations at
the same locations, with the same management and Board of Directors, and subject
to all the rights, obligations, and liabilities of the Bank existing immediately
prior to the  Reorganization.  The Bank may distribute capital to Parke Bancorp,
Inc.  prior to or following  the  reorganization  in the form of a cash dividend
subject to applicable  regulations regarding capital  distributions.  Initially,
the Bank intends to capitalize  Parke  Bancorp,  Inc. with $______ in cash.  See
"Market Prices and Dividends - Dividend Restrictions Imposed on the Bank."

REASONS FOR THE REORGANIZATION

     ADVANTAGES OF HOLDING COMPANY  STRUCTURE.  A bank holding company structure
will  provide  greater  flexibility  than is  currently  available  to the Bank.
Present  regulations  of the New Jersey  Department of Banking and Insurance and
the Federal Deposit Insurance Corporation limit the types of businesses in which
the Bank may  engage and limit the amount  that may be  invested  by the Bank in
subsidiaries. The

                                      - 6 -

<PAGE>

establishment of a bank holding company is designed to permit diversification of
operations and the  acquisition  and formation of companies  engaged in lines of
business which,  while  complementary  to the business of the Bank,  should help
reduce the risks  inherent in an industry  that is  sensitive  to interest  rate
changes.  Management  believes that acquisition or formation of such enterprises
which do not have the degree of asset and liability  interest  rate  sensitivity
inherent  in the  structure  of a bank would  provide a  beneficial  stabilizing
effect on  operations.  However,  at this time,  the Bank has not identified any
enterprises  that would be the subject of future  acquisitions nor have criteria
been developed to identify such an enterprise.

     Under the holding  company  structure,  Parke  Bancorp,  Inc. would operate
under the general  corporate  laws of the State of New Jersey which provide more
flexibility  than  currently  available  to the Bank in the  areas of  corporate
governance,  director and officer responsibility,  and limitations of liability.
In addition,  because of the requirements of New Jersey banking laws, interstate
branching by Parke Bank will be easier to accomplish  under the holding  company
structure.

     Upon  completion  of the  Reorganization,  the Board of  Directors of Parke
Bancorp,  Inc. would have the authority to adopt stock repurchase plans, subject
to any applicable  statutory and regulatory  requirements.  Based upon facts and
circumstances that may arise following  Reorganization,  Parke Bancorp, Inc. may
wish  to  repurchase  shares  of its  common  stock  in the  future.  Any  stock
repurchases will be subject to the determination of the Board that the Bank will
be  capitalized in excess of all applicable  regulatory  requirements  after any
such  repurchases and that capital will be adequate  taking into account,  among
other things, the level of non-performing and other risk assets,  Parke Bancorp,
Inc.'s  and  the  Bank's  current  and  projected   results  of  operations  and
asset/liability   structure,  the  economic  environment,   and  tax  and  other
considerations.

     Although the Board of Directors  presently intends for Parke Bancorp,  Inc.
to remain a unitary bank holding company,  it would have the ability to become a
multiple  bank holding  company (a holding  company which has more than one bank
subsidiary) in the future if the Board so desires.  A multiple  holding  company
structure can  facilitate  the  acquisition  of other banks and mutual and stock
savings institutions in addition to other companies.  If a multiple bank holding
company structure is utilized, the acquired institution would be able to operate
on a more autonomous basis as a wholly-owned  subsidiary of Parke Bancorp,  Inc.
rather than as a division  of the Bank.  For  example,  the  acquired  financial
institution  could retain its own directors,  officers,  and corporate  name, as
well as have  representation on Parke Bancorp,  Inc.'s Board of Directors.  This
more autonomous operation may be decisive in acquisition negotiations.  Although
there are  currently  no future  plans for the  acquisition  of other  financial
institutions  or companies or the expansion of additional  services  through the
formation of subsidiaries of Parke Bancorp,  Inc., it and the Bank would be in a
position  following the  Reorganization  to take advantage of any  opportunities
that may arise.

     In addition,  in the opinion of the Board of Directors,  the Certificate of
Incorporation of Parke Bancorp,  Inc. offers several advantages over the current
Certificate of  Incorporation  of the Bank. The Certificate of  Incorporation of
Parke  Bancorp,  Inc.  and the Bylaws  adopted by Parke  Bancorp,  Inc.  contain
provisions which offer  anti-takeover  protection.  These provisions  reduce the
ability of  minority  shareholders  to exert a  significant  influence  over the
control and management of Parke Bancorp, Inc.

     The  intention of the  anti-takeover  provisions is to reduce the risk of a
takeover  attempt  that has not been  negotiated  with the  Board of  Directors.
Certain  shareholders,  however,  might deem  takeover  attempts  to be in their
interest,  and such  provisions  could  discourage  takeover  attempts  in which
shareholders  might  otherwise have received a premium for their shares over the
current  market price.  Such  provisions  may also tend to  perpetuate  existing
management.

                                      - 7 -

<PAGE>

     PRESERVATION OF NASDAQ LISTING.  In addition to the benefits of the holding
company form of organization,  the Board of Directors  considered that new rules
of the Nasdaq Stock Market have made it necessary to restructure  the membership
of the Board of  Directors so that the common stock can continue to be quoted on
the Nasdaq Stock Market.

     New  Nasdaq  Rule  4350(c)(1)  requires  that a  majority  of the  board of
directors be  "independent  directors,"  as defined in Nasdaq Rule  4200(a)(15).
Nasdaq generally  defines an independent  director as any person,  other than an
officer of employee of the company,  who does not have a  relationship  with the
company  that  would,  in the  opinion  of the  company's  board  of  directors,
interfere  with  the  exercise  of  independent  judgment  in  carrying  out the
responsibilities  of a director.  Notwithstanding  the new Nasdaq  definition of
independence of directors, Parke Bank's Board of Directors believes that each of
the Bank's non-employee  directors is independent,  within the common meaning of
such term, and has no relationship  that would adversely  affect such director's
exercise  of  independent  judgment in carrying  out his  responsibilities  as a
director or acting in the best interests of the Bank.

     Nasdaq's rules  additionally state that a director "who is a partner in, or
a controlling  shareholder or an executive officer of, any organization to which
the company made, or from which the company  received,  payments for property or
services in the current or any of the past three  fiscal years that exceed 5% of
the  recipient's  consolidated  gross  revenues  for  that  year,  or  $200,000,
whichever is more," is not "independent" for purposes of the Nasdaq Rules.

     Parke Place  Construction,  owned by  Directors  Thomas  Hedenberg  and Ray
Tresh,  received rental payments from the Bank of $69,300 in 2001 for the Bank's
main office  building.  In January 2002, the building was purchased by a limited
liability company whose principals were all of the then directors of Parke Bank.
The highest  annual rent paid on the main office was  approximately  $84,000 for
2002.  Under  Nasdaq's  definition,  as stated  above,  directors  may engage in
transactions below $200,000 and still be considered  "independent" as defined by
Nasdaq.  Thus,  when the Bank filed its initial Nasdaq listing  application  and
began trading on Nasdaq in late 2002, this permissible  arm's length real estate
transaction  did not disqualify any of the directors who were  principals of the
limited liability company.  However,  subsequent to Parke Bank's initial listing
on Nasdaq,  the Bank purchased the office for fair market value from the limited
liability  company of which all of the directors of Parke Bank were  principals.
That purchase occurred in December 2002 and, similarly, a branch office building
was purchased by the Bank in February 2003 under similar circumstances. Nasdaq's
definition  of  independent  considers  whether  there has been a  disqualifying
business  transaction  with the company in "the current or any of the past three
fiscal years." Because the last disqualifying  transaction  occurred in February
2003, the directors who were involved in the real estate  transactions  will not
be independent  under Nasdaq's  definition until January 1, 2007, at which point
there will not have been a disqualifying transaction in the current (i.e., 2007)
or any of the past three fiscal years (i.e., 2006, 2005 and 2004).

     As a result of these  permissible  arms'  length real  estate  transactions
involving the Bank's main office and a branch office, the majority of the Bank's
Board of Directors are not "independent"  under Nasdaq's  definition.  Directors
Daniel J. Dalton and Fred G. Choate were not principals of the limited liability
company and are,  therefore,  independent  under Nasdaq Rules,  and,  along with
Director  Celestino R. Pennoni,  Chairman of the Board of Directors of the Bank,
will be the initial directors of Parke Bancorp, Inc. Through the Reorganization,
by creating a holding company with a majority  independent  board, the Bank will
be able to comply with the new rules of the Nasdaq  Stock Market  because  Parke
Bancorp,  Inc.  will  replace  the Bank as the issuer  whose  stock is quoted on
Nasdaq.  The nine directors  currently  serving on the Board of Directors of the
Bank who are not the initial  directors  of Parke  Bancorp,  Inc.  will later be
added to the Board of  Directors of Parke  Bancorp,  Inc. by  resolution  of the
three initial  directors.  There will be no changes in the Board of Directors of
the Bank as a result of the Reorganization.

                                      - 8 -

<PAGE>

PLAN OF ACQUISITION

     The  Reorganization  will be accomplished under the Plan, which is attached
as Appendix A to this Proxy Statement and is  incorporated  herein by reference.
The following discussion is qualified in its entirety by reference to the Plan.

     Upon shareholder approval and adoption of the Plan, the Reorganization will
be accomplished as follows:

     (1) Upon the Effective  Date, each  outstanding  share of Parke Bank common
stock shall be converted into one share of Parke Bancorp,  Inc. common stock and
the  holders of the then  issued  and  outstanding  shares of Parke Bank  common
stock, except shareholders who exercise  dissenters' rights,  shall, without any
further  action  on  their  part  or  on  the  part  of  Parke  Bancorp,   Inc.,
automatically and by operation of law cease to own such shares and shall instead
become owners of one share of Parke Bancorp, Inc. common stock for each share of
Parke Bank common stock theretofore held by them.

     (2) Upon the Effective  Date, the Bank shall issue to Parke  Bancorp,  Inc.
one share of Parke Bank common  stock for each share of Parke Bank common  stock
outstanding immediately prior to the Effective Date.

     (3) Upon or immediately after the Effective Date, the Bank shall notify all
shareholders of the procedure by which certificates representing shares of Parke
Bank common stock may be  exchanged  for  certificates  of Parke  Bancorp,  Inc.
common  stock.  The Bank's  transfer  agent,  Registrar  and  Transfer  Company,
Cranford,  New Jersey,  shall act as exchange agent in effecting the exchange of
certificates. After receipt of such notification, each holder shall be obligated
to surrender the certificates representing shares of Parke Bank common stock for
exchange into  certificates  of Parke Bancorp,  Inc. common stock as promptly as
possible.  Notwithstanding  the  foregoing,  any  shareholder  not  desiring  to
exchange his or her shares shall be entitled to  dissenters'  rights as provided
under the New Jersey Banking Act of 1948. See "Dissenters' Rights."

     The Board of Directors presently intends to cause Parke Bancorp, Inc. to be
initially  capitalized with $________.  Future  capitalization of Parke Bancorp,
Inc.  will be  dependent  upon  dividends  declared  by the Bank based on future
earnings,  or the raising of additional capital by Parke Bancorp, Inc. through a
future issuance of securities,  debt, or by other means.  The Board of Directors
has made no  determination  as to any future  issuance of  securities or debt at
this time.

     Each outstanding option to purchase shares of the Bank's common stock under
the Bank's 1999 Employee Stock Option Plan, 2002 Employee Equity  Incentive Plan
and 2003 Stock  Option Plan shall be  converted  into an option to purchase  the
same number of shares of Parke Bancorp,  Inc. common stock on the same terms and
conditions,  and each outstanding warrant to purchase common stock of Parke Bank
issued upon the Bank's organization in 1998 shall be converted into a warrant to
purchase the same number of shares of Parke  Bancorp,  Inc.  common stock on the
same terms and conditions.

     After the Reorganization,  the Bank will continue its existing business and
operations as a wholly-owned  subsidiary of Parke Bancorp, Inc. The consolidated
capitalization,  assets, liabilities,  income, and financial statements of Parke
Bancorp, Inc. immediately following the Reorganization will be substantially the
same  as  those  of  the  Bank   immediately   prior  to   consummation  of  the
Reorganization. The corporate existence of the Bank will continue unaffected and
unimpaired by the Reorganization. The Reorganization will not result in a change
in the Bank's directors, officers, or personnel. For information with respect to
the management of Parke Bancorp,  Inc., see "Parke Bancorp,  Inc. - Management."
After

                                      - 9 -

<PAGE>

consummation of the  Reorganization,  the Bank will be subject to regulation and
supervision  by  regulatory  authorities  to the same extent as it is now. It is
expected  that the Bank will pay the  initial  expenses of Parke  Bancorp,  Inc.
after  consummation  of the  Reorganization,  which  expenses are expected to be
nominal. For information with respect to the supervision and regulation of Parke
Bancorp, Inc., see "Parke Bancorp, Inc. - Regulation."

     In connection with the Reorganization, the Bank has filed an application to
form a bank holding  company with the Board of Governors of the Federal  Reserve
System (the "Federal  Reserve Board").  In addition,  the Bank has submitted the
Plan of  Acquisition  to the New Jersey  Department of Banking and Insurance for
approval.   New  Jersey  law   authorizes  a  New  Jersey   corporation   and  a
state-chartered  bank to enter into a plan of acquisition to exchange  shares in
the bank  for  shares  in the  holding  company  and  requires  that the Plan be
approved by the  affirmative  vote of  two-thirds of the  outstanding  shares of
voting  stock  of  the  Bank  and  that  the  Bank's  shareholders  be  accorded
dissenters' rights of appraisal.

EFFECTIVE DATE

     The effective date of the  Reorganization  (the "Effective Date") will be a
date  selected  by the Parke  Bancorp,  Inc.  and the Bank,  which date shall be
within  a  reasonable  period  after  shareholder  approval  and the  regulatory
approvals of the Federal Reserve Board and the New Jersey  Department of Banking
and Insurance are received.  Upon the Effective  Date,  the Plan of  Acquisition
shall be filed with the New Jersey  Department  of Banking and  Insurance  along
with the  certification  of the president of the Bank that the Plan was approved
at the Meeting by the holders of at least  two-thirds of the outstanding  shares
of the Bank.

EXCHANGE OF STOCK CERTIFICATES

     The former shareholders of the Bank will be notified of the consummation of
the   Reorganization   and  will  receive  a  letter  of  transmittal  by  which
certificates  representing  the  Bank's  common  stock  may be  surrendered  and
exchanged for  certificates  of Parke  Bancorp,  Inc.  common stock.  The Bank's
transfer agent, Registrar and Transfer Company,  Cranford, New Jersey, shall act
as exchange  agent in effecting the exchange of  certificates.  AFTER RECEIPT OF
SUCH  NOTIFICATION AND LETTER OF TRANSMITTAL,  EACH HOLDER SHALL BE OBLIGATED TO
SURRENDER THE  CERTIFICATES  REPRESENTING  SHARES OF PARKE BANK COMMON STOCK FOR
EXCHANGE INTO  CERTIFICATES  OF PARKE BANCORP,  INC. COMMON STOCK AS PROMPTLY AS
POSSIBLE.

     Until  so  surrendered  to  the  exchange  agent,   certificates   formerly
representing  Parke Bank common stock will be deemed for all corporate  purposes
to evidence the number of shares of Parke Bancorp,  Inc.  common stock which the
holder thereof would be entitled to receive upon surrender.

TAX CONSEQUENCES

     The Bank has received an opinion of its special  counsel,  Malizia  Spidi &
Fisch,  PC,  Washington,  D.C., as to certain  federal tax  consequences  of the
Reorganization. Such opinion is based upon the representations and warranties of
management of the Bank and assumes that the  Reorganization  is  consummated  in
accordance with the Plan and in conformity with the  requirements of the Federal
Reserve  Board and the New Jersey  Department  of Banking  and  Insurance.  Such
opinion, which is not binding on the Internal Revenue Service ("IRS"),  provides
in pertinent part as follows:

     (1)  Neither the Bank nor Parke  Bancorp,  Inc. will  recognize any gain or
          loss upon the share exchange of Parke Bancorp,  Inc.  common stock for
          Parke Bank common stock.

                                     - 10 -

<PAGE>

     (2)  The Bank  shareholders  will not recognize any gain or loss upon their
          exchange  of share of Parke  Bank  common  stock  solely for shares of
          Parke Bancorp, Inc. common stock.

     (3)  A Bank  shareholder's  basis in his or her Parke Bancorp,  Inc. common
          stock  received in the  exchange  will be the same as the basis of the
          Parke Bank common stock surrendered in the exchange therefor.

     (4)  A Bank shareholder's  holding period in his or her Parke Bancorp, Inc.
          common stock  received in the exchange  will include the period during
          which the Parke Bank common stock surrendered was held,  provided that
          the Parke Bank  common  stock  surrendered  is a capital  asset in the
          hands of the Bank shareholder on the date of the exchange.

     The Bank  believes that the  Reorganization  will be treated for New Jersey
state tax purposes  similar to the treatment of the  Reorganization  for federal
tax purposes, although it has not received an opinion of counsel to such effect.
EACH HOLDER OF PARKE BANK COMMON STOCK SHOULD CONSULT HIS OR HER OWN TAX ADVISOR
AS TO SPECIFIC FEDERAL, STATE, AND LOCAL TAX CONSEQUENCES OF THE REORGANIZATION,
IF ANY, TO SUCH SHAREHOLDER.

COMPARISON OF SHAREHOLDERS' RIGHTS

     As a result of the Reorganization,  holders of Parke Bank common stock will
become shareholders of Parke Bancorp,  Inc. There are certain differences in the
rights of shareholder  arising from the differences between the Bank's governing
documents and those of Parke Bancorp, Inc.

     The Certificate of Incorporation under which Parke Bancorp, Inc. was formed
is substantially  different from the Bank's  Certificate of  Incorporation.  The
Certificate  of  Incorporation  of Parke Bancorp,  Inc.  takes  advantage of the
anti-takeover protections available under New Jersey law. The Board of Directors
of the Bank unanimously  approved the Certificate of Incorporation  and found it
in the best interest of shareholders  to afford Parke Bancorp,  Inc. the maximum
protection  available  under  applicable  law following the  Reorganization.  In
addition,  there are a number of  differences  between the Bank's Bylaws and the
Bylaws of Parke Bancorp, Inc.

     The  discussion  herein is not  intended to be a complete  statement of the
differences affecting the rights of shareholders, but rather summarizes the more
significant  differences  and certain  important  similarities.  The  discussion
herein  is  qualified  in  its  entirety  by  reference  to the  Certificate  of
Incorporation  and Bylaws of Parke Bancorp,  Inc.,  which are attached hereto as
Appendices B and C,  respectively.  The Bank's  Certificate of Incorporation and
Bylaws are  available  without  charge upon written  request to the Secretary of
Parke Bank, 601 Delsea Drive, Washington Township, New Jersey 08080.

     PREEMPTIVE  RIGHTS.  The Bank may issue shares of  authorized  but unissued
shares of stock  without first  offering  such shares of existing  shareholders.
However,  shares of newly  authorized  stock upon an increase in the  authorized
capital  stock of the Bank must be offered  first to existing  shareholders.  An
increase  in the  authorized  amount of capital  stock  would also  require  the
affirmative  vote of the  holders  of at  least  two-thirds  of the  outstanding
shares.

     Parke  Bancorp,   Inc's  Certificate  of  Incorporation  provides  that  no
shareholder  shall have any  preemptive  right to purchase  shares of stock.  An
increase in the authorized amount of capital stock would require an amendment to
the  Certificate  of  Incorporation  approved by a majority of the votes cast on
such  amendment.  The  shares of newly  authorized  stock may be issued  without
offering them first to existing shareholders.

                                     - 11 -

<PAGE>

     AUTHORIZED  CAPITAL STOCK. The Bank's authorized  capital stock consists of
10,000,000  shares  of  capital  stock,  $5.00 par  value  per  share.  The Bank
currently has only common stock  outstanding,  but is permitted  pursuant to New
Jersey  law to issue  preferred  stock if an  amendment  to the  Certificate  of
Incorporation  authorizing  the issuance of  preferred  stock is approved by the
holders of at least two-thirds of the outstanding shares of common stock.

     Parke  Bancorp,  Inc.'s  authorized  capital  stock  consists of 11,000,000
shares, of which 10,000,000 shares are common stock,  $0.10 par value per share,
and  1,000,000  shares  are  preferred  stock,  $0.10 par value  per  share.  No
shareholder  approval is required  for Parke  Bancorp,  Inc. to issue  shares of
preferred stock.  Preferred stock,  which possibly would represent an additional
class of stock required to approve any proposed acquisition,  may be issued from
time to time  without  shareholder  approval  in one or more  series  subject to
applicable  provisions  of law, and the Board of Directors is  authorized to fix
the designations,  powers, preferences and relative participating,  optional and
other  special  rights of such shares,  including  voting rights (which could be
multiple  or as a  separate  class)  and  conversion  rights.  Issuance  of  the
preferred stock could adversely  affect the relative voting rights of holders of
Parke Bancorp,  Inc.  common stock.  In the event of a proposed  merger,  tender
offer or other attempt to gain control of Parke Bancorp,  Inc. that the Board of
Directors does not approve,  it might be possible for the Board to authorize the
issuance of a series of preferred stock with rights and  preferences  that would
impede the completion of such a transaction.  An effect of the possible issuance
of preferred stock, therefore,  may be to deter a future non-negotiated takeover
attempt.  The Board has no present plans or  understandings  for the issuance of
any preferred  stock and does not intend to issue any preferred  stock except on
terms which the Board deems to be in the best interests of the shareholders. The
preferred stock, none of which has been issued by Parke Bancorp,  Inc., together
with  authorized  but  unissued  shares of common  stock,  also could  represent
additional capital required to be purchased by the acquiror.

     PAYMENT  OF  DIVIDENDS.  The  ability of the Bank to pay  dividends  on its
capital  stock is  restricted  by FDIC and New Jersey  Department of Banking and
Insurance  regulations.  Although  Parke  Bancorp,  Inc. is not subject to these
restrictions  as a New Jersey  corporation,  such  restrictions  will indirectly
affect  Parke  Bancorp,  Inc.  because  dividends  from the  Bank  will be Parke
Bancorp,  Inc.'s  primary  source  of funds  for the  payment  of  dividends  to
shareholders  of  Parke  Bancorp,  Inc.  There  are also  restrictions  on Parke
Bancorp,  Inc.'s  ability to pay dividends to its  shareholders.  New Jersey law
provides that dividends may not be paid if it would cause the  corporation to be
unable to pay its debts as they  become due in the normal  course of business or
if it would  cause  the  corporation's  total  assets  to be less than its total
liabilities. See "Market Prices and Dividends."

     ELECTION OF DIRECTORS.  Cumulative  voting in elections of directors of the
Bank is  prohibited.  Similarly,  the  Certificate  of  Incorporation  of  Parke
Bancorp,  Inc.   specifically   disallows  cumulative  voting.  With  regard  to
cumulative voting, there is no difference between the governing documents of the
Bank and Parke Bancorp, Inc.

     TERMS OF DIRECTORS. Under the Bank's Certificate of Incorporation directors
serve a one-year term so that the entire Board of Directors must be elected each
year. The Certificate of Incorporation of Parke Bancorp,  Inc. divides the Board
of Directors  into three  classes as nearly equal in number as possible and that
the  members of each class  shall be elected  for a term of three years or until
their  successors  are  elected  and  qualified,  with one class  being  elected
annually.  Because the Board of Directors of Parke  Bancorp,  Inc. is classified
into  three  separate  terms of  office,  it could  potentially  take two annual
meetings of shareholders to change the composition of a majority of the Board of
Directors.

     NUMBER OF DIRECTORS.  The Bank's  Certificate of Incorporation  states that
there  shall be not less than five nor more than  twenty-five  directors  of the
Bank. In accordance with the Bank's Bylaws, the exact

                                     - 12 -

<PAGE>

number of directors is determined  by the Board of Directors in its  discretion.
Under New  Jersey  law , if the  number of  directors  is  increased,  the newly
created directorships shall be filled by the shareholders. The Board may, at its
option, fill any other vacancy in the Board, provided, however that if following
a vacancy less than five directors or less than a quorum  remain,  the remaining
directors  shall fill the vacancy at the next regular or special  meeting of the
Board. Additionally, the Bank's Board may, between annual meetings, increase the
number of directors  by not more than two,  and may appoint  persons to fill the
vacancies so created.

     Parke Bancorp,  Inc.'s Certificate of Incorporation  states that the number
of  directors  shall  be such  number  as  provided  from  time to time in or in
accordance with the Bylaws, which provide for three initial directors and permit
an increase to up to fifteen  directors.  Under the Certificate of Incorporation
of Parke Bancorp,  Inc., any vacancy may be filled by the affirmative  vote of a
majority of the remaining directors even if less than a quorum of the Board, and
any  director  so  chosen   shall  serve  until  the  next  annual   meeting  of
shareholders.  The Certificate of Incorporation  of Parke Bancorp,  Inc. permits
the Board to increase or decrease  the number of  directors at any time with the
affirmative vote of two-thirds of the directors then in office,  provided that a
decrease  shall not have the  effect  of  shortening  the term of any  incumbent
director.  There is no limit on the number of newly-created  directorships  that
the directors then in office may approve,  other than the general  limitation of
fifteen total directors.  The newly-created  directorships  shall be filled by a
vote of a  majority  of the  directors  then in office  and the newly  appointed
directors  shall hold office for a term  expiring at the next annual  meeting of
shareholders and may then be nominated for reelection.

     Accordingly,  the three initial directors of Parke Bancorp, Inc. may add up
to  twelve  seats to the Board of  Directors  at one  time.  The  three  initial
directors  of Parke  Bancorp,  Inc.  intend to add nine seats to Parke  Bancorp,
Inc.'s Board on or about January 1, 2007, as discussed  above.  It is the intent
of the three initial directors to appoint the nine directors who currently serve
on the Bank's  Board who are not initial  directors  of Parke  Bancorp,  Inc. to
these new seats.  The three initial  directors may add the new seats and appoint
the persons to fill the seats by Board action alone. The nine new seats would be
divided  evenly into the three classes of the Board and the appointed  directors
would serve until the next annual meeting of shareholders of Parke Bancorp, Inc.
at which they would be  nominated by the Board for  reelection  into those three
classes.  The result will be that Parke Bancorp,  Inc. will have a twelve member
Board of Directors, with four directors in each class, each serving a three-year
term.

     REMOVAL OF DIRECTORS.  Under the Bank's Bylaws, the shareholders may remove
one or more directors  with or without  cause,  by the approval of a majority of
the votes cast at a meeting of shareholders called for that purpose. Pursuant to
New Jersey  corporate  law,  unless the  certificate of  incorporation  provides
otherwise,  a director or the entire board of  directors  may be removed with or
without  cause  by  a  majority  of  the  votes  entitled  to  be  cast  by  all
shareholders.  Parke Bancorp,  Inc.'s Certificate of Incorporation provides that
directors  may be removed only for cause and only by a vote of the holders of at
least 80% of the outstanding shares. In addition, the Board may remove directors
for cause and suspend directors pending a final  determination that cause exists
for removal.

     SHAREHOLDER  NOMINATIONS  AND  PROPOSALS.  The Bank's  Bylaws  provide that
nominations,  other than those  made by the Board of  Directors,  may be made by
written  notice  to the Bank  not less  than 60 days in  advance  of the  annual
meeting of shareholders if the meeting is held within 30 days of the anniversary
date of the prior year's annual meeting, or 90 days in advance of the meeting if
the  meeting  is held on or after the  anniversary  of the prior  year's  annual
meeting.  If,  however,  a special  meeting to elect  shareholders is held, then
notice must be given no later than ten days  following  the date on which notice
of such special meeting was first given to shareholders. Nominations not made in
this  manner may,  in his  discretion,  be  disregarded  by the  chairman of the
meeting, and upon his instruction, the vote tellers may disregard all votes cast
for such

                                     - 13 -

<PAGE>
nominee. The same advance notice requirements apply to shareholder  proposals to
be considered at annual or special meetings.

     The Certificate of Incorporation of Parke Bancorp,  Inc.  provides that all
nominations,  other than those made by the Board,  must be made  within the time
frame specified in the Bylaws. Pursuant to the Bylaws of Parke Bancorp, Inc., to
be timely,  notice must be given at least 60 days in advance of the  anniversary
of the preceding  year's annual meeting,  except that notice with respect to the
first  scheduled  annual  meeting may be given not later than ten days following
the date that notice of such meeting was mailed to  shareholders,  provided that
the written  notice must be  received by Parke  Bancorp,  Inc. no later than the
close of  business  on the  fifth day  preceding  the date of the  meeting.  The
presiding  officer  of an annual  meeting  shall  determine  and  declare to the
meeting  whether  the  nomination  was  properly  made in  accordance  with  the
provisions of the Bylaws,  and any defective  nominee shall be disregarded.  The
same advance notice requirements apply to shareholder proposals to be considered
at annual or special meetings.

     SPECIAL MEETINGS OF SHAREHOLDERS. Under New Jersey law, special meetings of
shareholders  of the  Bank  may be  called  at any  time by the  president,  the
chairman,  the Board, or at the request of one or more  shareholders  who own in
the aggregate not less than 10% of all the stock of the Bank. The Certificate of
Incorporation  of  Parke  Bancorp,  Inc.  provides  that a  special  meeting  of
shareholders may be called only by the president,  by a majority of the Board of
Directors or by a designated  committee  of the Board.  Shareholders  are not be
permitted to call a special  meeting of  shareholders  under the  Certificate of
Incorporation of Parke Bancorp, Inc.

     SHAREHOLDER  ACTION  WITHOUT A MEETING.  Under New Jersey  law,  any action
required or permitted to be taken at a meeting of  shareholders  of the Bank may
be taken  without a meeting  if there is  unanimous  consent  in  writing by the
shareholders to such action without a meeting. Parke Bancorp, Inc.'s Certificate
of  Incorporation  also provides  that  shareholders  may take action  without a
meeting if there is  unanimous  consent in writing by the  shareholders  to such
action without a meeting.  The power of shareholders  of Parke Bancorp,  Inc. to
take action by non-unanimous consent is specifically denied.

     APPROVAL OF MERGERS. Under New Jersey law, approval of mergers requires the
affirmative vote of at least two-thirds of the outstanding stock of the Bank.

     The Certificate of Incorporation of Parke Bancorp,  Inc.  provides that any
merger, consolidation, liquidation, or dissolution of Parke Bancorp, Inc. or any
action  that  would  result  in  the  sale  or  other   disposition  of  all  or
substantially  all of the  assets  of Parke  Bancorp,  Inc.  shall  require  the
affirmative  vote of the  holders  of at least  80% of the  outstanding  shares,
provided,  however, that if a particular transaction is approved by the Board of
Directors,  such transaction  shall require only the minimum vote required under
New Jersey law for shareholder  approval of mergers,  which is a majority of the
votes actually cast in person or by proxy.

     DISSENTERS' RIGHTS OF APPRAISAL.  Under New Jersey law, shareholders of the
Bank have the right to dissent  from a merger  agreement,  subject to  specified
procedural requirements. This appraisal right is available for the capital stock
of the Bank (i) regardless of where the Bank's shares or the shares of the other
party to the merger  agreement are listed or traded;  and (ii) regardless of the
number of  shareholders  of record of the Bank or the number of  shareholders of
record of the other party to the merger agreement.

     Pursuant to general New Jersey corporate law, a shareholder of a New Jersey
corporation such as Parke Bancorp,  Inc. generally has the right to dissent from
any  merger  or  consolidation  involving  the  corporation  or  sale  of all or
substantially all of the corporation's assets, subject to specified procedural

                                     - 14 -

<PAGE>

requirements.  However, generally no such appraisal rights are available for the
shares of any class or series of a corporation's capital stock if:

o    as of the record  date fixed to  determine  the  shareholders  entitled  to
     receive notice of and to vote at the meeting of shareholders to act upon an
     agreement of merger or  consolidation,  such shares were either listed on a
     national  securities  exchange  or  held  of  record  by  more  than  1,000
     shareholders; or

o    the  consideration  to be  received  in the merger  consists of cash and/or
     shares of stock which are either listed on a national  securities  exchange
     or held of record by more than  1,000  shareholders.  In  addition,  if the
     merger or  consolidation  would not  require the  approval of  shareholders
     under New Jersey law, dissenters' rights are not available.

     For a discussion  of the rights of  dissenting  shareholder  of the Bank in
connection  with the  Reorganization,  see "Proposal No. I - The Holding Company
Reorganization - Dissenters' Rights."

     AMENDMENT OF GOVERNING INSTRUMENTS.  No amendment of the Bank's Certificate
of Incorporation  may be made unless it is adopted by the Board of Directors and
approved by at least two-thirds of the outstanding  stock of the Bank. The Board
of  Directors  has the power to make,  alter and  repeal the Bylaws of the Bank,
subject to alteration or repeal by the shareholders.

     Parke Bancorp,  Inc.'s  Certificate of Incorporation  may be amended if the
amendment is first approved by the Board of Directors and thereafter is approved
by the  holders of a  majority  of the shares of Parke  Bancorp,  Inc.  However,
amendments to Article VII  (preemptive  rights),  IX (meetings of  shareholders;
cumulative  voting;  proxies),  X (notice for  nominations  and  proposals),  XI
(directors),  XII (removal of  directors),  XIII (certain  limitations on voting
rights), XIV (approval of business  combinations),  XV (shareholder  approval of
certain transactions), XVII (elimination of directors' and officers' liability),
XVIII  (indemnification),  XIX  (amendment  of  bylaws)  and  XX  (amendment  of
certificate of incorporation) may not be amended without the affirmative vote of
the holders of at least 80% of the outstanding shares.

     Parke  Bancorp,  Inc.'s  Bylaws may be amended by a two-thirds  vote of the
Board of Directors or by the affirmative  vote of the holders of at least 80% of
the outstanding shares. The shareholders may prescribe that any bylaw so adopted
by a shareholder vote may not be changed by the Board.

     BOARD  CONSIDERATION  OF  NONMONETARY   FACTORS.   Parke  Bancorp,   Inc.'s
Certificate  of  Incorporation  permits the Board of Directors,  in evaluating a
business combination or a tender or exchange offer, to consider,  in addition to
the adequacy of the amount to be paid in connection  with any such  transaction,
certain  specified  factors  and any other  factors  the Board  deems  relevant,
including:

o    the social and economic effects of the transaction on Parke Bancorp,  Inc.,
     its employees,  depositors,  loan and other customers,  creditors and other
     elements of the communities in which the Bank conducts business;

o    the  business  and  financial  condition  and  earnings  prospects  of  the
     acquiring party or parties; and

o    the competence,  experience and integrity of the acquiring party or parties
     and its or their management.

     Being  permitted to consider  such factors may place the Board of Directors
in a stronger  position to oppose any proposed business  combination,  tender or
exchange offer if the Board concludes that the

                                     - 15 -

<PAGE>

transaction  would not be in the best interest of Parke Bancorp,  Inc.,  even if
the price  offered is  significantly  greater  than the then market price of any
equity security of Parke Bancorp, Inc.

     NEW  JERSEY  SHAREHOLDERS  PROTECTION  ACT.  In  addition  to  the  various
anti-takeover   protections   that  may  be  included  in  the   certificate  of
incorporation, some states have enacted statutes that provide protection against
unfriendly takeovers unless contrary provisions are contained in the certificate
of  incorporation.  Corporations that foresee  themselves as potential  takeover
targets  should  incorporate  in  states  having  such  statutory  anti-takeover
provisions in order to enhance their defensive position.

     New  Jersey  has  enacted   statutory   anti-takeover   provisions  in  its
Shareholder  Protection Act, under Sections  14A:10A-1  through 10A-6 of the New
Jersey  Business  Corporation  Act.  Statutory  anti-takeover  provisions can be
effective  by causing  substantial  delays  before an  acquiror  can  consummate
certain  business  combinations  (including a merger),  which  typically  either
causes  the  takeover  to fail or  enables  the  corporation  to  locate  a more
favorable acquiror.

     New Jersey's statute  provides for a five-year  prohibition on consummation
of a business  combination  with the target from the date an acquiror becomes an
"interested  shareholder"  (i.e.  holds 10% or more of the target  corporation's
voting  stock)  unless the  business  combination  is  approved  by the board of
directors prior to the time the interested shareholder acquired its 10% holding.

         In  addition,  a New  Jersey  corporation  may not engage in a business
combination  with  an  interested  shareholder  at any  time  unless  one of the
following  three  conditions  is met:  (1)  approval  by the  target's  board of
directors,  prior to the 10% acquisition;  (2) an affirmative vote of two-thirds
of the outstanding voting stock not owned by the interested shareholder;  or (3)
compliance with certain financial  formulations  designed to assure a fair price
for the target's shareholders in exchange for their ownership interest.

     A corporation may exempt itself from the  requirements of the statute by so
specifying in its certificate of incorporation. The Certificate of Incorporation
of Parke Bancorp, Inc. does not opt out of New Jersey's Shareholders  Protection
Act.

     ANTI-TAKEOVER  EFFECTS.  Certain  of  the  foregoing  provisions  of  Parke
Bancorp, Inc.'s Certificate of Incorporation and Bylaws and the operation of New
Jersey  law  could  have the  effect of  discouraging  an  acquisition  of Parke
Bancorp,  Inc., or stock purchases in furtherance of an  acquisition,  and could
accordingly,  under certain  circumstances,  discourage  transactions that might
otherwise have a favorable  effect on the price of Parke Bancorp,  Inc.'s common
stock. Furthermore,  because at least 80% of outstanding shares must approve the
amendment  of  certain  provisions  of  Parke  Bancorp,  Inc.'s  Certificate  of
Incorporation and approve certain business  combinations,  management,  together
with a minority of  shareholder  support,  could preclude or make more difficult
takeover  attempts  that do not have the  support of the Board of  Directors  of
Parke Bancorp, Inc. and may tend to perpetuate existing management.

     Notwithstanding  the foregoing,  the Board of Directors of the Bank believe
that the  provisions  described  above  with  respect to Parke  Bancorp,  Inc.'s
Certificate   of   Incorporation   and  Bylaws  are   prudent  and  will  reduce
vulnerability to takeover  attempts and certain other  transactions that are not
negotiated  with and approved by the Board of Directors of Parke  Bancorp,  Inc.
The Board of Directors of the Bank  believes  that these  provisions  are in the
best interests of the shareholders.  In the judgment of the Board, the directors
are in the best  position  to  determine  the true value of the  company  and to
negotiate  more  effectively  for  what  may be in  the  best  interests  of the
shareholders.  Accordingly,  the Board of Directors of the Bank believes that it
serves the shareholders to encourage such  negotiations  and discourage  hostile
takeover  attempts.  It is also the view of the Board of  Directors  of the Bank
that these provisions  should not discourage  persons from proposing a merger or
other transaction at prices reflective of the true value of Parke Bancorp, Inc.

                                     - 16 -

<PAGE>
     Despite the belief of the Board of Directors of the Bank as to the benefits
to the shareholders of the foregoing provisions,  these provisions also may have
the effect of discouraging a future takeover attempt in which shareholders might
receive a premium  for their  shares  over then  current  market  prices.  These
provisions  may serve to make it more difficult to remove  incumbent  management
and may also  discourage  all  attempts to acquire  control not  approved by the
Board for any reason. As a result,  shareholders who might desire to participate
in, or benefit from,  such a transaction  may not have an  opportunity to do so.
The Board of Directors of the Bank,  however,  have concluded that the potential
benefits of these provisions outweigh their possible disadvantages.

     The Board of Directors of the Bank is not aware of any effort that might be
made to acquire  control of the Bank or of Parke  Bancorp,  Inc.  following  the
Reorganization.

     INDEMNIFICATION  AND  LIMITATION ON LIABILITY.  Under New Jersey law and in
accordance with the Bank's Bylaws, the Bank shall indemnify a director, officer,
employee or agent who is a party to any  action,  suit or  proceeding,  civil or
criminal,  by reason of the fact  that he acted in such  capacity  for the Bank,
subject to certain  limitations and  qualifications.  The Bank's  Certificate of
Incorporation  also provides that directors and officers shall not be personally
liable to the Bank or its  shareholders  for damages for breach of any duty owed
to  the  Bank  or  its   shareholders,   subject  to  certain   limitations  and
qualifications.

     Under  New  Jersey  law  and  in  accordance  with  Parke  Bancorp,  Inc.'s
Certificate of  Incorporation,  Parke Bancorp,  Inc. shall indemnify a director,
officer,  employee  or agent who is a party to any action,  suit or  proceeding,
civil or  criminal,  by reason of the fact  that he acted in such  capacity  for
Parke Bancorp,  Inc., subject to certain limitations and  qualifications.  Parke
Bancorp,  Inc.'s  Certificate of Incorporation  also provides that directors and
officers shall not be personally  liable for damages for breach of any duty owed
to Parke Bancorp,  Inc. or its  shareholders,  other than a breach of duty based
upon an act or omission  (i) in breach of the duty of loyalty,  (ii) not in good
faith or involving a knowing  violation of law; or (iii) resulting in receipt of
an  improper  personal  benefit.  This  provision  does not limit  the  personal
liability of Parke Bancorp,  Inc. directors or officers for monetary damages for
breaches  of  the  fiduciary   duties  imposed  on  directors  which  constitute
self-dealing,  willful  misconduct,  or a knowing violation of law. In addition,
this  provision  does not limit the  liability of directors or officers  arising
under any criminal  statute or for the payment of any federal,  state,  or local
taxes.  However,  with respect to other  matters,  this  provision will preclude
certain  shareholder  derivative  actions and may be construed to preclude other
third party claims against the directors,  even if such actions  otherwise would
be  beneficial  to  shareholders  of Parke  Bancorp,  Inc.  The  Certificate  of
Incorporation  also provides that any amendment or repeal of this provision will
not adversely affect any right of a director of Parke Bancorp, Inc. with respect
to any right or protection of a director of Parke Bancorp,  Inc. existing at the
time to such amendment or repeal.

     The  provisions   regarding  personal  liability  and  indemnification  are
designed to assist Parke  Bancorp,  Inc. in attracting  and retaining  qualified
directors and officers and to ensure that directors and officers will be able to
exercise their best business judgment in managing Parke Bancorp, Inc.'s affairs,
subject to their  continuing  fiduciary  duties to Parke  Bancorp,  Inc. and its
shareholders,  in a manner that is not  unreasonably  impeded by exposure to the
potentially high personal costs or other uncertainties of litigation. The nature
of the tasks and  responsibilities  undertaken  by  directors  of  publicly-held
corporations  often  require such persons to make  difficult  judgments of great
importance which can expose such persons to personal  liability,  but from which
they will  acquire no personal  benefit.  In recent  years,  litigation  against
corporations  and their directors and officers,  challenging good faith business
judgments  and  involving  no  allegations  of personal  wrongdoing,  has become
common.  Such litigation  regularly involves damage claims in large amounts that
bear no relationship to the amount of compensation  received by the directors or
officers,  particularly  in the case of directors  who are not  employees of the
corporation. The expense of such litigation,  whether it is well-founded or not,
can be  enormous.  The  provisions  in  Parke  Bancorp,  Inc.'s  Certificate  of
Incorporation

                                     - 17 -

<PAGE>

relating to director liability are intended to reduce, in appropriate cases, the
risk  incident to serving as a director or officer and to assist Parke  Bancorp,
Inc. in  attracting  and  retaining  the persons most  qualified to serve.  Such
provisions,  however, may result in shareholders relinquishing a potential cause
of action  against a director for breach of fiduciary  duty,  including  acts or
omissions which constitute gross negligence.

ACCOUNTING TREATMENT

     For accounting purposes, the assets, liabilities,  and shareholders' equity
of the Bank immediately prior to the  Reorganization  will be carried forward on
either  separate  or  consolidated  financial  statements  of the Bank and Parke
Bancorp,  Inc.  after  the  Reorganization  at  the  amounts  carried  on  their
respective books at the Effective Date of the Reorganization.

CONDITIONS TO THE REORGANIZATION

     The Plan of Acquisition  sets forth a number of conditions that must be met
before the Reorganization will be consummated.

     The  obligations  of the  Bank and  Parke  Bancorp,  Inc.,  to  effect  the
Reorganization and otherwise consummate the transactions,  which are the subject
matter hereof, shall be subject to satisfaction of the following conditions:

o    approval  of the Plan by the  Commissioner  of  Banking of the State of New
     Jersey;

o    approval  of  the  Plan  by  the  holders  of at  least  two-thirds  of the
     outstanding shares of the Bank; and

o    non-objection  of the Board of Governors of the Federal  Reserve  System to
     Parke Bancorp, Inc.'s application to form a holding company and acquire the
     Bank.

     On January ___, 2005, Parke Bank filed an application with the Commissioner
of  Banking  of the  State  of New  Jersey  for  approval  of the  Plan  and the
Reorganization.   Such  application  was  approved  on  ____________,  2005.  On
___________,  2005,  Parke  Bancorp,  Inc.  filed with Federal  Reserve Board an
application to form a bank holding company. By approving the Reorganization, the
shareholders  will be approving  compliance by the Bank and Parke Bancorp,  Inc.
with any conditions  imposed by the Federal Reserve Board in connection with its
approval  of the  application  that are not deemed by the Bank to be  materially
adverse to the Bank or its shareholders.  In the event the Reorganization is not
approved by the shareholders, the Bank will not proceed with the Reorganization.

AMENDMENT OR TERMINATION

     The Bank and Parke  Bancorp,  Inc.,  by mutual  consent of their  Boards of
Directors  and to the extent  permitted by law,  may amend the Plan  pursuant to
which  the  Reorganization  will be  implemented  at any  time  before  or after
approval of the Plan by their  respective  shareholders,  but no amendment  that
would have a materially  adverse impact on the Bank or its  shareholders  may be
implemented unless approval of the shareholders is first obtained.

     At any time prior to the Effective Date, the Board of Directors of the Bank
may  terminate  the  Plan if in the  judgment  of the  Board  of  Directors  the
consummation of the Plan is inadvisable  for any reason.  To terminate the Plan,
the Bank's Board of Directors shall adopt a resolution terminating the Plan and,
in the event such  termination  occurs after the  shareholders  of the Bank have
voted  on the  Plan,  promptly  give  written  notice  that  the  Plan  has been
terminated to the shareholders of the Bank. Upon the adoption of the

                                     - 18 -

<PAGE>

Board  resolution,  the Plan shall be of no further force or effect and the Bank
and Parke Bancorp, Inc. shall not be liable to each other, to any shareholder of
the  Bank or to any  other  person  by  reason  of the  Plan or the  termination
thereof.  Without  limiting  the reasons for which the Bank's Board of Directors
may terminate the Plan, the Board may terminate the Plan if:

o    the number of shareholders  dissenting from the Plan and demanding  payment
     of the value of their  shares would in the judgment of the Board render the
     Plan inadvisable; or

o    the Bank or Parke Bancorp,  Inc.  fails to receive,  or fails to receive in
     form and substance  satisfactory  to the Bank or Parke  Bancorp,  Inc., any
     permit,  license  or  qualification  from any  federal  or state  authority
     required in connection with the consummation of the Plan.

FEDERAL AND STATE TAXATION

     After the consummation of the  Reorganization,  the Bank and Parke Bancorp,
Inc. may file consolidated  federal and state income tax returns that would have
the effect of eliminating inter-company  distributions,  including dividends, in
the computation of the consolidated taxable income.

DISSENTERS' RIGHTS

     In accordance  with the New Jersey  Banking Act of 1948,  which governs New
Jersey state-chartered  banks,  shareholders of the Bank will be entitled to the
rights and remedies  applicable to dissenting  shareholders and shall be subject
to the limitations on such rights and remedies under those provisions.

     IF THE  REORGANIZATION  IS NOT CONSUMMATED  FOR ANY REASON,  THE DEMAND FOR
APPRAISAL  WILL  BE  OF  NO  EFFECT.   ANY   SHAREHOLDER   WHO  OBJECTS  TO  THE
REORGANIZATION  MAY SEEK THE REMEDIES  PROVIDED UNDER THE NEW JERSEY BANKING ACT
OF 1948.  THE FOLLOWING  SUMMARY OF THIS LAW DOES NOT PURPORT TO BE COMPLETE AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO APPENDIX D HERETO,  WHICH  CONTAINS
THE COMPLETE TEXT OF THIS LAW.

     A  shareholder  wishing to demand  appraisal  rights  must file with at the
Bank's  principal  office,  601 Delsea Drive,  Washington  Township,  New Jersey
08080, a written notice of dissent to the Reorganization.  The notice of dissent
must be received by the Bank no later than the third day prior to the date fixed
for the meeting of shareholders to vote upon the  Reorganization.  The notice of
dissent  must  be sent  via  registered  mail  or  delivered  in  person  by the
dissenting shareholder or his agent. Voting against the Reorganization, by proxy
or otherwise, is not sufficient to enable a shareholder to perfect the rights of
a dissenting shareholder. However, any shareholder who files the required notice
of  dissent  and votes in favor of the  Reorganization,  whether in person or by
proxy (including those  shareholders who return the enclosed proxy card executed
but without a designation as to the vote on the  Reorganization)  will be deemed
to have waived the right to qualify as a dissenter. If the Reorganization is not
consummated for any reason, appraisal rights will not be available.

     Following approval by the shareholders,  if obtained,  the Bank will on the
Effective Date of the  Reorganization  file the Plan of Acquisition with the New
Jersey  Department of Banking and Insurance along with the  certification of the
president  of the Bank that the Plan was  approved at the Meeting by the holders
of at least  two-thirds  of the  outstanding  shares of the Bank.  A  dissenting
shareholder  who filed a timely  written  notice of dissent  and did not vote in
favor of the  Reorganization,  may within 30 days of the filing of the Plan with
the New Jersey  Department of Banking and Insurance serve a demand upon the Bank
at its principal office for payment of the value of his shares.

                                     - 19 -

<PAGE>

     The Bank may,  within ten days after the receipt of such  demand,  offer to
pay the  shareholder a sum for his shares,  which,  in the opinion of the Bank's
Board of  Directors,  does not exceed the amount  which  would be paid upon such
shares if the business and assets of the Bank were  liquidated  on the Effective
Date. If a dissenting  shareholder  fails to accept such sum offered by the Bank
for his  shares,  he may,  within  three  weeks  after the receipt by him of the
Bank's offer of payment, or, if no offer is made by the Bank, within three weeks
after the date upon  which his  demand for  payment  was  served  upon the Bank,
institute  an  action  in the  Superior  Court  for  the  appointment  of  three
appraisers.  The Superior Court shall fix the  compensation  of the  appraisers,
which shall be paid by the Bank. The Bank and each dissenting shareholder may be
represented  by attorneys in the  proceedings  before such  appraisers,  and may
present evidence.  The determination of any two of the appraisers shall control.
Upon the conclusion of their  deliberations,  the  appraisers  shall file in the
Superior Court a report and appraisal of the value of the shares.

     The Bank and each  dissenting  shareholder  shall  have ten days  after the
appraisers  file  their  report  and  appraisal  to  object  to the  appraisers'
determination.  If no objections  are made,  the report and  appraisal  shall be
binding upon the Bank and upon the dissenting  shareholders,  and the Bank shall
pay each  such  shareholder  the value as  determined  by the  appraisers,  with
interest from the Effective  Date. If objections  are made, the court shall make
such order or judgment thereon as shall be the court shall find just.

     No  notification  of the beginning or end of any  statutory  period will be
given by the Bank or Parke Bancorp, Inc. to any dissenting shareholder except as
required by law.  SHAREHOLDERS  WHO ARE  CONSIDERING  DISSENTING AND CLAIMING AN
APPRAISAL REMEDY ARE URGED TO CONSULT THEIR OWN LEGAL COUNSEL.

                       PROPOSAL II - ELECTION OF DIRECTORS

     The Board of Directors of Parke Bank currently  consists of twelve members.
Each current  director has been  nominated for  reelection,  each to serve for a
one-year  term and until his  successor  has been  elected  and  qualified.  The
following table sets forth the nominees.


                     NOMINEES FOR ELECTION TO ONE-YEAR TERMS
                            AS DIRECTORS OF THE BANK:
                            -------------------------
                              Celestino R. Pennoni
                              Vito S. Pantilione
                              Fred G. Choate
                              Daniel J. Dalton
                              Arret F. Dobson
                              Thomas Hedenberg
                              Edward Infantolino
                              Anthony J. Jannetti
                              Jeffrey H. Kripitz
                              Richard Phalines
                              Jack C. Sheppard, Jr.
                              Ray H. Tresch

     It is intended  that  proxies  solicited  by the Board of  Directors  will,
unless otherwise specified,  be voted for the election of the named nominees. If
any of the  nominees  is unable to serve,  the shares  represented  by all valid
proxies  will be voted  for the  election  of such  substitute  as the  Board of
Directors may recommend or the size of the Board may be reduced to eliminate the
vacancy. At this time, the Board of

                                     - 20 -

<PAGE>

Directors  knows of no reason why any of the nominees  might be  unavailable  to
serve. For information  regarding the nominees,  see "Management - Directors and
Executive Officers."

             PROPOSAL III - RATIFICATION OF APPOINTMENT OF AUDITORS

     The Board of Directors of the Bank has appointed McGladrey & Pullen, LLP as
the Bank's  independent  auditor for the fiscal year ending  December  31, 2005,
subject  to  ratification  by  the  Bank's  shareholders.  A  representative  of
McGladrey & Pullen, LLP is expected to be present at the Meeting,  will have the
opportunity  to  make  a  statement  if he so  desires,  and is  expected  to be
available to respond to appropriate questions.

     Ratification  of the appointment of the  independent  auditor  requires the
affirmative  vote of a majority of the votes cast, in person or by proxy, by the
shareholders of the Bank at the Meeting.  The Board of Directors recommends that
shareholders  vote "FOR" the  ratification  of the  appointment  of  McGladrey &
Pullen, LLP as the Bank's independent auditor for the 2005 fiscal year.

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATION

FORWARD LOOKING STATEMENTS

     Parke  Bank may from time to time  make  written  or oral  "forward-looking
statements",  including  statements  contained  in the Bank's  filings  with the
Federal Deposit  Insurance  Corporation  (including this proxy statement and the
Annual  Report on Form  10-KSB  and the  exhibits  thereto),  in its  reports to
shareholders  and in other  communications  by the Bank,  which are made in good
faith by the Bank  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  Bank's  plans,  objectives,   expectations,  estimates  and
intentions, which are subject to change based on various important factors (some
of which are beyond the Bank's control).  The following  factors,  among others,
could  cause the Bank's  financial  performance  to differ  materially  from the
plans,  objectives,  expectations,  estimates and  intentions  expressed in such
forward-looking statements: the strength of the United States economy in general
and the strength of the local  economies in which the Bank conducts  operations;
the effects of, and changes in,  trade,  monetary and fiscal  policies and laws,
including  interest  rate  policies  of the Board of  Governors  of the  Federal
Reserve System, inflation, interest rates, market and monetary fluctuations; the
timely  development  of and  acceptance of new products and services of the Bank
and the  perceived  overall  value of these  products  and  services  by  users,
including the features,  pricing and quality  compared to competitors'  products
and services;  the impact of changes in financial services' laws and regulations
(including  laws   concerning   taxes,   banking,   securities  and  insurance);
technological  changes;  changes in consumer spending and saving habits; and the
success of the Bank at managing the risks resulting from these factors.

     The Bank cautions that the listed factors are not exclusive.  The Bank 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 Bank.

OVERVIEW

     The Bank's  results of operations  are dependent  primarily on net interest
income,  which is the  difference  between  the  interest  income  earned on its
interest-earning assets, such as loans and securities, and

                                     - 21 -

<PAGE>
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,  BOLI income and other fees. The Bank's non-interest expenses primarily
consist of employee  compensation and benefits,  occupancy  expenses,  marketing
expenses,  data processing costs and other operating expenses.  The Bank is also
subject  to losses  from its loan  portfolio  if  borrowers  fail to meet  their
obligations. The Bank's results of operations are also significantly affected by
general  economic and  competitive  conditions,  particularly  changes in market
interest rates, government policies and actions of regulatory agencies.

     For  the  nine  months  ended   September  30,  2004,  net  income  totaled
$2,047,238, compared to $1,387,941 for the nine months ended September 30, 2003.
Diluted  earnings  per share for the first nine  months of 2004  totaled  $1.14,
compared  to $0.80 per share for the same period of 2003.  Increased  net income
for the first nine months of 2004 was  attributable  primarily  to  increases in
revenue (net  interest  income and  non-interest  income) of  $1,357,322,  and a
decrease in the  provision  of loan losses of $236,199,  partially  offset by an
increase in non interest expenses of $512,661, and an increase in tax expense of
$421,563.

     We recorded net income of  $2,001,899  or $1.02 per diluted  share for 2003
and  $941,979  or $.93  per  diluted  share  for  2002.  Pre-tax  earnings  were
$3,281,336 for 2003 compared to $1,562,464 for 2002.

     Total assets  increased by $43.1 million or 32.9%,  reflecting  significant
increases in loans. Loans outstanding increased by $51.2 million or 53.8%, while
investment  securities  decreased by $8.6  million.  Deposits also grew by $34.9
million or 32.5%. Growth in loans and deposits reflects our continued efforts in
business  development  and  advertising.  Shareholders'  equity  increased  $2.4
million or 13.7%, as a result of earnings for 2003.

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

CRITICAL ACCOUNTING POLICIES

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

OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

     NET INTEREST INCOME/MARGINS. Our 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 the interest-bearing  sources of funds, such as deposits and borrowings.  The
level of net interest  income is  determined  primarily by the average  balances
("volume")  and the rate  spreads  between the  interest-earning  assets and our
funding sources.


                                     - 22 -

<PAGE>

     Net interest  income for the first nine months of 2004 totaled  $5,860,898,
an increase of 30.1% over $4.5 million for the nine months ended  September  30,
2003. The net interest margin for the nine-month period ended September 30, 2004
remained the same at 4.4%, as compared to the same period of 2003.

     Interest  income  increased by  $1,680,469,  driven by an increase of $40.6
million in average  interest-earning assets. Average loans outstanding increased
by $41.5 million,  and average investment  securities decreased by $0.9 million.
Yields on earning  assets for the period ended  September 30, 2004  decreased to
6.4%  from 6.7% for the same  period  of 2003.  Interest  expense  increased  by
$324,898  for  the  nine  month  period.  Average  interest-bearing  liabilities
increased  by $37.2  million  during the same period.  Average  interest-bearing
deposits  increased by $33.0  million and average  borrowings  increased by $4.2
million. The average rate paid on interest-bearing liabilities decreased to 2.3%
for the period ended September 30, 2004 from 2.7% for the same period of 2003.

     COMPARATIVE AVERAGE BALANCES, INTEREST AND YIELDS. The following table sets
forth for the periods  indicated the Bank's average  volume of  interest-earning
assets and interest-bearing liabilities and average yields and rates. Changes in
net interest  income from period to period result from increases or decreases in
the volume and mix of interest-earning assets and interest-bearing  liabilities,
increases or  decreases in the average  rates earned and paid on such assets and
liabilities  and the  availability  of  particular  sources  of  funds,  such as
non-interest-bearing deposits.

                                     - 23 -

<PAGE>
<TABLE>
<CAPTION>

                                                                           FOR THE NINE MONTHS ENDED
                                                ---------------------------------------------------------------------------------
                                                        SEPTEMBER 30, 2004                          SEPTEMBER 30, 2003
                                                -------------------------------------        ------------------------------------
                                                 DAILY                                        DAILY
                                                AVERAGE          INCOME/       YIELD/        AVERAGE         INCOME/      YIELD/
                                                BALANCE          EXPENSE        RATE         BALANCE         EXPENSE       RATE
                                                -------          -------       ------        -------         -------      -------
<S>                               <C>           <C>             <C>             <C>        <C>              <C>            <C>
ASSETS:
Loans (net of deferred costs/fees)(1)           $157,224,069    $8,022,093      6.8%       $115,684,191     $6,315,798     7.3%
Investment securities                             16,889,054       524,030      4.1          19,326,970        561,456     3.9
Federal funds sold                                 3,654,156        30,905      1.1           2,113,278         18,790     1.2
                                                ------------    ----------                 ------------     ----------
    Total interest-earning assets                177,767,279    $8,577,028      6.4         137,124,439     $6,896,044     6.7
                                                                ----------                                  ----------
Allowance for loan losses                         (2,425,438)                                (1,616,686)
Other assets                                      15,804,506                                 10,683,832
                                                ------------                               ------------
    Total assets                                $191,146,347                               $146,191,585
                                                ============                               ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest-bearing deposits
  Regular savings deposits                     $  22,031,171    $  326,297      2.0        $ 22,207,095     $  384,849     2.3
  NOW & money market savings                      29,378,005       344,090      1.6          23,546,648        293,638     1.7
  Time deposits                                   93,035,065     1,888,740      2.7          65,726,054      1,596,900     3.2
                                                ------------    ----------                 ------------     ----------
    Total interest-bearing deposits              144,444,241     2,559,127      2.2         111,479,797      2,275,387     2.7

Borrowed funds                                    10,645,789       157,003      2.0           6,407,941        115,845     2.4
                                                                ----------                                  ----------
    Total interest-bearing liabilities           155,090,030    $2,716,130      2.3         117,887,738     $2,391,232     2.7
                                                                ----------                                  ----------

Non-interest-bearing demand deposits              13,547,222                                  8,734,891
Other liabilities                                  1,498,584                                  1,269,999
Shareholders' equity                              21,010,511                                 18,298,957
                                                ------------                               ------------
    Total liabilities and
    shareholders' equity                        $191,146,347                               $146,191,585
                                                ============                               ============
Interest rate spread (average yield
  less average rate)                                                            4.1%                                       4.0%
Net interest income (interest income
  less interest expense)                                        $5,860,898                                  $4,504,812
                                                                ==========                                  ==========
Net interest margin (net interest
income/average interest-earning assets)                                         4.4%                                       4.4%
<FN>
__________________________________________
1    Non-accrual loans are included in the calculation of average balances
</FN>
</TABLE>

     NON-INTEREST  INCOME.  Non-interest  income remained  constant for the nine
months ended  September 30, 2004.  BOLI income,  deposit  service  charges,  and
service  fees  increased  20.6% but were offset by a decrease in loan  brokerage
fees and gains on sale of securities  during the nine months ended September 30,
2003.

     PROVISION  FOR LOAN LOSSES.  The provision for loan losses was $399,411 for
the nine months  ended  September  30,  2004,  compared to $635,610 for the same
period in 2003.  The  reduction in the  provision for the 2004 period was due to
lower loan growth.

     NON-INTEREST  EXPENSE.  For the  nine  months  ended  September  30,  2004,
non-interest  expense increased by $512,661 or 23.5% to $2,693,559,  compared to
$2,180,899 for the same period of 2003. An increase in compensation  expenses of
30.1%  relates  to  personnel  costs  as a  result  of  staffing  increases  for
additional  support staff.  Occupancy,  equipment and data  processing  expenses
increased  only $15,996 due to new data center  which  provides the service at a
lower  cost in the first nine  months of 2004,  compared  to the same  period of
2003.

                                     - 24 -

<PAGE>
     INCOME  TAXES.  Income tax expense of $1,309,500  was  recognized on income
before taxes of $3,356,738 for the nine-month  period ended  September 30, 2004,
compared to income tax expense of $887,937 on income  before taxes of $2,275,878
for the same period of 2003.  Both periods  resulted in an effective tax rate of
39.0%.

FINANCIAL CONDITION AT SEPTEMBER 30, 2004 AND DECEMBER 31, 2003

     ASSETS.  Total assets  increased to $205.5  million at September  30, 2004,
compared to $174.0  million at December 31, 2003,  increasing  $31.6  million or
18.1%. Loans outstanding increased $21.3 million or 14.6%. Deposits increased by
$29.6  million  or 20.8%.  Borrowed  funds  decreased  by $0.7  million or 6.8%.
Shareholders' equity increased by $2.1 million or 10.5%, driven by net income of
$2.0 million for the nine months ended September 30, 2004, partially offset by a
decline in the market value of  securities  classified as available for sale and
minimal options and warrants exercised.

     The increase in total loans was  primarily  due to increases in  commercial
loans,  which grew by $23.4 million and totaled  $146.2  million as of September
30, 2004. This increase is in line with management's strategic plan and reflects
increased origination activity over the past year and a strong local real estate
market. All other categories of loans decreased by $2.1 million.

     ALLOWANCE FOR LOAN LOSSES.  The allowance for loan losses was $2,194,738 at
September 30, 2004 as compared to  $2,256,070  at December 31, 2003,  due to the
charge-off of a loan in the amount of $460,743 and a 2004 provision of $399,441.
The ratio of the allowance for loan losses to total loans decreased  slightly to
1.3% at  September  30,  2004 from 1.5% at December  31,  2003.  Management  has
considered non-performing assets and other assets of concern in establishing the
allowance  for loan  losses.  The Bank  continues to monitor its  allowance  for
possible  loan losses and will make future  additions or  reductions in light of
the level of loans in its  portfolio  and as economic  conditions  dictate.  The
current  level of the  allowance  for loan  losses is a result  of  management's
assessment of the risks within the portfolio based on the  information  revealed
in credit  reporting  processes.  The Bank utilizes a risk-rating  system on all
commercial, business, agricultural, construction and multi-family and commercial
real estate  loans,  including  purchased  loans.  A periodic  credit  review is
performed on all types of loans to establish the necessary  reserve based on the
estimated risk within the portfolio.  This assessment of risk takes into account
the composition of the loan portfolio,  historical loss experience for each loan
category,  previous loan experience,  concentrations of credit, current economic
conditions and other factors that in management's judgment deserve recognition.

     Although management believes that it uses the best information available to
determine  the  allowances,   unforeseen   market  conditions  could  result  in
adjustments  and net  earnings  being  significantly  affected if  circumstances
differ   substantially   from  the   assumptions   used  in  making   the  final
determinations.  Future  additions  to the Bank's  allowances  may  result  from
periodic loan,  property and collateral  reviews and thus cannot be predicted in
advance.

     Non-performing assets, expressed as a percentage of total assets, decreased
to .1% at September 30, 2004, down from .5% at December 31, 2003.

     At September 30, 2004,  the allowance for loan losses  represented  795% of
non-accruing loans, compared to 284% at December 31, 2003.

     At September 30, 2004, the Bank had $276,236 in non-accruing  loans,  which
decreased from $794,135 in non-accruing loans at December 31, 2003.

                                     - 25 -

<PAGE>

     DEPOSITS. Deposits totaled $172.0 million at September 30, 2004, increasing
$29.6 million or 20.8% from the December 31, 2003 balance of $142.4 million. The
increase in deposits is  attributable  to management's  growth  strategy,  which
includes  significant  marketing,  promotion  and cross  selling  of  additional
products to existing customers.

     Included in deposits at September 30, 2004 and December 31, 2003 were $33.9
million and $38.0 million, respectively, of brokered deposits.

     BORROWED FUNDS.  Borrowed funds totaled $9.6 million at September 30, 2004,
decreasing  $0.7 million or 6.8% from  December 31, 2003.  The majority of these
funds have been obtained from the Federal Home Loan Bank ("FHLB")  through short
and long term advances.

OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

     NET INTEREST INCOME/MARGINS.  Net interest income increased to $6.3 million
for 2003 compared to $3.7 million for 2002, a 71.5% increase.  The increase was
primarily attributable to the growth in average  interest-earning  assets, which
totaled  $141.5  million for 2003, a 48.7% increase as compared to $95.2 million
for 2002.  Average  loans  increased  by 54.4% to  $120.8  million  and  average
investments decreased by 27.8% to $18.9 million.  Interest-earning  asset growth
was funded by an increase in average interest-bearing  deposits of $39.5 million
or 53.2%.  The average  borrowed  funds  increased  $1.0 million during the 2003
fiscal year.

     The key  performance  measure for net interest  income is the "net interest
margin," or net interest income divided by average  interest-earning assets. Our
net interest margin is affected by loan pricing,  mix of earning assets, and the
distribution and pricing of deposits and borrowings. Our net interest margin was
4.4% for the year ended December 31, 2003,  compared to 3.8% for 2002. Yields on
average  interest-earning assets decreased by 20 basis points, while the cost of
interest-bearing  liabilities decreased by 110 basis points. A higher balance of
loans as a percentage of interest-earning assets and a higher average balance of
non-interest  deposit  accounts  did offset the  overall  decrease  in yields on
interest-earning assets.

     COMPARATIVE  AVERAGE  BALANCES,  YIELDS AND RATES. The following table sets
forth for the periods  indicated the Bank's average  volume of  interest-earning
assets and interest-bearing liabilities and average yields and rates. Changes in
net interest  income from period to period result from increases or decreases in
the volume and mix of interest-earning assets and interest-bearing  liabilities,
increases or  decreases in the average  rates earned and paid on such assets and
liabilities  and the  availability  of  particular  sources  of  funds,  such as
non-interest-bearing deposits.

                                     - 26 -

<PAGE>
<TABLE>
<CAPTION>
                                                                             FOR THE YEAR ENDED
                                                -------------------------------------------------------------------------------
                                                         DECEMBER 31, 2003                          DECEMBER 31, 2002
                                                ------------------------------------       ------------------------------------
                                                 DAILY                                      DAILY
                                                AVERAGE          INCOME/      YIELD/       AVERAGE           INCOME      YIELD/
                                                BALANCE          EXPENSE       RATE        BALANCE          EXPENSE       RATE
                                                -------          -------      ------       -------          -------      ------
<S>                               <C>           <C>            <C>             <C>       <C>               <C>            <C>
ASSETS:
Loans (net of deferred costs/fees)(1)           $120,796,806   $8,698,702      7.2%      $ 78,245,329      $5,787,953     7.4%
Investment securities                             18,877,268      724,238      3.8         14,803,214         791,785     5.3
Federal funds sold                                 1,847,384       21,500      1.2          2,119,526          32,310     1.5
                                                ------------   ----------                ------------      ----------
    Total interest-earning assets                141,521,458   $9,444,440      6.7         95,168,069      $6,612,048     6.9
                                                               ----------                                  ----------
Allowance for loan losses                         (1,728,983)                              (1,070,888)
Other assets                                      10,979,114                                6,518,040
                                                ------------                             ------------
    Total assets                                $150,771,589                             $100,615,221
                                                ============                             ============

LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest-bearing deposits
  Regular savings deposits                      $ 22,104,323   $  493,010      2.2       $  5,787,414     $   174,086     3.0
  NOW & money market savings                      24,351,546      381,592      1.6         13,313,873         328,982     2.5
  Time deposits                                   67,298,382    2,139,543      3.2         55,150,628       2,210,490     4.0
                                                ------------   ----------                ------------      ----------
    Total interest-bearing deposits              113,754,251    3,014,145      2.6         74,251,915       2,713,558     3.7

Borrowed funds                                     7,827,679      167,527      2.1          6,888,307         246,930     3.6
                                                ------------   ----------                ------------      ----------
    Total interest-bearing liabilities           121,581,930   $3,181,672      2.6         81,140,222      $2,960,488     3.6
                                                               ----------                                  ----------
Non-interest-bearing demand deposits               9,270,022                                8,968,835
Other liabilities                                  1,311,106                                  650,773
Shareholders' equity                              18,608,531                                9,855,391
                                                ------------                              -----------
    Total liabilities and
    shareholders' equity                        $150,771,589                             $100,615,221
                                                ============                             ============
Interest rate spread (average yield
  less average rate)                                                           4.1%                                       3.3%
Net interest income (interest income
  less interest expense)                                       $6,262,768                                  $3,651,560
                                                               ==========                                  ==========
Net interest margin (net interest
income/average interest-earning assets)                                        4.4%                                   3.8%
<FN>

__________________________________________
1    Non-accrual loans are included in the calculation of average balances
</FN>
</TABLE>

RETURN ON EQUITY AND ASSETS
<TABLE>
<CAPTION>
                                                                   December 31,
                                                       -------------------------------------
                                                        2003           2002            2001
                                                       ------         ------          ------
<S>                                                     <C>            <C>             <C>
Return on average assets........................        1.33%          0.94%           0.69%
Return on average equity........................       10.76%          9.56%           5.21%
Dividend payout ratio...........................            0              0               0
Average equity to average assets ratio..........       12.34%          9.80%          13.15%
</TABLE>


                                     - 27 -

<PAGE>

         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.
<TABLE>
<CAPTION>

                                                           YEAR ENDED DECEMBER 31, 2003
                                                              COMPARED TO YEAR ENDED
                                                                DECEMBER 31, 2002
                                                  ---------------------------------------------
                                                            VARIANCE DUE TO CHANGES IN
                                                  ---------------------------------------------
                                                                                          Net
                                                  AVERAGE                             Increase/
                                                  VOLUME         Average Rate        (Decrease)
                                                  -------        ------------        ----------
<S>                                             <C>            <C>                   <C>
Interest Income:
  Loans (net of deferred costs/fees)            $3,147,614       $ (236,865)         $2,910,749
  Investment securities                            217,911         (285,458)            (67,547)
  Federal funds sold                                (4,149)          (6,661)            (10,810)
                                                 ---------       ----------          ----------
Total interest income                            3,361,376         (528,934)          2,832,392
                                                 ---------       ----------          ----------
Interest Expense:
  Deposits                                       1,443,625       (1,143,038)            300,587
  Borrowed funds                                    33,674         (113,077)             79,403
                                                 ---------       ----------          ----------
Total interest expense                           1,477,299       (1,256,115)            221,184
                                                 ---------       ----------          ----------
Net interest income                             $1,884,077      $   727,131          $2,611,208
                                                 =========       ==========          ----------
</TABLE>

         NON-INTEREST  INCOME.  Non-interest  income is principally derived from
service fees on deposit accounts, BOLI income, fee income from loan services and
gains on sale of investment  securities.  Non-interest income for the year ended
December 31, 2003 was $779,044  compared to $488,090 for the year ended December
31, 2002.

         Other fee income increased to $456,919 from $265,154 to additional BOLI
purchased.  The gain on sale of securities increased to $63,681 from $18,124 for
2002 as the Bank elected to sell investment  securities for the higher yields on
loans.  Service charges on deposit accounts increased $42,700 or 24.2% due to an
increase in the number of accounts during fiscal 2003.

         NON-INTEREST  EXPENSE.  Mostly all categories of  non-interest  expense
increased during the year.  Non-interest  expenses totaled $2.8 million for 2003
compared to $2.1 million for the year ended  December  31, 2002,  an increase of
$758,737 or 36.5%.  This increase  reflects  greater costs  associated  with the
growth of the Bank, including data processing costs,  compensation and benefits,
as well as increases in loans and deposit activities.

         Compensation and benefits  increased $452,127 or 55.1% primarily due to
staffing increases to support loan and deposit growth, coupled with two new full
branch  offices,  as well as regular salary  increases and higher benefit costs.
Occupancy,  equipment and data  processing  costs grew for 2003 in the amount of
$226,227 or 40.1% when compared to the prior year. The opening of the Northfield
and Kennedy offices contributed to a large portion of the increase.

                                     - 28 -

<PAGE>
         Professional  services fees and expenses  increased by $21,720 or 14.5%
as a result of consulting  costs.  Marketing and business  development  expenses
decreased by $50,024or 32.9% due to fact the Northfield opening expenses were in
2002. Other operating expenses increased $108,637 or 27.7%.

         INCOME TAXES. We recorded tax expense of $1,279,437 in 2003 compared to
$620,485 in 2002, for an effective tax rate of 39.0% in 2003 and 39.7% in 2002.

FINANCIAL CONDITION AT DECEMBER 31, 2003 AND DECEMBER 31, 2002

         At December 31, 2003, we had total assets of $174.0  million,  compared
to $130.9 million at December 31, 2002,  representing an increase of 32.9%. This
increase was due to the continued expansion of business development efforts, and
continued  marketing of deposit and loan products.  The Bank's overall growth in
its core business,  generating  loans and gathering of deposits grew at a higher
rate than overall asset growth.

         Loans at  December  31,  2003 were  $146.3  million,  compared to $95.1
million at December 31, 2002,  which  represents an increase of $51.2 million or
53.8%.  Growth  occurred in all  categories of loans.  Investment  securities at
December 31, 2003  decreased by $8.0 million or 34.7% over the December 31, 2002
balance of $23.2 million.

         Total deposits  increased by $34.9 million,  an increase of 32.4%, from
$107.5 million at December 31, 2002.

         Shareholders  equity  increased  by  $2.4  million.   The  increase  is
attributable  earnings  of $2.0  million  and  exercise  of  stock  options  and
warrants.

LOAN QUALITY

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

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

         As of December 31, 2003, we had approximately  $794,135 in non-accruing
loans,  compared with $1.0 million in  non-accruing  loans at December 31, 2002.
Non-performing assets, expressed as a percentage

                                     - 29 -

<PAGE>

of total  assets,  decreased  to 0.5% at December 31, 2003 from 0.8% at December
31, 2002. At December 31, 2003, the allowance for loan losses  represented  284%
of non-accruing loans.

         The  provision  for loan  losses is a charge to earnings in the current
period to maintain the  allowance at a level  management  has  determined  to be
adequate  based upon factors noted above.  We provided  $923,070 for loan losses
for the year ended  December 31,  2003,  compared to $498,517 for the year ended
December 31, 2002. The increase  resulted  primarily to provide  coverage of the
higher level of loan growth in 2003 of $51.2 million,  compared to $31.9 million
in 2002.

         As of  December  31,  2003,  the  allowance  for loan  losses  was $2.3
million,  compared to the  December  31,  2002  balance of $1.3  million,  which
represents  an increase of $923,070 or 69.2%.  The growth in the  allowance  was
driven by the growth and mix in the loan portfolio.

         The following table summarizes the allowance activities:
<TABLE>
<CAPTION>

                                                         Years Ended December 31,
                                                     -------------------------------
                                                         2003              2002
                                                     -----------        -----------
<S>                                                  <C>               <C>
Allowance for loan losses, beginning of year .....   $   1,333,000     $     834,483
Loans charged off ................................          (1,000)             --
Recoveries .......................................           1,000              --
Provision for loan losses ........................         923,070           498,517
                                                     -------------     -------------
Allowance for loan losses, end of year ...........   $   2,256,070     $   1,333,000
                                                     =============     =============
Loans (net of deferred costs/fees)
   period-end balance ............................   $ 146,334,331     $  95,095,210
                                                     =============     =============
Allowance as percentage of period-end loan balance             1.5%              1.4%
                                                               ===               ===
</TABLE>

         Management's  judgment  as to the  level of future  losses on  existing
loans is based on its  internal  review  of the  loan  portfolio,  including  an
analysis of the borrowers'  current  financial  position,  the  consideration of
current and  anticipated  economic  conditions  and their  potential  effects on
specific  borrowers.   In  determining  the  collectibility  of  certain  loans,
management also considers the fair value of any underlying collateral.  However,
management's  determination  of the appropriate  allowance level is based upon a
number of assumptions about future events,  which are believed to be reasonable,
but which may or may not  prove  valid.  Thus,  there can be no  assurance  that
charge-offs  in future  period will not exceed the  allowance for loan losses or
that additional increases in the allowance for loan losses will not be required.
In addition an outside loan  reviewer  conducts an in dependent  analysis of the
loan loss reserve to ensure completeness.

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 statement of financial condition 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

                                     - 30 -

<PAGE>

are subject to interest-rate pricing within a given time period,  including both
floating  rate  or  adjustable  rate   instruments  and  instruments   that  are
approaching maturity.

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

         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 an establishing rates
on  the  earning  asset  portfolio  and  certain  interest-bearing   liabilities
commensurate with management's  expectations  relative to market interest rates.
Management  generally  attempts  to  maintain a balance  between  rate-sensitive
assets and  liabilities  as the exposure  period is  lengthened  to minimize our
overall interest rate risk.

         RATE SENSITIVITY ANALYSIS. The interest rate sensitivity position as of
December 31, 2003 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 that are based on prevailing prepayment  assumptions
and core deposits which are based on core deposit  studies done for banks in the
Mid-Atlantic   region.   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, 2003, our interest sensitive liabilities
exceeded interest  sensitive assets within a one year period by $11.5 million or
6.5% of total assets.
<TABLE>
<CAPTION>
                                                       AS OF DECEMBER 31, 2003
                                    ---------------------------------------------------------------
                                                     Over 3
                                                     Months        Over 1 Year     Over 3 Years
                                    3 MONTHS        Through          Through          Through
                                     OR LESS       12 Months         3 Years          5 Years
                                    --------       ---------       -----------     ------------
<S>                                 <C>           <C>              <C>              <C>
Interest-earning assets:
    Loans                           $26,136,660   $ 34,430,211     $ 20,254,081     $21,509,870
    Investment securities             4,219,680      1,428,683          101,310       1,016,985
    Federal funds sold                1,725,000              -                -               -
                                     ----------    -----------      -----------     -----------
    Total interest-earning
      assets                        $32,081,340   $ 35,858,894     $ 21,267,181     $22,526,855
                                     ==========    ===========     ============     ===========

Interest-bearing liabilities:
    Regular savings deposits        $ 3,789,317   $  3,789,317     $  3,789,317     $ 3,789,317
    NOW & money market
      savings deposits                4,028,163      4,028,163        4,018,163       4,028,163
    Time deposits                    16,586,184     36,208,144       23,914,963       6,087,029
    Borrowed funds                    5,000,000      3,750,000        1,060,000         590,123
                                     ----------    -----------      -----------     -----------
    Total interest-bearing
       liabilities
                                    $29,403,664   $ 47,775,624     $ 32,732,443     $14,494,632
                                     ==========    ===========     ============     ===========
Interest rate sensitive gap         $ 2,677,676   $(11,916,730)    $(11,465,262)    $ 8,032,223

Cumulative interest rate gap          2,677,676     (9,239,054)     (20,704,316)    $12,672,093

Ratio of rate sensitive assets  to
      rate-sensitive liabilities      1.09          0.75             0.65            1.55

<CAPTION>
                                                        AS OF DECEMBER 31, 2003
                                       ----------------------------------------------
                                        Over 5 Years
                                           Through         Over 15
                                          15 Years          Years           Total
                                        -------------      -------          -----
<S>                                      <C>             <C>             <C>
Interest-earning assets:
    Loans                                $38,270,933     $ 5,732,576     $146,334,331
    Investment securities                  1,552,748       5,890,828       15,122,034
    Federal funds sold                             -               -        1,725,000
                                          ----------      ----------      -----------
    Total interest-earning
      assets                             $39,823,681     $11,623,414    $ 163,181,365
                                         ===========     ===========     ============

Interest-bearing liabilities:
    Regular savings deposits             $ 3,789,317     $ 3,789,317      $22,735,902
    NOW & money market
      savings deposits                     4,028,164       4,028,164       24,168,980
    Time deposits                                  -               -       82,796,320
    Borrowed funds                                 -               -       10,340,123
                                          ----------      ----------      -----------
    Total interest-bearing
       liabilities
                                         $ 7,817,481     $ 7,817,481     $140,041,325
                                         ===========     ===========     ============
Interest rate sensitive gap              $32,006,200     $ 3,805,933      $23,140,040

Cumulative interest rate gap             $19,334,107     $23,140,040

Ratio of rate sensitive assets  to
      rate-sensitive liabilities          5.09            1.49
</TABLE>

                                     - 31 -
<PAGE>
     Liquidity  describes  our ability to meet the  financial  obligations  that
arise out of the ordinary  course of business.  Liquidity  addresses  the Bank'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  97.5% and  102.7%  at  September  30,  2004 and
December 31, 2003, respectively. Funds received from new and existing depositors
provided a large source of liquidity for the nine-month  period ended  September
30, 2004.  The Bank seeks to rely  primarily on core deposits from  customers to
provide  stable and  cost-effective  sources of funding to support local growth.
The Bank also  seeks to  augment  such  deposits  with  longer  term and  higher
yielding  certificates  of deposit.  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 September 30,
2004, the Bank maintained lines of credit with the FHLB of $15.8 million.

     As of  September  30,  2004,  the Bank's  investment  securities  portfolio
included $9.8 million of  mortgage-backed  securities  that provide  significant
cash flow each month.  Additionally,  another  $3.2  million is  available  in a
mutual fund that consists of adjustable  rate  mortgage-backed  securities.  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.
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  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,  2003 and 2002,  commitments  to extend  credit
amounted to approximately $35.2 million and $25.2 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, 2003 and 2002,
standby  letters of credit with  customers  were $2.3 million and $1.6  million,
respectively.

     The Bank does not issue or hold derivative  instruments  with the exception
of loan commitments and standby letters of credit.  These instruments are issued
in the ordinary course of business to meet customer

                                     - 32 -

<PAGE>

needs.  Commitments  to fund  fixed-rate  loans were  immaterial at December 31,
2003. 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.

IMPACT OF INFLATION AND CHANGING PRICES

     The consolidated financial statements and notes thereto presented elsewhere
herein have been  prepared in  accordance  with  generally  accepted  accounting
principles,  which require the  measurement of financial  position and operating
results in terms of historical  dollars  without  considering  the change in the
relative purchasing power of money over time and due to inflation. The impact of
inflation is  reflected in the  increased  cost of our  operations.  Unlike most
industrial  companies,  nearly all of our assets are  monetary  in nature.  As a
result,  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.

RECENT ACCOUNTING PRONOUNCEMENTS

     In December 2002,  the Financial  Accounting  Standards  Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 148, "Accounting
for Stock-Based  Compensation - Transition and Disclosure - an amendment of FASB
Statement No. 123." This statement  provides  alternative  methods of transition
for a  voluntary  change  to the fair  value  based  method  of  accounting  for
stock-based  employee  compensation.  In  addition,  this  statement  amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both
annual and  interim  financial  statements  about the method of  accounting  for
stock-based employee compensation and the effects of the method used on reported
results.

     In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based
Payment." This statement revises the original guidance contained in SFAS No. 123
and supersedes  Accounting  Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees,  and its related implementation  guidance.  Under
SFAS No. 123 (revised 2004), a public entity such as Parke Bank will be required
to measure the cost of employee  services  received in exchange  for an award of
equity instruments based on the grant-date fair value of the award (with limited
exceptions)  and recognize such cost over the period during which an employee is
required to provide  service in  exchange  for the reward  (usually  the vesting
period). For stock options and similar  instruments,  grant-date fair value will
be estimated using option-pricing models adjusted for the unique characteristics
of  instruments  (unless  observable  market  prices  for the  same  or  similar
instruments are available).  For public entities,  such as Parke Bank, that file
as small  business  issuers,  SFAS No. 123 (revised 2004) is effective as of the
beginning  of the first  interim or annual  reporting  period that begins  after
December 15, 2005.

     The aforementioned  pronouncements  related to stock-based payments have no
effect on Parke Bank's historical consolidated financial statements as we do not
currently have any stock-based payment plans.  However,  the stock-based payment
plans  contemplated  within this  document,  consisting  of the stock option and
restricted stock award plans,  will be subject to the provisions of SFAS No. 123
(revised 2004). While the actual costs of our stock-based  payment plans will be
based on  grant-date  fair  value,  which  cannot be  determined  at this  time,
additional  information on the possible future costs of these plans can be found
in the section of this document  entitled Pro Forma Data, which appears on pages
24 to 30.

     In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative  Instruments  and  Hedging  Activities."  This  statement  amends and
clarifies  accounting for derivative  instruments,  including certain derivative
instruments embedded in other contracts, and for hedging activities

                                     - 33 -

<PAGE>

under SFAS No. 133. The amendments  set forth in SFAS No. 149 improve  financial
reporting  by  requiring  that  contracts  with  comparable  characteristics  be
accounted for similarly.  In particular,  this  statement  clarifies  under what
circumstances a contract with an initial net investment meets the characteristic
of a derivative as discussed in SFAS No. 133. In addition,  it clarifies  when a
derivative contains a financing component that warrants special reporting in the
statement  of  cash  flows.   SFAS  No.  149  amends   certain  other   existing
pronouncements.  Those  changes  will  result in more  consistent  reporting  of
contracts  that are  derivatives  in their  entirety  or that  contain  embedded
derivatives  that warrant separate  accounting.  This statement is effective for
contracts  entered into or modified  after  September 30, 2003,  and for hedging
relationships  designated  after  September  30, 2003.  The  guidance  should be
applied prospectively.  The provisions of this statement that relate to SFAS No.
133,  "Implementation Issues," that have been effective for fiscal quarters that
began prior to September 15, 2003,  should  continue to be applied in accordance
with their respective effective dates. In addition,  certain provisions relating
to forward purchases or sales of when-issued securities or other securities that
do not  yet  exist  should  be  applied  to  existing  contracts  as well as new
contracts  entered into after September 30, 2003. The adoption of this statement
did  not  have a  material  effect  on our  financial  position  or  results  of
operations.

     In May  2003,  the  FASB  issued  SFAS No.  150,  "Accounting  for  Certain
Financial Instruments with Characteristics of Both Liabilities and Equity." This
statement  establishes  standards  for how an  issuer  classifies  and  measures
certain  financial  instruments  with  characteristics  of both  liabilities and
equity.  It  requires  that an issuer  classify a financial  instrument  that is
within  its  scope as a  liability  (or an asset  in some  circumstances).  Such
instruments  may have been  previously  classified as equity.  This statement is
effective for financial instruments entered into or modified after May 31, 2003,
and  otherwise  is  effective  at the  beginning  of the  first  interim  period
beginning  after September 15, 2003. The adoption of this statement did not have
a material effect on our reported equity.

     In November  2002,  the FASB  issued  Interpretation  No. 45,  "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees of  Indebtedness  of Others." This  interpretation  elaborates on the
disclosures  to be made by a  guarantor  in its  interim  and  annual  financial
statements  about its obligations  under certain  guarantees that it has issued.
This  interpretation  clarifies  that a guarantor is required to  disclose:  the
nature of the guarantee,  including the approximate  term of the guarantee,  how
the  guarantee  arose,  and the events or  circumstances  that would require the
guarantor to perform under the guarantee; the maximum potential amount of future
payments under the guarantee;  the carrying amount of the liability, if any, for
the guarantor's  obligations  under the guarantee;  and the nature and extent of
any recourse provisions or available  collateral that would enable the guarantor
to recover  the  amounts  paid under the  guarantee.  This  interpretation  also
clarifies  that a guarantor  is required to  recognize,  at the  inception  of a
guarantee,  a liability  for the  obligations  it has  undertaken in issuing the
guarantee,  including its ongoing  obligation to stand ready to perform over the
term of the  guarantee  in the event  that the  specified  triggering  events or
conditions occur. The objective of the initial  measurement of that liability is
the fair value of the guarantee at its inception.  The initial  recognition  and
initial  measurement  provisions  of this  interpretation  are  applicable  on a
prospective  basis to  guarantees  issued or modified  after  December 31, 2002,
irrespective of the guarantor's fiscal year-end. The disclosure  requirements in
this interpretation are effective for financial  statements of interim or annual
periods ending after December 15, 2002. The adoption of this  interpretation did
not have a material effect on our financial position or results of operations.

     In  December  2003,  the  FASB  issued a  revision  to  Interpretation  46,
"Consolidation of Variable Interest  Entities," which established  standards for
identifying a variable  interest entity ("VIE") and for  determining  under what
circumstances  a VIE  should  be  consolidated  with  its  primary  beneficiary.
Application of this Interpretation is required in financial statements of public
entities  that have  interests in  special-purpose  entities for periods  ending
after  December  15,  2003.  Application  by public  entities,  other than small
business  issuers,  for  all  other  types  of  VIEs is  required  in  financial
statements for periods ending

                                     - 34 -

<PAGE>

after March 15, 2004. Small business issuers must apply this  Interpretation  to
all other types of VIEs at the end of the first  reporting  period  ending after
December 15, 2004.  The adoption of this  Interpretation  has not had and is not
expected  to have a  material  effect on our  financial  position  or results of
operations.

                           MARKET PRICES AND DIVIDENDS

GENERAL

     The Bank's common stock has been traded in the over the counter  market and
listed on the Nasdaq Stock  Market  under the trading  symbol of "PKBK" since it
commenced  trading upon  completion of our public offering on November 26, 2002.
The  following   table   reflects  high  and  low  bid  prices  as  reported  on
www.nasdaq.com  for the calendar  quarters  indicated.  The  quotations  reflect
inter-dealer prices, without retail mark-up,  markdown or commission and may not
represent  actual  transactions.  Prices  reflect a 10% stock  dividend  paid in
November 2003 and a 20% stock dividend paid in December 2004.


QUARTER ENDED                                         HIGH          LOW
-------------                                         ----          ---
March 31, 2003                                     $    9.50    $    9.45
June 30, 2003                                      $    9.45    $    9.08
September 30, 2003                                 $   11.41    $   10.30
December 31, 2003                                  $   15.21    $   10.93
March 31, 2004                                     $   14.58    $   14.08
June 30, 2004                                      $   14.33    $   13.29
September 30, 2004                                 $   14.60    $   13.47
December 31, 2004                                  $   19.45    $   14.00
March 31, 2005 (through March 16, 2005)

         The number of  shareholders  of record of common  stock as of March 16,
2005,  was  approximately  ____.  This does not reflect the number of persons or
entities who held stock in nominee or "street"  name through  various  brokerage
firms.  At March 16,  2005,  there were  ___________  shares of our common stock
outstanding. To date, the Bank has not paid cash dividends.

         Because Parke Bancorp,  Inc. is a newly formed  corporation and has not
yet issued stock, no information is provided as to historical  market prices for
Parke Bancorp, Inc.'s common stock. There can be no assurance that following the
Reorganization Parke Bancorp, Inc.'s common stock will be quoted or traded at or
above the current value of the Bank's common stock.

         Holders of Parke Bancorp, Inc. common stock will be entitled to receive
dividends when, and if declared by the Board of Directors of Parke Bancorp, Inc.
out of funds  legally  available  therefor.  The  timing  and  amount  of future
dividends  will be within  the  discretion  of the Board of  Directors  of Parke
Bancorp, Inc. and will depend on the consolidated earnings, financial condition,
liquidity, and capital requirements of Parke Bancorp, Inc. and its subsidiaries,
applicable  governmental  regulations  and policies,  and other  factors  deemed
relevant by the Board. To date, the Bank has not paid cash dividends. Currently,
it is not  anticipated  that the dividend  policy of Parke  Bancorp,  Inc.  will
differ from the present dividend policy of the Bank.

DIVIDEND RESTRICTIONS IMPOSED ON PARKE BANCORP, INC.

         Certain restrictions generally imposed on corporations  incorporated in
New Jersey may have an impact on Parke Bancorp,  Inc.'s ability to pay dividends
to its shareholders. New Jersey law provides that

                                     - 35 -

<PAGE>

dividends may not be paid if it would cause the  corporation to be unable to pay
its debts as they  become due in the normal  course of  business  or if it would
cause the corporation's total assets to be less than its total liabilities.

DIVIDEND RESTRICTIONS IMPOSED ON THE BANK

     After the  Reorganization,  dividends  from the Bank will be Parke Bancorp,
Inc.'s  primary source of funds for the payment of dividends  because  initially
Parke Bancorp,  Inc. will have no source of income other than such dividends and
the capital contributed to Parke Bancorp,  Inc. by the Bank immediately prior to
consummation of the Reorganization. The following restrictions on the payment of
dividends by the Bank will  continue to apply to  dividends  paid by the Bank to
the Holding Company.

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

     The future  dividend  policy of the Bank is  subject to certain  regulatory
considerations  and to the discretion of the Board of Directors and depends upon
a number of  factors,  including  operating  results,  financial  condition  and
general business conditions.  Holders of the Bank's common stock are entitled to
receive  dividends  as, if, and when  declared by the Board of  Directors of the
Bank out of funds legally available  therefore,  subject to the restrictions set
forth in New Jersey law and the Federal Deposit  Insurance Act. Under New Jersey
law, the directors of a New Jersey  state-chartered  bank, such as the Bank, are
permitted to declare  dividends  on common stock -only if, after  payment of the
dividend,  the capital stock of the Bank will be unimpaired  and either the Bank
will have a surplus  (additional  paid-in  capital)  of not less than 50% of its
capital stock or the payment of the dividend will not reduce the Bank's surplus.

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

                         BUSINESS OF PARKE BANCORP, INC.

     Parke Bancorp, Inc. is currently a non-operating,  shell corporation.  Upon
the  completion  of the  Reorganization,  the Bank  will  become a  wholly-owned
subsidiary of Parke Bancorp, Inc. and each shareholder of the Bank will become a
shareholder of Parke Bancorp,  Inc. with the same respective  ownership interest
therein as presently held in the Bank.

     Immediately after consummation of the  Reorganization,  it is expected that
Parke Bancorp,  Inc. will not engage in any business activity other than to hold
all of the stock of the Bank. It is  anticipated,  however,  that Parke Bancorp,
Inc.  in the future will begin to explore the  feasibility  of other  investment
opportunities,  including  possible  diversification  through  acquisitions  and
mergers, although no specific future plans are being considered at this time.

     The initial Board of Directors of Parke Bancorp,  Inc. consists of three of
the current  directors of the Bank.  The  directors of Parke  Bancorp,  Inc. are
divided into three classes, each class as nearly equal in

                                     - 36 -

<PAGE>

number as  possible,  and each  class to serve  for a three  year  period,  with
approximately one-third of the directors elected each year.

     The nine directors  currently serving on the Board of Directors of the Bank
who are not the initial  directors  of Parke  Bancorp,  Inc.  are expected to be
added to the Board of Parke  Bancorp,  Inc. on or about January 2007.  The three
initial  directors  intend to add nine new seats to the Board of Parke  Bancorp,
Inc. and appoint the nine directors who currently  serve on the Bank's Board who
are not initial  directors of Parke Bancorp,  Inc. to these new seats. The three
initial  directors  may do so by board  action.  These nine  directors  would be
divided  evenly  into the three  classes of the Board and would  serve until the
next following  annual meeting of shareholders  of Parke Bancorp,  Inc. at which
they would be nominated by the Board for  reelection  into those three  classes.
The result will be that Parke  Bancorp,  Inc. will have a twelve member Board of
Directors with four directors in each class, each serving a three-year term.

     The following  executive  officers of the Bank are currently serving as the
executive officers of Parke Bancorp, Inc.:

   Vito S. Pantilione       President and Chief Executive Officer
   Ernest D. Huggard        Senior Vice President and Chief Financial Officer
   David O. Middlebrook     Senior Vice President and Corporate Secretary

     It is currently expected that, unless Parke Bancorp,  Inc. becomes actively
involved in the operation or acquisition of additional  savings  institutions or
other  businesses,  no separate  compensation  will be paid to the directors and
employees of Parke Bancorp, Inc. However, Parke Bancorp, Inc. may determine that
separate  compensation  is appropriate in the future.  Because the directors and
employees of the Bank will not initially be compensated  by Parke Bancorp,  Inc.
but will continue to serve and be compensated by the Bank, no new benefits plans
are  anticipated  at this time.  The Bank will  continue to maintain its current
benefit programs.  The Company is not expected to initially own or lease real or
personal property.  Instead, it intends to utilize the premises,  equipment, and
furniture of the Bank without the direct payment of any rental fees to the Bank.

                             BUSINESS OF PARKE BANK

GENERAL

     The Bank is a New Jersey-chartered  commercial bank, incorporated in August
1998. It commenced operations in January 1999. The Bank's deposits are currently
FDIC insured,  and the Bank is regulated by the New Jersey Department of Banking
and Insurance and the FDIC.

     The Bank  maintains  its principal  office at 601 Delsea Drive,  Washington
Township,  New  Jersey  in the Parke  Place  age-restricted  community.  It also
conducts business through a branch office in Northfield,  New Jersey that opened
in September  2002. The Bank opened another office in Washington  Township,  New
Jersey,  adjacent to Kennedy Memorial  Hospitals - University Medical Center, in
February 2003. The Bank is a full service  commercial  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, 2003, the Bank had
assets of $174.0 million, deposits of $142.4 million and shareholders' equity of
$20.0 million.

     The Bank has one subsidiary,  Parke Capital Markets,  a corporation,  which
was  formed in 2001 to  generate  fee  income  from  capital  markets  financing
activities, which include term financings. At December 31, 2003, the Bank had 24
full-time and 4 part-time employees.

                                     - 37 -

<PAGE>

     The Bank focuses its commercial  loan  originations  on small and mid-sized
business (generally up to $5 million in annual sales).  Commercial loan products
include  residential  and commercial  real estate  construction  loans;  working
capital loans and lines of credit;  demand,  term and time loans; and equipment,
inventory and accounts receivable financing.  Residential  construction loans in
tract  development are also included in the commercial  loan category.  The Bank
also offers a range of deposit products to its commercial customers.  Commercial
customers  also have the ability to use overnight  depository,  ACH activity and
wire transfer service, all at reduced rates.

     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 and Internet banking. Retail lending activities by
the Bank include residential  mortgage loans, home equity lines of credit, fixed
rate second mortgages, new and used auto loans and overdraft protection.

MARKET AREA

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

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

                                     - 38 -

<PAGE>

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)
<TABLE>
<CAPTION>
                                                                         December 31,
                                        -------------------------------------------------------------------------------------
                                               2003                            2002                          2001
                                        -------------------------       -------------------------      ----------------------
                                           Amount         Percent         Amount          Percent        Amount        Percent
                                        ------------      -------       -----------       -------      -----------     ------
<S>                                     <C>                 <C>         <C>                 <C>        <C>               <C>
Commercial........................      $  8,799,899         6.0%       $ 7,035,669          7.4%      $ 7,013,258        11.1%
Real estate construction:
    Residential...................         2,164,811         1.5          1,370,266          1.4         1,491,077         2.4
    Commercial....................        29,896,562        20.4         17,122,397         18.0         6,912,656        10.9
Real estate mortgage:
    Residential...................        18,013,087        12.3         13,188,780         13.9        10,417,895        16.5
    Commercial....................        84,054,063        57.5         53,503,768         56.3        35,550,050        56.2
Consumer..........................         3,405,909         2.3          2,874,330          3.0         1,852,236         2.9
                                        ------------      ------        -----------        -----       -----------       -----
         Total loans..............      $146,334,331       100.0%       $95,095,210        100.0%      $63,237,172       100.0%
                                        ============      ======        ===========        =====       ===========       =====

<CAPTION>
                                                              December 31,
                                          ----------------------------------------------------------
                                                  2000                           1999
                                          --------------------------     ---------------------------
                                             Amount          Percent        Amount          Percent
                                          -----------        -------     -----------       ---------
<S>                                       <C>                 <C>         <C>                <C>
Commercial........................        $ 4,647,089          12.4%      $ 7,262,680         44.9%
Real estate construction:
    Residential...................            588,830           1.6           524,547          3.2
    Commercial....................         10,190,251          27.2         3,225,128         19.9
Real estate mortgage:
    Residential...................          5,929,074          15.9         2,477,177         15.3
    Commercial....................         14,707,083          39.3         2,081,248         12.8
Consumer..........................          1,336,419           3.6           631,366          3.9
                                          -----------         -----       -----------        -----
         Total loans..............        $37,398,746         100.0%      $16,202,146        100.0%
                                          ===========         =====       ===========        =====
<FN>
(1) Amounts presented include adjustments for related unamortized deferred costs
    and fees.
</FN>
</TABLE>


                                     - 39 -

<PAGE>

     LOAN MATURITY.  The following table sets forth the contractual  maturity of
certain loan categories at December 31, 2003.
<TABLE>
<CAPTION>
                                                                    Due after
                                                Due within          1 through           Due after
                                                  1 year             5 years             5 years              Total
                                                ----------          ----------         ------------           -----
<S>                                              <C>                 <C>                <C>                <C>
    Commercial................................  $ 3,465,068          $4,205,807         $1,129,024           $ 8,799,899
    Real estate construction:
      Residential...........................      2,041,629             123,182                  -             2,164,811
      Commercial............................     27,002,074           2,894,488                  -            29,896,562
                                                -----------          ----------         ----------           -----------
           Total amount due.................    $32,508,771          $7,223,477         $1,129,024           $40,861,272
                                                ===========          ==========         ==========           ===========
</TABLE>

         The  following  table sets forth the dollar  amount of loans in certain
loan categories due after December 31, 2004, which have  predetermined  interest
rates and which have floating or adjustable interest rates.
<TABLE>
<CAPTION>
                                                                                Floating or
                                                           Fixed Rates(1)      Adjustable Rates          Total
                                                           --------------     -----------------      ----------

<S>                                                         <C>                 <C>                  <C>
Commercial.......................................           $4,704,729          $   630,102          $5,334,831
Real estate construction:
    Residential..................................              123,182                    -             123,182
    Commercial...................................            1,454,763            1,439,725           2,894,488
                                                            ----------           ----------          ----------
         Total...................................           $6,282,674           $2,069,827          $8,352,501
                                                            ==========           ==========          ==========
<FN>
______________
(1)      Construction loans are adjustable rate loans,  however, due to interest
         rate floors, they have been reclassified as fixed rate loans.
</FN>
</TABLE>

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

         Commercial  business loans  generally  involve a greater degree of risk
than residential  mortgage loans and carry larger loan balances.  This increased
credit  risk is a result of several  factors,  including  the  concentration  of
principal  in  a  limited  number  of  loans  and  borrowers,  the  mobility  of
collateral,  the  effects  of  general  economic  conditions  and the  increased
difficulty of evaluating and monitoring these types of loans. Unlike residential
mortgage loans,  which generally are made on the basis of the borrower's ability
to make  repayment  from his or her  employment  and other  income and which are
secured by real  property  whose value  tends to be more  easily  ascertainable,
commercial  business  loans  typically  are made on the basis of the  borrower's
ability to make repayment from the cash flow of the  borrower's  business.  As a
result, the availability of funds for the repayment of commercial business loans
may be  substantially  dependent on the success of the  business  itself and the
general  economic  environment.  If the cash flow from  business  operations  is
reduced, the borrower's ability to repay the loan may be impaired.


                                     - 40 -

<PAGE>

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

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

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

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

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

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

                                     - 41 -

<PAGE>

         COMMERCIAL  REAL ESTATE MORTGAGE  LOANS.  The Bank originates  mortgage
loans secured by  commercial  real estate.  Such loans are primarily  secured by
office  buildings,  retail  buildings,  warehouses and general purpose  business
space.  Although terms may vary, the Bank's commercial  mortgages generally have
maturities of twenty years, but re-price within five years.

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

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

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

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

         LOANS TO ONE BORROWER.  Federal regulations limit loans to one borrower
in an amount  equal to 15% of  unimpaired  capital and  unimpaired  surplus.  At
December 31, 2003, the Bank's loan to one borrower limit was approximately  $3.1
million  and the Bank had ten  borrowers  with loan  balances  in excess of $2.5
million.  At December  31, 2003,  the Bank's  largest loan to one borrower was a
loan for construction  and  development,  with a balance of $4.6 million and was
secured by real estate.  This loan is scheduled to be funded in stages after the
houses are sold. At December 31, 2003,  this loan was current and  performing in
accordance with the terms of the loan agreement.

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

                                     - 42 -

<PAGE>

NON-PERFORMING AND PROBLEM ASSETS

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

         Impaired  loans are  measured  based on the  present  value of expected
future  discounted cash flows, the market price of the loan or the fair value of
the underlying collateral if the loan is collateral  dependent.  The recognition
of  interest  income  on  impaired  loans is the same as for  non-accrual  loans
discussed above

         The following table sets forth information  regarding non-accrual loans
at the dates indicated.
<TABLE>
<CAPTION>
                                                                                       At December 31,
                                                            ------------------------------------------------------------------
                                                             2003            2002            2001           2000         1999
                                                            -------       ---------         -------       --------      ------
<S>                                                        <C>                             <C>           <C>           <C>
Loans accounted for on a non-accrual basis:
Commercial..........................................       $      -      $        -        $      -      $       -     $     -
Real estate construction:
    Residential.....................................        263,000         289,000               -              -           -
    Commercial......................................              -               -               -              -           -
Real estate mortgage:
    Residential.....................................        431,135               -               -              -           -
    Commercial......................................              -         742,067         745,000              -           -
Consumer............................................              -               -               -              -           -
                                                            -------       ---------         -------       --------      ------
     Total..........................................        794,135       1,031,067         745,000              -           -
                                                            -------       ---------         -------       --------      ------
Accruing loans delinquent 90 days or more:
Commercial..........................................              -               -               -              -           -
Real estate construction:
    Residential.....................................              -               -               -              -           -
    Commercial......................................              -               -               -              -           -
Real estate mortgage:
    Residential.....................................              -               -               -              -           -
    Commercial......................................              -          50,000               -              -           -
Consumer............................................              -               -               -              -           -
                                                            -------       ---------         -------       --------      ------
     Total..........................................              -          50,000         745,000              -           -
                                                            -------       ---------         -------       --------      ------
          Total non-performing loans................       $794,135      $1,081,067        $745,000      $       -     $
                                                            =======       =========         =======       ========      ======
Total non-performing loans as a
   percentage of net loans..........................          0.55%           1.15%           1.19%          0.00%        0.00%
                                                            =======       =========         =======       ========      ======
</TABLE>

         CLASSIFIED  ASSETS.  Federal  Regulations  provide for a classification
system for problem  assets of insured  institutions.  Under this  Classification
System,  problem assets of insured  institutions  are classified as substandard,
doubtful or loss. An asset is considered  "substandard" if it involves more than
an  acceptable  level  of  risk  due  to a  deteriorating  financial  condition,
unfavorable history of the borrower, inadequate

                                     - 43 -

<PAGE>

payment  capacity,  insufficient  security or other negative  factors within the
industry,   market  or  management.   Substandard  loans  have  clearly  defined
weaknesses which can jeopardize the timely payments of the loan.

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

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

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

         At December 31, 2003, the Bank had assets classified as follows:


Special mention..................................           $3,780,000
Substandard......................................              830,000
Doubtful.........................................              461,000
Loss.............................................                    -
                                                             ---------
     Total.......................................           $5,071,000
                                                             =========

         FORECLOSED REAL ESTATE. Real estate acquired by the Bank as a result of
foreclosure or by deed in lieu of foreclosure is classified as real estate owned
until  such  time as it is sold.  When  real  estate  owned is  acquired,  it is
recorded at the lower of the unpaid principal balance of the related loan or its
fair value less disposal  costs.  Any write-down of real estate owned is charged
to operations. At December 31, 2003, the Bank had no real estate owned.

         ALLOWANCE FOR LOSSES ON LOANS AND REAL ESTATE  OWNED.  It is the policy
of  management to provide for losses on  unidentified  loans in its portfolio in
addition  to  classified  loans.  A  provision  for loan  losses is  charged  to
operations  based on management's  evaluation of the inherent losses that may be
incurred in the Bank's loan  portfolio.  Management also  periodically  performs
valuations of Real Estate Owned and establishes allowances to reduce book values
of the properties to their net realizable values when necessary.

         Management's  judgment  as to the  level of future  losses on  existing
loans is based on its  internal  review  of the  loan  portfolio,  including  an
analysis of the borrowers'  current  financial  position,  the  consideration of
current and  anticipated  economic  conditions  and their  potential  effects on
specific  borrowers.   In  determining  the  collectibility  of  certain  loans,
management also considers the fair value of any underlying collateral.  However,
management's  determination  of the appropriate  allowance level is based upon a
number of assumptions about future events,  which are believed to be reasonable,
but which may or may not  prove  valid.  Thus,  there can be no  assurance  that
charge-offs  in future  period will not exceed the  allowance for loan losses or
that additional increases in the allowance for loan losses will not be required.

                                     - 44 -

<PAGE>



         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.
<TABLE>
<CAPTION>
                                                                 For the Year Ended December 31,
                                        -----------------------------------------------------------------------------------
                                             2003              2002             2001              2000               1999
                                        ------------      ------------     ------------      ------------     -------------

<S>                                    <C>               <C>              <C>               <C>              <C>
Balance at beginning of period .....    $  1,333,000      $    834,483     $    467,484      $    186,322     $          --
Charge-offs:
Commercial .........................              --                --           (7,000)               --                --
Real estate construction: ..........              --                --               --                --                --
    Residential
    Commercial .....................              --                --               --                --                --
Real estate mortgage: ..............              --                --               --                --                --
    Residential ....................              --                --               --                --                --
    Commercial .....................              --                --               --                --                --
Consumer ...........................          (1,000)               --               --            (2,731)               --
                                        ------------      ------------     ------------      ------------     -------------
     Total charge-offs: ............    $     (1,000)     $         --     $     (7,000)     $     (2,731)    $          --
                                        ------------      ------------     ------------      ------------     -------------

Recoveries:
Commercial .........................    $         --      $         --     $         --      $         --     $          --
Real estate construction: ..........              --                --               --                --                --
    Residential
    Commercial .....................              --                --               --                --                --
Real estate mortgage: ..............              --                --               --                --                --
    Residential ....................              --                --               --                --                --
    Commercial .....................              --                --               --                --                --
Consumer ...........................           1,000                --               --                --                --
                                        ------------      ------------     ------------      ------------     -------------
     Total recoveries ..............    $      1,000      $         --     $         --      $        --      $          --
                                        ------------      ------------     ------------      ------------     -------------

Net charge-offs ....................    $         --      $         --     $     (7,000)     $     (2,731)    $          --
                                        ------------      ------------     ------------      ------------     -------------
Provision for loan losses ..........    $    923,070      $    498,517     $    373,999      $    283,893     $     186,322
                                        ============      ============     ============      ============     =============
Balance at end of period ...........    $  2,256,070      $  1,333,000     $    834,483      $    467,484     $     186,322
                                        ============      ============     ============      ============     =============

Period-end loans outstanding (net of
    deferred costs/fees) ...........    $146,334,331      $ 95,095,210     $ 63,237,172      $ 37,398,746     $  16,202,146
                                        ============      ============     ============      ============     =============
Average loans outstanding ..........    $120,796,806      $ 78,245,329     $ 49,878,934      $ 27,417,365     $   7,478,681
                                        ============      ============     ============      ============     =============
Allowance as a percentage of period
    end loans ......................             1.5%             1.4%              1.3%             1.2%              1.1%
                                                 ===              ===               ===              ====              ===
Loans charged off as a percentage of
     average loans outstanding .....            0.00%            0.00%             0.01%            0.01%            0.00%
                                                ====             ====              ====             ====              ===
</TABLE>

                                     - 45 -

<PAGE>



         ALLOCATION OF ALLOWANCE FOR LOAN LOSSES. The following table sets forth
the  allocation of the Bank's  allowance for loan losses by loan category at the
dates indicated.  The portion of the loan loss allowance  allocated to each loan
category does not represent the total available for future losses that may occur
within the loan category as the total loan loss allowance is a valuation reserve
applicable to the entire loan portfolio.
<TABLE>
<CAPTION>
                                                                          At December 31,
                                 ----------------------------------------------------------------------------------------------
                                              2003                              2002                              2001
                                 -----------------------------    ---------------------------        --------------------------
                                                   Percent of                    Percent of                       Percent of
                                                  Loans in Each                 Loans in Each                    Loans in Each
                                                   Category to                   Category to                      Category to
Type of Loans:                     Amount          Total Loans      Amount       Total Loans        Amount        Total Loans
-------------                    ----------      -------------    ----------    -----------        --------     --------------

<S>                               <C>                <C>           <C>                <C>         <C>                  <C>
Commercial...................     $ 135,364          6.0%          $  98,642          7.4%        $ 92,628             11.1%
Real estate construction:
    Residential..............        33,841          1.5              18,662          1.4           20,027              2.4

    Commercial...............       460,238         20.4             239,940         18.0           90,959             10.9
Real estate mortgage:
    Residential..............       277,497         12.3             185,287         13.9          137,690             16.5
    Commercial...............     1,297,240         57.5             750,479         56.3          468,979             56.2

Consumer.....................        51,890          2.3              39,990          3.0           24,200              2.9
                                 ----------        -----          ----------        -----         --------            ------
         Total...............    $2,256,070        100.0%         $1,333,000        100.0%        $834,483            100.0%
                                 ==========        =====          ==========        =====         ========            ======
<CAPTION>
                                                            At December 31,
                                      ------------------------------------------------------------
                                                   2000                            1999
                                      ---------------------------     ---------------------------
                                                       Percent of                      Percent of
                                                      Loans in Each                   Loans in Each
                                                       Category to                     Category to
Type of Loans:                         Amount         Total Loans       Amount        Total Loans
-------------                         --------       ------------     --------       ------------
<S>                                   <C>                 <C>           <C>           <C>
Commercial...................         $ 40,671             8.7%         $     --             --
Real estate construction:
    Residential..............            8,415             1.8             7,639            4.1%

    Commercial...............           93,029            19.9            28,880           15.5
Real estate mortgage:
    Residential..............          120,611            25.8            42,854           23.0
    Commercial...............          203,356            43.5           106,204           57.0

Consumer.....................            1,402             0.3               745            0.4
                                      --------           -----          --------          -----
         Total...............         $467,484           100.0%         $186,322          100.0%
                                      ========           =====          ========          =====
</TABLE>

                                     - 46 -

<PAGE>

INVESTMENT ACTIVITIES

         GENERAL.  The  investment  policy of the Bank is  established by senior
management  and  approved  by the Board of  Directors.  It is based on asset and
liability  management  goals and is  designed  to  provide a  portfolio  of high
quality  investments that foster interest income within acceptable interest rate
risk and  liquidity  guidelines.  In  accordance  with  SFAS No.  115,  the Bank
classifies  its  portfolio of investment  securities as "available  for sale" or
"held to maturity." At December 31, 2003, the Bank's  investment  policy allowed
investments in instruments  such as: (i) U.S.  Treasury  obligations,  (ii) U.S.
federal agency or federally 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.  At December 31, 2003,
the Bank held an investment  portfolio with an amortized  cost of  approximately
$14,226,881  and an estimated  fair market value of $14,323,035 or 8.2% of total
assets.  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.
<TABLE>
<CAPTION>
                                                            At December 31,
                                                  ---------------------------------------
                                                      2003         2002          2001
                                                  -----------   -----------   -----------
<S>                                               <C>           <C>           <C>
Securities Held to Maturity:
    Municipals ................................   $   548,999   $        --   $        --
    Corporate trust preferred securities ......   $   250,000       250,000       250,000
                                                  -----------   -----------   -----------
        Total securities held to maturity .....       798,999       250,000       250,000
                                                  ===========   ===========   ===========

Securities Available for Sale:
    U.S. government agencies and
         government-sponsored entity securities   $ 4,255,820   $ 4,357,738   $ 5,669,761
    Municipals ................................            --     1,000,230            --
    Mortgage-backed securities ................     6,931,181     7,481,384     7,243,036
    Mutual funds ..............................     3,136,034    10,064,145            --
                                                  -----------   -----------   -----------
        Total securities available for sale ...    14,323,035    22,903,497    12,912,797
                                                  -----------   -----------   -----------
         Total ................................   $15,122,034   $23,153,497   $13,162,797
                                                  ===========   ===========   ===========
</TABLE>


                                     - 47 -

<PAGE>

         INVESTMENT  PORTFOLIO  MATURITIES.   The  following  table  sets  forth
information regarding the scheduled maturities,  carrying values, estimated fair
values,  and  weighted  average  yields  for the Bank's  investments  securities
portfolio at December 31, 2003 by contractual maturity. The following table does
not take into  consideration the effects of scheduled  repayments or the effects
of possible prepayments.
<TABLE>
<CAPTION>
                                                                            At December 31, 2003
                                             ---------------------------------------------------------------------------------
                                                    Within One Year            One to Five Years          Five to Ten Years
                                             -------------------------   --------------------------   ------------------------
                                                Carrying       Average       Carrying      Average      Carrying      Average
                                                 Value         Yield          Value        Yield         Value        Yield
                                              ----------       ------    -------------     ------     ----------      -------

<S>                                          <C>                          <C>                        <C>
Securities Held to Maturity:
  Corporate trust preferred securities..     $         -           -%     $        -           -%    $        -           -%
  Municipals............................               -                                                548,999         2.9
                                              ----------         ---      ----------         ---     ----------         ---
     Total securities held to maturity..               -           -               -           -        548,999         2.9
                                              ----------         ---      ----------         ---     ----------         ---

Securities Available for Sale:
  U.S. government agencies,
    government-sponsored entity
    securities and corporations.........               -           -       1,273,760         3.6      1,000,000         4.5
  Mortgage-backed securities............               -           -         243,021         5.7              -           -
  Mutual funds..........................       3,162,435         2.0               -           -              -          -
                                              ----------         ---      ----------         ---     ----------         ---
      Total securities available for sale      3,162,435         2.0       1,516,781         3.9      1,000,000         4.5
                                              ----------         ---      ----------         ---     ----------         ---
      Total.............................      $3,162,435         2.0%     $1,516,781         3.9%    $1,548,999         3.9%
                                              ==========         ===      ==========         ===     ==========         ===

<CAPTION>


                                                                  At December 31, 2003
                                               -----------------------------------------------------------------------
                                                More than Ten     Years                 Total Investment Securities
                                               --------------------------    -----------------------------------------
                                               Carrying          Average       Carrying        Average        Market
                                                 Value            Yield          Value          Yield          Value
                                                ----------       -------      -----------      -------     -----------
<S>                                            <C>                  <C>       <C>                 <C>      <C>
Securities Held to Maturity:
  Corporate trust preferred securities..       $   250,000          9.5%      $   250,000         9.5%     $   250,000
  Municipals............................                 -            -           548,999         2.9          540,308
                                                ----------          ---       -----------         ---      -----------
     Total securities held to maturity..           250,000          9.5           798,999         5.0          790,308
                                                ----------          ---       -----------         ---      -----------
Securities Available for Sale:
  U.S. government agencies,
    government-sponsored entity
    securities and corporations.........         2,055,253          3.6         4,329,013         3.9        4,255,820
  Mortgage-backed securities............         6,492,412          5.2         6,735,433         5.3        6,931,181
  Mutual funds..........................                 -            -         3,162,435         2.0        3,136,034
                                                ----------          ---       -----------         ---      -----------
      Total securities available for sale        8,547,665          4.8        14,226,881         4.5       14,323,035
                                                ----------          ---       -----------         ---      -----------
      Total.............................        $8,797,665          4.9%      $15,025,880         4.8%     $15,113,343
                                                ==========          ===       ===========         ===      ===========
</TABLE>

                                    - 48 -

<PAGE>

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 $38.0 million and $29.8 million at December 31, 2003 and 2002,  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.

         The following tables detail the average amount,  the average rate paid,
and the  percentage  of each  category  to total  deposits  for the years  ended
December 31, 2003, 2002 and 2001.
<TABLE>
<CAPTION>

                                                         Year ended December 31, 2003
                                                   ----------------------------------------
                                                      Daily                        Percent
                                                     Average           Average          of
                                                     Balance            Rate         Total
                                                   ------------        -------        -----
<S>                                                <C>                  <C>            <C>
NOW and money market
    savings deposits..........................     $ 24,351,546         1.6%           19.8%
Regular savings deposits......................       22,104,323         2.2            18.0
Time deposits.................................       67,298,382         3.2            54.7
                                                   ------------                       -----
      Total interest-bearing deposits.........      113,754,251                        92.5

Non interest-bearing demand deposits..........        9,270,022                         7.5
                                                   ------------                       -----
      Total deposits..........................     $123,024,273                       100.0%
                                                   ============                       =====
<CAPTION>

                                                         Year ended December 31, 2002
                                                   ----------------------------------------
                                                      Daily                        Percent
                                                     Average           Average          of
                                                     Balance            Rate         Total
                                                   ------------        -------        -----
<S>                                                <C>                  <C>            <C>
NOW and money market
    savings deposits..........................     $13,313,873          2.5%           16.0%
Regular savings deposits......................       5,787,414          3.0             7.0
Time deposits.................................      55,150,628          4.0            66.2
                                                   -----------                        -----
      Total interest-bearing deposits.........      74,251,915                         89.2

Non interest-bearing demand deposits..........       8,968,835                         10.8
                                                   -----------                        -----
      Total deposits..........................     $83,220,750                        100.0%
                                                   ===========                        =====
</TABLE>

                                                      - 49 -

<PAGE>
<TABLE>
<CAPTION>
                                                         Year ended December 31, 2001
                                                   ----------------------------------------
                                                      Daily                        Percent
                                                     Average           Average          of
                                                     Balance            Rate         Total
                                                   ------------        -------        -----
<S>                                                <C>                  <C>            <C>
NOW and money market
    savings deposits...........................    $ 7,160,038           3.2%         13.9%
Regular savings deposits.......................      1,797,774           2.9           3.5
Time deposits..................................     37,280,363           5.8          72.5
                                                   -----------                       -----
      Total interest-bearing deposits..........     46,238,175                        89.9

Non interest-bearing demand deposits...........      5,174,400                        10.1
                                                   -----------                       -----
      Total deposits...........................    $51,412,575                       100.0%
                                                   ===========                       =====
</TABLE>

         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,
2003.


                                                   Certificates
Maturity Period                                     of Deposits
---------------                                    ------------

Within three months........................         $ 9,721,923
Three through six months...................                   -
Six through twelve months..................          15,680,999
Over twelve months.........................          17,403,822
                                                    -----------
   Total...................................         $42,806,744
                                                    ===========

         BORROWINGS.  Borrowings  consist of reverse  repurchase  agreements 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
FHLB outstanding during 2003, 2002 and 2001 had maturities of five years or less
and cannot be prepaid without penalty.

         The  following  table  sets  forth  information  regarding  the  Bank's
borrowed funds:
<TABLE>
<CAPTION>
                                                               December 31,
                                                 ------------------------------------------
                                                    2003            2002            2001
                                                 -----------    -----------    ------------
<S>                                              <C>            <C>            <C>
Amount outstanding at year end ...............   $10,340,123    $ 4,948,690    $ 6,835,000
Weighted average interest rates at year end ..           1.8%           3.0%           4.0%
Maximum outstanding at any month end .........   $14,195,110    $ 9,375,000    $ 6,835,000
Average outstanding ..........................   $ 7,827,679    $ 6,888,307    $ 3,934,378
Weighted average interest rate during the year           2.1%           3.6%           5.1%
</TABLE>

PROPERTIES

         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.

                                     - 50 -


<PAGE>


         The  Bank  also  conducts  business  from  a  full-service   office  in
Northfield,  Atlantic County, New Jersey and a full-service office in Washington
Township,  Gloucester County, New Jersey.  These offices were opened by the Bank
in September  2002, and February 2003,  respectively.  The Northfield  Office is
leased.

         Management  considers the physical  condition of all offices to be good
and adequate for the conduct of the Bank's  business.  At December 31, 2003, net
property and equipment totaled approximately $3.2 million.

LEGAL PROCEEDINGS

         There are various claims and lawsuits in which the Bank is periodically
involved,  such  as  claims  to  enforce  liens,   condemnation  proceedings  on
properties  in which the Bank holds  security  interests,  claims  involving the
making and servicing of real property  loans,  and other issues  incident to the
Bank's business. In the opinion of management, no material loss is expected from
any of such pending claims or lawsuits.  Furthermore,  at December 31, 2003, the
Bank was not a party to any administrative or judicial proceedings arising under
Section 8 of the Federal Deposit Insurance Act.

                                   REGULATION

REGULATION OF PARKE BANK

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

         On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act
of 2002 (the "Act").  The  Securities  and Exchange  Commission  (the "SEC") has
promulgated certain regulations pursuant to the Act and will continue to propose
additional implementing or clarifying regulations as necessary in furtherance of
the Act.  The  passage  of the Act and the  regulations  implemented  by the SEC
subject  publicly-traded  companies to additional and more cumbersome  reporting
regulations   and  disclosure.   Compliance  with  the  Act  and   corresponding
regulations may increase the Bank's expenses.

         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.


                                     - 51 -

<PAGE>



         INSURANCE OF DEPOSITS.  The Bank's deposits are insured up to a maximum
of $100,000 per depositor  under the Bank  Insurance  Fund of the FDIC. The FDIC
has  established  a  risk-based  assessment  system for all  insured  depository
institutions.  Under the risk-based assessment system, deposit insurance premium
rates range from 0-27 basis  points.  Currently,  the Bank's  deposit  insurance
premium has been assessed at zero basis points of deposits.

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

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

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

         At December  31, 2004,  the Bank had the  requisite  capital  levels to
qualify as "well capitalized."

REGULATION OF PARKE BANCORP, INC.

         GENERAL.  Upon completion of the  Reorganization,  Parke Bancorp,  Inc.
will  become a bank  holding  company  within the  meaning  of the Bank  Holding
Company Act of 1956 (the "Act").  The Company will be subject to  regulation  by
the Federal  Reserve  Board.  The Federal  Reserve  Board will have  enforcement
authority  over Parke  Bancorp,  Inc. and its non-bank  subsidiaries  which also
permits the Federal  Reserve Board to restrict or prohibit  activities  that are
determined to be a serious risk to the  subsidiary  bank.  This  regulation  and
oversight is intended primarily for the protection of the depositors of the Bank
and not for shareholders of Parke Bancorp, Inc.

         A bank holding company is prohibited  under the Act from engaging in or
acquiring direct or indirect control of more than 5% of the voting shares of any
company engaged in non-banking  activities  unless the Federal Reserve Board, by
order or  regulation,  has found such  activities  to be so  closely  related to
banking or managing or controlling banks as to be a proper incident thereto.  In
making such  determinations,  the Federal  Reserve Board  considers  whether the
performance of these  activities by a bank holding  company would offer benefits
to the public that outweigh the possible adverse effects.


                                     - 52 -

<PAGE>


         As a bank holding company, Parke Bancorp, Inc. will be required to file
with the Federal  Reserve Board an annual report and any additional  information
as the  Federal  Reserve  Board may  require  pursuant  to the Act.  The Federal
Reserve Board will also examine Parke Bancorp, Inc. and its subsidiaries.

         Subsidiary  banks of a bank  holding  company  are  subject  to certain
restrictions  imposed  by the 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 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 Parke
Bancorp,  Inc.,  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 issuance of Parke Bancorp,  Inc.'s common
stock in  connection  with the  Reorganization  has been  registered  under  the
Securities Act of 1933. In addition,  upon  consummation of the  Reorganization,
Parke  Bancorp,  Inc.  will register its common stock under Section 12(g) of the
Securities  Exchange Act of 1934, as amended (the "1934 Act") and become subject
to the periodic  reporting and other  requirements  of Section 12(g) of the 1934
Act,  as  amended.  Parke Bank will,  after the  Reorganization,  no longer file
reports under the 1934 Act with the FDIC.

                                   MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

         The  following  table sets forth the names,  ages,  terms of, length of
board service and the number and percentage of shares of Parke Bank common stock
beneficially owned by the directors and executive officers of the Bank.

                                                     SHARES OF
                           AGE AT     YEAR FIRST    COMMON STOCK     PERCENT
                        DECEMBER 31,  ELECTED OR    BENEFICIALLY        OF
NAME                        2004      APPOINTED      OWNED (1)        CLASS
----                        ----      ---------      ---------        -----

DIRECTORS:
Celestino R. Pennoni         67         1998       ______(2)
Vito S. Pantilione           53         1998       ______(3)
Fred G. Choate               59         2003       ______
Daniel J. Dalton             55         2001       ______(4)
Arret F. Dobson              33         1998       ______(5)
Thomas Hedenberg             60         1998       ______(6)
Edward Infantolino           57         1998       ______(7)
Anthony J. Jannetti          67         1999       ______(8)




                                     - 53 -

<PAGE>




Jeffrey H. Kripitz           53         1998       ______(9)
Richard Phalines             62         1998       ______(10)
Jack C. Sheppard, Jr.        51         1998       ______(11)
Ray H. Tresch                67         1998       ______(12)

EXECUTIVE OFFICERS:
Ernest D. Huggard            47          N/A       ______(13)
David O. Middlebrook         46          N/A       ______(14)
Elizabeth Milavsky           53          N/A       ______

-----------------

(1)      Beneficial  ownership as of the Record Date.  Includes shares of common
         stock held directly as well as by spouses or minor children,  in trust,
         and other indirect beneficial ownership.
(2)      Includes _______ shares of common stock which may be acquired  pursuant
         to the exercise of warrants within 60 days of the Record Date.
(3)      Includes _______ shares of common stock which may be acquired  pursuant
         to the  exercise  of  options  within  60 days of the  Record  Date and
         _______  shares of common  stock which may be acquired  pursuant to the
         exercise of warrants within 60 days of the Record Date.
(4)      Includes _______ shares of common stock which may be acquired  pursuant
         to the exercise of warrants within 60 days of the Record Date.
(5)      Includes _______ shares of common stock which may be acquired  pursuant
         to the exercise of warrants within 60 days of the Record Date.
(6)      Includes _______ shares of common stock which may be acquired  pursuant
         to the exercise of warrants within 60 days of the Record Date.
(7)      Includes _______ shares of common stock which may be acquired  pursuant
         to the exercise of warrants within 60 days of the Record Date.
(8)      Includes _______ shares of common stock which may be acquired  pursuant
         to the exercise of warrants within 60 days of the Record Date.
(9)      Includes _______ shares of common stock which may be acquired  pursuant
         to the exercise of warrants within 60 days of the Record Date.
(10)     Includes _______ shares of common stock which may be acquired  pursuant
         to the exercise of warrants within 60 days of the Record Date.
(11)     Includes _______ shares of common stock which may be acquired  pursuant
         to the exercise of warrants within 60 days of the Record Date.
(12)     Includes _______ shares of common stock which may be acquired  pursuant
         to the exercise of warrants within 60 days of the Record Date.
(13)     Includes _______ shares of common stock which may be acquired  pursuant
         to the  exercise  of  options  within  60 days of the  Record  Date and
         _______  shares of common  stock which may be acquired  pursuant to the
         exercise of warrants within 60 days of the Record Date.
(14)     Includes _______ shares of common stock which may be acquired  pursuant
         to the  exercise  of  options  within  60 days of the  Record  Date and
         _______  shares of common  stock which may be acquired  pursuant to the
         exercise of warrants within 60 days of the Record Date.

         Set forth below is the business  experience  for the past five years of
each of the directors and executive officers of the Bank.

         C.R.  ("Chuck")  Pennoni.  Mr.  Pennoni is the Chairman of the Board of
Directors of the Bank.  From 1996 to the present,  Mr. Pennoni has been chairman
and chief executive officer of Pennoni Associates,  Inc.,  Consulting Engineers,
employing  over 600  professionals  and support staff with offices in the United
States, Mexico City, Shin Yokohama, Okinawau and Metro Manila.

         Vito S. Pantilione.  From the time of the Bank's formation in 1998, Mr.
Pantilione  has  served as the  President  and  Chief  Executive  Officer  and a
director of the Bank. Mr.  Pantilione  previously was the president and owner of
Eagle  Valley,   a  diversified   mortgage   company  located  in  Philadelphia,
Pennsylvania.  From  1992  to  1994,  he was  employed  as  president  of  First
Commercial Bank of Philadelphia. In addition,

                                     - 54 -

<PAGE>



he previously was the president and owner of Interstate Mortgage  Management,  a
mortgage  brokerage company located in South Jersey,  and was the executive vice
president of First Federal Savings of Hammonton. Mr. Pantilione also serves as a
member of the  foundation  board of directors of the Rowan  University  Business
College.

         Fred G. Choate. Mr. Choate is the President and controlling shareholder
of Greater  Philadelphia  Venture  Capital  Corporation,  a position he has held
since 1997. From 1987 to 1997, Mr. Choate was a principal in Sandhurst  Company,
a venture capital fund. Mr. Choate has also served on the audit committee of the
board of directors of another financial institution and a medical corporation.

         Daniel J. Dalton.  Mr. Dalton is president of Dalton Insurance  Agency,
LLC located in Glassboro,  New Jersey.  From 1992 to 1994,  Mr. Dalton served as
the 26th  Secretary of the State of New Jersey.  From 1979 to 1992,  Mr.  Dalton
served in the New Jersey State Legislature.

         Arret Dobson.  From 1989 to the present,  Mr. Dobson has been a builder
and land developer,  developing numerous residential and commercial projections.
Mr.  Dobson is president  of, and has an  ownership  interest in, the White Oaks
Country Club located in Newfield,  New Jersey,  and the Riverwinds Tennis Center
and Golf Club located in West Deptford Township, New Jersey.

         Thomas Hedenberg. Mr. Hedenberg is Vice-Chairman of the Bank. From 1969
to the present, Mr. Hedenberg has been a builder and land developer,  developing
numerous residential,  commercial and industrial projects.  Some of his projects
include Hollydell  Business Park,  Glassboro  Business Park, Bunker Hill Medical
Center,  Wedgewood Village Shopping Center and Point Shopping Center. One of his
current  projects  is the  Parke  Place  Community,  where the Bank has its main
offices.  He has also  developed  and is a general  partner in the Hollydell Ice
Arena.  His projects  include the Parke Place  Community  where the Bank has its
main offices and development of office and retail  buildings and  age-restricted
apartments at the Riverwinds Community in West Deptford, New Jersey.

         Edward  Infantolino.  Dr.  Infantolino  is president of Ocean  Internal
Medicine  Associates,  P.A. and has  practiced as an internist in both  Atlantic
City and Somers Point, New Jersey since 1977. Dr. Infantolino is a long-standing
member of the New Jersey and  Atlantic  County  Medical  Societies  as well as a
member of the National  Association of Realtors,  the New Jersey  Association of
Realtors and the Atlantic City and County Board of Realtors. He was a co-founder
of  Premium  Federal  Savings  Bank and  served as a  director  of that bank for
approximately ten years.

         Anthony J. Jannetti.  Mr. Jannetti is president of Anthony J. Jannetti,
Inc.,  a  national  health  care  marketing,   communications,   publishing  and
management firm located in Pitman,  New Jersey. Mr. Jannetti currently serves on
the Board of Trustees of the Education Foundation, the Samaritan Foundation, the
Nursing  Economic  Foundation and the Foundation of the National  Student Nurses
Association.  He is also an Honorary Member of the American  Nephrology  Nurses'
Association,  National  Student  Nurses'  Association,  National  Association of
Orthopedic  Nurses,  National  Association  of Pediatric  Nurse  Associates  and
Practitioners and The Oncology Nursing Society. Mr. Jannetti is also a member of
The American  Society of Association  Executives,  The Health Care Marketing and
Communications   Counsel  and  The   Professional   Convention   and  Management
Association.

         Jeffrey  H.  Kripitz.  Mr.  Kripitz is the owner and  operator  of Jeff
Kripitz Agency in Northfield,  New Jersey.  He specializes in employee  benefits
such  as  life,   health  and  long  term  care  insurance  for  businesses  and
individuals. He was an advisory board member of Premium Federal Savings Bank. He
has been a member of the Board of Directors of Linwood Golf and Country Club for
15 years. He was recently a

                                     - 55 -

<PAGE>



division   chairman  for  the  Jewish  Community  Center  Capital  Campaign  and
previously was Chairman of Beth Israel Synagogue Capital Campaign.

         Richard  Phalines.  Mr. Phalines has been the co-owner of Concord Truss
Company since 1982.  Mr.  Phalines is currently  chairman of the local  Planning
Board in Woodbury Heights.

         Jack C. Sheppard,  Jr. From 1983 to the present,  Mr. Sheppard has been
employed as vice president and treasurer of Storrie,  Budd & Jones Agency, Inc.,
providing full service insurance  products.  Mr. Sheppard is the Chairman of the
Board of Trustees of Underwood Memorial Hospital  Foundation.  He also currently
serves on the Board of  Trustees  of the  Community  Mental  Health  Center  for
Gloucester County and the Woodbury Chamber of Commerce.

         Ray H.  Tresch.  Mr.  Tresch  has been the owner  and  chief  executive
officer of Redy Mixt  Konkrete in Woodbury,  New Jersey for forty  years.  He is
also a real estate developer in many various projects in Gloucester  County, New
Jersey.  He is also  currently  the  secretary  and  partner of Pearla  Block in
Moorestown,  New Jersey,  and Gibbsboro Block in Voorhees,  New Jersey,  and the
managing  partner of Hollydell  Ice Arena.  Mr.  Tresch is also a partner in the
development  of office,  retail,  retail and  age-restricted  apartments  at the
Riverwinds Community in West Deptford, New Jersey.

         Ernest D. Huggard.  Mr.  Huggard is the Senior Vice President and Chief
Financial  Officer of the Bank. From 1989 to 1994, Mr. Huggard was the President
and Chief Executive  Officer of Roebling  Savings Bank in Roebling,  New Jersey.
From 1982 to 1988, he was the Chief Financial  Officer and Controller for Empire
Savings  Bank in  Hammonton,  New  Jersey.  Mr.  Huggard is a  Certified  Public
Accountant and has over twenty-two years of financial  industry  experience.  He
serves as president of the Board of Education for Galloway Township,  New Jersey
and is a member of the board of  directors  of  Career  Opportunity  Development
Incorporated.  He also serves as a Lieutenant Colonel in the New Jersey National
Guard..

         David O.  Middlebrook.  Mr.  Middlebrook is the Senior Vice  President,
Senior Loan  Officer and  Corporate  Secretary  of the Bank.  He has over twenty
years  experience in the commercial  banking industry with a focus on commercial
lending.  Mr. Middlebrook also serves as treasurer of the board of directors for
The  Arc  of  Atlantic   County,   a   non-profit   entity  that   supports  the
developmentally disabled.

         Elizabeth  Milavsky is a Senior Vice President.  She joined the Bank in
2004.  From 1982 until 2004,  Ms.  Milavsky was employed by Roxborough  Manayunk
Bank,  Philadelphia,  Pennsylvania,  as Senior  Vice  President/Operations  with
responsibility   for  the   supervision  of  Electronic   Banking,   Information
Technology,  Retirement  and  Check  Processing  Departments,  as  well  as  the
operations of the retail branch network.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

         The Board of Directors  conducts its business  through  meetings of the
Board and through  activities of its committees.  During the year ended December
31, 2004, the Board of Directors met ten times,  including  regularly  scheduled
meetings and special meetings.  No director attended fewer than 75% of the total
meetings of the Board of Directors  and meetings of the  committees  on which he
served  during the year ended  December 31, 2004.  The Board  maintains an Audit
Committee,  as well as a Loan Committee, a Compensation Committee, an Investment
and Asset Liability Committee, a Marketing Committee, an Asset Quality Committee
and a Nominating Committee.

         The Audit Committee consists of Directors Choate,  Dalton and Phalines.
The Board of Directors has  determined  that Mr. Choate,  is an Audit  Committee
Financial  Expert within the meaning of the  regulations  of the  Securities and
Exchange  Commission.  The Board of  Directors  as a whole has adopted a written
charter for the Audit  Committee,  and a copy of the charter was  attached as an
appendix   to  the  2003   proxy   statement.   The   Audit   Committee's   main
responsibilities include establishing and reviewing the Bank's internal controls
and operating  procedures to ensure  compliance by the Bank with all  applicable
laws,  regulations,   generally  accepted  accounting  standards  and  customary
operating  procedures  and  practices.  The Audit  Committee  also  monitors the
adequacy of the Bank's allowance for loan losses and the results of

                                     - 56 -

<PAGE>



examinations by the Bank's regulators and the Bank's independent auditor. During
the year ended December 31, 2004, this committee met five times.

         Other than Director Phalines, all of the members of the Audit Committee
are currently considered  independent under the rules of the Nasdaq Stock Market
which  require the Bank to have an audit  committee  consisting of a majority of
independent directors. Mr. Phalines has been determined not to be independent in
accordance  with the rules of the  Nasdaq  Stock  Market as a result of the Bank
having  previously  leased its main  office  building  from a limited  liability
company whose principals included Mr. Phalines.  The Bank purchased the building
from such company on December 15, 2002, for fair market value. Nonetheless,  the
Board believed that Director  Phalines would be an effective member of the Audit
Committee  and that  his  appointment  to the  Audit  Committee  was in the best
interests of the Bank and its shareholders.

         The  Bank's  Compensation  Committee  consists  of  Directors  Pennoni,
Hedenberg  and  Phalines.  The  Compensation  Committee did not hold an official
meeting during 2004.

         Report of the Audit  Committee.  For the fiscal year ended December 31,
2004,  the Audit  Committee:  (i)  reviewed  and  discussed  the Bank's  audited
financial statements with management, (ii) discussed with the Bank's independent
auditor,  McGladrey & Pullen,  LLP, all matters  required to be discussed  under
Statement on Auditing  Standards  No. 61, and (iii)  received  from  McGladrey &
Pullen,  LLP disclosures  regarding  McGladrey & Pullen,  LLP's  independence as
required by  Independence  Standards  Board  Standard No. 1 and  discussed  with
McGladrey & Pullen,  LLP its  independence.  Based on the  foregoing  review and
discussions,  the Audit Committee recommended to the Board of Directors that the
audited  financial  statements  be included in the Bank's  Annual Report on Form
10-KSB for the fiscal year ended December 31, 2004.

         Audit Committee:

         Fred G. Choate (Chairman)
         Daniel J. Dalton
         Richard Phalines

PRINCIPAL ACCOUNTING FEES AND SERVICES

         Effective  July 30, 2002,  the  Securities and Exchange Act of 1934 was
amended by the  Sarbanes-Oxley  Act of 2002 to require all auditing services and
non-audit services provided by an issuer's independent auditor to be approved by
the issuer's  audit  committee  prior to such services  being  rendered or to be
approved  pursuant to  pre-approval  policies and procedures  established by the
issuer's audit  committee.  The Company's  Audit  Committee has not  established
pre-approval  procedures and instead specifically approves each service prior to
the engagement of the auditor for all audit and non-audit services.

         It is the  Audit  Committee's  policy  to  pre-approve  all  audit  and
non-audit services prior to the engagement of the Bank's independent  auditor to
perform any  service.  All of the  services  listed above for 2003 and 2004 were
approved by the audit committee prior to the service being rendered.  All of the
services  listed  below for 2004 and 2003 were  approved by the Audit  Committee
prior to the  service  being  rendered.  There  were no  services  that were not
recognized to be non-audit services at the time of engagement that were approved
after the fact.

         Audit Fees.  The aggregate  fees billed by McGladrey & Pullen,  LLP for
professional  services rendered for the audit of the Bank's annual  consolidated
financial statements and for the review of the consolidated financial statements
included in the Bank's  Quarterly  Reports on Form  10-QSB for the fiscal  years
ended December 31, 2004 and 2003, and for services in connection with the Bank's
stock offering

                                     - 57 -

<PAGE>



completed in November 2002,  including  review of the Bank's offering  circular,
issuance of the comfort  letter and bring down  letters and review of the Bank's
registration  statement on Form 10-SB filed with the FDIC and related  technical
research, were $69,750 and $63,000, respectively.

         Audit  Related  Fees.  There were no fees billed by McGladrey & Pullen,
LLP for  assurance  and  related  services  related  to the audit of the  annual
financial  statements or to the review of the quarterly financial statements for
the years ended December 31, 2004 and 2003.

         Tax  Fees.  The  aggregate  fees  billed  by RSM  McGladrey,  Inc.  for
professional  services  rendered for tax compliance,  tax advice or tax planning
for the  years  ended  December  31,  2004  and 2003  were  $7,594  and  $5,532,
respectively.

         All Other Fees.  There were no fees billed by  McGladrey & Pullen,  LLP
for  professional  services  rendered for services or products  other than those
listed under the captions "Audit Fees," "Audit-Related Fees," and "Tax Fees" for
the years ended December 31, 2004 and 2003.

DIRECTOR NOMINATION PROCESS

         The Bank's  nominating  committee is comprised of Directors  Choate and
Dalton who are  independent  directors.  The  committee met once during the year
ended  December  31, 2004 in this  capacity.  The Board has adopted a nominating
committee charter,  and a copy of the charter was attached as an appendix to the
2004 proxy statement.

         The Bank does not pay fees to any third  party to  identify or evaluate
or assist in  identifying  or  evaluating  potential  nominees.  The process for
identifying  and  evaluating   potential  Board  nominees  includes   soliciting
recommendations from directors and officers of the Bank. Additionally, the Board
will consider  persons  recommended by shareholders of the Bank in selecting the
Board's  nominees for  election.  There is no  difference in the manner in which
persons  recommended  by directors or officers  versus  persons  recommended  by
shareholders in selecting Board nominees are evaluated.

         To be considered in the  selection of Board  nominees,  recommendations
from  shareholders  must be received by the Bank in writing by at least 120 days
prior to the date the proxy statement for the previous year's annual meeting was
first   distributed  to  shareholders.   Recommendations   should  identify  the
submitting shareholder, the person recommended for consideration and the reasons
the submitting shareholder believes such person should be considered.  The Board
believes  potential   directors  should  be  knowledgeable  about  the  business
activities and market areas in which the Bank engages.

SHAREHOLDER COMMUNICATIONS

         The Board of Directors does not have a formal process for  shareholders
to send  communications  to the Board. In view of the infrequency of shareholder
communications  to the Board of  Directors,  the Board does not  believe  that a
formal process is necessary.  Written  communications  received by the Bank from
shareholders  are shared  with the full  Board no later than the next  regularly
scheduled Board meeting. The Board encourages,  but does not require,  directors
to attend  the  annual  meeting  of  shareholders.  All of the  Board's  members
attended the 2004 annual meeting of shareholders.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         A member  of the  Board  of  Directors,  Jack C.  Sheppard,  Jr.,  is a
principal of a commercial  insurance  agency that  provides all of the insurance
coverage for the Bank. The cost of such insurance was

                                                      - 58 -

<PAGE>



approximately  $102,100  and $80,700 for the years ended  December  31, 2004 and
2003,  respectively.  An insurance agency owned by another director of the Bank,
Jeffrey  H.  Kripitz,   provides  employee  benefits  (medical  insurance,  life
insurance  and  disability  insurance)  to the Bank.  The cost of such  employee
benefits  totaled  approximately  $196,800  and  $150,700  for the  years  ended
December 31, 2004 and 2003, respectively.

         In the normal  course of its business as a financial  institution,  the
Bank has granted loans to its  officers,  directors  and their  affiliates.  The
terms of these related party loans,  including  interest  rates,  collateral and
repayment  terms,  are similar to those  prevailing for comparable  transactions
with  other   customers   and  do  not  involve  more  than  a  normal  risk  of
collectibility  or  other  unfavorable  features.  At  December  31,  2004,  the
aggregate  outstanding  principal  balance of all such  related  party loans was
$10.2 million and all such loans were current and performing in accordance  with
their terms.

DIRECTOR AND EXECUTIVE OFFICER COMPENSATION

         BOARD FEES.  Each director,  other than the Chairman and Vice Chairman,
is paid a fee of $300 per Board meeting.  The Chairman and Vice Chairman receive
a fee of $650 and $430,  respectively,  per meeting.  The total fees paid to the
directors for the year ended December 31, 2004 were approximately  $51,800.  Mr.
Pantilione,  who also serves as  President  and Chief  Executive  Officer of the
Bank, does not receive compensation as a director.

         SUMMARY   COMPENSATION  TABLE.  The  following  table  sets  forth  the
compensation  awarded  to or earned by the  Bank's  President,  Chief  Financial
Officer and Senior Loan Officer for the three years ended  December 31, 2004. No
other officer received a total annual salary and bonus in excess of $100,000 for
2004.

<TABLE>
<CAPTION>

                                                                  ANNUAL                  LONG-TERM COMPENSATION
                                                               COMPENSATION                       AWARDS
                                                               ------------             ----------------------------
                                                                                                         SECURITIES
                                                                                        RESTRICTED       UNDERLYING
                                          FISCAL                                           STOCK          OPTIONS/      ALL OTHER
NAME AND PRINCIPAL POSITION                YEAR          SALARY           BONUS           AWARDS           SARS(#)   COMPENSATION(1)
---------------------------                ----          ------           -----           ------           -------   ---------------

<S>                                     <C>          <C>         <C>              <C>                   <C>           <C>
Vito S. Pantilione, President and          2004         $210,000    $           -    $        -              600           $ 4,200
  Chief Executive Officer                  2003          195,000           97,500             -           15,959             4,000
                                           2002          175,000           87,500             -            7,872             2,745

Ernest D. Huggard, Senior Vice             2004         $113,750    $           -    $        -            2,400           $ 2,415
  President and Chief Financial            2003          110,000           15,000             -            9,900             2,500
   Officer                                 2002           95,000           25,000             -            8,580             1,994

David O. Middlebrook, Senior               2004         $ 94,500    $           -    $        -            2,400           $ 1,961
  Vice President, Senior Loan              2003           85,000           28,000             -            6,600             2,260
   Officer and Corporate                   2002           72,000           10,000             -            4,620            11,308
   Secretary

</TABLE>
-----------------
(1)      For the year ended December 31, 2004,  consists of Bank's  contribution
         to the  individual's  simple IRA account of $4,200,  $2,415 and $1,961,
         respectively, to Messrs. Pantilione, Huggard and Middlebrook.


         EMPLOYMENT  AGREEMENTS.   The  Bank  has  entered  into  an  employment
agreement with Mr. Pantilione. Mr. Pantilione's base salary under the employment
agreement for the year ended  December 31, 2004 was $210,000.  Mr.  Pantilione's
employment  agreement has a term of three years that is  automatically  extended
for one year on January 1st of each year , unless notice of  termination  of the
automatic  extension  is given in  accordance  with the terms of the  employment
agreement. The employment agreement may be

                                     - 59 -

<PAGE>



terminated  by the Bank for  "cause" as defined  in the  agreement.  If the Bank
terminates Mr.  Pantilione's  employment without just cause, he will be entitled
to a  continuation  of his  salary  from the  date of  termination  through  the
remaining term of the agreement.  The employment  agreement contains a provision
stating that after Mr. Pantilione's  employment is terminated in connection with
any change in control, he will be paid a lump sum amount equal to the balance of
the annual  compensation  due under the  agreement  plus an amount  equal to 3.0
times the highest  rate of bonus  awarded to him during the three years prior to
such  termination.  If payment had been made under the  agreement as of December
31,  2004,  the  payment  to Mr.  Pantilione  would have  equaled  approximately
$945,000. The employment agreement also grants the right of the employee, within
six months following a termination  without cause or a voluntary  termination by
the  employee  for good  reason,  to require the Bank to  repurchase  all of the
employee's  shares of common stock of the Bank then owned by the employee at the
closing price of such stock on the business day  immediately  preceding the date
of notice of the employee's  exercise of this right.  The  employment  agreement
also contains an agreement not to compete with the Bank which restricts  certain
post-employment  activities of the employee  within the Counties of  Gloucester,
Camden, Salem or Cumberland,  New Jersey, for two years following termination of
employment with the Bank.

         SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("SERP"). The Bank implemented a
SERP program effective January 1, 2003. Vito S. Pantilione, President, Ernest D.
Huggard, Senior Vice President, and David O. Middlebrook, Senior Vice President,
are each  participants  in the plan.  Under the plan,  retirement  benefits  are
payable to such  participant  commencing upon retirement after attainment of age
60 at the rate of 50% of their highest base salary paid while an employee of the
Bank for the remainder of their life. If such  retirement  benefit  payments are
made for less than ten years,  a survivor  benefit will  continue to be paid for
the balance of such ten year period. Such benefits are in addition to any social
security  benefits.  Upon a change of  control  of the Bank prior to the date of
retirement  of  a   participant,   all  benefits  shall  be  deemed  earned  and
non-forfeitable  as if such  participant had attained his or her retirement date
at age 60. A  participant  may  elect to retire  after age 55 and such  benefits
payable shall be actuarially reduced to reflect the earlier payment commencement
date.  If a  participant  dies  prior to age 60 while  employed  by the Bank,  a
survivor benefit will be paid equal to 100% of the participant's  highest salary
for one year and 50% of such salary for four  additional  years.  Benefits under
the plan  may be paid in the form of a  lump-sum  on an  actuarially  equivalent
basis.  As of December  31,  2004,  the Bank had total  accrued  plan expense of
$206,809  with respect to benefits  payable under the SERP.  Benefits  under the
SERP  will be a tax  deductible  expense  to the  Bank at the time  that  actual
benefit  payments  are made.  The Bank has  invested in various  life  insurance
agreements with policy proceeds payable to the Bank in the event of the death of
plan  participants.  Such  insurance  proceeds  and  earnings  related  to  such
investments  are  anticipated  to  exceed  any plan  costs  related  to  benefit
payments.

         STOCK OPTIONS.  The following table sets forth  information  concerning
options  granted to the named  executive  officers  during the fiscal year ended
December 31, 2004. The Bank has not granted to the named executive  officers any
stock appreciation rights.

                                     - 60 -

<PAGE>

<TABLE>
<CAPTION>



                                          Option Grants in Last Fiscal Year
                         ----------------------------------------------------------
                         Individual Grants
                          Number of         % of Total
                         Securities           Options
                         Underlying         Granted to    Exercise or
                           Option          Employees in   Base Price     Expiration
           Name          Granted (#)        Fiscal Year     ($/Sh)           Date
           ----          -----------        -----------     ------           ----

<S>                      <C>               <C>         <C>           <C>
Vito S. Pantilione             600               4.8%        $15.00     February 2014
Ernest D. Huggard            2,400              19.3%        $15.00     February 2014
David O. Middlebrook         2,400              19.3%        $15.00     February 2014

</TABLE>


         The following table sets forth information  concerning  options held by
the named  executive  officers as of December 31, 2004. The Bank has not granted
to the named executive officers any stock appreciation rights.

<TABLE>
<CAPTION>

                                AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                                       AND FISCAL YEAR END OPTION/SAR VALUES

                                                                               Number of Securities       Value of Unexercised
                                                                              Underlying Unexercised          in-the-Money
                               Average         Shares                         Options/SARs at Fiscal     Options/SARs at Fiscal
                               Exercise     Acquired on         Value         Year-End Exercisable/       Year-End Exercisable/
           Name                 Price       Exercise (#)     Realized ($)       Unexercisable (#)         Unexercisable ($)(1)
------------------------------------------------------------------------------------------------------------------------------

<S>                          <C>            <C>              <C>                 <C>      <C>               <C>       <C>
Vito S. Pantilione                 $ 8.40       N/A               N/A               64,031 / 0                 677,448 / 0
Ernest D. Huggard                  $ 9.64       N/A               N/A               23,190 / 0                 216,595 / 0
David O. Middlebrook               $10.06       N/A               N/A               15,270 / 0                 136,208 / 0


(1) Based on $18.98 per share,  the closing  price of the Bank's common stock on
    December 31, 2004.
</TABLE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Persons and groups owning in excess of 5% of the outstanding  shares of
the Bank's common stock are required to file reports  regarding  such  ownership
pursuant to the  Securities  Exchange Act of 1934,  as amended (the "1934 Act").
The following table sets forth, as of the Record Date, persons or groups who own
more than 5% of the  Bank's  common  stock and the  ownership  of all  executive
officers  and  Directors  of the Bank as a  group.  Other  than as noted  below,
management knows of no person or group that owns more than 5% of the outstanding
shares of the Bank's common stock at the Record Date.
<TABLE>
<CAPTION>

                                                                      PERCENT OF SHARES OF
                                              AMOUNT AND NATURE OF        COMMON STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER         BENEFICIAL OWNERSHIP(1)      OUTSTANDING
------------------------------------         -----------------------      -----------

<S>                                           <C>
Vito S. Pantilione                                 _______(2)
601 Delsea Drive
Washington Township, New Jersey 08080

Celestino R. Pennoni                               _______(3)
601 Delsea Drive
Washington Township, New Jersey 08080

Jeffrey H. Kripitz                                 _______(4)
601 Delsea Drive
Washington Township, New Jersey 08080

</TABLE>

                                                      - 61 -

<PAGE>





All directors and executive officers of the            _______(5)
     Bank as a group (15 persons)

(1)  Includes  shares of common  stock  held  directly  as well as by spouses or
     minor children, in trust and other indirect beneficial ownership.

(2)  Includes  _______ shares of common stock which may be acquired  pursuant to
     the  exercise  of  options  within 60 days of the Record  Date and  _______
     shares of common  stock which may be acquired  pursuant to the  exercise of
     warrants within 60 days of the Record Date.

(3)  Includes  _______ shares of common stock which may be acquired  pursuant to
     the exercise of warrants within 60 days of the Record Date.

(4)  Includes  _______ shares of common stock which may be acquired  pursuant to
     the exercise of warrants within 60 days of the Record Date.

(5)  Includes  _______ shares of common stock which may be acquired  pursuant to
     the  exercise  of  options  within 60 days of the Record  Date and  _______
     shares of common  stock which may be acquired  pursuant to the  exercise of
     warrants within 60 days of the Record Date.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the  Securities  and Exchange Act of 1934, as amended,
requires the Bank's officers and directors, and persons who own more than 10% of
the Bank's common  stock,  to file reports of ownership and changes in ownership
with the Federal Deposit Insurance Corporation ("FDIC") and to provide copies of
those reports to the Bank.  The Bank is not aware of any  beneficial  owner,  as
defined under Section 16(a), of more than 10% of its common stock.  Based on the
Bank's  review  of such  ownership  reports  furnished  to the  Bank or  written
representations  from certain  reporting  persons,  no officer,  director or 10%
beneficial  owner of the Bank failed to file such ownership  reports on a timely
basis during the fiscal year ended December 31, 2004.

                          DESCRIPTION OF CAPITAL STOCK

GENERAL

         Parke Bancorp,  Inc. is authorized to issue 10,000,000 shares of common
stock, par value $0.10 per share and 1,000,000 shares of serial preferred stock,
par value $0.10 per share. Upon the Effective Date of the  Reorganization,  each
share of Parke  Bank  common  stock  will be  converted  into one share of Parke
Bancorp,  Inc. common stock. Each share of Parke Bancorp, Inc. common stock will
have the same  relative  rights as, and will be identical in all respects  with,
each  other   share  of  common   stock.   The  common   stock  will   represent
non-withdrawable  capital, will not be an account of insurable type and will not
be  insured  by  the  Federal  Deposit   Insurance   Corporation  or  any  other
governmental  agency. The Board of Directors can, without shareholder  approval,
issue additional shares of common stock.

COMMON STOCK

         DISTRIBUTIONS.  Parke  Bancorp,  Inc. can pay dividends if, as and when
declared by its Board of Directors, subject to compliance with limitations which
are imposed by law.  See "Market  Prices and  Dividends - Dividend  Restrictions
Imposed on Parke  Bancorp,  Inc." The holders of common stock of Parke  Bancorp,
Inc. will be entitled to receive and share  equally in such  dividends as may be
declared by the Board of Directors of Parke  Bancorp,  Inc. out of funds legally
available therefor.  If Parke Bancorp,  Inc. issues preferred stock, the holders
thereof may have a priority over the holders of the common stock with respect to
dividends.


                                     - 62 -

<PAGE>



         VOTING  RIGHTS.  The  holders of common  stock will  possess  exclusive
voting rights in Parke Bancorp,  Inc., except to the extent that preferred stock
is issued in the future with full or limited voting powers. The holder of shares
of common  stock will be entitled to one vote for each share held on all matters
subject to shareholder vote and will not have any right to cumulate votes in the
election of directors.

         LIQUIDATION  RIGHTS. In the event of any liquidation,  dissolution,  or
winding-up of Parke  Bancorp,  Inc.,  the holders of the common stock  generally
would be entitled  to receive,  after  payment of all debts and  liabilities  of
Parke Bancorp,  Inc.  (including all debts and  liabilities of Parke Bank),  all
assets of Parke Bancorp, Inc. available for distribution.  If preferred stock is
issued,  the holders  thereof may have a priority over the holders of the common
stock in the event of liquidation or dissolution.

         PREEMPTIVE RIGHTS; REDEMPTION.  Because the holders of the common stock
do not have any preemptive rights with respect to any shares Parke Bancorp, Inc.
may issue,  the Board of  Directors  of Parke  Bancorp,  Inc. may sell shares of
capital stock of Parke Bancorp, Inc., including both common and preferred stock)
without first  offering such shares to existing  shareholders.  The common stock
will not be subject to any redemption provisions.

PREFERRED STOCK

         Parke  Bancorp,  Inc. is authorized to issue up to 1,000,000  shares of
serial  preferred  stock  and to fix  and  state  voting  powers,  designations,
preferences,  or other special rights of preferred stock and the qualifications,
limitations  and  restrictions  of those  shares as the Board of  Directors  may
determine  in its  discretion.  Preferred  stock  may be  issued  in  distinctly
designated  series,  may be convertible  into common stock and may rank prior to
the common stock as to dividends rights,  liquidation preferences,  or both, and
may have full or limited  voting rights.  The issuance of preferred  stock could
adversely affect the voting and other rights of holders of common stock.

         The  authorized  but  unissued   shares  of  preferred  stock  and  the
authorized but unissued and unreserved  shares of common stock will be available
for issuance in future mergers or  acquisitions,  in future public  offerings or
private  placements.  Except as otherwise required to approve the transaction in
which the additional  authorized  shares of preferred stock would be issued,  no
shareholder  approval  generally  would be  required  for the  issuance of these
shares.

                             LEGAL AND TAX OPINIONS

         The legality of the issuance of Parke Bancorp,  Inc. common stock being
offered and certain matters relating to the  Reorganization and federal taxation
will be passed upon for us by Malizia Spidi & Fisch, PC, Washington, D.C.

                                     EXPERTS

         The  consolidated  financial  statements of Park Bank and Subsidiary at
December  31,  2003 and 2002  and for each of the  years in the two year  period
ended  December 31, 2003 have been included in this proxy  statement in reliance
upon the report of McGladrey & Pullen,  LLP,  appearing  elsewhere in this proxy
statement  and upon the  authority  of said firm as  experts in  accounting  and
auditing.




                                     - 63 -

<PAGE>



                                    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                            PARK BANK AND SUBSIDIARY

<TABLE>
<CAPTION>


AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Years Ended December 31, 2003 and 2002)

<S>                                                                                                         <C>
Independent Auditor's Report....................................................................................F-1

Consolidated Balance Sheets as of December 31, 2003 and 2002 .................................................. F-2

Consolidated Statements of Operations for the Years Ended December 31, 2003 and 2002............................F-4

Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2003 and 2002..................F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2003 and 2002............................F-6

Notes to Consolidated Financial Statements......................................................................F-7

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Nine Months Ended September 30, 2004 and 2003)

Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003(audited) .......................... F-27

Consolidated Statements of Operations for the Nine Months Ended September 30, 2004 and 2003....................F-29

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2004 and 2003....................F-31

Notes to Consolidated Financial Statements.....................................................................F-32

</TABLE>


         All  schedules  are omitted as the required  information  either is not
applicable or is included in the  consolidated  financial  statements or related
notes.

         Separate  financial  statements for Parke  Bancorp,  Inc. have not been
included in this prospectus  because Parke Bancorp,  Inc.,  which has engaged in
only organizational activities to date, has no significant assets, contingent or
other liabilities, revenues, expenses or earnings per share.







                                     - 64 -

<PAGE>


McGladrey & Pullen
Certified Public Accountants



                          Independent Auditor's report


Directors and Shareholders
Parke Bank
Sewell, New Jersey


        We have audited the  accompanying  consolidated  balance sheets of Parke
Bank  and  Subsidiary  as  of  December  31,  2003  and  2002  and  the  related
consolidated statements of operations,  shareholders' equity, and cash flows for
the years then ended.  These financial  statements are the responsibility of the
Bank's  management.  Our  responsibility  is to  express  an  opinion  on  these
financial statements based on our audits.

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

        In our opinion, the consolidated  financial statements referred to above
present fairly, in all material  respects,  the financial position of Parke Bank
and  Subsidiary  as of  December  31,  2003 and 2002,  and the  results of their
operations  and their cash flows for the years then ended,  in  conformity  with
accounting principles generally accepted in the United States of America.


                                       /s/McGladrey & Pullen, LLP


Blue Bell, Pennsylvania
January 15, 2004

McGladrey & Pullen, LLP is an independent  member firm of RSM International,  an
affiliation of independent accounting and consulting firms.

                                      F-1

<PAGE>

                            PARKE BANK AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2003 AND 2002
<TABLE>
<CAPTION>
                                                                       ASSETS
                                                                 2003             2002
                                                            -------------    -------------
<S>                                                        <C>              <C>
Cash and due from banks                                     $   2,542,256    $   3,515,376
Federal funds sold                                              1,725,000        4,025,000
                                                            -------------    -------------

        Cash and cash equivalents                               4,267,256        7,540,376
                                                            -------------    -------------

Investment securities available for sale, at market value      14,323,035       22,903,497
Investment securities held to maturity, at amortized cost
     (market value 2003 - $790,308; 2002 - $242,825)              798,999          250,000
                                                            -------------    -------------

        Total investment securities                            15,122,034       23,153,497
                                                            -------------    -------------
Restricted stock, at cost                                         497,300          296,000
                                                            -------------    -------------
Loans                                                         146,334,331       95,095,210
Less:  allowance for loan losses                               (2,256,070)      (1,333,000)
                                                            -------------    -------------
        Total net loans                                       144,078,261       93,762,210
                                                            -------------    -------------
Bank premises and equipment, net                                3,239,413        2,594,974
Accrued interest receivable and other assets                    6,799,375        3,556,337
                                                            -------------    -------------

        Total assets                                        $ 174,003,639    $ 130,903,394
                                                            =============    =============

</TABLE>
          See Notes to Consolidated Financial Statements.

                                       F-2

<PAGE>

                      LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                                    2003           2002
                                                                ------------   ------------
<S>                                                           <C>            <C>
LIABILITIES
     Deposits
        Noninterest-bearing demand                              $ 12,745,309   $  8,637,685
        Interest-bearing                                         129,701,202     98,909,912
                                                                ------------   ------------
            Total deposits                                       142,446,511    107,547,597

     Borrowed funds                                               10,340,123      4,948,690

     Accrued interest payable and other accrued liabilities        1,224,398        779,194
                                                                ------------   ------------

            Total liabilities                                    154,011,032    113,275,481
                                                                ------------   ------------
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
     Common stock,
        $5 par value, 10,000,000 shares authorized;
        1,786,235 and 1,576,056 shares issued and outstanding
        at December 31, 2003 and 2002, respectively                8,931,175      7,880,280
     Additional paid-in capital                                   10,432,800      8,240,650
     Retained earnings                                               570,939      1,306,860
     Accumulated other comprehensive income                           57,693        200,123
                                                                ------------   ------------
            Total shareholders' equity                            19,992,607     17,627,913
                                                                ------------   ------------
            Total liabilities and shareholders' equity          $174,003,639   $130,903,394
                                                                ============   ============
</TABLE>

          See Notes to Consolidated Financial Statements.

                                       F-3

<PAGE>

                            PARKE BANK AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                     YEARS ENDED DECEMBER 31, 2003 and 2002

<TABLE>
<CAPTION>

                                                                      2003         2002
                                                                  ----------   ----------
<S>                                                             <C>          <C>
INTEREST AND DIVIDEND INCOME
     Interest and fees on loans                                   $8,698,702   $5,787,953
     Interest and dividends on securities                            724,238      791,785
     Interest on federal funds sold                                   21,500       32,310
                                                                  ----------   ----------
            Total interest and dividend income                     9,444,440    6,612,048
                                                                  ----------   ----------

INTEREST EXPENSE
     Interest on deposits                                          3,014,145    2,713,558
     Interest on borrowings                                          167,527      246,930
                                                                  ----------   ----------
            Total interest expense                                 3,181,672    2,960,488
                                                                  ----------   ----------

            Net interest income                                    6,262,768    3,651,560

PROVISION FOR LOAN LOSSES                                            923,070      498,517
                                                                  ----------   ----------
            Net interest income after provision for loan losses    5,339,698    3,153,043
                                                                  ----------   ----------

NONINTEREST INCOME
     Loan brokerage fees                                              39,318       28,386
     Service charges on deposit accounts                             219,126      176,426
     Other fee income                                                456,919      265,154
     Net gain on the sale of securities                               63,681       18,124
                                                                  ----------   ----------
            Total noninterest income                                 779,044      488,090
                                                                  ----------   ----------

NONINTEREST EXPENSES
     Compensation and benefits                                     1,272,865      820,738
     Occupancy, equipment and data processing                        790,619      564,342
     Marketing and business development                              101,857      151,881
     Professional services                                           171,538      149,818
     Other operating expenses                                        500,527      391,890
                                                                  ----------   ----------
            Total noninterest expenses                             2,837,406    2,078,669
                                                                  ----------   ----------

INCOME BEFORE INCOME TAX EXPENSE                                   3,281,336    1,562,464

INCOME TAX EXPENSE                                                 1,279,437      620,485
                                                                  ----------   ----------

NET INCOME                                                        $2,001,899   $  941,979
                                                                  ==========   ==========

NET INCOME PER COMMON SHARE:
     Basic                                                        $     1.15   $     0.94
                                                                  ==========   ==========
     Diluted                                                      $     1.02   $     0.93
                                                                  ==========   ==========

WEIGHTED AVERAGE SHARES OUTSTANDING:
     Basic                                                         1,740,608      998,058
                                                                  ==========   ==========
     Diluted                                                       1,959,358    1,008,038
                                                                  ==========   ==========
</TABLE>
          See Notes to Consolidated Financial Statements.

                                       F-4

<PAGE>

                            PARKE BANK AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                     YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                                                  Accumulated
                                                                    Additional                      Other         Total
                                                      Common          Paid-In        Retained    Comprehensive  Shareholders'
                                                      Stock           Capital        Earnings     Income (Loss)   Equity
                                                      -----           -------        --------     -------------   ------

<S>                                              <C>             <C>              <C>           <C>           <C>
Balance, December 31, 2001                         $4,192,780      $ 4,076,716      $ 364,881     $(81,566)     $ 8,552,811

Net proceeds from issuance of
     common stock                                   3,687,500        4,163,934              -            -        7,851,434

Comprehensive income:

     Net income - 2002                                      -                -        941,979            -          941,979

     Change in net unrealized gain (loss) on securities
        available for sale, net of reclassification
        adjustment and tax effects, if any                  -                -              -      281,689          281,689
                                                                                                             ---------------

            Total comprehensive income                                                                            1,223,668
                                                 -------------   --------------  -------------   ----------  ---------------

Balance, December 31, 2002                          7,880,280        8,240,650      1,306,860      200,123       17,627,913

Net proceeds from issuance of
     common stock                                     243,875          261,758              -            -          505,633

10% common stock dividend                             807,020        1,930,392     (2,737,820)           -             (408)

Comprehensive income:

     Net income - 2003                                      -                -      2,001,899            -        2,001,899

     Change in net unrealized gain (loss) on securities
        available for sale, net of reclassification
        adjustment and tax effects, if any                  -                -              -     (142,430)        (142,430)
                                                                                                             ---------------

            Total comprehensive income                                                                            1,859,469
                                                 -------------   --------------  -------------   ----------  ---------------

Balance, December 31, 2003                         $8,931,175      $10,432,800      $ 570,939      $57,693      $19,992,607
                                                 =============   ==============  =============   ==========  ===============
</TABLE>
          See Notes to Consolidated Financial Statements.

                                      F-5

<PAGE>

                            PARKE BANK AND SUBSIDIARY

                      CONDOLIDATED STATEMENTS OF CASH FLOWS

                     YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                                 2003            2002
                                                                            ------------    ------------
<S>                                                                       <C>             <C>
OPERATING ACTIVITIES
     Net income                                                             $  2,001,899    $    941,979
     Adjustments to reconcile net income to
        net cash provided by operating activities:
            Depreciation and amortization                                        194,874          88,593
            Provision for loan losses                                            923,070         498,517
            Realized gains on sales of securities and loans                      (63,681)        (18,124)
            Net (accretion) amortization of purchase premiums
               and discounts on securities                                        (6,714)         13,349
            Deferred income tax benefit                                         (290,700)       (137,372)
            Changes in operating assets and liabilities:
               Increase in accrued interest receivable and other assets         (857,385)       (249,404)
               Increase (decrease) in accrued interest payable and other
                   accrued liabilities                                           445,204        (178,884)
                                                                            ------------    ------------
                      Net cash provided by operating activities                2,346,567         958,654
                                                                            ------------    ------------

INVESTING ACTIVITIES
     Purchases of investment securities held to maturity                        (549,682)              -
     Purchases of investment securities available for sale                    (6,376,623)    (19,558,186)
     (Purchases) sales of restricted stock                                      (201,300)         40,500
     Proceeds from sales of investment securities available for sale           8,905,271         986,857
     Proceeds from maturities of investment securities available for sale      2,500,000       6,577,092
     Principal payments on mortgage-backed securities                          3,385,509       2,477,793
     Purchase of bank-owned life insurance                                    (2,000,000)     (2,500,000)
     Net increase in loans                                                   (51,239,121)    (31,858,038)
     Purchases of premises and equipment                                        (839,313)     (2,115,286)
                                                                            ------------    ------------
                      Net cash used in investing activities                  (46,415,259)    (45,949,268)
                                                                            ------------    ------------

FINANCING ACTIVITIES
     Net proceeds from issuance of common stock                                  505,225       7,851,434
     Proceeds from borrowings                                                  8,000,000       4,148,690
     Repayment of borrowings                                                  (2,608,567)     (6,035,000)
     Net increase in interest-bearing deposits                                30,791,290      38,522,370
     Net increase in noninterest-bearing deposits                              4,107,624       3,415,992
                                                                            ------------    ------------
                      Net cash provided by financing activities               40,795,572      47,903,486
                                                                            ------------    ------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                              (3,273,120)      2,912,872

CASH AND CASH EQUIVALENTS, JANUARY 1,                                          7,540,376       4,627,504
                                                                            ------------    ------------

CASH AND CASH EQUIVALENTS, DECEMBER 31,                                     $  4,267,256    $  7,540,376
                                                                            ============    ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Cash paid during the year for:
        Interest on deposits and borrowed funds                             $  3,171,116    $  2,938,912
                                                                            ============    ============
        Income taxes                                                        $  1,492,000    $    725,000
                                                                            ============    ============
</TABLE>

                 See Notes to Consolidated Financial Statements

                                      F-6

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.           DESCRIPTION OF BUSINESS AND SUMMARY OF
                  SIGNIFICANT ACCOUNTING POLICIES

                  Description of Business

                         Parke 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 two additional branch office locations, one at 501
                  Tilton Road,  Northfield,  New Jersey and the other at 567 Egg
                  Harbor Road, Washington Township, New Jersey.

                         The accounting and financial  reporting policies of the
                  Bank conform to accounting  principles  generally  accepted in
                  the United States of America 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  Bank  and its  wholly-owned
                  subsidiary    Parke   Capital    Markets.    All   significant
                  inter-company balances and transactions have been eliminated.

                  Cash and Cash Equivalents

                         Cash  and  cash  equivalents   include  cash  on  hand,
                  balances due from banks and federal funds sold.

                  Investment Securities

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

                                      F-7

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.           DESCRIPTION OF BUSINESS AND SUMMARY OF
                  SIGNIFICANT ACCOUNTING POLICIES (Continued)

                  Investment Securities (Continued)

                         At  December  31,  2003 and 2002,  the Bank  identified
                  investment  securities  that  would  be  held  for  indefinite
                  periods of time,  including  securities  that would be used as
                  part of the Bank's  asset/liability  management  strategy  and
                  possibly  sold in  response  to  changes  in  interest  rates,
                  prepayments  and  similar   factors.   These   securities  are
                  classified  as  "available  for sale" and are  carried at fair
                  value, with any temporary  unrealized gains or losses reported
                  as a separate component of other comprehensive  income, net of
                  the related  income tax effect.  Declines in the fair value of
                  individual  available for sale and held to maturity securities
                  below  their  cost that are  other  than  temporary  result in
                  write-downs of the individual  securities to their fair value,
                  and are included in  noninterest  income in the  statements of
                  operations.  Factors affecting the determination of whether an
                  other-than-temporary   impairment   has  occurred   include  a
                  downgrading  of the security by rating  agency,  a significant
                  deterioration  in the  financial  condition of the issuer,  or
                  that management  would not have the intent and ability to hold
                  a security  for a period of time  sufficient  to allow for any
                  anticipated recovery in fair value.

                         Also, at December 31, 2003 and 2002,  the Bank reported
                  investments in securities that were carried at cost,  adjusted
                  for  amortization  of premium and  accretion of discount.  The
                  Bank 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."

                         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
                  stocks of the  Federal  Home Loan Bank of New York  ("FHLBNY")
                  and the Atlantic  Central  Bankers Bank and is carried at cost
                  because of ownership restrictions.

                  Loans

                         The Bank makes  commercial,  real  estate and  consumer
                  loans  to  customers.   A  substantial  portion  of  the  loan
                  portfolio is represented by loans in Southern New Jersey.  The
                  ability of the  Bank's  debtors to honor  their  contracts  is
                  dependent upon the real estate and general economic conditions
                  in this area.  Loans are stated at the  outstanding  principal
                  amount,  adjusted  for the  allowance  for loan losses and any
                  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.

                                      F-8

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.           DESCRIPTION OF BUSINESS AND SUMMARY OF
                  SIGNIFICANT ACCOUNTING POLICIES (Continued)

                  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.

                  Loans-Restructured

                         Restructured  loans are those  loans  whose  terms have
                  been  modified  because  of  deterioration  in  the  financial
                  condition of the borrower to provide for a reduction of either
                  interest or principal or an extension of the payment period.

                  Concentration of Credit Risk

                         The Bank'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
                  approximately 78% of commercial loans as of December 31, 2003.
                  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 on the interest method. Loan brokerage fees,
                  which  represent  commissions  earned for  facilitating  loans
                  between  borrowers and other banks,  are recorded in income as
                  earned.

                  Allowance for Loan Losses

                         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 Bank to recognize additions
                  or reductions to the allowance.

                                      F-9

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.           DESCRIPTION OF BUSINESS AND SUMMARY OF
                  SIGNIFICANT ACCOUNTING POLICIES (Continued)

                  Allowance for Loan Losses (Continued)

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

                         A loan is considered  impaired  when,  based on current
                  information  and events,  it is probable that the Bank will be
                  unable to collect  the  scheduled  payments  of  principal  or
                  interest  when due according to the  contractual  terms of the
                  loan   agreement.   Factors   considered   by   management  in
                  determining  impairment  include  payment  status,  collateral
                  value, and the probability of collecting  scheduled  principal
                  and  interest   payments  when  due.  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.
                  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 Bank
                  does  not   separately   identify   individual   consumer  and
                  residential loans for impairment disclosures.

                  Interest Rate Risk

                         The Bank 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 the
                  potential  for the Bank to  assume  interest  rate  risk  that
                  results from  differences  in the  maturities  and  re-pricing
                  characteristics  of assets and  liabilities.  For this reason,
                  management  regularly monitors the level of interest rate risk
                  and the potential impact on net income.

                  Bank Premises and Equipment

                         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.  Leasehold
                  improvements  are amortized to expense over the shorter of the
                  term of the respective  lease or the estimated  useful life of
                  the improvements.

                                      F-10

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1.           DESCRIPTION OF BUSINESS AND SUMMARY OF
                  SIGNIFICANT ACCOUNTING POLICIES (Continued)

                  Income Taxes

                         The amount  provided for federal  income taxes is based
                  on  income  reported  for  consolidated   financial  statement
                  purposes.

                         Deferred  federal and state tax assets and  liabilities
                  are recognized  for the expected  future tax  consequences  of
                  existing differences between financial statement and tax bases
                  of existing assets and liabilities.  The effect of a change in
                  the tax rate on deferred  taxes is recognized in the period of
                  the enactment date.

                  Use of Estimates

                         The  preparation  of  financial   statements   requires
                  management to make estimates and  assumptions  that affect the
                  reported  amounts of assets and  liabilities and disclosure of
                  contingent assets and liabilities at the date of the financial
                  statements  and  reported  amounts of  revenues  and  expenses
                  during the reporting period.  Actual results could differ from
                  those  estimates.  Material  estimates  that are  particularly
                  susceptible to  significant  change in the near term relate to
                  the  determination  of the  allowance  for loan losses and the
                  valuation allowance for deferred tax assets.

                  Comprehensive Income

                         Accounting principles generally require that recognized
                  revenue, expenses, gains and losses be included in net income.
                  Although  certain changes in assets and  liabilities,  such as
                  unrealized  gains and losses on available for sale securities,
                  are reported as a separate  component of the equity section of
                  the  balance  sheet,  such items,  along with net income,  are
                  components of comprehensive income.

                         The  components  of  other  comprehensive   income  and
                  related tax effects are as follows:

<TABLE>
<CAPTION>
                                                                          2003         2002
                                                                       ---------    ---------

<S>                                                                  <C>          <C>
                  Unrealized holding gains (losses) on
                       available for sale securities                   $(173,703)   $ 487,606
                  Reclassification adjustment for net gains
                       realized in income                                (63,681)     (18,124)
                                                                       ---------    ---------
                  Net unrealized gains (losses)                         (237,384)     469,482
                  Tax effect                                              94,954     (187,793)
                                                                       ---------    ---------
                  Net-of-tax amount                                    $(142,430)   $ 281,689
                                                                       =========    =========
</TABLE>


                                      F-11
<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.           DESCRIPTION OF BUSINESS AND SUMMARY OF
                  SIGNIFICANT ACCOUNTING POLICIES (Continued)


                  Earnings Per Common Share

                         Basic earnings per common share is computed by dividing
                  net income by the  weighted  average  number of common  shares
                  outstanding  during the period.  Diluted  earnings  per common
                  share  considers  common  stock  equivalents  (when  dilutive)
                  outstanding  during the period  such as options  and  warrants
                  outstanding.  Earnings  per common  share  have been  computed
                  based on the following  for the years ended  December 31, 2003
                  and 2002:

                                                             2003         2002
                                                         ----------   ----------

                  Net income                             $2,001,899   $  941,979
                                                         ==========   ==========

                  Average number of common shares
                     outstanding                          1,740,608      998,058
                  Effect of dilutive options                218,750        9,980
                                                         ----------   ----------

                  Average number of common shares
                    outstanding  used
                    to calculate diluted
                    earnings per common share             1,959,358    1,008,038
                                                          =========    =========

                  Stock-Based Employee Compensation

                         The Bank has a stock-based  employee  compensation plan
                  which has been in  existence  for all periods  presented,  and
                  which is more fully  described in Note 13. As permitted  under
                  generally accepted  accounting  principles,  grants of options
                  under the plan are  accounted  for under the  recognition  and
                  measurement  principles of APB Opinion No. 25,  Accounting for
                  Stock  Issued  to  Employees,   and  related  Interpretations.
                  Because  options  granted under the plan had an exercise price
                  equal to or greater  than the market  value of the  underlying
                  common  stock on the date of grant,  no  stock-based  employee
                  compensation  cost is included in determining net income.  The
                  following  table  illustrates  the  effect on net  income  and
                  earnings  per  share if the Bank had  applied  the fair  value
                  recognition provisions of Financial Accounting Standards Board
                  ("FASB")   Statement  No.  123,   Accounting  for  Stock-Based
                  Employee Compensation, to stock-based employee compensation.

                                      F-12

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1.           DESCRIPTION OF BUSINESS AND SUMMARY OF
                  SIGNIFICANT ACCOUNTING POLICIES (Continued)

                  Stock-Based Employee Compensation (Continued)

                         For the years ended December 31, 2003 and 2002:

<TABLE>
<CAPTION>
                                                                                 2003       2002
                                                                                 ----       ----

<S>                                                                       <C>          <C>
                  Net income, as reported                                   $2,001,899   $941,979

                  Deduct total stock-based compensation expense
                       determined  under  the fair  value  method
                       for all awards, net of related tax effects             (114,000)   (73,200)
                                                                            ----------   --------

                  Pro forma net income                                      $1,887,899   $868,779
                                                                            ==========   ========

                        Earnings per share:
                              Basic:
                           As reported                                      $     1.15   $   0.94
                           Pro forma                                        $     1.08   $   0.87
                             Diluted:
                           As reported                                      $     1.02   $   0.93
                           Pro forma                                        $      .96   $   0.86
</TABLE>

NOTE 2.           CASH AND DUE FROM BANKS

                         The Bank 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. The Federal Deposit
                  Insurance  Corporation  insures these  accounts up to $100,000
                  per account.  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  Bank  as of
                  December 31, 2003,  because reserve  requirements were covered
                  by vault cash and balances held at the Federal Reserve Bank of
                  Philadelphia.

                                      F-13

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 3.           INVESTMENT SECURITIES

                           The Bank's  investment  securities as of December 31,
                  2003 were as follows:

<TABLE>
<CAPTION>

                                                                               Gross          Gross    Estimated
                                                           Amortized         Unrealized    Unrealized    Market
                                                             Cost              Gains         Losses      Value
                                                             ----              -----         ------      -----
<S>                                                      <C>                 <C>            <C>       <C>
   Available For Sale
   ------------------
     U.S. Government agencies and corporations            $ 4,329,013         $      -       $73,193   $ 4,255,820
     Mutual Funds                                           3,162,435                -        26,401     3,136,034
     Mortgage-backed securities
                                                            6,735,433          195,748             -     6,931,181
                                                          -----------         --------       -------    ----------
       Total securities available for sale                $14,226,881         $195,748       $99,594   $14,323,035
                                                          ===========         ========       =======   ===========
   Held to Maturity
   ----------------
     Municipals                                           $   548,999         $      -       $ 8,691   $   540,308
     Corporate trust preferred security                       250,000                -             -       250,000
                                                          -----------         --------       -------   -----------
            Total securities held to maturity             $   798,999         $      -       $ 8,691   $   790,308
                                                          ===========         ========       =======   ===========
</TABLE>


                         The Bank's  investment  securities  as of December  31,
                  2002 were as follows:

<TABLE>
<CAPTION>
                                                                               Gross          Gross    Estimated
                                                           Amortized         Unrealized    Unrealized    Market
                                                             Cost              Gains         Losses      Value
                                                             ----              -----         ------      -----

<S>                                                      <C>                 <C>             <C>      <C>
   Available For Sale
   ------------------
     U.S. Government agencies and corporations            $ 4,343,311         $ 14,427        $    -   $ 4,357,738
     Municipals                                             1,000,487                -           257     1,000,230
     Mutual Funds                                          10,032,135           32,010             -    10,064,145
     Mortgage-backed securities                             7,194,026          287,358             -     7,481,384
                                                          -----------         --------       -------    ----------
       Total securities available for sale                $22,569,959         $333,795        $  257   $22,903,497
                                                          ===========         ========        ======   ===========

   Held to Maturity
   ----------------
     Corporate trust preferred security                   $   250,000         $      -       $ 7,175   $   242,825
                                                          ===========         ========       =======   ===========
</TABLE>

                         The  amortized  cost  and  estimated  market  value  of
                  investment  securities  at December  31,  2003 by  contractual
                  maturities  are shown below.  Expected  maturities  may differ
                  from  contractual  maturities  in  mortgage-backed  securities
                  because the mortgages  underlying the securities may be called
                  or prepaid without any penalties;  therefore, these securities
                  are not included in the maturity  categories  in the following
                  maturity summary.

                                      F-14

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3.           INVESTMENT SECURITIES (Continued)

<TABLE>
<CAPTION>

                                                              Available For Sale                    Held to Maturity
                                                              ------------------                    ----------------
                                                         Amortized           Market           Amortized          Estimated
                                                            Cost              Value              Cost          Market Value
                                                            ----              -----              ----          ------------

<S>                                                  <C>                  <C>                 <C>                <C>
   Maturing within one year                            $         -          $         -         $       -          $        -
   Maturing after one year but within five years         1,273,760            1,266,550                 -                   -
   Maturing after five years, but within ten years       1,000,000            1,003,750           548,999             540,308
   Maturing after ten years                              2,055,253            1,985,520           250,000             250,000
                                                        -----------         -----------         ---------          ----------
                                                         4,329,013            4,255,820           798,899             790,308
   Mortgage-backed securities                            6,735,433            6,931,181                 -                   -
   Mutual funds                                          3,162,435            3,136,034
                                                        -----------         -----------         ---------          ----------
                                                                                                        -                   -
      Total securities                                 $14,226,881          $14,323,035         $ 798,999          $  790,308
                                                       ===========          ===========         =========          ==========
</TABLE>

                           Gross  realized gains amounted to $75,814 in 2003 and
                  $18,124 in 2002. There were realized losses of $12,133 in 2003
                  and $-0- in 2002.

                           As of December 31, 2003,  approximately $8,061,000 of
                  investment  securities  are pledged as collateral for borrowed
                  funds (Note 9). In addition,  securities with a carrying value
                  of $249,506 were pledged to secure public deposits at December
                  31, 2003.

                           As of December 31, 2002,  approximately $7,473,000 of
                  investment  securities  are pledged as collateral for borrowed
                  funds (Note 9). In addition,  securities with a carrying value
                  of $249,546 were pledged to secure public deposits at December
                  31, 2002.

                         The fair value of securities with unrealized  losses by
                  length of time that the individual  securities  have been in a
                  continuous loss position at December 31, 2003, are as follows:

<TABLE>
<CAPTION>
                                                    Continuous Unrealized Losses         Continuous Unrealized Losses
                                                  Existing for Less Than 12 Months     Existing for More Than 12 Months
                                                                      Unrealized                            Unrealized
                                                   Fair Value           Losses           Fair Value           Losses
                                                ---------------------------------------------------------------------------
<S>                                               <C>                <C>              <C>                   <C>
              Available for sale:
                U.S. Government agencies and
                 corporations:                      $  926,674         $ 73,193         $         -           $       -
                Mutual funds                         3,136,034           26,401                   -                   -

                Mortgage-backed securities                   -                -                   -                   -
                                                    ----------         --------         -----------           ---------
                                                     4,062,708           99,594                   -                   -
                                                    ----------         --------         -----------           ---------
              Held to maturity:
                Municipals                             540,308            8,691                   -                   -
                Corporate trust preferred
                 securities                                  -                -                   -                   -
                                                       540,308            8,691                   -                   -
                                                    ----------         --------         -----------           ---------
                  Total temporarily impaired
                    securities                      $4,603,016         $108,285        $          -           $       -
                                                    ==========         ========        ============           =========

</TABLE>

                                      F-15

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3.           INVESTMENT SECURITIES (Continued)

                         The  unrealized  losses that existed as of December 31,
                  2003 are the result of market  changes in interest rates since
                  the securities  were  purchased.  This factor coupled with the
                  fact  the  Bank  has  both  the  intent  and  ability  to hold
                  securities  for a period of time  sufficient  to allow for any
                  anticipated  recovery  in fair  value  substantiates  that the
                  unrealized  losses in the  available  for sale  portfolio  are
                  temporary.

NOTE 4.           LOANS

                         The  composition  of net loans as of December  31, 2003
                  and 2002 are as follows:
<TABLE>
<CAPTION>

                                                                   2003                  2002
                                                                   ----                  ----
<S>                                                         <C>                    <C>
                          Commercial                          $122,943,181           $77,824,267
                          Residential real estate               20,152,977            14,559,920
                          Consumer                               3,405,909             2,874,330
                                                              ------------           -----------
                          Total loans                          146,502,067            95,258,517
                          Less: allowance for loan losses       (2,256,070)           (1,333,000)
                          Less: net deferred loan fees            (167,736)             (163,307)
                                                              ------------           -----------
                            Net loans                         $144,078,261           $93,762,210
                                                              ============           ===========
</TABLE>

                         At December  31,  2003,  approximately  $11,700,000  of
                  residential  real estate  loans were pledged to the FHLBNY for
                  potential borrowings (Note 9).

NOTE 5.           LOANS AND DEPOSITS TO RELATED PARTIES

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

                         An analysis of the activity of such related party loans
                  is as follows:

                                                 2003               2002
                                                 ----               ----

                 Balance, beginning of year    $6,392,357       $4,047,257
                   Advances                     6,521,900        3,395,578
                   Less: Repayments            (2,695,078)      (1,050,478)
                                               ----------      -----------
                 Balance, end of year         $10,219,179       $6,392,357
                                              ===========       ==========

                         At December  31, 2003 and 2002,  deposits  from related
                  parties  totaled  approximately   $5,877,000  and  $6,430,000,
                  respectively.

                                      F-16

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6.           ALLOWANCE FOR LOAN LOSSES

                         An  analysis of the  allowance  for loan losses for the
                  years ended December 31, 2003 and 2002 is as follows:
<TABLE>
<CAPTION>

                                                          2003                2002
                                                          ----                ----
<S>                                                  <C>                 <C>
                 Balance, beginning of year            $1,333,000          $ 834,483
                 Provision for loan losses                923,070            498,517
                 Charge offs                               (1,000)                 -
                 Recoveries                                 1,000                  -
                                                       ----------         ----------
                 Balance, end of year                  $2,256,070         $1,333,000
                                                       ==========         ==========
</TABLE>

                         Information  about impaired loans and nonaccrual  loans
                  as of and for the years ended December 31, 2003 and 2002 is as
                  follows:

<TABLE>
<CAPTION>
                                                                                            2003                2002
                                                                                            ----                ----
<S>                                                                                   <C>                  <C>
                 Impaired loans with a valuation allowance                              $ 1,171,713          $ 1,151,574
                 Impaired loans without a valuation allowance                                     -              339,776
                                                                                        -----------          -----------
                      Total impaired loans                                              $ 1,171,713          $ 1,491,350
                                                                                        ===========          ===========
                 Related allowance for loan losses for loan impaired                    $   486,591          $   301,524
                                                                                        ===========          ===========
                 Nonaccrual loans (included in total impaired loans)                    $   794,135          $ 1,031,067
                                                                                        ===========          ===========
                 Loans past due ninety days or more and still accruing                            -          $    50,000
                                                                                        ===========          ===========
                 Average monthly balance of impaired loans (based on month-end
                   balances)                                                            $ 1,241,944          $ 1,191,441
                                                                                        ===========          ===========
                 Interest income recognized on cash basis on impaired loans             $    43,430          $     3,761
                                                                                        ===========          ===========
</TABLE>

NOTE 7.           BANK PREMISES AND EQUIPMENT

                         A summary of the cost and  accumulated  depreciation of
                  bank  premises and  equipment as of December 31, 2003 and 2002
                  is as follows:

<TABLE>
<CAPTION>
                                                                        2003                 2002
                                                                        ----                 ----
<S>                                                                <C>                   <C>
                 Land                                                $  470,000            $  300,000
                 Building and improvements                            2,484,510             1,932,492
                 Furniture and equipment                                675,566               676,930
                                                                     ----------            ----------
                 Total premises and equipment, at cost                3,630,076             2,909,422
                 Less: accumulated depreciation and amortization       (390,663)             (314,448)
                                                                    -----------            ----------
                 Premises and equipment, net                        $ 3,239,413            $2,594,974
                                                                    ===========            ==========
</TABLE>

                         Depreciation  expense was  $194,874 in 2003 and $88,593
                  in 2002.

                                      F-17

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7.           BANK PREMISES AND EQUIPMENT (Continued)

                         The Bank was  obligated  under a  non-cancelable  lease
                  agreement  executed in July 1998 related to its Bank  building
                  ("building") with a limited liability company whose principals
                  are also  members of the  Bank's  Board of  Directors.  During
                  2002,  the Bank  executed  its lease  option to  purchase  the
                  building for its market value of $1,500,000.  In addition,  in
                  March 2002, the Bank entered a non-cancelable  operating lease
                  agreement related to its Northfield branch office. The term of
                  the March 2002  lease is for 10 years with two 5-year  renewal
                  options.  Rental  payments under this lease  commenced in July
                  2002. The Bank 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 office. At December
                  31, 2003, the required future rental payments under this lease
                  are as follows:

                                 YEARS ENDING
                                 DECEMBER 31,                     AMOUNT
                                 ------------                     ------

                                   2004                           $55,500
                                   2005                            58,500
                                   2006                            62,500
                                   2007                            65,500
                                   2008                            66,500
                                   Thereafter                     240,500
                                                                 --------

                           Total minimum lease payments          $549,000
                                                                 ========

                         Rent  expense was $53,250 in 2003 and $113,361 in 2002.
                  Related party rent paid was $-0- in 2003 and $83,960 in 2002.

NOTE 8.           DEPOSITS

                         Deposits at December 31, 2003 and 2002 consisted of the
                  following:

<TABLE>
<CAPTION>
                                                                       2003                  2002
                                                                       ----                  ----

<S>                                                              <C>                    <C>
                         Demand deposits, noninterest-bearing      $ 12,745,309           $  8,637,685
                         Demand deposits, interest-bearing           24,168,980             18,748,048
                         Savings deposits                            22,735,902             18,157,627
                         Time deposits of $100,000 or more           42,806,744             29,287,513
                         Other time deposits                         39,989,576             32,716,724
                                                                   ------------           ------------
                         Total deposits                            $142,446,511           $107,547,597
                                                                   ============           ============
</TABLE>

                         Included in deposits at December 31, 2003 and 2002 were
                  $37,997,575  and   $29,762,214,   respectively,   of  brokered
                  deposits.

                                      F-18

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8.           DEPOSITS (Continued)

                         Scheduled  maturities  of  certificates  of  deposit at
                  December 31, 2003 are as follows:

                                 YEARS ENDING
                                 DECEMBER 31,                AMOUNT
                                 ------------                ------

                                   2004                    $52,794,328
                                   2005                      8,995,319
                                   2006                     14,919,644
                                   2007                      4,280,185
                                   2008                      1,806,844
                                                           -----------
                                                           $82,796,320
                                                           ===========

NOTE 9.           BORROWED FUNDS

                         An analysis of borrowed  funds as of December  31, 2003
                  and 2002 is as follows:

<TABLE>
<CAPTION>
                                                                               2003                   2002
                                                                               ----                   ----
                                                    Maturity Date        Amount    Rate         Amount    Rate
                                                    -------------        ------    ----         ------    ----
<S>                                             <C>                <C>            <C>       <C>          <C>
                 Federal Home Loan Bank                May 2003      $         -        -    $ 300,000     4.75%
                   Repurchase Agreements              June 2004          500,000     5.18%     500,000     5.18%
                 Federal Home Loan Bank              August 2003               -        -    1,250,000     2.03%
                   Advances                          January 2004      4,000,000     1.18%           -        -
                                                      July 2004        2,000,000     1.24%           -        -
                                                     August 2004       1,250,000     2.57%   1,250,000     2.57%
                                                      July 2005        1,000,000     1.57%           -        -
                                                     January 2007        590,123     4.73%     648,690     4.73%
                 Other borrowings                     March 2003               -        -    1,000,000     1.95%
                                                    February 2004      1,000,000     1.20%           -        -
                                                                     -----------            ----------        -
                 Total borrowed funds                                $10,340,123            $4,948,690
                                                                     ===========            ==========
</TABLE>

                         At December 31, 2003, the Bank had a $6,545,150 line of
                  credit from the FHLBNY. In addition,  the bank has available a
                  $6,545,150  one-month overnight  re-pricing line of credit. No
                  amounts were outstanding at December 31, 2003.

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

NOTE 10.          FAIR VALUE OF FINANCIAL INSTRUMENTS

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

                                      F-19

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 10.          FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

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

                  Cash and Cash Equivalents

                         The  carrying  amount of cash and  federal  funds  sold
                  approximates fair value.

                  Investment Securities

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

                  Loans

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

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

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

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

                  Bank-owned Life Insurance

                         Fair value of insurance  policies owned by the Bank are
                  based on the insurance contract's cash surrender value, net of
                  any policy loans.

                  Deposits

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

                                      F-20

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 10.          FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

                  Borrowed Funds

                         The  fair  value  of  borrow  funds  is  based  on  the
                  discounted  value of estimated cash flows. The discounted rate
                  is  estimated  using the rates  currently  offered for similar
                  advances.

                  Off-Balance Sheet Instruments

                         Since the  majority  of the  Bank's  off-balance  sheet
                  instruments  consist  of  non  fee-producing,   variable  rate
                  commitments,  the  Bank  has  determined  they  do not  have a
                  distinguishable fair value.

                         The following  table  summarizes  carrying  amounts and
                  fair values for financial instruments at December 31, 2003:

<TABLE>
<CAPTION>
                                                                                   Carrying Value            Fair Value
                                                                                   --------------            ----------
                         FINANCIAL ASSETS:
<S>                                                                                 <C>                    <C>
                           Cash and cash equivalents                                  $  4,267,256           $  4,267,256
                           Investment securities                                        15,122,034             15,113,343
                           Restricted stock                                                497,300                497,300
                           Loans, net                                                  144,078,261            144,403,876
                           Bank-owned life insurance                                     4,500,000              4,500,000

                         FINANCIAL LIABILITIES:
                           Demand deposits and savings deposits                       $ 59,650,191           $ 59,650,191
                           Time deposits                                                82,796,320             83,048,224
                           Borrowed funds                                               10,340,123             10,340,123
</TABLE>

                         The following  table  summarizes  carrying  amounts and
                  fair values for financial instruments at December 31, 2002:

<TABLE>
<CAPTION>
                                                                                   Carrying Value            Fair Value
                                                                                   --------------            ----------
<S>                                                                                  <C>                    <C>
                         FINANCIAL ASSETS:
                           Cash and cash equivalents                                   $ 7,540,376            $ 7,540,376
                           Investment securities                                        23,153,497             23,146,322
                           Restricted stock                                                296,000                296,000
                           Loans, net                                                   93,762,210             95,517,423
                           Bank-owned life insurance                                     2,500,000              2,500,000

                         FINANCIAL LIABILITIES:
                           Demand deposits and savings deposits                         45,543,360             45,543,360
                           Time deposits                                                62,004,237             63,131,141
                           Borrowed funds                                                4,948,690              4,948,690
</TABLE>

                                      F-21

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 11.          INCOME TAXES

                         The net  deferred  tax  asset,  which  is  included  in
                  "accrued interest receivable and other assets" at December 31,
                  2003 and 2002, includes the following:

<TABLE>
<CAPTION>
                                                                                          2003                  2002
                                                                                          ----                  ----

<S>                                                                                    <C>                   <C>
                         Deferred tax assets                                             $862,864              $ 448,195
                         Deferred tax liabilities                                        (319,578)              (290,562)
                                                                                         --------              ---------
                         Net deferred tax asset                                          $543,286              $ 157,633
                                                                                         ========              =========
</TABLE>

                         Income tax  expense for the years  ended  December  31,
                  2003 and 2002 consisted of the following:

<TABLE>
<CAPTION>
                                                                                         2003                  2002
                                                                                         ----                  ----
<S>                                                                                 <C>                    <C>
                          Current tax expense:
                            Federal                                                   $1,212,122             $582,832
                            State                                                        358,015              175,025
                                                                                      ----------             --------
                                                                                       1,570,137              757,857
                          Deferred tax (benefit)                                        (290,700)           ( 137,372)
                                                                                      ----------             --------
                                                                                      $1,279,437             $620,485
                                                                                      ==========             ========
</TABLE>

                         The components of the net deferred tax asset,  which is
                  included in other assets, are as follows:

<TABLE>
<CAPTION>
                                                                                         2003                  2002
                                                                                         ----                  ----
<S>                                                                                   <C>                  <C>
                          Allowance for loan losses                                     $835,309             $ 447,711
                          Deferred loan costs                                           (191,371)             (108,867)
                          Securities available for sale                                  (38,461)             (133,415)
                          Other                                                          (62,191)              (47,796)
                                                                                         -------               -------
                                                                                        $543,286             $ 157,633
                                                                                        ========             =========
</TABLE>

                         A  reconciliation  of the Bank's  effective  income tax
                  rate  with the  statutory  Federal  rate for the  years  ended
                  December 31, 2003 and 2002 is as follows:

<TABLE>
<CAPTION>
                                                                                          2003                  2002
                                                                                          ----                  ----
<S>                                                                                  <C>                     <C>
                          Tax expense at statutory rate (34%)                          $1,115,654              $531,238
                          Permanent differences and other, net                            (31,128)               (9,887)
                          State income taxes, net of Federal tax benefit                  194,911                99,134
                                                                                       ----------              --------
                                                                                       $1,279,437              $620,485
                                                                                       ==========              ========
</TABLE>
                                      F-22

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 12.          REGULATORY MATTERS

                  Regulatory Restrictions

                         Pursuant to the Bank's  charter and its de novo status,
                  since its  inception,  the Bank has been  subject  to, and has
                  complied with the following restrictions:

                    1.   Audited financial statements for five years;

                    2.   Limitation on interest  rates paid on deposits for five
                         years;

                    3.   Limitation   on  the   availability   of   the   Bank's
                         undistributed  net  assets  for  the  payment  of  cash
                         dividends  without  the prior  approval  of  regulatory
                         authorities.

                  Capital Ratios

                         The  Bank is  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  Bank'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.  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,  2003 and 2002,  that the Bank  meets all
                  capital adequacy requirements to which it is subject.

                         The most recent  notification  from the Federal Deposit
                  Insurance  Corporation,  as of June 30, 2003  categorized  the
                  Bank as well  capitalized  under the regulatory  framework for
                  prompt  corrective  action.  There are no conditions or events
                  since the notification  that management  believes have changed
                  the Bank's category.

                                      F-23

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 12.          REGULATORY MATTERS (Continued)

                  Capital Ratios (Continued)

                         The  Bank's  actual  capital  amounts  and ratios as of
                  December 31, 2003 and 2002 are also presented in the following
                  tables:
<TABLE>
<CAPTION>
                                                                                                         To Be Well
                                                                                                     Capitalized Prompt
                                                                                 For Capital          Under Corrective
                                                            Actual            Adequacy Purposes      Action Provisions
                                                            ------            -----------------      -----------------
                                                       Amount     Ratio      Amount       Ratio       Amount     Ratio
                                                       ------     -----      ------       -----       ------     -----
<S>                                                   <C>        <C>        <C>           <C>         <C>        <C>
                      As of December 31, 2003:
                       (amounts in thousands)
                       ----------------------

                      Total Risk Based Capital          $21,764    15%        $11,670       8%          $14,588    10%
                            (to Risk Weighted Assets)

                      Tier I Capital                     19,935    14%          5,835       4%            8,753     6%
                            (to Risk Weighted Assets)

                      Tier I Capital                     19,935    12%          6,574       4%            8,218     5%
                               (to Average Assets)
</TABLE>

<TABLE>
<CAPTION>
                                                                                                         To Be Well
                                                                                                     Capitalized Prompt
                                                                                 For Capital          Under Corrective
                                                            Actual            Adequacy Purposes       Action Provisions
                                                            ------            -----------------       -----------------
                                                       Amount     Ratio      Amount       Ratio       Amount     Ratio
                                                       ------     -----      ------       -----       ------     -----
<S>                                                   <C>        <C>        <C>           <C>         <C>        <C>
                      As of December 31, 2002:
                     (amounts in thousands)
                     ----------------------

                      Total Risk Based Capital          $18,659     19%      $ 7,869        8%          $ 9,836     10%
                            (to Risk Weighted Assets)

                      Tier I Capital                     17,428     18%        3,934        4%            5,902      6%
                            (to Risk Weighted Assets)

                      Tier I Capital                     17,428     14%        4,986        4%            6,233      5%
                               (to Average Assets)
</TABLE>

                                      F-24

<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 13.          SHAREHOLDERS' EQUITY

                  Common Stock Offering

                         During 2002, the Bank completed a common stock offering
                  of 737,500 shares,  which netted $7,851,434 of proceeds to the
                  Bank.

                  Common Stock Dividend

                         In  December  2003,  the Bank paid a 10%  common  stock
                  dividend (161,404 shares) to shareholders.

                  Stock Options and Warrants

                         In 1999, 2002 and 2003, the  shareholders  approved the
                  Bank's  Employee Stock Option Plans (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 172,958 shares of common
                  stock.  All options  issued  under the Plans are fully  vested
                  upon issuance. Certain officers and employees of the Bank have
                  been granted options under the Plans. All stock option amounts
                  and prices  included in the  following  discussions  have been
                  adjusted for stock dividends through December 31, 2003.

                         A  summary  of the  status  of  options  granted  is as
                  follows:

<TABLE>
<CAPTION>
                                                             2003                       2002
                                                             ----                       ----
                                                      Number      Exercise      Number      Exercise
                                                    of Options      Price     of Options     Price
                                                    ----------      -----     ----------     -----
<S>                                                  <C>          <C>          <C>          <C>
                Outstanding, beginning of year         62,330       $ 9.09       37,620       $9.09
                  Granted                              41,294        12.73       25,810        9.09
                  Expired/terminated                        -            -       (1,100)       9.09
                  Exercised                            (1,210)        9.09            -           -
                                                      -------                    ------
                Outstanding, end of year              102,414        10.66       62,330       $9.09
                                                      =======                    ======
</TABLE>

                         Information    regarding   options    outstanding   and
                  exercisable at December 31, 2003 is as follows:

                                                            Weighed-Average
                                            Number             Remaining
               Exercise Price             Outstanding       Contractual Life
               --------------             -----------       ----------------

                       $9.09               61,120                 6.6
                      $12.73               41,294                 9.5


                         At  December  31,  2003,   there  were  69,444   shares
                  available for grant under the Plans. At December 31, 2003, the
                  average weighted remaining contractual life is 7.75 years.

                                      F-25


<PAGE>

                           PARKE BANK AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 13.          SHAREHOLDERS' EQUITY (Continued)

                  Stock Options and Warrants (Continued)

                         The Bank has adopted the disclosure-only  provisions of
                  FASB No. 123. The Company accounts for its Plans in accordance
                  with  Accounting  Principles  Board Opinion No. 25 and related
                  interpretations.  Accordingly,  no compensation  cost has been
                  recognized  for the Plans in 2003 or 2002.  Compensation  cost
                  that would have been  recognized  using the fair value  method
                  pursuant to FASB No.  123,  if the Bank had so elected,  would
                  have been approximately $190,000 in 2003 and $122,000 in 2002.
                  The method of determining proforma  compensation cost for 2003
                  and 2002 was based on certain assumptions,  including the past
                  trading  ranges  of  the  Bank's  stock,  volatility  of  25%,
                  expected option lives of 5 - 7 years,  risk-free interest rate
                  of 4 - 5%, and no expected payment of dividends.

                         In connection with the Bank's initial stock offering in
                  1998,   approximately  632,000  (as  adjusted  for  10%  stock
                  dividend in 2003) warrants were issued. These warrants have an
                  exercise  price of $9.09 per share and expire in 2008.  During
                  2003, 47,675 warrants were exercised.

NOTE 14.          BANK-OWNED LIFE INSURANCE

                         In 2003 and 2002,  the Bank  purchased  $2,000,000  and
                  $2,500,000,  respectively,  of  Bank-owned  life  insurance on
                  selected  officers,  which is included  in  "accrued  interest
                  receivable  and  other  assets"  in the  accompanying  balance
                  sheets.

NOTE 15.          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  Bank.   The  cost  of  the  insurance  was
                  approximately   $80,700  in  2003  and  $46,000  in  2002.  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 $150,700 in 2003 and $119,000 in 2002.

NOTE 16.          COMMITMENTS AND CONTINGENCIES

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

                                      F-26

<PAGE>

NOTE 16.          COMMITMENTS AND CONTINGENCIES (Continued)

                         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  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,  2003 and 2002,  commitments  to  extend  credit
                  amounted  to   approximately   $35,211,000  and   $25,228,700,
                  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,
                  2003 and 2002,  standby  letters of credit with customers were
                  $2,280,163 and $1,615,500, respectively.

                         The Bank does not issue or hold derivative  instruments
                  with the exception of loan  commitments and standby letters of
                  credit. These instruments are issued in the ordinary course of
                  business  to  meet  customer   needs.   Commitments   to  fund
                  fixed-rate   loans  were  immaterial  at  December  31,  2003.
                  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.

                                      F-27

<PAGE>
                            PARKE BANK AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                    SEPTEMBER 30, 2004 AND DECEMBER 31, 2003

<TABLE>
<CAPTION>
                                                                                 September 30,     December 31,
                                                                                    2004               2003
                                                                                -------------    -------------
                                                                                 (unaudited)
<S>                                                                           <C>              <C>
                                    ASSETS
Cash and cash due from banks                                                    $   4,947,859    $   2,542,256
Federal funds sold                                                                  5,514,292        1,725,000
                                                                                -------------    -------------
          Cash and cash equivalents                                                10,462,151        4,267,256

Investment securities available for sale, at fair value                            17,971,383       14,323,035
Investment securities held to maturity, at amortized cost                             547,974          798,999
                                                                                -------------    -------------
    (fair value of  $542,804 and $790,308)
          Total investment securities                                              18,519,357       15,122,034

Restricted stock, at cost                                                             469,200          497,300

Loans                                                                             167,644,574      146,334,331
Less: allowance for loan losses                                                    (2,194,738)      (2,256,070)
                                                                                -------------    -------------
          Total net loans                                                         165,449,836      144,078,261

Bank premises and equipment, net                                                    3,248,065        3,239,413


Accrued interest receivable and other assets                                        7,422,646        6,799,375
                                                                                -------------    -------------

          Total assets                                                          $ 205,571,255    $ 174,003,639
                                                                                =============    =============
</TABLE>
                                      F-28

See Notes to Consolidated Financial Statements

<PAGE>

                            PARKE BANK AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                     SEPTEMBER 30, 2004 AND DECEMBER 31,2003

<TABLE>
<CAPTION>
                                                                             September 30,  December 31,
                                                                                2004           2003
                                                                             ------------   ------------
                                                                              (unaudited)
<S>                                                                        <C>            <C>
LIABILITIES

Deposits
     Non interest-bearing demand                                             $ 15,850,933   $ 12,745,309
     Interest-bearing                                                         156,186,935    129,701,202
                                                                             ------------   ------------
          Total deposits                                                      172,037,868    142,446,511

Borrowed funds                                                                  9,637,318     10,340,123

Accrued interest payable and other accrued liabilities                          1,803,186      1,224,398
                                                                             ------------   ------------

          Total liabilities                                                   183,478,372    154,011,032
                                                                             ------------   ------------

COMMITMENTS AND CONTINGENCIES (Note 1)
SHAREHOLDERS' EQUITY
  Common stock,
    $5 par value, 10,000,000 shares authorized;
    1,795,255 and 1,786,235 shares issued and outstanding
    at September 30, 2004 and December 31, 2003, respectively                   8,976,275      8,931,175
  Additional paid-in capital                                                   10,470,694     10,432,800
  Retained earnings                                                             2,618,177        570,939
  Accumulated other comprehensive income                                           27,737         57,693
                                                                             ------------   ------------
          Total shareholders' equity                                           22,092,883     19,992,607
                                                                             ------------   ------------
          Total liabilities and shareholders' equity                         $205,571,255   $174,003,639
                                                                             ============   ============
</TABLE>

See Notes to Consolidated Financial Statements

                                      F-29
<PAGE>

                            PARKE BANK AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                 For the three     For the three     For the nine     For the nine
                                                 months ended      months ended      months ended     months ended
                                                 September 30,     September 30,     September 30,    September 30,
                                                       2004             2003             2004             2003
                                                   ----------        ----------       ----------      ----------
<S>                                               <C>              <C>              <C>              <C>
INTEREST INCOME
  Interest and fees on loans                       $2,770,890       $2,343,218       $8,022,093       $6,315,798
  Interest and dividends on securities                193,454          164,543          524,030          561,456
  Interest on federal funds sold                       16,006            3,779           30,905           18,790
                                                   ----------       ----------       ----------       ----------
          Total interest and dividend income        2,980,350        2,511,540        8,577,028        6,896,044
                                                   ----------       ----------       ----------       ----------

INTEREST EXPENSE
  Interest on deposits                                898,553          742,709        2,559,127        2,275,387
  Interest on borrowings                               55,606           48,232          157,003          115,845
                                                   ----------       ----------       ----------       ----------
          Total interest expense                      954,159          790,941        2,716,130        2,391,232
                                                   ----------       ----------       ----------       ----------
         Net interest income                        2,026,191        1,720,599        5,860,898        4,504,812

PROVISION FOR LOAN LOSSES                             101,951          175,264          399,411          635,610
                                                   ----------       ----------       ----------       ----------

  Net interest income after provision for losses    1,924,240        1,545,335        5,461,487        3,869,202
                                                   ----------       ----------       ----------       ----------

NON INTEREST INCOME
  Loan brokerage fees                                   5,225           32,301            5,225           42,488
  Service charges and other fee income                278,144          189,059          575,696          477,472
  Gain on sale of securities                            7,889                0            7,889           67,614
                                                   ----------       ----------       ----------       ----------
         Total non interest income                    291,258          221,360          588,810          587,574
                                                   ----------       ----------       ----------       ----------

NON INTEREST EXPENSES
  Compensation and benefits                           479,440          290,699        1,275,220          980,336
  Occupancy, equipment and data processing            184,027          197,215          600,138          584,142
  Marketing and business development                   27,246           25,072          128,565           84,344
  Professional services                                75,646           49,873          191,037          202,730
  Other operating expenses                            190,534          121,022          498,599          329,346
                                                   ----------       ----------       ----------       ----------
          Total non interest expenses                 956,893          683,881        2,693,559        2,180,898
                                                   ----------       ----------       ----------       ----------

INCOME BEFORE INCOME TAX EXPENSE                    1,258,605        1,082,814        3,356,738        2,275,878

INCOME TAX EXPENSE                                    490,000          436,114        1,309,500          887,937
                                                   ----------       ----------       ----------       ----------

NET INCOME                                         $  768,605       $  646,700       $2,047,238       $1,387,941
                                                   ==========       ==========       ==========       ==========

NET INCOME PER COMMON SHARE
      Basic                                        $     0.43       $     0.37       $     1.14       $     0.80
                                                   ==========       ==========       ==========       ==========
      Diluted                                      $     0.37       $     0.33       $     0.97       $     0.73
                                                   ==========       ==========       ==========       ==========

WEIGHTED AVERAGE SHARES
OUTSTANDING
      Basic                                         1,792,778        1,735,095        1,790,901        1,734,381
                                                   ==========       ==========       ==========       ==========
      Diluted                                       2,099,174        1,935,608        2,104,220        1,912,121
                                                   ==========       ==========       ==========       ==========
</TABLE>

See Notes to Consolidated Financial Statements

                                      F-30
<PAGE>

                            PARKE BANK AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                       2004            2003
                                                                                  ------------    ------------
<S>                                                                             <C>             <C>
OPERATING ACTIVITIES
Net income                                                                        $  2,047,238    $  1,387,941
Adjustments to reconcile net income to net cash provided by
 operating activities:
      Depreciation and amortization                                                    184,111         142,570
      Provision for loan losses                                                        399,411         635,610
      Realized gains on sale of securities                                              (7,889)        (67,614)
Changes in operating assets and liabilities:
   Increase in accrued interest receivable and other assets                           (641,808)       (995,292)
   Increase in accrued interest payable and other liabilities                          578,788         478,931
                                                                                  ------------    ------------
      Net cash provided by operating activities                                      2,559,851       1,582,146
                                                                                  ------------    ------------
INVESTING ACTIVITIES
   Purchase of investment securities held to maturity                                        -        (549,682)
   Purchases of investment securities available for sale                            (7,501,871)     (3,721,205)
   Proceeds from sales (purchases) of restricted stock                                  28,100        (202,300)
   Proceeds from sales of investment securities available for sale                   1,144,694       5,949,510
   Proceeds from maturities of investment securities available for sale              1,000,000       2,500,000
   Principal payments on mortgage-backed securities                                  1,956,324       2,811,485
   Purchase of bank-owned life insurance                                                     -      (2,000,000)
   Net increase in loans                                                           (21,770,986)    (32,601,116)
   Purchase of building and equipment                                                 (192,763)       (809,010)
                                                                                  ------------    ------------
      Net cash used in investing activities                                        (25,336,502)    (28,622,318)
                                                                                  ------------    ------------

FINANCING ACTIVITIES
   Net proceeds from issuance of common stock                                           82,994          47,483
   Net (decrease) increase in borrowings                                              (702,805)      4,406,335
   Net increase in interest-bearing deposits                                        26,485,733      17,928,444
   Net increase in non-interest-bearing deposits                                     3,105,624       3,175,670
                                                                                  ------------    ------------
      Net cash provided by financing activities                                     28,971,546      25,557,932
                                                                                  ------------    ------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                     6,194,895      (1,482,240)

CASH AND CASH EQUIVALENTS, JANUARY 1,                                                4,267,256       7,540,376
                                                                                  ------------    ------------

CASH AND CASH EQUIVALENTS, SEPTEMBER 30,                                          $ 10,462,151    $  6,058,136
                                                                                  ============    ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash paid during the period for:
     Interest on deposits and borrowed funds                                      $  2,599,419    $  2,428,651
                                                                                  ============    ============
     Income taxes                                                                 $  1,413,115    $  1,092,000
                                                                                  ============    ============
     Non-monetary charged-off loan                                                $    460,743    $          -
                                                                                  ------------    ------------
</TABLE>

See Notes to Consolidated Financial Statements

                                      F-31

<PAGE>

                            PARKE BANK AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

         Parke 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 insured by the Federal
Deposit Insurance Corporation ("FDIC").  The Bank maintains its principal office
at 601 Delsea Drive,  Washington Township, New Jersey. It also conducts business
through an office in Northfield,  New Jersey that opened in September  2002. The
Bank opened an additional office in Washington Township, New Jersey, in February
2003. The Bank also has another office in  Philadelphia  maintained  exclusively
for loan production.

Financial Statements

         The  financial  statements  as  of  September  30,  2004  and  for  the
three-month  periods  and  nine-month  periods  ended  September  30,  2004  and
September 30, 2003 included  herein have not been audited.  Certain  information
and footnote  disclosures  normally included in financial statements prepared in
accordance with generally accepted accounting  principles ("GAAP") in the United
States of America have been  condensed or omitted;  therefore,  these  financial
statements should be read in conjunction with the audited  financial  statements
and the notes  thereto  for the year ended  December  31,  2003  included in the
Bank's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2003,
as  filed  with  the  Federal  Deposit  Insurance  Corporation   ("FDIC").   The
accompanying  financial  statements  reflect all adjustments,  which are, in the
opinion of management,  necessary to present a fair statement of the results for
the  interim  periods  presented.  Such  adjustments  are of a normal  recurring
nature.  The  results  for the nine  months  ended  September  30,  2004 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2004.

Basis of Financial Statement Presentation

         The  financial  statements  include the  accounts of Parke Bank and its
subsidiary.  All significant  inter-company  accounts and transactions have been
eliminated.  Such  statements  have been prepared in accordance  with accounting
principles  generally  accepted  in the  United  States of America  and  general
practice within the banking industry.

Use of Estimates

         The  preparation of financial  statements  requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities and the disclosure of contingent  assets and liabilities at the date
of the financial  statements  and the reported  amounts of revenues and expenses
during the reporting period. Actual results could differ from such estimates.

Commitments

         In the  general  course  of  business,  there are  various  outstanding
commitments to extend  credit,  such as letters of credit and  un-advanced  loan
commitments,  which are not reflected in the accompanying  financial statements.
Management  does  not  anticipate  any  material  losses  as a  result  of these
commitments.

Contingencies

         The Bank is from  time to time a party  to  routine  litigation  in the
normal course of its business.  Management  does not believe that the resolution
of  this  litigation  will  have a  material  adverse  effect  on the  financial
condition or results of operations of the Bank. However, the ultimate outcome of
any such litigation,  as with litigation generally,  is inherently uncertain and
it si possible  that some  litigation  matters may be resolved  adversely to the
Bank.

                                      F-32

<PAGE>

                            PARKE BANK AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Critical Accounting Policies

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


Note 2. EARNINGS PER SHARE

         Basic  earnings per share is computed by dividing net income  available
to common  stockholders (the numerator) by the weighted average number of common
shares outstanding (the denominator) during the period. Shares issued during the
period are  weighted  for the portion of the period that they were  outstanding.
The weighted  average  number of common shares  outstanding  for the  nine-month
periods  ended  September  30,  2004  and  2003  was  1,790,901  and  1,734,381,
respectively.

         Dilutive  earnings  per share are similar to the  computation  of basic
earnings  per share  except that the  denominator  is  increased  to include the
number of  additional  common  shares  that would have been  outstanding  if the
dilutive  options  and  warrants  outstanding  had been  exercised.  The assumed
conversion of dilutive  options and warrants  resulted in an additional  313,319
and 177,740  shares for dilution for the nine month periods ended  September 30,
2004 and 2003, respectively.

         Both  basic  and  dilutive   earnings  per  share   computations   give
retroactive effect to stock dividends declared in 2003.

Note 3. REGULATORY RESTRICTIONS

         The Bank is subject  to  various  regulatory  capital  requirements  of
federal and state 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
Bank'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 assets,  liabilities,
and certain  off-balance  sheet items as calculated under regulatory  accounting
practices.  The Bank's capital  amounts and  classification  are also subject to
qualitative judgments by the regulators about components,  risk weightings,  and
other factors.

Pursuant to the Bank's charter and its de novo status, since its inception,  the
Bank has been subject to, and has complied with the following restrictions:

         1.       Audited financial statements for five years;

         2.       Limitation on interest  rates paid on deposits for five years;
                  and

         3.       Limitation on the availability of the Bank's undistributed net
                  assets for the  payment of cash  dividends  without  the prior
                  approval of regulatory authorities.

The  restrictions  were removed  January 27, 2004 because the bank was no longer
considered a de novo.

                                      F-33

<PAGE>

                            PARKE BANK AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 3. REGULATORY RESTRICTIONS (continued)

         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).

                                                                 For Capital
                                           Actual              Adequacy Purpose
                                       Amount    Ratio         Amount    Ratio
                                       ------    -----         ------    -----
As of September 30, 2004:
-------------------------
Total Risk Based Capital             $24,199      14%         $13,650      8%
(to Risk Weighted Assets)
     Tier 1 Capital                   22,065      13%           6,825      4%
(to Risk Weighted Assets)
     Tier 1 Capital                   22,065      11%           8,048      4%
(to Average Assets)

As of December 31, 2003:
------------------------
Total Risk Based Capital             $21,764      15%         $11,670      8%
(to Risk Weighted Assets)
     Tier 1 Capital                   19,935      14%           5,835      4%
(to Risk Weighted Assets)
     Tier 1 Capital                   19,935      12%           6,574      4%
(to Average Assets)


           Management believes,  as of September 30, 2004 and December 31, 2003,
that the Bank met all capital adequacy requirements to which it was subject.

                                      F-34



<PAGE>



                                                                   APPENDIX A

                               PLAN OF ACQUISITION


                                       A-1

<PAGE>



                                                                   APPENDIX B

               CERTIFICATE OF INCORPORATION OF PARKE BANCORP, INC.


                                       B-1

<PAGE>



                                                                   APPENDIX C

                          BYLAWS OF PARKE BANCORP, INC.



                                       C-1

<PAGE>



                                                                   APPENDIX D

            SECTIONS 140 TO 145 OF THE NEW JERSEY BANKING ACT OF 1948
                       (RIGHTS OF DISSENTING SHAREHOLDERS)

17:9A-140. RIGHTS OF DISSENTING STOCKHOLDERS: SETTLEMENT BY AGREEMENT

A.   A stockholder who

     (1)  is  entitled  to vote at the  meeting of  stockholders  prescribed  by
          section 137; and who

     (2)  serves a written notice of dissent from the merger  agreement,  in the
          manner,  at the place, and within the time prescribed in subsections B
          and C of this section; and who

     (3)  does  not  vote  to  approve  the  merger  agreement  at  the  meeting
          prescribed by section 137, or at any adjournment thereof,

         may,  within  thirty  days  after the  filing of the  agreement  in the
department as provided by section 137, serve a demand upon the receiving bank at
its  principal  office,  for the  payment  to him of the value of his  shares of
stock. The receiving bank may, within ten days after the receipt of such demand,
offer to pay the stockholder a sum for his shares,  which, in the opinion of the
board of directors of the receiving bank, does not exceed the amount which would
be paid upon such shares if the business and assets of the bank whose stock such
stockholder  holds were  liquidated  on the day of the  filing of the  agreement
pursuant to section 137.

B.   Service of the notice of dissent  prescribed by paragraph (2) of subsection
     A of this section shall be made at the  principal  office of the bank whose
     stock is held by the  dissenting  stockholder,  and shall be made not later
     than  the  third  day  prior  to the  day  fixed  for  the  meeting  of the
     stockholders of such bank pursuant to section 137.

C.   Service of the notice of dissent and of the demand for  payment  prescribed
     by this  section  may be  made by  registered  mail  or  personally  by the
     dissenting stockholder or his agent.

17:9A-141. APPOINTMENT OF APPRAISERS

         If a  stockholder  fails  to  accept  the sum  offered  for his  shares
pursuant to section 140, he may,  within three weeks after the receipt by him of
the bank's offer of payment,  or, if no offer is made by the bank,  within three
weeks after the date upon which his demand was served upon the bank as specified
in section 140, institute an action in the Superior Court for the appointment of
a board of three  appraisers to determine the value of his shares of stock as of
the day of the filing of the merger agreement pursuant to section 137. The court
may  proceed  in  the  action  in a  summary  manner  or  otherwise.  Any  other
stockholder  who has the right to institute a similar action may intervene.  The
court  shall,  in  respect  to any one  bank,  appoint  a single  board of three
appraisers to determine the value of the shares of all stockholders of such bank
who are parties to such action.

17:9A-142. DUTIES OF APPRAISERS; REPORT; OBJECTIONS; COMPENSATION; VACANCIES

A.   The  appraisers  shall be sworn to the faithful  discharge of their duties.
     They  shall meet at such  place or  places,  and shall give such  notice of
     their  meetings as the court may prescribe.  The bank and each  stockholder
     who is a party to the action  instituted  pursuant to section  141,  may be
     represented by attorneys in the proceedings before such appraisers, and may
     present  such  evidence  to them as shall be  material  to the  issue.  The
     determination of any two of the appraisers shall control. Upon the

                                       D-1

<PAGE>



     conclusion  of  their  deliberations,  the  appraisers  shall  file  in the
     Superior  Court a report and appraisal of the value of the shares of stock,
     and shall mail a copy thereof to the bank and to each  stockholder who is a
     party to said action.

B.   The bank and each  stockholder who is a party to said action shall have ten
     days after the filing of the report and  appraisal  within  which to object
     thereto in the Superior Court. In the absence of any objections, the report
     and  appraisal  shall be binding upon the bank and upon such  stockholders,
     and the bank shall pay each such  stockholder  the value of his shares,  as
     reported by the  appraisers,  with  interest from the date of the filing of
     the merger  agreement  pursuant to section 137, at such rate, not in excess
     of the legal rate, as shall be fixed by the  appraisers.  If objections are
     made, the court shall make such order or judgment thereon as shall be just.

C.   The Superior  court shall fix the  compensation  of the  appraisers,  which
     shall be paid by the bank, and shall be vested with full  jurisdiction over
     all matters arising out of any action  instituted  pursuant to section 141.
     In the case of a vacancy in the board of  appraisers,  the  Superior  Court
     shall,  on its own  motion,  or upon  motion  of a  stockholder,  or of the
     receiving bank, fill such vacancy.

17;9A-143. ASSIGNMENT OF STOCK TO BANK

         Upon  payment by the bank of the value of shares of stock  pursuant  to
this article, the holder thereof shall assign such shares to the bank.

17:91-144. EFFECT OF STOCKHOLDER'S FAILURE TO ACT

         A  stockholder  who fails to act pursuant to sections 140 and 141 shall
be forever  barred from  bringing any action to enforce his right to be paid the
value of his shares in lieu of  continuing  his status as a  stockholder  in the
receiving bank.


                                       D-2

<PAGE>




                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.          Indemnification of Directors and Officers.

         In accordance with the New Jersey  Business  Corporation  Act,  Article
XVIII of the Registrant's  Certificate of Incorporation  provides as follows. In
addition, under a directors' and officers' liability insurance policy, directors
and  officers  of  the  Registrant  are  insured  against  certain  liabilities,
including certain liabilities under the Securities Act of 1933, as amended.

                                  ARTICLE XVIII

                                 Indemnification
                                 ---------------

         A. Indemnification.  The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened,  pending or
completed  action,  suit or proceeding,  including actions by or in the right of
the  Corporation,  whether  civil,  criminal,  administrative,   arbitrative  or
investigative,  by reason of the fact  that  such  person is or was a  director,
officer,  employee or agent of the Corporation or of any constituent corporation
absorbed by the Corporation in a consolidation  or merger,  or is or was serving
at the request of the Corporation as a director,  officer,  employee or agent of
another Corporation,  partnership, joint venture, sole proprietorship,  trust or
other enterprise,  against expenses  (including  attorneys'  fees),  judgements,
fines and amounts paid in settlement  actually and  reasonably  incurred by such
person in  connection  with such action,  suit or  proceeding to the full extent
permissible under New Jersey law.

         B. Advance  Payment.  The  Corporation  may pay in advance any expenses
(including  attorneys' fees) which may become subject to  indemnification  under
Section A of this Article XVIII if the person  receiving the payment  undertakes
in writing to repay the same if it is  ultimately  determined  that he or she is
not entitled to indemnification by the Corporation under New Jersey law.

         C.  Nonexclusive.  The  indemnification  and  advancement  of  expenses
provided by Sections A and B of this Article XVIII or otherwise granted pursuant
to New Jersey law shall not be  exclusive  of any other rights to which a person
may be entitled by law, bylaw, agreement, vote of stockholders, or disinterested
directors, or otherwise.

         D. Continuation.  The  indemnification  and advance payment provided by
Sections A and B shall continue as to a person who has ceased to hold a position
named in paragraph A of this Article  XVIII and shall inure to his or her heirs,
executors and  administrators.  In addition,  any repeal or modification of this
Article XVIII by the stockholders of the Corporation  shall not adversely affect
any right or protection of a director or officer of the Corporation hereunder or
otherwise  with respect to any act or omission  occurring  before such repeal or
modification is effective.

         E. Insurance.  The  Corporation may purchase and maintain  insurance on
behalf of any person who holds or who has held any  position  named in Section A
of this Article XVIII,  against any liability incurred by him or her in any such
position,  or  arising  out of his or her  status  as such,  whether  or not the
Corporation  would have power to  indemnify  him or her against  such  liability
under this Article and New Jersey law.

         F. Savings Clause. If this Article XVIII or any portion hereof shall be
invalidated  on any  ground by any  court of  competent  jurisdiction,  then the
Corporation shall nevertheless indemnify each director, officer,

                                      II-1

<PAGE>



employee,  and agent of the  Corporation  as to  costs,  charges,  and  expenses
(including  attorneys' fees),  judgments,  fines, and amounts paid in settlement
with  respect to any action,  suit,  or  proceeding,  whether  civil,  criminal,
administrative,  arbitrative or investigative,  including an action by or in the
right of the Corporation to the full extent permitted by any applicable  portion
of this  Article  XVIII  that  shall not have been  invalidated  and to the full
extent permitted by applicable law.

Item 21.          Exhibits and Financial Statements Schedules

         The exhibits and financial  statement schedules filed as a part of this
Registration Statement are as follows:

         (a) List of Exhibits (filed herewith unless otherwise noted)

         2.1      Plan of Acquisition
         3(i)     Certificate of Incorporation of Parke Bancorp, Inc.
         3(ii)    Bylaws of Parke Bancorp, Inc.
         4.1      Common stock certificate of Parke Bancorp, Inc.
         4.2      Common stock purchase warrant
         5        Opinion of Malizia Spidi & Fisch, PC
         8        Federal Tax Opinion of Malizia Spidi & Fisch, PC
         10.1     Employment Agreement between Parke Bank and Vito S. Pantilione
         10.2     Supplemental Executive Retirement Plan
         10.3     1999 Non-Qualified Stock Option Plan
         10.4     2002 Employee Equity Incentive Plan
         10.5     2003 Stock Option Plan
         21       Subsidiaries of the Registrant
         23.1     Consent of McGladrey & Pullen, LLP
         23.2     Consent of Malizia Spidi & Fisch, PC (contained in its
                    opinions filed as Exhibits 5 and 8)
         24       Power of Attorney (set forth on the signature page)
         99       Form of Proxy

         (b)  Financial Statement Schedules

         All schedules have been omitted as not applicable or not required under
the rules of Regulation S-X.

Item 22.          Undertakings.

(a) Undertakings Required by Item 512 of Regulation S-K.

         The undersigned Registrant hereby undertakes:

         (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:

         (i) To include  any  Prospectus  required  by Section  10(a)(3)  of the
Securities Act of 1933;

         (ii) To reflect in the Prospectus any facts or events arising after the
effective date of the Registration  Statement (or the most recent post-effective
amendment  thereof)  which,  individually  or  in  the  aggregate,  represent  a
fundamental  change in the information set forth in the Registration  Statement.
Notwithstanding the foregoing,  any increase or decrease in volume of securities
offered (if the total dollar value

                                      II-2

<PAGE>



of the securities  offered would not exceed that which was  registered)  and any
deviation from the low or high and the estimated  maximum  offering range may be
reflected in the form of Prospectus  filed with the Commission  pursuant to Rule
424 (b) if, in the aggregate,  the changes in volume and price represent no more
than 20 percent change in the maximum aggregate  offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration Statement;

         (iii) To include any material  information  with respect to the plan of
distribution  not  previously  disclosed  in the  Registration  Statement or any
material change to such information in the Registration Statement;

         (2) That,  for the  purpose  of  determining  any  liability  under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

         (3) To remove from registration by means of a post-effective  amendment
any of the securities being registered which remain unsold at the termination of
the Offering.

         The  undersigned  Registrant  hereby  undertakes  that, for purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
Registrant's  annual  report  pursuant  to  Section  13  (a)  or 15  (d)  of the
Securities  Exchange Act of 1934 (and each filing of an employee  benefit plan's
annual report pursuant to Section 15 (d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the Registration  Statement shall be deemed
a new registration statement relating to the securities offered therein, and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

         The undersigned  Registrant  hereby undertakes that prior to any public
reoffering of the securities  registered  hereunder  through use of a prospectus
which is a part of this  registration  statement,  by any person or party who is
deemed to be an  underwriter  within  the  meaning  of Rule  145(c),  the issuer
undertakes that such reoffering  prospectus will contain the information  called
for by the applicable  registration  form with respect to reofferings by persons
who may be deemed underwriters, in addition to the information called for by the
other items of the applicable form.

         The undersigned Registrant hereby undertakes that every prospectus: (i)
that is filed  pursuant to the  paragraph  immediately  preceding,  or (ii) that
purports to meet the  requirements of Section  10(a)(3) of the Securities Act of
1933 and is used in connection  with an offering of  securities  subject to Rule
415, will be filed as a part of an amendment to the  registration  statement and
will not be used until such  amendment is effective,  and that,  for purposes of
determining   any  liability  under  the  Securities  Act  of  1933,  each  such
post-effective  amendment  shall be  deemed to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors,  officers and controlling  persons of
the  Registrant  pursuant  to  the  foregoing  provisions,   or  otherwise,  the
Registrant  has been advised that in the opinion of the  Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore,  unenforceable. In the event that a claim for indemnification
against such  liabilities  (other than the payment by the Registrant of expenses
incurred or paid by a director,  officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director,  officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question of whether such

                                      II-3

<PAGE>



indemnification  by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

(b) The  undersigned  registrant  hereby  undertakes  to respond to requests for
information    that   is    incorporated    by   reference    into   the   proxy
statement/prospectus  pursuant to Item 4, 10 (b), 11 or 13 of this form,  within
one  business  day of  receipt  of such  request,  and to send the  incorporated
documents  by first class mail or other  equally  prompt  means.  This  includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.

(c) The  undersigned  registrant  hereby  undertakes  to  supply  by  means of a
post-effective  amendment  all  information  concerning a  transaction,  and the
company  being  acquired  involved  therein,  that  was not the  subject  of and
included in the registration statement when it became effective.





                                      II-4

<PAGE>



                                   SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
Registrant has duly caused this Registration  Statement on Form S-4 to be signed
on its behalf by the undersigned,  hereunto duly authorized, in the State of New
Jersey on January 31, 2005.

                                 Parke Bancorp, Inc.


                                 /s/Vito S. Pantilione
                                 ---------------------------------------------
                                 Vito S. Pantilione
                                 President, Chief Executive Officer and Director
                                 (Duly Authorized Representative)

         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
Registration  Statement has been signed by the following  persons on January 31,
2005 in the  capacities  indicated.  Each person whose  signature  appears below
hereby makes,  constitutes  and appoints Vito S.  Pantilione his true and lawful
attorney,  with full power to sign for each person and in such person's name and
capacity  indicated  below,  and with full  power of  substitution,  any and all
amendments to this Registration Statement,  hereby ratifying and confirming such
person's  signature  as it may be  signed  by  said  attorney  to  any  and  all
amendments.

<TABLE>
<CAPTION>


<S>                                   <C>
/s/Celestino R. Pennoni                     /s/Vito S. Pantilione
-----------------------------------------   -----------------------------------------------------
Celestino R. Pennoni                        Vito S. Pantilione
Chairman                                    President, Chief Operating Officer and Director


/s/Ernest D. Huggard                        /s/Daniel J. Dalton
-----------------------------------------   -----------------------------------------------------
Ernest D. Huggard                           Daniel J. Dalton
Senior Vice President, Chief Financial      Director
Officer and Chief Operating Officer


/s/Fred G. Choate
-----------------------------------------
Fred G. Choate
Director

</TABLE>



                                      II-5


</TEXT>
</DOCUMENT>
