UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
PARK BANCORP, INC.
(Exact name of registrant as specified in its charter)
0-20867
(Commission File Number)
DELAWARE
(State of incorporation)
36-4082530
(IRS Employer Identification No.)
5400 SOUTH PULASKI ROAD, CHICAGO, ILLINOIS
(Address of Principal Executive Offices)
60632
(ZIP Code)
(773) 582-8616
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes _____x_____ No ___________
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
Yes ___ No _x_
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
As of May 8, 2003, the Registrant had outstanding 1,193,595 shares of common
stock.
PARK BANCORP, INC.
Form 10-Q Quarterly Report
Index
Page
----
PART I - Financial Information
Item 1 Financial Statements 1
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Item 3 Quantitative and Qualitative Disclosures About Market Risk 9
Item 4 Controls and Procedures 10
PART II - Other Information
Item 1 Legal Proceedings 12
Item 2 Changes in Securities 12
Item 3 Defaults Upon Senior Securities 12
Item 4 Submission of Matters to a Vote of Securities Holders 12
Item 5 Other Information 12
Item 6 Exhibits and Reports on Form 8-K 12
SIGNATURES 13
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This report contains certain forward-looking statements within the meaning of
Section 27a of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Park Bancorp, Inc. (the Company)
intends such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private Securities
Reform Act of 1995, as amended, and is including this statement for purposes of
these safe harbor provisions. Forward-looking statements, which are based on
certain assumptions and describe future plans, strategies, and expectations of
the Company, are generally identifiable by use of the words such as "believe,"
"expect," "intend," "anticipate," "estimate," "project," or similar expressions.
The Company's ability to predict results or the actual effect of future plans or
strategies is inherently uncertain. Factors that could have a material adverse
effect on the operations and future prospects of the Company and its wholly
owned subsidiaries include, but are not limited to, changes in: interest rates;
the economic health of the local real estate market; general economic
conditions; legislative/regulatory provisions; monetary and fiscal policies of
the U.S. Government, including policies of the U.S. Treasury and the Federal
Reserve Board; the quality or composition of the loan and securities portfolios;
demand for loan products; deposit flows; competition; demand for financial
services in the Company's market area; and accounting principles, policies, and
guidelines. These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements.
ITEM 1 - FINANCIAL STATEMENTS
PARK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)
(UNAUDITED)
MARCH 31, DECEMBER 31,
2003 2002
------------ ------------
ASSETS
Cash and due from banks $ 2,061 $ 3,226
Federal funds sold 31,119 16,310
Interest-bearing deposit accounts in other financial institutions 1,193 4,462
------------ ------------
Total cash and cash equivalents 34,373 23,998
Time deposits with other financial institutions 1,125 1,117
Securities available-for-sale 60,975 61,113
Loans receivable, net 149,357 147,993
Federal Home Loan Bank stock 7,486 7,327
Premises and equipment, net 3,020 2,703
Accrued interest receivable 1,078 1,195
Bank-owned life insurance 5,444 5,381
Other assets 871 705
------------ ------------
Total assets $ 263,729 $ 251,532
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Non-interest bearing deposits $ 5,106 $ 4,478
Interest bearing deposits 167,171 159,490
------------ ------------
Total deposits 172,277 163,968
Securities sold under repurchase agreements 10,365 10,599
Advances from borrowers for taxes and insurance 1,600 1,969
Federal Home Loan Bank advances 48,019 43,663
Accrued interest payable 162 396
Other liabilities 1,738 1,043
------------ ------------
Total liabilities 234,161 221,638
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value, 1,000,000 shares authorized;
none issued and outstanding -- --
Common stock, $.01 par value, 9,000,000 shares authorized;
issued, 2,719,631 and 2,719,131 shares 27 27
Additional paid-in capital 27,114 27,050
Retained earnings 27,730 27,407
Treasury stock at cost - 1,526,036 and 1,493,836 shares, at cost (25,254) (24,491)
Unearned ESOP shares (942) (979)
Accumulated other comprehensive income 893 880
------------ ------------
Total stockholders' equity 29,568 29,894
------------ ------------
Total liabilities and stockholders' equity $ 263,729 $ 251,532
============ ============
See accompanying notes to consolidated financial statements.
1.
PARK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
2003 2002
---------- ----------
Interest income
Loans receivable $ 2,569 $ 2,548
Securities 807 1,026
Other interest-bearing deposits 83 82
---------- ----------
Total 3,459 3,656
Interest expense
Deposits 1,052 1,482
Federal Home Loan Bank advances and other borrowings 572 604
---------- ----------
Total 1,624 2,086
---------- ----------
Net interest income 1,835 1,570
Provision for loan losses 0 15
---------- ----------
Net interest income after provision for loan losses 1,835 1,555
Noninterest income
Gain on sale of securities 68 176
Service fee income 89 71
Earnings on bank-owned life insurance 72 78
Other operating income 11 10
---------- ----------
Total noninterest income 240 335
Noninterest expense
Compensation and benefits 858 750
Occupancy and equipment expense 156 155
Other operating expenses 331 272
---------- ----------
Total noninterest expense 1,345 1,177
---------- ----------
Income before income taxes 730 713
Income tax expense 241 222
---------- ----------
Net income $ 489 $ 491
========== ==========
Basic earnings per share $ .44 $ .44
Diluted earnings per share $ .42 $ .43
Comprehensive income (loss) $ 502 $ (11)
See accompanying notes to consolidated financial statements.
2.
PARK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
2003 2002
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 489 $ 491
Adjustments to reconcile net income to net cash from
operating activities
Net premium amortization on securities 41 6
Gain on sale of securities available-for-sale (68) (176)
Earnings on bank-owned life insurance, net (63) (71)
Provision for loan losses -- 15
Depreciation 75 75
ESOP compensation expense 93 88
FHLB stock dividends (159) (63)
Net change in:
Accrued interest receivable 117 86
Accrued interest payable (234) (344)
Other assets (147) (358)
Other liabilities 695 192
----------- -----------
Net cash from operating activities 839 (59)
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans (1,364) (9,573)
Purchase of securities available for sale (4,380) (18,289)
Maturities and calls of securities available-for-sale -- 5,720
Principal repayments on mortgage-backed securities 3,470 1,678
Proceeds from sales of securities available-for-sale 1,061 1,035
Purchase of premises and equipment (392) (33)
----------- -----------
Net cash from investing activities (1,605) (19,462)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits 8,309 (1,812)
Net change in repurchase agreements (234) (217)
Net change in advances from borrowers for taxes and insurance (369) (253)
Net change in Federal Home Loan Bank advances 4,356 --
Stock options exercised 8 272
Purchase of treasury stock (763) (154)
Dividends paid (166) (133)
----------- -----------
Net cash from financing activities 11,141 (2,297)
----------- -----------
Net change in cash and cash equivalents 10,375 (21,818)
Cash and cash equivalents at beginning of period 23,998 27,909
----------- -----------
Cash and cash equivalents at end of period $ 34,373 $ 6,091
=========== ===========
See accompanying notes to consolidated financial statements.
3.
PARK BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)
(UNAUDITED)
Accumulated Total
Additional Unearned Other Stock-
Common Paid-in Retained ESOP Treasury Comprehensive holders'
Stock Capital Earnings Shares Stock Income (Loss) Equity
-------- -------- -------- -------- -------- -------- --------
2002
----
Balance at January 1, 2002 $ 27 $ 26,600 $ 25,845 $ (1,131) $(24,019) $ (44) $ 27,278
Net income - - 491 - - - 491
Change in fair value of securities
available-for-sale, net of income taxes - - - - - (502) (502)
--------
Total comprehensive income (loss) (11)
Exercise of 17,290 stock options - 272 - - - - 272
Purchase of 8,300 shares of treasury stock - - - - (154) - (154)
Dividends declared - - (133) - - - (133)
ESOP shares earned - 50 - 38 - - 88
-------- -------- -------- -------- -------- -------- --------
Balance at March 31, 2002 $ 27 $ 26,922 $ 26,203 $ (1,093) $(24,173) $ (546) $ 27,340
======== ======== ======== ======== ======== ======== ========
2003
----
Balance at January 1, 2003 $ 27 $ 27,050 $ 27,407 $ (979) $(24,491) $ 880 $ 29,894
Net income - - 489 - - - 489
Change in fair value of securities
available-for-sale, net of income taxes - - - - - 13 13
--------
Total comprehensive income 502
Exercise of 500 stock options - 8 - - - - 8
Purchase of 32,200 shares of treasury stock - - - - (763) - (763)
Dividends declared - - (166) - - - (166)
ESOP shares earned - 56 - 37 - - 93
-------- -------- -------- -------- -------- -------- --------
Balance at March 31, 2003 $ 27 $ 27,114 $ 27,730 $ (942) $(25,254) $ 893 $ 29,568
======== ======== ======== ======== ======== ======== ========
4.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
(table amounts in thousands of dollars, except share data)
Note 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements include the
accounts of Park Bancorp, Inc. (the Company) and its wholly owned subsidiaries,
Park Federal Savings Bank (the Bank) and PBI Development Corporation (PBI), and
the Bank's subsidiaries, GPS Corporation and GPS Development Corporation (GPS),
as of March 31, 2003 and December 31, 2002 and for the three-month periods ended
March 31, 2003 and 2002. Significant intercompany accounts and transactions have
been eliminated in consolidation.
The accompanying unaudited interim consolidated financial statements have been
prepared pursuant to the rules and regulations for reporting on Form 10-Q.
Accordingly, certain disclosures required by accounting principles generally
accepted in the United States of America are not included herein. These interim
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's 2002 Annual Report on
Form 10-K filed with the Securities and Exchange Commission. The December 31,
2002 balance sheet presented herein has been derived from the audited financial
statements included in the Company's 2002 Annual Report on Form 10-K filed with
the Securities and Exchange Commission, but does not include all disclosures
required by accounting principles generally accepted in the United States of
America.
Interim statements are subject to possible adjustment in connection with the
annual audit of the Company for the year ending December 31, 2003. In the
opinion of management of the Company, the accompanying unaudited interim
consolidated financial statements reflect all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation of the consolidated
financial position and consolidated results of operations for the periods
presented.
The results of operations for the three months ended March 31, 2003 and 2002 are
not necessarily indicative of the results to be expected for the full year.
5.
NOTE 2 - EARNINGS PER SHARE
The following table presents a reconciliation of the components used to compute
basic and diluted earnings per share for the three-month periods ended March 31,
2003 and 2002.
2003 2002
---- ----
BASIC EARNINGS PER SHARE
Net income as reported $ 489 $ 491
Weighted average common shares outstanding 1,106,953 1,118,046
-------------- --------------
Basic earnings per share $ .44 $ .44
============== ==============
DILUTED EARNINGS PER SHARE
Net income as reported $ 489 $ 491
Weighted average common shares outstanding 1,106,953 1,118,046
Dilutive effect of stock options 70,190 32,876
-------------- --------------
Average common shares and dilutive
potential common shares 1,177,143 1,150,922
-------------- --------------
Diluted earnings per share $ .42 $ .43
============== ==============
The following table illustrates the effect on net income and earnings per share
if expense was measured using the fair value recognition of FASB Statement No.
123, ACCOUNTING FOR STOCK-BASED COMPENSATION.
2003 2002
---- ----
Net income as reported $ 489 $ 491
Deduct: Stock-based compensation expense
Determined under fair value based method (4) (9)
------------- --------------
Pro forma net income 485 482
Basic earnings per share as reported .44 .44
Pro forma basic earnings per share .44 .43
Diluted earnings per share as reported .42 .43
Pro forma diluted earnings per share .41 .42
Note 3 - Recent Accounting Pronouncements
Effective January 1, 2003, SFAS 143, "Accounting for Asset Retirement
Obigations", became effective for the Company. The statement requires that the
fair value of a liability for an asset retirement obligation be recognized in
the period incurred. Adoption of SFAS 143 did not have a material effect on the
financial position and operations of the Company.
6.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion compares the financial condition of Park Bancorp, Inc.
(the Company) and its wholly owned subsidiaries, Park Federal Savings Bank (the
Bank) and PBI Development Corporation, and the Bank's subsidiaries, at March 31,
2003 to its financial condition at December 31, 2002 and the results of
operations for the three months ended March 31, 2003 to the same period in 2002.
This discussion should be read in conjunction with the interim financial
statements and footnotes included herein.
FINANCIAL CONDITION
Total assets at March 31, 2003 were $263.7 million compared to $251.5 million at
December 31, 2002, an increase of $12.2 million. During the three months ended
March 31, 2003, cash and cash equivalents increased $10.4 million and loans
receivable increased by $1.4 million. The increase in cash and cash equivalents
was funded from an increase in deposits that have not yet been redeployed into
loans or securities.
The allowance for loan losses was $579,000 and $574,000 at March 31, 2003 and
December 31, 2002, respectively. Non-performing assets were $289,000 and
$290,000 at March 31, 2003 and December 31, 2002, respectively.
Total liabilities at March 31, 2003 were $234.2 million compared to $221.6
million at December 31, 2002, an increase of $12.6 million, primarily due to an
increase in deposits of $8.3 million and a $4.4 million increase in Federal Home
Loan Bank advances. Deposits continued to increase as a result of consumers'
hesitancy to place funds in other investment vehicles such as the stock market
in the current economic environment. Federal Home Loan Bank advances increased
as a result of management taking advantage of low fixed rate term advances for
asset/liability management purposes.
Stockholders' equity at March 31, 2003 was $29.6 million compared to $29.9
million at December 31, 2002. The decrease was primarily attributable to the
repurchase of 32,200 shares at an average price of $23.70 and dividends declared
of $166,000, offset by the net income of the Company.
RESULTS OF OPERATIONS
Net income decreased to $489,000 for the quarter ended March 31, 2003 from
$491,000 for the quarter ended March 31, 2002.
Net interest income was $1.8 million for the three months ended March 31, 2003
compared to $1.6 million for the same quarter in 2002. The net interest margin
increased to 3.01% for the 2003 period from 2.72% for the 2002 period. This was
largely due to an increase in the spread to 2.78% from 2.37% for the 2002
period. The increase in the spread was a result of the yield on deposits and
borrowings decreasing more rapidly in the current interest rate environment than
loans and securities, which were slower to reprice. The average yield on earning
assets decreased to 5.68% for the quarter ended March 31, 2003 from 6.32% for
the 2002 period. The average cost of funds decreased to 2.90% for the quarter
ended March 31, 2003 from 3.95% for the quarter ended March 31, 2002.
7.
Management establishes provisions for loan losses, which are charged to
operations, at a level management believes is appropriate to absorb probable
incurred credit losses in the loan portfolio. In evaluating the level of the
allowance for loan losses, management considers historical loss experience, the
types of loans and the amount of loans in the loan portfolio, adverse situations
that may affect the borrower's ability to repay, estimated value of any
underlying collateral, peer group information, and prevailing economic
conditions. This evaluation is inherently subjective, as it requires estimates
that are susceptible to significant revision as more information becomes
available or as future events change. The provision for loan losses was $0 and
$15,000 for the quarters ended March 31, 2003 and 2002, respectively. Management
believes that its assessment of the allowance for loan losses is adequate, given
trends in loan delinquencies and historical loss experience of the portfolio and
current economic conditions.
Management assesses the allowance for loan losses on a quarterly basis and makes
provisions for loan losses as necessary in order to maintain the allowance.
While management uses available information to recognize losses on loans, future
loan loss provisions may be necessary based on changes in economic conditions.
In addition, various regulatory agencies, as an integral part of their
examination process, periodically review the allowance for loan losses and may
require us to recognize additional provisions based on their judgment of
information available to them at the time of their examination. The allowance
for loan losses as of March 31, 2003 is maintained at a level that represents
management's best estimate of inherent losses in the loan portfolio, and such
losses were both probable and reasonably estimable.
Noninterest income decreased to $240,000 for the quarter ended March 31, 2003
from $335,000 for the quarter ended March 31, 2002. The change was due to a
decrease in gain on sale of securities from $176,000 for the quarter ended March
31, 2002 to $68,000 from the quarter ended March 31, 2003. This was partially
offset by an increase in service fees as a result of an increase in the deposit
base.
Noninterest expense increased to $1.3 million for the quarter ended March 31,
2003, compared to $1.2 million for the corresponding three month period in 2002,
due primarily to higher compensation costs due to increases in employee
benefits.
The Company's federal income tax expense increased to $241,000 for the
three-month period ended March 31, 2003 from $222,000 for the three-month period
ended March 31, 2002. The change in income tax was attributable to the increase
in income before income taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of funds are deposits, principal and interest
payments on loans and securities, proceeds from maturities and calls of
securities, FHLB advances, and securities sold under repurchase agreements.
While maturities and scheduled amortization of loans and securities are
predictable sources of funds, deposit flows and mortgage prepayments are greatly
influenced by general interest rates, economic conditions, and competition. The
Bank's liquidity ratio was 48% at March 31, 2003.
The Company's cash flows are comprised of three primary classifications: cash
flows from operating activities, investing activities, and financing activities.
Cash flows from operating activities were $839,000 and $(59,000) in 2003 and
2002, respectively. Net cash from investing activities consisted primarily of
disbursements for loan originations and the purchase of securities, offset by
principal collections on loans, and proceeds from maturing securities and
paydowns on mortgage-backed securities. Net cash from financing activities
consisted primarily of the activity in deposit accounts,
8.
FHLB borrowings, and securities sold under repurchase agreements in addition to
the purchase of treasury stock. The net cash from financing activities was $11.1
million and $(2.3) million in 2003 and 2002, respectively.
At March 31, 2003, the Bank exceeded all of its regulatory capital requirements
with a Tier 1 (core) capital level of $23.1 million, or 9.0% of adjusted total
assets, which is above the required level of $10.3 million, or 4.0%; and total
risk-based capital of $23.7 million, or 16.2% of risk-weighted assets, which is
above the required level of $11.7 million, or 8.0%. The Bank at March 31, 2003
was categorized as well capitalized. Management is not aware of any conditions
or events since the most recent notification that would change the Bank's
category.
The Bank's most liquid assets are cash and short-term investments. The levels of
these assets are dependent on the Bank's operating, financing, lending, and
investing activities during any given period. At March 31, 2003, cash and
short-term investments totaled $34.4 million. The Bank has other sources of
liquidity if a need for additional funds arises, including the repayment of
loans and mortgage-backed securities. The Bank may also utilize FHLB advances or
the sale of securities available-for-sale as a source of funds.
At March 31, 2003, the Bank had outstanding commitments to originate mortgage
loans of $2.9 million, and $1.5 million in standby letters of credit. The Bank
anticipates that it will have sufficient funds available to meet its current
loan origination commitments. Certificate accounts that are scheduled to mature
in less than one year from March 31, 2003 totaled $87.7 million. Management
expects that a substantial portion of the maturing certificate accounts will be
renewed at the Bank. However, if a substantial portion of these deposits is not
retained, the Bank may utilize FHLB advances or raise interest rates on deposits
to attract new accounts, which may result in higher levels of interest expense.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Bank's interest rate sensitivity is monitored by management through the use
of a model which estimates the change in net portfolio value (NPV) over a range
of interest rate scenarios. NPV is the present value of expected cash flows from
assets, liabilities, and off-balance-sheet contracts. An NPV Ratio, in any
interest rate scenario, is defined as the NPV in that scenario divided by the
market value of assets in the same scenario. The Sensitivity Measure is the
decline in the NPV Ratio, in basis points, caused by a 2% increase or decrease
in rates, whichever produces a larger decline. The higher an institution's
Sensitivity Measure is, the greater its exposure to interest rate risk is
considered to be. The OTS has incorporated an interest rate risk component into
its regulatory capital rule. Under the rule, an institution whose sensitivity
measure exceeds 2% would be required to deduct an interest rate risk component
in calculating its total capital for purposes of the risk-based capital
requirement. As of December 31, 2002, the latest date for which information is
available, the Bank's sensitivity measure, as measured by the OTS, resulting
from a 200 basis point increase in interest rates was (22)% and would result in
a $6.4 million reduction in the NPV of the Bank. Accordingly, increases in
interest rates would be expected to have a negative impact on the Bank's
operating results. The NPV Ratio sensitivity measure is below the threshold at
which the Bank could be required to hold additional risk-based capital under OTS
regulations.
Certain shortcomings are inherent in the methodology used in the above interest
rate risk measurements. Modeling changes in NPV requires the making of certain
assumptions that may tend to oversimplify the manner in which actual yields and
costs respond to changes in market interest rates. First, the models assume that
the composition of the Bank's interest sensitive assets and liabilities existing
at the beginning of a
9.
period remains constant over the period being measured. Second, the models
assume that a particular change in interest rates is reflected uniformly across
the yield curve regardless of the duration to maturity or repricing of specific
assets and liabilities. Third, the model does not take into account the impact
of the Bank's business or strategic plans on the structure of interest-earning
assets and interest-bearing liabilities. Accordingly, although the NPV
measurement provides an indication of the Bank's interest rate risk exposure at
a particular point in time, such measurement is not intended to and does not
provide a precise forecast of the effect of changes in market interest rates on
the Bank's net interest income and will differ from actual results. The results
of this modeling are monitored by management and presented to the Board of
Directors quarterly.
The following table shows the NPV and projected change in the NPV of the Bank at
December 31, 2002, the latest date for which information is available, assuming
an instantaneous and sustained change in market interest rates of 100, 200, and
300 basis points. On December 31, 2002, the yield on the three month Treasury
bill was below 2.00%. As a result, the net portfolio value analysis was unable
to produce results for the minus 200 and minus 300 basis point scenario for the
quarter ended December 31, 2002.
INTEREST RATE SENSITIVITY OF NET PORTFOLIO VALUE (NPV)
NPV as a % of
--------------Net Portfolio Value------------ -----------PV of Assets---------
------------------- ------------
Change in Rates $ Amount $ Change % Change NPV Ratio Change
--------------- -------- -------- -------- --------- ------
+ 300 bp $ 18,310 $ (10,895) (37)% 7.62% (374) bp
+ 200 bp 22,792 (6,413) (22) 9.25 (211) bp
+ 100 bp 26,937 (2,268) (8) 10.67 (69) bp
0 bp 29,205 -- -- 11.36 --
- 100 bp 29,361 156 1 11.31 (5) bp
- 200 bp N/A N/A N/A N/A N/A
- 300 bp N/A N/A N/A N/A N/A
The Bank and the Company do not maintain any securities for trading purposes.
The Bank and the Company do not currently engage in trading activities or use
derivative instruments in a material amount to control interest rate risk. In
addition, interest rate risk is the most significant market risk affecting the
Bank and the Company. Other types of market risk, such as foreign currency
exchange risk and commodity price risk, do not arise in the normal course of the
Company's business activities and operations.
Management has not yet completed the computation of NPV as of March 31, 2003 but
estimates that the results would not be materially different than those
presented above.
ITEM 4. CONTROLS AND PROCEDURES
Within the 90 days prior to the date of this report, the Company's Chief
Executive Officer and Chief Financial Officer carried out an evaluation, with
the participation of other members of management as they deemed appropriate, of
the effectiveness of the design and operation of the Company's disclosure
controls and procedures as contemplated by Exchange Act Rule 13a-14. Based upon
and as of the date of that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective, in all materials respects, in timely alerting them to
material information relating to the Company (and its consolidated subsidiaries)
that is required to be included in the periodic reports the Company is required
to file and submit to the SEC under the Exchange Act.
10.
There were no significant changes to the Company's internal controls or in other
factors that could significantly affect these internal controls subsequent to
the date the Company carried out its evaluation of its internal controls. There
were no significant deficiencies or material weaknesses identified in the
evaluation and, therefore, no corrective actions were taken.
11.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.
None
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
99.1 Certification Pursuant to 18 U.S.C. Section 1350, as
adopted to Section 906 of the Sarbanes-Oxley Act of 2002 from
the Company's Chief Executive Officer (attached as an exhibit
and incorporated herein by reference.)
99.2 Certification Pursuant to 18 U.S.C. Section 1350, as
adopted to Section 906 of the Sarbanes-Oxley Act of 2002 from
the Company's Financial Officer (attached as an exhibit and
incorporated herein by reference.)
(b) Reports on Form 8-K. No reports on Form 8-K were filed by the
registrant during the quarter ended March 31, 2003.
12.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PARK BANCORP, INC.
Date: May 13, 2003 /s/ David A. Remijas
------------ ------------------------------------------------
David A. Remijas
President and Chief Executive Officer
Date: May 13, 2003 /s/ Steven J. Pokrak
------------ ------------------------------------------------
Steven J. Pokrak
Treasurer and Chief Financial Officer
13.
I, David A. Remijas, certify that:
1) I have reviewed this quarterly report on Form 10-Q of Park Bancorp,
Inc.;
2) Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for the periods presented in
this quarterly report;
4) The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including is consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period
in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation date;
5) The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6) The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
/s/ David A. Remijas
David A. Remijas
President and Chief Executive Officer
May 13, 2003
14.
I, Steven J. Pokrak, certify that:
1) I have reviewed this quarterly report on Form 10-Q of Park Bancorp,
Inc.;
2) Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for the periods presented in
this quarterly report;
4) The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including is consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period
in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation date;
5) The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6) The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
/s/ Steven J. Pokrak
Steven J. Pokrak
Treasurer and Chief Financial Officer
May 13, 2003
15.