Annual report
Page 1
Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549 FORM 10-K ANNUAL REPORTPURSUANT TO SECTIONS 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934(Mark One)☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended: December 31, 2025 or☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ____________ to ____________ Commission File No. 000-51338 PARKE BANCORP, INC.(Exact name of Registrant as specified in its Charter) New Jersey 65-1241959(State or other Jurisdiction ofIncorporation or Organization) (I.R.S. Employer Identification No.) 601 Delsea Drive, Washington Township, New Jersey 08080 (Address of Principal Executive Offices) (Zip Code) Registrant’s telephone number, including area code: 856-256-2500 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Trading Symbol Name of Each Exchange on Which RegisteredCommon Stock, $0.10 par value PKBK The Nasdaq Stock Market LLC Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ 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 thepreceding 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 thepast 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of RegulationS-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerginggrowth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and emerging growth company in Rule 12b-2 ofthe Exchange Act. (Check one): Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated Filer ☐ Smaller reporting company ☒ Emerging growth company ☐
Page 2
Table of Contents If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for compliance with any new orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filingreflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The aggregate market value of the voting stock held by non-affiliates of the Registrant, based on the closing price of the Registrant’s common stock as quoted onthe Nasdaq Capital Market on June 30, 2025 was approximately $213.1 million. As of March 9, 2026 there were 11,842,596 outstanding shares of the Registrant’s common stock. DOCUMENTS INCORPORATED BY REFERENCE 1. Portions of the Proxy Statement for the 2026 Annual Meeting of Shareholders. (Part III)
Page 3
Table of Contents FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2025 INDEX PART 1 PageItem 1. Business 3Item 1A. Risk Factors 20Item 1B. Unresolved Staff Comments 20Item 1C. Cybersecurity 20Item 2. Properties 21Item 3. Legal Proceedings 22Item 4. Mine Safety Disclosures 22 PART II Item 5. Market for Common Equity, Related stockholder Matters and Issuer Purchases of Equity Securities 22Item 6. [Reserved] 23Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23Item 7A. Quantitative and Qualitative Disclosures About Market Risk 33Item 8. Financial Statements and Supplementary Data 34Item 9. Changes and Disagreements with Accountants on Accounting and Financial Disclosure 76Item 9A. Controls and Procedures 76Item 9B. Other Information 77Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 77 PART III Item 10. Directors, Executive Officers and Corporate Governance 77Item 11. Executive Compensation 77Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 77Item 13. Certain Relationships and Related Transactions, and Director Independence 78Item 14. Principal Accountant Fees and Services 78 PART IV Item 15. Exhibits and Financial Statement Schedules 79Item 16. Form 10-K Summary 80 Signatures 81
Page 4
Table of Contents Forward-Looking Statements Parke Bancorp, Inc. (the “Company”) may from time to time make written or oral “forward-looking statements,” including statements contained in theCompany’s filings with the Securities and Exchange Commission (including this Annual Report on Form 10-K and the exhibits hereto), in its reports toshareholders and in other communications by the Company, which are made in good faith by the Company pursuant to the “safe harbor” provisions of the PrivateSecurities Litigation Reform Act of 1995. As used in this Annual Report on Form 10-K, the terms "Parke Bancorp", "the Company", "registrant", "we", "us", and "our" mean Parke Bancorp, Inc.and its subsidiaries, on a consolidated basis, unless the context indicates otherwise. This Annual Report on Form 10-K contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,”“believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” and words of similar meaning. These forward-looking statements include, but are not limited to: • statements of our goals, intentions and expectations; • statements regarding our business plans, prospects, growth and operating strategies; • statements regarding the quality of our loan and investment portfolios; and • estimates of our risks and future costs and benefits. These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business,economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject toassumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to updateany forward-looking statements after the date of the Annual Report on Form 10-K. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in theforward-looking statements: • general economic conditions, either nationally or in our market areas, that are worse than expected; • the strength of the United States economy in general and the strength of the local economies in which the Company conducts operations; • the effects of, and changes in, trade, tariff, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of theFederal Reserve System (the "Federal Reserve"), inflation, interest rate, market and monetary fluctuations; • the potential adverse effects of the Consent Orders and any additional regulatory restrictions that may be imposed by banking regulators; • changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for creditlosses; • our ability to access cost-effective funding; • fluctuations in real estate values and both residential and commercial real estate market conditions; • demand for loans and deposits in our market area; • our ability to implement changes in our business strategies; • competition among depository and other financial institutions; • inflation and changes in the interest rate environment that reduce our margins and yields, or reduce the fair value of financial instruments orreduce the origination levels in our lending business, or increase the level of defaults, losses and prepayments on loans we have made and makewhether held in portfolio or sold in the secondary markets • adverse changes in the securities markets; • changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capitalrequirements; • changes in laws or government regulations or policies affecting financial institutions engaged in the cannabis related business; • our ability to manage market risk, credit risk and operational risk in the current economic conditions; • our ability to enter new markets successfully and capitalize on growth opportunities; • our ability to successfully integrate any assets, liabilities, customers, systems and management personnel we have acquired or may acquire intoour operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges relatedthereto; • changes in consumer demand, borrowing and savings habits; • changes in accounting policies and practices, as may be adopted by bank regulatory agencies, the Financial Accounting Standards Board, theSecurities and Exchange Commission or the Public Company Accounting Oversight Board; • our ability to retain key employees; • technological changes; • significant increases in our loan losses; • cyber- attacks, computer viruses and other technological risks that may breach the security of our websites or other systems to obtainunauthorized access to confidential information and destroy data or disable our systems; • technological changes that may be more difficult or expensive than expected; 2
Page 5
Table of Contents • the ability of third-party providers to perform their obligations to us; • the ability of the U.S. Government to manage federal debt limits; • changes in the financial condition, results of operations or future prospects of issuers of securities that we own; and • other economic, competitive, governmental, regulatory and operational factors affecting our operations, pricing products and services describedelsewhere in this Annual Report on Form 10-K. Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-lookingstatements. The Company cautions that the listed factors are not exclusive. The Company does not undertake to update any forward-looking statement, whetherwritten or oral, that may be made from time to time by or on behalf of the Company. Part I Item 1. Business. General We are a bank holding company incorporated under the laws of the State of New Jersey in January 2005. Our business and operations primarily consist ofour ownership of Parke Bank (the "Bank"). The Bank is a full-service commercial bank and is chartered by the New Jersey Department of Banking and insured bythe Federal Deposit Insurance Corporation (“FDIC”). The Bank conducts its business through offices in Gloucester, Atlantic and Camden Counties in New Jerseyand the Philadelphia area in Pennsylvania. We, through our wholly owned subsidiary Parke Bank, provide personal and business financial services to individuals and small to mid-sized businesses.We offer a range of loan products, deposits services, and other financial products through our retail branches and other channels to our customers. Our core lendingbusinesses are commercial real estate lending, residential real estate lending, and construction lending. We also offer a variety of commercial and industry loan andconsumer loan products to our customers. We fund our lending business primarily with deposits generated through retail deposits and commercial relationships.Our deposit products include checking, savings, money market deposit, time deposits, and other traditional deposit services. In addition to traditional products andservices, we offer contemporary products and services, such as debit cards, internet banking and online bill payment. We commenced operations on June 1, 2005, upon completion of the reorganization of the Bank into the holding company form of ownership followingapproval of the reorganization by shareholders of the Bank at its 2005 Annual Meeting of Shareholders. Our headquarters is located at 601 Delsea Drive,Washington Township, New Jersey. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to thosereports, are available free of charge at www.parkebank.com as soon as reasonably practicable after they are electronically filed with or furnished to the Securitiesand Exchange Commission ("SEC"). Investors are encouraged to access these reports and other information about our business on our website. At December 31, 2025, we had total assets of $2.25 billion, including loans of $2.04 billion, total deposits of $1.76 billion and total equity of$324.5 million. 3
Page 6
Table of Contents Market Area Substantially all of the Bank’s business is with customers in its market areas of Southern New Jersey, the Philadelphia area of Pennsylvania, and NewYork, New York. We have carefully expanded our lending footprint in other areas, including adding lending capabilities in South Carolina. Most of the Bank’scustomers are individuals and small to medium-sized businesses which are dependent upon the regional economy. Adverse changes in economic and businessconditions in the Bank’s markets could adversely affect the Bank’s borrowers, their ability to repay their loans and to borrow additional funds, and consequentlythe 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 economicconditions could adversely affect the values of such real estate. Consequently, a decline in local economic conditions may have a greater effect on the Bank’searnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are more geographically diverse. Competition The Bank faces significant competition, both in making loans and attracting deposits. The Bank’s competition in both areas comes principally from othercommercial banks, thrift and savings institutions, including savings and loan associations and credit unions, and other types of financial institutions, includingbrokerage firms and credit card companies. The Bank faces additional competition for deposits from short-term money market mutual funds and other corporateand government securities funds. Most of the Bank’s competitors, whether traditional or nontraditional financial institutions, have a longer history and significantly greater financial andmarketing resources than does the Bank. Among the advantages these institutions have over the Bank are their ability to finance wide-ranging and effectiveadvertising campaigns, to access international money markets and to allocate their investment resources to regions of highest yield and demand. Major banksoperating 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 andsmaller enterprises. However, the Bank’s legal lending limit is considerably lower than that of various competing institutions, which have substantially greatercapitalization. The Bank has a relatively smaller capital base than most other competing institutions which, although above regulatory minimums, may constrainthe Bank’s effectiveness in competing for loans. Cannabis Related Business In the State of New Jersey, cannabis is legal for recreational use. Once enacted, the law legalized and regulated cannabis use and possession for adults 21years and older. The law also clarified marijuana and cannabis use and possession penalties for individuals younger than 21 years old. Retail sales of cannabisbegan in New Jersey in April 2022. We provide banking services to customers that are licensed by various States to do business in the cannabis industry asgrowers, processors and dispensaries and who participate in retail sales of cannabis in New Jersey. Cannabis businesses are legal under the laws of these States, aswell as in New Jersey, although it is not legal under federal law. The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”)published guidelines in 2014 for financial institutions servicing state legal cannabis businesses. A financial institution that provides services to cannabis-relatedbusinesses can comply with Bank Secrecy Act (“BSA”) disclosure standards by following the FinCEN guidelines. We maintain stringent written policies andprocedures related to the acceptance of such businesses and to the monitoring and maintenance of such business accounts. We conduct a significant due diligencereview of the cannabis business before the business is accepted, including confirmation that the business is properly licensed by the applicable state. Throughoutthe relationship, we continue monitoring the business, including site visits, to ensure that the business continues to meet our stringent requirements, includingmaintenance of required licenses and periodic financial reviews of the business. 4
Page 7
Table of Contents While we believe we are operating in compliance with the FinCEN guidelines, there can be no assurance that federal enforcement guidelines will notchange. Federal prosecutors have significant discretion and there can be no assurance that the federal prosecutors will not choose to strictly enforce the federallaws governing cannabis. Any change in the Federal government’s enforcement position, could cause us to immediately cease providing banking services to thecannabis industry. At December 31, 2025 and 2024, deposit balances from cannabis customers were approximately $61.9 million and $151.9 million, or 3.5% and 9.3% oftotal deposits, respectively, with two customers accounting for 30.7% and 59.4% of the total at December 31, 2025 and 2024. At December 31, 2025 and 2024, theBank had cannabis-related loans in the amounts of $47.0 million and $43.4 million, respectively. Lending Activities Our lending relationships are primarily with small to mid-sized businesses and individual consumers residing primarily in and around southern NewJersey, southeastern Pennsylvania, and the Brooklyn and Bronx sections of New York, New York. We focus our lending efforts primarily in four lending areas:residential mortgage loans, commercial mortgage loans, commercial and industrial loans, and construction loans. Loan Maturity. The following table sets forth the contractual maturity of certain loan categories and the dollar amount of loans in certain loan categoriesdue after December 31, 2025, which have predetermined interest rates and which have floating or adjustable interest rates at December 31, 2025. Due within Due after Due after one year one through five through Due after or less five years fifteen years fifteen years Total (Dollars in thousands) Commercial and Industrial $ 22,649 $ 11,417 $ 4,606 $ — $ 38,672 Construction 156,546 55,129 307 325 212,307 Commercial Real Estate Mortgage: Commercial - Owner Occupied 8,316 31,850 141,041 1,322 182,529 Commercial - Non-Owner Occupied 41,511 143,762 293,022 — 478,295 Residential - 1 to 4 family 6,233 70,470 58,317 316,443 451,463 Residential - 1 to 4 family investment — — 6,789 487,439 494,228 Residential - multifamily 2,555 32,974 138,082 — 173,611 Consumer 10 302 2,931 879 4,122 Total $ 237,820 $ 345,904 $ 645,095 $ 806,408 $ 2,035,227 5
Page 8
Table of Contents The following table presents the distribution of those loans that mature in more than one year between predetermined rates and floating or adjustable ratesas of December 31, 2025. Predetermined Floating or Rates Adjustable Rates Total (Dollars in thousand) Commercial and Industrial $ 4,636 $ 11,387 $ 16,023 Construction — 55,761 55,761 Commercial Real Estate Mortgage: Commercial - Owner Occupied 14,760 159,453 174,213 Commercial - Non-Owner Occupied 11,424 425,360 436,784 Residential - 1 to 4 family 26,977 418,253 445,230 Residential - 1 to 4 family investment 10,118 484,110 494,228 Residential - multifamily 850 170,206 171,056 Consumer 4,103 9 4,112 Total $ 72,868 $ 1,724,539 $ 1,797,407 Commercial and Industrial Loans. The Bank originates secured loans for business purposes. Loans are made to provide working capital to businesses inthe form of lines of credit, which may be secured by accounts receivable, inventory, equipment or other assets. The financial condition and cash flow ofcommercial borrowers are closely monitored by means of corporate financial statements, personal financial statements and income tax returns. The frequency ofsubmissions 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 isto 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 creditrisk 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 ofgeneral economic conditions and the increased difficulty of evaluating and monitoring these types of loans. Unlike residential mortgage loans, which generally aremade on the basis of the borrower’s ability to make repayment from his or her employment and other income and which are secured by real property the value ofwhich 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 cashflow of the borrower’s business. As a result, the availability of funds for the repayment of commercial business loans may be substantially dependent on thesuccess 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 loanmay be impaired. Construction Loans. The Bank originates construction loans to individuals and real estate developers in its market area. The advantages of constructionlending are that the market is typically less competitive than more standard mortgage products, the interest rate typically charged is a variable rate, which permitsthe 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 shorterterm 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 provides interim real estate acquisition development and construction loans to builders and developers. Construction loans to provide interimfinancing on the property are based on acceptable percentages of the appraised value of the property securing the loan in each case. Construction loan funds aredisbursed 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. Construction loans are secured by the properties under development and personal guarantees are typically obtained. Further, to assure that reliance is notplaced solely on the value of the underlying property, the Bank considers the financial condition and reputation of the borrower and any guarantors, the amount ofthe borrower’s equity in the project, independent appraisals, costs estimates and pre-construction sale information. 6
Page 9
Table of Contents Loans to residential builders are for the construction of residential homes for which a binding sales contract exists and the prospective buyers have beenpre-qualified for permanent mortgage financing. Loans to residential developers are made only to developers with a proven sales record. Generally, these loans areextended 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 primaryresidence. They are typically secured by the property under construction, occasionally include additional collateral (such as a second mortgage on the borrower’spresent 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 andservicing each construction loan to completion. Construction financing is generally considered to involve a higher degree of risk of loss than long-term financingon 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 atcompletion of construction and development, the accuracy of projections, such as the sales of homes or the future leasing of commercial space, and the accuracy ofthe estimated cost (including interest) of construction. Substantial deviations can occur in such projections. During the construction phase, a number of factorscould 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 theamount 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 tothe 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 problemsfor the Bank such as selecting replacement builders for a project, considering alternate uses for the project and site and handling any structural and environmentalissues that might arise. Commercial Real Estate Mortgage Loans. The Bank originates mortgage loans secured by commercial real estate. Such loans are primarily secured byoffice buildings, retail buildings, warehouses and general purpose business space. Although terms may vary, the Bank’s commercial mortgages generally havematurities 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. Ofprimary concern in commercial and multi-family real estate lending is the borrower’s creditworthiness and the feasibility and cash flow potential of the project.Payments on loans secured by income properties are often dependent on the successful operation or management of the properties. As a result, repayment of suchloans 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 periodicfinancial statements and tax returns from borrowers. It is also the Bank’s general policy to obtain personal guarantees from the principals of the borrowers andassignments of all leases related to the collateral. Our commercial real estate mortgage portfolio was $660.8 million at December 31, 2025. Within the portfolio, we designate certain sectors of loans ashigh risk to monitor more closely, given the current economic conditions. At December 31, 2025, the high risk sectors consisted of office, hotel, retail, andrestaurant loans. All of these sectors combined represent 16.3% of total loan receivable, with no individual sector higher than 6.3%. Residential Real Estate Mortgage Loans. The Bank originates adjustable and fixed-rate residential mortgage loans. Such mortgage loans are generallyoriginated under terms, conditions and documentation acceptable to the secondary mortgage market. Although the Bank has placed all of these loans into itsportfolio, 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, includingautomobiles. 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 loanin each case, less the amount of any existing prior liens on the property, and generally have maximum terms of ten years. The interest rates on second mortgagesare generally fixed, while interest rates on home equity lines of credit are variable. 7
Page 10
Table of Contents Loans to One Borrower and Concentration of Loans. Federal regulations limit loans to one borrower in an amount equal to 15% of unimpaired capitaland unimpaired surplus. At December 31, 2025, the Bank’s loan to one borrower limit was approximately $55.6 million and the Bank had no borrowers with loanbalances in excess of this amount. At December 31, 2025, the Bank’s largest loan to one borrower was a construction loan with a balance of $23.4 million that wassecured by the property, as well as personal guarantees from the borrower. At December 31, 2025, this loan was current and performing in accordance with theterms 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 largercapitalization 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, noassurance can be given that such participations will be available at all or on terms which are favorable to the Bank and its customers. The Bank establishes policies and methods to determine concentrations of credit risk and to maintain discipline in lending practices with a focus onportfolio diversification. The Bank places limits on loans to one borrower; one industry; as well as product concentrations. At December 31, 2025, the Bank's loanportfolio consists of residential, commercial real estate loans, construction loans, commercial and industry loans as well as consumer loans. Non-Performing and Problem Assets Non-Performing Assets. Non-accrual loans are loans on which the accrual of interest has ceased. Loans are generally placed on non-accrual status if, inthe 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 coverprincipal 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 reversedand charged against interest income. Subsequent cash receipts are applied either to the outstanding principal or recorded as interest income, depending onmanagement’s assessment of ultimate collectability of principal and interest. Loans are returned to an accrual status when the borrower’s ability to make periodicprincipal and interest payments has returned to normal (i.e., brought current with respect to principal or interest or restructured) and the paying capacity of theborrower and/or the underlying collateral is deemed sufficient to cover principal and interest. A loan is considered individually evaluated when it has been modified for a borrower in financial distress or when, based on current information andevents, 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 loanagreement. Individually evaluated loans that have been modified are measured based on the present value of expected future discounted cash flows, the marketprice of the loan or the fair value of the underlying collateral if the loan is collateral dependent. The recognition of interest income on individually evaluated loansis the same as for non-accrual loans discussed above. Total non-performing loans, which include non-accrual loans, were $10.8 million and $12.2 million atDecember 31, 2025 and 2024, respectively. There were no loans included in individually evaluated loans at December 31, 2025 and 2024, respectively, that hadbeen modified to borrowers in financial distress. As of December 31, 2025, there was $20.5 million in loans which were not then on non-accrual status or modified but where there is a potential weaknessor pose unwarranted financial risk to the Bank, even though the asset value is not currently impaired. These loans require an increased degree of monitoring andservicing by management as a result of internal or external conditions. When a loan is more than 30 days delinquent, the borrower is contacted by mail or phone and payment is requested. If the delinquency continues,subsequent efforts are made to contact the delinquent borrower. In certain instances, the Bank may modify the loan or grant a limited moratorium on loanpayments to enable the borrower to reorganize their financial affairs. If the loan continues in a delinquent status for 90 days or more, the Bank generally willinitiate foreclosure proceedings. 8
Page 11
Table of Contents Loans are generally placed on non-accrual status when either principal or interest is 90 days or more past due. Interest accrued and unpaid at the time aloan is placed on non-accrual status is charged against interest income. Such interest, when ultimately collected, is applied either to the outstanding principal orrecorded as interest income, depending on management’s assessment of ultimate collectability of principal and interest. 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 untilsuch time as it is sold. When real estate owned is acquired, it is recorded at its fair value less disposal costs. Management also periodically performs valuations ofreal estate owned and establishes allowances to reduce book values of the properties to their net realizable values when necessary. Any write-down of real estateowned is charged to operations. Real estate owned at December 31, 2025 and December 31, 2024, was $2.9 million, and $1.6 million, respectively. Real estateowned consisted of two commercial owner-occupied properties, and one non-owner-occupied property as of December 31, 2025. Allowance for Credit Losses. It is the policy of management to estimate for possible losses on all loans in its portfolio, whether classified or not. Aprovision for credit losses is charged to operations based on management’s evaluation of the inherent losses estimated to have occurred in the Bank’s loanportfolio. Management’s judgment as to the level of probable losses on existing loans is based on its internal review of the loan portfolio, including an analysis ofthe borrower's current financial position; the level and trends in delinquencies, non-accruals and individually evaluated loans; the consideration of national andlocal economic conditions and trends; concentrations of credit; the impact of any changes in credit policy; the experience and depth of management and thelending staff; and any trends in loan volume and terms. In determining the collectability of certain loans, management also considers the fair value of anyunderlying collateral. However, management’s determination of the appropriate allowance level, which is based upon the factors outlined above, which arebelieved to be reasonable, may or may not prove to be valid. Thus, there can be no assurance that charge-offs in future periods will not exceed the allowance forcredit losses or that additional increases in the allowance for credit losses will not be required. 9
Page 12
Table of Contents Allocation of Allowance for Credit Losses on Loans. The following table sets forth the allocation of the Bank’s allowance for credit losses by loancategory at the dates indicated and the related percentage of the loans in the portfolio. The portion of the loan loss allowance allocated to each loan category doesnot 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 theentire loan portfolio. December 31, 2025 December 31, 2024 Net chargeoff Net chargeoff % of Loans Net chargeoff/ to averageloans % of Loans Net chargeoff/ to averageloans Amount to totalLoans (recovery) outstanding Amount to totalLoans (recovery) outstanding (Dollars in thousands) Commercial and Industrial $ 1,008 1.9% (5) —% $ 1,097 1.9% (28) —%Construction 4,032 10.4 — —% 3,037 8.0 — —%Real Estate Mortgage: Commercial – OwnerOccupied 2,239 9.0 — —% 1,871 8.6 (1) —%Commercial – Non-ownerOccupied 9,661 23.5 202 0.01% 6,300 19.7 — —%Residential – 1 to 4 Family 8,205 22.2 250 0.01% 9,166 24.0 — —%Residential - 1 to 4 FamilyInvestment 7,601 24.3 — —% 8,832 28.1 Residential – Multifamily 1,845 8.5 — —% 2,203 9.4 — —%Consumer 58 0.2 — —% 67 0.3 (53) —%Total allowance for creditlosses $ 34,649 100.0% $ 447 0.02% $ 32,573 100.0% $ (82) —%Period-end loans outstanding(net of deferred costs/fees) $ 2,035,227 $ 1,868,153 Average loans outstanding $ 1,924,254 $ 1,810,931 Total non-accrual loans $ 10,793 $ 11,773 Allowance as a percentage ofperiod end loans 1.70% 1.74% Non-accrual loans as apercentage of period end loans 0.53% 0.63% Allowance as a percentage ofnon-performing loans 321.03% 276.68% Investment Activities General. The investment policy of the Company is established by senior management and approved by the Board of Directors. It is based on asset andliability management goals and is designed to provide a portfolio of high quality investments that foster interest income within acceptable interest rate risk andliquidity guidelines. In accordance with accounting guidance, the Company classifies the majority of its portfolio of investment securities as “available for sale”with the remainder, which are a mix of municipal bonds and mortgage-backed-securities held for Community Reinvestment Act purposes, as “held to maturity.” AtDecember 31, 2025, the Bank’s investment policy allowed investments in instruments such as: (i) U.S. Treasury obligations, (ii) U.S. government agency orgovernment-sponsored agency obligations, (iii) local municipal obligations, (iv) mortgage-backed securities, (v) certificates of deposit, and (vi) investment gradecorporate bonds, trust preferred securities and mutual funds. The Board of Directors may authorize additional investments. At December 31, 2025, no one issuerof investment securities represented 10% or more of the Company’s stockholders’ equity. 10
Page 13
Table of Contents Investment Portfolio Maturities. The following table sets forth information regarding the scheduled maturities, amortized costs, estimated fair values, andweighted average yields for the Bank’s investment securities portfolio at December 31, 2025, by contractual maturity. At December 31, 2025 After One After FiveYears One Year orLess Through FiveYears Through TenYears After Ten Years Total Investment Securities Amortized Amortized Amortized Amortized Amortized Fair Cost Cost Cost Cost Cost Value (Dollars in thousands) Securities Held to Maturity: State and political subdivisions $ — $ 1,553 $ 2,471 $ — $ 4,024 $ 3,679 Yield —% 4.76% 1.91% —% 3.00% Residential mortgage-backed securities — — — 4,753 4,753 3,808 Yield —% —% —% 1.78% 1.78% Total securities held to maturity — 1,553 2,471 4,753 8,777 7,487 Weighted Average Yield —% 4.76% 1.91% 1.78% 2.32% Securities Available for Sale: Corporate debt obligations $ — $ — $ 500 $ — $ 500 $ 500 Yield —% —% 2.63% —% 2.63% Residential mortgage-backed securities 9 1,726 828 1,952 4,515 4,246 Yield 0.12% 2.26% 1.94% 2.82% 2.42% Total securities available for sale 9 1,726 1,328 1,952 5,015 4,746 Weighted Average Yield 0.12% 2.26% 2.18% 2.82% 2.44% Total Investment Securities $ 9 $ 3,279 $ 3,799 $ 6,705 $ 13,792 $ 12,233 Total Weighted Average Yield 0.12% 3.27% 2.01% 2.09% 2.36% Yields are calculated on a weighted average basis using the investments amortized cost and respective average yields for each investment category.Expected maturities of mortgage-backed securities may differ from contractual maturities due to calls or prepay obligations. 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 derivesfunds from the amortization, prepayment or sale of loans, maturities of investment securities and operations. Scheduled loan principal repayments are a relativelystable 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, individualretirement accounts and certificates of deposit. Total deposits were $1.76 billion at December 31, 2025. Deposits are obtained primarily from communities that theBank serves, however, the Bank held brokered deposits of $215.3 million and $215.7 million at December 31, 2025, and 2024, respectively. At December 31,2025, the Bank held brokered deposit balances in NOWs, money market, and time deposit categories. Brokered deposits do not increase the deposit franchise ofthe Bank, and in a rising rate environment, the Bank may be unwilling or unable to pay a competitive rate. The Bank primarily utilizes brokered relationships withPiper Sandler, and Wells Fargo. As of December 31, 2025, the Company had $156.7 million sourced from these relationships. To the extent that such deposits donot 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 ratespread, financial condition and results of operation. For an additional source of brokered liquidity, the Bank joined the IntraFi network ("IntraFi") to secure anadditional alternative funding source. IntraFi provides the Bank an additional source of external funds through their weekly CDARS™ settlement process and theirovernight and term ICS™ money market product. The Bank’s CDARS™ and ICS™ deposits included within the brokered deposit total amounted to $56.6 millionand $13.5 million at December 31, 2025 and 2024, respectively. 11
Page 14
Table of Contents The following table sets forth information regarding deposit categories of the Bank. 2025 Average Percent of Balance Yield/Rate Total (Dollars in thousands) NOWs $ 60,065 0.91% 3.59%Money markets 773,369 4.26% 46.22%Savings 50,416 1.07% 3.01%Time deposits 490,411 4.24% 29.31%Brokered CDs 117,108 4.28% 7.00% Total interest-bearing deposits 1,491,369 4.01% Non-interest bearing demand deposits 181,897 10.87% Total deposits $ 1,673,266 100.00% Uninsured deposits at the end of the period $ 728,398(1) (1) The Company had a $75.0 million letter of credit with the FHLBNY to secure public funds at December 31, 2025, which is not included in uninsured depositsbalance at the end of the period. 2024 Average Percent of Balance Yield/Rate Total (Dollars in thousands) NOWs $ 63,871 0.97% 4.22%Money markets 583,158 4.77% 38.52%Savings 66,369 1.13% 4.38%Time deposits 442,664 4.31% 29.24%Brokered CDs 170,454 5.30% 11.26%Total interest-bearing deposits 1,326,516 4.32% Non-interest bearing demand deposits 187,588 12.39% Total deposits $ 1,514,104 100.00% Uninsured deposits at the end of the period $ 642,730 The following table indicates the amount of the Company’s certificates of deposit of $250,000 or more, and the portion that are in excess of the FederalDeposit Insurance ("FDIC") limit, by time remaining until maturity as of December 31, 2025. Certificates Portion in Excess of Maturity Period of Deposit FDIC InsuranceLimit (Dollars in thousands) Within three months $ 41,306 $ 15,056 Over three through six months 41,248 14,998 Over six through twelve months 17,073 5,323 Over twelve months 4,406 2,656 Total $ 104,033 $ 38,033 12
Page 15
Table of Contents Under FDIC regulations, insured banks that are well capitalized with examination ratings in one of the two highest categories are permitted to acceptbrokered deposits and are not restricted as to the rates that can be paid on such deposits. Banks that are less than well capitalized or are not in one of the twohighest examination rating categories may not accept brokered deposits absent a waiver from the FDIC and may not pay interest on brokered deposits that they arepermitted to accept at a rate that is more than 75 basis points greater than the average national rate paid on deposits of similar size and maturity. Pursuant to theEconomic Growth, Regulatory Relief and Consumer Protection Act (“EGRRCPA”), the FDIC has amended its brokered deposit rule to exempt reciprocal depositsin an amount not exceeding the lesser of $5 billion or 20% of a bank’s total liabilities from the definition of brokered deposits. A bank that was well-capitalizedand highly rated may continue to accept reciprocal deposits after it becomes less than well-capitalized or is no longer highly rated provided that reciprocal depositsdo not exceed the average amount of reciprocal deposits as the preceding four quarter ends. Subsidiary Activities The Company's only significant subsidiary is the Bank. Personnel At December 31, 2025, the Bank had 103 full-time and 8 part-time employees. Regulation Set forth below is a brief description of certain laws that relate to the regulation of the Bank and the Company. The description does not purport to becomplete and is qualified in its entirety by reference to applicable laws and regulations. Consent Orders with Banking Regulators In the fourth quarter of 2020, the Bank entered into a Stipulation to the Issuance of a Consent Order with each of the Federal Deposit InsuranceCorporation (the “FDIC”) and the New Jersey Department of Banking and Insurance (the “NJDOBI”), consenting to the issuance of substantially identical consentorders (the “Consent Orders”) relating to weaknesses in the Bank’s Bank Secrecy Act and Anti-Money Laundering (collectively “BSA”) compliance program. Inconsenting to the issuance of the Consent Orders, the Bank did not admit or deny any charges of unsafe or unsound banking practices related to the BSAcompliance program. Under the terms of the Consent Orders, the Bank and/or its Board of Directors is required to take certain actions which include, but are not limited to: • Increase supervision and direction of the Bank’s BSA compliance program and assume full responsibility for the approval and implementation of soundBSA policies and procedures; • Creation of a compliance committee of the Board of Directors of the Bank with the responsibility of overseeing compliance with the Orders, BSA and theBSA compliance program; • Designate a qualified individual(s) acceptable to the FDIC and the NJDOBI as a BSA Officer; • Review and improve the Bank’s BSA compliance program, BSA risk assessment, system of BSA internal controls, and customer due diligence policies; • Develop, adopt and implement effective training programs for the Board and management on all relevant aspects of laws, regulations and policies relatingto BSA and ensure that an adequate number of qualified staff have been retained for the Bank’s BSA Department; • Ensure the Bank’s adherence to a written program of policies and procedures to provide for BSA compliance and the appropriate identification andmonitoring of transactions that pose greater than normal risk for BSA compliance; • Development and implementation of a customer due diligence program to enhance customer due diligence and risk assessment processes; • Review and improve policies and procedures for monitoring and reporting suspicious activity; • Conduct independent testing for compliance with BSA by either a qualified outside party or Bank personnel who are independent of the BSA function andare qualified to perform such testing; and • Hire a qualified firm acceptable to the FDIC and the NJDOBI to conduct a look back review of accounts and transaction activity for the time periodbeginning January 1, 2019, through the effective date of the Orders. 13
Page 16
Table of Contents Numerous actions have already been taken or commenced by the Bank, which will assist in complying with the Consent Orders and strengthen its BSAcompliance practices, policies, procedures and controls. The Consent Orders have resulted, and are expected to continue to result, in additional BSA compliance expenses for the Bank and the Company. TheConsent Orders do not otherwise impact the Bank’s business activities outside of BSA. The Consent Orders do not require the Bank to pay any civil money penalty or require additional capital. The foregoing summary description of the Consent Orders is not complete and is qualified by reference to the full text of the Consent Orders, copies ofwhich are filed as Exhibits 99.1 and 99.2 to this Annual Report on Form 10-K. The Consent Orders will remain in effect and be enforceable until they are modified, terminated, suspended or set aside by the FDIC and the NJDOBI.Management and the Board have expressed their full intention to comply with all parts of the Consent Orders at the earliest possible date. Issuance of the ConsentOrders do not preclude further government action with respect to the Bank’s BSA program, including the imposition of fines, sanctions, additional expenses andcompliance cost, and/or restrictions on the activities of the Bank. Holding Company Regulation General. The Company is a bank holding company within the meaning of the Bank Holding Company Act of 1956 (the “BHC Act”), and is regulated bythe Federal Reserve. The Federal Reserve has enforcement authority over the Company and the Company's non-bank subsidiary which also permits the FederalReserve to restrict or prohibit activities that are determined to be a serious risk to the subsidiary bank. The Company is required to file periodic reports of itsoperations with, and is subject to examination by, the Federal Reserve. This regulation and oversight is generally intended to ensure that the Company limits itsactivities to those allowed by law and that it operates in a safe and sound manner without endangering the financial health of its subsidiary bank. Under the BHC Act, the Company must obtain the prior approval of the Federal Reserve before it may acquire control of another bank or bank holdingcompany, merge or consolidate with another bank holding company, acquire all or substantially all of the assets of another bank or bank holding company, oracquire direct or indirect ownership or control of any voting shares of any bank or bank holding company if, after such acquisition, the Company would directly orindirectly own or control more than 5% of such shares. Subsidiary banks of a bank holding company are subject to certain restrictions imposed by the BHC Act on extensions of credit to the bank holdingcompany 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 stockor securities as collateral for loans to any borrower. Furthermore, under amendments to the BHC Act and regulations of the Federal Reserve, a bank holdingcompany and its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit or provision of credit orproviding 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 customeron the condition that the customer obtain additional credit or service from the bank, the bank holding company, or any other subsidiary of the bank holdingcompany 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 thebank. 14
Page 17
Table of Contents Source of Strength Doctrine. A bank holding company is required to serve as a source of financial and managerial strength to its subsidiary banks andmay not conduct its operations in an unsafe or unsound manner. In addition, it is the policy of the Federal Reserve that a bank holding company should stand readyto use available resources to provide adequate capital to its subsidiary banks during periods of financial stress or adversity and should maintain the financialflexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks. A bank holding company's failure to meet its obligations toserve as a source of strength to its subsidiary banks will generally be considered by the Federal Reserve to be an unsafe and unsound banking practice or aviolation of the Federal Reserve regulations, or both. Non-Banking Activities. The business activities of the Company, as a bank holding company, are restricted by the BHC Act and the Federal Reserve’sbank holding company regulations. Under the BHC Act and Federal Reserve regulation, the Company generally may only engage in, or acquire or control votingsecurities or assets of a company engaged in, (1) banking or managing or controlling banks and other subsidiaries authorized under the BHC Act and (2) any BHCAct activity the Federal Reserve has determined to be so closely related to banking or managing or controlling banks to be a proper incident thereto. These includeany incidental activities necessary to carry on those activities, as well as a lengthy list of activities that the Federal Reserve has determined to be so closely relatedto the business of banking as to be a proper incident thereto. In addition, a bank holding company that qualifies to be treated as a “financial holding company” and submits a financial holding company notice to theFederal Reserve may engage in a broad range of additional activities that are (i) financial in nature or incidental to such financial activities or (ii) complementaryto a financial activity and do not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally. These activitiesinclude securities underwriting and dealing, insurance agency and underwriting, and making merchant banking investments. The Company has not submittednotice to the Federal Reserve of its intent to be deemed a financial holding company. Regulatory Capital Requirements. The Federal Reserve has adopted regulatory capital requirements pursuant to which it assesses the adequacy of capitalin examining and supervising a bank holding company and in analyzing applications to it under the BHC Act. The Federal Reserve’s capital requirements aresimilar to those imposed on the Bank by the FDIC. See “Regulation of the Bank-Regulatory Capital Requirements.” Under the Federal Reserve’s Small BankHolding Company Policy Statement, however, such regulatory capital requirements generally do not apply on a consolidated basis to a bank holding company withtotal assets of less than $3 billion unless the holding company: (1) is engaged in significant nonbanking activities either directly or through a nonbank subsidiary;(2) conducts significant off-balance sheet activities (including securitization and asset management or administration) either directly or through a nonbanksubsidiary; or (3) has a material amount of debt or equity securities outstanding (other than trust preferred securities) that are registered with the SEC. The FederalReserve may apply the regulatory capital standards at its discretion to any bank holding company, regardless of asset size, if such action is warranted forsupervisory purposes. Restrictions on Dividends. The Company is subject to various restrictions relating to the payment of dividends. The Federal Reserve has issued guidanceindicating that bank holding companies should generally pay dividends only if the company’s net income available to common shareholders over the past year hasbeen sufficient to fully fund the dividends, and the prospective rate of earnings retention appears consistent with the company’s capital needs, asset quality andoverall financial condition. The Federal Reserve’s guidance also states that a bank holding company should inform and consult with its regional Federal ReserveBank in advance of declaring or paying a dividend that exceeds earnings for the period for which the dividend is being paid or that could result in a materialadverse change to the organization’s capital structure. The Federal Reserve has issued a policy statement on the payment of cash dividends by bank holding companies, which expresses the Federal Reserve’sview that a bank holding company should pay cash dividends only to the extent that the holding company’s net income for the past year is sufficient to cover boththe cash dividends and a rate of earnings retention that is consistent with the holding company’s capital needs, asset quality and overall financial condition. TheFederal Reserve also indicated that it would be inappropriate for a company experiencing serious financial problems to borrow funds to pay dividends. In addition,the Federal Reserve’s guidance states that a bank holding company should consult with its regional Federal Reserve Bank in advance of declaring or paying adividend that exceeds earnings for the period for which the dividend is being paid or that could result in a material adverse change to the organization’s capitalstructure. Finally, under the federal prompt corrective action regulations, the Federal Reserve may prohibit a bank holding company from paying any dividends ifthe holding company’s bank subsidiary is classified as “undercapitalized.” 15
Page 18
Table of Contents As a majority of the Company’s revenues result from dividends paid to the Company by the Bank, the Company’s ability to pay dividends to ourshareholders largely depends on the receipt of such dividends from the Bank. The Bank is subject to various laws and regulations limiting the amount of dividendsthat it can pay. Under New Jersey law, no dividend may be paid if the dividend would impair the capital stock of the Bank. In addition, no dividend may be paidunless the Bank would, after payment of the dividend, have a surplus of at least 50% of its capital stock (or if the payment of dividend would not reduce surplus).Finally, if the Bank does not maintain the capital conservation buffer required by applicable regulatory capital rules, its ability to pay dividends or other capitaldistributions to the Company will be limited. See “- Regulation of the Bank - Regulatory Capital Requirements.” Federal Securities Law. The Company’s common stock is registered under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “1934Act”), and the Company is subject to the periodic reporting and other requirements of Section 12(b) of the 1934 Act, as amended. Regulation of the Bank The Bank operates in a highly regulated industry. This regulation and supervision establishes a comprehensive framework of activities in which a bankmay 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 NJDOBI, the FDIC, the United States Congress or state legislatures,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 Bankor impose burdensome requirements upon it could reduce its profitability and could impair the value of the Bank’s franchise, which developments could hurt thetrading price of the Company’s stock. As a New Jersey-chartered commercial bank, the Bank is subject to the regulation and supervision of the NJDOBI. As an FDIC-insured institution, theBank is subject to regulation and supervision of the FDIC. The regulations of the FDIC and the NJDOBI affect virtually all activities of the Bank, including theminimum 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 acquisitionsand various other matters. The NJDOBI and the FDIC regularly examine the Bank and prepare reports to the Bank’s Board of Directors on deficiencies, if any,found in its operations. The regulatory authorities have substantial discretion to impose enforcement action on an institution that fails to comply with applicableregulatory requirements. 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 willbe 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. Federal Deposit Insurance. The FDIC insures deposits at federally insured financial institutions such as the Bank. Deposit accounts in the Bank areinsured by the FDIC's Deposit Insurance Fund up to a maximum of $250,000 per separately insured depositor. The Bank is subject to deposit insurance assessments established by the FDIC to maintain the Deposit Insurance Fund (the “DIF”). Under the FDIC’srisk-based assessment system, banks that are deemed to be less risky pay lower assessments. Assessment rates for small institutions (those with less than $10billion in assets) are based on an institution’s weighted average CAMELS component ratings and certain financial ratios and are applied to the institution’sassessment base, which equals its average total assets minus its average tangible equity. In October 2022, the FDIC adopted a final rule that increased the initial base deposit insurance assessment rate schedules uniformly by 2 basis pointsbeginning with the first quarterly assessment period of 2023. The increased assessment is expected to improve the likelihood that the DIF reserve ratio would reachthe statutory minimum of 1.35% by the statutory deadline of September 30, 2028, consistent with the FDIC’s amended restoration plan. The FDIC assessmentrates effective January 1, 2023 (which are subject to certain adjustments) range from 5 to 18 basis points for institutions with CAMELS composite ratings of 1 or2, 8 to 32 basis points for those with a CAMELS composite score of 3, and 18 to 32 basis points for those with CAMELS composite scores of 4 or 5. Significantincreases in assessments may have an adverse effect on the operating expenses and results of operations of the Bank. 16
Page 19
Table of Contents Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe orunsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC. We do not currently knowof any practice, condition or violation that may lead to termination of our deposit insurance. Regulatory Capital Requirements. The Bank is required to comply with applicable capital adequacy rules adopted by the FDIC and other federal bankregulatory agencies (the “Basel III Capital Rules”). The Basel III Capital Rules apply to all depository institutions as well as to all top-tier bank and savings andloan holding companies that are not subject to the Federal Reserve Small Bank Holding Company Policy Statement. Under the Basel III Capital Rules, banks are required to meet four minimum capital standards: (1) a “Tier 1” or “core” capital leverage ratio equal to atleast 4% of total adjusted assets; (2) a common equity Tier 1 capital ratio equal to 4.5% of risk-weighted assets; (3) a Tier 1 risk-based ratio equal to 6% of risk-weighted assets; and (4) a total capital ratio equal to 8% of total risk-weighted assets. Common equity Tier 1 capital is defined as common stock instruments,retained earnings, any common equity Tier 1 minority interest and, unless the bank has made an “opt-out” election, accumulated other comprehensive income, netof goodwill and certain other intangible assets. Tier 1 or core capital is defined as common equity Tier 1 capital plus certain qualifying subordinated interests andgrandfathered capital instruments. Total capital consists of Tier 1 capital plus Tier 2 or supplementary capital items, which include allowances for loan losses in anamount of up to 1.25% of risk-weighted assets, qualifying subordinated instruments and certain grandfathered capital instruments. An institution’s risk-basedcapital requirements are measured against risk-weighted assets, which equal the sum of each on-balance-sheet asset and the credit-equivalent amount of each off-balance-sheet item after being multiplied by an assigned risk weight. Risk weightings range from 0% for cash to 100% for property acquired through foreclosure,commercial loans, and certain other assets to 150% for exposures that are more than 90 days past due or are on nonaccrual status and certain commercial realestate facilities that finance the acquisition, development or construction of real property. In addition to the above minimum requirements, the Basel III Capital Rules require banks and covered financial institution holding companies tomaintain a capital conservation buffer of at least 2.5% of risk-weighted assets over and above the minimum risk-based capital requirements. Institutions that do notmaintain the required capital buffer will become subject to progressively more stringent limitations on the percentage of earnings that can be paid out in dividendsor used for stock repurchases and on the payment of discretionary bonuses to senior executive management. The capital buffer requirement effectively raises theminimum required risk-based capital ratios to 7% for Common Equity Tier 1 Capital, 8.5% for Tier 1 Capital and 10.5% for Total Capital on a fully phased-inbasis. In assessing an institution’s capital adequacy, the FDIC takes into consideration not only these numeric factors but also qualitative factors, and has theauthority to establish higher capital requirements for individual institutions where necessary. Prompt Corrective Regulatory Action. Under applicable federal statute, the federal bank regulatory agencies are required to take “prompt correctiveaction” with respect to institutions that do not meet specified minimum capital requirements. For these purposes, the statute establishes five capital categories: wellcapitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. Under the implementing regulations, in order tobe considered well capitalized, a bank must have a ratio of common equity Tier 1 capital to risk-weighted assets of 6.5%, a ratio of Tier 1 capital to risk-weightedassets of 8%, a ratio of total capital to risk-weighted assets of 10%, and a leverage ratio of 5%. An institution is “adequately capitalized” if it has a Total Risk-Based Capital Ratio of 8.0% or greater, a Tier 1 Risk-Based Capital Ratio of 6.0% orgreater, a Common Equity Tier 1 Capital Ratio of 4.5% or better and a Leverage Ratio of 4.0% or greater. An institution is “undercapitalized” if it has a Total Risk-Based Capital Ratio of less than 8.0%, a Tier 1 Risk-Based Capital ratio of less than 6.0%, a Common Equity Tier 1 ratio of less than 4.5% or a Leverage Ratio ofless than 4.0%. An institution is deemed to be “significantly undercapitalized” if it has a Total Risk-Based Capital Ratio of less than 6.0%, a Tier 1 Risk-BasedCapital Ratio of less than 4.0%, a Common Equity Tier 1 ratio of less than 3.0% or a Leverage Ratio of less than 3.0%. An institution is considered to be “criticallyundercapitalized” if it has a ratio of tangible equity to total assets that is equal to or less than 2.0% 17
Page 20
Table of Contents The prompt corrective action regulations provide for the imposition of a variety of requirements and limitations on institutions that fail to meet the abovecapital requirements. In particular, the FDIC may require any state non-member bank that is not “adequately capitalized” to take certain action to increase itscapital ratios. If the non-member bank’s capital is significantly below the minimum required levels of capital or if it is unsuccessful in increasing its capital ratios,the bank’s activities may be restricted. As of December 31, 2025, the Bank was in compliance with all regulatory capital standards and qualified as “well capitalized.” See Note 13 of Notes toConsolidated Financial Statements. Bank Secrecy Act / Anti-Money Laundering Laws. The Bank is subject to the Bank Secrecy Act and other anti-money laundering laws and regulations,including the USA PATRIOT Act of 2001. These laws and regulations require the Bank to implement policies, procedures, and controls to detect, prevent, andreport money laundering and terrorist financing and to verify the identity of their customers. Violations of these requirements can result in substantial civil andcriminal sanctions. In addition, provisions of the USA PATRIOT Act require the federal financial institution regulatory agencies to consider the effectiveness of afinancial institution's anti-money laundering activities when reviewing mergers and acquisitions. Privacy Regulations and Cybersecurity. Federal regulations generally require that the Bank disclose its privacy policy, including identifying with whomit shares a customer’s “non-public personal information,” to customers at the time of establishing the customer relationship and annually thereafter. In addition, theBank is required to provide its customers with the ability to “opt-out” of having their personal information shared with unaffiliated third parties and not to discloseaccount numbers or access codes to non-affiliated third parties for marketing purposes. The Bank currently has a privacy protection policy in place and believesthat such policy is in compliance with the regulations. In November 2021, the federal bank regulatory agencies issued a final rule requiring banking organizations to notify their primary federal regulator assoon as possible and no later than 36 hours of determining that a “computer-security incident” that rises to the level of a “notification incident,” as those terms aredefined in the final rule, has occurred. A notification incident is a “computer-security incident” that has materially disrupted or degraded, or is reasonably likely tomaterially disrupt or degrade, the banking organization’s ability to deliver services to a material portion of its customer base, jeopardize the viability of keyoperations of the banking organization, or impact the stability of the financial sector. The final rule also requires bank service providers to notify any affected bankto or on behalf of which the service provider provides services “as soon as possible” after determining that it has experienced an incident that materially disrupts ordegrades, or is reasonably likely to materially disrupt or degrade, covered services provided to such bank for four or more hours. Transactions with Related Parties. The Bank is subject to the Federal Reserve’s Regulation W, which implements the restrictions of Sections 23A and23B of the Federal Reserve Act on transactions between a bank and its “affiliates.” The sole “affiliate” of the Bank, as defined in Regulation W, is the Company.Section 23A and Regulation W generally place limits on the amount of a bank’s loans or extensions of credit to, investments in, or certain other transactions withits affiliates, and on the amount of advances to third parties collateralized by the securities or obligations of affiliates. Section 23B and Regulation W also require abank’s transactions with affiliates to be on terms substantially the same, or at least as favorable to the bank, as those prevailing at the time for comparabletransactions with non-affiliated companies. The Bank is also subject to certain restrictions under Sections 22(g) and 22(h) of the Federal Reserve Act on extensions of credit to the executive officers,directors, principal shareholders of the Bank and the Company, as well as to entities controlled by such persons. Among other things and subject to certainexceptions, these provisions generally require that the Bank’s extensions of credit to the insiders of the Bank and the Company must be made on substantially thesame terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with third parties and must not involve more than thenormal risk of repayment or present other unfavorable features. Commercial Real Estate Lending Concentrations. The federal banking agencies have issued guidance on sound risk management practices forconcentrations in commercial real estate lending. The particular focus is on exposure to commercial real estate loans that are dependent on the cash flow from thereal estate held as collateral and that are likely to be sensitive to conditions in the commercial real estate market (as opposed to real estate collateral held as asecondary source of repayment or as an abundance of caution). The purpose of the guidance is not to limit a bank’s commercial real estate lending but to guidebanks in developing risk management practices and capital levels commensurate with the level and nature of real estate concentrations. The guidance directs theFDIC and other federal bank regulatory agencies to focus their supervisory resources on institutions that may have significant commercial real estate loanconcentration risk. A bank that has experienced rapid growth in commercial real estate lending, has notable exposure to a specific type of commercial real estateloan, or is approaching or exceeding the following supervisory criteria may be identified for further supervisory analysis with respect to real estate concentrationrisk: • Total reported loans for construction, land development and other land represent 100% or more of the bank's capital, or • Total commercial real estate loans (as defined in the guidance) represent 300% or more of the bank's capital or the outstanding balance of the bank'scommercial real estate loan portfolio has increased 50% or more during the prior 36 months. The guidance provides that the strength of an institution's lending and risk management practices with respect to such concentrations will be taken intoaccount in supervisory guidance on evaluation of capital adequacy. 18
Page 21
Table of Contents Federal Home Loan Bank System. The Bank is a member of the Federal Home Loan Bank (“FHLB”) of New York, which is one of 11 regional FHLBs.Each FHLB serves as a reserve or central bank for its members within its assigned region. It is funded primarily from funds deposited by member institutions andproceeds from the sale of consolidated obligations of the FHLB System. It makes loans to members (i.e., advances) in accordance with policies and proceduresestablished by the Board of Directors of the FHLB. As a member, the Bank is required to purchase and maintain restricted stock in the FHLB of New York (“FHLBNY”) in an amount equal to the greater of1% of its aggregate unpaid residential mortgage loans, home purchase contracts or similar obligations at the beginning of each year or 5% of the Bank’soutstanding advances from the FHLB. At December 31, 2025, the Bank was in compliance with this requirement. Community Reinvestment Act and Fair Lending Laws. Under the Community Reinvestment Act, every insured depository institution, including theBank, has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including lowand moderate income neighborhoods. The Community Reinvestment Act does not establish specific lending requirements or programs for financial institutions,nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community. The CommunityReinvestment Act requires the depository institution’s record of meeting the credit needs of its community to be assessed and taken into account in the evaluationof certain applications by such institution, such as a merger or the establishment of a branch office by the Bank. An unsatisfactory Community Reinvestment Actexamination rating may be used as the basis for the denial of an application. The Bank received a “needs to improve” rating in its most recent CommunityReinvestment Act examination. In May 2022, the FDIC and the other federal bank regulatory agencies issued a joint proposal to modernize the regulations implementing the CRA, whichwould change both the process and substantive tests that the regulators use to assess the record of each bank in fulfilling its obligation to the community. Theregulatory agencies stated that the proposal is intended to achieve the following objectives: (i) expand access to credit, investment and basic banking services inlow- and moderate-income communities, (ii) adapt to changes in the banking industry, including internet and mobile banking, (iii) provide greater clarity,consistency and transparency in the application of the regulations and (iv) tailor performance standards to account for differences in bank size, business model, andlocal conditions. The Company will evaluate the impact of the proposal’s potential changes to the regulations implementing the CRA and their impact to ourfinancial condition and/or results of operations, which cannot be predicted at this time. In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices on the basis ofcharacteristics specified in those statutes. A failure to comply with the Equal Credit Opportunity Act or the Fair Housing Act or with the federal fair lendingregulations implementing those statutes could result in an enforcement action by the FDIC, as well as by the Department of Justice. Incentive Compensation. The FDIC and the Federal Reserve review, as part of their regular, risk-focused examinations, the incentive compensationarrangements of banking organizations. These reviews are tailored to each organization based on the scope and complexity of the organization’s activities and theprevalence of incentive compensation arrangements. Deficiencies are incorporated into the organization’s supervisory ratings, which can affect the organization’sability to make acquisitions and take other actions. Enforcement actions may be taken against a banking organization if its incentive compensation arrangements,or related risk-management control or governance processes, pose a risk to the organization’s safety and soundness and the organization is not taking prompt andeffective measures to correct the deficiencies. The FDIC and the other federal bank regulatory agencies issued comprehensive guidance on incentive compensation policies intended to ensure that theincentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking.The guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, is based upon the principles that a bankingorganization’s incentive compensation arrangements should (i) provide incentives that do not encourage risk-taking beyond the organization’s ability to effectivelyidentify and manage risks, (ii) be compatible with effective internal controls and risk management, and (iii) be supported by strong corporate governance,including active and effective oversight by the organization’s board of directors. 19
Page 22
Table of Contents The SEC has adopted a rule implementing the incentive-based compensation recovery (“clawback”) provisions of the Dodd-Frank Act. The rule directednational securities exchanges and associations, including NASDAQ, to require listed companies to develop and implement clawback policies to recovererroneously awarded incentive-based compensation from current or former executive officers in the event of a required accounting restatement due to materialnoncompliance with any financial reporting requirement under the securities laws, and to disclose their clawback policies and any actions taken under thesepolicies. In October 2023, the Nasdaq adopted listing standards requiring listed companies to adopt policies providing for the recovery or “clawback” of excessincentive-based compensation earned by current or former executive officers during the three fiscal years preceding the date the listed company determines anaccounting restatement is required. The Company adopted a clawback policy compliant with the new Nasdaq listing standard, effective October 2 ,2023. Item 1A. Risk Factors. Not applicable Item 1B. Unresolved Staff Comments. None. Item 1C. Cybersecurity The Risk Management Committee of the Board of Directors (the “Committee”) is responsible for overseeing the risks from cybersecurity threats. TheCommittee receives reports from, and oversees, IT Risk Assessment, Cybersecurity Risk Assessment, Annual IT Program Status Report, Vendor Management RiskAssessment, and Quarterly Internal Vulnerability Reports and current Cyber Events briefings. The Committee also makes budgeting, procedure, and policydecisions designed and intended to improve the Company’s residual risk. The IT Steering Committee consists of the Company’s senior management, the entire IT team, and various operations personnel. The primary function ofthe IT Steering Committee is to perform Strategic Planning, discuss hardware and software replacement, new projects, current cybersecurity threats, and ongoingcybersecurity issues and threats. The IT manager provides an IT status report to the Risk Management committee on a quarterly basis. Our IT department performs annual risk assessments to evaluate the effectiveness of the controls to support the requirements under Gramm-Leach BlileyAct ("GLBA"), and Federal Institutions Examination Council ("FFIEC") Guidance on Securing Customer Information. The focus areas include: • technology systems used for information that is collected, processed, and stored; • assessing internal and external cybersecurity threats and vulnerabilities; • performing regular penetration and controls testing; • evaluation and assessment of impact should the information or systems become compromised; • evaluation for the effectiveness of the governance structure for Information security risk management. Internal and external Penetration Testing is performed annually. Tests are conducted or reviewed by independent third parties or qualified Associatesindependent of those that develop or maintain the security program. Testing is performed annually by third party auditors contracted through the company's ITdepartment. Management reviews test results promptly and ensures that appropriate steps are taken to address adverse test results. Remediation efforts areorganized and made available to the Committee as well as for review by third party auditors and examiners. The Company has adopted an Incident Response Plan (the “Plan”) to monitor, detect, mitigate and remediate cybersecurity incidents. The Plan requiresall employees to have a working knowledge of the Company’s Information Security Program and Incident Response Policies. Pursuant to the Plan, the InformationTechnology Administrator and Senior\Compliance Management identify information owners for sensitive customer information and create an incident responseteam. Each Department Manager, upon notification of a potential unauthorized access, manipulation of data or theft of any item identified under GLBA Inventoryand Asset Classification, is responsible for further assessing the situation in order to document the suspected or actual breech, and forward the appropriatedocumentation to the Information Technology Administrator. The documentation of the suspected or actual incident includes the following: a. Identify the nature and scope of the incident. b. Identify the information systems affected. c. Identify the types of customer information potentially affected. 20
Page 23
Table of Contents Once the Department Manager has determined that unauthorized access, manipulation of data or theft of any item identified under GLBA Inventory andAsset Classification has occurred, Senior Management, the Compliance Officer and the Information Technology Administrator must be contacted immediately. If theft of any item identified under GLBA Inventory and Asset Classification has occurred, and it cannot be determined what specific information wasincluded on the Asset, the Asset is treated as if it contained sensitive customer information and Senior Management, the Compliance Officer and the InformationTechnology Administrator must be contacted immediately. If the Information Technology Administrator and Senior\Compliance Management declare an incidentor if there is a confirmed theft or loss of customer information, appropriate regulatory authorities, law enforcement, and legal counsel are notified. During the fiscal year ended December 31, 2025, the risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have notmaterially affected the Company, its business strategy, results of operations, or financial condition. Item 2. Properties. (a) Properties Office Location Year Facility Opened Lease or Owned Parke Main Office 1999 Owned601 Delsea Drive Sewell, NJ 08080 Northfield Branch 2002 Leased501 Tilton Road Northfield, NJ 08225 Kennedy Branch 2003 Owned567 Egg Harbor Road Sewell, NJ 08080 Spruce Street Branch 2006 Leased1610 Spruce Street Philadelphia, PA 19103 Galloway Township Branch 2010 Owned67 E. Jimmy Leeds Road Galloway Township, NJ 08205 Collingswood Branch 2016 Owned1150 Haddon Avenue Collingswood, NJ 08108 Arch Street Branch 2016 Leased1032 Arch Street Philadelphia, PA 19108 Philadelphia Lending Office 2023 Leased1817 E. Venango St. Philadelphia, PA 19108 21
Page 24
Table of Contents Item 3. Legal Proceedings. Information regarding legal proceedings is included in Note 14, Commitments and Contingencies, to the Consolidated Financial Statements under Part II,Item 8, "Financial Statement and Supplementary Data". Item 4. Mine Safety Disclosures. Not Applicable. Part II Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's common stock is listed on the Nasdaq Capital Market under the trading symbol of "PKBK". The number of shareholders of record ofcommon stock as of December 31, 2025, was approximately 213. This does not reflect the number of persons or entities who held stock in nominee or "street"name through various brokerage firms. As of March 9, 2026, there were 11,730,950 shares of our common stock issued and outstanding. The Company paid an $0.18 per share quarterly common stock cash dividend during each quarter of 2025. During 2025, the Company paid a total of$8.4 million in common stock cash dividends. The Company also has 325 shares of 6% non-Cumulative Series B Preferred Stock outstanding at December 31, 2025. The preferred stock has aliquidation preference of $1,000 per share. Each share of Series B Preferred Stock is convertible, at the option of the holder into approximately 137.6 shares ofCommon Stock at December 31, 2025. Upon full conversion of the outstanding shares of the Series B Preferred Stock, the Company will issue approximately44,720 shares of Common Stock assuming that the conversion rate does not change. The conversion rate and the total number of shares to be issued would beadjusted for future stock dividends, stock splits and other corporate actions. The Company has recorded dividends on preferred stock in the approximate amount of $19,500 and $20,250 for the years ended December 31, 2025 and2024, respectively. The Company paid quarterly cash dividends of $15 per share on the preferred stock for the years 2025 and 2024. During 2025, there were noconversions of preferred stock performed. The preferred stock qualifies, and is accounted, as equity securities and is included in the Company’s Tier I capital sinceissued. The timing and amount of future dividends will be within the discretion of the Board of Directors and will depend on the consolidated earnings, financialcondition, liquidity, and capital requirements of the Company and its subsidiaries, applicable governmental regulations and restrictions, and Board policies, andother factors deemed relevant by the Board. The Company's ability to pay dividends is substantially dependent upon the dividends it receives from the Bank and is subject to other restrictions. Undercurrent regulations, the Bank's ability to pay dividends is restricted as well. 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 willbe 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. Pursuant to the terms of the Series B Preferred Stock, the Company may not pay a cash dividend on the common stock unless all dividends on the SeriesB Preferred Stock for the then-current dividend period have been paid or set aside. 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 couldclaim that a dividend payment constitutes an unsafe or unsound practice. The New Jersey Department of Banking and Insurance has similar power to issue ceaseand 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 tomaintain adequate capital or to meet loan loss reserve requirements). 22
Page 25
Table of Contents Set forth below is information regarding the Company's stock repurchases during the fiscal year ended December 31, 2025. Issuer Purchases of Equity Securities Total Number of Maximum Numberof Shares Purchased Shares that MayYet Total Number of Average Price as Part of Publicly Be Purchased Shares Purchased Paid Per Share AnnouncedProgram Under the Program July 1 - 31, 2025 50,000 $ 21.76 50,000 363,096 August 1 - 31, 2025 200,000 21.37 200,000 163,096 September 1 - 30, 2025 50,000 22.25 50,000 113,096 Total 300,000 $ 21.58 300,000 Shareholders wishing to change the name, address or ownership of the Company’s stock, report lost certificates or consolidate accounts are asked tocontact the Company’s Transfer Agent and Registrar directly: Computershare Investor Services ("Computershare"), P.O. Box 43078, Providence, Rhode Island02940-3078. Shareholders may also contact Computershare at 1-800-942-5909 and www.computershare.com. Item 6. [Reserved] Not applicable Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Overview We are a bank holding company and are headquartered in Washington Township, New Jersey. Through the Bank, we provide personal and business financialservices to individuals and small to mid-sized businesses primarily in New Jersey, Pennsylvania, and New York. The Bank has branches in Galloway Township,Northfield, Washington Township, and Collingswood, New Jersey and Philadelphia, Pennsylvania. The vast majority of our revenue and income is currentlygenerated through the Bank. We manage our Company for the long term. We are focused on the fundamentals of growing customers, loans, deposits and revenue and improving profitability,while investing for the future and managing risk, expenses and capital. We continue to invest in our products, markets and brand, and embrace our commitments toour customers, shareholders, employees and the communities where we do business. Our approach is concentrated on organically growing and deepening clientrelationships across our businesses that meet our risk/return measures. We focus on small to mid - sized business and retail customers and offer a range of loan products, deposit services, and other financial products through our retailbranches and other channels. The Company's results of operations are dependent primarily on its net interest income, which is the difference between the interestincome earned on its interest earning-assets and the interest expense paid on its interest-bearing liabilities. In our operations, we have three major lines of lending:residential real estate mortgage, commercial real estate mortgage, and construction lending. Our interest income is primarily generated from our lending andinvestment activities. Our deposit products include checking, savings, money market accounts, and certificates of deposit. The majority of our deposit accounts areobtained through our retail banking business, which provides us with low cost funding to grow our lending efforts. The Company also generates income from loanand deposit fees and other non-interest related activities. The Company's non-interest expense primarily consists of employee compensation, administration, andother operating expenses. 23
Page 26
Table of Contents As of December 31, 2025, we had total assets of $2.25 billion, total liabilities of $1.92 billion, and total shareholders' equity of $324.5 million. Net incomeavailable to common shareholders for the year ended December 31, 2025 was $37.8 million. In 2025, net income available to common shareholders increased37.3% over the previous year primarily due to an increase in net interest income, partially offset by an increase in the provision for credit losses, a decrease in non-interest income, and an increase in non-interest expense. At December 31, 2025, total assets increased 5.0% and total equity increased 8.1%, compared toDecember 31, 2024. Our risk based tier 1 capital ratio was 20.5% at December 31, 2025. In addition, during the fiscal year ended December 31, 2025 we returned$8.4 million of capital to our common shareholders through cash dividends, and we repurchased 300,000 common stock shares at a total cost of $6.5 million. Our business operations are subject to risks and uncertainties that could materially affect our operating results. The extent of such impact will depend on futuredevelopments, which are highly uncertain. There continues to be various other risks and uncertainties that could impact the Company’s businesses and futureresults, such as changes to the economic conditions in the United States, market interest rates, the Federal Reserve's monetary policy, other government policies,and actions of regulatory agencies. Please refer to "Forward-Looking Statements" above for further information about risks and uncertainties that could affect ouroperating results. Results of Operations Net Income We recorded net income available to common shareholders of $37.8 million or $3.20 per basic common share and $3.16 per diluted common share, for the yearended December 31, 2025, compared to $27.5 million, or $2.30 per basic common share and $2.27 per diluted common share, for the year ended December 31,2024, an increase of $10.3 million or 37.3%. Net Interest Income Net interest income increased $17.8 million, or 30.2%, to $76.5 million for the year ended December 31, 2025 compared to $58.7 million for the year endedDecember 31, 2024. The increase in net interest income was primarily due to an increase in interest income of $17.6 million, and a decrease in interest expense of$0.2 million. Interest income for 2025 increased to $142.7 million, an increase of $17.6 million, or 14.0%, from $125.1 million for 2024, primarily due to anincrease in interest and fees on loans of $17.4 million, or 14.7%. Interest and fees on loans increased during the year ended December 31, 2025, due to higheraverage outstanding loan balances and higher market interest rates. Interest expense decreased to $66.2 million for 2025, from $66.4 million for 2024, a decreaseof $0.2 million, or 0.3%. The decrease in interest expense was primarily due to a decrease interest on borrowings, a decrease in borrowing levels and a decrease inmarket interest rates. The decrease was partially offset by an increase in interest expense on deposits during the year ended December 31, 2025, due to a change inthe deposit mix. Comparative Average Balances, Yields and Rates The following table presents the average daily balances of assets, liabilities and equity and the respective interest earned or paid on interest-earning assets andinterest-bearing liabilities, as well as average annualized rates, for the years ended December 31, 2025 and 2024. Interest rate spread is the difference between theaverage yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities. Net interest margin is net interest income divided byaverage earning assets. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances and have beenreflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized oraccreted to interest income or expense. 24
Page 27
Table of Contents For the Years Ended December 31, 2025 2024 Interest Interest Average Income/ Yield/ Average Income/ Yield/ Balance Expense Cost Balance Expense Cost (Dollars in thousands) Assets Loans (1) (2) $ 1,924,254 $ 135,189 7.03% $ 1,810,931 $ 117,834 6.51%Investment securities (3) 21,015 921 4.38% 23,679 1,042 4.40%Deposits with banks 154,645 6,567 4.25% 124,037 6,237 5.03%Total interest-earning assets 2,099,914 $ 142,677 6.79% 1,958,647 $ 125,113 6.39%Non-interest earning assets 66,693 65,939 Allowance for credit losses (33,431) (32,321) Total assets $ 2,133,176 $ 1,992,265 Liabilities and Equity Interest bearing deposits NOWs $ 60,065 $ 545 0.91% $ 63,871 $ 618 0.97%Money markets 773,369 32,971 4.26% 583,158 27,812 4.77%Savings 50,416 537 1.07% 66,369 750 1.13%Time deposits 490,411 20,784 4.24% 442,664 19,099 4.31%Brokered certificates of deposit 117,108 5,011 4.28% 170,454 9,033 5.30%Total interest-bearing deposits 1,491,369 59,848 4.01% 1,326,516 57,312 4.32%Borrowings 127,358 6,371 5.00% 165,753 9,093 5.49%Total interest-bearing liabilities 1,618,727 $ 66,219 4.09% 1,492,269 $ 66,405 4.45%Non-interest bearing deposits 181,897 187,588 Other liabilities 19,563 18,261 Total liabilities 1,820,187 1,698,118 Equity 312,989 294,147 Total liabilities and equity $ 2,133,176 $ 1,992,265 Net interest income $ 76,458 $ 58,708 Interest rate spread 2.70% 1.94%Net interest margin 3.64% 3.00% (1) Interest income includes $4.4 million and $3.6 million of net fee income for the years ended December 31, 2025 and 2024, respectively.(2) Average balances are net of unearned income and include nonperforming loans.(3) Includes restricted stock and related dividend income. Net interest income and the net interest margin in any one period can be significantly affected by a variety of factors including the mix and overall size of ourearning assets portfolio and the cost of funding those assets. We expect net interest income and our net interest margin to fluctuate based on changes in interestrates and changes in the amount and composition of our interest-earning assets and interest-bearing liabilities. 25
Page 28
Table of Contents 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., changesin volume multiplied by the previous rate) and (ii) changes in rate (i.e., changes in rate multiplied by old volume). For purposes of this table, changes attributableto both rate and volume, which cannot be segregated, have been allocated proportionately to the change due to volume and the change due to rate. Years ended December 31, 2025 vs 2024 Variance due to change in Net Average Average Increase/ Volume Rate (Decrease) (Dollars in thousands) Interest Income: Loans (net of deferred costs/fees) $ 7,374 $ 9,981 $ 17,355 Investment securities (117) (4) (121)Deposits with banks 1,539 (1,209) 330 Total interest income 8,796 8,768 17,564 Interest Expense: NOWs (37) (35) (72)Money markets 9,072 (3,913) 5,159 Savings (180) (33) (213)Time deposits 2,060 (375) 1,685 Brokered CDs (2,827) (1,195) (4,022)Borrowed funds (2,107) (616) (2,723) Total interest expense 5,981 (6,167) (186) Net interest income $ 2,815 $ 14,935 $ 17,750 Provision for credit losses Our provision for credit losses in each period is driven by net charge-offs and changes to the allowance for credit losses. We recorded a provision for credit lossesof $2.5 million and $0.7 million in 2025 and 2024, respectively. The provision for credit losses as a percentage of interest income was 1.74% and 0.58% in2025 and 2024, respectively. Our provision for credit losses increased by $1.8 million in 2025 compared to 2024 primarily as a result of an increase in outstanding loan balances, partially offsetby a decrease in loss rates. Additionally, the provision for unfunded commitments decreased slightly at December 31, 2025, from the prior year. For moreinformation about our provision and allowance for credit losses and our loss experience, see “Risk Management and Asset Quality-Allowance for Credit Losses”and NOTE 4. Loans and Allowance for Credit Losses in the Notes to the Consolidated Financial Statements. 26
Page 29
Table of Contents Non-interest Income The table below shows the components of non-interest income for the years ended December 31, 2025 and 2024. 2025 2024 $ Change % Change (Dollars in thousands) Service fees on deposit accounts $ 1,232 $ 1,387 $ (155) (11.2)%Other Loan fees 676 849 (173) (20.4)%Bank owned life insurance income 740 655 85 13.0%Other 759 1,410 (651) (46.2)% Total non-interest income $ 3,407 $ 4,301 $ (894) (20.8)% Non-interest income decreased by $0.9 million to $3.4 million during the year ended December 31, 2025 compared to 2024, primarily due to a decrease inother income as a result of a decrease in one-time insurance payments and settlements received in 2024. The fee income for the year ended December 31, 2025 from the commercial deposit accounts of depositors who do business in the cannabis industry totaled$0.9 million and is included in service fees on deposit accounts in the accompanying consolidated statements of income. Such deposit fee income totaled$1.0 million during the year ended December 31, 2024. Please refer to Note 15. Commitments and Contingencies in the Notes to the Consolidated FinancialStatements for our banking services to customers who do business in the cannabis industry. Non-Interest Expense The following table displays the components of non-interest expense for the years ended December 31, 2025 and 2024. 2025 2024 $ Change % Change (Dollars in thousands) Compensation and benefits $ 13,314 $ 12,768 $ 546 4.3%Professional services 3,428 2,730 698 25.6%Occupancy and equipment 2,760 2,598 162 6.2%Data processing 1,544 1,366 178 13.0%FDIC insurance and other assessments 1,449 1,306 143 10.9%OREO expense 649 835 (186) (22.3)%Other operating expense 4,830 4,381 449 10.2% Total non-interest expense $ 27,974 $ 25,984 $ 1,990 7.7% Non-interest expense increased $2.0 million to $28.0 million for the year ended December 31, 2025, from $26.0 million for 2024 primarily due to an increase inprofessional services of $0.7 million, an increase in compensation and benefits expense of $0.5 million, and an increase in other operating expense of $0.5 million,partially offset by a decrease in OREO expense of $0.2 million. The increase in professional services during the year ended December 31, 2025, was primarily dueto a $0.6 million increase in legal fees. The increase in compensation and benefits expense was primarily due to an increase in salaries of $0.4 million, and a $0.1million decrease in deferred loan origination costs attributable to a reduction in the number of loans originated. 27
Page 30
Table of Contents Income Tax Income tax expense increased $2.8 million to $11.6 million on income before taxes of $49.4 million for 2025, compared to income tax expense of $8.8 million onincome before taxes of $36.3 million for 2024. The effective income tax rates for 2025 and 2024 were 23.5% and 24.2%, respectively. Financial Condition General At December 31, 2025, the Company’s total assets were $2.25 billion, an increase of $107.2 million or 5.0%, from December 31, 2024. The increase in total assetswas primarily attributable to an increase in gross loans outstanding, and an increase in banked owned life insurance ("BOLI"), partially offset by a decrease in cashand cash equivalents. Gross loans increased $167.1 million, to $2.04 billion at December 31, 2025 primarily due to an increase in the CRE non-owner occupiedloan portfolio of $107.0 million, an increase in the construction portfolio loan balance of $63.0 million, and an increase in the CRE owner occupied loan portfoliobalance of $22.1 million, partially offset by a decrease in the residential 1 - 4 family investment portfolio balance of $29.9 million. BOLI increased $6.3 million atDecember 31, 2025, primarily due to the purchase of additional insurance policies. The increase in assets was partially offset by a decrease in cash and cashequivalents of $64.7 million, or 29.2%, from December 31, 2024. Total liabilities were $1.92 billion at December 31, 2025. This represented a $82.8 million, or 4.5%, increase from $1.84 billion at December 31, 2024. Theincrease in total liabilities was primarily due to an increase in deposits, partially offset by a decrease in borrowings. Total deposits increased $127.6 million, or7.8%, to $1.76 billion at December 31, 2025, from $1.63 billion at December 31, 2024. Deposits from the cannabis industries decreased to $61.9 million atDecember 31, 2025, from $151.9 million at December 31, 2024. Total borrowings were $143.4 million at December 31, 2025, a decrease of $44.9 million,compared to December 31, 2024, primarily due to the repayment of $30.0 million of subordinated debt, and a decrease in FHLB advances of $15.0 million. Total equity was $324.5 million and $300.1 million at December 31, 2025 and December 31, 2024, respectively, an increase of $24.4 million from December 31,2024. The following table presents certain key condensed balance sheet data as of December 31, 2025 and December 31, 2024: December 31, December 31, 2025 2024 $ Change % Change (Dollars in thousands) Cash and cash equivalents $ 156,863 $ 221,527 $ (64,664) (29.2)%Investment securities 13,523 14,760 (1,237) (8.4)%Loans, net of unearned income 2,035,227 1,868,153 167,074 8.9%Allowance for credit losses (34,649) (32,573) (2,076) 6.4%Total assets 2,249,436 2,142,236 107,200 5.0%Total deposits 1,758,669 1,631,050 127,619 7.8%FHLBNY borrowings 130,000 145,000 (15,000) (10.3)%Subordinated debt 13,403 43,300 (29,897) (69.0)%Total liabilities 1,924,918 1,842,163 82,755 4.5%Total equity 324,518 300,073 24,445 8.1%Total liabilities and equity 2,249,436 2,142,236 107,200 5.0% 28
Page 31
Table of Contents Cash and cash equivalents Cash and cash equivalents decreased $64.7 million to $156.9 million at December 31, 2025, from $221.5 million at December 31, 2024, a decrease of 29.2%. Thedecrease was mainly due to an increase in loans, and a decrease in borrowings, partially offset by an increase in deposits. Investment securities Total investment securities decreased to $13.5 million at December 31, 2025, from $14.8 million at December 31, 2024, a decrease of $1.2 million or 8.4%. Thedecrease was primarily due to pay downs of $1.7 million, partially offset by the purchase of a $0.5 million corporate security. Loans, net unearned income Loans receivable increased to $2.04 billion at December 31, 2025, from $1.87 billion at December 31, 2024. The increase was primarily due to an increase in theCRE non-owner occupied loan portfolio of $107.0 million, an increase in the construction portfolio loan balance of $63.0 million, and an increase in the CREowner occupied loan portfolio balance of $22.1 million, partially offset by a decrease in the residential 1 - 4 family investment portfolio balance of $29.9 million. Allowance for credit losses Allowance for credit losses increased $2.1 million, to $34.6 million, or 6.4%, at December 31, 2025, from $32.6 million at December 31, 2024. The increase wasprimarily due to an increase in the portfolio balance, and an increase in specific reserves for individually evaluated loans, partially offset by a decrease in historicalloss rates. Deposits At December 31, 2025, the Bank’s total deposits increased to $1.76 billion from $1.63 billion at December 31, 2024, an increase of $127.6 million, or 7.8%. Theincrease in deposits was primarily attributed to an increase in money market deposits of $130.5 million, interest checking deposits of $49.4 million, and non-interest checking of $12.5 million, partially offset by a decrease in brokered time deposits of $41.9 million, time deposits of $11.4 million, and savings deposits of$11.4 million. Brokered interest checking deposits, included in the above balances, increased $45.0 million at December 31, 2025, from zero at December 31,2024. Borrowings At December 31, 2025, total borrowings decreased $44.9 million to $143.4 million, from $188.3 million at December 31, 2024. The decrease in borrowings wasprimarily due to the repayment of $30.0 million of subordinated debt, and a decrease in FHLB advances of $15.0 million. Equity Total shareholders’ equity increased to $324.5 million at December 31, 2025, from $300.1 million at December 31, 2024, an increase of $24.4 million or 8.1%.The increase in total shareholders' equity was primarily due to the retention of earnings from the period, partially offset by the recognition of $8.5 million of cashdividends, and repurchases of shares of the Company's common stock in the amount of $6.5 million during the year ended December 31, 2025. 29
Page 32
Table of Contents Liquidity and Capital Resources Liquidity is a measure of our ability to generate cash to support asset growth, meet deposit withdrawals, satisfy other contractual obligations, and otherwiseoperate on an ongoing basis. At December 31, 2025, our cash position was $156.9 million. We invest cash that is in excess of our immediate operating needsprimarily in our interest-bearing account at the Federal Reserve. Our primary source of funding has been deposits. Funds from other operations, financing arrangements, investment securities available-for-sale also providesignificant sources of funding. The Company seeks to rely primarily on core deposits from customers to provide stable and cost-effective sources of funding tosupport loan growth. We focus on customer service which we believe has resulted in a history of customer loyalty. Stability, low cost and customer loyaltycomprise key characteristics of core deposits. We also use brokered deposits as a funding source. The Bank joined the IntraFi network to secure an additional alternative funding source. IntraFi provides theBank an additional source of external funds through their weekly CDARS® settlement process, as well as their ICS® money market product. As of December 31,2025, the Company has $56.6 million of brokered deposits from IntraFi. Additionally, we have access to other brokered deposit funding sources that we utilize as asource of additional liquidity. In addition to IntraFi, we utilize Piper Sandler, Wells Fargo, and Stonecastle to obtain brokered deposits, and as of December 31,2025, the Company had $158.7 million sourced from these broker relationships. While deposit accounts comprise the vast majority of our funding needs, wemaintain secured borrowing lines with the FHLBNY and the Federal Reserve Bank ("FRB"). At December 31, 2025, the Company had a $611.8 million line ofcredit from the FHLBNY, of which $130.0 million was outstanding, $75.0 million was a letter of credit to secure public deposits, and $406.8 million was unused.As of December 31, 2025, the Company had a borrowing capacity through the FRB discount window of $391.3 million. There were no outstanding balances withthe FRB as of December 31, 2025. Our investment portfolio primarily consists of mortgage-backed available for sale securities issued by US government agency and government sponsored entities.These available for sale securities are readily marketable and are available to meet our additional liquidity needs. At December 31, 2025, the Company'sinvestment securities portfolio classified as available for sale was $4.7 million. We had unused loan commitments of $158.3 million at December 31, 2025. Our loan commitments are normally originated with the full amount of collateral. Suchcommitments have historically been drawn at only a fraction of the total commitment. Since many of the commitments are expected to expire without being drawnupon, the total commitment amounts do not necessarily represent future cash requirements. The funding requirements for such commitments occur on a measuredbasis over time and would be funded by normal deposit growth. Capital Adequacy Consistent with the goal to operate a sound and profitable financial organization, the Company and Bank actively seeks to maintain their status as well-capitalizedin accordance with regulatory standards. As of December 31, 2025, the Company and the Bank exceeded all applicable regulatory capital requirements. See Note13 to our Consolidated Financial Statements for more information about the Company's and the Bank's regulatory capital compliance. Interest Rate Sensitivity Interest rate sensitivity is an important factor in the management of the composition and maturity configurations of earning assets and funding sources. Theprimary objective of asset/liability management is to ensure the steady growth of our primary earnings component, net interest income. Net interest income canfluctuate with significant interest rate movements. To lessen the impact of interest rate movements, management endeavors to structure the balance sheet so thatrepricing opportunities exist for both assets and liabilities in roughly equivalent amounts at approximately the same time intervals. Imbalances in these repricingopportunities at any point in time constitute interest rate sensitivity. 30
Page 33
Table of Contents 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 dollardifference between assets and liabilities that are subject to interest-rate pricing within a given time period, including both floating rate or adjustable rateinstruments and instruments that are approaching maturity. Our management and the Board of Directors oversee the asset/liability management function through the asset/liability committee of the Board that meetsperiodically to monitor and manage the balance sheet, control interest rate exposure, and evaluate our pricing strategies. The asset mix of the balance sheet iscontinually evaluated in terms of several variables: yield, credit quality, appropriate funding sources and liquidity. Management of the liability mix of the balancesheet 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 fundingsources. Accordingly, we undertake to manage the interest-rate sensitivity gap by adjusting the maturity of and establishing rates on the earning asset portfolio andcertain interest-bearing liabilities commensurate with management's expectations relative to market interest rates. Management generally attempts to maintain abalance between rate-sensitive assets and liabilities as the exposure period is lengthened to minimize our overall interest rate risk. The interest rate sensitivity position as of December 31, 2025 is presented in the following table. Assets and liabilities are scheduled based on maturity or re-pricing data except for mortgage loans and mortgage-backed securities, which are based on prevailing prepayment assumptions and expected maturities anddeposits which are based on recent retention experience of core deposits. The difference between rate-sensitive assets and rate-sensitive liabilities, or the interestrate sensitivity gap, is shown at the bottom of the table. As of December 31, 2025 3 Months Over 3 Months Over 1 Year Over 3 Years or Less Through 12Months Through 3Years Through 5Years Over 5 Years Total (Dollars in thousands) Interest-earning assets: Loans (1) $ 185,672 $ 643,865 $ 759,404 $ 204,235 $ 231,287 $ 2,024,463 Investment securities 8,243 1,284 4,510 2,085 5,486 21,608 Cash and cash equivalents 149,125 — — — — 149,125 Total interest-earning assets $ 343,040 $ 645,149 $ 763,914 $ 206,320 $ 236,773 $ 2,195,196 Interest-bearing liabilities: NOW, Saving and Money marketdeposits $ 62,276 $ 126,829 $ 337,626 $ 257,872 $ 115,728 $ 900,331 Retail time deposits 179,095 288,064 12,748 5,785 — 485,692 Brokered time deposits 118,425 57,716 — — — 176,141 Borrowed funds 123,403 20,000 — — — 143,403 Total interest-bearing liabilities $ 483,199 $ 492,609 $ 350,374 $ 263,657 $ 115,728 $ 1,705,567 Interest rate sensitive gap $ (140,159) $ 152,540 $ 413,540 $ (57,337) $ 121,045 $ 489,629 Cumulative interest rate gap $ (140,159) $ 12,381 $ 425,921 $ 368,584 $ 489,629 $ — Ratio of rate-sensitive assets to rate-sensitive liabilities 71.0% 131.0% 218.0% 78.3% 204.6% 128.7%Cumulative interest sensitivity gap to totalassets (6.2)% 0.6% 18.9% 16.4% 21.8% — (1) Loan balances exclude non-accruing loans, deferred fees and costs, and loan discounts. 31
Page 34
Table of Contents Off-Balance Sheet Arrangements and Contractual Obligations In the ordinary course of business, we engage in financial transactions that are not recorded on the balance sheet, or may be recorded on the balance sheet inamounts that are different from the full contract or notional amount of the transaction. Our off-balance sheet arrangements include commitments to extend credit,standby letters of credit and other commitments. These transactions are primarily designed to meet the financial needs of our customers. We enter into commitments to lend funds to customers, which are usually at a stated interest rate, if funded, and for specific purposes and time periods. When wemake commitments, we are exposed to credit risk. However, the maximum credit risk for these commitments will generally be lower than the contractual amountbecause a significant portion of these commitments is expected to expire without being used by the customer. In addition, we manage the potential risk incommitments to lend by limiting the total amount of commitments, by monitoring maturity structure of these commitments and by applying the same creditstandards for these commitments as for all of our credit activities. For commitments to lend, we generally require collateral or a guarantee. We may require various types of collateral, including accounts receivable, inventory,property, plant and equipment and income-producing commercial properties. Collateral requirements for each loan or commitment may vary based on thecommitment type and our assessment of a customer’s credit risk according to the specific credit underwriting, including credit terms and structure. Commitments to extend credit, or net unfunded loan commitments, represent arrangements to lend funds or provide liquidity subject to specified contractualconditions. These commitments generally have fixed expiration dates, may require payment of a fee, and contain termination clauses in the event the customer’scredit quality deteriorates. At December 31, 2025 and December 31, 2024, unused commitments to extend credit amounted to approximately $158.3 million and$122.5 million, respectively. Commitments to fund fixed-rate loans were immaterial at December 31, 2025. Variable-rate commitments are generally issued forless 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 of the Company. 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 inissuing letters of credit is essentially the same as that involved in extending loan facilities to customers. At December 31, 2025 and December 31, 2024, standbyletters of credit with customers were $0.6 million. At December 31, 2025, we had contractual obligations primarily relating to commitments to extend credits, deposits, secured and unsecured borrowings, andoperating leases. We have adequate resources to fund all unfunded commitments to the extent required and meet all contractual obligations as they come due.Please refer to Notes 6, 7, 9, and 15 of the Notes to the Consolidated Financial Statements for detailed information regarding our contractual obligations. Impact of Inflation and Changing Prices The financial statements included in this document have been prepared in accordance with accounting principles generally accepted in the United States ofAmerica. These principles require the measurement of financial position and operating results in terms of historical dollars, without considering changes in therelative purchasing power of money over time due to inflation. Our primary assets and liabilities are monetary in nature. As a result, interest rates have a more significant impact on our performance than the effects of generallevels of inflation. Interest rates, however, do not necessarily move in the same direction or with the same magnitude as the price of goods and services, since suchprices are affected by inflation. In a period of rapidly rising interest rates, the liquidity and maturities of our assets and liabilities are critical to the maintenance ofacceptable performance levels. The principal effect of inflation on earnings, as distinct from levels of interest rates, is in the area of non-interest expense. Expense items such as employeecompensation, employee benefits and occupancy and equipment costs may be subject to increases as a result of inflation. An additional effect of inflation is thepossible increase in the dollar value of the collateral securing loans that we have made. We are unable to determine the extent, if any, to which properties securingour loans have appreciated in dollar value due to inflation. 32
Page 35
Table of Contents Critical Accounting Policies The Company’s accounting policies are more fully described in Note 1 - Description of Business and Summary of Significant Accounting Policies in theConsolidated Financial Statements. As disclosed in Note 1, the preparation of financial statements in conformity with generally accepted accounting principles inthe United States ("GAAP") requires management to make estimates and assumptions about future events that affect the amounts reported in the financialstatements and accompanying notes. Actual results could differ significantly from those estimates. The Company believes that the following discussion addressesthe Company’s most critical accounting policies, which are those that are most important to the portrayal of the Company’s financial condition and results ofoperations and require management’s most difficult, subjective and complex judgments. Allowance for Credit Losses: Our allowances for credit losses represents management's best estimate of probable losses inherent in our investment and loanportfolios, excluding those loans accounted for under fair value. Refer to Note 1 in the Notes to the Consolidated Financial Statements for further information. Our determination of the allowance for credit losses is based on periodic evaluations of the loan and lease portfolios and other relevant factors, broken down intovintage based on year of origination. These critical estimates include significant use of our own historical data and other qualitative, and quantitative data. Theseevaluations are inherently subjective, as they require material estimates and may be susceptible to significant change. Our allowance for credit losses is comprisedof two components, a specific allowance and a general calculation. A specific allowance is calculated for loans and leases that do not share similar riskcharacteristics with other financial assets, and include collateral dependent loans. A loan is considered to be collateral dependent when foreclosure of theunderlying collateral is probable. Parke has elected to apply the practical expedient to measure expected credit losses of a collateral dependent asset using the fairvalue of the collateral, less any estimated costs to sell, when foreclosure is not probable but repayment of the loan is expected to be provided substantially throughthe operation or sale of the collateral, and the borrower is experiencing financial difficulty. The general based component covers loans and leases on which thereare expected credit losses that are not yet individually identifiable. The allowance calculation and determination process is dependent on the use of keyassumptions. Key reserve assumptions and estimation processes react to and are influenced by observed changes in loan portfolio performance experience, thefinancial strength of the borrower, projected industry outlook, and economic conditions. One key assumption in the vintage model is the underlying prepaymentspeeds, which is derived by the average loan life within the various pools. To provide a sensitivity of the impact to the ACL estimate, management adjusted theaverage lives of the vintage pools, by both increasing and decreasing the prepayment speeds by 20%, which provided an estimated range of impact between$0.9 million for a lower prepayment speed and $(1.7) million for a higher prepayment speed. This range was deemed immaterial to the overall ACL reservebalance. The process of determining the level of the allowance for credit losses requires a high degree of judgment. To the extent actual outcomes differ from our estimates,additional provision for loan and lease losses may be required that would reduce future earnings. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Not applicable 33
Page 36
Table of Contents Item 8. Financial Statements and Supplementary Data. 34
Page 37
Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Parke Bancorp, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Parke Bancorp, Inc. and subsidiaries (the “Company”) as of December 31, 2025 and 2024; therelated consolidated statements of income, comprehensive income, equity, and cash flows for the years then ended; and the related notes to the consolidatedfinancial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position ofthe Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accountingprinciples generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internalcontrol over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission in 2013, and our report dated March 11, 2026, expressed an unqualified opinion on the effectiveness of theCompany’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statementsbased on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are requiredto be independent, with respect to the Company, in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities andExchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures toassess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Suchprocedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating theaccounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believethat our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required tobe communicated to the Audit Committee and that: (1) relate to accounts or disclosures that are material to the financial statements; and (2) involve our especiallychallenging, subjective, or complex judgments. The communication of critical audit matters does not alter, in any way, our opinion on the financial statements,taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts ordisclosures to which they relate. 35
Page 38
Table of Contents Allowance for Credit Losses (ACL) – Qualitative Adjustments Description of the MatterThe Company’s loan portfolio totaled $2.0 billion as of December 31, 2025, and the associated ACL was $34.6 million. As discussed in Notes 1 and 4 to thefinancial statements, the calculation of the ACL requires significant judgment about the expected future losses, which is based on a base loss projection determinedthrough a historical vintage loss rate analysis, which is then adjusted for current qualitative conditions and reasonable and supportable forecasts. Managementapplies these qualitative adjustments to the base loss projection to reflect changes in the current and forecasted environment, both internal and external, that aredifferent from the conditions that existed during the historical loss calculation period. The qualitative adjustments include analysis of items related to economicconditions, credit quality indicators within the loan portfolio, and other internal and external factors. We identified these qualitative adjustments within the ACL as critical audit matters because they involve a high degree of subjectivity. While the determination ofthese qualitative adjustments includes analysis of observable data over the historical loss period, the judgments required to assess the directionality and magnitudeof adjustments is highly subjective. Auditing these complex judgments and assumptions involved especially challenging auditor judgment due to the nature ofaudit evidence and the nature and extent of effort required to address these matters. How We Addressed the Matter in Our AuditThe primary procedures we performed to address this critical audit matter included: – Testing the design, implementation, and operating effectiveness of internal controls over the calculation of the allowance for credit losses, including thequalitative factor adjustments. – Testing the completeness and accuracy of the significant data points that management uses in their evaluation of the qualitative adjustments. – Testing the anchoring calculation that management completes to properly align the magnitude of the adjustments with the Company's historical loss data. – Evaluating the directional consistency and reasonableness of management's conclusions regarding basis points applied (whether positive or negative)based on the trends identified in the underlying data. – Testing the mathematical accuracy of the application of the qualitative adjustments to the loan segments within the ACL calculation. We have served as the Company’s auditor since 2022. /s/ S.R. Snodgrass, P.C. Cranberry Township, PennsylvaniaMarch 11, 2026 36
Page 39
Table of Contents Parke Bancorp, Inc. and SubsidiariesConsolidated Balance SheetsDecember 31, 2025 and 2024(Dollars in thousands except per share data) December 31, December 31, 2025 2024 Assets Cash and due from banks $ 7,738 $ 4,624 Interest earning deposits with banks 149,125 216,903 Cash and cash equivalents 156,863 221,527 Investment securities available for sale, at fair value 4,746 5,551 Investment securities held to maturity, net of allowance for credit losses of $0 at December 31, 2025 and 2024(fair value of $7,487 at December 31, 2025 and $7,492 at December 31, 2024) 8,777 9,209 Total investment securities 13,523 14,760 Loans, net of unearned income 2,035,227 1,868,153 Less: Allowance for credit losses (34,649) (32,573)Net loans 2,000,578 1,835,580 Accrued interest receivable 11,257 9,659 Premises and equipment, net 5,506 5,316 Restricted stock 8,085 8,619 Bank owned life insurance (BOLI) 35,320 29,070 Deferred tax asset 10,719 9,113 Other real estate owned (OREO) 2,862 1,562 Other assets 4,723 7,030 Total Assets $ 2,249,436 $ 2,142,236 Liabilities and Shareholders' Equity Liabilities Deposits Noninterest-bearing deposits $ 196,506 $ 184,037 Interest-bearing deposits 1,562,163 1,447,013 Total deposits 1,758,669 1,631,050 FHLBNY borrowings 130,000 145,000 Subordinated debentures 13,403 43,300 Accrued interest payable 4,575 7,968 Accrued expenses and other liabilities 18,271 14,845 Total liabilities 1,924,918 1,842,163 Shareholders' Equity Preferred stock, 1,000,000 shares authorized, $1,000 liquidation value Series B non-cumulative convertible;325 shares outstanding at December 31, 2025 and 2024, respectively 325 325 Common stock, $0.10 par value; authorized 15,000,000 shares; Issued: 12,425,768 shares and 12,313,489shares at December 31, 2025 and 2024, respectively 1,243 1,231 Additional paid-in capital 139,268 137,784 Retained earnings 197,671 168,347 Accumulated other comprehensive loss (200) (337)Treasury stock, 784,522 shares and 484,522 shares at December 31, 2025 and 2024, respectively, at cost (13,789) (7,277) Total shareholders’ equity 324,518 300,073 Total liabilities and shareholders' equity $ 2,249,436 $ 2,142,236 See accompanying notes to consolidated financial statements 37
Page 40
Table of Contents Parke Bancorp, Inc. and SubsidiariesConsolidated Statements of IncomeYears Ended December 31, 2025 and 2024(Dollars in thousands except per share data) December 31, 2025 December 31, 2024 Interest income: Interest and fees on loans $ 135,189 $ 117,834 Interest and dividends on investments 921 1,042 Interest on deposits with banks 6,567 6,237 Total interest income 142,677 125,113 Interest expense: Interest on deposits 59,848 57,312 Interest on borrowings 6,371 9,093 Total interest expense 66,219 66,405 Net interest income 76,458 58,708 Provision for credit losses 2,484 728 Net interest income after provision for credit losses 73,974 57,980 Non-interest income Service fees on deposit accounts 1,232 1,387 Other loan fees 676 849 Bank owned life insurance income 740 655 Other 759 1,410 Total non-interest income 3,407 4,301 Non-interest expense Compensation and benefits 13,314 12,768 Professional services 3,428 2,730 Occupancy and equipment 2,760 2,598 Data processing 1,544 1,366 FDIC insurance and other assessments 1,449 1,306 OREO expense 649 835 Other operating expense 4,830 4,381 Total non-interest expense 27,974 25,984 Income before income tax expense 49,407 36,297 Income tax expense 11,632 8,785 Net income attributable to Company 37,775 27,512 Less: Preferred stock dividend (20) (20) Net income available to common shareholders $ 37,755 $ 27,492 Earnings per common share Basic $ 3.20 $ 2.30 Diluted $ 3.16 $ 2.27 Weighted average common shares outstanding Basic $ 11,794,531 $ 11,954,483 Diluted $ 11,966,541 $ 12,139,451 See accompanying notes to consolidated financial statements 38
Page 41
Table of Contents Parke Bancorp, Inc. and SubsidiariesConsolidated Statements of Comprehensive IncomeYears Ended December 31, 2025 and 2024 For the Year ended December 31, 2025 2024 (Dollars in thousands) Net income attributable to the Company $ 37,775 $ 27,512 Unrealized gains on investment securities, net of reclassification into income: Unrealized gains on available for sale securities 185 90 Tax impact on unrealized gain (48) (23) Total other comprehensive gain 137 67 Comprehensive income attributable to the Company $ 37,912 $ 27,579 See accompanying notes to consolidated financial statements 39
Page 42
Table of Contents Parke Bancorp, Inc. and SubsidiariesConsolidated Statements of EquityYears Ended December 31, 2025 and 2024(Dollars in thousands except share data) Accumulated Shares of Shares of Additional Other PreferredStock Preferred CommonStock Common Paid-In Retained Comprehensive Treasury Total Outstanding Stock issued Stock Capital Earnings Income (Loss) Stock Equity Balance, December 31,2023 375 $ 375 12,240,821 $ 1,224 $ 136,700 $ 149,437 $ (404) $ (3,015) $ 284,317 Net income attributable toCompany — — — — — 27,512 — — 27,512 Stock compensationissued/exercised — — 65,791 7 699 — — — 706 Preferred stock sharesconversion (50) (50) 6,877 — 49 — — — (1)Treasury stock purchase(200,000 shares) — — — — — — — (4,262) (4,262)Other comprehensive gain — — — — — — 67 — 67 Stock compensation expense — — — — 336 — — — 336 Dividend on preferred stock($60.00 per share) — — — — — (20) — — (20)Dividend on common stock($0.72 per share) — — — — — (8,582) — — (8,582)Balance, December 31,2024 325 $ 325 12,313,489 $ 1,231 $ 137,784 $ 168,347 $ (337) $ (7,277) $ 300,073 Net income attributable toCompany — — — — — 37,775 — — 37,775 Stock compensationissued/exercised — — 112,279 12 1,191 — — — 1,203 Treasury stock purchase(300,000 shares) — — — — — — — (6,483) (6,483)Excise tax payment on stockrepurchase — — — — — — — (29) (29)Other comprehensive gain — — — — — — 137 — 137 Stock compensation expense — — — — 293 — — — 293 Dividend on preferred stock($60.00 per share) — — — — — (20) — — (20)Dividend on common stock($0.72 per share) — — — — — (8,431) — — (8,431)Balance, December 31,2025 325 $ 325 12,425,768 $ 1,243 $ 139,268 $ 197,671 $ (200) $ (13,789) $ 324,518 See accompanying notes to consolidated financial statements 40
Page 43
Table of Contents Parke Bancorp, Inc. and SubsidiariesConsolidated Statements of Cash FlowsYears Ended December 31, 2025 and 2024(Dollars in thousands) 2025 2024 Cash Flows from Operating Activities Net income attributable to Company $ 37,775 $ 27,512 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 508 571 Provision for credit losses 2,484 728 Increase in value of bank-owned life insurance (740) (655)Gain on sale of SBA loans — (23)SBA loans originated for sale — (300)Proceeds from sale of SBA loans originated for sale — 323 OREO writeoff 147 — Net accretion of purchase premiums and discounts on securities (43) (45)Stock based compensation 293 336 (Increase) decrease in deferred income tax (1,654) 126 Net changes in: Decrease in accrued interest receivable and other assets 709 2,385 Increase in accrued interest payable and other accrued liabilities 72 4,200 Net cash provided by operating activities 39,551 35,158 Cash Flows from Investing Activities Repayments and maturities of investment securities available for sale 1,472 1,614 Repayments and maturities of investment securities held to maturity 493 148 Purchase of investment securities (500) — Bank-owned life insurance additional purchase (5,510) — Net increase in loans (168,968) (80,731)Purchases of bank premises and equipment (595) (119)Redemptions of restricted stock 16,438 7,213 Purchases of restricted stock (15,904) (8,196) Net cash used in investing activities (173,074) (80,071)Cash Flows from Financing Activities Cash dividends (8,451) (8,602)Proceeds from exercise of stock options 1,203 706 Treasury stock purchase (6,483) (4,262)Conversion of Series B preferred stock — (1)Excise tax payment on purchase of treasury stock (29) — Repayment of sub debt (30,000) — Increase in FHLBNY short-term borrowings 5,000 95,000 Decrease in FHLBNY long-term borrowings (20,000) (75,000)Net increase (decrease) in noninterest-bearing deposits 12,469 (48,152)Net increase in interest-bearing deposits 115,150 126,375 Net cash provided by financing activities 68,859 86,064 (Decrease) increase in cash and cash equivalents (64,664) 41,151 Cash and Cash Equivalents, January 1, 221,527 180,376 Cash and Cash Equivalents, December 31, $ 156,863 $ 221,527 Supplemental Disclosure of Cash Flow Information: Interest paid $ 69,612 $ 62,583 Federal income taxes paid $ 7,600 $ 3,960 State taxes paid $ 832 $ 582 Non-cash Investing and Financing Items Loans transferred to OREO $ 1,448 $ — Accrued dividends payable $ 2,093 $ 2,141 See accompanying notes to consolidated financial statements 41
Page 44
Table of Contents Note 1. Description of Business and Summary of Significant Accounting Policies Business: Parke Bancorp, Inc. (the “Company, we, us, our”) is a bank holding company headquartered in Sewell, New Jersey. Through subsidiaries, the Company providesindividuals, corporations and other businesses, and institutions with commercial and retail banking services, principally loans and deposits. The Company wasincorporated in January 2005 under the laws of the State of New Jersey for the sole purpose of becoming the holding company of Parke Bank (the "Bank"). The Bank is a commercial bank, which was incorporated on August 25, 1998, and commenced operations on January 28, 1999. The Bank is chartered by the NewJersey Department of Banking and Insurance and its deposits are insured by the Federal Deposit Insurance Corporation. The Bank maintains seven branch officeswith its principal office at 601 Delsea Drive, Sewell, New Jersey, and additional branch office locations; 631 Tilton Road, Northfield, New Jersey, 567 Egg HarborRoad, Washington Township, New Jersey, 67 East Jimmie Leeds Road, Galloway Township, New Jersey, 1150 Haddon Avenue, Collingswood, New Jersey, 1610Spruce Street, Philadelphia, Pennsylvania, and 1032 Arch Street, Philadelphia, Pennsylvania. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with GAAP. We have reclassified certain prior year amounts to conform tothe 2025 presentation, which did not have a material impact on our consolidated financial condition or results of operations. The accounting policies that materiallyaffect 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 the Company and its wholly-owned subsidiary, ParkeBank. Parke Capital Trust I, Parke Capital Trust II and Parke Capital Trust III are wholly-owned subsidiaries but are not consolidated because they do not meet therequirements for consolidation under applicable accounting guidance. All material inter-company balances and transactions have been eliminated. Cash and cash equivalents: Consists of cash and due from banks, and interest-bearing deposits and other-short term investments, all of which, if applicable, havestated maturities of three months or less when acquired. Investment Securities: Debt securities are recorded on a trade-date basis. We classify debt securities as held to maturity if we have the positive intent and ability tohold the securities to maturity. We report securities held to maturity on our consolidated balance sheets at carrying value, which generally equals amortized cost.Amortized cost reflects historical cost adjusted for amortization of premiums, accretion of discounts and any previously recorded impairments. Debt securities notclassified as held to maturity or trading are designated as securities available for sale ("AFS") and carried at fair value with unrealized gains and losses, net ofincome taxes, reflected in accumulated other comprehensive income (loss). We did not have any securities classified as trading securities during 2025 or 2024. Interest on debt securities, including amortization of premiums and accretion of discounts, is included in interest income. Premiums and discounts are amortized oraccreted to interest income at a constant effective yield over the contractual lives of the securities. Realized gains and losses from the sales of debt securities aredetermined on a specific security basis. These securities gains/(losses) are included in other noninterest income. Restricted Stock: Restricted stock includes investments in the common stock of the FHLBNY and the Atlantic Central Bankers Bank for which no readilyavailable market exists and, accordingly, is carried at cost. The stocks have no quoted market value and are subject to redemption restrictions. Managementreviews these stocks for credit loss based on the ultimate recoverability of the cost basis in the stock. The stocks’ values are determined by the ultimaterecoverability of the par value rather than by recognizing temporary declines. Management considers such criteria as the significance of the decline in net assets, ifany, the length of time this situation has persisted and the financial performance of the issuers. In addition, management considers any commitments by theFHLBNY to make payments required by law or regulation, the impact of legislative and regulatory changes on the customer base of the FHLBNY and the liquidityposition of the FHLBNY. 42
Page 45
Table of Contents Loans: We classify loans as held for investment or held for sale based on our investment strategy and management’s intent and ability with regard to the loanswhich may change over time. The accounting and measurement framework for loans differs depending on the loan classification. Loans that we have the abilityand intent to hold for the foreseeable future or until maturity or pay-off are classified as held for investment. Loans classified as held for investment are reported attheir amortized cost, which is the outstanding principal balance, adjusted for any unearned income, unamortized deferred fees and costs, unamortized premiumsand discounts and charge-offs. Interest income on the loans is recognized as earned based on contractual interest rates applied to daily principal amountsoutstanding. Loan origination fees, direct loan origination costs, and loan premiums and discounts are deferred and accreted or amortized into net interest incomeusing the constant effective yield method, over the contractual life of the loan. Loans originated with the intent to sell or for which we do not have the ability and intent to hold for the foreseeable future are classified as held for sale. Interest onthese loans is recognized on an accrual basis. These loans are recorded at the lower of cost or fair value. Our Small Business Administration ("SBA") loans thatmanagement has the intention to sell are designated as held for sale and are reported at fair value. Fair value represents the face value of the guaranteed portion ofSBA loans pending settlement. Loan origination fees and direct loan origination costs are deferred until the loan is sold and are recognized as part of the total gainor loss on sale. We calculate the gross gain or loss on loan sales as the difference between the proceeds received and the carrying value of the loans sold. 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 interestover the term of the related loan using the interest method. Prepayment penalties on loans are recognized in loan interest. Loan brokerage fees representcommissions earned for facilitating loans between borrowers and other companies and is recorded as other loan fee income. Non-accrual Loans: Loans are placed on non-accrual status when, in management's opinion, the borrower may be unable to meet contractual payment obligationsas they become due, as well as when a loan is 90 days past due, unless the loan is well secured and in the process of collection, as required by regulatoryprovisions. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, allunpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Allowance for Credit Losses on Loans and Leases: The allowance for credit losses represents management’s estimate of expected losses inherent in the Company’slending activities excluding loans accounted for under fair value. The allowance for credit losses is maintained through charges to the provision for credit losses inthe Consolidated Statements of Income as expected losses are estimated. Loans or portions thereof that are determined to be uncollectible are charged against theallowance, and subsequent recoveries, if any, are credited to the allowance. The Company performs periodic reviews of its loan and lease portfolios to identify credit risks and to assess the overall collectability of those portfolios. TheCompany's allowance for credit losses includes a general component and an asset-specific component for collateral-dependent loans. To determine the asset-specific component of the allowance, the loans are evaluated individually based on the fair value of the underlying collateral. The Company generally measures theasset-specific allowance as the difference between the net realizable value of loan collateral and the recorded investment of a loan. The general component of the allowance evaluates the impairments of pools of the loan portfolio collectively. It incorporates a historical valuation allowance andqualitative allowance. The historical valuation utilizes a vintage loss rate approach utilizing a third party software model. The vintage loss rate approach createspools of loans based on the segments defined by management, and consists of commercial and industrial, construction, commercial - owner occupied, commercial- non-owner occupied, residential - 1 to 4 family, residential - 1 to 4 family investment, residential - multifamily, and consumer. The loan pools are aggregated byorigination year. Charge-offs, net of recoveries, are allocated by the year of charge-off to each loan pool. An average life is prescribed to a pool of loans that wereoriginated in a particular year. The actual charge-offs as a percent of total loans are calculated for each historical year, and projected for future years for each yearwithin the average life time horizon. The sum of the actual charge-offs and projected charge-offs are divided by the average amortized origination amount for eachrespective year. Those charge-off percentages are added together to obtain an aggregated vintage loss percentage which is then multiplied by the outstanding loanbalances to obtain a reserve requirement. 43
Page 46
Table of Contents The qualitative allowance component is based on general economic conditions and other qualitative risk factors both internal and external to the Company. It isgenerally determined by evaluating, among other things: (i) the experience, ability and effectiveness of the Bank's lending management and staff; (ii) theeffectiveness of the Bank's lending policies, procedures and internal controls; (iii) volume and severity of loan credit quality; (iv) nature and volume of portfolioand term of loans (v) the composition and concentrations of credit; (vi) the effectiveness of the internal loan review system;(vii) national and local economic trendsand conditions, and industry conditions; and (viii) the valuation of loan collateral assessed by regional home valuation indexes. Management evaluates the degreeof risk that each one of these components has on the quality of the loan portfolio on a quarterly basis. Each component is determined to have either a high, high-moderate, moderate, low-moderate or low degree of risk. The results are then input into a "general allocation matrix" to determine an appropriate general valuationallowance. The Company has elected to exclude accrued interest receivable from the measurement of the ACL. When a loan is placed on non-accrual status, any outstandingaccrued interest is generally reversed against interest income. Accrued interest receivable, including loan and investment security, at December 31, 2025 and2024 was $11.3 million and $9.7 million, respectively. The process of determining the level of the allowance for credit losses requires a high degree of estimate and judgment. It is reasonably possible that actualoutcomes may differ from our estimates. Allowance for Credit Losses on Lending-Related Commitments: Parke estimates expected credit losses over the contractual period in which it is exposed to creditrisk on contractual obligations to extend credit, unless the obligation is unconditionally cancellable by the Company. The allowance for credit losses on lending-related commitments is recorded in other liabilities in the consolidated balance sheet and is recorded as a provision for credit losses in the consolidated incomestatement. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to befunded over their estimated lives. The lifetime loss rates for off-balance sheet credit exposures are calculated in the same manner as on-balance sheet creditexposures, using the same model and economic forecasts, adjusted for the estimated likelihood that funding will occur. Individually Assessed Loans and Leases: A loan or lease is measured individually if it does not share similar risk characteristics with other financial assets. ForParke, loans and leases which are identified to be individually assessed under the Current Expected Credit Loss ("CECL") model typically are those that are onnon-accrual at the reporting date, and include collateral dependent loans. Collateral Dependent LoansParke considers a loan to be collateral dependent when foreclosure of the underlying collateral is probable. Parke has also elected to apply the practical expedientto measure expected credit losses of a collateral dependent asset using the fair value of the collateral, less any estimated costs to sell, when foreclosure is notprobable but repayment of the loan is expected to be provided substantially through the operation or sale of the collateral, and the borrower is experiencingfinancial difficulty. Allowance for Credit Losses on Held to Maturity Securities: Parke measures expected credit losses on held-to-maturity debt securities on a collective basis bysecurity investment grade. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonableand supportable forecasts. The Company classifies the held-to-maturity debt securities into the following major security types: residential mortgage backed, and state and politicalsubdivisions. These securities are highly rated with a history of no credit losses, and are assigned ratings based on the most recent data from ratings agenciesdepending on the availability of data for the security. Credit ratings of held-to-maturity debt securities, which are a significant input in calculating the expectedcredit loss, are reviewed on a quarterly basis. Based on the credit ratings of our held-to-maturity securities and our historical experience including no losses, wehave determined that an allowance for credit loss on the held-to-maturity portfolio is not required 44
Page 47
Table of Contents Accrued interest receivable on held-to-maturity debt securities is excluded from the estimate of credit losses and is included in Accrued interest receivable on theConsolidated Statements of Financial Condition. At December 31, 2025 and 2024, accrued interest receivable on held-to-maturity debt securities was$11.9 thousand and $12.7 thousand, respectively. Allowance for Credit Losses on Available for Sale Securities: For available-for-sale debt securities in an unrealized loss position, the Company first evaluateswhether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either criteria is met,the security's amortized cost basis is reduced to fair value and recognized as a reduction to non-interest income in the Consolidated Statements of Income. For debt securities available-for-sale which the Company does not intend to sell, or it is not likely the security would be required to be sold before recovery, weevaluate whether a decline in fair value has resulted from credit losses or other adverse factors, such as a change in the security's credit rating. In assessing whethera credit loss exists, the Company compares the present value of cash flows expected to be collected from the security with the amortized cost basis of the security.If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance is recorded, limited to the fairvalue of the security. Accrued interest receivable on available-for-sale securities is excluded from the estimate of credit losses and is included in Accrued interest receivable on theConsolidated Statements of Financial Condition. At December 31, 2025 and 2024, accrued interest receivable on available-for-sale securities was $22.8 thousandand $13.9 thousand, respectively. Charge-Offs: We charge off loans as a reduction to the allowance for credit losses when we determine the loan is uncollectible and record subsequent recoveries ofpreviously charged off amounts as an increase to the allowance for credit losses. Concentration of Credit Risk: The Company’s loans are generally to customers in Southern New Jersey, the Philadelphia area of Pennsylvania, and New York,New York. Loans to general building contractors, general merchandise stores, restaurants, motels, warehouse space, and real estate ventures (includingconstruction loans) constitute a majority of commercial loans. The concentrations of credit by type of loan are set forth in Note 4. Generally, loans arecollateralized 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. Other Real Estate Owned (“OREO”): Real estate acquired through foreclosure or other proceedings is carried at the lower of cost or estimated fair value, lessestimated costs to sell. When a property is acquired, the excess of the loan balance over the estimated fair value is charged to the allowance for credit losses. Costsof improving OREO are capitalized to the extent that the carrying value does not exceed its fair value less estimated selling costs. Subsequent valuationadjustments, declines, if any, are recognized as a charge against current earnings. Holding costs are charged to expense. Gains and losses on sales are recognized innon-interest income as they occur. Bank-owned life insurance (“BOLI”): Policies insure the lives of officers and team members of the Company and name the Company as beneficiary. Non-interestincome is generated tax free (subject to certain limitations) from the increase in value of the policies’ underlying investments made by the insurance company.Cash proceeds received from the settlement of the BOLI policies are generally tax-free and can be used to partially offset costs associated with employeecompensation and benefit programs. Bank Premises and Equipment: Bank premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed andcharged to expense using the straight-line method over the estimated useful lives of the assets, generally three years for computers and software, five to ten yearsfor equipment and forty years for buildings. Leasehold improvements are amortized to expense over the shorter of the term of the respective lease or the estimateduseful life of the improvements. 45
Page 48
Table of Contents Lease: Lease classification is determined at inception for all lease transactions with an initial term greater than one year. Operating leases are included as right-of-use (“ROU”) assets within other assets, and operating lease liabilities are classified as other liabilities on our consolidated balance sheets. Our operating leaseexpense is included in occupancy and equipment within non-interest expense in our consolidated statements of income. Stock-Based Compensation: Stock-based compensation expense is based on the grant date fair value, which is estimated using a Black-Scholes option pricingmodel. The fair value of restricted stock grants is equal to the fair market value of our common stock on the date of grant. We generally recognize compensationexpense on a straight-line basis over the award’s requisite service period based on the fair value of the award at grant date. Stock-based compensation expense isincluded in compensation and benefits in the consolidated statements of income. Revenue recognition: Our revenue includes net interest income on financial instruments and non-interest income. Interest income and fees on loans, investmentsecurities, and other financial instruments are recognized based on the contractual provisions of the underlying arrangements according to applicable accountingguidance. Deposit-related-fee-based revenue within the scope of ASC Topic 606 - Revenue from Contracts with Customers (Topic 606) is included in non-interestincome in our consolidated statements of income. Our deposit-related-fee-based revenues are recognized when or as those services are transferred to the customer and are generally recognized either immediatelyupon the completion of our service or over time as we perform services. Any services performed over time generally require that we render services each periodand therefore we measure our progress in completing these services based upon the passage of time. Deposit-related fees are recognized over the period in whichthe related service is provided. Service charges on deposit accounts are earned on depository accounts for customers and include fees for account and overdraftservices. Account services include fees for event-driven services and fees for periodic account maintenance activities. Our obligation for event-driven services issatisfied at the time of the event when the service is delivered, while our obligation for maintenance services is satisfied over the course of each month. Ourobligation for overdraft services is satisfied at the time of the overdraft. Income Taxes: We recognize the current and deferred tax consequences of all transactions that have been recognized in the financial statements using theprovisions of the enacted tax laws. Current income tax expense represents our estimated taxes to be paid or refunded for the current period. Deferred tax assets andliabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax ratesand laws that will be in effect when the differences are expected to reverse. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws andrates on the date of enactment. Thus, at the enactment date, deferred taxes are remeasured and the change is recognized in income tax expense. The recognition ofdeferred tax assets requires an assessment to determine the realization of such assets. Realization refers to the incremental benefit achieved through the reductionin future taxes payable or refunds receivable. We establish a valuation allowance for tax assets when it is more likely than not that they will not be realized, basedupon all available evidence. Realization of deferred tax assets is dependent on generating sufficient taxable income in the future. When tax returns are filed, it is highly certain that some positions taken will be sustained upon examination by the taxing authorities, while others are subject touncertainty about the merits of the position taken or the amount of the position that ultimately would be sustained. The benefit of a tax position is recognized in thefinancial statements in the period during which, based on all available evidence, management believes it is more-likely-than not that the position will be sustainedupon examination, including the resolution of appeals or litigation processes, if any. The evaluation of a tax position taken is considered by itself and not offset oraggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that ismore than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of benefits associated with tax positions taken thatexceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with anyassociated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefitswould be recognized in income tax expense on the income statement. 46
Page 49
Table of Contents The Company did not recognize any interest or penalties related to income tax during the years ended December 31, 2025 and 2024, respectively. The Companydoes not have an accrual for uncertain tax positions as of December 31, 2025 and 2024, as deductions taken and benefits accrued are based on widely understoodadministrative practices and procedures and are based on clear and unambiguous tax law. All years after 2022 are open under the original federal statute oflimitations. For state tax returns, the Company is subject to income tax examinations by local tax authorities for years 2022 and after, except for the State of NewJersey which is still subject to income tax examinations for years 2021 and after. Fair value: Fair value, also referred to as an exit price, is defined as the price that would be received for an asset or paid to transfer a liability in an orderlytransaction between market participants on the measurement date. The fair value accounting guidance provides a three-level fair value hierarchy for classifyingfinancial instruments. This hierarchy is based on whether the inputs to the valuation techniques used to measure fair value are observable or unobservable. Fairvalue measurement of a financial asset or liability is assigned to a level based on the lowest level of any input that is significant to the fair value measurement in itsentirety. The accounting guidance for fair value requires that we maximize the use of observable inputs and minimize the use of unobservable inputs indetermining fair value. Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenuesand expenses during the reporting period. Our most significant estimates pertain to our allowances for credit losses, fair value measurements, individuallyevaluated loans, the carrying value of OREO, and the valuation of deferred income taxes. Actual results may differ from the estimates and the differences may bematerial to the consolidated financial statements. Segment Reporting: The Company operates one reportable segment of business, “community banking”. Through its community banking segment, the Companyprovides a broad range of retail and community banking services. The accounting policies of the community banking segment are the same as those described inthe summary of significant accounting policies. The Company's chief operating decision maker ("CODM") is the President, Chief Executive Officer and Director, who decides how to allocate resources based onnet income that also is reported on the income statement as consolidated net income. The measure of segment assets is reported on the balance sheet as total consolidated assets. 47
Page 50
Table of Contents The following table presents segment profit and significant expenses. Community Banking Segment(Dollars in thousands) December 31, 2025 December 31, 2024 Total interest income $ 142,677 $ 125,113 Total interest expense 66,219 66,405 Provision for credit losses 2,484 728 Net interest income after provision for credit losses 73,974 57,980 Total non-interest income 3,407 4,301 Total non-interest expense 27,974 25,984 Income before income tax expense 49,407 36,297 Income tax expense 11,632 8,785 Net income attributable to the Company $ 37,775 $ 27,512 Reconciliation of profit or loss Adjustments and reconciling items — — Consolidated net income $ 37,775 $ 27,512 Other Comprehensive Income: Comprehensive income consists of net income and other gains and losses affecting shareholders' equity that, under GAAP, areexcluded from net income, including unrealized gains and losses on available for sale securities. For the years ended December 31, 2025 and 2024, we did not reclassify any amounts from accumulated other comprehensive income to income. The followingtable provides the components of other comprehensive income, reclassifications to net income and the related tax effect for the years ended December 31, 2025and 2024: Year ended December 31, 2025 2024 (Dollars in thousands) Investment securities: Net unrealized gain $ 185 $ 90 Tax effect related to the unrealized gain (48) (23) Accumulated other comprehensive income $ 137 $ 67 48
Page 51
Table of Contents Earnings Per Common Share: Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted averagenumber of common shares outstanding during the period. Diluted earnings per common share considers common stock equivalents (when dilutive) outstandingduring the period such as options outstanding and convertible preferred stock using the treasury stock and if-converted methods. To the extent that stockequivalents are anti-dilutive, they have been excluded from the earnings per share calculation. Earnings per common share have been computed based on thefollowing for the years ended December 31, 2025 and 2024: 2025 2024 (Dollars in thousands, except per share data) Basic earnings per common share Net income available to common shareholders $ 37,755 $ 27,492 Basic weighted-average common shares outstanding 11,794,531 11,954,483 Basic earnings per common share $ 3.20 $ 2.30 Diluted earnings per common share Net income available to common shareholders $ 37,755 $ 27,492 Dividend on Preferred Series B 20 20 Net income attributable to diluted common shares $ 37,775 $ 27,512 Basic weighted-average common shares outstanding 11,794,531 11,954,483 Dilutive potential common shares 172,010 184,968 Total diluted weighted-average common shares outstanding 11,966,541 12,139,451 Diluted earnings per common share $ 3.16 $ 2.27 For the years ended December 31, 2025 and 2024, there were 251,409 and 283,441 weighted average option shares outstanding, respectively, that were notincluded in the computation of diluted EPS because these shares were anti-dilutive. Statement of Cash Flows: Cash and cash equivalents include cash and due from financial institutions and federal funds sold. For the purposes of the statement ofcash flows, changes in loans and deposits are shown on a net basis. Accounting Pronouncements Adopted in 2025 ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures: During the year ended December 31, 2025, the Company adoptedASU 2023-09, Income Taxes (Topic 740): "Improvements to Income Tax Disclosures". The amendments further enhance income tax disclosures, primarilythrough standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for fiscal yearsbeginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. Early adoption is permitted and should be appliedeither prospectively or retrospectively. The implementation of this guidance did not have a material impact on the Consolidated Financial Statements. 49
Page 52
Table of Contents Note 2. Cash and Due from Banks The Company maintains various deposit accounts with other banks to meet normal funds transaction requirements, to satisfy deposit reserve requirements, and tocompensate other banks for certain correspondent services. Management is responsible for assessing the credit risk of its correspondent banks. At December 31,2025 and 2024, the vast majority of the Company's cash deposits with other banks were due from the Federal Reserve Bank of Philadelphia and the Federal HomeLoan Bank of New York. Note 3. Investment Securities The following is a summary of the Company's investments in available for sale and held to maturity securities as of December 31, 2025 and 2024: Gross Gross Amortized unrealized unrealized Fair Credit As of December 31, 2025 cost gains losses value Losses (Dollars in thousands) Available for sale: Residential mortgage-backed securities $ 4,515 $ 10 $ 279 $ 4,246 $ — Corporate debt obligations 500 — — 500 — Total available for sale $ 5,015 $ 10 $ 279 $ 4,746 $ — Held to maturity: States and political subdivisions $ 4,024 $ — $ 345 $ 3,679 $ — Residential mortgage-backed securities 4,753 — 945 3,808 — Total held to maturity $ 8,777 $ — $ 1,290 $ 7,487 $ — Gross Gross Amortized unrealized unrealized Fair Credit As of December 31, 2024 cost gains losses value Losses (Dollars in thousands) Available for sale: Residential mortgage-backed securities $ 6,005 $ 2 $ 456 $ 5,551 $ — Total available for sale $ 6,005 $ 2 $ 456 $ 5,551 $ — Held to maturity: States and political subdivisions $ 3,953 $ 3 $ 515 $ 3,441 $ — Residential mortgage-backed securities 5,256 — 1,205 4,051 — Total held to maturity $ 9,209 $ 3 $ 1,720 $ 7,492 $ — 50
Page 53
Table of Contents The amortized cost and fair value of debt securities classified as available for sale and held to maturity, by contractual maturity as of December 31, 2025, are asfollows: Amortized Fair Cost Value (Dollars in thousands) Available for sale: Due within one year $ 9 $ 9 Due after one year through five years 1,726 1,628 Due after five years through ten years 1,328 1,271 Due after ten years 1,952 1,838 Total available for sale $ 5,015 $ 4,746 Held to maturity: Due within one year $ — $ — Due after one year through five years 1,553 1,546 Due after five years through ten years 2,471 2,133 Due after ten years 4,753 3,808 Total held to maturity $ 8,777 $ 7,487 Expected maturities may differ from contractual maturities because the issuers of certain debt securities have the right to call or prepay their obligations withoutany penalty. During the year ended December 31, 2025 and 2024, the Company did not sell any investment securities. The following tables show the gross unrealized losses and fair value of the Company's available for sale securities which are aggregated by investment categoryand length of time that individual securities have been in a continuous unrealized loss position at December 31, 2025 and December 31, 2024. As of December 31, 2025 Less Than 12 Months 12 Months or Greater Total Fair Unrealized Fair Unrealized Fair Unrealized Description of Securities Value Losses Value Losses Value Losses (Dollars in thousands) Available for sale: Residential mortgage-backed securities $ 46 $ — $ 3,816 $ 279 $ 3,862 $ 279 Total available for sale $ 46 $ — $ 3,816 $ 279 $ 3,862 $ 279 51
Page 54
Table of Contents As of December 31, 2024 Less Than 12 Months 12 Months or Greater Total Fair Unrealized Fair Unrealized Fair Unrealized Description of Securities Value Losses Value Losses Value Losses (Dollars in thousands) Available for sale: Residential mortgage-backed securities $ 80 $ 1 $ 4,973 $ 455 $ 5,053 $ 456 Total available for sale $ 80 $ 1 $ 4,973 $ 455 $ 5,053 $ 456 The Company’s unrealized loss for the available for sale securities is comprised of 2 securities in the less than 12 months loss position and 12 securities in the 12months or greater loss position at December 31, 2025. The mortgage-backed securities that had unrealized losses were issued or guaranteed by the US governmentor government sponsored entities. The unrealized losses associated with those mortgage-backed securities are generally driven by changes in interest rates and notdue to credit losses given the explicit or implicit guarantees provided by the U.S. government. Because the Company does not intend to sell the securities and it isnot more likely than not that the Company will be required to sell these investments before recovery of their amortized cost basis, the Company does not considerthe unrealized loss in these securities to be a credit loss at December 31, 2025. Impairment of Debt Securities On at least a quarterly basis, we review all debt securities that are in an unrealized loss position for a credit loss. An investment security is deemed impaired if thefair value of the investment is less than its amortized cost. Amortized cost includes adjustments (if any) made to the cost basis of an investment for accretion,amortization, and previous other-than-temporary impairments. For individual debt securities classified as available for sale, we determine whether a decline in fairvalue below the amortized cost has resulted from a credit loss or other factors. If the decline in fair value is due to credit, we will record the portion of theimpairment loss relating to credit through an allowance for credit losses. Impairment that has not been recorded through an allowance for credit losses is recordedthrough other comprehensive income, net of applicable taxes. Please refer to Note 1 - Description of Business and Summary of Significant Accounting Policies fora detailed description of our accounting policy for the impairment of securities. Note 4. Loans Receivable and Allowance for Credit Losses Loans Receivable As of December 31, 2025, the Company had $2.04 billion in loans receivable outstanding. Outstanding balances include $0.03 million and $1.8 million atDecember 31, 2025 and 2024, respectively, for net deferred loan costs, and unamortized discounts. 52
Page 55
Table of Contents The portfolios of loans receivable at December 31, 2025, and December 31, 2024, consist of the following, by portfolio segment: December 31, 2025 December 31, 2024 (Dollars in thousands) Commercial and Industrial $ 38,672 $ 35,381 Construction 212,307 149,346 Real Estate Mortgage: Commercial – Owner Occupied 182,529 160,441 Commercial – Non-owner Occupied 478,295 371,298 Residential – 1 to 4 Family 451,463 447,880 Residential - 1 to 4 Family Investment 494,228 524,167 Residential – Multifamily 173,611 174,756 Consumer 4,122 4,884 Total Loan receivable 2,035,227 1,868,153 Allowance for credit losses on loans (34,649) (32,573) Total loan receivable, net of allowance for credit losses on loans $ 2,000,578 $ 1,835,580 An age analysis of past due loans by class at December 31, 2025 and December 31, 2024 as follows: 30-59 60-89 Greater Days Past Days Past than 90 Total Past Total December 31, 2025 Due Due Days Due Current Loans (Dollars in thousands) Commercial and Industrial $ — $ — $ 688 $ 688 $ 37,984 $ 38,672 Construction — — 1,091 1,091 211,216 212,307 Real Estate Mortgage: Commercial – Owner Occupied — — 400 400 182,129 182,529 Commercial – Non-owner Occupied — 1,122 3,668 4,790 473,505 478,295 Residential – 1 to 4 Family — 1,434 2,965 4,399 447,064 451,463 Residential - 1 to 4 Family Investment — 896 1,840 2,736 491,492 494,228 Residential – Multifamily — — — — 173,611 173,611 Consumer — 32 141 173 3,949 4,122 Total Loans $ — $ 3,484 $ 10,793 $ 14,277 $ 2,020,950 $ 2,035,227 53
Page 56
Table of Contents 30-59 60-89 Greater Days Past Days Past than 90 Total Past December 31, 2024 Due Due Days Due Current Total Loans (Dollars in thousands) Commercial and Industrial $ — $ — $ 684 $ 684 $ 34,697 $ 35,381 Construction — — 1,091 1,091 148,255 149,346 Real Estate Mortgage: Commercial – Owner Occupied — — 400 400 160,041 160,441 Commercial – Non-owner Occupied — — 5,485 5,485 365,813 371,298 Residential – 1 to 4 Family 223 362 2,883 3,468 444,412 447,880 Residential - 1 to 4 Family Investment — 454 1,609 2,063 522,104 524,167 Residential – Multifamily — — — — 174,756 174,756 Consumer 34 — — 34 4,850 4,884 Total Loans $ 257 $ 816 $ 12,152 $ 13,225 $ 1,854,928 $ 1,868,153 The following table provides the amortized cost of loans on nonaccrual status: December 31, 2025 Loans Past Due Nonaccrual Nonaccrual Total Over 90 Days Total (amounts in thousands) with no ACL with ACL Nonaccrual Still Accruing Nonperforming Commercial and Industrial $ — $ 688 $ 688 $ — $ 688 Construction 1,091 — 1,091 — 1,091 Commercial - Owner Occupied 400 — 400 — 400 Commercial - Non-owner Occupied 1,109 2,559 3,668 — 3,668 Residential - 1 to 4 Family 2,965 — 2,965 — 2,965 Residential - 1 to 4 Family Investment 1,840 — 1,840 — 1,840 Residential - Multifamily — — — — — Consumer 141 — 141 — 141 Total $ 7,546 $ 3,247 $ 10,793 $ — $ 10,793 December 31, 2024 Loans Past Due Nonaccrual Nonaccrual Total Over 90 Days Total (amounts in thousands) with no ACL with ACL Nonaccrual Still Accruing Nonperforming Commercial and Industrial $ — $ 684 $ 684 $ — $ 684 Construction 1,091 — 1,091 — 1,091 Commercial - Owner Occupied 400 — 400 — 400 Commercial - Non-owner Occupied 1,389 3,806 5,195 290 5,485 Residential - 1 to 4 Family 2,048 746 2,794 89 2,883 Residential - 1 to 4 Family Investment 1,609 — 1,609 — 1,609 Residential - Multifamily — — — — — Consumer — — — — — Total $ 6,537 $ 5,236 $ 11,773 $ 379 $ 12,152 54
Page 57
Table of Contents Allowance For Credit Losses (ACL) We maintain the ACL at a level that we believe to be appropriate to absorb estimated credit losses in the loan portfolios as of the balance sheet date. The following tables present the information regarding the allowance for credit losses and associated loan data by portfolio segment under the CECL model: Twelve Months Ended December 31, 2025 As of December 31, 2025 Real Estate Mortgage Commercial Commercial Residential Commercial Owner Non-owner Residential 1 to 4Family Residential (Dollars in thousands) andIndustrial Construction Occupied Occupied 1 to 4Family Investment Multifamily Consumer Total December 31, 2024 $ 1,097 $ 3,037 $ 1,871 $ 6,300 $ 9,166 $ 8,832 $ 2,203 $ 67 $ 32,573 Charge-offs — — — (202) (250) — — — (452)Recoveries 5 — — — — — — — 5 Provisions (benefits) (94) 995 368 3,563 (711) (1,231) (358) (9) 2,523 Ending Balance December31, 2025 $ 1,008 $ 4,032 $ 2,239 $ 9,661 $ 8,205 $ 7,601 $ 1,845 $ 58 $ 34,649 The increase in allowance for credit losses for construction is primarily due to an increase in the loan balance during the year, partially offset by a decrease in thevintage loss factor due to amortization of prior year losses. The increase in the commercial owner occupied is primarily due to an increase in the loan balanceduring the year, as well as an increase in the qualitative factor due to an increase in the problem loan balance. The increase in the commercial non-owner occupiedis primarily due to an increase in the loan balance during the year, which increased qualitative concentration levels. The decrease in residential 1 to 4 family is dueto a decrease in the qualitative factor due to a decrease in the concentration level of the portfolio. The decrease in residential 1 to 4 family investment is primarilydue to a decrease in the loan balance, as well as a decrease in the qualitative loss factor due to a decease in the concentration level of the portfolio. Twelve Months Ended December 31, 2024 As of December 31, 2024 Real Estate Mortgage Commercial Commercial Residential Commercial Owner Non-owner Residential 1 to 4Family Residential (Dollars in thousands) andIndustrial Construction Occupied Occupied 1 to 4Family Investment Multifamily Consumer Total December 31, 2023 $ 926 $ 3,347 $ 1,795 $ 7,108 $ 9,061 $ 8,783 $ 1,049 $ 62 $ 32,131 Charge-offs — — — — — — — (21) (21)Recoveries 28 — 1 — — — — 74 103 Provisions 143 (310) 75 (808) 105 49 1,154 (48) 360 Ending Balance December31, 2024 $ 1,097 $ 3,037 $ 1,871 $ 6,300 $ 9,166 $ 8,832 $ 2,203 $ 67 $ 32,573 The increase in allowance for credit losses for residential multifamily is primarily due to an increase in the loan balance during the year, as well as an increase inthe qualitative factor due to the increased volume of the portfolio. The decrease in construction is due to a decrease in the loan balance during the year, as well as adecrease in the qualitative factor due to the decrease in volume, as well as a decrease in the vintage loss factor due to amortization of prior year losses. Thedecrease in commercial non-owner occupied is due to a decrease in the qualitative factor due to a reduction in the problem loan balance, and a decrease in thevintage loss factor due to the amortization of prior year losses. 55
Page 58
Table of Contents Collateral-Dependent Loans The following table presents the collateral-dependent loans by portfolio segment and collateral type at December 31, 2025: (amounts in thousands) Real Estate Business Assets Other Commercial and Industrial $ 688 $ — $ — Construction 1,091 — — Commercial - Owner Occupied 400 — — Commercial - Non-owner Occupied 3,668 — — Residential - 1 to 4 Family 2,965 — — Residential - 1 to 4 Family Investment 1,840 — — Residential - Multifamily — — — Consumer 141 — — Total $ 10,793 $ — $ — Credit Quality Indicators: As part of the on-going monitoring of the credit quality of the Company's loan portfolio, management tracks certain credit qualityindicators including trends related to the risk grades of loans, the level of classified loans, net charge-offs, nonperforming loans (see details above) and the generaleconomic conditions in the region. The Company utilizes a risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 7. Grades 1 through 4 are considered“Pass”. A description of the general characteristics of the seven risk grades is as follows: 1. Good: Borrower exhibits the strongest overall financial condition and represents the most creditworthy profile. 2. Satisfactory (A): Borrower reflects a well-balanced financial condition, demonstrates a high level of creditworthiness and typically will have a strongbanking relationship with the Bank. 3. Satisfactory (B): Borrower exhibits a balanced financial condition and does not expose the Bank to more than a normal or average overall amount of risk.Loans are considered fully collectable. 4. Watch List: Borrower reflects a fair financial condition, but there exists an overall greater than average risk. Risk is deemed acceptable by virtue ofincreased monitoring and control over borrowings. Probability of timely repayment is present. 5. Other Assets Especially Mentioned (OAEM): Financial condition is such that assets in this category have a potential weakness or pose unwarrantedfinancial risk to the Bank even though the asset value is not currently individually evaluated. The asset does not currently warrant adverse classification butif not corrected could weaken and could create future increased risk exposure. Includes loans that require an increased degree of monitoring or servicing asa result of internal or external changes. 6. Substandard: This classification represents more severe cases of #5 (OAEM) characteristics that require increased monitoring. Assets are characterized bythe distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Assets are inadequately protected by the current net worthand paying capacity of the borrower or of the collateral. Asset has a well-defined weakness or weaknesses that impairs the ability to repay debt andjeopardizes the timely liquidation or realization of the collateral at the asset’s net book value. 7. Doubtful: Assets which have all the weaknesses inherent in those assets classified #6 (Substandard) but the risks are more severe relative to financialdeterioration in capital and/or asset value; accounting/evaluation techniques may be questionable and the overall possibility for collection in full is highlyimprobable. Borrowers in this category require constant monitoring, are considered work-out loans and present the potential for future loss to the Bank. 56
Page 59
Table of Contents The following tables provide an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for credit losses, asof December 31, 2025 and 2024. (Dollars in thousands) Term Loans Amortized Cost Basis by Origination Year RevolvingLoans at As of December 31, 2025 2025 2024 2023 2022 2021 Prior AmortizedCost Basis Total Commercial and Industrial Pass $ 4,990 $ 879 $ 3,313 $ 305 $ 2 $ 5,778 $ 22,717 $ 37,984 OAEM — — — — — — — — Substandard — — — 411 — — 277 688 Doubtful — — — — — — — — $ 4,990 $ 879 $ 3,313 $ 716 $ 2 $ 5,778 $ 22,994 $ 38,672 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Construction Pass $ 1,001 $ 325 $ 307 $ 1,396 $ — $ 193 $ 207,994 $ 211,216 OAEM — — — — — — — — Substandard — — — — — 1,091 — 1,091 Doubtful — — — — — — — — $ 1,001 $ 325 $ 307 $ 1,396 $ — $ 1,284 $ 207,994 $ 212,307 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial – Owner Occupied Pass $ 32,560 $ 23,259 $ 32,471 $ 34,016 $ 11,545 $ 46,025 $ 2,253 $ 182,129 OAEM — — — — — — — — Substandard — — — — — 400 — 400 Doubtful — — — — — — — — $ 32,560 $ 23,259 $ 32,471 $ 34,016 $ 11,545 $ 46,425 $ 2,253 $ 182,529 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial – Non-owner Occupied Pass $ 109,092 $ 50,669 $ 14,659 $ 102,688 $ 29,279 $ 150,007 $ 4,794 $ 461,188 OAEM — — — — — 2,176 — 2,176 Substandard — — — 370 — 14,561 — 14,931 Doubtful — — — — — — — — $ 109,092 $ 50,669 $ 14,659 $ 103,058 $ 29,279 $ 166,744 $ 4,794 $ 478,295 Current period gross charge-offs $ — $ — $ — $ — $ — $ 202 $ — $ 202 Residential – 1 to 4 Family Performing $ 59,089 $ 43,287 $ 47,018 $ 95,574 $ 49,503 $ 148,408 $ 5,619 $ 448,498 Nonperforming — — 841 733 — 1,391 — 2,965 $ 59,089 $ 43,287 $ 47,859 $ 96,307 $ 49,503 $ 149,799 $ 5,619 $ 451,463 Current period gross charge-offs $ — $ — $ 47 $ — $ — $ 203 $ — $ 250 Residential – 1 to 4 FamilyInvestment Performing $ 39,340 $ 52,575 $ 70,258 $ 114,208 $ 90,734 $ 125,273 $ — $ 492,388 Nonperforming — — 985 525 — 330 — 1,840 $ 39,340 $ 52,575 $ 71,243 $ 114,733 $ 90,734 $ 125,603 $ — $ 494,228 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Residential – Multifamily Pass $ 27,456 $ 13,952 $ 4,812 $ 63,789 $ 31,067 $ 32,535 $ — $ 173,611 OAEM — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — $ 27,456 $ 13,952 $ 4,812 $ 63,789 $ 31,067 $ 32,535 $ — $ 173,611 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Consumer Performing $ — $ 226 $ — $ — $ — $ 3,746 $ 9 $ 3,981 Nonperforming — — — — — 141 — 141 $ — $ 226 $ — $ — $ — $ 3,887 $ 9 $ 4,122 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Total Loan Receivable $ 273,528 $ 185,172 $ 174,664 $ 414,015 $ 212,130 $ 532,055 $ 243,663 $2,035,227 57
Page 60
Table of Contents (Dollars in thousands) Term Loans Amortized Cost Basis by Origination Year RevolvingLoans at As of December 31, 2024 2024 2023 2022 2021 2020 Prior AmortizedCost Basis Total Commercial and Industrial Pass $ 1,351 $ 4,231 $ 654 $ 6 $ 658 $ 6,213 $ 21,584 $ 34,697 OAEM — — — — — — — — Substandard — — 407 — — — 277 684 Doubtful — — — — — — — — $ 1,351 $ 4,231 $ 1,061 $ 6 $ 658 $ 6,213 $ 21,861 $ 35,381 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Construction Pass $ — $ 315 $ 1,800 $ — $ 193 $ — $ 145,947 $ 148,255 OAEM — — — — — — — — Substandard — — — — — 1,091 — 1,091 Doubtful — — — — — — — — $ — $ 315 $ 1,800 $ — $ 193 $ 1,091 $ 145,947 $ 149,346 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial – Owner Occupied Pass $ 21,893 $ 33,293 $ 34,831 $ 11,942 $ 6,705 $ 48,946 $ 2,431 $ 160,041 OAEM — — — — — — — — Substandard — — — — — 400 — 400 Doubtful — — — — — — — — $ 21,893 $ 33,293 $ 34,831 $ 11,942 $ 6,705 $ 49,346 $ 2,431 $ 160,441 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial – Non-owner Occupied Pass $ 38,697 $ 15,635 $ 75,261 $ 31,460 $ 23,780 $ 153,027 $ 16,494 $ 354,354 OAEM — — — — — 11,459 — 11,459 Substandard — — — — 249 4,946 290 5,485 Doubtful — — — — — — — — $ 38,697 $ 15,635 $ 75,261 $ 31,460 $ 24,029 $ 169,432 $ 16,784 $ 371,298 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Residential – 1 to 4 Family Performing $ 48,704 $ 53,018 $ 108,691 $ 56,027 $ 29,580 $ 145,467 $ 3,510 $ 444,997 Nonperforming — 644 375 — 602 1,262 — 2,883 $ 48,704 $ 53,662 $ 109,066 $ 56,027 $ 30,182 $ 146,729 $ 3,510 $ 447,880 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Residential – 1 to 4 FamilyInvestment Performing $ 58,772 $ 79,266 $ 127,600 $ 103,343 $ 44,301 $ 109,276 $ — $ 522,558 Nonperforming — 995 614 — — — — 1,609 $ 58,772 $ 80,261 $ 128,214 $ 103,343 $ 44,301 $ 109,276 $ — $ 524,167 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Residential – Multifamily Pass $ 6,770 $ 4,942 $ 92,918 $ 25,410 $ 9,150 $ 35,566 $ — $ 174,756 OAEM — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — $ 6,770 $ 4,942 $ 92,918 $ 25,410 $ 9,150 $ 35,566 $ — $ 174,756 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Consumer Performing $ 246 $ — $ — $ — $ — $ 4,627 $ 11 $ 4,884 Nonperforming — — — — — — — — $ 246 $ — $ — $ — $ — $ 4,627 $ 11 $ 4,884 Current period gross charge-offs $ — $ — $ — $ — $ — $ 21 $ — $ 21 Total Loan Receivable $ 176,434 $ 192,338 $ 443,151 $ 228,189 $ 115,219 $ 522,571 $ 190,251 $1,868,153 58
Page 61
Table of Contents Modifications to Borrowers Experiencing Financial Difficulty At December 31, 2025 and 2024, the Company did not make any modifications to borrowers experiencing financial difficulty. At December 31, 2025 and 2024, there was $5.5 million and $4.9 million, respectively, of residential real estate loans where the Company was actively pursuingforeclosure. Loans to Related Parties: In the normal course of business, the Company has granted loans to its executive officers, directors and their affiliates (related parties).All loans to related parties were made in the ordinary course of business. An analysis of the activity of such related party loans for 2025 is as follows: 2025 2024 (Dollars in thousands) Balance, beginning of year $ 561 $ 696 Advances 151 375 Less: repayments (307) (510) Balance, end of year $ 405 $ 561 Pledged Loans: At December 31, 2025 and 2024, approximately $611.8 million and $740.5 million, respectively, of unpaid principal balance of loans were pledgedto the FHLBNY on borrowings (Note 7). This pledge consists of a blanket lien on residential mortgages and certain qualifying commercial real estate loans. At December 31, 2025 there were $391.3 million and approximately $361.0 million of unpaid principal balance of loans pledged to the FRB on borrowings. Concentrations of Credit: Most of the Company's lending activity occurs within the areas of southern New Jersey, southeastern Pennsylvania, and New York, NewYork, as well as other markets. We maintain discipline in our lending with a focus on portfolio diversification. In our underwriting process, we have limits on loansto one borrower, one industry as well as product concentrations. Our loan portfolio consists of residential, commercial real estate loans, construction loans,commercial and industry loans as well as consumer loans. Note 5. OREO Other real estate owned (OREO) at December 31, 2025 and 2024 was $2.9 million, compared to $1.6 million at December 31, 2024. The real estate owned atDecember 31, 2025, consisted of three properties. During the years ended December 31, 2025, the Company did not dispose of any OREO properties. TheCompany wrote down $147.3 thousand OREO property during 2025, compared to $0 during 2024. Operating expenses related to OREO, net of related income, for2025 and 2024, were $649.0 thousand and $835.0 thousand, respectively. An analysis of OREO activity for the years ended December 31, 2025 and 2024 is as follows: For the Year Ended December 31, 2025 2024 (Dollars in thousands) Balance at beginning of period $ 1,562 $ 1,550 Real estate acquired in settlement of loans 1,447 — Capital improvements to existing OREO properties — 12 Sales of OREO, net — — Valuation adjustments (147) — Balance at end of period $ 2,862 $ 1,562 59
Page 62
Table of Contents Note 6. Deposits Deposits at December 31, 2025 and 2024, consisted of the following: 2025 2024 (Dollars in thousands) Noninterest-bearing demand $ 196,506 $ 184,037 NOWs 109,861 60,499 Money market deposits 745,918 615,444 Savings deposits 44,551 55,912 Time deposits over $250,000 104,033 136,360 Other time deposits 381,659 368,092 Brokered time deposits 176,141 210,706 Total deposits $ 1,758,669 $ 1,631,050 Scheduled maturities of certificates of deposit at December 31, 2025 are as follows: Years Ending December 31, (Dollars inthousands) 2026 $ 643,300 2027 12,308 2028 440 2029 1,206 2030 4,579 Total $ 661,833 The following table is a summary of interest expense on deposits by category: 2025 2024 (Dollars in thousands) NOWs $ 546 $ 618 Money market deposits 32,970 27,812 Savings deposits 537 750 Time deposits 20,784 19,099 Brokered time deposits 5,011 9,033 Total $ 59,848 $ 57,312 60
Page 63
Table of Contents Note 7. Borrowings An analysis of borrowings at December 31, 2025 and 2024 is as follows: 2025 2024 Weighted Weighted Average Average Maturity Date or Range Amount Rate Amount Rate (Dollars in thousands) Borrowed funds: Federal Home Loan Bank advances Less than one year $ 130,000 4.17% $ 125,000 4.83% One to three years — 0.00% 20,000 4.67% Total $ 130,000 $ 145,000 Subordinated debentures, capital trusts November 2035 $ 5,155 5.80% $ 5,155 6.44% November 2035 5,155 5.80% 5,155 6.44% September 2037 3,093 5.48% 3,093 6.12% Total $ 13,403 $ 13,403 Subordinated debentures notes, net July 15, 2030 $ — 0.00% $ 29,897 6.50% At December 31, 2025, the Company had a $611.8 million line of credit from the FHLBNY, of which $130.0 million, as detailed above, was outstanding, $75.0million was a letter of credit to secure public deposits, and $406.8 million was unused. At December 31, 2025, the Company had a $391.3 million line of credit from the FRB, with no balances outstanding. Subordinated Debentures – Capital Trusts: On August 23, 2005, Parke Capital Trust I, a Delaware statutory business trust and a wholly-owned subsidiary of theCompany, issued $5,000,000 of variable rate capital trust pass-through securities to investors. The variable interest rate re-prices quarterly at the three-monthSOFR plus a spread adjustment of 0.26161% plus 1.66% and was 5.80% at December 31, 2025. Parke Capital Trust I purchased $5,155,000 of variable rate juniorsubordinated deferrable interest debentures from the Company. The debentures are the sole asset of the Trust. The terms of the junior subordinated debentures arethe same as the terms of the capital securities. The Company has also fully and unconditionally guaranteed the obligations of the Trust under the capital securities.The capital securities are redeemable by the Company on or after November 23, 2010, at par. The capital securities must be redeemed upon final maturity of thesubordinated debentures on November 23, 2035. Proceeds of approximately $4.2 million were contributed to paid-in capital at the Bank. The remaining $955,000was retained at the Company for future use. On August 23, 2005, Parke Capital Trust II, a Delaware statutory business trust and a wholly-owned subsidiary of the Company, issued $5,000,000 offixed/variable rate capital trust pass-through securities to investors. Currently, the interest rate is variable at 5.80%. The variable interest rate re-prices quarterly atthe three-month SOFR plus a spread adjustment of 0.26161% plus 1.66% beginning November 23, 2010. Parke Capital Trust II purchased $5,155,000 of variablerate junior subordinated deferrable interest debentures from the Company. The debentures are the sole asset of the Trust. The terms of the junior subordinateddebentures are the same as the terms of the capital securities. The Company has also fully and unconditionally guaranteed the obligations of the Trust under thecapital securities. The capital securities are redeemable by the Company on or after November 23, 2010, at par. The capital securities must be redeemed upon finalmaturity of the subordinated debentures on November 23, 2035. Proceeds of approximately $4.2 million were contributed to paid-in capital at the Bank. Theremaining $955,000 was retained at the Company for future use. 61
Page 64
Table of Contents On June 21, 2007, Parke Capital Trust III, a Delaware statutory business trust and a wholly-owned subsidiary of the Company, issued $3,000,000 of variable ratecapital trust pass-through securities to investors. The variable interest rate re-prices quarterly at the three-month SOFR plus a spread adjustment of 0.26161% plus1.50% and was 5.48% at December 31, 2025. Parke Capital Trust III purchased $3,093,000 of variable rate junior subordinated deferrable interest debentures fromthe Company. The debentures are the sole asset of the Trust. The terms of the junior subordinated debentures are the same as the terms of the capital securities. TheCompany has also fully and unconditionally guaranteed the obligations of the Trust under the capital securities. The capital securities are redeemable by theCompany on or after December 15, 2012, at par. The capital securities must be redeemed upon final maturity of the subordinated debentures on September 15,2037. The proceeds were contributed to paid-in capital at the Bank. Subordinated Debentures – Notes: On July 15, 2020, the Company issued and sold $30 million in aggregate principal amount of its 6.50% Fixed-to-Floating RateSubordinated Notes due 2030 (the “Notes”) to certain qualified institutional buyers and accredited investors (the “Purchasers”). The Notes were offered and soldby the Company to eligible purchasers in a private offering in reliance on the exemption from the registration requirements of Section 4(a)(2) of the Securities Actof 1933, as amended (the “Securities Act”), and the provisions of Regulation D promulgated thereunder (the “Private Placement”). The Company intends to use thenet proceeds from the offering for general corporate purposes. The Notes have a ten-year term and, from and including the date of issuance to but excluding July15, 2025, will bear interest at a fixed annual rate of 6.50%, payable semi-annually in arrears. From and including July 15, 2025 to but excluding the maturity dateor earlier redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to the then-current three-month SOFR (provided, that in theevent the three-month SOFR is less than zero, the three-month SOFR will be deemed to be zero) plus 644 basis points, payable quarterly in arrears. The Notes areredeemable, in whole or in part, at the Company’s option, on any scheduled interest payment date on or after July 15, 2025, and at any time upon the occurrence ofcertain events. Any redemption of the Notes will be subject to prior regulatory approval to the extent required. There were approximately $948,000 in costsassociated with the issuance of this debt. On July 15, 2025, the Company fully redeemed the 6.5% Fixed to Floating Rate Notes (the “SubordinatedDebt”) at a redemption price of 100% of the principal amountthereof, or $30 million, including the interest accrued on such principal amount up to the redemption date. After the redemption, the outstanding principal balance onthe Subordinated Debt has been reduced to zero. Note 8. Premises and Equipment A summary of the cost and accumulated depreciation and amortization of Company premises and equipment as of December 31, 2025 and 2024 is as follows: 2025 2024 (Dollars in thousands) Land $ 1,044 $ 1,044 Building and improvements 7,208 7,284 Furniture and equipment 4,727 4,056 Total premises and equipment 12,979 12,384 Less: accumulated depreciation and amortization (7,473) (7,068) Premises and equipment, net $ 5,506 $ 5,316 Depreciation and amortization expense was $435,000 and $382,000 in 2025 and 2024, respectively. 62
Page 65
Table of Contents Note 9. Leases We lease three retail branches, a loan office, and a parcel of land for a retail branch location. These leases generally have remaining terms of 10 years or less exceptthe land lease, which has a remaining lease term of eighty years. Some of the leases may include options to renew the leases. The exercise of lease renewal is atour sole discretion. Our right-of-use assets and lease liabilities for operating leases are included in other assets and other liabilities on our consolidated balance sheets. We use theinterest rate implicit in the lease or incremental borrowing rate in determining the present value of lease payments. At December 31, 2025, we had future minimumlease payments of $27.1 million and imputed interest of $24.7 million and lease liability of $2.4 million. The weighted average remaining lease term was46.7 years and weighted average discount rate was 7.23% at December 31, 2025, respectively. Our operating lease expense is included in occupancy expenseswithin non-interest expense, and our sublease income is included in other non-interest income, in our consolidated statements of income. Total operating leaseexpense consists of operating lease cost, which is recognized on a straight-line basis over the lease term, and variable lease cost, which is recognized based onactual amounts incurred. The components of the Company's ongoing operating lease cost were as follows: Twelve Months Ended (Dollars in thousands) 2025 2024 Lease Cost $ 469 $ 409 Sublease income (225) (219) Net lease cost $ 244 $ 190 The following table presents information about our operating leases during the year ended December 31, 2025. Dollars in thousands 2025 Lease right of use assets (ROU) $ 2,387 Lease liabilities $ 2,387 Cash paid for amounts included in the measurement of lease liabilities was $353.6 thousand and $348.8 thousand during the years ended December 31, 2025 and2024, respectively. The following table presents future undiscounted cash flows on our operating leases: Years Ended December 31, (Dollars inthousands) 2026 $ 315 2027 283 2028 288 2029 306 2030 312 Thereafter 25,560 Total undiscounted lease payments $ 27,064 Impact of present value discount $ (24,678) 63
Page 66
Table of Contents Note 10. Shareholders’ Equity Common Stock Dividend: The Company paid a $0.18 per share dividend each quarter of 2025, and 2024, respectively. During the year ended December 31, 2025,the Company paid a total of $8.4 million in common stock cash dividends. During the year ended December 31, 2024, the Company paid a total of $8.6 million incommon stock cash dividends. The timing and amount of future dividends will be within the discretion of the Board of Directors and will depend on the consolidated earnings, financialcondition, liquidity, and capital requirements of the Company and its subsidiaries, applicable governmental regulations and policies, and other factors deemedrelevant by the Board. Treasury Stock: During the years ended December 31, 2025 and 2024, the Company repurchased 300,000 shares and 200,000 shares of its outstanding commonstock for $6.5 million and $4.3 million at an average price of $21.58 and $21.28 per share, respectively. Stock Options: The 2020 Equity Incentive Plan (the “2020 Plan”) became effective after shareholder approval in 2020. In addition, the Company also has the 2015Equity Incentive Plan (the “2015 Plan”). No future awards are being granted under the 2015 Plan. The 2020 Plan will terminate on the tenth anniversary of itseffective date, after which no awards may be granted. Collectively, the 2015 Plan and the 2020 Plan are referred to as Stock Option Plans. Under the 2020 Plan, theCompany may grant options to purchase up to 935,000 shares of Company's common stock and award up to 55,000 of restricted stock. At December 31, 2025,there were 426,500 shares remaining for future option grants, and 207 shares remaining for future restricted stock awards under the plan. During the year ended December 31, 2025, 48,275 restricted stock awards of commons stock were awarded, and had a grant date price of $20.80, which was theending stock price for the Company on the date of the grant. The restricted stock awards granted vest over a five-year service period, with 20% of the awardsvesting on each anniversary of the date of grant. The Company did not grant any options during the year ended December 31, 2025. Compensation expense for stock options and restricted stock awards was $292.8 thousand, and $335.8 thousand at December 31, 2025 and 2024, respectively. A summary of stock options at December 31, 2025 was as follows: Year Ended December 31, 2025 Weighted Average Stock Options: Shares Exercise Price Outstanding at beginning of period 613,826 $ 16.33 Granted — $ — Exercised (110,578) $ 10.87 Forfeited (4,392) $ 19.35 Outstanding at end of period 498,856 $ 17.51 Exercisable at end of period 437,842 $ 17.02 The total amount of compensation cost remaining to be recognized relating to unvested employees and directors option grants as of December 31, 2025 was$0.3 million. The weighted-average period over which the expense is expected to be recognized is 1.0 year. At December 31, 2025, the intrinsic value of optionsexercisable and all options outstanding was approximately $3.5 million and $3.8 million, respectively. The aggregate intrinsic value of options exercised in2025 was $1.3 million. The aggregate intrinsic value of options exercised in 2024 was $675.1 thousand. 64
Page 67
Table of Contents Under the 2020 Plan, the Company was authorized to issue 55,000 shares of restricted stock upon the grant of awards. All restricted stocks vests over five years.The table below presents the status of the restricted stock units at December 31, 2025, and the changes during the year ended December 31, 2025. Weighted Average Restricted Grant-Date Stock Units Fair Value Outstanding and unvested at December 31, 2024 1,968 19.33 Granted 48,275 20.80 Vested (1,305) 18.41 Outstanding and unvested at December 31, 2025 48,938 20.80 The Company recognized $74,209 and $34,005 compensation costs of the restricted shares during year 2025 and 2024. The total amount of restricted stockexpense remaining to be recognized is $0.8 million at December 31, 2025. Preferred Stock: In December of 2013, the Company completed a private placement of newly designated 6% Non-Cumulative Perpetual Convertible PreferredStock, Series B, with a liquidation preference of $1,000 per share. The Company sold 20,000 shares in the placement for gross proceeds of $20.0 million. Eachshare of Series B Preferred Stock is convertible, at the option of the holder into approximately 137.6 shares of Common Stock at December 31, 2025. There were325 shares of Series B Preferred Stock outstanding at December 31, 2025. Upon full conversion of the outstanding shares of the Series B Preferred Stock, theCompany will issue approximately 44,720 shares of Common Stock assuming that the conversion rate does not change. The conversion rate and the total numberof shares to be issued would be adjusted for future stock dividends, stock splits and other corporate actions. The conversion rate was set using a conversion pricefor the common stock of $10.64, which was approximately 20% over the closing price of the Common Stock on October 10, 2013, the day the Series B PreferredStock was priced. During 2025, there were no conversions of preferred stock. During 2024, preferred stockholders converted 50 shares of preferred shares into 6,877 shares of common stock, respectively. The Company has recorded dividends on preferred stock in the approximate amount of $19,500 and $20,250 for the years ended December 31, 2025 and 2024,respectively. The Company paid quarterly cash dividends of $15 per share on the preferred stock for year 2025 and 2024. The preferred stock qualifies for and isaccounted for as equity securities and is included in the Company’s Tier I capital since issued. 65
Page 68
Table of Contents Note 11. Income Taxes Income tax expense for 2025 and 2024 consisted of the following: 2025 2024 (Dollars in thousands) Current tax expense: Federal $ 10,499 $ 7,265 State 2,787 1,394 13,286 8,659 Deferred tax (benefit)/expense (1,654) 126 Income tax expense $ 11,632 $ 8,785 The components of the net deferred tax asset at December 31, 2025 and 2024 were as follows: 2025 2024 (Dollars in thousands) Deferred tax assets: Allowance for credit losses $ 8,535 $ 7,197 Supplemental Executive Retirement Plan ("SERP") 1,555 1,522 Deferred Loan Fees 1,461 1,411 Non-accrued interest 135 44 Non-qualified stock options and restricted stock 442 376 Write-down on partnership investment (29) 130 Unrealized loss on securities 69 117 Lease liability 2,387 2,212 Other 255 269 14,810 13,278 Valuation allowance (29) (130)Total gross deferred tax assets 14,781 13,148 Deferred tax liabilities: Depreciation — (58)Partnership income — (54)Right of use asset (2,387) (2,212)Deferred loan costs (1,675) (1,711) Total gross deferred tax liabilities (4,062) (4,035) Net deferred tax asset $ 10,719 $ 9,113 66
Page 69
Table of Contents A reconciliation of the Company’s effective income tax rate with the statutory federal rate for 2025 and 2024 is as follows: 2025 Effective TaxRate 2024 Effective TaxRate (Dollars in thousands) At Federal statutory rate $ 10,375 21.00% $ 7,622 21.00%Adjustments resulting from: State income taxes, net of Federal tax benefit 1,515 3.07% 1,776 4.89%Tax exempt income (20) (0.04)% (20) (0.05)%BOLI (155) (0.31)% (138) (0.38)%Stock compensation (53) (0.11)% (26) (0.07)%Nondeductible expenses 2 0.00% 2 0.00%Nondeductible executive compensation 42 (0.09)% 32 (0.09)%Other (74) 0.15% (463) (1.28)% $ 11,632 23.54% $ 8,785 24.20% Management has evaluated the Company’s tax positions and concluded that the Company has taken no uncertain tax positions that require adjustments to thefinancial statements. With few exceptions, the Company is no longer subject to income tax examinations by federal and local tax authorities for years before 2022,and by the State of New Jersey for years before 2021. The Company is still subject to examination for 2022 and after. The Company recorded income tax expense of 11.6 million on income before taxes of $49.4 million on for the year ended December 31, 2025, resulting in aneffective tax rate of 23.5%, compared to income tax expense of $8.8 million on income before taxes of $36.3 million for the same period of 2024, resulting in aneffective tax rate of 24.2%. The Company pays the majority of its state taxes to the state of New Jersey. Note 12. Retirement Plans The Company has a Supplemental Executive Retirement Plan (“SERP”) covering certain members of management. The net SERP pension cost was approximately $155.3 thousand in 2025 and $197.1 thousand in 2024. The unfunded benefit obligation, which was included inother liabilities, was approximately $6.3 million at December 31, 2025 and $6.4 million at December 31, 2024. The benefit obligation at December 31, 2025 and December 31, 2024 was calculated as follows: 2025 2024 (Dollars in thousands) Benefit obligation, January 1 $ 6,397 $ 6,439 Service cost/(benefit) (183) (146)Interest cost 339 343 Benefits paid (239) (239) Accrued liability at December 31 $ 6,314 $ 6,397 The net SERP pension cost for 2025 and benefit for 2024 was calculated as follows: 2025 2024 (Dollars in thousands) Service cost $ (183) $ (146)Interest cost 339 343 $ 156 $ 197 67
Page 70
Table of Contents The service cost for 2025 and 2024 are included in the compensation cost in the income statement. The discount rate used in determining the actuarial presentvalue of the projected benefit obligation was 5.5% for 2025 and 2024. Annual benefit payments are estimated at $534,146 for 2026, $829,246 for 2027, $829,246for 2028, $829,246 for 2029, $829,246 for 2030 and $4.5 million thereafter. The Company has a 401(k) Plan covering substantially all employees. Under the Plan, the Company is required to contribute 3% of all qualifying employees’eligible salary to the Plan. The Plan expense in 2025 was $264.4 thousand and $250.2 thousand in 2024. Note 13. Regulatory Matters Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and,additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculatedunder regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capitalrequirements can result in regulatory action. Under the Basel III rules, the Company must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer is 2.50%. The Bank made a one-time election to opt-out the net unrealized gain or loss on available for salesecurities in computing regulatory capital. At December 31, 2025, the Bank was considered “well capitalized" under the regulatory framework for promptcorrective action. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, andcritically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required toaccept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year-end 2025 and 2024 the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action.There are no conditions or events since that notification that management believes have changed the institution's category. Community Bank Leverage Ratio The Economic Growth, Regulatory Relief and Consumer Protection Act (“EGRRCPA”), enacted in May 2018, introduced an optional simplified measure ofcapital adequacy for qualifying community banking organizations with total consolidated assets of less than $10 billion by instructing the federal bankingregulators to establish a single “Community Bank Leverage Ratio” of tangible equity capital divided by average consolidated assets (“CBLR”) of between 8 and10 percent. Under the statute, any qualifying depository institution or holding company that maintains a leverage ratio exceeding the CBLR will be considered tosatisfy the generally applicable leverage and risk-based regulatory capital requirements. Under final regulations adopted by the federal banking agencies under the EGRRCPA, a community banking organization may opt into the CBLR framework if ithas a Tier 1 leverage ratio of at least 9%, less than $10 billion in total consolidated assets, and limited amounts of off-balance-sheet exposures and trading assetsand liabilities. A qualifying community banking organization that opts into the CBLR framework will not be required to report or calculate compliance with risk-based capital requirements and will also be considered to have met the well-capitalized ratio requirements under the prompt corrective action regulations. We haveelected to use the CBLR framework and is presented as of December 31, 2025. 68
Page 71
Table of Contents The Company and Bank's regulatory capital as of December 31, 2025 and 2024, is presented in the following table. As of December 31, 2025 Actual For Capital Adequacy Purpose* Company Amount Ratio Amount Ratio (Dollars in thousands except ratios) Total risk-based capital $ 358,387 21.76% $ 131,788 8.00%Tier 1 risk-based capital 337,795 20.51% 98,841 6.00%Tier 1 leverage 337,795 15.69% 86,090 4.00%Tier 1 common equity 324,392 19.69% 74,131 4.50%Parke Bank Community Bank Leverage Ratio 335,985 15.61% 193,666 9.00% As of December 31, 2024 Actual For Capital Adequacy Purpose* Company Amount Ratio Amount Ratio (Dollars in thousands except ratios) Total risk-based capital $ 362,000 24.44% $ 118,478 8.00%Tier 1 risk-based capital 313,488 21.17% 88,859 6.00%Tier 1 leverage 313,488 15.00% 83,604 4.00%Tier 1 common equity 300,085 20.26% 66,644 4.50%Parke Bank Community Bank Leverage Ratio 342,282 16.38% 188,072 9.00% * Combination of both community bank leverage approach and the regular rule of capital adequacy. Note 14. Commitments and Contingencies The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. Thesefinancial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk inexcess of the amount recognized in the consolidated balance sheet. The contract or notional amounts of these instruments reflect the extent of the Company’sinvolvement in these particular classes of financial instruments. The Company’s exposure to the maximum possible credit risk in the event of nonperformance bythe other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount ofthose instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does 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. Commitmentsgenerally have fixed expiration dates or other termination clauses and may require the payment of a fee. The Company evaluates each customer’s credit-worthinesson a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation. Collateralheld varies but may include accounts receivable; inventory; property, plant and equipment and income-producing commercial properties. Since many of thecommitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.Commitments to fund fixed-rate loans were immaterial at December 31, 2025. Variable-rate commitments are generally issued for less than one year and carrymarket rates of interest. Such instruments are not likely to be affected by annual rate caps triggered by rising interest rates. Management believes that off-balancesheet risk is not material to the results of operations or financial condition. As of December 31, 2025 and 2024, unused commitments to extend credit amounted toapproximately $158.3 million and $122.5 million, respectively. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The credit risk involvedin issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. As of December 31, 2025 and 2024, standby letters ofcredit with customers were $0.6 million and $0.6 million, respectively. 69
Page 72
Table of Contents At December 31, 2025 and December 31, 2024, the allowance for credit losses of unfunded lending commitments was $0.8 million and $0.9 million, respectively.A provision recovery for unfunded lending commitments of $0.1 million was recognized during the year ended December 31, 2025, while there was $0.4 millionprovision expense recognized during the year ended December 31, 2024. The Company also has entered into an employment contract with the President of the Company, which provides for continued payment of certain employmentsalary and benefits prior to the expiration date of the agreement and in the event of a change in control, as defined. The Company has also entered into Change-in-Control Severance Agreements with certain officers which provide for the payment of severance in certain circumstances following a change in control. We provide banking services to customers that are licensed by various States to do business in the cannabis industry as growers, processors and dispensaries.Cannabis businesses are legal in these States, although it is not legal at the federal level. The U.S. Department of the Treasury’s Financial Crimes EnforcementNetwork (“FinCEN”) published guidelines in 2014 for financial institutions servicing state legal cannabis businesses. A financial institution that provides servicesto cannabis-related businesses can comply with Bank Secrecy Act (“BSA”) disclosure standards by following the FinCEN guidelines. We maintain stringentwritten policies and procedures related to the acceptance of such businesses and to the monitoring and maintenance of such business accounts. We conduct asignificant due diligence review of the cannabis business before the business is accepted, including confirmation that the business is properly licensed by theapplicable state. Throughout the relationship, we continue monitoring the business, including site visits, to ensure that the business continues to meet our stringentrequirements, including maintenance of required licenses and periodic financial reviews of the business. While we believe we are operating in compliance with the FinCEN guidelines, there can be no assurance that federal enforcement guidelines will not change.Federal prosecutors have significant discretion and there can be no assurance that the federal prosecutors will not choose to strictly enforce the federal lawsgoverning cannabis. Any change in the Federal government’s enforcement position, could cause us to immediately cease providing banking services to thecannabis industry. At December 31, 2025 and 2024, deposit balances from cannabis customers were approximately $61.9 million and $151.9 million, or 3.5% and 9.3% of totaldeposits, respectively, with two customers accounting for 30.7% and 59.4% of the total at December 31, 2025 and 2024. At December 31, 2025 and 2024, therewere cannabis-related loans in the amounts of $47.0 million and $43.4 million, respectively. Absecon Gardens Condominium Association v. Parke Bank Matter Absecon Gardens Condominium Association v. Parke Bank, One Mechanic Street, et al, Superior Court of New Jersey, Law Division, Atlantic County, Docket No.ATL-L-2321-21. The Company is the successor to the interests of the developer of the Absecon Gardens Condominium project in Absecon NJ. Some of the unitowners have suggested that the Company is responsible for contributions and/or repair for alleged damages purportedly relating to construction. The owners filed aComplaint, alleging that the damages total approximately $1.7 million. The matter is in discovery so it is difficult to determine whether that amount accuratelyreflects the claimed damages, or whether the Company is in any way culpable for the damages. At this time it is too early to predict whether an unfavorableoutcome will result. The Company is vigorously defending this matter. See "Note 15. Commitments and Contingencies" in the Notes to the Consolidated FinancialStatements. 70
Page 73
Table of Contents Mori Restaurant LLC v. Parke Bank Matter On May 20, 2014, Parke Bank (the "Bank") loaned Voorhees Diner Corporation ("VDC") the original principal sum of $1.0 million for purposes of tenant fit out,and operation, of the Voorhees Diner situated at 320 Route 73, Voorhees, New Jersey 08043. VDC leased the Diner property under that certain Lease with MoriRestaurant LLC ("Mori") dated May 20, 2014. In connection with the loan from the Bank and as security therefor, VDC pledged its leasehold interest to the Bank.On March 6, 2015, the loan was modified, and the principal amount of the loan was increased to $1.4 million. On January 8, 2020, the Bank declared VDC indefault of its loan obligations. Judgment was entered against VDC and in favor of the Bank, and the court appointed Alan I. Gould, Esquire, as the Receiver for theVoorhees Diner Corporation. Mr. Gould subsequently caused VDC's leasehold interest in the Diner property to be sold at sheriffs sale. The Bank's REO subsidiary,320 Route 73 LLC, was the successful bidder and took title thereto. Mori Restaurant has filed counterclaims against 320 Route 73 LLC and the Bank for rentallegedly accruing due during the period that the Receiver was in possession of the premises. As to all of Mori Restaurant’s claims, the Bank defendants’ primary,but not exclusive, defense in this matter is that, pursuant to that certain Fee Owner Consent executed by and between Mori Restaurant and the Bank, in November2014, the lease between VDC and Mori Restaurant was terminated as a matter of law and neither the Bank nor 320 Route 73 LLC have liability to Mori Restaurantunder the lease or otherwise. In August 2024, Parke Bank filed an amended complaint asserting claims against Mori for breach of the Assignment of Leases anddefault under the mortgage loan documents. Mori sought summary judgement on, among other things, its claims for possession of the diner and against the Bank'saffirmative claims. The court determined that the Lease remained binding on 320 Route 73 LLC and that 320 Route 73 LLC was liable to Mori for rent under theLease during its period of possession. The court also ruled that Mori was entitled to repossess the diner. The court did not determine damages and reserved alldamages issues for trial, which is scheduled for early 2026. In November 2025, Mori repossessed the diner. The Bank denies liability beyond the court's rulings todate and will continue to vigorously defend this matter. 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. Other than the foregoing, neither the Company nor the Bank are involved in any other pending legal proceedings, other than routine legal matters occurring in theordinary course of business, which in the aggregate involve amounts which are believed by management to be immaterial to the consolidated financial condition orresults of operations of the Company. Note 15. Fair Value Fair Value Measurements The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordancewith the Fair Value Measurements and Disclosures (Topic 820) of FASB Accounting Standards Codification, the fair value of a financial instrument is the pricethat would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is bestdetermined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company's various financial instruments. Incases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques aresignificantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not berealized in an immediate settlement of the instrument. Fair value is a market-based measurement, not an entity-specific measurement. The fair value guidance provides a consistent definition of fair value, whichfocuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date undercurrent market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or theuse of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at themeasurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is areasonable point within the range that is most representative of fair value under current market conditions. In accordance with this guidance, the Company groupsits assets and liabilities carried at fair value in three levels as follows: Level 1 Input: 1) Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 Inputs: 1) Quoted prices for similar assets or liabilities in active markets.2) Quoted prices for identical or similar assets or liabilities in markets that are not active.3) Inputs other than quoted prices that are observable, either directly or indirectly, for the term of the asset or liability (e.g., interest rates, yield curves, creditrisks, prepayment speeds or volatilities) or “market corroborated inputs.” 71
Page 74
Table of Contents Level 3 Inputs: 1) Prices or valuation techniques that require inputs that are both unobservable (i.e. supported by little or no market activity) and that are significant to thefair value of the assets or liabilities.2) These assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similartechniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Fair Value on a Recurring Basis: The following is a description of the Company’s valuation methodologies for assets carried at fair value on a recurring basis. These methods may produce a fairvalue calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes that its valuationmethods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certainfinancial instruments could result in a different estimate of fair value at the reporting measurement date. Investments in Available for Sale Securities: Where quoted prices are available in an active market, securities or other assets are classified in Level 1 of the valuation hierarchy. If quoted market prices are notavailable for the specific security, then fair values are provided by independent third-party valuation services. These valuation services estimate fair values usingpricing models and other accepted valuation methodologies, such as quotes for similar securities and observable yield curves and spreads. As part of theCompany’s overall valuation process, management evaluates these third-party methodologies to ensure that they are representative of exit prices in the Company’sprincipal markets. Securities in Level 2 include mortgage-backed securities, corporate debt obligations, and collateralized mortgage-backed securities. The table below presents the balances of assets and liabilities measured at fair value on a recurring basis at December 31, 2025 and 2024. Financial Assets Level 1 Level 2 Level 3 Total (Dollars in thousands) Investment securities available for sale As of December 31, 2025 Corporate debt obligations $ — $ 500 $ — $ 500 Residential mortgage-backed securities — 4,246 — 4,246 Total $ — $ 4,746 $ — $ 4,746 As of December 31, 2024 Residential mortgage-backed securities $ — $ 5,551 $ — $ 5,551 Total $ — $ 5,551 $ — $ 5,551 For the year ended December 31, 2025, there were no transfers between the levels within the fair value hierarchy. There were no level 3 assets or liabilities held for the year ended at December 31, 2025 and December 31, 2024. 72
Page 75
Table of Contents Fair Value on a Non-Recurring Basis: Certain assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example,when there is evidence of impairment). Financial Assets Level 1 Level 2 Level 3 Total (Dollars in thousands) As of December 31, 2025 Collateral dependent loans $ — $ — $ 2,672 $ 2,672 OREO $ — $ — $ 2,862 $ 2,862 As of December 31, 2024 Collateral dependent loans $ — $ — $ 5,189 $ 5,189 OREO $ — $ — $ 1,562 $ 1,562 All collateral dependent individually evaluated loans have an independent third-party full appraisal to determine the NRV based on the fair value of the underlyingcollateral, less cost to sell (a range of 5% to 10%) and other costs, such as unpaid real estate taxes, that have been identified. The appraisal will be based on an "as-is" valuation and will follow a reasonable valuation method that addresses the direct sales comparison, income, and cost approaches to market value, reconcilesthose approaches, and explains the elimination of each approach not used. Appraisals are updated every 12 months or sooner if we have identified possible furtherdeterioration in value. OREO consists of real estate properties which are recorded at fair value. All properties have an independent third-party full appraisal to determine the fair value,less cost to sell (a range of 5% to 10%) and other costs, such as unpaid real estate taxes, that have been identified. The appraisal will be based on an "as-is"valuation and will follow a reasonable valuation method that addresses the direct sales comparison, income, and cost approaches to market value, reconciles thoseapproaches, and explains the elimination of each approach not used. Appraisals are updated every 12 months or sooner if we have identified possible furtherdeterioration in value. 73
Page 76
Table of Contents The following table summarizes the carrying amounts and fair values for financial instruments at December 31, 2025 and December 31, 2024: December 31, 2025 Carrying Fair Value Amount Total Level 1 Level 2 Level 3 (Dollars in thousands) Financial Assets: Cash and cash equivalents $ 156,863 $ 156,863 $ 156,863 $ — $ — Investment securities AFS 4,746 4,746 — 4,746 — Investment securities HTM 8,777 7,487 — 7,487 — Restricted stock 8,085 8,085 — — 8,085 Loans, net 2,000,578 2,020,810 — 2,010,017 10,793 Accrued interest receivable 11,257 11,257 — 11,257 — Financial Liabilities: Non-time deposits $ 1,096,836 $ 1,096,836 $ 1,096,836 $ — $ — Time deposits 661,833 662,947 — 662,947 — Borrowings 143,403 145,748 — 145,748 — Accrued interest payable 4,575 4,575 — 4,575 — December 31, 2024 Carrying Fair Value Amount Total Level 1 Level 2 Level 3 (Dollars in thousands) Financial Assets: Cash and cash equivalents $ 221,527 $ 221,527 $ 221,527 $ — $ — Investment securities AFS 5,551 5,551 — 5,551 — Investment securities HTM 9,209 7,492 — 7,492 — Restricted stock 8,619 8,619 — — 8,619 Loans, net 1,835,580 1,834,007 — 1,822,203 11,804 Accrued interest receivable 9,659 9,659 — 9,659 — Financial Liabilities: Non-time deposits $ 915,892 $ 915,892 $ 915,892 $ — $ — Time deposits 715,158 716,904 — 716,904 — Borrowings 188,300 189,621 — 189,621 — Accrued interest payable 7,968 7,968 — 7,968 — 74
Page 77
Table of Contents Note 16. Parent Company Only Financial Statements Condensed financial information of the parent company only is presented in the following two tables: Balance Sheets December 31, 2025 2024 (Dollars in thousands) Assets: Cash $ 3,896 $ 4,147 Investments in subsidiaries 336,188 342,348 Total assets $ 340,084 $ 346,495 Liabilities and Equity: Subordinated debentures $ 13,403 $ 43,300 Other liabilities 2,163 3,122 Equity 324,518 300,073 Total liabilities and equity $ 340,084 $ 346,495 Statements of Income Years ended December 31, 2025 2024 (Dollars in thousands) Income: Dividends from bank subsidiary $ 46,601 $ 15,389 Total income 46,601 15,389 Expense: Interest on subordinated debentures $ 1,958 $ 3,080 Salary 160 160 Other expenses 118 118 Total expenses 2,236 3,358 Net Income 44,365 12,031 Equity in undistributed income of subsidiaries (6,590) 15,481 Net income 37,775 27,512 Preferred stock dividend and discount accretion (20) (20) Net income available to common shareholders $ 37,755 $ 27,492 Total comprehensive income $ 37,912 $ 27,579 75
Page 78
Table of Contents Statements of Cash Flows Years ended December 31, 2025 2024 (Dollars in thousands) Cash Flows from Operating Activities Net income $ 37,775 $ 27,512 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries 6,590 (15,481)Repayment of subordinate debt (30,000) — Amortization of subordinate debt issuance costs 103 190 Changes in Decrease in accrued interest payable and other accrued liabilities (959) (27) Net cash provided by operating activities 13,509 12,194 Cash Flows from Financing Activities Purchase of treasury stock (6,483) (4,262)Excise tax payment on stock repurchase (29) — Proceeds from exercise of stock options 1,203 706 Payment of dividend on preferred stock and common stock (8,451) (8,602) Net cash used in financing activities (13,760) (12,158) (Decrease) increase in cash and cash equivalents (251) 36 Cash and Cash Equivalents, January 1, 4,147 4,111 Cash and Cash Equivalents, December 31, $ 3,896 $ 4,147 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None Item 9A. Controls and Procedures. (a) Disclosure Controls and Procedures As of the end of the period covered by this Annual Report on Form 10-K, an evaluation was carried out by our management, with the participation of our ChiefExecutive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the SecuritiesExchange Act of 1934). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls andprocedures were effective as of the end of the period covered by this report. No changes were made to our internal control over financial reporting (as defined inRule 13a-15(f) under the Securities Exchange Act of 1934) during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, ourinternal control over financial reporting. (b) Internal Control over Financial Reporting Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls andprocedures as of December 31, 2025. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controlsand procedures were effective as of such date. Changes in Internal Control Over Financial Reporting During the last quarter of the year under report, there was no change in the Company’s internal control over financial reporting that has materially affected, or isreasonably likely to materially affect, the Company’s internal control over financial reporting. Report On Management’s Assessment Of Internal Control Over Financial Reporting To The Shareholders Of Parke Bancorp, Inc. Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expendituresof the Company are being made only in accordance with authorization of management and directors of the Company; and (iii) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financialstatements. Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements prepared for external purposes in accordance with generally accepted accounting principles. Because of inherent limitations, internal control overfinancial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk thatcontrols may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. Under supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluationof the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission in 2013. Based on our evaluation under the framework in Internal Control - Integrated Framework,management concluded that our internal control over financial reporting was effective as of December 31, 2025. S.R. Snodgrass, P.C., an independent registered public accounting firm, has audited the Corporation’s Consolidated Financial Statements as of and for the yearended December 31, 2025 and the effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2025, as stated in their reports,which are included herein.
Page 79
March 11, 2026 /s/ Vito S. Pantilione /s/ Jonathan D. HillVito S. Pantilione Jonathan D. HillPresident and Chief Executive Officer Senior Vice President and Chief Financial Officer REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of Parke Bancorp, Inc. Opinion on Internal Control over Financial Reporting We have audited Parke Bancorp, Inc. and subsidiaries (the “Company”)’s internal control over financial reporting as of December 31, 2025, based on criteriaestablished in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In ouropinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria establishedin Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balancesheets of the Company as of December 31, 2025 and 2024; and the related consolidated statements of income, comprehensive income, equity, and cash flows forthe years then ended, of the Company; and our report dated March 11, 2026, expressed an unqualified opinion. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internalcontrol over financial reporting in the accompanying Report on Management’s Assessment of Internal Control Over Financial Reporting. Our responsibility is toexpress an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB andare required to be independent, with respect to the Company, in accordance with U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understandingof internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believethat our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financialreporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate. /s/ S.R. Snodgrass, P.C. Cranberry Township, PennsylvaniaMarch 11, 2026 76
Page 80
Table of Contents Item 9B. Other Information. Rule 10b5-1 Trading Plans During the fiscal quarter ended December 31, 2025, none of the Company’s directors or executive officers adopted or terminated any contract, instruction orwritten plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule10b5-1 trading arrangement.” Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance. The information contained under the headings “Proposal I - Election of Directors,” “Corporate Governance” and "Delinquent Section 16(a) Reports" in theCompany’s Proxy Statement for its 2026Annual Meeting of Stockholders (the “Proxy Statement”) is incorporated herein by reference. The Company has adopted a Code of Ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller orpersons performing similar functions. A copy of the Code of Ethics will be furnished without charge upon written request to the Chief Financial Officer, ParkeBancorp, Inc., 601 Delsea Drive, Washington Township, New Jersey, 08080. There have been no material changes to the procedures by which security holders may recommend nominees to the Registrant’s Board of Directors since thedate of the Registrant’s last proxy statement mailed to its stockholders. Item 11. Executive Compensation. The information contained in the sections captioned “Executive Compensation,” and “Director Compensation,” in the Proxy Statement is incorporated herein byreference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. (a) Security Ownership of Certain Beneficial Owners The information contained in the section captioned “Principal Holders of our Common Stock” in the Proxy Statement is incorporated herein by reference. (b) Security Ownership of Management The information contained in the sections captioned “Principal Holders of our Common Stock” and “Proposal I – Election of Directors” in the ProxyStatement is incorporated herein by reference. 77
Page 81
Table of Contents (c) Management of the Registrant knows of no arrangements, including any pledge by any person of securities of the Registrant, the operation ofwhich may at a subsequent date result in a change in control of the Registrant. (d) Securities Authorized for Issuance Under Equity Compensation Plans Set forth below is information as of December 31, 2025, with respect to compensation plans under which equity securities of the Registrant are authorized forissuance. ( c ) Number of securities remaining available for ( a ) ( b ) issuance under equity Number of Securities to be Weighted-average compensation plans issued upon exercise of exercise price of (excluding securitiesreflected Equity compensation plans approved by security holders outstanding options (1) outstanding options in column (a) (2) 2020 Equity Incentive Plan 367,500 $ 16.60 573,562 2015 Equity incentive plan 133,359 $ 20.04 — Equity compensation plans not approved by security holders None Total 500,859 $ 17.51 573,562 (1) The number of securities includes 421,059 vested options as of December 31, 2025. In addition to these options, 1,305 restricted stock units were vested, and48,938 restricted stock units were non-vested as of December 31 2025. The restricted stock units are earned at a rate of 20% annually. (2) As of December 31, 2025, there were 426,500 options, and 207 restricted stock units remaining available for award under the approved equity compensationplans. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information contained in the sections captioned “Related Party Transactions” and “Corporate Governance” in the Proxy Statement is incorporated herein byreference. Item 14. Principal Accountant Fees and Services. Our independent registered public accounting firm is S.R. Snodgrass, P.C., Cranberry Township, Pennsylvania (Auditor Firm ID:74) The information contained in the section captioned “Proposal II-Ratification of Appointment of Auditors" in the Proxy Statement is incorporated herein byreference. 78
Page 82
Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules (a) Listed below are all financial statements, schedules and exhibits filed as part of this Form 10-K: 1 The consolidated balance sheets of Parke Bancorp, Inc. and subsidiary as of December 31, 2025 and 2024, and the related consolidatedstatements of income, comprehensive income, stockholders’ equity and cash flows for each of the years in the two-year period endedDecember 31, 2025, together with the related notes and the independent registered public accounting firm reports of S.R. Snodgrass,P.C., independent registered public accounting firm (Auditor Firm ID:74). 2 Schedules omitted as they are not applicable. 3 The following exhibits are included in this Report or incorporated herein by reference: 3.1 Certificate of Incorporation of Parke Bancorp, Inc. (1) 3.2 Bylaws of Parke Bancorp, Inc. (7) 3.3 Certificate of Amendment setting forth the terms of the Registrant’s 6.00% Non-Cumulative Perpetual Convertible Preferred Stock,Series B (2) 4.1 Specimen stock certificate of Parke Bancorp, Inc. (1) 4.2 Description of Capital Stock of Parke Bancorp, Inc. (7) 10.1 Amended Employment Agreement Between Bancorp, Bank and Vito S. Pantilione (3) 10.2 Supplemental Executive Retirement Plan (1) 10.7 2015 Equity Incentive Plan (4) 10.12 Management Change in Control Severance Agreement dated March 19, 2024 by and between Parke Bancorp, Inc. and Jonathan D. Hill(8) 10.14 2020 Equity Incentive Plan (6) 10.15 Management Change in Control Severance Agreement by and between Parke Bancorp, Inc. and Nicholas J. Pantilione 10.16 Management Change in Control Severance Agreement by and between Parke Bancorp, Inc. and Ralph Gallo 19 Stock Trading Policy (11) 21 Subsidiaries of the Registrant 23.1 Consent of S.R. Snodgrass, P.C. 31.1 Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32 Certification of CEO and CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97 Incentive Based Recovery Policy (10) 99.1 Consent Order with the Federal Deposit Insurance Corporation dated October 8, 2020 (6) 99.2 Consent Order with the New Jersey Department of Banking and Insurance (6) 79
Page 83
Table of Contents 101 The following materials from the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, formatted in Inline XBRL(Extensible Business Reporting Language): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Operations;(iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholder’s Equity, (v) theConsolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements. 101.INS Inline XBRL Instance Document (The instance document does not appear in the Interactive Data File because its XBRL tags are embedded with theInline XBRL document) 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) (1) Incorporated by Reference to the Company’s Registration Statement on Form S-4 filed with the SEC on January 31, 2005 (File No. 333-122406).(2) Incorporated by Reference to Company’s Current Report on Form 8-K filed with the SEC on December 24, 2013 (File No. 000-51338).(3) Incorporated by Reference to Company’s Current Report on Form 8-K filed with the SEC on July 20, 2016 (File No. 000-51338).(4) Incorporated by Reference to Company's Registration Statement on Form S-8 filed with the SEC on November 16, 2015 (File No. 333-208051).(5) Incorporated by Reference to Company's Quarterly Report on Form 10-Q for the period ended March 31, 2020, filed with the SEC on May 8, 2020 (File No.000-51338).(6) Incorporated by Reference to Company's Current Report on Form 8-K filed with the SEC on October 9, 2020 (File No. 000-51338).(7) Incorporated by Reference to Company's Annual Report on Form 10-K filed with the SEC on March 31, 2021 (File No. 000-51338).(8) Incorporated by Reference to Company's Current Report on Form 8-K filed with the SEC on March 22, 2024 (File No. 000-51338).(10) Incorporated herein by reference from the identically numbered exhibit to the Company’s Form 10-K filed with the Commission on March 13, 2024 (File No.000-51338).(11) Incorporated herein by reference from the identically numbered exhibit to the Company’s Form 10-K/A filed with the Commission on March 27, 2025 (FileNo. 000-51338). Item 16. Form 10-K Summary Not applicable 80
Page 84
Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf bythe undersigned, thereunto duly authorized. PARKE BANCORP, INC. Dated: March 11, 2026 /s/ Vito S. Pantilione By: Vito S. PantilionePresident, Chief Executive Officer and Director Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and inthe capacities indicated on March 11, 2026. /s/ Daniel J. Dalton /s/ Vito S. PantilioneDaniel J. Dalton Vito S. PantilioneChairman of the Board and Director President, Chief Executive Officer and Director /s/ Arret F. Dobson /s/ Fred G. ChoateArret F. Dobson Fred G. ChoateDirector Director /s/ Jack C. Sheppard, Jr. /s/ Edward InfantolinoJack C. Sheppard, Jr. Edward InfantolinoDirector Director /s/ Jeffrey H. Kripitz /s/ Elizabeth MilavskyJeffrey H. Kripitz Elizabeth MilavskyDirector Director /s/ Jonathan D. Hill Jonathan D. Hill Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 81
Page 85
Exhibit 10.15 MANAGEMENT CHANGE IN CONTROL SEVERANCE AGREEMENT THIS MANAGEMENT CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement”) is effective as of the 23rd day of April 2024 (“Effective Date”), by and among Parke Bancorp, Inc. (“Company”), a corporation organized under the laws of the State of New Jersey, which serves as a bank holding company, with its principal office at 601 Delsea Drive, Sewell, New Jersey 08080, Parke Bank (“Bank”), a banking corporation organized under the laws of the State of New Jersey, with its principal office at 601 Delsea Drive, Sewell, New Jersey 08080, and Nicholas J. Pantilione (“Executive”). BACKGROUND A. The Executive is, as of the Effective Date, employed by the Company and the Bank, a wholly owned subsidiary of the Company, as Senior Vice President and Chief Lending Officer (the “Position”). B. The board of directors of the Bank (“Board of Directors of the Bank”) believes that the Executive has worked, and will continue to work, diligently in the Position in pursuing the Bank’s business objectives to the direct benefit of the Company and its shareholders. C. The board of directors of the Company (“Board of Directors of the Company”) believes that if the Company receives a proposal from a third-party concerning a possible business combination with, or the acquisition of equity securities of, the Company (each, a “Proposal”), it is imperative that the Company, the Board of Directors of the Bank, and the Board of Directors of the Company be able to rely upon the Executive to continue in the Position with the Company and the Bank, and that the Board of Directors of the Company and the Board of Directors of the Bank be able to receive and rely upon the Executive’s advice, if it requests it, as to the best interests of the Company and its shareholders, without concern that the Executive might be distracted by the personal uncertainties and risks created by the Proposal. D. The Company, the Bank and the Executive (collectively, the “Parties”) have, with the full support and concurrence of the Board of Directors of the Company and the Board of Directors of the Bank (each, a “Board” and collectively, the “Boards”), have agreed to enter into this Agreement to provide to the Executive certain benefits solely in the event of a Change in Control (as hereinafter defined). E. The terms of this Agreement shall have no force or effect except in the event of a Change in Control. NOW THEREFORE, in order to assure the Company and the Bank that they will receive the Executive’s continued dedication, availability, advice and contribution, notwithstanding the possibility, threat or occurrence of a Change in Control, and to induce the Executive to remain in the Employers’ respective employ in the event of a Change in Control, the Parties, each intending to be legally bound hereby, agree as follows: 1
Page 86
Definitions. a. Cause. For purposes of this Agreement, “Cause,” with respect to termination of the Executive's employment by either Employer, shall mean: 1) Executive’s willful and continued failure to perform Executive’s duties for either Employer under this Agreement after at least one written warning from the Employer’s President and/or Chief Executive Officer identifying such failure and providing the Executive with at least a ten-day period to cure such failure; 2) Executive engaged in conduct involving fraud, deceit, personal dishonesty, breach of fiduciary duty or illegal conduct in the Executive’s business and/or personal matters; 3) Executive’s willful misconduct, including but not limited to disclosing or improperly using any material, non-public, business-related information, written or oral, whether or not it is marked as such, that is disclosed or made available to the Executive, directly or indirectly, through any means of communication or observation, including any proprietary data of the Company, the Bank or any of their respective subsidiaries or affiliates (collectively, “Confidential Information”) under this Agreement, which causes material injury to the Employer and/or its respective subsidiaries and/or affiliates, as specified in a written notice to the Executive from the President and/or Chief Executive Officer of either Employer; 4) Executive's conviction of a crime (other than a traffic violation); 5) Executive shall have become subject to continuing intemperance in using alcohol or drugs which adversely affected, or may adversely affect, the business or reputation of either or both Employers, as determined by either or both of the Boards or the President and/or Chief Executive Officer of either or both Employers; 6) The Executive’s violation of any banking law or regulation, memorandum of understanding, cease and desist order, or other agreement with any banking agency having jurisdiction over either or both Employers which, in the judgment of either or both of the Boards or the President and/or Chief Executive Officer of either or both Employers, adversely affected, or may adversely affect, the business or reputation of either or both Employers including, without limitation, any consent agreement, consent order or consent decree; 7) Any petition under the federal bankruptcy laws or any state insolvency laws filed by the Executive or against the Executive; or 8) Initiation of any proceeding for removal of the Executive by any banking authority that possesses supervisory jurisdiction over either or both Employers. 2
Page 87
b. Change in Control. “Change in Control” shall mean the occurrence of any of the following events: 1) Merger: The Company or the Bank merges into or consolidates with another entity, or merges another bank or corporation into the Bank or the Company, and as a result, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company or the Bank immediately before the merger or consolidation; 2) Acquisition of Significant Share Ownership: A report on Schedule 13D or another form or schedule (other than Schedule 13G) is required to be filed under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of twenty-five (25%) percent or more of a class of the Company's or the Bank's voting securities; provided, however, this Section 1(b)(2) shall not apply to beneficial ownership of the Company’s or the Bank’s voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns fifty (50%) percent or more of its outstanding voting securities; 3) Change in Board Composition: Individuals who constitute the respective Boards on the Effective Date (collectively, the “Incumbent Boards”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the Effective Date whose election was approved by a vote of at least three- quarters of the directors comprising the Incumbent Boards shall be considered, for purposes of this Section 1(b)(3), as though there were a member of the Incumbent Boards; or 4) Sale of Assets: The Company and/or the Bank sells all or substantially all of its respective assets to a third party. The definition of Change in Control shall be construed to be consistent with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and Treasury Regulations promulgated thereunder. c. Contract Period. “Contract Period” shall mean the period commencing on the business day immediately preceding a Change in Control and ending on the earlier of (i) the second anniversary of the Change in Control, and (ii) the Executive’s death. A “business day” is defined to mean any day except any Saturday, any Sunday, or any day which is a federal legal holiday or any day on which banking institutions are closed. d. Employer. “Employer” shall mean the Company and/or the Bank, whichever entity that shall employ the Executive from time to time, and any successor entity thereto and collectively, the “Employers.” 3
Page 88
e. Good Reason. When used with reference to the Executive’s voluntary termination of Executive’s employment with the Employer, “Good Reason” shall mean any of the following, if taken without the Executive’s written consent: 1) A material diminution in the Executive's base compensation during the Contract Period; 2) a material diminution in the Executive's authority, duties, or responsibilities during the Contract Period; 3) A material diminution in the budget over which the Executive retains authority, to the extent that the Executive retains authority over either or both Employer’s budgets; 4) a change in the geographic location of the Executive's office location by more than 25 miles during the Contract Period; or 5) any other action or inaction that constitutes a material breach of an agreement under which the Executive provides services to either or both Employers. f. Term.Except as otherwise set forth herein, this Agreement shall commence on the Effective Date and shall continue for a period of two (2) consecutive years thereafter (the “Term”) or until the end of the Contract Period, whichever is later. The Term shall be automatically extended for an additional one (1) year period on each annual anniversary date of the Effective Date (each, a “Renewal Term”), unless either or both of the Boards’ respective directors vote not to extend the Term or Renewal Term, as applicable, prior to the annual anniversary date of the applicable Term or Renewal Term. The Executive shall be notified of the non-extension of a Term or Renewal Term, as applicable, within a reasonable period of time thereafter. 2. Employment. The Employers, as applicable, hereby agree to employ the Executive, and the Executive hereby accepts such employment, during the Contract Period upon the terms and conditions set forth herein. The Employers may, in the exercise of their sole discretion, transfer the Executive's employment relationship from the Bank to the Company, or from the Company to the Bank, in which case the transferee Employer shall be the Employer for all purposes of this Agreement. The transfer of the Executive's employment relationship between the Bank and the Company shall not be deemed to be a termination of the Executive or “Good Reason” for any purpose of this Agreement, and the Executive's employment shall be deemed to have continued without interruption for all purposes of this Agreement. 4
Page 89
3. Job Position. During the Contract Period, the Executive shall be employed in the Position with the Company and/or the Bank, or such other corporate or divisional profit center as shall then be the principal successor to the business, assets and properties of the Bank, with a comparable position title and comparable professional job duties, responsibilities and required experience and skill level as were in effect before the Change in Control. The Executive shall devote the Executive’s full-time professional effort and attention to the respective Employer’s business and shall not, during the Contract Period, be engaged in any other business activity without the written consent of the Employer, which may be withheld for any reason or no reason. 4. Cash Compensation. The Employer shall compensate the Executive for the Executive’s services during the Contract Period as follows: a. Base Compensation. The base compensation shall be equal to not less than such annual compensation, including both salary and bonus, as was paid to or accrued by, or for the benefit of, the Executive in the twelve (12) months immediately prior to the Change in Control. The annual salary portion of base compensation shall be payable in installments in accordance with the Employer's usual payroll method immediately prior to the Change in Control. The bonus, if any, shall be payable at the time and in the manner as to which the Employer paid such bonuses prior to the Change in Control. Any increase in the Executive's annual compensation pursuant to Section 4(b), or otherwise, shall automatically increase the base compensation. b. Annual Increase. During the Contract Period, either Board shall review, no less than annually, the Executive's compensation and shall award the Executive additional compensation to reflect the Executive's performance, as determined in the discretion of the applicable Board. Additional compensation may take any form, as determined by either Board, including but not limited to increases in annual salary, incentive bonuses and/or bonuses not tied to performance. 5. Expenses and Fringe Benefits. During the Contract Period, the Executive shall be entitled to reimbursement for all business expenses incurred by the Executive with respect to the business of the Employer in the same manner and to the same extent as such expenses were previously reimbursed to the Executive immediately prior to the Change in Control. If prior to the Change in Control, the Executive was entitled to the use of an automobile, the Executive shall continue to be entitled to the same use of an automobile at least comparable to the automobile provided to the Executive prior to the Change in Control, and the Executive shall be entitled to vacation leave and sick days, in accordance with the practices and procedures of the Employer, as such existed immediately prior to the Change in Control. During the Contract Period, the Executive also shall be entitled to hospital, health, medical and life insurance, and any other material benefits enjoyed, from time to time, by executive officers of the Employer, all upon terms as favorable as those enjoyed by other executive officers of the Employer. 5
Page 90
Notwithstanding anything in this section to the contrary, if the Employer adopts any change in the expenses allowed to, or fringe benefits provided for, executive officers of the Employer, and such policy is uniformly applied to all executive officers of the Employer, and any successor or acquirer of the Employer, if any, including the chief executive officer of such entities, then no such change in policy shall be deemed to be a violation of this provision. 5. Disability. During the Contract Period, if the Executive becomes disabled within the meaning of the Social Security Act, the Employer may terminate the Executive’s employment; in which event, the Executive shall not be entitled to any further benefits under this Agreement other than payments under any disability policy which the Employer may maintain that covers the Executive. 6. Death Benefits. If the Executive passes away during the Contract Period, the Executive shall be entitled to the benefits of any life insurance policy or supplemental executive retirement plan paid for, or maintained by, the Employer on the life of the Executive. The Executive’s estate shall not be entitled to any further benefits under this Agreement. 7. Termination without Cause or Resignation for Good Reason. a. The Employer may terminate the Executive without Cause during the Contract Period by providing the Executive four weeks’ written notice prior to terminating the Executive. During the Contract Period, the Executive may resign within ninety (90) days following the initial occurrence of a condition constituting a Good Reason upon giving four weeks' prior written notice to the Employer specifying the condition constituting Good Reason. The date of termination of employment for Good Reason shall be no later than twenty-four months following commencement of the Contract Period. If the Employer terminates the Executive's employment during the Contract Period without Cause or if the Executive resigns for Good Reason, the Employer shall, upon such termination of employment, pay the Executive a lump sum amount equal to 2.5 times the average of the annualized compensation, comprised of annualized salary and cash incentive or bonus compensation, paid or accrued to the Executive during the thirty-six month period (or such lesser number of months of actual employment) immediately prior to the Change in Control (the “Lump Sum Payment”). Notwithstanding the foregoing, any notice of resignation for Good Reason during the Contract Period furnished by the Executive to the Employer shall not be effective prior to the date that is three months following the date of the Change in Control, and the Executive shall continue to work through such three-month period, unless the Employer shall agree in writing to an earlier effective date of such resignation. b. For a period of eighteen (18) months following the effective date of the Executive’s termination of employment following a Change in Control, whether resulting from Cause initiated by the Employer or for Good Reason initiated bythe Executive, the Employer shall continue to provide the Executive with and pay the applicable premiums for medical and hospital insurance, disability insurance and life insurance benefits, as were provided and paid for at the time of the Executive’s termination of employment with the Employer; provided that, if at any time during such eighteen (18) month period, the Executive becomes employed by another employer which provides one or more such benefits, the Employer shall, immediately, and from the date when such benefits are made available to the Executive by the successor employer, be relieved of its obligation to provide such benefits. 6
Page 91
c. At all times, during the Contract Period, the Employer shall have the right to terminate the Executive for Cause, upon written notice to the Executive of the Executive’s termination, which notice shall specify the reasons for the termination. In the event of the Executive’s termination for Cause, the Executive shall not be entitled to any further benefits under this Agreement. Notwithstanding the foregoing, if the Executive delivers written notice to the Employer of the Executive’s termination of employment for Good Reason, the Employer shall have a period of thirty (30) calendar days during which the Employer may remedy the condition constituting Good Reason and if such condition is remedied, the Employer shall not be required to pay the amount due to the Executive under this Section 7 and such termination of employment shall not be effective. 8. Resignation without Good Reason. The Executive shall be entitled to resign from the Employer’s employ at any time during the Contract Period without Good Reason, but upon such resignation, the Executive shall not be entitled to any additional compensation for the time after which the Executive ceases to be employed by the Employer, and shall not be entitled to any other benefit provided for herein, except as may otherwise be provided by the terms of such other plans or arrangements of the Employer or in accordance with applicable law. No such resignation shall be effective unless in writing with four weeks' notice prior to such resignation provided to the Employer. 9. Restrictions and Limitations on Executive Conduct. a. Non-Disclosure of Confidential Information. Except in the course of the Executive’s employment with the Employer and in pursuit of the business of the Company, the Bank or any of their respective subsidiaries or affiliates, the Executive shall not, at any time during or following the Contract Period, disclose or use for any purpose any Confidential Information. The Executive agrees that, among other things, all information concerning the identity of, and the Company's and the Bank's relations with, their respective customers is confidential and proprietary information. 7
Page 92
b. Covenant Not to Compete. The Executive agrees that for a period of twelve (12) months following termination of Executive’s employment by the Employer in conjunction with or after a Change in Control, the Executive shall not become employed or retained by, directly or indirectly, any Federal Deposit Insurance Corporation (“FDIC”) insured depository institution whereby the Executive shall have a new work location that is within 15 miles of any branch or office of the Bank in existence as of the date of the Change in Control. The Executive acknowledges that the terms and conditions of this restrictive covenant are reasonable and necessary to protect the Company, its subsidiaries, its affiliates, and any successors in interest (collectively, the “Companies”), and that the Employer's tender of compensation under this Agreement is fair, adequate and valid consideration in exchange for the Executive’s promises and restrictions under this Section 9(b). The Executive further acknowledges that the Executive’s knowledge, skills and abilities are sufficient to permit the Executive to earn a satisfactory livelihood without violating the provisions of this Section 9(b). c. Non-Solicitation of Business. The Executive agrees that for a period of one (1) year following termination of Executive’s employment with Employer in conjunction with or after a Change in Control, the Executive shall not contact (with a view toward selling any product or service competitive with any product or service sold or proposed to be sold by the Companies) any person, firm, association or corporation (i) to which the Companies sell any product or service, (ii) which the Executive solicited, contacted or otherwise dealt with on behalf of the Companies, or (iii) which the Executive is otherwise aware is a client, or could be a potential customer, of one or all of the Companies. During such one-year period, the Executive shall not directly or indirectly make any such contact, either for Executive’s own benefit or for the benefit of any other person, firm, association, or corporation. d. Non-Solicitation of Employees. The Executive agrees that for a period of one (1) year following termination of Executive’s employment with the Employer in conjunction with or after a Change in Control, the Executive shall not contact, on the Executive’s own behalf, or on behalf of others, employ, solicit, or induce, or attempt to employ, solicit or induce, any employee of any of the Companies for purposes of employment or other business relationships with any other business entity, nor will the Executive directly or indirectly, on the Executive's behalf or for others, seek to influence any Companies' employee to leave any of the respective Companies’ employ. e. Specific Performance and Survival. The Executive agrees that the Company and the Bank do not have an adequate remedy at law for breach of this Section 9 and agrees that the Executive shall be subject to injunctive relief and equitable remedies as a result of any breach of this Section 9. This Section 9 shall survive the termination or resignation of the Executive's employment with the Employer during the Contract Period for any reason and the expiration of this Agreement. f. No Effect Prior to Change in Control. This Agreement shall not, in any respect, affect any rights of the Employer or the Executive prior to a Change in Control, nor shall this Agreement affect or limit any rights of the Executive granted in accordance with any other agreement, plan or arrangement. The rights, duties and benefits provided hereunder shall only become effective upon the occurrence of a Change in Control, as defined in this Agreement. If the employment of the Executive is terminated by the Employer for any reason in good faith prior to a Change in Control, this Agreement shall thereafter be of no further force and effect. 8
Page 93
10. Limitations under Section 280G. Notwithstanding the forgoing, all sums payable hereunder shall be reduced in such manner and to such extent so that no such payments made hereunder when aggregated with all other payments to be made to the Executive by the Company and the Bank shall be deemed an “excess parachute payment” in accordance with Section 280G of the Code, and thereby subjecting the Executive to the excise tax provided at Section 4999(a) of the Code. 11. Regulatory Matters. Notwithstanding anything herein to the contrary, any payments made to the Executive pursuant to this Agreement, or otherwise, shall be subject to and conditioned upon compliance with 12 U.S.C. § 1828(k) and FDIC Regulation 12CFR Part 359, Golden Parachute and Indemnification Payments promulgated thereunder. 12. Section 409A Compliance. a. This Agreement shall be amended to the extent necessary to comply with Section 409A of the Code and regulations promulgated thereunder. Prior to such amendment, and notwithstanding anything contained herein to the contrary, this Agreement shall be construed in a manner consistent with Section 409A of the Code and the parties shall take such actions as are required to comply in good-faith with the provisions of Section 409A of the Code such that payments shall not be made to the Executive at such time if such payments shall subject the Executive to the penalty tax under Section 409A of the Code, but rather such payments shall be made by the Bank to the Executive at the earliest time permissible thereafter without the Executive incurring liability for such penalty tax under Section 409A of the Code. b. If and to the extent termination payments under this Agreement constitute deferred compensation within the meaning of Section 409A of the Code and the regulations promulgated thereunder, and if the payment under this Section 12 does not qualify as a short-term deferral under Section 409A of the Code and Treas. Reg. §1.409A-1(b)(4) (or any similar or successor provisions), and the Executive is a Specified Employee within the meaning of Section 409A of the Code and the regulations promulgated thereunder, then the payment of such termination payments that constitute deferred compensation under Section 409A of the Code shall comply with Section 409A(a)(2)(B)(i) of the Code and the regulations thereunder, which generally provide that distributions of deferred compensation (within the meaning of Section 409A of the Code) to a Specified Employee that are payable on account of termination of employment may not commence prior to the six (6) month anniversary of the Executive's termination of employment (or, if earlier, the date of the Executive's death) from the Employer. 9
Page 94
13. Release in Favor of the Company and Bank. In consideration for the compensation received under Section 4 of this Agreement, the Executive shall deliver a general release to the Employer, substantially in form and content annexed hereto as Exhibit “A,” within fourteen (14) days after Executive’s receipt thereof. 14. At-Will Employment. Subject to the terms of this Agreement, the Parties acknowledge that Executive’s employment is and will continue to be at-will, as defined under applicable law, unless otherwise set forth in a written employment agreement between or among the applicable parties. If Executive’s employment terminates for any reason, Executive will not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or pursuant to the Company’s policies in place at the time of the termination (to the extent applicable) and the payment of accrued but unpaid wages, as required by law, and any unreimbursed reimbursable expenses. 15. Voluntary Nature of Agreement. The Parties acknowledge and agree that each Party is executing this Agreement voluntarily and without any duress or undue influence by anyone. Executive further acknowledges and agrees that Executive carefully read this Agreement and has asked any questions needed for Executive to understand the terms, consequences, and binding effect of this Agreement and fully understands it. Executive acknowledges that Executive has been provided an opportunity to seek the advice of an attorney of Executive’s choice before signing this Agreement. 16. Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement. 17. Withholding. All payments made pursuant to this Agreement shall be subject to withholding of applicable income, employment and other taxes. 18. Governing Law. The terms of this Agreement shall be governed by, and interpreted and construed in accordance with the provisions of, the laws of New Jersey and, to the extent applicable, Federal law, without regard to principles of its conflict of laws. Except as specifically set forth in this Agreement, this Agreement supersedes all prior agreements and understandings with respect to the matters covered hereby. 19. No Modification. The amendment or termination of this Agreement may be made only in a writing executed by the Parties and no amendment or termination of this Agreement shall be effective unless in writing. 20. Binding Agreement/Assignability. This Agreement shall be binding to the extent of its applicability upon any successor (whether direct or indirect, by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the assets of the Company or the Bank. This Agreement is personal to the Executive, and the Executive may not assign any of Executive’s rights or duties hereunder, but this Agreement shall be enforceable by the Executive's legal representatives, executors or administrators. 21. Counterparts. This Agreement may be executed electronically and in two or more 10 counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. 10
Page 95
22. Assumption. The Company or the Bank shall, as part of any Change in Control involving an acquiring entity or successor to the Company or the Bank, obtain an enforceable assumption in writing by the entity which is the acquiring entity or successor to the Company in the Change in Control 23. Severability. If any provision of this Agreement shall be held invalid, such invalidity shall not affect any other provision of this Agreement not held so invalid, and all other such provisions shall, to the full extent consistent with law, continue in full force and effect. If any such provision shall be held invalid in part, such invalidity shall in no way affect the rest of such provision not held so invalid, and the rest of such provision, together with all other provisions of this Agreement, shall continue in full force and effect to the full extent consistent with law. 24. Entire Agreement. This Agreement constitutes the entire agreement and understanding among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings among the Parties regarding the subject matter hereof. (SIGNATURE PAGE FOLLOWS) 11
Page 96
IN WITNESS WHEREOF, the Company and the Bank caused this Agreement to be signed by their respective duly authorized representative and the Executive executed this Agreement, all as of the Effective Date. ATTEST: PARKE BANCORP, INC. Vito S. Pantilione, President and Chief Executive Officer ATTEST: PARKE BANK Vito S. Pantilione, President and Chief Executive Officer WITNESS: EXECUTIVE Nicholas J. Pantilione 12
Page 97
EXHIBIT A RELEASE AGREEMENT I, Nicholas J. Pantilione, understand and agree to the terms set forth in my Change in Control Severance Agreement (the “Agreement”) with Parke Bancorp, Inc. (the “Company”) and Park Bank (the “Bank”). I understand that this Release Agreement (“Release”), together with the Agreement, constitutes the complete, final and exclusive embodiment of the entire agreement among the Company, the Bank and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company or the Bank that is not expressly stated herein. I hereby confirm my obligations under the Agreement regarding Confidential Information, as that term is defined in the Agreement. In consideration of the compensation I may receive under the Agreement, I hereby generally and completely release the Company, the Bank and their respective subsidiaries and/or affiliates and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to me signing this Release. This general release includes, but is not limited to: (a) all claims arising out of or in any way related to my employment with the Company and Bank, or the termination of that employment; (b) all claims related to my compensation or benefits from the Company and Bank, including, but not limited to, salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company and Bank; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including, but not limited to, claims for fraud, defamation, emotional distress, and discharge in violation of public policy; (e) all federal, state, and local statutory claims, including, but not limited to, claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended); (f) any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds that I may receive as a result of the Agreement; and (g) any and all claims for attorneys’ fees and costs. I agree that this Release shall be and remain in effect in all respects as a complete general release as to the matters released. This Release does not extend to any obligations incurred under the Agreement. This Release does not release claims that cannot be released as a matter of law, including, but not limited to, my right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against the Company and Bank (with the understanding that any such filing or participation does not give me the right to recover any monetary damages against the Company and Bank; my release of claims herein bars me from recovering such monetary relief from the Company and Bank). 13
Page 98
I hereby represent that I have been paid or provided all salary, wages, bonuses, accrued vacation/paid time off, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and compensation due to me, and I have not suffered any on-the-job injury for which I have not already filed a claim. I acknowledge that to become effective, I must sign and return this Release to the Company and Bank so that it is received not later than fourteen (14) days following the date it is provided to me. DATE: Nicholas J. Pantilione 14
Page 99
Exhibit 10.16 MANAGEMENT CHANGE IN CONTROL SEVERANCE AGREEMENT THIS MANAGEMENT CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement”) is effective as of the 23rd day of April, 2024 (“Effective Date”), by and among Parke Bancorp, Inc. (“Company”), a corporation organized under the laws of the State of New Jersey, which serves as a bank holding company, with its principal office at 601 Delsea Drive, Sewell, New Jersey 08080, Parke Bank (“Bank”), a banking corporation organized under the laws of the State of New Jersey, with its principal office at 601 Delsea Drive, Sewell, New Jersey 08080, and Ralph Gallo (“Executive”). BACKGROUND A. The Executive is, as of the Effective Date, employed by the Company and the Bank, a wholly owned subsidiary of the Company, as Executive Vice President and Chief Operating Officer (the “Position”). B. The board of directors of the Bank (“Board of Directors of the Bank”) believes that the Executive has worked, and will continue to work, diligently in the Position in pursuing the Bank’s business objectives to the direct benefit of the Company and its shareholders. C. The board of directors of the Company (“Board of Directors of the Company”) believes that if the Company receives a proposal from a third-party concerning a possible business combination with, or the acquisition of equity securities of, the Company (each, a “Proposal”), it is imperative that the Company, the Board of Directors of the Bank, and the Board of Directors of the Company be able to rely upon the Executive to continue in the Position with the Company and the Bank, and that the Board of Directors of the Company and the Board of Directors of the Bank be able to receive and rely upon the Executive’s advice, if it requests it, as to the best interests of the Company and its shareholders, without concern that the Executive might be distracted by the personal uncertainties and risks created by the Proposal. D. The Company, the Bank and the Executive (collectively, the “Parties”) have, with the full support and concurrence of the Board of Directors of the Company and the Board of Directors of the Bank (each, a “Board” and collectively, the “Boards”), have agreed to enter into this Agreement to provide to the Executive certain benefits solely in the event of a Change in Control (as hereinafter defined). E. The terms of this Agreement shall have no force or effect except in the event of a Change in Control. NOW THEREFORE, in order to assure the Company and the Bank that they will receive the Executive’s continued dedication, availability, advice and contribution, notwithstanding the possibility, threat or occurrence of a Change in Control, and to induce the Executive to remain in the Employers’ respective employ in the event of a Change in Control, the Parties, each intending to be legally bound hereby, agree as follows: 1
Page 100
Definitions. a. Cause. For purposes of this Agreement, “Cause,” with respect to termination of the Executive's employment by either Employer, shall mean: 1) Executive’s willful and continued failure to perform Executive’s duties for either Employer under this Agreement after at least one written warning from the Employer’s President and/or Chief Executive Officer identifying such failure and providing the Executive with at least a ten-day period to cure such failure; 2) Executive engaged in conduct involving fraud, deceit, personal dishonesty, breach of fiduciary duty or illegal conduct in the Executive’s business and/or personal matters; 3) Executive’s willful misconduct, including but not limited to disclosing or improperly using any material, non-public, business-related information, written or oral, whether or not it is marked as such, that is disclosed or made available to the Executive, directly or indirectly, through any means of communication or observation, including any proprietary data of the Company, the Bank or any of their respective subsidiaries or affiliates (collectively, “Confidential Information”) under this Agreement, which causes material injury to the Employer and/or its respective subsidiaries and/or affiliates, as specified in a written notice to the Executive from the President and/or Chief Executive Officer of either Employer; 4) Executive's conviction of a crime (other than a traffic violation); 5) Executive shall have become subject to continuing intemperance in using alcohol or drugs which adversely affected, or may adversely affect, the business or reputation of either or both Employers, as determined by either or both of the Boards or the President and/or Chief Executive Officer of either or both Employers; 6) The Executive’s violation of any banking law or regulation, memorandum of understanding, cease and desist order, or other agreement with any banking agency having jurisdiction over either or both Employers which, in the judgment of either or both of the Boards or the President and/or Chief Executive Officer of either or both Employers, adversely affected, or may adversely affect, the business or reputation of either or both Employers including, without limitation, any consent agreement, consent order or consent decree; 7) Any petition under the federal bankruptcy laws or any state insolvency laws filed by the Executive or against the Executive; or 8) Initiation of any proceeding for removal of the Executive by any banking authority that possesses supervisory jurisdiction over either or both Employers. 2
Page 101
b. Change in Control. “Change in Control” shall mean the occurrence of any of the following events: 1) Merger: The Company or the Bank merges into or consolidates with another entity, or merges another bank or corporation into the Bank or the Company, and as a result, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company or the Bank immediately before the merger or consolidation; 2) Acquisition of Significant Share Ownership: A report on Schedule 13D or another form or schedule (other than Schedule 13G) is required to be filed under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of twenty-five (25%) percent or more of a class of the Company's or the Bank's voting securities; provided, however, this Section 1(b)(2) shall not apply to beneficial ownership of the Company’s or the Bank’s voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns fifty (50%) percent or more of its outstanding voting securities; 3) Change in Board Composition: Individuals who constitute the respective Boards on the Effective Date (collectively, the “Incumbent Boards”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the Effective Date whose election was approved by a vote of at least three- quarters of the directors comprising the Incumbent Boards shall be considered, for purposes of this Section 1(b)(3), as though there were a member of the Incumbent Boards; or 4) Sale of Assets: The Company and/or the Bank sells all or substantially all of its respective assets to a third party. The definition of Change in Control shall be construed to be consistent with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and Treasury Regulations promulgated thereunder. c. Contract Period. “Contract Period” shall mean the period commencing on the business day immediately preceding a Change in Control and ending on the earlier of (i) the second anniversary of the Change in Control, and (ii) the Executive’s death. A “business day” is defined to mean any day except any Saturday, any Sunday, or any day which is a federal legal holiday or any day on which banking institutions are closed. d. Employer. “Employer” shall mean the Company and/or the Bank, whichever entity that shall employ the Executive from time to time, and any successor entity thereto and collectively, the “Employers.” 3
Page 102
e. Good Reason. When used with reference to the Executive’s voluntary termination of Executive’s employment with the Employer, “Good Reason” shall mean any of the following, if taken without the Executive’s written consent: 1) A material diminution in the Executive's base compensation during the Contract Period; 2) a material diminution in the Executive's authority, duties, or responsibilities during the Contract Period; 3) A material diminution in the budget over which the Executive retains authority, to the extent that the Executive retains authority over either or both Employer’s budgets; 4) a change in the geographic location of the Executive's office location by more than 25 miles during the Contract Period; or 5) any other action or inaction that constitutes a material breach of an agreement under which the Executive provides services to either or both Employers. f. Term. Except as otherwise set forth herein, this Agreement shall commence on the Effective Date and shall continue for a period of two (2) consecutive years thereafter (the “Term”) or until the end of the Contract Period, whichever is later. The Term shall be automatically extended for an additional one (1) year period on each annual anniversary date of the Effective Date (each, a “Renewal Term”), unless either or both of the Boards’ respective directors vote not to extend the Term or Renewal Term, as applicable, prior to the annual anniversary date of the applicable Term or Renewal Term. The Executive shall be notified of the non-extension of a Term or Renewal Term, as applicable, within a reasonable period of time thereafter. 2. Employment. The Employers, as applicable, hereby agree to employ the Executive, and the Executive hereby accepts such employment, during the Contract Period upon the terms and conditions set forth herein. The Employers may, in the exercise of their sole discretion, transfer the Executive's employment relationship from the Bank to the Company, or from the Company to the Bank, in which case the transferee Employer shall be the Employer for all purposes of this Agreement. The transfer of the Executive's employment relationship between the Bank and the Company shall not be deemed to be a termination of the Executive or “Good Reason” for any purpose of this Agreement, and the Executive's employment shall be deemed to have continued without interruption for all purposes of this Agreement. 4
Page 103
3. Job Position. During the Contract Period, the Executive shall be employed in the Position with the Company and/or the Bank, or such other corporate or divisional profit center as shall then be the principal successor to the business, assets and properties of the Bank, with a comparable position title and comparable professional job duties, responsibilities and required experience and skill level as were in effect before the Change in Control. The Executive shall devote the Executive’s full-time professional effort and attention to the respective Employer’s business and shall not, during the Contract Period, be engaged in any other business activity without the written consent of the Employer, which may be withheld for any reason or no reason. 4. Cash Compensation. The Employer shall compensate the Executive for the Executive’s services during the Contract Period as follows: a. Base Compensation. The base compensation shall be equal to not less than such annual compensation, including both salary and bonus, as was paid to or accrued by, or for the benefit of, the Executive in the twelve (12) months immediately prior to the Change in Control. The annual salary portion of base compensation shall be payable in installments in accordance with the Employer's usual payroll method immediately prior to the Change in Control. The bonus, if any, shall be payable at the time and in the manner as to which the Employer paid such bonuses prior to the Change in Control. Any increase in the Executive's annual compensation pursuant to Section 4(b), or otherwise, shall automatically increase the base compensation. b. Annual Increase. During the Contract Period, either Board shall review, no less than annually, the Executive's compensation and shall award the Executive additional compensation to reflect the Executive's performance, as determined in the discretion of the applicable Board. Additional compensation may take any form, as determined by either Board, including but not limited to increases in annual salary, incentive bonuses and/or bonuses not tied to performance. 5. Expenses and Fringe Benefits. During the Contract Period, the Executive shall be entitled to reimbursement for all business expenses incurred by the Executive with respect to the business of the Employer in the same manner and to the same extent as such expenses were previously reimbursed to the Executive immediately prior to the Change in Control. If prior to the Change in Control, the Executive was entitled to the use of an automobile, the Executive shall continue to be entitled to the same use of an automobile at least comparable to the automobile provided to the Executive prior to the Change in Control, and the Executive shall be entitled to vacation leave and sick days, in accordance with the practices and procedures of the Employer, as such existed immediately prior to the Change in Control. During the Contract Period, the Executive also shall be entitled to hospital, health, medical and life insurance, and any other material benefits enjoyed, from time to time, by executive officers of the Employer, all upon terms as favorable as those enjoyed by other executive officers of the Employer. 5
Page 104
Notwithstanding anything in this section to the contrary, if the Employer adopts any change in the expenses allowed to, or fringe benefits provided for, executive officers of the Employer, and such policy is uniformly applied to all executive officers of the Employer, and any successor or acquirer of the Employer, if any, including the chief executive officer of such entities, then no such change in policy shall be deemed to be a violation of this provision. 5. Disability. During the Contract Period, if the Executive becomes disabled within the meaning of the Social Security Act, the Employer may terminate the Executive’s employment; in which event, the Executive shall not be entitled to any further benefits under this Agreement other than payments under any disability policy which the Employer may maintain that covers the Executive. 6. Death Benefits. If the Executive passes away during the Contract Period, the Executive shall be entitled to the benefits of any life insurance policy or supplemental executive retirement plan paid for, or maintained by, the Employer on the life of the Executive. The Executive’s estate shall not be entitled to any further benefits under this Agreement. 7. Termination without Cause or Resignation for Good Reason. a. The Employer may terminate the Executive without Cause during the Contract Period by providing the Executive four weeks’ written notice prior to terminating the Executive. During the Contract Period, the Executive may resign within ninety (90) days following the initial occurrence of a condition constituting a Good Reason upon giving four weeks' prior written notice to the Employer specifying the condition constituting Good Reason. The date of termination of employment for Good Reason shall be no later than twenty-four months following commencement of the Contract Period. If the Employer terminates the Executive's employment during the Contract Period without Cause or if the Executive resigns for Good Reason, the Employer shall, upon such termination of employment, pay the Executive a lump sum amount equal to 2.5 times the average of the annualized compensation, comprised of annualized salary and cash incentive or bonus compensation, paid or accrued to the Executive during the thirty-six month period (or such lesser number of months of actual employment) immediately prior to the Change in Control (the “Lump Sum Payment”). Notwithstanding the foregoing, any notice of resignation for Good Reason during the Contract Period furnished by the Executive to the Employer shall not be effective prior to the date that is three months following the date of the Change in Control, and the Executive shall continue to work through such three-month period, unless the Employer shall agree in writing to an earlier effective date of such resignation. b. For a period of eighteen (18) months following the effective date of the Executive’s termination of employment following a Change in Control, whether resulting from Cause initiated by the Employer or for Good Reason initiated by the Executive, the Employer shall continue to provide the Executive with and pay the applicable premiums for medical and hospital insurance, disability insurance and life insurance benefits, as were provided and paid for at the time of the Executive’s termination of employment with the Employer; provided that, if at any time during such eighteen (18) month period, the Executive becomes employed by another employer which provides one or more such benefits, the Employer shall, immediately, and from the date when such benefits are made available to the Executive by the successor employer, be relieved of its obligation to provide such benefits. 6
Page 105
c. At all times, during the Contract Period, the Employer shall have the right to terminate the Executive for Cause, upon written notice to the Executive of the Executive’s termination, which notice shall specify the reasons for the termination. In the event of the Executive’s termination for Cause, the Executive shall not be entitled to any further benefits under this Agreement. Notwithstanding the foregoing, if the Executive delivers written notice to the Employer of the Executive’s termination of employment for Good Reason, the Employer shall have a period of thirty (30) calendar days during which the Employer may remedy the condition constituting Good Reason and if such condition is remedied, the Employer shall not be required to pay the amount due to the Executive under this Section 7 and such termination of employment shall not be effective. 8. Resignation without Good Reason. The Executive shall be entitled to resign from the Employer’s employ at any time during the Contract Period without Good Reason, but upon such resignation, the Executive shall not be entitled to any additional compensation for the time after which the Executive ceases to be employed by the Employer, and shall not be entitled to any other benefit provided for herein, except as may otherwise be provided by the terms of such other plans or arrangements of the Employer or in accordance with applicable law. No such resignation shall be effective unless in writing with four weeks' notice prior to such resignation provided to the Employer. 9. Restrictions and Limitations on Executive Conduct. a. Non-Disclosure of Confidential Information. Except in the course of the Executive’s employment with the Employer and in pursuit of the business of the Company, the Bank or any of their respective subsidiaries or affiliates, the Executive shall not, at any time during or following the Contract Period, disclose or use for any purpose any Confidential Information. The Executive agrees that, among other things, all information concerning the identity of, and the Company's and the Bank's relations with, their respective customers is confidential and proprietary information. b. Covenant Not to Compete. The Executive agrees that for a period of twelve (12) months following termination of Executive’s employment by the Employer in conjunction with or after a Change in Control, the Executive shall not become employed or retained by, directly or indirectly, any Federal Deposit Insurance Corporation (“FDIC”) insured depository institution whereby the Executive shall have a new work location that is within 15 miles of any branch or office of the Bank in existence as of the date of the Change in Control. The Executive acknowledges that the terms and conditions of this restrictive covenant are reasonable and necessary to protect the Company, its subsidiaries, its affiliates, and any successors in interest (collectively, the “Companies”), and that the Employer's tender of compensation under this Agreement is fair, adequate and valid consideration in exchange for the Executive’s promises and restrictions under this Section 9(b). The Executive further acknowledges that the Executive’s knowledge, skills and abilities are sufficient to permit the Executive to earn a satisfactory livelihood without violating the provisions of this Section 9(b). 7
Page 106
c. Non-Solicitation of Business. The Executive agrees that for a period of one (1) year following termination of Executive’s employment with Employer in conjunction with or after a Change in Control, the Executive shall not contact (with a view toward selling any product or service competitive with any product or service sold or proposed to be sold by the Companies) any person, firm, association or corporation (i) to which the Companies sell any product or service, (ii) which the Executive solicited, contacted or otherwise dealt with on behalf of the Companies, or (iii) which the Executive is otherwise aware is a client, or could be a potential customer, of one or all of the Companies. During such one-year period, the Executive shall not directly or indirectly make any such contact, either for Executive’s own benefit or for the benefit of any other person, firm, association, or corporation. d. Non-Solicitation of Employees. The Executive agrees that for a period of one (1) year following termination of Executive’s employment with the Employer in conjunction with or after a Change in Control, the Executive shall not contact, on the Executive’s own behalf, or on behalf of others, employ, solicit, or induce, or attempt to employ, solicit or induce, any employee of any of the Companies for purposes of employment or other business relationships with any other business entity, nor will the Executive directly or indirectly, on the Executive's behalf or for others, seek to influence any Companies' employee to leave any of the respective Companies’ employ. e. Specific Performance and Survival. The Executive agrees that the Company and the Bank do not have an adequate remedy at law for breach of this Section 9 and agrees that the Executive shall be subject to injunctive relief and equitable remedies as a result of any breach of this Section 9. This Section 9 shall survive the termination or resignation of the Executive's employment with the Employer during the Contract Period for any reason and the expiration of this Agreement. f. No Effect Prior to Change in Control. This Agreement shall not, in any respect, affect any rights of the Employer or the Executive prior to a Change in Control, nor shall this Agreement affect or limit any rights of the Executive granted in accordance with any other agreement, plan or arrangement. The rights, duties and benefits provided hereunder shall only become effective upon the occurrence of a Change in Control, as defined in this Agreement. If the employment of the Executive is terminated by the Employer for any reason in good faith prior to a Change in Control, this Agreement shall thereafter be of no further force and effect. 10. Limitations under Section 280G. Notwithstanding the forgoing, all sums payable hereunder shall be reduced in such manner and to such extent so that no such payments made hereunder when aggregated with all other payments to be made to the Executive by the Company and the Bank shall be deemed an “excess parachute payment” in accordance with Section 280G of the Code, and thereby subjecting the Executive to the excise tax provided at Section 4999(a) of the Code. 11. Regulatory Matters. Notwithstanding anything herein to the contrary, any payments made to the Executive pursuant to this Agreement, or otherwise, shall be subject to and conditioned upon compliance with 12 U.S.C. § 1828(k) and FDIC Regulation 12CFR Part 359, Golden Parachute and Indemnification Payments promulgated thereunder. 12. Section 409A Compliance. a. This Agreement shall be amended to the extent necessary to comply with Section 409A of the Code and regulations promulgated thereunder. Prior to such amendment, and notwithstanding anything contained herein to the contrary, this Agreement shall be construed in a manner consistent with Section 409A of the Code and the parties shall take such actions as are required to comply in good-faith with the provisions of Section 409A of the Code such that payments shall not be made to the Executive at such time if such payments shall subject the Executive to the penalty tax under Section 409A of the Code, but rather such payments shall be made by the Bank to the Executive at the earliest time permissible thereafter without the Executive incurring liability for such penalty tax under Section 409A of the Code. b. If and to the extent termination payments under this Agreement constitute deferred compensation within the meaning of Section 409A of the Code and the regulations promulgated thereunder, and if the payment under this Section 12 does not qualify as a short-term deferral under Section 409A of the Code and Treas. Reg. §1.409A-1(b)(4) (or any similar or successor provisions), and the Executive is a Specified Employee within the meaning of Section 409A of the Code and the regulations promulgated thereunder, then the payment of such termination payments that constitute deferred compensation under Section 409A of the Code shall comply with Section 409A(a)(2)(B)(i) of the Code and the regulations thereunder, which generally provide that distributions of deferred compensation (within the meaning of Section 409A of the Code) to a Specified Employee that are payable on account of termination of employment may not commence prior to the six (6) month anniversary of the Executive's termination of employment (or, if earlier, the date of the Executive's death) from the Employer. 8
Page 107
13. Release in Favor of the Company and Bank. In consideration for the compensation received under Section 4 of this Agreement, the Executive shall deliver a general release to the Employer, substantially in form and content annexed hereto as Exhibit “A,” within fourteen (14) days after Executive’s receipt thereof. 14. At-Will Employment. Subject to the terms of this Agreement, the Parties acknowledge that Executive’s employment is and will continue to be at-will, as defined under applicable law, unless otherwise set forth in a written employment agreement between or among the applicable parties. If Executive’s employment terminates for any reason, Executive will not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or pursuant to the Company’s policies in place at the time of the termination (to the extent applicable) and the payment of accrued but unpaid wages, as required by law, and any unreimbursed reimbursable expenses. 15. Voluntary Nature of Agreement. The Parties acknowledge and agree that each Party is executing this Agreement voluntarily and without any duress or undue influence by anyone. Executive further acknowledges and agrees that Executive carefully read this Agreement and has asked any questions needed for Executive to understand the terms, consequences, and binding effect of this Agreement and fully understands it. Executive acknowledges that Executive has been provided an opportunity to seek the advice of an attorney of Executive’s choice before signing this Agreement. 16. Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement. 17. Withholding. All payments made pursuant to this Agreement shall be subject to withholding of applicable income, employment and other taxes. 18. Governing Law. The terms of this Agreement shall be governed by, and interpreted and construed in accordance with the provisions of, the laws of New Jersey and, to the extent applicable, Federal law, without regard to principles of its conflict of laws. Except as specifically set forth in this Agreement, this Agreement supersedes all prior agreements and understandings with respect to the matters covered hereby. 19. No Modification. The amendment or termination of this Agreement may be made only in a writing executed by the Parties and no amendment or termination of this Agreement shall be effective unless in writing. 20. Binding Agreement/Assignability. This Agreement shall be binding to the extent of its applicability upon any successor (whether direct or indirect, by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the assets of the Company or the Bank. This Agreement is personal to the Executive, and the Executive may not assign any of Executive’s rights or duties hereunder, but this Agreement shall be enforceable by the Executive's legal representatives, executors or administrators. 21. Counterparts. This Agreement may be executed electronically and in two or more 10 counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. 9
Page 108
22. Assumption. The Company or the Bank shall, as part of any Change in Control involving an acquiring entity or successor to the Company or the Bank, obtain an enforceable assumption in writing by the entity which is the acquiring entity or successor to the Company in the Change in Control 23. Severability. If any provision of this Agreement shall be held invalid, such invalidity shall not affect any other provision of this Agreement not held so invalid, and all other such provisions shall, to the full extent consistent with law, continue in full force and effect. If any such provision shall be held invalid in part, such invalidity shall in no way affect the rest of such provision not held so invalid, and the rest of such provision, together with all other provisions of this Agreement, shall continue in full force and effect to the full extent consistent with law. 24. Entire Agreement. This Agreement constitutes the entire agreement and understanding among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings among the Parties regarding the subject matter hereof. (SIGNATURE PAGE FOLLOWS) 10
Page 109
IN WITNESS WHEREOF, the Company and the Bank caused this Agreement to be signed by their respective duly authorized representative and the Executive executed this Agreement, all as of the Effective Date. ATTEST: PARKE BANCORP, INC. Vito S. Pantilione, President and Chief Executive Officer ATTEST: PARKE BANK Vito S. Pantilione, President and Chief Executive Officer WITNESS: EXECUTIVE Ralph Gallo 11
Page 110
EXHIBIT A RELEASE AGREEMENT I, Ralph Gallo, understand and agree to the terms set forth in my Change in Control Severance Agreement (the “Agreement”) with Parke Bancorp, Inc. (the “Company”) and Park Bank (the “Bank”). I understand that this Release Agreement (“Release”), together with the Agreement, constitutes the complete, final and exclusive embodiment of the entire agreement among the Company, the Bank and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company or the Bank that is not expressly stated herein. I hereby confirm my obligations under the Agreement regarding Confidential Information, as that term is defined in the Agreement. In consideration of the compensation I may receive under the Agreement, I hereby generally and completely release the Company, the Bank and their respective subsidiaries and/or affiliates and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to me signing this Release. This general release includes, but is not limited to: (a) all claims arising out of or in any way related to my employment with the Company and Bank, or the termination of that employment; (b) all claims related to my compensation or benefits from the Company and Bank, including, but not limited to, salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company and Bank; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including, but not limited to, claims for fraud, defamation, emotional distress, and discharge in violation of public policy; (e) all federal, state, and local statutory claims, including, but not limited to, claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended); (f) any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds that I may receive as a result of the Agreement; and (g) any and all claims for attorneys’ fees and costs. I agree that this Release shall be and remain in effect in all respects as a complete general release as to the matters released. This Release does not extend to any obligations incurred under the Agreement. This Release does not release claims that cannot be released as a matter of law, including, but not limited to, my right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against the Company and Bank (with the understanding that any such filing or participation does not give me the right to recover any monetary damages against the Company and Bank; my release of claims herein bars me from recovering such monetary relief from the Company and Bank). 12
Page 111
I hereby represent that I have been paid or provided all salary, wages, bonuses, accrued vacation/paid time off, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and compensation due to me, and I have not suffered any on-the-job injury for which I have not already filed a claim. I acknowledge that to become effective, I must sign and return this Release to the Company and Bank so that it is received not later than fourteen (14) days following the date it is provided to me. DATE: May 21, 2024 Ralph Gallo 13
Page 112
Exhibit 21. Subsidiaries of the Registrant Parent Parke Bancorp, Inc. State or Other Jurisdiction Percentage Subsidiary Of Incorporation Ownership Parke Bank New Jersey 100% Parke Capital Trust I Delaware 100% Parke Capital Trust II Delaware 100% Parke Capital Trust III Delaware 100% Subsidiaries of Parke Bank 100% PDL LLC New Jersey 51%
Page 113
Exhibit 23.1 Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in Registration Statements File Nos. 333-128202, 333-134249, 333-208051, 333-255965, and 333-255966 on Form S-8 and the Registration Statements File No. 333-146121 and File No. 333-157631 on Form S-3 of Parke Bancorp, Inc. of our report dated March 11, 2026, relating to our audit of the consolidated financial statements, and the effectiveness of internal controls over financial reporting which appears in the Annual Report to Shareholders, which is incorporated in this Annual Report on Form 10-K of Parke Bancorp, Inc. for the year ended December 31, 2025. /s/ S.R. Snodgrass, P.C. Cranberry Township, Pennsylvania March 11, 2026
Page 114
Exhibit 31.1 CERTIFICATION I, Vito S. Pantilione, President and Chief Executive Officer, certify that: 1. I have reviewed this Form 10-K of Parke Bancorp, Inc. for the year ended December 31, 2025; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 11, 2026 /s/ Vito S. Pantilione Vito S. Pantilione President and Chief Executive Officer
Page 115
Exhibit 31.2 CERTIFICATION I, , Jonathan D. Hill, Senior Vice President and Chief Financial Officer, certify that: 1. I have reviewed this Form 10-K of Parke Bancorp, Inc. for the year ended December 31, 2025; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 11, 2026 /s/ Jonathan D. Hill Jonathan D. Hill Senior Vice President and Chief Financial Officer
Page 116
Exhibit 32 CERTIFICATION CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report on Form 10-K for the year ended December 31, 2025 (the “Report”) of Parke Bancorp, Inc. (the “Company”) as filed with the Securities and Exchange Commission, we, Vito S. Pantilione, President and Chief Executive Officer, and Jonathan D. Hill, Senior Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Vito S. Pantilione /s/ Jonathan D. Hill Vito S. Pantilione Jonathan D. Hill President and Chief Executive Officer Senior Vice President and Chief Financial Officer (Principal Executive Officer) (Principal Financial Officer) March 11, 2026