PARKE BANCORP, INC.

NOTE1. ORGANIZATION

Parke Bancorp, Inc. (the “Company, we, us, our”) is a bank holding company headquartered in Sewell, New Jersey. Through subsidiaries, the Company provides individuals, corporations and other businesses and institutions with commercial and retail banking services, principally loans and deposits. The Company was incorporated in* January 2005*under the laws of the State of New Jersey for the sole purpose of becoming the holding company of Parke Bank (the "Bank").

The Bank is a commercial bank, which was incorporated on* August 25, 1998,and commenced operations on January**28,* 1999. The Bank is chartered by the New Jersey Department of Banking and Insurance and its deposits are insured by the Federal Deposit Insurance Corporation. The Bank maintains its principal office at601 Delsea Drive, Sewell, New Jersey, and hassix additional branch office locations;501 Tilton Road, Northfield, New Jersey,567 Egg Harbor Road, Washington Township, New Jersey,67 East Jimmie Leeds Road, Galloway Township, New Jersey,1150 Haddon Avenue, Collingswood, New Jersey,1610 Spruce Street, Philadelphia, Pennsylvania, and1032 Arch Street, Philadelphia, Pennsylvania. The Bank also has a loan office located at1817 East Venango Street, Philadelphia, Pennsylvania.

NOTE2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Financial Statement Presentation: We prepared our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Parke Bank (including certain partnership interests). Parke Capital Trust I, Parke Capital Trust II and Parke Capital Trust III are wholly-owned subsidiaries but arenot consolidated as they donot meet the requirements for consolidation under applicable accounting guidance. We have eliminated inter-company balances and transactions. We have also reclassified certain prior year amounts to conform to the current year presentation, which didnot have a material impact on our consolidated financial condition or results of operations.

The accompanying interim financial statements should be read in conjunction with the annual financial statements and notes thereto included in the Company’s Annual Report on Form10-K for the year ended* December 31, 2025*. The accompanying interim financial statements for thethree months ended* March 31, 2026and2025* are unaudited. The balance sheet as of* December 31, 2025*, was derived from the audited financial statements. In the opinion of management, these financial statements include all normal and recurring adjustments necessary for a fair statement of the results for such interim periods. Results of operations for thethree months ended* March 31, 2026* arenot necessarily indicative of the results for the full year or any other period.

Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the allowance for credit losses, the valuation of deferred income taxes, and the carrying value of other real estate owned ("OREO").

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**Segment Reporting:**The Company operatesone reportable segment of business, "community banking". Through its community banking segment, the Company provides a broad range of retail and community banking services. The accounting policies of the community banking segment are the same as those described in the 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 on net 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.

The following table presents segment profit and significant expenses.

Community Banking Segment

(Dollars in thousands)

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NOTE3. INVESTMENT SECURITIES

The following is a summary of the Company's investments in available for sale and held to maturity securities as of* March 31, 2026* and* December 31, 2025*.None of the securities shown below required an allowance for credit losses.

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The amortized cost and fair value of debt securities classified as available for sale and held to maturity, by contractual maturity as of* March 31, 2026* are as follows:

Expected maturities* may*differ from contractual maturities because the issuers of certain debt securities do have the right to call or prepay their obligations without any penalty.

The Company didnot sell any securities during thethree months ended* March 31, 2026and2025*. The following tables show the gross unrealized losses and fair value of the Company's available for sale investments for which an allowance for credit losses hasnot been recorded, which are aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at* March 31, 2026* and* December 31, 2025*:

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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 the fair 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 fair value 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 the impairment loss relating to credit through an allowance for credit losses. Impairment that hasnot been recorded through an allowance for credit losses is recorded through other comprehensive income, net of applicable taxes.

The Company’s unrealized loss for the debt securities classified as available for sale is comprised of 2 securities in the less than12 months loss position and 12 securities in the12 months or greater loss position at* March 31, 2026*. These securities are mortgage-backed securities that had unrealized losses issued or guaranteed by the US government or US government sponsored entities. The unrealized losses associated with those mortgage-backed securities are generally driven by changes in interest rates and arenot due to credit losses given the explicit or implicit guarantees provided by the U.S. government.

The Company classifies the held-to-maturity debt securities into the following major security types: residential mortgage backed, and state and political subdivisions. These securities are highly rated with a history ofno credit losses, and are assigned ratings based on the most recent data from ratings agencies depending on the availability of data for the security. Credit ratings of held-to-maturity debt securities, which are a significant input in calculating the expected credit loss, are reviewed on a quarterly basis. Based on the credit ratings of our held-to-maturity securities and our historical experience includingno losses, we have determined that an allowance for credit loss on the held-to-maturity portfolio isnot required. Because the Company doesnot intend to sell the securities and it isnot more likely thannot that the Company will be required to sell these investments before recovery of their amortized cost basis, the Company doesnot consider the unrealized loss in these securities to be credit losses at* March 31, 2026*.

NOTE4. LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

At* March 31, 2026* and* December 31, 2025*, the Company had $2.04 billion and $2.04 billion, respectively, in loans receivable outstanding. Outstanding balances include $0.05 million and $0.03 million at* March 31, 2026* and* December 31, 2025*, respectively, for net deferred loan costs, and unamortized discounts.

The portfolio segments of loans receivable at* March 31, 2026* and* December 31, 2025*, consist of the following:

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An age analysis of past due loans by class at* March 31, 2026* and* December 31, 2025* is as follows:

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The following table provides the amortized cost of loans on nonaccrual status:

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is recorded in other liabilities and is adjusted through the provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. At* March 31, 2026* and* December 31, 2025*, the allowance for credit losses on off-balance sheet credit exposures was $762.3 thousand and $829.1 thousand, respectively, on exposures totaling $198.0 million and $189.8 million, respectively. During thethree months ended* March 31, 2026and2025* , we recorded a recovery for credit losses of $66.8 thousand, and a provision for credit losses on off balance sheet exposures of $73.3 thousand, respectively.

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Allowance for Credit Losses (ACL)

The following tables present the information regarding the allowance for credit losses for thethree months ended* March 31, 2026and2025*:

For thethree months ended* March 31, 2026*, the increase to the Residential1 to4 Family Investment segment was due to an increase in the qualitative factors related to an increase in problem loans that are30 -89 days delinquent. The increase in the Residential Multifamily segment was due to an increase in the portfolio balance that increased the loan exposure and also caused changes to the qualitative factors related to concentration levels within the portfolio segment. The provision benefit during thethree months ended* March 31, 2026* to the Commercial Non-owner Occupied segment is due to a decrease in the problem loans balance that decreased the loan exposure and also caused changes to the qualitative factors related to concentration levels within the portfolio segments.

For thethree months ended* March 31, 2025,*the increase to the Commercial Owner Occupied, and the Commercial Non-owner Occupied portfolio's was due to an increase in the portfolio balances that increased the loan exposure and also caused changes to the qualitative factors related to concentration levels within the portfolio segments. The provision benefit during the quarter to the Construction segment is due to a decrease in the portfolio balance that decreased the loan exposure and also caused changes to the qualitative factors related to concentration levels within the portfolio segments.

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Collateral-Dependent Loans

The following table presents the collateral-dependent loans by portfolio segment and collateral type at* March 31, 2026*:

The following table presents the collateral-dependent loans by portfolio segment and collateral type at* December 31, 2025*:

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

The Company utilizes a risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of1 to7. Grades1 through4 are considered “Pass”. A description of the general characteristics of theseven risk grades is as follows:

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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, as of* March 31, 2026*.

As of* March 31, 2026*, the Company was in the process of foreclosing on 21 residential1 to4 family loans with a principal balance of $5.2 million.

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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, as of* December 31, 2025*.

Modifications to Borrowers Experiencing Financial Difficulty

During the periods ended* March 31, 2026and2025*, the Company didnot make any modifications to borrowers experiencing financial difficulty.

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NOTE5. EARNINGS PER SHARE (“EPS”)

The following tables set forth the calculation of basic and diluted EPS for thethree months ended* March 31, 2026and2025*.

During thethree months ended* March 31, 2026* and2025, respectively, there were zero and 174,125 weighted average option shares outstanding, respectively, that werenot included in the computation of diluted EPS because these shares were anti-dilutive.

NOTE6. 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. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. In accordance with this guidance, the Company groups its assets and liabilities carried at fair value inthree levels as follows:

Level1 Input:

Level2 Inputs:

Level3 Inputs:

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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* mayproduce a fair value calculation that may**not* be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes that its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting measurement date.

Investments in Available for Sale Securities:

Where quoted prices are available in an active market, securities or other assets are classified in Level1 of the valuation hierarchy. If quoted market prices arenot available for the specific security or available for sale loans, then fair values are provided by independentthird-party valuation services. These valuation services estimate fair values using pricing models and other accepted valuation methodologies, such as quotes for similar securities and observable yield curves and spreads. As part of the Company’s overall valuation process, management evaluates thesethird-party methodologies to ensure that they are representative of exit prices in the Company’s principal markets. Securities in Level2 are mortgage-backed securities.

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

For thethree months ended* March 31, 2026*, there wereno transfers between the levels within the fair value hierarchy. There wereno level3 assets or liabilities held during thethree months ended* March 31, 2026and2025*.

Fair Value on a Non-recurring Basis:

Certain assets and liabilities arenot 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).

Collateral-dependent loans are those loans that are accounted for under ASC326, Financial Instruments - Credit Losses ("ASC326"), in which the Bank has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independentthird-party appraisals of the properties that collateralize the loans. If the loan balance exceeds the fair value of the collateral, a specific reserve is applied and these assets are generally classified as Level3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

OREO consists of real estate properties that are recorded at fair value based upon current appraised value, or agreements of sale, less estimated disposition costs using level3 inputs. Properties are reappraised annually.

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Fair Value of Financial Instruments

The Company discloses estimated fair values for its significant financial instruments in accordance with FASB ASC (Topic825), “Disclosures about Fair Value of Financial Instruments”. The methodologies for estimating the fair value of financial assets and liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above.

For certain financial assets and liabilities, carrying value approximates fair value due to the nature of the financial instrument. These instruments include cash and cash equivalents, accrued interest receivable, bank owned life insurance, Federal Home Loan Bank of New York ("FHLBNY") restricted stock, demand and other non-maturity deposits and accrued interest payable, and they are considered to be level1 measurements.

The following table summarizes the carrying amounts and fair values for financial instruments that arenot carried at fair value at* March 31, 2026* and* December 31, 2025*:

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NOTE7. 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. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheet. The contract or notional amounts of these instruments reflect the extent of the Company’s involvement in these particular classes of financial instruments. The Company’s exposure to the maximum possible credit risk in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as there isno violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and* mayrequire the payment of a fee. The Company evaluates each customer’s credit-worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation. Collateral held varies but mayinclude accounts receivable; inventory; property, plant and equipment and income-producing commercial properties. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts donot* necessarily represent future cash requirements. Commitments to fund fixed-rate loans were immaterial at* March 31, 2026*. Variable-rate commitments are generally issued for less thanone year and carry market rates of interest. Such instruments arenot likely to be affected by annual rate caps triggered by rising interest rates. As of* March 31, 2026* and* December 31, 2025*, unused commitments to extend credit amounted to approximately $143.2 million and $158.3 million, respectively. At* March 31, 2026* and* December 31, 2025*, the allowance for credit losses on off-balance sheet credit exposures was $762.3 thousand and $829.1 thousand, respectively, a decrease of $66.8 thousand, mainly due to the decrease in the unused commitment balance.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to athird party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. As of* March 31, 2026* and* December 31, 2025*, standby letters of credit with customers were $0.6 million and $0.6 million, respectively.

On* March12,* 2026, the Bank entered into an agreement with the FHLBNY for a Municipal Letter of Credit ("MLOC") of $100.0 million. The MLOC is used to pledge against public deposits and the MLOC expires on* June1,* 2026. There wereno outstanding borrowings on the letters of credit as of* March 31, 2026*.

The Company also has entered into an employment contract with the President of the Company, which provides for continued payment of certain employment salary 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 in 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 they arenot legal at the federal level. The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) published guidelines in2014 for financial institutions servicing state legal cannabis businesses. A financial institution that provides services to cannabis-related businesses can comply with Bank Secrecy Act (“BSA”) disclosure standards by following the FinCEN guidelines. We maintain stringent written policies and procedures related to the acceptance of such businesses and to the monitoring and maintenance of such business accounts. We conduct a significant due diligence review of the cannabis business before the business is accepted, including confirmation that the business is properly licensed by the applicable state. Throughout the relationship, we continue monitoring the business, including site visits, to ensure that the business continues to meet our stringent requirements, 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 beno assurance that federal enforcement guidelines willnot change. Federal prosecutors have significant discretion and there can beno assurance that the federal prosecutors willnot choose to strictly enforce the federal laws governing cannabis. Any change in the Federal government’s enforcement position, could cause us to immediately cease providing banking services to the cannabis industry.

At* March 31, 2026* and* December 31, 2025*, deposit balances from cannabis customers were approximately $56.2 million and $61.9 million, or 3.3% and 3.5% of total deposits, respectively, withtwo customers accounting for 27.8% and 30.7% of the total at* March 31, 2026* and* December 31, 2025*. At* March 31, 2026* and* December 31, 2025*, there were cannabis-related loans in the amounts of $46.0 million and $47.0 million, respectively.

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