<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                    For the quarter ended September 30, 2006

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

             For the transition period from __________ to __________

                            Commission File 000-32605

                               NEFFS BANCORP, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                          <C>
          Pennsylvania                                            23-2400383
(State or other jurisdiction of                                 (IRS Employer
 incorporation or organization)                              Identification No.)
</TABLE>

              5629 PA Route 873, P.O. Box 10, Neffs, PA l8065-0010
                    (Address of principal executive offices)

                                 (610) 767-3875
                           (Issuer's telephone number)

     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                              Yes  X    No
                                  ---      ---

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12-b-2 of the Exchange Act. (Check
one):

Large accelerated filer:     Accelerated filer:     Non-Accelerated filer:  X
                         ---                    ---                        ---

     Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act.)

                              Yes       No  X
                                  ---      ---

As of September 30, 2006, 197,941 shares of common stock, par value of $1.00
were outstanding.


                                        1

<PAGE>

                               NEFFS BANCORP, INC.

                                      INDEX

<TABLE>
<S>                                                                           <C>
PART I.  FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements

         Consolidated Statements of Financial Condition (Unaudited)
         September 30, 2006 and December 31, 2005..........................    3

         Consolidated Statements of Income (Unaudited)
         Three months ended September 30, 2006 and September 30, 2005
         Nine months ended September 30, 2006 and September 30, 2005.......    4

         Consolidated Statements of Stockholders' Equity  (Unaudited)
         Nine months ended September 30, 2006 and September 30, 2005.......    5

         Consolidated Statements of Cash Flows (Unaudited)
         Nine months ended September 30, 2006 and September 30, 2005.......    6

         Notes to the Interim Consolidated Financial Statements
         (Unaudited).......................................................    7

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations.........................................    9

Item 3.  Quantitative and Qualitative Disclosures about Market Risk........   19

Item 4.  Controls and Procedures...........................................   19

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.................................................   20

Item 1A. Risk Factors......................................................   20

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.......   20

Item 3.  Defaults Upon Senior Securities...................................   20

Item 4.  Submission of Matters to a Vote of Security Holders...............   20

Item 5.  Other Information.................................................   20

Item 6.  Exhibits .........................................................   20

SIGNATURES.................................................................   22
</TABLE>


                                        2
<PAGE>

ITEM 1.

                        CONSOLIDATED FINANCIAL STATEMENTS

                        NEFFS BANCORP, INC AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                              September 30,   December 31,
                                                                   2006           2005
                                                              -------------   ------------
Dollars in thousands, except per share data
<S>                                                           <C>             <C>
                           ASSETS
Cash and due from banks                                         $  2,270        $  2,958
Interest bearing deposits with banks                                 134             163
Federal funds sold                                                   127           2,348
Securities available for sale                                     38,411          42,021
Securities held to maturity, fair value
   $81,760 in 2006; $79,248 in 2005                               81,360          78,923
Loans                                                             87,021          83,042
   Less allowance for loan losses                                   (658)           (657)
                                                                --------        --------
         Net loans                                                86,363          82,385
                                                                --------        --------
Premises and equipment, net                                        2,563           2,549
Other assets                                                       2,595           2,200
                                                                --------        --------
         Total assets                                           $213,823        $213,547
                                                                ========        ========
            LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
   Deposits
      Non-interest bearing                                      $ 17,789        $ 16,912
      Interest bearing                                           154,003         156,364
                                                                --------        --------
         Total deposits                                          171,792         173,276
   Other liabilities                                               1,516             977
                                                                --------        --------
         Total liabilities                                       173,308         174,253
                                                                --------        --------
Stockholders' Equity:
   Common stock, $1 par value, authorized 2,500,000 shares;
      issued 200,000 shares; outstanding 197,941 shares              200             200
   Paid-in capital                                                   753             753
   Retained earnings                                              40,906          39,603
   Accumulated other comprehensive loss                             (926)           (844)
   Treasury stock, at cost 2,059 shares                             (418)           (418)
                                                                --------        --------
         Total stockholders' equity                               40,515          39,294
                                                                --------        --------
         Total liabilities and stockholders' equity             $213,823        $213,547
                                                                ========        ========
</TABLE>

See Notes to Consolidated Financial Statements.


                                       3

<PAGE>

                       NEFFS BANCORP, INC AND SUBSIDIARY
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                 Three Months Ended    Nine Months Ended
                                                   September 30,         September 30,
                                                -------------------   -------------------
                                                  2006       2005       2006       2005
                                                --------   --------   --------   --------
Dollars in thousands, except per share data
<S>                                             <C>        <C>        <C>        <C>
Interest income:
   Interest and fees on loans                   $  1,387   $  1,274   $  4,018   $  3,722
   Interest and dividends on investments:
      Taxable                                        896        833      2,620      2,486
      Exempt from federal income taxes               490        514      1,495      1,548
   Interest on federal funds sold and other           14         24         43         58
                                                --------   --------   --------   --------
         Total interest income                     2,787      2,645      8,176      7,814
                                                --------   --------   --------   --------
Interest Expense
   Deposits                                        1,299      1,171      3,742   $  3,315
   Borrowings                                          9         --         11         --
                                                --------   --------   --------   --------
         Total interest expense                    1,308      1,171      3,753      3,315
                                                --------   --------   --------   --------
         Net interest income                       1,479      1,474      4,423      4,499
                                                --------   --------   --------   --------
Other income:
   Service charges on deposit accounts                37         42        111        125
   Other service charges and fees                     24         27         60         75
   Other income                                        2          3         18          7
                                                --------   --------   --------   --------
         Total other income                           63         72        189        207
                                                --------   --------   --------   --------
Other expenses:
   Salaries and employee benefits                    323        298      1,018        922
   Occupancy                                          52         51        123        122
   Furniture and equipment                            75         75        225        174
   Pennsylvania shares tax                            96         90        286        222
   Other expenses                                    184        166        527        476
                                                --------   --------   --------   --------
         Total other expenses                        730        680      2,179      1,916
                                                --------   --------   --------   --------
         Income before income taxes                  812        866      2,433      2,790
Income tax expense                                   114        127        338        444
                                                --------   --------   --------   --------
         Net income                             $    698   $    739   $  2,095   $  2,346
                                                ========   ========   ========   ========
Per share data:
   Earnings per share, basic                    $   3.52   $   3.75   $  10.58   $  11.90
                                                ========   ========   ========   ========
   Weighted average common shares outstanding    197,941    197,091    197,941    197,091
                                                ========   ========   ========   ========
   Cash dividends declared per share            $   2.00   $   2.00   $   4.00   $   4.00
                                                ========   ========   ========   ========
</TABLE>

See Notes to Consolidated Financial Statements.


                                       4

<PAGE>

                       NEFFS BANCORP, INC AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 Nine Months Ended September 30, 2006 and 2005
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                Accumulated                     Total
                                              Common   Paid-In   Retained          Other         Treasury   Stockholders'
                                               Stock   Capital   Earnings   Comprehensive Loss     Stock        Equity
                                              ------   -------   --------   ------------------   --------   -------------
Dollars in thousands, except per share data
<S>                                           <C>      <C>       <C>        <C>                  <C>        <C>
Balance, December 31, 2004                     $200      $690    $37,319          $(331)          $(562)       $37,316
   Comprehensive Income:
      Net income                                 --        --      2,346             --              --          2,346
      Change in unrealized net losses on
         securities available for sale,
         net of tax                                                                (330)                          (330)
                                                                                                               -------
         Total comprehensive income                                                                              2,016
                                                                                                               -------
   Cash dividends declared on common stock,
      $4.00 per share                            --        --       (788)            --              --           (788)
                                               ----      ----    -------          -----           -----        -------
Balance, September 30, 2005                    $200      $690    $38,877          $(661)          $(562)       $38,544
                                               ====      ====    =======          =====           =====        =======
</TABLE>

<TABLE>
<CAPTION>
                                                                                Accumulated                     Total
                                              Common   Paid-In   Retained          Other         Treasury   Stockholders'
                                               Stock   Capital   Earnings   Comprehensive Loss     Stock        Equity
                                              ------   -------   --------   ------------------   --------   -------------
Dollars in thousands, except per share data
<S>                                           <C>      <C>       <C>        <C>                  <C>        <C>
Balance, December 31, 2005                     $200      $753    $39,603          $(844)          $(418)       $39,294
   Comprehensive Income:
      Net income                                 --        --      2,095             --              --          2,095
      Change in unrealized net losses on
         securities available for sale,
         net of tax                                                                 (82)                           (82)
                                                                                                               -------
         Total comprehensive income                                                                              2,013
                                                                                                               -------
   Cash dividends declared on common stock,
      $4.00  per share                           --        --       (792)            --              --           (792)
                                               ----      ----    -------          -----           -----        -------
Balance, September 30, 2006                    $200      $753    $40,906          $(926)          $(418)       $40,515
                                               ====      ====    =======          =====           =====        =======
</TABLE>

See Notes to Consolidated Financial Statements.


                                       5
<PAGE>

                        NEFFS BANCORP, INC AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               2006      2005
                                                             -------   -------
Dollars in thousands
<S>                                                          <C>       <C>
Nine Months Ended September 30,
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                $ 2,095   $ 2,346
   Adjustments to reconcile net income to net cash
      provided by operating activities:
      Depreciation                                               151       118
      Net amortization of securities                             106       179
      Change in assets and liabilities:
         Increase in:
            Accrued interest receivable                         (250)     (176)
            Income taxes receivable                               --       (92)
            Other assets                                        (103)      (67)
         Increase in:
            Other liabilities                                    143        28
                                                             -------   -------
         Net cash provided by operating activities             2,142     2,336
                                                             -------   -------
CASH FLOWS FROM INVESTING ACTIVITIES
   Decrease in interest bearing deposits with banks               29        10
   Increase in interest bearing time deposits                     --      (100)
   Decrease in federal funds sold                              2,221       856
   Purchase of securities available for sale                  (1,888)   (7,945)
   Proceeds from maturities/calls and principal repayments
      of securities available for sale                         5,258     7,253
   Purchase of securities held to maturity                    (5,728)   (1,642)
   Proceeds from maturities/calls of securities held to
      maturity                                                 3,301     2,832
   Net increase in loans                                      (3,978)   (4,056)
   Purchases of premises and equipment                          (165)     (360)
                                                             -------   -------
      Net cash used in investing activities                     (950)   (3,152)
                                                             -------   -------
CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase (decrease) in deposits                        (1,484)      286
   Dividends paid                                               (396)     (394)
                                                             -------   -------
      Net cash used by financing activities                   (1,880)     (108)
                                                             -------   -------
      Decrease in cash and cash equivalents                     (688)     (924)
Cash and cash equivalents:
   Beginning                                                   2,958     4,076
                                                             -------   -------
   Ending                                                    $ 2,270   $ 3,152
                                                             =======   =======
Supplementary Cash Flows Information
   Interest Paid                                             $ 3,620   $ 3,211
                                                             =======   =======
   Income Taxes Paid                                         $   386   $   529
                                                             =======   =======
</TABLE>

See Notes to Consolidated Financial Statements.


                                        6

<PAGE>

                               NEFFS BANCORP, INC.
             NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2006
                                   (UNAUDITED)

NOTE 1. BASIS OF PRESENTATION

The consolidated financial statements include the accounts of Neffs Bancorp,
Inc. (the "Corporation") and its wholly owned subsidiary, The Neffs National
Bank (the "Bank"). All material intercompany accounts and transactions have been
eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles in the United States
of America for interim financial information. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included and
are of a normal, recurring nature. Operating results for the nine-month period
ended September 30, 2006, are not necessarily indicative of the results that may
be expected for the year ending December 3l, 2006. These statements should be
read in conjunction with notes to the financial statements contained in the 2005
Annual Report to Stockholders.

For further information, refer to the financial statements and footnotes thereto
included in the Neffs Bancorp, Inc. Annual Report for the year ended December
31, 2005.

NOTE 2. COMMITMENTS AND CONTINGENCIES

The Corporation is subject to certain routine legal proceedings and claims
arising in the ordinary course of business. It is management's opinion that the
ultimate resolution of these claims will not have a material adverse effect on
the Corporation's financial position or results of operations.

NOTE 3. COMPREHENSIVE INCOME

The components of other comprehensive income and related tax effects for the
nine months and three months ended September 30, 2006 and 2005 are as follows:

<TABLE>
<CAPTION>
                                                 Three Months    Nine Months
                                                    Ended           Ended
                                                September 30,   September 30,
                                                -------------   -------------
                                                 2006    2005    2006    2005
                                                -----   -----   -----   -----
Dollars in thousands
<S>                                             <C>     <C>     <C>     <C>
Unrealized holding gains (losses) on
   available for sale securities                $ 805   $(541)  $(124)  $(500)
Tax effect                                       (274)    184      42     170
                                                -----   -----   -----   -----
Other comprehensive income (loss), net of tax   $ 531   $(357)  $ (82)  $(330)
                                                =====   =====   =====   =====
</TABLE>


                                        7

<PAGE>

NOTE 4. EARNINGS PER SHARE

Earnings per share is based on the weighted average shares of common stock
outstanding during each year. The Corporation currently maintains a simple
capital structure, thus there are no dilutive effects on earnings per share.

NOTE 5. GUARANTEES

The Corporation does not issue any guarantees that would require liability
recognition or disclosure, other than its standby letters of credit. Standby
letters of credit written are conditional commitments issued by the Corporation
to guarantee the performance of a customer to a third party. Generally, all
letters of credit, when issued have expiration dates within one year. The credit
risk involved in issuing letters of credit is essentially the same as those that
are involved in extending loan facilities to customers. The Corporation,
generally, holds collateral and/or personal guarantees supporting these
commitments. The Corporation has $1,202,000 of standby letters of credit as of
September 30, 2006. Management believes that the proceeds obtained through a
liquidation of collateral and the enforcement of guarantees would be sufficient
to cover the potential amount of future payment required under the corresponding
guarantees. The current amount of the liability as of September 30, 2006 for
guarantees under standby letters of credit issued is not material.

NOTE 6. NEW ACCOUNTING STANDARDS

In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments". SFAS No. 155 amends FASB Statement No. 133 and FASB
Statement No. 140, and improves the financial reporting of certain hybrid
financial instruments by requiring more consistent accounting that eliminates
exemptions and provides a means to simplify the accounting for these
instruments. Specifically, SFAS No. 155 allows financial instruments that have
embedded derivatives to be accounted for as a whole (eliminating the need to
bifurcate the derivative from its host) if the holder elects to account for the
whole instrument on a fair value basis. SFAS No. 155 is effective for all
financial instruments acquired or issued after the beginning of an entity's
first fiscal year that begins after September 15, 2006. The Corporation is
required to adopt the provisions of SFAS No. 155, as applicable, beginning in
fiscal year 2007. Management does not believe the adoption of SFAS No. 155 will
have any impact on the Corporation's financial position and results of
operations.

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets - An Amendment of FASB Statement No. 140" ("SFAS 156"). SFAS
156 requires that all separately recognized servicing assets and servicing
liabilities be initially measured at fair value, if practicable. The statement
permits, but does not require, the subsequent measurement of servicing assets
and servicing liabilities at fair value. SFAS 156 is effective as of the
beginning of an entity's first fiscal year that begins after September 15, 2006,
which for the Corporation will be as of the beginning of fiscal 2007. The
Corporation does not believe that the adoption of SFAS 156 will have any effect
on its financial statements.


                                        8

<PAGE>

In July 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes-an
interpretation of FASB Statement No. 109" (FIN 48)), which clarifies the
accounting for uncertainty in tax positions. This Interpretation requires that
companies recognize in their financial statements the impact of a tax position,
if that position is more likely that not of being sustained on audit, based on
the technical merits of the position. The provisions of FIN 48 are effective for
fiscal years beginning after December 15, 2006, with the cumulative effect of
the change in accounting principle recorded as an adjustment to opening retained
earnings. We do not expect that there will be any impact of adopting FIN 48 on
our financial statements.

In September 2006, the FASB Statement No. 157, Fair Value Measurements, which
defines fair value, establishes a framework for measuring fair value under GAAP,
and expands disclosures about fair value measurements. The new guidance is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and for interim periods within those fiscal years. We are
currently evaluating the potential impact, if any, of the adoption of FASB
Statement No. 157 on our consolidated financial position, results of operations
and cash flows.

On September 13, 2006, the Securities and Exchange Commission "SEC" issued Staff
Accounting Bulleting No. 108 ("SAB 108"). SAB 108 provides interpretive guidance
on how the effects of the carryover or reversal of prior year misstatements
should be considered in quantifying a potential current year misstatement. Prior
to SAB 108, companies might evaluate the materiality of financial-statement
misstatements using either the income statement or balance sheet approach, with
the income statement approach focusing on new misstatements added in the current
year, and the balance sheet approach focusing on the cumulative amount of
misstatement present in a company's balance sheet. Misstatements that would be
material under one approach could be viewed as immaterial under another
approach, and not be corrected. SAB 108 now requires that companies view
financial statement misstatements as material if they are material according to
either the income statement or balance sheet approach. The Corporation has
analyzed SAB 108 and determined that upon adoption it will have no impact on the
reported results of operations or financial condition.

In September 2006, the FASB issued FASB Staff Position AUG AIR-1, "Accounting
for Planned Major Maintenance Activities" which is effective for fiscal years
beginning after December 15, 2006. This position statement eliminates the
accrue-in-advance method of accounting for planned major maintenance activities.
We do not expect this pronouncement to have a significant impact on the
determination or reporting of our financial results.

ITEM 2.

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

Management's Discussion and Analysis of Financial Condition and Results of
Operations analyzes the major elements of the Corporation's balance sheets and
statements of income. This section should be read in conjunction with the
Corporation's financial statements and accompanying notes.


                                        9

<PAGE>

Management of the Corporation has made forward-looking statements in this Form
10-Q. These forward-looking statements may be subject to risks and
uncertainties. Forward-looking statements include the information concerning
possible or assumed future results of operations of the Corporation and its
subsidiary. When words such as "believes," "expects," "anticipates" or similar
expressions occur in this Form 10-Q, management is making forward-looking
statements.

Readers should note that many factors, some of which are discussed elsewhere in
this report and in the documents that management incorporates by reference,
could affect the future financial results of the Corporation and its subsidiary,
both individually and collectively, and could cause those results to differ
materially from those expressed in the forward-looking statements contained or
incorporated by reference in this Form 10-Q. These factors include the
following:

*    operating, legal and regulatory risks;

*    economic, political and competitive forces affecting banking, securities,
     asset management and credit services businesses; and

*    the risk that management's analyses of these risks and forces could be
     incorrect and/or that the strategies developed to address them could be
     unsuccessful.

The Corporation undertakes no obligation to publicly revise or update these
forward-looking statements to reflect events or circumstances that arise after
the date of this report. Readers should carefully review the risk factors
described in other documents that the Corporation files periodically with the
Securities and Exchange Commission.

CRITICAL ACCOUNTING POLICIES

Disclosure of the Corporation's significant accounting policies is included in
Note 1 to the financial statements of the Corporation's Annual Report on Form
10-K for the year ended December 31, 2005. Some of these policies are
particularly sensitive, requiring significant judgments, estimates and
assumptions to be made by management, most particularly in connection with
determining the provision for loan losses and the appropriate level of the
allowance for loan losses. Additional information is contained in this Form 10-Q
on page 12 under the paragraph titled "Provision for Loan Losses" and on page 15
under the paragraphs titled "Loan and Asset Quality and Allowance for Loan
Losses".

OVERVIEW

Net income for the third quarter of 2006 decreased 5.5% to $698,000 as compared
to $739,000 for the third quarter of 2005 due mainly to increased operating
expenses. Net income per common share decreased 6.1% to $3.52 per share from
$3.75 per share in the third quarter a year ago. At September 30, 2006, the
Corporation had total assets of $214 million, total loans of $86 million, and
total deposits of $172 million.


                                       10
<PAGE>

RESULTS OF OPERATIONS

AVERAGE BALANCES AND AVERAGE INTEREST RATES

Interest earning assets averaged $208.1 million for the third quarter of 2006 as
compared to $206.0 million for the same period in 2005. The yield on earning
assets for the third quarter of 2006 was 5.4%, compared to 5.1% for the same
period in 2005. The growth in interest earning assets was the result of a $7.5
million increase in average total loans which was partially offset by a decrease
of $3.5 million in investments.

Average interest-bearing liabilities decreased from $156.9 million during the
third quarter of 2005 to $155.4 million during the third quarter of 2006.
Decline in average interest bearing liabilities was the result of increases in
time deposits of $9.0 million; offset by a $10.3 million decrease in savings
deposits and an $850,000 increase in interest bearing demand deposits. The net
decline in average interest bearing liabilities was mainly due to the
competitive interest rate environment.

The average rate paid on interest-bearing liabilities was 3.4% for the third
quarter of 2006 and 3.0% for the third quarter of 2005, an increase of 39 basis
points. This was the result of the increasing interest rate environment that was
experienced during much of 2005 and 2006.

NET INTEREST INCOME AND NET INTEREST MARGIN

Net interest income is the difference between interest income earned on assets
and interest expense incurred on liabilities used to fund those assets. Interest
earning assets primarily include loans and securities and Federal Funds Sold.
Liabilities used to fund such assets include deposits. Changes in net interest
income and margin result from the interaction between the volume and composition
of earning assets, related yields and associated funding costs.

Interest income increased by $142,000, or 5.4%, over the third quarter of 2005.
The increase in interest income is attributed to the slight rise in interest
rates on the Bank's loan and securities portfolios and the increase in average
earning assets. Interest expense for the third quarter of 2006 increased by
$137,000, or 11.7%, compared to the third quarter of 2005. The increase was due
to the general increase in rates being offered and paid on interest bearing
deposits, mainly certificates of deposit.

Net interest income increased by $5,000, or 0.3%, over the third quarter of
2005. As marketplace rates continued to increase, the Corporation increased
rates being offered on interest bearing deposit accounts. Interest-earning asset
yields have not increased to the same extent, however, interest-earning assets
have increased over the prior year to provide the increase in net interest
income.

For the nine months ended September 30, 2006, interest income increased by
$362,000 or 4.6%, over the same period in 2005. Interest earning assets for the
first nine months of 2006 averaged $206.7 million versus $204.3 million for the
comparable period in 2005. The yield on those assets for 2006 was 5.3%, which
remained constant over the same period in 2005.


                                       11

<PAGE>

Interest expense for the first nine months of 2006 increased by $438,000 or
13.2%. Average interest-bearing liabilities decreased from $157.0 million for
the first nine months of 2005 to $155.3 million for the first nine months of
2006. The average rate paid for these nine months was 3.2%, an increase of 40
basis points from 2.8% for the comparable period in the prior year.

Net interest income for the first nine months of 2006 decreased by $76,000, or
1.7%, over the same period in 2005, due to increased rates being offered on
interest bearing deposit accounts. Interest-earning asset yields have not
increased to the same extent. The company's net interest margin remained
constant at 2.9% for the first nine months of 2006 and 2005.

Net interest margin represents the difference between interest income, including
net loan fees earned, and interest expense, reflected as a percentage of average
earning assets. Net interest margin for the third quarter of 2006 was 2.8%,
which is a slight decrease from 2.9% for the third quarter of 2005. During the
third quarter of 2006, yields on earning assets increased to 5.4% compared to
5.1% for the third quarter of 2005. Rates paid on interest bearing deposits
increased to 3.4%, as compared to 3.0%, for the third quarter of 2005.

PROVISION FOR LOAN LOSSES

Based on historical and projected loss trends, no provision for loan losses was
made for the first nine months of 2006 or 2005. Management has concluded that
the Allowance for Loan Losses had an adequate balance to justify no provision
being made for the first nine months of 2006.

NON-INTEREST INCOME

Non-interest income for the third quarter of 2006 decreased by $9,000, or 12.5%,
over the same period in 2005. The decrease was due mainly to a decrease in
service charges on deposit accounts and an adjustment for creditor insurance fee
income. Non-interest income for the nine months ended September 30, 2006
decreased by $18,000 or 8.7%. The decrease was mainly attributable to the
adjustment for creditor insurance fee income and was offset in part by an
increase in rental income.

NON-INTEREST EXPENSE

For the third quarter of 2006, non-interest expenses increased by $50,000, or
7.4%, to $730,000, compared to $680,000 over the same period in 2005. The
majority of this increase is related to increases in salary/employee benefits
and maintenance/depreciation expenses related to data processing and Internet
related hardware and software purchases.

Salary and employee benefits represent the largest component, 44.2%, of
non-interest expenses, increased by $25,000, or 8.4%, for the third quarter of
2006. This increase is the result of increases in health insurance costs, normal
salary increases and the hiring of additional staff.


                                       12

<PAGE>

Other expenses increased by $18,000 or 10.8% in the third quarter of 2006 as
compared to the third quarter of 2005. This increase is due to increased accrual
for professional services related to SEC filing requirements.

For the first nine months of 2006, non-interest expense increased by $263,000 or
13.7% over the same period in 2005.

Salary expense and employee benefits, which represent the largest component,
46.7% of non-interest expenses, had an increase of $96,000 or 10.4% over the
first nine months of 2005. This increase was due to normal salary adjustments,
hiring of additional staff, and increases in health insurance premiums.

Occupancy expense and furniture and equipment expense for the first nine months
of 2006 increased by $52,000 or 17.6% as compared to the same period of 2005.
This increase was mostly the result of maintenance/depreciation expenses related
to data processing and Internet related hardware and software purchases.

Shares tax expense increased by $64,000, or 28.8%, from $222,000 to $286,000 for
the first nine months of 2005 as compared to the same period of 2006. This
increase was due mainly to the unavailability of tax credits for 2006 for
qualified contributions to an educational foundation. Such tax credits were
available in 2005.

Other expenses increased by $51,000 or 10.7% for the first nine months ended
September 30, 2006 over the first nine months of 2005. This increase in other
expenses is due to an increased accrual for professional services of $60,000
related to SEC filing requirements, increased expenses for EDP consulting and
conferences, net of a $50,000 decrease in qualified contribution to an
educational foundation.

One key measure used to monitor progress in controlling overhead expenses is the
ratio of net non-interest expense to average assets. Net non-interest expenses
equal noninterest expenses (excluding foreclosed real estate expenses) less
non-interest income (exclusive of nonrecurring gains), divided by average
assets. This annualized ratio was 1.25% for the three months ended September 30,
2006, slightly higher than 1.14% for the three months ended September 30, 2005.
It was 1.25% for the first nine months of 2006 compared to 1.08% for the
comparable period in 2005.

Another productivity measure is the operating efficiency ratio. This ratio
expresses the relationship of non-interest expenses (excluding foreclosed real
estate expenses) to net interest income plus noninterest income (excluding
nonrecurring gains). For the quarter ended September 30, 2006, the operating
efficiency ratio was 47.3% compared to 44.0% for the similar period in 2005. For
the nine months ended September 30, 2006, this ratio was 47.2% compared to 40.7%
for the nine months ended September 30, 2005. The increases were due in part to
increase in salary and employee benefits, occupancy and equipment expenses and
increased professional services.


                                       13

<PAGE>

PROVISION FOR FEDERAL INCOME TAXES

The provision for federal income taxes was $114,000 for the third quarter of
2006, as compared to $127,000 for the same period in 2005. For nine months ended
September 30, the provision was $338,000 and $444,000 for 2006 and 2005,
respectively. The effective tax rate, which is the ratio of income tax expense
to income before income taxes, was 14.0% for the third quarter of 2006 and 14.7%
for the third quarter of 2005. The effective tax rate for the first nine months
of 2006 and 2005 were 13.9% and 15.9%, respectively. The effective tax rate is
lower than the statutory rate of 34% due to tax-exempt interest income on
securities and loans and is lower than same period for the previous year due to
tax-exempt investment income comprising a higher percentage of income before
income taxes.

NET INCOME

Net income for the third quarter of 2006 was $698,000, a decrease of $41,000 or
5.5% over the $739,000 recorded in the third quarter of 2005. This decrease was
primarily the result of increases in non-interest expenses.

Net income for the first nine months of 2006 decreased by $251,000, or 10.7%, as
compared to September 30, 2005. This was mainly due to decreased net interest
income due to the increasing rate environment on deposit accounts and increases
in other expenses.

RETURN ON AVERAGE ASSETS

Return on average assets (ROA) measures the Corporation's net income in relation
to its total average assets. The Corporation's annualized ROA for the third
quarter of 2006 was 1.3% compared to 1.4% for the third quarter of 2005. The ROA
for the first nine months of 2006 declined to 1.3% from 1.5% during the first
nine months of 2005.

RETURN ON AVERAGE EQUITY

Return on average equity (ROE) indicates how effectively the Corporation can
generate net income on the capital invested by its stockholders. ROE is
calculated by dividing net income by average stockholders' equity. For purposes
of calculating ROE, average stockholders' equity includes the effect of
unrealized gains or losses, net of income taxes, on securities available for
sale. The annualized ROE for the third quarter of 2006 was 7.0% as compared to
7.7% for the third quarter of 2005. The ROE for the first nine months of 2006
was 7.1% as compared to 8.3% for the same period of 2005.

FINANCIAL CONDITION

SECURITIES

During the first nine months of 2006 securities available for sale decreased by
$3.6 million from $42.0 million as of December 31, 2005 to $38.4 million as of
September 30, 2006. This decrease was due mainly to the payments received on
mortgage backed securities that were not reinvested in securities available for
sale. Securities held to maturity increased by $2.4 million from $78.9 million
to $81.4 million. This increase was due mainly to the purchase of higher
yielding government agency securities.


                                       14

<PAGE>

Federal funds sold decreased by $2.2 million from $2.3 million to $0.1 million
during the first nine months of 2006 from December 31, 2005 as such funds were
used to fund loan growth. Total securities and federal funds sold aggregated
$119.9 million at September 30, 2006, and represented 56.1% of total assets.

The average yield on the combined securities portfolio for the first nine months
of 2006 was 5.3% as compared to 4.3% for the similar period of 2005. For the
third quarter of 2006, the average yield on the combined securities portfolio
was 5.4% as compared to 4.3% for the same period in 2005. The weighted average
life of the combined securities portfolio was approximately 10 years at
September 30, 2006.

NET LOANS RECEIVABLE

During the first nine months of 2006 net loans receivable increased by $4.0
million, or 4.9%, from $82.4 million at December 31, 2005, to $86.4 million on
September 30, 2006. This increase consisted of a $2.2 million increase in
installment loans, a $1.2 million increase in Single Payment loans, and a $1.2
million increase in Real Estate mortgages. These increases were offset by a
$726,000 decrease in Line of Credit loans. Loans receivable represented 50.2% of
total deposits and 40.4% of total assets at September 30, 2006, as compared to
47.5% and 38.6%, respectively, at December 31, 2005.

LOAN AND ASSET QUALITY AND ALLOWANCE FOR LOAN LOSSES

There were no nonaccrual loans as of September 30, 2006 and December 31, 2005.
There was no foreclosed real estate held by the Corporation as of September 30,
2006 and December 31, 2005.

                         Nonperforming Loans and Assets

<TABLE>
<CAPTION>
                                       September 30,   December 31,
(Dollars in Thousands)                      2006           2005
                                       -------------   ------------
<S>                                    <C>             <C>
Nonaccrual Loans:
Commercial                                 $  --           $  --
Real Estate:                                  --              --
   Construction                               --              --
   Mortgage                                   --              --
                                           -----           -----
      Total nonaccrual                        --              --
Restructured loans                            --              --
Loans past due 90 days or more                 7              67
                                           -----           -----
      Total nonperforming loans                7              67
Foreclosed real estate                        --              --
                                           -----           -----
      Total nonperforming assets               7              67
                                           =====           =====
Nonperforming loans to total loans          0.01%           0.08%
Nonperforming assets to total assets        0.00%           0.03%
</TABLE>


                                       15

<PAGE>

The following table sets forth the Corporation's provision and allowance for
loan losses.

                            Allowance for Loan Losses

<TABLE>
<CAPTION>
                                                  9 Months        9 Months
                                                   Ending          Ending
                                               September 30,   September 30,
                                                    2006            2005
                                               -------------   -------------
(Dollars in Thousands)
<S>                                            <C>             <C>
Balance at beginning of period                     $ 657           $ 662
Provisions charged to operating expenses              --              --
Recoveries of loans previously charged-off:
   Commercial                                         --              --
   Consumer                                            2              --
   Real estate                                        --              --
                                                   -----           -----
Total Recoveries                                       2              --
Loans Charged-off:
   Commercial                                         --              --
   Consumer                                           (1)             (3)
   Real Estate                                        --              --
                                                   -----           -----
Total Charged-off                                     (1)             (3)
                                                   -----           -----
Net (Charge-off) recoveries                            1              (3)
                                                   -----           -----
Balance at end of period                           $ 658           $ 659
                                                   =====           =====
Net Charge-offs as a percentage of
   average loans outstanding                        0.00%           0.00%
Allowance for loan losses as a percentage of
   period end loans                                 0.76%           0.81%
</TABLE>

DEPOSITS

Total deposits at September 30, 2006, were $171.8 million, down $1.5 million, or
..9%, over total deposits of $173.3 million at December 3l, 2005. The average
balances for the first nine months of 2006 and 2005 are presented in the
following table:

<TABLE>
<CAPTION>
                               Nine Months Ended September 30,
                           ---------------------------------------
                                  2006                 2005
                           ------------------   ------------------
                            Average   Average    Average   Average
                            Balance     Rate     Balance     Rate
                           --------   -------   --------   -------
(Dollars in thousands)
<S>                        <C>        <C>       <C>        <C>
Demand Deposits:
   Noninterest-bearing     $ 17,432             $ 15,378
   Interest-bearing           8,028    1.60%       8,465     .97%
Savings                      51,841    1.68%      63,500    1.61%
Time deposits:
   Less than $100,000        63,936    4.08%      57,294    3.73%
   Greater than $100,000     30,798    4.47%      27,574    4.23%
                           --------             --------
Total Deposits             $172,035             $172,211
                           ========             ========
</TABLE>


                                       16
<PAGE>

INTEREST RATE SENSITIVITY

The management of interest rate sensitivity seeks to avoid fluctuating net
interest margins and to provide consistent net interest income through periods
of changing interest rates.

The Corporation's risk of loss arising from adverse changes in the fair value of
financial instruments, or market risk, is composed primarily of interest rate
risk. The primary objective of the Corporation's asset/liability management
activities is to maximize net interest income while maintaining acceptable
levels of interest rate risk. The Bank's Asset/Liability Committee (ALCO) is
responsible for establishing policies to limit exposure to interest rate risk,
and to ensure procedures are established to monitor compliance with those
policies. The Corporation's Board of Directors approves the guidelines
established by ALCO.

An interest rate sensitive asset or liability is one that, within a defined
period, either matures or experiences an interest rate change in line with
general market interest rates. Historically, the most common method of
estimating interest rate risk was to measure the maturity and repricing
relationships between interest-earning assets and interest-bearing liabilities
at specific points in time (GAP), typically one year. Under this method, a
company is considered liability sensitive when the amount of its
interest-bearing liabilities exceeds the amount of its interest-earning assets
within the one-year horizon. However, assets and liabilities with similar
repricing characteristics may not reprice at the same time or to the same
degree. As a result, the Corporation's GAP does not necessarily predict the
impact of changes in general levels of interest rates on net interest income.

Management believes the simulation of net interest income in different interest
rate environments provides a more meaningful measure of interest rate risk.
Income simulation analysis captures not only the potential of all assets and
liabilities to mature or reprice, but also the probability that they will do so.
Income simulation also attends to the relative interest rate sensitivities of
these items, and projects their behavior over an extended period of time.
Finally, income simulation permits management to assess the probable effects on
the balance sheet not only of changes in interest rates, but also of proposed
strategies for responding to them.

The Corporation's income simulation model analyzes interest rate sensitivity by
projecting net interest income over the next 12 months in a flat rate scenario
versus net income in alternative interest rate scenarios. Management continually
reviews and refines its interest rate risk management process in response to the
changing economic climate. Currently, the Corporation's model projects a
proportionate 200 basis point change during the next year.

The Corporation's ALCO policy has established that income sensitivity will be
considered acceptable if overall net income volatility in a plus or minus 200
basis point scenario is within 5% of net interest income in a flat rate
scenario. At September 30, 2006, the Corporation's simulation model indicates
net interest income would decrease 2.1% within the first year if rates increased
as described above. The model projects that net interest income would decrease
by 1.1% in the first year if rates decreased as described above. All of these
forecasts are within an acceptable level of interest rate risk per the policies
established by ALCO.


                                       17

<PAGE>

LIQUIDITY

Liquidity management involves the ability to generate cash or otherwise obtain
funds at reasonable rates to support asset growth and reduce assets to meet
deposit withdrawals, to maintain reserve requirements, and to otherwise operate
the Corporation on an ongoing basis. Liquidity needs are generally met by
converting assets into cash or obtaining sources of additional funds, mainly
deposits. Primarily cash and federal funds sold, and the cash flow from the
amortizing securities and loan portfolios provide liquidity sources from asset
categories. The primary source of liquidity from liability categories is the
generation of additional core deposit balances.

Additionally, the Corporation has established secondary sources of liquidity
consisting of federal funds lines of credit and borrowing capacity at the
Federal Home Loan Bank, which can be drawn upon if needed. In view of the
primary and secondary sources as previously mentioned, management believes that
the Corporation is capable of meeting its anticipated liquidity needs.

OFF-BALANCE SHEET ARRANGEMENTS

The Corporation's financial statements do not reflect off-balance sheet
arrangements that are made in the normal course of business. Those off-balance
sheet arrangements consist of unfunded loans and letters of credit made under
the same standards as on-balance sheet instruments. These commitments, at
September 30, 2006 totaled $6.63 million. This consisted of $387,000 in
tax-exempt loans, commercial real estate, construction, and land development
loans, $3.825 million in home equity lines of credit, $1.202 million in standby
letters of credit, and the remainder in other unused commitments. Because these
instruments have fixed maturity dates, and because many of them will expire
without being drawn upon, they do not generally present any significant
liquidity risk to the Corporation.

Management believes that any amounts actually drawn upon can be funded in the
normal course of operations. The Corporation has no investment in or financial
relationship with any unconsolidated entities that are reasonably likely to have
a material effect on liquidity or the availability of capital resources.

CAPITAL ADEQUACY

At September 30, 2006, stockholders' equity totaled $40.5 million, up 3.1% over
stockholders' equity of $39.3 million at December 31, 2005. The increase in
stockholders' equity for the nine months ended September 30, 2005 included an
$82,000 unrealized loss, net of income taxes, on securities available for sale.
Excluding this unrealized loss, gross stockholders' equity changed by an
increase of $1.3 million in retained net income.

Risk-based capital provides the basis for which all banks are evaluated in terms
of capital adequacy. The risk-based capital standards require all banks to have
Tier 1 capital of at least 4% and total capital, including Tier 1 capital, of at
least 8% of risk-adjusted assets. Tier 1 capital includes common stockholders'
equity together with related surpluses and retained earnings. Total capital may
be comprised of total Tier 1 capital plus qualifying debt instruments, and the
allowance for loan losses.


                                       18

<PAGE>

The following table provides a comparison of the Bank's risk-based capital
ratios and leverage ratios to the minimum regulatory requirements for the
periods indicated:

<TABLE>
<CAPTION>
                                                            For Capital
                             September 30,   December 31,     Adequacy
                                  2006           2005         Purposes
                             -------------   ------------   -----------
<S>                          <C>             <C>            <C>
Risk-Based Capital Ratios:
   Tier 1 Capital                40.34%         40.60%         4.00%
   Total Capital                 40.99%         41.20%         8.00%
   Leveraged Capital             19.22%         18.70%         4.00%
</TABLE>

The Corporation's capital ratios are not materially different from that of the
Bank. At September 30 2006 the capital levels of the Bank met the definition of
a "well capitalized" institution.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Corporation's exposure to market risk has not changed significantly since
December 31, 2005. The market risk principally includes interest rate risk,
which is discussed in the Management's Discussion and Analysis above.

ITEM 4.

CONTROLS AND PROCEDURES

The Corporation maintains controls and procedures designed to ensure that
information required to be disclosed in the reports that the Corporation files
or submits under the Securities and Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the SEC. Based upon their evaluation of those controls and procedures as of
September 30, 2006, the chief executive officer and principal financial officer
of the Corporation concluded that the Corporation's disclosure controls and
procedures were adequate.

The Corporation made no changes in its internal controls or in other factors
that has materially affected, or is reasonably likely to materially affect these
controls during the quarter ended September 30, 2006, including any corrective
actions with regard to significant deficiencies and material weaknesses.


                                       19

<PAGE>

PART II.

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     In the opinion of the management of the Corporation, there are no
     proceedings pending to which the Corporation or its subsidiary are a party
     or to which their property is subject, which, if determined adversely to
     the Corporation or its subsidiary, would be material in relation to the
     Corporation's or its subsidiary's financial condition. There are no
     proceedings pending other than ordinary routine litigation incident to the
     business of the Corporation or its subsidiary. In addition, no material
     proceedings are pending or are known to be threatened or contemplated
     against the Corporation or its subsidiary by government authorities.

ITEM 1A. RISK FACTORS

     There are no material changes to the risk factors set forth in Part 1, Item
     1A, "Risk Factors", of the Corporation's Form 10-K for the year ended
     December 31, 2005. Please refer to that section for disclosures regarding
     the risks and uncertainties related to the Corporation's business.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     Not applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     Not applicable

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not applicable

ITEM 5. OTHER INFORMATION

     Not applicable

ITEM 6. EXHIBITS

     3(i) Amended and Restated Articles of Incorporation for Neffs Bancorp, Inc.
          (Incorporated by reference to Exhibit 3 (i) to the Form 10 filed with
          the Commission on April 27, 2001, as amended on June 29, 2001 and July
          20, 2001.)


                                       20

<PAGE>

     3(ii) Amended and Restated By-laws of Neffs Bancorp, Inc. (Incorporated by
          reference to Exhibit 99.1 to the Form 8K filed with the Commission on
          February 27, 2002.)

     31.1 Certification of Chief Executive Officer pursuant to Section 302 of
          the Sarbanes Oxley Act of 2002

     31.2 Certification of Principal Financial Officer pursuant to Section 302
          of the Sarbanes Oxley Act of 2002

     32.1 Certification of Chief Executive Officer pursuant to Section 1350 of
          the Sarbanes-Oxley Act of 2002.

     32.2 Certification of Principal Financial Officer pursuant to Section 1350
          of the Sarbanes-Oxley Act of 2002.


                                       21

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                        NEFFS BANCORP, INC.


Date: November 13, 2006                 /s/ John J. Remaley
                                        ----------------------------------------
                                        John J. Remaley, President


                                       22