**UNITED STATES
SECURITIES AND EXCHANGE COMMISSION**
Washington, D.C. 20549

**FORM 10-K**

|(Mark One)
|----------
|[X]       
|          
|          
|-OR-      
|[   ]     

Commission File Number: 0-51500

|**AMERICAN BANCORP OF NEW JERSEY, INC.**
(Exact Name of Registrant as Specified in its Charter)
|-----------------------------------------------------------------------------------------------

|**New Jersey**(State or Other Jurisdiction
of Incorporation or Organization)               |  | **55-0897507**(I.R.S. EmployerIdentification Number)
|------------------------------------------------------------------------------------------ |  | ----------------------------------------------------
|**365 Broad Street, Bloomfield, New Jersey 07003**(Address of Principal Executive Offices) |  | **07003**(Zip Code)                                 

Registrant's telephone number, including area code:  (973) 748-3600

Securities registered pursuant to Section 12(b) of the Exchange Act:

|Title of each class                    | Name of each exchange on which registered
|-------------------------------------- | -----------------------------------------
|                                       |                                          
|Common Stock, par value $.10 per share | The NASDAQ Stock Market LLC              

Securities registered pursuant to Section 12(g) of the Exchange 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  [X] No

Indicate by check mark if the registrant is required to file reports pursuant to Section 13 or Section
15(d) of the Act. [  ] Yes  [X] 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 the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. 	[X] Yes [  ] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [X]

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

|Large accelerated filer   [  ] | Accelerated filer   [X] | Non-accelerated filer [  ]
|------------------------------ | ----------------------- | --------------------------

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act
Rule 12b-2). [   ] Yes        [X] No

The aggregate market value of the voting and non-voting common equity held by nonaffiliates
of the registrant, computed by reference to the closing price of the registrant's common stock on the NASDAQ Stock Market on March 31, 2006, was $129,035,269.   The exclusion from such amount of the market value of the shares owned by any person shall not be deemed an admission by the registrant that such person is an affiliate of the registrant.

As of December 8, 2006, the registrant had outstanding 13,101,220 shares of Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE:

Parts II and IV of Form 10-K - Portions of the Annual Report to Stockholders for the year ended
September 30, 2006

Part III of Form 10-K - Portions of the proxy statement for the Annual Meeting of Stockholders for the
year ended September 30, 2006

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**PART I**

**Forward-Looking Statements**

American Bancorp of New Jersey, Inc. (the "Company" or "Registrant") may from time to
time make written or oral "forward looking statements," including statements contained in documents filed with or furnished to the
Securities and Exchange Commission (including this Annual Report on
Form 10-K and the exhibits thereto), in its reports to stockholders and in other communications by the
Company, which are made in good faith by the Company pursuant to the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995.

These forward-looking statements involve risks and uncertainties, such as statements of the
Company's plans, objectives, expectations, estimates and intentions that are subject to change based on
various important factors (some of which are beyond the Company's control).  The following factors,
among others, could cause the Company's financial performance to differ materially from the plans,
objectives, expectations, estimates and intentions expressed in such forward-looking statements: the
strength of the United States economy in general and the strength of the local economies in which the
Company conducts operations; the effects of, and changes in, monetary and fiscal policies and laws,
including interest  rate policies of the Board of Governors of the Federal Reserve System, inflation,
interest rates, market and  monetary fluctuations; the timely development of and acceptance of new
products and services of the Company and the perceived overall value of these products and services by
users, including the features,  pricing and quality as compared to competitors' products and services;
the impact of changes in financial services laws and regulations (including laws concerning taxes,
banking, securities and insurance); technological changes; acquisitions; changes in consumer spending
and saving habits; and the success of the Company at managing the risks resulting from these factors.

The Company cautions that the listed factors are not exclusive.  The Company does not
undertake to update any forward-looking statement, whether written or oral, that may be made from
time to time by or on behalf of the Company.

**Item 1.	 Business.**

**General**

On October 5, 2005, American Savings, MHC (the "MHC") completed its reorganization into
stock form and the Company succeeded to the business of ASB Holding Company, the MHC's former
stock holding company subsidiary.  Each outstanding share of common stock of the former mid-tier
stock holding company (other than shares held by the MHC which were canceled) was converted into
2.55102 shares of common stock of the Company.  As part of the second-step mutual to stock
conversion transaction, the Company sold a total of 9,918,750 shares to eligible depositors of American
Bank of New Jersey (the "Bank") in a subscription offering at $10.00 per share, including 793,500
shares purchased by the Bank's employee stock ownership plan with funds borrowed from the
Company.

The Company is a New Jersey corporation that was incorporated in May 2005 for the purpose
of being a holding company for the Bank, a federally-chartered stock savings bank.  The Company is a
unitary savings and loan holding company and conducts no significant business or operations of its
own.  References in this Annual Report on Form 10-K to the Company generally refer to the
consolidated entity, which includes the Bank, unless the context indicates otherwise.  References to
"we," "us," or "our" refer to the Bank or Company, or both, as the context indicates.

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The Bank was originally founded in 1919 as the American-Polish Building & Loan Association
of Bloomfield, New Jersey.  It became a state-chartered savings and loan association in 1948 and
converted to a federally chartered savings bank in 1995.  The Bank's deposits are insured by
the Federal Deposit Insurance Corporation up to the maximum amount permitted by law.
The Bank is regulated by the Office of Thrift Supervision and the Federal Deposit Insurance
Corporation.

Our core business is using retail deposits in order to fund a variety of mortgage and consumer
loan products.  We operate as a traditional community bank, offering retail banking services, one- to
four-family residential mortgage loans, home equity loans and lines of credit, multi-family and non-residential mortgage loans, business and consumer loans.  We also invest in mortgage-backed
securities, collateralized mortgage-backed obligations and other investment securities.  The principal
source of funds for our lending and investing activities is retail deposits, supplemented with Federal
Home Loan Bank borrowings. Our results of operations depend primarily on our net interest income.
Net interest income is the difference between the interest income we earn on our interest-earning assets
and the interest we pay on interest-bearing liabilities.  It is a function of the average balances of loans
and investments versus deposits and borrowed funds outstanding in any one period and the yields
earned on those loans and investments and the cost of those deposits and borrowed funds.  Our interest-earning assets consist primarily of residential mortgage loans, multi-family and nonresidential real
estate loans, construction loans, as well as residential mortgage-related securities and U.S. Agency
debentures.  Interest-bearing liabilities consist primarily of retail deposits and borrowings from the
Federal Home Loan Bank of New York.

**Market Area**

Our main office is located in Bloomfield, New Jersey, and our two branch offices are located in Cedar Grove and Verona, New Jersey.  Our lending is concentrated in the New Jersey and New York
metropolitan area, and our predominant sources of deposits are the communities in which our three
offices are located as well as the neighboring communities.  Our business of attracting deposits and
making loans is primarily conducted within our market area.  A downturn in the local economy could
reduce the amount of funds available for deposit and the ability of borrowers to repay their loans.  As a
result, our profitability could decrease.

**Competition**

We face substantial competition in our attraction of deposits, which are our primary source of funds for lending, and in our origination of loans.  Many of our competitors are significantly larger
institutions and have greater financial and other resources.  Our ability to compete successfully is
a significant factor affecting our profitability.

Our competition for deposits and loans historically has come from other insured financial
institutions such as local and regional commercial banks, savings institutions, and credit unions located
in our primary market area.  We also compete with mortgage banking companies for real estate loans,
and commercial banks and savings institutions for consumer loans; and we face competition for deposits
from investment products such as mutual funds, short-term money funds and corporate and government
securities.

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**Lending Activities**

***General.*****Historically, we have focused on the origination of one- to four-family loans.  Consequently, a majority of our total loan
portfolio comprises such loans as reflected in the table below.  Notwithstanding, our business plan calls for significantly greater emphasis on
commercial lending  which includes multifamily, nonresidential, construction and business loans.  Toward that end, the Bank continues to expand
its commercial lending division with the hiring of several additional commercial lending officers and administrative support staff.    While outstanding balances
in commercial loans still fall below those in the one- to four-family loan category, the table below shows the dollar and percentage of portfolio
growth trends in the commercial categories reflecting the Company's loan diversification strategy.

**Loan Portfolio Composition.**  The following table analyzes the composition of our loan portfolio by loan category at the dates indicated.

|                                                | At September 30       
|----------------------------------------------- | ----------------------
|2006                                            | 2005                  
|Amount                                          | Percent               
|                                                | (Dollars in thousands)
|Type of Loans:                                 
|One- to four-family
    real estate(1)          | $283,469              
|Multi-family and nonresidential
    real estate | 73,496                
|Land                                            | 534                   
|Construction                                    | 33,155                
|Consumer                                        | 720                   
|Home equity                                     | 19,122                
|Business                                        | 6,068                 
|                                               
|Total loans receivable                          | 416,564               
|Less:                                          
|Allowance for loan losses                       | (2,123)               
|Net deferred origination costs                  | 1,100                 
|Loans in process                                | (16,917)              
|Total loans receivable, net                     | $398,624              

_____________(1) 	Includes loans held for sale of $280,250 and $500,000 at September 30, 2005 and September 30, 2003, respectively.

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***Loan Maturity Schedule.***  The following table sets forth the maturity of our loan portfolio at September 30, 2006.  Demand loans, loans
having no stated maturity, and overdrafts are shown as due in one year or less.  This table shows contractual maturities and does not reflect
repricing or the effect of prepayments.  Actual repayment of loan balances will vary significantly from their contractual maturities due to
amortization and prepayments.

|                         | At September 30, 2006         
|------------------------ | ------------------------------
|                         | One- to Four-FamilyReal Estate
|                         | (Dollars in thousands)        
|**Amounts Due:**        
|Within 1 Year            | $          51                 
|After 1 year:           
|1 to 5 years             | 2,980                         
|5 to 10 years            | 28,159                        
|10 to 15 years           | 56,372                        
|Over 15 years            | 195,907                       
|Total due after one year | 283,418                       
|Total amount due         | $	283,469                     

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The following table sets forth the dollar amount of all loans at September 30, 2006 due after
September 30, 2007, which have fixed interest rates and which have floating or adjustable interest
rates.

|                                             | Fixed Rates    | Floating orAdjustable Rates | Total    
|-------------------------------------------- | -------------- | --------------------------- | ---------
|                                             | (In thousands)
|                                            
|One- to four-family real estate              | $	137,998      | $	145,420                   | $	283,418
|Multi-family and non-residential real estate | 26,629         | 44,149                      | 70,778   
|Land                                         | 534            | -                           | 534      
|Construction                                 | -              | 9,554                       | 9,554    
|Consumer                                     | 2              | -                           | 2        
|Home equity                                  | -              | 19,122                      | 19,122   
|Business                                     | 426            | 1,313                       | 1,739    
|Total                                        | $	165,589      | $	219,558                   | $	385,147

***One- to Four-Family Real Estate Loans.*****As noted above, our primary lending activity
historically has consisted of the origination of one- to four-family mortgage loans, most of which are
secured by property located in northern New Jersey.  We will generally originate  a one- to four-family
mortgage loan in an amount up to 80% of the lesser of the appraised value or the purchase price of a
mortgaged property.  For loans exceeding this guideline, private mortgage insurance on the loan is
typically required.

Our residential loans are generally originated with fixed or adjustable rates and have terms of
ten to thirty years.  We also offer mortgage loans with bi-weekly payments and recently began offering
mortgage loans with terms up to forty years as well as fully amortizing, adjustable rate loans with
interest only payments for the first three to five years.  Loans with interest only payments are generally considered to entail greater risk than loans whose terms require the payment of both interest and principal over the life of the loan.  Of particular concern are borrowers' abilities to meet their payment obligations when the interest rate on the loan resets for the first time while, simultaneously, schedule prinicipal amortization begins to be collect over the loan's remaining term to maturity.  These concurrent factors may result in significant increases to a borrower's monthly payment obligations.

The majority of our adjustable rate loan
products provide for an interest rate that is tied to the one-year Constant Maturity U.S. Treasury index
and have terms of up to thirty years with initial fixed rate periods of one, three, five, seven, or ten
years according to the terms of the loan.  We also offer an adjustable rate loan with a rate that adjusts
every three years to the three-year Constant Maturity U.S. Treasury index.

The fixed rate mortgage loans that we originate generally meet the secondary mortgage market
standards of the Federal National Mortgage Association ("FNMA").  For the purposes of interest rate
risk management, we have historically sold qualifying one- to four-family residential mortgages into the
secondary market on a servicing retained basis without recourse.  Toward that end, we have entered
into a master selling and servicing agreement with FNMA under which the Bank sold $5.8 million in
the year ended September 30, 2006, $2.4 million in the year ended September 30, 2005, and $4.8
million in the year ended September 30, 2004.  We have recently entered into a correspondent
relationship with Countrywide Home Loans through which we expect to sell one- to four-family
mortgage loans on a servicing released basis.  With these relationships in place, we expect to increase
the number of one- to four-family loans sold into the secondary market.

Substantially all of our residential mortgages include "due on sale" clauses, which are
provisions giving us the right to declare a loan immediately payable if the borrower sells or otherwise
transfers an interest in the property to a third party.  Property appraisals on real estate securing our
one- to four-family residential loans are made by state certified or licensed independent appraisers
approved by the Board of Directors.  Appraisals are performed in accordance with applicable
regulations and policies.  We require title insurance policies on all first mortgage real estate loans
originated. Homeowners, liability, fire and, if required, flood insurance policies are also required.

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***Multifamily and Nonresidential Real Estate Loans.***  We  originate and participate in commercial
loans on multi-family and non-residential real estate properties, including loans on retail/service
properties, small office buildings, strip malls and other income-producing properties.  We generally
require a 25% down payment or equity position for these mortgage loans.  Typically these loans are
made with amortization terms of up to twenty-five years.  The majority of these loans are on properties
located within the New Jersey and New York metropolitan area.

Commercial real estate  loans generally are considered to entail significantly greater risk than
that which is involved with one- to four-family real estate lending.  The repayment of these loans
typically is dependent on the real estate securing the loan as collateral and the successful operations of the property and
income stream of the borrower generated from the property. These risks can be significantly affected by economic conditions.  In
addition, commercial loans may carry larger balances to single borrowers or related groups of
borrowers than one- to four-family loans.  Furthermore, this type of real estate lending generally
requires substantially greater evaluation and oversight efforts compared to one-to-four family mortgage
lending.

***Construction Loans.*****  We originate and participate in construction loans throughout the New
Jersey and New York metropolitan area.  Our construction lending includes loans to individuals for
construction of a primary residence as well as loans to builders and developers for single family homes,
multi-family homes, small residential tract development, small condominium projects, as well as other
commercial real estate projects.   We have no formal limits as to the number of projects a builder may
have under construction or development, and make a case by case determination on loans to builders
and developers who have multiple projects under development.  In some cases, we convert a
construction loan to the permanent end mortgage loan upon completion of construction.

Construction lending is generally considered to involve a higher degree of credit risk than long-term permanent financing of residential properties.  If the estimate of construction cost proves to be
inaccurate, we may be compelled to advance additional funds to complete the construction with
repayment dependent, in part, on the success of the ultimate project rather than the ability of a
borrower or guarantor to repay the loan. If we are forced to foreclose on a project prior to completion,
there is no assurance that we will be able to recover all of the unpaid portion of the loan. In addition,
we may be required to fund additional amounts to complete a project and may have to hold the
property for an indeterminate period of time.

***Business Loans.*** We also originate business loans to a variety of professionals, sole
proprietorships and small businesses, primarily in our market area.  These loans are generally secured
by real estate.  We generally require the personal guarantee of the business owner.  Business
lending products include term loans and lines of credit.  Our business term loans generally have
terms from one to five years and are mostly fixed rate loans.  Our business lines of credit have
terms from one to three years and are mostly adjustable rate loans.

Unlike single-family residential mortgage loans, which generally are made on the basis of the
borrower's ability to make repayment from his or her employment and other income and which are
secured by real property whose value tends to be more easily ascertainable, business loans
typically are made on the basis of the borrower's ability to make repayment from the cash flow of the
borrower's business.  As a result, the availability of funds for the repayment of business
loans may be substantially dependent on the success of the business itself and the general economic
environment.  Business loans, therefore, have greater credit risk than residential mortgage
loans.  In addition, business loans may carry larger balances to single borrowers or related groups
of borrowers than one- to four-family loans.  In addition, business lending generally requires
substantially greater evaluation and oversight efforts compared to residential or non-residential real
estate lending.

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***Home Equity Loans.*** Our home equity loan portfolio includes home equity lines of credit and
second mortgage term loans.  Home equity lines of credit are prime-based loans that are adjusted
monthly.  Home equity loans are primarily originated in our market area and are generally made in
amounts of up to 80% of value on term loans and up to 80% of value on home equity lines of credit.
During 2001, we began offering home equity loans on investment properties in addition to loans on
primary residences.  Loans on investment properties are made in amounts of up to 65% of value on
term loans and up to 60% of value of home equity lines of credit.

Generally, our second mortgage loans have fixed rates for terms of up to fifteen years.  Second
mortgages and home equity lines of credit do not require title insurance but do require homeowner,
liability, fire and, if required, flood insurance policies.

***Consumer Loans.***Consumer loans consist of savings secured loans and unsecured consumer
loans. We will generally lend up to 90% of the account balance on a savings secured loan.  At
September 30, 2006, we had $74,000 of unsecured consumer loans.

Consumer loans generally have shorter terms and higher interest rates than residential loans.
The consumer loan market can be helpful in improving the spread between the average loan yield and
the cost of funds and at the same time improve the matching of rate sensitive assets and liabilities.

Unsecured consumer loans, and consumer loans secured by collateral other than savings
accounts, entail greater risks than residential mortgage loans.  Consumer loan repayment is dependent
on the borrower's continuing financial stability and is more likely to be adversely affected by job loss,
divorce, illness or personal bankruptcy.  Finally, the application of various federal laws, including
federal and state bankruptcy and insolvency laws, may limit the amount which can be recovered on
consumer loans in the event of a default.

Our underwriting standards for consumer loans include a determination of the applicant's credit
history and an assessment of the applicant's ability to meet existing obligations and payments on the
proposed loan.  The stability of the applicant's monthly income may be determined by verification of
gross monthly income from primary employment, and additionally from any verifiable secondary
income.

***Loans to One Borrower.***  Under federal law, savings institutions have, subject to certain
exemptions, lending limits to one borrower or a group of related borrowers in an amount equal to the
greater of $500,000 or 15% of the institution's unimpaired capital and surplus.  As of September 30,
2006, our loans to one borrower limit was approximately $12.7 million.

At September 30, 2006, our largest group of related borrowers had an aggregate balance,
including unfunded commitments, of approximately $8.0  million, representing 7 loans on single
purpose commercial real estate, mixed use properties, single family residential and a construction loan
for residential properties.

At the same date, our second largest group of related borrowers had an aggregate balance including total commitments of approximately $6.3 million, representing 2 loans
secured by a construction loan for a condominium project and a small unsecured line of credit.     Our
third largest group of related borrowers at that date had an aggregate balance including total
commitments of approximately $5.6 million, representing 4 loans on condominium units, 9 loans
secured by multi-family properties and 3 single family residential loans.    At September 30, 2006 , we
had 15  additional lending relationships exceeding $2.0 million, with outstanding balances at that date
ranging from $2.0 million to $5.6 million. All of these lending relationships were current and
performing in accordance with the terms of their loan agreements as of September 30, 2006.

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***Loan Originations, Purchases, Sales, Solicitation and Processing.***  Our loan growth arises
primarily from the retail origination of our own loans and retaining such loans in portfolio.  Our
sources of loan originations include repeat customers, referrals from realtors and other professionals,
such as attorneys, accountants and financial planners, as well as "walk-in" customers. Gross loan
originations totaled $153 million for the year ended September 30, 2006.  Net of principal repayments,
loan growth totaled approximately $57.3 million for the year ended September 30, 2006.

By contrast, our loan purchase activity has been limited in recent years.  During the year ended
September 30, 2004, we purchased $3.3 million of adjustable rate mortgage loans.  We did not
purchase any whole loans during the years ended September 30, 2006 and 2005.  During the years
ended September 30, 2006, 2005, and 2004, we sold loans totaling $5.8 million, $2.4 million, and $4.8
million, respectively.  Loan sales are part of our interest rate risk management strategy and may
increase in the future.   Historically, we have sold loans on a non-recourse, servicing retained basis.
At September 30, 2006, loans serviced for the benefit of others totaled $20.5 million.
Notwithstanding, we may sell loans servicing released in the future based on our correspondent
relationship with Countrywide Home Loans.

We occasionally purchase participations in loans originated through other lending institutions.
At September 30, 2006, we had participations with New Jersey thrift institutions that had outstanding
balances totaling $8.3 million.  An additional $1.0 million of unfunded commitments remain
outstanding related to those loans.  Additionally, we have $1.6 million of outstanding loan balances from the
Thrift Institutions Community Investment Corporation of New Jersey ("TICIC").  Our participations
through these entities are secured by one-to-four family properties as well as multi-family or other non-one- to-four family properties, such as assisted living facilities.  We may also sell participation interests
in multi-family, commercial and other real estate loans or construction loans.

***Loan Commitments.***  We provide written commitments to prospective borrowers on all one- to-
four-family and commercial loans.  The total amount of commitments to extend credit for these loans as
of September 30, 2006, was approximately $19.0 million, excluding commitments on unused lines of
credit of $23.5 million and undisbursed portions of construction loans totaling $16.9 million.

***Loan Approval Procedures and Authority.***  Our lending policies and loan approval limits are
recommended by senior management and approved by the Board of Directors.  Our loan origination
underwriter has loan authority to approve one-to four-family loans up to $417,000, the Federal National
Mortgage Association conforming loan limit.  Our Loan Origination Manager has loan authority to
approve one-to four-family loans up to $500,000 with Federal National Mortgage Association
automated underwriting approvals.  Our Loan Committee consists of Officers Kliminski, Kowal, Bzdek
and Bringuier.  Each of these officers has authority to approve one-to four-family loans up to
$750,000.  One-to four-family loans between $750,000 and $1,000,000 require two signatures; one
member must be from Loan Committee.     One-to four-family loans between $1,000,000 and
$1,750,000 require two signatures from Loan Committee.  One-to four-family loans greater than $1,750,000 require the
approval of the Board of Directors.

Loans other than one-to four-family loans up to $750,000 require one signature from Loan
Committee, which must be the President or Chief Lending Officer.   Loans between $750,000 and
$1,750,000 require two signatures from Loan Committee, one of which must be the President or Chief
Lending Officer.    Approval by the loan sub-committee of the Board is required for non one-to four-
family loans over $1,750,000.

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As with existing policies and limits, any such changes recommended by management, regarding
loan authority, will be subject to Board of Director approval.

**Asset Quality**

***Loan Delinquencies and Collection Procedures.***  The borrower is notified by both mail and
telephone when a loan is sixteen days past due.  If the delinquency continues, subsequent efforts are
made to contact the delinquent borrower and additional collection notices and letters are sent.  When a
loan is ninety days delinquent, it is referred to an attorney for repossession or foreclosure.  All
reasonable attempts are made to collect from borrowers prior to referral to an attorney for collection.
In certain instances, we may modify the loan or grant a limited moratorium on loan payments to enable
the borrower to reorganize his financial affairs, and we attempt to work with the borrower to establish
a repayment schedule to cure the delinquency.

As to mortgage loans, if a foreclosure action is taken and the loan is not reinstated, paid in full
or refinanced, the property is sold at judicial sale at which we may be the buyer if there are no
adequate offers to satisfy the debt.  Any property acquired as the result of foreclosure or by deed in
lieu of foreclosure is classified as real estate owned until it is sold or otherwise disposed of.  When real
estate owned is acquired, it is recorded at the lower of the unpaid principal balance of the related loan
or its fair market value less estimated selling costs.  The initial write-down of the property is charged to
the allowance for loan losses. Adjustments to the carrying value of the properties that result from
subsequent declines in value are charged to operations in the period in which the declines occur.  At
September 30, 2006, we held no real estate owned.

Loans are reviewed on a regular basis and are placed on non-accrual status when they are more
than ninety days delinquent.  Loans may be placed on a non-accrual status at any time if, in the opinion
of management, the collection of additional interest is doubtful.  Interest accrued and unpaid at the time
a loan is placed on non-accrual status is charged against interest income.  Subsequent payments are
either applied to the outstanding principal balance or recorded as interest income, depending on the
assessment of the ultimate collectibility of the loan.  At September 30, 2006, we had approximately
$2.1 million of loans that were held on a non-accrual basis.

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***Non-Performing Assets.***  The following table provides information regarding our non-performing loans and other non-performing assets as of the dates indicated.

|                                                      | At September 30,      
|----------------------------------------------------- | ----------------------
|                                                      | 2006                  
|                                                      | (Dollars in thousands)
|**Loans accounted for on a non-accrual basis:**      
|One- to four-family                                   | $	691                 
|Multi-family and non residential                      | 1,398                 
|Construction                                          | -                     
|Consumer                                              | -                     
|Home equity                                           | -                     
|Business                                              | -                     
|Total                                                 | 2,089                 
|Accruing loans contractually past due 90 days or more | -                     
|Total non-performing loans                            | 2,089                 
|Real estate owned                                     | -                     
|Other non-performing assets                           | -                     
|Total non-performing assets                           | $	2,089               
|Allowance for loan losses to non-performing loans     | 101.64%               
|Total non-performing loans to total loans             | 0.52%                 
|Total non-performing loans to total assets            | 0.41%                 
|Total non-performing assets to total assets           | 0.41%                 

During the year ended September 30, 2006, gross interest income of $108,000 would have
been recorded on loans accounted for on a non-accrual basis if those loans had been current, and
$55,000 of interest on such loans was included in income for the year ended September 30, 2006.

***Classified Assets.***  Management, in compliance with Office of Thrift Supervision ("OTS")
guidelines, has instituted an internal loan review program, whereby non-performing loans are classified
as substandard, doubtful or loss.  It is our policy to review the loan portfolio, in accordance with
regulatory classification procedures, on at least a quarterly basis.  When a loan is classified as
substandard or doubtful, management evaluates the loan for impairment.  When management classifies
a portion of a loan as loss, a reserve equal to 100% of the loss amount is allocated against the loan.

An asset is considered "substandard" if it is inadequately protected by the paying capacity and
net worth of the obligor or the collateral pledged, if any.  Substandard assets include those
characterized by the distinct possibility that the insured institution will sustain some loss if the
deficiencies are not corrected.  Assets classified as "doubtful" have all of the weaknesses inherent in
those classified substandard, with the added characteristic that the weaknesses present make collection
or liquidation in full highly questionable and improbable, on the basis of currently existing facts,
conditions, and values.  Assets, or portions thereof, classified as "loss" are considered uncollectible and
of so little value that their continuance as assets without the allocation of an impairment reserve is not
warranted.  Assets which do not currently expose the insured institution to a sufficient degree of risk to
warrant classification in one of the aforementioned categories but which have credit deficiencies or
potential weaknesses are required to be designated "special mention" by management.

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Management's classification of assets is reviewed by the Board on a regular basis and by the
regulatory agencies as part of their examination process.  The following table discloses our
classification of assets and designation of certain loans as special mention as of September 30, 2006.
At September 30, 2006, all of the classified assets and special mention designated assets were loans.

|                | At
September 30, 2006
|--------------- | ---------------------
|                | (In thousands)       
|               
|Special Mention | $       473          
|Substandard     | 1,698                
|Doubtful        | 172                  
|Loss            | -                    
|Total           | $	2,343              

At September 30, 2006, approximately $1.1 million of loans classified as "substandard" were
accounted for as non-performing loans.  At September 30, 2006, no loans classified as "special
mention" or "doubtful" were accounted for as non-performing loans.

***Allowance for Loan Losses.***  The allowance for loan losses is a valuation account that reflects
our estimation of the losses in our loan portfolio to the extent they are both probable and reasonable to
estimate. The allowance is maintained through provisions for loan losses that are charged to income in
the period they are established.  We charge losses on loans against the allowance for loan losses when
we believe the collection of loan principal is unlikely.  Recoveries on loans previously charged-off are
added back to the allowance.

Our methodology for calculating the allowance for lease and loan losses is based upon FAS 5
and FAS 114.  Under FAS 114, we identify and analyze certain loans for impairment.  If an
impairment is identified on a specific loan, a loss allocation is recorded in the amount of that
impairment.  Loan types subject to FAS 114 are, multi-family mortgage loans, non-residential
mortgage loans, construction loans and business loans.  We also conduct a separate review of all loans
on which the collectibility of principal may not be reasonably assured.  We evaluate all classified loans
individually and base our determination of a loss factor on the likelihood of collectibility of principal
including consideration of the value of the underlying collateral securing the loan.

Under our implementation of FAS 5, we segregate loans by loan category and evaluate
homogeneous loans as a group.  The loss characteristics of aggregated homogeneous loans are
examined using two sets of factors: (1) annual historical loss experience factors that consider the net
charge-off history of both the Bank and that of its regional peer group and (2) environmental factors.
Although there may be other factors that also warrant consideration, we consider the following
environmental factors:

> levels and trends of delinquencies and impaired loans;levels and trends of charge-offs and recoveries;trends in volume and terms of loans;

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> changes to lending policies, procedures and practices;experience, ability and depth of lending management and staff;national, regional and local economic trends and conditions;industry conditions; andchanges in credit concentration.

In recent years, our charge-offs have been low and, consequently, our estimation of the amount
of losses in the loan portfolio both probable and reasonable to estimate has been more reflective of
other factors.

Our allowance estimation methodology utilizes historical loss experience and environmental
factors such as the local and national economy, loan growth rate, trends in delinquencies and non-performing loans, experience of lending personnel, and other similar factors.  However, we have had
significant growth in recent years.  As a result of the significant loan growth, a portion of our loan
portfolio is considered "unseasoned," meaning that the loans were originated less than three years ago.
Generally, unseasoned loans demonstrate a greater risk of credit losses than their seasoned
counterparts.  Moreover, in many cases, these unseasoned loans are obligations of borrowers with
whom the Bank has had no prior payment experience.  In the absence of adequate historical loss
experience upon which the Bank can base its allowance calculations, the Bank includes peer group
information in its evaluation of the allowance.  The peer group information utilized by the Bank is that
of OTS regulated thrifts in the northeast region.  Management believes that the majority of thrifts in the
northeast region have similar loan portfolio composition.

This estimation is inherently subjective as it requires estimates and assumptions that are
susceptible to significant revisions as more information becomes available or as future events change.
Future additions to the allowance for loan losses may be necessary if economic and other conditions in
the future differ substantially from the current operating environment.  In addition, the OTS as an
integral part of its examination process, periodically reviews our loan and foreclosed real estate
portfolios and the related allowance for loan losses and valuation allowance for foreclosed real estate.
The OTS may require the allowance for loan losses or the valuation allowance for foreclosed real estate
to be increased based on its review of information available at the time of the examination, which
would negatively affect our earnings.

Based on the allowance for loan loss methodology discussed above, management expects
provisions for loan losses to increase as a result of the net growth in loans called for in the Company's
business plan.  Specifically, our business strategy calls for increased strategic emphasis in commercial
real estate and business lending.  The loss factors used in the Bank's loan loss calculations are generally
higher for such loans compared with those applied to one-to-four family mortgage loans.
Consequently, future net growth in commercial real estate and business loans may result in required
loss provisions that exceed those recorded in prior years when comparatively greater strategic emphasis
had been placed growing the 1-4 family mortgage loan portfolio.

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The following table sets forth information with respect to our allowance for loan losses for the
periods indicated:

|                                              | Year Ended September 30,
|--------------------------------------------- | ------------------------
|                                              | 2006                    
|                                              | (Dollars in thousands)  
|                                             
|Allowance balance at beginning of period      | $	1,658                 
|Provision for loan losses                     | 465                     
|Charge-offs:                                 
|One- to four-family real estate               | -                       
|Consumer                                      | -                       
|Total charge-offs                             | -                       
|Recoveries:                                  
|Consumer                                      | -                       
|Total recoveries                              | -                       
|Net (charge-offs) recoveries                  | -                       
|Allowance balance at end of period            | $    	2,123             
|Total loans outstanding at end of period      | $	416,564               
|Average loans outstanding during period       | $	369,916               
|Allowance as a % of total loans               | 0.53%                   
|Net loans charge-offs as a % of average loans | 0.00%                   

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***Allocation of Allowance for Loan Losses.***The following table sets forth the allocation of our allowance for loan losses by loan category
and the percent of loans in each category to total loans receivable, net, at the dates indicated.  The portion of the loan loss allowance allocated to
each loan category does not represent the total available for future losses which may occur within the loan category since the total loan loss
allowance is a valuation allocation applicable to the entire loan portfolio.

|                                                  | At September 30       
|------------------------------------------------- | ----------------------
|                                                  | 2006                  
|                                                  | Amount                
|                                                  | (Dollars in thousands)
|                                                 
|At end of period allocated to:                   
|One- to four-family real
     estate              | $	806                 
|Multi-family and non-residential
     real estate | 878                   
|Land                                              | 6                     
|Construction                                      | 174                   
|Consumer                                          | 5                     
|Home equity                                       | 95                    
|Business                                          | 115                   
|Unallocated                                       | 44                    
|Total allowance                                   | $2,123                

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**Securities Portfolio**

***General.***  Federally chartered savings banks have the authority to invest in various types of
liquid assets.  The investments authorized by the Bank's board-approved investment policy include U.S.
government and government agency obligations, mortgage-related securities of various U.S.
government agencies or government-sponsored enterprises and private corporate issuers (including
securities collateralized by mortgages), and mutual funds comprising such securities.  Authorized investments also include certificates of deposits of insured banks and savings institutions
and municipal securities. Our policy does not permit corporate non-residential mortgage related
securities.  Our investment securities portfolio at September 30, 2006 did not contain securities of any
issuer with an aggregate book value in excess of 10% of our equity, excluding those issued by the
United States Government or its agencies.

Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities," requires that securities be categorized as "held-to-maturity," "trading
securities" or "available-for-sale," based on management's intent as to the ultimate disposition of each
security.  Statement No. 115 allows debt securities to be classified as "held-to-maturity" and reported in
financial statements at amortized cost only if the reporting entity has the positive intent and ability to
hold these securities to maturity.  Securities that might be sold in response to changes in market interest
rates, changes in the security's prepayment risk, increases in loan demand, or other similar factors
cannot be classified as "held-to-maturity."

We do not currently use or maintain a trading account.  Securities not classified as "held-to-maturity" are classified as "available-for-sale."  These securities are reported at fair value, and
unrealized gains and losses on the securities are excluded from earnings and reported, net of deferred
taxes, as a separate component of equity.

All of our securities carry market risk insofar as changes in market rates of interest may cause
a decrease in their market value.  Investments in securities are made based on certain considerations,
which include the interest rate, tax considerations, yield, settlement date and maturity of the security,
our liquidity position, and anticipated cash needs and sources.  The effect that the proposed security
would have on our credit and interest rate risk and risk-based capital is also considered.  We purchase
securities to provide necessary liquidity for day-to-day operations, to aid in the management of interest
rate risk and when investable funds exceed loan demand.

Our investment policy, which is approved by the Board of Directors, is designed to foster
earnings and liquidity within prudent interest rate risk guidelines, while complementing our lending
activities.  Generally, our investment policy is to invest funds in various categories of securities and
maturities based upon our liquidity needs, asset/liability management policies, investment quality,
marketability and performance objectives.  The Asset/Liability Management Committee, comprised of
Joseph Kliminski, the Bank's Chief Executive Officer, Fred Kowal, the Bank's President and Chief
Operating Officer, Richard Bzdek, the Bank's Executive Vice President and Corporate Secretary, Eric
Heyer, the Bank's Senior Vice President and Chief Financial Officer, Catherine Bringuier, the Bank's
Senior Vice President and Chief Lending Officer, Josephine Castaldo, the Bank's Vice President of
Deposit Operations, and John Scognamiglio, the Bank's Vice President and Controller, is responsible
for the oversight of the securities portfolio.  Management conducts regular, informal meetings,
generally on a weekly basis while the committee meets quarterly to formally review the Bank's
securities portfolio.  The results of the committee's quarterly review are reported to the full Board,
which makes adjustment to the investment policy and strategies as it considers necessary and
appropriate.

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We do not currently participate in hedging programs, interest rate caps, floors or swaps, or
other activities involving the use of off-balance sheet derivative financial instruments, but we may do so
in the future as part of our interest rate risk management.  Further, we do not invest in securities which
are not rated investment grade.

Actual maturities of the securities held by us may differ from contractual maturities because
issuers may have the right to call or prepay obligations with and without prepayment penalties.

***Mortgage-related Securities.***  Mortgage-related securities represent a participation interest in a
pool of one- to four-family or multi-family mortgages, although we focus primarily on mortgage-related securities secured by one- to four-family mortgages.  Our mortgage-related securities portfolio
includes mortgage-backed securities and collateralized mortgage obligations issued by U.S. government
agencies or government-sponsored entities, such as Federal Home Loan Mortgage Corporation, the
Government National Mortgage Association, and the Federal National Mortgage Association, as well
as by private corporate issuers.

The mortgage originators use intermediaries (generally government agencies and government-sponsored enterprises, but also a variety of private corporate issuers) to pool and repackage the
participation interests in the form of securities, with investors such as us receiving the principal and
interest payments on the mortgages.  Securities issued or sponsored by U.S. government agencies and
government-sponsored entities are guaranteed as to the payment of principal and interest to investors.
Privately issued securities typically offer rates above those paid on government agency issued or
sponsored securities, but lack the guaranty of those agencies and are generally less liquid investments.
In the absence of an agency guarantee, our policy requires that we purchase only privately-issued
mortgage-related securities that have been assigned the highest credit rating (AAA) by the applicable
securities rating agencies.  Limiting our purchases of privately-issued mortgage-related securities to
those with a AAA rating reduces our added credit risk in purchasing non-agency guaranteed securities.
Moreover, because there is a robust secondary market for AAA-rated privately-issued mortgage-related
securities, much of the liquidity risk otherwise associated with our investment in non-agency securities
is mitigated.

Mortgage-backed securities are pass-through securities typically issued with stated principal
amounts, and the securities are backed by pools of mortgages that have loans with interest rates that are
within a specific range and have varying maturities.  The life of a mortgage-backed security thus
approximates the life of the underlying mortgages.  Mortgage-backed securities generally yield less
than the mortgage loans underlying the securities.  The characteristics of the underlying pool of
mortgages, i.e., fixed-rate or adjustable-rate, as well as prepayment risk, are passed on to the
certificate holder.  Mortgage-backed securities are generally referred to as mortgage participation
certificates or pass-through certificates.

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Collateralized mortgage obligations are mortgage-derivative products that aggregate pools of
mortgages and mortgage-backed securities and create different classes of securities with varying
maturities and amortization schedules as well as a residual interest with each class having different risk
characteristics.  The cash flows from the underlying collateral are usually divided into "tranches" or
classes whereby tranches have descending priorities with respect to the distribution of principal and
interest repayment of the underlying mortgages and mortgage-backed securities as opposed to pass
through mortgage-backed securities where cash flows are distributed pro rata to all security holders.
Unlike mortgage-backed securities from which cash flow is received and prepayment risk is shared pro
rata by all securities holders, cash flows from the mortgages and mortgage-backed securities underlying
collateralized mortgage obligations are paid in accordance with a predetermined priority to investors
holding various tranches of the securities or obligations.  A particular tranche or class may carry
prepayment risk which may be different from that of the underlying collateral and other tranches.

At
September 30, 2006, the Company's portfolio of collateralized mortgage obligations primarily included tranches whose terms and structure support the regular receipt of principal cash flows within a wide range of prepayment speeds of the underlying collateral.  This reduces the likelihood that reductions in market value resulting from movements in market interest rates may be identified as "other than temporary" which would require an adjustment to the carrying cost of the security recorded through earnings.  Rather,
investing in collateralized mortgage obligations allows us to better manage the prepayment and
extension risk associated with conventional mortgage-related securities thereby reducing the market value sensitivity of that segment of the investment portfolio.  Management believes
collateralized mortgage obligations represent attractive alternatives relative to other investments due to
the wide variety of maturity, repayment and interest rate options available.  At September 30, 2006,
collateralized mortgage obligations comprised $34.6 million of our securities portfolio.

***Other Securities.***  In addition, at September 30, 2006 we held an approximate investment of
$3.4 million in Federal Home Loan Bank of New York common stock (this amount is not shown in the
securities portfolio).

The following table sets forth the carrying value of our securities portfolio at the dates
indicated.  Securities that are held-to-maturity are shown at our amortized cost, and securities that are
available-for-sale are shown at the current market value.

|                                               | At September 30,
|---------------------------------------------- | ----------------
|                                               | 2006            
|                                               | (In thousands)  
|Securities Held-to-Maturity:                  
|U.S. government and federal agency obligation  | $	  2,000       
|Collateralized mortgage non-agency obligations | 2,137           
|Collateralized mortgage agency obligations     | 58              
|Government National Mortgage Association       | 200             
|Federal Home Loan Mortgage Corporation         | 286             
|Federal National Mortgage Association          | 5,866           
|Total securities held-to-maturity              | 10,547          
|Securities Available-for-Sale:                
|U.S. government and federal agency obligation  | 10,917          
|Collateralized mortgage non-agency obligations | -               
|Collateralized mortgage agency obligations     | 32,393          
|Government National Mortgage Association       | 108             
|Federal Home Loan Mortgage Corporation         | 12,882          
|Federal National Mortgage Association          | 18,223          
|Mutual fund                                    | -               
|Total securities available-for-sale            | 74,523          
|Total                                          | $	85,070        

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The following table sets forth certain information regarding the carrying values, weighted average yields and maturities of our investment and mortgage-backed securities portfolio at September 30, 2006.  This table shows contractual maturities and does not reflect repricing or the effect of prepayments.  Actual
maturities may differ.

The following table sets forth certain information regarding the carrying values, weighted average yields and maturities of our investment and mortgage-backed securities portfolio at September 30, 2006.  This table shows contractual maturities and does not reflect repricing or the effect of prepayments.  Actual
maturities may differ.

|                                          | At September 30, 2006 
|----------------------------------------- | ----------------------
|                                          | One Year or Less      
|                                          | CarryingValue         
|                                          | (Dollars in thousands)
|                                         
|U.S. Government and Federal Agency        | $	12,917              
|Mortgage-backed non-agency
 Obligations   | -                     
|                                         
|Government National Mortgage
 Association | -                     
|                                         
|Federal Home Loan Mortgage
 Association   | -                     
|                                         
|Federal National Mortgage Association     | -                     
|                                         
|Total                                     | $	12,917              

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**Sources of Funds**

***General.*** Deposits are our major source of funds for lending and other investment purposes.
In addition, we derive funds from loan and mortgage-backed securities principal repayments, and
proceeds from the maturity, call and sale of mortgage-backed securities and investment securities.
Loan and securities payments are a relatively stable source of funds, while deposit inflows are
significantly influenced by general interest rates and money market conditions.  Borrowings (principally
from the Federal Home Loan Bank) are also used to supplement the amount of funds for lending and
investment.

***Deposits.***  Our current deposit products include checking, savings, money market, club
accounts, certificates of deposit accounts ranging in terms from thirty days to ten years, and individual
retirement accounts.  Deposit account terms vary, primarily as to the required minimum balance
amount, the amount of time that the funds must remain on deposit and the applicable interest rate.

Deposits are obtained primarily from within New Jersey.  Traditional methods of advertising
are used to attract new customers and deposits, including print media, cable television, direct mail and
inserts included with customer statements.  We have not in the past utilized the services of deposit
brokers, however, our current growth strategy includes a modest brokered CD program.  Although we
did offer special savings programs in connection with the opening of our Cedar Grove branch office,
premiums or incentives for opening accounts are generally not offered.  We periodically select
particular certificate of deposit maturities for promotion.

The determination of interest rates is based upon a number of factors, including: (1) our need
for funds based on loan demand, current maturities of deposits and other cash flow needs; (2) a current
survey of general market rates and rates of a selected group of competitors' rates for similar products;
(3) our current cost of funds and yield on assets; and (4) the alternate cost of funds on a wholesale
basis, in particular the cost of advances from the Federal Home Loan Bank.  Interest rates are reviewed
by senior management on a weekly basis.

At September 30, 2006, $165.2 million or 50.5% of our deposits were in certificates of
deposit.  Our liquidity could be reduced if a significant amount of certificates of deposit, maturing
within a short period of time, were not renewed.  Historically, a significant portion of the certificates of
deposit remain with us after they mature and we believe that this will continue.  However, the need to
retain these time deposits could result in an increase in our cost of funds.

At September 30, 2006, we had approximately $16.9 million of municipal deposits at the Bank.
These deposits include the one municipal account relationship noted above whose balances at
September 30, 2006 totaled approximately $11.8 million.  The Bank expects these funds to be
withdrawn during the first fiscal quarter of 2007 due to the municipality's closing of that account
relationship.

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The following table sets forth the distribution of deposits at the Bank at the dates indicated and the weighted average nominal interest
rates for each period on each category of deposits presented.****

|                                       | At September 30
|-------------------------------------- | ---------------
|                                       | 2006           
|                                       | Amount         
|Non-interest-bearing   demand deposits | $	23,545       
|                                      
|Interest-bearing   demand deposits     | 31,429         
|                                      
|Savings deposits                       | 107,008        
|                                      
|Time deposits                          | 165,165        
|                                      
|Total deposits                         | $	327,147      

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The following table shows the amount of our certificates of deposit of $100,000 or more by
time remaining until maturity as of September 30, 2006.

|Remaining Time Until Maturity |  | Certificatesof Deposits
|----------------------------- |  | -----------------------
|                              |  | (In thousands)         
|                             
|Within three months           |  | $	 17,477              
|Three through six months      |  | 12,721                 
|Six through twelve months     |  | 20,556                 
|Over twelve months            |  | 13,538                 
|Total                         |  | $	64,292               

***Borrowings.***   To supplement our deposits as a source of funds for lending or investment, we
borrow funds in the form of advances from the Federal Home Loan Bank.  We regularly make use of
Federal Home Loan Bank advances as part of our interest rate risk management, primarily to extend
the duration of funding to match the longer term fixed rate loans held in the loan portfolio as part of
our growth strategy.  During fiscal 2004 we recognized a $125,000 penalty to prepay $3.0 million of
fixed rate FHLB advances with a weighted average cost of 6.28%.  In the future, we may evaluate the
costs and benefits of further prepayments, which may result in additional one time charges to earnings
in the form of FHLB prepayment penalties to further improve the Bank's net interest spread and margin
and enhance future earnings.

Advances from the Federal Home Loan Bank are typically secured by the Federal Home Loan
Bank stock we own and a portion of our residential mortgage loans and may be secured by other assets,
mainly securities which are obligations of or guaranteed by the U.S. government.  At September 30,
2006, our borrowing limit with the Federal Home Loan Bank was approximately $122.3 million.
Additional information regarding our Federal Home Loan Bank advances is included under Note 8 of
the Notes to the Financial Statements.

The following table sets forth certain information regarding our borrowed funds.

|                                                                | At or For the
Year Ended September 30,
|--------------------------------------------------------------- | --------------------------------------
|                                                                | 2006                                  
|Federal Home Loan Bank Advances:                               
|Average balance outstanding                                     | $  52,725                             
|                                                               
|Maximum amount outstanding
  at any month-end during the period | $	  56,075                            
|                                                               
|Balance outstanding at end of period                            | $	   56,075                           
|                                                               
|Weighted average interest rate during
   the period             | 4.95%                                 
|                                                               
|Weighted average interest rate at end
   of period              | 5.16%                                 

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**Subsidiary Activity**

In addition to American Bank of New Jersey, the Company has one other subsidiary, ASB
Investment Corp., a New Jersey corporation, which was organized in June 2003 for the purpose of
selling insurance and investment products, including annuities, to customers of the Bank and the
general public through a third party networking arrangement.  There has been very little activity at this
subsidiary and sales are currently limited to the sale of fixed rate annuities.

American Bank of New Jersey has one subsidiary, American Savings Investment Corp., which
was formed in August 2004 under New Jersey law as an investment company subsidiary.  The purpose
of this subsidiary is to invest in stocks, bonds, notes and all types of equity, mortgages, debentures and
other investment securities.  Holding investment securities in this subsidiary reduces our New Jersey
state income tax rate.

**Personnel**

As of September 30, 2006, we had 64 full-time employees and 17 part-time employees.  The
employees are not represented by a collective bargaining unit.  We believe our relationship with our
employees is satisfactory.

**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 be complete and is qualified in its entirety by
reference to applicable laws and regulations.  The Bank and the Company operate in a highly regulated
industry.  This regulation and supervision establishes a comprehensive framework of activities in which
a federal savings bank may engage and is intended primarily for the protection of the deposit insurance
fund and depositors.

Any change in applicable statutory and regulatory requirements, whether by the OTS, the
Federal Deposit Insurance Corporation ("FDIC") or the United States Congress, could have a material
adverse impact on the Company and the Bank, and their operations.  The adoption of regulations or the
enactment of laws that restrict the operations of the Bank and/or the Company or impose burdensome
requirements upon one or both of them could reduce their profitability and could impair the value of
the Bank's franchise which could hurt the trading price of the Company's common stock.

**Regulation of the Bank**

***General.*** As a federally chartered, SAIF-insured savings bank, the Bank is subject to extensive
regulation by the OTS and the FDIC.  This regulatory structure gives the regulatory authorities
extensive discretion in connection with their supervisory and enforcement activities and examination
policies, including policies regarding the classification of assets and the level of the allowance for loan
losses.  The activities of federal savings banks are subject to extensive regulation including restrictions
or requirements with respect to loans to one borrower, the percentage of non-mortgage loans or
investments to total assets, capital distributions, permissible investments and lending activities, liquidity
management, transactions with affiliates and community reinvestment.  Federal savings banks are also
subject to reserve requirements of the Federal Reserve System.  A federal savings bank's relationship
with its depositors and borrowers is regulated by both state and federal law, especially in such matters
as the ownership of savings accounts and the form and content of the bank's mortgage documents.

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The Bank must file regular reports with the OTS and the FDIC concerning its activities and
financial condition, and must obtain regulatory approvals prior to entering into certain transactions such
as mergers with or acquisitions of other financial institutions.  The OTS regularly examines the Bank
and prepares reports to the Bank's Board of Directors on deficiencies, if any, found in its operations.

***Insurance of Deposit Accounts.*** The FDIC administers two separate deposit insurance funds.
Generally, the Bank Insurance Fund ("BIF") insures the deposits of commercial banks and the Savings
Association Insurance Fund ("SAIF") insures the deposits of savings institutions.  The FDIC is
authorized to increase deposit insurance premiums if it determines such increases are appropriate to
maintain the reserves of either the BIF or SAIF or to fund the administration of the FDIC.  In addition,
the FDIC is authorized to levy emergency special assessments on BIF and SAIF members.

In addition, all FDIC-insured institutions are required to pay assessments to the FDIC to fund
interest payments on bonds issued by the Financing Corporation ("FICO"), an agency of the Federal
government established to recapitalize the predecessor to the SAIF.  These assessments will continue
until the FICO bonds mature in 2017.

***Regulatory Capital Requirements.***  OTS capital regulations require savings institutions to meet
three capital standards: (1) tangible capital equal to 1.5% of total adjusted assets, (2) "Tier 1" or "core"
capital equal to at least 4% (3% if the institution has received the highest possible rating on its most
recent examination) of total adjusted assets, and (3) risk-based capital equal to 8% of total
risk-weighted assets. At September 30, 2006 the Bank exceeded all regulatory capital requirements and
was classified as "well capitalized."

In addition, the OTS may require that a savings institution that has a risk-based capital ratio of
less than 8%, a ratio of Tier 1 capital to risk-weighted assets of less than 4% or a ratio of Tier 1 capital
to total adjusted assets of less than 4% (3% if the institution has received the highest rating on its most
recent examination) take certain action to increase its capital ratios. If the savings institution's capital is
significantly below the minimum required levels of capital or if it is unsuccessful in increasing its
capital ratios, the OTS may restrict its activities.

For purposes of the OTS capital regulations, tangible capital is defined as core capital less all
intangible assets except for certain mortgage servicing rights.  Tier 1 or core capital is defined as
common stockholders' equity, non-cumulative perpetual preferred stock and related surplus, minority
interests in the equity accounts of consolidated subsidiaries, and certain non-withdrawable accounts and
pledged deposits of mutual savings banks.  The Bank does not have any non-withdrawable accounts or
pledged deposits.  Tier 1 and core capital are reduced by an institution's intangible assets, with limited
exceptions for certain mortgage and non-mortgage servicing rights and purchased credit card
relationships.  Both core and tangible capital are further reduced by an amount equal to the savings
institution's debt and equity investments in "non-includable" subsidiaries engaged in activities not
permissible to national banks other than subsidiaries engaged in activities undertaken as agent for
customers or in mortgage banking activities and subsidiary depository institutions or their holding
companies.

The risk-based capital standard for savings institutions requires the maintenance of total capital
of 8% of risk-weighted assets.  Total capital equals the sum of core and supplementary capital.  The
components of supplementary capital include, among other items, cumulative perpetual preferred stock,
perpetual subordinated debt, mandatory convertible subordinated debt, intermediate-term preferred
stock, the portion of the allowance for loan losses not designated for specific loan losses and up to 45%
of unrealized gains on equity securities.  The portion of the allowance for loan and lease losses
includable in supplementary capital is limited to a maximum of 1.25% of risk-weighted assets.
Overall, supplementary capital is limited to 100% of core capital.  For purposes of determining total
capital, a savings institution's assets are reduced by the  amount of capital instruments held by other
depository institutions pursuant to reciprocal arrangements and by the amount of the institution's equity
investments (other than those deducted from core and tangible capital) and its high loan-to-value ratio
land loans and non-residential construction loans.

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A savings institution's risk-based capital requirement is 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.  These risk weights range from
0% for cash to 100% for delinquent loans, property acquired through foreclosure, commercial loans,
and other assets.

OTS rules require a deduction from capital for savings institutions with certain levels of interest
rate risk.  The OTS calculates the sensitivity of an institution's net portfolio value based on data
submitted by the institution in a schedule to its quarterly Thrift Financial Report and using the interest
rate risk measurement model adopted by the OTS.  The amount of the interest rate risk component, if
any, deducted from an institution's total capital is based on the institution's Thrift Financial Report filed
two quarters earlier.  The OTS has indefinitely postponed implementation of the interest rate risk
component, and the Bank has not been required to determine whether it will be required to deduct an
interest rate risk component from capital.

***Prompt Corrective Regulatory Action.*** Under the OTS Prompt Corrective Action regulations,
the OTS is required to take supervisory actions against undercapitalized institutions, the severity of
which depends upon the institution's level of capital.  Generally, a savings institution that has total
risk-based capital of less than 8.0%, or a leverage ratio or a Tier 1 core capital ratio that is less than
4.0%, is considered to be undercapitalized.  A savings institution that has total risk-based capital less
than 6.0%, a Tier 1 core risk-based capital ratio of less than 3.0% or a leverage ratio that is less than
3.0% is considered to be "significantly undercapitalized."  A savings institution that has a tangible
capital to assets ratio equal to or less than 2.0% is deemed to be "critically undercapitalized."
Generally, the banking regulator is required to appoint a receiver or conservator for an institution that
is "critically undercapitalized."  The regulation also provides that a capital restoration plan must be
filed with the OTS within forty-five days of the date an institution receives notice that it is
"undercapitalized," "significantly undercapitalized" or "critically undercapitalized."  In addition,
numerous mandatory supervisory actions become immediately applicable to the institution, including,
but not limited to, restrictions on growth, investment activities, capital distributions, and affiliate
transactions.  The OTS may also take any one of a number of discretionary supervisory actions against
undercapitalized institutions, including the issuance of a capital directive and the replacement of senior
executive officers and directors.

***Dividend and Other Capital Distribution Limitations.*** The OTS imposes various restrictions or
requirements on the ability of savings institutions to make capital distributions, including cash
dividends.

A savings institution that is a subsidiary of a savings and loan holding company, such as the
Bank, must file an application or a notice with the OTS at least thirty days before making a capital
distribution. A savings institution must file an application for prior approval of a capital distribution if:
(i) it is not eligible for expedited treatment under the applications processing rules of the OTS; (ii) the
total amount of all capital distributions, including the proposed capital distribution, for the applicable
calendar year would exceed an amount equal to the savings bank's net income for that year to date plus
the institution's retained net income for the preceding two years; (iii) it would not adequately be
capitalized after the capital distribution; or (iv) the distribution would violate an agreement with the
OTS or applicable regulations.

Next Page 25


The Bank is required to file a capital distribution notice or application with the OTS before
paying any dividend to the Company.  However, capital distributions by the Company, as a savings and
loan holding company, are not subject to the OTS capital distribution rules.

The OTS may disapprove a notice or deny an application for a capital distribution if: (i) the
savings institution would be undercapitalized following the capital distribution; (ii) the proposed capital
distribution raises safety and soundness concerns; or (iii) the capital distribution would violate a
prohibition contained in any statute, regulation or agreement.  In addition, a federal savings institution
cannot distribute regulatory capital that is required for its liquidation account.

***Qualified Thrift Lender Test.*** Federal savings institutions must meet a qualified thrift lender
("QTL") test or they become subject to the business activity restrictions and branching rules applicable
to national banks.  To qualify as a QTL, a savings institution must either (i) be deemed a "domestic
building and loan association" under the Internal Revenue Code by maintaining at least 60% of its total
assets in specified types of assets, including cash, certain government securities, loans secured by and
other assets related to residential real property, educational loans and investments in premises of the
institution or (ii) satisfy the statutory QTL test set forth in the Home Owners' Loan Act by maintaining
at least 65% of its "portfolio assets" in certain "Qualified Thrift Investments" (defined to include
residential mortgages and related equity investments, certain mortgage-related securities, small business
loans, student loans and credit card loans, and 50% of certain community development loans).  For
purposes of the statutory QTL test, portfolio assets are defined as total assets minus intangible assets,
property used by the institution in conducting its business, and liquid assets equal to 20% of total
assets.  A savings institution must maintain its status as a QTL on a monthly basis in at least nine out of
every twelve months.  The Bank met the QTL test as of September 30, 2006 and in each of the last
twelve months and, therefore, qualifies as a QTL.

***Transactions with Affiliates.*** Generally, federal banking law requires that transactions between
a savings institution or its subsidiaries and its affiliates must be on terms as favorable to the savings
institution as comparable transactions with non-affiliates.  In addition, certain types of these
transactions are restricted to an aggregate percentage of the savings institution's capital.  Collateral in
specified amounts must usually be provided by affiliates in order to receive loans from the savings
institution.  In addition, a savings institution may not extend credit to any affiliate engaged in activities
not permissible for a bank holding company or acquire the securities of any affiliate that is not a
subsidiary.  The OTS has the discretion to treat subsidiaries of savings institutions as affiliates on a
case-by-case basis.

***Community Reinvestment Act***.  Under the Community Reinvestment Act ("CRA"), every
insured depository institution, including the Bank, has a continuing and affirmative obligation consistent
with its safe and sound operation to help meet the credit needs of its entire community, including low-
and moderate-income neighborhoods.  The CRA 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 CRA requires the
OTS to assess the depository institution's record of meeting the credit needs of its community and to
take such record into account in its evaluation of certain applications by such institution, such as a
merger or the establishment of a branch office by the Bank.  An unsatisfactory CRA examination rating
may be used as the basis for the denial of an application by the OTS. The Office of Thrift Supervision
assigned the Bank an overall rating of "Satisfactory" in its most recent CRA evaluation.

***Federal Home Loan Bank ("FHLB") System.*** The Bank is a member of the FHLB of New
York, which is one of twelve 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 financial
institutions and proceeds derived from the sale of consolidated obligations of the FHLB System.  It
makes loans to members pursuant to policies and procedures established by the board of directors of the
FHLB.

Next Page 26


As a member, the Bank is required to purchase and maintain stock in the FHLB of New York
in an amount equal to the greater of 1% of our aggregate unpaid residential mortgage loans, home
purchase contracts or similar obligations at the beginning of each year or 5% of FHLB advances.  We
are in compliance with this requirement.  The FHLB imposes various limitations on advances such as
limiting the amount of certain types of real estate related collateral to 30% of a member's capital and
limiting total advances to a member.

The FHLBs are required to provide funds for the resolution of troubled savings institutions and
to contribute to affordable housing programs through direct loans or interest subsidies on advances
targeted for community investment and low- and moderate-income housing projects.  These
contributions have adversely affected the level of FHLB dividends paid and could continue to do so in
the future.

***Federal Reserve System.***  The Federal Reserve System requires all depository institutions to
maintain non-interest-bearing reserves at specified levels against their checking accounts and
non-personal certificate accounts.  The balances maintained to meet the reserve requirements imposed
by the Federal Reserve System may be used to satisfy the OTS liquidity requirements.

Savings institutions have authority to borrow from the Federal Reserve System "discount
window,"  but Federal Reserve System policy generally requires savings institutions to exhaust all other
sources before borrowing from the Federal Reserve System.

**Regulation of the Company**

***General.*** The Company is a savings and loan holding company, subject to regulation and
supervision by the OTS.  In addition, the OTS has enforcement authority over the Company and any
non-savings institution subsidiaries.  This permits the OTS to restrict or prohibit activities that it
determines to be a serious risk to the Company.  This regulation is intended primarily for the protection
of the  depositors and not for the benefit of stockholders of the Company.

***Activities Restrictions.*** As a savings and loan holding company formed after May 4, 1999, the
Company is  not a grandfathered unitary savings and loan holding company under the Gramm-Leach-Bliley Act (the "GLB Act").  As a result, the Company and its non-savings institution subsidiaries are
subject to statutory and regulatory restrictions on their business activities.  Under the Home Owners'
Loan Act, as amended by the GLB Act, the non-banking activities of the Company are restricted to
certain activities specified by OTS regulation, which include performing services and holding
properties used by a savings institution subsidiary, activities authorized for savings and loan holding
companies as of March 5, 1987, and non-banking activities permissible for bank holding companies
pursuant to the Bank Holding Company Act of 1956 (the "BHC Act") or authorized for financial
holding companies pursuant to the GLB Act.  Furthermore, no company may acquire control of
American Bank of New Jersey unless the acquiring company was a unitary savings and loan holding
company on May 4, 1999 (or became a unitary savings and loan holding company pursuant to an
application pending as of that date) or the company is only engaged in activities that are permitted for
multiple savings and loan holding companies or for financial holding companies under the BHC Act as
amended by the GLB Act.

***Mergers and Acquisitions.***  The Company must obtain approval from the OTS before acquiring
more than 5% of the voting stock of another savings institution or savings and loan holding company or
acquiring such a savings institution or savings and loan holding company by merger, consolidation or
purchase of its assets.  In evaluating an application for the Company to acquire control of a savings
institution, the OTS would consider the financial and managerial resources and future prospects of the
Company and the target institution, the effect of the acquisition on the risk to the insurance funds, the
convenience and the needs of the community and competitive factors.

Next Page 27


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

**Item 1A. Risk Factors.**

**Our strategic plan calls for us to diversify our loan portfolio with increased emphasis on
commercial lending.**

Commercial loans include multi-family and nonresidential mortgage loans, construction loans and
business loans. At September 30, 2006, our loan portfolio included commercial loans totaling $96.3
million, or 24.2% of our total portfolio. It is our intention to significantly increase our origination of
these types of loans. As part of our plan to grow and diversify the loan mix, we continue to expand our
commercial lending business unit and expect to hire additional commercial lenders over the next several
years.  Our compensation and benefit expenses will increase significantly as we hire these lenders and associated support staff.  We also expect that our construction lending program will also continue to expand in connection
with our increasing strategic emphasis on commercial lending.

Commercial loans are generally considered to involve a higher degree of credit risk than long-term
financing of owner-occupied residential properties. The likelihood that these loans will not be repaid or
will be late in paying is generally greater than with residential loans. Furthermore, it may take some
time for us to attract lending business sufficient to offset the increased compensation and benefit
expenses that results from hiring the additional personnel we will need.  There can be no assurance that
the lenders we hire will successfully grow our loan portfolio.

**Our strategic plan calls for us to expand our franchise through de novo branching.**

We are currently seeking to expand our branch network by up to five branches over the next three to
five years. The first of these new branches is located in Verona, New Jersey and  opened in November
2006.  A second location has been identified in Clifton, New Jersey which we hope to open during the
latter half of fiscal 2007.  Until new branches attract sufficient business to offset the increased expenses
incurred by de novo branching, the new branches are likely to reduce our earnings. There is no
assurance, however, that we will be successful in opening de novo branches. Costs for land purchase
and branch construction will adversely impact earnings going forward. We currently estimate that total
land, construction and equipment costs could average as much as $3.1 million per branch and could be
higher.  The expenses associated with opening new offices, in addition to the personnel and operating
costs that we will have once these offices are open, will significantly increase noninterest expenses.
Because these expenses are in fixed assets, they will not result in any additional earnings but will result
in a substantial increase in depreciation and occupancy expense. There can be no assurance when, or if,
these new offices will open or that we will be successful in executing this part of the business plan. If
we are able to locate and obtain suitable sites for these branches, there is no guarantee that these de
novo branches will be profitable.

Next Page 28


While not a de novo branch, per se, we also expect to incur additional costs associated with relocating
and expanding the Bloomfield deposit branch.  The new facility will be located on a property adjacent
to our Bloomfield headquarters building where the branch is currently located.  This relocation will
enable us to greatly enhance and modernize the Bloomfield branch facility.  Such enhancements will
greatly support our customer service goals and objectives while expanding the office space available for
the additional staff  needed to support our growth plans.  Specifically, our main office in Bloomfield
currently houses our management staff as well as our lending and administrative operations. This space
will need to be augmented in order to add the additional lenders and support staff called for by our
growth plans.  Like the do novo branches mentioned above, the relocation of the Bloomfield deposit
branch is expected to increase our operating costs through various forms of additional occupancy and
depreciation costs,

**We expect that changes in interest rates may have a significant, adverse impact on our net
interest income.**

The income from our assets and the cost of our liabilities are sensitive to changes in interest rates. Our
ability to make a profit largely depends on our net interest income, which could be negatively affected
by changes in interest rates. Net interest income is the difference between: (a) the interest income we
earn on our interest-earning assets such as loans and securities; and (b) the interest expense we pay on
our interest-bearing liabilities such as deposits and amounts we borrow. The rates we earn on our assets
and the rates we pay on our liabilities are generally fixed for a contractual period of time. We, like
many savings institutions, have liabilities that generally have shorter contractual maturities or other
repricing characteristics than our assets. This imbalance can create significant earnings volatility,
because market interest rates change over time. In a period of rising interest rates, the interest income
earned on our assets may not increase as rapidly as the interest paid on our liabilities. In a period of
declining interest rates the interest income earned on our assets may decrease more rapidly than the
interest paid on our liabilities.

Next Page 29


**Our business is geographically concentrated in New Jersey and the New York metropolitan area.
A downturn in economic conditions in the state and/or the surrounding region could have an
adverse impact on our profitability.**

A substantial majority of our loans are to individuals and businesses in New Jersey and the New York
metropolitan area. Any decline in the regional economy could have an adverse impact on our earnings.
Because we have a significant amount of real estate loans, decreases in local real estate values could
adversely affect the value of property used as collateral. Adverse changes in the economy and real
estate values may also have a negative effect on the ability of our borrowers to make timely repayments
of their loans, which would have an adverse impact on our earnings.

**Strong competition within our market area may limit our growth and profitability.**

Competition in the banking and financial services industry in New Jersey is intense. In our market area,
we compete with commercial banks, savings institutions, mortgage brokerage firms, credit unions,
finance companies, mutual funds, insurance companies and brokerage and investment banking firms
operating locally and elsewhere. Many of these competitors have substantially greater resources and
lending limits than we do and offer services that we do not or cannot provide. This competition has
made it more difficult for us to make new loans and more difficult to retain deposits. Price competition
for loans might result in us originating fewer loans, or earning less on our loans, and price competition
for deposits might result in slower growth or reduction of our total deposits or having to pay more for
our deposits.

**We operate in a highly regulated environment and may be adversely affected by changes in laws
and regulations.**

We are subject to extensive regulation, supervision and examination by the Office of Thrift Supervision
and by the Federal Deposit Insurance Corporation. This regulation and supervision govern the activities
in which a bank and its holding company may engage and are intended primarily for the protection of
the insurance fund and depositors. Regulatory authorities have extensive discretion in connection with
their supervisory and enforcement activities, including the imposition of restrictions on the operation of
a bank, the classification of assets by a bank and the adequacy of a bank's allowance for loan losses.
Any change in this regulation and oversight, whether in the form of regulatory policy, regulations, or
legislation could have a material impact on us and our operations.

**Item 1B. Unresolved Staff Comments.**

None.

Next Page 30


**Item 2.	 Properties.**

At September 30, 2006, our net investment in property and equipment totaled $6.5 million.
We use  an outside service company for data processing.  The following table sets forth the location of
our main office, separate drive-up facility and two branch offices, the year each opened and the net
book value for each location. The net book value reported for the Verona branch location includes only
those funds disbursed through September 30, 2006 relating to branch acquisition and construction.
Additional disbursements were made in the first quarter of fiscal 2007 increasing its net book value as
construction of that branch was completed.  Additionally, at September 30, 2006, we had purchase
deposits and other professional fees totaling approximately $274,000 million in connection with de
novo branch site acquisitions.

|**Office Location**                                                                                                    | **YearFacilityOpened** | **Leased orOwned** | **Net Book Value atSeptember 30, 2006**
|---------------------------------------------------------------------------------------------------------------------- | ---------------------- | ------------------ | ---------------------------------------
|                                                                                                                       | (In thousands)        
|Main Office365 Broad StreetBloomfield, New Jersey  07003                                                               | 1965                   | Owned              | $  1,354                               
|                                                                                                                      
|Main Office Drive Up Facility16 Pitt StreetBloomfield, New Jersey  07003                                               | 1998                   | Owned              | $   316                                
|                                                                                                                      
|Full Service Branch
310 Pompton Avenue
Cedar Grove, New Jersey  07009                                                  | 2001                   | Owned              | $  1,821                               
|                                                                                                                      
|Full Service Branch
(in process of construction at
September 30, 2006)
725 Bloomfield Avenue
Verona, New Jersey  07009 | 2006                   | Owned              | $  2,758                               

**Item 3.	 Legal Proceedings.**

From time to time the Company and its subsidiaries are parties to routine litigation, which
arises in the normal course of business, such as claims to enforce liens, condemnation proceedings on
properties in which the Bank holds security interests, claims involving the making and servicing of real
property loans, and other issues incident to the business of the Bank.  In the opinion of management,
there were no lawsuits pending or known to be contemplated at September 30, 2006 that would have a
material effect on operations or income.

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

None.

Next Page 31


**PART II**

**Item 5.  Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.**

The information contained in the section captioned "Stockholder Information" in the portions of the Annual Report filed as Exhibit 13 to this Form 10-K is incorporated herein by reference.

The information contained in "Note 1 of the Consolidated Financial Statements" and the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital" in the portions of the Annual Report filed as Exhibit 13 to this Form 10-K regarding the OTS restrictions on dividends from the Bank to the Company.

The following table summarizes our share repurchase activity during the three months ended September 30, 2006 and additional information regarding our share repurchase program.

|**Repurchases for the Month**    | **(a) Total NumberOf Shares (orUnits) Purchased** | **(b)Average PricePaid per Share(or Unit)** | **(c) Total Numberof Shares (or Units)Purchased as PartOf Publicly
Announced Plansor Programs** | **(d) Maximum Number(or Approximate DollarValue) of Shares (orUnits) that May Yet BePurchased UnderPlans or Programs**
|-------------------------------- | ------------------------------------------------- | ------------------------------------------- | ----------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------
|July 1 - July 31, 2006           | -                                                 | -                                           | -                                                                                               | -                                                                                                                     
|August 1 - August 30, 2006       | 355,898                                           | $11.99                                      | 355,898                                                                                         | -                                                                                                                     
|September 1 - September 30, 2006 | -                                                 | -                                           | -                                                                                               | -                                                                                                                     
|Total repurchases                | 355,898                                           | $11.99                                      | 355,898                                                                                         | -(1)(2)                                                                                                               

-------------------------(1)
As of September 30, 2006, the Company had completed its repurchase of shares to fund stock awards previously made under
the American Bank of New Jersey 2005 Restricted Stock Plan (208,295 shares) and American Bancorp of New Jersey, Inc. 2006
Equity Incentive Plan (358,484 shares).(2)
The table above was prepared as of September 30, 2006 and does not reflect shares to be repurchased in accordance with the
Company's 10% share repurchase program announced on October 19, 2006.

Next Page 32


**Item 6.  Selected Financial Data.**

The information contained in the table captioned "Selected Consolidated Financial and Other
Data" in the portions of the Annual Report filed as Exhibit 13 to this Form 10-K is incorporated herein
by reference.

**Item 7 .  Management's Discussion and Analysis of Financial Condition and Results of
Operations.**

The information contained in the section captioned "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Annual Report filed as Exhibit 13 to this Form
10-K is incorporated herein by reference.

**Item  7A.  Quantitative and Qualitative Disclosures About Market Risk.**

The information contained in the section captioned "Management of Interest Rate Risk and
Market Risk" in the Annual Report filed as Exhibit 13 to this Form 10-K is incorporated herein by
reference.

**Item 8.  Financial Statements and Supplementary Data.**

The Company's financial statements listed under Item 15 of this Form 10-K and included in
Exhibit 13 to this Form 10-K are incorporated herein by reference.

**Item 9.	 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.**

Not applicable.

**Item 9A.  Controls and Procedures.**

***(a)  Evaluation of disclosure controls and procedures.***  An evaluation of our disclosure
controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the
"Act")) was carried out as of September 30, 2006 under the supervision and with the participation of
our Chief Executive Officer, Chief Financial Officer and several other members of our senior
management.  Our Chief Executive Officer and Chief Financial Officer concluded that, as of
September 30, 2006, our disclosure controls and procedures were effective in ensuring that the
information we are required to disclose in the reports we file or submit under the Act is (i) accumulated
and communicated to our management (including the Chief Executive Officer and Chief Financial
Officer) to allow timely decisions regarding required disclosure, and (ii) recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms.

***(b)  Management's annual report on internal control over financial reporting and attestation report of the registered public accounting firm.***  The annual
report of management on the effectiveness of our internal control over financial reporting and the
attestation report thereon issued by our independent registered public accounting firm are set forth
under "Management's Report on Internal Control Over Financial Reporting" and "Report of
Independent Registered Public Accounting Firm" under "Item 8. Financial Statements and
Supplementary Data."

Next Page 33


***(c)  Changes in internal control over financial reporting.***  During the quarter ended
September 30, 2006, no change occurred in our internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.

We do not expect that our disclosure controls and procedures and internal control over financial reporting
will prevent all error and all fraud.  A control procedure, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the control procedure are met.
Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute
assurance that all control issues and instances of fraud, if any, within the Company have been detected.
These inherent limitations include the realities that judgments in decision-making can be faulty, and that
breakdowns in controls or procedures can occur because of simple error or mistake.  Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two or more people, or by
management override of the control.  The design of any control procedure also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions; over time, controls may become
inadequate because of changes in conditions, or the degree of compliance with the policies or procedures
may deteriorate.  Because of the inherent limitations in a cost-effective control procedure, misstatements
due to error or fraud may occur and not be detected.

**Item 9B.  Other Information.**

Not applicable.

**PART III**

**Item 10.  Directors and Executive Officers of the Registrant.**

Information required by this item concerning the Company's directors and compliance with
section 16(a) of the Act is incorporated herein by reference from the definitive proxy statement for the
Annual Meeting of Stockholders to be held in February 2007, except for the information contained
under the heading "Compensation Committee Report on Executive Compensation", "Report of the
Audit Committee of the Board of Directors" and "Stockholder Return Performance Presentation", a
copy of which will be filed not later than 120 days after the close of the fiscal year.

**Code of Ethics**

The Company has adopted a Code of Ethics that applies to its principal executive officer,
principal financial officer, principal accounting officer or controller or persons performing similar
functions. The Company's Code of Ethics will be provided without charge upon request to the
Corporate Secretary, American Bancorp of New Jersey, Inc., 365 Broad Street, Bloomfield, New
Jersey 07003.

**Item 11.  Executive Compensation.**

Information required by this item concerning compensation is incorporated herein by reference
from the definitive proxy statement for the Annual Meeting of Stockholders to be held in February
2007, except for the information contained under the heading "Compensation Committee Report on
Executive Compensation", "Report of the Audit Committee of the Board of Directors" and
"Stockholder Return Performance Presentation", a copy of which will be filed not later than 120 days
after the close of the fiscal year.

Next Page 34


**Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.**

Information required by this item concerning security ownership of certain beneficial owners
and management is incorporated herein by reference from the definitive proxy statement for the Annual
Meeting of Stockholders to be held in February 2007, except for the information contained under the
heading "Compensation Committee Report on Executive Compensation", "Report of the Audit
Committee of the Board of Directors" and "Stockholder Return Performance Presentation", a copy of
which will be filed not later than 120 days after the close of the fiscal year.

|**EQUITY COMPENSATION PLAN INFORMATION**                                   
|---------------------------------------------------------------------------
|                                                                           
|                                                                           
|**Equity compensation plans
   approved by security holders**              
|                                                                           
|**Equity compensation plans****not approved by security holders**
     None
|                                                                           
|TOTAL                                                                      

|(1) | Includes 6,249 shares of restricted stock that may be awarded under the Company's 2005 Restricted Stock Plan and 19,094 of options available under the 2005 Stock Option Plan.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

**Item 13.	Certain Relationships and Related Transactions.**

Information required by this item concerning certain relationships and related transactions is
incorporated herein by reference from the definitive proxy statement for the Annual Meeting of
Stockholders to be held in February 2007, except for the information contained under the heading
"Compensation Committee Report on Executive Compensation", "Report of the Audit Committee of
the Board of Directors" and "Stockholder Return Performance Presentation", a copy of which will be
filed not later than 120 days after the close of the fiscal year.

**Item 14.	Principal Accounting Fees and Services.**

Information required by this item concerning principal accounting fees and services is
incorporated herein by reference from the definitive proxy statement for the Annual Meeting of
Stockholders to be held in February 2007, a copy of which will be filed not later than 120 days after
the close of the fiscal year.

Next Page 35


**PART IV**

**Item 15.	Exhibits, Financial Statement Schedules.**

(a)	Listed below are all financial statements and exhibits filed as part of this Form 10-K.

1.	The consolidated statements of financial condition as of September 30, 2006 and 2005
and the related consolidated statements of income, changes in stockholders' equity, and cash flows for
the three years ended September 30, 2006, together with the related notes and the report of independent
certified public accountants.

2.	The following exhibits are either included with this Form 10-K or incorporated herein
by reference:

(a)	List of Exhibits:

|3(i)  | Certificate of Incorporation of American Bancorp of New Jersey, Inc.(1)                  
|----- | -----------------------------------------------------------------------------------------
|3(ii) | Bylaws of American Bancorp of New Jersey, Inc.(1)                                        
|4     | Specimen Stock Certificate of American Bancorp of New Jersey(1)                          
|10.1  | Employment Agreement between American Bank of New Jersey and
   Joseph Kliminski(2)      
|10.2  | Employment Agreement between American Savings Bank of NJ and
   Richard M. Bzdek(2)      
|10.3  | Employment Agreement between American Savings Bank of NJ and
   Eric B. Heyer(2)         
|
|10.4  | Form of Executive Salary Continuation Agreement(2)                                       
|10.5  | Employment Agreement between ASB Holding Company and
   Joseph Kliminski(3)              
|10.6  | Employment Agreement between American Bank of New Jersey and
   Fred G. Kowal(4)         
|10.7  | Employment Agreement between American Bank of New Jersey and Catherine M.
   Bringuier(1)
|10.8  | 2005 Stock Option Plan(5)                                                                
|10.9  | 2005 Restricted Stock Plan(5)                                                            
|13    | Portions of the 2006 Annual Report to Stockholders                                       
|21    | Subsidiaries                                                                             
|23.1  | Consent of Auditor                                                                       
|31    | Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                 
|32    | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                  

_______________(1)
Incorporated by reference to the Company's Registration Statement on Form S-1 (File No. 333-125957) filed
with the SEC on June 20, 2005.(2)
Incorporated by reference to the Registration Statement on Form SB-2 (File No. 333-105472) of ASB
Holding Company filed with the SEC on May 22, 2003.(3)
Incorporated by reference to the Form 10-KSB (File No. 000-31789) of ASB Holding Company filed with
the SEC on December 24, 2003.(4)
Incorporated by reference to the Form 8-K (File No. 000-31789) of ASB Holding Company filed with the
SEC on April 18, 2005.(5)
Incorporated by reference to the definitive proxy statement (File No. 000-31789) of ASB Holding Company
filed with the SEC on December 28, 2004.

Next Page 36


**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized as of December 14, 2006.

| | **AMERICAN BANCORP OF NEW JERSEY, INC.**
| | ----------------------------------------
|
| | By:                                     

Pursuant to the requirement of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities
indicated as of December 14, 2006.

|/s/ W. George ParkerW. George Parker
Chairman                                  |  | /s/ Joseph KliminskiJoseph Kliminski
Chief Executive Officer and Director
(Principal Executive Officer)                                  
|------------------------------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------
|                                                                              
|/s/ Fred G. KowalFred G. Kowal
President, Chief Operating Officer
and Director |  | /s/ Eric B. HeyerEric B. Heyer
Senior Vice President, Treasurer and	
Chief Financial Officer
(Principal Financial and Accounting Officer)
|                                                                              
|/s/ H. Joseph NorthH. Joseph North
Director                                    |  | /s/ James H. WardJames H. Ward, III
Vice Chairman                                                                                        
|                                                                              
|/s/ Stanley ObalStanley ObalDirector                                           |  | /s/ Robert GaccioneRobert GaccioneDirector                                                                                               
|                                                                              
|/s/ Vincent S. RospondVincent S. Rospond
Director