**EXHIBIT      99.1**

**PRESS      RELEASE**

**FOR      IMMEDIATE RELEASE**

| Contact:                         | Theresa                M. Wasko, Treasurer and Chief Financial Officer |
|----------------------------------|------------------------------------------------------------------------|
| Telephone                Number: | 610-965-5959                                                           |
| E-mail:                          | twasko@eastpennbank.com                                                |

**EAST      PENN FINANCIAL CORPORATION**

**REPORTS      A 3.1% INCREASE IN 2006 YEAR END EARNINGS**

**(January      24, 2007) - EMMAUS, PA - **
**(NASDAQ      Capital Market: EPEN)**

|   | § | Net                interest income of $3,295,000 for the fourth quarter of 2006 remained                relatively stable in comparison with net interest income of $3,279,000                for                the fourth quarter of 2005 reflecting the flatness of the yield curve.                While the Bank experienced compression in its net interest margin,                it was                able to manage further deterioration through the 10.0% growth of                its                loans, which are its highest yielding assets, and proactively managing                its                cost of funds associated with deposits and other interest bearing                liabilities. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | The                provision made to the allowance for loan losses in the fourth quarter                of                2006 was $90,000 as compared with $84,000 for 2005. Although the                provision                increased, it was incrementally less than the growth in loans because                of                the continued high credit quality of the                portfolio. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Non                interest income increased to $923,000 in the fourth quarter of 2006                as                compared with $731,000 for the same period in 2005. This increase                was                primarily attributable to a one-time net gain of $302,000 from the                sale of                the Bank’s credit card portfolio recorded during the                quarter. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Non                interest expenses decreased $83,000, or 2.9%, to $2,814,000 at the                end of                the fourth quarter of 2006 from $2,897,000 in 2005 in spite of the                additional expenses incurred from the opening of a new branch location                during 2006. The decrease is attributable to management’s ongoing efforts                to improve the Bank’s efficiency. |
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**www.eastpennbank.com**

| **East                  Penn Financial Corporation**             |   |                              |      |
|------------------------------------------------------------------|--------|-----------------------------------|-----------|
| **Consolidated                  Selected Financial Information** |   |                              |      |   |   |
|                                                             |   | **December                  31,** |      |
| (in                  thousands, except share data)               |   | **2006**                          |      | **2005** |   |
|                                                             |   | (Unaudited)                       |      |
| **Balance                  Sheet Data:**                         |   |                              |      |   |   |   |   |
|                                                             |   |                              |      |   |   |   |   |
| Total                  assets                                    |   | $                                 | 439,452   |   | $ | 404,229 |   |
| Securities                  available for sale                   |   |                              | 70,392    |   |   | 74,175 |   |
| Securities                  held to maturity, at cost            |   |                              | -         |   |   | 1,038 |   |
| Mortgages                  held for sale                         |   |                              | 373       |   |   | 1,077 |   |
| Total                  loans (net of unearned discount)          |   |                              | 322,800   |   |   | 293,387 |   |
| Allowance                  for loan losses                       |   |                              | (3,258    | ) |   | (3,072 | ) |
| Premises                  and equipment, net                     |   |                              | 9,820     |   |   | 9,320 |   |
|                                                             |   |                              |      |   |   |   |   |
| Non-interest                  bearing deposits                   |   |                              | 46,110    |   |   | 44,257 |   |
| Interest                  bearing deposits                       |   |                              | 326,521   |   |   | 280,049 |   |
| Total                  deposits                                  |   |                              | 372,631   |   |   | 324,306 |   |
| Federal                  funds purchased and securities          |   |                              |      |   |   |   |   |
| sold                  under agreements to repurchase             |   |                              | 6,749     |   |   | 7,573 |   |
| Other                  borrowings                                |   |                              | 24,000    |   |   | 40,000 |   |
| Junior                  subordinated debentures                  |   |                              | 8,248     |   |   | 8,248 |   |
|                                                             |   |                              |      |   |   |   |   |
| Stockholders'                  equity                            |   |                              | 25,161    |   |   | 22,841 |   |
|                                                             |   |                              |      |   |   |   |   |
| Common                  shares outstanding                       |   |                              | 6,305,262 |   |   | 6,304,262 |   |
| Book                  value per share                            |   | $                                 | 3.99      |   | $ | 3.62 |   |

----

|                                                 |   | **Three                  Months**       |   | **Twelve                  Months**      |   |
|------------------------------------------------------|--------|-----------------------------------------|--------|-----------------------------------------|--------|
|                                                 |   | **Ended                  December 31,** |   | **Ended                  December 31,** |   |
| (in                  thousands, except share data)   |   | **2006**                                |   | **2005**                                |   | **2006** |   | **2005** |   |
|                                                 |   |   (Unaudited)                 |   |   (Unaudited)            |   |
| **Statement                  of Income Data:**       |   |                                    |   |                                    |   |   |   |   |   |   |   |   |   |
|                                                 |   |                                    |   |                                    |   |   |   |   |   |   |   |   |   |
| Total                  interest income               |   | $                                       | 6,334  |                                    | $      | 5,421 |   | $ | 23,783 |   | $ | 20,026 |   |
| Total                  interest expense              |   |                                    | 3,039  |                                    |   | 2,142 |   |   | 10,475 |   |   | 7,255 |   |
| Net                  interest income                 |   |                                    | 3,295  |                                    |   | 3,279 |   |   | 13,308 |   |   | 12,771 |   |
|                                                 |   |                                    |   |                                    |   |   |   |   |   |   |   |   |   |
| Provision                  for loan losses           |   |                                    | 90     |                                    |   | 84 |   |   | 389 |   |   | 420 |   |
| Net                  interest income after provision |   |                                    | 3,205  |                                    |   | 3,195 |   |   | 12,919 |   |   | 12,351 |   |
| Other                  income                        |   |                                    | 923    |                                    |   | 731 |   |   | 2,732 |   |   | 2,511 |   |
| Other                  expenses                      |   |                                    | 2,814  |                                    |   | 2,897 |   |   | 11,107 |   |   | 10,345 |   |
|                                                 |   |                                    |   |                                    |   |   |   |   |   |   |   |   |   |
| Net                  income before taxes             |   |                                    | 1,314  |                                    |   | 1,029 |   |   | 4,544 |   |   | 4,517 |   |
| Income                  tax expense                  |   |                                    | 282    |                                    |   | 211 |   |   | 933 |   |   | 1,014 |   |
|                                                 |   |                                    |   |                                    |   |   |   |   |   |   |   |   |   |
| Net                  income                          |   | $                                       | 1,032  |                                    | $      | 818 |   | $ | 3,611 |   | $ | 3,503 |   |
|                                                 |   |                                    |   |                                    |   |   |   |   |   |   |   |   |   |
| Basic                  earnings per share (1)        |   | $                                       | 0.16   |                                    | $      | 0.13 |   | $ | 0.57 |   | $ | 0.56 |   |
| Diluted                  earnings per share (2)      |   | $                                       | 0.16   |                                    | $      | 0.13 |   | $ | 0.57 |   | $ | 0.55 |   |
| Cash                  dividends per common share     |   | $                                       | 0.00   |                                    | $      | 0.00 |   | $ | 0.22 |   | $ | 0.19 |   |

----

|                                                                                   |   | **Twelve                  Months**      |   |
|----------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                                                   |   | **Ended                  December 31,** |   |
|                                                                                   |   | **2006**                                |   | **2005** |   |
|                                                                                   |   | (Unaudited)                             |   |   (Unaudited) |   |
| **Selected                  Financial Ratios:**                                   |   |                                    |   |   |   |   |   |
|                                                                                   |   |                                    |   |   |   |   |   |
| Annualized                  return on average equity                                   |   |                                    | 15.64  | % |   | 15.86 | % |
| Annualized                  return on average assets                                   |   |                                    | 0.87   | % |   | 0.92 | % |
| Net                  interest margin (3)                                               |   |                                    | 3.63   | % |   | 3.80 | % |
| Efficiency                  ratios:                                                    |   |                                    |   |   |   |   |   |
| Operating                  expenses as a percentage of revenues                  (3)   |   |                                    | 64.60  | % |   | 63.13 | % |
| Operating                  expenses as a percentage of average                  assets |   |                                    | 2.67   | % |   | 2.71 | % |
| Tier                  1 leverage capital                                               |   |                                    | 7.79   | % |   | 7.97 | % |
| Net                  loans (4) as a percent of deposits                                |   |                                    | 86.63  | % |   | 90.47 | % |
| Average                  equity to average assets                                      |   |                                    | 5.54   | % |   | 5.79 | % |
|                                                                                   |   |                                    |   |   |   |   |   |
| **Selected                  Asset Quality Ratios:**                                    |   |                                    |   |   |   |   |   |
|                                                                                   |   |                                    |   |   |   |   |   |
| Allowance                  for loan losses / Total loans (4)                           |   |                                    | 1.01   | % |   | 1.05 | % |
| Allowance                  for loan losses /                                           |   |                                    |   |   |   |   |   |
| Non-performing                  assets (5)                                             |   |                                    | 752.42 | % |   | 468.29 | % |
| Non-accrual                  loans / Total loans (4)                                   |   |                                    | 0.13   | % |   | 0.21 | % |
| Non-performing                  assets (5) / Total assets                              |   |                                    | 0.10   | % |   | 0.16 | % |
| Net                  charge-offs / Average loans (4)                                   |   |                                    | 0.07   | % |   | 0.07 | % |
|                                                                                   |   |                                    |   |   |   |   |   |

| (1)                    Based upon the weighted average number of shares of common stock                    outstanding for the applicable periods.                                                     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)                    Based upon the weighted average number of shares plus dilutive                    potential                    common share equivalents outstanding for the applicable periods. |
| (3)                    Calculated on a fully tax-equivalent basis.                                                                                                                                     |
| (4)                    The term “loans” includes loans held in the portfolio, including                    non-accruing loans, and excludes loans held for sale.                           |
| (5)                    Includes non-accrual loans.                                                                                                                                                     |