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

**FORM 10-Q**

|**[X]**   | **QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the quarterly period ended June 30, 2007                                                                                                                                                        
|--------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**[   ]** | **TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from _____________ to ___________

**Commission file number 000-1330039**

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

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

Yes [ X ]       No  [    ]

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

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

As of August 6, 2007, there were 12,373,866 outstanding shares of the Registrant's Common Stock.



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**AMERICAN BANCORP OF NEW JERSEY, INC.**

**Table of Contents**

|**PART I - FINANCIAL INFORMATION (UNAUDITED)**
|----------------------------------------------
|                                              
|Item 1.                                       
|                                              
|                                              
|Item 2.                                       
|                                              
|Item 3.                                       
|                                              
|Item 4.                                       
|                                              
|**PART II - OTHER INFORMATION**               
|                                              
|Item 1.                                       
|Item 1A.                                      
|Item 2.                                       
|Item 3.                                       
|Item 4.                                       
|Item 5.                                       
|Item 6.                                       
|                                              
|**FORM 10-Q SIGNATURE PAGE**                  
|                                              
|**CERTIFICATIONS**                            



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**ITEM 1.	FINANCIAL STATEMENTS**

**American Bancorp of New Jersey, Inc.
Statements of Financial Condition
(in thousands, except share data)
(unaudited)**

|                                                                                                                                                                                                                                                        | **June 30,2007** | **September 30,2006**
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------- | ---------------------
|**ASSETS**                                                                                                                                                                                                                                             
|Cash and cash equivalents                                                                                                                                                                                                                              
|Cash and due from banks                                                                                                                                                                                                                                 | $     6,101      | $     6,671          
|Interest-bearing deposits                                                                                                                                                                                                                               | 27,829           | 494                  
|Federal funds sold                                                                                                                                                                                                                                      | 11,000           | -                    
|Total cash and cash equivalents                                                                                                                                                                                                                         | 44,930           | 7,165                
|                                                                                                                                                                                                                                                       
|Securities available-for-sale                                                                                                                                                                                                                           | 52,793           | 74,523               
|Securities held-to-maturity (fair value: June 30, 2007-$7,076
   September 30, 2006 - $10,423)                                                                                                                                                          | 7,215            | 10,547               
|Loans held for sale                                                                                                                                                                                                                                     | 503              | -                    
|Loans receivable, net of allowance for loan losses (June 30, 2007 -$2,443,
   September 30, 2006 -$2,123)                                                                                                                                               | 425,563          | 398,624              
|Premises and equipment                                                                                                                                                                                                                                  | 10,341           | 6,523                
|Federal Home Loan Bank stock, at cost                                                                                                                                                                                                                   | 2,644            | 3,356                
|Cash surrender value of life insurance                                                                                                                                                                                                                  | 13,084           | 8,747                
|Accrued interest receivable                                                                                                                                                                                                                             | 2,162            | 1,979                
|Other assets                                                                                                                                                                                                                                            | 2,971            | 2,855                
|Total assets                                                                                                                                                                                                                                            | $   562,206      | $   514,319          
|                                                                                                                                                                                                                                                       
|**LIABILITIES AND EQUITY**                                                                                                                                                                                                                             
|Deposits                                                                                                                                                                                                                                               
|Non-interest-bearing                                                                                                                                                                                                                                    | $    29,748      | $    23,545          
|Interest-bearing                                                                                                                                                                                                                                        | 380,168          | 303,602              
|Total deposits                                                                                                                                                                                                                                          | 409,916          | 327,147              
|                                                                                                                                                                                                                                                       
|Advance payments by borrowers for taxes and insurance                                                                                                                                                                                                   | 2,865            | 2,466                
|Federal Home Loan Bank advances                                                                                                                                                                                                                         | 39,628           | 56,075               
|Accrued expenses and other liabilities                                                                                                                                                                                                                  | 3,827            | 3,770                
|Total liabilities                                                                                                                                                                                                                                       | $   456,236      | $   389,458          
|                                                                                                                                                                                                                                                       
|Commitments and contingent liabilities                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                       
|Equity                                                                                                                                                                                                                                                 
|Preferred stock, $.10 par value, 10,000,000 shares authorized
       at June 30, 2007 and September 30, 2006;                                                                                                                                           | -                | -                    
|                                                                                                                                                                                                                                                       
|Common stock, $.10 par value, 20,000,000 shares authorized,
       14,527,953 and 14,527,953 shares issued
       at June 30, 2007 and September 30, 2006;
       12,468,866 and 14,163,220 outstanding
       at June 30, 2007 and September 30, 2006; | 1,453            | 1,453                
|                                                                                                                                                                                                                                                       
|Additional paid in capital                                                                                                                                                                                                                              | 113,157          | 111,780              
|Unearned ESOP shares                                                                                                                                                                                                                                    | (8,212)          | (8,549)              
|Retained earnings                                                                                                                                                                                                                                       | 24,775           | 25,438               
|Treasury Stock; 2,059,087 and 364,733 shares
       at June 30, 2007 and September 30, 2006                                                                                                                                                             | (24,651)         | (4,380)              
|Accumulated other comprehensive loss                                                                                                                                                                                                                    | (552)            | (881)                
|Total equity                                                                                                                                                                                                                                            | 105,970          | 124,861              
|Total liabilities and equity                                                                                                                                                                                                                            | $   562,206      | $   514,319          

See accompanying notes to unaudited consolidated financial statements



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**American Bancorp of New Jersey, Inc.
Statements of Income
(in thousands, except share data)
(unaudited)**

|                                                    | **Nine Months EndedJune 30,** | **Three Months EndedJune 30,**
|--------------------------------------------------- | ----------------------------- | ------------------------------
|****                                                | **2007**                      | **2006**                      
|Interest and dividend income                       
|Loan, including fees                                | $   18,206                    | $   14,754                    
|Securities                                          | 2,306                         | 2,970                         
|Federal funds sold and other                        | 863                           | 1,027                         
|Total interest income                               | 21,375                        | 18,751                        
|                                                   
|Interest expense                                   
|NOW and money market                                | 2,140                         | 592                           
|Savings                                             | 2,054                         | 1,692                         
|Certificates of deposit                             | 6,124                         | 4,272                         
|Federal Home Loan Bank advances                     | 1,767                         | 1,951                         
|Total interest expense                              | 12,085                        | 8,507                         
|                                                   
|Net interest income                                 | 9,290                         | 10,244                        
|                                                   
|Provision for loan losses                           | 320                           | 355                           
|                                                   
|Net interest income after provision for loan losses | 8,970                         | 9,889                         
|                                                   
|Noninterest income                                 
|Deposit service fees and charges                    | 518                           | 533                           
|Income from cash surrender value of life insurance  | 337                           | 234                           
|Gain on sale of loans                               | 42                            | 12                            
|Loss on sales of securities available-for-sale      | (11)                          | (271)                         
|Other                                               | 165                           | 196                           
|Total noninterest income                            | 1,051                         | 704                           
|                                                   
|Noninterest expense                                
|Salaries and employee benefits                      | 6,345                         | 4,912                         
|Occupancy and equipment                             | 744                           | 683                           
|Data processing                                     | 549                           | 504                           
|Advertising and marketing                           | 244                           | 222                           
|Professional and consulting                         | 299                           | 383                           
|Legal                                               | 110                           | 233                           
|Other                                               | 826                           | 731                           
|Total noninterest expense                           | 9,117                         | 7,668                         
|                                                   
|Income before provision for income taxes            | 904                           | 2,925                         
|                                                   
|Provision for income taxes                          | 276                           | 1,111                         
|                                                   
|Net income                                          | $      628                    | $    1,814                    
|                                                   
|Comprehensive income (loss)                         | $      957                    | $    1,364                    
|                                                   
|Earnings per share:                                
|Basic                                               | $     0.05                    | $     0.14                    
|Diluted                                             | $     0.05                    | $     0.14                    

See accompanying notes to unaudited consolidated financial statements



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**American Bancorp of New Jersey, Inc.
Statements of Stockholders' Equity
Nine months ended June 30, 2006
(in thousands)
(unaudited)**

|                                                                                                     | CommonStock | AdditionalPaid-InCapital | UnearnedESOPShares | UnearnedRSPShares | RetainedEarnings | AccumulatedOtherComprehensiveLoss | AmountReclassifiedOn ESOPShares | TotalEquity   | Compre-hensiveIncome(Loss)
|---------------------------------------------------------------------------------------------------- | ----------- | ------------------------ | ------------------ | ----------------- | ---------------- | --------------------------------- | ------------------------------- | ------------- | --------------------------
|Balance at   September 30, 2005                                                                      | $       555 | $      17,242            | $     (1,064)      | $     (1,212)     | $     25,417     | $       (959)                     | $     (473)                     | $      39,506 |                           
|Transfer of Unearned RSP to
   APIC due to adoption of
   FAS 123R                                   | -           | (1,212)                  | -                  | 1,212             | -                | -                                 | -                               | -             |                           
|Issuance and exchange of
   common stock, net of
   issuance costs                                   | 862         | 96,661                   | (7,935)            | -                 | -                | -                                 | -                               | 89,588        |                           
|MHC capital infusion from
   merger                                                                  | -           | 99                       | -                  | -                 | -                | -                                 | -                               | 99            |                           
|RSP stock grants                                                                                     | 36          | (36)                     | -                  | -                 | -                | -                                 | -                               | -             |                           
|RSP share purchases                                                                                  | -           | (2,254)                  | -                  | -                 | -                | -                                 | -                               | (2,254)       |                           
|RSP shares earned                                                                                    |             | 393                      |                    |                   |                  |                                   |                                 | 393           |                           
|Stock options earned                                                                                 | -           | 246                      | -                  | -                 | -                | -                                 | -                               | 246           |                           
|ESOP shares earned                                                                                   | -           | 84                       | 337                | -                 | -                | -                                 | -                               | 421           |                           
|Cash dividends paid -
    $0.12 per share                                                            | -           | -                        | -                  | -                 | (1,586)          | -                                 | -                               | (1,586)       |                           
|Reclassification due to
   elimination of
   repurchase obligation                                   | -           | -                        | -                  | -                 | -                | -                                 | 473                             | 473           |                           
|Comprehensive income                                                                                
|Net income                                                                                           | -           | -                        | -                  | -                 | 1,814            | -                                 | -                               | 1,814         |                           
|Change in unrealized 
         loss on securities
         available-for-sale, net
         of taxes | -           | -                        | -                  | -                 | -                | (450)                             | -                               | (450)         |                           
|Total comprehensive             income                                                               |             |                          |                    |                   |                  |                                   |                                 |               | $     1,364               
|Balance at 
   June 30, 2006                                                                         | $     1,453 | $     111,223            | $     (8,662)      | $         -       | $     25,645     | $     (1,409)                     | $          -                    | $  128,250    |                           

See accompanying notes to unaudited consolidated financial statements



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**American Bancorp of New Jersey, Inc.
Statements of Stockholders' Equity
Nine months ended June 30, 2007
(in thousands)
(unaudited)**

|                                                                                   | CommonStock | AdditionalPaid-InCapital | UnearnedESOPShares | RetainedEarnings | AccumulatedOtherComprehensiveIncome | Treasury Stock   | TotalEquity   | Compre-hensiveIncome(Loss)
|---------------------------------------------------------------------------------- | ----------- | ------------------------ | ------------------ | ---------------- | ----------------------------------- | ---------------- | ------------- | --------------------------
|Balance at
   September 30, 2006                                                   | $     1,453 | $     111,780            | $     (8,549)      | $     25,438     | $     (881)                         | $     (4,380)    | $     124,861 |                           
|RSP stock grants                                                                   | -           | (76)                     | -                  | -                | -                                   | 76               | -             |                           
|RSP shares earned                                                                  | -           | 904                      | -                  | -                | -                                   | -                | 904           |                           
|Treasury share purchases                                                           | -           | -                        | -                  | -                | -                                   | (20,347)         | (20,347)      |                           
|Stock options earned                                                               |             | 422                      | -                  | -                | -                                   | -                | 422           |                           
|ESOP shares earned                                                                 | -           | 127                      | 337                | -                | -                                   | -                | 464           |                           
|Cash dividends paid -
    $0.12 per share                                          | -           | -                        | -                  | (1,421)          | -                                   | -                | (1,421)       |                           
|Cumulative effect of
   adoption of SAB 108                                        | -           | -                        | -                  | 130              | -                                   | -                | 130           |                           
|Comprehensive income                                                              
|Net income                                                                         | -           | -                        | -                  | 628              | -                                   | -                | 628           |                           
|Change in unrealized
    loss on securities    available-for-sale, net    of taxes | -           | -                        | -                  | -                | 329                                 | -                | 329           |                           
|Total comprehensive        income                                                  |             |                          |                    |                  |                                     |                  |               | $    957                  
|Balance at
   June 30, 2007                                                        | $     1,453 | $    113,157             | $     (8,212)      | $     24,775     | $    (552)                          | $       (24,651) | $     105,970 |                           



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**American Bancorp of New Jersey, Inc.
Statements of Cash Flows
(in thousands)
(unaudited)**

|                                                                                      |  | Nine Months Ended
June 30,
|------------------------------------------------------------------------------------- |  | --------------------------
|                                                                                      |  | 2007                      
|**Cash flows from operating activities**                                             
|Net Income                                                                            |  | 628                       
|Adjustments to reconcile net income to net cash
     provided by operating activities
|Depreciation and amortization                                                         |  | 261                       
|Net amortization of premiums and discounts                                            |  | (10)                      
|Losses on sales of securities available-for-sale                                      |  | 11                        
|ESOP compensation expense                                                             |  | 464                       
|RSP compensation expense                                                              |  | 904                       
|SOP compensation expense                                                              |  | 422                       
|Provision for loan losses                                                             |  | 320                       
|Increase in cash surrender value of life insurance                                    |  | (337)                     
|Gain on sale of loans                                                                 |  | (42)                      
|Proceeds from sales of loans                                                          |  | 8,421                     
|Origination of loans held for sale                                                    |  | (8,882)                   
|Decrease (increase) in accrued interest receivable                                    |  | (183)                     
|Decrease (increase) in other assets                                                   |  | (41)                      
|Change in deferred income taxes                                                       |  | (269)                     
|Increase (decrease) in other liabilities                                              |  | 187                       
|Net cash provided by operating activities                                             |  | 1,854                     
|                                                                                     
|**Cash flows from investing activities**                                             
|Net increase in loans receivable                                                      |  | (27,259)                  
|Purchases of securities held-to-maturity                                              |  | -                         
|Maturities of securities held-to-maturity                                             |  | 2,000                     
|Principal paydowns on securities held-to-maturity                                     |  | 1,319                     
|Purchases of securities available-for-sale                                            |  | (4,990)                   
|Sales of securities available-for-sale                                                |  | 3,227                     
|Maturities of securities available-for-sale                                           |  | 11,000                    
|Principal paydowns on securities available-for-sale                                   |  | 13,028                    
|Purchase of Federal Home Loan Bank stock                                              |  | (1,999)                   
|Redemption of Federal Home Loan Bank stock                                            |  | 2,711                     
|Purchase of bank-owned life insurance                                                 |  | (4,000)                   
|Purchase of premises and equipment                                                    |  | (4,079)                   
|Net cash used in investing activities                                                 |  | (9,042)                   
|                                                                                     
|**Cash flows from financing activities**                                              |  |                           
|Net increase in deposits                                                              |  | 82,769                    
|Stock subscriptions held for parent received (refunded or
          applied)          |  | -                         
|Net change in advance payments by borrowers for taxes and
          insurance         |  | 399                       
|Repayment of Federal Home Loan Bank of New York advances                              |  | (6,047)                   
|Net change in Federal Home Loan Bank of New York overnight
          lines of credit  |  | (10,400)                  
|Cash dividends paid                                                                   |  | (1,421)                   
|MHC Capital infusion                                                                  |  | -                         
|RSP and treasury share purchases                                                      |  | (20,347)                  
|Net proceeds from stock issuance                                                      |  | -                         
|Net cash provided by (used in) financing activities                                   |  | 44,953                    
|Net change in cash and cash equivalents                                               |  | 37,765                    
|Cash and cash equivalents at beginning of year                                        |  | 7,165                     
|**Cash and cash equivalents at end of year**                                          |  | $   44,930                

(Continued)



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**American Bancorp of New Jersey, Inc.
Statements of Cash Flows
(in thousands)
(unaudited)**

|                                                                 | Nine Months Ended
June 30,
|---------------------------------------------------------------- | --------------------------
|                                                                 | 2007                      
|Supplemental cash flow information:                             
|Cash paid during the period for                                 
|Interest                                                         | $     12,232              
|Income taxes, net of refunds                                     | 867                       
|                                                                
|Supplemental disclosures of non-cash financing transaction:     
|Transfer of stock subscriptions received and deposits to capital | -                         
|Cumulative effect of adoption of SAB 108                         | 130                       

See accompanying notes to unaudited consolidated financial statements



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**American Bancorp of New Jersey, Inc.
Notes To Unaudited Financial Statements
(in thousands)**

Note 1 - Basis of Presentation

American Bancorp of New Jersey, Inc. (the "Company") is a New Jersey chartered corporation
organized in May 2005 that was formed for the purpose of acquiring all of the capital stock of American
Bank of New Jersey (the "Bank"), which was previously owned by ASB Holding Company ("ASBH").
ASBH was a federally chartered corporation organized in June 2003 that was formed for the purpose of
acquiring all of the capital stock of the Bank, which was previously owned by American Savings, MHC
(the "MHC"), a federally chartered mutual holding company.  The Bank had previously converted from a
mutual to a stock savings bank in a mutual holding company reorganization in 1999 in which no stock
was issued to any person other than the MHC.

On October 3, 2003, ASB Holding Company, the predecessor of American Bancorp of New
Jersey, Inc., completed a minority stock offering and sold 1,666,350 shares of common stock in a
subscription offering at $10 per share and received proceeds of $16,060,000 net of offering costs of
$603,000.  ASBH contributed $9,616,000 or approximately 60% of the net proceeds to the Bank in the form
of a capital contribution.  ASBH loaned $1,333,080 to the Bank's employee stock ownership plan and the
ESOP used those funds to acquire 133,308 shares of common stock at $10 per share.

After the sale of the stock, the MHC held 70%, or 3,888,150 shares, of the outstanding stock of
ASBH with the remaining 30% or, 1,666,350 shares, held by persons other than the MHC.  ASBH held
100% of the Bank's outstanding common stock.

On October 5, 2005, the Company completed a second step conversion in which the
3,888,150 shares of ASB Holding Company held by American Savings, MHC were converted
and sold in a subscription offering.  Through this transaction, ASB Holding Company ceased to
exist and was supplanted by American Bancorp of New Jersey as the holding company for the
Bank.  A total of 9,918,750 shares of common stock were sold in the offering at $10 per share
through which the Company received proceeds of $97,524,302 net of offering costs of
$1,663,198.  The Company contributed $48,762,151 or approximately 50% of the net proceeds to
the Bank in the form of a capital contribution.  The Company loaned $7,935,000 to the Bank's
ESOP which used those funds to acquire 793,500 shares of common stock at $10 per share.

As part of the conversion, each of the 1,666,350 outstanding shares of ASB Holding Company
held by public shareholders was exchanged for 2.55102 of the Company's shares.  This exchange resulted
in an additional 4,250,719 shares of American Bancorp of New Jersey, Inc. being issued for a total of
14,169,469 outstanding shares.

The accompanying unaudited consolidated financial statements include the accounts of
American Bancorp of New Jersey, Inc. and its wholly owned subsidiaries, American Bank of New Jersey
and ASB Investment Corp. (the "Investment Corp.") as of June 30, 2007 and September 30, 2006 and for
the three and nine months ended June 30, 2007 and June 30, 2006.  Significant intercompany accounts
and transactions have been eliminated in consolidation.  References in this Quarterly Report on Form 10-Q to the Company generally refer to the Company and 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.

The primary business of the Company is the ownership of the Bank and the Investment Corp.
The Bank provides a full range of banking services to individual and corporate customers located
primarily in the New Jersey and New York metropolitan area.  The Bank is subject to competition from



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The accompanying unaudited consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of America for interim
financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all the information and notes required by accounting principles
generally accepted in the United States of America for complete financial statements.  These interim
statements should be read in conjunction with the consolidated financial statements and notes included
in the Annual Report on Form 10-K.  The June 30, 2007 balance sheet presented herein has been derived
from the audited financial statements included in the consolidated financial statements and notes
included in the Annual Report on Form 10-K filed with the Securities and Exchange Commission, but
does not include all disclosures required by accounting principles generally accepted in the United States
of America.

To prepare financial statements in conformity with accounting principles generally accepted in
the United States of America, management makes estimates and assumptions based on available
information.  These estimates and assumptions affect the amounts reported in the financial statements
and the disclosures provided, and future results could differ.  The allowance for loan losses, prepayment
speeds on mortgage -backed securities, and status of contingencies are particularly subject to change.

Interim statements are subject to possible adjustment in connection with the annual audit of the
Company for the year ended September 30, 2007.  In the opinion of management of the Company, the
accompanying unaudited interim consolidated financial statements reflect all of the adjustments
(consisting of normal recurring adjustments) necessary for a fair presentation of the consolidated
financial position and consolidated results of operations for the periods presented.

The results of operations for the three and nine months ended June 30, 2007 are not necessarily
indicative of the results to be expected for the full year or any other period.

Note 2 - Earnings Per Share (EPS)

Amounts reported as basic earnings per share of common stock reflect earnings available to
common stockholders for the period divided by the weighted average number of common shares
outstanding during the period less unearned ESOP and restricted stock plan shares.  Diluted EPS reflects
the potential dilution that could occur if securities or other contracts to issue common stock (such as
stock awards and options) were exercised or converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the entity.  Diluted EPS is computed by dividing
income by the weighted-average number of shares outstanding for the period plus common-equivalent
shares computed using the treasury stock method.



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The factors used in the earnings per share computation follow.

|                                                                                      | Nine Months Ended | Three Months Ended
|------------------------------------------------------------------------------------- | ----------------- | ------------------
|                                                                                      | June 30,          | June 30,          
|                                                                                      | 2007              | 2006              
|Basic                                                                                
|Net income                                                                            | $           628   | $         1,814   
|                                                                                     
|Weighted average common shares
   outstanding                                         | 11,729,694        | 13,090,242        
|                                                                                     
|Basic earnings per common
share                                                       | $          0.05   | $          0.14   
|                                                                                     
|Diluted                                                                              
|Net income                                                                            | $           628   | $           1,814 
|                                                                                     
|Weighted average common shares
   outstanding  for basic earnings per
   common share | 11,729,694        | 13,090,242        
|                                                                                     
|Add:  Dilutive effects of assumed
   exercises of  stock options                      | 159,117           | 96,721            
|                                                                                     
|Add:  Dilutive effects of full vesting
   of stock  awards                            | 31,809            | 33,742            
|Average shares and dilutive
   potential  common shares                               | 11,920,620        | 13,220,705        
|                                                                                     
|Diluted earnings per common share                                                     | $          0.05   | $          0.14   

Note 3 - Other Stock-Based Compensation

At June 30, 2007, all shares and options available under the 2005 Restricted Stock Plan, 2005 Stock Option
Plan and the 2006 Equity Incentive Plan had been awarded to participants.



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A summary of the activity in the Company's stock option plans for the nine months ended June 30, 2007
and 2006 is as follows.

|                                               | For the nine months ended
|---------------------------------------------- | -------------------------
|                                               | June 30, 2007            
|                                               | Shares                   
|Outstanding at beginning of
   period          | 1,397,854                
|Granted                                        | 19,094                   
|Exercised                                      | -                        
|Forfeited or expired                           | -                        
|Outstanding at end of period                   | 1,416,948                
|                                              
|Options exercisable at period
   end           | 414,594                  
|Weighted average remaining
   contractual life |                          

A summary of the status of the Company's nonvested restricted stock plan shares as of June 30, 2007 and
2006 and changes during the nine months ended June 30, 2007 and 2006 are as follows.

|                                      | For the nine months ended
|------------------------------------- | -------------------------
|                                      | June 30, 2007            
|                                      | Shares                   
|Outstanding at beginning of
   period | 520,126                  
|Granted                               | 6,249                    
|Vested                                | (112,094)                
|Forfeited or expired                  | -                        
|Outstanding at end of period          | 414,281                  

Note 4 - Recent Accounting Pronouncements

In July 2006, the FASB released Interpretation No. 48, "Accounting for Uncertainty in Income
Taxes."  This Interpretation revises the recognition tests for tax positions taken in tax returns such that a
tax benefit is recorded only when it is more likely than not that the tax position will be allowed upon
examination by taxing authorities.  The amount of such a tax benefit to record is the largest amount that
is more likely than not to be allowed.   Any reduction in deferred tax assets or increase in tax liabilities
upon



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In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 "Fair
Value Measurements" ("SFAS No. 157"), which defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands disclosures about fair
value measurements.  SFAS No. 157 is effective for financial statements issued for fiscal years beginning
after November 15, 2007.  The adoption of SFAS No. 157 is not expected to have a material impact on the
Company's consolidated financial statements.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159 "The
Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS No. 159"), SFAS No. 159 permits
entities to choose to measure certain financial assets and financial liabilities at fair value. The objective is
to improve financial reporting by providing entities with the opportunity to mitigate volatility in
reported earnings caused by measuring related assets and liabilities differently without having to apply
complex hedge accounting provisions.  SFAS No. 159 is effective for financial statements issued for fiscal
years beginning after November 15, 2007.  The Company has not yet determined the effect of adopting
SFAS No. 159, which is effective for it on October 1, 2008, but may be adopted as early as October 1, 2007.

On September 13, 2006, the Securities and Exchange Commission (SEC) issued Staff Accounting
Bulletin No. 108 ("SAB 108").  SAB 108 provides guidance on the consideration of the effects of prior year
misstatements in quantifying current year misstatements for the purpose of a materiality assessment.
SAB 108 is effective for financial statements issued for fiscal years ending after November 15, 2006.
Management implemented the guidance issued under SAB 108 during the Company's first fiscal quarter
ended December 31, 2006 which resulted in an increase to retained earnings of $130,000 offset by a
decrease in deferred income taxes in the same amount.  This amount represented the entire balance of an
excess income tax liability originally recorded to the Bank's balance sheet prior to its conversion to a
public company in 2003 (see Statement of Stockholder's Equity for the nine months ended June 30, 2007
above).



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**ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                    RESULTS OF OPERATIONS**

**Forward-Looking Statements**

This report contains certain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended.  The Company intends such forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995 as amended and is including this statement for purposes of these
safe harbor provisions.  Forward-looking statements, which are based on certain assumptions
and describe future plans, strategies, and expectations of the Company, are generally
identifiable by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project,"
or similar expressions.  The Company's ability to predict results or the actual effect of future
plans or strategies is inherently uncertain.  Factors that could have a material adverse affect on
the operations and future prospects of the Company and its wholly-owned subsidiaries
include, but are not limited to, changes in:  interest rates; general economic conditions;
legislative/regulatory provisions; monetary and fiscal policies of the U.S. Government,
including policies of the U.S. Treasury and the Federal Reserve Board; the quality or
composition of the loan or investment portfolios; demand for loan products; deposit flows;
competition; and demand for financial services in the Company's market area.  These risks and
uncertainties should be considered in evaluating forward-looking statements, and undue
reliance should not be placed on such statements.

**Business Strategy**

Our business strategy has been to operate as a well-capitalized independent financial
institution dedicated to providing convenient access and quality service at competitive prices.
During recent years, we have experienced significant loan and deposit growth.  Our current
strategy seeks to continue that growth while we evolve from a traditional thrift institution into
a full service, community bank.   The highlights of our business strategy include the following:

> **Grow and diversify the deposit mix by emphasizing non-maturity account relationships
> acquired through de novo branching and existing deposit growth.  Our current business
> plan calls for us to open up to five de novo branches over approximately the next three to
> five years.**
> 
> Toward that end, we opened our newest full service branches in Verona and Nutley,
> New Jersey during the current fiscal year.  Our contiguous growth is expected to continue in
> fiscal 2007 with the opening of our next full service branch in Clifton, New Jersey - a
> community that is adjacent to that of our headquarters in Bloomfield, New Jersey.  We
> expect to open our Clifton, New Jersey branch during our fourth fiscal quarter ended
> September 30, 2007.**Grow and diversify the loan mix by increasing commercial loan origination volume while
> increasing the balance of such loans as a percentage of total assets.**
> 
> In support of our loan growth and diversification objectives, we have expanded our
> commercial lending staff which has, in turn, resulted in significant growth in the associated
> loans.  For the nine months ended June 30, 2007, our commercial loans, including multi-family, nonresidential real estate, construction and business loans, grew $36.8 million, or
> 38.3%, from $96.2 million to $133.0 million.  This increase has resulted in commercial loans
> growing from 24.1% to 31.1% of loans receivable, net over that same nine month period.



Next Page 14


> **Grow and diversify noninterest income through supplemental deposit and lending
> related services and strategies.**
> 
> Toward this end, we have expanded our loan sale capabilities to include selling loans on a
> servicing released basis.  Doing so has enabled the Bank to generate greater income per loan
> sold than had been recorded when loans were sold on a servicing retained basis.  Additional
> enhancements to noninterest income are expected to arise as the Bank grows its branch
> network and expands its menu of business-related deposit services.**Continue to implement or enhance alternative delivery channels for the origination and
> servicing of loan and deposit products.**
> 
> In support of this objective, we recently completed a significant overhaul of our Internet
> website which serves as a portal through which our customers access a growing menu of
> online services.  While enhancing our online services for retail customers, we are
> concurrently addressing the growth in business demand for such services.  Toward that end,
> we have expanded our business online banking product and service offering to now include
> remote check deposit, online cash management and online bill payment services for
> business.**Broaden and strengthen customer relationships by bolstering cross marketing strategies
> and tactics with a focus on multiple account/service relationships.**
> 
> We expect to continue our de novo branch deposit gathering strategy by which premium
> interest rates are paid on non-maturity, transaction accounts for a period of time to initially
> attract customers and funds.   During this initial period, we will continue to cross market
> other products and services to promote multiple account/service relationships and the
> retention of long term customers and core deposits.  We continue to make similar cross
> marketing efforts to enhance and expand our relationships with customers within the
> existing branches.**Utilize capital markets tools to effectively manage capital and enhance shareholder value.**
> 
> Toward that end, during the quarter ended March 31, 2007, the Company completed its
> repurchase of ten percent of its outstanding shares in accordance with its share repurchase
> plan announced in October 2006.  A second share repurchase plan by which an additional
> five percent of its shares would be repurchased by the Company was announced on April
> 30, 2007.  Of the 637,657 shares to be repurchased in accordance with this plan,
> approximately 284,000 shares or 45% were repurchased through the quarter ended June 30,
> 2007.

We expect that a number of the strategies outlined above will continue to have a detrimental
impact on near term earnings.  This impact is exacerbated by current market conditions exemplified by
the inverted yield curve.  Notwithstanding the near term earnings consequences, we expect to continue
to execute these growth and diversification strategies designed to enhance future earnings and their
resiliency toward the goal of enhancing shareholder value.



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**Executive Summary**

The Company's results of operations depend primarily on its 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 our 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 loans consist
primarily of residential mortgage loans, comprising first and second mortgages and home equity lines of
credit, and commercial loans, comprising multi-family and nonresidential real estate mortgage loans,
construction loans and business loans.  Our investments primarily include residential mortgage-related
securities and U.S. Agency debentures.  Our interest-bearing liabilities consist primarily of retail deposits
and borrowings from the Federal Home Loan Bank of New York.

During the first nine months of fiscal 2007, the Company's net interest spread declined 34 basis
points to 1.46% in comparison to 1.80% for all of fiscal 2006, as increases in the yield on earning assets
lagged the continued increases in the Company's cost of interest-bearing liabilities.  This decline was
primarily attributable to increases in the cost of retail deposits which outpaced the improved yields on
loans.  Contributing to this increase in the cost of deposits was the impact of higher promotional interest
rates paid on new deposit accounts at the Bank's Verona and Nutley branches which each opened during
the current fiscal year - Verona in the quarter ended December 31, 2006 and Nutley in the quarter ended
June 30, 2007.  However, a significant portion of that increase continued to be attributable to upward
pressure on overall deposit interest rates in the highly competitive markets serviced by the Bank whose
effects were exacerbated by the inverted yield curve.

The factors resulting in the compression of the Company's net interest spread also impacted the
Company's net interest margin.  However, the effects of that compression were somewhat diminished by
the continued favorable impact on net interest income resulting from the additional earning assets
funded by the significant level of capital held by the Company.  As a result, the Company's net interest
margin decreased by 29 basis points from 2.73% for fiscal 2006 to 2.44% for the first nine months of fiscal
2007.

Our results of operations are also affected by our provision for loan losses.  Provisions
for specific nonperforming assets and historical losses based on net charge-offs continue to be
nominal due to a history of low charge-offs and the relative stability of nonperforming asset
balances.  Non-performing loans as a percentage of total assets decreased from 0.41% at
September 30, 2006 to 0.22% at June 30, 2007.  For the nine months ended June 30, 2007, the
Company recorded net loan loss provision expense of $320,000.  Net loan loss provision as a
percentage of average assets decreased by one basis point to 0.08% for the first nine months of
fiscal 2007 from 0.09% for fiscal 2006.  The expense for the nine month period ended June 30,
2007 reflected the reversal of an $86,000 loss reserve against a previously impaired loan
participation.  Management's review conducted as of December 31, 2006 concluded that, based
upon the loan's consistent payment history and the improved financial performance of the
underlying commercial property, the loan was no longer impaired resulting in the reversal of
the prior impairment reserve.  The loan's classification was also upgraded from doubtful to
substandard.  Excluding this adjustment, the Bank's provision expense totaled $406,000 for the
nine months ended June 30, 2007.  This adjusted amount reflects those loan loss provisions that
continue to be made primarily in connection with the overall growth in portfolio loans.

Our results of operations also depend on our noninterest income and noninterest
expense.  Noninterest income includes deposit service fees and charges, income on the cash
surrender value of life insurance, gains on sales of loans and securities, gains on sales of other
real estate owned and loan related fees and charges.  Excluding gains and losses on sale of
assets, annualized noninterest income as a percentage of average assets totaled 0.25% for the
nine months ended June 30, 2007 which is consistent with that reported for all of fiscal 2006.



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Gains and losses on sale of assets, excluded in the comparison above, typically result
from the Company selling long term, fixed rate mortgage loan originations into the secondary
market for interest rate risk management purposes.  Demand for such loans typically fluctuates
with market interest rates.  As interest rates rise, market demand for long term, fixed rate
mortgage loans diminishes in favor of hybrid ARMs which the Company has historically
retained in its portfolio rather than selling into the secondary market.  Consequently, the gains
and losses on sale of loans reported by the Company will fluctuate with market conditions.
Additionally, such gains and losses may also reflect the impact of infrequent investment
security sales for asset/liability management purposes.  This was the case in fiscal 2006 when
the Company realized a $271,000 loss on sale of an underperforming investment security.  For
the first nine months of fiscal 2007, the gains and losses on asset sales resulted in net gains
totaling approximately $31,000 or approximately 0.01% of average assets for the period.

Noninterest expense includes salaries and employee benefits, occupancy and equipment
expenses, data processing and other general and administrative expenses. Generally, operating
costs have increased from those reported for fiscal 2006.  A significant portion of this increase is
attributable to additional personnel costs associated with executing the Company's business
plan which calls for further branching and increased strategic focus on commercial lending.
Benefit costs, in particular, have also increased as we granted shares and options under the
equity incentive plan approved by shareholders during fiscal 2006.  In the aggregate,
annualized noninterest expense as a percentage of average assets totaled 2.27% for the nine
months ended June 30, 2007 - an increase of 19 basis points from 2.08% for all of fiscal 2006.

Management expects occupancy and equipment expense to increase in future periods as
we continue to implement our de novo branching strategy to expand our branch office
network.  Our current business plan targets the opening of up to five de novo branches over a
three to five year timeframe.  Toward that end, we opened our newest deposit branches in
Verona and Nutley, New Jersey in the quarters ended December 31, 2006 and June 30, 2007,
respectively, with branch growth expected to continue with the opening of a full service
deposit branch in Clifton, New Jersey during the fourth fiscal quarter ending September 30,
2007.  Costs for land purchases or leases and branch construction costs for these and other
future branches will impact earnings going forward.  The expenses associated with opening
new offices, in addition to the personnel and operating costs that we will have once these
offices are open, are expected to significantly increase noninterest expenses.

The Company also expects compensation and occupancy expense to increase in future
periods as additional lending staff is added to support the Bank's commercial loan growth and
diversification strategies.  Implementation of these strategies will likely result in the need to
augment the office space available for our lending and administrative operations in order to
add the personnel called for by our growth plans.  Toward that end, the Bank has entered into a
land lease agreement through which it plans to relocate the Bank's Bloomfield branch site.  This
relocation will significantly upgrade and modernize the Bloomfield branch facility supporting
the Company's deposit growth and customer service enhancement objectives.  The relocation
will also support expansion of the administrative and lending office space within the
Company's existing headquarters facility where the branch is currently located.

Finally, management expects the costs associated with the Sarbanes-Oxley Act of 2002
(the "Act") to continue throughout the remainder of fiscal 2007, albeit at a comparatively lower
level than that recorded in fiscal 2006 - the first year of compliance with Section 404 of the Act.
In particular, management expects the cost of the Company's outsourced internal audit services
and, to a lesser extent, that of its external auditors, to be reduced as the Company transitions
from building and implementing its Sarbanes Oxley compliance program to managing and
maintaining it.

In total, our annualized return on average assets decreased 26 basis points to 0.16% for
the nine months ended June 30, 2007 from 0.42% for all of fiscal 2006, while annualized return
on average equity decreased 93 basis points to 0.75% from 1.68% for the same comparative
periods.



Next Page 17


Our net interest margin may continue to be adversely affected throughout several
possible interest rate environments.  The risks presented by movements in interest rates is
addressed more fully under Item 3. Quantitative and Qualitative Disclosures About Market
Risk found later in this report.  Additionally, our results of operations may also be affected
significantly by other economic and competitive conditions in our market area as well as
changes in applicable laws, regulations or governmental policies.  Furthermore, because our
lending activity is concentrated in loans secured by real estate located in New Jersey and the
New York metropolitan area, downturns in the regional economy could have a negative impact
on our earnings.

**Comparison of Financial Condition at June 30, 2007 and September 30, 2006**

Our total assets increased by $47.9 million, or 9.3%, to $562.2 million at June 30, 2007 from $514.3
million at September 30, 2006.  The increase reflected net growth in cash and cash equivalents, loans
receivable, net, premises and equipment and the cash surrender value of life insurance partially offset by
decreases in securities available for sale and  securities held to maturity.

Cash and cash equivalents increased by $37.7 million, or 527.1%, to $44.9 million at June 30, 2007
from $7.2 million at September 30, 2006.  The increase in cash and cash equivalents was largely
attributable to the accumulation of short term, interest earning investments which resulted from the net
cash inflows associated with deposit growth over that same period.  Such funds are expected to remain
invested in cash and cash equivalents or short term investment securities until reinvested into loans.

Securities classified as available-for-sale decreased $21.7 million, or 29.2%, to $52.8 million at
June 30, 2007 from $74.5 million at September 30, 2006.  Additionally, securities held to maturity
decreased approximately $3.3 million, or 31.6% to $7.2 million at June 30, 2007 from $10.5 million at
September 30, 2006.  The net decline in investment balances reflects the Company's continued strategy of
utilizing most cash flows from the investment securities portfolio to fund a portion of its growth in
commercial real estate and business loans and repay maturing borrowings.



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The following table compares the composition of the Company's investment securities portfolio
by security type as a percentage of total assets at June 30, 2007 and September 30, 2006.  Amounts
reported exclude unrealized gains and losses on the available for sale portfolio.

|                             | June 30, 2007          | September 30, 2006    
|---------------------------- | ---------------------- | ----------------------
|Type of Securities           | Amount                 | Percent ofTotal Assets
|                             | (Dollars in thousands)
|                            
|Fixed rate MBS               | $	12,200               | 2.17%                 
|ARM MBS                      | 15,651                 | 2.78                  
|Fixed rate CMO               | 25,912                 | 4.61                  
|Floating rate CMO            | 2,120                  | 0.38                  
|Fixed rate agency debentures | 4,998                  | 0.89                  
|Total                        | $	60,881               | 10.83%                

Assuming no change in interest rates, the estimated average life of the investment securities
portfolio was 2.06 years and 2.37 years, respectively, at June 30, 2007 and September 30, 2006.  Assuming
a hypothetical immediate and permanent increase in interest rates of 300 basis points, the estimated
average life of the portfolio would have extended to 2.59 years and 2.83 years at June 30, 2007 and
September 30, 2006, respectively.

Loans receivable, net increased by $27.0 million, or 6.8%, to $425.6 million at June 30, 2007 from
$398.6 million at September 30, 2006.  The growth was comprised of net increases in commercial loans
totaling $36.8 million or 38.2%.  Such loans include multi-family, nonresidential real estate, construction
and business loans.  The increase in loans receivable, net also included net increases in home equity loans
and home equity lines of credit totaling $2.8 million.  Offsetting the growth in these categories was a
$12.2 million decrease in the balance of 1-4 family first mortgages and net increases to the allowance for
loan losses totaling $320,000.

The following two tables compare the composition of the Company's loan portfolio by loan type
as a percentage of total assets at June 30, 2007 with that of September 30, 2006.  Amounts reported
exclude allowance for loan losses and net deferred origination costs.



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The table below generally defines loan type by loan maturity and/or repricing characteristics:

|                           | June 30, 2007          | September 30, 2006    
|-------------------------- | ---------------------- | ----------------------
|Type of Loans              | Amount                 | Percent ofTotal Assets
|                           | (Dollars in thousands)
|                          
|Construction               | $  29,106              | 5.18%                 
|1/1 and 3/3 ARMs           | 7,858                  | 1.40                  
|3/1 and 5/1 ARMs           | 138,120                | 24.56                 
|5/5 and 10/10 ARMs         | 44,521                 | 7.92                  
|7/1 and 10/1 ARMs          | 2,852                  | 0.51                  
|15 year fixed or less      | 126,865                | 22.57                 
|Greater than 15 year fixed | 50,649                 | 9.01                  
|Prime-indexed HELOC        | 20,134                 | 3.58                  
|Consumer                   | 641                    | 0.11                  
|Business                   | 6,710                  | 1.19                  
|                          
|Total                      | $     427,456          | 76.03%                

At June 30, 2007 and September 30, 2006, respectively, the balance of one-to-four family mortgage loans
included $23.8 million and $20.0 million of thirty year adjustable rate loans with initial fixed interest rate
periods of three to five years during which time monthly loan payments comprise interest only.  After
the initial period, the monthly payments on such loans are adjusted to reflect the collection of both
interest and principal over the loan's remaining term to maturity.

The table below generally defines loan type by collateral or purpose:

|                          | June 30, 2007          | September 30, 2006    
|------------------------- | ---------------------- | ----------------------
|Type of Loans             | Amount                 | Percent ofTotal Assets
|                          | (Dollars in thousands)
|                         
|Construction              | $   29,106             | 5.18%                 
|1-4 family mortgage       | 273,564                | 48.66                 
|Multifamily (5+) mortgage | 31,091                 | 5.53                  
|Nonresidential mortgage   | 61,989                 | 11.03                 
|Land                      | 4,220                  | 0.75                  
|1-4 family HELOC          | 20,134                 | 3.58                  
|Consumer                  | 641                    | 0.11                  
|Business                  | 6,710                  | 1.19                  
|                         
|Total                     | $427,456               | 76.03%                

Total deposits increased by $82.8 million, or 25.3%, to $409.9 million at June 30, 2007
from $327.1 million at September 30, 2006.  This increase was primarily attributable to the
opening of the Bank's newest full service branches located in Verona and Nutley, New
Jersey which opened in the quarters ended December 31, 2006 and June 30, 2007, respectively.
In total, noninterest bearing checking accounts increased approximately $6.2 million or 26.3%
while interest bearing checking accounts, including a promotional, high yield money market
account offered in conjunction with the Bank's newest branches, grew $70.0 million or 222.8%.
For that same period, time deposits grew $16.3 million or 9.8% while savings deposit balances
declined $9.7 million or 9.1%.  The decline in savings account balances was due largely to the
disintermediation of such balances into higher yielding accounts.



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At June 30, 2007, the Bank held approximately $3.3 million of municipal deposits,
representing a reduction of approximately $13.6 million from $16.9 million at September 30,
2006.  The outflow of municipal deposits included the closing of one municipal account
relationship whose balances at September 30, 2006 totaled approximately $11.8 million.

The following table compares the composition of the Company's deposit portfolio by category as
a percentage of total assets at June 30, 2007 with that of September 30, 2006.

|                             | June 30, 2007          | September 30, 2006    
|---------------------------- | ---------------------- | ----------------------
|Deposit category             | Amount                 | Percent ofTotal Assets
|                             | (Dollars in thousands)
|                            
|Money market checking        | $     82,335           | 14.64%                
|Noninterest bearing checking | 29,748                 | 5.29                  
|Interest bearing checking    | 19,130                 | 3.40                  
|Money market savings         | 10,996                 | 1.96                  
|Other savings                | 86,271                 | 15.35                 
|Certificates of deposit      | 181,436                | 32.27                 
|Total                        | $   409,916            | 72.91%                

The following table compares the composition of the Company's deposit portfolio by branch as a
percentage of total assets at June 30, 2007 with that of September 30, 2006.

|                 | June 30, 2007          | September 30, 2006    
|---------------- | ---------------------- | ----------------------
|Deposit category | Amount                 | Percent ofTotal Assets
|                 | (Dollars in thousands)
|                
|Bloomfield       | $  232,485             | 41.36%                
|Cedar Grove      | 108,295                | 19.26                 
|Verona           | 61,975                 | 11.02                 
|Nutley           | 7,161                  | 1.27                  
|Total            | $	409,916              | 72.91%                

FHLB advances decreased $16.5 million, or 29.3%, to $39.6 million at June 30, 2007 from $56.1
million at September 30, 2006.  The reduction was primarily attributable to the repayment of FHLB
advances totaling $6.0 million and the repayment of overnight borrowings totaling $10.4 million.



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The following table compares the composition of the Company's borrowing portfolio by
remaining term to maturity as a percentage of total assets at June 30, 2007 with that of September 30,
2006.  Scheduled principal payments on amortizing borrowings are reported as maturities.

|                     | June 30, 2007          | September 30, 2006    
|-------------------- | ---------------------- | ----------------------
|Remaining Term       | Amount                 | Percent ofTotal Assets
|                     | (Dollars in thousands)
|                    
|Overnight            | $            -         | -%                    
|One year or less     | 8,065                  | 1.43                  
|One to two years     | 11,563                 | 2.05                  
|Two to three years   | 6,000                  | 1.07                  
|Three to four years  | 6,000                  | 1.07                  
|Four to five years   | 6,000                  | 1.07                  
|More than five years | 2,000                  | 0.36                  
|Total                | $	39,628               | 7.05%                 

Equity decreased $18.9 million, or 15.1% to $106.0 million at June 30, 2007 from $124.9 million at
September 30, 2006.  The reported decrease in equity was primarily attributable to a $20.3 million
increase in Treasury stock resulting from the Company's share repurchases through June 30, 2007.

**Comparison of Operating Results for the Three Months Ended June 30, 2007 and June 30, 2006**

**General.**  Net income for the three months ended June 30, 2007 was $150,000, a decrease of
$314,000, or 67.7% from the quarter ended June 30, 2006.  The decrease in net income resulted from a
decrease in net interest income and an increase in noninterest expense partially offset by a decrease in the
provision for loan losses, an increase in noninterest income and a decrease in the provision for income
taxes.

**Interest Income.**  Total interest income increased 16.7% or $1.1 million to $7.5 million for the
quarter ended June 30, 2007 from $6.4 million for the quarter ended June 30, 2006.  For those same
comparative quarters, the average yield on interest-earning assets increased 47 basis points to 5.69%
from 5.22% while the average balance of interest-earning assets increased $34.2 million or 6.9% to $527.3
million from $493.1 million.

Interest income on loans increased $1.1 million or 20.8%, to $6.3 million for the quarter ended
June 30, 2007 from $5.2 million for the quarter ended June 30, 2006.  This increase was due, in part, to a
$47.6 million increase in the average balance of loans receivable, including loans held for sale, to $425.6
million for the quarter ended June 30, 2007 from $378.0 million for the quarter ended June 30,  2006.  In
addition, the average yield on loans increased 40 basis points to 5.92% from 5.52% for those same
comparative periods.  The increase in the average balance and yields of loans receivable was primarily
attributable to the Company's strategic emphasis on commercial lending.

The rise in interest income on loans was partially offset by lower interest income on securities, which decreased $362,000 or 34.1% to $699,000 for the quarter ended June 30, 2007 from $1.1 million  for
the quarter ended June 30, 2006.  The decrease was due largely to a $37.3 million decline in the average
balance of investment securities to $64.0 million for the quarter ended June 30, 2007 from $101.3 million
for the quarter ended June 30, 2006.  The impact on interest income of that decline in average balance was
partially offset by a 20 basis point increase in the average yield on securities which grew to 4.31% from
4.11% for the same comparative periods.



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Further, interest and dividend income on federal funds sold, other interest-bearing deposits and
FHLB stock increased $355,000 to $510,000 for the quarter ended June 30, 2007 from $155,000 for the
quarter ended June 30, 2006.  This increase was attributable, in part, to a 30 basis point increase in the
average yield on these assets which increased to 5.53% from 5.23%.  The impact on interest income from
the higher yields on these assets was augmented by an increase of $25.1 million in the average balance of
these assets to $36.9 million for the quarter ended June 30, 2007 from $11.8 million for the quarter ended
June 30, 2006.  The average balances reported and used for yield calculations reflect, where appropriate,
the reduction for outstanding checks issued against such accounts.  This has the effect of increasing the
reported yield on such assets.

**Interest Expense.**  Total interest expense increased by $1.4 million or 46.5% to $4.4 million for the
quarter ended June 30, 2007 from $3.0 million for the quarter ended June 30, 2006.  For those same
comparative periods, the average cost of interest-bearing liabilities increased 87 basis points from 3.43%
to 4.30%, while the average balance of interest-bearing liabilities increased $59.9 million or 16.9% to
$413.7 million for the quarter ended June 30, 2007 from $353.7 million for the quarter ended June 30,
2006.

Interest expense on deposits increased $1.5 million or 64.8% to $3.9 million for the quarter ended
June 30, 2007 from $2.4 million for the quarter ended June 30, 2006.  This increase was due largely to
growth in the average balance of interest bearing deposits which grew $71.8 million to $372.3 million for
the quarter ended June 30, 2007 from $300.5 million for the quarter ended June 30, 2006.  The reported
net growth in average interest-bearing deposits comprised $58.7 million and $24.2 million of growth in
the average balance of interest-bearing checking accounts and certificates of deposit, respectively.
Offsetting this growth was a net decline in the average balance of savings accounts totaling $11.1 million.

The growth in the average balance of interest bearing deposits for the quarter ended June 30,
2007 was primarily attributable to the Bank's branch in Verona, New Jersey whose deposit balances grew
to $62.0 million at June 30, 2007 since opening in first quarter of fiscal 2007.  At June 30, 2007,
approximately $58.2 million of Verona's deposits were held in interest bearing accounts while $3.8
million were held in noninterest bearing accounts.  To a lesser extent, the average balance of interest
bearing deposits was also influenced by the growth in the Bank's newest branch in Nutley, New Jersey
which celebrated its grand opening on June 16, 2007.  Deposits at the Nutley branch grew to $7.2 million
by June 30, 2007 which was primarily comprised of interest bearing deposits.

The growth in deposits at the Bank's two newest branches, coupled with higher promotional
interest rates paid on those deposits, contributed significantly to the reported increase in deposit interest
expense.  However, a portion of this increase was also attributable to continued upward pressure on
deposit interest rates in the other highly competitive markets serviced by the Bank.

In total, the average cost of interest-bearing deposits increased 104 basis points to 4.20% for the
quarter ended June 30, 2007 from 3.16% for the quarter ended June 30, 2006.  The components of this
increase include a 237 basis point increase in the average cost of interest-bearing checking accounts, an 88
basis point increase in the average cost of certificates of deposit, and a 34 basis point increase in the
average cost of savings accounts.

Interest expense on FHLB advances decreased $126,000 to $533,000 for the quarter ended June
30, 2007 from $659,000 for the quarter ended June 30, 2006.  This decrease was due, in part, to a $11.8
million decrease in the average balance of advances to $41.4 million for the quarter ended June 30, 2007
from $53.2 million for the quarter ended June 30, 2006.  The impact on interest expense from the lower
average balances reported were offset, in part, by a 19 basis point increase in the average cost of
advances to 5.14% for the quarter ended June 30, 2007 from 4.95% for the quarter ended June 30, 2006.
The higher average cost for the current quarter was primarily attributable to the repayment of term
advances since



Next Page 23


the close of the earlier comparative quarter whose total weighted average cost was below
that of the average outstanding advances during the quarter ended June 30, 2007.

**Net Interest Income.**  Net interest income decreased by $335,000 or 9.8%, to $3.1 million for the
quarter ended June 30, 2007 from $3.4 million for the quarter ended June 30, 2006.  The Company's net
interest rate spread declined 39 basis points from 1.79% to 1.40% for the same comparative periods, while
the net interest margin decreased 44 basis points from 2.76% to 2.32%.

**Provision for Loan Losses.**Using the allowance methodology described under Critical
Accounting Policies found later in this discussion, the provision for loan losses totaled $77,000 for the
quarter ended June 30, 2007, representing a decrease of $32,000 from the quarter ended June 30, 2006.
The lower provision amount in the current period reflects the comparatively lower increase in loan loss
provision generally attributable to lower net growth in our commercial loan portfolio during the more
recent period.  Specifically, each period's comparative provision resulted largely from the incremental
growth in the outstanding balance of the loans on which historical and environmental loss factors are
applied.  For the quarter ended June 30, 2007, outstanding loan balances, excluding the allowance for
loan loss and loans held for sale, increased $2.7 million to $428.0 million from $425.3 million at the prior
quarter ended March 31, 2007.  The growth was comprised of net increases in commercial loans totaling
$6.2 million.  Such loans include multi-family, nonresidential real estate, construction and business loans.
The increase in loans receivable, net also included net increases in home equity loans and home equity
lines of credit totaling $1.2 million.  Offsetting the growth in these categories was a $4.6 million decrease
in the balance of 1-4 family first mortgages.

By comparison, for the three months ended June 30, 2006, total outstanding loan balances,
excluding the allowance for loan loss and loans held for sale, grew by $12.4 million - an amount
exceeding that of the current quarter.  Moreover, that growth was comprised of net increases in the
outstanding balance of commercial loans, as defined above, of approximately $8.2 million -
comparatively higher net growth on those loans on which the Bank applies relatively higher historical
and environment loss factors.  Loan growth in the earlier quarter also included net increases, rather than
decreases, in 1-4 family first mortgages totaling $1.7 million coupled with comparatively greater net
increases in home equity loans and home equity lines of credit of $2.4 million - loan types for which the
Bank applies comparatively lower historical and environmental loss factors.

In total, the allowance for loan losses as a percentage of gross loans outstanding increased to
0.57% as of June 30, 2007- an increase of 1 basis point from 0.56% as of March 31, 2007.  These ratios
reflect allowance for loan loss balances of $2,443,000 and $2,366,000, respectively.  The overall increase in
the ratio of allowance to gross loans reported reflects the changing composition of the portfolio with
greater strategic emphasis on loans with higher risk factors.  The level of the allowance is based on
estimates and the ultimate losses may vary from those estimates.

**Noninterest Income.**  Noninterest income increased $102,000 to $408,000 for the quarter ended
June 30, 2007 from $306,000 for the quarter ended June 30, 2006.  The net increase was largely attributable
to an increase of $48,000 in income from the cash surrender value of life insurance attributable to a
combination of higher average balances and improved yields on those assets.  Additionally, the
Company recognized an increase of $16,000 in deposit service fees and charges attributable, in part, to
deposit growth from the newest branches.  The Company also recognized a $26,000 increase in the gain
on sale of loans resulting from comparatively greater 1-4 family mortgage loan sales than had been
recorded in the prior period.

**Noninterest Expense.**  Noninterest expense increased $346,000 to $3.2 million for the quarter
ended June 30, 2007 from $2.9 million for the quarter ended June 30, 2006.  Significant components of this
growth in operating costs include comparative increases to salaries and employee benefits of $429,000,
increases in data processing costs of $28,000 and increases in other noninterest expenses of $35,000.



Next Page 24


Offsetting these increases were decreases of $98,000 in legal expense coupled with reductions in
advertising and marketing expenses and professional and consulting fees of $18,000 and $33,000,
respectively.

The $429,000 increase in salaries and employee benefits for the comparative quarters included
increases of $263,000 to employee salaries and payroll taxes.  Such increases were primarily attributable
to additions to retail deposit staff associated with the Company's branching strategy and, to a lesser
extent, additions to the Company's commercial lending staff.  Other noteworthy increases to salaries and
employee benefits resulted from the implementation of the Company's 2006 Equity Incentive Plan
approved by shareholders in May, 2006.  Costs relating to the Company's restricted stock and stock
option plans increased by a total of $94,000 from the quarter ended June 30, 2006 to the same period in
fiscal 2007.  Finally, director compensation costs increased $65,000 due primarily to assumption changes
utilized in retirement benefit expense accruals.

The reported increases in data processing and other noninterest expense were primarily
attributable to the start up and ongoing operation of the Bank's newest branches in Verona and Nutley,
New Jersey.  By contrast, the comparative decrease in advertising and marketing expenses reflects
reduced expenditures during the current quarter in anticipation of the costs of forthcoming advertising
and marketing campaigns associated with the Company's newest branch in Nutley, New Jersey and its
forthcoming branch in Clifton, New Jersey which is expected to open in the fourth fiscal quarter ended
September 30, 2007.

The reported decrease in legal fees was primarily attributable to the comparative timing of the
Company's 2006 and 2007 annual shareholders' meeting and resulting recognition of legal fees relating
to matters addressed at those meetings. The Company's 2007 annual shareholders' meeting was held in
January 2007 with legal costs relating thereto recognized during the quarter ended March 31, 2007.  By
contrast, the Company's 2006 annual meeting was held in May 2006 with most legal costs relating
thereto recognized during the quarter ended June 30, 2006.

Finally, comparative decreases in professional and consulting fees were primarily the result of
lower internal and external audit costs associated with the Sarbanes Oxley Act of 2002 ("the Act") during
the current quarter.  The expense incurred in the earlier quarter ended June 30, 2006 included a portion
of the first year costs associated with the development, implementation and audit of controls over
financial statement reporting in accordance with Section 404 of the Act.   The lower costs in the quarter
ended June 30, 2007 reflect the reduced financial burden of maintaining and updating those controls as
required to ensure ongoing compliance with the Act.

**Provision for Income Taxes**.  The provision for income taxes decreased $232,000 for the quarter
ended June 30, 2007 compared with the quarter ended June 30, 2006.  For those same comparative
periods, the Company's effective tax rate was 21.5% and 37.0%, respectively.  The lower effective tax rate
in the current period was largely the result of the level of "tax favored" income reported by the
Company for the comparative quarters in relation to the level of pretax net income reported by the
Company for those same periods.

Specifically, the Company's effective tax rate is influenced by the level of interest income on
investment securities held by the Bank's investment subsidiary, American Savings Investment
Corporation ("ASIC").  ASIC is a wholly owned New Jersey investment subsidiary formed in August
2004 by American Bank of New Jersey.  The purpose of this subsidiary is to invest in stocks, bonds, notes
and all types of equity, mortgages, debentures and other investment securities.  Interest income from this
subsidiary is taxed by the state of New Jersey at an effective rate lower than the statutory corporate state
income tax rate.  Additionally, the Company also recognizes tax exempt income from the cash surrender
value of bank owned life insurance.



Next Page 25


The Company recognized income from these two "tax favored" sources during both
comparative quarters ended June 30, 2007 and June 30, 2006.  However, the comparatively lower pretax
net income reported for the current quarter resulted in the items discussed above having a
proportionally greater net beneficial impact on the Company's reported effective tax rate in the more
recent period.

**Comparison of Operating Results for the Nine Months Ended June 30, 2007 and June 30, 2006**

**General.**  Net income for the nine months ended June 30, 2007 was $628,000, a decrease of $1.2
million, or 65.4% from the nine months ended June 30, 2006.  The decrease in net income resulted from a
decrease in net interest income and an increase in noninterest expense partially offset by a decrease in the
provision for loan losses, an increase in noninterest income and a decrease in the provision for income
taxes.

**Interest Income.**  Total interest income increased 14.0% or $2.6 million to $21.4 million for the
nine months ended June 30, 2007 from $18.8 million for the nine months ended June 30, 2006.  For those
same comparative quarters, the average yield on interest-earning assets increased 58 basis points to
5.61% from 5.03% while the average balance of interest-earning assets increased $11.5 million to $508.4
million from $497.0 million.

Interest income on loans increased $3.4 million or 23.4%, to $18.2 million for the nine months
ended June 30, 2007 from $14.8 million for the nine months ended June 30, 2006.  This increase was due,
in part, to a $52.4 million increase in the average balance of loans receivable, including loans held for
sale, to $414.8 million for the nine months ended June 30, 2007 from $362.5 million for the nine months
ended June 30, 2006.  In addition, the average yield on loans increased 42 basis points to 5.85% from
5.43% for those same comparative periods.  The increase in the average balance and yield of loans
receivable was primarily attributable to the Company's strategic emphasis on commercial lending.

The rise in interest income on loans was partially offset by lower interest income on securities,
which decreased $664,000 or 22.4% to $2.3 million for the nine months ended June 30, 2007 from $3.0
million for the nine months ended June 30, 2006.  The decrease was due in part, to a $25.6 million decline
in the average balance of investment securities to $72.9 million for the nine months ended June 30, 2006
from $98.5 million for the nine months ended June 30, 2006.  The impact on interest income attributable
to this decrease was partially offset by a 21 basis point increase in the average yield on securities which
grew to 4.16% from 3.95% for the same comparative periods.  The increase in yield primarily resulted
from the maturity and repayment of lower yielding investment securities coupled with higher yields on
newly purchased securities and existing adjustable rate securities in portfolio which have repriced
upward in accordance with the general movement of market interest rates.

Further, interest and dividend income on federal funds sold, other interest-bearing deposits and
FHLB stock decreased $164,000 to $863,000 for the nine months ended June 30, 2007 from $1.0 million for
the nine months ended June 30, 2006.  This decrease was due, in part, to a decline of $14.6 million in the
average balance of these assets to $19.7 million for the nine months ended June 30, 2007 from $34.3
million for the nine months ended June 30, 2006.  The higher average balance in the earlier comparative
period reflects the initial receipt of stock offering proceeds from the closing of the Company's second
step conversion which were subsequently deployed into other interest-earnings assets during the first
quarter of fiscal 2006.  The impact on interest income attributable to this decline in average balance was
partially offset by a 185 basis point rise in the average yield on these assets which increased to 5.84%
from 3.99%.  The average balances reported and used for yield calculations reflect, where appropriate,
the reduction for outstanding checks issued against such accounts.  This has the effect of increasing the
reported yield on such assets.



Next Page 26


**Interest Expense.**  Total interest expense increased by $3.6 million or 42.1% to $12.1 million for
the nine months ended June 30, 2007 from $8.5 million for the nine months ended June 30, 2006.  For
those same comparative periods, the average cost of interest-bearing liabilities increased 97 basis points
from 3.18% to 4.15%, while the average balance of interest-bearing liabilities increased $31.9 million or
8.9% to $388.3 million for the nine months ended June 30, 2007 from $356.4 million for the nine months
ended June 30, 2006.

Interest expense on deposits increased $3.7 million or 57.4% to $10.3 million for the nine months
ended June 30, 2007 from $6.6 million for the nine months ended June 30, 2006.  This increase was due
largely to growth in the average balance of interest-bearing deposits which grew $38.9 million to $342.1
million for the nine months ended June 30, 2007 from $303.2 million for the nine months ended June 30,
2006.  The reported net growth in average interest-bearing deposits comprised $28.9 million and $19.7
million of growth in the average balance of interest-bearing checking accounts and certificates of deposit,
respectively.  Offsetting this growth was a net decline in the average balance of savings accounts totaling
$9.7 million.

The growth in the average balance of interest-bearing deposits for the nine months ended June
30, 2007 was primarily attributable to the Bank's branch in Verona, New Jersey whose deposit balances
grew to $62.0 million at June 30, 2007 since opening in first quarter of fiscal 2007.  At June 30, 2007,
approximately $58.2 million of Verona's deposits were held in interest bearing accounts while $3.8
million were held in noninterest bearing accounts.  To a lesser extent, the average balance of interest
bearing deposits was also influence by the growth in the Bank's newest branch in Nutley, New Jersey
which celebrated its grand opening on June 16, 2007.  Deposits at the Nutley branch grew to $7.2 million
by June 30, 2007 which was primarily comprised of interest bearing deposits.

The growth in deposits at the Bank's two newest branches, coupled with higher promotional
interest rates paid on those deposits, contributed significantly to the reported increase in deposit interest
expense.  However, a portion of this increase was also attributable to continued upward pressure on
deposit interest rates in the other highly competitive markets serviced by the Bank.

In total, the average cost of interest-bearing deposits increased 114 basis points to 4.02% for the
nine months ended June 30, 2007 from 2.88% for the nine months ended June 30, 2006.  The components
of this increase include a 219 basis point increase in the average cost of interest-bearing checking
accounts, a 101 basis point increase in the average cost of certificates of deposit, and a 66 basis point
increase in the average cost of savings accounts.

Interest expense on FHLB advances decreased $183,000 to $1.8 million for the nine months ended
June 30, 2007 from $1.9 million for the nine months ended June 30, 2006.  This decrease was due, in part,
to a $7.1 million decrease in the average balance of advances to $46.1 million for the nine months ended
June 30, 2007 from $53.2 million for the nine months ended June 30, 2006.  The impact on interest expense
from the lower average balances reported were offset, in part, by a 22 basis point increase in the average
cost of advances to 5.11% for the nine months ended June 30, 2007 from 4.89% for the nine months ended
June 30, 2006.  The higher average cost for the current period was primarily attributable to the repayment
of term advances since the close of the earlier comparative period whose total weighted average cost was
below that of the average outstanding advances during the nine months ended June 30, 2007.

**Net Interest Income.**  Net interest income decreased by $954,000 or 9.3%, to $9.3 million for the
nine months ended June 30, 2007 from $10.2 million for the nine months ended June 30, 2006.  The
Company's net interest rate spread declined 39 basis points from 1.85% to 1.46% for the same
comparative periods, while the net interest margin decreased 31 basis points from 2.75% to 2.44%.

**Provision for Loan Losses.**Using the allowance methodology described under Critical
Accounting Policies found later in this discussion, the provision for loan losses totaled $320,000 for the



Next Page 27


By comparison, for the nine months ended June 30, 2006, total outstanding loan balances,
excluding the allowance for loan loss and loans held for sale, grew by $43.6 million - an amount
exceeding that of the current nine month period.  However, the growth was comprised of net increases in
the outstanding balance of commercial loans, as defined above, of approximately $26.8 million -
comparatively lower net growth on those loans on which the Bank applies relatively higher historical
and environment loss factors.  By contrast, loan growth in the earlier period included net increases in
one-to-four family mortgages totaling $9.9 million coupled with increases in home equity loans and
home equity lines of credit of $6.7 million - loan types for which the Bank applies comparatively lower
historical and environmental loss factors.

In total, the allowance for loan losses as a percentage of gross loans outstanding was increased to
0.57% at June 30, 2007- an increase of 4 basis points from 0.53% at September 30, 2006.  These ratios
reflect allowance for loan loss balances of $2.4 million and $2.1 million, respectively.  The overall increase
in the ratio of allowance to gross loans reported reflects the changing composition of the portfolio with
greater strategic emphasis on loans with higher risk factors.  The level of the allowance is based on
estimates and the ultimate losses may vary from those estimates.

**Noninterest Income.**  Noninterest income increased $348,000 to $1.1 million for the nine months
ended June 30, 2007 from $703,000 for the nine months ended June 30, 2006.  The net increase was
attributable, in large part, to a comparative decrease in losses on sale of investment securities totaling
$260,000.  The losses reported in the prior period included a $271,000 loss on sale of an underperforming
investment security.  The Company also reported an increase of $103,000 in income from the cash
surrender value of life insurance attributable to a combination of higher average balances and improved
yields on those assets.  The Company also recognized a $30,000 increase in the gain on sale of loans
resulting from comparatively greater 1-4 family mortgage loan sales than had been recorded in the prior
period.  Offsetting these increases in noninterest income were comparative reductions in deposit service
fees and charges of $15,000 attributable to comparatively lower receipts of uncollected and insufficient
funds charges on transaction accounts.  Additionally, other non interest income decreased approximately
$32,000 resulting primarily from comparatively lower receipts of loan prepayment penalties partially
offset by increases in loan withdrawal fees.

**Noninterest Expense.**  Noninterest expense increased $1.4 million to $9.1 million for the nine
months ended June 30, 2007 from $7.7 million for the nine months ended June 30, 2006.  Significant
components of this growth in operating costs include comparative increases to salaries and employee



Next Page 28


benefits of $1.4 million, increased occupancy and equipment costs of $61,000, increases in data
processing costs of $46,000, increases in advertising and marketing costs of $22,000 and increases to other
noninterest expenses of $96,000.  Offsetting these increases were decreases of $123,000 and $84,000 in
legal costs and professional and consulting fees, respectively.

The $1.4 million increase in salaries and employee benefits for the comparative periods includes
increases of $501,000 to employee salaries and payroll taxes.  Such increases were primarily attributable
to additions to retail deposit staff associated with the Company's branching strategy and, to a lesser
extent, additions to the Company's commercial lending staff.  Other noteworthy increases to salaries and
employee benefits resulted from the implementation of the Company's 2006 Equity Incentive Plan
approved by shareholders in May, 2006.  Costs relating to the Company's restricted stock and stock
option plans increased by a total of $648,000 from the nine months ended June 30, 2006 to the same
period in fiscal 2007.  Additionally, ESOP costs increased $43,000 due to an increase in share value while
director compensation costs increased $123,000 due primarily to assumption changes utilized in
retirement benefit expense accruals.  Finally, the variance for the comparative nine month periods
reflects the reversal of $131,000 of profit sharing expense recorded in the earlier comparative period
resulting from the discontinuation of that benefit.

The reported increases in occupancy and equipment, data processing, advertising and
marketing, and other non interest expense were primarily attributable to the start up and ongoing
operation of the Bank's newest branches in Verona and Nutley, New Jersey.

The reported decrease in legal fees was primarily attributable to comparatively lower utilization
of legal services during the current nine month period.  The earlier comparative period included
expenses for legal services resulting from the completion of the Company's second step conversion for
which similar expenses were not incurred during the current nine month period.  Legal expenses during
the earlier comparative period included those relating to the modification of the Bank's employee benefit
plans, including the Bank's 401k and ESOP, as well as the development of the 2006 Equity Incentive Plan.

Finally, comparative decreases in professional and consulting fees were primarily the result of
lower internal and external audit costs associated with the Sarbanes Oxley Act of 2002 during the current
period.  The expense incurred for the nine months ended June 30, 2006 included a portion of the first
year costs associated with the development, implementation and audit of controls over financial
statement reporting in accordance with Section 404 of the Act.   The lower costs in the nine months ended
June 30, 2007 reflect the reduced financial burden of maintaining and updating those controls as required
to ensure ongoing compliance with the Act.

**Provision for Income Taxes**.  The provision for income taxes decreased $835,000 for the nine
months ended June 30, 2007 compared with the nine months ended June 30, 2006.  For those same
comparative periods, the Company's effective tax rate was 30.5% and 38.0%, respectively.  The lower
effective tax rate in the current period rate was largely the result of the level of "tax favored" income
reported by the Company for the comparative quarters in relation to the level of pretax net income
reported by the Company for those same periods.

Specifically, the Company's  effective tax rate is influenced by the level of interest income on
investment securities held by the Bank's investment subsidiary, American Savings Investment
Corporation ("ASIC").  ASIC is a wholly owned New Jersey investment subsidiary formed in August
2004 by American Bank of New Jersey.  The purpose of this subsidiary is to invest in stocks, bonds, notes
and all types of equity, mortgages, debentures and other investment securities.  Interest income from this
subsidiary is taxed by the state of New Jersey at an effective rate lower than the statutory corporate state
income tax rate.  Additionally, the Company also recognizes tax exempt income from the cash surrender
value of bank owned life insurance.



Next Page 29


The Company recognized income from these two "tax favored" sources during both
comparative nine month periods ended June 30, 2007 and June 30, 2006.  However, the comparatively
lower pretax net income reported for the current nine month period resulted in the items discussed
above having a proportionally greater net beneficial impact on the Company's reported effective tax rate
in the more recent period.

**Critical Accounting Policies**

Various elements of our accounting policies, by their nature, are inherently subject to estimation
techniques, valuation assumptions and other subjective assessments.  The following is a description of
our critical accounting policy and an explanation of the methods and assumptions underlying its
application.

**Allowance for Loan Losses.**  Our policy with respect to the methodologies used to determine the
allowance for loan losses is our most critical accounting policy.  This policy is important to the
presentation of our financial condition and results of operations, and it involves a higher degree of
complexity and requires management to make difficult and subjective judgments, which often require
assumptions or estimates about highly uncertain matters.  The use of different judgments, assumptions,
and estimates could result in material differences in our results of operations or financial condition.

In evaluating the level of the allowance for loan losses, management considers the Company's
historical loss experience as well as various "environmental factors" including the types of loans and the
amount of loans in the loan portfolio, adverse situations that may affect the borrower's ability to repay,
estimated value of any underlying collateral, industry condition information, and prevailing economic
conditions.  Large groups of smaller balance homogeneous loans, such as residential real estate and
home equity and consumer loans, are evaluated in the aggregate using historical loss factors adjusted for
current economic conditions.  Large balance and/or more complex loans, such as multi-family,
nonresidential real estate and construction loans, are evaluated individually for impairment.  This
evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision, as
more information becomes available or as projected events change.

Management assesses the allowance for loan losses quarterly.  While management uses available
information to recognize losses on loans, future loan loss provisions may be necessary based on changes
in economic conditions.  In addition, regulatory agencies, as an integral part of their examination
process, periodically review the allowance for loan losses and may require the Bank to recognize
additional provisions based on their judgment of information available to them at the time of their
examination.  The allowance for loan losses in the periods presented was maintained at a level that
represented management's best estimate of losses in the loan portfolio to the extent they were both
probable and reasonable to estimate.

Application of the Bank's loan loss methodology outlined above results, in part, in historical and
environmental loss factors being applied to the outstanding balance of homogeneous groups of loans to
estimate probable credit losses.  Both historical and environmental loss factors are reviewed and updated
quarterly, where appropriate, as part of management's assessment of the allowance for loan losses.

During fiscal 2007, changes to environmental factors used in the Bank's allowance for loan loss
calculations generally reflected the Company's increased strategic focus on commercial lending.  Such
changes were made during the first fiscal quarter of 2007.  Environmental factors applied to the
outstanding balance of commercial loans reflected the changes to overall lending policies, procedures
and practices associated with that strategic emphasis, the increased volume of commercial loans in
relation to total loan originations, changes in credit concentration reflecting larger loan balances to
borrowers and concerns about potential changes in regional real estate values.  However, the impact of
these increases were largely offset by reductions in environmental factors attributable to the experience,
ability, and



Next Page 30


depth of lending management and staff, both of which were enhanced through expanded
staffing during the prior fiscal year.  No significant changes to environmental factors used in the Bank's
loss provision calculations had been made during fiscal 2006.

Management generally expects provisions for loan losses to continue 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 lending.  The loss factors used in the Bank's allowance for
loan loss calculations are generally higher for such loans compared with those applied to one-to-four
family mortgage loans.  Consequently, management expects the net growth in commercial loans called
for in the Company's strategic business plan to result in required loss provisions that exceed those
recorded in prior years when comparatively greater strategic emphasis had been placed on growth in 1-4
family mortgage loans.

**Liquidity and Commitments**

We are required to have enough investments that qualify as liquid assets in order to maintain
sufficient liquidity to ensure a safe and sound operation.  Liquidity may increase or decrease depending
upon the availability of funds and comparative yields on investments in relation to the return on loans.
Historically, we have maintained liquid assets above levels believed to be adequate to meet the
requirements of normal operations, including potential deposit outflows.  Cash flow projections are
regularly reviewed and updated to assure that adequate liquidity is maintained.

The Bank's short term liquidity, represented by cash and cash equivalents, is a product of its
operating, investing and financing activities.  The Bank's primary sources of funds are deposits,
amortization, prepayments and maturities of outstanding loans and mortgage-backed securities,
maturities of investment securities and other short-term investments and funds provided from
operations.  While scheduled payments from the amortization of loans and mortgage-backed securities
and maturing investment securities and short-term investments are relatively predictable sources of
funds, deposit flows and loan prepayments are greatly influenced by the level of market interest rates,
economic conditions, and competition.  In addition, the Bank invests excess funds in short-term interest-earning assets, which provide liquidity to meet lending requirements.  The Bank also generates cash
through borrowings.  The Bank utilizes Federal Home Loan Bank advances to leverage its capital base by
providing funds for its lending activities, and to enhance its interest rate risk management.

Liquidity management is both a daily and long-term function of business management.  Excess
liquidity is generally invested in short-term investments such as overnight deposits or U.S. Agency
securities.  On a longer-term basis, the Bank maintains a strategy of investing in various loan products
and in securities collateralized by loans.  The Bank uses its sources of funds primarily to meet its ongoing
commitments, to pay maturing certificates of deposit and savings withdrawals, to fund loan
commitments and to maintain its portfolio of mortgage-backed securities and investment securities.  At
June 30, 2007, the total approved loan origination commitments outstanding amounted to $25.0 million.
At the same date, unused lines of credit were $27.8 million and undisbursed construction loans in
process were $17.2 million.

Certificates of deposit scheduled to mature in one year or less at June 30, 2007, totaled $147.4
million.  Management's policy is to maintain deposit rates at levels that are competitive with other local
financial institutions.  Based on the competitive rates and on historical experience, management believes
that a significant portion of maturing deposits will remain with the Bank.  Additionally, at June 30, 2007
the Bank had $8.1 million of borrowings from the Federal Home Loan Bank of New York ("FHLB")
maturing in less than one year.  Repayment of such advances increases the Bank's unused borrowing
capacity from the FHLB which totaled $97.7 million at June 30, 2007.  In calculating our borrowing
capacity, the Bank utilizes the FHLB's guideline, which generally limits advances secured by residential
mortgage collateral to 25% of the Bank's total assets.



Next Page 31


The following tables disclose our contractual obligations and commercial commitments as of
June 30, 2007.  Scheduled principal payments on amortizing borrowings are reported as maturities.

|                  | Total          | Less Than1 Year | 1-3 Years | 4-5 Years | After5 Years
|----------------- | -------------- | --------------- | --------- | --------- | ------------
|                  | (In thousands)
|                 
|Time Deposits     | $	181,436      | $    147,430    | $	20,785  | $   3,536 | $   9,685   
|FHLB  advances(1) | 39,628         | 8,064           | 17,564    | 12,000    | 2,000       
|Total             | $	221,064      | $    155,494    | $	38,349  | $	15,536  | $	11,685    

_______________
(1)	At June 30, 2007, the total collateralized borrowing limit was $137.4 million, of which we had
$39.6 million outstanding.

|                                         | TotalAmountsCommitted | Less Than1 Year | 1-3 Years | 4-5 Years | Over5 Years
|---------------------------------------- | --------------------- | --------------- | --------- | --------- | -----------
|                                         | (In thousands)       
|                                        
|Lines of credit(1)                       | $	27,800              | $   3,753       | $    161  | $    854  | $	23,032   
|Land lease - Bloomfield                  | 2,407                 | 81              | 277       | 277       | 1,772      
|Building lease - Nutley                  | 1,523                 | 69              | 184       | 184       | 1,086      
|Construction loans in
   process(1)      | 17,155                | 10,113          | 7,042     | -         | -          
|Other commitments to
   extend credit(1) | 25,033                | 25,033          | -         | -         | -          
|Total                                    | $	73,918              | $	39,049        | $	7,664   | $	1,315   | $	25,890   

_______________
(1)	Represents amounts committed to customers.

As noted in the table above, the Bank has entered into a land lease agreement through which it is
committed to pay $2,407,079 over a 15 year term.  This commitment relates to the relocation of the Bank's
Bloomfield branch site.  Such relocation will significantly upgrade and modernize the Bloomfield branch
facility supporting the Company's deposit growth and customer service enhancement objectives.  The
relocation will also support expansion of the administrative and lending office space within the
Company's existing headquarters facility where the branch is currently located.  This commitment is
contingent upon the fulfillment of certain conditions outlined in the lease contract.

The Bank has also entered into a building lease agreement through which it is committed to pay
$1,546,317 over a 15 year term.  This commitment relates to the Bank's branch location in Nutley, New
Jersey which opened during the current quarter ended June 30, 2007.

Finally, the Bank has one outstanding standby letter of credit totaling $160,714.  The standby
letter of credit, which represents a contingent liability to the Bank, expires in May 2008.



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**Regulatory Capital**

Consistent with its goals to operate a sound and profitable financial organization, American
Bank of New Jersey actively seeks to maintain its classification as a "well capitalized" institution in
accordance with regulatory standards.  The Bank's total equity was $80.2 million at June 30, 2007, or
14.60% of total assets on that date and reflects the payment of a $4.0 million dividend from the Bank to
the holding company during the quarter ended June 30, 2007.   As of June 30, 2007, the Bank exceeded all
capital requirements of the Office of Thrift Supervision.  The Bank's regulatory capital ratios at June 30,
2007 were as follows: Core capital, 14.68%; Tier I risk-based capital, 23.49%; and total Risk-based capital,
24.20%.  The regulatory capital requirements to be considered well capitalized are 5.0%, 6.0% and 10.0%,
respectively.

**Impact of Inflation**

The consolidated financial statements presented herein have been prepared in accordance with
accounting principles generally accepted in the United States of America.  These principles require the
measurement of financial position and operating results in terms of historical dollars, without
considering changes in the relative purchasing power of money over time due to inflation.

Our primary assets and liabilities are monetary in nature.  As a result, interest rates have a more
significant impact on our performance than the effects of general levels of inflation.  Interest rates,
however, do not necessarily move in the same direction or with the same magnitude as the price of
goods and services, since such prices are affected by inflation.  In a period of rapidly rising interest rates,
the liquidity and maturity structure of our assets and liabilities are critical to the maintenance of
acceptable performance levels.

The principal effect of inflation, as distinct from levels of interest rates, on earnings is in the area
of noninterest expense.  Such expense items as employee compensation, employee benefits and
occupancy and equipment costs may be subject to increases as a result of inflation.  An additional effect
of inflation is the possible increase in the dollar value of the collateral securing loans that we have made.
We are unable to determine the extent, if any, to which properties securing our loans have appreciated in
dollar value due to inflation.

**Recent Accounting Pronouncements**

See Note 4 - Recent Accounting Pronouncements within the Notes to Unaudited Financial
Statements included in this report.



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**ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**Qualitative Analysis.**  Because the income on the majority of our assets and the cost of the
majority of our liabilities are sensitive to changes in interest rates, a significant form of market risk for us
is interest rate risk.  Changes in interest rates may have a significant, adverse impact on our net interest
income.

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:

> The interest income we earn on our interest-earning assets such as loans and securities;
> andThe 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 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, due to accelerated
prepayments, than the interest paid on our liabilities.

The prepayment characteristics of our loans and mortgage-backed and related securities are
greatly influenced by movements in market interest rates.  For example, a reduction in interest rates
results in increased prepayments of loans and mortgage-backed and related securities, as borrowers
refinance their debt in order to reduce their borrowing cost.  This causes reinvestment risk, because we
are generally not able to reinvest prepayment proceeds at rates that are comparable to the rates we
previously earned on the prepaid loans or securities.  By contrast, increases in interest rates reduce the
incentive for borrowers to refinance their debt.  In such cases, prepayments on loans and mortgage-backed and related securities may decrease thereby extending the average lives of such assets and
reducing the cash flows that are available to be reinvested by the Company at higher interest rates.

Tables presenting the composition and allocation of the Company's interest-earning assets and
interest-costing liabilities from an interest rate risk perspective are set forth in the preceding section of
this report titled "Comparison of Financial Condition at June 30, 2007 and September 30, 2006."  These
tables present the Company's investment securities, loans, deposits, and borrowings by categories that
reflect the interest rate risk characteristics of the underlying assets or liabilities.  Shown as a percentage of
total assets, the comparative data presents changes in the interest rate risk characteristics of the
Company's balance sheet.

Our net interest margin may be adversely affected throughout several possible interest rate environments.  Foremost, the continued inversion of the yield curve, by which shorter term market
interest rates exceed those of longer term rates, could trigger further increases in the Bank's cost of
interest-bearing liabilities that continue to outpace its yield on earning assets causing further net interest
spread compression.  As noted in the Executive Summary discussion earlier, such compression occurred
during the nine months ended June 30, 2007 when our net interest spread shrank 34 basis points to 1.46%
from 1.80% for the fiscal year ended September 30, 2006.  During that time, the continued growth in the
Company's commercial lending activities contributed significantly to improved yields on earning assets,
which increased 49 basis points from 5.12% to 5.61%.  However, these improved yields were more than
offset by increases in the cost of interest-bearing liabilities which grew by 83 basis points from 3.32% to
4.15%.  Contributing to this increase in the cost of interest-bearing liabilities was the impact of higher
promotional interest rates paid on new deposit accounts at the Bank's Verona branch.  However, a



Next Page 34


Depending upon the movement of market interest rates, our earnings may continue to be
impacted by an "earnings squeeze" in the future.  For example, we are vulnerable to an increase in
interest rates because the majority of our loan portfolio consists of longer-term, fixed rate loans and
adjustable rate mortgages, most of which are fixed rate for an initial period of time.  At June 30, 2007,
excluding allowance for loan losses and net deferred origination costs and including loans held for sale,
loans totaled $427.5 million comprising 76.03% of total assets.  As presented in the loan-related tables in
the preceding section of this report titled "Comparison of Financial Condition at June 30, 2007 and
September 30, 2006", loans reported as fixed rate mortgages totaled $177.5 million or 31.6% of total assets
while ARMs totaled $193.4 million or 34.4% of total assets. In a rising rate environment, our cost of funds
may increase more rapidly than the interest earned on our loan portfolio and investment securities
portfolio because our primary source of funds is deposits with substantially greater repricing sensitivity
than that of our loans and investment securities.  Having interest-bearing liabilities that reprice more
frequently than interest-earning assets is detrimental during periods of rising interest rates and could
cause our net interest rate spread to shrink because the increase in the rates we would earn on our
securities and loan portfolios would be less than the increase in the rates we would pay on deposits and
borrowings.

Notwithstanding the risks presented by the current yield curve or those resulting from further
increases to short term interest rates, a significant decrease in market interest rates could, by contrast,
trigger a new wave of loan refinancing that could result in the margin compression experienced in prior
years when rates fell to their historical lows.

The Bank also faces the risk of continued disintermediation of our deposits into higher cost
accounts.  Like many banks, we were successful in growing non-maturity deposits in prior years while
interest rates had decreased to their historical lows.  However, our ability to retain such deposits at a
reasonable cost, while a highly competitive marketplace adjusts its pricing strategies to an environment
of rising interest rates, continues to be rigorously challenged.  Additional increases in market interest
rates, particularly shorter term interest rates, could result in further inversion of the yield curve.  Such an
event could exacerbate net interest spread compression by triggering increases in deposit costs resulting
from higher rates paid to retain deposits - a risk compounded by the continued disintermediation of
those deposits into higher cost accounts.



Next Page 35


**Quantitative Aspects of Market Risk.**  The following table presents American Bank of New
Jersey's net portfolio value as of March 31, 2007 - the latest date for which information is available.  The
net portfolio value was calculated by the Office of Thrift Supervision, based on information provided by
the Bank.

|                       | Net Portfolio Value | Net PortfolioValue as % ofPresent Value of Assets |          | BoardEstablished Limits
|---------------------- | ------------------- | ------------------------------------------------- | -------- | -----------------------
|Changes inRates        | $ Amount            | $ Change                                          | % Change | NetPortfolioValueRatio 
|(Dollars in thousands)
|+300 bp                | 70,431              | -25,939                                           | -27%     | 13.61%                 
|+200 bp                | 79,278              | -17,092                                           | -18%     | 14.99%                 
|+100 bp                | 88,337              | -8,034                                            | -8%      | 16.34%                 
|0 bp                   | 96,370              |                                                   |          | 17.47%                 
|-100 bp                | 101,674             | 5,304                                             | +6%      | 18.15%                 
|-200 bp                | 103,954             | 7,584                                             | +8%      | 18.36%                 

Future interest rates or their effect on net portfolio value or net interest income are not
predictable.  Computations of prospective effects of hypothetical interest rate changes are based on
numerous assumptions, including relative levels of market interest rates, prepayments, and deposit run-offs, and should not be relied upon as indicative of actual results.  Certain shortcomings are inherent in
this type of computation.  Although certain assets and liabilities may have similar maturity or periods of
repricing, they may react at different times and in different degrees to changes in the market interest
rates.  The interest rate on certain types of assets and liabilities such as demand deposits and savings
accounts, may fluctuate in advance of changes in market interest rates, while rates on other types of
assets and liabilities may lag behind changes in market interest rates.  Certain assets such as adjustable
rate mortgages generally have features, which restrict changes in interest rates on a short-term basis and
over the life of the asset.  In the event of a change in interest rates, prepayments and early withdrawal
levels could deviate significantly from those assumed in making calculations set forth above.
Additionally, an increased credit risk may result as the ability of many borrowers to service their debt
may decrease in the event of an interest rate increase.

**Strategies for the Management of Interest Rate Risk and Market Risk.**  The Board of Directors
has established an Asset/Liability Management Committee which is responsible for monitoring interest
rate risk.  The committee comprises the Bank's Chief Executive Officer, the Bank's President and Chief
Operating Officer, the Bank's Senior Vice President and Chief Financial Officer, the Bank's Senior Vice
President and Chief Lending Officer, the Bank's Senior Vice President Commercial Real Estate, the
Bank's VP Branch Administration and the Bank's Vice President and Controller.  Management conducts
regular, informal meetings, generally on a weekly basis, to address the day-to-day management of the
assets and liabilities of the Bank, including review of the Bank's short term liquidity position; loan and
deposit pricing and production volumes and alternative funding sources; current investments; average
lives, durations and repricing frequencies of loans and securities; and a variety of other asset and liability
management topics.  The committee generally meets quarterly to formally review such matters.  The
results of the committee's quarterly review are reported to the full Board, which makes adjustments to
the Bank's interest rate risk policy and strategies, as it considers necessary and appropriate.



Next Page 36


The qualitative and quantitative interest rate analysis presented above indicate that various
foreseeable movements in market interest rates may have an adverse effect on our net interest margin
and earnings.  The growth and diversification strategies outlined in the Company's current business plan
are designed not only to enhance earnings, but also to better support the resiliency of those earnings
throughout various movements in interest rates.  Toward that end, implementation of the Company's
business plan over time is expected to result in a better matching of the repricing characteristics of its
interest earnings assets and interest bearing liabilities.  Specific business plan strategies to achieve this
objective include:

| | (1) | Open up to five de novo branches over the next three to five years with an emphasis on
growth in non-maturity deposits;                                                                                                                                                                                                                          
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) | Attract and retain lower cost business transaction accounts by expanding and enhancing
business deposit services including online cash management and remote deposit capture
services;                                                                                                                                                           
|
| | (3) | Attract and retain lower cost personal checking and savings accounts through expanded and
enhanced cross selling efforts and modified ATM surcharge policies;                                                                                                                                                                                    
|
| | (4) | Originate and retain commercial loans with terms that increase overall loan portfolio
repricing frequency and cash flows while reducing call risk through prepayment
compensation provisions;                                                                                                                                                    
|
| | (5) | Originate and retain 1-4 family home equity loans and variable rate lines of credit to increase
loan portfolio repricing frequency and cash flows;                                                                                                                                                                                               
|
| | (6) | Originate both fixed and adjustable rate 1-4 family first mortgage loans eligible for sale in the
secondary market and, if warranted, sell such loans on either a servicing retained or
servicing released basis.  The strategy reduces the balance of longer duration and/or non-prepayment protected loans while enhancing non interest income.

With regard to this last strategy, the Bank currently expects to continue the sale of longer-term,
fixed rate loan originations into the secondary market while evaluating greater use of the secondary
markets for selling other conforming and non-conforming 1-4 family mortgage loan originations.  For the
nine months ended June 30, 2007, we sold a total of $8.4 million of loans to the Federal National
Mortgage Association and Countrywide Home Loans, Inc. which resulted in gains on sales of mortgage
loans held for sale of $42,000.  Because we offer borrowers the option to lock in their interest rate prior to
closing their mortgage loans, we may be exposed to market risk on the loans we sell into the secondary
market.  Once a loan's rate is locked, the price at which we can sell the loan will vary with movements in
market interest rates.  To manage that risk, we may take forward commitments to sell loans at a fixed
price.  At June 30, 2007, the Bank had two outstanding contracts to sell $900,000 of long term, fixed rate
mortgage loans into the secondary market.  Loans sold under contracts drawn in the future may generate
additional gains or losses on sale of mortgage loans in subsequent periods.

In addition to the strategies noted above, we may utilize other strategies aimed at improving the
matching of interest-earning asset maturities to interest-bearing liability maturities.  Such strategies may
include:

| | (1) | Purchase short to intermediate term securities and maintain a securities portfolio that
provides a stable cash flow, thereby providing investable funds in varying interest rate
cycles;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) | Lengthen the maturities of our liabilities through utilization of FHLB advances and other
wholesale funding alternatives.                                                               



Next Page 37


Finally, in the past, the Company has occasionally prepaid FHLB advances which had resulted
in the recognition of prepayment penalties.  Although no such prepayments were transacted in fiscal
2005 or fiscal 2006, we may evaluate the costs and benefits of prepaying additional borrowings or other
balance sheet restructuring transactions, which may result in additional one-time charges to earnings to
further improve the Bank's net interest spread and margin and enhance future earnings.



Next Page 38


**ITEM 4.	CONTROLS AND PROCEDURES**

| | (a) | Evaluation of disclosure controls and procedures: An evaluation of the Company's disclosure
controls and procedures (as defined in Section 13(a)-15(e) of the Securities Exchange Act of 1934
("the Act") was carried out under the supervision and with the participation of the Company's
Chief Executive Officer, Chief Financial Officer and several other members of the Company's
senior management.  Based on such evaluation, the Company's Chief Executive Officer and
Chief Financial Officer concluded that the Company's disclosure controls and procedures in
effect as of the end of the period covered by this quarterly report are effective in ensuring that
the information required to be disclosed by the Company in the reports it files or submits under
the Act is (i) accumulated and communicated to the Company's management (including the
Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded,
processed, summarized and reported within the time periods specified in the Securities and
Exchange Commission rules and forms.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | Changes in internal controls: In the quarter ended June 30, 2007, there was no change in the
Company's internal control over financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company's internal control over financial reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



Next Page 39


**PART II - - OTHER INFORMATION**

**ITEM 1.   LEGAL PROCEEDINGS**

At June 30, 2007, the Company and its subsidiaries were not involved in any pending
proceedings other than the legal proceedings occurring in the ordinary course of business.  Such legal
proceedings in the aggregate are believed by management to be immaterial to the Company's financial
condition and results of operations.

**ITEM 1A.   RISK FACTORS**

There have been no material changes to the factors disclosed in Item 1A., Risk Factors, in our Annual
Report on Form 10-K for the year ended September 30, 2006.

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

The following table summarizes our share repurchase activity during the three months ended June
30, 2007 and additional information regarding our share repurchase program.

|**Period**                                                                                                       | **(a) Total NumberOf Shares (orUnits) Purchased** | **(b)Average PricePaid per Share(or Unit)** | **(c) Total Numberof Shares (orUnits) Purchasedas Part OfPublicly
Announced Plansor Programs** | **(d) Maximum Number(or Approximate DollarValue) of Shares (or Units) that May Yet BePurchased UnderPlans or Programs**
|---------------------------------------------------------------------------------------------------------------- | ------------------------------------------------- | ------------------------------------------- | ---------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------
|                                                                                                                
|Repurchases for the Month
April 1 - April 30, 2007
May 1 - May 31, 2007
June 1 - June 30, 2007
Total repurchases | -
146,890
137,391
284,281                         | -
$11.35
$10.60
$10.99                      | -
146,890
137,391
284,281                                                                      | 637,657
490,767
353,376                                                                                                

**ITEM 3.   DEFAULTS UPON SENIOR SECURITIES**

None



Next Page 40


**ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS**

None

**ITEM 5.  OTHER INFORMATION**

None

**ITEM 6.  EXHIBITS**

| | (a) | Exhibits
| | --- | --------
| |     | 31.1    
| |     | 31.2    
| |     | 32      



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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

|                        | American Bancorp of New Jersey, Inc.
       (Registrant)                       
|----------------------- | -------------------------------------------------------------------------------
|Date:    August 9, 2007 | /s/ Joseph KliminskiJoseph KliminskiChief Executive Officer                    
|Date:    August 9, 2007 | /s/ Eric B. HeyerEric B. HeyerSenior Vice President and Chief Financial Officer

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