----

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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      DC 20549**

**FORM      10-Q**

| x      | QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | For                the quarterly period ended September 30, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| OR     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| o      | TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | For                the transition period                from                                                                     to                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Commission                file number: 0-52705                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

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| Pennsylvania                                                                  |   | 20-8613037                                          |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------------|
| (State                or Other Jurisdiction of Incorporation or Organization) |   | (I.R.S.                Employer Identification No.) |

| 180                Old York Road                        |   |                      |
|---------------------------------------------------------|--------|---------------------------|
| Jenkintown,                Pennsylvania                 |   | 19046                     |
| (Address                of Principal Executive Offices) |   | (Zip                Code) |

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| Large                accelerated filer o | Accelerated                filer o | Non-accelerated                filer x |
|------------------------------------------|------------------------------------|----------------------------------------|

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**ABINGTON      BANCORP, INC.**

**TABLE        OF CONTENTS**

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|                           |                               |                                                                                                                                                      | **Page** |
|--------------------------------|------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| PART                I –  | FINANCIAL              INFORMATION |                                                                                                                                                      |
|                           | ITEM                1.             | CONDENSED                FINANCIAL STATEMENTS                                                                                                             |     |
|                           |                               |                                                                                                                                                      |     |
|                           |                               | Unaudited                Consolidated Statements of Financial Condition as of September 30,                2007                and December 31, 2006 | 1        |
|                           |                               |                                                                                                                                                      |     |
|                           |                               | Unaudited                Consolidated Statements of Income for the Three Months and Nine Months                Ended September 30, 2007 and 2006          | 2        |
|                           |                               |                                                                                                                                                      |     |
|                           |                               | Unaudited                Consolidated Statements of Stockholders’ Equity for the Nine Months                Ended September 30, 2007 and 2006  | 3        |
|                           |                               |                                                                                                                                                      |     |
|                           |                               | Unaudited                Consolidated Statements of Cash Flows for the Nine Months Ended September                30, 2007 and 2006                       | 4        |
|                           |                               |                                                                                                                                                      |     |
|                           |                               | Notes                to Unaudited Consolidated Financial Statements                                                                                       | 5        |
|                           |                               |                                                                                                                                                      |     |
|                           | ITEM                2.             | MANAGEMENT’S                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF                OPERATIONS                            | 25       |
|                           |                               |                                                                                                                                                      |     |
|                           | ITEM                3.             | QUANTITATIVE                AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                                                 | 40       |
|                           |                               |                                                                                                                                                      |     |
|                           | ITEM                4.             | CONTROLS                AND PROCEDURES                                                                                                                    | 43       |
|                           |                               |                                                                                                                                                      |     |
| PART                II – | OTHER              INFORMATION     |                                                                                                                                                      |
|                           |                               |                                                                                                                                                      |     |
|                           | ITEM                1.             | Legal                Proceedings                                                                                                                          | 43       |
|                           |                               |                                                                                                                                                      |     |
|                           | ITEM                1A.            | Risk                Factors                                                                                                                               | 43       |
|                           |                               |                                                                                                                                                      |     |
|                           | ITEM                2.             | Unregistered                Sales of Equity Securities and Use of Proceeds                                                                                | 43       |
|                           |                               |                                                                                                                                                      |     |
|                           | ITEM                3.             | Defaults                upon Senior Securities                                                                                                            | 44       |
|                           |                               |                                                                                                                                                      |     |
|                           | ITEM                4.             | Submission                of Matters to a Vote of Security Holders                                                                                        | 44       |
|                           |                               |                                                                                                                                                      |     |
|                           | ITEM                5.             | Other                Information                                                                                                                          | 44       |
|                           |                               |                                                                                                                                                      |     |
|                           | ITEM                6.             | Exhibits                                                                                                                                                  | 44       |
|                           |                               |                                                                                                                                                      |     |
|                           | SIGNATURES                         |                                                                                                                                                      | 45       |
|                           |                               |                                                                                                                                                      |     |
|                           | CERTIFICATIONS                     |                                                                                                                                                      |     |

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| **ABINGTON                  BANCORP, INC.**                                                                                                           |   |                                    |          |   |                                   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|---------------|--------|----------------------------------------|--------|
|                                                                                                                                                  |   |                                    |          |   |                                   |   |
| **CONSOLIDATED                  STATEMENTS OF FINANCIAL CONDITION (unaudited)**                                              |   |
|                                                                                                                                                  |   |                                    |          |   |                                   |   |
|                                                                                                                                                  |   | **September                  30, 2007** |          |   | **December                  31, 2006** |   |
|                                                                                                                                                  |   |                                    |          |   |                                   |   |
| **ASSETS**                                                                                                                                            |   |                                    |          |   |                                   |   |
|                                                                                                                                                  |   |                                    |          |   |                                   |   |
| Cash                  and due from banks                                                                                                              |   | $                                       | 24,389,266    |   |                                   | $      | 22,136,438 |   |
| Interest-bearing                  deposits in other banks                                                                                             |   |                                    | 40,191,570    |   |                                   |   | 22,428,814 |   |
| Short-term                  discount notes                                                                                                            |   |                                    | 39,893,572    |   |                                   |   | - |   |
|       Total                  cash and cash equivalents                                                                  |   |                                    | 104,474,408   |   |                                   |   | 44,565,252 |   |
| Investment                  securities held to maturity (estimated fair  value—2007, $20,468,053;                  2006, $20,429,576)      |   |                                    | 20,391,809    |   |                                   |   | 20,393,430 |   |
| Investment                  securities available for sale (amortized cost— 2007, $88,113,785; 2006,                  $75,834,898)               |   |                                    | 87,873,580    |   |                                   |   | 74,489,055 |   |
| Mortgage-backed                  securities held to maturity (estimated fair  value—2007, $47,079,629;                  2006, $53,957,015) |   |                                    | 49,019,879    |   |                                   |   | 56,143,619 |   |
| Mortgage-backed                  securities available for sale (amortized cost— 2007, $77,838,926; 2006,                  $79,831,266)          |   |                                    | 76,624,924    |   |                                   |   | 78,022,794 |   |
| Loans                  receivable, net of allowance for loan losses (2007, $1,833,069;                  2006,                  $1,602,613)            |   |                                    | 670,137,753   |   |                                   |   | 605,062,980 |   |
| Accrued                  interest receivable                                                                                                          |   |                                    | 5,323,578     |   |                                   |   | 4,365,535 |   |
| Federal                  Home Loan Bank stock—at cost                                                                                           |   |                                    | 11,116,800    |   |                                   |   | 11,240,700 |   |
| Cash                  surrender value - bank owned life insurance                                                                                     |   |                                    | 36,830,932    |   |                                   |   | 16,184,256 |   |
| Property                  and equipment, net                                                                                                          |   |                                    | 10,203,792    |   |                                   |   | 8,908,910 |   |
| Deferred                  tax asset                                                                                                                   |   |                                    | 2,378,854     |   |                                   |   | 2,808,716 |   |
| Prepaid                  expenses and other assets                                                                                                    |   |                                    | 6,594,226     |   |                                   |   | 3,001,035 |   |
|                                                                                                                                                  |   |                                    |          |   |                                   |   |   |   |
| TOTAL                  ASSETS                                                                                                                         |   | $                                       | 1,080,970,535 |   |                                   | $      | 925,186,282 |   |
|                                                                                                                                                  |   |                                    |          |   |                                   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY**                                                                                             |   |                                    |          |   |                                   |   |   |   |
|                                                                                                                                                  |   |                                    |          |   |                                   |   |   |   |
| LIABILITIES:                                                                                                                                          |   |                                    |          |   |                                   |   |   |   |
|   Deposits:                                                                                                                                 |   |                                    |          |   |                                   |   |   |   |
|     Noninterest-bearing                                                                                                           |   | $                                       | 36,459,978    |   |                                   | $      | 45,186,397 |   |
|     Interest-bearing                                                                                                              |   |                                    | 565,089,729   |   |                                   |   | 541,815,163 |   |
|       Total                  deposits                                                                                   |   |                                    | 601,549,707   |   |                                   |   | 587,001,560 |   |
|   Advances                  from Federal Home Loan Bank                                                                                     |   |                                    | 193,206,247   |   |                                   |   | 196,293,273 |   |
|   Other                  borrowed money                                                                                                     |   |                                    | 20,407,365    |   |                                   |   | 17,781,260 |   |
|   Accrued                  interest payable                                                                                                 |   |                                    | 7,074,545     |   |                                   |   | 2,504,270 |   |
|   Advances                  from borrowers for taxes and insurance                                                                          |   |                                    | 652,643       |   |                                   |   | 2,624,310 |   |
|   Accounts                  payable and accrued expenses                                                                                    |   |                                    | 11,044,741    |   |                                   |   | 4,879,385 |   |
|                                                                                                                                                  |   |                                    |          |   |                                   |   |   |   |
|            Total                  liabilities                                                  |   |                                    | 833,935,248   |   |                                   |   | 811,084,058 |   |
|                                                                                                                                                  |   |                                    |          |   |                                   |   |   |   |
| COMMITMENTS                  AND CONTINGENCIES                                                                                                        |   |                                    |          |   |                                   |   |   |   |
|                                                                                                                                                  |   |                                    |          |   |                                   |   |   |   |
| STOCKHOLDERS'                  EQUITY                                                                                                                 |   |                                    |          |   |                                   |   |   |   |
|   Preferred                  stock, $0.01 par value; authorized: 20,000,000 shares in                  2007,                                |   |                                    |          |   |                                   |   |   |   |
|     10,000,000                  shares in 2006; none issued                                                                       |   |                                    | -             |   |                                   |   | - |   |
|   Common                  stock, $0.01 par value; authorized: 80,000,000 shares in                  2007,                                   |   |                                    |          |   |                                   |   |   |   |
|     40,000,000                  shares in 2006; issued: 24,460,240 in 2007, 15,870,000 in                                         |   |                                    |          |   |                                   |   |   |   |
|     2006;                  outstanding: 24,449,972 in 2007, 15,288,154 in 2006                                                    |   |                                    | 244,602       |   |                                   |   | 158,700 |   |
|   Additional                  paid-in capital                                                                                               |   |                                    | 200,535,440   |   |                                   |   | 69,674,243 |   |
|   Treasury                  stock—at cost, 10,268 shares in 2007; 581,846 shares in                  2006                             |   |                                    | (101,214      | )      |                                   |   | (8,317,848 | ) |
|   Unallocated                  common stock held by:                                                                                        |   |                                    |          |   |                                   |   |   |   |
|     Employee                  Stock Ownership Plan (ESOP)                                                                         |   |                                    | (16,274,116   | )      |                                   |   | (6,388,788 | ) |
|     Recognition                  & Retention Plan Trust (RRP)                                                                 |   |                                    | (2,051,994    | )      |                                   |   | (2,606,781 | ) |
|     Deferred                  compensation plans trust                                                                            |   |                                    | (1,145,613    | )      |                                   |   | (1,059,116 | ) |
|   Retained                  earnings                                                                                                        |   |                                    | 67,256,158    |   |                                   |   | 65,252,214 |   |
|   Accumulated                  other comprehensive loss                                                                                     |   |                                    | (1,427,976    | )      |                                   |   | (2,610,400 | ) |
|                                                                                                                                                  |   |                                    |          |   |                                   |   |   |   |
|            Total                  stockholders' equity                                         |   |                                    | 247,035,287   |   |                                   |   | 114,102,224 |   |
|                                                                                                                                                  |   |                                    |          |   |                                   |   |   |   |
| TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                           |   | $                                       | 1,080,970,535 |   |                                   | $      | 925,186,282 |   |
|                                                                                                                                                  |   |                                    |          |   |                                   |   |   |   |
| See                  notes to unaudited consolidated financial statements.                                                                            |   |                                    |          |   |                                   |   |   |   |

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| **ABINGTON                  BANCORP, INC.**                                                                                                                                                                                                                                                                      |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|------------|--------|------------------------------------------------------|--------|------------|----------|--------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |
| **CONSOLIDATED                  STATEMENTS OF INCOME (unaudited)**                                                                                                                                                                                                  |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |
|                                                                                                                                                                                                                                                                                                             |   | **Three                  Months Ended September 30,** |       |   | **Nine                  Months Ended September 30,** |   |
|                                                                                                                                                                                                                                                                                                             |   | **2007**                                              |       |   | **2006**                                             |   |       | **2007** |   |   | **2006**   |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |
| INTEREST                  INCOME:                                                                                                                                                                                                                                                                                |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |
|   Interest                  and fees on loans                                                                                                                                                                                                                                                          |   | $                                                     | 11,141,193 |   |                                                 | $      | 10,146,533 |     |   | $      | 32,170,905 |   |   | $ | 28,321,461 |   |
|   Interest                  and dividends on investment and                                                                                                                                                                                                                                            |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
|     mortgage-backed                  securities:                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
|       Taxable                                                                                                                                                                                                                                                                      |   |                                                  | 3,533,525  |   |                                                 |   | 2,715,257  |     |   |   | 8,967,312  |   |   |   | 7,599,627 |   |
|       Tax-exempt                                                                                                                                                                                                                                                                   |   |                                                  | 219,851    |   |                                                 |   | 212,727    |     |   |   | 645,304    |   |   |   | 639,935 |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
|            Total                  interest income                                                                                                                                                                                                         |   |                                                  | 14,894,569 |   |                                                 |   | 13,074,517 |     |   |   | 41,783,521 |   |   |   | 36,561,023 |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
| INTEREST                  EXPENSE:                                                                                                                                                                                                                                                                               |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
|   Interest                  on deposits                                                                                                                                                                                                                                                                |   |                                                  | 5,424,299  |   |                                                 |   | 4,629,897  |     |   |   | 16,052,944 |   |   |   | 11,776,374 |   |
|   Interest                  on Federal Home Loan Bank advances                                                                                                                                                                                                                                         |   |                                                  | 2,053,327  |   |                                                 |   | 2,535,445  |     |   |   | 6,529,007  |   |   |   | 7,207,782 |   |
|   Interest                  on other borrowed money                                                                                                                                                                                                                                                    |   |                                                  | 263,146    |   |                                                 |   | 268,440    |     |   |   | 682,278    |   |   |   | 620,257 |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
|            Total                  interest expense                                                                                                                                                                                                        |   |                                                  | 7,740,772  |   |                                                 |   | 7,433,782  |     |   |   | 23,264,229 |   |   |   | 19,604,413 |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
| NET                  INTEREST INCOME                                                                                                                                                                                                                                                                             |   |                                                  | 7,153,797  |   |                                                 |   | 5,640,735  |     |   |   | 18,519,292 |   |   |   | 16,956,610 |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
| PROVISION                  FOR LOAN LOSSES                                                                                                                                                                                                                                                                       |   |                                                  | 163,390    |   |                                                 |   | 120,000    |     |   |   | 272,935    |   |   |   | 128,000 |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
| NET                  INTEREST INCOME AFTER                                                                                                                                                                                                                                                                       |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
|   PROVISION                  FOR LOAN LOSSES                                                                                                                                                                                                                                                           |   |                                                  | 6,990,407  |   |                                                 |   | 5,520,735  |     |   |   | 18,246,357 |   |   |   | 16,828,610 |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
| NON-INTEREST                  INCOME                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
|   Service                  charges                                                                                                                                                                                                                                                                     |   |                                                  | 398,880    |   |                                                 |   | 435,978    |     |   |   | 1,202,522  |   |   |   | 1,282,401 |   |
|   Rental                  income                                                                                                                                                                                                                                                                       |   |                                                  | 7,536      |   |                                                 |   | 10,348     |     |   |   | 22,608     |   |   |   | 25,520 |   |
|   Income                  on bank owned life insurance                                                                                                                                                                                                                                                 |   |                                                  | 287,294    |   |                                                 |   | 171,605    |     |   |   | 646,676    |   |   |   | 504,856 |   |
|   Loss                  on sale of investment securities                                                                                                                                                                                                                                               |   |                                                  | -          |   |                                                 |   | -          |     |   |   | -          |   |   |   | (601 | ) |
|   Other                  income                                                                                                                                                                                                                                                                        |   |                                                  | 89,679     |   |                                                 |   | 97,910     |     |   |   | 308,893    |   |   |   | 349,289 |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
|            Total                  non-interest income                                                                                                                                                                                                     |   |                                                  | 783,389    |   |                                                 |   | 715,841    |     |   |   | 2,180,699  |   |   |   | 2,161,465 |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
| NON-INTEREST                  EXPENSES                                                                                                                                                                                                                                                                           |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
|   Salaries                  and employee benefits                                                                                                                                                                                                                                                      |   |                                                  | 2,585,302  |   |                                                 |   | 2,158,377  |     |   |   | 7,319,200  |   |   |   | 6,402,075 |   |
|   Occupancy                                                                                                                                                                                                                                                                                            |   |                                                  | 538,268    |   |                                                 |   | 365,762    |     |   |   | 1,412,046  |   |   |   | 1,140,453 |   |
|   Depreciation                                                                                                                                                                                                                                                                                         |   |                                                  | 197,524    |   |                                                 |   | 173,723    |     |   |   | 581,249    |   |   |   | 490,874 |   |
|   Professional                  services                                                                                                                                                                                                                                                               |   |                                                  | 307,643    |   |                                                 |   | 128,871    |     |   |   | 765,924    |   |   |   | 514,731 |   |
|   Data                  processing                                                                                                                                                                                                                                                                     |   |                                                  | 361,965    |   |                                                 |   | 322,957    |     |   |   | 1,069,943  |   |   |   | 957,032 |   |
|   ATM                  expense                                                                                                                                                                                                                                                                         |   |                                                  | 95,580     |   |                                                 |   | 82,734     |     |   |   | 272,395    |   |   |   | 246,772 |   |
|   Deposit                  insurance premium                                                                                                                                                                                                                                                           |   |                                                  | 38,611     |   |                                                 |   | 35,345     |     |   |   | 113,121    |   |   |   | 104,623 |   |
|   Advertising                  and promotions                                                                                                                                                                                                                                                          |   |                                                  | 163,092    |   |                                                 |   | 158,786    |     |   |   | 398,053    |   |   |   | 390,191 |   |
|   Other                                                                                                                                                                                                                                                                                                |   |                                                  | 535,712    |   |                                                 |   | 437,795    |     |   |   | 1,631,663  |   |   |   | 1,419,965 |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
|            Total                  non-interest expenses                                                                                                                                                                                                   |   |                                                  | 4,823,697  |   |                                                 |   | 3,864,350  |     |   |   | 13,563,594 |   |   |   | 11,666,716 |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
| INCOME                  BEFORE INCOME TAXES                                                                                                                                                                                                                                                                      |   |                                                  | 2,950,099  |   |                                                 |   | 2,372,226  |     |   |   | 6,863,462  |   |   |   | 7,323,359 |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
| PROVISION                  FOR INCOME TAXES                                                                                                                                                                                                                                                                      |   |                                                  | 876,731    |   |                                                 |   | 665,667    |     |   |   | 1,918,751  |   |   |   | 2,099,227 |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
| NET                  INCOME                                                                                                                                                                                                                                                                                      |   | $                                                     | 2,073,368  |   |                                                 | $      | 1,706,559  |     |   | $      | 4,944,711  |   |   | $ | 5,224,132 |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
| BASIC                  EARNINGS PER COMMON SHARE                                                                                                                                                                                                                                                                 |   | $                                                     | 0.09       |   |                                                 | $      | 0.07       | *        |   | $      | 0.21       |   |   | $ | 0.22 | * |
| DILUTED                  EARNINGS PER COMMON SHARE                                                                                                                                                                                                                                                               |   | $                                                     | 0.09       |   |                                                 | $      | 0.07       | *        |   | $      | 0.21       |   |   | $ | 0.22 | * |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
| BASIC                  AVERAGE COMMON SHARES OUTSTANDING:                                                                                                                                                                                                                                                        |   |                                                  | 22,386,157 |   |                                                 |   | 23,286,516 | *        |   |   | 23,033,868 |   |   |   | 23,683,564 | * |
| DILUTED                  AVERAGE COMMON SHARES OUTSTANDING:                                                                                                                                                                                                                                                      |   |                                                  | 22,745,007 |   |                                                 |   | 23,679,535 | *        |   |   | 23,539,206 |   |   |   | 24,065,036 | * |
|                                                                                                                                                                                                                                  |   |
| *                  Earnings per share and average common shares outstanding for the prior                  periods have been adjusted to reflect the impact of the second-step                  conversion and reorganization of the Company, which occurred on                  June 27,                  2007. |   |
|                                                                                                                                                                                                                                                                                                             |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |
| See                  notes to unaudited consolidated financial statements.                                                                                                                                                                                                                                       |   |                                                  |       |   |                                                 |   |       |     |   |   |       |   |   |   |   |   |

----

| **ABINGTON                  BANCORP, INC.**                                                                                                                                                                                                                                                                                             |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|-------------|--------|------------|--------|----------|----------------|----------------|--------|--------------|--------|--------|----------------------------------|------------|----------------------------------|--------------|------------|-------------|-------------------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                    |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |
| **UNAUDITED                  CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY**                                                                                                                                                                |   |
|                                                                                                                                                                                                                                                                                                                                    |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                    |   |       |        |   |       |   |     |           |           |   |         |   |   | **Common**                       |       |                             |         |       |        |              |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                    |   |       |        |   |       |   |     |           |           |   |         |   |   | **Stock**                        |       |                             |         |       |        | **Accumulated**   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                    |   | **Common** |        |   |       |   |     | **Additional** |           |   |         |   |   | **Acquired                  by** |       |                             |         |       |        | **Other**         |   |   | **Total** |   |
|                                                                                                                                                                                                                                                                                                                                    |   | **Stock**  |        |   | **Common** |   |     | **Paid-in**    |           |   | **Treasury** |   |   | **Benefit**                      |       |                             | **Retained** |       |        | **Comprehensive** |   |   | **Stockholders'** |   |
|                                                                                                                                                                                                                                                                                                                                    |   | **Shares** |        |   | **Stock**  |   |     | **Capital**    |           |   | **Stock**    |   |   | **Plans**                        |       |                             | **Earnings** |       |        | **Loss**          |   |   | **Equity** |   |
|                                                                                                                                                                                                                                                                                                                                    |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |
| BALANCE—JANUARY                  1, 2007                                                                                                                                                                                                                                                                                          |   |       | 15,870,000  |   |       | $      | 158,700  |           |           | $      | 69,674,243   |   |   | $                                | (8,317,848 | )                                |         | $          | (10,054,685 | )                 |   | $      | 65,252,214 |   |   | $ | (2,610,400 | ) |   | $ | 114,102,224 |   |
|                                                                                                                                                                                                                                                                                                                                    |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|   Comprehensive                  income:                                                                                                                                                                                                                                                                                      |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|     Net                  income                                                                                                                                                                                                                                                                                     |   |       | -           |   |       |   | -        |           |           |   | -            |   |   |                             | -          |                             |         |       | -           |              |   |   | 4,944,711 |   |   |   | - |   |   |   | 4,944,711 |   |
|     Net                  unrealized holding gain on                                                                                                                                                                                                                                                                 |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|      available                  for sale securities                                                                                                                                                                                                                                                            |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|       arising                  during the period, net                                                                                                                                                                                                                                                     |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|       of                  tax expense of $578,037                                                                                                                                                                                                                                                         |   |       | -           |   |       |   | -        |           |           |   | -            |   |   |                             | -          |                             |         |       | -           |              |   |   | - |   |   |   | 1,122,071 |   |   |   | 1,122,071 |   |
|     Amortization                  of unrecognized                                                                                                                                                                                                                                                                   |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|      prior                  service costs on defined                                                                                                                                                                                                                                                           |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|       benefit                  pension plan, net                                                                                                                                                                                                                                                          |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|       of                  tax expense of $31,091                                                                                                                                                                                                                                                          |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   | 60,353 |   |   |   | 60,353 |   |
|   Comprehensive                  income                                                                                                                                                                                                                                                                                       |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   | 6,127,135 |   |
|   Treasury                  stock purchased                                                                                                                                                                                                                                                                                   |   |       | -           |   |       |   | -        |           |           |   | -            |   |   |                             | (101,214   | )                                |         |       | -           |              |   |   | - |   |   |   | - |   |   |   | (101,214 | ) |
|   Cash                  dividends declared,                                                                                                                                                                                                                                                                                   |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|      ($0.126                  per share)*                                                                                                                                                                                                                                                                      |   |       | -           |   |       |   | -        |           |           |   | -            |   |   |                             | -          |                             |         |       | -           |              |   |   | (2,940,767 | ) |   |   | - |   |   |   | (2,940,767 | ) |
|   Cancellation                  of common stock                                                                                                                                                                                                                                                                               |   |       | (15,870,000 | )      |       |   | (158,700 | )              |           |   | 158,700      |   |   |                             | -          |                             |         |       | -           |              |   |   | - |   |   |   | - |   |   |   | - |   |
|   Issuance                  of common stock, net                                                                                                                                                                                                                                                                              |   |       | 24,460,240  |   |       |   | 244,602  |           |           |   | 134,440,983  |   |   |                             | -          |                             |         |       | -           |              |   |   | - |   |   |   | - |   |   |   | 134,685,585 |   |
|   Dissolution                  of Abington Mutual                                                                                                                                                                                                                                                                             |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|     Holding                  Company                                                                                                                                                                                                                                                                                |   |       | -           |   |       |   | -        |           |           |   | 4,123,098    |   |   |                             | -          |                             |         |       | -           |              |   |   | - |   |   |   | - |   |   |   | 4,123,098 |   |
|   Cancellation                  of treasury stock                                                                                                                                                                                                                                                                             |   |       | -           |   |       |   | -        |           |           |   | (8,317,848   | )      |   |                             | 8,317,848  |                             |         |       | -           |              |   |   | - |   |   |   | - |   |   |   | - |   |
|   Excess                  tax benefit on stock-based                                                                                                                                                                                                                                                                          |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|      compensation                                                                                                                                                                                                                                                                                              |   |       | -           |   |       |   | -        |           |           |   | 71,275       |   |   |                             | -          |                             |         |       | -           |              |   |   | - |   |   |   | - |   |   |   | 71,275 |   |
|   Stock                  options expense                                                                                                                                                                                                                                                                                      |   |       | -           |   |       |   | -        |           |           |   | 296,434      |   |   |                             | -          |                             |         |       | -           |              |   |   | - |   |   |   | - |   |   |   | 296,434 |   |
|   Common                  stock released from                                                                                                                                                                                                                                                                                 |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|       benefit                  plans                                                                                                                                                                                                                                                                      |   |       | -           |   |       |   | -        |           |           |   | 88,555       |   |   |                             | -          |                             |         |       | 1,109,272   |              |   |   | - |   |   |   | - |   |   |   | 1,197,827 |   |
|   Common                  stock acquired by                                                                                                                                                                                                                                                                                   |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|       benefit                  plans                                                                                                                                                                                                                                                                      |   |       | -           |   |       |   | -        |           |           |   | -            |   |   |                             | -          |                             |         |       | (10,526,310 | )                 |   |   | - |   |   |   | - |   |   |   | (10,526,310 | ) |
|                                                                                                                                                                                                                                                                                                                                    |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCE—                                                                                                                                                                                                                                                                                                                          |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|          SEPTEMBER                  30, 2007                                                                                                                                                                                                                                               |   |       | 24,460,240  |   |       | $      | 244,602  |           |           | $      | 200,535,440  |   |   | $                                | (101,214   | )                                |         | $          | (19,471,723 | )                 |   | $      | 67,256,158 |   |   | $ | (1,427,976 | ) |   | $ | 247,035,287 |   |
|                                                                                                                                                                                                                                                                                                                                    |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                    |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         | **Common** |        |              |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                    |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         | **Stock**  |        |              |   |   |   |   | **Accumulated** |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                    |   | **Common** |        |   |       |   |     |           | **Additional** |   |         |   |   |                             |       | **Acquired                  by** |         |       |        |              |   |   | **Other** |   |   | **Total** |   |
|                                                                                                                                                                                                                                                                                                                                    |   | **Stock**  |        |   | **Common** |   |     | **Paid-in**    |           |   | **Treasury** |   |   | **Benefit**                      |       |                             | **Retained** |       |        | **Comprehensive** |   |   | **Stockholders'** |   |
|                                                                                                                                                                                                                                                                                                                                    |   | **Shares** |        |   | **Stock**  |   |     | **Capital**    |           |   | **Stock**    |   |   | **Plans**                        |       |                             | **Earnings** |       |        | **Loss**          |   |   | **Equity** |   |
|                                                                                                                                                                                                                                                                                                                                    |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCE—JANUARY                  1, 2006                                                                                                                                                                                                                                                                                          |   |       | 15,870,000  |   |       | $      | 158,700  |           |           | $      | 69,234,964   |   |   | $                                | -          |                             |         | $          | (11,269,649 | )                 |   | $      | 61,889,180 |   |   | $ | (2,782,428 | ) |   | $ | 117,230,767 |   |
|                                                                                                                                                                                                                                                                                                                                    |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|   Comprehensive                  income:                                                                                                                                                                                                                                                                                      |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|     Net                  income                                                                                                                                                                                                                                                                                     |   |       | -           |   |       |   | -        |           |           |   | -            |   |   |                             | -          |                             |         |       | -           |              |   |   | 5,224,132 |   |   |   | - |   |   |   | 5,224,132 |   |
|     Net                  unrealized holding gain on                                                                                                                                                                                                                                                                 |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|      available                  for sale securities                                                                                                                                                                                                                                                            |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|       arising                  during the period, net                                                                                                                                                                                                                                                     |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|       of                  tax expense of $186,827                                                                                                                                                                                                                                                         |   |       | -           |   |       |   | -        |           |           |   | -            |   |   |                             | -          |                             |         |       | -           |              |   |   | - |   |   |   | 362,663 |   |   |   | 362,663 |   |
|   Comprehensive                  income                                                                                                                                                                                                                                                                                       |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   | 5,586,795 |   |
|   Treasury                  stock purchased                                                                                                                                                                                                                                                                                   |   |       | -           |   |       |   | -        |           |           |   | -            |   |   |                             | (8,316,768 | )                                |         |       | -           |              |   |   | - |   |   |   | - |   |   |   | (8,316,768 | ) |
|   Cash                  dividends declared,                                                                                                                                                                                                                                                                                   |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|      ($0.106                  per share)*                                                                                                                                                                                                                                                                      |   |       | -           |   |       |   | -        |           |           |   | -            |   |   |                             | -          |                             |         |       | -           |              |   |   | (2,553,916 | ) |   |   | - |   |   |   | (2,553,916 | ) |
|   Excess                  tax benefit on stock-based                                                                                                                                                                                                                                                                          |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|      compensation                                                                                                                                                                                                                                                                                              |   |       | -           |   |       |   | -        |           |           |   | 36,134       |   |   |                             | -          |                             |         |       | -           |              |   |   | - |   |   |   | - |   |   |   | 36,134 |   |
|   Stock                  options expense                                                                                                                                                                                                                                                                                      |   |       | -           |   |       |   | -        |           |           |   | 275,500      |   |   |                             | -          |                             |         |       | -           |              |   |   | - |   |   |   | - |   |   |   | 275,500 |   |
|   Common                  stock released from                                                                                                                                                                                                                                                                                 |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|       benefit                  plans                                                                                                                                                                                                                                                                      |   |       | -           |   |       |   | -        |           |           |   | (5,822       | )      |   |                             | -          |                             |         |       | 916,952     |              |   |   | - |   |   |   | - |   |   |   | 911,130 |   |
|   Common                  stock acquired by                                                                                                                                                                                                                                                                                   |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|       benefit                  plans                                                                                                                                                                                                                                                                      |   |       | -           |   |       |   | -        |           |           |   | -            |   |   |                             | -          |                             |         |       | (9,876      | )                 |   |   | - |   |   |   | - |   |   |   | (9,876 | ) |
|                                                                                                                                                                                                                                                                                                                                    |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCE—                                                                                                                                                                                                                                                                                                                          |   |       |        |   |       |   |     |           |           |   |         |   |   |                             |       |                             |         |       |        |              |   |   |   |   |   |   |   |   |   |   |   |   |
|          SEPTEMBER                  30, 2006                                                                                                                                                                                                                                               |   |       | 15,870,000  |   |       | $      | 158,700  |           |           | $      | 69,540,776   |   |   | $                                | (8,316,768 | )                                |         | $          | (10,362,573 | )                 |   | $      | 64,559,396 |   |   | $ | (2,419,765 | ) |   | $ | 113,159,766 |   |
|                                                                                                                                                                         |   |
| *                  Dividends per share for all periods have been adjusted to reflect                  the                  impact of the second-step conversion and reorganization of the                  Company, which occurred on June 27, 2007.              |
|                                                                                                                                                                                                                                                                                                                                    |
| See                  notes to unaudited consolidated financial                  statements.                                                                                                                                                                                                                                             |

----

| **ABINGTON                  BANCORP, INC.**                                                                                              |   |                                                 |         |   |     |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------------|--------|----------|--------|
|                                                                                                                                     |   |                                                 |         |   |     |   |
| **UNAUDITED                  CONSOLIDATED STATEMENTS OF CASH FLOWS**                                            |   |
|                                                                                                                                     |   |                                                 |         |   |     |   |
|                                                                                                                                     |   | **Nine                  Months Ended September 30,** |         |
|                                                                                                                                     |   | **2007**                                             |         |   | **2006** |   |
| OPERATING                  ACTIVITIES:                                                                                                   |   |                                                 |         |   |     |   |
|   Net                  income                                                                                                  |   | $                                                    | 4,944,711    |   |     | $      | 5,224,132 |   |
|   Adjustments                  to reconcile net income to net cash                                                             |   |                                                 |         |   |     |   |   |   |
|     provided                  by operating activities:                                                               |   |                                                 |         |   |     |   |   |   |
|     Provision                  for loan losses                                                                       |   |                                                 | 272,935      |   |     |   | 128,000 |   |
|     Depreciation                                                                                                     |   |                                                 | 581,249      |   |     |   | 490,874 |   |
|     Share-based                  compensation expense                                                                |   |                                                 | 1,482,158    |   |     |   | 1,186,630 |   |
|     Loss                  on sale of investment securities                                                           |   |                                                 | -            |   |     |   | 601 |   |
|     Deferred                  income tax benefit                                                                     |   |                                                 | (179,266     | )      |     |   | (158,800 | ) |
|     Amortization                  of:                                                                                |   |                                                 |         |   |     |   |   |   |
|       Deferred                  loan fees                                                                  |   |                                                 | (610,793     | )      |     |   | (666,341 | ) |
|       Premiums                  and discounts, net                                                         |   |                                                 | 17,399       |   |     |   | 77,438 |   |
|     Income                  from bank owned life insurance                                                           |   |                                                 | (646,676     | )      |     |   | (504,856 | ) |
|     Changes                  in assets and liabilities which (used) provided cash:                                   |   |                                                 |         |   |     |   |   |   |
|       Accrued                  interest receivable                                                         |   |                                                 | (958,043     | )      |     |   | (1,143,519 | ) |
|       Prepaid                  expenses and other assets                                                   |   |                                                 | (3,593,191   | )      |     |   | 128,790 |   |
|       Accrued                  interest payable                                                            |   |                                                 | 4,570,275    |   |     |   | 4,416,039 |   |
|       Accounts                  payable and accrued expenses                                               |   |                                                 | 6,170,303    |   |     |   | 423,086 |   |
|                                                                                                                                     |   |                                                 |         |   |     |   |   |   |
|            Net                  cash provided by operating activities             |   |                                                 | 12,051,061   |   |     |   | 9,602,074 |   |
|                                                                                                                                     |   |                                                 |         |   |     |   |   |   |
| INVESTING                  ACTIVITIES:                                                                                                   |   |                                                 |         |   |     |   |   |   |
|   Principal                  collected on loans                                                                                |   |                                                 | 100,661,599  |   |     |   | 110,061,097 |   |
|   Disbursements                  for loans                                                                                     |   |                                                 | (165,398,514 | )      |     |   | (174,794,875 | ) |
|   Purchases                  of:                                                                                               |   |                                                 |         |   |     |   |   |   |
|     Mortgage-backed                  securities available for sale                                                   |   |                                                 | (8,270,728   | )      |     |   | (11,075,891 | ) |
|     Investments                  available for sale                                                                  |   |                                                 | (44,949,137  | )      |     |   | (18,098,266 | ) |
|     Federal                  Home Loan Bank stock                                                                    |   |                                                 | (2,146,400   | )      |     |   | (2,936,091 | ) |
|     Property                  and equipment                                                                          |   |                                                 | (1,876,131   | )      |     |   | (2,333,253 | ) |
|     Bank                  owned life insurance                                                                       |   |                                                 | (20,000,000  | )      |     |   | - |   |
|   Proceeds                  from:                                                                                              |   |                                                 |         |   |     |   |   |   |
|     Sales                  and maturities of investments available for sale                                          |   |                                                 | 32,700,000   |   |     |   | 17,878,688 |   |
|     Principal                  repayments of mortgage-backed securities held to maturity                             |   |                                                 | 7,052,148    |   |     |   | 8,412,832 |   |
|     Principal                  repayments of mortgage-backed securities available for                  sale          |   |                                                 | 10,289,132   |   |     |   | 11,724,442 |   |
|     Redemption                  of Federal Home Loan Bank stock                                                      |   |                                                 | 2,270,300    |   |     |   | 2,108,791 |   |
|                                                                                                                                     |   |                                                 |         |   |     |   |   |   |
|            Net                  cash used in investing activities                 |   |                                                 | (89,667,731  | )      |     |   | (59,052,526 | ) |
|                                                                                                                                     |   |                                                 |         |   |     |   |   |   |
| FINANCING                  ACTIVITIES:                                                                                                   |   |                                                 |         |   |     |   |   |   |
|   Net                  decrease in demand deposits and savings accounts                                                        |   |                                                 | (10,019,393  | )      |     |   | (34,370,436 | ) |
|   Net                  increase in certificate accounts                                                                        |   |                                                 | 24,567,540   |   |     |   | 88,203,002 |   |
|   Net                  increase in other borrowed money                                                                        |   |                                                 | 2,626,105    |   |     |   | 5,881,836 |   |
|   Advances                  from Federal Home Loan Bank                                                                        |   |                                                 | 414,480,000  |   |     |   | 765,100,000 |   |
|   Repayments                  of advances from Federal Home Loan Bank                                                          |   |                                                 | (417,567,026 | )      |     |   | (762,148,502 | ) |
|   Net                  increase in advances from borrowers for taxes and                  insurance                            |   |                                                 | (1,971,667   | )      |     |   | (1,837,314 | ) |
|   Excess                  tax benefit from stock-based compensation                                                            |   |                                                 | 71,275       |   |     |   | 36,134 |   |
|   Purchase                  of treasury stock                                                                                  |   |                                                 | (101,214     | )      |     |   | (8,316,768 | ) |
|   Acquisition                  of stock for benefit plans                                                                      |   |                                                 | (10,427,710  | )      |     |   | - |   |
|   Proceeds                  from stock issuance, net                                                                           |   |                                                 | 134,685,585  |   |     |   | - |   |
|   Dissolution                  of Abington Mutual Holding Company                                                              |   |                                                 | 4,123,098    |   |     |   | - |   |
|   Payment                  of cash dividend                                                                                    |   |                                                 | (2,940,767   | )      |     |   | (2,553,916 | ) |
|                                                                                                                                     |   |                                                 |         |   |     |   |   |   |
|              Net                  cash provided by financing activities |   |                                                 | 137,525,826  |   |     |   | 49,994,036 |   |
|                                                                                                                                     |   |                                                 |         |   |     |   |   |   |
| NET  INCREASE                  IN CASH AND CASH EQUIVALENTS                                                                    |   |                                                 | 59,909,156   |   |     |   | 543,584 |   |
|                                                                                                                                     |   |                                                 |         |   |     |   |   |   |
| CASH                  AND CASH EQUIVALENTS—Beginning of period                                                                     |   |                                                 | 44,565,252   |   |     |   | 27,714,241 |   |
|                                                                                                                                     |   |                                                 |         |   |     |   |   |   |
| CASH                  AND CASH EQUIVALENTS—End of period                                                                           |   | $                                                    | 104,474,408  |   |     | $      | 28,257,825 |   |
|                                                                                                                                     |   |                                                 |         |   |     |   |   |   |
| SUPPLEMENTAL                  DISCLOSURES OF CASH FLOW INFORMATION:                                                                      |   |                                                 |         |   |     |   |   |   |
|                                                                                                                                     |   |                                                 |         |   |     |   |   |   |
|   Cash                  paid during the year for:                                                                              |   |                                                 |         |   |     |   |   |   |
|                                                                                                                                     |   |                                                 |         |   |     |   |   |   |
|     Interest                  on deposits and other borrowings                                                       |   | $                                                    | 18,693,954   |   |     | $      | 15,188,374 |   |
|     Income                  taxes                                                                                    |   | $                                                    | 2,050,000    |   |     | $      | 2,375,000 |   |
|                                                                                                                                     |   |                                                 |         |   |     |   |   |   |
|   Cancellation                  of treasury stock                                                                              |   | $                                                    | 8,317,848    |   |     | $      | - |   |
|                                                                                                                                     |   |                                                 |         |   |     |   |   |   |
| See                  notes to unaudited consolidated financial statements.                                                               |   |                                                 |         |   |     |   |   |   |

----

**ABINGTON      BANCORP, INC.**

**NOTES        TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**

----

**1.          **
**FINANCIAL      STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES**

***Basis      of Financial Statement Presentation—***

----

***Use      of Estimates in the Preparation of Financial Statements—***

***Other-Than-Temporary      Impairment of Securities—***

***Allowance      for Loan Losses***

----

***Comprehensive      Income—***

|                                                                   |   | **Three                  Months Ended**              |      |   | **Nine                  Months Ended**               |   |
|------------------------------------------------------------------------|--------|------------------------------------------------------|-----------|--------|------------------------------------------------------|--------|
|                                                                   |   | **September                  30,**    |      |   | **September                  30,**    |   |
|                                                                   |   | **2007**                                             |      |   | **2006**                                             |   |   | **2007** |   |   | **2006** |   |
|                                                                   |   |                                                 |      |   |                                                 |   |   |   |   |   |   |   |
| Net                  unrealized gain on securities arising             |   |                                                 |      |   |                                                 |   |   |   |   |   |   |   |
|   during                  the year                           |   | $                                                    | 1,141,325 |   |                                                 | $      | 1,541,442 |   |   | $ | 1,122,071 |   |   | $ | 362,266 |   |
| Plus:                  reclassification adjustment for net             |   |                                                 |      |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
|   losses                  included in net income, net of tax |   |                                                 | -         |   |                                                 |   | 397 |   |   |   | - |   |   |   | 397 |   |
|                                                                   |   |                                                 |      |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Net                  unrealized gain on securities                     |   | $                                                    | 1,141,325 |   |                                                 | $      | 1,541,839 |   |   | $ | 1,122,071 |   |   | $ | 362,663 |   |
|                                                                   |   |                                                 |      |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                  of unrecognized prior service            |   |                                                 |      |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
|   cost                  on defined benefit pension plan,     |   |                                                 |      |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
|   net                  of tax                                |   |                                                 | 20,119    |   |                                                 |   | - |   |   |   | 60,353 |   |   |   | - |   |
|                                                                   |   |                                                 |      |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Total                  other comprehensive income                      |   | $                                                    | 1,161,444 |   |                                                 | $      | 1,541,839 |   |   | $ | 1,182,424 |   |   | $ | 362,663 |   |

|                                                                 |   | **September                  30,** |       |   | **December                  31,** |   |
|----------------------------------------------------------------------|--------|------------------------------------|------------|--------|-----------------------------------|--------|
|                                                                 |   | **2007**                           |       |   | **2006**                          |   |
|                                                                 |   |                               |       |   |                              |   |
| Net                  unrealized loss on securities                   |   | $                                  | (959,777   | )      |                              | $      | (2,081,848 | ) |
| Unrecognized                  deferred costs of defined benefit plan |   |                               | (468,199   | )      |                              |   | (528,552 | ) |
|                                                                 |   |                               |       |   |                              |   |   |   |
| Total                  accumulated other comprehensive loss          |   | $                                  | (1,427,976 | )      |                              | $      | (2,610,400 | ) |

----

***Share-Based      Compensation***
*Share-Based Payment*

*Employers’Accounting for Employee Stock Ownership Plans*

***Earnings      per share—***

|                                                           |   | **Three                  Months Ended September 30,**    |       |
|----------------------------------------------------------------|--------|-------------------------------------------------------------------------|------------|
|                                                           |   | **2007**                                                 |       |   | **2006**    |   |
|                                                           |   | **Basic**                                                               |       |   | **Diluted** |   |   | **Basic** |   |   | **Diluted** |   |
|                                                           |   |                                                                    |       |   |   |   |   |   |   |   |   |   |
| Net                  income                                    |   | $                                                                       | 2,073,368  |   |   | $ | 2,073,368 |   |   | $ | 1,706,559 |   |   | $ | 1,706,559 |   |
| Weighted                  average shares outstanding           |   |                                                                    | 22,386,157 |   |   |   | 22,386,157 |   |   |   | 23,286,516 |   |   |   | 23,286,516 |   |
| Effect                  of common stock equivalents            |   |                                                                    | -          |   |   |   | 358,850 |   |   |   | - |   |   |   | 393,019 |   |
| Adjusted                  weighted average shares used         |   |                                                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   in                  earnings per share computation |   |                                                                    | 22,386,157 |   |   |   | 22,745,007 |   |   |   | 23,286,516 |   |   |   | 23,679,535 |   |
|                                                           |   |                                                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                  per share                            |   | $                                                                       | 0.09       |   |   | $ | 0.09 |   |   | $ | 0.07 |   |   | $ | 0.07 |   |

----

|                                                           |   | **Nine                  Months Ended September 30,**    |       |
|----------------------------------------------------------------|--------|------------------------------------------------------------------------|------------|
|                                                           |   | **2007**                                                |       |   | **2006**    |   |
|                                                           |   | **Basic**                                                              |       |   | **Diluted** |   |   | **Basic** |   |   | **Diluted** |   |
|                                                           |   |                                                                   |       |   |   |   |   |   |   |   |   |   |
| Net                  income                                    |   | $                                                                      | 4,944,711  |   |   | $ | 4,944,711 |   |   | $ | 5,224,132 |   |   | $ | 5,224,132 |   |
| Weighted                  average shares outstanding           |   |                                                                   | 23,033,868 |   |   |   | 23,033,868 |   |   |   | 23,683,564 |   |   |   | 23,683,564 |   |
| Effect                  of common stock equivalents            |   |                                                                   | -          |   |   |   | 505,338 |   |   |   | - |   |   |   | 381,472 |   |
| Adjusted                  weighted average shares used         |   |                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   in                  earnings per share computation |   |                                                                   | 23,033,868 |   |   |   | 23,539,206 |   |   |   | 23,683,564 |   |   |   | 24,065,036 |   |
|                                                           |   |                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                  per share                            |   | $                                                                      | 0.21       |   |   | $ | 0.21 |   |   | $ | 0.22 |   |   | $ | 0.22 |   |

***Recent      Accounting Pronouncements***
*Accounting for Deferred Compensation and Postretirement Benefit Aspects      of      Endorsement Split-Dollar Life Insurance Arrangements*

*Accounting for Purchases of Life Insurance – Determining the Amount      That Could Be Realized in Accordance with FASB Technical Bulletin No. 85-4,      Accounting for Purchases of Life Insurance*

*Fair Value      Measurements*

*The Fair Value Option for      Financial Assets and Financial Liabilities*

----

***Reclassifications***
**—**

**2.     INVESTMENT      SECURITIES**

|                                                                                                     |   | **Held                  to Maturity**   |       |
|----------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|------------|
|                                                                                                     |   | **September                  30, 2007** |       |
|                                                                                                     |   |                                    |       |   | **Gross** |   |   | **Gross** |   |   | **Estimated** |   |
|                                                                                                     |   | **Amortized**                           |       |   | **Unrealized** |   |   | **Unrealized** |   |   | **Fair** |   |
|                                                                                                     |   | **Cost**                                |       |   | **Gains** |   |   | **Losses** |   |   | **Value** |   |
|                                                                                                     |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Debt                  securities:                                                                        |   |                                    |       |   |   |   |   |   |   |   |   |   |
|   Municipal                  bonds                                                             |   | $                                       | 20,391,809 |   |   | $ | 84,757 |   |   | $ | (8,513 | ) |   | $ | 20,468,053 |   |
|                                                                                                     |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total                  debt securities |   | $                                       | 20,391,809 |   |   | $ | 84,757 |   |   | $ | (8,513 | ) |   | $ | 20,468,053 |   |

|                                                                                                       |   | **Available                  for Sale** |       |
|------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|------------|
|                                                                                                       |   | **September                  30, 2007** |       |
|                                                                                                       |   |                                    |       |   | **Gross** |   |   | **Gross** |   |   | **Estimated** |   |
|                                                                                                       |   | **Amortized**                           |       |   | **Unrealized** |   |   | **Unrealized** |   |   | **Fair** |   |
|                                                                                                       |   | **Cost**                                |       |   | **Gains** |   |   | **Losses** |   |   | **Value** |   |
|                                                                                                       |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Debt                  securities:                                                                          |   |                                    |       |   |   |   |   |   |   |   |   |   |
|   Agency                  bonds                                                                  |   | $                                       | 79,983,393 |   |   | $ | 382,786 |   |   | $ | (536,595 | ) |   | $ | 79,829,584 |   |
|   Corporate                  bonds and                                                           |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     commercial                  paper                                                  |   |                                    | 2,488,133  |   |   |   | 2,330 |   |   |   | (9,278 | ) |   |   | 2,481,185 |   |
|   Municipal                  bonds                                                               |   |                                    | 1,880,871  |   |   |   | 16,978 |   |   |   | - |   |   |   | 1,897,849 |   |
|   Certificates                  of deposit                                                       |   |                                    | 585,000    |   |   |   | - |   |   |   | - |   |   |   | 585,000 |   |
|                                                                                                       |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total                  debt securities   |   |                                    | 84,937,397 |   |   |   | 402,094 |   |   |   | (545,873 | ) |   |   | 84,793,618 |   |
|                                                                                                       |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  securities:                                                                        |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Common                  stock                                                                  |   |                                    | 10         |   |   |   | 476 |   |   |   | - |   |   |   | 486 |   |
|   Mutual                  funds                                                                  |   |                                    | 3,176,378  |   |   |   | - |   |   |   | (96,902 | ) |   |   | 3,079,476 |   |
|                                                                                                       |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total                  equity securities |   |                                    | 3,176,388  |   |   |   | 476 |   |   |   | (96,902 | ) |   |   | 3,079,962 |   |
|                                                                                                       |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                                      |   | $                                       | 88,113,785 |   |   | $ | 402,570 |   |   | $ | (642,775 | ) |   | $ | 87,873,580 |   |

----

|                                                                                                         |   | **Held                      to Maturity**  |       |
|--------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|------------|
|                                                                                                         |   | **December                      31, 2006** |       |
|                                                                                                         |   |                                       |       |   | **Gross** |   |   | **Gross** |   |   | **Estimated** |   |
|                                                                                                         |   | **Amortized**                              |       |   | **Unrealized** |   |   | **Unrealized** |   |   | **Fair** |   |
|                                                                                                         |   | **Cost**                                   |       |   | **Gains** |   |   | **Losses** |   |   | **Value** |   |
|                                                                                                         |   |                                       |       |   |   |   |   |   |   |   |   |   |
| Debt                      securities:                                                                        |   |                                       |       |   |   |   |   |   |   |   |   |   |
|   Municipal                      bonds                                                             |   | $                                          | 20,393,430 |   |   | $ | 66,540 |   |   | $ | (30,394 | ) |   | $ | 20,429,576 |   |
|                                                                                                         |   |                                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total                      debt securities |   | $                                          | 20,393,430 |   |   | $ | 66,540 |   |   | $ | (30,394 | ) |   | $ | 20,429,576 |   |

|                                                                                                       |   | **Available                  for Sale** |       |
|------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|------------|
|                                                                                                       |   | **December                  31, 2006**  |       |
|                                                                                                       |   |                                    |       |   | **Gross** |   |   | **Gross** |   |   | **Estimated** |   |
|                                                                                                       |   | **Amortized**                           |       |   | **Unrealized** |   |   | **Unrealized** |   |   | **Fair** |   |
|                                                                                                       |   | **Cost**                                |       |   | **Gains** |   |   | **Losses** |   |   | **Value** |   |
|                                                                                                       |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Debt                  securities:                                                                          |   |                                    |       |   |   |   |   |   |   |   |   |   |
|   Agency                  bonds                                                                  |   | $                                       | 71,492,107 |   |   | $ | 24,640 |   |   | $ | (1,286,913 | ) |   | $ | 70,229,834 |   |
|   Corporate                  bonds and                                                           |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     commercial                  paper                                                  |   |                                    | 499,646    |   |   |   | - |   |   |   | (2,926 | ) |   |   | 496,720 |   |
|   Certificates                  of deposit                                                       |   |                                    | 785,000    |   |   |   | - |   |   |   | - |   |   |   | 785,000 |   |
|                                                                                                       |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total                  debt securities   |   |                                    | 72,776,753 |   |   |   | 24,640 |   |   |   | (1,289,839 | ) |   |   | 71,511,554 |   |
|                                                                                                       |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  securities:                                                                        |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Common                  stock                                                                  |   |                                    | 10         |   |   |   | 465 |   |   |   | - |   |   |   | 475 |   |
|   Mutual                  funds                                                                  |   |                                    | 3,058,135  |   |   |   | - |   |   |   | (81,109 | ) |   |   | 2,977,026 |   |
|                                                                                                       |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total                  equity securities |   |                                    | 3,058,145  |   |   |   | 465 |   |   |   | (81,109 | ) |   |   | 2,977,501 |   |
|                                                                                                       |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                                      |   | $                                       | 75,834,898 |   |   | $ | 25,105 |   |   | $ | (1,370,948 | ) |   | $ | 74,489,055 |   |

----

|                                                    |   | **September                  30, 2007**       |       |
|---------------------------------------------------------|--------|-----------------------------------------------------------------------------|------------|
|                                                    |   | **Available                  for Sale**                      |       |   | **Held                  to Maturity**    |   |
|                                                    |   |                                                                        |       |   | **Estimated** |   |   |   |   |   | **Estimated** |   |
|                                                    |   | **Amortized**                                                               |       |   | **Fair** |   |   | **Amortized** |   |   | **Fair** |   |
|                                                    |   | **Cost**                                                                    |       |   | **Value** |   |   | **Cost** |   |   | **Value** |   |
|                                                    |   |                                                                        |       |   |   |   |   |   |   |   |   |   |
| Due                  in one year or less                |   | $                                                                           | 13,584,832 |   |   | $ | 13,521,464 |   |   | $ | - |   |   | $ | - |   |
| Due                  after one year through five years  |   |                                                                        | 70,230,132 |   |   |   | 70,139,144 |   |   |   | - |   |   |   | - |   |
| Due                  after five years through ten years |   |                                                                        | 1,122,433  |   |   |   | 1,133,010 |   |   |   | - |   |   |   | - |   |
| Due                  after ten years                    |   |                                                                        | -          |   |   |   | - |   |   |   | 20,391,809 |   |   |   | 20,468,053 |   |
|                                                    |   |                                                                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                   |   | $                                                                           | 84,937,397 |   |   | $ | 84,793,618 |   |   | $ | 20,391,809 |   |   | $ | 20,468,053 |   |

|                                                                                                                   |   | **Less                  than 12 months** |   |   | **More                  than 12 months** |   |
|------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------|--------|------------------------------------------|--------|
|                                                                                                                   |   | **Gross**                                |   |   | **Estimated**                            |   |   | **Gross** |   |   | **Estimated** |   |
|                                                                                                                   |   | **Unrealized**                           |   |   | **Fair**                                 |   |   | **Unrealized** |   |   | **Fair** |   |
|                                                                                                                   |   | **Losses**                               |   |   | **Value**                                |   |   | **Losses** |   |   | **Value** |   |
|                                                                                                                   |   |                                     |   |   |                                     |   |   |   |   |   |   |   |
| Securities                  held to maturity:                                                                          |   |                                     |   |   |                                     |   |   |   |   |   |   |   |
|    Municipal                  bonds                                                                     |   | $                                        | (4,177 | )      |                                     | $      | 3,271,620 |   |   | $ | (4,336 | ) |   | $ | 2,242,395 |   |
|                                                                                                                   |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|            Total                  securities held to maturity   |   |                                     | (4,177 | )      |                                     |   | 3,271,620 |   |   |   | (4,336 | ) |   |   | 2,242,395 |   |
|                                                                                                                   |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Securities                  available for sale:                                                                        |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|    Government                  agency securities                                                        |   | $                                        | -      |   |                                     | $      | - |   |   | $ | (536,595 | ) |   | $ | 30,456,435 |   |
|    Other                  securities                                                                    |   |                                     | (2,360 | )      |                                     |   | 991,310 |   |   |   | (103,820 | ) |   |   | 3,676,212 |   |
|                                                                                                                   |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|            Total                  securities available for sale |   |                                     | (2,360 | )      |                                     |   | 991,310 |   |   |   | (640,415 | ) |   |   | 34,132,647 |   |
|                                                                                                                   |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                                                  |   | $                                        | (6,537 | )      |                                     | $      | 4,262,930 |   |   | $ | (644,751 | ) |   | $ | 36,375,042 |   |

----

|                                                                                                                   |   | **Less                  than 12 months** |    |   | **More                  than 12 months** |   |
|------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|---------|--------|------------------------------------------|--------|
|                                                                                                                   |   | **Gross**                                |    |   | **Estimated**                            |   |   | **Gross** |   |   | **Estimated** |   |
|                                                                                                                   |   | **Unrealized**                           |    |   | **Fair**                                 |   |   | **Unrealized** |   |   | **Fair** |   |
|                                                                                                                   |   | **Losses**                               |    |   | **Value**                                |   |   | **Losses** |   |   | **Value** |   |
|                                                                                                                   |   |                                     |    |   |                                     |   |   |   |   |   |   |   |
| Securities                  held to maturity:                                                                          |   |                                     |    |   |                                     |   |   |   |   |   |   |   |
|    Municipal                  bonds                                                                     |   | $                                        | (26,015 | )      |                                     | $      | 5,877,674 |   |   | $ | (4,379 | ) |   | $ | 501,090 |   |
|                                                                                                                   |   |                                     |    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|            Total                  securities held to maturity   |   |                                     | (26,015 | )      |                                     |   | 5,877,674 |   |   |   | (4,379 | ) |   |   | 501,090 |   |
|                                                                                                                   |   |                                     |    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Securities                  available for sale:                                                                        |   |                                     |    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|    Agency                  bonds                                                                        |   |                                     | (3,120  | )      |                                     |   | 3,996,880 |   |   |   | (1,283,793 | ) |   |   | 54,208,315 |   |
|    Other                  securities                                                                    |   |                                     | -       |   |                                     |   | - |   |   |   | (84,035 | ) |   |   | 3,473,746 |   |
|                                                                                                                   |   |                                     |    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|            Total                  securities available for sale |   |                                     | (3,120  | )      |                                     |   | 3,996,880 |   |   |   | (1,367,828 | ) |   |   | 57,682,061 |   |
|                                                                                                                   |   |                                     |    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                                                  |   | $                                        | (29,135 | )      |                                     | $      | 9,874,554 |   |   | $ | (1,372,207 | ) |   | $ | 58,183,151 |   |

----

**3.     MORTGAGE-BACKED      SECURITIES**

|                                                                    |   | **Held                  to Maturity**            |       |
|-------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|------------|
|                                                                    |   | **September                  30, 2007**          |       |
|                                                                    |   |                                                                                          |       |   | **Gross** |   |   | **Gross** |   |   | **Estimated** |   |
|                                                                    |   | **Amortized**                                                                                 |       |   | **Unrealized** |   |   | **Unrealized** |   |   | **Fair** |   |
|                                                                    |   | **Cost**                                                                                      |       |   | **Gains** |   |   | **Losses** |   |   | **Value** |   |
|                                                                    |   |                                                                                          |       |   |   |   |   |   |   |   |   |   |
| FNMA                  pass-through                                      |   |                                                                                          |       |   |   |   |   |   |   |   |   |   |
|   certificates                                                |   | $                                                                                             | 21,094,527 |   |   | $ | - |   |   | $ | (897,225 | ) |   | $ | 20,197,302 |   |
| FHLMC                  pass-through                                     |   |                                                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   certificates                                                |   |                                                                                          | 15,028,815 |   |   |   | - |   |   |   | (740,158 | ) |   |   | 14,288,657 |   |
| Collateralized                  mortgage                                |   |                                                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   obligations                                                 |   |                                                                                          | 12,896,537 |   |   |   | 13,385 |   |   |   | (316,252 | ) |   |   | 12,593,670 |   |
|                                                                    |   |                                                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total |   | $                                                                                             | 49,019,879 |   |   | $ | 13,385 |   |   | $ | (1,953,635 | ) |   | $ | 47,079,629 |   |

|                                                                    |   | **Available                  for sale**      |       |
|-------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|------------|
|                                                                    |   | **September                  30, 2007**      |       |
|                                                                    |   |                                                                  |       |   | **Gross** |   |   | **Gross** |   |   | **Estimated** |   |
|                                                                    |   | **Amortized**                                                         |       |   | **Unrealized** |   |   | **Unrealized** |   |   | **Fair** |   |
|                                                                    |   | **Cost**                                                              |       |   | **Gains** |   |   | **Losses** |   |   | **Value** |   |
|                                                                    |   |                                                                  |       |   |   |   |   |   |   |   |   |   |
| GNMA                  pass-through                                      |   |                                                                  |       |   |   |   |   |   |   |   |   |   |
|   certificates                                                |   | $                                                                     | 335,429    |   |   | $ | 10,592 |   |   | $ | (16 | ) |   | $ | 346,005 |   |
| FNMA                  pass-through                                      |   |                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   certificates                                                |   |                                                                  | 10,466,213 |   |   |   | 36,895 |   |   |   | (135,620 | ) |   |   | 10,367,488 |   |
| FHLMC                  pass-through                                     |   |                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   certificates                                                |   |                                                                  | 56,541,422 |   |   |   | 120,085 |   |   |   | (1,179,925 | ) |   |   | 55,481,582 |   |
| Collateralized                  mortgage                                |   |                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   obligations                                                 |   |                                                                  | 10,495,862 |   |   |   | 33,607 |   |   |   | (99,620 | ) |   |   | 10,429,849 |   |
|                                                                    |   |                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total |   | $                                                                     | 77,838,926 |   |   | $ | 201,179 |   |   | $ | (1,415,181 | ) |   | $ | 76,624,924 |   |

----

|                                                                    |   | **Held                    to Maturity**           |       |
|-------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|------------|
|                                                                    |   | **December                    31, 2006**          |       |
|                                                                    |   |                                                                                           |       |   | **Gross** |   |   | **Gross** |   |   | **Estimated** |   |
|                                                                    |   | **Amortized**                                                                                  |       |   | **Unrealized** |   |   | **Unrealized** |   |   | **Fair** |   |
|                                                                    |   | **Cost**                                                                                       |       |   | **Gains** |   |   | **Losses** |   |   | **Value** |   |
|                                                                    |   |                                                                                           |       |   |   |   |   |   |   |   |   |   |
| FNMA                    pass-through                                    |   |                                                                                           |       |   |   |   |   |   |   |   |   |   |
|   certificates                                                |   | $                                                                                              | 24,298,423 |   |   | $ | - |   |   | $ | (969,362 | ) |   | $ | 23,329,061 |   |
| FHLMC                    pass-through                                   |   |                                                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   certificates                                                |   |                                                                                           | 17,103,783 |   |   |   | - |   |   |   | (853,654 | ) |   |   | 16,250,129 |   |
| Collateralized                    mortgage                              |   |                                                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   obligations                                                 |   |                                                                                           | 14,741,413 |   |   |   | 28,704 |   |   |   | (392,292 | ) |   |   | 14,377,825 |   |
|                                                                    |   |                                                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total |   | $                                                                                              | 56,143,619 |   |   | $ | 28,704 |   |   | $ | (2,215,308 | ) |   | $ | 53,957,015 |   |

|                                                                    |   | **Available                    for sale**      |       |
|-------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|------------|
|                                                                    |   | **December                    31, 2006**       |       |
|                                                                    |   |                                                                    |       |   | **Gross** |   |   | **Gross** |   |   | **Estimated** |   |
|                                                                    |   | **Amortized**                                                           |       |   | **Unrealized** |   |   | **Unrealized** |   |   | **Fair** |   |
|                                                                    |   | **Cost**                                                                |       |   | **Gains** |   |   | **Losses** |   |   | **Value** |   |
|                                                                    |   |                                                                    |       |   |   |   |   |   |   |   |   |   |
| GNMA                    pass-through                                    |   |                                                                    |       |   |   |   |   |   |   |   |   |   |
|   certificates                                                |   | $                                                                       | 424,074    |   |   | $ | 10,308 |   |   | $ | (743 | ) |   | $ | 433,639 |   |
| FNMA                    pass-through                                    |   |                                                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   certificates                                                |   |                                                                    | 9,726,032  |   |   |   | 37,334 |   |   |   | (184,091 | ) |   |   | 9,579,275 |   |
| FHLMC                    pass-through                                   |   |                                                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   certificates                                                |   |                                                                    | 64,665,295 |   |   |   | 120,584 |   |   |   | (1,627,920 | ) |   |   | 63,157,959 |   |
| Collateralized                    mortgage                              |   |                                                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   obligations                                                 |   |                                                                    | 5,015,865  |   |   |   | 3,346 |   |   |   | (167,290 | ) |   |   | 4,851,921 |   |
|                                                                    |   |                                                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total |   | $                                                                       | 79,831,266 |   |   | $ | 171,572 |   |   | $ | (1,980,044 | ) |   | $ | 78,022,794 |   |

----

|                                                                                                                   |   | **Less                  than 12 months** |   |   | **More                  than 12 months** |   |
|------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------|--------|------------------------------------------|--------|
|                                                                                                                   |   | **Gross**                                |   |   | **Estimated**                            |   |   | **Gross** |   |   | **Estimated** |   |
|                                                                                                                   |   | **Unrealized**                           |   |   | **Fair**                                 |   |   | **Unrealized** |   |   | **Fair** |   |
|                                                                                                                   |   | **Losses**                               |   |   | **Value**                                |   |   | **Losses** |   |   | **Value** |   |
|                                                                                                                   |   |                                     |   |   |                                     |   |   |   |   |   |   |   |
| Securities                  held to maturity:                                                                          |   |                                     |   |   |                                     |   |   |   |   |   |   |   |
|   FNMA                  pass-through                                                                         |   |                                     |   |   |                                     |   |   |   |   |   |   |   |
|     certificates                                                                                   |   | $                                        | -      |   |                                     | $      | - |   |   | $ | (897,225 | ) |   | $ | 20,197,301 |   |
|   FHLMC                  pass-through                                                                        |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|     certificates                                                                                   |   |                                     | -      |   |                                     |   | - |   |   |   | (740,158 | ) |   |   | 14,288,658 |   |
|   Real                  estate mortgage                                                                      |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|     investment                  conduits                                                           |   |                                     | -      |   |                                     |   | - |   |   |   | (316,252 | ) |   |   | 11,642,464 |   |
|                                                                                                                   |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|            Total                  securities held to maturity   |   |                                     | -      |   |                                     |   | - |   |   |   | (1,953,635 | ) |   |   | 46,128,423 |   |
|                                                                                                                   |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Securities                  available for sale:                                                                        |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|   GNMA                  pass-through                                                                         |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|     certificates                                                                                   |   | $                                        | (16    | )      |                                     | $      | 53,168 |   |   | $ | - |   |   | $ | - |   |
|   FNMA                  pass-through                                                                         |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|     certificates                                                                                   |   |                                     | (877   | )      |                                     |   | 85,340 |   |   |   | (134,743 | ) |   |   | 5,493,263 |   |
|   FHLMC                  pass-through                                                                        |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|     certificates                                                                                   |   |                                     | (612   | )      |                                     |   | 1,298,311 |   |   |   | (1,179,313 | ) |   |   | 46,512,261 |   |
|   Real                  estate mortgage                                                                      |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|     investment                  conduits                                                           |   |                                     | -      |   |                                     |   | - |   |   |   | (99,620 | ) |   |   | 4,283,543 |   |
|                                                                                                                   |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|            Total                  securities available for sale |   |                                     | (1,505 | )      |                                     |   | 1,436,819 |   |   |   | (1,413,676 | ) |   |   | 56,289,067 |   |
|                                                                                                                   |   |                                     |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                                                  |   | $                                        | (1,505 | )      |                                     | $      | 1,436,819 |   |   | $ | (3,367,311 | ) |   | $ | 102,417,490 |   |

----

|                                                                                                                   |   | **Less                  than 12 months** |     |   | **More                  than 12 months** |   |
|------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|----------|--------|------------------------------------------|--------|
|                                                                                                                   |   | **Gross**                                |     |   | **Estimated**                            |   |   | **Gross** |   |   | **Estimated** |   |
|                                                                                                                   |   | **Unrealized**                           |     |   | **Fair**                                 |   |   | **Unrealized** |   |   | **Fair** |   |
|                                                                                                                   |   | **Losses**                               |     |   | **Value**                                |   |   | **Losses** |   |   | **Value** |   |
|                                                                                                                   |   |                                     |     |   |                                     |   |   |   |   |   |   |   |
| Securities                  held to maturity:                                                                          |   |                                     |     |   |                                     |   |   |   |   |   |   |   |
|   FNMA                  pass-through                                                                         |   |                                     |     |   |                                     |   |   |   |   |   |   |   |
|     certificates                                                                                   |   | $                                        | -        |   |                                     | $      | - |   |   | $ | (969,362 | ) |   | $ | 23,329,061 |   |
|   FHLMC                  pass-through                                                                        |   |                                     |     |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|     certificates                                                                                   |   |                                     | -        |   |                                     |   | - |   |   |   | (853,654 | ) |   |   | 16,250,129 |   |
|   Collateralized                  mortgage                                                                   |   |                                     |     |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|     obligations                                                                                    |   |                                     | (111,660 | )      |                                     |   | 3,871,654 |   |   |   | (280,632 | ) |   |   | 9,839,646 |   |
|                                                                                                                   |   |                                     |     |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|            Total                  securities held to maturity   |   |                                     | (111,660 | )      |                                     |   | 3,871,654 |   |   |   | (2,103,648 | ) |   |   | 49,418,836 |   |
|                                                                                                                   |   |                                     |     |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Securities                  available for sale:                                                                        |   |                                     |     |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|   GNMA                  pass-through                                                                         |   |                                     |     |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|     certificates                                                                                   |   |                                     | -        |   |                                     |   | - |   |   |   | (743 | ) |   |   | 80,548 |   |
|   FNMA                  pass-through                                                                         |   |                                     |     |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|     certificates                                                                                   |   |                                     | (263     | )      |                                     |   | 34,026 |   |   |   | (183,828 | ) |   |   | 6,426,884 |   |
|   FHLMC                  pass-through                                                                        |   |                                     |     |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|     certificates                                                                                   |   |                                     | (3,247   | )      |                                     |   | 1,644,371 |   |   |   | (1,624,673 | ) |   |   | 52,967,849 |   |
|   Collateralized                  mortgage                                                                   |   |                                     |     |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|     obligations                                                                                    |   |                                     | -        |   |                                     |   | - |   |   |   | (167,290 | ) |   |   | 4,767,131 |   |
|                                                                                                                   |   |                                     |     |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
|            Total                  securities available for sale |   |                                     | (3,510   | )      |                                     |   | 1,678,397 |   |   |   | (1,976,534 | ) |   |   | 64,242,412 |   |
|                                                                                                                   |   |                                     |     |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                                                  |   | $                                        | (115,170 | )      |                                     | $      | 5,550,051 |   |   | $ | (4,080,182 | ) |   | $ | 113,661,248 |   |

----

**4.     LOANS      RECEIVABLE - NET**

|                                                                                           |   | **September                  30, 2007** |        |   | **December                  31, 2006** |   |
|------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-------------|--------|----------------------------------------|--------|
|                                                                                           |   |                                    |        |   |                                   |   |
|                                                                                           |   |                                    |        |   |                                   |   |
| One-to                  four-family residential                                                |   | $                                       | 420,113,585 |   |                                   | $      | 375,743,476 |   |
| Multi-family                  residential and commercial                                       |   |                                    | 78,868,406  |   |                                   |   | 92,427,910 |   |
| Construction                                                                                   |   |                                    | 154,540,389 |   |                                   |   | 134,976,214 |   |
| Home                  equity lines of credit                                                   |   |                                    | 31,192,979  |   |                                   |   | 33,953,399 |   |
| Commercial                  business loans                                                     |   |                                    | 22,220,443  |   |                                   |   | 11,416,252 |   |
| Consumer                  non-real estate loans                                                |   |                                    | 7,644,563   |   |                                   |   | 4,399,778 |   |
|                                                                                           |   |                                    |        |   |                                   |   |   |   |
|            Total                  loans |   |                                    | 714,580,365 |   |                                   |   | 652,917,029 |   |
|                                                                                           |   |                                    |        |   |                                   |   |   |   |
| Less:                                                                                          |   |                                    |        |   |                                   |   |   |   |
|   Construction                  loans in process                                     |   |                                    | (41,840,636 | )      |                                   |   | (45,338,523 | ) |
|   Deferred                  loan fees, net                                           |   |                                    | (768,907    | )      |                                   |   | (912,913 | ) |
|   Allowance                  for loan losses                                         |   |                                    | (1,833,069  | )      |                                   |   | (1,602,613 | ) |
|                                                                                           |   |                                    |        |   |                                   |   |   |   |
| Loans                  receivable—net                                                    |   | $                                       | 670,137,753 |   |                                   | $      | 605,062,980 |   |

|                                                       |   | **Nine                  Months Ended**  |      |   | **Year                  Ended**        |   |
|------------------------------------------------------------|--------|-----------------------------------------|-----------|--------|----------------------------------------|--------|
|                                                       |   | **September                  30, 2007** |      |   | **December                  31, 2006** |   |
|                                                       |   |                                    |      |   |                                   |   |
| Balance—beginning                  of year           |   | $                                       | 1,602,613 |   |                                   | $      | 1,454,510 |   |
|   Provision                  for loan losses     |   |                                    | 272,935   |   |                                   |   | 185,521 |   |
|   Charge-offs                                    |   |                                    | (64,115   | )      |                                   |   | (55,460 | ) |
|   Recoveries                                     |   |                                    | 21,636    |   |                                   |   | 18,042 |   |
|     (Charge-offs)/recoveries—net |   |                                    | (42,479   | )      |                                   |   | (37,418 | ) |
|                                                       |   |                                    |      |   |                                   |   |   |   |
| Balance—end                  of period               |   | $                                       | 1,833,069 |   |                                   | $      | 1,602,613 |   |

----

|                                                 |   | **September                  30,** |      |   | **December                  31,** |   |
|------------------------------------------------------|--------|------------------------------------|-----------|--------|-----------------------------------|--------|
|                                                 |   | **2007**                           |      |   | **2006**                          |   |
|                                                 |   |                               |      |   |                              |   |
| Impaired                  collateral-dependent loans |   | $                                  | 4,999,962 |   |                              | $      | 2,346,896 |   |
|                                                 |   |                               |      |   |                              |   |   |   |
| Average                  balance of impaired loans   |   | $                                  | 4,073,939 |   |                              | $      | 709,639 |   |
|                                                 |   |                               |      |   |                              |   |   |   |
| Interest                  income recognized on       |   |                               |      |   |                              |   |   |   |
|   impaired                  loans          |   | $                                  | -         |   |                              | $      | 65,955 |   |

----

**5.     DEFERRED      INCOME TAXES**

|                                                                                                              |   | **September                  30, 2007** |      |   | **December                  31, 2006** |   |
|-------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-----------|--------|----------------------------------------|--------|
|                                                                                                              |   |                                    |      |   |                                   |   |
| Deferred                  tax assets:                                                                             |   |                                    |      |   |                                   |   |
|   Allowance                  for loan losses                                                            |   | $                                       | 623,243   |   |                                   | $      | 544,888 |   |
|   Deferred                  compensation                                                                |   |                                    | 1,539,488 |   |                                   |   | 1,503,835 |   |
|   Unrealized                  loss on securities available-for-sale                                     |   |                                    | 494,430   |   |                                   |   | 1,072,467 |   |
|   Property                  and equipment                                                               |   |                                    | 60,844    |   |                                   |   | 19,157 |   |
|                                                                                                              |   |                                    |      |   |                                   |   |   |   |
|            Total                  deferred tax assets      |   |                                    | 2,718,005 |   |                                   |   | 3,140,347 |   |
|                                                                                                              |   |                                    |      |   |                                   |   |   |   |
| Deferred                  tax liabilities:                                                                        |   |                                    |      |   |                                   |   |   |   |
|   Deferred                  loan fees, net                                                              |   |                                    | (321,562  | )      |                                   |   | (313,063 | ) |
|   Other                                                                                                 |   |                                    | (17,589   | )      |                                   |   | (18,568 | ) |
|                                                                                                              |   |                                    |      |   |                                   |   |   |   |
|            Total                  deferred tax liabilities |   |                                    | (339,151  | )      |                                   |   | (331,631 | ) |
|                                                                                                              |   |                                    |      |   |                                   |   |   |   |
| Net                  deferred tax asset                                                                           |   | $                                       | 2,378,854 |   |                                   | $      | 2,808,716 |   |

**6.     PENSION      AND PROFIT SHARING PLANS**

----

**Supplemental      Retirement Plan**

|                                                                        |   | **Nine                  Months Ended September 30,** |    |
|-----------------------------------------------------------------------------|--------|------------------------------------------------------|---------|
|                                                                        |   | **2007**                                             |    |   | **2006** |   |
|                                                                        |   |                                                 |    |   |   |   |
| Components                  of net periodic pension cost:                   |   |                                                 |    |   |   |   |
|   Service                  cost                                   |   | $                                                    | 106,757 |   |   | $ | 80,592 |   |
|   Interest                  cost                                  |   |                                                 | 107,799 |   |   |   | 98,219 |   |
|   Expected                  return on assets                      |   |                                                 | -       |   |   |   | - |   |
|   Amortization                  of prior service cost             |   |                                                 | 91,444  |   |   |   | 91,189 |   |
|                                                                        |   |                                                 |    |   |   |   |   |   |
| Net                  periodic pension cost                                  |   | $                                                    | 306,000 |   |   | $ | 270,000 |   |
|                                                                        |   |                                                 |    |   |   |   |   |   |
| Other                  changes in plan assets and benefit                   |   |                                                 |    |   |   |   |   |   |
|   obligations                  recognized in accumulated          |   |                                                 |    |   |   |   |   |   |
|   other                  comprehensive loss:                      |   |                                                 |    |   |   |   |   |   |
|     Amortization                  of prior service cost |   |                                                 | (60,353 | ) |   |   | - |   |
| Total                  recognized in accumulated other                      |   |                                                 |    |   |   |   |   |   |
|   comprehensive                  loss                             |   |                                                 | (60,353 | ) |   |   | - |   |
| Total                  recognized in net periodic pension cost and          |   |                                                 |    |   |   |   |   |   |
|   accumulated                  other comprehensive loss           |   | $                                                    | 245,647 |   |   | $ | 270,000 |   |

|                                                                 |   | **Nine                  Months Ended September 30,** |   |
|----------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                 |   | **2007**                                             |   |   | **2006** |   |
|                                                                 |   |                                                 |   |   |   |   |
| Discount                  rate                                       |   |                                                 | 5.75   | % |   |   | 5.55 | % |
| Rate                  of return on assets                            |   |                                                 | n/a    |   |   |   | n/a |   |
| Rate                  of increase in future board fees/salary levels |   |                                                 | 4.00   | % |   |   | 4.00 | % |

----

|                                                                                      |   | **September                  30,** |    |   | **December                  31,** |   |
|-------------------------------------------------------------------------------------------|--------|------------------------------------|---------|--------|-----------------------------------|--------|
|                                                                                      |   | **2007**                           |    |   | **2006**                          |   |
|                                                                                      |   |                               |    |   |                              |   |
| Amount                  recognized in accumulated                                         |   |                               |    |   |                              |   |
|   other                  comprehensive loss for:                                |   |                               |    |   |                              |   |
|     Net                  actuarial loss                               |   | $                                  | 70,968  |   |                              | $      | 70,968 |   |
|     Prior                  service cost                               |   |                               | 397,231 |   |                              |   | 457,584 |   |
|       Total                  recognized in accumulated      |   |                               |    |   |                              |   |   |   |
|         other                  comprehensive loss |   | $                                  | 468,199 |   |                              | $      | 528,552 |   |

**Employee      Stock Ownership Plan**

**Recognition      and Retention Plan**

----

|                                                    |   | **Nine                  Months Ended September 30,**    |    |
|---------------------------------------------------------|--------|------------------------------------------------------------------------|---------|
|                                                    |   | **2007**                                                |    |   | **2006**    |   |
|                                                    |   | **Number                  of****shares**                               |    |   | **Weighted****average                  grant****date                  fair value** |   |   | **Number                  of****shares** |   |   | **Weighted****average                  grant****date                  fair value** |   |
|                                                    |   |                                                                   |    |   |   |   |   |   |   |   |   |   |
| Nonvested                  at the beginning of the year |   |                                                                   | 366,285 |   |   | $ | 7.54 |   |   |   | 457,056 |   |   | $ | 7.51 |   |
| Granted                                                 |   |                                                                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Vested                                                  |   |                                                                   | (89,971 | ) |   |   | 7.51 |   |   |   | (89,971 | ) |   |   | 7.51 |   |
| Forfeited                                               |   |                                                                   | -       |   |   |   | - |   |   |   | (3,200 | ) |   |   | 7.51 |   |
|                                                    |   |                                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nonvested                  at the end of the period     |   |                                                                   | 276,314 |   |   | $ | 7.55 |   |   |   | 363,885 |   |   | $ | 7.51 |   |

**Stock      Options**

----

|                                                      |   | **Nine                  Months Ended September 30,**       |      |
|-----------------------------------------------------------|--------|------------------------------------------------------------------------------------------|-----------|
|                                                      |   | **2007**                                                                  |      |   | **2006**    |   |
|                                                      |   | **Number                  of****shares**                                                 |      |   | **Weighted****average****exercise                  price** |   |   | **Number                  of****shares** |   |   | **Weighted****average****exercise                  price** |   |
|                                                      |   |                                                                                     |      |   |   |   |   |   |   |   |   |   |
| Outstanding                  at the beginning of the year |   |                                                                                     | 1,065,680 |   |   | $ | 7.62 |   |   |   | 1,029,200 |   |   | $ | 7.52 |   |
| Granted                                                   |   |                                                                                     | 69,500    |   |   |   | 9.63 |   |   |   | - |   |   |   | - |   |
| Exercised                                                 |   |                                                                                     | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Forfeited                                                 |   |                                                                                     | -         |   |   |   | - |   |   |   | (3,760 | ) |   |   | 7.51 |   |
|                                                      |   |                                                                                     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding                  at the end of the period     |   |                                                                                     | 1,135,180 |   |   | $ | 7.74 |   |   |   | 1,025,440 |   |   | $ | 7.52 |   |
|                                                      |   |                                                                                     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercisable                  at the end of the period     |   |                                                                                     | 408,736   |   |   | $ | 7.51 |   |   |   | 203,648 |   |   | $ | 7.51 |   |

|                                |   |   | **Options                  Outstanding**    |      |      | **Options                  Exercisable**                   |   |
|-------------------------------------|--------|--------|------------------------------------------------------------|-----------|-----------|------------------------------------------------------------|--------|
| **Exercise                  Price** |   |   | **Number                  of****Shares**                   |      |      | **Weighted****Average****Exercise                  Price** |   |   | **Weighted                  Average****Remaining****Contractual                  Life** |   |   | **Number                  of****Shares** |   |   | **Weighted****Average****Exercise                  Price** |   |
|                                |   |   |                                                       |      |      |                                                       |   |   | (in                  years) |   |   |   |   |   |   |   |
|                                |   |   |                                                       |      |      |                                                       |   |   |   |   |   |   |   |   |   |   |
| $                                   | 7.51   |   |                                                       |      | 1,018,240 |                                                       |   | $ | 7.51 |   |   |   | 7.8 |   |   |   | 407,296 |   |   | $ | 7.51 |   |
|                                | 8.35   |   |                                                       |      | 7,200     |                                                       |   |   | 8.35 |   |   |   | 8.2 |   |   |   | 1,440 |   |   |   | 8.35 |   |
|                                | 9.63   |   |                                                       |      | 69,500    |                                                       |   |   | 9.63 |   |   |   | 9.9 |   |   |   | - |   |   |   | - |   |
|                                | 10.18  |   |                                                       |      | 40,240    |                                                       |   |   | 10.18 |   |   |   | 9.1 |   |   |   | - |   |   |   | - |   |
|                                |   |   |                                                       |      |      |                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                               |   |   |                                                       | 1,135,180 |      |                                                       | $      | 7.74 |   |   |   | 7.9 |   |   |   | 408,736 |   |   | $ | 7.51 |   |
|                                |   |   |                                                       |      |      |                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intrinsic                  value    |   |   | $                                                          | 2,299,278 |      |                                                       |   |   |   |   |   |   |   |   | $ | 914,359 |   |   |   |   |   |

**7.     COMMITMENTS      AND CONTINGENCIES**

----

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

***Overview—***

----

----

***Critical      Accounting Policies, Judgments and Estimates—***

***Allowance      for Loan Losses—***

----

***Other-Than-Temporary      Impairment of Securities—***

***Income      Taxes—***

----

**COMPARISON      OF FINANCIAL CONDITION AT SEPTEMBER 30, 2007 AND DECEMBER 31,      2006**

----

**LIQUIDITY      AND CAPITAL RESOURCES**

----

|                                           |   | Actual                Ratios At    |   |   |                              |   |   |              |   |
|------------------------------------------------|--------|------------------------------------|--------|--------|-----------------------------------|--------|--------|-------------------|--------|
|                                           |   | September                  30,2007 |   |   | December                  31,2006 |   |   | RegulatoryMinimum |   |   | To                  Be WellCapitalized |   |
| **Capital                Ratios**:             |   |                               |   |   |                              |   |   |              |   |   |   |   |
| Tier                1 leverage ratio           |   |                               |   |   |                              |   |   |              |   |   |   |   |
|    The                Company   |   | N/A                                |   |   |                              | 12.80  | %      |              |   | 4.00 | % |   | N/A |   |
|    The                Bank      |   | 15.48%                             |   |   |                              | 10.54  |   |              |   | 4.00 |   |   | 5.00% |   |
| Tier                1 risk-based capital ratio |   |                          |   |   |                              |   |   |              |   |   |   |   |   |   |
|    The                Company   |   | N/A                                |   |   |                              | 20.01  |   |              |   | 4.00 |   |   | N/A |   |
|    The                Bank      |   | 24.24                              |   |   |                              | 16.49  |   |              |   | 4.00 |   |   | 6.00 |   |
| Total                risk-based capital ratio  |   |                          |   |   |                              |   |   |              |   |   |   |   |   |   |
|    The                Company   |   | N/A                                |   |   |                              | 20.29  |   |              |   | 8.00 |   |   | N/A |   |
|    The                Bank      |   | 24.51                              |   |   |                              | 16.77  |   |              |   | 8.00 |   |   | 10.00 |   |

**SHARE-BASED      COMPENSATION**

*Share-Based Payment*

----

*Employers’Accounting for Employee Stock Ownership Plans*

**COMMITMENTS      AND OFF-BALANCE SHEET ARRANGEMENTS**

----

|                                                                                                |   |                                    |    |   | Amount                  of Commitment Expiration - Per Period |   |
|-----------------------------------------------------------------------------------------------------|--------|-----------------------------------------|---------|--------|---------------------------------------------------------------|--------|
|                                                                                                |   | Total                  AmountsCommitted |    |   | To1                  Year                                     |   |   | Over                1 to3                  Years |   |   | Over                  4to                  5 Years |   |   | After                5Years |   |
|                                                                                                |   | (In                Thousands)           |    |
| Letters                of credit                                                                    |   | $                                       | 20,882  |   |                                                          | $      | 19,545 |   |   | $ | 1,332 |   |   | $ | -- |   |   | $ | 5 |   |
| Recourse                obligations on loans    sold                            |   |                                    | 185     |   |                                                          |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 185 |   |
| Commitments                to originate loans                                                       |   |                                    | 6,265   |   |                                                          |   | 6,265 |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Unused                portion of home equity   lines                of credit        |   |                                    | 22,640  |   |                                                          |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 22,640 |   |
| Unused                portion of commercial   lines                of credit         |   |                                    | 53,245  |   |                                                          |   | 53,245 |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Undisbursed                portion of   construction                loans in process |   |                                    | 41,841  |   |                                                          |   | 33,006 |   |   |   | 8,835 |   |   |   | -- |   |   |   | -- |   |
|       Total                commitments                                |   | $                                       | 145,058 |   |                                                          | $      | 112,061 |   |   | $ | 10,167 |   |   | $ | -- |   |   | $ | 22,830 |   |

|                                                           |   |                          |    |   | Payments                  Due By Period |   |
|----------------------------------------------------------------|--------|-------------------------------|---------|--------|-----------------------------------------|--------|
|                                                           |   | Total                         |    |   | To1                  Year               |   |   | Over                1 to3                  Years |   |   | Over                  4 to5                  Years |   |   | After                5Years |   |
|                                                           |   | (In                Thousands) |    |
| Certificates                of deposit                         |   | $                             | 413,541 |   |                                    | $      | 340,169 |   |   | $ | 52,088 |   |   | $ | 8,708 |   |   | $ | 12,576 |   |
| FHLB                advances                                   |   |                          | 193,206 |   |                                    |   | 52,422 |   |   |   | 70,839 |   |   |   | 44,551 |   |   |   | 25,394 |   |
| Repurchase                agreements                           |   |                          | 20,407  |   |                                    |   | 20,407 |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
|    Total                debt                    |   |                          | 213,613 |   |                                    |   | 72,829 |   |   |   | 70,839 |   |   |   | 44,551 |   |   |   | 25,394 |   |
| Operating                lease obligations                     |   |                          | 6,511   |   |                                    |   | 730 |   |   |   | 1,246 |   |   |   | 1,179 |   |   |   | 3,356 |   |
|    Total                contractual obligations |   | $                             | 633,665 |   |                                    | $      | 413,728 |   |   | $ | 124,173 |   |   | $ | 54,438 |   |   | $ | 41,326 |   |

----

**COMPARISON      OF OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2007 AND      2006**

**General.  **

**Interest      Income.**

**Interest      Expense.**

----

**Average      Balances, Net Interest Income, and Yields Earned and Rates Paid.**

|                                                                                                         |   | Three                  Months Ended September 30, |      |
|--------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|-----------|
|                                                                                                         |   |                                              |      |   |   |   |
|                                                                                                         |   | 2007                                              |      |   | 2006 |   |
|                                                                                                         |   | AverageBalance                                    |      |   | Interest |   |   | AverageYield/Rate |   |   | AverageBalance |   |   | Interest |   |   | AverageYield/Rate |   |
|                                                                                                         |   | (Dollars                in Thousands)             |      |
| Interest-earning                assets:                                                                      |   |                                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment                securities(1)                                                                      |   | $                                                 | 105,447   |   |   | $ | 1,307 |   |   |   | 4.96 | % |   | $ | 101,746 |   |   | $ | 1,069 |   |   |   | 4.20 | % |
| Mortgage-backed                securities                                                                    |   |                                              | 125,382   |   |   |   | 1,359 |   |   |   | 4.34 |   |   |   | 143,545 |   |   |   | 1,518 |   |   |   | 4.23 |   |
| Loans                receivable(2)                                                                           |   |                                              | 660,290   |   |   |   | 11,141 |   |   |   | 6.75 |   |   |   | 588,385 |   |   |   | 10,147 |   |   |   | 6.90 |   |
| Other                interest-earning                assets                                                  |   |                                              | 98,616    |   |   |   | 1,088 |   |   |   | 4.41 |   |   |   | 26,237 |   |   |   | 341 |   |   |   | 5.20 |   |
| Total                interest-earning                assets                                                  |   |                                              | 989,735   |   |   |   | 14,895 |   |   |   | 6.02 |   |   |   | 859,913 |   |   |   | 13,075 |   |   |   | 6.08 |   |
| Cash                and non-interest                bearingbalances                                          |   |                                              | 24,488    |   |   |   |   |   |   |   |   |   |   |   | 18,341 |   |   |   |   |   |   |   |   |   |
| Other                non-interest-earning                assets                                              |   |                                              | 43,229    |   |   |   |   |   |   |   |   |   |   |   | 25,448 |   |   |   |   |   |   |   |   |   |
| Total                assets                                                                                  |   | $                                                 | 1,057,452 |   |   |   |   |   |   |   |   |   |   | $ | 903,702 |   |   |   |   |   |   |   |   |   |
| Interest-bearing                liabilities:                                                                 |   |                                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                                                                    |   |                                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings                and money market                accounts                                              |   | $                                                 | 95,429    |   |   |   | 321 |   |   |   | 1.35 |   |   | $ | 97,169 |   |   |   | 272 |   |   |   | 1.12 |   |
| Checking                accounts                                                                             |   |                                              | 59,928    |   |   |   | 10 |   |   |   | 0.07 |   |   |   | 52,696 |   |   |   | 2 |   |   |   | 0.02 |   |
| Certificate                accounts                                                                          |   |                                              | 405,204   |   |   |   | 5,093 |   |   |   | 5.03 |   |   |   | 361,544 |   |   |   | 4,356 |   |   |   | 4.82 |   |
| Total                deposits                                                                                |   |                                              | 560,561   |   |   |   | 5,424 |   |   |   | 3.87 |   |   |   | 511,409 |   |   |   | 4,630 |   |   |   | 3.62 |   |
| FHLB                advances                                                                                 |   |                                              | 170,770   |   |   |   | 2,053 |   |   |   | 4.81 |   |   |   | 202,371 |   |   |   | 2,536 |   |   |   | 5.01 |   |
| Other                borrowings                                                                              |   |                                              | 23,584    |   |   |   | 264 |   |   |   | 4.48 |   |   |   | 23,649 |   |   |   | 268 |   |   |   | 4.53 |   |
| Total                interest-bearing                liabilities                                             |   |                                              | 754,915   |   |   |   | 7,741 |   |   |   | 4.10 |   |   |   | 737,429 |   |   |   | 7,434 |   |   |   | 4.03 |   |
| Non-interest-bearing                liabilities:                                                             |   |                                              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing                demandaccounts                                                           |   |                                              | 40,772    |   |   |   |   |   |   |   |   |   |   |   | 41,965 |   |   |   |   |   |   |   |   |   |
| Real                estate tax escrow                accounts                                                |   |                                              | 2,672     |   |   |   |   |   |   |   |   |   |   |   | 2,380 |   |   |   |   |   |   |   |   |   |
| Other                liabilities                                                                             |   |                                              | 13,408    |   |   |   |   |   |   |   |   |   |   |   | 10,291 |   |   |   |   |   |   |   |   |   |
| Total                liabilities                                                                             |   |                                              | 811,767   |   |   |   |   |   |   |   |   |   |   |   | 792,065 |   |   |   |   |   |   |   |   |   |
| Stockholders’                equity                                                                    |   |                                              | 245,685   |   |   |   |   |   |   |   |   |   |   |   | 111,637 |   |   |   |   |   |   |   |   |   |
| Total                liabilities and                stockholders’equity                                |   | $                                                 | 1,057,452 |   |   |   |   |   |   |   |   |   |   | $ | 903,702 |   |   |   |   |   |   |   |   |   |
| Net                interest-earning                assets                                                    |   | $                                                 | 234,820   |   |   |   |   |   |   |   |   |   |   |   | 122,484 |   |   |   |   |   |   |   |   |   |
| Net                interest income;                averageInterest                rate                spread |   |                                              |      |   |   | $ | 7,154 |   |   |   | 1.92 | % |   |   |   |   |   | $ | 5,641 |   |   |   | 2.05 | % |
| Net                interest                margin(3)                                                         |   |                                              |      |   |   |   |   |   |   |   | 2.89 | % |   |   |   |   |   |   |   |   |   |   | 2.62 | % |

| (1)   | Investment                securities for the 2007 period include 54 tax-exempt municipal bonds                with                an aggregate average balance of $20.8 million and an average yield                of                4.2%. Investment securities for the 2006 period include 46 tax-exempt                municipal bonds with an aggregate average balance of $20.4 million                and an                average yield of 4.2%. The tax-exempt income from such securities                has not                been presented on a tax equivalent                basis. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Includes                non-accrual loans during the respective periods.  Calculated net                of deferred fees and discounts and loans in                process. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Equals                net interest income divided by average interest-earning                assets. |
|-----------------|------------------------------------------------------------------------------------------------------|

----

**Provision      for Loan Losses.**

**Non-interest      Income.**

**Non-interest      Expenses.**

**Income      Tax Expense.**

----

**COMPARISON      OF OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND      2006**

**General.  **

**Interest      Income.**

**Interest      Expense.**

**Average      Balances, Net Interest Income, and Yields Earned and Rates Paid.**

----

|                                                                                                         |   | Nine                  Months Ended September 30, |    |
|--------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|
|                                                                                                         |   |                                             |    |   |   |   |
|                                                                                                         |   | 2007                                             |    |   | 2006 |   |
|                                                                                                         |   | AverageBalance                                   |    |   | Interest |   |   | AverageYield/Rate |   |   | AverageBalance |   |   | Interest |   |   | AverageYield/Rate |   |
|                                                                                                         |   | (Dollars                in Thousands)            |    |
| Interest-earning                assets:                                                                      |   |                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment                securities(1)                                                                      |   | $                                                | 101,968 |   |   | $ | 3,550 |   |   |   | 4.64 | % |   | $ | 100,985 |   |   | $ | 2,905 |   |   |   | 3.84 | % |
| Mortgage-backed                securities                                                                    |   |                                             | 128,998 |   |   |   | 4,160 |   |   |   | 4.30 |   |   |   | 145,738 |   |   |   | 4,579 |   |   |   | 4.19 |   |
| Loans                receivable(2)                                                                           |   |                                             | 636,958 |   |   |   | 32,171 |   |   |   | 6.73 |   |   |   | 561,634 |   |   |   | 28,321 |   |   |   | 6.72 |   |
| Other                interest-earning                assets                                                  |   |                                             | 62,483  |   |   |   | 1,903 |   |   |   | 4.06 |   |   |   | 24,870 |   |   |   | 756 |   |   |   | 4.05 |   |
| Total                interest-earning                assets                                                  |   |                                             | 930,407 |   |   |   | 41,784 |   |   |   | 5.99 |   |   |   | 833,227 |   |   |   | 36,561 |   |   |   | 5.85 |   |
| Cash                and non-interest                bearingbalances                                          |   |                                             | 20,484  |   |   |   |   |   |   |   |   |   |   |   | 19,051 |   |   |   |   |   |   |   |   |   |
| Other                non-interest-earning                assets                                              |   |                                             | 35,392  |   |   |   |   |   |   |   |   |   |   |   | 24,793 |   |   |   |   |   |   |   |   |   |
| Total                assets                                                                                  |   | $                                                | 986,283 |   |   |   |   |   |   |   |   |   |   | $ | 877,071 |   |   |   |   |   |   |   |   |   |
| Interest-bearing                liabilities:                                                                 |   |                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                                                                    |   |                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings                and money market                accounts                                              |   | $                                                | 94,917  |   |   |   | 900 |   |   |   | 1.26 |   |   | $ | 104,341 |   |   |   | 860 |   |   |   | 1.10 |   |
| Checking                accounts                                                                             |   |                                             | 58,575  |   |   |   | 18 |   |   |   | 0.04 |   |   |   | 53,677 |   |   |   | 9 |   |   |   | 0.02 |   |
| Certificate                accounts                                                                          |   |                                             | 403,160 |   |   |   | 15,135 |   |   |   | 5.01 |   |   |   | 328,053 |   |   |   | 10,907 |   |   |   | 4.43 |   |
| Total                deposits                                                                                |   |                                             | 556,652 |   |   |   | 16,053 |   |   |   | 3.85 |   |   |   | 486,071 |   |   |   | 11,776 |   |   |   | 3.23 |   |
| FHLB                advances                                                                                 |   |                                             | 181,004 |   |   |   | 6,529 |   |   |   | 4.81 |   |   |   | 202,637 |   |   |   | 7,208 |   |   |   | 4.74 |   |
| Other                borrowings                                                                              |   |                                             | 20,765  |   |   |   | 683 |   |   |   | 4.39 |   |   |   | 20,699 |   |   |   | 620 |   |   |   | 3.99 |   |
| Total                interest-bearing                liabilities                                             |   |                                             | 758,421 |   |   |   | 23,265 |   |   |   | 4.09 |   |   |   | 709,407 |   |   |   | 19,604 |   |   |   | 3.68 |   |
| Non-interest-bearing                liabilities:                                                             |   |                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing                demandaccounts                                                           |   |                                             | 42,836  |   |   |   |   |   |   |   |   |   |   |   | 41,786 |   |   |   |   |   |   |   |   |   |
| Real                estate tax escrow                accounts                                                |   |                                             | 3,105   |   |   |   |   |   |   |   |   |   |   |   | 2,755 |   |   |   |   |   |   |   |   |   |
| Other                liabilities                                                                             |   |                                             | 11,146  |   |   |   |   |   |   |   |   |   |   |   | 8,543 |   |   |   |   |   |   |   |   |   |
| Total                liabilities                                                                             |   |                                             | 815,508 |   |   |   |   |   |   |   |   |   |   |   | 762,491 |   |   |   |   |   |   |   |   |   |
| Stockholders’                equity                                                                    |   |                                             | 170,775 |   |   |   |   |   |   |   |   |   |   |   | 114,580 |   |   |   |   |   |   |   |   |   |
| Total                liabilities and                stockholders’equity                                |   | $                                                | 986,283 |   |   |   |   |   |   |   |   |   |   | $ | 877,071 |   |   |   |   |   |   |   |   |   |
| Net                interest-earning                assets                                                    |   | $                                                | 171,986 |   |   |   |   |   |   |   |   |   |   | $ | 123,820 |   |   |   |   |   |   |   |   |   |
| Net                interest income;                averageInterest                rate                spread |   |                                             |    |   |   | $ | 18,519 |   |   |   | 1.90 | % |   |   |   |   |   | $ | 16,957 |   |   |   | 2.17 | % |
| Net                interest                margin(3)                                                         |   |                                             |    |   |   |   |   |   |   |   | 2.65 | % |   |   |   |   |   |   |   |   |   |   | 2.71 | % |

| (1)   | Investment                securities for the 2007 period include 54 tax-exempt municipal bonds                with                an aggregate average balance of $20.5 million and an average yield                of                4.2%. Investment securities for the 2006 period include 47 tax-exempt                municipal bonds with an aggregate average balance of $20.4 million                and an                average yield of 4.2%. The tax-exempt income from such securities                has not                been presented on a tax equivalent                basis. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Includes                non-accrual loans during the respective periods.  Calculated net                of deferred fees and discounts and loans in                process. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Equals                net interest income divided by average interest-earning                assets. |
|-----------------|------------------------------------------------------------------------------------------------------|

----

**Provision      for Loan Losses.**

**Non-interest      Income.**

**Non-interest      Expenses.**

**Income      Tax Expense.**

**FORWARD      LOOKING STATEMENTS**

----

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

**Asset/Liability      Management and Market Risk.**

| ·   | we                have increased our originations of shorter term loans and/or loans                with                adjustable rates of interest, particularly construction loans, commercial                real estate and multi-family residential mortgage loans and home                equity                lines of credit; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | we                have attempted to match fund a portion of our securities portfolio                with                borrowings having similar expected                lives; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | we                have attempted, where possible, to extend the maturities of our deposits                and borrowings; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ·   | we                have invested in securities with relatively short anticipated lives,                generally three to five years, and increased our holding of liquid                assets. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Gap      Analysis.**

----

|                                                                                                                                                                                                                                                                                                      |   | 6                Monthsor                  Less |    |   | More                than6                Monthsto                  1 Year |   |    | More                than1                Yearto                  3 Years |   |   | More                than3                Yearsto                  5 Years |   |   | More                than5                  Years |    |   | Total                  Amount |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|--------|---------------------------------------------------------------------------|--------|---------|--------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------|--------|--------|--------------------------------------------------|---------|--------|-------------------------------|--------|
|                                                                                                                                                                                                                                                                                                      |   | (Dollars                in Thousands)           |    |
| Interest-earning                assets(1):                                                                                                                                                                                                                                                                |   |                                            |    |   |                                                                      |   |    |                                                                     |   |   |                                                                      |   |   |                                             |    |   |                          |   |
| Loans                receivable                                                                                                                                                                                                                                                                           |   | $                                               | 259,005 |   |                                                                      | $      | 47,943  |                                                                     |   | $      | 139,778                                                                   |   |   | $                                                | 83,079  |   |                          | $      | 142,166 |   |   | $ | 671,971 |   |
| Mortgage-backedsecurities                                                                                                                                                                                                                                                                                 |   |                                            | 30,716  |   |                                                                      |   | 18,628  |                                                                     |   |   | 39,265                                                                    |   |   |                                             | 17,089  |   |                          |   | 21,161 |   |   |   | 126,859 |   |
| Investment                securities                                                                                                                                                                                                                                                                      |   |                                            | 9,481   |   |                                                                      |   | 7,387   |                                                                     |   |   | 28,500                                                                    |   |   |                                             | 31,750  |   |                          |   | 31,388 |   |   |   | 108,506 |   |
| Other                interest-earningassets                                                                                                                                                                                                                                                               |   |                                            | 91,202  |   |                                                                      |   | --      |                                                                     |   |   | --                                                                        |   |   |                                             | --      |   |                          |   | -- |   |   |   | 91,202 |   |
|    Total                interest-earning     assets                                                                                                                                                                                                               |   |                                            | 390,404 |   |                                                                      |   | 73,958  |                                                                     |   |   | 207,543                                                                   |   |   |                                             | 131,918 |   |                          |   | 194,715 |   |   |   | 998,538 |   |
| Interest-bearing                liabilities:                                                                                                                                                                                                                                                              |   |                                            |    |   |                                                                      |   |    |                                                                     |   |   |                                                                      |   |   |                                             |    |   |                          |   |   |   |   |   |   |   |
| Savings                and money market                accounts                                                                                                                                                                                                                                           |   | $                                               | 13,941  |   |                                                                      | $      | 13,941  |                                                                     |   | $      | 34,953                                                                    |   |   | $                                                | 16,081  |   |                          | $      | 14,098 |   |   | $ | 93,014 |   |
| Checking                accounts                                                                                                                                                                                                                                                                          |   |                                            | --      |   |                                                                      |   | --      |                                                                     |   |   | --                                                                        |   |   |                                             | --      |   |                          |   | 58,535 |   |   |   | 58,535 |   |
| Certificate                accounts                                                                                                                                                                                                                                                                       |   |                                            | 270,829 |   |                                                                      |   | 104,025 |                                                                     |   |   | 17,403                                                                    |   |   |                                             | 8,708   |   |                          |   | 12,576 |   |   |   | 413,541 |   |
| FHLB                advances                                                                                                                                                                                                                                                                              |   |                                            | 106,834 |   |                                                                      |   | 17,011  |                                                                     |   |   | 41,173                                                                    |   |   |                                             | 8,041   |   |                          |   | 20,147 |   |   |   | 193,206 |   |
| Other                borrowed                money                                                                                                                                                                                                                                                        |   |                                            | 20,407  |   |                                                                      |   | --      |                                                                     |   |   | --                                                                        |   |   |                                             | -       |   |                          |   | -- |   |   |   | 20,407 |   |
| Total                interest-bearingliabilities                                                                                                                                                                                                                                                          |   |                                            | 412,011 |   |                                                                      |   | 134,977 |                                                                     |   |   | 93,529                                                                    |   |   |                                             | 32,830  |   |                          |   | 105,356 |   |   |   | 778,703 |   |
|                                                                                                                                                                                                                                                                                                      |   |                                            |    |   |                                                                      |   |    |                                                                     |   |   |                                                                      |   |   |                                             |    |   |                          |   |   |   |   |   |   |   |
| Interest-earning                assets less   interest-bearing                liabilities                                                                                                                                                                                                  |   | $                                               | (21,607 | )      |                                                                      | $      | (61,019 | )                                                                        |   | $      | 114,014                                                                   |   |   | $                                                | 99,088  |   |                          | $      | 89,359 |   |   | $ | 219,835 |   |
|                                                                                                                                                                                                                                                                                                      |   |                                            |    |   |                                                                      |   |    |                                                                     |   |   |                                                                      |   |   |                                             |    |   |                          |   |   |   |   |   |   |   |
| Cumulative                interest-rate   sensitivity                gap(2)                                                                                                                                                                                                                |   | $                                               | (21,607 | )      |                                                                      | $      | (82,626 | )                                                                        |   | $      | 31,388                                                                    |   |   | $                                                | 130,476 |   |                          | $      | 219,835 |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                      |   |                                            |    |   |                                                                      |   |    |                                                                     |   |   |                                                                      |   |   |                                             |    |   |                          |   |   |   |   |   |   |   |
| Cumulative                interest-rate                               gap                as a percentage of total assets at September 30, 2007 |   |                                            | (2.00   | )%     |                                                                      |   | (7.64   | )%                                                                       |   |   | 2.90                                                                      | %      |   |                                             | 12.07   | %      |                          |   | 20.34 | % |   |   |   |   |
|                                                                                                                                                                                                                                                                                                      |   |                                            |    |   |                                                                      |   |    |                                                                     |   |   |                                                                      |   |   |                                             |    |   |                          |   |   |   |   |   |   |   |
| Cumulative                interest-earning   assets                as a percentage of   cumulative                interest-bearing liabilities at September 30, 2007                                                                                                        |   |                                            | 94.76   | %      |                                                                      |   | 84.89   | %                                                                        |   |   | 104.90                                                                    | %      |   |                                             | 119.38  | %      |                          |   | 128.23 | % |   |   |   |   |

|   | (1)    | Interest-earning                assets are included in the period in which the balances are expected                to be                redeployed and/or repriced as a result of anticipated prepayments,                scheduled rate adjustments and contractual maturities. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                              |
|   | (2)    | Interest-rate                sensitivity gap represents the difference between net interest-earning                assets and interest-bearing                liabilities.                                                                                                        |

----

**ITEM      4.  – CONTROLS AND PROCEDURES**

**PART      II                                                                                    OTHER      INFORMATION**

**ITEM      1.    LEGAL      PROCEEDINGS**

**ITEM      1A.    **
**RISK      FACTORS**

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

|   | (a)    | Not                applicable.                    |
|--------|--------|---------------------------------------------------|
|   |   |                                              |
|   | (b)    | Not                applicable.                    |
|   |   |                                              |
|   | (c)    | **Purchases                of Equity Securities** |

----

| **Period**                                            |   | **Total****Number                  of****Shares****Purchased(1)** |   |   | **Average****Price                  Paid****per                  Share** |   |   | **Total                  Number of Shares Purchased****as                  Part of Publicly Announced Plans****or                  Programs** |   |   | **Maximum                  Number****of                  Shares that May****Yet                  be Purchased Under the Plan or Programs** |   |
|-------------------------------------------------------|--------|-------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|--------|
| July                1 – July 31, 2007           |   |                                                              | 10,268 |   |                                                                     |   | 9.84   |                                                                                                                                          |   |   | --                                                                                                                                         |   |   |   | -- |   |
| August                1 – August 31, 2007       |   |                                                              | --     |   |                                                                     |   | --     |                                                                                                                                          |   |   | --                                                                                                                                         |   |   |   | -- |   |
| September                1 – September 30, 2007 |   |                                                              | --     |   |                                                                     |   | --     |                                                                                                                                          |   |   | --                                                                                                                                         |   |   |   | -- |   |
|                                                  |   |                                                              |   |   |                                                                     |   |   |                                                                                                                                          |   |   |                                                                                                                                       |   |   |   |   |   |
| Total                                                 |   |                                                              | 10,268 |   |                                                                     | $      | 9.84   |                                                                                                                                          |   |   | --                                                                                                                                         |   |   |   | -- |   |

**ITEM      3.    DEFAULTS UPON SENIOR      SECURITIES**

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

**ITEM      5.    OTHER      INFORMATION**

**ITEM      6.    EXHIBITS**

|   | No.    | Description                                                                                                                                                                                                                                            |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 10.1   | Form                of Split Dollar Insurance Agreement by and between Abington Bank                and each                of Robert W. White, Edward W. Gormley, Frank Kovalcheck, Jack J.                Sandoski                and Eric L. Golden |
|   |   |                                                                                                                                                                                                                                                   |
|   | 31.1   | Rule                13a-14(d) and 15d-14(d) Certification of the Chief Executive                Officer.                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                   |
|   | 31.2   | Rule                13a-14(d) and 15d-14(d) Certification of the Chief Financial                Officer.                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                   |
|   | 32.1   | Section                1350 Certification.                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                   |
|   | 32.2   | Section                1350 Certification.                                                                                                                                                                                                             |

----

**SIGNATURES**

|                                   |   | **ABINGTON                BANCORP, INC.** |
|----------------------------------------|--------|-------------------------------------------|
|                                   |   |                                      |   |   |
|                                   |   |                                      |   |   |
|                                   |   |                                      |   |   |
| Date:                November 14, 2007 |   | By:                                       | /s/                Robert W. White |   |
|                                   |   |                                      | Robert                W. White |   |
|                                   |   |                                      | Chairman,                President and |   |
|                                   |   |                                      | Chief                Executive Officer |   |
|                                   |   |                                      |   |   |
|                                   |   |                                      |   |   |
|                                   |   |                                      |   |   |
|                                   |   |                                      |   |   |
| Date:                November 14, 2007 |   | By:                                       | /s/                Jack J. Sandoski |   |
|                                   |   |                                      | Jack                J. Sandoski |   |
|                                   |   |                                      | Senior                Vice President and |   |
|                                   |   |                                      | Chief                Financial Officer |   |