##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 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
 Abington Bancorp, Inc.
  Pennsylvania
    
    20-8613037(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)180 Old York RoadJenkintown, Pennsylvania
    
    19046(Address of Principal Executive Offices)
    
    (Zip Code)
 (Registrants Telephone Number, Including Area Code)
 (Former name, former address or former fiscal year if changed since last report)
 þ o
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 Yes o No þ




---



##### 



ABINGTON BANCORP, INC.
 TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSUnaudited Consolidated Statements of Financial Condition as of March 31, 2009 and
December 31, 2008
    
    
    1Unaudited Consolidated Statements of Income for the Three Months Ended March 31,
2009 and 2008
    
    
    2Unaudited Consolidated Statements of Stockholders Equity for the Three Months Ended
March 31, 2009 and 2008
    
    
    3Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31,
2009 and 2008
    
    
    4Notes to Unaudited Consolidated Financial Statements
    
    
    5ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    29ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    43ITEM 4. CONTROLS AND PROCEDURES
    
    
    46PART II  OTHER INFORMATIONITEM 1. Legal Proceedings
    
    
    46ITEM 1A. Risk Factors
    
    
    46ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    46ITEM 3. Defaults upon Senior Securities
    
    
    47ITEM 4. Submission of Matters to a Vote of Security Holders
    
    
    47ITEM 5. Other Information
    
    
    47ITEM 6. Exhibits
    
    
    47SIGNATURES
    
    
    48Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




---



##### Table of Contents



ABINGTON BANCORP, INC.
 
 UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 March 31, 2009
    
    
    December 31, 2008ASSETSCash and due from banks
    
    $
    21,229,253
    
    
    $
    23,074,990Interest-bearing deposits in other banks
    
    
    28,512,718
    
    
    
    8,788,354Total cash and cash equivalents
    
    
    49,741,971
    
    
    
    31,863,344Investment securities held to maturity (estimated fair
value2009, $20,623,263; 2008, $20,590,495)
    
    
    20,388,565
    
    
    
    20,389,106Investment securities available for sale (amortized cost2009, $59,128,104; 2008, $67,782,158)
    
    
    60,473,181
    
    
    
    69,323,505Mortgage-backed securities held to maturity (estimated fair
value2009, $77,883,203; 2008, $81,702,915)
    
    
    78,757,555
    
    
    
    83,093,064Mortgage-backed securities available for sale (amortized cost2009, $143,722,549; 2008, $148,601,190)
    
    
    147,984,916
    
    
    
    151,628,507Loans receivable, net of allowance for loan losses
(2009, $8,183,133; 2008, $11,596,784)
    
    
    751,538,734
    
    
    
    756,552,352Accrued interest receivable
    
    
    4,927,460
    
    
    
    4,856,707Federal Home Loan Bank stockat cost
    
    
    14,607,700
    
    
    
    14,607,700Cash surrender value  bank owned life insurance
    
    
    39,633,443
    
    
    
    39,184,889Property and equipment, net
    
    
    10,946,084
    
    
    
    11,070,542Real estate owned
    
    
    13,139,077
    
    
    
    1,739,599Deferred tax asset
    
    
    2,787,393
    
    
    
    4,456,103Prepaid expenses and other assets
    
    
    1,761,306
    
    
    
    988,060TOTAL ASSETS
    
    $
    1,196,687,385
    
    
    $
    1,189,753,478LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIES:Deposits:Noninterest-bearing
    
    $
    39,253,743
    
    
    $
    37,194,591Interest-bearing
    
    
    690,429,098
    
    
    
    627,755,843Total deposits
    
    
    729,682,841
    
    
    
    664,950,434Advances from Federal Home Loan Bank
    
    
    202,498,507
    
    
    
    257,051,203Other borrowed money
    
    
    20,336,768
    
    
    
    17,609,637Accrued interest payable
    
    
    3,455,763
    
    
    
    2,617,721Advances from borrowers for taxes and insurance
    
    
    4,332,274
    
    
    
    3,275,285Accounts payable and accrued expenses
    
    
    5,536,997
    
    
    
    6,148,613Total liabilities
    
    
    965,843,150
    
    
    
    951,652,893COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITYPreferred stock, $0.01 par value, 20,000,000 shares authorized
none issued
    
    
    
    
    
    
    Common stock, $0.01 par value, 80,000,000 shares authorized;
24,460,240 shares issued; outstanding: 21,988,861 shares in 2009,
23,369,916 shares in 2008
    
    
    244,602
    
    
    
    244,602Additional paid-in capital
    
    
    201,457,677
    
    
    
    201,378,465Treasury stockat cost, 2,471,379 shares in 2009,
1,090,324 shares in 2008
    
    
    (20,539,288
    )
    
    
    (10,525,100
    )Unallocated common stock held by:Employee Stock Ownership Plan (ESOP)
    
    
    (14,928,658
    )
    
    
    (15,138,418
    )Recognition & Retention Plan Trust (RRP)
    
    
    (5,168,382
    )
    
    
    (5,593,821
    )Deferred compensation plans trust
    
    
    (967,455
    )
    
    
    (1,190,857
    )Retained earnings
    
    
    67,132,738
    
    
    
    66,007,138Accumulated other comprehensive income
    
    
    3,613,001
    
    
    
    2,918,576Total stockholders equity
    
    
    230,844,235
    
    
    
    238,100,585TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    1,196,687,385
    
    
    $
    1,189,753,478
   1




---



##### Table of Contents



ABINGTON BANCORP, INC.
 
 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended March 31,2009
    
    
    2008INTEREST INCOME:Interest and fees on loans
    
    $
    10,028,633
    
    
    $
    10,711,406Interest and dividends on investment and
mortgage-backed securities:Taxable
    
    
    3,282,931
    
    
    
    2,658,306Tax-exempt
    
    
    400,775
    
    
    
    296,775Interest and dividends on other interest-earning assets
    
    
    12,930
    
    
    
    530,883Total interest income
    
    
    13,725,269
    
    
    
    14,197,370INTEREST EXPENSE:Interest on deposits
    
    
    4,041,397
    
    
    
    4,922,109Interest on Federal Home Loan Bank advances
    
    
    2,084,584
    
    
    
    2,247,438Interest on other borrowed money
    
    
    14,578
    
    
    
    135,302Total interest expense
    
    
    6,140,559
    
    
    
    7,304,849NET INTEREST INCOME
    
    
    7,584,710
    
    
    
    6,892,521PROVISION FOR LOAN LOSSES
    
    
    116,691
    
    
    
    49,140NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES
    
    
    7,468,019
    
    
    
    6,843,381NON-INTEREST INCOME:Service charges
    
    
    389,246
    
    
    
    381,909Income on bank owned life insurance
    
    
    448,554
    
    
    
    476,052Net gain on real estate owned
    
    
    15,834
    
    
    
    Loss on sale of securities
    
    
    
    
    
    
    (11,758
    )Other income
    
    
    162,906
    
    
    
    107,081Total non-interest income
    
    
    1,016,540
    
    
    
    953,284NON-INTEREST EXPENSES:Salaries and employee benefits
    
    
    2,957,359
    
    
    
    2,865,186Occupancy
    
    
    579,294
    
    
    
    533,941Depreciation
    
    
    222,185
    
    
    
    196,993Professional services
    
    
    337,660
    
    
    
    275,948Data processing
    
    
    379,812
    
    
    
    382,590Advertising and promotions
    
    
    74,535
    
    
    
    102,452Director compensation
    
    
    223,746
    
    
    
    188,412Other
    
    
    815,814
    
    
    
    640,698Total non-interest expenses
    
    
    5,590,405
    
    
    
    5,186,220INCOME BEFORE INCOME TAXES
    
    
    2,894,154
    
    
    
    2,610,445PROVISION FOR INCOME TAXES
    
    
    741,785
    
    
    
    692,276NET INCOME
    
    $
    2,152,369
    
    
    $
    1,918,169BASIC EARNINGS PER COMMON SHARE
    
    $
    0.10
    
    
    $
    0.09DILUTED EARNINGS PER COMMON SHARE
    
    $
    0.10
    
    
    $
    0.08BASIC AVERAGE COMMON SHARES OUTSTANDING:
    
    
    20,550,141
    
    
    
    22,352,051DILUTED AVERAGE COMMON SHARES OUTSTANDING:
    
    
    21,107,543
    
    
    
    22,858,601
   2




---



##### Table of Contents



ABINGTON BANCORP, INC.
 
 UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 CommonStock
    
    
    
    
    
    
    AccumulatedCommon
    
    
    
    
    
    
    Additional
    
    
    
    
    
    
    Acquired by
    
    
    
    
    
    
    Other
    
    
    TotalStock
    
    
    Common
    
    
    Paid-in
    
    
    Treasury
    
    
    Benefit
    
    
    Retained
    
    
    Comprehensive
    
    
    StockholdersShares
    
    
    Stock
    
    
    Capital
    
    
    Stock
    
    
    Plans
    
    
    Earnings
    
    
    Income
    
    
    EquityBALANCEJANUARY 1, 2009
    
    
    24,460,240
    
    
    $
    244,602
    
    
    $
    201,378,465
    
    
    $
    (10,525,100
    )
    
    $
    (21,923,096
    )
    
    $
    66,007,138
    
    
    $
    2,918,576
    
    
    $
    238,100,585Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,152,369
    
    
    
    
    
    
    
    2,152,369Net unrealized holding gain on
available for sale securities
arising during the period, net
of tax expense of $353,185
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    685,595
    
    
    
    685,595Amortization of unrecognized
deferred costs on SERP, net
of tax benefit of $4,549
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,830
    
    
    
    8,830Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,846,794Treasury stock purchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,014,188
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,014,188
    )Cash dividends declared,
($0.05 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,026,769
    )
    
    
    
    
    
    
    (1,026,769
    )Excess tax liability on
stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    (68,037
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (68,037
    )Stock options expense
    
    
    
    
    
    
    
    
    
    
    221,151
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    221,151Common stock released from
benefit plans
    
    
    
    
    
    
    
    
    
    
    (73,902
    )
    
    
    
    
    
    
    874,670
    
    
    
    
    
    
    
    
    
    
    
    800,768Common stock acquired by
benefit plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,069
    )
    
    
    
    
    
    
    
    
    
    
    (16,069
    )BALANCEMARCH 31, 2009
    
    
    24,460,240
    
    
    $
    244,602
    
    
    $
    201,457,677
    
    
    $
    (20,539,288
    )
    
    $
    (21,064,495
    )
    
    $
    67,132,738
    
    
    $
    3,613,001
    
    
    $
    230,844,235
 Common
    
    
    
    
    
    
    AccumulatedStock
    
    
    
    
    
    
    OtherCommon
    
    
    
    
    
    
    Additional
    
    
    
    
    
    
    Acquired by
    
    
    
    
    
    
    Comprehensive
    
    
    TotalStock
    
    
    Common
    
    
    Paid-in
    
    
    Treasury
    
    
    Benefit
    
    
    Retained
    
    
    Income
    
    
    StockholdersShares
    
    
    Stock
    
    
    Capital
    
    
    Stock
    
    
    Plans
    
    
    Earnings
    
    
    (Loss)
    
    
    EquityBALANCEJANUARY 1, 2008
    
    
    24,460,240
    
    
    $
    244,602
    
    
    $
    200,634,467
    
    
    $
    (104,997
    )
    
    $
    (18,994,133
    )
    
    $
    68,360,520
    
    
    $
    (225,399
    )
    
    $
    249,915,060Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,918,169
    
    
    
    
    
    
    
    1,918,169Net unrealized holding gain on
available for sale securities
arising during the period, net
of tax expense of $815,185
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,582,419
    
    
    
    1,582,419Amortization of unrecognized
deferred costs on SERP, net
of tax expense of $10,364
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,117
    
    
    
    20,117Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,520,705Cash dividends declared,
($0.05 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,135,512
    )
    
    
    
    
    
    
    (1,135,512
    )Stock options expense
    
    
    
    
    
    
    
    
    
    
    197,283
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    197,283Common stock released from
benefit plans
    
    
    
    
    
    
    
    
    
    
    (4,797
    )
    
    
    
    
    
    
    569,193
    
    
    
    
    
    
    
    
    
    
    
    564,396Common stock acquired by
benefit plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,050,744
    )
    
    
    
    
    
    
    
    
    
    
    (3,050,744
    )BALANCEMARCH 31, 2008
    
    
    24,460,240
    
    
    $
    244,602
    
    
    $
    200,826,953
    
    
    $
    (104,997
    )
    
    $
    (21,475,684
    )
    
    $
    69,143,177
    
    
    $
    1,377,137
    
    
    $
    250,011,188
   3




---



##### Table of Contents



ABINGTON BANCORP, INC.
 
 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three Months Ended March 31,2009
    
    
    2008OPERATING ACTIVITIES:Net income
    
    $
    2,152,369
    
    
    $
    1,918,169Adjustments to reconcile net income to net cash
provided by operating activities:Provision for loan losses
    
    
    116,691
    
    
    
    49,140Depreciation
    
    
    222,185
    
    
    
    196,993Share-based compensation expense
    
    
    782,448
    
    
    
    759,079Net gain on real estate owned
    
    
    (15,834
    )
    
    
    Loss on sale of investment securities
    
    
    
    
    
    
    11,758Deferred income tax expense (benefit)
    
    
    1,310,976
    
    
    
    (189,524
    )Amortization of:Deferred loan fees
    
    
    (307,654
    )
    
    
    (173,102
    )Premiums and discounts, net
    
    
    (57,690
    )
    
    
    34,299Income from bank owned life insurance
    
    
    (448,554
    )
    
    
    (476,052
    )Changes in assets and liabilities which (used) provided cash:Accrued interest receivable
    
    
    (70,753
    )
    
    
    (39,311
    )Prepaid expenses and other assets
    
    
    (773,246
    )
    
    
    267,994Accrued interest payable
    
    
    838,042
    
    
    
    1,251,552Accounts payable and accrued expenses
    
    
    (374,835
    )
    
    
    732,718Net cash provided by operating activities
    
    
    3,374,145
    
    
    
    4,343,713INVESTING ACTIVITIES:Principal collected on loans
    
    
    34,124,827
    
    
    
    34,592,073Disbursements for loans
    
    
    (40,870,441
    )
    
    
    (47,023,260
    )Purchases of:Mortgage-backed securities held to maturity
    
    
    
    
    
    
    (9,861,264
    )Mortgage-backed securities available for sale
    
    
    (4,399,240
    )
    
    
    (18,278,032
    )Investments available for sale
    
    
    (535,024
    )
    
    
    (11,139,335
    )Federal Home Loan Bank stock
    
    
    
    
    
    
    (496,400
    )Property and equipment
    
    
    (97,727
    )
    
    
    (287,846
    )Proceeds from:Sales and maturities of mortgage-backed securities available for sale
    
    
    461,536
    
    
    
    1,960,836Maturities of investments available for sale
    
    
    9,194,000
    
    
    
    18,099,000Principal repayments of mortgage-backed securities held to maturity
    
    
    4,318,601
    
    
    
    1,658,314Principal repayments of mortgage-backed securities available for sale
    
    
    8,886,562
    
    
    
    4,655,263Redemption of Federal Home Loan Bank stock
    
    
    
    
    
    
    562,700Sales of real estate owned
    
    
    491,106
    
    
    
    Reimbursements towards (additions to) real estate owned
    
    
    75,445
    
    
    
    (95,217
    )Net cash provided by (used in) investing activities
    
    
    11,649,645
    
    
    
    (25,653,168
    )FINANCING ACTIVITIES:Net increase in demand deposits and savings accounts
    
    
    23,169,586
    
    
    
    10,345,868Net increase in certificate accounts
    
    
    41,562,821
    
    
    
    14,161,301Net increase in other borrowed money
    
    
    2,727,131
    
    
    
    3,027,827Advances from Federal Home Loan Bank
    
    
    45,935,000
    
    
    
    32,805,000Repayments of advances from Federal Home Loan Bank
    
    
    (100,487,696
    )
    
    
    (34,509,073
    )Net increase in advances from borrowers for taxes and insurance
    
    
    1,056,989
    
    
    
    449,805Excess tax liability from stock-based compensation
    
    
    (68,037
    )
    
    
    Acquisition of stock for benefit plans
    
    
    
    
    
    
    (3,035,263
    )Purchase of treasury stock
    
    
    (10,014,188
    )
    
    
    Payment of cash dividend
    
    
    (1,026,769
    )
    
    
    (1,135,512
    )Net cash provided by financing activities
    
    
    2,854,837
    
    
    
    22,109,953NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    17,878,627
    
    
    
    800,498CASH AND CASH EQUIVALENTSBeginning of period
    
    
    31,863,344
    
    
    
    68,055,461CASH AND CASH EQUIVALENTSEnd of period
    
    $
    49,741,971
    
    
    $
    68,855,959SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the year for:Interest on deposits and other borrowings
    
    $
    5,302,517
    
    
    $
    6,053,297Income taxes
    
    $
    
    
    
    $
    130,000Non-cash transfer of loans to real estate owned
    
    $
    11,950,195
    
    
    $
    977,386Release of stock from deferred compensation plans trust
    
    $
    239,471
    
    
    $
    
   4




---



##### Table of Contents



ABINGTON BANCORP, INC.
 
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 1.
    
    FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIESBasis of Financial Statement PresentationAbington Bancorp, Inc. (the Company) is a
Pennsylvania corporation which was organized to be the stock holding company for Abington
Savings Bank in connection with our second-step conversion and reorganization completed on June
27, 2007, which is discussed further below. Abington Savings Bank is a Pennsylvania-chartered,
FDIC-insured savings bank, which conducts business under the name Abington Bank (the Bank or
Abington Bank). As a result of the Banks election pursuant to Section 10(l) of the Home
Owners Loan Act, the Company is a savings and loan holding company regulated by the Office of
Thrift Supervision (the OTS). The Bank is a wholly owned subsidiary of the Company. The
Companys results of operations are primarily dependent on the results of the Bank and the
Banks wholly owned subsidiary, ASB Investment Co. The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiaries. All significant intercompany
balances and transactions have been eliminated.The Banks executive offices are in Jenkintown, Pennsylvania, with twelve other branches and
seven limited service facilities located in Montgomery, Bucks and Delaware Counties,
Pennsylvania. The Bank is principally engaged in the business of accepting customer deposits and
investing these funds in loans that include residential mortgage, commercial, consumer and
construction loans. The principal business of ASB Investment Co. is to hold certain investment
securities for the Bank. Keswick Services II, and its wholly owned subsidiaries, and Abington
Corp. are currently inactive subsidiaries.Abington Community Bancorp, Inc., a Pennsylvania corporation, was the former mid-tier holding
company for the Bank. Abington Community Bancorp was organized in conjunction with the Banks
reorganization from the mutual savings bank to the mutual holding company structure in December
2004. Abington Mutual Holding Company, a Pennsylvania corporation, was the mutual holding
company parent of Abington Community Bancorp, Inc. and originally owned 55% of Abington
Community Bancorps outstanding stock. As a result of treasury stock purchases, this stake
increased to approximately 57% of Abington Community Bancorps outstanding stock at the time of
the Banks second-step conversion.On June 27, 2007, a second-step conversion was completed after which Abington Mutual Holding
Company and Abington Community Bancorp, Inc. ceased to exist and Abington Bancorp, Inc. was
organized as the new stock-form holding company for the Bank and successor to Abington Community
Bancorp. A total of 13,965,600 new shares of the Company were sold at $10 per share in the
subscription, community and syndicated community offerings through which the Company received
proceeds of approximately $134.7 million, net of offering costs of approximately $5.0 million.
As part of the conversion, each outstanding public share of Abington Community Bancorp, Inc.
(that is, shares owned by stockholders other than Abington Mutual Holding Company) was exchanged
for 1.6 shares of Company Common Stock. The exchange resulted in an additional 10,494,640
outstanding shares of common stock of the Company for a total of 24,460,240 outstanding shares
as of the closing of the second-step conversion. Treasury stock held was cancelled.
  5




---



##### Table of Contents



Use of Estimates in the Preparation of Financial Statements
 Other-Than-Temporary Impairment of Securities
 Allowance for Loan Losses
   6




---



##### Table of Contents



Comprehensive Income
  Three Months EndedMarch 31,2009
    
    
    2008Net unrealized gain on securities arising
during the period
    
    $
    685,595
    
    
    $
    1,574,659Plus: reclassification adjustment for net
losses included in net income, net of tax
    
    
    
    
    
    
    7,760Net unrealized gain on securities
    
    $
    685,595
    
    
    $
    1,582,419Amortization of deferred costs on
supplemental retirement plan, net of tax
    
    
    8,830
    
    
    
    20,117Total other comprehensive income
    
    $
    694,425
    
    
    $
    1,602,536
  March 31,
    
    
    December 31,2009
    
    
    2008Net unrealized gain on securities
    
    $
    3,700,912
    
    
    $
    3,015,317Unrecognized deferred costs of supplemental
retirment plan
    
    
    (87,911
    )
    
    
    (96,741
    )Total accumulated other comprehensive income
    
    $
    3,613,001
    
    
    $
    2,918,576
 Share-Based Compensation Share-Based Payment
  7




---



##### Table of Contents



Employers Accounting for Employee Stock Ownership Plans
 Earnings per share
 Three Months Ended March 31,2009
    
    
    2008Basic
    
    
    Diluted
    
    
    Basic
    
    
    DilutedNet income
    
    $
    2,152,369
    
    
    $
    2,152,369
    
    
    $
    1,918,169
    
    
    $
    1,918,169Weighted average shares outstanding
    
    
    20,550,141
    
    
    
    20,550,141
    
    
    
    22,352,051
    
    
    
    22,352,051Effect of common stock equivalents
    
    
    
    
    
    
    557,402
    
    
    
    
    
    
    
    506,550Adjusted weighted average shares used
in earnings per share computation
    
    
    20,550,141
    
    
    
    21,107,543
    
    
    
    22,352,051
    
    
    
    22,858,601Earnings per share
    
    $
    0.10
    
    
    $
    0.10
    
    
    $
    0.09
    
    
    $
    0.08
 Recent Accounting Pronouncements Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly Fair Value
Measurements
   8




---



##### Table of Contents



Recognition and Presentation of
Other-Than-Temporary Impairments
 Recognition and Presentation of
Other-Than-Temporary Impairments
  Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly
  9




---



##### Table of Contents



In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair
Value of Financial Instruments(FSP FAS 107-1 and APB 28-1). FSP FAS 107-1 and APB 28-1 amends
FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, to require
disclosures about fair value of financial instruments for interim reporting periods of publicly
traded companies as well as in annual financial statements. This FSP also amends APB Opinion No.
28, Interim Financial Reporting, to require those disclosures in summarized financial information
at interim reporting periods.This FSP is effective for interim and annual reporting periods ending after June 15, 2009, with
early adoption permitted for periods ending after March 15, 2009. An entity early adopting FSP
FAS 107-1 and APB 28-1 must also early adopt FSP FAS 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderlyand FSP FAS 115-2 and FAS 124-2, Recognition and
Presentation of Other-Than-Temporary Impairments. The Company did not elect to early adopt this
pronouncement and is continuing to evaluate the impact that it will have on our consolidated
financial position and results of operations.ReclassificationsCertain items in the 2008 consolidated financial statements have been
reclassified to conform to the presentation in the 2009 consolidated financial statements. Such
reclassifications did not have a material impact on the presentation of the overall financial
statements.2.
    
    INVESTMENT SECURITIESThe amortized cost and estimated fair value of investment securities are summarized as follows:
 Held to MaturityMarch 31, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDebt securities:Municipal bonds
    
    $
    20,388,565
    
    
    $
    298,257
    
    
    $
    (63,559
    )
    
    $
    20,623,263Total debt securities
    
    $
    20,388,565
    
    
    $
    298,257
    
    
    $
    (63,559
    )
    
    $
    20,623,263
  10




---



##### Table of Contents



Available for SaleMarch 31, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDebt securities:Agency bonds
    
    $
    32,971,423
    
    
    $
    962,632
    
    
    $
    
    
    
    $
    33,934,055Corporate bonds and
commercial paper
    
    
    1,984,967
    
    
    
    
    
    
    
    (69,807
    )
    
    
    1,915,160Municipal bonds
    
    
    21,567,815
    
    
    
    562,027
    
    
    
    (14,192
    )
    
    
    22,115,650Certificates of deposit
    
    
    99,000
    
    
    
    
    
    
    
    
    
    
    
    99,000Total debt securities
    
    
    56,623,205
    
    
    
    1,524,659
    
    
    
    (83,999
    )
    
    
    58,063,865Equity securities:Common stock
    
    
    10
    
    
    
    
    
    
    
    (4
    )
    
    
    6Mutual funds
    
    
    2,504,889
    
    
    
    
    
    
    
    (95,579
    )
    
    
    2,409,310Total equity securities
    
    
    2,504,899
    
    
    
    
    
    
    
    (95,583
    )
    
    
    2,409,316Total
    
    $
    59,128,104
    
    
    $
    1,524,659
    
    
    $
    (179,582
    )
    
    $
    60,473,181
 Held to MaturityDecember 31, 2008Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDebt securities:Municipal bonds
    
    $
    20,389,106
    
    
    $
    300,162
    
    
    $
    (98,773
    )
    
    $
    20,590,495Total debt securities
    
    $
    20,389,106
    
    
    $
    300,162
    
    
    $
    (98,773
    )
    
    $
    20,590,495
  11




---



##### Table of Contents



Available for SaleDecember 31, 2008Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDebt securities:Agency bonds
    
    $
    41,962,148
    
    
    $
    1,159,700
    
    
    $
    
    
    
    $
    43,121,848Corporate bonds and
commercial paper
    
    
    1,979,499
    
    
    
    
    
    
    
    (97,319
    )
    
    
    1,882,180Municipal bonds
    
    
    21,073,983
    
    
    
    479,220
    
    
    
    (250
    )
    
    
    21,552,953Certificates of deposit
    
    
    288,000
    
    
    
    
    
    
    
    
    
    
    
    288,000Total debt securities
    
    
    65,303,630
    
    
    
    1,638,920
    
    
    
    (97,569
    )
    
    
    66,844,981Equity securities:Common stock
    
    
    10
    
    
    
    
    
    
    
    (4
    )
    
    
    6Mutual funds
    
    
    2,478,518
    
    
    
    
    
    
    
    
    
    
    
    2,478,518Total equity securities
    
    
    2,478,528
    
    
    
    
    
    
    
    (4
    )
    
    
    2,478,524Total
    
    $
    67,782,158
    
    
    $
    1,638,920
    
    
    $
    (97,573
    )
    
    $
    69,323,505
     March 31, 2009Available for Sale
    
    
    Held to MaturityEstimated
    
    
    
    
    
    
    EstimatedAmortized
    
    
    Fair
    
    
    Amortized
    
    
    FairCost
    
    
    Value
    
    
    Cost
    
    
    ValueDue in one year or less
    
    $
    2,269,967
    
    
    $
    2,205,014
    
    
    $
    
    
    
    $
    Due after one year through five years
    
    
    38,305,190
    
    
    
    39,463,979
    
    
    
    
    
    
    
    Due after five years through ten years
    
    
    16,048,048
    
    
    
    16,394,872
    
    
    
    3,650,635
    
    
    
    3,702,541Due after ten years
    
    
    
    
    
    
    
    
    
    
    16,737,930
    
    
    
    16,920,722Total
    
    $
    56,623,205
    
    
    $
    58,063,865
    
    
    $
    20,388,565
    
    
    $
    20,623,263
  12




---



##### Table of Contents



Less than 12 months
    
    
    More than 12 monthsGross
    
    
    Estimated
    
    
    Gross
    
    
    EstimatedUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    FairLosses
    
    
    Value
    
    
    Losses
    
    
    ValueSecurities held to maturity:Municipal bonds
    
    $
    (7,518
    )
    
    $
    1,485,944
    
    
    $
    (56,041
    )
    
    $
    2,498,707Total securities held to maturity
    
    
    (7,518
    )
    
    
    1,485,944
    
    
    
    (56,041
    )
    
    
    2,498,707Securities available for sale:Corporate bonds and
commercial paper
    
    $
    (28,548
    )
    
    $
    958,680
    
    
    $
    (41,259
    )
    
    $
    956,480Municipal bonds
    
    
    (14,192
    )
    
    
    996,979
    
    
    
    
    
    
    
    Equity securities
    
    
    (95,583
    )
    
    
    2,409,316
    
    
    
    
    
    
    
    Total securities available for sale
    
    
    (138,323
    )
    
    
    4,364,975
    
    
    
    (41,259
    )
    
    
    956,480Total
    
    $
    (145,841
    )
    
    $
    5,850,919
    
    
    $
    (97,300
    )
    
    $
    3,455,187
  Less than 12 months
    
    
    More than 12 monthsGross
    
    
    Estimated
    
    
    Gross
    
    
    EstimatedUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    FairLosses
    
    
    Value
    
    
    Losses
    
    
    ValueSecurities held to maturity:Municipal bonds
    
    $
    (76,549
    )
    
    $
    2,406,781
    
    
    $
    (22,224
    )
    
    $
    355,946Total securities held to maturity
    
    
    (76,549
    )
    
    
    2,406,781
    
    
    
    (22,224
    )
    
    
    355,946Securities available for sale:Corporate bonds and
commercial paper
    
    $
    (31,898
    )
    
    $
    950,540
    
    
    $
    (65,421
    )
    
    $
    931,640Municipal bonds
    
    
    (250
    )
    
    
    506,658
    
    
    
    
    
    
    
    Equity securities
    
    
    (4
    )
    
    
    6
    
    
    
    
    
    
    
    Total securities available for sale
    
    
    (32,152
    )
    
    
    1,457,204
    
    
    
    (65,421
    )
    
    
    931,640Total
    
    $
    (108,701
    )
    
    $
    3,863,985
    
    
    $
    (87,645
    )
    
    $
    1,287,586
  13




---



##### Table of Contents



On a quarterly basis, management of the Company reviews the securities in its investment
portfolio to identify any securities that might have an other-than-temporary impairment. At
March 31, 2009, investment securities in a gross unrealized loss position for twelve months or
longer consisted of six securities having an aggregate depreciation of 2.7% from the Companys
amortized cost basis. Investment securities in a gross unrealized loss position for less than
twelve months at March 31, 2009, consisted of 13 securities having an aggregate depreciation of
2.5% from the Companys amortized cost basis. Management has concluded that the unrealized
losses above are temporary in nature. The unrealized losses on our debt securities are not
related to the underlying credit quality of the issuers, and they are on securities that have
contractual maturity dates (with the exception of equity securities). The principal and interest
payments on our debt securities have been made as scheduled, and there is no evidence that the
issuer will not continue to do so. In managements opinion, the future principal payments will
be sufficient to recover the current amortized cost of the securities. The unrealized losses
above are primarily related to market interest rates and the current investment environment. The
current declines in market value are not significant, and management of the Company believes
that these values will recover as market interest rates move and the current market environment
improves. The unrealized losses on equity securities, which do not have maturity dates or
principal payments, are also primarily related to market interest rates and the current
investment environment. These equity securities have continued to pay monthly dividends as
anticipated and we expect that they will continue to perform. The Company has the intent and
ability to hold each of these investments for the time necessary to recover its cost and
management of the Company does not expect to sell any of these securities prior to a recovery of
its cost basis.3.
    
    MORTGAGE-BACKED SECURITIESThe amortized cost and estimated fair value of mortgage-backed securities are summarized as
follows:
 Held to MaturityMarch 31, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueGNMA pass-through
certificates
    
    $
    17,903,739
    
    
    $
    
    
    
    $
    
    
    
    $
    17,903,739FNMA pass-through
certificates
    
    
    34,412,894
    
    
    
    1,117,982
    
    
    
    
    
    
    
    35,530,876FHLMC pass-through
certificates
    
    
    16,000,573
    
    
    
    266,681
    
    
    
    (18,782
    )
    
    
    16,248,472Collateralized mortgage
obligations
    
    
    10,440,349
    
    
    
    
    
    
    
    (2,240,233
    )
    
    
    8,200,116Total
    
    $
    78,757,555
    
    
    $
    1,384,663
    
    
    $
    (2,259,015
    )
    
    $
    77,883,203
  14




---



##### Table of Contents



Available for saleMarch 31, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueGNMA pass-through
certificates
    
    $
    2,829
    
    
    $
    324
    
    
    $
    
    
    
    $
    3,153FNMA pass-through
certificates
    
    
    57,106,713
    
    
    
    1,922,762
    
    
    
    
    
    
    
    59,029,475FHLMC pass-through
certificates
    
    
    68,417,505
    
    
    
    2,133,502
    
    
    
    (54,268
    )
    
    
    70,496,739Collateralized mortgage
obligations
    
    
    18,195,502
    
    
    
    379,395
    
    
    
    (119,348
    )
    
    
    18,455,549Total
    
    $
    143,722,549
    
    
    $
    4,435,983
    
    
    $
    (173,616
    )
    
    $
    147,984,916
 Held to MaturityDecember 31, 2008Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueGNMA pass-through
certificates
    
    $
    19,780,669
    
    
    $
    
    
    
    $
    
    
    
    $
    19,780,669FNMA pass-through
certificates
    
    
    35,800,959
    
    
    
    917,098
    
    
    
    (58,079
    )
    
    
    36,659,978FHLMC pass-through
certificates
    
    
    16,613,987
    
    
    
    299,956
    
    
    
    
    
    
    
    16,913,943Collateralized mortgage
obligations
    
    
    10,897,449
    
    
    
    
    
    
    
    (2,549,124
    )
    
    
    8,348,325Total
    
    $
    83,093,064
    
    
    $
    1,217,054
    
    
    $
    (2,607,203
    )
    
    $
    81,702,915
  15




---



##### Table of Contents



Available for saleDecember 31, 2008Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueGNMA pass-through
certificates
    
    $
    2,948
    
    
    $
    308
    
    
    $
    
    
    
    $
    3,256FNMA pass-through
certificates
    
    
    60,266,060
    
    
    
    1,217,941
    
    
    
    (2,037
    )
    
    
    61,481,964FHLMC pass-through
certificates
    
    
    73,505,894
    
    
    
    1,733,749
    
    
    
    (75,063
    )
    
    
    75,164,580Collateralized mortgage
obligations
    
    
    14,826,288
    
    
    
    185,637
    
    
    
    (33,218
    )
    
    
    14,978,707Total
    
    $
    148,601,190
    
    
    $
    3,137,635
    
    
    $
    (110,318
    )
    
    $
    151,628,507
     16




---



##### Table of Contents



Less than 12 months
    
    
    More than 12 monthsGross
    
    
    Estimated
    
    
    Gross
    
    
    EstimatedUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    FairLosses
    
    
    Value
    
    
    Losses
    
    
    ValueSecurities held to maturity:FHLMC pass-through
certificates
    
    $
    
    
    
    $
    
    
    
    $
    (18,782
    )
    
    $
    5,670,695Collateralized mortgage
obligations
    
    
    
    
    
    
    
    
    
    
    (2,240,233
    )
    
    
    8,200,116Total securities held to maturity
    
    
    
    
    
    
    
    
    
    
    (2,259,015
    )
    
    
    13,870,811Securities available for sale:FHLMC pass-through
certificates
    
    
    (23,260
    )
    
    
    2,354,145
    
    
    
    (31,008
    )
    
    
    1,971,281Collateralized mortgage
obligations
    
    
    (115,365
    )
    
    
    3,277,000
    
    
    
    (3,983
    )
    
    
    133,476Total securities available for sale
    
    
    (138,625
    )
    
    
    5,631,145
    
    
    
    (34,991
    )
    
    
    2,104,757Total
    
    $
    (138,625
    )
    
    $
    5,631,145
    
    
    $
    (2,294,006
    )
    
    $
    15,975,568
  17




---



##### Table of Contents



Less than 12 months
    
    
    More than 12 monthsGross
    
    
    Estimated
    
    
    Gross
    
    
    EstimatedUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    FairLosses
    
    
    Value
    
    
    Losses
    
    
    ValueSecurities held to maturity:FNMA pass-through
certificates
    
    $
    
    
    
    $
    
    
    
    $
    (58,079
    )
    
    $
    7,746,498Collateralized mortgage
obligations
    
    
    (415,128
    )
    
    
    522,693
    
    
    
    (2,133,996
    )
    
    
    7,825,632Total securities held to maturity
    
    
    (415,128
    )
    
    
    522,693
    
    
    
    (2,192,075
    )
    
    
    15,572,130Securities available for sale:FNMA pass-through
certificates
    
    
    (2,037
    )
    
    
    1,859,605
    
    
    
    
    
    
    
    FHLMC pass-through
certificates
    
    
    (15,846
    )
    
    
    5,655,458
    
    
    
    (59,217
    )
    
    
    3,292,856Collateralized mortgage
obligations
    
    
    (25,031
    )
    
    
    2,855,731
    
    
    
    (8,187
    )
    
    
    137,235Total securities available for sale
    
    
    (42,914
    )
    
    
    10,370,794
    
    
    
    (67,404
    )
    
    
    3,430,091Total
    
    $
    (458,042
    )
    
    $
    10,893,487
    
    
    $
    (2,259,479
    )
    
    $
    19,002,221
   18




---



##### Table of Contents



4.
    
    LOANS RECEIVABLE  NETLoans receivable consist of the following:
 March 31, 2009
    
    
    December 31, 2008One-to four-family residential
    
    $
    452,910,512
    
    
    $
    452,922,968Multi-family residential and commercial
    
    
    101,042,680
    
    
    
    102,088,507Construction
    
    
    205,697,136
    
    
    
    219,542,552Home equity lines of credit
    
    
    30,060,932
    
    
    
    27,119,068Commercial business loans
    
    
    20,213,094
    
    
    
    18,966,744Consumer non-real estate loans
    
    
    3,197,343
    
    
    
    2,811,075Total loans
    
    
    813,121,697
    
    
    
    823,450,914Less:Construction loans in process
    
    
    (52,913,900
    )
    
    
    (54,797,754
    )Deferred loan fees, net
    
    
    (485,930
    )
    
    
    (504,024
    )Allowance for loan losses
    
    
    (8,183,133
    )
    
    
    (11,596,784
    )Loans receivablenet
    
    $
    751,538,734
    
    
    $
    756,552,352
  Three Months Ended
    
    
    Year EndedMarch 31, 2009
    
    
    December 31, 2008Balancebeginning of year
    
    $
    11,596,784
    
    
    $
    1,811,121Provision for loan losses
    
    
    116,691
    
    
    
    9,759,936Charge-offs
    
    
    (3,669,223
    )
    
    
    (63,788
    )Recoveries
    
    
    138,881
    
    
    
    89,515(Charge-offs)/recoveriesnet
    
    
    (3,530,342
    )
    
    
    25,727Balanceend of period
    
    $
    8,183,133
    
    
    $
    11,596,784
   19




---



##### Table of Contents



March 31,
    
    
    December 31,2009
    
    
    2008Impaired collateral-dependent loans with a
valuation allowance
    
    $
    17,801,882
    
    
    $
    22,439,654Impaired collateral-dependent loans with no
valuation allowance
    
    
    240,133
    
    
    
    751,727Total Impaired collateral-dependent loans
    
    $
    18,042,015
    
    
    $
    23,191,381Average impaired loan balance
    
    $
    33,219,637
    
    
    $
    11,948,700Valuation allowance on impaired loans
    
    $
    4,776,527
    
    
    $
    7,455,469Interest income recognized on impaired loans
    
    $
    
    
    
    $
    278,550
    20




---



##### Table of Contents



Interest payments on impaired loans and non-accrual loans are typically applied to principal
unless the ability to collect the principal amount is fully assured, in which case interest is
recognized on the cash basis. For the three months ended March 31, 2009 and 2008, no cash basis
interest income was recognized. Interest income foregone on non-accrual loans for the three
months ended March 31, 2009 and 2008 was approximately $252,000 and $24,000, respectively.5.
    
    DEFERRED INCOME TAXESItems that gave rise to significant portions of the deferred tax balances are as follows:
 March 31,
    
    
    December 31,2009
    
    
    2008Deferred tax assets:Allowance for loan losses
    
    $
    2,782,265
    
    
    $
    3,942,907Deferred compensation
    
    
    1,586,461
    
    
    
    1,803,336Write-down of impaired investments
    
    
    295,526
    
    
    
    295,526Property and equipment
    
    
    117,761
    
    
    
    112,131Other assets
    
    
    261,684
    
    
    
    190,855Total deferred tax assets
    
    
    5,043,697
    
    
    
    6,344,755Deferred tax liabilities:Unrealized gain on securities available-for-sale
    
    
    (1,906,531
    )
    
    
    (1,553,346
    )Deferred loan fees
    
    
    (336,432
    )
    
    
    (320,621
    )Other liabilities
    
    
    (13,341
    )
    
    
    (14,685
    )Total deferred tax liabilities
    
    
    (2,256,304
    )
    
    
    (1,888,652
    )Net deferred tax asset
    
    $
    2,787,393
    
    
    $
    4,456,103
 6.
    
    PENSION, PROFIT SHARING AND STOCK COMPENSATION PLANSIn addition to the plans disclosed below, the Company also maintains an executive deferred
compensation plan for selected executive officers, which was frozen retroactive to January 1,
2005, a board of directors deferred compensation plan for directors, a supplemental retirement
plan for directors and selected executive officers and a 401(k) retirement plan for
substantially all of its employees. Further detail of these plans can be obtained from the
Companys Annual Report on Form 10-K for the year ended December 31, 2008.
  21




---



##### Table of Contents



Employee Stock Ownership Plan
  Recognition and Retention Plans
    22




---



##### Table of Contents



Three Months Ended March 31,2009
    
    
    2008Weighted
    
    
    
    
    
    
    WeightedNumber of
    
    
    average grant
    
    
    Number of
    
    
    average grantShares
    
    
    date fair value
    
    
    shares
    
    
    date fair valueNonvested at the beginning of the year
    
    
    661,763
    
    
    $
    8.72
    
    
    
    274,874
    
    
    $
    7.54Granted
    
    
    
    
    
    
    
    
    
    
    517,200
    
    
    
    9.11Vested
    
    
    (97,140
    )
    
    
    9.11
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Nonvested at the end of the period
    
    
    564,623
    
    
    $
    8.65
    
    
    
    792,074
    
    
    $
    8.57
  Stock Options
    23




---



##### Table of Contents



Three Months Ended March 31,2009
    
    
    2008Weighted
    
    
    
    
    
    
    WeightedNumber of
    
    
    average
    
    
    Number of
    
    
    averageshares
    
    
    exercise price
    
    
    shares
    
    
    exercise priceOutstanding at the beginning of the year
    
    
    2,206,296
    
    
    $
    8.48
    
    
    
    1,135,180
    
    
    $
    7.74Granted
    
    
    
    
    
    
    
    
    
    
    1,247,500
    
    
    
    9.11Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at the end of the period
    
    
    2,206,296
    
    
    $
    8.48
    
    
    
    2,382,680
    
    
    $
    8.46Exercisable at the end of the period
    
    
    817,600
    
    
    $
    8.05
    
    
    
    418,224
    
    
    $
    7.57
  Options Outstanding
    
    
    Options ExercisableWeighted
    
    
    Weighted Average
    
    
    
    
    
    
    WeightedNumber of
    
    
    Average
    
    
    Remaining
    
    
    Number of
    
    
    AverageExercise Price
    
    Shares
    
    
    Exercise Price
    
    
    Contractual Life
    
    
    Shares
    
    
    Exercise Price(in years)$7.51
    
    
    921,856
    
    
    $
    7.51
    
    
    
    6.3
    
    
    
    554,784
    
    
    $
    7.518.35
    
    
    7,200
    
    
    
    8.35
    
    
    
    6.7
    
    
    
    4,320
    
    
    
    8.359.11
    
    
    1,142,500
    
    
    
    9.11
    
    
    
    8.8
    
    
    
    228,500
    
    
    
    9.119.63
    
    
    94,500
    
    
    
    9.63
    
    
    
    8.7
    
    
    
    13,900
    
    
    
    9.6310.18
    
    
    40,240
    
    
    
    10.18
    
    
    
    7.6
    
    
    
    16,096
    
    
    
    10.18Total
    
    
    2,206,296
    
    
    $
    8.48
    
    
    
    7.7
    
    
    
    817,600
    
    
    $
    8.05Intrinsic value
    
    $
    709,829
    
    
    
    
    
    
    
    
    
    
    $
    427,184
  Dividend yield
    
    1.88%Expected volatility
    
    23.25%Risk-free interest rate
    
    3.13  3.49%Expected life of options
    
    4  7 years
   24




---



##### Table of Contents



7.
    
    COMMITMENTS AND CONTINGENCIESThe Bank had approximately $7.3 million in outstanding mortgage loan commitments at March 31,
2009. The commitments are expected to be funded within 90 days. All $7.3 million in commitments
are in fixed rate loans with interest rates ranging from 4.875% to 6.0%. The Bank had
approximately $2.1 million in outstanding mortgage loan commitments at December 31, 2008. None
of these loans at March 31, 2009 and December 31, 2008 were originated for resale. Also
outstanding at March 31, 2009 and December 31, 2008, were unused lines of credit totaling
approximately $74.0 million and $78.5 million, respectively.Letters of credit are conditional commitments issued by the Bank guaranteeing payments of drafts
in accordance with the terms of the letter of credit agreements. Commercial letters of credit
are used primarily to facilitate trade or commerce and are also issued to support public and
private borrowing arrangements, bond financings and similar transactions. Standby letters of
credit are conditional commitments issued by the Bank to guarantee the performance of a customer
to a third party. Collateral may be required to support letters of credit based upon
managements evaluation of the creditworthiness of each customer. The credit risk involved in
issuing letters of credit is substantially the same as that involved in extending loan
facilities to customers. Most of the Banks letters of credit expire within one year. At March
31, 2009 and December 31, 2008, the Bank had letters of credit outstanding of approximately
$46.3 million and $48.9 million, respectively, of which $45.4 million and $47.4 million,
respectively, were standby letters of credit. At March 31, 2009 and December 31, 2008, the
uncollateralized portion of the letters of credit extended by the Bank was approximately $1.0
million and $109,000, respectively. At March 31, 2009, $285,000 of the uncollateralized letters
of credit were for standby letters of credit. At December 31, 2008, all of the uncollateralized
letters of credit were for standby letters of credit.The Company is subject to various pending claims and contingent liabilities arising in the
normal course of business which are not reflected in the accompanying consolidated financial
statements. Management considers that the aggregate liability, if any, resulting from such
matters will not be material.Among the Companys contingent liabilities, are exposures to limited recourse arrangements with
respect to the Banks sales of whole loans and participation interests. At March 31, 2008, the
exposure, which represents a portion of credit risk associated with the sold interests, amounted
to $185,000. The exposure is for the life of the related loans and payable, on our proportional
share, as losses are incurred.8.
    
    FAIR VALUE MEASUREMENTSThe Company uses fair value measurements to record fair value adjustments to certain assets to
determine fair value disclosures. Investment and mortgage-backed securities available for sale
are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may
be required to record at fair value other assets on a nonrecurring basis, such as impaired loans,
real estate owned and certain other assets. These nonrecurring fair value adjustments typically involve
application of lower-of-cost-or-market accounting or write-downs of individual assets.
  25




---



##### Table of Contents



Fair Value Measurements
 
    
    Level 1  Valuation is based upon quoted prices for identical instruments traded
in active markets.
    
    Level 2  Valuation is based upon quoted prices for similar instruments in active
markets, quoted prices for identical or similar instruments in markets that are not
active, and model-based valuation techniques for which all significant assumptions are
observable in the market.
    
    Level 3  Valuation is generated from model-based techniques that use significant
assumptions not observable in the market. These unobservable assumptions reflect the
Companys own estimates of assumptions that market participants would use in pricing
the asset.
    Investment and Mortgage-backed Securities Available for Sale
  26




---



##### Table of Contents



Impaired Loans
 Real Estate Owned
  March 31, 2009Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Investment securities
available for sale
    
    $
    60,473,181
    
    
    $
    2,409,316
    
    
    $
    58,063,865
    
    
    $
    Mortgage-backed securities
available for sale
    
    
    147,984,916
    
    
    
    
    
    
    
    147,984,916
    
    
    
    Total
    
    $
    208,458,097
    
    
    $
    2,409,316
    
    
    $
    206,048,781
    
    
    $
    
  27




---



##### Table of Contents



December 31, 2008Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Investment securities
available for sale
    
    $
    69,323,505
    
    
    $
    2,478,524
    
    
    $
    66,844,981
    
    
    $
    Mortgage-backed securities
available for sale
    
    
    151,628,507
    
    
    
    
    
    
    
    151,628,507
    
    
    
    Total
    
    $
    220,952,012
    
    
    $
    2,478,524
    
    
    $
    218,473,488
    
    
    $
    
  March 31, 2009Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Impaired loans
    
    $
    13,025,355
    
    
    $
    
    
    
    $
    
    
    
    $
    13,025,355Real estate owned
    
    
    13,139,077
    
    
    
    
    
    
    
    
    
    
    
    13,139,077Total
    
    $
    26,164,432
    
    
    $
    
    
    
    $
    
    
    
    $
    26,164,432
 December 31, 2008Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Impaired loans
    
    $
    14,984,185
    
    
    $
    
    
    
    $
    
    
    
    $
    14,984,185Real estate owned
    
    
    1,739,599
    
    
    
    
    
    
    
    
    
    
    
    1,739,599Total
    
    $
    16,723,784
    
    
    $
    
    
    
    $
    
    
    
    $
    16,723,784
   28




---



##### Table of Contents



ITEM 2.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 FORWARD LOOKING STATEMENTS
    Overview
    29




---



##### Table of Contents



Critical Accounting Policies, Judgments and Estimates
 Allowance for Loan Losses
    30




---



##### Table of Contents



Fair Value Measurements
  31




---



##### Table of Contents



Fair Value Measurements
 
    
    Level 1  Valuation is based upon quoted prices for identical instruments traded in
active markets.
    
    Level 2  Valuation is based upon quoted prices for similar instruments in active
markets, quoted prices for identical or similar instruments in markets that are not
active, and model-based valuation techniques for which all significant assumptions are
observable in the market.
    
    Level 3  Valuation is generated from model-based techniques that use significant
assumptions not observable in the market. These unobservable assumptions reflect the
Companys own estimates of assumptions that market participants would use in pricing the
asset.
   Other-Than-Temporary Impairment of Securities
  32




---



##### Table of Contents



Income Taxes
  Recent Accounting Pronouncements Determining Fair Value When the Volume and Level
of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly Fair Value Measurements
   Recognition and Presentation of
Other-Than-
Temporary Impairments
  33




---



##### Table of Contents



Recognition and Presentation of
Other-Than-Temporary Impairments
  Determining Fair Value When the Volume and
Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly
 Interim Disclosures about Fair Value
of Financial Instruments Disclosures about Fair Value of Financial Instruments Interim Financial Reporting
 Determining Fair Value When the Volume and
Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly Recognition and Presentation of
Other-Than-Temporary Impairments
  34




---



##### Table of Contents



COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2009 AND DECEMBER 31, 2008
    LIQUIDITY AND CAPITAL RESOURCES
   35




---



##### Table of Contents



Actual Ratios AtMarch 31,
    
    
    December 31,
    
    
    Regulatory
    
    
    To Be Well2009
    
    
    2008
    
    
    Minimum
    
    
    CapitalizedCapital Ratios:Tier 1 leverage ratio
    
    
    14.17
    %
    
    
    14.20
    %
    
    
    4.00
    %
    
    
    5.00
    %Tier 1 risk-based capital ratio
    
    
    22.38
    
    
    
    22.06
    
    
    
    4.00
    
    
    
    6.00Total risk-based capital ratio
    
    
    23.45
    
    
    
    23.32
    
    
    
    8.00
    
    
    
    10.00
 SHARE-BASED COMPENSATION
 Share-Based Payment
   36




---



##### Table of Contents



Employers Accounting for Employee Stock Ownership Plans
 COMMITMENTS AND OFF-BALANCE SHEET ARRANGEMENTS
    37




---



##### Table of Contents



Amount of Commitment Expiration  Per PeriodAfter One to
    
    
    After ThreeTotal Amounts
    
    
    To
    
    
    Three
    
    
    to Five
    
    
    After FiveCommitted
    
    
    One Year
    
    
    Years
    
    
    Years
    
    
    Years(In Thousands)Letters of credit
    
    $
    46,256
    
    
    $
    3,471
    
    
    $
    27,785
    
    
    $
    15,000
    
    
    $
    Recourse obligations on loans
sold
    
    
    185
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    185Commitments to originate loans
    
    
    7,289
    
    
    
    7,289
    
    
    
    
    
    
    
    
    
    
    
    Unused portion of home equity
lines of credit
    
    
    25,214
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,214Unused portion of commercial
lines of credit
    
    
    48,820
    
    
    
    48,820
    
    
    
    
    
    
    
    
    
    
    
    Undisbursed portion of
construction loans in process
    
    
    52,914
    
    
    
    29,598
    
    
    
    23,316
    
    
    
    
    
    
    
    Total commitments
    
    $
    180,678
    
    
    $
    89,178
    
    
    $
    51,101
    
    
    $
    15,000
    
    
    $
    25,399
  38




---



##### Table of Contents



Payments Due By PeriodAfter One to
    
    
    After ThreeTo
    
    
    Three
    
    
    to Five
    
    
    After FiveTotal
    
    
    One Year
    
    
    Years
    
    
    Years
    
    
    Years(In Thousands)Certificates of deposit
    
    $
    452,886
    
    
    $
    366,624
    
    
    $
    49,283
    
    
    $
    17,020
    
    
    $
    19,959FHLB advances
    
    
    202,499
    
    
    
    72,397
    
    
    
    60,792
    
    
    
    22,140
    
    
    
    47,170Repurchase agreements
    
    
    20,337
    
    
    
    20,337
    
    
    
    
    
    
    
    
    
    
    
    Total debt
    
    
    222,836
    
    
    
    92,734
    
    
    
    60,792
    
    
    
    22,140
    
    
    
    47,170Operating lease obligations
    
    
    6,942
    
    
    
    858
    
    
    
    1,713
    
    
    
    1,387
    
    
    
    2,984Total contractual obligations
    
    $
    682,664
    
    
    $
    460,216
    
    
    $
    111,788
    
    
    $
    40,547
    
    
    $
    70,113
 COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008
 General.
 Interest Income.
  39




---



##### Table of Contents



Interest Expense.
  40




---



##### Table of Contents



Average Balances, Net Interest Income, and Yields Earned and Rates Paid.
 Three Months Ended March 31,2009
    
    
    2008Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    Interest
    
    
    Yield/Rate
    
    
    Balance
    
    
    Interest
    
    
    Yield/Rate(Dollars in Thousands)Interest-earning assets:Investment securities(1)
    
    $
    83,477
    
    
    $
    876
    
    
    
    4.20
    %
    
    $
    115,881
    
    
    $
    1,334
    
    
    
    4.60
    %Mortgage-backed securities
    
    
    229,505
    
    
    
    2,807
    
    
    
    4.89
    
    
    
    149,002
    
    
    
    1,621
    
    
    
    4.35Loans receivable(2)
    
    
    749,559
    
    
    
    10,029
    
    
    
    5.35
    
    
    
    688,958
    
    
    
    10,711
    
    
    
    6.22Other interest-earning assets
    
    
    33,433
    
    
    
    13
    
    
    
    0.16
    
    
    
    60,135
    
    
    
    531
    
    
    
    3.53Total interest-earning assets
    
    
    1,095,974
    
    
    
    13,725
    
    
    
    5.01
    
    
    
    1,013,976
    
    
    
    14,197
    
    
    
    5.60Cash and non-interest bearing
balances
    
    
    22,997
    
    
    
    
    
    
    
    
    
    
    
    22,523Other non-interest-earning assets
    
    
    77,393
    
    
    
    
    
    
    
    
    
    
    
    57,275Total assets
    
    $
    1,196,364
    
    
    
    
    
    
    
    
    
    
    $
    1,093,774Interest-bearing liabilities:Deposits:Savings and money market accounts
    
    $
    155,524
    
    
    
    568
    
    
    
    1.46
    
    
    $
    97,723
    
    
    
    345
    
    
    
    1.41Checking accounts
    
    
    68,266
    
    
    
    4
    
    
    
    0.02
    
    
    
    60,127
    
    
    
    5
    
    
    
    0.03Certificate accounts
    
    
    432,668
    
    
    
    3,469
    
    
    
    3.21
    
    
    
    422,706
    
    
    
    4,572
    
    
    
    4.33Total deposits
    
    
    656,458
    
    
    
    4,041
    
    
    
    2.46
    
    
    
    580,556
    
    
    
    4,922
    
    
    
    3.39FHLB advances
    
    
    234,760
    
    
    
    2,085
    
    
    
    3.55
    
    
    
    188,734
    
    
    
    2,248
    
    
    
    4.76Other borrowings
    
    
    18,069
    
    
    
    14
    
    
    
    0.31
    
    
    
    19,989
    
    
    
    135
    
    
    
    2.70Total interest-bearing liabilities
    
    
    909,287
    
    
    
    6,140
    
    
    
    2.70
    
    
    
    789,279
    
    
    
    7,305
    
    
    
    3.70Non-interest-bearing liabilities:Non-interest-bearing demand
accounts
    
    
    38,719
    
    
    
    
    
    
    
    
    
    
    
    39,987Real estate tax escrow accounts
    
    
    4,006
    
    
    
    
    
    
    
    
    
    
    
    3,572Other liabilities
    
    
    8,997
    
    
    
    
    
    
    
    
    
    
    
    10,791Total liabilities
    
    
    961,009
    
    
    
    
    
    
    
    
    
    
    
    843,629Stockholders equity
    
    
    235,355
    
    
    
    
    
    
    
    
    
    
    
    250,145Total liabilities and stockholders
equity
    
    $
    1,196,364
    
    
    
    
    
    
    
    
    
    
    $
    1,093,774Net interest-earning assets
    
    $
    186,687
    
    
    
    
    
    
    
    
    
    
    $
    224,697Net interest income; average
Interest rate spread
    
    
    
    
    
    $
    7,585
    
    
    
    2.31
    %
    
    
    
    
    
    $
    6,892
    
    
    
    1.90
    %Net interest margin(3)
    
    
    
    
    
    
    
    
    
    
    2.77
    %
    
    
    
    
    
    
    
    
    
    
    2.72
    %
 
 (1)
    
    Investment securities for the 2009 period include 134 tax-exempt municipal bonds with an
aggregate average balance of $41.5 million and an average yield of 3.9%. Investment securities
for the 2008 period include 95 tax-exempt municipal bonds with an aggregate average balance of
$29.3 million and an average yield of 4.1%. 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.  41




---



##### Table of Contents



Provision for Loan Losses.
 Non-interest Income.
  42




---



##### Table of Contents



Non-interest Expenses.
 Income Tax Expense.
 
 ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Asset/Liability Management and Market Risk.
   43




---



##### Table of Contents



Gap Analysis.
  44




---



##### Table of Contents



More than
    
    
    More than
    
    
    More than6 Months
    
    
    6 Months
    
    
    1 Year
    
    
    3 Years
    
    
    More than
    
    
    Totalor Less
    
    
    to 1 Year
    
    
    to 3 Years
    
    
    to 5 Years
    
    
    5 Years
    
    
    Amount(Dollars in Thousands)Interest-earning assets (1):Loans receivable (2)
    
    $
    298,062
    
    
    $
    61,815
    
    
    $
    168,404
    
    
    $
    92,531
    
    
    $
    130,198
    
    
    $
    751,010Mortgage-backed
securities
    
    
    37,151
    
    
    
    25,244
    
    
    
    63,250
    
    
    
    36,992
    
    
    
    64,105
    
    
    
    226,742Investment securities
    
    
    18,104
    
    
    
    5,785
    
    
    
    9,685
    
    
    
    22,950
    
    
    
    24,338
    
    
    
    80,862Other interest-earning
assets
    
    
    43,120
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,120Total interest-earning
assets
    
    
    396,437
    
    
    
    92,844
    
    
    
    241,339
    
    
    
    152,473
    
    
    
    218,641
    
    
    
    1,101,734Interest-bearing liabilities:Savings and money market
accounts
    
    $
    25,022
    
    
    $
    25,022
    
    
    $
    62,911
    
    
    $
    28,946
    
    
    $
    25,425
    
    
    $
    167,326Checking accounts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70,217
    
    
    
    70,217Certificate accounts
    
    
    242,555
    
    
    
    127,845
    
    
    
    45,507
    
    
    
    17,020
    
    
    
    19,959
    
    
    
    452,886FHLB advances
    
    
    65,266
    
    
    
    28,335
    
    
    
    67,140
    
    
    
    11,824
    
    
    
    29,934
    
    
    
    202,499Other borrowed money
    
    
    20,337
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,337Total interest-bearing
liabilities
    
    
    353,180
    
    
    
    181,202
    
    
    
    175,558
    
    
    
    57,790
    
    
    
    145,535
    
    
    
    913,265Interest-earning assets less
interest-bearing liabilities
    
    $
    43,257
    
    
    $
    (88,358
    )
    
    $
    65,781
    
    
    $
    94,683
    
    
    $
    73,106
    
    
    $
    188,469Cumulative interest-rate
sensitivity gap (3)
    
    $
    43,257
    
    
    $
    (45,101
    )
    
    $
    20,680
    
    
    $
    115,363
    
    
    $
    188,469Cumulative interest-rate
gap
as a percentage of total
assets at March 31, 2009
    
    
    3.62
    %
    
    
    (3.77
    )%
    
    
    1.73
    %
    
    
    9.64
    %
    
    
    15.75
    %Cumulative interest-earning
assets as a percentage of
cumulative interest-bearing
liabilities at March 31, 2009
    
    
    112.25
    %
    
    
    91.56
    %
    
    
    102.91
    %
    
    
    115.03
    %
    
    
    120.64
    %
 
 (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)
    
    For purposes of the gap analysis, loans receivable includes non-performing
loans net of the allowance for loan losses, undisbursed loan funds, unamortized
discounts and deferred loan fees.(3)
    
    Interest-rate sensitivity gap represents the difference between net interest-earning
assets and interest-bearing liabilities.  45




---



##### Table of Contents



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
     46




---



##### Table of Contents



Total Number of
    
    
    Maximum NumberTotal
    
    
    
    
    
    
    Shares Purchased
    
    
    of Shares that MayNumber of
    
    
    Average
    
    
    as Part of Publicly
    
    
    Yet be PurchasedShares
    
    
    Price Paid
    
    
    Announced Plans
    
    
    Under the Plan orPeriod
    
    Purchased(1)
    
    
    per Share
    
    
    or Programs
    
    
    Programs(2)January 1  January 31, 2009
    
    
    123,077
    
    
    
    8.74
    
    
    
    100,401
    
    
    
    1,163,475February 1  February 28,
2009
    
    
    887,829
    
    
    
    6.99
    
    
    
    887,829
    
    
    
    275,646March 1  March 31, 2009
    
    
    370,149
    
    
    
    7.21
    
    
    
    370,149
    
    
    
    1,009,665Total
    
    
    1,381,055
    
    
    $
    7.20
    
    
    
    1,358,379
    
    
    
    1,009,665
 (1)
    
    Certain shares purchased during the quarter were acquired as part of the
Companys recognition and retention plan. In conjunction with the plan, participants may
elect to have a portion of their awarded shares withheld upon vesting solely to pay for
any related tax liabilities on these awards.(2)
    
    On July 31, 2008, the Company announced a stock repurchase program to repurchase
up to 5% of its outstanding shares, or 1,221,772 shares. Purchases under this plan were
completed in January 2009. On January 28, 2009, the Company announced another stock
repurchase program to repurchase up to 5% of its outstanding shares, or 1,163,475
shares. Purchases under this plan were completed in March 2009. On March 16, 2009, the
Company announced another stock repurchase program to repurchase up to 5% of its
outstanding shares, or 1,104,168 shares. This repurchase program is scheduled to
terminate as of March 16, 2010. 
 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.
    
    Description31.1
    
    
    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.
 
  47




---



##### Table of Contents



SIGNATURES
  ABINGTON BANCORP, INC.Date: May 7, 2009
    By:
    /s/ Robert W. WhiteRobert W. WhiteChairman, President and
Chief Executive OfficerDate: May 7, 2009
    By:
    /s/ Jack J. SandoskiJack J. SandoskiSenior Vice President and
Chief Financial Officer  48




---



##### Table of Contents



EXHIBIT INDEX
 ExhibtNo.
    
    Description31.1
    
    
    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.