##### 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 September 30, 2010
 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 Road 
Jenkintown, 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
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



ABINGTON BANCORP, INC.
 TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSUnaudited Consolidated Statements of Financial Condition as of September 30, 2010 and
December 31, 2009
    
    
    1Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended
September 30, 2010 and 2009
    
    
    2Unaudited Consolidated Statements of Stockholders Equity for the Nine Months Ended
September 30, 2010 and 2009
    
    
    3Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended September 30,
2010 and 2009
    
    
    4Notes to Unaudited Consolidated Financial Statements
    
    
    6ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    33ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    51ITEM 4. CONTROLS AND PROCEDURES
    
    
    54PART II  OTHER INFORMATIONITEM 1. Legal Proceedings
    
    
    54ITEM 1A. Risk Factors
    
    
    54ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    54ITEM 3. Defaults upon Senior Securities
    
    
    55ITEM 4. (Removed and Reserved)
    
    
    55ITEM 5. Other Information
    
    
    55ITEM 6. Exhibits
    
    
    55SIGNATURES
    
    
    56CERTIFICATIONSExhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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##### Table of Contents



ABINGTON BANCORP, INC.
 
 UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 September 30, 2010
    
    
    December 31, 2009ASSETSCash and due from banks
    
    $
    24,676,284
    
    
    $
    18,941,066Interest-bearing deposits in other banks
    
    
    45,753,105
    
    
    
    25,773,173Total cash and cash equivalents
    
    
    70,429,389
    
    
    
    44,714,239Investment securities held to maturity (estimated fair
value2010, $21,593,960; 2009, $20,787,269)
    
    
    20,385,322
    
    
    
    20,386,944Investment securities available for sale (amortized cost
2010, $114,120,129; 2009, $82,905,101)
    
    
    116,247,716
    
    
    
    84,317,271Mortgage-backed securities held to maturity (estimated fair
value2010, $63,513,898; 2009, $77,297,497)
    
    
    61,764,910
    
    
    
    77,149,936Mortgage-backed securities available for sale (amortized cost
2010, $161,002,687; 2009, $133,916,731)
    
    
    166,793,923
    
    
    
    138,628,592Loans receivable, net of allowance for loan losses
(2010, $4,685,160; 2009, $9,090,353)
    
    
    714,822,707
    
    
    
    764,559,941Accrued interest receivable
    
    
    4,275,874
    
    
    
    4,279,032Federal Home Loan Bank stockat cost
    
    
    14,607,700
    
    
    
    14,607,700Cash surrender value  bank owned life insurance
    
    
    42,310,193
    
    
    
    40,983,202Property and equipment, net
    
    
    9,870,836
    
    
    
    10,423,190Real estate owned
    
    
    20,027,964
    
    
    
    22,818,856Deferred tax asset
    
    
    1,751,835
    
    
    
    4,711,447Prepaid expenses and other assets
    
    
    14,678,221
    
    
    
    10,531,771TOTAL ASSETS
    
    $
    1,257,966,590
    
    
    $
    1,238,112,121LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIES:Deposits:Noninterest-bearing
    
    $
    43,997,062
    
    
    $
    45,146,650Interest-bearing
    
    
    858,364,892
    
    
    
    805,053,843Total deposits
    
    
    902,361,954
    
    
    
    850,200,493Advances from Federal Home Loan Bank
    
    
    109,891,311
    
    
    
    146,739,435Other borrowed money
    
    
    18,019,549
    
    
    
    16,673,480Accrued interest payable
    
    
    4,022,419
    
    
    
    1,807,334Advances from borrowers for taxes and insurance
    
    
    707,332
    
    
    
    3,142,470Accounts payable and accrued expenses
    
    
    10,094,380
    
    
    
    5,366,909Total liabilities
    
    
    1,045,096,945
    
    
    
    1,023,930,121COMMITMENTS 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: 20,161,608 shares in 2010,
21,049,025 shares in 2009
    
    
    244,602
    
    
    
    244,602Additional paid-in capital
    
    
    202,352,367
    
    
    
    201,922,651Treasury stockat cost, 4,298,632 shares in 2010,
3,411,215 shares in 2009
    
    
    (34,995,086
    )
    
    
    (27,446,596
    )Unallocated common stock held by:Employee Stock Ownership Plan (ESOP)
    
    
    (13,670,098
    )
    
    
    (14,299,378
    )Recognition & Retention Plan Trust (RRP)
    
    
    (2,833,931
    )
    
    
    (3,918,784
    )Deferred compensation plans trust
    
    
    (1,035,560
    )
    
    
    (995,980
    )Retained earnings
    
    
    57,692,961
    
    
    
    54,804,913Accumulated other comprehensive income
    
    
    5,114,390
    
    
    
    3,870,572Total stockholders equity
    
    
    212,869,645
    
    
    
    214,182,000TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    1,257,966,590
    
    
    $
    1,238,112,121
   1




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##### Table of Contents



ABINGTON BANCORP, INC.
 
 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months EndedSeptember 30,
    
    

Nine Months EndedSeptember 30,2010
    
    
    2009
    
    
    2010
    
    
    2009INTEREST INCOME:Interest on loans
    
    $
    9,950,488
    
    
    $
    9,872,855
    
    
    $
    29,765,723
    
    
    $
    30,050,716Interest and dividends on investment and
mortgage-backed securities:Taxable
    
    
    2,608,375
    
    
    
    2,736,909
    
    
    
    7,980,849
    
    
    
    9,022,260Tax-exempt
    
    
    385,171
    
    
    
    401,062
    
    
    
    1,171,444
    
    
    
    1,204,646Interest and dividends on other interest-earning assets
    
    
    26,448
    
    
    
    6,607
    
    
    
    52,101
    
    
    
    33,537Total interest income
    
    
    12,970,482
    
    
    
    13,017,433
    
    
    
    38,970,117
    
    
    
    40,311,159INTEREST EXPENSE:Interest on deposits
    
    
    3,179,474
    
    
    
    3,801,382
    
    
    
    9,700,929
    
    
    
    11,889,584Interest on Federal Home Loan Bank advances
    
    
    1,302,589
    
    
    
    1,794,970
    
    
    
    4,270,932
    
    
    
    5,783,241Interest on other borrowed money
    
    
    20,068
    
    
    
    19,879
    
    
    
    54,684
    
    
    
    56,214Total interest expense
    
    
    4,502,131
    
    
    
    5,616,231
    
    
    
    14,026,545
    
    
    
    17,729,039NET INTEREST INCOME
    
    
    8,468,351
    
    
    
    7,401,202
    
    
    
    24,943,572
    
    
    
    22,582,120PROVISION FOR LOAN LOSSES
    
    
    
    
    
    
    8,802,678
    
    
    
    563,445
    
    
    
    12,324,090NET INTEREST INCOME (LOSS) AFTER
PROVISION FOR LOAN LOSSES
    
    
    8,468,351
    
    
    
    (1,401,476
    )
    
    
    24,380,127
    
    
    
    10,258,030NON-INTEREST INCOME (LOSS)Service charges
    
    
    280,464
    
    
    
    388,850
    
    
    
    903,798
    
    
    
    1,175,515Income on bank owned life insurance
    
    
    442,493
    
    
    
    451,713
    
    
    
    1,326,991
    
    
    
    1,353,479Net loss on real estate owned
    
    
    (278,152
    )
    
    
    (5,152,887
    )
    
    
    (991,348
    )
    
    
    (4,983,805
    )Net gain on sale of securities
    
    
    
    
    
    
    5,102
    
    
    
    
    
    
    
    5,102Other income
    
    
    166,449
    
    
    
    160,998
    
    
    
    532,911
    
    
    
    451,836Total non-interest income (loss)
    
    
    611,254
    
    
    
    (4,146,224
    )
    
    
    1,772,352
    
    
    
    (1,997,873
    )NON-INTEREST EXPENSESSalaries and employee benefits
    
    
    2,934,517
    
    
    
    2,736,723
    
    
    
    8,895,026
    
    
    
    8,503,992Occupancy
    
    
    645,148
    
    
    
    630,544
    
    
    
    2,069,856
    
    
    
    1,734,540Depreciation
    
    
    219,560
    
    
    
    228,583
    
    
    
    677,095
    
    
    
    676,657Professional services
    
    
    509,352
    
    
    
    335,623
    
    
    
    1,529,472
    
    
    
    1,034,023Data processing
    
    
    429,421
    
    
    
    383,011
    
    
    
    1,283,832
    
    
    
    1,175,790Deposit insurance premium
    
    
    522,443
    
    
    
    331,735
    
    
    
    1,377,362
    
    
    
    1,486,239Advertising and promotions
    
    
    171,709
    
    
    
    128,613
    
    
    
    427,966
    
    
    
    309,669Director compensation
    
    
    151,753
    
    
    
    224,709
    
    
    
    597,208
    
    
    
    673,564Other
    
    
    576,740
    
    
    
    518,032
    
    
    
    1,666,885
    
    
    
    1,767,573Total non-interest expenses
    
    
    6,160,643
    
    
    
    5,517,573
    
    
    
    18,524,702
    
    
    
    17,362,047INCOME (LOSS) BEFORE INCOME TAXES
    
    
    2,918,962
    
    
    
    (11,065,273
    )
    
    
    7,627,777
    
    
    
    (9,101,890
    )PROVISION (BENEFIT) FOR INCOME TAXES
    
    
    753,724
    
    
    
    (4,089,152
    )
    
    
    1,881,900
    
    
    
    (3,900,369
    )NET INCOME (LOSS)
    
    $
    2,165,238
    
    
    $
    (6,976,121
    )
    
    $
    5,745,877
    
    
    $
    (5,201,521
    )BASIC EARNINGS (LOSS) PER COMMON SHARE
    
    $
    0.12
    
    
    $
    (0.36
    )
    
    $
    0.31
    
    
    $
    (0.26
    )DILUTED EARNINGS (LOSS) PER COMMON SHARE
    
    $
    0.11
    
    
    $
    (0.36
    )
    
    $
    0.29
    
    
    $
    (0.26
    )BASIC AVERAGE COMMON SHARES OUTSTANDING:
    
    
    18,404,143
    
    
    
    19,635,808
    
    
    
    18,771,303
    
    
    
    19,963,132DILUTED AVERAGE COMMON SHARES OUTSTANDING:
    
    
    19,624,366
    
    
    
    19,635,808
    
    
    
    20,033,491
    
    
    
    19,963,132
   2




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##### 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, 2010
    
    
    24,460,240
    
    
    $
    244,602
    
    
    $
    201,922,651
    
    
    $
    (27,446,596
    )
    
    $
    (19,214,142
    )
    
    $
    54,804,913
    
    
    $
    3,870,572
    
    
    $
    214,182,000Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,745,877
    
    
    
    
    
    
    
    5,745,877Net unrealized holding gain on
available for sale securities
arising during the period, net
of tax expense of $610,228
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,184,564
    
    
    
    1,184,564Amortization of unrecognized
deferred costs on SERP, net
of tax benefit of $30,525
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59,254
    
    
    
    59,254Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,989,695Treasury stock purchased
(897,065 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,640,628
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,640,628
    )Cash dividends declared,
($0.15 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,857,829
    )
    
    
    
    
    
    
    (2,857,829
    )Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    (14,786
    )
    
    
    92,138
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    77,352Excess tax liability on
stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    (29,918
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (29,918
    )Stock options expense
    
    
    
    
    
    
    
    
    
    
    578,401
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    578,401Common stock released from
benefit plans
    
    
    
    
    
    
    
    
    
    
    (103,981
    )
    
    
    
    
    
    
    1,721,933
    
    
    
    
    
    
    
    
    
    
    
    1,617,952Common stock acquired by
benefit plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (47,380
    )
    
    
    
    
    
    
    
    
    
    
    (47,380
    )BALANCESEPTEMBER 30, 2010
    
    
    24,460,240
    
    
    $
    244,602
    
    
    $
    202,352,367
    
    
    $
    (34,995,086
    )
    
    $
    (17,539,589
    )
    
    $
    57,692,961
    
    
    $
    5,114,390
    
    
    $
    212,869,645
 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, 2009
    
    
    24,460,240
    
    
    $
    244,602
    
    
    $
    201,378,465
    
    
    $
    (10,525,100
    )
    
    $
    (21,923,096
    )
    
    $
    66,007,138
    
    
    $
    2,918,576
    
    
    $
    238,100,585Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,201,521
    )
    
    
    
    
    
    
    (5,201,521
    )Net unrealized holding gain on
available for sale securities
arising during the period, net
of tax expense of $912,294
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,770,924
    
    
    
    1,770,924Amortization of unrecognized
deferred costs on SERP, net
of tax benefit of $13,647
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,490
    
    
    
    26,490Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,404,107
    )Treasury stock purchased
(1,702,013 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,704,620
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,704,620
    )Cash dividends declared,
($0.15 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,034,474
    )
    
    
    
    
    
    
    (3,034,474
    )Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    (16,520
    )
    
    
    67,137
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,617Excess tax liability on
stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    (57,690
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57,690
    )Stock options expense
    
    
    
    
    
    
    
    
    
    
    665,202
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    665,202Common stock released from
benefit plans
    
    
    
    
    
    
    
    
    
    
    (175,790
    )
    
    
    
    
    
    
    2,146,155
    
    
    
    
    
    
    
    
    
    
    
    1,970,365Common stock acquired by
benefit plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (43,164
    )
    
    
    
    
    
    
    
    
    
    
    (43,164
    )BALANCESEPTEMBER 30, 2009
    
    
    24,460,240
    
    
    $
    244,602
    
    
    $
    201,793,667
    
    
    $
    (23,162,583
    )
    
    $
    (19,820,105
    )
    
    $
    57,771,143
    
    
    $
    4,715,990
    
    
    $
    221,542,714
   3




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##### Table of Contents



ABINGTON BANCORP, INC.
 
 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months Ended September 30,2010
    
    
    2009OPERATING ACTIVITIES:Net income (loss)
    
    $
    5,745,877
    
    
    $
    (5,201,521
    )Adjustments to reconcile net income (loss) to net cash provided by
operating activities:Provision for loan losses
    
    
    563,445
    
    
    
    12,324,090Depreciation
    
    
    677,095
    
    
    
    676,657Stock-based compensation expense
    
    
    2,188,553
    
    
    
    2,390,896Net loss on real estate owned
    
    
    601,121
    
    
    
    4,983,805Net gain on sale of investments and mortgage-backed securities
    
    
    
    
    
    
    (5,102
    )Deferred income tax expense (benefit)
    
    
    2,318,859
    
    
    
    (3,717,579
    )Amortization of:Deferred loan fees
    
    
    (1,102,915
    )
    
    
    (914,230
    )Premiums and discounts, net
    
    
    (147,119
    )
    
    
    (170,249
    )Income from bank owned life insurance
    
    
    (1,326,991
    )
    
    
    (1,353,479
    )Changes in assets and liabilities which (used) provided cash:Accrued interest receivable
    
    
    3,158
    
    
    
    314,885Prepaid expenses and other assets
    
    
    (4,146,450
    )
    
    
    (3,459,697
    )Accrued interest payable
    
    
    2,215,085
    
    
    
    2,036,744Accounts payable and accrued expenses
    
    
    4,777,670
    
    
    
    1,729,765Net cash provided by operating activities
    
    
    12,367,388
    
    
    
    9,634,985INVESTING ACTIVITIES:Principal collected on loans
    
    
    92,448,227
    
    
    
    101,476,923Disbursements for loans
    
    
    (49,146,523
    )
    
    
    (145,312,378
    )Purchases of:Mortgage-backed securities held to maturity
    
    
    
    
    
    
    (9,972,266
    )Mortgage-backed securities available for sale
    
    
    (69,927,577
    )
    
    
    (20,732,549
    )Investments available for sale
    
    
    (139,234,111
    )
    
    
    (37,557,039
    )Property and equipment
    
    
    (124,741
    )
    
    
    (256,579
    )Additions to real estate owned, net
    
    
    (281,524
    )
    
    
    (1,159,940
    )Proceeds from:Maturities of mortgage-backed securities held to maturity
    
    
    150,178
    
    
    
    Maturities of mortgage-backed securities available for sale
    
    
    3,811,213
    
    
    
    2,955,058Sales and maturities of investments available for sale
    
    
    107,994,000
    
    
    
    30,999,102Principal repayments of mortgage-backed securities held to maturity
    
    
    15,181,502
    
    
    
    19,649,063Principal repayments of mortgage-backed securities available for sale
    
    
    39,257,578
    
    
    
    33,971,342Sales of real estate owned
    
    
    9,446,295
    
    
    
    648,802Net cash provided by (used) in investing activities
    
    
    9,574,517
    
    
    
    (25,290,461
    )FINANCING ACTIVITIES:Net increase in demand deposits and savings accounts
    
    
    50,117,531
    
    
    
    100,539,191Net increase in certificate accounts
    
    
    2,043,930
    
    
    
    52,195,328Net increase in other borrowed money
    
    
    1,346,069
    
    
    
    4,723,016Advances from Federal Home Loan Bank
    
    
    10,000,000
    
    
    
    30,935,000Repayments of advances from Federal Home Loan Bank
    
    
    (46,848,124
    )
    
    
    (135,231,390
    )Net decrease in advances from borrowers for taxes and insurance
    
    
    (2,435,138
    )
    
    
    (2,453,622
    )Proceeds from exercise of stock options
    
    
    77,352
    
    
    
    50,617Excess tax liability from stock-based compensation
    
    
    (29,918
    )
    
    
    (57,690
    )Purchase of treasury stock
    
    
    (7,640,628
    )
    
    
    (12,704,620
    )Payment of cash dividend
    
    
    (2,857,829
    )
    
    
    (3,034,474
    )Net cash provided by financing activities
    
    
    3,773,245
    
    
    
    34,961,356NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    25,715,150
    
    
    
    19,305,880CASH AND CASH EQUIVALENTSBeginning of period
    
    
    44,714,239
    
    
    
    31,863,344CASH AND CASH EQUIVALENTSEnd of period
    
    $
    70,429,389
    
    
    $
    51,169,224
   4




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##### Table of Contents



ABINGTON BANCORP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
 Nine Months Ended September 30,2010
    
    
    2009SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the year for:Interest on deposits and other borrowings
    
    $
    11,811,460
    
    
    $
    15,692,295Income taxes
    
    $
    1,000,000
    
    
    $
    750,000Non-cash transfer of loans to real estate owned
    
    $
    6,975,000
    
    
    $
    20,914,058Acquisition of stock for deferred compensation plans trust
    
    $
    47,380
    
    
    $
    43,164Release of stock from deferred compensation plans trust
    
    $
    7,800
    
    
    $
    244,671
   5




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##### Table of Contents



ABINGTON BANCORP, INC.
 
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 1.
    
    FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
 Basis of Financial Statement Presentation
     6




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##### Table of Contents



Use of Estimates in the Preparation of Financial Statements
 Other-Than-Temporary Impairment of Securities
 Allowance for Loan Losses
  7




---



##### Table of Contents



Comprehensive Income
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net unrealized gain on securities
arising during the period, net of tax
    
    $
    213,040
    
    
    $
    1,381,656
    
    
    $
    1,184,564
    
    
    $
    1,774,291Plus: reclassification adjustment for net gain
included in net income, net of tax
    
    
    
    
    
    
    (3,367
    )
    
    
    
    
    
    
    (3,367
    )Net unrealized gain on securities,
net of tax
    
    
    213,040
    
    
    
    1,378,289
    
    
    
    1,184,564
    
    
    
    1,770,924Amortization of deferred costs on
supplemental retirement plan, net of tax
    
    
    19,752
    
    
    
    8,829
    
    
    
    59,254
    
    
    
    26,490Total other comprehensive income (loss),
net of tax
    
    $
    232,792
    
    
    $
    1,387,118
    
    
    $
    1,243,818
    
    
    $
    1,797,414
  8




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##### Table of Contents



September 30,
    
    
    December 31,2010
    
    
    2009Net unrealized gain on securities
    
    $
    5,226,424
    
    
    $
    4,041,860Unrecognized deferred costs of supplemental
retirment plan
    
    
    (112,034
    )
    
    
    (171,288
    )Total accumulated other comprehensive income
    
    $
    5,114,390
    
    
    $
    3,870,572
 Share-Based Compensation Compensation 
Stock Compensation
    9




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##### Table of Contents



Earnings per share
 Three Months Ended September 30,2010
    
    
    2009Basic
    
    
    Diluted
    
    
    Basic
    
    
    DilutedNet income (loss)
    
    $
    2,165,238
    
    
    $
    2,165,238
    
    
    $
    (6,976,121
    )
    
    $
    (6,976,121
    )Weighted average shares outstanding
    
    
    18,404,143
    
    
    
    18,404,143
    
    
    
    19,635,808
    
    
    
    19,635,808Effect of common stock equivalents
    
    
    
    
    
    
    1,220,223
    
    
    
    
    
    
    
    Adjusted weighted average shares used
in earnings per share computation
    
    
    18,404,143
    
    
    
    19,624,366
    
    
    
    19,635,808
    
    
    
    19,635,808Earnings (loss) per share
    
    $
    0.12
    
    
    $
    0.11
    
    
    $
    (0.36
    )
    
    $
    (0.36
    )
 Nine Months Ended September 30,2010
    
    
    2009Basic
    
    
    Diluted
    
    
    Basic
    
    
    DilutedNet income (loss)
    
    $
    5,745,877
    
    
    $
    5,745,877
    
    
    $
    (5,201,521
    )
    
    $
    (5,201,521
    )Weighted average shares outstanding
    
    
    18,771,303
    
    
    
    18,771,303
    
    
    
    19,963,132
    
    
    
    19,963,132Effect of common stock equivalents
    
    
    
    
    
    
    1,262,188
    
    
    
    
    
    
    
    Adjusted weighted average shares used
in earnings per share computation
    
    
    18,771,303
    
    
    
    20,033,491
    
    
    
    19,963,132
    
    
    
    19,963,132Earnings (loss) per share
    
    $
    0.31
    
    
    $
    0.29
    
    
    $
    (0.26
    )
    
    $
    (0.26
    )
 Recent Accounting Pronouncements Scope Exception Related to Embedded Credit Derivatives Derivatives and Hedging
 Effect of a Loan Modification When the Loan Is Part
of a Pool That Is Accounted for as a Single Asset Receivables Receivables: Loans and Debt Securities Acquired with Deteriorated Credit Quality
  10




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##### Table of Contents



Disclosures about the Credit Quality of Financing
Receivables and the Allowance for Credit Losses , Receivables
 Reclassifications
 2.
    
    INVESTMENT SECURITIES
  Held to MaturitySeptember 30, 2010Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDebt securities:Municipal bonds
    
    $
    20,385,322
    
    
    $
    1,208,638
    
    
    $
    
    
    
    $
    21,593,960Total debt securities
    
    $
    20,385,322
    
    
    $
    1,208,638
    
    
    $
    
    
    
    $
    21,593,960
  11




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##### Table of Contents



Available for SaleSeptember 30, 2010Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDebt securities:Agency bonds
    
    $
    89,958,107
    
    
    $
    1,075,057
    
    
    $
    
    
    
    $
    91,033,164Corporate bonds and
commercial paper
    
    
    2,093,411
    
    
    
    27,979
    
    
    
    
    
    
    
    2,121,390Municipal bonds
    
    
    19,423,707
    
    
    
    954,887
    
    
    
    
    
    
    
    20,378,594Total debt securities
    
    
    111,475,225
    
    
    
    2,057,923
    
    
    
    
    
    
    
    113,533,148Equity securities:Mutual funds
    
    
    2,644,904
    
    
    
    69,664
    
    
    
    
    
    
    
    2,714,568Total equity securities
    
    
    2,644,904
    
    
    
    69,664
    
    
    
    
    
    
    
    2,714,568Total
    
    $
    114,120,129
    
    
    $
    2,127,587
    
    
    $
    
    
    
    $
    116,247,716
 Held to MaturityDecember 31, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDebt securities:Municipal bonds
    
    $
    20,386,944
    
    
    $
    400,325
    
    
    $
    
    
    
    $
    20,787,269Total debt securities
    
    $
    20,386,944
    
    
    $
    400,325
    
    
    $
    
    
    
    $
    20,787,269
  12




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##### Table of Contents



Available for SaleDecember 31, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDebt securities:Agency bonds
    
    $
    55,863,999
    
    
    $
    691,337
    
    
    $
    (95,669
    )
    
    $
    56,459,667Corporate bonds and
commercial paper
    
    
    3,123,496
    
    
    
    6,286
    
    
    
    (8,342
    )
    
    
    3,121,440Municipal bonds
    
    
    21,238,185
    
    
    
    817,838
    
    
    
    (848
    )
    
    
    22,055,175Certificates of deposit
    
    
    99,000
    
    
    
    
    
    
    
    
    
    
    
    99,000Total debt securities
    
    
    80,324,680
    
    
    
    1,515,461
    
    
    
    (104,859
    )
    
    
    81,735,282Equity securities:Common stock
    
    
    10
    
    
    
    
    
    
    
    (1
    )
    
    
    9Mutual funds
    
    
    2,580,411
    
    
    
    1,569
    
    
    
    
    
    
    
    2,581,980Total equity securities
    
    
    2,580,421
    
    
    
    1,569
    
    
    
    (1
    )
    
    
    2,581,989Total
    
    $
    82,905,101
    
    
    $
    1,517,030
    
    
    $
    (104,860
    )
    
    $
    84,317,271
    September 30, 2010Available for Sale
    
    
    Held to MaturityEstimated
    
    
    
    
    
    
    EstimatedAmortized
    
    
    Fair
    
    
    Amortized
    
    
    FairCost
    
    
    Value
    
    
    Cost
    
    
    ValueDue in one year or less
    
    $
    6,038,273
    
    
    $
    6,072,120
    
    
    $
    
    
    
    $
    Due after one year through five years
    
    
    98,556,008
    
    
    
    100,200,244
    
    
    
    
    
    
    
    Due after five years through ten years
    
    
    6,880,944
    
    
    
    7,260,784
    
    
    
    14,062,470
    
    
    
    14,946,541Due after ten years
    
    
    
    
    
    
    
    
    
    
    6,322,852
    
    
    
    6,647,419Total
    
    $
    111,475,225
    
    
    $
    113,533,148
    
    
    $
    20,385,322
    
    
    $
    21,593,960
  13




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##### Table of Contents



Less than 12 months
    
    
    More than 12 monthsGross
    
    
    Estimated
    
    
    Gross
    
    
    EstimatedUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    FairLosses
    
    
    Value
    
    
    Losses
    
    
    ValueSecurities available for sale:Agency bonds
    
    $
    (95,669
    )
    
    $
    18,299,480
    
    
    $
    
    
    
    $
    Corporate bonds and
commercial paper
    
    
    (8,342
    )
    
    
    1,127,220
    
    
    
    
    
    
    
    Municipal bonds
    
    
    (848
    )
    
    
    251,938
    
    
    
    
    
    
    
    Equity securities
    
    
    (1
    )
    
    
    9
    
    
    
    
    
    
    
    Total securities available for sale
    
    $
    (104,860
    )
    
    $
    19,678,647
    
    
    $
    
    
    
    $
    
  3.
    
    MORTGAGE-BACKED SECURITIES
  Held to MaturitySeptember 30, 2010Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueGNMA pass-through
certificates
    
    $
    14,648,837
    
    
    $
    652,738
    
    
    $
    
    
    
    $
    15,301,575FNMA pass-through
certificates
    
    
    22,203,640
    
    
    
    1,293,320
    
    
    
    
    
    
    
    23,496,960FHLMC pass-through
certificates
    
    
    10,651,681
    
    
    
    397,761
    
    
    
    
    
    
    
    11,049,442Collateralized mortgage
obligations
    
    
    14,260,752
    
    
    
    106,501
    
    
    
    (701,332
    )
    
    
    13,665,921Total
    
    $
    61,764,910
    
    
    $
    2,450,320
    
    
    $
    (701,332
    )
    
    $
    63,513,898
  14




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##### Table of Contents



Available for saleSeptember 30, 2010Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueGNMA pass-through
certificates
    
    $
    2,069
    
    
    $
    90
    
    
    $
    
    
    
    $
    2,159FNMA pass-through
certificates
    
    
    33,783,088
    
    
    
    2,226,649
    
    
    
    
    
    
    
    36,009,737FHLMC pass-through
certificates
    
    
    31,685,011
    
    
    
    2,058,898
    
    
    
    
    
    
    
    33,743,909Collateralized mortgage
obligations
    
    
    95,532,519
    
    
    
    1,506,145
    
    
    
    (546
    )
    
    
    97,038,118Total
    
    $
    161,002,687
    
    
    $
    5,791,782
    
    
    $
    (546
    )
    
    $
    166,793,923
 Held to MaturityDecember 31, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueGNMA pass-through
certificates
    
    $
    18,607,580
    
    
    $
    374,179
    
    
    $
    (198,784
    )
    
    $
    18,782,975FNMA pass-through
certificates
    
    
    27,817,665
    
    
    
    1,031,598
    
    
    
    
    
    
    
    28,849,263FHLMC pass-through
certificates
    
    
    13,242,317
    
    
    
    258,707
    
    
    
    (26,483
    )
    
    
    13,474,541Collateralized mortgage
obligations
    
    
    17,482,374
    
    
    
    
    
    
    
    (1,291,656
    )
    
    
    16,190,718Total
    
    $
    77,149,936
    
    
    $
    1,664,484
    
    
    $
    (1,516,923
    )
    
    $
    77,297,497
 Available for saleDecember 31, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueGNMA pass-through
certificates
    
    $
    2,464
    
    
    $
    369
    
    
    $
    
    
    
    $
    2,833FNMA pass-through
certificates
    
    
    45,813,997
    
    
    
    2,265,098
    
    
    
    
    
    
    
    48,079,095FHLMC pass-through
certificates
    
    
    48,863,220
    
    
    
    2,363,183
    
    
    
    (24,953
    )
    
    
    51,201,450Collateralized mortgage
obligations
    
    
    39,237,050
    
    
    
    354,656
    
    
    
    (246,492
    )
    
    
    39,345,214Total
    
    $
    133,916,731
    
    
    $
    4,983,306
    
    
    $
    (271,445
    )
    
    $
    138,628,592
  15




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##### Table of Contents



Less than 12 months
    
    
    More than 12 monthsGross
    
    
    Estimated
    
    
    Gross
    
    
    EstimatedUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    FairLosses
    
    
    Value
    
    
    Losses
    
    
    ValueSecurities held to maturity:Collateralized mortgage
obligations
    
    $
    
    
    
    $
    
    
    
    $
    (701,332
    )
    
    $
    3,019,217Total securities held to maturity
    
    
    
    
    
    
    
    
    
    
    (701,332
    )
    
    
    3,019,217Securities available for sale:Collateralized mortgage
obligations
    
    
    (546
    )
    
    
    3,499,454
    
    
    
    
    
    
    
    Total securities available for sale
    
    
    (546
    )
    
    
    3,499,454
    
    
    
    
    
    
    
    Total
    
    $
    (546
    )
    
    $
    3,499,454
    
    
    $
    (701,332
    )
    
    $
    3,019,217
  16




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##### Table of Contents



Less than 12 months
    
    
    More than 12 monthsGross
    
    
    Estimated
    
    
    Gross
    
    
    EstimatedUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    FairLosses
    
    
    Value
    
    
    Losses
    
    
    ValueSecurities held to maturity:GNMA pass-through
certificates
    
    $
    (198,784
    )
    
    $
    10,122,441
    
    
    $
    
    
    
    $
    FHLMC pass-through
certificates
    
    
    (26,483
    )
    
    
    4,787,594
    
    
    
    
    
    
    
    Collateralized mortgage
obligations
    
    
    (322,627
    )
    
    
    8,755,414
    
    
    
    (969,029
    )
    
    
    7,435,304Total securities held to maturity
    
    
    (547,894
    )
    
    
    23,665,449
    
    
    
    (969,029
    )
    
    
    7,435,304Securities available for sale:FHLMC pass-through
certificates
    
    
    (21,372
    )
    
    
    2,060,797
    
    
    
    (3,581
    )
    
    
    1,225,716Collateralized mortgage
obligations
    
    
    (194,886
    )
    
    
    13,186,239
    
    
    
    (51,606
    )
    
    
    3,340,759Total securities available for sale
    
    
    (216,258
    )
    
    
    15,247,036
    
    
    
    (55,187
    )
    
    
    4,566,475Total
    
    $
    (764,152
    )
    
    $
    38,912,485
    
    
    $
    (1,024,216
    )
    
    $
    12,001,779
   17




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##### Table of Contents



4.
    
    LOANS RECEIVABLE AND REAL ESTATE OWNED
  September 30, 2010
    
    
    December 31, 2009One-to four-family residential
    
    $
    403,484,220
    
    
    $
    432,004,572Multi-family residential and commercial
    
    
    140,238,650
    
    
    
    135,482,758Construction
    
    
    147,660,950
    
    
    
    203,642,336Home equity lines of credit
    
    
    42,731,261
    
    
    
    36,273,685Commercial business loans
    
    
    17,832,142
    
    
    
    18,876,987Consumer non-real estate loans
    
    
    722,626
    
    
    
    2,358,063Total loans
    
    
    752,669,849
    
    
    
    828,638,401Less:Construction loans in process
    
    
    (32,457,299
    )
    
    
    (54,198,647
    )Deferred loan fees, net
    
    
    (704,683
    )
    
    
    (789,460
    )Allowance for loan losses
    
    
    (4,685,160
    )
    
    
    (9,090,353
    )Loans receivablenet
    
    $
    714,822,707
    
    
    $
    764,559,941
  Nine Months Ended
    
    
    Year Ended
    
    
    Nine Months EndedSeptember 30, 2010
    
    
    December 31, 2009
    
    
    September 30, 2009Balancebeginning of year
    
    $
    9,090,353
    
    
    $
    11,596,784
    
    
    $
    11,596,784Provision for loan losses
    
    
    563,445
    
    
    
    18,736,847
    
    
    
    12,324,090Charge-offs
    
    
    (6,188,410
    )
    
    
    (21,394,378
    )
    
    
    (5,265,747
    )Recoveries
    
    
    1,219,772
    
    
    
    151,100
    
    
    
    146,650Charge-offsnet
    
    
    (4,968,638
    )
    
    
    (21,243,278
    )
    
    
    (5,119,097
    )Balanceend of period
    
    $
    4,685,160
    
    
    $
    9,090,353
    
    
    $
    18,801,777
   18




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##### Table of Contents



September 30,
    
    
    December 31,2010
    
    
    2009Impaired collateral-dependent loans with a
valuation allowance
    
    $
    6,983,798
    
    
    $
    18,111,166Impaired collateral-dependent loans with no
valuation allowance
    
    
    5,637,136
    
    
    
    10,237,145Total Impaired collateral-dependent loans
    
    $
    12,620,934
    
    
    $
    28,348,311Average impaired loan balance
    
    $
    24,566,097
    
    
    $
    23,575,378Valuation allowance on impaired loans
    
    $
    685,626
    
    
    $
    3,605,504Interest income recognized on impaired loans
    
    $
    
    
    
    $
    
    19




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##### Table of Contents



Nine Months Ended
    
    
    Year EndedSeptember 30, 2010
    
    
    December 31, 2009Balancebeginning of period
    
    $
    22,818,856
    
    
    $
    1,739,599Additions
    
    
    6,975,000
    
    
    
    25,582,818Capitalized improvements
    
    
    281,524
    
    
    
    1,129,046Valuation adjustments
    
    
    (350,981
    )
    
    
    (4,501,580
    )Dispositions
    
    
    (9,696,435
    )
    
    
    (1,131,027
    )Balanceend of period
    
    $
    20,027,964
    
    
    $
    22,818,856
   20




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##### Table of Contents



5.
    
    DEPOSITS
  September 30, 2010
    
    
    December 31, 2009Type of Account
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentCertificates
    
    $
    458,817,908
    
    
    
    50.9
    %
    
    $
    456,773,978
    
    
    
    53.8
    %Passbook and MMDA
    
    
    311,788,964
    
    
    
    34.5
    
    
    
    265,487,994
    
    
    
    31.2NOW
    
    
    87,758,020
    
    
    
    9.7
    
    
    
    82,791,871
    
    
    
    9.7DDA
    
    
    43,997,062
    
    
    
    4.9
    
    
    
    45,146,650
    
    
    
    5.3Total
    
    $
    902,361,954
    
    
    
    100.0
    %
    
    $
    850,200,493
    
    
    
    100.0
    %
 6.
    
    DEFERRED INCOME TAXES
  September 30,
    
    
    December 31,2010
    
    
    2009Deferred tax assets:Allowance for loan losses
    
    $
    1,592,954
    
    
    $
    3,090,720Deferred compensation
    
    
    2,007,795
    
    
    
    2,048,647Write-down of impaired investments
    
    
    295,529
    
    
    
    295,526Write-down of real estate owned
    
    
    286,728
    
    
    
    1,530,537Other assets
    
    
    613,369
    
    
    
    181,702Total deferred tax assets
    
    
    4,796,375
    
    
    
    7,147,132Deferred tax liabilities:Unrealized gain on securities available-for-sale
    
    
    (2,692,400
    )
    
    
    (2,082,171
    )Deferred loan fees
    
    
    (342,366
    )
    
    
    (333,723
    )Other liabilities
    
    
    (9,774
    )
    
    
    (19,791
    )Total deferred tax liabilities
    
    
    (3,044,540
    )
    
    
    (2,435,685
    )Net deferred tax asset
    
    $
    1,751,835
    
    
    $
    4,711,447
 7.
    
    PENSION, PROFIT SHARING AND STOCK COMPENSATION PLANS
   21




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Employee Stock Ownership Plan
  Recognition and Retention Plans
    22




---



##### Table of Contents



Nine Months Ended September 30,2010
    
    
    2009Weighted
    
    
    
    
    
    
    WeightedNumber of
    
    
    average grant
    
    
    Number of
    
    
    average grantshares
    
    
    date fair value
    
    
    shares
    
    
    date fair valueNonvested at the beginning of the year
    
    
    481,272
    
    
    $
    8.79
    
    
    
    661,763
    
    
    $
    8.72Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vested
    
    
    (177,096
    )
    
    
    8.38
    
    
    
    (181,311
    )
    
    
    8.38Forfeited
    
    
    (3,876
    )
    
    
    7.95
    
    
    
    (2,400
    )
    
    
    9.11Nonvested at the end of the period
    
    
    300,300
    
    
    $
    9.03
    
    
    
    478,052
    
    
    $
    8.84
  Stock Options
    23




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##### Table of Contents



Nine Months Ended September 30,2010
    
    
    2009Weighted
    
    
    
    
    
    
    WeightedNumber of
    
    
    average
    
    
    Number of
    
    
    averageshares
    
    
    exercise price
    
    
    shares
    
    
    exercise priceOutstanding at the beginning of the year
    
    
    2,198,888
    
    
    $
    8.47
    
    
    
    2,206,296
    
    
    $
    8.48Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (9,648
    )
    
    
    8.02
    
    
    
    (4,176
    )
    
    
    7.51Forfeited
    
    
    (8,340
    )
    
    
    8.06
    
    
    
    (3,200
    )
    
    
    9.11Outstanding at the end of the period
    
    
    2,180,900
    
    
    $
    8.47
    
    
    
    2,198,920
    
    
    $
    8.48Exercisable at the end of the period
    
    
    1,437,404
    
    
    $
    8.13
    
    
    
    1,015,860
    
    
    $
    7.98
  Options Outstanding
    
    
    Options ExercisableWeighted
    
    
    Weighted Average
    
    
    
    
    
    
    WeightedNumber of
    
    
    Average
    
    
    Remaining
    
    
    Number of
    
    
    AverageExercise Price
    
    Shares
    
    
    Exercise Price
    
    
    Contractual Life
    
    
    Shares
    
    
    Exercise Price(in years)$6.00 - $7.00
    
    
    12,500
    
    
    $
    6.72
    
    
    
    9.2
    
    
    
    
    
    
    $
    7.01 - 8.00
    
    
    905,920
    
    
    
    7.51
    
    
    
    4.8
    
    
    
    905,920
    
    
    
    7.518.01 - 9.00
    
    
    7,200
    
    
    
    8.35
    
    
    
    5.2
    
    
    
    5,760
    
    
    
    8.359.01 - 10.00
    
    
    1,216,000
    
    
    
    9.15
    
    
    
    7.3
    
    
    
    501,900
    
    
    
    9.16Over 10.00
    
    
    39,280
    
    
    
    10.18
    
    
    
    6.1
    
    
    
    23,824
    
    
    
    10.18Total
    
    
    2,180,900
    
    
    $
    8.47
    
    
    
    6.2
    
    
    
    1,437,404
    
    
    $
    8.13Intrinsic value
    
    $
    4,514,000
    
    
    
    
    
    
    
    
    
    
    $
    3,457,794
    24




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##### Table of Contents



8.
    
    COMMITMENTS AND CONTINGENCIES
       25




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##### Table of Contents



9.
    
    FAIR VALUE MEASUREMENTS
  Fair Value Measurements and Disclosures
 
    
    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.
    26




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##### Table of Contents



Cash and Cash Equivalents
 Investment and Mortgage-backed Securities Available for Sale
 Loans Receivable
 Impaired Loans
  27




---



##### Table of Contents



Accrued Interest Receivable
 FHLB Stock
 Real Estate Owned
 Deposits
 Advances from Federal Home Loan Bank
 Other Borrowed Money
 Accrued Interest Payable
 Commitments to Extend Credit and Letters of Credit
  28




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##### Table of Contents



September 30, 2010Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Investment securities
available for sale:Debt securities:Agency bonds
    
    $
    91,033,164
    
    
    $
    
    
    
    $
    91,033,164
    
    
    $
    Corporate bonds and
commercial paper
    
    
    2,121,390
    
    
    
    
    
    
    
    2,121,390
    
    
    
    Municipal bonds
    
    
    20,378,594
    
    
    
    
    
    
    
    20,378,594
    
    
    
    Equity securities:Mutual funds
    
    
    2,714,568
    
    
    
    2,714,568
    
    
    
    
    
    
    
    Total investment securities
available for sale
    
    
    116,247,716
    
    
    
    2,714,568
    
    
    
    113,533,148
    
    
    
    Mortgage-backed securities
available for sale:GNMA pass-through
certificates
    
    $
    2,159
    
    
    $
    
    
    
    $
    2,159
    
    
    $
    FNMA pass-through
certificates
    
    
    36,009,737
    
    
    
    
    
    
    
    36,009,737
    
    
    
    FHLMC pass-through
certificates
    
    
    33,743,909
    
    
    
    
    
    
    
    33,743,909
    
    
    
    Collateralized mortgage
obligations
    
    
    97,038,118
    
    
    
    
    
    
    
    97,038,118
    
    
    
    Total mortgage-backed
securities available for sale
    
    
    166,793,923
    
    
    
    
    
    
    
    166,793,923
    
    
    
    Total
    
    $
    283,041,639
    
    
    $
    2,714,568
    
    
    $
    280,327,071
    
    
    $
    
  29




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##### Table of Contents



December 31, 2009Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Investment securities
available for sale:Debt securities:Agency bonds
    
    $
    56,459,667
    
    
    $
    
    
    
    $
    56,459,667
    
    
    $
    Corporate bonds and
commercial paper
    
    
    3,121,440
    
    
    
    
    
    
    
    3,121,440
    
    
    
    Municipal bonds
    
    
    22,055,175
    
    
    
    
    
    
    
    22,055,175
    
    
    
    Certificates of deposit
    
    
    99,000
    
    
    
    
    
    
    
    99,000
    
    
    
    Equity securities:Common stock
    
    
    9
    
    
    
    9
    
    
    
    
    
    
    
    Mutual funds
    
    
    2,581,980
    
    
    
    2,581,980
    
    
    
    
    
    
    
    Total investment securities
available for sale
    
    
    84,317,271
    
    
    
    2,581,989
    
    
    
    81,735,282
    
    
    
    Mortgage-backed securities
available for sale:GNMA pass-through
certificates
    
    $
    2,833
    
    
    $
    
    
    
    $
    2,833
    
    
    $
    FNMA pass-through
certificates
    
    
    48,079,095
    
    
    
    
    
    
    
    48,079,095
    
    
    
    FHLMC pass-through
certificates
    
    
    51,201,450
    
    
    
    
    
    
    
    51,201,450
    
    
    
    Collateralized mortgage
obligations
    
    
    39,345,214
    
    
    
    
    
    
    
    39,345,214
    
    
    
    Total mortgage-backed
securities available for sale
    
    
    138,628,592
    
    
    
    
    
    
    
    138,628,592
    
    
    
    Total
    
    $
    222,945,863
    
    
    $
    2,581,989
    
    
    $
    220,363,874
    
    
    $
    
  30




---



##### Table of Contents



September 30, 2010Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Impaired loans:Multi-family
residential and
commerical
    
    $
    1,226,972
    
    
    $
    
    
    
    $
    
    
    
    $
    1,226,972Construction
    
    
    5,071,200
    
    
    
    
    
    
    
    
    
    
    
    5,071,200Total impaired loans
    
    
    6,298,172
    
    
    
    
    
    
    
    
    
    
    
    6,298,172Real estate owned
    
    
    20,027,964
    
    
    
    
    
    
    
    
    
    
    
    20,027,964Total
    
    $
    26,326,136
    
    
    $
    
    
    
    $
    
    
    
    $
    26,326,136
 December 31, 2009Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Impaired loans:Multi-family
residential and
commerical
    
    $
    3,646,396
    
    
    $
    
    
    
    $
    
    
    
    $
    3,646,396Construction
    
    
    10,859,266
    
    
    
    
    
    
    
    
    
    
    
    10,859,266Total impaired loans
    
    
    14,505,662
    
    
    
    
    
    
    
    
    
    
    
    14,505,662Real estate owned
    
    
    22,818,856
    
    
    
    
    
    
    
    
    
    
    
    22,818,856Total
    
    $
    37,324,518
    
    
    $
    
    
    
    $
    
    
    
    $
    37,324,518
  31




---



##### Table of Contents



September 30, 2010
    
    
    December 31, 2009Estimated
    
    
    
    
    
    
    EstimatedCarrying
    
    
    Fair
    
    
    Carrying
    
    
    FairAmount
    
    
    Value
    
    
    Amount
    
    
    Value(In Thousands)Assets:Cash and cash equivalents
    
    $
    70,429
    
    
    $
    70,429
    
    
    $
    44,714
    
    
    $
    44,714Investment securities
    
    
    136,633
    
    
    
    137,842
    
    
    
    104,704
    
    
    
    105,105Mortgage-backed securities
    
    
    228,559
    
    
    
    230,308
    
    
    
    215,779
    
    
    
    215,926Loans receivablenet
    
    
    714,823
    
    
    
    732,689
    
    
    
    764,560
    
    
    
    769,058FHLB stock
    
    
    14,608
    
    
    
    14,608
    
    
    
    14,608
    
    
    
    14,608Accrued interest receivable
    
    
    4,276
    
    
    
    4,276
    
    
    
    4,279
    
    
    
    4,279Liabilities:Deposits
    
    $
    902,362
    
    
    $
    894,044
    
    
    $
    850,200
    
    
    $
    836,176Advances from Federal
Home Loan Bank
    
    
    109,891
    
    
    
    116,709
    
    
    
    146,739
    
    
    
    152,773Other borrowed money
    
    
    18,020
    
    
    
    18,020
    
    
    
    16,673
    
    
    
    16,673Accrued interest payable
    
    
    4,022
    
    
    
    4,022
    
    
    
    1,807
    
    
    
    1,807Off balance sheet financial
instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   32




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##### Table of Contents



ITEM 2.   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 FORWARD LOOKING STATEMENTS
    Overview
    33




---



##### Table of Contents



Critical Accounting Policies, Judgments and Estimates
 Allowance for Loan Losses
   34




---



##### Table of Contents



35




---



##### 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.
  36




---



##### Table of Contents



Other-Than-Temporary Impairment of Securities
 Income Taxes
  37




---



##### Table of Contents



COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2010 AND DECEMBER 31, 2009
    38




---



##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
      39




---



##### Table of Contents



Actual Ratios AtSeptember 30,
    
    
    December 31,
    
    
    Regulatory
    
    
    To Be Well2010
    
    
    2009
    
    
    Minimum
    
    
    CapitalizedCapital Ratios:Tier 1 leverage ratio
    
    
    13.49
    %
    
    
    13.14
    %
    
    
    4.00
    %
    
    
    5.00
    %Tier 1 risk-based capital ratio
    
    
    22.36
    
    
    
    20.04
    
    
    
    4.00
    
    
    
    6.00Total risk-based capital ratio
    
    
    22.98
    
    
    
    21.16
    
    
    
    8.00
    
    
    
    10.00
 SHARE-BASED COMPENSATION
    COMMITMENTS AND OFF-BALANCE SHEET ARRANGEMENTS
   40




---



##### Table of Contents



41




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##### 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
    
    $
    48,518
    
    
    $
    20,173
    
    
    $
    28,189
    
    
    $
    
    
    
    $
    156Recourse obligations on loans
sold
    
    
    185
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    185Commitments to originate loans
    
    
    4,205
    
    
    
    4,205
    
    
    
    
    
    
    
    
    
    
    
    Unused portion of home equity
lines of credit
    
    
    30,966
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,966Unused portion of commercial
lines of credit
    
    
    48,911
    
    
    
    48,911
    
    
    
    
    
    
    
    
    
    
    
    Undisbursed portion of
construction loans in process
    
    
    32,457
    
    
    
    18,293
    
    
    
    14,164
    
    
    
    
    
    
    
    Total commitments
    
    $
    165,242
    
    
    $
    91,582
    
    
    $
    42,353
    
    
    $
    
    
    
    $
    31,307
  Payments Due By PeriodAfter One to
    
    
    After ThreeTo
    
    
    Three
    
    
    to Five
    
    
    After FiveTotal
    
    
    One Year
    
    
    Years
    
    
    Years
    
    
    Years(In Thousands)Certificates of deposit
    
    $
    458,818
    
    
    $
    271,344
    
    
    $
    69,920
    
    
    $
    53,899
    
    
    $
    63,655FHLB advances
    
    
    109,891
    
    
    
    20,604
    
    
    
    38,010
    
    
    
    41,496
    
    
    
    9,781Repurchase agreements
    
    
    18,020
    
    
    
    18,020
    
    
    
    
    
    
    
    
    
    
    
    Total debt
    
    
    127,911
    
    
    
    38,624
    
    
    
    38,010
    
    
    
    41,496
    
    
    
    9,781Operating lease obligations
    
    
    4,233
    
    
    
    873
    
    
    
    1,510
    
    
    
    890
    
    
    
    960Total contractual obligations
    
    $
    590,962
    
    
    $
    310,841
    
    
    $
    109,440
    
    
    $
    96,285
    
    
    $
    74,396
 COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009
 General.
  42




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##### Table of Contents



Interest Income.
 Interest Expense.
  43




---



##### Table of Contents



Average Balances, Net Interest Income, and Yields Earned and Rates Paid.
 Three Months Ended September 30,2010
    
    
    2009Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    Interest
    
    
    Yield/Rate
    
    
    Balance
    
    
    Interest
    
    
    Yield/Rate(Dollars in Thousands)Interest-earning assets:Investment securities(1)
    
    $
    142,125
    
    
    $
    909
    
    
    
    2.56
    %
    
    $
    87,501
    
    
    $
    728
    
    
    
    3.33
    %Mortgage-backed securities
    
    
    214,271
    
    
    
    2,084
    
    
    
    3.89
    
    
    
    206,596
    
    
    
    2,410
    
    
    
    4.67Loans receivable(2)
    
    
    713,794
    
    
    
    9,951
    
    
    
    5.58
    
    
    
    758,773
    
    
    
    9,873
    
    
    
    5.20Other interest-earning assets
    
    
    65,002
    
    
    
    26
    
    
    
    0.16
    
    
    
    38,226
    
    
    
    6
    
    
    
    0.06Total interest-earning assets
    
    
    1,135,192
    
    
    
    12,970
    
    
    
    4.57
    
    
    
    1,091,096
    
    
    
    13,017
    
    
    
    4.77Cash and non-interest bearing balances
    
    
    22,744
    
    
    
    
    
    
    
    
    
    
    
    22,432Other non-interest-earning assets
    
    
    106,671
    
    
    
    
    
    
    
    
    
    
    
    94,427Total assets
    
    $
    1,264,607
    
    
    
    
    
    
    
    
    
    
    $
    1,207,955Interest-bearing liabilities:Deposits:Savings and money market accounts
    
    $
    298,913
    
    
    
    612
    
    
    
    0.82
    
    
    $
    212,983
    
    
    
    632
    
    
    
    1.19Checking accounts
    
    
    85,267
    
    
    
    10
    
    
    
    0.05
    
    
    
    76,994
    
    
    
    12
    
    
    
    0.06Certificate accounts
    
    
    459,896
    
    
    
    2,557
    
    
    
    2.22
    
    
    
    456,240
    
    
    
    3,157
    
    
    
    2.77Total deposits
    
    
    844,076
    
    
    
    3,179
    
    
    
    1.51
    
    
    
    746,217
    
    
    
    3,801
    
    
    
    2.04FHLB advances
    
    
    123,795
    
    
    
    1,303
    
    
    
    4.21
    
    
    
    152,806
    
    
    
    1,795
    
    
    
    4.70Other borrowings
    
    
    24,451
    
    
    
    20
    
    
    
    0.33
    
    
    
    26,961
    
    
    
    20
    
    
    
    0.30Total interest-bearing liabilities
    
    
    992,322
    
    
    
    4,502
    
    
    
    1.81
    
    
    
    925,984
    
    
    
    5,616
    
    
    
    2.43Non-interest-bearing liabilities:Non-interest-bearing demand accounts
    
    
    45,118
    
    
    
    
    
    
    
    
    
    
    
    44,057Real estate tax escrow accounts
    
    
    2,721
    
    
    
    
    
    
    
    
    
    
    
    2,843Other liabilities
    
    
    11,913
    
    
    
    
    
    
    
    
    
    
    
    8,337Total liabilities
    
    
    1,052,074
    
    
    
    
    
    
    
    
    
    
    
    981,221Stockholders equity
    
    
    212,533
    
    
    
    
    
    
    
    
    
    
    
    226,734Total liabilities and stockholders equity
    
    $
    1,264,607
    
    
    
    
    
    
    
    
    
    
    $
    1,207,955Net interest-earning assets
    
    $
    142,870
    
    
    
    
    
    
    
    
    
    
    $
    165,112Net interest income; average interest rate spread
    
    
    
    
    
    $
    8,468
    
    
    
    2.76
    %
    
    
    
    
    
    $
    7,401
    
    
    
    2.34
    %Net interest margin(3)
    
    
    
    
    
    
    
    
    
    
    2.98
    %
    
    
    
    
    
    
    
    
    
    
    2.71
    %
 
 (1)
    
    Investment securities for the 2010 period include 125 tax-exempt municipal bonds with an
aggregate average balance of $39.7 million and an average yield of 3.9%. Investment securities
for the 2009 period include 135 tax-exempt municipal bonds with an aggregate average balance
of $42.0 million and an average yield of 3.9%. 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.  44




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##### Table of Contents



Provision for Loan Losses.
    45




---



##### Table of Contents



September 30, 2010
    
    
    June 30, 2010
    
    
    December 31, 2009(Dollars in Thousands)Non-accruing loans:One-to four-family residential
    
    $
    
    
    
    $
    
    
    
    $
    237Multi-family residential and
commercial real estate(1)
    
    
    3,455
    
    
    
    3,502
    
    
    
    4,801Construction
    
    
    8,583
    
    
    
    18,456
    
    
    
    23,303Commercial business
    
    
    
    
    
    
    
    
    
    
    Home equity lines of credit
    
    
    
    
    
    
    
    
    
    
    Consumer non-real estate
    
    
    
    
    
    
    
    
    
    
    Total non-accruing loans
    
    
    12,038
    
    
    
    21,958
    
    
    
    28,341Accruing loans 90 days or more past due:One- to four-family residential
    
    
    60
    
    
    
    63
    
    
    
    110Multi-family residential and
commercial real estate
    
    
    
    
    
    
    
    
    
    
    Construction
    
    
    16
    
    
    
    
    
    
    
    5,998Commercial business
    
    
    
    
    
    
    
    
    
    
    Home equity lines of credit
    
    
    107
    
    
    
    109
    
    
    
    141Consumer non-real estate
    
    
    
    
    
    
    
    
    
    
    Total accruing loans 90 days
or more past due
    
    
    183
    
    
    
    172
    
    
    
    6,249Total non-performing loans(2)
    
    
    12,221
    
    
    
    22,130
    
    
    
    34,590Real estate owned, net
    
    
    20,028
    
    
    
    13,142
    
    
    
    22,819Total non-performing assets
    
    
    32,249
    
    
    
    35,272
    
    
    
    57,409Performing troubled debt restructurings:One- to four-family residential(3)
    
    
    583
    
    
    
    
    
    
    
    Multi-family residential and
commercial real estate
    
    
    
    
    
    
    
    
    
    
    Construction
    
    
    
    
    
    
    
    
    
    
    Commercial business
    
    
    
    
    
    
    
    
    
    
    Home equity lines of credit
    
    
    
    
    
    
    
    
    
    
    Consumer non-real estate
    
    
    
    
    
    
    
    
    
    
    Total performing troubled debt
restructurings
    
    $
    583
    
    
    $
    
    
    
    $
    Total nonperforming assets and
performing troubled debt
restructurings
    
    $
    32,832
    
    
    $
    35,272
    
    
    $
    57,409Total non-performing loans as a
percentage of loans
    
    
    1.70
    %
    
    
    2.98
    %
    
    
    4.47
    %Total non-performing loans as a
percentage of total assets
    
    
    0.97
    %
    
    
    1.73
    %
    
    
    2.79
    %Total non-performing assets as a
percentage of total assets
    
    
    2.56
    %
    
    
    2.78
    %
    
    
    4.64
    %
 
 (1)
    
    Included in this category of non-accruing loans at September 30, 2010, June 30, 2010,
and December 31, 2009 is one troubled debt restructuring with a balance of $1.4 million,
$1.4 million and $2.5 million, respectively, which was classified as non-accrual at such
dates.(2)
    
    Non-performing loans consist of non-accruing loans plus accruing loans 90 days or more
past due.(3)
    
    Two performing troubled debt restructurings (TDRs) included in one- to four-family
residential loans with an aggregate outstanding balance of $583,000 at June 30, 2010 were
identified as a result of enhanced procedures, although no such balances were previously
reported at such date.  46




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##### Table of Contents



AllowanceAccruing
    
    
    for LoanType
    
    
    Loan Classification
    
    
    
    
    
    
    Loans 90
    
    
    LossesTotal
    
    
    
    
    
    
    One- to
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Days or
    
    
    Allocated toNo. of
    
    
    Balance
    
    
    Land
    
    
    Four-
    
    
    Multi-
    
    
    Commercial
    
    
    
    
    
    
    
    
    
    
    Special
    
    
    
    
    
    
    More Past
    
    
    ConstructionRange
    
    Loans
    
    
    Outstanding
    
    
    Only
    
    
    Family
    
    
    Family
    
    
    Real Estate
    
    
    Doubtful
    
    
    Substandard
    
    
    Mention
    
    
    Non-Accrual(1)
    
    
    Due
    
    
    Loans(Dollars in Thousands)Loans over $10.0 million
    
    
    1
    
    
    $
    19,259
    
    
    $
    
    
    
    $
    
    
    
    $
    19,259
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    19,259
    
    
    $
    
    
    
    $
    
    
    
    $
    Loans $5.0 million to $10.0 million
    
    
    6
    
    
    
    36,929
    
    
    
    
    
    
    
    17,768
    
    
    
    5,000
    
    
    
    14,161
    
    
    
    
    
    
    
    8,386
    
    
    
    10,283
    
    
    
    
    
    
    
    
    
    
    
    843Loans $2.5 million to $5.0 million
    
    
    7
    
    
    
    26,594
    
    
    
    3,445
    
    
    
    11,025
    
    
    
    
    
    
    
    12,124
    
    
    
    
    
    
    
    3,445
    
    
    
    3,332
    
    
    
    
    
    
    
    
    
    
    
    624Loans $1.0 million to $2.5 million
    
    
    15
    
    
    
    26,352
    
    
    
    6,651
    
    
    
    14,779
    
    
    
    
    
    
    
    4,922
    
    
    
    
    
    
    
    12,048
    
    
    
    3,726
    
    
    
    6,820
    
    
    
    
    
    
    
    940Loans under $1.0 million
    
    
    15
    
    
    
    6,070
    
    
    
    1,155
    
    
    
    3,367
    
    
    
    1,548
    
    
    
    
    
    
    
    
    
    
    
    2,218
    
    
    
    2,058
    
    
    
    1,763
    
    
    
    16
    
    
    
    218Total construction loans
    
    
    44
    
    
    $
    115,204
    
    
    $
    11,251
    
    
    $
    46,939
    
    
    $
    25,807
    
    
    $
    31,207
    
    
    $
    
    
    
    $
    26,097
    
    
    $
    36,658
    
    
    $
    8,583
    
    
    $
    16
    
    
    $
    2,625
 
 (1)
    
    All of the $8.6 million of non-accrual construction loans at September 30, 2010 are classified
substandard.  47




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##### Table of Contents



Non-interest Income.
 Non-interest Expenses.
 Income Tax Expense.
 COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009
 General.
  48




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##### Table of Contents



Interest Income.
 Interest Expense.
  49




---



##### Table of Contents



Average Balances, Net Interest Income, and Yields Earned and Rates Paid.
 Nine Months Ended September 30,2010
    
    
    2009Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    Interest
    
    
    Yield/Rate
    
    
    Balance
    
    
    Interest
    
    
    Yield/Rate(Dollars in Thousands)Interest-earning assets:Investment securities(1)
    
    $
    128,555
    
    
    $
    2,603
    
    
    
    2.70
    %
    
    $
    85,376
    
    
    $
    2,405
    
    
    
    3.76
    %Mortgage-backed securities
    
    
    210,353
    
    
    
    6,549
    
    
    
    4.15
    
    
    
    216,523
    
    
    
    7,822
    
    
    
    4.82Loans receivable(2)
    
    
    726,217
    
    
    
    29,766
    
    
    
    5.47
    
    
    
    755,109
    
    
    
    30,051
    
    
    
    5.31Other interest-earning assets
    
    
    62,097
    
    
    
    52
    
    
    
    0.11
    
    
    
    35,838
    
    
    
    33
    
    
    
    0.12Total interest-earning assets
    
    
    1,127,222
    
    
    
    38,970
    
    
    
    4.61
    
    
    
    1,092,846
    
    
    
    40,311
    
    
    
    4.92Cash and non-interest bearing balances
    
    
    22,312
    
    
    
    
    
    
    
    
    
    
    
    23,040Other non-interest-earning assets
    
    
    111,190
    
    
    
    
    
    
    
    
    
    
    
    85,993Total assets
    
    $
    1,260,724
    
    
    
    
    
    
    
    
    
    
    $
    1,201,879Interest-bearing liabilities:Deposits:Savings and money market accounts
    
    $
    288,015
    
    
    
    1,965
    
    
    
    0.91
    
    
    $
    183,923
    
    
    
    1,804
    
    
    
    1.31Checking accounts
    
    
    83,128
    
    
    
    29
    
    
    
    0.05
    
    
    
    72,805
    
    
    
    25
    
    
    
    0.05Certificate accounts
    
    
    462,489
    
    
    
    7,707
    
    
    
    2.22
    
    
    
    446,681
    
    
    
    10,061
    
    
    
    3.00Total deposits
    
    
    833,632
    
    
    
    9,701
    
    
    
    1.55
    
    
    
    703,409
    
    
    
    11,890
    
    
    
    2.25FHLB advances
    
    
    133,141
    
    
    
    4,271
    
    
    
    4.28
    
    
    
    189,806
    
    
    
    5,783
    
    
    
    4.06Other borrowings
    
    
    23,209
    
    
    
    54
    
    
    
    0.31
    
    
    
    23,684
    
    
    
    56
    
    
    
    0.32Total interest-bearing liabilities
    
    
    989,982
    
    
    
    14,026
    
    
    
    1.89
    
    
    
    916,899
    
    
    
    17,729
    
    
    
    2.58Non-interest-bearing liabilities:Non-interest-bearing demand accounts
    
    
    43,540
    
    
    
    
    
    
    
    
    
    
    
    41,526Real estate tax escrow accounts
    
    
    3,449
    
    
    
    
    
    
    
    
    
    
    
    3,635Other liabilities
    
    
    9,912
    
    
    
    
    
    
    
    
    
    
    
    8,893Total liabilities
    
    
    1,046,883
    
    
    
    
    
    
    
    
    
    
    
    970,953Stockholders equity
    
    
    213,841
    
    
    
    
    
    
    
    
    
    
    
    230,926Total liabilities and stockholders equity
    
    $
    1,260,724
    
    
    
    
    
    
    
    
    
    
    $
    1,201,879Net interest-earning assets
    
    $
    137,240
    
    
    
    
    
    
    
    
    
    
    $
    175,947Net interest income; average interest rate spread
    
    
    
    
    
    $
    24,944
    
    
    
    2.72
    %
    
    
    
    
    
    $
    22,582
    
    
    
    2.34
    %Net interest margin(3)
    
    
    
    
    
    
    
    
    
    
    2.95
    %
    
    
    
    
    
    
    
    
    
    
    2.76
    %
 
 (1)
    
    Investment securities for the 2010 period include 133 tax-exempt municipal bonds with an
aggregate average balance of $40.4 million and an average yield of 4.0%. Investment securities
for the 2009 period include 135 tax-exempt municipal bonds with an aggregate average balance
of $42.0 million and an average yield of 3.9%. 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.  50




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##### Table of Contents



Provision for Loan Losses.
 Non-interest Income.
 Non-interest Expenses.
 Income Tax Expense.
 
 ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Asset/Liability Management and Market Risk.
   51




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##### Table of Contents



Gap Analysis.
   52




---



##### 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)
    
    $
    273,128
    
    
    $
    55,392
    
    
    $
    151,012
    
    
    $
    85,900
    
    
    $
    142,038
    
    
    $
    707,470Mortgage-backed
securities
    
    
    43,348
    
    
    
    32,919
    
    
    
    81,776
    
    
    
    45,745
    
    
    
    18,980
    
    
    
    222,768Investment securities
    
    
    7,253
    
    
    
    1,430
    
    
    
    70,320
    
    
    
    51,910
    
    
    
    3,592
    
    
    
    134,505Other interest-earning
assets
    
    
    60,361
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,361Total interest-earning assets
    
    
    384,090
    
    
    
    89,741
    
    
    
    303,108
    
    
    
    183,555
    
    
    
    164,610
    
    
    
    1,125,104Interest-bearing liabilities:Savings and money market accounts
    
    $
    73,209
    
    
    $
    57,619
    
    
    $
    81,738
    
    
    $
    53,952
    
    
    $
    45,271
    
    
    $
    311,789Checking accounts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    87,758
    
    
    
    87,758Certificate accounts
    
    
    184,351
    
    
    
    89,859
    
    
    
    67,057
    
    
    
    53,899
    
    
    
    63,652
    
    
    
    458,818FHLB advances
    
    
    34,817
    
    
    
    13,199
    
    
    
    29,992
    
    
    
    28,308
    
    
    
    3,575
    
    
    
    109,891Other borrowed money
    
    
    18,020
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,020Total interest-bearing liabilities
    
    
    310,397
    
    
    
    160,677
    
    
    
    178,787
    
    
    
    136,159
    
    
    
    200,256
    
    
    
    986,276Interest-earning assets less interest-bearing liabilities
    
    $
    73,693
    
    
    $
    (70,936
    )
    
    $
    124,321
    
    
    $
    47,396
    
    
    $
    (35,646
    )
    
    $
    138,828Cumulative interest-rate sensitivity gap (3)
    
    $
    73,693
    
    
    $
    2,757
    
    
    $
    127,078
    
    
    $
    174,474
    
    
    $
    138,828Cumulative interest-rate gap as a percentage of total assets at September 30, 2010
    
    
    5.86
    %
    
    
    0.22
    %
    
    
    10.10
    %
    
    
    13.87
    %
    
    
    11.04
    %Cumulative interest-earning assets as a percentage of cumulative interest-bearing liabilities at September 30, 2010
    
    
    123.74
    %
    
    
    100.59
    %
    
    
    119.55
    %
    
    
    122.20
    %
    
    
    114.08
    %
 
 (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.  53




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##### 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
 (a)
    
    Not applicable.(b)
    
    Not applicable.(c)
    
    Purchases of Equity Securities
  54




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##### 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
    
    
    per Share
    
    
    or Programs
    
    
    Programs(1)July 1,  July 31, 2010
    
    
    174,881
    
    
    $
    8.95
    
    
    
    162,380
    
    
    
    286,223August 1,  August 31, 2010
    
    
    19,233
    
    
    
    9.34
    
    
    
    18,799
    
    
    
    267,424September 1,  September 30, 2010
    
    
    1,600
    
    
    
    10.00
    
    
    
    1,600
    
    
    
    265,824Total
    
    
    195,714
    
    
    $
    8.99
    
    
    
    182,779
    
    
    
    265,824
 (1)
    
    On January 14, 2010, the Company announced a stock repurchase program to repurchase up
to 5% of its outstanding shares, or 1,048,603 shares. This repurchase program is schedule
to terminate as of January 14, 2011. 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. (REMOVED AND RESERVED)
 
 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.
  55




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##### Table of Contents



SIGNATURES
  ABINGTON BANCORP, INC.Date: November 9, 2010
    By:
    /s/ Robert W. WhiteRobert W. WhiteChairman, President and
Chief Executive OfficerDate: November 9, 2010
    By:
    /s/ Jack J. SandoskiJack J. SandoskiSenior Vice President and
Chief Financial Officer  56