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

                                    FORM 10-Q
(Mark One)

X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the quarterly period ended September 30, 2007
                               ------------------

OR

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 000-52826
                               -------   -----

                          BEACON FEDERAL BANCORP, INC.
                          ----------------------------
             (Exact name of registrant as specified in its charter)

         Maryland                                      26-0706826
-------------------------------                  -------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

5000 Brittonfield Parkway, East Syracuse, New York                      13057
--------------------------------------------------                   ---------
(Address of principal executive office)                              (Zip Code)
Registrant's telephone number, including area code (315) 433-0111
                                                   --------------

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by  Sections  13 or 15(d)  of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  Registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.      Yes         No X

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

Indicate by checkmark  whether the  Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes No X

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

          Class                                    Outstanding November 8, 2007
--------------------------------------------------------------------------------
Common Stock, par value $0.01 per share                      7,396,431


<PAGE>

                          BEACON FEDERAL BANCORP, INC.
                                    FORM 10-Q

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2007

                                      INDEX

                                                                        PAGE NO.

PART I - Financial Information.                                               3

Item 1.  Financial Statements.                                                3

             Consolidated Balance Sheets                                      3

             Consolidated Statements of Income                                4

             Consolidated Statements of Comprehensive Income                  5

             Consolidated Statements of Cash Flows                            6

             Notes to Consolidated Financial Statements                       8

Item 2.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations.                            10

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.         25

Item 4. Controls and Procedures.                                             26

PART II - Other Information.                                                 27

Item 1.  Legal Proceedings.                                                  27

Item 1A.  Risk Factors                                                       27

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.        27

Item 3.  Defaults Upon Senior Securities.                                    27

Item 4. Submission of Matters to a Vote of Security Holders.                 27

Item 5.  Other Information.                                                  27

Item 6.  Exhibits.                                                           27

Signatures                                                                   29

Certifications                                                               30

                                       2
<PAGE>


                                 BEACON FEDERAL

PART 1.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

On October 1, 2007,  Beacon Federal  Bancorp,  Inc. ("the  Company")  became the
holding company for Beacon Federal and its subsidiary  ("Beacon Federal" or "the
Bank")  upon the  Bank's  completion  of the  conversion  from a mutual  savings
association  to a capital  stock  corporation.  At September  30,  2007,  Beacon
Federal  Bancorp,   Inc.  has  no  assets  and  conducted  no  operations,   and
accordingly, the information presented in this report is for the Bank.

                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)
<TABLE>
<CAPTION>
                                                                                    September 30,             December 31,
                                                                                    -------------             -------------
ASSETS                                                                                   2007                     2006
                                                                                    -------------             -------------
                                                                                     (Unaudited)
<S>                                                                              <C>                         <C>
Cash and due from financial institutions                                           $       5,733             $      8,799
Federal funds sold                                                                        38,000                        -
                                                                                    -------------             -------------
    Cash and cash equivalents                                                             43,733                    8,799
Interest-bearing deposits in other financial institutions                                  1,636                    2,135
Securities held to maturity (fair value of $31,965
   and $36,874, respectively)                                                             32,321                   37,706
Securities available for sale                                                             64,645                    8,852
Loans, net of allowance for loan losses of $6,036
   and $5,192, respectively                                                              667,101                  537,097
Federal Home Loan Bank stock of New York                                                   9,798                    4,091
Premises and equipment, net                                                                3,748                    3,717
Accrued interest receivable                                                                2,990                    2,233
Foreclosed and repossessed assets                                                            310                      952
Other assets                                                                               8,643                    2,087
                                                                                    -------------             -------------
      Total assets                                                                 $     834,925              $   607,669
                                                                                   ==============             =============
LIABILITIES AND EQUITY

Deposits                                                                           $     588,444              $   471,137
Federal Home Loan Bank advances                                                          197,618                   73,900
Securities sold under agreement to repurchase                                                 -                    15,227
Accrued interest payable and other liabilities                                             3,117                    3,160
                                                                                    -------------             -------------
      Total liabilities                                                                  789,179                  563,424
Commitments and contingencies                                                       -------------             -------------
Accumulated other comprehensive loss, net                                                   (248)                      (9)
Retained earnings - substantially restricted                                              45,994                   44,254
                                                                                    -------------             -------------
      Total equity                                                                        45,746                   44,245
                                                                                    -------------             -------------
      Total liabilities and equity                                                 $     834,925              $   607,669
                                                                                    =============             =============
</TABLE>


See accompanying notes to consolidated financial statements.

                                       3

<Page>

                                 BEACON FEDERAL
                        CONSOLIDATED STATEMENTS OF INCOME
                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                                Three Months Ended                     Nine Months Ended
                                                                   September 30,                          September 30,
                                                        ------------------------------           -----------------------------
                                                           2007                2006                 2007               2006
                                                        -----------       -----------            -----------       -----------
Interest and dividend income:                                      (Unaudited)                               (Unaudited)
<S>                                                      <C>             <C>                   <C>                 <C>
   Loans, including fees                                 $   10,031      $      7,697          $    27,734         $   21,272
   Securities                                                 1,008               607                2,150              1,621
   FHLB stock                                                   160                49                  328                130
   Federal funds sold and other                                 148               134                  412                476
                                                        -----------       -----------          -----------         ----------
      Total interest income                                  11,347             8,487               30,624             23,499
Interest expense:                                       -----------       -----------          -----------         ----------
   Deposits                                                   5,446             3,947               15,646             10,037
   FHLB advances                                              1,943               715                3,729              1,914
   Securities sold under agreement to repurchase                 26               184                  284                581
                                                        -----------       -----------          -----------         ----------
      Total interest expense                                  7,415             4,846               19,659             12,532
                                                        -----------       -----------          -----------         ----------
      Net interest income                                     3,932             3,641               10,965             10,967
Provision for loan losses                                       737               184                1,394                592
                                                        -----------       -----------          -----------         ----------
      Net interest income after provision
        for loan losses                                       3,195             3,457                9,571             10,375
Noninterest income:                                     -----------       -----------          -----------         ----------
   Service charges                                              647               616                1,837              1,733
   Commission income                                             92                82                  349                301
   Loss on sale of loans                                          -                 -                    -                 (5)
   Other                                                        125                65                  220                159
                                                        -----------       -----------          -----------         ----------
      Total noninterest income                                  864               763                2,406              2,188
Noninterest expense:                                    -----------       -----------          -----------         ----------
   Salaries and employee benefits                             1,560             1,463                4,958              4,788
   Occupancy and equipment                                      310               253                  908                791
   Advertising and marketing                                     57                78                  226                258
   Telephone, delivery and postage                              108                70                  355                240
   Supplies                                                      70                71                  300                311
   Audit and examination                                         79                77                  220                192
   FDIC premium expense                                          94                14                  275                 40
   Provision for loss on foreclosed assets                        -                 -                  110                  -
   Provision for loss on impaired assets                        218                 -                  218                  -
   Other                                                        559               530                1,570              1,500
                                                        -----------       -----------          -----------         ----------
      Total noninterest expense                               3,055             2,556                9,140              8,120
                                                        -----------       -----------          -----------         ----------
Income before income taxes                                    1,004             1,664                2,837              4,443
Income tax expense                                              399               615                1,097              1,626
                                                        -----------       -----------          -----------         ----------
      Net income                                         $      605      $      1,049          $     1,740           $  2,817
                                                        ===========       ===========          ===========         ===========
Basic and diluted earnings per share                     $      N/A      $     N/A             $       N/A           $    N/A
                                                        ===========       ===========          ===========         ===========
</TABLE>
N/A  Not applicable.

See accompanying notes to consolidated financial statements.

                                       4
<PAGE>

                                 BEACON FEDERAL
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                                              Three Months Ended                Nine Months Ended
                                                                                 September 30,                    September 30,
                                                                        ---------------------------     ---------------------------
                                                                            2007            2006           2007             2006
                                                                        -----------      ----------     -----------      ----------
                                                                                 (Unaudited)                       (Unaudited)
<S>                                                                       <C>            <C>               <C>           <C>
Net income                                                                $    605       $   1,049       $   1,740       $   2,817
Other comprehensive income:
   Unrealized gains (losses) on securities
        arising during the period, net of tax                                 (163)             23            (239)            (41)
                                                                        -----------      ----------     -----------      ----------
Comprehensive income                                                      $    442       $   1,072       $   1,501       $   2,776
                                                                        ===========      ==========     ===========      ==========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       5
<Page>

                                 BEACON FEDERAL
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)

<TABLE>
<CAPTION>

                                                                                            Nine Months Ended
                                                                                              September 30,
                                                                                  ------------------------------------
                                                                                      2007                  2006
                                                                                  --------------       ---------------
Cash flows from operating activities:                                                         (Unaudited)
<S>                                                                               <C>                   <C>
   Net income                                                                     $    1,740           $    2,817
   Adjustments to reconcile net income to net
      cash provided by (used for) operating activities:
         Provision for loan losses                                                     1,394                  592
         Provision for loss on foreclosed assets                                         110                   -
         Provision for loss on impaired assets                                           218                   -
         Depreciation and amortization                                                   326                  319
         Amortization of net deferred loan costs                                         624                  576
         Net amortization of premiums and discounts on securities                         17                   37
         Loss on sale of loans                                                             -                    5
         Originations of loans held for sale                                               -                 (54)
         Proceeds from loans held for sale                                                 -                   49
         Net change in:
             Accrued interest receivable                                                 (757)               (249)
             Other assets                                                              (6,556)                (27)
             Accrued interest payable and other liabilities                               117                 (55)
                                                                                  --------------       ---------------
            Net cash provided by (used for) operating activities                       (2,767)              4,010
Cash flows from investing activities:                                             --------------       ---------------
   Purchase of FHLB stock                                                              (8,776)             (3,058)
   Redemption of FHLB stock                                                             3,069               2,243
   Purchase of interest-bearing deposits                                                   -               (5,620)
   Maturities of interest-bearing deposits                                                499               3,225
   Securities held to maturity:
      Maturities, prepayments and calls                                                 5,388               5,777
      Purchases                                                                            -               (2,303)
   Securities available for sale:
      Purchases                                                                       (56,704)            (13,120)
      Proceeds from maturity or call                                                      492                  -
   Loan originations and payments, net                                               (131,490)            (67,586)
   Purchase of premises and equipment                                                    (575)               (124)
   Proceeds from foreclosed and repossessed assets                                         -                   29
                                                                                  --------------       ---------------
           Net cash used for investing activities                                 $  (188,097)         $  (80,537)
                                                                                  --------------       ---------------


                                                                                           Continued on following page
</TABLE>

                                       6

<page>
                                 BEACON FEDERAL
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
Continued

<TABLE>
<CAPTION>

                                                                                             Nine Months Ended
                                                                                              September 30,
                                                                                  ------------------------------------
                                                                                      2007                  2006
                                                                                  --------------       ---------------
Cash flows from financing activities:                                                          (Unaudited)
<S>                                                                                <C>                   <C>
   Net change in deposits                                                          $   117,307           $   60,075
   Proceeds from FHLB advances                                                         981,593              300,783
   Repayment of FHLB advances                                                         (857,875)            (286,083)
   Repayments of securities sold under agreement to repurchase                         (15,227)              (3,000)
                                                                                  --------------       ---------------
         Net cash provided by financing activities                                     225,798               71,775
                                                                                  --------------       ---------------
Net change in cash and cash equivalents                                                 34,934               (4,752)
Cash and cash equivalents at beginning of period                                         8,799               11,927
                                                                                  --------------       ---------------
Cash and cash equivalents at end of period                                         $    43,733           $    7,175
Supplemental cash flow information:                                               ==============       ===============
   Interest paid                                                                   $    18,950           $   12,453
   Income taxes paid                                                                     1,312                1,736
   Real estate and repossessions acquired in settlement of loans                   $       465           $       -
   Loans originated to finance the sale of foreclosed real estate                  $       997           $       -
</TABLE>



See accompanying notes to consolidated financial statements.
                                       7
<Page>
                                 BEACON FEDERAL
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                             (Dollars in thousands)

NOTE 1 - BASIS OF PRESENTATION

The accompanying  unaudited interim consolidated  financial statements have been
prepared in  accordance  with the  instructions  for Form 10-Q and Rule 10-01 of
Regulation S-X and,  therefore,  do not include all disclosures  necessary for a
complete  presentation  of the  financial  statements  in  conformity  with U.S.
generally  accepted  accounting  principles.  In the opinion of management,  the
accompanying unaudited consolidated financial statements contain all adjustments
(consisting only of normal recurring accruals)  considered  necessary for a fair
presentation of the results of operations for the interim  periods.  The results
of  operations  for the three and nine months ended  September  30, 2007 are not
necessarily  indicative  of the results that may be expected for the entire year
or any other interim period.

NOTE 2 - STOCK CONVERSION

On  October 1, 2007,  Beacon  Federal  completed  its  conversion  from a mutual
savings  association  to a capital  stock  corporation.  A new holding  company,
Beacon Federal  Bancorp,  Inc., was established as part of the  conversion.  The
public offering was consummated  through the sale and issuance by Beacon Federal
Bancorp, Inc. of 7,396,431 shares of common stock at $10 per share. Net proceeds
of $66.0 million were raised in the stock offering, after deduction of estimated
conversion  costs of $2.0 million and excluding $5.9 million which was loaned by
the  Company to a trust for the  Employee  Stock  Ownership  Plan (the  "ESOP"),
enabling the ESOP to purchase 591,714 shares of common stock in the offering for
the  benefit of the  Bank's  employees.  Shares of the  Company's  common  stock
purchased  by the  ESOP  are  held in a  suspense  account  until  released  for
allocation to  participants.  Shares released will be allocated to each eligible
participant  based on the  ratio of each  such  participant's  compensation,  as
defined  in  the  ESOP,  to  the  total   compensation   of  all  eligible  plan
participants.  As the unearned  shares are released from  suspense,  the Company
will recognize  compensation  expense equal to the fair value of the ESOP shares
committed to be released during the period. To the extent that the fair value of
the ESOP shares differs from the cost of such shares,  the difference is charged
or credited to equity as additional  paid-in  capital.  Because the ESOP did not
exist at September 30, 2007,  no  compensation  expense  related to the ESOP had
been recognized at that time.

Beacon Federal Bancorp, Inc.'s common stock is traded on the NASDAQ Global
Market under the symbol "BFED."

Voting rights will be held and exercised  exclusively by the stockholders of the
new holding company.  Deposit account holders will continue to be insured by the
FDIC. A  liquidation  account was  established  in the amount of $44.7  million,
which  represented  the Bank's  total  equity as of March 31,  2007,  the latest
balance sheet date in the final prospectus used in the conversion.

The Bank may not declare,  pay a dividend on, or  repurchase  any of its capital
stock,  if the effect thereof would cause retained  earnings to be reduced below
the liquidation account amount or regulatory capital requirements.  Any purchase
of the new holding  company's  common stock will be conducted in accordance with
applicable laws and regulations.

At September 30, 2007, conversion costs of $906,000 had been deferred.

                                       8
<Page>

                                 BEACON FEDERAL

NOTE 3 - EARNINGS PER SHARE

Since the Company had not issued any shares of common stock as of September  30,
2007, per share data is not applicable for any periods  covered by the financial
statements.

NOTE 4 - UNREALIZED LOSSES ON SECURITIES

Securities with unrealized losses,  aggregated by investment category and length
of time that  individual  securities  have been in a continuous  unrealized loss
position, are as follows:

<TABLE>
<CAPTION>

                                Less than 12 Months              12 Months or Longer                     Total
                              Fair         Unrealized          Fair        Unrealized            Fair             Unrealized
September 30, 2007            Value           loss             Value         loss                Value                loss
---------------------      -----------    -------------     -----------    -----------       -------------       ------------

<S>                         <C>                 <C>          <C>            <C>                <C>                <C>
Agencies                    $    1,749      $     (1)       $      -       $     -            $   1,749          $       (1)
Corporates                       2,890          (109)              -             -                2,890                (109)
Mortgage-backed
  securities                     4,883           (51)          6,201           (89)              11,084                (140)
Asset-backed securities          2,766           (28)              -             -                2,766                 (28)
Collateralized
mortgage obligations            15,786          (143)         26,529          (627)              42,315                (770)
                              ---------    ----------       ---------      ----------         ----------         -----------
                           $    28,074      $   (332)       $ 32,730       $  (716)           $  60,804          $   (1,048)
                              =========    ==========       =========      ==========         ==========         ===========
</TABLE>

For all of the above  securities,  the  unrealized  losses are  primarily due to
changes in market  interest  rates and not credit quality of the issuers and, as
such, are considered to be temporary by the Bank. In addition, management of the
Bank has the intent and ability to hold these  securities  until market recovery
or maturity and believes that the fair value of these securities will recover in
the future.

NOTE 5 - PROVISION FOR LOSS ON IMPAIRED ASSETS

In accordance  with SFAS No. 144,  "Accounting for the Impairment or Disposal of
Long-Lived  Assets," the Bank recognized a provision for loss on impaired assets
of $218,000  during the third quarter of 2007.  The  impairment  resulted from a
decline in the fair value of certain Bank properties, which were sold in October
2007.

                                       9

<Page>

                                 BEACON FEDERAL

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

Management's  discussion and analysis of the financial  condition and results of
operations  at  September  30,  2007 and for the  three  and nine  months  ended
September 30, 2007 and 2006 is intended to assist in understanding the financial
condition and results of operations of the Bank.  The  information  contained in
this  section  should be read in  conjunction  with the  Unaudited  Consolidated
Financial Statements and the notes thereto,  appearing in Part 1, Item 1 of this
report.

Forward-Looking Statements

When used in this Form 10-Q,  the words or phrases  "will likely  result,"  "are
expected  to," "will  continue,"  "is  anticipated,"  "estimate,"  "project"  or
similar expressions are intended to identify "forward-looking statements" within
the  meaning of the  Private  Securities  Litigation  Reform  Act of 1995.  Such
statements are subject to certain risks and  uncertainties  including changes in
economic  conditions  in our market  area,  changes in  policies  by  regulatory
agencies,  fluctuations in interest rates,  demand for loans in our market area,
and  competition  that could  cause  actual  results to differ  materially  from
historical earnings and those presently anticipated or projected.  Additionally,
other  risks and  uncertainties  are  described  in the  Company's  registration
statement on Form S-1 filed with the  Securities  and Exchange  Commission  (the
"SEC"), which is available through the SEC's website at www.sec.gov. The Company
wishes  to  caution   readers   not  to  place   undue   reliance  on  any  such
forward-looking  statements,  which only speak as of the date made.  The Company
wishes  to advise  readers  that the  factors  listed  above  could  affect  the
Company's financial performance and could cause the Company's actual results for
future periods to differ  materially  from any opinions or statements  expressed
with respect to future periods in any current statements.

The Company does not undertake,  and specifically  disclaims any obligation,  to
publicly  release  the  result  of  any  revisions  which  may  be  made  to any
forward-looking  statements to reflect events or circumstances after the date of
such  statements or to reflect the occurrence of  anticipated  or  unanticipated
events.

Overview

Our results of operations depend mainly on our net interest income, which is the
difference  between  the  interest  income  earned  on our loan  and  investment
portfolios and interest  expense we pay on our deposits and borrowings.  Results
of  operations  are  also  affected  by  fee  income  from  banking  operations,
provisions  for  loan  losses,  gains  (losses)  on sales  of  loans  and  other
miscellaneous income. Our noninterest expense consists primarily of compensation
and   employee   benefits,   occupancy   and   equipment,   marketing,   general
administrative expenses and income tax expense.

Our results of operations are also  significantly  affected by general  economic
and  competitive  conditions,  particularly  with respect to changes in interest
rates, government policies and actions of regulatory authorities. Future changes
in applicable law,  regulations or government policies may materially affect our
financial condition and results of operations.

Net income  decreased to $605,000 for the three months ended  September 30, 2007
from $1.0 million for the three months ended September 30, 2006. The decrease in
net income  reflected  an increase  in  non-interest  expense  and an  increased
provision  for loan  losses,  partially  offset by an increase  in net  interest
income and non-interest income.

                                       10

<page>

                                 BEACON FEDERAL

Critical Accounting Policies

We consider accounting policies that require management to exercise  significant
judgment or discretion or make significant assumptions that have, or could have,
a material  impact on the carrying value of certain  assets or on income,  to be
critical  accounting  policies.  We consider  the  following  to be our critical
accounting policies:

Allowance for Loan Losses. The allowance for loan losses is the estimated amount
considered  necessary to cover probable  incurred  credit losses inherent in the
loan portfolio at the balance sheet date.  The allowance is established  through
the provision for loan losses,  which is charged against income.  In determining
the allowance  for loan losses,  management  makes  significant  estimates.  The
methodology  for  determining  the  allowance  for loan losses is  considered  a
critical  accounting  policy by  management  due to the high  degree of judgment
involved,  the  subjectivity of the  assumptions  utilized and the potential for
changes in the economic  environment  that could result in changes to the amount
of the recorded allowance for loan losses.

A substantial  amount of our loan  portfolio is  collateralized  by real estate.
Appraisals of the  underlying  value of property  securing  loans and discounted
cash flow valuations of properties are critical in determining the amount of the
allowance required for specific loans. Assumptions for appraisals and discounted
cash flow  valuations are  instrumental  in determining the value of properties.
Overly   optimistic   assumptions  or  negative  changes  to  assumptions  could
significantly affect the valuation of a property securing a loan and the related
allowance.  The assumptions  supporting such appraisals and discounted cash flow
valuations are carefully  reviewed by management to determine that the resulting
values reasonably reflect amounts realizable on the related loans.

Management performs a quarterly  evaluation of the adequacy of the allowance for
loan losses. Consideration is given to a variety of factors in establishing this
estimate including, but not limited to, current economic conditions, delinquency
statistics,  geographic  and  industry  concentrations,   the  adequacy  of  the
underlying  collateral,  the  financial  strength  of the  borrower,  results of
internal and external loan reviews and other relevant  factors.  This evaluation
is  inherently  subjective,  as it  requires  material  estimates  that  may  be
susceptible to significant revision based on changes in economic and real estate
market conditions.

The analysis of the allowance for loan losses has two  components:  specific and
general allocations. Specific allocations are made for loans that are determined
to be  impaired.  Impairment  is measured by  determining  the present  value of
expected future cash flows or, for collateral-dependent loans, the fair value of
the collateral adjusted for market conditions and selling expenses.  The general
allocation  is determined by  segregating  the remaining  loans by type of loan,
risk weighting (if applicable) and payment history.  We also analyze  historical
loss experience,  delinquency trends, general economic conditions and geographic
and industry concentrations.  This analysis establishes factors that are applied
to the loan groups to determine  the amount of the general  allocations.  Actual
loan losses may be significantly more than the allowance for loan losses we have
established,  which  could  have a  material  negative  effect on our  financial
results.

Comparison of Financial Condition at September 30, 2007 and December 31, 2006

Total assets  increased  $227.2  million to $834.9 million at September 30, 2007
from $607.7  million at December 31, 2006. The increase was primarily the result
of a $130.0 million increase in net loans,  $55.8 million increase in securities

                                       11
<PAGE>

                                 BEACON FEDERAL

available  for sale and $34.9  million  increase  in cash and cash  equivalents,
funded by a $117.3 million increase in deposits and a $108.5 million increase in
borrowings.  Approximately  $60.0 million of deposits at September 30, 2007 were
held on behalf of  subscribers  for purchase of common  stock of Beacon  Federal
Bancorp, Inc. in our conversion.

Cash and cash equivalents  increased to $43.7 million at September 30, 2007 from
$8.8  million at December  31, 2006 as a result of deposits  held for the public
offering.  Net loans increased  $130.0  million,  or 24.2%, to $667.1 million at
September  30,  2007 from  $537.1  million  at  December  31,  2006,  reflecting
continued  strong  business  relationships  maintained  by our loan staff in our
local  markets.  Securities  available  for sale  increased to $64.6  million at
September 30, 2007 from $8.9 million at December 31, 2006, while securities held
to maturity  decreased to $32.3 million at September 30, 2007 from $37.7 million
at December 31, 2006. The increase in securities  available for sale  reflected,
in part, the deployment of excess liquidity. Federal Home Loan Bank stock of New
York  increased  $5.7  million as required by the FHLB due to a higher  level of
FHLB advances outstanding. Accrued interest receivable increased due to a higher
balance of loans and  securities  outstanding  and timing of interest  receipts.
Other assets  increased  primarily  as a result of a  receivable  related to the
ESOP, which was formed in connection with the conversion.

Deposits increased $117.3 million,  or 24.9%, to $588.4 million at September 30,
2007 from  $471.1  million at  December  31,  2006 due to the  success of recent
promotions to attract additional  deposits and deposits of $60.0 million held on
behalf of subscribers  for purchase of common stock of Beacon  Federal  Bancorp,
Inc.  Federal Home Loan Bank advances are utilized to the extent that  liquidity
needs are not met by cash  received from  customer  deposits.  Federal Home Loan
Bank  advances  increased  $123.7  million,  or  167.4%,  to $197.6  million  at
September 30, 2007 from $73.9 million at December 31, 2006.

Equity  increased $1.5 million,  or 3.3%, to $45.7 million at September 30, 2007
from $44.2 million at December 31, 2006.  The increase  resulted from net income
of $1.7  million for the nine months  ended  September  30,  2007.  In addition,
unrealized losses, net of taxes on securities increased to $248,000 at September
30, 2007 from $9,000 at December 31, 2006.

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

General.  Net income  decreased to $605,000 for the three months ended September
30, 2007 from $1.0 million for the three months ended  September  30, 2006.  The
decrease in net income  reflected  an increase  in  non-interest  expense and an
increased  provision  for loan  losses,  partially  offset by an increase in net
interest income and non-interest income.

Interest  Income.  Interest  income  increased $2.8 million,  or 33.7%, to $11.3
million for the three months ended  September 30, 2007 from $8.5 million for the
three months ended  September 30, 2006.  The increase  resulted  primarily  from
higher  average  balances  of loans and higher  yields on such loans in the 2007
period compared to the 2006 period.

Interest  income on loans  increased to $10.0 million for the three months ended
September  30, 2007 from $7.7 million for the three months ended  September  30,
2006.  The  increase  was due to the higher  average  balance of loans to $647.4
million for the three months ended  September  30, 2007 from $508.0  million for
the three months ended September 30, 2006,  reflecting our continued emphasis on
loan  growth.  The  increase in interest  income on loans also was due to higher
average  yields  earned  on such  loans  to 6.15%  for the  three  months  ended
September  30, 2007 from 6.02% for the three  months ended  September  30, 2006,
reflecting  higher market interest rates generally,  increases in interest rates
on our  adjustable-rate  loans in the higher interest rate environment,  and the
greater proportion of higher-yielding commercial business and multi-family loans
in our loan  portfolio  during  the 2007  period  compared  to the 2006  period.

                                       12
<PAGE>

                                 BEACON FEDERAL

Interest  income on securities,  including FHLB stock,  increased  $512,000,  or
78.0%,  to $1.2  million  for the three  months  ended  September  30, 2007 from
$656,000  for the three  months ended  September  30, 2006,  reflecting a higher
average balance of such securities (to $82.6 million from $50.2 million) as well
as higher average yields on such securities to 5.61% from 5.18% in the generally
higher market interest rate environment.

Interest  Expense.  Interest expense  increased $2.6 million,  or 53.0%, to $7.4
million for the three months ended  September 30, 2007 from $4.8 million for the
three  months  ended  September  30,  2006.  The  increase in  interest  expense
reflected  substantially  higher average  balances of deposits and borrowings to
fund loan growth,  as well as  substantially  higher rates on such  deposits and
borrowings in the higher market interest rate  environment.  Interest expense on
deposits increased $1.5 million,  or 38.0%, to $5.4 million for the three months
ended  September 30, 2007 from $3.9 million for the three months ended September
30,  2006,  reflecting  an increase in the average  balance of such  deposits to
$517.8 million for the three months ended September 30, 2007 from $444.3 million
for the three months ended  September  30, 2006.  In addition,  the average rate
paid on such  deposits  increased  to 4.18%  from  3.53%.  Interest  expense  on
certificates  of deposit  increased  to $3.6  million for the three months ended
September  30, 2007 from $3.1 million for the three months ended  September  30,
2006, due primarily to the higher average rate on such deposits  (5.04% compared
to 4.49%) in the  higher  market  interest  rate  environment  and,  to a lesser
extent,  the higher average balance of such deposits ($281.0 million compared to
$272.5  million).  Interest  expense on money market  accounts also increased to
$1.4  million  from  $272,000,  reflecting  substantially  higher  rates on such
accounts  (4.53% in the 2007 period  compared to 2.87% in the 2006  period),  as
well as higher average  balances of such accounts  ($122.5  million  compared to
$37.6 million).

Interest  expense on  borrowings  increased to $2.0 million for the three months
ended  September 30, 2007 from $899,000 for the three months ended September 30,
2006. The increase was due to a higher average  balance of such  borrowings,  to
$162.4 million for the three months ended  September 30, 2007 from $85.7 million
for the three  months  ended  September  30, 2006,  as  borrowings  were used to
supplement  deposits  to  fund  loan  growth.  The  average  rates  paid on such
borrowings increased to 4.81% from 4.16%.

Net Interest Income.  Net interest income increased  $291,000,  or 8.0%, to $3.9
million for the three months ended  September 30, 2007 from $3.6 million for the
three months ended  September 30, 2006. The increase in net interest  income was
due to an increase in net interest earning assets to $61.9 million for the three
months ended  September  30, 2007 from $42.0  million for the three months ended
September  30, 2006,  which more than offset  decreases in our net interest rate
spread (to 1.74% from 2.26%) and net interest margin (to 2.10% from 2.53%).  The
decreases in our net interest rate spread and net interest margin  reflected the
current  interest rate  environment  and the continued flat U.S.  Treasury yield
curve environment.

Provision  for Loan Losses.  We recorded a provision for loan losses of $737,000
for the three months ended  September  30, 2007 compared to a provision for loan
losses of $184,000 for the three months ended  September 30, 2006. The provision
for loan  losses  reflected  substantial  growth  in our loan  portfolio  and an
increase in  classified  assets.  Components  of the  provision  for loan losses
included a general allowance for each type of loan based on historical loan loss
experience,  and related  adjustments  to historical  experience,  and the risks
associated with increased commercial lending.  Loans increased $54.8 million, or
9.0%,  from $612.3  million at June 30, 2007 to $667.1  million at September 30,
2007. The provisions recorded also reflected net charge offs of $476,000 for the
three months ended September 30, 2007 compared to net charge offs of $21,000 for
the three months ended  September  30, 2006.  The  allowance for loan losses was

                                       13

<PAGE>

                                 BEACON FEDERAL

$6.0  million,  or 0.90% of total loans at September  30, 2007  compared to $5.0
million,  or 0.97% of total loans at  September  30, 2006.  Total  nonperforming
loans were $775,000 at September 30, 2007 compared to $601,000 at June 30, 2007.
We used the same  methodology in assessing the  allowances for both periods.  To
the best of our  knowledge,  we have  recorded all losses that are both probable
and  reasonable  to estimate for the three months ended  September  30, 2007 and
2006.

Non-Interest  Income.  Non-interest  income  increased to $864,000 for the three
months  ended  September  30,  2007 from  $763,000  for the three  months  ended
September 30, 2006. Service charges increased $31,000, to $647,000 for the three
months ended September 30, 2007,  reflecting higher  deposit-related fees. Other
noninterest  income increased  primarily as a result of a prepayment  penalty on
one loan.

Non-Interest Expense. Non-interest expense increased $499,000, or 19.5%, to $3.0
million for the three months ended  September 30, 2007 from $2.5 million for the
three months ended  September 30, 2006.  The increase  reflected a provision for
loss on impaired assets,  higher FDIC premium  expenses,  higher accrued bonuses
and normal salary increases,  higher occupancy and equipment expenses and higher
other noninterest  expenses.  The Bank recognized an impairment loss of $218,000
as a result of a decline  in the fair  value of certain  Bank  properties.  FDIC
premium  expense  increased due to a new  risk-based  assessment  system,  which
became  effective  January  1, 2007 and  considers  the  supervisory  rating and
certain financial ratios of each financial institution.  Occupancy and equipment
increased as a result of higher office rent  expenses and equipment  maintenance
costs. Other non-interest  expense increased due primarily to New York sales tax
audit expenses and call center related costs.

Income Tax Expense.  The  provision  for income taxes was $399,000 for the three
months ended  September 30, 2007 compared to $615,000 for the three months ended
September 30, 2006.  Our effective tax rate was 39.7% for the three months ended
September  30, 2007  compared to 37.0% for the three months ended  September 30,
2006.

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

General.  Net  income  decreased  to $1.7  million  for the  nine  months  ended
September  30, 2007 from $2.8  million for the nine months ended  September  30,
2006. The decrease in net income  reflected an increase in non-interest  expense
and an increased  provision for loan losses,  partially offset by an increase in
non-interest income.

Interest  Income.  Interest  income  increased $7.2 million,  or 30.3%, to $30.6
million for the nine months ended  September 30, 2007 from $23.4 million for the
nine months ended  September  30, 2006.  The increase  resulted  primarily  from
higher  average  balances  of loans and higher  yields on such loans in the 2007
period compared to the 2006 period.

Interest  income on loans  increased to $27.7  million for the nine months ended
September  30, 2007 from $21.3  million for the nine months ended  September 30,
2006.  The  increase  was due to the higher  average  balance of loans to $595.9
million for the nine months ended September 30, 2007 from $482.9 million for the
nine months  ended  September  30, 2006,  reflecting  our  continued  efforts to
increase our loan  portfolio.  The increase in interest income on loans also was
due to higher  average  yields earned on such loans to 6.23% for the nine months
ended  September  30, 2007 from 5.89% for the nine months  ended  September  30,
2006,  reflecting higher market interest rates generally,  increases in interest

                                       14
<PAGE>

                                 BEACON FEDERAL

rates on our adjustable-rate loans in the higher interest rate environment,  and
the greater proportion of higher-yielding  commercial  business and multi-family
loans in our loan portfolio  during the 2007 period compared to the 2006 period.
Interest  income on securities,  including FHLB stock,  increased  $727,000,  or
41.5%,  to $2.5 million for the nine months ended  September  30, 2007 from $1.8
million  for the nine months  ended  September  30,  2006,  reflecting  a higher
average balance of such securities (to $61.4 million from $47.6 million) as well
as higher average yields on such securities to 5.40% from 4.92% in the generally
higher market interest rate environment.

Interest Expense.  Interest expense  increased $7.2 million,  or 56.9%, to $19.7
million for the nine months ended  September 30, 2007 from $12.5 million for the
nine months ended September 30, 2006. The increase in interest expense reflected
substantially  higher  average  balances of deposits and borrowings to fund loan
growth, as well as substantially higher rates on such deposits and borrowings in
the higher  market  interest  rate  environment.  Interest  expense on  deposits
increased  $5.6  million,  or 55.9%,  to $15.6 million for the nine months ended
September  30, 2007 from $10.0  million for the nine months ended  September 30,
2006,  reflecting an increase in the average  balance of such deposits to $507.7
million for the nine months ended September 30, 2007 from $421.5 million for the
nine months ended September 30, 2006. In addition, the average rate paid on such
deposits  increased to 4.12% from 3.19%.  Interest  expense on  certificates  of
deposit  increased to $10.4 million for the nine months ended September 30, 2007
from $7.9 million for the nine months ended September 30, 2006, due primarily to
the higher average rate on such deposits (4.98% compared to 4.15%) in the higher
market  interest rate  environment  and, to a lesser extent,  the higher average
balance of such deposits ($280.1 million  compared to $253.3 million).  Interest
expense on money market  accounts also  increased to $3.8 million from $985,000,
reflecting substantially higher rates on such accounts (4.61% in the 2007 period
compared to 2.70% in the 2006  period),  as well as higher  average  balances of
such accounts ($110.2 million compared to $48.8 million).

Interest  expense on  borrowings  increased  to $4.0 million for the nine months
ended  September 30, 2007 from $2.5 million for the nine months ended  September
30, 2006. The increase was due to a higher average  balance of such  borrowings,
to $111.6  million  for the nine  months  ended  September  30,  2007 from $83.8
million for the nine months ended September 30, 2006, as borrowings were used to
supplement  deposits  to  fund  loan  growth.  The  average  rates  paid on such
borrowings  also  increased  to 4.81% from 3.98%,  reflecting  generally  higher
market interest rates.

Net Interest  Income.  Net interest income was $11.0 million for the nine months
ended  September 30, 2007 and 2006. The decrease in our net interest rate spread
(to 1.88% from 2.44%) and net interest margin (to 2.19% from 2.69%),  was offset
by an  increase in net  interest  earning  assets to $49.3  million for the nine
months  ended  September  30, 2007 from $40.4  million for the nine months ended
September  30,  2006.  The  decreases  in our net  interest  rate spread and net
interest  margin  reflected  the  current  interest  rate  environment  and  the
continued flat U.S. Treasury yield curve environment.

Provision  for Loan  Losses.  We  recorded a  provision  for loan losses of $1.4
million for the nine months ended September 30, 2007 compared to a provision for
loan losses of $592,000  for the nine  months  ended  September  30,  2006.  The
provision for loan losses reflected substantial growth in our loan portfolio and
an increase in  classified  assets.  Components of the provision for loan losses
included a general allowance for each type of loan based on historical loan loss
experience,  and related  adjustments  to historical  experience,  and the risks
associated with increased commercial lending. Loans increased $130.0 million, or
24.2%,  from $537.1  million at December 31, 2006 to $667.1 million at September

                                       15
<PAGE>
                                 BEACON FEDERAL

30, 2007. The provisions also reflected net charge offs of $550,000 for the nine
months ended  September  30, 2007  compared to net charge offs of $1,000 for the
nine months ended September 30, 2006. We used the same  methodology in assessing
the allowances for both periods. To the best of our knowledge,  we have recorded
all losses that are both probable and reasonable to estimate for the nine months
ended September 30, 2007 and 2006.

Non-Interest Income.  Non-interest income increased to $2.4 million for the nine
months  ended  September  30, 2007 from $2.2  million for the nine months  ended
September 30, 2006. Service charges increased $104,000,  to $1.8 million for the
nine months ended September 30, 2007,  reflecting higher  deposit-related  fees.
Other noninterest income increased primarily as a result of a prepayment penalty
on one loan.

Non-Interest Expense.  Non-interest expense increased $1.0 million, or 12.6%, to
$9.1 million for the nine months ended  September 30, 2007 from $8.1 million for
the nine months ended September 30, 2006. The increase reflected a provision for
loss on impaired assets,  higher FDIC premium  expenses,  higher accrued bonuses
and normal salary  increases,  higher occupancy and equipment  expenses,  higher
telephone  and  postage  expenses,  a higher  provision  for loss on  foreclosed
assets,  and  higher  other  non-interest   expenses.  The  Bank  recognized  an
impairment  loss of  $218,000  as a result  of a  decline  in the fair  value of
certain Bank properties.  FDIC premium expense increased due to a new risk-based
assessment  system,  which became  effective  January 1, 2007 and  considers the
supervisory  rating and certain financial ratios of each financial  institution.
Occupancy and equipment increased as a result of higher office rent expenses and
equipment  maintenance costs. Other non-interest expense increased due primarily
to New York sales tax audit expenses and call center related costs.

The Company expects salaries and employee benefits to increase in the future due
to expenses related to the Employee Stock Ownership Plan approved as part of the
stock conversion. Pursuant to Statement of Position 93-6, "Employers' Accounting
for Employee Stock  Ownership  Plans," the Company will  recognize  compensation
expense equal to the fair market value of shares committed to be released during
the period.

Income Tax Expense. The provision for income taxes was $1.1 million for the nine
months  ended  September  30, 2007  compared to $1.6 million for the nine months
ended  September 30, 2006,  reflecting  lower pre-tax income for the 2007 period
compared  to the 2006  period.  Our  effective  tax rate was  38.7% for the nine
months  ended  September  30, 2007  compared to 36.6% for the nine months  ended
September 30, 2006.

Average Balances and Yields

The following tables set forth average balance sheets, average yields and rates,
and certain other information for the periods indicated. No tax-equivalent yield
adjustments  were made,  as the effect  thereof  was not  material.  All average
balances are daily  average  balances.  Non-accrual  loans were  included in the
computation of average  balances,  but have been reflected in the table as loans
carrying a zero  yield.  The yields set forth  below  include  the effect of net
deferred  costs,  discounts  and  premiums  that are  amortized  or  accreted to
interest income.

                                       16

<PAGE>

                                 BEACON FEDERAL
<TABLE>
<CAPTION>
                                                                       For the Three Months Ended September 30,
                                             -------------------------------------------------------------------------------------
                                                                2007                                       2006
                                             -----------------------------------------     ---------------------------------------
                                               Average                                        Average
                                             Outstanding        Interest      Yield/       Outstanding       Interest       Yield/
                                              Balance          Earned/Paid    Rate           Balance        Earned/Paid       Rate
                                             -----------------------------------------     ---------------------------------------
                                                                       (Dollars in thousands)
Interest-earning assets:
<S>                                          <C>                <C>              <C>        <C>             <C>               <C>
   Loans                                     $    647,353       $   10,031       6.15%      $   507,986     $    7,697        6.02%
   Securities                                      74,561            1,008       5.37            46,416            607        5.19
   FHLB stock                                       8,073              160       7.87             3,807             49        5.11
   Interest-earning deposits                       12,171              148       4.83            13,754            134        3.87
                                             -----------------------------                  --------------------------
   Total interest-earning assets                  742,158           11,347       6.07           571,963          8,487        5.89
                                                                ----------                                  ----------
   Non-interest-earning assets                      9,764                                         8,511
                                             ------------                                   -----------
        Total assets                         $    751,922                                   $   580,474
                                             ============                                   ===========
Interest-bearing liabilities:
   Savings                                   $     66,855              128       0.76       $    70,597            118        0.66
   Money market accounts                          122,500            1,398       4.53            37,626            272        2.87
   NOW accounts                                    47,473              350       2.93            63,581            479        2.99
   Time accounts                                  280,981            3,570       5.04           272,490          3,078        4.49
                                             -----------------------------                  --------------------------
        Total deposits                            517,809            5,446       4.18           444,294          3,947        3.53
   FHLB advances                                  160,756            1,943       4.80            66,953            715        4.24
   Reverse repurchase agreements                    1,666               26       6.20            18,714            184        3.90
                                             -----------------------------                  --------------------------
        Total interest-bearing liabilities        680,231            7,415       4.33           529,961          4,846        3.63
                                                               -----------                                  ----------
   Non-interest-bearing deposits                   23,459                                         4,916
   Other non-interest-bearing liabilities           2,663                                         1,632
                                             ------------                                   -----------
        Total liabilities                         706,353                                       536,509
   Equity                                          45,569                                        43,965
                                            ------------                                    -----------
        Total liabilities and equity        $     751,922                                   $   580,474
                                            ============                                    ===========
   Net interest income                                          $    3,932                                   $   3,641
                                                                ==========                                   =========
   Net interest rate spread                                                      1.74%                                        2.26%
                                                                               ======                                       ======
   Net interest-earning assets              $      61,927                                 $      42,002
                                            =============                                 =============
   Net interest margin                                                           2.10%                                        2.53%
                                                                               ======                                       ======
   Average of interest-earning assets to
     interest-bearing liabilities                                              109.10%                                      107.93%
                                                                               ======                                       ======
</TABLE>

                                       17
<PAGE>

                                 BEACON FEDERAL
<TABLE>
<CAPTION>

                                                                  For the Nine Months Ended September 30,
                                             -------------------------------------------------------------------------------------
                                                                2007                                       2006
                                             -----------------------------------------     ---------------------------------------
                                             Average                                        Average
                                             Outstanding        Interest      Yield/       Outstanding       Interest       Yield/
                                              Balance          Earned/Paid    Rate           Balance        Earned/Paid       Rate
                                             -----------------------------------------     ---------------------------------------
                                                                       (Dollars in thousands)
Interest-earning assets:
<S>                                           <C>               <C>         <C>              <C>            <C>              <C>
   Loans                                      $   595,917     $   27,734      6.23%         $  482,910      $   21,272       5.89%
   Securities                                      55,874          2,150      5.15              43,953           1,621       4.93
   FHLB stock                                       5,534            328      7.93               3,619             130       4.80
   Interest-earning deposits                       11,244            412      4.90              15,183             476       4.19
                                              --------------------------                    --------------------------
   Total interest-earning assets                  668,569         30,624      6.13             545,665          23,499       5.76
                                                              ----------                                    ----------
   Non-interest-earning assets                      8,539                                        8,078
                                              -----------                                   ----------
        Total assets                          $   677,108                                   $  553,743
                                              ===========                                   ==========
Interest-bearing liabilities:
   Savings                                    $    67,097     $      421      0.84          $   71,253      $      305       0.57
   Money market accounts                          110,219          3,796      4.61              48,800             985       2.70
   NOW accounts                                    50,253          1,012      2.69              48,241             887       2.46
   Time accounts                                  280,093         10,417      4.98             253,254           7,860       4.15
                                              --------------------------                    --------------------------
        Total deposits                            507,662         15,646      4.12             421,548          10,037       3.19
   FHLB advances                                  102,607          3,729      4.86              63,709           1,914       4.02
   Reverse repurchase agreements                    8,990            284      4.23              20,047             581       3.88
                                              --------------------------                    --------------------------
        Total interest-bearing liabilities        619,259         19,659      4.25             505,304          12,532       3.32
                                                              ----------                                     ---------
   Non-interest-bearing deposits                   11,269                                        4,051
   Other non-interest-bearing liabilities           1,519                                        1,273
                                              -----------                                   ----------
        Total liabilities                         632,047                                      510,628
   Equity                                          45,061                                       43,115
                                              -----------                                   ----------
        Total liabilities and equity          $   677,108                                   $  553,743
                                              ===========                                   ==========
   Net interest income                                        $   10,965                                    $  10,967
                                                              ==========                                    =========
   Net interest rate spread                                                   1.88%                                          2.44%
                                                                            ======                                         ======
   Net interest-earning assets                  $  49,310                                   $   40,361
                                              ===========                                   ==========
   Net interest margin                                                        2.19%                                          2.69%
                                                                            ======                                         ======
   Average of interest-earning assets to
     interest-bearing liabilities                                           107.96%                                        107.99%
                                                                            ======                                         ======

</TABLE>

                                       18

<PAGE>

                                 BEACON FEDERAL

Liquidity and Capital Resources

Our  primary  sources  of funds  consist of deposit  inflows,  loan  repayments,
advances from the Federal Home Loan Bank of New York,  and  maturities and sales
of securities.  In addition, we have the ability to collateralize  borrowings in
the wholesale markets.  While maturities and scheduled amortization of loans and
securities  are  predictable  sources  of  funds,  deposit  flows  and  mortgage
prepayments  are  greatly   influenced  by  general  interest  rates,   economic
conditions  and  competition.  We seek to maintain a liquidity  ratio of 4.0% or
greater.  For the nine months ended  September  30, 2007,  our  liquidity  ratio
averaged 12.17%.  We believe that we have enough sources of liquidity to satisfy
our short- and long-term liquidity needs as of September 30, 2007. We anticipate
that we will maintain higher liquidity levels as a result of the stock offering.
Excess liquid  assets are invested  generally in  interest-earning  deposits and
short- and intermediate-term securities.

Our most liquid assets are cash and cash equivalents. The levels of these assets
are dependent on our  operating,  financing,  lending and  investing  activities
during any given  period.  At  September  30,  2007,  cash and cash  equivalents
totaled  $43.7  million.  Securities  classified  as  available-for-sale,  which
provide additional sources of liquidity,  totaled $64.6 million at September 30,
2007.  On that date,  we had $197.6  million in advances  outstanding,  with the
ability to borrow an additional  $72.9 million.  Our cash flows are derived from
operating activities,  investing activities and financing activities as reported
in our  Consolidated  Statements  of Cash  Flows  included  in our  Consolidated
Financial Statements.

At September 30, 2007, we had $46.1 million in loan commitments outstanding.  In
addition to commitments to originate loans, we had $49.3 million in unused lines
of credit to borrowers. Certificates of deposit due within one year of September
30, 2007 totaled $235.0 million,  or 39.9% of total deposits.  If these deposits
do not  remain  with us, we will be  required  to seek  other  sources of funds,
including  loan sales,  brokered  deposits and Federal Home Loan Bank  advances.
Depending on market  conditions,  we may be required to pay higher rates on such
deposits  or other  borrowings  than we  currently  pay on the  certificates  of
deposit due on or before September 30, 2008. We believe,  however, based on past
experience  that a significant  portion of such deposits will remain with us. We
have the ability to attract and retain  deposits by adjusting the interest rates
offered.

Our primary  investing  activity is  originating  loans.  During the nine months
ended September 30, 2007, we originated  $235.7 million of loans, and during the
nine months ended September 30, 2006, we originated  $161.3 million of loans. We
purchased $56.7 million of securities during the nine months ended September 30,
2007 and we purchased  $15.4 million of securities  during the nine months ended
September 30, 2006.

Financing  activities  consist  primarily  of activity in deposit  accounts  and
Federal Home Loan Bank advances. We experienced a net increase in total deposits
of  $117.3  million  for the nine  months  ended  September  30,  2007 and a net
increase in total deposits of $60.1 million for the nine months ended  September
30, 2006. Deposit flows are affected by the overall level of interest rates, the
interest  rates and  products  offered by us and our local  competitors,  and by
other factors.

If we require  funds beyond our ability to generate them  internally,  borrowing
agreements  exist with the Federal Home Loan Bank of New York,  which provide an
additional source of funds.  Federal Home Loan Bank advances increased by $123.7
million for the nine months ended September 30, 2007, compared to an increase of
$14.7 million for the nine months ended  September  30, 2006.  Federal Home Loan
Bank advances  have  primarily  been used to fund loan demand.  At September 30,
2007,  we had the ability to borrow up to $270.5  million  from the Federal Home
Loan Bank of New York.

The net  proceeds  from the  stock  offering  will  significantly  increase  our
liquidity and capital resources.  Over time, the initial level of liquidity will

                                       19

<page>

                                 BEACON FEDERAL

be  reduced  as net  proceeds  from the  stock  offering  are  used for  general
corporate  purposes,  including  the funding of loans.  We expect our  financial
condition  and results of  operations  will be enhanced by the net proceeds from
the stock offering,  resulting in increased net interest-earning  assets and net
interest  income.  However,  due to our inability to initially  fully deploy the
increase in equity,  our return on equity is expected to be  adversely  affected
following the stock offering.

Banks are subject to regulatory  capital  requirements  administered  by federal
banking  agencies.  Capital  adequacy  guidelines and prompt  corrective  action
regulations involve quantitative  measures of assets,  liabilities,  and certain
off-balance-sheet   items  calculated  under  regulatory  accounting  practices.
Capital amounts and classifications are also subject to qualitative judgments by
regulators. Failure to meet capital requirements can initiate regulatory action.
At September 30, 2007 the Bank met all capital adequacy requirements.

Prompt  corrective  action  regulations  provide  five   classifications:   well
capitalized,    adequately    capitalized,    undercapitalized,    significantly
undercapitalized, and critically undercapitalized,  although these terms are not
used to  represent  overall  financial  condition.  If  adequately  capitalized,
regulatory   approval   is   required   to   accept   brokered   deposits.    If
undercapitalized,  capital  distributions  are  limited,  as is asset growth and
expansion, and capital restoration plans are required. At September 30, 2007 and
December 31, 2006, the most recent regulatory notification  categorized the Bank
as well capitalized under the regulatory framework for prompt corrective action.
There are no  conditions  or events  since  that  notification  that  management
believes have changed the institution's category.

Actual and required capital amounts and ratios for the Bank are presented below:
<TABLE>
<CAPTION>
                                                                                                                     To Be Well
                                                                                                                 Capitalized Under
                                                                                         For Capital             Prompt Corrective
                                                               Actual                 Adequacy Purposes          Action Provisions
                                                       --------------------        ---------------------       --------------------
September 30, 2007 (Dollars in Thousands)               Amount        Ratio         Amount        Ratio         Amount        Ratio
----------------------------------------               -------       ------        --------      -------       --------      ------

<S>                                                   <C>             <C>           <C>           <C>          <C>           <C>
Equity                                                $ 45,746
Unrealized loss on AFS securities                          248
                                                      --------
Tier 1 (Core) Capital and Tangible Capital              45,994                     $ 12,530        1.50%
General valuation allowance                              6,036
Deduction for low-level recourse                          (118)
                                                      --------
Total Capital to risk-weighted
   assets                                             $ 51,912        9.68%        $ 42,893        8.00%       $ 53,616      10.00%
                                                      ========
Tier 1 (Core) Capital to risk-
   weighted assets                                    $ 45,876        8.56%        $ 21,446        4.00%       $ 32,169       6.00%
                                                      ========
Tier 1 (Core) Capital to adjusted
   total assets                                       $ 45,994        5.51%        $ 33,414        4.00%       $ 41,767       5.00%
                                                      ========
</TABLE>


                                       20

<page>

                                 BEACON FEDERAL
<TABLE>
<CAPTION>

                                                                                                                    To Be Well
                                                                                                                 Capitalized Under
                                                                                         For Capital             Prompt Corrective
                                                               Actual                 Adequacy Purposes          Action Provisions
                                                       --------------------        ---------------------       --------------------
December 31, 2006 (Dollars in Thousands)               Amount        Ratio         Amount        Ratio         Amount        Ratio
----------------------------------------               -------       ------        --------      -------       --------      ------
<S>                                                   <C>            <C>          <C>           <C>            <C>           <C>
Equity                                                $  44,245
Unrealized loss on AFS securities                             9
                                                      ---------
Tier 1 (Core) Capital and Tangible Capital               44,254                    $  9,110       1.50%
General valuation allowance                               5,192
Deduction for low-level recourse                            (96)
                                                      ---------
Total Capital to risk-weighted
   assets                                             $  49,350       11.74%       $ 33,624       8.00%        $  42,030      10.00%
                                                      =========
Tier 1 (Core) Capital to risk-
   weighted assets                                    $  44,158       10.51%       $ 16,812       4.00%        $  25,218       6.00%
                                                      =========
Tier 1 (Core) Capital to adjusted
   total assets                                       $  44,254       7.29%        $ 24,293       4.00%        $  30,366       5.00%
                                                      =========
</TABLE>

Asset Quality

General.  The  table  below  sets  forth  the  amounts  and  categories  of  our
non-performing assets at the dates indicated.  At each date presented, we had no
troubled debt restructurings (loans for which a portion of interest or principal
has been  forgiven and loans  modified at interest  rates  materially  less than
current market rates).

                                                 September 30,      December 31,
                                                    2007                 2006
                                                 ------------       -----------
                                                          (In Thousands)
Nonaccrual loans                                 $     709           $      -
Loans past due over 90 days still on accrual            66                  4
                                                 ------------       -----------
  Total nonperforming loans                            775                  4
Foreclosed and repossessed assets                      310                952
                                                 ------------       -----------
  Total nonperforming assets                     $   1,085           $    956
                                                 ============       ===========
Ratios:
Nonperforming loans to total loans                    0.12%              0.00%
                                                 ============       ===========
Nonperforming assets to total assets                  0.13%              0.16%
                                                 ============       ===========


The average  balance of impaired  loans for the nine months ended  September 30,
2007 and  interest  income  recognized  during  the  period  that the loans were
impaired was $257,000 and $4,000, respectively.


                                       21
<Page>

                                 BEACON FEDERAL

At September 30, 2007,  we had loans to one borrower  totaling $1.5 million that
were not currently  classified as  nonaccrual,  90 days past due or impaired but
where known  information  about possible  credit problems of the borrower caused
management to have serious  concerns as to the ability of the borrower to comply
with  present  loan  repayment  terms  and  that may  result  in  disclosure  as
nonaccrual, 90 days past due or impaired.

Classification  of Assets.  We regularly review our asset portfolio to determine
whether  any  assets  require   classification  in  accordance  with  applicable
regulations.  On the basis of our review of our assets at  September  30,  2007,
classified  assets consisted of substandard  assets of $2.6 million and doubtful
assets of $219,000. Substandard assets and doubtful assets were $2.2 million and
$203,000,  respectively,  at December 31, 2006.  As of September  30, 2007,  our
largest  substandard  asset was a loan secured by commercial real estate located
in  Tennessee,  with a principal  balance of $1.1  million.  As of September 30,
2007, we had $14.3 million of assets designated as special mention,  compared to
$14.5 million at December 31, 2006.

Allowance for losses.  The following  table sets forth activity in our allowance
for loan losses for the periods indicated.

                                                        Nine Months Ended
                                                           September 30,
                                                    --------------------------
                                                      2007              2006
                                                    ---------         ---------
                                                          (In Thousands)
Beginning balance                                   $  5,192           $  4,437
Provision for loan losses                              1,394                592
Loans charged off                                       (801)              (232)
Recoveries                                               251                231
                                                    --------           ---------
Ending balance                                      $  6,036           $  5,028
                                                    ========           =========
Ratios:
Net charge-offs to average loans
  outstanding (annualized)                              0.12%              0.00%
                                                    ========           =========
Allowance for loan losses to nonperforming
  loans at end of period                              778.84%                NM
                                                    ========           =========
Allowance for loan losses to total loans at
  end of period                                         0.90%              0.97%
                                                    ========           =========
NM- Not meaningful.

                                       22

<Page>

                                 BEACON FEDERAL

Off-Balance Sheet Arrangements

Commitments.  As a financial  services  provider,  we  routinely  are a party to
various financial instruments with off-balance-sheet  risks, such as commitments
to extend credit and unused lines of credit. While these contractual obligations
represent our future cash requirements,  a significant portion of commitments to
extend credit may expire without being drawn upon. Such  commitments are subject
to the same credit policies and approval process accorded to loans we make.

The contractual amount of financial instruments with  off-balance-sheet risk was
as follows:
<TABLE>
<CAPTION>

                                                        September 30, 2007                          December 31, 2006
                                                  ----------------------------              -------------------------------
                                                   Fixed             Variable                Fixed                Variable
                                                    Rate               Rate                   Rate                  Rate
                                                  -------            --------               --------              --------
                                                                           (Dollars in Thousands)
<S>                                            <C>                  <C>                     <C>                  <C>
Commitments to make loans                      $    31,038          $   15,081              $   11,012           $   4,894
Unused lines of credit                         $     8,902          $   40,406              $    8,716           $  34,229
Range of fixed-rate commitments                4.49%-15.00%                 -              5.625%-9.50%                 -

</TABLE>


The  following  instruments  are  considered  financial  instruments  under FASB
Interpretation  45. These  instruments  are carried at fair value.  The contract
amount and carrying value of these instruments was as follows:
<TABLE>
<CAPTION>

                                                   September 30, 2007                        December 31, 2006
                                               ---------------------------            -------------------------------
                                                  Contract      Carrying               Contract              Carrying
                                                   Amount         Value                 Amount                 Value
                                                                     (Dollars in Thousands)
<S>                                            <C>             <C>                     <C>                  <C>
Standby letters of credit                      $     738       $     -                 $    729             $      -
Limited recourse obligations
  related to loans sold                        $     118       $     -                 $     96             $      -

</TABLE>

Loans sold to the Federal  Home Loan Bank (FHLB) of New York under the  Mortgage
Partnership  Finance  program are sold with  limited  recourse.  The Bank has an
agreement to sell  residential  loans up to $10 million to the FHLB of New York.
Approximately  $5.6 million has been sold through  September 30, 2007. Under the
agreement,  the Bank has a maximum  credit  enhancement of $118,000 at September
30, 2007. Based upon a favorable  payment history,  the Bank does not anticipate
recognizing any losses on these  residential  loans,  and  accordingly,  has not
recorded a liability for the credit enhancement.

Recent Accounting Pronouncements

The following paragraphs summarize recent accounting pronouncements:

In December  2004, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement  of Financial  Accounting  Standards  ("SFAS") No. 123 (revised  2004)
(SFAS No. 123(R)) "Share-Based  Payment".  SFAS No. 123(R) requires all entities
to  recognize  compensation  expense  equal  to the fair  value  of  share-based
payments  such as  stock  options  granted  to  employees.  SFAS No.  123(R)  is
effective  for the first interim  period after the  effective  date of our stock
offering.  The effect on future  operations  will  depend on the level of future
option grants,  vesting period of such options and fair value of options granted
at such future dates.

                                       23
<page>

                                 BEACON FEDERAL

In March 2005, the Securities and Exchange  Commission  ("SEC") issued SEC Staff
Accounting  Bulletin  No.  107 (SAB  107),  which  expresses  views of the staff
regarding  the  interaction  between  SFAS No.  123(R) and certain SEC rules and
regulations   and  provides  the  staff's  views   regarding  the  valuation  of
share-based  payment  arrangements  for public  entities.  We will  consider the
guidance provided by SAB 107 as part of our adoption of SFAS No. 123(R).

In June  2006,  the FASB  issued  FASB  Interpretation  No. 48  "Accounting  for
Uncertainty in Income Taxes - an Interpretation of FASB No. 109" (FIN 48"). This
Interpretation  prescribes a recognition threshold and measurement attribute for
financial statement recognition and measurement of a tax position taken in a tax
return,  and provides  guidance on derecognition,  classification,  interest and
penalties,  accounting  for  interim  periods  and  transition.  We adopted  the
provisions of FIN 48, effective  January 1, 2007. No adjustments were recognized
for uncertain tax positions.  We are subject to U.S.  Federal  income taxes,  as
well as State of New York, Massachusetts,  Texas and Tennessee income taxes. Tax
years  ending  December  31,  2004  through  December  31,  2006  remain open to
examination by these jurisdictions.  We recognize interest and penalties related
to tax  positions in income tax expense.  At  September  30, 2007,  there was no
accrual for uncertain tax positions or related interest.

In September 2006, the FASB issued SFAS No. 157, "Fair Value  Measurements,"  to
define fair value,  establish a framework  for  measuring  fair value and expand
disclosures  about  fair  values.  The  Statement  is  effective  for  financial
statements  issued for fiscal years  beginning  after  November  15,  2007,  and
interim periods within those fiscal years. We do not expect SFAS No. 157 to have
a material impact on the Bank's financial position or results of operation.

In February  2007,  the FASB issued  SFAS No.  159,  "The Fair Value  Option for
Financial  Assets and Financial  Liabilities."  SFAS No. 159 permits entities to
choose to measure many  financial  instruments  and certain  other items at fair
value.  Entities shall report  unrealized  gains and losses on those items which
the fair value option has been elected in earnings. SFAS No. 159 is effective as
of the beginning of an entity's first fiscal year that begins after November 15,
2007. We are currently  evaluating the  requirements of the Statement and impact
on our financial position and results of operations.


                                       24

<Page>

                                 BEACON FEDERAL

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

General.  Because the majority of our assets and  liabilities  are  sensitive to
changes in interest rates,  our most significant form of market risk is interest
rate risk. We are vulnerable to an increase in interest rates to the extent that
our  interest-bearing  liabilities  mature  or  reprice  more  quickly  than our
interest-earning  assets. As a result, a principal part of our business strategy
is to manage  interest  rate risk and limit  the  exposure  of our net  interest
income to changes in market interest rates.

Our interest  rate  sensitivity  is monitored  through the use of a net interest
income  simulation  model,  which  generates  estimates of the change in our net
interest  income over a range of interest rate scenarios.  The modeling  assumes
loan  prepayment  rates,  reinvestment  rates and  deposit  decay rates based on
historical experience and current economic conditions.

We  generally  have not  engaged  in  hedging  through  the use of  derivatives.
However,  in February 2007, we purchased a two-year,  $30 million notional value
interest rate cap, in order to limit our potential  exposure to rising  interest
rates.  The  cost of the  transaction  was  $37,000.  The  counter-party  in the
transaction, a nationally recognized broker-dealer firm, will pay us if and when
the one-month  LIBOR rate is above the rate cap of 5.75%.  The interest rate cap
agreement expires in February 2009.

Net Portfolio Value. The Office of Thrift  Supervision  requires the computation
of amounts by which the net  present  value of an  institution's  cash flow from
assets, liabilities and off-balance sheet items (the institution's net portfolio
value or  "NPV")  would  change in the event of a range of  assumed  changes  in
market interest rates. The Office of Thrift Supervision  simulation model uses a
discounted cash flow analysis and an option-based  pricing approach to measuring
the interest  rate  sensitivity  of net  portfolio  value.  The Office of Thrift
Supervision  provides us the results of the  interest  rate  sensitivity  model,
which is based on information we provide to the Office of Thrift  Supervision to
estimate the sensitivity of our net portfolio value.

Net Interest Income. In addition to NPV calculations, we analyze our sensitivity
to changes in interest rates through our internal net interest income model. Net
interest  income is the  difference  between the interest  income we earn on our
interest-earning  assets, such as loans and securities,  and the interest we pay
on our  interest-bearing  liabilities,  such as deposits and borrowings.  In our
model,  we estimate  what our net interest  income  would be for a  twelve-month
period using  historical data for assumptions  such as loan prepayment rates and
deposit decay rates,  the current term structure for interest rates, and current
deposit and loan offering  rates. We then calculate what the net interest income
would be for the same  period in the event of an  instantaneous  200 basis point
increase or decrease in market interest rates.

As of  September  30, 2007,  our exposure to interest  rate risk has not changed
significantly  from  disclosures  included in the  prospectus of Beacon  Federal
Bancorp, Inc. dated August 10, 2007.


                                       25

<page>

                                 BEACON FEDERAL

ITEM 4.  CONTROLS AND PROCEDURES.

As of the end of the period covered by this report,  the Company  carried out an
evaluation,  under the supervision and with the  participation  of the Company's
principal   executive   officer  and  principal   financial   officer,   of  the
effectiveness  of the design and  operation  of the  Company's  disclosures  and
procedures.  Based on this evaluation, the Company's principal executive officer
and  principal  financial  officer  concluded  that, as of the end of the period
covered by this report,  the Company's  disclosure  controls and procedures were
effective  to ensure that  information  required to be  disclosed in the reports
that the Company files or submits under the  Securities and Exchange Act of 1934
is  recorded,  processed,  summarized  and  reported  within  the  time  periods
specified in the Securities and Exchange Commission's rules and forms. It should
be noted that the design of any system of controls is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving  its stated goals under all  potential
future conditions, regardless of how remote.

In addition,  there have been no changes in the Company's  internal control over
financial  reporting  during the most recent fiscal  quarter that has materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.


                                       26

<page>


                                 BEACON FEDERAL

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings.

There are no material  legal  proceedings  to which the Company is a party or of
which any of its property is subject.  From time to time, the Company is a party
to various legal proceedings incident to its business.

Item 1A - Risk Factors

For information  regarding the Company's risk factors see "Risk Factors", in the
prospectus  of Beacon  Federal  Bancorp,  Inc.  (Company)  dated August 10, 2007
contained in the Company's  Registration  Statement on Form S-1 (Commission File
No. 333-143522).

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds.

(a)  There were no sales of  unregistered  equity  securities  during the period
     covered by this Report.
(b)  The Company's stock offering was completed on October 1, 2007. Net proceeds
     from  the sale of  common  stock of $66.0  million  have  been  temporarily
     deposited in federal funds sold and used to repay short-term borrowings. On
     a longer-term  basis,  the Company may deploy a portion of the net offering
     proceeds  to  fund  new  loans,   invest  in  mortgage-backed   securities,
     collateralized mortgage obligations and United States  government-sponsored
     agencies,  and  acquire  other  financial  institutions,  branches or other
     financial service companies. There can be no assurance that we will be able
     to effectively deploy the net offering proceeds.
(c)  There were no issuer  repurchases  of equity  securities  during the period
     covered by this Report.

Item 3 - Defaults upon Senior Securities.

Not applicable.

Item 4 - Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 5 - Other Information.

None

Item 6 - Exhibits.

(a)  Exhibits.
         2.0   Plan of Conversion. (1)
         3.1   Articles of Incorporation of Beacon Federal Bancorp Inc. (1)
         3.2   Bylaws of Beacon Federal Bancorp, Inc. (1)
         4.0   Stock Certificate of Beacon Federal Bancorp, Inc. (1)
         31.1  Certification of Chief Executive Officer pursuant to Section  302
               of the Sarbanes-Oxley Act of 2002.
         31.2  Certification of Chief Financial Officer pursuant to Section  302
               of the Sarbanes-Oxley Act of 2002.
         32.0  Certification pursuant to  Section  906 of the Sarbanes-Oxley Act
               of 2002.

                                       27

<page>

                                 BEACON FEDERAL


(1)  Incorporated  by reference  into this document from the Exhibits filed with
     the Securities  Exchange  Commission in the Registration  Statement on Form
     S-1, and any amendments thereto, Registration No. 333-143522.


                                       28

<PAGE>


                          BEACON FEDERAL BANCORP, INC.


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                           BEACON FEDERAL BANCORP, INC.
                                                  (Registrant)

DATE: November 8, 2007                     /s/  Ross J. Prossner
      -----------------                    ------------------------------------
                                           Ross J. Prossner, President and
                                           Chief Executive Officer

                                           /s/ James D. Lapsley
                                           ------------------------------------
                                           James D. Lapsley, Senior  Vice-
                                           President and Chief Financial Officer




                                       29


<page>
                          BEACON FEDERAL BANCORP, INC.

                                                                    Exhibit 31.1

                    Certification of Chief Executive Officer
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Ross J. Prossner, certify that:

1.   I have  reviewed  this  quarterly  report on Form  10-Q of  Beacon  Federal
     Bancorp, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     (a)  designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this quarterly report is being prepared;

     (b)  evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this quarterly  report our conclusions
          about the effectiveness of the disclosure controls and procedures,  as
          of the end of the period  covered by this  quarterly  report  based on
          such evaluation; and

     (c)  disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          case  of  an  annual  report)  that  has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors:

     (a)  all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     (b)  any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date: November 8, 2007
                                           /s/ Ross J. Prossner
                                           ----------------------------------
                                           Ross J. Prossner
                                           President and Chief Executive Officer

                                       30

<page>

                          BEACON FEDERAL BANCORP, INC.

                                                                    Exhibit 31.2
                    Certification of Chief Financial Officer
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, James D. Lapsley, certify that:

1.   I have  reviewed  this  quarterly  report on Form  10-Q of  Beacon  Federal
     Bancorp, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     (a)  designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this quarterly report is being prepared;

     (b)  evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this quarterly  report our conclusions
          about the effectiveness of the disclosure controls and procedures,  as
          of the end of the period  covered by this  quarterly  report  based on
          such evaluation; and

     c)   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          case  of  an  annual  report)  that  has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors:

     (a)  all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     (b)  any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.

Date: November 8, 2007
                                                    /s/ James D. Lapsley
                                                    ------------------------
                                                    James D. Lapsley
                                                    Senior Vice-President
                                                     and Chief Financial Officer


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<Page>

                          BEACON FEDERAL BANCORP, INC.

                                                                    Exhibit 32.0

      Certification of Chief Executive Officer and Chief Financial Officer
            Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Ross J. Prossner,  President and Chief Executive Officer,  and James D. Lapsley,
Senior  Vice-President and Chief Financial  Officer,  of Beacon Federal Bancorp,
Inc. (Company) each certify in his capacity as an officer of the Company that he
has  reviewed the  Quarterly  Report of the Company on Form 10-Q for the quarter
ended September 30, 2007 (Report) and that to the best of his knowledge:

1.   the Report fully complies with the  requirements  of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   the information  contained in this Report fairly presents,  in all material
     respects, the financial condition and results of operations of the Company.

The purpose of this  statement  is solely to comply  with Title 18,  Chapter 63,
Section  1350 of the United  States  Code,  as  amended  by  Section  906 of the
Sarbanes-Oxley Act of 2002.


                                     By:   /s/ Ross J. Prossner
                                           -------------------------------------
                                           Ross J. Prossner
                                           President and Chief Executive Officer



                                     By:    /s/ James D. Lapsley
                                           -------------------------------------
                                           James D. Lapsley
                                           Senior Vice-President
                                            and Chief Financial Officer


Date:  November 8, 2007


                                       32