**Exhibit      10.4**

**DELANCO      FEDERAL SAVINGS BANK**

**EMPLOYMENT      AGREEMENT**

**THIS      AGREEMENT**
**DELANCO      FEDERAL SAVINGS BANK**
**      DOUGLAS R. ALLEN, JR. **

**WHEREAS,      **

**WHEREAS,      **

**WHEREAS,      **

**NOW,      THEREFORE, **

**1.**
**Employment**
**.      **

**2.**
**Location      and Facilities**
**.**

**3.**
**Term**
**.**

|   | a. | The                term of this Agreement shall include: (i) the initial term, consisting                of                the period commencing on the date of this Agreement (the “Effective Date”)                and ending on the third anniversary of the Effective Date, plus (ii)                any                and all extensions of the initial term made pursuant to this Section                3. |
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|   | b. | Commencing                on the first anniversary of the Effective Date and continuing on                each                anniversary of the Effective Date thereafter, the disinterested members                of                the Board may extend the Agreement term for an additional year, so                that                the remaining term of the Agreement again becomes thirty-six (36)                months,                unless Executive elects not to extend the term of this Agreement                by giving                written notice in accordance with Section 18 of this Agreement. The                Board                will review the Agreement and Executive’s performance annually for                purposes of determining whether to extend the Agreement term and                will                include the rationale and results of its review in the minutes of                its                meeting. The Board will notify Executive as soon as possible after                its                annual review whether it has determined to extend the                Agreement. |
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**4.**
**Base      Compensation**
**.      **

|   | a. | For                his services as Senior Vice President, Treasurer and Chief Financial                Officer, the Bank agrees to pay Executive an annual base salary at                the                rate of **$**88,825                per year, payable in accordance with customary payroll practices.                Following October 1, 2007, the Board shall adjust Executive’s annual base                salary upward to reflect his new duties and                responsibilities. |
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|   | b. | During                the term of this Agreement, the Board will review the level of Executive’s                base salary at least annually, based upon factors deemed relevant,                in                order to determine Executive’s base salary through the remaining term of                the Agreement. |
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**5.**
**Bonuses**
**.**

**6.**
**Benefit      Plans**
**.**

**7.      **
**Vacations      and Leave**
**.**

|   | a. | Executive                may take vacations and other leave in accordance with the Bank’s policy                for senior executives, or otherwise as approved by the                Board. |
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|   | b. | In                addition to paid vacations and other leave, the Board may grant Executive                a leave or leaves of absence, with or without pay, at such time or                times                and upon such terms and conditions as the Board, in its discretion,                may                determine. |
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**8.**
**Expense      Payments and Reimbursements**
**.      **

**9.**
**Loyalty      and Confidentiality**
**.**

|   | a. | During                the term of this Agreement, Executive will devote all his business                time,                attention, skill, and efforts to the faithful performance of his                duties                under this Agreement; provided, however, that from time to time,                Executive                may serve on the boards of directors of, and hold any other offices                or                positions in, companies or organizations that will not present any                conflict of interest with the Bank or any of its subsidiaries or                affiliates, unfavorably affect the performance of Executive’s duties                pursuant to this Agreement, or violate any applicable statute or                regulation. Executive will not engage in any business or activity                contrary                to the business affairs or interests of the Bank or any of its                subsidiaries or affiliates. |
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|   | b. | Nothing                contained in this Agreement will prevent or limit Executive’s right to                invest in the capital stock or other securities or interests of any                business dissimilar from that of the Bank, or, solely as a passive,                minority investor, in any business. |
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|   | c. | Executive                agrees to maintain the confidentiality of any and all information                concerning the operations or financial status of the Bank; the names                or                addresses of any of its borrowers, depositors and other customers;                any                information concerning or obtained from such customers; and any other                information concerning the Bank or its subsidiaries or affiliates                to which                he may be exposed during the course of his employment. Executive                further                agrees that, unless required by law or specifically permitted by                the Board                in writing, he will not disclose to any person or entity, either                during or                subsequent to his employment, any of the above-mentioned information                which                is not generally known to the public, nor will he use the information                in                any way other than for the benefit of the                Bank. |
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**10.**
**Termination      and Termination Pay**
**.      **

|   | a. | Death.                Executive’s employment under this Agreement will terminate upon his death                during the term of this Agreement, in which event Executive’s estate will                receive the compensation due to Executive through the last day of                the                calendar month in which his death                occurred. |
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|   | b. | Retirement.                This Agreement will terminate upon Executive’s retirement under the                retirement benefit plan or plans in which he participates pursuant                to                Section 6 of this Agreement or                otherwise. |
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|  | c. | Disability. |
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|   | i. | The                Board or Executive may terminate Executive’s employment after having                determined Executive has a Disability. For purposes of this Agreement,                “Disability” means a physical or mental infirmity that impairs Executive’s                ability to substantially perform his duties under this Agreement                and                results in Executive becoming eligible for long-term disability benefits                under any long-term disability plans of the Bank (or, if no such                plans                exist, that impairs Executive’s ability to substantially perform his                duties under this Agreement for a period of one hundred eighty (180)                consecutive days). The Board will determine whether or not Executive                is                and continues to be permanently disabled for purposes of this Agreement                in                good faith, based upon competent medical advice and other factors                that the                Board reasonably believes to be relevant. As a condition to any benefits,                the Board may require Executive to submit to physical or mental                evaluations and tests as the Board or its medical experts deem reasonably                appropriate. |
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|   | ii. | In                the event of his Disability, Executive will no longer be obligated                to                perform services under this Agreement. The Bank will pay Executive,                as                Disability pay, an amount equal to one hundred percent (100%) of                Executive’s rate of base salary in effect as of the date of his                termination of employment due to Disability. The Bank will make Disability                payments on a monthly basis commencing on the first day of the month                following the effective date of Executive’s termination of employment due                to Disability and ending on the earlier of: (A) the date he returns                to                full-time employment at the Bank in the same capacity as he was employed                prior to his termination for Disability; (B) his death; (C) his attainment                of age 65 or (D) the date this Agreement would have expired had                Executive’s employment not terminated by reason of Disability. The Bank                will reduce Disability payments by the amount of any short- or long-term                disability benefits payable to Executive under any other disability                programs sponsored by the Bank. In addition, during any period of                Executive’s Disability, the Bank will continue to provide Executive and                his dependents, to the greatest extent possible, with continued coverage                under all benefit plans (including, without limitation, retirement                plans                and medical, dental and life insurance plans) in which Executive                and/or                his dependents participated prior to his Disability on the same terms                as                if he remained actively employed by the                Bank. |
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|  | d. | Termination                for Cause. |
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|   | i. | The                Board may, by written notice to Executive in the form and manner                specified                in this paragraph, immediately terminate his employment at any time                for                “Cause.” Executive shall have no right to receive compensation or other                benefits for any period after termination for Cause, except for already                vested benefits. Termination for Cause shall mean termination because                of,                in the good faith determination of the Board, Executive’s: |
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|   | (1) | Personal                dishonesty; |
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|   | (2) | Incompetence; |
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|   | (3) | Willful                misconduct; |
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|   | (4) | Breach                of fiduciary duty involving personal                profit; |
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|   | (5) | Intentional                failure to perform stated duties; |
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|   | (6) | Willful                violation of any law, rule or regulation (other than traffic violations                or                similar offenses) or final cease-and-desist order;                or |
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|   | (7) | Material                breach of any provision of this                Agreement. |
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|   | ii. | Notwithstanding                the foregoing, Executive’s termination for Cause will not become effective                unless the Bank has delivered to Executive a copy of a resolution                duly                adopted by the affirmative vote of a majority of the entire membership                of                the Board, at a meeting of the Board called and held for the purpose                of                finding that, in the good faith opinion of the Board (after reasonable                notice to Executive and an opportunity for Executive to be heard                before                the Board with counsel), Executive was guilty of the conduct described                above and specifying the particulars of this                conduct. |
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|   | e. | Voluntary                Termination by Executive.                In addition to his other rights to terminate under this Agreement,                Executive may voluntarily terminate employment during the term of                this                Agreement upon at least sixty (60) days prior written notice to the                Board.                Upon Executive’s voluntary termination, he will receive only his                compensation and vested rights and benefits through the date of his                termination. Following his voluntary termination of employment under                this                Section 10(e), Executive will be subject to the restrictions set                forth in                Section 10(g) of this Agreement for a period of one (1) year from                his                termination date. |
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|   | f. | Without                Cause or With Good Reason. |
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|   | i. | In                addition to termination pursuant to Sections 10(a) through 10(e),                the                Board may, by written notice to Executive, immediately terminate                his                employment at any time for a reason other than Cause (a termination                “Without Cause”) and Executive may, by written notice to the Board,                immediately terminate this Agreement at any time within ninety (90)                days                following an event constituting “Good Reason,” as defined below (a                termination “With Good Reason”). |
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|   | ii. | Subject                to Section 11 of this Agreement, in the event of termination under                this                Section 10(f), Executive will receive his base salary as of his                termination date for the remaining term of the Agreement, with such                amount                paid in one lump sum within ten (10) calendar days of his termination.                Executive will also continue to participate in any benefit plans                of the                Bank that provide medical, dental and life insurance coverage for                the                remaining term of the Agreement, under terms and conditions no less                favorable than the most favorable terms and conditions provided to                senior                executives of the Bank during the same period. If the Bank cannot                provide                such coverage because Executive is no longer an employee, the Bank                will                provide Executive with comparable coverage on an individual policy                basis                or the cash equivalent. |
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|   | iii. | “Good                Reason” exists if, without Executive’s express written consent, the Bank                materially breaches any of its obligations under this Agreement.                Without                limitation, such a material breach will occur upon any of the                following: |
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|   | (1) | A                material reduction in Executive’s responsibilities or authority in                connection with his employment with the                Bank; |
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|   | (2) | Assignment                to Executive of duties of a non-executive nature or duties for which                he is                not reasonably equipped by his skills and                experience; |
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|   | (3) | Failure                of Executive to be nominated or renominated to the Board to the extent                Executive is a Board member prior to the Effective Date; |
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|   | (4) | A                reduction in salary or benefits contrary to the terms of this Agreement,                or following a Change in Control as defined in Section 11 of this                Agreement, any reduction in salary or material reduction in benefits                below                the amounts Executive was entitled to receive prior to the Change                in                Control; |
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|   | (5) | Termination                of incentive and benefit plans, programs or arrangements, or reduction                of                Executive’s participation, that is not applicable to other similarly                situated participants and to such an extent as to materially reduce                their                aggregate value below their aggregate value as of the Effective Date; |
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|   | (6) | A                requirement that Executive relocate his principal business office                or his                principal place of residence outside of the area consisting of a                thirty-five (35) mile radius from the current main office and any                branch                of the Bank, or the assignment to Executive of duties that would                reasonably require such a relocation;                or |
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|  | (7) | Liquidation                or dissolution of the Bank. |
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|   | iv. | Notwithstanding                the foregoing, a reduction or elimination of Executive’s benefits under                one or more benefit plans, programs or arrangements maintained by                the Bank                as part of a good faith, overall reduction or elimination of such                plans or                benefits, applicable to all participants in a manner that does not                discriminate against Executive (except as such discrimination may                be                necessary to comply with law), will not constitute an event of Good                Reason                or a material breach of this Agreement, provided that benefits of                the same                type or to the same general extent as those offered under such plans                prior                to the reduction or elimination are not available to other officers                of the                Bank or any affiliate under a plan or plans in or under which Executive                is                not entitled to participate. |
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|   | g. | Continuing                Covenant Not to Compete or Interfere with Relationships.                Regardless of anything herein to the contrary, following a termination                by                the Bank or Executive pursuant to Section 10(e) or                10(f): |
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|   | i. | Executive’s                obligations under Section 9(c) of this Agreement will continue in                effect;                and |
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|   | ii. | During                the period ending on the first anniversary of such termination, Executive                will not serve as an officer, director or employee of any bank holding                company, bank, savings association, savings and loan holding company,                mortgage company or other financial institution that offers products                or                services competing with those offered by the Bank from any office                within                thirty-five (35) miles from the main office or any branch of the                Bank** **and,                further, Executive will not interfere with the relationship of the                Bank,                its subsidiaries or affiliates and any of their employees, agents,                or                representatives. |
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|   | h. | To                the extent Executive is a member of the Board on the date of termination                of employment with the Bank, Executive will resign from the Board                immediately following such termination of employment with the Bank.                Executive will be obligated to tender this resignation regardless                of the                method or manner of termination, and such resignation will not be                conditioned upon any event or                payment. |
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**11.**
**Termination      in Connection with a Change in Control**
**.**

|   | a. | For                purposes of this Agreement, a “Change in Control” means any of the                following events: |
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|   | i. | Merger:                Delanco Bancorp, Inc. (the “Company”) merges into or consolidates with                another entity, or merges another corporation into the Company, and                as a                result, less than a majority of the combined voting power of the                resulting                corporation immediately after the merger or consolidation is held                by                persons who were stockholders of the Company immediately before the                merger                or consolidation; |
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|   | ii. | Acquisition                of Significant Share Ownership:                There is filed, or is required to be filed, a report on Schedule                13D or                another form or schedule (other than Schedule 13G) required under                Sections                13(d) or 14(d) of the Securities Exchange Act of 1934, as amended,                if the                schedule discloses that the filing person or persons acting in concert                has                or have become the beneficial owner of 25% or more of a class of                the                Company’s voting securities, but this clause (ii) shall not apply to                beneficial ownership of Company voting shares held in a fiduciary                capacity                by an entity of which the Company directly or indirectly beneficially                owns                50% or more of its outstanding voting                securities; |
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|   | iii. | Change                    in Board Composition:                    During any period of two consecutive years, individuals who constitute                    the                    Company’s Board of Directors at the beginning of the two-year period                    cease                    for any reason to constitute at least a majority of the Company’s Board of                    Directors; provided, however, that for purposes of this clause                    (iii), each                    director who is first elected by the board (or first nominated                    by the                    board for election by the members) by a vote of at least two-thirds                    (2/3)                    of the directors who were directors at the beginning of the two-year                    period shall be deemed to have also been a director at the beginning                    of                    such period; or |
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|   | iv. | Sale                    of Assets:                    The Company or the Bank sells to a third party all or substantially                    all of                    its assets. |
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|   |  | Notwithstanding                anything in this Agreement to the contrary, in no event shall the                conversion of the Bank’s mutual holding company parent, Delanco MHC, from                mutual to stock form, i.e., a “second step conversion,” constitute a                “Change in Control” for purposes of this                Agreement. |
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|   | b. | Termination.                If within the period ending one year after a Change in Control, (i)                the                Bank terminates Executive’s employment without Cause, or (ii) Executive                voluntarily terminates his employment With Good Reason, the Bank                will,                within ten calendar days of the termination of Executive’s employment,                make a lump-sum cash payment to him equal to three times Executive’s                average taxable compensation (as reported on Form W-2) over the five                (5)                most recently completed calendar years (or years of employment, if                less                than five), ending with the year immediately preceding the effective                date                of the Change in Control. The cash payment made under this Section                11(b)                shall be made in lieu of any payment also required under Section                10(f) of                this Agreement because of Executive’s termination of employment; however,                Executive’s rights under Section 10(f) are not otherwise affected by this                Section 11. Following termination of employment, executive will also                continue to participate in any benefit plans of the Bank that provide                medical, dental and life insurance coverage upon terms no less favorable                than the most favorable terms provided to senior executives. If the                Bank                cannot provide such coverage because Executive is no longer an employee,                the Bank will provide Executive with comparable coverage on an individual                basis or the cash equivalent. The medical, dental and life insurance                coverage provided under this Section 11(b) shall cease upon the earlier                of: (i) Executive’s death; (ii) Executive’s employment by another employer                other than one of which he is the majority owner; or (iii) thirty-six                (36)                months after his termination of                employment. |
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|   | c. | The                provisions of Section 11 and Sections 13 through 25, including the                defined                terms used in such sections, shall continue in effect until the later                of                the expiration of this Agreement or one year following a Change in                Control. |
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**12.**
**Indemnification      and Liability Insurance**
**.**

|   | a. | Indemnification.                The Bank agrees to indemnify Executive (and his heirs, executors,                and                administrators), and to advance expenses related to this indemnification,                to the fullest extent permitted under applicable law and regulations                against any and all expenses and liabilities that Executive reasonably                incurs in connection with or arising out of any action, suit, or                proceeding in which he may be involved by reason of his service as                an                officer or director of the Bank or any of its subsidiaries or affiliates                (whether or not he continues to be an officer or director at the                time of                incurring any such expenses or liabilities). Covered expenses and                liabilities include, but are not limited to, judgments, court costs,                and                attorneys’ fees and the costs of reasonable settlements, subject to Board                approval, if the action is brought against Executive in his capacity                as an                officer or director of the Bank or any of its subsidiaries.                Indemnification for expenses will not extend to matters related to                Executive’s termination for Cause. Notwithstanding anything in this                Section 12(a) to the contrary, the Bank will not be required to provide                indemnification prohibited by applicable law or regulation. The                obligations of this Section 12 will survive the term of this Agreement                by                a period of six (6) years. |
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|   | b. | Insurance.                During the period for which the Bank must indemnify Executive, the                Bank                will provide Executive (and his heirs, executors, and administrators)                with                coverage under a directors’ and officers’ liability policy at the Bank’s                expense, that is at least equivalent to the coverage provided to                directors                and senior executives of the Bank. |
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**13.**
**Reimbursement      of Executive’s Expenses to Enforce this Agreement**
**.      **

**14.**
**Limitation      of Benefits Under Certain Circumstances**
**.      **

**15.**
**Injunctive      Relief**
**.      **

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**16.**
**Successors      and Assigns**
**.**

|   | a. | This                Agreement shall inure to the benefit of and be binding upon any corporate                or other successor of the Bank which shall acquire, directly or                indirectly, by merger, consolidation, purchase or otherwise, all                or                substantially all of the assets or stock of the                Bank. |
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|   | b. | Since                the Bank is contracting for the unique and personal skills of Executive,                Executive shall not assign or delegate his rights or duties under                this                Agreement without first obtaining the written consent of the                Bank. |
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**17.**
**No      Mitigation**
**.      **

**18.**
**Notices**
**.      **

**19.**
**No      Plan Created by this Agreement**
**.      **

**20.**
**Amendments**
**.**

**21.**
**Applicable      Law**
**.**

**22.**
**Severability**
**.      **

**23.**
**Headings**
**.**

**24.**
**Entire      Agreement**
**.**

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**25.**
**Required      Provisions**
**.**

|  | a. | The                Bank’s Board of Directors may terminate Executive’s employment at any                time, but any termination by the Bank, other than termination for                Cause,                shall not prejudice Executive’s right to compensation or other benefits                under this Agreement. Executive shall not have the right to receive                compensation or other benefits for any period after termination for                Cause                as defined in Section 10(d) of this                Agreement. |
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|   | b. | If                Executive is suspended from office and/or temporarily prohibited                from                participating in the conduct of the Bank’s affairs by a notice served                under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance                Act, 12                U.S.C. Section 1818(e)(3) or (g)(1), the Bank’s obligations under this                Agreement shall be suspended as of the date of service, unless stayed                by                appropriate proceedings. If the charges in the notice are dismissed,                the                Bank may, in its discretion: (i) pay Executive all or part of the                compensation withheld while its contract obligations were suspended;                and                (ii) reinstate (in whole or in part) any of the obligations which                were                suspended. |
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|   | c. | If                Executive is removed and/or permanently prohibited from participating                in                the conduct of the Bank’s affairs by an order issued under Section 8(e)(4)                or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. Section                1818(e)(4) or (g)(1), all obligations of the Bank under this Agreement                shall terminate as of the effective date of the order, but vested                rights                of the contracting parties shall not be                affected. |
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|   | d. | If                the Bank is in default as defined in Section 3(x)(1) of the Federal                Deposit Insurance Act, 12 U.S.C. Section 1813(x)(1), all obligations                under                this Agreement shall terminate as of the date of default, but this                paragraph shall not affect any vested rights of the contracting                parties. |
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|   | e. | All                obligations under this Agreement shall terminate, except to the extent                determined that continuation of the Agreement is necessary for the                continued operation of the institution: (i) by the Director of the                Office                of Thrift Supervision (OTS), or his designee, at the time the Federal                Deposit Insurance Corporation (FDIC) enters into an agreement to                provide                assistance to or on behalf of the Bank under the authority contained                in                Section 13(c) of the Federal Deposit Insurance Act, 12 U.S.C. Section                1823(c), or (ii) by the Director of the OTS (or his designee) at                the time                the Director (or his designee) approves a supervisory merger to resolve                problems related to the operations of the Bank or when the Bank is                determined by the Director to be in an unsafe or unsound condition.                Any                rights of the parties that have already vested, however, shall not                be                affected by such action. |
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|  | f. | Any                payments made to Executive pursuant to this Agreement, or otherwise,                are                subject to and conditioned upon their compliance with 12 U.S.C. Section                1828(k) and FDIC Regulation 12 C.F.R. Part 359, Golden Parachute                and                Indemnification Payments. |
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**IN      WITNESS WHEREOF,**

|         |                                                            |                                              |
|--------------|-----------------------------------------------------------------|---------------------------------------------------|
| ATTEST:      | **DELANCO              FEDERAL SAVINGS BANK**                   |
|    |                                                       |                                         |
| Illegible    | By:                                                   | /s/ John              W.              Seiber |
| Witness      | **For              the Entire Board of              Directors** |

|                               |                                                |                                        |
|------------------------------------|-----------------------------------------------------|---------------------------------------------|
| WITNESS:                           | **EXECUTIVE**                                       |
|                          |                                           |                                   |
| /s/              Robert M. Notigan | By:                                       | /s/ Douglas              R. Allen, Jr. |
|                               | **Douglas              R. Allen,              Jr.** |

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