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

                                   FORM 10-QSB

(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

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

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from __________________ to ______________________

Commission File Number:   000-51234
                          ---------

                            NORTH PENN BANCORP, INC.
                            ------------------------
        (Exact name of small business issuer as specified in its charter)

         Pennsylvania                                            20-1882440
         ------------                                            ----------
(State or other jurisdiction of                                (IRS Employer
Incorporation or organization)                               Identification No.)

                      216 Adams Avenue, Scranton, PA 18503
                      ------------------------------------
                    (Address of principal executive offices)

                                 (570) 344-6113
                                 --------------
                           (Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [X] No [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of August 14, 2007, the issuer had 1,443,555 shares of common stock, par
value $0.10 per share, outstanding.

Transitional Small Business Disclosure Format (Check One): Yes [ ] No [X]

================================================================================

<PAGE>

PART I.  FINANCIAL INFORMATION

         Item 1. Financial Statements

                 Consolidated Balance Sheets
                 at June 30, 2007 and December 31, 2006

                 Consolidated Statements of Income
                 for the Three and Six Months Ended June 30, 2007 and 2006

                 Consolidated Statements of Cash Flows
                 for the Six Months Ended June 30, 2007 and 2006

                 Notes to Unaudited Consolidated Financial Statements

         Item 2. Management's Discussion and Analysis or Plan of Operation.

         Item 3. Controls and Procedures.

PART II  OTHER INFORMATION

         Item 1. Legal Proceedings.

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

         Item 3. Defaults Upon Senior Securities.

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

         Item 5. Other Information.

         Item 6. Exhibits.

                                       2
<PAGE>

PART I - FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS

                     NORTH PENN BANCORP, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                          JUNE 30,      DECEMBER 31,
                                                                             2007           2006
                                                                          ---------     ------------
                                                                         (Unaudited)     (Audited)
                                                                               (In thousands)
<S>                                                                       <C>                <C>
ASSETS:
Cash and due from banks                                                   $   3,034          4,029
Interest bearing deposits                                                        96             87
                                                                          ---------      ---------
Total cash and cash equivalents                                               3,130          4,116
Investment securities, available for sale                                    13,570         14,227
Equity securities at cost, substantially restricted                           1,239          1,236
Loans, net of allowance for loan losses                                      93,621         95,154
Bank premises and equipment - net                                             4,249          4,342
Accrued interest receivable                                                     621            638
Cash surrender value of life insurance                                        2,099          2,094
Deferred income taxes                                                           497            417
Other real estate owned                                                         100            100
Other assets                                                                    372            132
                                                                          ---------      ---------
TOTAL ASSETS                                                              $ 119,498      $ 122,456
                                                                          =========      =========
LIABILITIES:
Deposits:
Non-interest bearing deposits                                             $   7,585      $   6,993
Interest bearing demand deposits                                             29,588         26,026
Interest bearing time deposits                                               47,610         53,727
                                                                          ---------      ---------
     Total deposits                                                          84,783         86,746
Other borrowed funds                                                         20,660         21,741
Accrued interest and other liabilities                                          939            843
                                                                          ---------      ---------
TOTAL LIABILITIES                                                           106,382        109,330

STOCKHOLDERS' EQUITY
Preferred stock, no par; 20,000,000 authorized; issued and
outstanding, none                                                                --             --
Common stock, par value $0.10; 80,000,000 authorized; issued
and outstanding, 1,443,555                                                      144            144
Additional paid-in capital                                                    5,886          5,870
Retained earnings                                                             7,751          7,623
Unearned ESOP shares                                                           (460)          (460)
Accumulated other comprehensive income                                         (205)           (51)
                                                                          ---------      ---------
TOTAL STOCKHOLDERS' EQUITY                                                   13,116         13,126
                                                                          ---------      ---------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                                $ 119,498      $ 122,456
                                                                          =========      =========
</TABLE>
            See notes to unaudited consolidated financial statements.

                                       3
<PAGE>
                     NORTH PENN BANCORP, INC. AND SUBSIDIARY
                   UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006
                                 (In thousands)
<TABLE>
<CAPTION>
                                                       SIX MONTHS ENDED              THREE MONTHS ENDED
                                                  -------------------------      -------------------------
                                                    JUNE 30,       JUNE 30,       JUNE 30,       JUNE 30,
                                                     2007            2006           2007           2006
                                                  ----------      ---------      ---------      ----------
<S>                                               <C>             <C>            <C>            <C>
INTEREST INCOME
Interest on loans                                 $    3,399      $   2,961      $   1,709      $    1,536
Interest and dividends on investments                    333            351            164             179
                                                  ----------      ---------      ---------      ----------
     Total interest income                             3,732          3,312          1,873           1,715
INTEREST EXPENSE
Interest on deposits                                   1,420          1,155            685             651
Interest on borrowed funds                               544            433            287             208
                                                  ----------      ---------      ---------      ----------
     Total interest expense                            1,964          1,588            972             859
                                                  ----------      ---------      ---------      ----------

NET INTEREST INCOME                                    1,768          1,724            901             856

PROVISION FOR LOAN LOSSES                                 60             60             30              30
                                                  ----------      ---------      ---------      ----------

NET INTEREST INCOME  AFTER PROVISION FOR LOAN
LOSSES                                                 1,708          1,664            871             826
                                                  ----------      ---------      ---------      ----------

OTHER INCOME
Service charges on deposit accounts                       72             66             40              35
Other operating income                                   106            107             46              41
Gain on sale of loans                                     79              -             79               -
Gain on sale of securities                                34             11             17              11
                                                  ----------      ---------      ---------      ----------
TOTAL OTHER INCOME                                       291            184            182              87

OTHER EXPENSE
Salaries and employee benefits                           944            880            481             436
Occupancy and equipment expense                          304            311            155             169
Other operating expenses                                 439            391            237             229
                                                  ----------      ---------      ---------      ----------
TOTAL OTHER EXPENSE                                    1,687          1,582            873             834

                                                  ----------      ---------      ---------      ----------
INCOME BEFORE INCOME TAXES                               312            266            180              79

INCOME TAX EXPENSE                                        97             48             60               7

                                                  ----------      ---------      ---------      ----------
NET INCOME                                               215            218            120              72
OTHER COMPREHENSIVE INCOME (LOSS):
Unrealized holding loss arising during period,
net of income tax                                      (154)          (222)          (107)           (112)
                                                  ----------      ---------      ---------      ----------
COMPREHENSIVE INCOME                              $       61      $     (4)      $      13      $     (40)
                                                  ==========      ========       =========      =========

Weighted average number of shares outstanding
                                                   1,398,562      1,393,844      1,398,562       1,393,844
Earnings per share, basic and diluted             $     0.15     $     0.16     $     0.09      $     0.05
Dividends per share                               $     0.06     $     0.03     $     0.03      $     0.03
</TABLE>

            See notes to unaudited consolidated financial statements.

                                       4
<PAGE>
                     NORTH PENN BANCORP, INC. AND SUBSIDIARY
                (UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                       2007          2006
                                                                     --------      --------
<S>                                                                  <C>           <C>
Operating Activities:
Net income                                                           $    215      $    218
Items not requiring (providing) cash
  Depreciation                                                            135           135
  Provision for loan losses                                                60            60
  Amortization of securities (net of accretion)                             7            15
  Increase in cash surrender value of life insurance                       (5)          (38)
  Net realized gain on securities                                         (34)          (11)
  Net realized gain on other real estate owned                             (6)          (29)
  Net realized gain on sale of loans                                      (79)           --
  Changes in:
    Accrued interest income and other assets                             (224)           41
    Accrued interest expense and other liabilities                        112           206
                                                                     --------      --------
      Net Cash Provided by  Operating Activities                          181           597
                                                                     --------      --------

Investing Activities:
  Purchase bank premises and equipment                                    (42)         (973)
  Proceeds from sale of other real estate owned                           427           134
  Proceeds from sale of securities "available for sale"                   189            48
  Purchase of securities "available for sale"                            (198)         (220)
  Redemptions of securities "available for sale"                           --           500
  Redemptions of mortgage-backed securities "available for sale"          460           545
  Net purchase of restricted stock                                         (3)         (107)
  Net increase in loans to customers                                   (3,309)       (9,822)
  Proceeds from sale of loans                                           4,440            --
                                                                     --------      --------
    Net Cash Provided by (Used in) Investing Activities                 1,964        (9,895)
                                                                     --------      --------

Financing Activities:
  (Decrease) increase in deposits                                      (1,963)       10,039
  (Decrease) increase in borrowed funds                                (1,081)        1,174
  Cash dividends paid                                                     (87)          (43)
                                                                     --------      --------
    Net Cash (Used In) Provided by Financing Activities                (3,131)       11,170
                                                                     --------      --------
Net (Decrease) Increase in Cash and Cash Equivalents                     (986)        1,872
                                                                     --------      --------

Cash and Cash Equivalents, January 1                                 $  4,116      $  2,353
                                                                     --------      --------
Cash and Cash Equivalents, June 30                                   $  3,130      $  4,225
                                                                     ========      ========

Supplementary Schedule of Cash Flow Information:
  Cash paid during the period for:
    Interest                                                         $  1,995      $  1,588
    Income taxes                                                           62            21

  Non-cash investing and financing activities:
    None
</TABLE>

            See notes to unaudited consolidated financial statements.

                                       5
<PAGE>
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.       NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         NATURE OF OPERATIONS

         North Penn Bancorp, Inc. (Company) is the bank holding company for
         North Penn Bank (Bank). The Company's common stock is quoted on the OTC
         Bulletin Board under the symbol "NPEN.OB". The Bank operates from five
         offices under a state savings bank charter and provides financial
         services to individuals and corporate customers primarily in
         Northeastern Pennsylvania. The Bank's primary deposit products are
         savings and demand deposit accounts and certificates of deposit. Its
         primary lending products are real estate, commercial and consumer
         loans.

         PRINCIPLES OF CONSOLIDATION

         The accompanying consolidated financial statements include the accounts
         of North Penn Bancorp, Inc., its wholly-owned subsidiary, North Penn
         Bank and North Penn Bank's wholly-owned subsidiaries, Norpenco, Inc.
         and North Penn Settlement Services, LLC. These entities are
         collectively referred to herein as the Company. All significant
         intercompany accounts and transactions have been eliminated in
         consolidation. Norpenco, Inc.'s sole activities are purchasing bank
         stocks and receiving dividends on such stocks. North Penn Settlement
         Services, LLC, receives non interest income from providing title search
         work.

         The accounting policies of the Company conform with accounting
         principles generally accepted in the United States of America and with
         general practices within the banking industry.

         BASIS OF PRESENTATION

         The unaudited consolidated financial statements have been prepared in
         accordance with generally accepted accounting principals for interim
         financial information. In the opinion of management, all adjustments
         that are of a normal recurring nature and are considered necessary for
         a fair presentation have been included. They are not, however,
         necessarily indicative of the results of consolidated operations for a
         full year.

         USE OF ESTIMATES

         The preparation of financial statements in conformity with accounting
         principles generally accepted in the United States of America requires
         management to make estimates and assumptions that affect the reported
         amounts of assets and liabilities and disclosure of contingent assets
         and liabilities at the date of the financial statements and the
         reported amounts of revenue and expenses during the reporting period.
         Actual results could differ from those estimates.

         Material estimates that are particularly susceptible to significant
         change relate to the determination of the allowance for loan losses on
         loans and the valuation of real estate acquired in connection with
         foreclosures or in the satisfaction of loans. In connection with the
         determination of the allowances for losses on loans and foreclosed real
         estate, management periodically obtains independent appraisals for
         significant properties.

                                       6
<PAGE>

         MORTGAGE PARTNERSHIP FINANCE PROGRAM

         The Bank participates in the Mortgage Partnership Finance (MPF) Program
         of the Federal Home Loan Bank of Pittsburgh (FHLB). The program is
         intended to provide member institutions with an alternative to holding
         fixed-rate mortgages in their loan portfolios or selling them in the
         secondary market. An institution participates in the MPF Program by
         either originating individual loans on a "flow" basis as an agent for
         the FHLB pursuant to the "MPF 100 Program" or by selling, as a
         principal, closed loans owned by an institution to the FHLB pursuant to
         one of the FHLB's closed-loan programs. Under the MPF Program(s),
         credit risk is shared by the participating institution and the FHLB by
         structuring the loss exposure in several layers, with the participating
         institution being liable for losses after application of an initial
         layer of losses (after any private mortgage insurance) is absorbed by
         the FHLB, subject to an agreed-upon maximum amount of such secondary
         credit enhancement which is intended to be in an amount equivalent to a
         "AA" credit risk rating by a rating agency. The participating
         institution may also be liable for certain first layer losses after a
         specified period of time. The participating institution receives credit
         enhancement fees from the FHLB for providing this credit enhancement
         and continuing to manage the credit risk of the MPF Program loans.
         Participating institutions are also paid specified servicing fees for
         servicing the loans.

         Transfers involving sales with the Bank acting as principal are
         accounted for in accordance with SFAS No. 140, Accounting for Transfers
         and Servicing of Financial Assets and Extinguishment of Liabilities
         (SFAS 140), with the recognition of gains and losses on the sale and
         related mortgage servicing rights.

         The credit enhancement feature of the MPF Program is accounted for by
         the Bank as a financial guarantee in accordance with FASB
         Interpretation No. 45, Guarantor's Accounting and Disclosure
         Requirements for Guarantees, Including Indirect Guarantees of
         Indebtedness of Others (FIN 45) and reported on the balance sheet at
         its initial fair value. Subsequent changes in the recorded guarantee
         amount would result from termination of any portion or all of the
         guarantee, additional guarantees being issued or increases in the
         expected losses resulting from the guarantee. Such changes in recorded
         amounts are recognized in the consolidated statements of income or as
         an increase in the offsetting guarantee fees receivable account in the
         case of additional guarantees being issued.

2.       INVESTMENT SECURITIES

         The Bank's investments in securities are classified in two categories
         and accounted for as follows:

         Securities Held-to-Maturity. Bonds, notes and debentures for which the
         Bank has the positive intent and ability to hold to maturity are
         reported at cost, adjusted for amortization of premiums and accretion
         of discounts.

         Securities Available-for-Sale. Securities available-for-sale consist of
         bonds, notes, debentures and equity securities not classified to be
         held-to-maturity and are carried at fair value with unrealized holding
         gains and losses, net of tax, reported as a separate component of other
         comprehensive income until realized.

         Purchase premiums and discounts are recognized in interest income on
         the straight-line basis over the terms of the securities, which
         approximates the interest method. Declines in the fair value of
         held-to-maturity and available-for-sale securities below their cost


                                       7
<PAGE>

         that are deemed to be other than temporary are reflected in earnings as
         realized losses. Gains and losses on the sale of securities are
         recorded on the trade date and are determined using the specific
         identification method and are reported as other income in the statement
         of income.

         The amortized cost and fair value of investment securities at June 30,
         2007 and December 31, 2006 are as follows:

                               AVAILABLE-FOR-SALE
                                  JUNE 30, 2007
                                 (In thousands)
<TABLE>
<CAPTION>
                                                     GROSS       GROSS
                                       AMORTIZED   UNREALIZED  UNREALIZED     FAIR
                                         COST        GAINS      LOSSES        VALUE
                                        -------     -------     -------     -------
<S>                                     <C>         <C>         <C>         <C>
         U.S. Agency securities         $   385     $    --     $     7     $   378
         Mortgage-backed securities       4,926           5         157       4,774
         Municipal securities             7,025          --         101       6,924
         Other securities                   502          --           5         497
                                        -------     -------     -------     -------
            Total debt securities        12,838           5         270      12,573
         Equity securities                1,043          39          85         997
                                        -------     -------     -------     -------
           Total Available for Sale     $13,881     $    44     $   355     $13,570
                                        =======     =======     =======     =======
</TABLE>

                               AVAILABLE-FOR-SALE
                                DECEMBER 31, 2006
                                 (In thousands)
<TABLE>
<CAPTION>
                                                     GROSS       GROSS
                                       AMORTIZED   UNREALIZED  UNREALIZED     FAIR
                                         COST        GAINS      LOSSES        VALUE
                                        -------     -------     -------     -------
<S>                                     <C>         <C>         <C>         <C>
         U.S. Agency securities         $   385     $    --     $     7     $   378
         Mortgage-backed securities       5,391           2         113       5,280
         Municipal securities             7,026          51          --       7,077
         Other securities                   503          --           8         495
                                        -------     -------     -------     -------
              Total debt securities      13,305          53         128      13,230
         Equity securities                  999          51          53         997
                                        -------     -------     -------     -------
           Total Available for Sale     $14,304     $   104     $   181     $14,227
                                        =======     =======     =======     =======
</TABLE>

         All of the Company's investment securities were classified as available
         for sale at June 30, 2007 and December 31, 2006.

         The gross fair value and unrealized losses of the Bank's investments,
         aggregated by investment category and length of time that individual
         securities have been in a continuous unrealized loss position at June
         30, 2007 is as follows:
<TABLE>
<CAPTION>
                               LESS THAN 12 MONTHS     12 MONTHS OR LONGER           TOTAL
                               ---------------------   --------------------    --------------------
                                FAIR      UNREALIZED    FAIR     UNREALIZED     FAIR     UNREALIZED
                                VALUE       LOSSES      VALUE       LOSSES      VALUE      LOSSES
                               -------    ----------   -------   ----------    -------     --------
<S>                            <C>         <C>         <C>         <C>         <C>         <C>
         U.S. Agencies         $    --     $    --     $   378     $     7     $   378     $     7
         Mortgage-backed           306           8       4,083         149       4,389         157
         Municipal               6,924         101          --          --       6,924         101
         Other securities           --          --         497           5         497           5
         Equity securities         303          26         365          59         668          85
                               -------     -------     -------     -------     -------     -------
                               $ 7,533     $   135     $ 5,323     $   220     $12,856     $   355
                               =======     =======     =======     =======     =======     =======
</TABLE>

                                       8
<PAGE>

         The above table at June 30, 2007 includes 31 securities that have
         unrealized losses for less than 12 months and 31 securities that have
         been in an unrealized loss position for 12 or more months.

         The Bank invests in debt securities of the U.S. government, U.S.
         agencies, U.S. sponsored agencies, obligations of states and political
         subdivisions and corporate obligations. Changes in market value of all
         debt securities can result from changes in interest rates. Changes in
         credit quality can affect securities of states and political
         subdivisions and corporate obligations. The changes in market value of
         the debt securities held by the Bank have been due to changes in
         interest rates, and because the Bank has the ability to hold these
         investments until maturity, the Bank does not consider these
         investments to be other-than-temporarily impaired at June 30, 2007.

         The Bank invests in equity securities of other banks through its
         subsidiary, Norpenco, Inc. Management has evaluated the near-term
         prospects of the issuers with unrealized losses, in relation to the
         severity and duration of the impairment. Based on that evaluation, and
         the Bank's ability to hold these stocks for a reasonable period of time
         sufficient for a forecasted recovery of fair value, the management does
         not consider these investments to be other-than-temporarily impaired at
         June 30, 2007.

3.       LOANS
<TABLE>
<CAPTION>
                                               JUNE 30,  DECEMBER 31,
                                                 2007        2006
                                               --------  ------------
                                                  (In thousands)
<S>                                            <C>         <C>
         Real estate mortgages:
         Construction and land development     $ 1,015     $ 1,186
         Residential, 1 - 4 family              41,058      42,323
         Residential, multi-family               2,325       2,449
         Commercial                             39,354      37,711
                                               -------     -------
              Total real estate mortgages       83,752      83,669
         Commercial                              1,831       1,742
         Consumer                                9,219      10,864
                                               -------     -------
               Total loans                      94,802      96,275
         Allowance for loan loss                 1,181       1,121
                                               -------     -------
              Total loans, net                 $93,621     $95,154
                                               =======     =======
</TABLE>

         Loans are stated at the principal amount outstanding, net of any
         unearned income, deferred loan fees and the allowance for loan losses.
         Interest on mortgage and commercial loans is calculated at the time of
         payment based on the current outstanding balance of the loan. Interest
         on consumer loans is recognized on the simple interest method.

         The allowance for loan losses is increased by charges to income and
         decreased by charge-offs (net of recoveries). Management's periodic
         evaluation of the adequacy of the allowance is based on the bank's past
         loan loss experience, known and inherent losses in the portfolio,
         adverse situations that may affect the borrower's ability to pay, the
         estimated value of any underlying collateral and current economic
         conditions.

         Uncollectible interest on loans that are contractually past due 90 days
         or more is credited to an allowance established through management's
         periodic evaluation. The allowance is established by a charge to
         interest income equal to all interest previously accrued, and income is
         subsequently recognized only to the extent that cash payments are
         received until, in management's judgment, the borrower's ability to
         make periodic interest and principal payments is back to normal, in
         which case the loan is returned to accrual status.

                                       9
<PAGE>

4.       OTHER BORROWINGS

         The Bank has a line of credit agreement with FHLBank of Pittsburgh for
         short term borrowings varying from one day to three years. Advances on
         this line must be secured by "qualifying collateral" as defined in the
         agreement and bear interest at fixed or variable rates as determined at
         the date advances are made. The line expires in June, 2011. At June 30,
         2007, the Bank borrowed $8,660,000 in overnight funds.

         The Bank also has a $5,000,000 borrowing with FHLBank of Pittsburgh at
         a fixed rate of 6.19%, which was issued in July of 2000, and matures
         July of 2010. The loan requires monthly interest payments, with the
         principal due at maturity.

         The Bank also has a $7,000,000 borrowing with FHLBank of Pittsburgh at
         a fixed rate of 4.34%, which was issued in July of 2005, and matures
         July of 2015. The loan requires quarterly interest payments, with the
         principal due at maturity.

5.       EARNINGS PER SHARE

         Basic earnings per share is computed on the weighted average number of
         common shares outstanding during each year, adjusted for unearned
         shares of the ESOP, as prescribed in Statement of Financial Accounting
         Standards No. 128, Earnings Per Share (SFAS 128). Diluted earnings per
         share includes common shares issuable upon exercise of employee stock
         options as follows:
<TABLE>
<CAPTION>
                                                SIX MONTHS ENDED              THREE MONTHS ENDED
                                                     JUNE 30,                     JUNE 30,
                                             -------------------------     -------------------------
                                                2007           2006           2007           2006
                                             ----------     ----------     ----------     ----------
<S>                                          <C>            <C>            <C>            <C>
         Numerator                           $  215,000     $  218,000     $  120,000     $   72,000
         Denominator
            Basic shares outstanding          1,398,562      1,393,844      1,398,562      1,393,844
            Effective of dilutive shares          1,122             --          1,122             --
                                             ----------     ----------     ----------     ----------
            Diluted shares outstanding        1,399,684      1,393,844      1,399,684      1,393,844

         Earnings per share
            Basic                            $     0.15     $     0.16     $     0.09     $     0.05
            Diluted                          $     0.15     $     0.16     $     0.09     $     0.05
</TABLE>

         As of June 30, 2006 there were no dilutive shares.

6.       OMNIBUS STOCK OPTION PLAN

         STOCK GRANTS. Restricted stock grants totaling 4,875 shares were
         awarded on September 26, 2006 having a fair value of $54,000. The
         grants vest over five years. The market value as of the grant date of
         the restricted stock grants is charged to expense as the grants vest.

         STOCK OPTIONS. Stock options covering 27,000 shares of common stock
         were awarded on September 26, 2006. The option awards were granted with
         an exercise price equal to the average price on the last trade date.
         The stock options vest and therefore become exercisable on a pro rata
         basis annually over five years from the date awarded, commencing
         September 26, 2007. The options are available to be exercised for a
         period of ten years after the date awarded.

                                       10
<PAGE>

         The fair value of each option grant was estimated to be $3.86 on the
         date of grant using the Black-Scholes option pricing model with the
         following assumptions used for grants during the applicable period:

         Dividend Yield (per share)      $   0.12
         Volatility (%)                      3.76%
         Risk-free Interest Rate (%)         4.76%
         Expected Life                   10 years

         During the quarter and six months ended June 30, 2007, the Company
         recorded $8,000 and $16,000, respectively, in expense included in
         "Salaries and employee benefits" on the accompanying financial
         statements. As of June 30, 2007, there was approximately $135,000 of
         total unrecognized compensation cost related to unvested options and
         grants. That cost is expected to be recognized over a weighted-average
         period of 5 years. The Company plans on obtaining shares to be issued
         upon exercise of stock options through authorized common stock.
<TABLE>
<CAPTION>
                                                                                WEIGHTED -AVERAGE
                                              NUMBER OF    WEIGHTED -AVERAGE        REMAINING
                                               SHARES       EXERCISE PRICE      CONTRACTUAL TERM
                                              ---------    -----------------    -----------------
<S>                                            <C>             <C>                      <C>
         Outstanding, January 1, 2007          27,000          $   11.15                 --
         Granted                                   --                 --                 --
         Exercised                                 --                 --                 --
         Forfeited  or expired                     --                 --                 --
                                               ------
         Outstanding, June 30, 2007            27,000          $   11.15                9.3
                                               ======
</TABLE>

<TABLE>
<CAPTION>
                                                      STOCK OPTIONS                 RESTRICTED STOCK
                                            -------------------------------  -----------------------------
                                                           WEIGHTED-AVERAGE               WEIGHTED-AVERAGE
                                            NUMBER OF      GRANT-DATE FAIR   NUMBER OF    GRANT-DATE FAIR
                                              SHARES           VALUE          SHARES           VALUE
                                            ---------      ----------------  ---------    ----------------
<S>                                           <C>             <C>             <C>            <C>
         Nonvested shares
         Nonvested,  January 1, 2007          27,000          $   3.86        4,875          $   11.15
         Granted                                  --                --           --                 --
         Vested                                   --                --           --                 --
         Forfeited                                --                --           --                 --
                                              ------                          -----
         Nonvested, June 30, 2007             27,000          $   3.86        4,875          $   11.15
                                              ======                          =====
</TABLE>

7.       GUARANTEES

         FASB Interpretation No. 45, Guarantor's Accounting and Disclosure
         Requirements for Guarantees, Including Indirect Guarantees of
         Indebtedness of Others (FIN 45), requires certain guarantees to be
         recorded at fair value as a liability at inception and when a loss is
         probable and reasonably estimable, as those terms are defined in FASB
         Statement No. 5, Accounting for Contingencies (FAS 5). FIN 45 also
         requires a guarantor to make significant new disclosures even when the
         likelihood of making any payments under the guarantee is remote.

         In September 2006, the Bank executed a Mortgage Partnership Finance
         (MPF) Master Commitment (the Commitment) with the FHLBank of Pittsburgh
         (FHLB) to deliver $5.0 million of mortgage loans and to guarantee the
         payment of any realized losses that exceed the FHLB's first loss


                                       11
<PAGE>

         account for mortgages delivered under the Commitment. The Bank receives
         credit enhancement fees from the FHLB for providing this guarantee and
         continuing to manage the credit risk of the MPF Program mortgage loans.
         The term of the Commitment and guarantee per the Master Commitment is
         through September 25, 2007. The maximum potential amount of future
         payments that the Bank is required to make under the guarantee is
         $125,000. Under the Commitment, the Bank agrees to service the loans
         and therefore, is responsible for any necessary foreclosure
         proceedings. Any future recoveries on any losses would not be paid by
         the FHLB under the Commitment. The Bank has not experienced any losses
         under these guarantees.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

FORWARD-LOOKING STATEMENTS

         North Penn Bancorp, Inc. makes forward-looking statements in this
         report. These forward-looking statements may include: statements of
         goals, intentions and expectations; estimates of risks and of future
         costs and benefits; assessments of probable loan losses; assessments of
         market risk; and statements of the ability to achieve financial and
         other goals. Forward-looking statements are typically identified by
         words such as "believe," "expect," "anticipate," "intend," "outlook,"
         "estimate," "forecast," "project" and other similar words and
         expressions. Forward-looking statements are subject to numerous
         assumptions, risks and uncertainties, which change over time.
         Forward-looking statements speak only as of the date they are made. The
         Company does not assume any duty and does not undertake to update its
         forward-looking statements. Because forward-looking statements are
         subject to assumptions and uncertainties, actual results or future
         events could differ, possibly materially, from those that the Company
         anticipated in its forward-looking statements, and future results could
         differ materially from historical performance.

         The Company's forward-looking statements are subject to the following
         principal risks and uncertainties: general economic conditions and
         trends, either nationally or locally; conditions in the securities
         markets; changes in interest rates; changes in deposit flows, and in
         the demand for deposit and loan products and other financial services;
         changes in real estate values; changes in the quality or composition of
         the Company's loan or investment portfolios; changes in competitive
         pressures among financial institutions or from non-financial
         institutions; the Company's ability to retain key members of
         management; changes in legislation, regulation, and policies; and a
         variety of other matters which, by their nature, are subject to
         significant uncertainties. The Company provides greater detail
         regarding some of these factors in its Form 10-KSB for the year ended
         December 31, 2006, including in the Risk Factors section of that
         report. The Company's forward-looking statements may also be subject to
         other risks and uncertainties, including those that it may discuss
         elsewhere in this report or in its other filings with the SEC.

RECENT DEVELOPMENTS

         On April 24, 2007, the Boards of Directors of the Company, North Penn
         Mutual Holding Company and the Bank adopted a Plan of Conversion and
         Reorganization (the "Plan") pursuant to which the Bank will reorganize
         from the mutual holding company structure to the stock holding company
         structure. Pursuant to the terms of the Plan, shares of the Company's
         common stock, other than those held by North Penn Mutual Holding
         Company, will be converted into shares of a new Pennsylvania
         corporation pursuant to an exchange ratio designed to preserve their
         aggregate percentage ownership interest. The new Pennsylvania holding
         company will offer shares of its common stock for sale to the Bank's
         eligible account holders, to the Bank's tax-qualified employee benefit
         plans and to members of the general public in a subscription and
         community offering in the manner, and subject to the priorities, set
         forth in the Plan. The conversion will be subject to approval of the
         Bank's depositors, the Company's shareholders (including the approval
         of a majority of the shares held by persons other than North Penn
         Mutual Holding Company) and regulatory agencies.

                                       12
<PAGE>

FINANCIAL CONDITION

         Our total assets decreased $3.0 million, or 2.4%, to $119.5 at June 30,
         2007 from $122.5 million at December 31, 2006. The decrease was
         primarily the result of selling a small portion of our mortgage loan
         portfolio.

         Net loans decreased $1.6 million, or 1.7%, to $93.6 million at June 30,
         2007 from $95.2 million at December 31, 2006, primarily due to the sale
         of $4.4 million in mortgage loans. The Bank chose to sell a segment of
         its mortgage loan portfolio to reduce its exposure to the interest rate
         risk associated with residential mortgages and to pay down a portion of
         our overnight borrowings.

         Investment securities declined $657,000, or 4.6%, since December 31,
         2006 primarily as a result of pay downs on mortgage-backed securities.
         During the six months ended June 30, 2007, we continued to use our
         liquidity to originate loans and did not purchase any debt securities.

         The allowance for loan loss increased $30,000 for the quarter ended and
         $60,000 for the six months ended June 30, 2007. The Bank had no loans
         charged-off and no recoveries during the six months ended June 30,
         2007. Management assesses the adequacy of the allowance for loan losses
         based on evaluating known and inherent losses in the loan portfolio and
         upon management's continuing analysis of the factors underlying the
         quality of the loan portfolio.

         While management believes that, based on information currently
         available, the allowance for loan losses is sufficient to cover losses
         inherent in its loan portfolio at this time, no assurance can be given
         that the level of the allowance for loan losses is sufficient to cover
         future possible loan losses incurred by the Bank or that future
         adjustments to the allowance for loan losses will not be necessary if
         economic and other conditions differ substantially from the economic
         and other conditions used by management to determine the current level
         of the allowance for loan losses. Management may in the future increase
         the level of the allowance for loan losses as a percentage of total
         loans and non-performing loans in the event it increases the level of
         commercial or consumer lending as a percentage of its total loan
         portfolio. In addition, various regulatory agencies, as an integral
         part of their examination process, periodically review the allowance
         for loan losses. Such agencies may require the Bank to provide
         additions to the allowance based upon judgments different from
         management.

         Non-performing loans, which are loans past due 90 days or more and
         non-accruing loans, totaled $417,000 at June 30, 2007, compared to
         $594,000 at December 31, 2006. The improvement was primarily in
         non-accruing residential mortgages which decreased by $255,000 while
         non-accruing consumer loans increased by $6,000. The ratio of the
         Bank's allowance for loan losses to total loans was 1.25% at June 30,
         2007 and 1.16% at December 31, 2006.

         Total deposits decreased $1.9 million, or 2.2%, from $86.7 million at
         December 31, 2006 to $84.8 million at June 30, 2007. Non-interest
         bearing deposits increased by $592,000, or 8.5%, while interest bearing
         demand deposits increased $3.6 million, or 13.8%. These increases were
         offset by a decrease in time deposits of $6.1 million, or 11.4%. The
         increase in non-interest bearing deposits is primarily due to
         fluctuations in consumer and commercial accounts. The increases in
         interest bearing demand deposits and decreases in time deposits are
         primarily due to changes in the marketplace.

         Borrowings decreased $1.0 million, or 4.6%, to $20.7 million at June
         30, 2007 from $21.7 million at December 31, 2006, as a portion of the
         proceeds from the sale of loans were used to pay down our overnight
         borrowings from FHLBank of Pittsburgh. Borrowings are primarily being
         used to fund loan growth when deposit growth is inadequate.

                                       13
<PAGE>

RESULTS OF OPERATIONS

COMPARISON OF THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2007 AND 2006

         Net income for the second quarter of 2007 increased $48,000, or 66.7%,
         to $120,000, compared to $72,000 in 2006. Net income for the six months
         ended June 30, 2007 decreased $3,000, or 1.4 %, to $215,000 from
         $218,000 for the six months ended June 30, 2006. Included in the
         current year is a gain on the sale of loans of $79,000.

         Net interest income for the second quarter increased $45,000, or 5.3%,
         to $901,000 in 2007 from $856,000 in 2006. For the six months ended
         June 30, 2007, net interest income increased $44,000 or 2.6%, to $1.8
         million from $1.7 million.

         Interest income for the second quarter of 2007 increased $158,000 or
         9.3%, to $1.9 million compared to $1.7 million in 2006. Interest income
         for the six months ended June 30, 2007 increased $420,000, or 12.7%, to
         $3.7 million compared to $3.3 million for the six months ended June 30,
         2006. Interest on loans increased $173,000, or 11.5%, to $1.7 million
         during the second quarter of 2007 from $1.5 million in 2006. For the
         six months ended June 30, interest on loans increased $438,000, or
         14.6%, to $3.4 million for 2007 from $3.0 million for 2006. The
         increases are due to slightly higher commercial loan volumes. Interest
         on investments decreased $15,000 or 8.4%, to $164,000 during the second
         quarter, from $179,000 and $18,000, or 5.1%, from $351,000 to $333,000
         for the six months ended June 30, 2007 due to lower balances of
         investments.

         Interest expense during the second quarter increased $113,000, or
         13.2%, to $972,000 in 2007 from $859,000 in 2006. For the six months
         ended June 30, 2007, interest expense increased $376,000, or 23.5%, to
         $2.0 million in 2007 from $1.6 million in 2006. Interest on deposits
         for the second quarter increased $34,000 or 5.2%, to $685,000 in 2007,
         from $651,000 in 2006, due to increases in the volume of demand
         deposits and the rates on time deposits. For the six months ended June
         30, interest on deposits increased $265,000, or 22.1%, to $1.4 million
         in 2007, from $1.2 million in 2006. Interest on borrowed funds
         increased $79,000, or 38.0%, for the second quarter of 2007 and
         $111,000 or 25.6%, for the six months ended June 30, 2007 due to the
         increases in the rate and volume of overnight borrowings.

         Other income for the second quarter increased $95,000 or 109.2%, to
         $182,000 in 2007 from $87,000 in 2006. The biggest contributor to this
         increase was a gain of $79,000 on the sale of $4.4 million of our
         mortgage loans during the second quarter. Total other expenses
         increased $39,000 or 4.7%, to $873,000 in 2007 from $834,000 in 2006.
         Salaries and employee benefits increased $45,000 or 10.3%, to $481,000
         in 2007 from $436,000 in 2006. A portion of this increase is related to
         additional staffing at our Effort branch location which opened in May
         of 2006 and the addition of a Retail Banking Manager hired in the
         second quarter of 2007. Occupancy and equipment expense decreased
         $14,000 or 8.3%, to $155,000 in 2007 from $169,000 in 2006, while other
         expenses increased $8,000 or 3.5%, to $237,000 in 2007 from $229,000 in
         2006.

         For the six months ended June 30, other income increased $107,000 or
         58.2%, to $291,000 in 2007 from $184,000 in 2006. The majority of this
         increase was related to the gain on loan sales as well as gains on the
         sale of equity securities. Total other expenses increased $105,000 or
         6.6%, to $1.7 million in 2007 from $1.6 million in 2006. Salaries and
         employee benefits increased $64,000 or 7.3%, to $944,000 in 2007 from
         $880,000 in 2006, while occupancy and equipment expense decreased
         $7,000, or 2.3%, to $304,000 in 2007 from $311,000 in 2006. Other
         expenses increased $48,000, or 12.3%, to $439,000 in 2007 from $391,000
         in 2006.

LIQUIDITY AND CAPITAL RESOURCES

         The Bank's primary sources of funds are deposits, principal and
         interest payments on loans and FHLBank advances. While maturities and
         scheduled amortization of loans are predictable sources of funds,


                                       14
<PAGE>

         deposit flows and mortgage prepayments are greatly influenced by
         general interest rates, economic conditions, and competition. The
         Bank's regulators require the Bank to maintain sufficient liquidity to
         ensure its safe and sound operation.

         A review of the Consolidated Statements of Cash Flows included in the
         accompanying financial statements shows that the Bank's cash and cash
         equivalents decreased $986,000 for the six months ended June 30, 2007.
         During that period, cash was primarily provided from earnings, customer
         deposits and the sale of loans to FHLBank of Pittsburgh and primarily
         used to fund new loans.

         The Company's and North Penn Bank's capital ratios at June 30, 2007 and
         December 31, 2006 as well as the required minimum ratios for capital
         adequacy purposes and to be well capitalized under the prompt
         corrective action provisions as defined by the FDIC are summarized as
         follows:
<TABLE>
<CAPTION>
                                                                                              TO BE WELL
                                                                                          CAPITALIZED UNDER
                                                                 FOR CAPITAL              PROMPT CORRECTIVE
                                            ACTUAL            ADEQUACY PURPOSES           ACTION PROVISIONS
                                      -----------------    -----------------------    -----------------------
                                      AMOUNT      RATIO        AMOUNT        RATIO        AMOUNT        RATIO
                                      ------      -----        ------        -----        ------        -----
<S>                                   <C>         <C>          <C>           <C>          <C>           <C>
         AT JUNE 30, 2007:
         -------------------------------------
         TOTAL CAPITAL TO RISK-WEIGHTED ASSETS:
            Consolidated              $14,851     15.54%       >$7,647        >8.0%       >$9,559       >10.0%
            North Penn Bank           $12,608     13.41%       >$7,521        >8.0%       >$9,401       >10.0%
         TIER 1 CAPITAL TO RISK-WEIGHTED ASSETS:
            Consolidated              $13,275     13.89%       >$3,823        >4.0%       >$5,735        >6.0%
            North Penn Bank           $11,433     12.16%       >$3,760        >4.0%       >$5,641        >6.0%
         TIER 1 CAPITAL TO TOTAL AVERAGE ASSETS:
            Consolidated              $13,275     11.09%       >$4,788        >4.0%       >$5,986        >5.0%
            North Penn Bank           $11,433      9.68%       >$4,725        >4.0%       >$5,907        >5.0%

         Risk-Weighted Assets:
            Consolidated              $95,587
            North Penn Bank           $94,011
         Average Assets:
            Consolidated             $119,710
            North Penn Bank          $118,134

         AT DECEMBER 31, 2006:
         -------------------------------------
         TOTAL CAPITAL TO RISK-WEIGHTED ASSETS:
            Consolidated              $14,295     15.13%       >$7,560        >8.0%      >$9,450       >10.0%
            North Penn Bank           $12,326     13.17%       >$7,487        >8.0%      >$9,359       >10.0%
         TIER 1 CAPITAL TO RISK-WEIGHTED ASSETS:
            Consolidated              $13,175     13.94%       >$3,780        >4.0%      >$5,670        >6.0%
            North Penn Bank           $11,206     11.97%       >$3,744        >4.0%      >$5,615        >6.0%
         TIER 1 CAPITAL TO TOTAL AVERAGE ASSETS:
            Consolidated              $13,175     11.02%       >$4,782        >4.0%      >$5,977        >5.0%
            North Penn Bank           $11,206      9.45%       >$4,746        >4.0%      >$5,932        >5.0%

         Risk-Weighted Assets:
            Consolidated              $94,496
            North Penn Bank           $93,586
         Average Assets:
            Consolidated             $119,548
            North Penn Bank          $118,641
</TABLE>

                                       15
<PAGE>

RELATED PARTIES

         The Company does not have any material transactions involving related
         persons or entities, other than traditional banking transactions, which
         are made on the same terms and conditions as those prevailing at the
         time for comparable transactions with unrelated parties.

ITEM 3.  CONTROLS AND PROCEDURES.

         The Company's management, including the Company's principal executive
         officer and principal financial officer, have evaluated the
         effectiveness of the Company's "disclosure controls and procedures," as
         such term is defined in Rule 13a-15(e) promulgated under the Securities
         Exchange Act of 1934, as amended, (the "Exchange Act"). Based upon
         their evaluation, the 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 for the purpose of ensuring that the information required to
         be disclosed in the reports that the Company files or submits under the
         Exchange Act with the Securities and Exchange Commission (the "SEC")
         (1) is recorded, processed, summarized and reported within the time
         periods specified in the SEC's rules and forms, and (2) is accumulated
         and communicated to the Company's management, including its principal
         executive and principal financial officers, as appropriate to allow
         timely decisions regarding required disclosure.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         The Company is not involved in any pending legal proceedings other than
         routine legal proceedings occurring in the ordinary course of business.
         Such routine legal proceedings, in the aggregate, are believed by
         management to be immaterial to the Company's financial condition or
         results of operations.

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

         The Company did not repurchase any shares of its common stock during
         the quarter ended June 30, 2007 and did not have any publicly announced
         repurchase plans or programs.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         None.

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

         The Annual Meeting of Shareholders of North Penn Bancorp, Inc. on May
         24, 2007.

         The results of the items submitted for a vote are as follows:

         The following two Directors were elected for a term of three years,
         expiring in 2010 -
<TABLE>
<CAPTION>
         NAME                        VOTES FOR       VOTES AGAINST     VOTES NOT CAST
         ----                        ---------       -------------     --------------
<S>                                  <C>                <C>               <C>
         Frederick L. Hickman        1,383,703          4,727             55,125
         Kevin M. Lamont             1,383,803          4,627             55,125
</TABLE>

                                       16
<PAGE>

         The following Director was elected for a term of one year, expiring in
         2008 -
<TABLE>
<CAPTION>
         NAME                        VOTES FOR       VOTES AGAINST     VOTES NOT CAST
         ----                        ---------       -------------     --------------
<S>                                 <C>                    <C>                 <C>
         Virginia D. McGregor       1,370,703              17,727              55,125
</TABLE>

         The ratification of Appointment of McGrail Merkel Quinn & Associates as
         Independent Registered Public Accounting Firm of North Penn Bancorp,
         Inc. for the fiscal year ending December 31, 2007.

                  Votes for                  1,384,050
                  Votes against                  4,380
                  Votes abstained                    0
                  Votes not cast                55,125

         Name of Each Director Whose Term of Office Continued After the Annual
         Meeting:

                  NAME                                   TERM EXPIRES
                  ----                                   ------------
                  Gordon S. Florey                          2008
                  James W. Reid, Esq.                       2008
                  Virginia D. McGregor                      2008
                  Frank H. Mechler                          2009
                  Hebert C. Kneller                         2009
                  David Samuel                              2009

ITEM 5.  OTHER INFORMATION.

None

ITEM 6.  EXHIBITS

3.1      Certificate of Incorporation of North Penn Bancorp, Inc.*

3.2      By-laws of North Penn Bancorp, Inc.*

4.       Specimen Stock Certificate of North Penn Bancorp, Inc.*

31.1     Rule 13a-14(a) /15d-14(a) Chief Executive Officer Certification

31.2     Rule 13a-14(a) /15d-14(a) Principal Accounting Officer Certification

32.1     Section 1350 Certification of Chief Executive Officer

32.2     Section 1350 Certification of Principal Accounting Officer

----------
*   Incorporated herein by reference into this document from Form SB-2
    Registration Statement, as amended, filed on December 10, 2004, Registration
    No. 333-121121.

                                       17
<PAGE>
                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be so signed on its behalf by the undersigned, thereunto duly
authorized.

                                                    North Penn Bancorp, Inc

    Dated: August 14, 2007                          /s/ Frederick L. Hickman
           ---------------                          ----------------------------
                                                    Frederick L. Hickman
                                                    President and
                                                    Chief Executive Officer

    Dated: August 14, 2007                          /s/ Glenn J. Clark
           ---------------                          ----------------------------
                                                    Glenn J. Clark
                                                    Assistant Vice President and
                                                    Principal Accounting Officer

                                       18