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

                                  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      September 30, 2006
                                         ------------------


[ ] 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]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the last practical date: 1,443,555 as of November 14, 2006.

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

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

<PAGE>


PART I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements

                  Consolidated Balance Sheets at September 30, 2006 and
                  December 31, 2005

                  Consolidated Statements of Income for the Three and Nine
                  Months Ended September 30, 2006 and 2005

                  Consolidated Statements of Cash Flows for the Nine Months
                  Ended September 30, 2006 and 2005

                  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.




<PAGE>


                         PART I - FINANCIAL INFORMATION

         North Penn Bancorp, Inc. (the "Company") was organized on November 22,
2004 in anticipation of the mutual holding company reorganization of North Penn
Bank (the "Bank"). The reorganization was completed on June 1, 2005. The Company
is a bank holding company and parent of the Bank. The principal activities of
the Company are the ownership and supervision of the Bank and, therefore, the
information presented in this report is primarily for the Bank and its
subsidiary.


ITEM I.  FINANCIAL STATEMENTS

                     NORTH PENN BANCORP, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                SEPTEMBER 30,  DECEMBER 31,
                                                                   2006           2005
                                                                (Unaudited)     (Audited)
                                                                 ---------      ---------
                                                                       (In thousands)
<S>                                                              <C>            <C>
ASSETS:
Cash and due from banks                                          $   4,521      $   2,333
Interest bearing deposits                                               27             20
                                                                 ---------      ---------
Total cash and cash equivalents                                      4,548          2,353
Investment securities, available for sale                           14,611         15,651
Investment securities, held to maturity                                 --             --
Equity securities at cost, substantially restricted                    997            991
Loans, net of allowance for loan losses                             89,957         79,560
Bank premises and equipment - net                                    4,401          3,592
Accrued interest receivable                                            740            480
Cash surrender value of life insurance                               2,075          2,018
Deferred income taxes                                                  417            448
Other real estate owned                                                 92            105
Other assets                                                           132            183
                                                                 ---------      ---------
TOTAL ASSETS                                                     $ 117,970      $ 105,381
                                                                 =========      =========

LIABILITIES:
Deposits:
Non-interest bearing deposits                                    $   7,964      $   7,306
Interest bearing demand deposits                                    28,692         23,604
Interest bearing time deposits                                      54,750         46,519
                                                                 ---------      ---------
     Total deposits                                                 91,406         77,429
Other borrowed funds                                                12,747         14,698
Accrued interest and other liabilities                                 771            459
                                                                 ---------      ---------
TOTAL LIABILITIES                                                  104,924         92,586

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 (Note 5)                                    144            144
Additional paid-in capital                                           5,853          5,853
Retained earnings                                                    7,664          7,481
Unearned ESOP shares                                                  (509)          (509)
Accumulated other comprehensive income                                (106)          (174)
                                                                 ---------      ---------
TOTAL STOCKHOLDERS' EQUITY                                          13,046         12,795
                                                                 ---------      ---------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                       $ 117,970      $ 105,381
                                                                 =========      =========
</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 NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
                                 (In thousands)

<TABLE>
<CAPTION>
                                                      NINE MONTHS ENDED             THREE MONTHS ENDED
                                                        SEPTEMBER 30,                  SEPTEMBER 30,
                                                     2006           2005            2006            2005
                                                 -----------    -----------     -----------     -----------
<S>                                              <C>            <C>             <C>             <C>
INTEREST INCOME
Interest on loans                                $     4,594    $     3,218     $     1,633     $     1,149
Interest and dividends on investments                    517            619             166             200
                                                 -----------    -----------     -----------     -----------
     Total interest income                             5,111          3,837           1,799           1,349
INTEREST EXPENSE
Interest on deposits                                   1,899          1,210             744             418
Interest on borrowed funds                               627            319             194             150
                                                 -----------    -----------     -----------     -----------
     Total interest expense                            2,526          1,529             938             568

                                                 -----------    -----------     -----------     -----------
NET INTEREST INCOME                                    2,585          2,308             861             781

PROVISION FOR LOAN LOSSES                                 90             75              30              30
                                                 -----------    -----------     -----------     -----------

NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES                                        2,495          2,233             831             751
                                                 -----------    -----------     -----------     -----------

OTHER INCOME
Service charges on deposit accounts                       94             84              28              29
Other income                                             151            164              44              44
Gain on sale of securities                                11              4              --              --
                                                 -----------    -----------     -----------     -----------
TOTAL OTHER INCOME                                       256            252              72              73

OTHER EXPENSE
Salaries and employee benefits                         1,350          1,186             470             443
Occupancy and equipment expense                          479            379             168             132
Other expenses                                           611            596             220             158
                                                 -----------    -----------     -----------     -----------
TOTAL OTHER EXPENSE                                    2,440          2,161             858             733

                                                 -----------    -----------     -----------     -----------
INCOME BEFORE INCOME TAXES                               311            324              45              91


INCOME TAX EXPENSE                                        41            109              (7)              7

                                                 -----------    -----------     -----------     -----------
NET INCOME                                               270            215              52              84
OTHER COMPREHENSIVE INCOME (LOSS):
Unrealized holding gain (loss) arising
during period, net of income tax                          68           (248)            290            (134)
                                                 -----------    -----------     -----------     -----------
COMPREHENSIVE INCOME                             $       338    $       (33)    $       342     $       (50)
                                                 ===========    ===========     ===========     ===========

Weighted average number of shares outstanding      1,393,844      1,443,555       1,393,844       1,443,555
Earnings per share                               $      0.19    $      0.15     $      0.04     $      0.06
Dividends per share                              $      0.06    $      0.00     $      0.03     $      0.00

</TABLE>
            See notes to unaudited consolidated financial statements.

                                       4

<PAGE>


                     NORTH PENN BANCORP, INC. AND SUBSIDIARY
                (UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                      2006         2005
                                                                    --------     --------
<S>                                                                 <C>          <C>
Operating Activities:
Net income                                                          $    270     $    215
Items not requiring (providing) cash
  Depreciation                                                           222          156
  Provision for loan losses                                               90           75
  Amortization of securities (net of accretion)                           20          116
  Increase in cash surrender value of life insurance                     (57)         (57)
  Net realized gain on securities                                        (11)          (4)
  Net realized gain on other real estate owned                           (29)          --
  Changes in:
    Accrued interest income and other assets                            (213)         382
    Accrued interest expense and other liabilities                       312          (68)
                                                                    --------     --------
      Net Cash Provided by  Operating Activities                         604          815
                                                                    --------     --------

Investing Activities:
  Purchase bank premises and equipment                                (1,031)        (250)
  Proceeds from sale of other real estate owned                          134           --
  Proceeds from sale of securities "available for sale"                   48        4,519
  Purchase of securities "available for sale"                           (290)      (7,455)
  Redemptions of securities "available for sale"                         500        5,262
  Redemptions of securities "held to maturity"                            --          500
  Redemptions of mortgage-backed securities "available for sale"         876        1,430
  Purchase of life insurance policies                                     --         (125)
  Purchase of restricted stock                                            (6)         (82)
  Net increase in loans to customers                                 (10,579)     (10,339)
                                                                    --------     --------
    Net Cash Used in Investing Activities                            (10,348)      (6,540)
                                                                    --------     --------

Financing Activities:
  Net increase (decrease) in deposits                                 13,977       (3,388)
  (Decrease) increase in borrowed funds                               (1,951)       5,350
  Net proceeds of initial public stock offering                           --        5,714
  Initial capitalization of North Penn Mutual Holding Company             --         (100)
  Cash dividends paid                                                    (87)          --
                                                                    --------     --------
    Net Cash Provided by Financing Activities                         11,939        7,576
                                                                    --------     --------
Net Increase in Cash and Cash Equivalents                              2,195        1,851
                                                                    --------     --------
Cash and Cash Equivalents, January 1                                $  2,353     $  1,659
                                                                    --------     --------
Cash and Cash Equivalents, September 30                             $  4,548     $  3,510
                                                                    ========     ========
Supplementary Schedule of Cash Flow Information:
  Cash paid during the period for:
    Interest                                                        $  2,526     $  1,488
    Income taxes                                                          36           46

  Non-cash investing and financing activities:
    Transfer from loans to other real estate owned                        92          105
</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. was organized on November 22, 2004 to be the
         bank holding company for North Penn Bank (Bank) in connection with the
         Bank's mutual holding company reorganization and minority stock
         issuance. The common stock trades on the OTC Bulletin Board under the
         symbol "NPEN". 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 subsidiary, Norpenco, Inc.
         These entities are collectively referred to herein as the Company. All
         significant intercompany accounts and transactions have been eliminated
         in consolidation. Norpenco, Inc. received approval and began purchasing
         bank stocks in October, 2004. Its sole activities are purchasing bank
         stocks and receiving dividends on such stocks.

         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.

         All information is presented in thousands of dollars, except per share
         amounts.

                                       6

<PAGE>

         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.

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
         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 September
         30, 2006 and December 31, 2005 are as follows:

                                       7

<PAGE>


                                             AVAILABLE-FOR-SALE
                                            SEPTEMBER 30, 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      $    --      $    (5)      $   380
          Mortgage-backed securities        5,607            1         (205)        5,403
          Municipal securities              7,026           87           (1)        7,112
          Other securities                    754           --           (9)          745
                                          -------      -------      -------       -------
             Total debt securities         13,772           88         (220)       13,640
          Equity securities                   998           29          (56)          971
                                          -------      -------      -------       -------
            Total Available for Sale      $14,770      $   117      $  (276)      $14,611
                                          =======      =======      =======       =======
</TABLE>

                                              HELD-TO-MATURITY
                                             SEPTEMBER 30, 2006
                                               (In thousands)
              None


                                              AVAILABLE-FOR-SALE
                                              DECEMBER 31, 2005
                                               (In thousands)

<TABLE>
<CAPTION>
                                                        GROSS        GROSS
                                         AMORTIZED    UNREALIZED   UNREALIZED      FAIR
                                           COST         GAINS       LOSSES         VALUE
                                          -------      -------      -------       -------
          <S>                             <C>          <C>          <C>           <C>
          U.S. Agency securities          $   385      $    --      $    (8)      $   377
          Mortgage-backed securities        6,494            1         (149)        6,346
          Municipal securities              7,026           --          (74)        6,952
          Other securities                  1,264            3          (11)        1,256
                                          -------      -------      -------       -------
               Total debt securities       15,169            4         (242)       14,931
          Equity securities                   745           15          (40)          720
                                          -------      -------      -------       -------
            Total Available for Sale      $15,914      $    19      $  (282)      $15,651
                                          =======      =======      =======       =======
</TABLE>

                                             HELD-TO-MATURITY
                                             DECEMBER 31, 2005
                                              (In thousands)
              None


                                       8

<PAGE>


         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
         September 30, 2006 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                       $    --      $    --      $   380      $    (5)     $   380      $    (5)
          Mortgage-backed                         464           (7)       4,891         (198)       5,355         (205)
          Municipal                                --           --          434           (1)         434           (1)
          Other securities                        745           (9)          --           --          745           (9)
          Equity securities                       302          (17)         410          (39)         712          (56)
                                              -------      -------      -------      -------      -------      -------
                                              $ 1,511      $   (33)       6,115      $  (243)     $ 7,626      $  (276)
                                              =======      =======      =======      =======      =======      =======
</TABLE>


         The above table at September 30, 2006 includes 24 securities that have
         unrealized losses for less than 12 months and 29 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 September 30,
         2006.

         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
         September 30, 2006.






                                       9

<PAGE>

3.       LOANS

                                                 SEPTEMBER 30,   DECEMBER 31,
                                                    2006            2005
                                                  -------         -------
          Real estate mortgages:                       (In thousands)
            Construction and land development     $   887         $ 1,126
            Residential, 1 - 4 family              45,134          43,159
            Residential, multi-family                  35           1,997
            Commercial                             33,501          23,738
                                                  -------         -------
               Total real estate mortgages         79,557          70,020
          Commercial                                1,573           1,069
          Consumer                                  9,918           9,496
                                                  -------         -------
                Total loans                        91,048          80,585
          Allowance for loan loss                   1,091           1,025
                                                  -------         -------
               Total loans, net                   $89,957         $79,560
                                                  =======         =======

         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 risks 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.


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
         September 30, 2006, the Bank borrowed $747 in overnight funds.

                                       10
<PAGE>

         The Bank also has a $5,000 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 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

         Earnings per share are calculated based on 1,443,555 shares outstanding
         less 49,711 unearned ESOP shares for the current period. See footnote 7
         regarding fully diluted earnings per share.

6.       CONSTRUCTION OF A BRANCH

         On May 1, 2006, a new branch office opened in Effort, Pennsylvania. At
         December 31, 2004, the land purchased by the Bank in the amount of $571
         was recorded in "Other Assets," since it was intended to be transferred
         to North Penn Bancorp, Inc. At September 30, 2006, the total cost of
         the branch facility, including furniture, fixtures and equipment was
         approximately $1,401, not including the land acquisition costs of $571.
         The cost is no longer designated "construction-in-progress," but is now
         included in "Bank premises and equipment". The company recorded $30 of
         depreciation expense as of September 30, 2006. The land is still held
         as an asset of North Penn Bank.

7.       OMNIBUS STOCK OPTION PLAN

         The Company's 2006 Omnibus Stock Option Plan (the Plan), which is
         shareholder-approved, permits the grant of stock options and shares to
         its employees for up to 93,119 shares of common stock. The Company
         believes that such awards better align the interests of its employees
         with those of its shareholders. Option awards are generally granted
         with an exercise price equal to the average price of the last trade
         date; those option awards generally vest based on five years of
         continuous service and have ten-year contractual terms. Stock awards
         generally vest over five years. Certain option and stock awards provide
         for accelerated vesting if there is a change in control (as defined in
         the Plan).

         The fair value of each option award is estimated on the date of grant
         using the Black-Scholes option pricing model. Expected volatilities are
         based on implied volatilities from traded options on the Company's
         stock, historical volatility of the Company's stock, and other factors.
         The expected term of options granted is ten years. The risk-free rate

                                       11
<PAGE>

         for periods within the contractual life of the option is based on the
         U.S. Treasury yield curve in effect at the time of grant. The dividend
         yield is assumed at 0% based on historical dividends paid.

         Shares were granted on September 26, 2006. A summary of the status of
         the Company's nonvested shares as of September 30, 2006, and changes
         during the period ended September 30, 2006, is presented below:



                                                              WEIGHTED-AVERAGE
                   NONVESTED SHARES         SHARES (000)   GRANT-DATE FAIR VALUE
                   ----------------         -----------    ---------------------
          Nonvested at January 1, 2006             0              $ 0.00
          Granted                                  32             $11.15
          Vested                                   0              $ 0.00
          Forfeited                                0              $ 0.00
          Nonvested at September 30, 2006          32             $11.15


         As of September 30, 2006, there was $200 of total unrecognized
         compensation cost related to nonvested share-based compensation
         arrangements granted under the Plan. That cost is expected to be
         recognized over a weighted-average period of 5 years. Since the grant
         date was September 26, 2006, the amount of compensation cost to be
         recognized from that date to September 30, 2006 would be negligible and
         has not been reflected on the income statement. The effect on a
         weighted earnings per share calculation would also be negligible and
         has not been reflected.








                                       12
<PAGE>


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

FORWARD-LOOKING STATEMENTS

         This report contains certain "forward-looking statements" within the
         meaning of the federal securities laws. These statements are not
         historical facts but rather are statements based on North Penn Bancorp,
         Inc.'s current expectations regarding its business strategies, intended
         results and future performance. Forward-looking statements may be
         preceded by terms such as "expects," "believes," "anticipates,"
         "intends" and similar expressions.

         Management's ability to predict results or the effect of future plans
         or statements is inherently uncertain. Factors which could affect
         actual results in which North Penn Bancorp, Inc. operates, as well as
         nationwide, include North Penn Bancorp, Inc.'s ability to control costs
         and expenses, competitive products and pricing, loan delinquency rates
         and changes in federal and state legislation and regulation. These
         factors should be considered in evaluating the forward-looking
         statements and undue reliance should not be placed on such statements.
         North Penn Bancorp, Inc. assumes no obligation to update any
         forward-looking statements.

FINANCIAL CONDITION

         Our total assets increased $12,589, or 12%, from $105,381 at December
         31, 2005 to $117,970 at September 30, 2006. The increase was primarily
         due to loan growth, specifically in the commercial real estate sector.

         Net loans increased $10,397 or 13%, from $79,560 at December 31, 2005
         to $89,957 million at September 30, 2006. The majority of the increase
         stemmed from commercial real estate loans. The Bank has been increasing
         its commercial loan portfolio to diversify its loan portfolio and
         reduce its exposure to the interest rate risk associated with
         residential mortgages. Most of the Bank's commercial loans are secured
         by real estate in order to minimize their risk.

         The allowance for loan losses was $1,091 at September 30, 2006,
         compared to $1,025 at December 31, 2005. We recorded $30 in loan loss
         provision expense for the three months and $90 for the nine months
         ended September 30, 2006. The Bank had no loans charged-off during the
         three months and $32 charged off during the nine months ended September
         30, 2006. However, during the third quarter, the Bank recovered $8 in
         repayments from consumer loans charged off earlier in the year.
         Management assesses the adequacy of the allowance for loan losses based
         on evaluating known and inherent risks in the loan portfolio and upon
         management's continuing analysis of the factors underlying the quality
         of the loan portfolio.

                                       13
<PAGE>

         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 $244 at September 30, 2006, compared to
         $539 at December 31, 2005. The improvement was primarily in
         non-accruing residential mortgages which decreased by $289, while
         non-accruing consumer loans decreased by $6. The ratio of the Bank's
         allowance for loan losses to total loans was 1.20% at September 30,
         2006 and 1.27% at December 31, 2005.

         Total deposits increased $13,977, or 18%, from $77,429 at December 31,
         2005 to $91,406 at September 30, 2006. Non-interest bearing deposits
         increased by $658 or 9%, while interest bearing demand deposits
         increased $5,088 or 22%, and time deposits increased $8,231, or 18%.
         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 time deposits are primarily due to
         accounts being opened through our new branch in Effort, PA, coupled
         with increasing balances of our already existing customers.

         Other borrowings decreased $1,951, or 13%, from $14,698 at December 31,
         2005 to $12,747 at September 30, 2006, due to pay downs in overnight
         borrowings from FHLBank of Pittsburgh. Borrowings are primarily being
         used to fund loan growth when deposit growth is inadequate and
         repayment is made when deposit growth exceeds loan demand.

RESULTS OF OPERATIONS

COMPARISON OF THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2006 AND 2005

         Net income for the third quarter of 2006 decreased $32, or 38%, to $52,
         compared to $84 in 2005. Net income for the nine months ended September

                                       14
<PAGE>

         30, 2006 increased $55, or 26%, to $270, compared to $215 in 2005. Net
         income increased primarily due to the increase in loan interest and fee
         income.

         Interest income for the third quarter of 2006 increased $450, or 33%,
         to $1,799, compared to $1,349 in 2005. Interest income for the nine
         months ended September 30, 2006 increased $1,274, or 33%, to $5,111
         compared to $3,837 for September 30, 2005. Interest on loans increased
         $484, or 42%, from $1,149 in 2005 to $1,633 during the third quarter in
         2006. For the nine months ended September 30, interest on loans
         increased $1,376, or 43%, from $3,218 for 2005, to $4,594 for 2006. The
         increases are due to higher loan volumes and the increase in the prime
         rate. Interest on investments decreased $34, or 17%, from $200 to $166
         during the third quarter, and $102, or 16%, from $619 to $517 for the
         nine months ended September 30, 2006 due to lower balances of
         investments.

         Interest expense during the third quarter increased $370, or 65%, from
         $568 in 2005 to $938 in 2006. For the nine months ended September 30,
         2006, interest expense increased $997, or 65%, from $1,529 in 2005 to
         $2,526 in 2006. Interest on deposits for the third quarter increased
         $326, or 78%, from $418 in 2005 to $744 in 2006, due to increases in
         volume and rate of time and demand deposits. For the nine months ended
         September 30, interest on deposits increased $689, or 57%, from $1,210
         in 2005 to $1,899 in 2006. Interest on borrowed funds increased $44, or
         29%, for the third quarter of 2006 and $308, or 97%, for the nine
         months ended September 30, 2006 due to the increases in the rate and
         average volume of overnight borrowings.

         Net interest income for the third quarter increased $80, or 10%, from
         $781 in 2005, to $861 in 2006. For the nine months ended September 30,
         2006, net interest income increased $277, or 12%, from $2,308 to
         $2,585.

         Other income for the third quarter decreased $1, or 1%, from $73, in
         2005, to $72 in 2006. Total other expenses increased $125, or 17%, from
         $733 in 2005 to $858 in 2006. Salaries and employee benefits increased
         $27, or 6%, from $443 in 2005, to $470 in 2006, while occupancy and
         equipment expense increased $36, or 27%, from $132 in 2005, to $168 in
         2006, and other expenses increased $62, or 39%, from $158 in 2005 to
         $220 in 2006. The increase in expenses was related to increased
         personnel and operating expenses involved with our new branch.

         For the nine months ended September 30, other income increased $4, or
         2%, from $252 in 2005 to $256 in 2006. Total other expenses increased
         $279, or 13%, from $2,161 in 2005 to $2,440 in 2006. Salaries and
         employee benefits increased $164, or 14%, from $1,186 in 2005 to $1,350
         in 2006, largely related to increased personnel in our new branch.
         Occupancy and equipment expense increased $100, or 26%, from $379 in
         2005 to $479 in 2006, while other expenses increased $15, or 3%, from

                                       15
<PAGE>

         $596 in 2005 to $611 in 2006, primarily due to the contribution to our
         charitable foundation in 2005, offset by expenses incurred in opening
         and supplying our new branch in the second and third quarters of 2006.

         Applicable taxes for the third quarter decreased $14 or 200%, from $7
         in 2005 to ($7) in 2006. For the nine months ended September 30, 2006,
         taxes decreased $68 or 62%, from $109 in 2005 to $41 in 2006. The
         reduction in taxes is due to higher tax free income.

LIQUIDITY AND CAPITAL RESOURCES

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, 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 increased $2,195 for the nine months ended
              September 30, 2006. During that period, cash was primarily
              provided from earnings and customer deposits and primarily used to
              fund loans to customers and pay down overnight borrowings.

              The Company's and North Penn Bank's capital ratios at September
              30, 2006 and December 31, 2005 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:















                                       16
<PAGE>

<TABLE>
<CAPTION>
                                                                                               TO BE WELL CAPITALIZED
                                                                                                    UNDER PROMPT
                                                                     FOR CAPITAL ADEQUACY         CORRECTIVE ACTION
                                                 ACTUAL                    PURPOSES                  PROVISIONS
                                          ----------------------    -----------------------    ------------------------
                                             AMOUNT       RATI O      AMOUNT        RATIO        AMOUNT        RATIO
                                          -----------    -------    ----------    ---------    ----------    ----------
              <S>                             <C>         <C>         <C>            <C>         <C>             <C>
              AT SEPTEMBER 30, 2006:
              TIER 1 CAPITAL TO RISK-WEIGHTED ASSETS:
                 Consolidated                $13,152     13.73%       >$3,832        >4.0%       >$5,748         > 6.0%
                 North Penn Bank             $11,131     11.86%       >$3,754        >4.0%       >$5,631         > 6.0%
              TOTAL CAPITAL TO RISK-WEIGHTED ASSETS:
                 Consolidated                $13,046     13.62%       >$7,665        >8.0%       >$9,581         >10.0%
                 North Penn Bank             $11,055     11.78%       >$7,508        >8.0%       >$9,386         >10.0%
              TIER 1 CAPITAL TO TOTAL AVERAGE ASSETS:
                 Consolidated                $13,152     11.25%       >$4,678        >4.0%       >$5,847         > 5.0%
                 North Penn Bank             $11,131      9.68%       >$4,600        >4.0%       >$5,749         > 5.0%
              TANGIBLE CAPITAL TO TOTAL AVERAGE ASSETS:
                 Consolidated                $13,152     11.25%       >$1,754        >1.5%           N/A           N/A
                 North Penn Bank             $11,131      9.68%       >$1,725        >1.5%           N/A           N/A

              Risk-Weighted Assets:
                 Consolidated                $95,808
                 North Penn Bank             $93,856
              Average Assets:
                 Consolidated               $116,940
                 North Penn Bank            $114,988

              AT DECEMBER 31, 2005:
              ---------------------------------------
              TIER 1 CAPITAL TO RISK-WEIGHTED ASSETS:
                 Consolidated                $13,450     17.03%       >$3,158        >4.0%       >$4,737         > 6.0%
                 North Penn Bank             $10,824     13.76%       >$3,146        >4.0%       >$4,720         > 6.0%
              TOTAL CAPITAL TO RISK-WEIGHTED ASSETS:
                 Consolidated                $13,304     16.85%       >$6,317        >8.0%       >$7,896         >10.0%
                 North Penn Bank             $10,677     13.57%       >$6,293        >8.0%       >$7,866         >10.0%
              TIER 1 CAPITAL TO TOTAL AVERAGE ASSETS:
                 Consolidated                $13,450     13.44%       >$4,002        >4.0%       >$5,003         > 5.0%
                 North Penn Bank             $10,824     11.20%       >$3,866        >4.0%       >$4,833         > 5.0%
              TANGIBLE CAPITAL TO TOTAL AVERAGE ASSETS:
                 Consolidated                $13,450     13.44%       >$1,501        >1.5%           N/A            N/A
                 North Penn Bank             $10,824     11.20%       >$1,450        >1.5%           N/A            N/A

              Risk-Weighted Assets:
                 Consolidated                $78,958
                 North Penn Bank             $78,659
              Average Assets:
                 Consolidated               $100,060
                 North Penn Bank             $96,659
</TABLE>



                                       17
<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.










                                       18
<PAGE>

                          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.

USE OF PROCEEDS

1.       The effective date of the Securities Act statement for which the use of
         proceeds information is being disclosed is December 10, 2004. The
         Commission file number assigned to the registration statement is
         333-121121.

                                       19
<PAGE>

2.       From March 28, 2005 to September 30, 2006, the amount of net offering
         proceeds used for certain items and any other purposes for which at
         least 5% of the Company's total offering proceeds or $100,000
         (whichever is less) has been used are listed below:

                                                                   Amount of Net
          Activity                                                 Proceeds
          --------------------------------------------------------------------

          Net Offering Proceeds                                    $5,714,000

          Construction of Plant, Building and Facilities            1,000,000
          Purchase and Installation of Machinery and Equipment        401,000
          Purchase of Real Estate                                          --
          Acquisition of Other Business(es)                                --
          Repayment of Indebtedness                                        --
          Working Capital                                                  --
          Temporary Investments                                            --
          North Penn Bank                                           2,929,000
          North Penn Mutual Holding Company                           100,000
          North Penn Charitable Foundation                            100,000
          North Penn Bank Employee Stock Ownership Plan               545,000
          Dividends Paid                                              130,000
                                                                   ----------

          Proceeds Remaining at North Penn Bancorp, Inc.           $  509,000
                                                                   ==========


ITEM 3.    DEFAULTS UPON SENIOR SECURITIES.

         None.

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

         None

ITEM 5     OTHER INFORMATION.

         None





                                       20
<PAGE>


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K.

 EXHIBITS   DESCRIPTION
 --------   -------------------------------------------------------------------
   3.1      Certificate of Incorporation of North Penn Bancorp, Inc.(1)

   3.2      By-laws of North Penn Bancorp, Inc.(1)

   4.       Specimen Stock Certificate of North Penn Bancorp, Inc. (1)

   11.1     Statement re: computation of per share earnings ((2))

   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

------------

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

(2)  Note 5 of the Notes to Unaudited Consolidated Financial Statements is
     incorporated herein by reference.





















                                       21
<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:    November 14, 2006                 /s/ Frederick L. Hickman
          ------------------------          ----------------------------------
                                            Frederick L. Hickman
                                            President and
                                            Chief Executive Officer

Dated:    November 14, 2006                 /s/ Glenn J. Clark
          ------------------------          ----------------------------------
                                            Glenn J. Clark
                                            Assistant Vice President and
                                            Principal Accounting Officer



<PAGE>