**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**____________**

**FORM      10-QSB**

|  x | QUARTERLY                REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT                OF                1934 |
|---------|---------------------------------------------------------------------------------------------------------------------------------|

|  o | TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
|---------|--------------------------------------------------------------------------------|

**DELANCO      BANCORP, INC.**

| **United                States**                 (State                or other jurisdiction of incorporation or                organization) | **36-4519533**(I.R.S.                Employer Identification No.) |
|----------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------|

**615      Burlington Avenue, Delanco, New Jersey 08075**

**(856)      461-0611**

**Not      Applicable**

----

**DELANCO      BANCORP, INC.**

**FORM      10-QSB**

**Index**

|                                               |  ***Page                  No.*** |
|----------------------------------------------------|---------------------------------------|
| **PART                  I. FINANCIAL INFORMATION** |                                  |
|                                               |                                  |   |   |   |
| Item                                               | 1                                     | . | Financial                  Statements |   |
|                                               |                                  |   |   |   |
|                                               |                                  |   | Consolidated                  Statements of Financial Condition at September                    30, 2007 (Unaudited) and March 31, 2007 | 1 |
|                                               |                                  |   |   |   |
|                                               |                                  |   | Consolidated                  Statements of Income for the three and six months ended                    September 30, 2007 and 2006 (Unaudited) | 2 |
|                                               |                                  |   |   |   |
|                                               |                                  |   | Consolidated                  Statements of Stockholders’ Equity for the six months ended                    September 30, 2007 (Unaudited) | 3 |
|                                               |                                  |   |   |   |
|                                               |                                  |   | Consolidated                  Statements of Cash Flows for the six months ended September                    30, 2007 and 2006 (Unaudited) | 4 |
|                                               |                                  |   |   |   |
|                                               |                                  |   | Notes                  to Unaudited Consolidated Financial Statements |  6 |
|                                               |                                  |   |   |   |
| Item                                               | 2                                     | . | Management’s                  Discussion and Analysis or Plan of Operation |  7 |
|                                               |                                  |   |   |   |
| Item                                               | 3                                     | . | Controls                  and Procedures |  13 |
|                                               |                                  |
| **PART                  II. OTHER INFORMATION**    |                                  |
|                                               |                                  |   |   |   |
| Item                                               | 1                                     | . | Legal                  Proceedings |  14 |
|                                               |                                  |   |   |   |
| Item                                               | 2                                     | . | Unregistered                  Sales of Equity Securities and Use of Proceeds |  14 |
|                                               |                                  |   |   |   |
| Item                                               | 3                                     | . | Defaults                  upon Senior Securities |  14 |
|                                               |                                  |   |   |   |
| Item                                               | 4                                     | . | Submission                  of Matters to a Vote of Security Holders |  14 |
|                                               |                                  |   |   |   |
| Item                                               | 5                                     | . | Other                  Information |  14 |
|                                               |                                  |   |   |   |
| Item                                               | 6                                     | . | Exhibits |  15 |
|                                               |                                  |   |   |   |
| **Signatures**                                     |                                  |   |   |   |

----

**PART      I. FINANCIAL INFORMATION**

**Item      1. Financial Statements**

**DELANCO      BANCORP, INC. AND SUBSIDIARY**

**Consolidated      **
**Statements      of Financial Condition**

|                                                                                                                                                           |   | **September                30,****2007** |        | **March                31,****2007** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|-------------|--------------------------------------|--------|
|                                                                                                                                                           |   | **(unaudited)**                          |        |                                 |   |
| **ASSETS**                                                                                                                                                     |   |                                     |        |                                 |   |
| Cash                and cash equivalents                                                                                                                       |   |                                     |        |                                 |   |
| Cash                and amounts due from banks                                                                                                                 |   | $                                        | 653,407     |                                 | $      | 271,007 |   |
| Interest-bearing                deposits                                                                                                                       |   |                                     | 11,422,407  |                                 |   | 8,405,373 |   |
| Total                cash and cash equivalents                                                                                                                 |   |                                     | 12,075,814  |                                 |   | 8,676,380 |   |
| Investment                securities:                                                                                                                          |   |                                     |        |                                 |   |   |   |
| Securities                held-to-maturity                                                                                                                     |   |                                     | 12,549,578  |                                 |   | 15,822,529 |   |
| Securities                available-for-sale                                                                                                                   |   |                                     | 262,882     |                                 |   | 252,647 |   |
| Total                investment securities                                                                                                                     |   |                                     | 12,812,460  |                                 |   | 16,075,176 |   |
| Loans,                net of allowance for loan losses of $517,448 at September 30, 2007                (unaudited), $492,448                at March 31, 2007 |   |                                     | 93,932,758  |                                 |   | 76,497,739 |   |
| Accrued                interest receivable                                                                                                                     |   |                                     | 574,290     |                                 |   | 425,872 |   |
| Premises                and equipment, net                                                                                                                     |   |                                     | 8,278,817   |                                 |   | 8,422,457 |   |
| Investment                required by law-stock in Federal Home Loan Bank, at cost                                                                             |   |                                     | 172,900     |                                 |   | 102,700 |   |
| Deferred                income taxes                                                                                                                           |   |                                     | 249,800     |                                 |   | 240,100 |   |
| Bank-owned                life insurance                                                                                                                       |   |                                     | 124,412     |                                 |   | 124,412 |   |
| Prepaid                income taxes                                                                                                                            |   |                                     | 86,459      |                                 |   | 231,230 |   |
| Other                assets                                                                                                                                    |   |                                     | 249,182     |                                 |   | 265,204 |   |
| Total                assets                                                                                                                                    |   | $                                        | 128,556,892 |                                 | $      | 111,061,270 |   |
|                                                                                                                                                           |   |                                     |        |                                 |   |   |   |
| **LIABILITIES**                                                                                                                                                |   |                                     |        |                                 |   |   |   |
| Deposits                                                                                                                                                       |   |                                     |        |                                 |   |   |   |
| Non-interest                bearing deposits                                                                                                                   |   | $                                        | 3,929,521   |                                 | $      | 3,372,058 |   |
| Interest                bearing deposits                                                                                                                       |   |                                     | 109,613,319 |                                 |   | 92,617,217 |   |
| Total                deposits                                                                                                                                  |   |                                     | 113,542,840 |                                 |   | 95,989,275 |   |
| Accrued                interest payable                                                                                                                        |   |                                     | 339,774     |                                 |   | 349,178 |   |
| Advance                payments by borrowers for taxes and insurance                                                                                           |   |                                     | 272,120     |                                 |   | 260,262 |   |
| Other                liabilities                                                                                                                               |   |                                     | 549,093     |                                 |   | 640,206 |   |
| Total                liabilities                                                                                                                               |   |                                     | 114,703,827 |                                 |   | 97,238,921 |   |
|                                                                                                                                                           |   |                                     |        |                                 |   |   |   |
| **COMMITMENTS                AND CONTINGENCIES**                                                                                                               |   |                                     |        |                                 |   |   |   |
|                                                                                                                                                           |   |                                     |        |                                 |   |   |   |
| **STOCKHOLDERS’                EQUITY**                                                                                                                  |   |                                     |        |                                 |   |   |   |
| Preferred                stock, $.01 par value, 3,000,000 shares authorized; no shares                issued                                                   |   |                                     | —     |                                 |   | — |   |
| Common                stock, $.01 par value, 7,000,000 shares authorized; 1,634,725 shares                issued and outstanding                               |   |                                     | 16,347      |                                 |   | 16,347 |   |
| Additional                paid-in capital                                                                                                                      |   |                                     | 6,688,921   |                                 |   | 6,688,921 |   |
| Retained                earnings, substantially restricted                                                                                                     |   |                                     | 7,822,081   |                                 |   | 7,797,552 |   |
| Unearned                employee stock ownership plan                                                                                                          |   |                                     | (640,810    | )                                    |   | (640,810 | ) |
| Accumulated                other comprehensive (loss)                                                                                                          |   |                                     | (33,474     | )                                    |   | (39,661 | ) |
| Total                stockholder’s equity                                                                                                                |   |                                     | 13,853,065  |                                 |   | 13,822,349 |   |
| Total                liabilities and stockholders’ equity                                                                                                |   | $                                        | 128,556,892 |                                 | $      | 111,061,270 |   |

*See      Notes to the Unaudited Consolidated Financial Statements.*

----

**DELANCO      BANCORP, INC. AND SUBSIDIARY**

**Consolidated      Statements of Income**

**(Unaudited)**

|                                                                 |   | **Three                Months Ended****September                30,** |                    | **Six                Months Ended****September                30,** |   |
|----------------------------------------------------------------------|--------|-----------------------------------------------------------------------|-------------------------|---------------------------------------------------------------------|--------|
|                                                                 |   | **2007**                                                              |                    | **2006**                                                            |   | **2007** |   | **2006** |   |
| **INTEREST                INCOME**                                   |   |                                                                  |                    |                                                                |   |   |   |   |   |
| Loans                                                                |   | $                                                                     | 1,624,425               |                                                                | $      | 876,377 |   | $ | 3,096,524 |   | $ | 1,547,774 |   |
| Investment                securities                                 |   |                                                                  | 207,859                 |                                                                |   | 237,625 |   |   | 442,561 |   |   | 497,255 |   |
| Total                interest income                                 |   |                                                                  | 1,832,284               |                                                                |   | 1,114,002 |   |   | 3,539,085 |   |   | 2,045,029 |   |
|                                                                 |   |                                                                  |                    |                                                                |   |   |   |   |   |   |   |   |   |
| **INTEREST                EXPENSE**                                  |   |                                                                  |                    |                                                                |   |   |   |   |   |   |   |   |   |
| Interest-bearing                checking accounts                    |   |                                                                  | 12,374                  |                                                                |   | 8,959 |   |   | 23,738 |   |   | 20,653 |   |
| Passbook                and money market accounts                    |   |                                                                  | 258,380                 |                                                                |   | 172,089 |   |   | 498,243 |   |   | 303,804 |   |
| Certificates                of deposits                              |   |                                                                  | 718,841                 |                                                                |   | 344,422 |   |   | 1,359,591 |   |   | 640,421 |   |
| Advances                from Federal Home Loan Bank                  |   |                                                                  | 4,946                   |                                                                |   | 29,700 |   |   | 4,946 |   |   | 32,703 |   |
| Total                interest expense                                |   |                                                                  | 994,541                 |                                                                |   | 555,170 |   |   | 1,886,518 |   |   | 997,581 |   |
|                                                                 |   |                                                                  |                    |                                                                |   |   |   |   |   |   |   |   |   |
| Net                interest income                                   |   |                                                                  | 837,743                 |                                                                |   | 558,832 |   |   | 1,652,567 |   |   | 1,047,448 |   |
| Provision                for loan losses                             |   |                                                                  | 15,000                  |                                                                |   | 15,000 |   |   | 25,000 |   |   | 30,000 |   |
| Net                interest income after provision for loan losses   |   |                                                                  | 822,743                 |                                                                |   | 543,832 |   |   | 1,627,567 |   |   | 1,017,448 |   |
|                                                                 |   |                                                                  |                    |                                                                |   |   |   |   |   |   |   |   |   |
| **NONINTEREST                INCOME**                                |   |                                                                  |                    |                                                                |   |   |   |   |   |   |   |   |   |
| Income                from bank-owned life insurance                 |   |                                                                  | —                 |                                                                |   | 5,034 |   |   | — |   |   | 5,034 |   |
| Net                gain on sale of non-marketable securities         |   |                                                                  | —                 |                                                                |   | — |   |   | — |   |   | 18,505 |   |
| Net                gain on sale of securities available-for-sale     |   |                                                                  | —                 |                                                                |   | 96,972 |   |   | — |   |   | 175,204 |   |
| Service                charges                                       |   |                                                                  | 29,548                  |                                                                |   | 18,475 |   |   | 60,393 |   |   | 41,173 |   |
| Rental                income                                         |   |                                                                  | 3,916                   |                                                                |   | — |   |   | 9,919 |   |   | — |   |
| Other                                                                |   |                                                                  | 13,917                  |                                                                |   | 14,832 |   |   | 26,841 |   |   | 22,038 |   |
| Total                noninterest income                              |   |                                                                  | 47,381                  |                                                                |   | 135,313 |   |   | 97,153 |   |   | 261,954 |   |
|                                                                 |   |                                                                  |                    |                                                                |   |   |   |   |   |   |   |   |   |
| **NONINTEREST                EXPENSE**                               |   |                                                                  |                    |                                                                |   |   |   |   |   |   |   |   |   |
| Salaries                and employee benefits                        |   |                                                                  | 470,100                 |                                                                |   | 397,954 |   |   | 911,348 |   |   | 757,916 |   |
| Advertising                                                          |   |                                                                  | 17,503                  |                                                                |   | 9,245 |   |   | 25,776 |   |   | 19,789 |   |
| Office                supplies, telephone and postage                |   |                                                                  | 33,509                  |                                                                |   | 26,618 |   |   | 70,485 |   |   | 45,647 |   |
| Net                occupancy expense                                 |   |                                                                  | 171,928                 |                                                                |   | 80,765 |   |   | 335,245 |   |   | 145,308 |   |
| Federal                insurance premiums                            |   |                                                                  | 4,236                   |                                                                |   | 2,076 |   |   | 6,912 |   |   | 4,016 |   |
| Data                processing expenses                              |   |                                                                  | 31,537                  |                                                                |   | 40,806 |   |   | 63,731 |   |   | 65,850 |   |
| ATM                expenses                                          |   |                                                                  | 15,434                  |                                                                |   | 12,406 |   |   | 29,839 |   |   | 25,472 |   |
| Bank                charges and fees                                 |   |                                                                  | 13,428                  |                                                                |   | 13,554 |   |   | 26,718 |   |   | 26,248 |   |
| Insurance                and surety bond premiums                    |   |                                                                  | 15,863                  |                                                                |   | 10,578 |   |   | 29,587 |   |   | 20,153 |   |
| Dues                and subscriptions                                |   |                                                                  | 23,104                  |                                                                |   | 7,489 |   |   | 36,739 |   |   | 18,035 |   |
| Professional                fees                                     |   |                                                                  | 20,319                  |                                                                |   | 4,082 |   |   | 38,543 |   |   | 18,000 |   |
| On-line                banking expense                               |   |                                                                  | 21,152                  |                                                                |   | 19,066 |   |   | 43,516 |   |   | 29,492 |   |
| Other                                                                |   |                                                                  | 44,270                  |                                                                |   | 43,780 |   |   | 80,966 |   |   | 80,704 |   |
| Total                noninterest expense                             |   |                                                                  | 882,383                 |                                                                |   | 668,419 |   |   | 1,699,405 |   |   | 1,256,630 |   |
|                                                                 |   |                                                                  |                    |                                                                |   |   |   |   |   |   |   |   |   |
| **INCOME                (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)** |   |                                                                  | (12,259                 | )                                                                   |   | 10,726 |   |   | 25,315 |   |   | 22,772 |   |
|                                                                 |   |                                                                  |                    |                                                                |   |   |   |   |   |   |   |   |   |
| Federal                income tax (benefit)                          |   |                                                                  | (7,305                  | )                                                                   |   | (2,720 | ) |   | 595 |   |   | 1,653 |   |
| State                income tax (benefit)                            |   |                                                                  | (2,029                  | )                                                                   |   | (1,184 | ) |   | 191 |   |   | 1,002 |   |
| Total                income tax (benefit)                            |   |                                                                  | (9,334                  | )                                                                   |   | (3,904 | ) |   | 786 |   |   | 2,655 |   |
|                                                                 |   |                                                                  |                    |                                                                |   |   |   |   |   |   |   |   |   |
| **NET                INCOME (LOSS)**                                 |   |                                                                  | ($                2,925 | )                                                                   | $      | 14,630 |   | $ | 24,529 |   | $  | 20,117 |   |
| **INCOME                PER COMMON SHARE**                           |   | $                                                                     | .00                     |                                                                |   | N/A |   | $ | .02 |   |   | N/A |   |

*See      Notes to the Unaudited Consolidated Financial Statements*
*.*

----

**DELANCO      BANCORP, INC. AND SUBSIDIARY**

**Consolidated      Statements of Stockholders’ Equity**

**(Unaudited)**

|                                                                                                                                                         |   |                              |      |           |   |        |   |                                |      | **Unearned**              |   |                               |   |               |     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|-----------|----------------|--------|-------------|--------|-------------------------------------|-----------|---------------------------|--------|------------------------------------|--------|-------------------------|----------|
|                                                                                                                                                         |   | **Common                  Stock** |      | **Additional** |   |        |   | **Employee                  Stock** |      | **Accumulated****Other-** |   | **Total**                          |   |
|                                                                                                                                                         |   |                              |      |           |   | **Paid-in** |   | **Retained**                        |      | **Ownership**             |   | **Comprehensive**                  |   | **Stockholders’** |     |
|                                                                                                                                                         |   | **Shares**                        |      | **Amount**     |   | **Capital** |   | **Earnings**                        |      | **Plan**                  |   | **Income                  (Loss)** |   | **Equity**              |     |
|                                                                                                                                                         |   |                              |      |           |   |        |   |                                |      |                      |   |                               |   |                    |     |   |   |   |   |   |   |   |
| **Balance                  at March 31, 2007**                                                                                                               |   |                              | 1,634,725 |           | $      | 16,347      |   | $                                   | 6,688,921 |                      | $      | 7,797,552                          |   | $                       | (640,810 | ) | $ | (39,661 | ) | $ | 13,822,349 |   |
| **Comprehensive                  income**                                                                                                                    |   |                              |      |           |   |        |   |                                |      |                      |   |                               |   |                    |     |   |   |   |   |   |  |   |
| Net                  income                                                                                                                                  |   |                              |      |           |   |        |   |                                |      |                      |   |  24,529                       |   |                    |     |   |   |   |   |   | 24,529 |   |
| Other                  comprehensive income, net of tax:                                                                                                     |   |                              |      |           |   |        |   |                                |      |                      |   |                               |   |                    |     |   |   |   |   |   |   |   |
| Change                  in unrealized gain (loss) on securities available-for-sale, net                  of                  deferred income taxes of $4,667 |   |                              |      |           |   |        |   |                                |      |                      |   |                               |   |                    |     |   |   | 6,187 |   |   | 6,187 |   |
|  Total                  comprehensive income                                                                                                            |   |                              |      |           |   |        |   |                                |      |                      |   |                               |   |                    |     |   |   |   |   |   | 30,716 |   |
| **Balance                  at September 30, 2007**                                                                                                           |   |                              | 1,634,725 |           | $      | 16,347      |   | $                                   | 6,688,921 |                      | $      | 7,822,081                          |   | $                       | (640,810 | ) | $ | (33,474 | ) | $ | 13,853,065 |   |

*See      Notes to the Unaudited Consolidated Financial Statements.*

----

**DELANCO      BANCORP, INC. AND SUBSIDIARY**

**Consolidated      **
**Statements      of Cash Flows**

**(Unaudited)**

|                                                                                                            |   | **Six                Months Ended****September                30,** |         |
|-----------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------------|
|                                                                                                            |   | **2007**                                                            |         | **2006** |   |
| **Cash                flow from operating activities**                                                          |   |                                                                |         |   |   |
| Net                income                                                                                       |   | $                                                                   | 24,529       |   | $ | 20,117 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities: |   |                                                                |         |   |   |   |   |
| Deferred                income taxes                                                                            |   |                                                                | (13,826      | ) |   | (99,000 | ) |
| Depreciation                                                                                                    |   |                                                                | 159,931      |   |   | 63,834 |   |
| Discount                accretion net of premium amortization                                                   |   |                                                                | (7,565       | ) |   | (5,530 | ) |
| Provision                for loan losses                                                                        |   |                                                                | 25,000       |   |   | 30,000 |   |
| Net                gain on sale of non-marketable securities                                                    |   |                                                                |         |   |   | (18,505 | ) |
| Net                gain on sale of securities available-for-sale                                                |   |                                                                |         |   |   | (175,204 | ) |
| Loss                from bank-owned life insurance                                                              |   |                                                                |         |   |   | (5,034 | ) |
| **Changes                in operating assets and liabilities****(Increase)                  decrease in:**      |   |                                                                |         |   |   |   |   |
| Accrued                interest receivable                                                                      |   |                                                                | (148,418     | ) |   | (87,317 | ) |
| Other                assets                                                                                     |   |                                                                | 16,022       |   |   | 73,450 |   |
| Prepaid                income taxes                                                                             |   |                                                                | 144,771      |   |   | (118,325 | ) |
| **Increase                (decrease) in:**                                                                      |   |                                                                |         |   |   |   |   |
| Accrued                interest payable                                                                         |   |                                                                | (9,404       | ) |   | 89,864 |   |
| Other                liabilities                                                                                |   |                                                                | (91,113      | ) |   | 78,789 |   |
|                                                                                                            |   |                                                                |         |   |   |   |   |
| Net                cash provided by (used in) operating activities                                              |   | $                                                                   | 99,927       |   | $ | (152,861 | ) |
|                                                                                                            |   |                                                                |         |   |   |   |   |
| **Cash                flows from investing activities**                                                         |   |                                                                |         |   |   |   |   |
| Purchases                of securities available-for-sale                                                       |   |                                                                |         |   |   | (3,120 | ) |
| Proceeds                from sale of securities available-for-sale                                              |   |                                                                | 78           |   |   | 263,048 |   |
| Proceeds                from maturities and principal repayments of securities                held-to-maturity  |   |                                                                | 3,280,516    |   |   | 1,610,629 |   |
| Purchase                of investment required by law - stockin                Federal Home Loan Bank           |   |                                                                | (70,200      | ) |   | (42,000 | ) |
| Net                increase in loans                                                                            |   |                                                                | (17,460,019  | ) |   | (14,750,760 | ) |
| Purchases                of premises and equipment                                                              |   |                                                                | (16,291      | ) |   | (1,582,081 | ) |
|                                                                                                            |   |                                                                |         |   |   |   |   |
| Net                cash used in investing activities                                                            |   | $                                                                   | (14,265,916  | ) | $ | (14,504,284 | ) |
|                                                                                                            |   |                                                                |         |   |   |   |   |
| **Cash                flows from financing activities**                                                         |   |                                                                |         |   |   |   |   |
| Net                increase in deposits                                                                         |   |                                                                | 17,553,565   |   |   | 10,045,473 |   |
| Net                increase in advance payments by borrowers                for taxes and insurance             |   |                                                                | 11,858       |   |   | 5,512 |   |
| Net                increase in advances from FHLB                                                               |   |                                                                |    |   |   | 1,000,000 |   |
| Net                cash provided by financing activities                                                        |   | $                                                                   | 17,565,423   |   | $ | 11,050,985 |   |

----

|                                                                                                        |   | **Six                Months Ended****September                30,** |       |
|-------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|------------|
|                                                                                                        |   | **2007**                                                            |       | **2006** |   |
|                                                                                                        |   |                                                                |       |   |   |
| **Net                increase (decrease) in cash and cash equivalents**                                     |   | $                                                                   | 3,399,434  |   |   | ($3,606,160 | ) |
|                                                                                                        |   |                                                                |       |   |   |   |   |
| Cash                and cash equivalents, beginning of the period                                           |   |                                                                | 8,676,380  |   |   | 5,553,058 |   |
|                                                                                                        |   |                                                                |       |   |   |   |   |
| Cash                and cash equivalents, end of period                                                     |   | $                                                                   | 12,075,814 |   | $ | 1,946,898 |   |
|                                                                                                        |   |                                                                |       |   |   |   |   |
| **Supplemental                Disclosures:**                                                                |   |                                                                |       |   |   |   |   |
|                                                                                                        |   |                                                                |       |   |   |   |   |
| Cash                paid during the period for interest                                                     |   | $                                                                   | 1,895,922  |   | $ | 907,717 |   |
|                                                                                                        |   |                                                                |       |   |   |   |   |
| Cash                paid during the period for income taxes                                                 |   | $                                                                   | -0-        |   | $ | 36,979 |   |
|                                                                                                        |   |                                                                |       |   |   |   |   |
| Loans                transferred to foreclosed real estate during the period                                |   | $                                                                   | -0-        |   | $ | -0- |   |
|                                                                                                        |   |                                                                |       |   |   |   |   |
| Proceeds                from sales of foreclosed real estate financed through                loans          |   | $                                                                   | -0-        |   | $ | -0- |   |
|                                                                                                        |   |                                                                |       |   |   |   |   |
| Total                increase (decrease) in unrealized gain on securities                available-for-sale |   | $                                                                   | 10,312     |   |   | ($                155,572 | ) |

*See      Notes to the Unaudited Consolidated Financial Statements.*

----

**DELANCO      BANCORP, INC. AND SUBSIDIARY**

**Notes      to the Unaudited Consolidated Financial Statements**

**September      30, 2007**

**(1)**
**Basis      of Presentation**

**(2)**
**Stock      Issuance **

**(3)      **
**Earnings      Per Share**

----

|                                         |   | **Three                Months Ended****September                30,** |      | **Six                Months Ended****September                30,** |   |
|----------------------------------------------|--------|-----------------------------------------------------------------------|-----------|---------------------------------------------------------------------|--------|
|                                         |   | **2007**                                                              |      | **2006**                                                            |   | **2007** |   | **2006** |   |
| Numerator                                    |   |                                                                  |      | —                                                             |   |   |   | — |   |
| Denominators:                                |   |                                                                  |      |                                                                |   |   |   |   |   |
| Basic                shares outstanding      |   |                                                                  | 1,570,644 |                                                                |   | — |   |   | 1,570,644 |   |   | — |   |
| Effect                of dilutive securities |   |                                                                  | —   |                                                                |   | — |   |   | — |   |   | — |   |
| Dilutive                shares outstanding   |   |                                                                  | 1,570,644 |                                                                |   | — |   |   | 1,570,644 |   |   | — |   |
| Earnings                per share:           |   |                                                                  |      |                                                                |   |   |   |   |   |   |   |   |   |
| Basic                                        |   |                                                                  | .00       |                                                                |   | — |   |   | .02 |   |   | — |   |
| Dilutive                                     |   |                                                                  | .00       |                                                                |   | — |   |   | .02 |   |   | — |   |

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

**Forward-Looking      Statements**

**General**

----

**Balance      Sheet Analysis**

***Overview***
**.      **

***Loans***

| **Table                1: Loan Portfolio Analysis** |   |
|-----------------------------------------------------|--------|
|                                                |   | **September                30,** |   | **March                31,** |   |
|                                                |   | **2007** |   | **2007** |   |
| (Dollars                in thousands)               |   | **Amount** |   | **Percent** |   | **Amount** |   | **Percent** |   |
| Real                estate loans:                   |   |   |   |   |   |   |   |   |   |
| Residential                                         |   | $ | 29,052 |   |   | 30.1 | % | $ | 24,112 |   |   | 30.9 | % |
| Commercial                and multi-family          |   |   | 22,687 |   |   | 23.5 |   |   | 12,681 |   |   | 16.3 |   |
| Construction                                        |   |   | 3,914 |   |   | 4.0 |   |   | 2,061 |   |   | 2.6 |   |
| Total                real estate loans              |   |   | 55,653 |   |   | 57.6 |   |   | 38,854 |   |   | 49.8 |   |
| Commercial                loans                     |   |   | 13,917 |   |   | 14.4 |   |   | 15,124 |   |   | 19.4 |   |
| Consumer                loans                       |   |   | 27,061 |   |   | 28.0 |   |   | 24,066 |   |   | 30.8 |   |
| Total                loans                          |   |   | 96,631 |   |   | 100.0 | % |   | 78,044 |   |   | 100.0 | % |
| Loans                in process                     |   |   | (2,019 | ) |   |   |   |   | (916 | ) |   |   |   |
| Net                deferred loan fees               |   |   | (161 | ) |   |   |   |   | (138 | ) |   |   |   |
| Allowance                for losses                 |   |   | (518 | ) |   |   |   |   | (492 | ) |   |   |   |
| Loans,                net                           |   | $ | 93,933 |   |   |   |   | $ | 76,498 |   |   |   |   |

| **Table                2: Nonperforming Assets**                                                          |   |
|-----------------------------------------------------------------------------------------------------------|--------|
|                                                                                                      |   | **September                30,** |   | **March                31,** |   |
| (Dollars                in thousands)                                                                     |   | **2007** |   | **2007** |   |
| Nonaccrual                loans                                                                           |   | $ |   |   |   | $— |   |
| Accruing                loans past due 90 days or more                                                    |   |   | 1,607 |   |   | 564 |   |
| Total                of nonaccrual and 90 days or more past due loans                                     |   |   | 1,607 |   |   | 564 |   |
| Real                estate owned                                                                          |   |   | — |   |   | — |   |
| Other                nonperforming assets                                                                 |   |   | — |   |   | — |   |
| Total                nonperforming assets                                                                 |   |   | 1,607 |   |   | 564 |   |
| Troubled                debt restructurings                                                               |   |   | — |   |   | — |   |
| Troubled                debt restructurings and total nonperforming assets                                |   | $ | 1,607 |   | $ | 564 |   |
|                                                                                                      |   |   |   |   |   |   |   |
| Total                nonperforming loans to total loans                                                   |   |   | 1.7 | % |   | 0.7 | % |
| Total                nonperforming loans to total assets                                                  |   |   | 1.3 |   |   | 0.5 |   |
| Total                nonperforming assets and troubled debt restructurings to total                assets |   |   | 1.3 |   |   | 0.5 |   |

***Securities.***

----

| **Table                3: Investment Securities**    |   |
|------------------------------------------------------|--------|
|                                                 |   | **September                30,** |   | **March                31,** |   |
|                                                 |   | **2007** |   | **2007** |   |
| (Dollars                in thousands)                |   | **Amortized****Cost** |   | **Fair****Value** |   | **Amortized****Cost** |   | **Fair****Value** |   |
| Securities                available for sale:        |   |   |   |   |   |   |   |   |   |
| Mutual                funds                          |   | $ | 212 |   | $ | 263 |   | $ | 212 |   | $ | 253 |   |
| Equity                securities                     |   |   | — |   |   | — |   |   | — |   |   | — |   |
| Total                available for sale              |   |   | 212 |   |   | 263 |   |   | 212 |   |   | 253 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities                held to maturity:          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.                Government and agency securities |   |   | 3,000 |   |   | 2,975 |   |   | 4,000 |   |   | 3,942 |   |
| Mortgage-backed                securities            |   |   | 9,550 |   |   | 8,551 |   |   | 11,823 |   |   | 11,810 |   |
| Total                held to maturity                |   |   | 12,550 |   |   | 11,526 |   |   | 15,823 |   |   | 15,752 |   |
| Total                                                |   | $ | 12,762 |   | $ | 11,789 |   | $ | 16,035 |   | $ | 16,005 |   |

***Deposits***

| **Table                4: Deposits**               |   |
|----------------------------------------------------|--------|
|                                               |   | **September                30,** |   | **March                31,** |   |
|                                               |   | **2007** |   | **2007** |   |
| (Dollars                in thousands)              |   | **Amount** |   | **Percent** |   | **Amount** |   | **Percent** |   |
| Noninterest-bearing                demand deposits |   | $ | 3,930 |   |   | 3.5 | % | $ | 3,381 |   |   | 3.5 | % |
| Interest-bearing                demand deposits    |   |   | 8,360 |   |   | 7.3 |   |   | 7,930 |   |   | 8.3 |   |
| Savings                and money market accounts   |   |   | 36,444 |   |   | 32.1 |   |   | 33,154 |   |   | 34.5 |   |
| Certificates                of deposit             |   |   | 64,809 |   |   | 57.1 |   |   | 51,524 |   |   | 53.7 |   |
| Total                                              |   | $ | 113,543 |   |   | 100.0 | % | $ | 95,989 |   |   | 100.0 | % |

***Borrowings***

**Results      of Operations for the Six Months Ended September 30, 2007 and      2006**

*** ***
***Financial      Highlights.***

| **Table                5: Summary Income Statements**                |   |     |   |     |   |                            |   |                        |   |
|----------------------------------------------------------------------|--------|----------|--------|----------|--------|---------------------------------|--------|-----------------------------|--------|
| Six                months ended September 30, (Dollars in thousands) |   | **2007** |   | **2006** |   | **2007                v. 2006** |   | **%                Change** |   |
| Net                interest income                                   |   | $        | 1,653  |     | $      | 1,047                           |   | $                           | 606    |   |   | 57.9 | % |
| Provision                for loan losses                             |   |     | 25     |     |   | 30                              |   |                        | (5     | ) |   | (16.7 | ) |
| Noninterest                income                                    |   |     | 97     |     |   | 262                             |   |                        | (165   | ) |   | (63.0 | ) |
| Noninterest                expenses                                  |   |     | 1,699  |     |   | 1,257                           |   |                        | 442    |   |   | (35.2 | ) |
| Net                income                                            |   |     | 25     |     |   | 20                              |   |                        | 5      |   |   | 25.0 |   |
|                                                                 |   |     |   |     |   |                            |   |                        |   |   |   |   |   |
| Return                on average equity (annualized)                 |   |     | .35    | %        |   | .50                             | %      |                        |   |   |   |   |   |
| Return                on average assets (annualized)                 |   |     | .04    | %        |   | .05                             | %      |                        |   |   |   |   |   |

----

***Net      Interest Income.***

| **Table                6: Analysis of Net Interest Income** |   |   |   |   |   |   |   |   |   |
|-------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

| Six                months ended September 30, (Dollars in thousands) |   | **2007** |   | **2006** |   | **2007                v. 2006** |   | **%                Change** |   |
|----------------------------------------------------------------------|--------|----------|--------|----------|--------|---------------------------------|--------|-----------------------------|--------|
| **Components                of net interest income**                 |   |     |   |     |   |                            |   |                        |   |
| Loans                                                                |   | $        | 3,096  |     | $      | 1,548                           |   | $                           | 1,548  |   |   | 100.0 | % |
| Investment                securities                                 |   |     | 443    |     |   | 497                             |   |                        | (54    | ) |   | (10.9 | ) |
| Total                interest income                                 |   |     | 3,539  |     |   | 2,045                           |   |                        | 1,494  |   |   | 73.1 |   |
| Deposits                                                             |   |     | 1,881  |     |   | 965                             |   |                        | 916    |   |   | 94.9 |   |
| Borrowings                                                           |   |     | 5      |     |   | 33                              |   |                        | (28    | ) |   | (84.8 | ) |
| Total                interest expense                                |   |     | 1,886  |     |   | 998                             |   |                        | 888    |   |   | 89.0 |   |
| Net                interest income                                   |   |     | 1,653  |     |   | 1,047                           |   |                        | 606    |   |   | 57.9 |   |
| **Average                yields and rates paid**                     |   |     |   |     |   |                            |   |                        |   |   |   |   |   |
| Interest-earning                assets                               |   |     | 6.46   |     |   | 5.71                            |   |                        | .75    |   |   |   |   |
| Interest-bearing                liabilities                          |   |     | 3.78   |     |   | 2.90                            |   |                        | .88    |   |   |   |   |
| Interest                rate spread                                  |   |     | 2.68   |     |   | 2.81                            |   |                        | (.13   | ) |   |   |   |
| Net                interest margin                                   |   |     | 3.02   |     |   | 2.92                            |   |                        | .10    |   |   |   |   |
| **Average                balances**                                  |   |     |   |     |   |                            |   |                        |   |   |   |   |   |
| Loans                                                                |   |     | 89,590 |     |   | 50,099                          |   |                        | 39,491 |   |   | 78.8 |   |
| Investment                securities                                 |   |     | 14,464 |     |   | 19,700                          |   |                        | (5,236 | ) |   | (26.6 | ) |
| Other                earning assets                                  |   |     | 5,487  |     |   | 1,884                           |   |                        | 3,603  |   |   | 191.2 |   |
| Interest-bearing                deposits                             |   |     | 99,605 |     |   | 67,511                          |   |                        | 32,094 |   |   | 47.5 |   |
| Borrowings                                                           |   |     | 208    |     |   | 1,317                           |   |                        | (1,109 | ) |   | 84.2 |   |

***Provision      for Loan Losses.***

----

| **Table                7: Analysis of Loan Loss Experience** |   |
|--------------------------------------------------------------|--------|

| Six                months ended September 30, (Dollars in thousands)                                      |   | **2007** |    | **2006** |   |
|-----------------------------------------------------------------------------------------------------------|--------|----------|---------|----------|--------|
| Allowance                at beginning of period                                                           |   | $        | 492     |     | $      | 237 |   |
| Provision                for loan losses                                                                  |   |     | 25      |     |   | 30 |   |
| Total                charge-offs                                                                          |   |     | — |     |   | — |   |
| Recoveries                                                                                                |   |     | — |     |   | — |   |
| Net                charge-offs                                                                            |   |     | — |     |   | — |   |
| Allowance                at end of period                                                                 |   | $        | 517     |     | $      | 267 |   |
|                                                                                                      |   |     |    |     |   |   |   |
| Allowance                to nonperforming loans                                                           |   |     | 32.2    | %        |   | 47.3 | % |
| Allowance                to total loans outstanding at the end of the period                              |   |     | .52     |     |   | .47 |   |
| Net                charge-offs (recoveries) to average loans outstanding during                the period |   |     | — |     |   | — |   |

***Non-Interest      Income.***

| **Table                8: Noninterest Income Summary**               |   |     |    |     |   |                        |   |                        |                |
|----------------------------------------------------------------------|--------|----------|---------|----------|--------|-----------------------------|--------|-----------------------------|---------------------|
| Six                months ended September 30, (Dollars in thousands) |   | **2007** |    | **2006** |   | **$                Change** |   | **%                Change** |                |
| Income                from bank-owned life insurance                 |   | $        | — |     | $      | 5                           |   |                        | ($                5 | ) |   | (100.0 | )% |
| Gain                (loss) on sale of securities                     |   |     | — |     |   | 175                         |   |                        | (175                | ) |   | (100.0 | ) |
| Net                gain on sale of non-marketable securities         |   |     | — |     |   | 19                          |   |                        | (19                 | ) |   | (100.0 | ) |
| Service                charges                                       |   |     | 60      |     |   | 41                          |   |                        | 19                  |   |   | 46.3 |   |
| Rental                income                                         |   |     | 10      |     |   | —                     |   |                        | 10                  |   |   | 100.0 |   |
| Other                                                                |   |     | 27      |     |   | 22                          |   |                        | 5                   |   |   | 22.7 |   |
| Total                                                                |   | $        | 97      |     | $      | 262                         |   |                        | ($165               | ) |   | (63.0 | )% |

***Non-Interest      Expenses.***

| **Table                9: Noninterest Expense Summary** |   |   |   |   |
|---------------------------------------------------------|--------|--------|--------|--------|

| Six                months ended September 30, (Dollars in thousands) |   | **2007** |   | **2006** |   | **$                Change** |   | **%                Change** |    |
|----------------------------------------------------------------------|--------|----------|--------|----------|--------|-----------------------------|--------|-----------------------------|---------|
| Salaries                and employee benefits                        |   | $        | 911    |     | $      | 758                         |   | $                           | 153     |   |   | 20.2 | % |
| Advertising                                                          |   |     | 26     |     |   | 20                          |   |                        | 6       |   |   | 30.0 |   |
| Office                supplies, telephone and postage                |   |     | 70     |     |   | 46                          |   |                        | 24      |   |   | 52.2 |   |
| Net                occupancy expense                                 |   |     | 335    |     |   | 145                         |   |                        | 190     |   |   | 131.0 |   |
| Federal                insurance premiums                            |   |     | 7      |     |   | 4                           |   |                        | 3       |   |   | 75.0 |   |
| Data                processing expenses                              |   |     | 64     |     |   | 66                          |   |                        | (2      | ) |   | (3.0 | ) |
| ATM                expenses                                          |   |     | 30     |     |   | 26                          |   |                        | 4       |   |   | 15.4 |   |
| Bank                charges and fees                                 |   |     | 27     |     |   | 26                          |   |                        | 1       |   |   | 3.9 |   |
| Insurance                and surety bond premiums                    |   |     | 30     |     |   | 20                          |   |                        | 10      |   |   | 50.0 |   |
| Dues                and subscriptions                                |   |     | 37     |     |   | 18                          |   |                        | 19      |   |   | 105.6 |   |
| Professional                fees                                     |   |     | 38     |     |   | 18                          |   |                        | 20      |   |   | 111.1 |   |
| On-line                banking expenses                              |   |     | 43     |     |   | 29                          |   |                        | 14      |   |   | 48.3 |   |
| Other                                                                |   |     | 81     |     |   | 81                          |   |                        | — |   |   | — |   |
| Total                                                                |   | $        | 1,699  |     | $      | 1,257                       |   | $                           | 442     |   |   | 35.2 | % |

----

**Liquidity      and Capital Management**

***Liquidity      Management.***

***Capital      Management.***

**Off-Balance      Sheet Arrangements**

----

**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**

|                                |   | Votes                  for |      |  Votes                  Withheld |   |
|-------------------------------------|--------|----------------------------|-----------|---------------------------------------|--------|
| William                  C. Jenkins |   |                       | 1,424,636 |                                  |   | 18,072 |   |
| John                  A. Latimer    |   |                       | 1,424,636 |                                  |   | 18,072 |   |
| James                  W. Verner    |   |                       | 1,423,626 |                                  |   | 19,072 |   |

|                            |   | Votes                  for |      |  Votes                  Withheld |   |
|---------------------------------|--------|----------------------------|-----------|---------------------------------------|--------|
| Renee                  C. Vidal |   |                       | 1,412,302 |                                  |   | 30,406 |   |

|   | 2. | The                appointment of Connolly, Grady & Cha, P.C.as auditors for the Company                for the fiscal year ending March 31, 2008 was ratified by stockholders                by                the following vote: |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| For:     |   |   | 1,425,624 |   |
|----------|--------|--------|-----------|--------|
| Against: |   |   | 99        |   |
| Abstain: |   |   | 5,075     |   |

**Item      5.**
**      Other Information**

----

**Item      6.**
**      Exhibits**

| 3.1    | Charter                  of Delanco Bancorp, Inc. (1)                                                                                                         |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                          |
| 3.2    | Bylaws                  of Delanco Bancorp, Inc. (1)                                                                                                          |
|   |                                                                                                                                                          |
| 4.0    | Stock                  Certificate of Delanco Bancorp, Inc. (1)                                                                                               |
|   |                                                                                                                                                          |
| 10.1   | First                  Amendment to the Employment Agreement between Delanco Bancorp,                  Inc. and                  Robert M. Notigan            |
|   |                                                                                                                                                          |
| 10.2   | First                  Amendment to the Employment Agreement between Delanco Federal Savings                  Bank                  and Robert M Notigan      |
|   |                                                                                                                                                          |
| 10.3   | First                  Amendment to the Employment Agreement between Delanco Bancorp,                  Inc. and                  Douglas R. Allen, Jr.        |
|   |                                                                                                                                                          |
| 10.4   | First                  Amendment to the Employment Agreement between Delanco Federal Savings                  Bank                  and Douglas R. Allen, Jr. |
|   |                                                                                                                                                          |
| 31.1   | Rule                  13a-14(a)/15d-14(a) Certification of Chief Executive                  Officer                                                           |
|   |                                                                                                                                                          |
| 31.2   | Rule                  13a-14(a)/15d-14(a) Certification of Chief Financial                  Officer                                                           |
|   |                                                                                                                                                          |
| 32.0   | Section                  1350 Certification                                                                                                                   |

----

**SIGNATURES**

|                                      |                                 |                                                                                                                                                                 |
|-------------------------------------------|--------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                      | DELANCO                BANCORP, INC. |
|                                 |                            |                                                                                                                                                            |
| Date: November              14, 2007 | By:                        | /s/ Robert              M.              Notigan                                                                                                                 |
|                                      |                                      | Robert                M. NotiganPresident                and Chief Executive Officer(principal                executive officer)                                     |
|                                      |                                      |                                                                                                                                                                 |
|                                      |                                 |                                                                                                                                                                 |
| Dated: November 14, 2007                  |                                 | Douglas R. Allen, Jr.                                                                                                                                                |
|                                      |                                 | Douglas                R. Allen, Jr.Senior                Vice President and Chief Financial Officer(principal                financial and accounting officer) |
|                                      |                                 |                                                                                                                                                                 |
|                                      |                                 |                                                                                                                                                                 |

----