##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549





FORM 10-Q





(Mark One)

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

For the quarterly period ended March 31, 2010

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from
 to

Commission file number: 001-32971





Fox Chase Bancorp, Inc.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|United
States                                                  |  | 33-1145559                          
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)
|                                                               | 
|4390 Davisville Road, Hatboro,
Pennsylvania                    |  | 19040                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

(215) 682-7400

(Registrants telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)





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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definition of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large Accelerated Filer |  |  ̈                                                |  | Accelerated Filer         |  |  ̈
|                        |  |                                                  | 
|Non-Accelerated Filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller Reporting Company |  | x

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

As of May 7, 2010, there were 13,609,187 shares of the registrants common stock outstanding.









---

##### Table of Contents

FOX CHASE BANCORP, INC.

Table of Contents



|                              |  |                                                                                                             |  |        
|----------------------------- |  | ----------------------------------------------------------------------------------------------------------- |  | -------
|                              |  |                                                                                                             |  | PageNo.
|Part I. Financial Information |  |                                                                                                            
|                              |  |                                                                                                            
|Item 1.                       |  | Financial Statements                                                                                        |  | 3      
|                              |  |                                                                                                            
|                              |  | Consolidated Statements of Condition at March 31, 2010 (unaudited) and December 31,
2009                    |  | 3      
|                              |  |                                                                                                            
|                              |  | Consolidated Statements of Operations for the Three Months Ended March 31, 2010 and 2009 (unaudited)        |  | 4      
|                              |  |                                                                                                            
|                              |  | Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2010 and 2009 (unaudited) |  | 5      
|                              |  |                                                                                                            
|                              |  | Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and 2009 (unaudited)        |  | 6      
|                              |  |                                                                                                            
|                              |  | Notes to Unaudited Consolidated Financial Statements                                                        |  | 7      
|                              |  |                                                                                                            
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of
Operations                       |  | 24     
|                              |  |                                                                                                            
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                                  |  | 34     
|                              |  |                                                                                                            
|Item 4T.                      |  | Controls and Procedures                                                                                     |  | 34     
|                              | 
|Part II. Other Information    |  |                                                                                                            
|                              |  |                                                                                                            
|Item 1.                       |  | Legal Proceedings                                                                                           |  | 34     
|                              |  |                                                                                                            
|Item 1A.                      |  | Risk Factors                                                                                                |  | 35     
|                              |  |                                                                                                            
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                 |  | 35     
|                              |  |                                                                                                            
|Item 3.                       |  | Defaults Upon Senior Securities                                                                             |  | 35     
|                              |  |                                                                                                            
|Item 4.                       |  | (Removed and Reserved)                                                                                      |  | 35     
|                              |  |                                                                                                            
|Item 5.                       |  | Other Information                                                                                           |  | 35     
|                              |  |                                                                                                            
|Item 6.                       |  | Exhibits                                                                                                    |  | 35     
|                              | 
|Signatures                    |  |                                                                                                            



2



---

##### Table of Contents

PART I. FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

FOX CHASE BANCORP, INC.

Consolidated Statements of Condition

(In Thousands, Except Share Data)



|                                                                                                                                                               |             |               |           |   |                  |   |           |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | ------------- | --------- | - | ---------------- | - | --------- | -
|                                                                                                                                                               |             | March 31,2010 |           |   | December 31,2009 |  
|                                                                                                                                                               | (unaudited) |               |           |   |                 
|                                                                                                                                                               |             |              
|ASSETS                                                                                                                                                         |             |               |           |   |                  |   |           |  
|Cash and due from banks                                                                                                                                        |             | $             | 69        |   |                  | $ | 44        |  
|Interest-earning demand deposits in other banks                                                                                                                |             |               | 51,109    |   |                  |   | 65,374    |  
|                                                                                                                                                               |             |               |           |   |                  |   |           |  
|Total cash and cash equivalents                                                                                                                                |             |               | 51,178    |   |                  |   | 65,418    |  
|Investment securities available-for-sale                                                                                                                       |             |               | 18,961    |   |                  |   | 19,548    |  
|Mortgage related securities available-for-sale                                                                                                                 |             |               | 378,203   |   |                  |   | 402,919   |  
|Loans, net of allowance for loan losses of $10,721 at March 31, 2010 and $10,605 at December 31, 2009                                                          |             |               | 645,093   |   |                  |   | 631,296   |  
|Assets acquired through foreclosure                                                                                                                            |             |               | 5,076     |   |                  |   | 4,052     |  
|Federal Home Loan Bank stock, at cost                                                                                                                          |             |               | 10,435    |   |                  |   | 10,435    |  
|Bank-owned life insurance                                                                                                                                      |             |               | 12,782    |   |                  |   | 12,667    |  
|Premises and equipment                                                                                                                                         |             |               | 10,996    |   |                  |   | 11,137    |  
|Real estate held for investment                                                                                                                                |             |               | 1,730     |   |                  |   | 1,730     |  
|Accrued interest receivable                                                                                                                                    |             |               | 4,470     |   |                  |   | 4,467     |  
|Mortgage servicing rights, net                                                                                                                                 |             |               | 652       |   |                  |   | 683       |  
|Deferred tax asset, net                                                                                                                                        |             |               | 1,222     |   |                  |   | 1,467     |  
|Other assets                                                                                                                                                   |             |               | 15,625    |   |                  |   | 7,999     |  
|                                                                                                                                                               |             |               |           |   |                  |   |           |  
|Total Assets                                                                                                                                                   |             | $             | 1,156,423 |   |                  | $ | 1,173,818 |  
|                                                                                                                                                               |             |               |           |   |                  |   |           |  
|                                                                                                                                                               |             |              
|LIABILITIES AND STOCKHOLDERS EQUITY LIABILITIES                                                                                                               |             |               |           |   |                  |   |           |  
|Deposits                                                                                                                                                       |             | $             | 846,159   |   |                  | $ | 858,277   |  
|Federal Home Loan Bank advances                                                                                                                                |             |               | 126,088   |   |                  |   | 137,165   |  
|Other borrowed funds                                                                                                                                           |             |               | 50,000    |   |                  |   | 50,000    |  
|Advances from borrowers for taxes and insurance                                                                                                                |             |               | 2,062     |   |                  |   | 2,119     |  
|Accrued interest payable                                                                                                                                       |             |               | 637       |   |                  |   | 696       |  
|Accrued expenses and other liabilities                                                                                                                         |             |               | 6,238     |   |                  |   | 1,927     |  
|                                                                                                                                                               |             |               |           |   |                  |   |           |  
|Total Liabilities                                                                                                                                              |             |               | 1,031,184 |   |                  |   | 1,050,184 |  
|                                                                                                                                                               |             |               |           |   |                  |   |           |  
|STOCKHOLDERS EQUITY                                                                                                                                           |             |               |           |   |                  |   |           |  
|Preferred stock ($.01 par value; 1,000,000 shares authorized, none issued and outstanding at March 31, 2010 and December 31,
2009)                             |             |               |          |   |                  |   |          |  
|Common stock ($.01 par value; 35,000,000 shares authorized, 14,679,750 shares issued and 13,609,187 shares outstanding at
March 31, 2010 and December 31, 2009 |             |               | 147       |   |                  |   | 147       |  
|Additional paid-in capital                                                                                                                                     |             |               | 64,227    |   |                  |   | 64,016    |  
|Treasury stock, at cost (1,070,563 shares at March 31, 2010 and December 31, 2009)                                                                             |             |               | (11,814   | ) |                  |   | (11,814   | )
|Common stock acquired by benefit plans                                                                                                                         |             |               | (6,717    | ) |                  |   | (6,862    | )
|Retained earnings                                                                                                                                              |             |               | 72,145    |   |                  |   | 71,604    |  
|Accumulated other comprehensive income, net                                                                                                                    |             |               | 7,251     |   |                  |   | 6,543     |  
|                                                                                                                                                               |             |               |           |   |                  |   |           |  
|Total Stockholders Equity                                                                                                                                     |             |               | 125,239   |   |                  |   | 123,634   |  
|                                                                                                                                                               |             |               |           |   |                  |   |           |  
|                                                                                                                                                               |             |              
|Total Liabilities and Stockholders Equity                                                                                                                     |             | $             | 1,156,423 |   |                  | $ | 1,173,818 |  
|                                                                                                                                                               |             |               |           |   |                  |   |           |  

See accompanying notes to the unaudited consolidated financial statements.



3



---

##### Table of Contents

FOX CHASE BANCORP, INC.

Consolidated Statements of Operations

(Unaudited)

(In Thousands, Except Per Share Data)



|                                                           |      |                             |        |  |   |       
|---------------------------------------------------------- | ---- | --------------------------- | ------ |  | - | ------
|                                                           |      | Three Months EndedMarch 31,
|                                                           | 2010 |                             | 2009  
|                                                           |      |                            
|INTEREST INCOME                                            |      |                             |        |  |   |       
|Interest and fees on loans                                 |      | $                           | 8,782  |  | $ | 8,377 
|Interest on money market funds                             |      |                             |       |  |   | 38    
|Interest on mortgage related securities available-for-sale |      |                             | 3,612  |  |   | 3,255 
|Interest on investment securities available-for-sale       |      |                             |        |  |   |       
|Taxable                                                    |      |                             | 77     |  |   | 124   
|Nontaxable                                                 |      |                             | 89     |  |   | 143   
|Dividend income                                            |      |                             |       |  |   | 1     
|Other interest income                                      |      |                             | 99     |  |   | 1     
|                                                           |      |                             |        |  |   |       
|Total Interest Income                                      |      |                             | 12,659 |  |   | 11,939
|                                                           |      |                             |        |  |   |       
|INTEREST EXPENSE                                           |      |                             |        |  |   |       
|Deposits                                                   |      |                             | 4,578  |  |   | 4,379 
|Federal Home Loan Bank advances                            |      |                             | 1,217  |  |   | 1,330 
|Other borrowed funds                                       |      |                             | 427    |  |   | 429   
|                                                           |      |                             |        |  |   |       
|Total Interest Expense                                     |      |                             | 6,222  |  |   | 6,138 
|                                                           |      |                             |        |  |   |       
|Net Interest Income                                        |      |                             | 6,437  |  |   | 5,801 
|Provision for loan losses                                  |      |                             | 891    |  |   | 395   
|                                                           |      |                             |        |  |   |       
|Net Interest Income after Provision for Loan Losses        |      |                             | 5,546  |  |   | 5,406 
|                                                           |      |                             |        |  |   |       
|NONINTEREST INCOME                                         |      |                             |        |  |   |       
|Service charges and other fee income                       |      |                             | 253    |  |   | 170   
|Net gain on sale of loans                                  |      |                             |       |  |   | 3     
|Income on bank-owned life insurance                        |      |                             | 115    |  |   | 109   
|Other                                                      |      |                             | 35     |  |   | 65    
|                                                           |      |                             |        |  |   |       
|                                                           |      |                            
|Total Noninterest Income                                   |      |                             | 403    |  |   | 347   
|                                                           |      |                             |        |  |   |       
|NONINTEREST EXPENSE                                        |      |                             |        |  |   |       
|Salaries, benefits and other compensation                  |      |                             | 2,983  |  |   | 2,850 
|Occupancy expense                                          |      |                             | 499    |  |   | 495   
|Furniture and equipment expense                            |      |                             | 143    |  |   | 221   
|Data processing costs                                      |      |                             | 369    |  |   | 385   
|Professional fees                                          |      |                             | 262    |  |   | 266   
|Marketing expense                                          |      |                             | 71     |  |   | 84    
|FDIC premiums                                              |      |                             | 372    |  |   | 241   
|Other                                                      |      |                             | 481    |  |   | 409   
|                                                           |      |                             |        |  |   |       
|Total Noninterest Expense                                  |      |                             | 5,180  |  |   | 4,951 
|                                                           |      |                             |        |  |   |       
|Income Before Income Taxes                                 |      |                             | 769    |  |   | 802   
|Income tax provision                                       |      |                             | 218    |  |   | 201   
|                                                           |      |                             |        |  |   |       
|Net Income                                                 |      | $                           | 551    |  | $ | 601   
|                                                           |      |                             |        |  |   |       
|Earnings per share:                                        |      |                             |        |  |   |       
|Basic                                                      |      | $                           | 0.04   |  | $ | 0.05  
|Diluted                                                    |      | $                           | 0.04   |  | $ | 0.05  

See accompanying notes
to the unaudited consolidated financial statements.



4



---

##### Table of Contents

FOX CHASE BANCORP, INC.

Consolidated Statements of Changes in Equity

Three months ended March 31, 2010

(In Thousands, Unaudited)



|                                               |  |             |     |                          |   |        |               |  |   |                                     |   |  |                  |        |   |                                          |   |             |   |  |   |       |  |   |         |  
|---------------------------------------------- |  | ----------- | --- | ------------------------ | - | ------ | ------------- |  | - | ----------------------------------- | - |  | ---------------- | ------ | - | ---------------------------------------- | - | ----------- | - |  | - | ----- |  | - | ------- | -
|                                               |  | CommonStock |     | AdditionalPaid inCapital |   |        | TreasuryStock |  |   | CommonStockAcquired byBenefit Plans |   |  | RetainedEarnings |        |   | AccumulatedOtherComprehensiveIncome      |   | TotalEquity |  
|BALANCE - DECEMBER 31, 2008                    |  | $           | 147 |                          | $ | 63,516 |               |  | $ | (7,293                              | ) |  | $                | (7,819 | ) |                                          | $ | 72,664      |   |  | $ | 5     |  | $ | 121,220 |  
|Purchase of treasury stock, net                |  |             |     |                          |   |        |               |  |   | (856                                | ) |  |                  |        |   |                                          |   |             |   |  |   |       |  |   | (856    | )
|Stock based compensation expense               |  |             |     |                          |   | 243    |               |  |   |                                     |   |  |                  |        |   |                                          |   |             |   |  |   |       |  |   | 243     |  
|Issuance of stock for vested equity awards     |  |             |     |                          |   | (24    | )             |  |   |                                     |   |  |                  | 28     |   |                                          |   | (4          | ) |  |   |       |  |   |        |  
|Unallocated ESOP shares committed to employees |  |             |     |                          |   | (3     | )             |  |   |                                     |   |  |                  | 96     |   |                                          |   |             |   |  |   |       |  |   | 93      |  
|Shares allocated in long-term incentive plan   |  |             |     |                          |   | 26     |               |  |   |                                     |   |  |                  |        |   |                                          |   |             |   |  |   |       |  |   | 26      |  
|Net income                                     |  |             |     |                          |   |        |               |  |   |                                     |   |  |                  |        |   |                                          |   | 601         |   |  |   |       |  |   | 601     |  
|Other comprehensive income                     |  |             |     |                          |   |        |               |  |   |                                     |   |  |                  |        |   |                                          |   |             |   |  |   | 2,593 |  |   | 2,593   |  
|                                               |  |             |     |                          |   |        |               |  |   |                                     |   |  |                  |        |   |                                          |   |             |   |  |   |       |  |   |         |  
|BALANCE - MARCH 31, 2009                       |  | $           | 147 |                          | $ | 63,758 |               |  | $ | (8,149                              | ) |  | $                | (7,695 | ) |                                          | $ | 73,261      |   |  | $ | 2,598 |  | $ | 123,920 |  
|                                               |  |             |     |                          |   |        |               |  |   |                                     |   |  |                  |        |   |                                          |   |             |   |  |   |       |  |   |         |  
|                                               |  |             |     |                          |   |        |              
|                                               |  | CommonStock |     | AdditionalPaid inCapital |   |        | TreasuryStock |  |   | CommonStockAcquired byBenefit Plans |   |  | RetainedEarnings |        |   | AccumulatedOtherComprehensiveIncome, net |   | TotalEquity |  
|BALANCE - DECEMBER 31, 2009                    |  | $           | 147 |                          | $ | 64,016 |               |  | $ | (11,814                             | ) |  | $                | (6,862 | ) |                                          | $ | 71,604      |   |  | $ | 6,543 |  | $ | 123,634 |  
|Stock based compensation expense               |  |             |     |                          |   | 229    |               |  |   |                                     |   |  |                  |        |   |                                          |   |             |   |  |   |       |  |   | 229     |  
|Issuance of stock for vested equity awards     |  |             |     |                          |   | (39    | )             |  |   |                                     |   |  |                  | 49     |   |                                          |   | (10         | ) |  |   |       |  |   |        |  
|Unallocated ESOP shares committed to employees |  |             |     |                          |   | (1     | )             |  |   |                                     |   |  |                  | 96     |   |                                          |   |             |   |  |   |       |  |   | 95      |  
|Shares allocated in long-term incentive plan   |  |             |     |                          |   | 22     |               |  |   |                                     |   |  |                  |        |   |                                          |   |             |   |  |   |       |  |   | 22      |  
|Net income                                     |  |             |     |                          |   |        |               |  |   |                                     |   |  |                  |        |   |                                          |   | 551         |   |  |   |       |  |   | 551     |  
|Other comprehensive income                     |  |             |     |                          |   |        |               |  |   |                                     |   |  |                  |        |   |                                          |   |             |   |  |   | 708   |  |   | 708     |  
|                                               |  |             |     |                          |   |        |               |  |   |                                     |   |  |                  |        |   |                                          |   |             |   |  |   |       |  |   |         |  
|BALANCE - MARCH 31, 2010                       |  | $           | 147 |                          | $ | 64,227 |               |  | $ | (11,814                             | ) |  | $                | (6,717 | ) |                                          | $ | 72,145      |   |  | $ | 7,251 |  | $ | 125,239 |  
|                                               |  |             |     |                          |   |        |               |  |   |                                     |   |  |                  |        |   |                                          |   |             |   |  |   |       |  |   |         |  

See accompanying notes to the unaudited consolidated financial statements.



5



---

##### Table of Contents

FOX CHASE BANCORP, INC.

Consolidated Statements of Cash Flows

(In Thousands)



|                                                                                  |  |                              |         |   |      |   |         |  
|--------------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                  |  | Three Months Ended March 31, |        
|                                                                                  |  | 2010                         |         |   | 2009 |  
|                                                                                  |  | (Unaudited)                  |        
|Cash Flows From Operating Activities                                              |  |                              |         |   |      |   |         |  
|Net income                                                                        |  | $                            | 551     |   |      | $ | 601     |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                              |         |   |      |   |         |  
|Provision for loan losses                                                         |  |                              | 891     |   |      |   | 395     |  
|Depreciation                                                                      |  |                              | 183     |   |      |   | 238     |  
|Net amortization of securities premiums and discounts                             |  |                              | 1,163   |   |      |   | 297     |  
|Change in benefit for deferred income taxes                                       |  |                              | (175    | ) |      |   | (221    | )
|Stock benefit plans                                                               |  |                              | 346     |   |      |   | 362     |  
|Origination of loans held for sale                                                |  |                              |        |   |      |   | (417    | )
|Proceeds from sales of loans held for sale                                        |  |                              |        |   |      |   | 416     |  
|Net gain on sales of loans and loans held for sale                                |  |                              |        |   |      |   | (3      | )
|Valuation adjustment on assets acquired through foreclosure                       |  |                              | 34      |   |      |   |        |  
|Earnings on investment in bank-owned life insurance                               |  |                              | (115    | ) |      |   | (109    | )
|Decrease in mortgage servicing rights                                             |  |                              | 31      |   |      |   | 71      |  
|Increase in accrued interest receivable and other assets                          |  |                              | (1,460  | ) |      |   | (264    | )
|Increase in accrued interest payable, accrued expenses and other liabilities      |  |                              | 4,252   |   |      |   | 105     |  
|                                                                                  |  |                              |         |   |      |   |         |  
|Net Cash Provided by Operating Activities                                         |  |                              | 5,701   |   |      |   | 1,471   |  
|                                                                                  |  |                              |         |   |      |   |         |  
|                                                                                  |  |                             
|Cash Flows from Investing Activities                                              |  |                              |         |   |      |   |         |  
|Equity investment in unconsolidated entity                                        |  |                              |        |   |      |   | (630    | )
|Investment securities - available for sale:                                       |  |                              |         |   |      |   |         |  
|Purchases                                                                         |  |                              |        |   |      |   | (6,781  | )
|Proceeds from maturities, calls and principal repayments                          |  |                              | 690     |   |      |   | 505     |  
|Mortgage related securities  available for sale:                                 |  |                              |         |   |      |   |         |  
|Purchases                                                                         |  |                              | (13,630 | ) |      |   | (49,444 | )
|Proceeds from maturities, calls and principal repayments                          |  |                              | 32,021  |   |      |   | 14,251  |  
|Net increase in loans                                                             |  |                              | (12,424 | ) |      |   | (27,613 | )
|Purchases of loans and loan participations                                        |  |                              | (3,304  | ) |      |   | (98     | )
|Purchases of premises and equipment                                               |  |                              | (42     | ) |      |   | (73     | )
|                                                                                  |  |                              |         |   |      |   |         |  
|Net Cash Provided (Used) by Investing Activities                                  |  |                              | 3,311   |   |      |   | (69,883 | )
|                                                                                  |  |                              |         |   |      |   |         |  
|                                                                                  |  |                             
|Cash Flows from Financing Activities                                              |  |                              |         |   |      |   |         |  
|Net (decrease) increase in deposits                                               |  |                              | (12,118 | ) |      |   | 201,623 |  
|Decrease in advances from borrowers for taxes and insurance                       |  |                              | (57     | ) |      |   | (162    | )
|Principal payments on Federal Home Loan Bank advances                             |  |                              | (11,077 | ) |      |   | (1,040  | )
|Purchase of treasury stock                                                        |  |                              |        |   |      |   | (856    | )
|                                                                                  |  |                              |         |   |      |   |         |  
|Net Cash (Used) Provided by Financing Activities                                  |  |                              | (23,252 | ) |      |   | 199,565 |  
|                                                                                  |  |                              |         |   |      |   |         |  
|Net (Decrease) Increase in Cash and Cash Equivalents                              |  |                              | (14,240 | ) |      |   | 131,153 |  
|Cash and Cash Equivalents  Beginning                                             |  |                              | 65,418  |   |      |   | 3,944   |  
|                                                                                  |  |                              |         |   |      |   |         |  
|Cash and Cash Equivalents  Ending                                                |  | $                            | 51,178  |   |      | $ | 135,097 |  
|                                                                                  |  |                              |         |   |      |   |         |  
|Supplemental Disclosure of Cash Flow Information                                  |  |                              |         |   |      |   |         |  
|Interest paid                                                                     |  | $                            | 6,281   |   |      | $ | 6,132   |  
|                                                                                  |  |                              |         |   |      |   |         |  
|Income taxes paid                                                                 |  | $                            | 400     |   |      | $ | 501     |  
|                                                                                  |  |                              |         |   |      |   |         |  
|Transfers of loans to assets acquired through foreclosure                         |  | $                            | 1,058   |   |      | $ |        |  
|                                                                                  |  |                              |         |   |      |   |         |  
|Net charge-offs                                                                   |  | $                            | 775     |   |      | $ |        |  
|                                                                                  |  |                              |         |   |      |   |         |  

See accompanying notes to the unaudited consolidated financial statements.



6



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements

NOTE 1 - PRINCIPLES OF CONSOLIDATION AND PRESENTATION

Fox Chase Bancorp, Inc. (the Bancorp) was organized on September 29, 2006 under the laws of the United States for the purpose of being a
holding company for Fox Chase Bank (the Bank), a stock savings bank also organized under the laws of the United States. On September 29, 2006, the Bancorp completed its initial public offering in which it sold 6,395,835 shares, or
43.57% of its outstanding common stock to the public, including 575,446 shares purchased by the Fox Chase Bank Employee Stock Ownership Plan (the ESOP). An additional 8,148,915 shares, or 55.51% of the Bancorps outstanding stock,
were issued to Fox Chase MHC, the Bancorps federally chartered mutual holding company. Additionally, the Bancorp contributed $150,000 in cash and issued 135,000 shares, or 0.92% of its outstanding common stock, to the Fox Chase Bank Charitable
Foundation.

The Bancorps primary business has been that of holding the common stock of the Bank and making a loan to the ESOP. The
Bancorp is authorized to pursue other business activities permissible by laws and regulations for other savings and loan holding companies.

The Bancorp and the Bank (collectively referred to as the Company) provide a wide variety of financial products and services to individuals
and businesses through the Banks eleven branches in Philadelphia, Richboro, Willow Grove, Warminster, Lahaska, Hatboro, Media and West Chester, Pennsylvania, and Ocean City, Marmora and Egg Harbor Township, New Jersey. The Bank also has an
approximately 45% ownership in Philadelphia Mortgage Advisors, Inc. (PMA), a licensed mortgage banker located in Blue Bell, Pennsylvania and Ocean City, New Jersey. The operations of the Company are managed as a single business segment.
The Company competes with other financial institutions and other companies that provide financial services.

The Company is subject to
regulations of certain federal banking agencies. These regulations can and do change significantly from period to period. The Company also undergoes periodic examinations by the Office of Thrift Supervision which may subject them to further changes
with respect to asset valuations, amounts of required loan loss allowances and operating restrictions resulting from the regulators judgments based on information available to them at the time of its examination.

The consolidated financial statements include the accounts of the Bancorp and the Bank. The Banks operations include the accounts of its wholly
owned subsidiaries, Fox Chase Financial, Inc. and Fox Chase Service Corporation. Fox Chase Financial, Inc. is a Delaware chartered investment holding company and its sole purpose is to manage and hold investment securities. Fox Chase Service
Corporation is a Pennsylvania chartered company and its sole purpose is to make and manage the Banks investment in PMA. The consolidated financial statements do not include the transactions and balances of Fox Chase MHC. All material
inter-company transactions and balances have been eliminated in consolidation. Prior period amounts are reclassified, when necessary, to conform with the current years presentation.

During 2010 and 2009, the Bank engaged in certain business activities with PMA. These activities included providing a warehouse line of credit to PMA, as
well as acquiring residential mortgage and home equity loans from PMA. The Bank recorded interest income from PMA on the warehouse line of $33,000 and $44,000 for the three months ended March 31, 2010 and 2009, respectively, as well as loan
satisfaction fees, which are recorded in service charges and other fee income, from PMA of $8,000 and $12,000 for the three months ended March 31, 2010 and 2009, respectively. In addition, the Bank acquired total loans from PMA of $7.6 million
and $14.3 million for the three months ended March 31, 2010 and 2009, respectively, which includes the cost of the loans.

The Company
follows accounting principles and reporting practices that are in compliance with U.S. generally accepted accounting principles (GAAP). The preparation of the financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation and realizability of
deferred tax assets and the evaluation of other-than-temporary impairment and valuation of investment securities.



7



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 1 - PRINCIPLES OF CONSOLIDATION AND PRESENTATION



These interim financial statements do not contain all necessary disclosures required by GAAP for
complete financial statements and therefore should be read in conjunction with the audited financial statements and the notes thereto included in Fox Chase Bancorp, Inc.s Annual Report on Form 10-K, as filed with the Securities and Exchange
Commission on March 12, 2010. These financial statements include all normal and recurring adjustments which management believes were necessary in order to conform to GAAP. The results for the three months ended March 31, 2010 are not
necessarily indicative of the results that may be expected for the year ending December 31, 2010 or for any other period.

Per Share Information

Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted-average common shares
outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. Unallocated shares in the
ESOP and shares purchased to fund the Bancorps 2007 Equity Incentive Plan are not included in either basic or diluted earnings per share. Unvested shares in the Bancorps long-term incentive plan are not included in basic earnings per
share.

The following table presents the reconciliation of the numerators and denominators of the basic and diluted earnings per share
computations (unaudited).



|                                                                            |  |                             |            |   |      |   |            |  
|--------------------------------------------------------------------------- |  | --------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                                            |  | Three Months EndedMarch 31, |           
|                                                                            |  | 2010                        |            |   | 2009 |  
|                                                                            |  |                            
|Net income                                                                  |  | $                           | 551,000    |   |      | $ | 601,000    |  
|                                                                            |  |                             |            |   |      |   |            |  
|                                                                            |  |                            
|Weighted-average common shares outstanding (1)                              |  |                             | 13,609,187 |   |      |   | 14,021,468 |  
|Average common stock acquired by stock benefit plans:                       |  |                             |            |   |      |   |            |  
|Unvested shares  long-term incentive plan                                  |  |                             | (7,091     | ) |      |   | (16,743    | )
|ESOP shares unallocated                                                     |  |                             | (418,691   | ) |      |   | (457,054   | )
|Shares purchased by trust                                                   |  |                             | (201,054   | ) |      |   | (246,209   | )
|                                                                            |  |                             |            |   |      |   |            |  
|Weighted-average common shares used to calculate basic earnings per share   |  |                             | 12,982,351 |   |      |   | 13,301,462 |  
|Dilutive effect of:                                                         |  |                             |            |   |      |   |            |  
|Unvested shares  long-term incentive plans                                 |  |                             | 7,091      |   |      |   | 16,743     |  
|Restricted stock awards                                                     |  |                             | 2,010      |   |      |   | 1,576      |  
|                                                                            |  |                             |            |   |      |   |            |  
|Weighted-average common shares used to calculate diluted earnings per share |  |                             | 12,991,452 |   |      |   | 13,319,781 |  
|                                                                            |  |                             |            |   |      |   |            |  
|                                                                            |  |                            
|Earnings per share-basic                                                    |  | $                           | 0.04       |   |      | $ | 0.05       |  
|Earnings per share-diluted                                                  |  | $                           | 0.04       |   |      | $ | 0.05       |  
|                                                                            |  |                            
|Outstanding common stock equivalents having no dilutive effect              |  |                             | 763,438    |   |      |   | 879,643    |  



|(1) | Excludes treasury stock.
|--- | ------------------------



8



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 2 - INVESTMENT AND MORTGAGE RELATED SECURITIES



The amortized cost and fair value of securities available-for-sale as of March 31, 2010 and
December 31, 2009 are summarized as follows:



|                                                     |               |                   |                      |                      |                       |                       |  |             |             |   |           |           |      |   |  |   |        
|---------------------------------------------------- | ------------- | ----------------- | -------------------- | -------------------- | --------------------- | --------------------- |  | ----------- | ----------- | - | --------- | --------- | ---- | - |  | - | -------
|                                                     |               | March 31, 2010   
|                                                     | AmortizedCost |                   | GrossUnrealizedGains |                      | GrossUnrealizedLosses |                       |  | OTTIin AOCI |             |   | FairValue
|                                                     |               | (In Thousands)   
|Obligations of U.S. government agencies              |               | $                 | 302                  |                      | $                     | 1                     |  | $           |            |   |           | $         |     |   |  | $ | 303    
|State and political subdivisions                     |               |                   | 8,513                |                      |                       | 132                   |  |             | (31         | ) |           |           |     |   |  |   | 8,614  
|Corporate securities                                 |               |                   | 9,898                |                      |                       | 146                   |  |             |             |   |           |           |     |   |  |   | 10,044 
|                                                     |               |                   |                      |                      |                       |                       |  |             |             |   |           |           |      |   |  |   |        
|                                                     |               |                   | 18,713               |                      |                       | 279                   |  |             | (31         | ) |           |           |     |   |  |   | 18,961 
|                                                     |               |                   |                      |                      |                      
|Private label residential mortgage related security  |               |                   | 609                  |                      |                       | 28                    |  |             |            |   |           |           | (448 | ) |  |   | 189    
|Private label commercial mortgage related securities |               |                   | 16,975               |                      |                       | 465                   |  |             |            |   |           |           |     |   |  |   | 17,440 
|Agency residential mortgage related securities       |               |                   | 349,673              |                      |                       | 11,039                |  |             | (138        | ) |           |           |     |   |  |   | 360,574
|                                                     |               |                   |                      |                      |                       |                       |  |             |             |   |           |           |      |   |  |   |        
|Total mortgage related securities                    |               |                   | 367,257              |                      |                       | 11,532                |  |             | (138        | ) |           |           | (448 | ) |  |   | 378,203
|                                                     |               |                   |                      |                      |                       |                       |  |             |             |   |           |           |      |   |  |   |        
|                                                     |               |                   |                      |                      |                      
|Total securities                                     |               | $                 | 385,970              |                      | $                     | 11,811                |  | $           | (169        | ) |           | $         | (448 | ) |  | $ | 397,164
|                                                     |               |                   |                      |                      |                       |                       |  |             |             |   |           |           |      |   |  |   |        
|                                                     |              
|                                                     |               | December 31, 2009
|                                                     |               | AmortizedCost     |                      | GrossUnrealizedGains |                       | GrossUnrealizedLosses |  |             | OTTIin AOCI |   |           | FairValue
|                                                     |               | (In Thousands)   
|Obligations of U.S. government agencies              |               | $                 | 305                  |                      | $                     | 1                     |  | $           |            |   |           | $         |     |   |  | $ | 306    
|State and political subdivisions                     |               |                   | 9,199                |                      |                       | 130                   |  |             | (37         | ) |           |           |     |   |  |   | 9,292  
|Corporate securities                                 |               |                   | 9,838                |                      |                       | 112                   |  |             |            |   |           |           |     |   |  |   | 9,950  
|                                                     |               |                   |                      |                      |                       |                       |  |             |             |   |           |           |      |   |  |   |        
|                                                     |               |                   | 19,342               |                      |                       | 243                   |  |             | (37         | ) |           |           |     |   |  |   | 19,548 
|                                                     |               |                   |                      |                      |                      
|Private label residential mortgage related security  |               |                   | 628                  |                      |                       | 15                    |  |             |            |   |           |           | (448 | ) |  |   | 195    
|Private label commercial mortgage related securities |               |                   | 17,607               |                      |                       | 249                   |  |             | (23         | ) |           |           |     |   |  |   | 17,833 
|Agency residential mortgage related securities       |               |                   | 374,824              |                      |                       | 10,567                |  |             | (500        | ) |           |           |     |   |  |   | 384,891
|                                                     |               |                   |                      |                      |                       |                       |  |             |             |   |           |           |      |   |  |   |        
|Total mortgage related securities                    |               |                   | 393,059              |                      |                       | 10,831                |  |             | (523        | ) |           |           | (448 | ) |  |   | 402,919
|                                                     |               |                   |                      |                      |                       |                       |  |             |             |   |           |           |      |   |  |   |        
|                                                     |               |                   |                      |                      |                      
|Total securities                                     |               | $                 | 412,401              |                      | $                     | 11,074                |  | $           | (560        | ) |           | $         | (448 | ) |  | $ | 422,467
|                                                     |               |                   |                      |                      |                       |                       |  |             |             |   |           |           |      |   |  |   |        



9



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 2 - INVESTMENT AND MORTGAGE RELATED SECURITIES (CONTINUED)



The following tables show gross unrealized losses and fair value of securities, aggregated by security
category and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2010 and December 31, 2009:



|                                                     |  |                     |        |                  |                   |      |           |       |                                 |       |  |           |      |                  |  |   |        |  |   |      |  
|---------------------------------------------------- |  | ------------------- | ------ | ---------------- | ----------------- | ---- | --------- | ----- | ------------------------------- | ----- |  | --------- | ---- | ---------------- |  | - | ------ |  | - | ---- | -
|                                                     |  | March 31, 2010      |       
|                                                     |  | Less than 12 Months |        |                  | 12 Months or More |      |           | Total |                                
|                                                     |  | FairValue           |        | UnrealizedLosses |                   |      | FairValue |       | UnrealizedLossesPlusOTTIin AOCI |       |  | FairValue |      | UnrealizedLosses | 
|                                                     |  | (In Thousands)      |       
|State and political subdivisions                     |  | $                   |       |                  | $                 |     |           |       | $                               | 825   |  | $         | (31  | )                |  | $ | 825    |  | $ | (31  | )
|Corporate securities                                 |  |                     |       |                  |                   |     |           |       |                                 |      |  |           |     |                  |  |   |       |  |   |     |  
|                                                     |  |                     |        |                  |                   |      |           |       |                                 |       |  |           |      |                  |  |   |        |  |   |      |  
|                                                     |  |                     |       |                  |                   |     |           |       |                                 | 825   |  |           | (31  | )                |  |   | 825    |  |   | (31  | )
|                                                     |  |                     |        |                  |                   |     
|Private label residential mortgage related security  |  |                     |       |                  |                   |     |           |       |                                 | 189   |  |           | (420 | )                |  |   | 189    |  |   | (420 | )
|Private label commercial mortgage related securities |  |                     |       |                  |                   |     |           |       |                                 |      |  |           |     |                  |  |   |       |  |   |     |  
|Agency residential mortgage related securities       |  |                     | 50,478 |                  |                   | (138 | )         |       |                                 |      |  |           |     |                  |  |   | 50,478 |  |   | (138 | )
|                                                     |  |                     |        |                  |                   |      |           |       |                                 |       |  |           |      |                  |  |   |        |  |   |      |  
|Total mortgage related securities                    |  |                     | 50,478 |                  |                   | (138 | )         |       |                                 | 189   |  |           | (420 | )                |  |   | 50,667 |  |   | (558 | )
|                                                     |  |                     |        |                  |                   |      |           |       |                                 |       |  |           |      |                  |  |   |        |  |   |      |  
|                                                     |  |                     |        |                  |                   |     
|Total securities                                     |  | $                   | 50,478 |                  | $                 | (138 | )         |       | $                               | 1,014 |  | $         | (451 | )                |  | $ | 51,492 |  | $ | (589 | )
|                                                     |  |                     |        |                  |                   |      |           |       |                                 |       |  |           |      |                  |  |   |        |  |   |      |  
|                                                     | 
|                                                     |  | December 31, 2009   |       
|                                                     |  | Less than 12 Months |        |                  | 12 Months or More |      |           | Total |                                
|                                                     |  | FairValue           |        | UnrealizedLosses |                   |      | FairValue |       | UnrealizedLossesPlusOTTIin AOCI |       |  | FairValue |      | UnrealizedLosses | 
|                                                     |  | (In Thousands)      |       
|State and political subdivisions                     |  | $                   |       |                  | $                 |     |           |       | $                               | 819   |  | $         | (37  | )                |  | $ | 819    |  | $ | (37  | )
|Corporate securities                                 |  |                     |       |                  |                   |     |           |       |                                 |      |  |           |     |                  |  |   |       |  |   |     |  
|                                                     |  |                     |        |                  |                   |      |           |       |                                 |       |  |           |      |                  |  |   |        |  |   |      |  
|                                                     |  |                     |       |                  |                   |     |           |       |                                 | 819   |  |           | (37  | )                |  |   | 819    |  |   | (37  | )
|                                                     |  |                     |        |                  |                   |     
|Private label residential mortgage related security  |  |                     |       |                  |                   |     |           |       |                                 | 195   |  |           | (433 | )                |  |   | 195    |  |   | (433 | )
|Private label commercial mortgage related securities |  |                     |       |                  |                   |     |           |       |                                 | 5,987 |  |           | (23  | )                |  |   | 5,987  |  |   | (23  | )
|Agency residential mortgage related securities       |  |                     | 51,801 |                  |                   | (500 | )         |       |                                 |      |  |           |     |                  |  |   | 51,801 |  |   | (500 | )
|                                                     |  |                     |        |                  |                   |      |           |       |                                 |       |  |           |      |                  |  |   |        |  |   |      |  
|Total mortgage related securities                    |  |                     | 51,801 |                  |                   | (500 | )         |       |                                 | 6,182 |  |           | (456 | )                |  |   | 57,983 |  |   | (956 | )
|                                                     |  |                     |        |                  |                   |      |           |       |                                 |       |  |           |      |                  |  |   |        |  |   |      |  
|                                                     |  |                     |        |                  |                   |     
|Total securities                                     |  | $                   | 51,801 |                  | $                 | (500 | )         |       | $                               | 7,001 |  | $         | (493 | )                |  | $ | 58,802 |  | $ | (993 | )
|                                                     |  |                     |        |                  |                   |      |           |       |                                 |       |  |           |      |                  |  |   |        |  |   |      |  



10



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 2 - INVESTMENT AND MORTGAGE RELATED SECURITIES (CONTINUED)



The Company held a private label residential mortgage related security which had an amortized cost,
prior to the identified credit related impairment, of $766,000 at March 31, 2010 and $785,000 at December 31, 2009, respectively. During the second quarter 2009, managements analysis indicated that the security was
other-than-temporarily impaired in the amount of $605,000, $157,000 of which was recognized on the statement of operations and $448,000, which was recognized in the statement of condition in other comprehensive income (before taxes). There was no
additional other-than-temporary credit impairment charge on this investment through March 31, 2010. At March 31, 2010 and December 31, 2009, after other-than-temporary impairment charges, the private label residential mortgage related
security had an amortized cost of $609,000 and $628,000, respectively, and a fair value of $189,000 and $195,000, respectively, with a remaining net unrealized loss, including other-than-temporary impairment in accumulated other comprehensive
income, of $420,000 and $433,000, respectively. The remaining unrealized loss is not considered an other-than-temporary credit impairment, as management does not have the intention or requirement to sell this security.

The Company held six private label commercial mortgage backed securities (CMBS) with an amortized cost of $17.0 million at March 31,
2010 and $17.6 million at December 31, 2009. At March 31, 2010, all six CMBS were in an unrealized gain position with a total unrealized gain of $465,000. At December 31, 2009, the six CMBS had a net unrealized gain position totaling
$226,000; comprised of four CMBS in an unrealized gain position of $249,000 and two CMBS in an unrealized loss of $23,000. Management believes the improvement in the net unrealized gain position was due to a reduction in the required yield on
commercial mortgage related securities as the credit markets continued to improve in the first quarter 2010. At December 31, 2009, both securities in an unrealized loss were rated AAA.

The Company evaluates current characteristics of each of these private label securities such as fair value, delinquency and foreclosure levels, credit
enhancement, projected losses, coverage and cash flows, on a quarterly basis. It is possible that the underlying collateral of these securities will perform worse than current expectations, which may lead to adverse changes in cash flows on these
securities and potential future other-than-temporary impairment losses. Events that may trigger material declines in fair values for these securities in the future would include but are not limited to deterioration of credit metrics, significantly
higher levels of default and severity of loss on the underlying collateral, deteriorating credit enhancement and loss coverage ratios, or further illiquidity.

There are 16 securities with a temporary impairment at March 31, 2010, 13 have a rating of AAA. The securities rated less than AAA are: (1) two
state or political subdivision securities with a total fair value of $825,000, which do not have a rating and (2) one private label collateralized mortgage obligation, which was discussed above, with a fair value of $189,000 and a rating of
BB+.

Securities that have been impaired greater than twelve months are the private label residential mortgage related security, which was
identified and discussed in detail in the preceding paragraphs, and state and political subdivisions, the impairment of which was deemed temporary due to positive factors supporting the recoverability of these securities, and because the Company
does not have the intention to sell the securities or will be more likely than not required to sell the securities prior to recovery of the amortized cost. Positive factors considered include timely principal payments and the financial health of the
issuer.



11



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 2 - INVESTMENT AND MORTGAGE RELATED SECURITIES (CONTINUED)



The amortized cost and estimated fair value of investment securities available-for-sale at
March 31, 2010 and December 31, 2009 by contractual maturity are as follows:



|                                       |  |                |         |                   |   |               |  |           |         |  |   |        
|-------------------------------------- |  | -------------- | ------- | ----------------- | - | ------------- |  | --------- | ------- |  | - | -------
|                                       |  | March 31, 2010 |         | December 31, 2009
|                                       |  | AmortizedCost  |         | FairValue         |   | AmortizedCost |  | FairValue
|                                       |  | (In Thousands) |         | (In Thousands)   
|                                       |  |                |         |                  
|Due in one year or less                |  | $              | 7,291   |                   | $ | 7,369         |  | $         | 4,879   |  | $ | 4,922  
|Due after one year through five years  |  |                | 4,486   |                   |   | 4,575         |  |           | 7,111   |  |   | 7,196  
|Due after five years through ten years |  |                | 3,886   |                   |   | 3,950         |  |           | 3,278   |  |   | 3,323  
|Due after ten years                    |  |                | 3,050   |                   |   | 3,067         |  |           | 4,074   |  |   | 4,107  
|Total mortgage related securities      |  |                | 367,257 |                   |   | 378,203       |  |           | 393,059 |  |   | 402,919
|                                       |  |                |         |                   |   |               |  |           |         |  |   |        
|                                       |  | $              | 385,970 |                   | $ | 397,164       |  | $         | 412,401 |  | $ | 422,467
|                                       |  |                |         |                   |   |               |  |           |         |  |   |        

Securities with a carrying value of $20.6 million and $19.8 million at
March 31, 2010 and December 31, 2009, respectively, were pledged to secure public deposits and for other purposes as required or permitted by law.

Securities with a carrying value of $61.6 million and $58.1 million, at March 31, 2010 and December 31, 2009, respectively, were pledged as
collateral for $50.0 million in borrowed funds. See Note 6.



12



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 3 - LOANS

The composition of net loans at March 31, 2010, and December 31, 2009 is provided below (in thousands).



|                                     |  |               |         |   |                  |   |         |  
|------------------------------------ |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                     |  | March 31,2010 |         |   | December 31,2009 |  
|                                     |  | (Unaudited)   |         |   |                  |  
|Real estate loans:                   |  |               |         |   |                  |   |         |  
|One-to four-family                   |  | $             | 265,578 |   |                  | $ | 268,535 |  
|Multi-family and commercial          |  |               | 208,878 |   |                  |   | 207,738 |  
|Construction                         |  |               | 38,286  |   |                  |   | 40,799  |  
|                                     |  |               |         |   |                  |   |         |  
|                                     |  |               | 512,742 |   |                  |   | 517,072 |  
|                                     |  |               |         |   |                  |   |         |  
|Consumer loans:                      |  |               |         |   |                  |   |         |  
|Home equity                          |  |               | 47,499  |   |                  |   | 50,080  |  
|Home equity lines of credit          |  |               | 13,567  |   |                  |   | 13,664  |  
|Other                                |  |               | 5,505   |   |                  |   | 5,618   |  
|                                     |  |               |         |   |                  |   |         |  
|                                     |  |               | 66,571  |   |                  |   | 69,362  |  
|                                     |  |               |         |   |                  |   |         |  
|Commercial and industrial loans      |  |               | 76,423  |   |                  |   | 55,434  |  
|                                     |  |               |         |   |                  |   |         |  
|                                     |  |              
|Total loans                          |  |               | 655,736 |   |                  |   | 641,868 |  
|                                     |  |               |         |   |                  |   |         |  
|Deferred loan origination costs, net |  |               | 78      |   |                  |   | 33      |  
|Allowance for loan losses            |  |               | (10,721 | ) |                  |   | (10,605 | )
|                                     |  |               |         |   |                  |   |         |  
|Net loans                            |  | $             | 645,093 |   |                  | $ | 631,296 |  
|                                     |  |               |         |   |                  |   |         |  

The following table presents changes in the allowance for loan losses (in thousands):



|                          |  |                             |        |   |                        |   |       |      |  |   |        |  
|------------------------- |  | --------------------------- | ------ | - | ---------------------- | - | ----- | ---- |  | - | ------ | -
|                          |  | Three Months EndedMarch 31, |        |   | Year EndedDecember 31, |  
|                          |  | 2010                        |        |   | 2009                   |   |       | 2009 | 
|                          |  | (Unaudited)                 |        |   |                        |  
|Balance, beginning        |  | $                           | 10,605 |   |                        | $ | 6,260 |      |  | $ | 6,260  |  
|Provision for loan losses |  |                             | 891    |   |                        |   | 395   |      |  |   | 9,052  |  
|Loans charged off         |  |                             | (778   | ) |                        |   | (145  | )    |  |   | (4,707 | )
|Recoveries                |  |                             | 3      |   |                        |   |      |      |  |   |       |  
|                          |  |                             |        |   |                        |   |       |      |  |   |        |  
|Balance, ending           |  | $                           | 10,721 |   |                        | $ | 6,510 |      |  | $ | 10,605 |  
|                          |  |                             |        |   |                        |   |       |      |  |   |        |  

As of March 31, 2010, the Bank had one interest rate swap agreement that was entered into during the quarter ended
June 30, 2007. The Bank had entered into a 15-year fixed-rate commercial loan and the Banks risk management objective was to lock in the fair value of the loan. The Bank met this objective by entering into a swap agreement to exchange
fixed-rate cash flows for variable rate cash flows. The fair value of the swap is recorded in other assets in the Companys consolidated statements of condition. The Bank has not entered into a swap since the June 2007 quarter and currently
does not consider itself to be an active participant in the swap market.

As of March 31, 2010 and December 31, 2009, the
Banks swap agreement had a notional amount of $1.2 million. The Company is receiving a variable rate payment of three-month LIBOR plus 2.24% and is paying a fixed-rate payment of 7.43%. The swap matures in April 2022 and had a fair value loss
position of $137,000 and $125,000 at March 31, 2010 and December 31, 2009, respectively. The Bank carries the loan at fair value. The loan is contractually current and the critical terms of the loan and the swap are a mirror image except
that the loan includes a default interest rate clause. Accordingly, the Company has determined the fair value of the gain position of the loan approximates the fair value loss position of the swap as of March 31, 2010 and December 31,
2009, respectively.



13



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 4 - MORTGAGE SERVICING ACTIVITY

Loans serviced for others are not included in the accompanying consolidated statements of condition. The unpaid principal balances of these loans were
$84.8 million and $104.4 million at March 31, 2010 and 2009, respectively, and $88.2 million at December 31, 2009.

The following
summarizes mortgage servicing rights for the three months ended March 31, 2010 and 2009 and the year ended December 31, 2009 (in thousands):



|                                    |  |                            |     |   |                       |   |     |      |  |   |      |  
|----------------------------------- |  | -------------------------- | --- | - | --------------------- | - | --- | ---- |  | - | ---- | -
|                                    |  | Three
MonthsEndedMarch 31, |     |   | YearEndedDecember 31, |  
|                                    |  | 2010                       |     |   | 2009                  |   |     | 2009 | 
|                                    |  | (Unaudited)                |     |   |                       |  
|Balance, beginning                  |  | $                          | 683 |   |                       | $ | 827 |      |  | $ | 827  |  
|Mortgage servicing rights amortized |  |                            | (34 | ) |                       |   | (47 | )    |  |   | (192 | )
|Change in valuation allowance       |  |                            | 3   |   |                       |   | (24 | )    |  |   | 48   |  
|                                    |  |                            |     |   |                       |   |     |      |  |   |      |  
|Balance, ending                     |  | $                          | 652 |   |                       | $ | 756 |      |  | $ | 683  |  
|                                    |  |                            |     |   |                       |   |     |      |  |   |      |  

At March 31, 2010, March 31, 2009 and December 31, 2009, the fair value of the mortgage servicing rights
(MSRs) was $673,000 (unaudited), $775,000 (unaudited) and $703,000, respectively. The fair value at these dates was determined using a third-party valuation model that calculates the present value of estimated future servicing income.
The model incorporates assumptions that market participants use in estimating future net servicing income, including estimates of prepayment speeds and discount rates. Mortgage loan prepayment speed is the annual rate at which borrowers are
forecasted to repay their mortgage loan principal and is based on historical experience and current interest rates. The discount rate used to determine the present value of future net servicing income is the required rate of return the market would
expect for an asset with similar risk. Both assumptions can, and generally will, change quarterly valuations as market conditions and interest rates change.

NOTE 5 - DEPOSITS

Deposits and their
respective weighted average interest rate at March 31, 2010 and December 31, 2009 consist of the following (dollars in thousands):



|                                    |  |                               |  |                   |         |                              |       |        |   |        
|----------------------------------- |  | ----------------------------- |  | ----------------- | ------- | ---------------------------- | ----- | ------ | - | -------
|                                    |  | March 31,2010                 |  | December 
31,2009
|                                    |  | WeightedAverage 
InterestRate |  | Amount            |         | WeightedAverageInterest Rate |       | Amount
|                                    |  | (Unaudited)                   |  |                  
|Noninterest-bearing demand accounts |  |   %                          |  | $                 | 65,788  |                              |   %  |        | $ | 56,912 
|NOW accounts                        |  | 0.64                          |  |                   | 41,105  |                              | 0.63  |        |   | 41,369 
|Money market accounts               |  | 1.05                          |  |                   | 181,441 |                              | 1.05  |        |   | 184,407
|Savings and club accounts           |  | 0.15                          |  |                   | 53,075  |                              | 0.15  |        |   | 51,563 
|Certificates of deposit             |  | 3.11                          |  |                   | 504,750 |                              | 3.29  |        |   | 524,026
|                                    |  |                               |  |                   |         |                              |       |        |   |        
|                                    |  | 2.12%                         |  | $                 | 846,159 |                              | 2.27% |        | $ | 858,277
|                                    |  |                               |  |                   |         |                              |       |        |   |        



14



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 6 - BORROWINGS

Pursuant to collateral agreements with the Federal Home Loan Bank of Pittsburgh (the FHLB), advances are secured by qualifying first mortgage
loans, qualifying fixed-income securities, FHLB stock and an interest-bearing demand deposit account with the FHLB. As of March 31, 2010, the Bank has $185.4 million in qualifying collateral pledged against its advances.



|              |  |                |         |               |      |   |             |      |   |           |               |                |               
|------------- |  | -------------- | ------- | ------------- | ---- | - | ----------- | ---- | - | --------- | ------------- | -------------- | --------------
|Maturity Date |  | Amount         |         | Interest Rate |      |   | Strike Rate |      |   | Call Date |               | Rate if Called
|              |  | (in thousands) |         |               |      |   |             |      |   |           |               |               
|August 2011   |  |                | 20,000  |               | 4.89 | % |             | 7.50 | % |           | May 2010      |                | LIBOR + .2175%
|August 2011   |  |                | 10,000  |               | 4.87 | % |             | 7.50 | % |           | May 2010      |                | LIBOR + .2175%
|July 2013     |  |                | 9,604   |               | 4.10 | % |             |      |   |           |               |                |               
|December 2013 |  |                | 5,000   |               | 2.80 | % |             |      |   |           | December 2010 |                | LIBOR + 1.04% 
|January 2015  |  |                | 21,484  |               | 3.49 | % |             |      |   |           |               |                |               
|December 2015 |  |                | 5,000   |               | 3.06 | % |             |      |   |           | December 2011 |                | LIBOR + 1.12% 
|November 2017 |  |                | 15,000  |               | 3.62 | % |             |      |   |           | November 2010 |                | LIBOR + 0.10% 
|November 2017 |  |                | 15,000  |               | 3.87 | % |             |      |   |           | November 2011 |                | LIBOR + 0.10% 
|December 2017 |  |                | 20,000  |               | 2.83 | % |             |      |   |           | June 2010     |                | LIBOR + 0.11% 
|December 2018 |  |                | 5,000   |               | 3.15 | % |             |      |   |           | December 2012 |                | LIBOR + 1.14% 
|              |  |                |         |               |      |   |             |      |   |           |               |                |               
|              |  | $              | 126,088 |               |      |   |             |      |   |           |               |                |               
|              |  |                |         |               |      |   |             |      |   |           |               |                |               

For the two borrowings which have a Strike Rate disclosed in the above table, if three-month LIBOR is
greater than or equal to the Strike Rate, the FHLB can notify the Bank of its intention to convert the borrowing to an adjustable-rate advance equal to three-month LIBOR (0.29% at March 31, 2010) plus .2175% on a quarterly basis. If converted
to a floating rate, the Bank has the option to repay these advances at each of the option dates without penalty. Accordingly, the contractual maturities above may differ from actual maturities.

For the borrowings which have Call Dates disclosed in the above table, if the borrowing is called, the Bank has the option to either pay off
the borrowing without penalty or the borrowings fixed rate resets to a variable LIBOR based rate, as noted in the above table. Subsequent to the call date, the borrowings are callable by the FHLB quarterly. Accordingly, the contractual
maturities above may differ from actual maturities.

The Bank has a maximum borrowing capacity with the Federal Home Loan Bank of Pittsburgh
of approximately $334.5 million at December 31, 2009, the latest date for which information is available.

As a member of the FHLB of
Pittsburgh, the Bank is required to acquire and hold shares of capital stock in the FHLB of Pittsburgh in an amount of at least equal to 4.75% of its advances from the FHLB of Pittsburgh, plus 0.75% of the unused borrowing capacity. The Bank was in
compliance with this requirement with a stock investment in the FHLB of Pittsburgh of $10.4 million at March 31, 2010.

The FHLB of
Pittsburgh ceased paying a dividend on its common stock during the first quarter 2009 and has not paid a dividend through March 31, 2010. Additionally, the FHLB of Pittsburgh indicated it would not redeem any common stock associated with member
advance repayments and that it may increase its individual member stock investment requirements. The FHLB of Pittsburgh is permitted to increase the amount of capital stock owned by the Company to 6.00% of a members advances, plus 1.50% of the
unused borrowing capacity. As of March 31, 2010, the Companys maximum stock obligation was $10.7 million.



15



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 6 - BORROWINGS (CONTINUED)



Other Borrowed Funds

Other borrowed funds obtained from large commercial banks totaled $50.0 million at March 31, 2010. These borrowings contractually mature with dates
ranging from November 2014 through November 2018 and may be called by the lender based on the underlying agreements. Subsequent to the call date, these borrowings are callable by the lender quarterly. Accordingly, the contractual maturities above
may differ from actual maturities.



|               |  |              |   |  |                |  |                |       
|-------------- |  | ------------ | - |  | -------------- |  | -------------- | ------
|Maturity Date  |  | InterestRate |   |  | Call Date      |  | Amount        
|               |  |              |   |  |                |  | (in thousands)
|November 2014  |  | 3.60         | % |  | May 2010       |  | $              | 20,000
|September 2018 |  | 3.40         | % |  | September 2012 |  |                | 10,000
|September 2018 |  | 3.20         | % |  | September 2012 |  |                | 5,000 
|October 2018   |  | 3.15         | % |  | October 2011   |  |                | 5,000 
|October 2018   |  | 3.27         | % |  | October 2011   |  |                | 5,000 
|November 2018  |  | 3.37         | % |  | November 2013  |  |                | 5,000 
|               |  |              |   |  |                |  |                |       
|               |  |              |   |  |                |  | $              | 50,000
|               |  |              |   |  |                |  |                |       

Mortgage-backed securities with a fair value of $61.6 million at
March 31, 2010 were pledged as collateral for these other borrowed funds.

NOTE 7 - STOCK BASED COMPENSATION

During the three months ended March 31, 2010, the Company recorded $229,000 of stock based compensation expense in connection with the 2007 Equity
Incentive Plan, comprised of stock option expense of $99,000 and restricted stock expense of $130,000.

The following is a summary of the
Bancorps stock option activity and related information for the 2007 Equity Incentive Plan for the three months ended March 31, 2010:



|                                 |  |                       |   |  |                              |      
|-------------------------------- |  | --------------------- | - |  | ---------------------------- | -----
|                                 |  | Number ofStockOptions |   |  | WeightedAverageExercisePrice
|                                 |  |                      
|Outstanding at December 31, 2009 |  | 634,705               |   |  | $                            | 11.79
|Granted                          |  |                      |   |  |                              |     
|Exercised                        |  |                      |   |  |                              |     
|Expired                          |  | (1,200                | ) |  |                              | 12.06
|Forfeited                        |  | (3,400                | ) |  |                              | 10.99
|                                 |  |                       |   |  |                              |      
|Outstanding at March 31, 2010    |  | 630,105               |   |  | $                            | 11.80
|                                 |  |                       |   |  |                              |      
|Exercisable at March 31, 2010    |  | 229,781               |   |  | $                            | 12.01



16



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 7 - STOCK-BASED COMPENSATION (CONTINUED)



The following is a summary of the Companys unvested options as of March 31, 2010 and changes
therein during the three months then ended:



|                              |  |                       |   |  |                                     |     
|----------------------------- |  | --------------------- | - |  | ----------------------------------- | ----
|                              |  | Number ofStockOptions |   |  | WeightedAverageGrant DateFair Value
|                              |  |                      
|Unvested at December 31, 2009 |  | 432,205               |   |  | $                                   | 3.11
|Granted                       |  |                      |   |  |                                     |     
|Exercised                     |  |                      |   |  |                                     |    
|Vested                        |  | (28,481               | ) |  |                                     | 2.55
|Forfeited                     |  | (3,400                | ) |  |                                     | 2.87
|                              |  |                       |   |  |                                     |     
|Unvested at March 31, 2010    |  | 400,324               |   |  | $                                   | 3.15
|                              |  |                       |   |  |                                     |     

Expected future expense relating to the 400,324 non-vested options
outstanding as of March 31, 2010 is $1.0 million over a weighted average period of 2.7 years.

The following is a summary of the status
of the Companys restricted stock as of March 31, 2010 and changes therein during the three months then ended:



|                              |  |                           |   |  |                                     |      
|----------------------------- |  | ------------------------- | - |  | ----------------------------------- | -----
|                              |  | Number ofRestrictedShares |   |  | WeightedAverageGrant DateFair Value
|Unvested at December 31, 2009 |  | 139,183                   |   |  | $                                   | 11.94
|Granted                       |  |                          |   |  |                                     |      
|Vested                        |  | (3,720                    | ) |  |                                     | 10.24
|Forfeited                     |  | (120                      | ) |  |                                     | 12.38
|                              |  |                           |   |  |                                     |      
|Unvested at March 31, 2010    |  | 135,343                   |   |  | $                                   | 11.98
|                              |  |                           |   |  |                                     |      

Expected future compensation expense relating to the 135,343
restricted shares at March 31, 2010 is $1.3 million over a weighted average period of 2.6 years.



17



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 8 - FAIR VALUE

Management uses its best judgment in estimating the fair value of the Companys financial instruments; however, there are inherent weaknesses in any
estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction on the dates indicated. The estimated
fair value amounts have been measured as of their respective period ends, and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of
these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each period-end.

The
following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Companys assets and liabilities. Due to a wide range of
valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Companys disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the
fair values of the Companys financial instruments at March 31, 2010 and December 31, 2009:

Cash and
Cash Equivalents

The carrying amounts of cash and cash equivalents approximate their fair value.

Investment and Mortgage Related SecuritiesAvailable-for-Sale

Fair values for investments securities and mortgage related securities available-for-sale are obtained from a third party pricing service
and are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable securities. If quoted market prices are not available for comparable securities, fair
value is based on quoted bids for the security or comparable securities.

Loans Held for Sale

The fair values of mortgage loans originated and intended for sale in the secondary market are based on current quoted market prices.

Loans Receivable, Net

For variable-rate loans that reprice frequently and that entail no significant changes in credit risk, fair values are based on carrying
values. To determine the fair values of loans that are not impaired, we employ discounted cash flow analyses that use interest rates and terms similar to those currently being offered to borrowers. This methodology is consistent with the guidance in
ASC 825-10-55-3 Financial Instruments, and we believe our disclosures provide fair value that is more indicative of an entry price. We do not record loans at fair value on a recurring basis, except one loan associated with the interest
rate swap. We record fair value adjustments to loans on a nonrecurring basis to reflect full and partial charge-offs due to impairment. For impaired loans, we use a variety of techniques to measure fair value, such as using the current appraised
value of the collateral, discounting the contractual cash flows, and analyzing market data that we may adjust due to specific characteristics of the loan or collateral.

Federal Home Loan Bank Stock

The fair value of the Federal Home Loan Bank stock is assumed to equal its cost, since the stock is nonmarketable but redeemable at its
par value.

Mortgage Servicing Rights

The fair value of the MSRs for these periods was determined using a third-party valuation model that calculates the present value of
estimated future servicing income. The model incorporates assumptions that market participants use in estimating future net servicing income, including estimates of prepayment speeds and discount rates.

Accrued Interest Receivable and Accrued Interest Payable

The carrying amount of accrued interest receivable and accrued interest payable approximates fair value.



18



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 8 - FAIR VALUE (CONTINUED)



Deposit Liabilities

Fair values for demand deposits (including NOW and money market accounts), savings and club accounts and money market deposits are, by
definition, equal to the amount payable on demand at the reporting date. Fair values of fixed-maturity certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on similar
instruments with similar maturities.

Federal Home Loan Bank Advances and Other Borrowed Funds

Fair value of Federal Home Loan Bank advances and other borrowed funds are estimated using projected discounted cash flow analyses, based
on rates currently available to the Bank for advances with similar terms, and remaining maturities and call features, where applicable.

Off-Balance Sheet Financial Instruments

Fair value of commitments to extend credit are estimated using the fees currently charged to enter into similar agreements, taking into
account market interest rates, the remaining terms and present credit worthiness of the counterparties.

The estimated fair
values of the Companys financial instruments at March 31, 2010 and December 31, 2009 were as follows (in thousands):



|                                                     |  |                |         |                    |   |                |  |                    |         |  |   |        
|---------------------------------------------------- |  | -------------- | ------- | ------------------ | - | -------------- |  | ------------------ | ------- |  | - | -------
|                                                     |  | March 31,2010  |         | December 
31,2009 
|                                                     |  | CarryingAmount |         | EstimatedFairValue |   | CarryingAmount |  | EstimatedFairValue
|                                                     |  |                |         |                   
|Financial assets:                                    |  |                |         |                    |   |                |  |                    |         |  |   |        
|Cash and cash equivalents                            |  | $              | 51,178  |                    | $ | 51,178         |  | $                  | 65,418  |  | $ | 65,418 
|Investment securities available-for-sale             |  |                | 18,961  |                    |   | 18,961         |  |                    | 19,548  |  |   | 19,548 
|Private label residential mortgage related security  |  |                | 189     |                    |   | 189            |  |                    | 195     |  |   | 195    
|Private label commercial mortgage related securities |  |                | 17,440  |                    |   | 17,440         |  |                    | 17,833  |  |   | 17,833 
|Agency residential mortgage related securities       |  |                | 360,574 |                    |   | 360,574        |  |                    | 384,891 |  |   | 384,891
|Loans receivable, net                                |  |                | 645,093 |                    |   | 645,654        |  |                    | 631,296 |  |   | 624,966
|Federal Home Loan Bank stock                         |  |                | 10,435  |                    |   | 10,435         |  |                    | 10,435  |  |   | 10,435 
|Accrued interest receivable                          |  |                | 4,470   |                    |   | 4,470          |  |                    | 4,467   |  |   | 4,467  
|Mortgage servicing rights                            |  |                | 652     |                    |   | 673            |  |                    | 683     |  |   | 703    
|                                                     |  |                |         |                   
|Financial liabilities:                               |  |                |         |                    |   |                |  |                    |         |  |   |        
|Savings and club accounts                            |  |                | 53,075  |                    |   | 53,075         |  |                    | 51,563  |  |   | 51,563 
|Demand, NOW and money market deposits                |  |                | 288,334 |                    |   | 288,334        |  |                    | 282,688 |  |   | 282,688
|Certificates of deposit                              |  |                | 504,750 |                    |   | 509,470        |  |                    | 524,026 |  |   | 530,946
|Federal Home Loan Bank advances                      |  |                | 126,088 |                    |   | 132,312        |  |                    | 137,165 |  |   | 144,124
|Other borrowed funds                                 |  |                | 50,000  |                    |   | 48,224         |  |                    | 50,000  |  |   | 47,529 
|Accrued interest payable                             |  |                | 637     |                    |   | 637            |  |                    | 696     |  |   | 696    
|                                                     |  |                |         |                   
|Off-balance sheet instruments                        |  |                |        |                    |   | 935            |  |                    |        |  |   | 929    



19



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 8 - FAIR VALUE (CONTINUED)



The Company determines the fair value of investments using three levels of input:

Level 1Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date.

Level 2Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or
liabilities.

Level 3Valuations are observed from unobservable inputs that are supported by little or no market activity and that are
significant to the fair value of the assets or liabilities.

The Company classified three types of financial instruments as Level 3 as of
March 31, 2010. The first instrument is a private label collateralized mortgage obligation (CMO), the fair value of which, unlike U.S. agency mortgage related securities, is more difficult to determine because they are not actively
traded in securities markets. The second type of instrument includes six private label commercial mortgage backed securities (CMBS), the fair value of which is also more difficult to determine because they are not actively traded in
securities markets. The third instrument is a loan, which was recorded at fair value when the Company adopted ASC Topic 820 Fair Value Measurements and Disclosures, since lending credit risk is not an observable input for this individual
commercial loan (see Note 3). The net unrealized loss, including other-than-temporary impairment in accumulated other comprehensive income, in the private label CMO was $420,000 at March 31, 2010 and $433,000 at December 31, 2009,
respectively. As of March 31, 2010, all of the securities in the private label CMBS portfolio were at an unrealized gain position compared to December 31, 2009, which had two of the six securities at an unrealized loss position of a total
of $23,000. The unrealized gain on the loan was $137,000 at March 31, 2010 compared to $125,000 at December 31, 2009.

The following
tables, which set forth the Companys fair value measurements included in the financial statements at March 31, 2010 and December 31, 2009, include (1) investment securities and mortgage related securities available-for-sale;
(2) the two financial instruments, associated with the interest rate swap agreement as discussed in Note 3 and (3) tranches of MSRs recorded at fair value.

The following measures were made on a recurring basis as of March 31, 2010 and December 31, 2009:



|                                                     |  |                     |         |   |                                                            |    |                                           |   |         |                                             |  |   |       
|---------------------------------------------------- |  | ------------------- | ------- | - | ---------------------------------------------------------- | -- | ----------------------------------------- | - | ------- | ------------------------------------------- |  | - | ------
|                                                     |  |                     |         |   | Fair Value Measurements at Reporting DateUsing            
|Description                                          |  | As ofMarch 31, 2010 |         |   | Quoted Prices inActive Marketsfor
IdenticalAssets(Level 1) |    | SignificantOtherObservableInputs(Level 2) |   |         | SignificantOtherUnobservableInputs(Level 3)
|                                                     |  | (In Thousands)     
|Obligations of U.S. government agencies              |  | $                   | 303     |   |                                                            | $ |                                           | $ | 303     |                                             |  | $ |      
|State and political subdivisions                     |  |                     | 8,614   |   |                                                            |   |                                           |   | 8,614   |                                             |  |   |      
|Corporate securities                                 |  |                     | 10,044  |   |                                                            |   |                                           |   | 10,044  |                                             |  |   |      
|Private label residential mortgage related security  |  |                     | 189     |   |                                                            |   |                                           |   |        |                                             |  |   | 189   
|Private label commercial mortgage related securities |  |                     | 17,440  |   |                                                            |   |                                           |   |        |                                             |  |   | 17,440
|Agency residential mortgage related securities       |  |                     | 360,574 |   |                                                            |   |                                           |   | 360,574 |                                             |  |   |      
|Loan                                                 |  |                     | 1,256   |   |                                                            |   |                                           |   |        |                                             |  |   | 1,256 
|Swap contract                                        |  |                     | (137    | ) |                                                            |   |                                           |   | (137    | )                                           |  |   |      
|                                                     |  |                     |         |   |                                                            |    |                                           |   |         |                                             |  |   |       
|Total                                                |  | $                   | 398,283 |   |                                                            | $ |                                           | $ | 379,398 |                                             |  | $ | 18,885
|                                                     |  |                     |         |   |                                                            |    |                                           |   |         |                                             |  |   |       



20



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 8 - FAIR VALUE (CONTINUED)



|                                                     |  |                                                            |         |                                           |                                                 |    |                                             |   |         |   |  |   |       
|---------------------------------------------------- |  | ---------------------------------------------------------- | ------- | ----------------------------------------- | ----------------------------------------------- | -- | ------------------------------------------- | - | ------- | - |  | - | ------
|Description                                          |  | As
ofDecember 31, 2009                                     |         |                                           | Fair Value Measurements at Reporting 
DateUsing
|                                                     |  | Quoted Prices inActive
Marketsfor
IdenticalAssets(Level 1) |         | SignificantOtherObservableInputs(Level 2) |                                                 |    | SignificantOtherUnobservableInputs(Level 3)
|                                                     |  | (In Thousands)                                            
|Obligations of U.S. government agencies              |  | $                                                          | 306     |                                           |                                                 | $ |                                             | $ | 306     |   |  | $ |      
|State and political subdivisions                     |  |                                                            | 9,292   |                                           |                                                 |   |                                             |   | 9,292   |   |  |   |      
|Corporate securities                                 |  |                                                            | 9,950   |                                           |                                                 |   |                                             |   | 9,950   |   |  |   |      
|Private label residential mortgage related security  |  |                                                            | 195     |                                           |                                                 |   |                                             |   |        |   |  |   | 195   
|Private label commercial mortgage related securities |  |                                                            | 17,833  |                                           |                                                 |   |                                             |   |        |   |  |   | 17,833
|Agency residential mortgage related securities       |  |                                                            | 384,891 |                                           |                                                 |   |                                             |   | 384,891 |   |  |   |      
|Loan                                                 |  |                                                            | 1,259   |                                           |                                                 |   |                                             |   |        |   |  |   | 1,259 
|Swap contract                                        |  |                                                            | (125    | )                                         |                                                 |   |                                             |   | (125    | ) |  |   |      
|                                                     |  |                                                            |         |                                           |                                                 |    |                                             |   |         |   |  |   |       
|Total                                                |  | $                                                          | 423,601 |                                           |                                                 | $ |                                             | $ | 404,314 |   |  | $ | 19,287
|                                                     |  |                                                            |         |                                           |                                                 |    |                                             |   |         |   |  |   |       

The following measures were made on a non-recurring basis as of
March 31, 2010 and December 31, 2009:



|                                        |  |                                                            |       |                                                 |    |                                             |   |     |  |   |      
|--------------------------------------- |  | ---------------------------------------------------------- | ----- | ----------------------------------------------- | -- | ------------------------------------------- | - | --- |  | - | -----
|Description                             |  | Balance                                                    |       | Fair Value Measurements at Reporting 
DateUsing
|                                        |  | Quoted Prices inActive Marketsfor IdenticalAssets(Level 1) |       | SignificantOtherObservableInputs(Level 2)       |    | SignificantOtherUnobservableInputs(Level 3)
|                                        |  | (In Thousands)                                            
|As of March 31, 2010                    |  |                                                            |       |                                                 |    |                                             |   |     |  |   |      
|Loan (1)                                |  | $                                                          |      |                                                 | $ |                                             | $ |    |  | $ |     
|Mortgage servicing rights               |  |                                                            | 595   |                                                 |   |                                             |   | 595 |  |   |     
|Assets acquired through foreclosure (2) |  |                                                            | 5,076 |                                                 |   |                                             |   |    |  |   | 5,076
|                                        |  |                                                            |       |                                                 |    |                                             |   |     |  |   |      
|Total                                   |  | $                                                          | 5,671 |                                                 | $ |                                             | $ | 595 |  | $ | 5,076
|                                        |  |                                                            |       |                                                 |    |                                             |   |     |  |   |      
|                                        |  |                                                            |       |                                                
|As of December 31, 2009                 |  |                                                            |       |                                                 |    |                                             |   |     |  |   |      
|Loan (1)                                |  | $                                                          | 770   |                                                 | $ |                                             | $ |    |  | $ | 770  
|Mortgage servicing rights               |  |                                                            | 621   |                                                 |   |                                             |   | 621 |  |   |     
|Assets acquired through foreclosure (2) |  |                                                            | 4,052 |                                                 |   |                                             |   |    |  |   | 4,052
|                                        |  |                                                            |       |                                                 |    |                                             |   |     |  |   |      
|Total                                   |  | $                                                          | 5,443 |                                                 | $ |                                             | $ | 621 |  | $ | 4,822
|                                        |  |                                                            |       |                                                 |    |                                             |   |     |  |   |      



|(1) | At December 31, 2009, the loan was partially charged off based on the loans fair value, less cost to sell. Fair value was based on a sales agreement, which
closed in January 2010, a Level 3 input. This loan was paid in full during the first quarter 2010. These amounts do not include fully charged-off loans, because we carry fully charged-off loans at zero on our balance sheet. Also, according to ASC
820, measurements for impaired loans that are determined using a present value technique are not considered fair value measurements under the standard and, therefore, are not included.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | For assets acquired through foreclosure, we used Level 3 inputs, which consist of appraisals. Assets acquired through foreclosure are recorded on our balance sheet at
fair value, net of costs to sell, when we obtain control of the property.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



21



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 8 - FAIR VALUE (CONTINUED)



The following tables include a roll forward of the financial instruments which fair value is determined
using Significant Other Unobservable Inputs (Level 3) for the periods of January 1, 2009 to March 31, 2009 and January 1, 2010 to March 31, 2010.



|                                   |  |                                           |     |   |                                            |   |        |       |  |   |       |   |  |   |        |  
|---------------------------------- |  | ----------------------------------------- | --- | - | ------------------------------------------ | - | ------ | ----- |  | - | ----- | - |  | - | ------ | -
|                                   |  | Private 
LabelResidentialMortgageSecurity |     |   | Private 
LabelCommercialMortgageSecurities |   |        | Loans |  |   | Total |  
|                                   |  |                                           |     |  
|Beginning balance, January 1, 2009 |  | $                                         | 269 |   |                                            | $ | 7,304  |       |  | $ | 1,425 |   |  | $ | 8,998  |  
|Purchases                          |  |                                           |    |   |                                            |   | 3,945  |       |  |   |      |   |  |   | 3,945  |  
|Payments received                  |  |                                           | (23 | ) |                                            |   |       |       |  |   | (14   | ) |  |   | (37    | )
|Premium amortization               |  |                                           |    |   |                                            |   | (5     | )     |  |   |      |   |  |   | (5     | )
|Increase/(decrease) in value       |  |                                           | (14 | ) |                                            |   | 690    |       |  |   | (21   | ) |  |   | 655    |  
|Reclassification to Level 3        |  |                                           |    |   |                                            |   |       |       |  |   |      |   |  |   |       |  
|                                   |  |                                           |     |   |                                            |   |        |       |  |   |       |   |  |   |        |  
|                                   |  |                                           |     |  
|Ending balance, March 31, 2009     |  | $                                         | 232 |   |                                            | $ | 11,934 |       |  | $ | 1,390 |   |  | $ | 13,556 |  
|                                   |  |                                           |     |   |                                            |   |        |       |  |   |       |   |  |   |        |  
|                                   |  |                                           |     |  
|                                   |  | Private
LabelResidentialMortgageSecurity  |     |   | Private
LabelCommercialMortgageSecurities  |   |        | Loan  |  |   | Total |  
|                                   |  |                                           |     |  
|Beginning balance, January 1, 2010 |  | $                                         | 195 |   |                                            | $ | 17,833 |       |  | $ | 1,259 |   |  | $ | 19,287 |  
|Purchases                          |  |                                           |    |   |                                            |   |       |       |  |   |      |   |  |   |       |  
|Payments received                  |  |                                           | (19 | ) |                                            |   | (683   | )     |  |   | (15   | ) |  |   | (717   | )
|Discount accretion                 |  |                                           |    |   |                                            |   | 51     |       |  |   |      |   |  |   | 51     |  
|Increase in AOCI                   |  |                                           | 13  |   |                                            |   | 239    |       |  |   | 12    |   |  |   | 264    |  
|Reclassification to Level 3        |  |                                           |    |   |                                            |   |       |       |  |   |      |   |  |   |       |  
|                                   |  |                                           |     |   |                                            |   |        |       |  |   |       |   |  |   |        |  
|Ending balance, March 31, 2010     |  | $                                         | 189 |   |                                            | $ | 17,440 |       |  | $ | 1,256 |   |  | $ | 18,885 |  
|                                   |  |                                           |     |   |                                            |   |        |       |  |   |       |   |  |   |        |  

The Company utilizes one external pricing service (primary pricing service) as the provider of
pricing on the investment portfolio on a quarterly basis. We generally obtain one quote per investment security. We review the estimates of fair value provided by the pricing service to determine if they are representative of fair value based upon
our general knowledge of market conditions and relative changes in interest rates and the credit environment. The Company made no adjustments to the values obtained from the primary pricing service. The Company will be evaluating the appropriateness
of the identified Level 1, 2 or 3 classifications on a recurring basis.



22



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 9 - COMPREHENSIVE INCOME

Comprehensive income for the three months ended March 31, 2010, and 2009 is as follows (in thousands):



|                                                                                                                                              |  |                              |       |      |   |      
|--------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ----- | ---- | - | -----
|                                                                                                                                              |  | Three Months EndedMarch 
31,
|                                                                                                                                              |  | 2010                         |       | 2009
|                                                                                                                                              |  | (Unaudited)                 
|                                                                                                                                              |  |                             
|Net income                                                                                                                                    |  | $                            | 551   |      | $ | 601  
|                                                                                                                                              |  |                             
|Other comprehensive income:                                                                                                                   |  |                              |       |      |   |      
|                                                                                                                                              |  |                             
|Unrealized holding gains arising during the period, net of tax ($419 and $1,371 for three months ended March 31, 2010 and
2009, respectively) |  |                              | 708   |      |   | 2,593
|                                                                                                                                              |  |                              |       |      |   |      
|                                                                                                                                              |  |                             
|Other comprehensive income                                                                                                                    |  |                              | 708   |      |   | 2,593
|                                                                                                                                              |  |                              |       |      |   |      
|                                                                                                                                              |  |                             
|Comprehensive income                                                                                                                          |  | $                            | 1,259 |      | $ | 3,194
|                                                                                                                                              |  |                              |       |      |   |      

NOTE 10 - ACCOUNTING PRONOUNCEMENTS

ASC Topic 860Transfers and Servicing (Statement No. 166,Accounting for Transfers of Financial Assetsan amendment of FASB
Statement No. 140) (ASC 860). This accounting guidance was originally issued in June 2009 and is now incorporated in ASC 860. The guidance amends the derecognition guidance and eliminates the concept of qualifying special-purpose
entities (QSPEs). ASC 860 is effective for fiscal years and interim periods beginning after November 15, 2009. The Company adopted ASC 860 effective January 1, 2010 and it did not have a material effect on the Companys
financial position or results of operations.

ASC Topic 810Consolidation (Statement No. 167,Amendments to FASB
Interpretation No. 46R) (ASC 810)This accounting guidance was originally issued in June 2009 and is now incorporated in ASC 810. The guidance amends the consolidation guidance applicable to variable interest entities
(VIEs). An entity would consolidate a VIE, as the primary beneficiary, when the entity has both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the entitys
economic performance and (b) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. Ongoing reassessment
of whether an enterprise is the primary beneficiary of a VIE is required. This guidance is effective for fiscal years and interim periods beginning after November 15, 2009. The Company adopted ASC 810 effective January 1, 2010 and it did
not have a material effect on the Companys financial position or results of operations.

Accounting Standards Update (ASU)
2010-05Fair Value Measurements and Disclosures (Topic 820): Measuring Liabilities at Fair Value. The ASU amends Subtopic 820-10 to clarify certain issues with the accounting guidance for determining the fair value of liabilities.
Specifically, the guidance states that, when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustments to other inputs relating to the existence of a restriction that prevents the
transfer of the liability. The guidance also provides clarification on measuring liabilities at fair value when a quoted price in an active market is not available. In such circumstances, the ASU specifies that a valuation technique should be
applied that uses either the quoted prices of the liability when traded as an asset, the quoted prices for similar liabilities or similar liabilities when traded as assets, or another valuation technique consistent with existing fair value
measurement guidance. The amendments are effective for annual or interim reporting periods beginning after December 15, 2009. The Company adopted this ASU effective January 1, 2010 and it did not have a material effect on the
Companys financial position or results of operations.



23



---

##### Table of Contents

FOX CHASE BANCORP, INC

Notes to the Unaudited Consolidated Financial Statements(Continued)



NOTE 10 - ACCOUNTING PRONOUNCEMENTS (CONTINUED)



Accounting Standards Update (ASU) 2010-06Fair Value Measurements and Disclosures (Topic 820):
Improving Disclosures about Fair Value Measurements. The ASU amends Subtopic 820-10 with new disclosure requirements and clarification of existing disclosure requirements. New disclosures required include the amount of significant transfers in
and out of levels 1 and 2 fair value measurements and the reasons for the transfers. In addition, the reconciliation for level 3 activity will be required on a gross rather than net basis. The ASU provides additional guidance related to
the level of disaggregation in determining classes of assets and liabilities and disclosures about inputs and valuation techniques. The amendments are effective for annual or interim reporting periods beginning after December 15, 2009, except
for the requirement to provide the reconciliation for level 3 activity on a gross basis, which will be effective for fiscal years beginning after December 15, 2010. The Company adopted this ASU effective January 1, 2010, except for
the requirement to provide the reconciliation for level 3 activity on a gross basis, which the Company plans to adopt effective January 1, 2011. As the Company did not have any significant transfers in and out of levels 1 and 2 fair value
measurements, the adoption of this ASU did not have a material effect on the Companys financial position or results of operations.

NOTE 11 - SECOND STEP CONVERSION

On March 10, 2010, the Boards of Directors of the Company, Fox Chase MHC and the Bank adopted a Plan of Conversion and Reorganization (the
Plan) pursuant to which the Bank will reorganize from the mutual holding company structure to the stock holding company structure. Pursuant to the terms of the Plan, shares of the Companys common stock held by persons other
than Fox Chase MHC will be converted into shares of a new Maryland corporation pursuant to an exchange ratio designed to preserve their aggregate percentage ownership interest. The new Maryland holding company will offer shares
of its common stock for sale to the Banks eligible account holders, to the Banks tax-qualified employee benefit plans and to members of the general public in a subscription and community offering in the manner, and subject to the
priorities, set forth in the Plan. The transactions contemplated by the Plan were conditionally approved by the Office of Thrift Supervision on May 14, 2010. The Plan is also subject to approval by the shareholders of the Company and
members of Fox Chase MHC, which is scheduled to occur on June 24, 2010. If the conversion and offering are completed, conversion costs will be netted against the offering proceeds. If the conversion and offering are terminated, such
costs will be expensed. As of March 31, 2010, the Company had incurred approximately $490,000 of conversion costs.



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Forward-Looking Statements

This
quarterly report contains forward-looking statements that are based on assumptions and may describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words
believe, expect, intend, anticipate, estimate, project or similar expressions. The Companys ability to predict results or the actual effect of future plans or strategies
is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiary include, but are not limited to, changes in interest rates, national and regional economic conditions, legislative and
regulatory changes, monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality and composition of the loan or investment portfolios, demand for loan products, deposit
flows, competition, demand for financial services in the Companys market area, changes in real estate market values in the Companys market area, changes in relevant accounting principles and guidelines and the inability of third party
service providers to perform their functions. Additional factors that may affect our results are discussed in the section titled Risk Factors in the Companys Annual Report on Form 10-K, as filed with the Securities and Exchange
Commission on March 12, 2010, and its other Securities and Exchange Commission reports.

These risks and uncertainties should be
considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release
publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

Critical Accounting Policies

We
consider accounting policies involving significant judgments and assumptions by management that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. We consider the following
to



24



---

##### Table of Contents

be our critical accounting policies: allowance for loan losses, valuation and other-than-temporary impairment of securities, and deferred income taxes.

Allowance for Loan Losses. The allowance for loan losses is maintained at a level representing managements best estimate of known and
inherent losses in the loan portfolio, based on managements evaluation of the portfolios collectibility. The allowance is established through the provision for loan losses, which is charged against income. Management estimates the
allowance balance required using loss experience in particular segments of the portfolio, the size and composition of the loan portfolio, trends and absolute levels of nonperforming loans, trends and absolute levels of classified and criticized
loans, trends and absolute levels in delinquent loans, trends in risk ratings, trends in industry charge-offs by particular segments and changes in existing general economic and business conditions affecting our lending areas and the national
economy. Additionally, for loans identified by management as impaired, management will provide a specific loan loss provision based on the expected discounted cash flows of the loan, or for loans determined to be collateral dependent, a specific
loan loss provision is established based on appraised value less costs to sell. Determining the amount of the allowance for loan losses necessarily involves a high degree of judgment. Among the material estimates required to establish the allowance
are: loss exposure at default; the amount and timing of future cash flows on impaired loans; value of collateral; and determination of loss factors to be applied to the various elements of the portfolio. All of these estimates are susceptible to
significant change. Although we believe that we use the best information available to establish the allowance for loan losses, future adjustments to the allowance may be necessary if actual conditions differ substantially from the assumptions used
in making the evaluation. Further, current economic conditions have increased the uncertainty inherent in these estimates and assumptions. In addition, the Office of Thrift Supervision, as an integral part of its examination process, periodically
reviews our allowance for loan losses. Such agency may require us to recognize adjustments to the allowance based on its judgments about information available to it at the time of its examination. A large loss could deplete the allowance and require
increased provisions to replenish the allowance, which would negatively affect earnings.

Valuation and Other-Than-Temporary Impairment of
Investment Securities.Investment securities are reviewed quarterly to determine whether the fair value is below the current carrying value. When the fair value of any of our investment securities has declined below its current carrying value,
management is required to assess whether the decline is other-than-temporary. A review of other-than-temporary impairment requires companies to make certain judgments regarding the nature of the decline, and the probability, extent and timing of a
valuation recovery and Fox Chase Bancorps intent to sell the security or if it is more likely than not that the security will be required to be sold before recovery its amortized cost. Pursuant to these requirements, we assess valuation
declines to determine the extent to which such changes are attributable to (1) fundamental factors specific to the issuer, such as financial condition, business prospects or other factors, or (2) market-related factors, such as required
market yields, interest rates or equity market declines. If the decline in the market value of a security is determined to be other-than-temporary, the credit portion of the impairment is written down through earnings and the non-credit portion is
an adjustment to other comprehensive income. Fox Chase Bancorp recorded an other-than-temporary impairment charge of $605,000 during the second quarter of 2009, $157,000 of which was recognized on the statement of operations and $448,000 of which
was recognized on the statements of condition in other comprehensive income (before taxes). There was no additional other-than-temporary credit impairment charge on this investment since June 30, 2009. See Note 2 to the consolidated financial
statements for a schedule that shows gross unrealized losses, fair value of securities as well as the impairment loss and other-than-temporary impairment write down, aggregated by security category and length of time that individual securities have
been in continuous unrealized loss position at March 31, 2010 and December 31, 2009, and Note 8 for a discussion related to the determination of fair value.

Deferred Income Taxes. We use the asset and liability method of accounting for income. Under this method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We exercise significant judgment in evaluating the amount and timing of recognition of
the resulting tax liabilities and assets. These judgments require us to make projections of future taxable income. The judgments and estimates we make in determining our deferred tax assets, which are inherently subjective, are reviewed on a
continual basis as regulatory and business factors change. Any reduction in estimated future taxable income may require us to record a valuation allowance against our deferred tax assets.

Comparison of Financial Condition at March 31, 2010 and December 31, 2009

Total assets decreased $17.4 million, or 1.5%, to $1.16 billion at March 31, 2010, compared to $1.17 billion at December 31, 2009. Cash and cash
equivalents decreased $14.2 million from December 31, 2009 to March 31, 2010 as funds were used to pay off $11.0 million in advances from the Federal Home Loan Bank. Loans increased $13.8 million from December 31, 2009 to
March 31, 2010. Commercial and industrial loans increased $21.0 million, primarily as a result of loans originated by a middle market group of lenders hired during 2009. Commercial construction loans decreased by $2.5 million as we
de-emphasized construction lending during the past year and commercial real estate loans increased by $1.1 million. Additionally, our one- to four-family real estate



25



---

##### Table of Contents

loans decreased $3.0 million and our consumer loans decreased $2.8 million. The decrease in consumer loans was due to Fox Chase Bancorps decision to de-emphasize these types of loans as a
result of the current economic environment. Mortgage related securities available-for-sale decreased $24.7 million, as cash repayments exceeded new purchases during the three months ended March 31, 2010. Investment related securities available
for sale decreased $587,000, primarily due to bond calls by state and political subdivisions.

Deposits decreased $12.1 million, or 1.4%, from
$858.3 million at December 31, 2009 to $846.2 million at March 31, 2010. Certificates of deposits decreased $19.3 million, or 3.7%, and money market accounts decreased $3.0 million, or 1.6%, from December 31, 2009 to March 31,
2010. These decreases were offset by increases in noninterest-bearing demand accounts of $8.9 million, or 15.6%, and in savings and club accounts of $1.5 million, or 2.9%, from December 2009 to March 2010. The decrease in certificates of deposits
relates primarily to customer redemptions associated with certificates of deposit obtained during a pricing promotion offered in the first quarter of 2009. The increase in noninterest-bearing demand accounts was primarily due to deposits obtained
from new commercial borrowing relationships.

Stockholders equity increased $1.6 million to $125.2 million at March 31, 2010
compared to $123.6 million at December 31, 2009 primarily due to unrealized gains, net of taxes, on the investment portfolio of $7.3 million compared to $6.5 million at December 31, 2009 and net income of $551,000 for the three months
ended March 31, 2010.

Comparison of Operating Results for the Three Months Ended March 31, 2010 and 2009

General.Net income decreased $50,000, or 8.3%, to $551,000 for the three months ended March 31, 2010, compared to $601,000 for the
three months ended March 31, 2009. The decrease in net income was due to an increase in the loan loss provision of $496,000, an increase of $229,000 in noninterest expense, primarily the result of an increase of $131,000 in FDIC premiums, and
an increase of $17,000 in income tax expense, offset by an increase in net interest income of $636,000 and an increase in noninterest income of $56,000.

Net Interest Income.Net interest income increased $636,000, or 11.0%, during the three months ended March 31, 2010, compared
to the same period in 2009 primarily due to an increase in interest income of $720,000 offset by a $84,000 increase in interest expense. The increase in interest income was primarily due to an increase in the average balance of total interest
earning assets of $187.1 million, offset by a decrease in the average yield on interest-earning assets from 5.10% to 4.49%. The increase in average balances of interest-earning assets was primarily due to: (1) an increase in the average balance
of loans of $42.1 million during the respective quarterly periods primarily related to Fox Chase Bancorps focus on increasing its levels of commercial loans; (2) an increase in the average balance of mortgage related securities of $125.6
million during the respective quarterly periods; and (3) an increase in the average balance of interest-earning demand deposits of $48.7 million offset by a decrease of $18.2 million in money market funds. The decrease in yield on
interest-earning assets was primarily due to a reduction in overall interest rates from 2009 to 2010.

The increase in interest expense was
primarily due to an increase in the average balances of interest-bearing liabilities of $180.4 million offset by a decrease in the average cost of interest bearing-liabilities from 3.14% to 2.59%. The increase in the average balance of
interest-bearing liabilities was primarily due to an increase in the average balance of interest-bearing deposits of $197.8 million offset by a decrease in the average balance of Federal Home Loan Bank advances of $16.4 million and a decrease in the
average balance of other borrowed funds of $1.0 million. The increase in the average balance of interest-bearing deposits was primarily the result of a promotion offered by Fox Chase Bank in the first quarter of 2009 as well as maintaining
competitive rates on money market accounts throughout the second and third quarters of 2009. The decrease in average cost of interest bearing-liabilities was primarily due to a reduction in overall interest rates from 2009 to 2010.



26



---

##### Table of Contents

The following table summarizes average balances and average yields and costs of interest-earning assets and
interest-bearing liabilities for the three months ended March 31, 2010 and 2009. Yields are not presented on a tax-equivalent basis. Any adjustments necessary to present yields on a tax-equivalent basis are insignificant.



|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|----------------------------------------------------------------------- |  | ---------------------------- | --------- | - | -------------------- | - | ---------- |  | ------ | -------------- |  | - | -------------------- | - | ---------- | - | ------ |  | ------ | -
|                                                                        |  | Three Months Ended March 31, |          
|                                                                        |  | 2010                         |           |   | 2009                 |  
|                                                                        |  | AverageBalance               |           |   | InterestandDividends |   | Yield/Cost |  |        | AverageBalance |  |   | InterestandDividends |   | Yield/Cost |  
|                                                                        |  | (Dollars in thousands)       |          
|Assets:                                                                 |  |                              |           |  
|Interest-earning assets:                                                |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Interest-earning demand deposits                                        |  | $                            | 60,602    |   |                      | $ | 99         |  | 0.66   | %              |  | $ | 11,855               |   |            | $ | 1      |  | 0.04   | %
|Money market funds                                                      |  |                              |          |   |                      |   |           |  |       |                |  |   | 18,183               |   |            |   | 38     |  | 0.84   | %
|Mortgage-related securities                                             |  |                              | 395,077   |   |                      |   | 3,612      |  | 3.66   | %              |  |   | 269,523              |   |            |   | 3,255  |  | 4.83   | %
|Taxable securities                                                      |  |                              | 20,744    |   |                      |   | 77         |  | 1.48   | %              |  |   | 21,820               |   |            |   | 125    |  | 2.29   | %
|Nontaxable securities                                                   |  |                              | 8,931     |   |                      |   | 89         |  | 4.01   | %              |  |   | 14,538               |   |            |   | 143    |  | 3.93   | %
|Loans (1):                                                              |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Residential loans                                                       |  |                              | 268,869   |   |                      |   | 3,582      |  | 5.33   | %              |  |   | 261,767              |   |            |   | 3,733  |  | 5.70   | %
|Commercial loans                                                        |  |                              | 305,730   |   |                      |   | 4,184      |  | 5.47   | %              |  |   | 263,353              |   |            |   | 3,594  |  | 5.46   | %
|Consumer loans                                                          |  |                              | 67,963    |   |                      |   | 1,016      |  | 5.98   | %              |  |   | 75,317               |   |            |   | 1,050  |  | 5.58   | %
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Total Loans                                                             |  |                              | 642,562   |   |                      |   | 8,782      |  | 5.47   | %              |  |   | 600,437              |   |            |   | 8,377  |  | 5.58   | %
|Allowance for loan losses                                               |  |                              | (10,851   | ) |                      |   |            |  |        |                |  |   | (6,356               | ) |            |   |        |  |        |  
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Net loans                                                               |  |                              | 631,711   |   |                      |   | 8,782      |  |        |                |  |   | 594,081              |   |            |   | 8,377  |  |        |  
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Total interest-earning assets                                           |  |                              | 1,117,065 |   |                      |   | 12,659     |  | 4.49   | %              |  |   | 930,000              |   |            |   | 11,939 |  | 5.10   | %
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Noninterest-earning assets                                              |  |                              | 43,850    |   |                      |   |            |  |        |                |  |   | 36,266               |   |            |   |        |  |        |  
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Total assets                                                            |  | $                            | 1,160,915 |   |                      |   |            |  |        |                |  | $ | 966,266              |   |            |   |        |  |        |  
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Liabilities and equity:                                                 |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Interest-bearing liabilities:                                           |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|NOW and money market deposit accounts                                   |  | $                            | 218,635   |   |                      |   | 526        |  | 0.98   | %              |  | $ | 140,727              |   |            |   | 629    |  | 1.81   | %
|Savings accounts                                                        |  |                              | 52,110    |   |                      |   | 19         |  | 0.15   | %              |  |   | 52,244               |   |            |   | 32     |  | 0.25   | %
|Certificates of deposit                                                 |  |                              | 519,770   |   |                      |   | 4,033      |  | 3.15   | %              |  |   | 399,700              |   |            |   | 3,718  |  | 3.77   | %
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Total interest-bearing deposits                                         |  |                              | 790,515   |   |                      |   | 4,578      |  | 2.35   | %              |  |   | 592,671              |   |            |   | 4,379  |  | 3.00   | %
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|FHLB advances                                                           |  |                              | 130,101   |   |                      |   | 1,217      |  | 3.74   | %              |  |   | 146,524              |   |            |   | 1,330  |  | 3.63   | %
|Other borrowed funds                                                    |  |                              | 50,000    |   |                      |   | 427        |  | 3.42   | %              |  |   | 50,993               |   |            |   | 429    |  | 3.36   | %
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Total borrowings                                                        |  |                              | 180,101   |   |                      |   | 1,644      |  | 3.65   | %              |  |   | 197,517              |   |            |   | 1,759  |  | 3.56   | %
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Total interest-bearing liabilities                                      |  |                              | 970,616   |   |                      |   | 6,222      |  | 2.59   | %              |  |   | 790,188              |   |            |   | 6,138  |  | 3.14   | %
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Noninterest-bearing deposits                                            |  |                              | 60,010    |   |                      |   |            |  |        |                |  |   | 46,950               |   |            |   |        |  |        |  
|Other noninterest-bearing liabilities                                   |  |                              | 5,076     |   |                      |   |            |  |        |                |  |   | 6,820                |   |            |   |        |  |        |  
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Total liabilities                                                       |  |                              | 1,035,702 |   |                      |   |            |  |        |                |  |   | 843,958              |   |            |   |        |  |        |  
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Retained earnings                                                       |  |                              | 117,793   |   |                      |   |            |  |        |                |  |   | 121,364              |   |            |   |        |  |        |  
|Accumulated comprehensive income                                        |  |                              | 7,420     |   |                      |   |            |  |        |                |  |   | 944                  |   |            |   |        |  |        |  
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Total stockholders equity                                              |  |                              | 125,213   |   |                      |   |            |  |        |                |  |   | 122,308              |   |            |   |        |  |        |  
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Total liabilities and stockholders equity                              |  | $                            | 1,160,915 |   |                      |   |            |  |        |                |  | $ | 966,266              |   |            |   |        |  |        |  
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|                                                                        |  |                              |           |   |                      |  
|Net interest income                                                     |  |                              |           |   |                      | $ | 6,437      |  |        |                |  |   |                      |   |            | $ | 5,801  |  |        |  
|                                                                        |  |                              |           |   |                      |   |            |  |        |                |  |   |                      |   |            |   |        |  |        |  
|Interest rate spread                                                    |  |                              |           |   |                      |   |            |  | 1.90   | %              |  |   |                      |   |            |   |        |  | 1.96   | %
|Net interest margin                                                     |  |                              |           |   |                      |   |            |  | 2.26   | %              |  |   |                      |   |            |   |        |  | 2.45   | %
|Average interest-earning assets to average interest-bearing liabilities |  |                              |           |   |                      |   |            |  | 115.09 | %              |  |   |                      |   |            |   |        |  | 117.69 | %



|(1) | Nonperforming loans are included in average balance computations
|--- | ----------------------------------------------------------------



27



---

##### Table of Contents

Rate/Volume Analysis. The following table sets forth the effects of
changing rates and volumes on our net interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by current volume). The volume column shows the effects attributable to changes in volume (changes
in volume multiplied by prior rate). The net column represents the sum of the prior columns. For purposes of this table, changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionally based on
the changes due to rate and the changes due to volume.



|                                   |  |                                                                             |        |   |        |   |       |     |  |   |      |  
|---------------------------------- |  | --------------------------------------------------------------------------- | ------ | - | ------ | - | ----- | --- |  | - | ---- | -
|                                   |  | Three Months EndedMarch 31,
2010Compared toThree Months
EndedMarch 31, 2009 |       
|                                   |  | Increase (Decrease)Due
to                                                   |        |   |        |  
|                                   |  | Rate                                                                        |        |   | Volume |   |       | Net | 
|                                   |  |                                                                             |       
|Interest and dividend income:      |  |                                                                             |        |   |        |   |       |     |  |   |      |  
|Interest-earning demand deposits   |  | $                                                                           | 93     |   |        | $ | 5     |     |  | $ | 98   |  
|Money market funds                 |  |                                                                             |       |   |        |   | (38   | )   |  |   | (38  | )
|Mortgage related securities        |  |                                                                             | (1,160 | ) |        |   | 1,517 |     |  |   | 357  |  
|Taxable securities                 |  |                                                                             | (42    | ) |        |   | (6    | )   |  |   | (48  | )
|Nontaxable securities              |  |                                                                             | 2      |   |        |   | (56   | )   |  |   | (54  | )
|Loans:                             |  |                                                                             |        |   |        |   |       |     |  |   |      |  
|Residential loans                  |  |                                                                             | (252   | ) |        |   | 101   |     |  |   | (151 | )
|Commercial loans                   |  |                                                                             | 12     |   |        |   | 578   |     |  |   | 590  |  
|Consumer loans                     |  |                                                                             | 68     |   |        |   | (102  | )   |  |   | (34  | )
|                                   |  |                                                                             |        |   |        |   |       |     |  |   |      |  
|Total loans                        |  |                                                                             | (172   | ) |        |   | 577   |     |  |   | 405  |  
|                                   |  |                                                                             |        |   |        |   |       |     |  |   |      |  
|Total interest-earning assets      |  |                                                                             | (1,279 | ) |        |   | 1,999 |     |  |   | 720  |  
|                                   |  |                                                                             |        |   |        |   |       |     |  |   |      |  
|                                   |  |                                                                             |       
|Interest Expense:                  |  |                                                                             |        |   |        |   |       |     |  |   |      |  
|NOW and money market deposits      |  |                                                                             | (452   | ) |        |   | 349   |     |  |   | (103 | )
|Savings accounts                   |  |                                                                             | (13    | ) |        |   |      |     |  |   | (13  | )
|Certificates of deposit            |  |                                                                             | (802   | ) |        |   | 1,117 |     |  |   | 315  |  
|                                   |  |                                                                             |        |   |        |   |       |     |  |   |      |  
|Total interest-bearing deposits    |  |                                                                             | (1,267 | ) |        |   | 1,466 |     |  |   | 199  |  
|                                   |  |                                                                             |       
|FHLB advances                      |  |                                                                             | 7      |   |        |   | (120  | )   |  |   | (113 | )
|Other borrowed funds               |  |                                                                             | 36     |   |        |   | (38   | )   |  |   | (2   | )
|                                   |  |                                                                             |        |   |        |   |       |     |  |   |      |  
|Total borrowings                   |  |                                                                             | 43     |   |        |   | (158  | )   |  |   | (115 | )
|                                   |  |                                                                             |        |   |        |   |       |     |  |   |      |  
|Total interest-bearing liabilities |  |                                                                             | (1,224 | ) |        |   | 1,308 |     |  |   | 84   |  
|                                   |  |                                                                             |        |   |        |   |       |     |  |   |      |  
|                                   |  |                                                                             |       
|Net change in net interest income  |  | $                                                                           | (55    | ) |        | $ | 691   |     |  | $ | 636  |  
|                                   |  |                                                                             |        |   |        |   |       |     |  |   |      |  



28



---

##### Table of Contents

Provision for Loan Losses. Fox Chase Bancorp recorded a provision for loan losses of $891,000
for the three months ended March 31, 2010 compared to $395,000 for the three months ended March 31, 2009. The increase in the provision was a result of downgrades within the commercial loan portfolio, additional provision on the mortgage
loan portfolio, primarily because of an increase in nonperforming loans, and an increase in commercial loans.

The following table provides
information with respect to our nonperforming assets at the dates indicated. We had troubled debt restructurings totaling $1.2 million related to three residential mortgage loans as of March 31, 2010 and December 31, 2009, respectively.



|                                                                                     |  |                        |        |   |                      |   |        |  
|------------------------------------------------------------------------------------ |  | ---------------------- | ------ | - | -------------------- | - | ------ | -
|                                                                                     |  | At March 
31,2010      |        |   | At December 
31,2009 |  
|                                                                                     |  | (Dollars in thousands) |       
|                                                                                     |  | (Unaudited)            |        |   |                      |  
|Nonperforming loans:                                                                 |  |                        |        |   |                      |   |        |  
|One- to four-family real estate                                                      |  | $                      | 8,256  |   |                      | $ | 7,740  |  
|Multi-family and commercial real estate                                              |  |                        | 6,147  |   |                      |   | 4,738  |  
|Construction                                                                         |  |                        | 12,950 |   |                      |   | 15,739 |  
|Consumer                                                                             |  |                        | 602    |   |                      |   | 612    |  
|Commercial and industrial                                                            |  |                        | 568    |   |                      |   | 250    |  
|                                                                                     |  |                        |        |   |                      |   |        |  
|Total                                                                                |  |                        | 28,523 |   |                      |   | 29,079 |  
|                                                                                     |  |                        |        |   |                      |   |        |  
|                                                                                     |  |                       
|Accruing loans past due 90 days or more:                                             |  |                        |        |   |                      |   |        |  
|Multi-family and commercial real estate                                              |  |                        |       |   |                      |   | 601    |  
|                                                                                     |  |                        |        |   |                      |   |        |  
|Total                                                                                |  |                        |       |   |                      |   | 601    |  
|                                                                                     |  |                        |        |   |                      |   |        |  
|Total of nonperforming loans and accruing loans past due 90 days or more             |  |                        | 28,523 |   |                      |   | 29,680 |  
|                                                                                     |  |                        |        |   |                      |   |        |  
|                                                                                     |  |                       
|Assets acquired through foreclosure                                                  |  |                        | 5,076  |   |                      |   | 4,052  |  
|                                                                                     |  |                        |        |   |                      |   |        |  
|Total nonperforming assets                                                           |  | $                      | 33,599 |   |                      | $ | 33,732 |  
|                                                                                     |  |                        |        |   |                      |   |        |  
|                                                                                     |  |                       
|Total nonperforming loans and accruing loans past due 90 days or more to total loans |  |                        | 4.35   | % |                      |   | 4.62   | %
|Total nonperforming loans to total assets                                            |  |                        | 2.47   |   |                      |   | 2.53   |  
|Total nonperforming assets to total assets                                           |  |                        | 2.91   |   |                      |   | 2.87   |  

Nonperforming assets decreased
$133,000 to $33.6 million at March 31, 2010 from $33.7 million at December 31, 2009. Significant changes in nonperforming assets include a reduction in nonperforming construction loans of $2.8 million due to a sale of property at a
residential housing development with net proceeds of $1.3 million to the Bank, and the reclassification of one loan to assets acquired through foreclosure in the amount of $889,000 after a charge-off of $675,000; offset by (1) an increase in
multi-family and commercial real estate loans of $1.4 million due to one loan in the amount of $2.2 million secured by a commercial business located in Philadelphia County, Pennsylvania offset by the paydown of a $771,000 loan due to the sale of an
underling property on another loan in this category; and (2) an increase in one- to four-family real estate loans of $516,000 due to an additional loan.

At March 31, 2010, nonperforming assets were comprised of the following:



| |  |  | Five construction loans for residential developments, the largest of which was a $5.8 million loan collateralized by a residential housing development
in Cape May County, New Jersey. The four other nonperforming construction loans totaled $7.1 million at March 31, 2010 and are collateralized by a condominium project located in Atlantic County, New Jersey, land associated with an apartment complex
development located in Sussex County, Delaware, a townhome project located in Montgomery County, Pennsylvania and a single family residential development in Montgomery County, Pennsylvania.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Five multi-family and commercial real estate loans, the largest of which was a $2.6 million loan secured by a self-storage facility located in
Burlington County, New Jersey.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



29



---

##### Table of Contents

| |  |  | Two commercial and industrial loans located in Philadelphia County, Pennsylvania and Atlantic County, New Jersey.
| | - |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | Eleven one-to four-family real estate loans, the largest of which is a $4.3 million loan secured by a residential home located in Somerset County, New
Jersey.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Five consumer loans, each of which is secured by a second or third mortgage position.
| | - |  | -------------------------------------------------------------------------------------



| |  |  | Five properties in assets acquired through foreclosure, consisting of a single family residential development located in Atlantic County, New Jersey
with a book value of $2.1 million, a condominium project located in Philadelphia County, Pennsylvania with a book value of $1.7 million, a residential home located in Atlantic County, New Jersey with a book value of $889,000, a single family
residential home in Atlantic County, New Jersey with a book value of $216,000 and a single family residential home located in Bucks County, Pennsylvania with a book value of $168,000.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our methodology for assessing the appropriateness of the allowance for loan losses consists of a specific allowance on impaired loans and a general
valuation allowance on the remainder of the loan portfolio. Although we determine the amount of each element of the allowance separately, the entire allowance for loan losses is available for the losses on entire portfolio.

Our allowance for loan losses was $10.7 million, which represented 1.63% of total loans and 37.6% of nonperforming loans at March 31, 2010, compared
to our allowance for loan losses of $10.6 million, which represented 1.65% of total loans and 35.7% of nonperforming loans at December 31, 2009.

Impaired loans requiring an allowance for loan losses increased to $26.4 million at March 31, 2010 compared to $26.2 million at December 31,
2009. Our specific allowance for loan losses for impaired loans was $4.0 million and the general valuation allowance for the loan portfolio was $6.7 million at March 31, 2010; compared to specific allowance for loan losses for impaired loans of
$4.3 million and the general valuation allowance for the loan portfolio of $6.3 million at December 31, 2009.

The following table
provides information about delinquencies in our loan portfolio at the dates indicated.



|                                        |                   |                  |                   |                     |                   |     |                   |   |       |  |   |      
|--------------------------------------- | ----------------- | ---------------- | ----------------- | ------------------- | ----------------- | --- | ----------------- | - | ----- |  | - | -----
|                                        |                   | At March 31,2010 |                   | At
December 31,2009
|                                        | 30-59DaysPast Due |                  | 60-89DaysPast Due |                     | 30-59DaysPast Due |     | 60-89DaysPast Due
|                                        |                   | (In thousands)  
|One- to four-family real estate         |                   | $                | 238               |                     | $                 | 316 |                   | $ | 678   |  | $ |     
|Multi-family and commercial real estate |                   |                  |                  |                     |                   |    |                   |   | 198   |  |   | 2,303
|Consumer:                               |                   |                  |                   |                     |                   |     |                   |   |       |  |   |      
|Home equity loans and lines of credit   |                   |                  | 386               |                     |                   | 124 |                   |   | 393   |  |   | 3    
|Other                                   |                   |                  | 7                 |                     |                   |    |                   |   |      |  |   |     
|                                        |                   |                  |                   |                     |                   |     |                   |   |       |  |   |      
|Total                                   |                   | $                | 631               |                     | $                 | 440 |                   | $ | 1,269 |  | $ | 2,306
|                                        |                   |                  |                   |                     |                   |     |                   |   |       |  |   |      

Total delinquent loans decreased to $1.1 million at March 31,
2010 as compared to $3.6 million at December 31, 2009. The decrease was primarily due to one $2.3 million multi-family and commercial real estate loan, which was paying current, but 60 days past its contractual maturity date at
December 31, 2009 and was renewed during the first quarter of 2010. At March 31, 2010, delinquent loans were comprised of fourteen different loan relationships. The largest relationship was a $295,000 home equity loan secured by a second
lien position on a residential property located in Atlantic County, New Jersey.

The Banks loan portfolio has many loans where the loan
is collateralized by either residential homes, residential developments or commercial real estate. Continued declines in real estate values and home sales, and an increase in the financial stress on borrowers from an uncertain economic environment,
including rising unemployment, could have an adverse effect on our borrowers or their customers, which could adversely impact the repayment of individual loans in the loan portfolio.



30



---

##### Table of Contents

Noninterest Income.The following table summarizes noninterest income for the three
months ended March 31, 2010 and 2009.



|                                     |  |                              |     |      |   |          |  |   |          |   |  |        |  
|------------------------------------ |  | ---------------------------- | --- | ---- | - | -------- |  | - | -------- | - |  | ------ | -
|                                     |  | Three Months EndedMarch 
31, |     |      |   |          |  |  
|                                     |  | 2010                         |     | 2009 |   | $ Change |  |   | % Change |  
|Service charges and other fee income |  | $                            | 253 |      | $ | 170      |  | $ | 83       |   |  | 48.8   | %
|Net gain on sale of loans            |  |                              |    |      |   | 3        |  |   | (3       | ) |  | (100.0 | )
|Income on bank-owned life insurance  |  |                              | 115 |      |   | 109      |  |   | 6        |   |  | 5.5    |  
|Other                                |  |                              | 35  |      |   | 65       |  |   | (30      | ) |  | (46.2  | )
|                                     |  |                              |     |      |   |          |  |   |          |   |  |        |  
|Total noninterest income             |  | $                            | 403 |      | $ | 347      |  | $ | 56       |   |  | 16.1   | %
|                                     |  |                              |     |      |   |          |  |   |          |   |  |        |  

Service charges and other fee income increased as a result of a $50,000 increase in loan fee income and a $33,000
increase in retail fee income. The increase in loan fee income was due to: (1) a $23,000 increase in net loan servicing income, which included a reduction in valuation allowance on Fox Chase Banks mortgage servicing rights of $3,000 in
the quarter ended March 31, 2010 compared to an increase in this valuation allowance of $24,000 in the quarter ended March 31, 2009 resulting in a net $27,000 increase; and (2) an increase of $27,000 in other loan fee income, which
was related to an increase in unused line of credit fees on commercial and industrial loans and fees on commercial loan accounts. The increase in retail fee income was the result of increased ATM fees based on higher usage and an increase in cash
management fees as the number of such accounts continuing to grow. These increases were offset by a decrease in other income primarily as a result of a decrease of $42,000 of income earned on Fox Chase Banks investment in Philadelphia Mortgage
Advisors, Inc., due to lower volume of mortgage loans sold during the quarter ended March 31, 2010, offset by a $10,000 increase in merchant processing fees.

Noninterest Expense. The following table summarizes noninterest expense for the three months ended March 31, 2010 and 2009.



|                                          |  |                              |       |      |   |          |  |   |          |   |  |       |  
|----------------------------------------- |  | ---------------------------- | ----- | ---- | - | -------- |  | - | -------- | - |  | ----- | -
|                                          |  | Three Months EndedMarch 
31, |       |      |   |          |  |  
|                                          |  | 2010                         |       | 2009 |   | $ Change |  |   | % Change |  
|                                          |  | (In thousands)               |       |      |   |          |  |  
|Salaries, benefits and other compensation |  | $                            | 2,983 |      | $ | 2,850    |  | $ | 133      |   |  | 4.7   | %
|Occupancy expense                         |  |                              | 499   |      |   | 495      |  |   | 4        |   |  | 0.8   |  
|Furniture and equipment expense           |  |                              | 143   |      |   | 221      |  |   | (78      | ) |  | (35.3 | )
|Data processing costs                     |  |                              | 369   |      |   | 385      |  |   | (16      | ) |  | (4.2  | )
|Professional fees                         |  |                              | 262   |      |   | 266      |  |   | (4       | ) |  | (1.5  | )
|Marketing expense                         |  |                              | 71    |      |   | 84       |  |   | (13      | ) |  | (15.5 | )
|FDIC premiums                             |  |                              | 372   |      |   | 241      |  |   | 131      |   |  | 54.4  |  
|Other                                     |  |                              | 481   |      |   | 409      |  |   | 72       |   |  | 17.6  |  
|                                          |  |                              |       |      |   |          |  |   |          |   |  |       |  
|Total noninterest expense                 |  | $                            | 5,180 |      | $ | 4,951    |  | $ | 229      |   |  | 4.6   | %
|                                          |  |                              |       |      |   |          |  |   |          |   |  |       |  

The increase in noninterest expense was primarily a result of: (1) an increase in FDIC insurance premiums due
to an increased assessment for the three months ended March 31, 2010 by 3 basis points to 15.6 basis points as well as an increase in average deposits; (2) an increase in salaries, benefits and other compensation primarily a result of the
hiring of a middle market team of lenders in June 2009; and (3) an increase in other expense driven by a $34,000 valuation allowance on assets acquired through foreclosure and a $42,000 increase in losses on checking accounts. These increases
were offset by a reduction of furniture and equipment expense, primarily as a result of certain fixed assets becoming fully depreciated in 2009.

Income Taxes.The income tax provision for the three months ended March 31, 2010 was $218,000 compared to $201,000 for the
three months ended March 31, 2009. Fox Chase Bancorps effective income tax rate was 28.3% and 25.1% for the three months ended March 31, 2010 and 2009, respectively. The rates reflect Fox Chase Bancorps level of tax-exempt
interest income and tax-exempt bank-owned life insurance income for both periods, relative to the overall level of pre-tax income.



31



---

##### Table of Contents

Liquidity and Capital Management

Liquidity Management. Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources
of funds consist of deposit inflows, loan repayments, securities repayments, maturities and sales and funds available from the FHLB. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows
and loans and securities sales and prepayments are greatly influenced by general interest rates, economic conditions and competition.

The
following table presents certain of our contractual obligations as of March 31, 2010 and December 31, 2009.



|                                       |  |                   |         |                        |   |                    |  |                     |        |  |   |        |  |   |       
|-------------------------------------- |  | ----------------- | ------- | ---------------------- | - | ------------------ |  | ------------------- | ------ |  | - | ------ |  | - | ------
|Contractual Obligations                |  | Total             |         | Payments Due by Period
|                                       |  | Less ThanOne Year |         | One toThree Years      |   | Three toFive Years |  | More ThanFive
Years
|                                       |  | (In thousands)   
|                                       |  |                   |         |                        |  
|At March 31, 2010                      |  |                   |         |                        |   |                    |  |                     |        |  |   |        |  |   |       
|Operating lease obligations (1)        |  | $                 | 1,105   |                        | $ | 483                |  | $                   | 622    |  | $ |       |  | $ |      
|FHLB advances and other borrowings (2) |  |                   | 209,213 |                        |   | 10,865             |  |                     | 49,370 |  |   | 50,167 |  |   | 98,811
|Other long-term obligations (3)        |  |                   | 5,771   |                        |   | 1,701              |  |                     | 3,003  |  |   | 1,067  |  |   |      
|                                       |  |                   |         |                        |   |                    |  |                     |        |  |   |        |  |   |       
|Total                                  |  | $                 | 216,089 |                        | $ | 13,049             |  | $                   | 52,995 |  | $ | 51,234 |  | $ | 98,811
|                                       |  |                   |         |                        |   |                    |  |                     |        |  |   |        |  |   |       
|                                       |  |                   |         |                        |  
|At December 31, 2009                   |  |                   |         |                        |   |                    |  |                     |        |  |   |        |  |   |       
|Operating lease obligations (1)        |  | $                 | 1,229   |                        | $ | 494                |  | $                   | 735    |  | $ |       |  | $ |      
|FHLB advances and other borrowings (2) |  |                   | 221,937 |                        |   | 20,890             |  |                     | 49,737 |  |   | 51,348 |  |   | 99,962
|Other long-term obligations (3)        |  |                   | 6,046   |                        |   | 1,684              |  |                     | 2,981  |  |   | 1,381  |  |   |      
|                                       |  |                   |         |                        |   |                    |  |                     |        |  |   |        |  |   |       
|Total                                  |  | $                 | 229,212 |                        | $ | 23,068             |  | $                   | 53,453 |  | $ | 52,729 |  | $ | 99,962
|                                       |  |                   |         |                        |   |                    |  |                     |        |  |   |        |  |   |       



|(1) | Represents lease obligations for operations center, one loan production office and equipment.
|--- | ---------------------------------------------------------------------------------------------

|(2) | Includes principal and projected interest payments.
|--- | ---------------------------------------------------

|(3) | Represents obligations to the Companys third party data processing provider and other vendors.
|--- | -----------------------------------------------------------------------------------------------

We regularly adjust our investments in liquid assets based upon our assessment of: (1) expected loan demand; (2) expected deposit flows;
(3) maturities of FHLB advances and other borrowings; (4) expected repayments of loans and investments; (5) yields available on interest-earning deposits and securities; and (6) the objectives of our asset/liability management
policy. We use a variety of measures to assess our liquidity needs, which are provided to our Asset/Liability Management Committee on a regular basis.

Our most liquid assets are cash and cash equivalents. The levels of these assets depend on our operating, financing, lending and investing activities
during any given period. At March 31, 2010, cash and cash equivalents totaled $51.2 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $397.2 million at March 31, 2010. In addition,
at December 31, 2009, the latest date available, we had the ability to borrow a total of approximately $334.5 million from the FHLB. On March 31, 2010, we had $126.1 million of borrowings outstanding with the FHLB as well as $50.0 million
of borrowings outstanding with another financial institution.

At March 31, 2010, we had $124.6 million in loan commitments outstanding,
which consisted of $2.7 million of mortgage loan commitments, $23.1 million in home equity and consumer loan commitments, $98.8 million in commercial loan commitments and $268,000 in standby letters of credit.

Certificates of deposit due within one year of March 31, 2010 totaled $318.3 million, representing 63.1% of certificates of deposit at
March 31, 2010, a decrease from 64.7% at December 31, 2009. As a result of a pricing promotion in March 2009, $130.6 of the certificates of deposit mature in the third quarter of 2010. We believe the large percentage of certificates of
deposit that mature within one year reflect customers hesitancy to invest their funds for long periods in the current low



32



---

##### Table of Contents

interest rate environment as well as the successful efforts of the March 2009 promotion. We are implementing marketing and pricing strategies that we believe will help retain a significant
portion of these maturities. If these maturing deposits do not remain with us, we will be required to seek other sources of funds, including other certificates of deposit and borrowings. Depending on market conditions, we may be required to pay
higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit due on or before December 31, 2010.

Our primary investing activities are the origination of loans and the purchase and sale of securities. Our primary financing activities consist of
activity in deposit accounts and borrowed funds. Deposit flows are affected by the overall levels of interest rates, the interest rates and products offered by us and our local competitors and other factors. We generally manage the pricing of our
deposits to be competitive and to increase core deposit relationships. Occasionally, we offer promotional rates on certain deposit products to attract deposits.

The following table presents our primary investing and financing activities during the periods indicated and does not include loans originated and held
for sale.



|                                                    |  |                                  |         |   |                             |   |          |  
|--------------------------------------------------- |  | -------------------------------- | ------- | - | --------------------------- | - | -------- | -
|                                                    |  | Three 
MonthsEndedMarch 31, 2010 |         |   | Year
EndedDecember 31, 2009 |  
|                                                    |  | (In thousands)                   |        
|Investing activities:                               |  |                                  |         |   |                             |   |          |  
|Loan originations                                   |  | $                                | (45,524 | ) |                             | $ | (211,062 | )
|Other decreases in loans                            |  |                                  | 33,100  |   |                             |   | 155,765  |  
|Purchase of loans and loan participations           |  |                                  | (3,304  | ) |                             |   | (127     | )
|Security purchases                                  |  |                                  | (13,630 | ) |                             |   | (313,473 | )
|Security sales                                      |  |                                  |        |   |                             |   | 77,531   |  
|Security maturities, calls and principal repayments |  |                                  | 32,711  |   |                             |   | 117,024  |  
|Financing activities:                               |  |                                  |         |   |                             |   |          |  
|Changes in deposits                                 |  |                                  | (12,118 | ) |                             |   | 249,805  |  
|Net decrease in FHLB advances                       |  |                                  | (11,077 | ) |                             |   | (9,214   | )
|Purchase of treasury stock                          |  |                                  |        |   |                             |   | (4,521   | )

The Bancorp is a separate entity and apart
from the Bank and must provide for its own liquidity. As of March 31, 2010, the Bancorp had $4.6 million in cash and cash equivalents compared to $12.4 million as of December 31, 2009. During the three months ended March 31, 2010, the
Bancorp contributed $7.5 million to the Bank in the form of a capital contribution. In addition to its operating expenses, the Bancorp may utilize its cash position for the payment of dividends to stockholders or to repurchase common stock. Through
March 31, 2010, no dividends have been paid. Substantially all of the Bancorps cash and cash equivalents was obtained from proceeds it retained from its initial public offering in 2006. The Bancorp can receive dividends from the Bank.
Payment of such dividends to the Bancorp by the Bank is limited under federal law. The amount that can be paid in any calendar year, without prior regulatory approval, cannot exceed the retained net earnings (as defined) for the year plus the
preceding two calendar years. The Bancorp believes that such restriction will not have an impact on the Bancorps ability to meet its ongoing cash obligations.

Capital Management. The Bank is subject to various regulatory capital requirements administered by the Office of Thrift Supervision,
including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk
categories. At March 31, 2010, the Bank exceeded all of regulatory capital requirements and was considered a well capitalized institution under regulatory guidelines.



33



---

##### Table of Contents

The following table presents the Banks capital ratios and the minimum capital requirements to be
considered well capitalized by the OTS as of March 31, 2010 and December 31, 2009:



|                                                   |  |       |   |  |                               |      |  
|-------------------------------------------------- |  | ----- | - |  | ----------------------------- | ---- | -
|                                                   |  | Ratio |   |  | Minimumto be 
WellCapitalized |     
|March 31, 2010:                                    |  |       |   |  |                               |      |  
|Total risk-based capital (to risk-weighted assets) |  | 17.33 | % |  | 3                             | 10.0 | %
|Tier 1 capital (to risk-weighted assets)           |  | 16.12 | % |  | 3                             | 6.0  | %
|Tier 1 capital (to adjusted assets)                |  | 9.37  | % |  | 3                             | 5.0  | %
|                                                   |  |      
|December 31, 2009:                                 |  |       |   |  |                               |      |  
|Total risk-based capital (to risk-weighted assets) |  | 16.57 | % |  | 3                             | 10.0 | %
|Tier 1 capital (to risk-weighted assets)           |  | 15.41 | % |  | 3                             | 6.0  | %
|Tier 1 capital (to adjusted assets)                |  | 8.51  | % |  | 3                             | 5.0  | %

Total stockholders equity to total assets was 10.8% at March 31, 2010 and 10.5% at December 31, 2009. The Companys financial
condition and results of operations have been enhanced by the capital from the initial public offering in 2006, resulting in increased net interest-earning assets. However, the large increase in equity resulting from the capital raised in the
offering has had an adverse impact on our return on equity. The Company may use capital management tools such as cash dividends and share repurchases as well as improving operating income to increase its return on equity.

Off-Balance Sheet Arrangements

In the normal course of operations, we engage in a variety of financial transactions that, in accordance with US generally accepted accounting principles,
are not recorded in our financial statements. These transactions involve, to varying degrees, elements of credit, interest rate and liquidity risk. Such transactions are used primarily to manage customers requests for funding and take the form
of loan commitments, letters of credit and lines of credit.

For the period ended March 31, 2010, we did not engage in any off-balance
sheet transactions reasonably likely to have a material effect on our financial condition, results of operations or cash flows.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk.
|------- | -----------------------------------------------------------

At March 31, 2010, there has not been any material change to the market risk disclosure from that contained in the Companys Annual Report on
Form 10-K for the year ended December 31, 2009.



|Item 4T. | 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. In addition, no change in the Companys internal control over financial
reporting occurred during the quarter ended March 31, 2010 that has materially affected, or is reasonably likely to materially effect, Companys internal control over financial reporting.

PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

Periodically, there
have been various claims and lawsuits against us, such as claims to enforce liens, condemnation proceedings on properties in which we hold security interests, claims involving the making and servicing of real property



34



---

##### Table of Contents

loans and other issues incident to our business. We are not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of
operations or cash flows.



|Item 1A. | Risk Factors
|-------- | ------------

In addition to the other
information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2009, which could materially affect our
business, financial condition or future results. As of March 31, 2010, the risk factors of the Company have not changed materially from those reported in the Companys Annual Report on Form 10-K. The risks described in our Annual Report on
Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.



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

On May 21, 2009, the Company announced that the Board of Directors approved the repurchase of up to 327,000 shares of the Companys common
stock. The Company did not repurchase any of its securities during the three months ended March 31, 2010. As of March 31, 2010, 237,437 shares remain available for repurchase. This repurchase program will continue until it is
completed or terminated by the Board of Directors.



|Item 3. | Defaults upon Senior Securities
|------- | -------------------------------

Not
applicable.



|Item 4. | (Removed and Reserved)
|------- | ----------------------



|Item 5. | Other Information
|------- | -----------------

Not applicable.



|Item 6. | Exhibits
|------- | --------



|     |  |                                                                                  
|---- |  | ---------------------------------------------------------------------------------
|2.0  |  | Plan of Conversion and Reorganization, as amended and restated (1)               
|     | 
|3.1  |  | Charter of Fox Chase Bancorp, Inc. (2)                                           
|     | 
|3.2  |  | Bylaws of Fox Chase Bancorp, Inc. (3)                                            
|     | 
|4.1  |  | Stock Certificate of Fox Chase Bancorp, Inc. (2)                                 
|     | 
|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 of Chief Executive Officer and Chief Financial Officer



|(1) | Incorporated by reference to this document from the exhibits to the Companys Registration Statement on Form S-1/A as filed with the Securities and Exchange
Commission on April 26, 2010.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to this document from the exhibits to the Companys Registration Statement on Form S-1 (File No. 333-134160), as amended, initially
filed with the Securities and Exchange Commission on May 16, 2006.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Incorporated by reference to this document from the exhibits to the Companys Quarterly Report on Form 8-K filed with the Securities and Exchange Commission on
March 10, 2010.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



35



---

##### Table of Contents

SIGNATURES

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



|                    |  |                         |  |                                      
|------------------- |  | ----------------------- |  | -------------------------------------
|                    |  | FOX CHASE BANCORP, INC.
|                    |  |                        
|Dated: May 17, 2010 |  | By:                     |  | /S/    THOMAS M.
PETRO               
|                    |  |                         |  | Thomas M. Petro                      
|                    |  |                         |  | President and Chief Executive Officer
|                    |  |                         |  | (principal executive officer)        
|                    |  |                        
|Dated: May 17, 2010 |  | By:                     |  | /S/    ROGER S.
DEACON               
|                    |  |                         |  | Roger S. Deacon                      
|                    |  |                         |  | Chief Financial Officer              
|                    |  |                         |  | (principal financial officer)