EX-99.1
2
pr.txt
PRESS RELEASE


                                                   Exhibit 99.1


Press Release                           For Immediate Release
                                        Contact: Robert W. White
                                        (215) 886-8280


ABINGTON COMMUNITY BANCORP, INC. ANNOUNCES RECORD EARNINGS

Jenkintown, PA (February 10, 2005) - Abington Community Bancorp,
Inc. (the "Company") (Nasdaq: ABBC), the recently formed "mid-
tier" holding company for Abington Bank (the "Bank"), reported
net income of $1.4 million for the quarter ended December 31,
2004 and $4.6 million for the year ended December 31, 2004,
representing increases of 8.8% and 11.4%, respectively, over the
comparable 2003 periods. On December 16, 2004, the Bank completed
its reorganization to the mutual holding company form and the
related subscription offering for shares of the Company's common
stock. The Company generated gross proceeds of $71.4 million
through the initial public offering.

Mr. Robert W. White, Chairman, President and CEO of the Company,
stated, "2004 truly was a memorable year for Abington Bank.  We
successfully completed our reorganization into a mutual holding
company and the stock offering by Abington Community Bancorp, and
today we are announcing the highest net income in our long
history.  In addition, the amount of our new loan originations
reached historic levels in 2004. Our loan origination activity in
2004 was well diversified among the various types of loans we
offer - mortgage loans, commercial loans, consumer loans and
construction loans - reflecting our philosophy of growth as a
true community bank. Abington Bank has rededicated itself to
meeting the personal finance and business needs of our customers.
We pledge to our customers and new stockholders to stay on course
as we continue to build our franchise."

The Company's total assets increased $113.5 million, or 18.8%, to
$718.0 million at December 31, 2004 compared to $604.4 million at
December 31, 2003. During 2004, the largest increases in our
assets were in the categories of net loans receivable, mortgage-
backed securities and cash and cash equivalents. Our net loans
receivable increased by $48.0 million, or 13.2%, to $412.7
million at December 31, 2004 compared to $364.6 million at
December 31, 2003. Our growth in loans resulted from $181.2
million of diversified loan originations consisting of 37%
construction loans, 26% mortgage loans, 17% consumer loans and
20% commercial loans. Our mortgage-backed securities, both held-
to-maturity and available-for-sale, increased by an aggregate of
$43.5 million, or 35.9% to an aggregate of $164.7 million at
December 31, 2004 compared to an aggregate of $121.2 million at
December 31, 2003. During 2004, purchases of $83.1 million in the
aggregate more than offset $38.7 million in payments and
repayments of our held-to-maturity and available-for-sale
mortgage-backed securities. Given the relative efficiencies
provided by mortgage-backed securities coupled with what we
believe is good credit risk, we have continued to invest in
mortgage-backed securities as part of our growth efforts. Our
cash and cash equivalents increased by $13.6 million to $33.3
million at December 31, 2004 compared to $19.7 million at
December 31, 2003. This was due primarily to $69.3 million in net

proceeds from our stock issuance in December 2004 as well as a
$42.6 million increase in our deposit base during 2004. These
increases were partially offset by the previously described new
loan originations (net of repayments) and purchases of mortgage-
backed securities (net of payments and repayments), as well as
approximately $8.0 million in aggregate purchases of both held-to-
maturity and available-for-sale investment securities net of
maturities.

The $42.6 million or 11.8% increase in deposits at December 31,
2004 compared to December 31, 2003 resulted from an increase in
all categories of deposits. During 2004, demand deposits
increased $13.2 million, savings accounts increased $13.1 million
and certificates of deposit increased $16.3 million. The $4.2
million increase in other borrowed money to $12.9 million at
December 31, 2004 compared to $8.7 million at December 31, 2003
reflects an increase in the amount of securities repurchase
agreements entered into with certain commercial checking account
customers.

Our stockholders' equity increased $69.8 million to $123.1
million at December 31, 2004 compared to $53.2 million at
December 31, 2003. The primary reason for the increase was $69.3
million in net proceeds from the Company's initial public
offering on December 16, 2004. The Company sold 7,141,500 shares
of stock to eligible depositors for $10 per share representing
45% of the total outstanding shares of the Company. The remaining
55% or 8,728,500 outstanding shares are owned by the Company's
parent mutual holding company, Abington Mutual Holding Company.
As of December 31, 2004, approximately 153,000 shares of the
Company's common stock had been purchased for $2.0 million by the
Bank's Employee Stock Ownership Plan ("ESOP"). Subsequent to
December 31, 2004, the ESOP has purchased an additional 247,000
shares of the Company's common stock towards its anticipated
total purchases of approximately 571,000 shares. Retained
earnings increased $4.5 million during 2004 primarily as a result
of $4.6 million in net income, which was partially offset by a
$770,000 increase in accumulated other comprehensive losses and
the $100,000 capitalization of Abington Mutual Holding Company.

Net interest income for the three-months ended December 31, 2004
increased $652,000 or 16.4% to $4.6 million compared to $4.0
million for the three-months ended December 31, 2003. Interest
income increased $1.0 million for the fourth quarter of 2004 when
compared to the prior year comparable period due to increases in
the average balances of all categories of interest-earning
assets, with the largest increases occurring in the average
balances of loans and mortgage-backed securities. The increases
in these average balances were somewhat offset by decreases in
the average yields on mortgage-backed securities, loans
receivable and other interest-earning assets, as well as a
$389,000 or 11.4% increase in interest expense. The increase in
interest expense for the fourth quarter of 2004 when compared to
the same period in the prior year resulted from increases in the
average balances of all categories of interest-bearing
liabilities as well as increases in the average rates paid on
those liabilities.

Net interest income for the year ended December 31, 2004
increased $541,000 or 3.4% to $16.6 million compared to $16.1
million for the year ended December 31, 2003. Interest income
increased $852,000 or 2.8% to $30.8 million for the year ended
December 31, 2004 compared to $30.0 million for the prior year
due to increases in interest income on investments and mortgage-
backed securities. Both the average yield and average balance of
investment securities increased while a slight decrease in the
average yield of mortgage-backed securities was more than offset
by a $44.8 million or 48.6% increase in the average balance. A
decrease in the average yield on loans receivable to 5.93% in
2004 compared to 6.59% in 2003 offset a $23.4 million increase in
the average balance of such assets. Interest expense increased
$310,000 or 2.2% to $14.2 million

                               2

for the year ended December 31, 2004 compared to $13.9 million for
the prior year due primarily to increases in the average balances
of FHLB advances and other borrowings.

We made no provision for loan losses in the fourth quarter of
2004 or 2003. For the year ended December 31, 2004 our provision
for loan losses was $45,000 compared to $375,000 for the year
ended December 31, 2003. At December 31, 2004 we had $227,000 of
non-performing assets and our allowance for loan losses amounted
to $1.4 million. Our non-performing loans as a percentage of
total loans receivable was 0.05% at December 31, 2004 and 0.12%
at December 31, 2003. For the year ended December 31, 2004 our
net loan charge-offs amounted to $88,000. Net loan charge-offs
amounted to $733,000 for the year ended December 31, 2003 of
which $671,000 related to one borrower.

Our total non-interest income amounted to $639,000 for the three-
months ended December 31, 2004 compared to $700,000 for the three-
months ended December 31, 2003. The decrease was due primarily to
a $92,000 decrease in the amount of gain  recognized on
derivative instruments which was partially offset by an increase
in other non-interest income. Total non-interest income increased
$383,000 or 20.6% to $2.2 million for the year ended December 31,
2004 compared to $1.9 million for the year ended December 31,
2003. Contributing to the increase was a $329,000 or 24.6%
increase in service charge income, particularly fees earned on
our overdraft protection program which we began offering in May
2003. Our loss on derivative instruments improved to $141,000 for
the year ended December 31, 2004 compared to $407,000 for the
year ended December 31, 2003. These changes were somewhat offset
as $190,000 of combined gains on sales of loans and property that
were recognized in 2003 did not recur in 2004.

Our total non-interest expense for the quarter and year ended
December 31, 2004 amounted to $3.2 million and $12.0 million,
respectively, representing increases of $414,000 and $543,000,
respectively, from the quarter and year ended December 31, 2003.
The increases for both the quarter and the year ended December
31, 2004 when compared to the same periods for the prior year
were due primarily to increases in salaries and employee benefits
expense, the largest component of non-interest expense, and data
processing expense. The increase in salaries and employee
benefits expense was due primarily to normal merit increases in
salaries and an increase in staffing levels. Our data processing
expense increased as a result of increased deposits and deposit
activity, as data processing expense is dependent in part on the
number of deposit transactions that are processed. These
increases were partially offset by decreases in ATM expense and
advertising and promotions expense. The decrease in ATM expense
was due to certain savings negotiated during a contract renewal
in 2004. The decrease in advertising and promotions was due to
higher expenditures in 2003 to promote the opening of new
branches.

Income tax expense for the quarter and year ended December 31,
2004 amounted to $657,000 and $2.3 million, respectively,
compared to $595,000 and $2.0 million, respectively, for the
quarter and year ended December 31, 2003. Our effective income
tax rate remained relatively consistent at 31.8% and 31.5% for
the quarters ended December 31, 2004 and 2003, respectively. Our
effective income tax rate was also consistent from year to year
at 33.2% and 33.1% for the years ended December 31, 2004 and
2003, respectively.

Abington Community Bancorp, Inc. is the "mid-tier" holding
company for Abington Bank. Abington Bank is a Pennsylvania-
chartered, FDIC-insured savings bank which was originally
organized in 1867.  Abington Bank conducts business from its
headquarters and main office in Jenkintown, Pennsylvania as well
as seven additional full service branch offices and four limited
service banking offices located in Montgomery and Bucks Counties,
Pennsylvania.  As of
                               3

December 31, 2004, Abington Community Bancorp had $718.0 million
in total assets, $405.3 million in deposits and $123.1 million in
stockholders' equity.

This news release contains certain forward-looking statements,
including statements about the financial condition, results of
operations and earnings outlook for Abington Community Bancorp,
Inc. Forward-looking statements can be identified by the fact
that they do not relate strictly to historical or current facts.
They often include words such as "believe," "expect,"
"anticipate," "estimate" and "intend" or future or conditional
verbs such as "will," "would," "should," "could" or "may."
Forward-looking statements, by their nature, are subject to risks
and uncertainties. A number of factors - many of which are beyond
the Company's control - could cause actual conditions, events or
results to differ significantly from those described in the
forward-looking statements. The Company's reports filed from time-
to-time with the Securities and Exchange Commission, describe
some of these factors, including general economic conditions,
changes in interest rates, deposit flows, the cost of funds,
changes in credit quality and interest rate risks associated with
the Company's business and operations. Other factors described
include changes in our loan portfolio, changes in competition,
fiscal and monetary policies and legislation and regulatory
changes. Investors are encouraged to access the Company's
periodic reports filed with the Securities and Exchange
Commission for financial and business information regarding the
Company at www.abingtonbank.com under the Investor Relations
menu. We undertake no obligation to update any forward-looking
statements.


















                               4



ABINGTON COMMUNITY BANCORP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)
----------------------------------------------------------------------------------------------------
                                                            December 31, 2004      December 31, 2003
                                                            ----------------------------------------
                                                                                    
ASSETS

Cash and cash equivalents                                        $ 33,295,832         $   19,695,625
Investment securities held to maturity (estimated fair
  value - 2004, $10,336,485)                                       10,219,764
Investment securities available for sale (amortized cost-
  2004, $77,348,884; 2003, $79,579,757)                            76,163,951             78,984,495
Mortgage-backed securities held to maturity (estimated fair
  value - 2004, $81,322,041; 2003, $42,891,508)                    81,703,737             43,009,221
Mortgage-backed securities available for sale (amortized cost-
  2004, $83,300,963; 2003, $77,908,514)                            83,027,943             78,212,883
Loans receivable, net of allowance for loan loss
   (2004, $1,412,697; 2003, $1,455,889)                           412,655,664            364,619,621
Accrued interest receivable                                         2,710,162              2,386,841
Federal Home Loan Bank stock - at cost                             10,450,100             10,039,300
Property and equipment, net                                         5,533,085              5,800,068
Deferred tax asset                                                  1,313,068              1,062,471
Prepaid expenses and other assets                                     905,074                628,431
                                                                 ------------         --------------

TOTAL ASSETS                                                     $717,978,380         $  604,438,956
                                                                 ============         ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
  Deposits:
    Noninterest-bearing                                          $ 37,596,228         $   37,855,415
    Interest-bearing                                              367,693,829            324,810,757
                                                                 ------------         --------------
      Total deposits                                              405,290,057            362,666,172
  Advances from Federal Home Loan Bank                            170,666,374            173,731,623
  Other borrowed money                                             12,865,521              8,680,916
  Accrued interest payable                                            910,040                943,949
  Advances from borrowers for taxes and insurance                   2,047,151              2,135,301
  Accounts payable and accrued expenses                             3,144,536              3,046,727
                                                                 ------------         --------------

           Total liabilities                                      594,923,679            551,204,688
                                                                 ------------         --------------

STOCKHOLDERS' EQUITY
  Preferred stock, $0.01 par value, 10,000,000 shares authorized,
    none issued
  Common stock, $0.01 par value, 40,000,000 shares authorized,
    issued and outstanding: 15,870,000 in 2004                        158,700
  Additional paid-in capital                                       69,096,936
  Unallocated common stock held by:
    Employee Stock Ownership Plan (ESOP)                           (2,046,137)
    Deferred compensation plans trust                              (1,074,200)
  Retained earnings                                                57,881,651             53,426,380
  Accumulated other comprehensive loss                               (962,249)              (192,112)
                                                                 ------------         --------------

           Total stockholders' equity                             123,054,701             53,234,268
                                                                 ------------         --------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $717,978,380         $  604,438,956
                                                                 ============         ==============
5 ABINGTON COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME (unaudited) --------------------------------------------------------------------------------------------------------------------------------- Quarter Ended December 31, Year Ended December 31, ------------------------------------------------------------------- 2004 2003 2004 2003 ------------------------------------------------------------------- INTEREST INCOME: Interest on loans $6,112,011 $5,441,594 $22,820,635 $23,827,902 Interest and dividends on investment and mortgage-backed securities 2,314,147 1,943,841 8,027,992 6,168,838 --------- --------- ---------- ---------- Total interest income 8,426,158 7,385,435 30,848,627 29,996,740 INTEREST EXPENSE: Interest on deposits 1,781,391 1,532,902 6,561,036 6,822,294 Interest on Federal Home Loan Bank advances 1,960,650 1,867,332 7,531,886 7,008,352 Interest on other borrowed money 60,881 13,505 115,618 67,494 --------- --------- ---------- ---------- Total interest expense 3,802,922 3,413,739 14,208,540 13,898,140 --------- --------- ---------- ---------- NET INTEREST INCOME 4,623,236 3,971,696 16,640,087 16,098,600 PROVISION FOR LOAN LOSSES 45,000 375,000 --------- --------- ---------- ---------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 4,623,236 3,971,696 16,595,087 15,723,600 --------- --------- ---------- ---------- NON-INTEREST INCOME Service charges 421,349 430,336 1,662,727 1,333,917 Rental income 13,050 14,395 52,327 55,667 Gain (loss) on derivative instruments, net 14,056 105,817 (140,813) (406,710) Gain on sale of property 146,268 Gain on sale of loans 44,036 Other income 190,382 149,831 668,577 686,655 --------- --------- ---------- ---------- Total non-interest income 638,837 700,379 2,242,818 1,859,833 --------- --------- ---------- ---------- NON-INTEREST EXPENSES Salaries and employee benefits 1,737,945 1,346,505 6,431,433 5,971,415 Net occupancy 306,763 272,896 1,163,667 1,157,090 Depreciation 122,080 136,488 496,477 539,454 Data processing 366,007 346,650 1,268,339 1,166,936 ATM expense 84,501 105,043 291,962 422,463 Deposit insurance premium 28,420 34,076 113,318 107,565 Advertising and promotions 58,969 113,258 285,532 349,448 Other 491,898 427,458 1,964,477 1,757,848 --------- --------- ---------- ---------- Total non-interest expenses 3,196,583 2,782,374 12,015,205 11,472,219 --------- --------- ---------- ---------- INCOME BEFORE INCOME TAXES 2,065,490 1,889,701 6,822,700 6,111,214 --------- --------- ---------- ---------- PROVISION FOR INCOME TAXES 656,689 594,701 2,267,429 2,021,192 --------- --------- ---------- ---------- NET INCOME $1,408,801 $1,295,000 $ 4,555,271 $ 4,090,022 ========= ========= ========== ========== BASIC EARNINGS PER SHARE (1) n/a (1) n/a DILUTED EARNINGS PER SHARE (1) n/a (1) n/a
_______________________________________________________________________________ (1) Due to the timing of the Bank's reorganization into the mutual holding company form and the completion of the Company's initial public offering on December 16, 2004, earnings per share for the period from December 16, 2004 to December 31, 2004 is not considered meaningful and is not shown. 6 ABINGTON COMMUNITY BANCORP, INC. SELECTED FINANCIAL DATA (unaudited) --------------------------------------------------------------------------------------------------------------- Quarter Ended December 31, Year Ended December 31, ----------------------------------------------------- 2004 2003 2004 2003 ----------------------------------------------------- Selected Operating Ratios(1): Average yield on interest-earning assets 4.96% 5.08% 4.95% 5.36% Average rate on interest-bearing liabilities 2.74% 2.69% 2.65% 2.86% Average interest rate spread(2) 2.22% 2.39% 2.30% 2.50% Net interest margin(2) 2.72% 2.73% 2.67% 2.88% Average interest-earning assets to average interest-bearing liabilities 122.29% 114.70% 116.08% 115.11% Net interest income after provision for loan losses to non-interest expense 144.60% 142.77% 138.12% 137.05% Total non-interest expense to average assets 1.79% 1.84% 1.85% 1.97% Efficiency ratio(3) 60.76% 59.55% 63.63% 63.88% Return on average assets 0.79% 0.86% 0.70% 0.70% Return on average equity 7.15% 9.77% 7.52% 7.85% Average equity to average assets 11.02% 8.75% 9.30% 8.94% Asset Quality Ratios(4): Non-performing loans as a percent of total loans receivable(5) 0.05% 0.13% 0.05% 0.13% Non-performing assets as a percent of total assets(5) 0.03% 0.08% 0.03% 0.08% Allowance for loan losses as a percent of non-performing loans 622.03% 315.15% 622.03% 315.15% Net charge-offs to average loans receivable 0.00% 0.01% 0.02% 0.21% Capital Ratios(6): Tier 1 leverage ratio 12.73% 8.81% 12.73% 8.81% Tier 1 risk-based capital ratio 21.24% 15.12% 21.24% 15.12% Total risk-based capital ratio 21.57% 15.53% 21.57% 15.53%
_______________________________________________________________________________ (1) With the exception of end of period ratios, all ratios are based on average monthly balances during the indicated periods and, for the three-month periods ended December 31, 2004 and 2003, are annualized where appropriate. (2) Average interest rate spread represents the difference between the average yield on interest-earning assets and the average rate paid on interest-bearing liabilities, and net interest margin represents net interest income as a percentage of average interest-earning assets. (3) The efficiency ratio represents the ratio of non-interest expense divided by the sum of net interest income and non-interest income. (4) Asset quality ratios are end of period ratios, except for net charge-offs to average loans receivable. (5) Non-performing assets consist of non-performing loans and real estate owned. Non-performing loans consist of all accruing loans 90 days or more past due and all non-accruing loans. It is our policy to cease accruing interest on all loans 90 days or more past due. Real estate owned consists of real estate acquired through foreclosure and real estate acquired by acceptance of a deed-in-lieu of foreclosure. (6) Capital ratios are end of period ratios and are calculated for Abington Bank per regulatory requirements. 7

The following information was filed by Abington Community Bancorp, Inc. on Friday, February 11, 2005 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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