Exhibit 99.1




Press Release
     
For Immediate Release
       
Contact:
       
Robert W. White,
       
Chairman, President and CEO
       
or
       
Jack Sandoski,
       
Senior Vice President and CFO
       
(215) 886-8280
 
 
ABINGTON COMMUNITY BANCORP, INC. ANNOUNCES EARNINGS FOR THE FIRST QUARTER OF 2007

Jenkintown, PA (April 30, 2007) - Abington Community Bancorp, Inc. (the “Company”) (Nasdaq: ABBC), the “mid-tier” holding company for Abington Bank (the “Bank”), reported net income of $1.5 million for the quarter ended March 31, 2007, representing a decrease of $284,000 or 16.3% over the comparable 2006 period. Diluted earnings per share decreased to $0.10 for the quarter compared to $0.11 for the first quarter of 2006.

The decrease in net income was due primarily to two factors - the continued compression of our interest rate spread in the current interest rate environment, which had a negative effect on net interest income, and an increase in our non-interest expense due largely to our recent branch expansion.

Mr. Robert W. White, Chairman, President and CEO of the Company, stated, “Like many financial institutions, we are experiencing a narrowing of our net interest margin as a result of the extended, flat and inverted interest rate yield curves. Although we expect that our margin will be further squeezed until we return to a normal yield curve, we have considered this impact as part of our long-term strategic plan. We are also incurring increased operating expenses from our recently opened branches. These branches require a period of time to generate sufficient revenues to offset their costs. We will experience the same lag with our new branches in Chalfont and Whitemarsh, Pennsylvania that opened in April and our planned branch openings currently underway. Our ongoing branch expansion is a key component of our long-term business strategy to leverage our capital by growing our franchise in a manner which we expect to provide increased profitability in the future.”

Mr. White continued that, “Despite the growing pains that we are experiencing, we were able to increase our loan portfolio by 3.9% in the first quarter of 2007, while maintaining our high credit quality. We have avoided investments in risky loans, such as those issued in the subprime lending market, in which we do not participate. We are excited about our continued growth and about the opportunities that lay ahead.”
 
1

 
Net interest income was $5.5 million for the three months ended March 31, 2007, representing a decrease of $44,000 or 0.8% over the comparable 2006 period. Interest income for the three months ended March 31, 2007 increased $1.9 million or 17.2% over the comparable 2006 period. The increase in interest income was primarily a result of growth in the average balance of our loan portfolio combined with an increase in the average yield on all interest-earning assets. The average balance of our loan portfolio increased $81.6 million or 15.3% to $615.9 million for the quarter ended March 31, 2007 from $534.3 million for the quarter ended March 31, 2006. The average yield on our loan portfolio increased 20 basis points to 6.73% from 6.53% over the same period. The average yield on our interest-earning assets increased 41 basis points to 6.00% for the first quarter of 2007 from 5.59% for the first quarter of 2006.

Our increase in interest income for the first quarter of 2007 was offset by an increase in our interest expense. Interest expense for the three months ended March 31, 2007 increased $2.0 million or 34.6% over the comparable 2006 period. The increase in interest expense was primarily the result of increases in the average balance of and average rate paid on deposits. During the three months ended March 31, 2007 compared to the three months ended March 31, 2006, our average deposit balance grew by $85.8 million or 18.6%, primarily due to growth in higher-rate certificates of deposit. As a result of the increase in our certificates of deposit as a proportion of our total deposits, as well as the rising interest rate environment, the average rate we paid on our deposits increased 92 basis points to 3.78% for the first quarter of 2007 from 2.86% for the first quarter of 2006. Our average interest rate spread and net interest margin for the first quarter of 2007 decreased to 1.93% and 2.50%, respectively, from 2.23% and 2.75%, respectively, for the first quarter of 2006.

We made a $4,000 provision for loan losses during the first quarter of 2007, with no such provision made during the first quarter of 2006. The provision for loan losses is charged to expense as necessary to bring our allowance for loan losses to a sufficient level to cover known and inherent losses in the loan portfolio. The quality of our credit portfolio, and as a result, our provision for loan losses, has not been impacted by the recent crisis in the subprime lending market, as we do not participate in this type of lending. At March 31, 2007, we held an aggregate of $2.5 million of non-performing loans, compared to $2.6 million at December 31, 2006. At March 31, 2007, non-performing loans amounted to 0.38% of total loans receivable.

Our total non-interest income amounted to $687,000 for the first quarter of 2007 compared to $695,000 for the first quarter of 2006. A $12,000 increase in income on bank owned life insurance for the first quarter of 2007 compared to the first quarter of 2006 was offset by an $11,000 decrease in service charges and a $9,000 decrease in other non-interest income. The decrease in service charge income was primarily due to a decrease in overdraft fees. The decrease in other non-interest income was primarily due to a decrease in appraisal fees.

Our total non-interest expense for the first quarter of 2007 amounted to $4.2 million, representing an increase of $405,000 or 10.7% from the first quarter of 2006. The largest increases were in salaries and employee benefits, occupancy, depreciation, data processing and other non-interest expense. Salaries and employee benefits expense increased $206,000 quarter-over-quarter due primarily to growth in the total number of employees, normal merit increases in salaries, and higher health and insurance benefit costs. Our number of full-time equivalent employees increased from 115 at March 31, 2006 to 142 at March 31, 2007, primarily as a result of our branch expansion. Also contributing to the increase in salaries and employee benefits expense was a $57,000 or 45.2% increase in the expense for our Employee Stock Ownership Plan (“ESOP”), which is based on the average price of our common stock for the period. Occupancy expense and depreciation expense increased by $49,000 and $35,000, respectively, quarter-over-quarter as a result of our additional facilities, primarily the Bank’s new branches in Warrington, Concordville, and Lansdale, Pennsylvania, which opened in April 2006, October 2006, and January 2007, respectively. Our data processing costs and other non-interest expense increased by $26,000 and $77,000, respectively, quarter-over-quarter. The increase in data processing expense was due primarily to an increased amount of deposit transactions as a result of our new offices. The increase in other non-interest expense was due largely to increases in expenses for office supplies, copying, and postage, as a result of the new branch offices.
 
2

 
Income tax expense for the first quarter of 2007 amounted to $526,000 compared to $702,000 for the first quarter of 2006. Our effective tax rate improved to 26.5% for the quarter ended March 31, 2007, from 28.7% for quarter ended March 31, 2006. The improvement resulted primarily from an increase in our tax-exempt income as a percent of our total pretax income. The decrease in tax expense was the result of both the decrease in our pre-tax income and the improvement in our effective tax rate.

The Company’s total assets increased $26.0 million, or 2.8%, to $951.2 million at March 31, 2007 compared to $925.2 million at December 31, 2006. The primary reason for the increase in total assets during the first quarter of 2007 was a $23.9 million or 3.9% increase in net loans receivable. The largest loan growth occurred in one- to four-family residential loans, which increased $13.2 million or 3.5%, and construction loans, which increased $7.6 million or 5.6%. Additionally, commercial business loans increased $3.5 million or 31.0%. These increases were partially offset by a $4.3 million decrease in home equity lines of credit, a $570,000 decrease in multi-family residential and commercial real estate loans, and a $904,000 decrease in consumer non-real estate loans. Also contributing to the overall increase in assets during the first quarter of 2007 was an increase in property and equipment, net, of $666,000 or 7.5%, primarily as a result of increased investment in new branches.

Our total deposits increased $28.9 million or 4.9% to $615.9 million at March 31, 2007 compared to $587.0 million at December 31, 2006. The increase was due to growth in all types of deposit accounts. Although the biggest increase in dollar terms was to certificate accounts, which grew $17.5 million during the quarter, checking accounts grew $10.0 million and savings and money market accounts grew $1.4 million, resulting in an increase of $11.4 million in core deposits. Our other borrowed money, which is comprised of securities repurchase agreements entered into with certain commercial checking account customers, increased $2.0 million during the first quarter of 2007. Advances from the Federal Home Loan Bank decreased $9.8 million or 5.0% to $186.5 million at March 31, 2007. The decrease in advances was a result of the decreased use of such borrowing as part of management’s strategic plan in the current interest rate environment.

Our stockholders’ equity increased $1.5 million to $115.6 million at March 31, 2007 compared to $114.1 million at December 31, 2006. Our retained earnings increased $573,000 during the first quarter of 2007 as our net income of $1.5 million was partially offset by a reduction of $890,000 resulting from the payment of our first quarter dividend of $0.06 per share. Our additional paid-in capital and our unallocated common stock increased $451,000 in the aggregate as a result of the expensing of stock options and the release of shares for other stock benefit plans. Our accumulated other comprehensive loss improved $477,000, primarily as a result of increased fair values of our available for sale investment and mortgage-backed securities.
 
3

 
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 ten additional full service branch offices and six limited service banking offices located in Montgomery, Bucks and Delaware Counties, Pennsylvania. As of March 31, 2007, Abington Community Bancorp had $951.2 million in total assets, $615.9 million in deposits and $115.6 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.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities; the offering will be made only by means of a prospectus in accordance with the Securities Act of 1933, as amended, and all applicable state securities laws.
 
4




ABINGTON COMMUNITY BANCORP, INC.
         
           
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)
         
           
   
March 31, 2007
 
December 31, 2006
 
           
ASSETS
             
Cash and due from banks
 
$
16,908,221
 
$
22,136,438
 
Interest-bearing bank balances
   
30,480,176
   
22,428,814
 
Total cash and cash equivalents
   
47,388,397
   
44,565,252
 
Investment securities held to maturity (estimated fair value—2007, $20,509,646; 2006, $20,429,576)
   
20,392,890
   
20,393,430
 
Investment securities available for sale (amortized cost— 2007, $80,873,244; 2006, $75,834,898)
   
79,861,772
   
74,489,055
 
Mortgage-backed securities held to maturity (estimated fair value—2007, $52,247,321; 2006, $53,957,015)
   
54,138,914
   
56,143,619
 
Mortgage-backed securities available for sale (amortized cost— 2007, $76,723,280; 2006, $79,831,266)
   
75,271,962
   
78,022,794
 
Loans receivable, net of allowance for loan losses (2007, $1,598,633; 2006, $1,602,613)
   
628,953,078
   
605,062,980
 
Accrued interest receivable
   
4,704,277
   
4,365,535
 
Federal Home Loan Bank stock—at cost
   
10,867,100
   
11,240,700
 
Cash surrender value - bank owned life insurance
   
16,362,723
   
16,184,256
 
Property and equipment, net
   
9,575,127
   
8,908,910
 
Deferred tax asset
   
2,667,215
   
2,808,716
 
Prepaid expenses and other assets
   
976,079
   
3,001,035
 
               
TOTAL ASSETS
 
$
951,159,534
 
$
925,186,282
 
               
LIABILITIES AND STOCKHOLDERS' EQUITY
             
               
LIABILITIES:
             
Deposits:
             
Noninterest-bearing
 
$
49,766,580
 
$
45,186,397
 
Interest-bearing
   
566,087,837
   
541,815,163
 
Total deposits
   
615,854,417
   
587,001,560
 
Advances from Federal Home Loan Bank
   
186,474,148
   
196,293,273
 
Other borrowed money
   
19,824,758
   
17,781,260
 
Accrued interest payable
   
5,051,739
   
2,504,270
 
Advances from borrowers for taxes and insurance
   
2,941,919
   
2,624,310
 
Accounts payable and accrued expenses
   
5,410,349
   
4,879,385
 
               
Total liabilities
   
835,557,330
   
811,084,058
 
               
COMMITMENTS AND CONTINGENCIES
             
               
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:              
15,870,000 in 2007 and 2006, outstanding: 15,288,154 in 2007 and 2006
   
158,700
   
158,700
 
Additional paid-in capital
   
69,820,453
   
69,674,243
 
Treasury stock—at cost, 581,846 shares in 2007 and 2006
   
(8,317,848
)
 
(8,317,848
)
Unallocated common stock held by:
             
Employee Stock Ownership Plan (ESOP)
   
(6,265,926
)
 
(6,388,788
)
Recognition & Retention Plan Trust (RRP)
   
(2,421,852
)
 
(2,606,781
)
Deferred compensation plans trust
   
(1,062,227
)
 
(1,059,116
)
Retained earnings
   
65,824,780
   
65,252,214
 
Accumulated other comprehensive loss
   
(2,133,876
)
 
(2,610,400
)
               
Total stockholders' equity
   
115,602,204
   
114,102,224
 
               
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 
$
951,159,534
 
$
925,186,282
 


5

 

ABINGTON COMMUNITY BANCORP, INC.
         
           
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
         
     
Three Months Ended March 31,
 
   
2007
 
2006
 
           
INTEREST INCOME:
             
Interest on loans
 
$
10,368,479
 
$
8,717,783
 
Interest and dividends on investment and  mortgage-backed securities:
             
Taxable
   
2,638,797
   
2,345,812
 
Tax-exempt
   
212,727
   
214,482
 
               
Total interest income
   
13,220,003
   
11,278,077
 
               
INTEREST EXPENSE:
             
Interest on deposits
   
5,178,577
   
3,298,660
 
Interest on Federal Home Loan Bank advances
   
2,354,977
   
2,289,428
 
Interest on other borrowed money
   
184,560
   
144,127
 
               
Total interest expense
   
7,718,114
   
5,732,215
 
               
NET INTEREST INCOME
   
5,501,889
   
5,545,862
 
               
PROVISION FOR LOAN LOSSES
   
3,607
   
-
 
               
NET INTEREST INCOME AFTER
             
PROVISION FOR LOAN LOSSES
   
5,498,282
   
5,545,862
 
               
NON-INTEREST INCOME
             
Service charges
   
397,716
   
408,635
 
Rental income
   
7,536
   
7,636
 
Income on bank owned life insurance
   
178,467
   
166,687
 
Loss on sale of investment securities
   
-
   
(601
)
Other income
   
103,731
   
112,631
 
               
Total non-interest income
   
687,450
   
694,988
 
               
NON-INTEREST EXPENSES
             
Salaries and employee benefits
   
2,327,544
   
2,121,408
 
Occupancy
   
436,810
   
387,745
 
Depreciation
   
184,182
   
148,919
 
Professional services
   
161,614
   
160,631
 
Data processing
   
350,676
   
324,348
 
ATM expense
   
87,559
   
82,493
 
Deposit insurance premium
   
36,832
   
34,476
 
Advertising and promotions
   
95,762
   
92,981
 
Other
   
515,843
   
438,870
 
               
Total non-interest expenses
   
4,196,822
   
3,791,871
 
               
INCOME BEFORE INCOME TAXES
   
1,988,910
   
2,448,979
 
               
PROVISION FOR INCOME TAXES
   
526,478
   
702,468
 
               
NET INCOME
 
$
1,462,432
 
$
1,746,511
 
               
BASIC EARNINGS PER COMMON SHARE
 
$
0.10
 
$
0.12
 
DILUTED EARNINGS PER COMMON SHARE
 
$
0.10
 
$
0.11
 
               
BASIC AVERAGE COMMON SHARES OUTSTANDING:
   
14,600,634
   
15,026,117
 
DILUTED AVERAGE COMMON SHARES OUTSTANDING:
   
14,972,741
   
15,278,905
 

 
6



ABINGTON COMMUNITY BANCORP, INC.
         
           
SELECTED FINANCIAL DATA (unaudited)
         
 
Three Months Ended March 31,
 
     
2007
   
2006
 
               
Selected Operating Ratios(1):
             
Average yield on interest-earning assets
   
6.00
%
 
5.59
%
Average rate on interest-bearing liabilities
   
4.07
%
 
3.36
%
Average interest rate spread(2)
   
1.93
%
 
2.23
%
Net interest margin(2)
   
2.50
%
 
2.75
%
Average interest-earning assets to average interest-bearing liabilities
   
116.28
%
 
118.25
%
Net interest income after provision for loan losses to non-interest expense
   
131.00
%
 
146.26
%
Total non-interest expense to average assets
   
1.81
%
 
1.78
%
Efficiency ratio(3)
   
67.81
%
 
60.76
%
Return on average assets
   
0.63
%
 
0.82
%
Return on average equity
   
5.09
%
 
5.97
%
Average equity to average assets
   
12.38
%
 
13.77
%
               
Asset Quality Ratios(4):
             
Non-performing loans as a percent of total loans receivable(5)
   
0.38
%
 
0.07
%
               
Non-performing assets as a percent of total assets(5)
   
0.25
%
 
0.05
%
               
Allowance for loan losses as a percent of non-performing loans
   
67.13
%
 
370.00
%
               
Net charge-offs or (recoveries) to average loans receivable
   
0.00
%
 
0.00
%
               
Capital Ratios(6):
             
Tier 1 leverage ratio
   
10.55
%
 
10.55
%
Tier 1 risk-based capital ratio
   
16.54
%
 
17.21
%
Total risk-based capital ratio
   
16.81
%
 
17.49
%
               
(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 March 31, 2007 and 2006, 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 Monday, April 30, 2007 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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