Abington Bancorp, Inc. Announces Results for the Fourth Quarter of 2008 and Share Repurchase Plan

Market Wire, January, 2009

Our total non-interest income for the fourth quarter of 2008 amounted to $271,000 compared to $997,000 for the fourth quarter of 2007. The decrease was due primarily to an impairment charge on investment securities of $539,000 and a loss on the sale of real estate owned ("REO") of $150,000. The impairment charge was taken to write-down the carrying value of our investment in a mortgage-backed securities based mutual fund to its fair value of $2.5 million at December 31, 2008, based on our determination that the investment, the AMF Ultra Short Mortgage Fund, was other-than-temporarily impaired. The loss on the sale of REO resulted from the sale of two properties in December 2008. The first property, with an aggregate carrying value of $952,000, was sold for a gain of approximately $25,000. The second property, with a carrying value of $700,000, was sold for a loss of approximately $175,000.

Our total non-interest income for the year ended December 31, 2008 amounted to $3.1 million compared to $3.2 million for the year ended December 31, 2007. As was the case for the quarter ended December 31, 2008, the decrease was due primarily to securities impairment charges aggregating $869,000 and a loss on the sale of REO of $150,000. These charges were partially offset by an increase in income on bank owned life insurance ("BOLI") of $773,000 and a gain on the sale of securities of $146,000. The increase in income on BOLI resulted mainly from the purchase of $20.0 million of additional BOLI during the third quarter of 2007.

Our total non-interest expenses for the fourth quarter of 2008 amounted to $5.5 million, representing an increase of $397,000 or 7.8% from the fourth quarter of 2007. The largest increases were in salaries and employee benefits, director compensation, and other non-interest expenses. Salaries and employee benefits expense increased $71,000 or 2.6%, quarter-over-quarter, due largely to growth in the total number of employees, normal merit increases in salaries, and higher health and insurance benefit costs. Salaries and employee benefits expense also increased due to an additional expense of $237,000 recognized during the fourth quarter of 2008 as the result of the issuance of awards to officers and employees under the 2007 Stock Option Plan (the "2007 SOP") and the 2007 Recognition and Retention Plan (the "2007 RRP") which were approved by shareholders in January 2008. These increases were partially offset by a decrease of $319,000 in our employee profit sharing expense. This expense, which relates to the year-end bonuses for officers and employees, is based on various factors considered by the Compensation Committee and the Board of Directors, including the Company's net income. Director compensation increased $101,000 or 85.9%, quarter-over-quarter, primarily due to the issuance of awards to directors under the 2007 SOP and the 2007 RRP. Other non-interest expenses increased $297,000 or 49.9%, quarter-over-quarter, due primarily to a $281,000 increase in deposit insurance premiums, based on a new fee structure implemented by the FDIC.