Abington Bancorp, Inc. Announces Results for the First Quarter of 2009

Market Wire, April, 2009

Abington Bancorp, Inc. (the "Company") (NASDAQ: ABBC), the parent holding company for Abington Bank (the "Bank"), reported net income of $2.2 million for the quarter ended March 31, 2009, representing an increase of $234,000 or 12.2% over the quarter ended March 31, 2008. Basic and diluted earnings per share were each $0.10 for the first quarter of 2009 compared to $0.09 and $0.08, respectively, for the first quarter of 2008.

Mr. Robert W. White, Chairman, President and CEO of the Company, stated, "After a difficult year in 2008, we are pleased to begin 2009 by reporting an increase in net income over last year's first quarter. This increase was driven by an increase in our net interest income as a result of improvements in both our net interest spread and net interest margin. Our new loan originations were strong during the quarter, especially for refinancing of residential mortgages and for our first time home buyers program. The challenges of this uncertain economic environment are not entirely behind us, however, and we are continuing to closely monitor our loan portfolio. While we cannot make any assurances that additional provisions for loan losses will not be necessary during the year, we remain committed to reducing our exposure to non-performing assets. Moreover, we are maintaining our fundamental approach of sound, community-oriented banking while striving to improve long-term returns to our shareholders. With that goal in mind, and with the security of a strong capital base, we aggressively repurchased our Company's stock during the first quarter of 2009 in an effort to enhance shareholder value."

Net interest income was $7.6 million for the three months ended March 31, 2009, representing an increase of $692,000 or 10.0% over the first quarter of 2008. The increase in our net interest income was due to lower interest expense in the first quarter of 2009 which more than offset a reduction in interest income. Our average interest rate spread increased 41 basis points to 2.31% for the first quarter of 2009 from 1.90% for the first quarter of 2008. Over the same period, our net interest margin increased five basis points to 2.77% for the first quarter of 2009 from 2.72% for the first quarter of 2008.

Interest income for the three months ended March 31, 2009 decreased $472,000 or 3.3% over the comparable 2008 period to $13.7 million. The decrease occurred as growth in the average balance of our total interest-earning assets was offset by a decrease in the average yield earned on those assets. The average balance of our total interest-earning assets increased $82.0 million or 8.1% to $1.10 billion for the first quarter of 2009 from $1.01 billion for the first quarter of 2008. The increase was driven by an $80.5 million increase in the average balance of our mortgage-backed securities and a $60.6 million increase in the average balance of our loans receivable which was partially offset by a $32.4 million decrease in the average balance of our investment securities and a $26.7 million decrease in the average balance of our other interest-earning assets. The average yield earned on our total interest-earning assets decreased 59 basis points to 5.01% for the first quarter of 2009 from 5.60% for the first quarter of 2008. An increase in the average yield earned on our mortgage-backed securities of 54 basis points, quarter-over-quarter, was offset by a decrease in the average yield earned on all other interest-earning assets. The most significant decreases in yield were an 87 basis point decrease in the average yield earned on our loans receivable and a 337 basis point decrease in the average yield earned on our other interest-earning assets. The average yield earned on our investment securities decreased 40 basis points quarter-over-quarter. The decreases in the yields were primarily the result of the current interest rate environment, reflected by the Federal Reserve Board's Open Market Committee actions to cut the federal funds rate by 400 basis points from January 2008 to January 2009. The decrease in the yield on our other interest-earning assets was also impacted by the decision of the Federal Home Loan Bank of Pittsburgh (the "FHLB") to suspend the dividend on their stock beginning with the fourth quarter of 2008. As of March 31, 2009, we held approximately 146,000 shares of FHLB capital stock on which we received no dividends during the first quarter of 2009 compared to approximately $127,000 in dividends earned on FHLB stock in the quarter ended March 31, 2008.

Interest expense for the three months ended March 31, 2009 decreased $1.2 million or 15.9% from the comparable 2008 period to $6.1 million. The decrease in our interest expense occurred as a decrease in the average rate paid on our total interest-bearing liabilities offset an increase in the average balance of those liabilities. The average rate we paid on our total interest-bearing liabilities decreased 100 basis points to 2.70% for the first quarter of 2009 from 3.70% for the first quarter of 2008. The average rate we paid on our total deposits decreased 93 basis points, quarter-over-quarter, driven by a 112 basis point decrease in the average rate paid on our certificates of deposit. The average balance of our total deposits increased $75.9 million or 13.1% to $656.5 million for the first quarter of 2009 from $580.6 million for the first quarter of 2008 due primarily to growth in our core deposits. The average balance of our core deposits increased $65.9 million or 41.8% to $223.8 million for the first quarter of 2009 from $157.9 million for the first quarter of 2008. The average rate we paid on our advances from the FHLB decreased 121 basis points for the first quarter of 2009 compared to the first quarter of 2008. The average balance of our advances from the FHLB increased $46.0 million or 24.4% over the same period.