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

We recorded a provision for loan losses of $117,000 during the first quarter of 2009 compared to a provision of $49,000 for the first quarter of 2008. 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.

As of March 31, 2009, our allowance for loan losses amounted to $8.2 million, or 1.1% of total loans, compared to $11.6 million, or 1.5% of total loans, at December 31, 2008. Our loan portfolio at March 31, 2009 included an aggregate of $14.8 million of non-performing loans compared to $23.5 million of non-performing loans at December 31, 2008. The decrease in non-performing loans primarily related to three construction loans with an aggregate outstanding balance of $15.1 million at December 31, 2008 that were transferred to real estate owned ("REO") during the first quarter of 2009. These three loans were for the construction of a 40-unit, high rise residential condominium project in Center City, Philadelphia. During the first quarter of 2009, the borrower agreed to cede control of this project to us and, accordingly, we became lender in possession of the high rise property. At March 31, 2009, the property was classified in our balance sheet as REO with a carrying value of $11.5 million, which was equal to the $15.2 million loan balance at March 31, 2009 net of our charge-off of the $3.7 million allowance for loan losses maintained for these loans. No additional write-down of fair value was made at the time of the transfer to REO. We are continuing with foreclosure proceedings with respect to these loans, but as lender in possession of the high rise property, we are in the process of completing the improvements necessary to complete construction of the project. The amount of our non-performing loans at March 31, 2009 was adversely affected by the addition of two construction loans to one borrower with an aggregate balance of $6.6 million at March 31, 2009 that became over 90 days past due during the first quarter of 2009. The first of these loans, which was on non-accrual status at March 31, 2009, had an outstanding balance of $1.1 million at such date. The second loan, which had an outstanding balance of $5.5 million at March 31, 2009, is more than 90 days past due, but is continuing to accrue interest. Both loans were included in our classified assets at March 31, 2009 and December 31, 2008. As of March 31, 2009, $648,000 of our allowance for loan losses was allocated to these two loans. A third construction loan to this borrower with an outstanding balance of $3.6 million at March 31, 2009 was also classified at such date, but was not included in non-performing loans as the loan was less than 90 days past due and remained on accrual status. We commenced foreclosure proceedings with respect to all three of these loans, with sheriff's sales currently scheduled for the second quarter of 2009. If the sheriff's sale for one or more of these loans is completed, we would likely own the collateral properties as REO. At March 31, 2009 and December 31, 2008, our non-performing loans amounted to 1.95% and 3.06% of loans receivable, respectively, and our allowance for loan losses amounted to 55.34% and 49.35% of non-performing loans, respectively. At March 31, 2009 and December 31, 2008, our non-performing assets amounted to 2.33% and 2.12% of total assets, respectively. We are continuing to monitor our loan portfolio, and given current economic conditions, no assurances can be given that additional provisions for loan losses will not be necessary in subsequent quarters.