Profile: Abington Bancorp, Inc. (ABBC.O)

Abington Bancorp, Inc. is a stock holding company for Abington Savings Bank (the Bank). Abington Bank is a community oriented savings bank and has a network of 12 full-service branch offices and seven limited service branch offices. It provides automated teller machine (ATM) at all of its banking offices and also has two off-site ATMs. The Bank provides on-line banking and telephone banking services, deposits, and loans and securities. The Bank is a wholly owned subsidiary of the Company. The Bank’s principal sources of funds are deposits, repayments of loans and mortgage-backed securities, maturities of investments and interest-bearing deposits, funds provided from operations and funds borrowed from outside sources such as the Federal Home Loan Bank (FHLB). The funds are primarily used for the origination of various loan types including single-family residential mortgage loans, construction loans, non-residential or commercial real estate mortgage loans, home equity loans, commercial business loans and consumer loans.

Lending Activities

The Bank’s principal lending activity comprised of loans collateralized by one- to four-family, also known as single-family, residential real estate loans located in its market area. In addition, it offers construction loans to homebuilders and others. It also offers home equity lines of credit, commercial business loans and consumer loans. Loans are obtained through a variety of sources, primarily existing customers as well as new customers obtained from referrals and local advertising and promotional efforts. Its primary lending activities consists of loans secured by mortgages on one- to four-family residences in its market area. Its single-family residential mortgage loans also include home equity loans. Home equity loans are amortized and have terms to maturity of up to 20 years.

The Bank’s single-family residential mortgage loans also include some loans to local businessmen for a commercial purpose, but which are secured by liens on the borrower’s residence. The Bank offers commercial real estate and multi-family residential loans, which amounted to 12.4% of its total loan portfolio. In addition to commercial real estate loans, it offers lines of credit for commercial uses. Its commercial real estate and residential multi-family real estate loan portfolio consists primarily of loans secured by office buildings, retail and industrial use buildings, strip shopping centers, residential properties with five or more units and other properties used for commercial and multi-family purposes located in its market area.

The Bank offers construction loans to homebuilders in the Delaware Valley area to acquire, develop and build single-family residences. Its construction loans include loans for the construction of commercial and industrial use properties such as office buildings, retail shops and warehouses. During the year ended December 31, 2008, construction loans amounted to 26.7% of its total loan portfolio. The Company offers home equity loans to its customers, which amount to 3.3% of its net loan portfolio. Commercial business loans typically are offered to small to mid-sized businesses in its market area and may be for working capital, inventory financing or accounts receivable financing. The loans are secured by equipment, machinery or other corporate assets.

Investment Activities

During 2008, the Company’s investment and mortgage-backed securities amounted to 27.3% of total assets. Its mortgage-backed securities consist primarily of mortgage pass-through certificates issued by the Government National Mortgage Association (GNMA), Fannie Mae or Freddie Mac. The Company’s mortgage-backed securities also include collateralized mortgage obligations (CMO) issued by such agencies and certain AAA rated private issuers.

Sources of Funds

The Company offers a variety of deposit accounts with a range of interest rates and terms. The deposits consist of checking, both interest-bearing and non-interest-bearing, money market, savings and certificate of deposit accounts. Its primary sources of fund includes deposits, loan repayments and prepayments, proceeds from sales of loans, cash flows generated from operations and Federal Home Loan Bank advances. During 2008, 38.2% of the funds were deposited with Abington Bank.