S-1

As filed with the Securities and Exchange Commission on June 11, 2013

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Delanco Bancorp, Inc.

(Exact name of registrant as specified in its charter)

New Jersey	0635	to be applied for
State or other jurisdiction of incorporation or organization	(Primary Standard Industrial Classification Code Number)	(IRS Employer Identification Number)

615 Burlington Avenue

Delanco, New Jersey 08075

(856) 461-0611

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

James E. Igo

Chairman, President and Chief Executive Officer

Delanco Bancorp, Inc.

615 Burlington Avenue

Delanco, New Jersey 08075

(856) 461-0611

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:
Aaron M. Kaslow, Esq. Joseph J. Bradley, Esq.	Alan Schick, Esq. Luse Gorman Pomerenk & Schick, P.C.
Kilpatrick Townsend & Stockton LLP	5335 Wisconsin Avenue, NW, Suite 780
607 14th Street, N.W., Suite 900	Washington, DC 20015
Washington, DC 20005	(202) 274-2000
(202) 508-5800

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box:  x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	x

Calculation of Registration Fee

Title of each class of securities to be registered	Amount to be registered	Proposed maximum offering price per unit	Proposed maximum Aggregate offering price (1)	Amount of registration fee
Common Stock, $0.01 par value	1,264,541 shares	$8.00	$10,116,328	$1,380

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Regulation 457(o) under the Securities Act.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

PROSPECTUS

[LOGO]

(Proposed holding company for Delanco Federal Savings Bank)

Up to 610,938 Shares of Common Stock

(Subject to increase to 702,579 shares)

Delanco Bancorp, Inc., a newly formed New Jersey corporation that is referred to as new Delanco Bancorp throughout this prospectus, is offering common stock for sale in connection with the conversion of Delanco Federal Savings Bank from the mutual holding company form of organization to the stock form of organization.

We are offering up to 610,938 shares of common stock for sale on a best efforts basis, subject to certain conditions. We must sell a minimum of 451,563 shares to complete the offering. All shares are offered at a price of $8.00 per share. Purchasers will not pay a commission to purchase shares of common stock in the offering. The amount of capital being raised is based on an independent appraisal of new Delanco Bancorp. Most of the terms of this offering are required by regulations of the Board of Governors of the Federal Reserve System. If, as a result of regulatory considerations, demand for the shares or changes in financial market conditions, the independent appraiser determines that our market value has increased, we may sell up to 702,579 shares without giving you further notice or the opportunity to change or cancel your order.

The shares we are offering represent the 55.0% ownership interest in Delanco Bancorp, Inc., a federal corporation that is referred to as old Delanco Bancorp throughout this prospectus, now owned by Delanco MHC. The remaining 45.0% interest in old Delanco Bancorp currently owned by the public will be exchanged for shares of common stock of new Delanco Bancorp. The 735,626 shares of old Delanco Bancorp currently owned by the public will be exchanged for between 361,185 shares and 488,662 shares of common stock of new Delanco Bancorp (subject to increase to 561,962 shares if we sell 702,579 shares in the offering) so that old Delanco Bancorp’s existing public shareholders will own approximately the same percentage of new Delanco Bancorp common stock as they owned of old Delanco Bancorp’s common stock immediately before the conversion. Old Delanco Bancorp and Delanco MHC will cease to exist upon completion of the conversion and offering.

We are offering the shares of common stock in a subscription offering to eligible depositors and borrowers of Delanco Federal and Delanco Federal’s tax-qualified employee stock ownership plan. Shares of common stock not purchased in the subscription offering may be offered for sale in a community offering, with a preference given to natural persons residing in Burlington County, New Jersey, then to shareholders of old Delanco Bancorp and then to other members of the general public. To the extent any shares offered for sale are not purchased in the subscription or community offerings, they may be sold in a syndicated community offering to be managed by Keefe, Bruyette & Woods, Inc. With respect to the subscription offering, the community offering and the syndicated community offering Keefe, Bruyette & Woods will use its best efforts to assist Delanco Bancorp in its selling efforts but is not required to purchase any shares of common stock that are being offered for sale in such offerings.

The minimum order is 25 shares. The subscription offering will end at 2:00 p.m., Eastern time, on [Date 1], 2013. We expect that the community offering, if held, will terminate at the same time, although it may continue without notice to you until [Date 2], 2013 or longer if the Federal Reserve Board approves a later date. No single extension may exceed 90 days and the offering must be completed by [•], 2015. Once submitted, orders are irrevocable unless the offering is terminated or is extended beyond [Date 2], 2013, or the number of shares of common stock to be sold is increased to more than 702,579 shares or decreased to less than 451,563 shares. If we extend the offering beyond [Date 2], 2013, all subscribers will be notified and given the opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will promptly return your funds with interest calculated at Delanco Federal’s passbook savings rate or cancel your deposit account withdrawal authorization. If we intend to sell fewer than 451,563 shares or more than 702,579 shares, we will promptly return all funds and set a new offering range. All subscribers will be notified and given the opportunity to place a new order. Funds received before the completion of the subscription and community offerings will be held in a segregated account at Delanco Federal and will earn interest at Delanco Federal’s passbook savings rate, which is currently .10%.

Old Delanco Bancorp’s common stock is currently quoted on the OTC Bulletin Board under the symbol “DLNO” and we expect the common stock of new Delanco Bancorp will also be quoted on the OTC Bulletin Board under the symbol “DLNO.”

This investment involves a degree of risk, including the possible loss of principal. Please read “Risk Factors” beginning on page 13.

OFFERING SUMMARY

Price Per Share: $8.00

	Minimum		Midpoint		Maximum		Maximum, as Adjusted
Number of shares		451,563		531,250		610,938		702,579
Gross offering proceeds	$	3,612,504	$	4,250,000	$	4,887,504	$	5,620,632
Estimated offering expenses, excluding selling agent fees	$	710,000	$	710,000	$	710,000	$	710,000
Estimated selling agent fees (1)(2)	$	160,000	$	160,000	$	160,000	$	160,000
Estimated net proceeds	$	2,742,504	$	3,380,000	$	4,017,504	$	4,750,632
Estimated net proceeds per share	$	6.07	$	6.36	$	6.58	$	6.76

(1) Assumes all shares are sold in the subscription and community offerings and excludes reimbursable expenses and conversion agent fees. For information regarding compensation to be received by Keefe, Bruyette & Woods, see “Pro Forma Data” on page              and “The Conversion and Offering—Marketing Arrangements”.

(2) If all shares of common stock are sold in the syndicated community offering, excluding shares purchased by the employee stock ownership plan and shares purchased by insiders of Delanco Bancorp, Inc., for which no selling agent commissions would be paid, the maximum selling agent fees and commissions would be $354,516 at the minimum, $427,574 at the maximum, and $469,582 at the adjusted maximum. See “The Conversion and Offering—Syndicated Community Offering; Marketing Arrangements” for a discussion of the fees to be paid to Keefe, Bruyette & Woods and other FINRA member firms in the event that all shares are sold in the syndicated community offering.

These securities are not deposits or savings accounts and are not insured or guaranteed by the FDIC or any other government agency. Neither the Securities and Exchange Commission, the Board of Governors of the Federal Reserve System nor any state securities regulator has approved or disapproved of these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

Keefe, Bruyette & Woods

                    a Stifel Company

For assistance, please contact

the Stock Information Center

at                         

The date of this prospectus is                         , 2013

TABLE OF CONTENTS

	Page
Summary		1
Risk Factors		13
A Warning About Forward-Looking Statements		19
Selected Consolidated Financial and Other Data		20
Use of Proceeds		22
Our Dividend Policy		23
Market for the Common Stock		24
Capitalization		25
Regulatory Capital Compliance		26
Pro Forma Data		27
Our Business		30
Management’s Discussion and Analysis of Financial Condition and Results of Operations		35
Our Management		50
Stock Ownership		56
Subscriptions by Executive Officers and Directors		57
Regulation and Supervision		58
Federal and State Taxation		64
The Conversion and Offering		65
Comparison of Shareholders’ Rights		83
Restrictions on Acquisition of New Delanco Bancorp		89
Description of New Delanco Bancorp Capital Stock		91
Transfer Agent and Registrar		91
Registration Requirements		91
Legal and Tax Opinions		92
Experts		92
Where You Can Find More Information		92
Index to Consolidated Financial Statements of Delanco Bancorp		93

SUMMARY

This summary highlights material information from this prospectus and may not contain all the information that is important to you. To understand the conversion and offering fully, you should read this entire document carefully.

Our Company

New Delanco Bancorp, Inc. The shares being offered will be issued by new Delanco Bancorp, Inc., a New Jersey corporation. Upon completion of the conversion, new Delanco Bancorp will become the successor corporation to old Delanco Bancorp and the parent holding company for Delanco Federal Savings Bank. New Delanco Bancorp will be subject to comprehensive regulation and examination by the Board of Governors of the Federal Reserve System, which we refer to herein as the Federal Reserve Board.

Old Delanco Bancorp, Inc. and Delanco MHC. Old Delanco Bancorp is a federally chartered corporation that owns all of the outstanding shares of common stock of Delanco Federal. Old Delanco Bancorp’s common stock is currently quoted on the OTC Bulletin Board under the symbol “DLNO” and we expect the common stock of new Delanco Bancorp will also be quoted on the OTC Bulletin Board under the symbol “DLNO.”

At March 31, 2013, old Delanco Bancorp had consolidated total assets of $129.4 million, net loans of $88.4 million, total deposits of $117.0 million and total stockholders’ equity of $11.4 million. As of the date of this prospectus, old Delanco Bancorp had 1,634,725 shares of common stock outstanding. We have experienced net losses of $324 thousand and $494 thousand for the years ended March 31, 2013 and 2012, respectively. Our profitability has suffered due to lower net interest income resulting from the prolonged low interest rate environment, as well as heightened provisions for loan losses, expenses for and losses on the sale of real estate owned, and other problem loan expenses.

Delanco MHC is the federally chartered mutual holding company of old Delanco Bancorp. Delanco MHC’s sole business activity is the ownership of 899,099 shares of common stock of old Delanco Bancorp, or 55.0% of the common stock outstanding as of the date of this prospectus. After completion of the conversion, Delanco MHC will cease to exist.

Delanco Federal Savings Bank. Delanco Federal operates from two full-service locations in Delanco Township and Cinnaminson, New Jersey. We offer a variety of deposit and loan products to individuals and small businesses in our market area. Delanco and Cinnaminson are in western Burlington County, New Jersey, across the Delaware River from northeastern Philadelphia. We did not participate in any of the U.S. Treasury’s capital raising programs for financial institutions.

Our principal executive offices are located at 615 Burlington Avenue, Delanco, New Jersey 08075 and our telephone number is (856) 461-0611. Our web site address is www.delancofsb.com. Information on our web site should not be considered a part of this prospectus.

Regulatory Agreement

Delanco Federal is a party to a written agreement with the Office of the Comptroller of the Currency (the “OCC”) dated November 21, 2012. The written agreement supersedes and terminates the Order to Cease and Desist issued by the Office of Thrift Supervision on March 17, 2010.

The written agreement requires Delanco Federal to take the following actions:

• prepare a three-year strategic plan that establishes objectives for Delanco Federal’s overall risk profile, earnings performance, growth, balance sheet mix, liability structure, reduction in the volume of nonperforming assets, and product line development;

• prepare a capital plan that includes specific proposals related to the maintenance of adequate capital, identifies strategies to strengthen capital if necessary and includes detailed quarterly financial projections. If the OCC determines that Delanco Federal has failed to submit an acceptable capital plan or fails to implement or adhere to its capital plan, then the OCC may require Delanco Federal to develop a contingency capital plan detailing Delanco Federal’s proposal to sell, merge or liquidate Delanco Federal;

• prepare a criticized asset plan that will include strategies, targets and timeframes to reduce Delanco Federal’s level of criticized assets;

• implement a plan to improve Delanco Federal’s credit risk management and credit administration practices;

• implement programs and policies related to Delanco Federal’s allowance for loan and lease losses, liquidity risk management, independent loan review and other real estate owned;

• review the capabilities of Delanco Federal’s management to perform present and anticipated duties and to recommend and implement any changes based on such assessment;

1

• not pay any dividends or make any other capital distributions without the prior written approval of the OCC;

• not make any severance or indemnification payments without complying with regulatory requirements regarding such payments; and

• comply with prior regulatory notification requirements for any changes in directors or senior executive officers.

We have submitted strategic and capital plans to the OCC and have developed the other plans and policies required by the written agreement. The written agreement will remain in effect until terminated, modified, or suspended in writing by the OCC.

The written agreement does not require Delanco Federal to maintain any specific minimum regulatory capital ratios. However, by letter dated January 2, 2013, the OCC established higher individual minimum capital requirements for Delanco Federal. Specifically, Delanco Federal must maintain Tier 1 capital at least equal to 8% of adjusted total assets, Tier 1 capital at least equal to 12% of risk-weighted assets, and total capital at least equal to 13% of risk-weighted assets. At March 31, 2013, Delanco Federal’s Tier 1 leverage capital ratio, Tier 1 risk-based capital ratio and total risk based-capital ratio were 7.79%, 13.41% and 14.67%, respectively. Since the imposition of the Order to Cease and Desist, our capital preservation activities have included balance sheet contraction, curtailed lending activities, reduced concentrations in commercial lending, and working to reduce adversely classified assets. We are undertaking the conversion in furtherance of our capital plan.

Our Business

We operate as a community bank. Our primary business is generating funds from deposits and investing such funds in loans and investment securities.

• Retail Lending. Our primary line of business is originating loans to consumers in our market area. The largest segment of our loan portfolio is one- to four-family mortgage loans. We also offer home equity loans, construction loans and consumer loans.

• Commercial Lending. Our loan portfolio includes multi-family and commercial real estate loans and commercial business loans and lines of credit. We have made very few loans of this type in recent years due to asset quality problems and restrictions imposed by our regulators.

• Deposit Products and Services. We offer a full range of traditional deposit products for consumers and businesses, such as checking accounts, savings accounts, money market accounts and certificates of deposit. We provide features such as direct deposit, ATM and check card services, and on-line banking and bill pay services.

Our Business Strategy

Our mission is to operate and grow a profitable, independent community-oriented financial institution serving primarily retail customers and small businesses in our market area. In pursuing our mission, our goal is to improve our capital, earnings and asset quality so that we can be released from our written agreement with the OCC and our higher individual minimum capital requirements. The following are key elements of our business strategy:

• Improve asset quality. Working through our problem assets remains one of our top priorities. Non-performing loans spiked significantly during the recent recession and totaled $4.4 million at March 31, 2013. Real estate owned totaled $2.5 million at the same date. Total non-performing assets and troubled debt restructurings represented 6.8% of total assets at March 31, 2013. We continue to work with delinquent borrowers to restore loans to performing status where possible and to pursue foreclosure and disposition of collateral when it is not. In January 2013, we engaged an independent third party to conduct periodic loan portfolio reviews.

• Implementing a controlled growth strategy to prudently increase profitability. We intend to pursue a controlled growth strategy for the foreseeable future, with the goal of improving the profitability of our core business through increased net interest income. We anticipate moderate growth in our one- to four-family mortgage loan portfolio and in our investment securities portfolio. To a lesser extent, we also intend to originate multi-family and commercial real estate loans and commercial business loans to provide diversification to our loan portfolio.

• Continuing our community-oriented focus. As a community-oriented financial institution, we emphasize providing exceptional customer service as a means to attract and retain customers. We believe that our community orientation is attractive to our customers and distinguishes us from the large banks that operate in our market area.

• Improve our funding mix by attracting lower cost core deposits. Core deposits (demand, money market and savings accounts) comprised 53% of our total deposits at March 31, 2013, up from 47% at March 31, 2012. We value core deposits because they represent longer-term customer relationships and a lower cost of funding compared to certificates of deposit.

2

Description of the Conversion (page         )

In 2002, we reorganized Delanco Federal into a stock savings bank with a mutual holding company structure and formed old Delanco Bancorp as the mid-tier holding company for Delanco Federal. In 2007, we sold a minority interest in old Delanco Bancorp common stock to our depositors, our borrowers and our employee stock ownership plan in a subscription offering. The majority of old Delanco Bancorp’s shares were issued to Delanco MHC, a mutual holding company organized under federal law. As a mutual holding company, Delanco MHC does not have any shareholders, does not hold any significant assets other than the common stock of old Delanco Bancorp, and does not engage in any significant business activity. Our current ownership structure is as follows:

The “second-step” conversion process that we are now undertaking involves a series of transactions by which we will convert our organization from the partially public mutual holding company form to the fully public stock holding company structure. In the stock holding company structure, all of Delanco Federal’s common stock will be owned by new Delanco Bancorp, and all of new Delanco Bancorp’s common stock will be owned by the public. We are conducting the conversion and offering under the terms of our plan of conversion and reorganization (which is referred to as the “plan of conversion”). Upon completion of the conversion and offering, old Delanco Bancorp and Delanco MHC will cease to exist.

As part of the conversion, we are offering for sale common stock representing the ownership interest of old Delanco Bancorp that is currently held by Delanco MHC. At the conclusion of the conversion and offering, existing public shareholders of old Delanco Bancorp will receive shares of common stock in new Delanco Bancorp in exchange for their existing shares of common stock of old Delanco Bancorp, based upon an exchange ratio of 0.4910 to 0.6643 at the minimum and maximum of the offering range, respectively. If, as a result of regulatory considerations, demand for the shares or changes in financial market conditions, the independent appraiser determines that our market value has increased, we may sell up to 702,579 shares in the offering and the exchange ratio will be increased to 0.7639. The actual exchange ratio will be determined at the conclusion of the conversion and the offering based on the total number of shares sold in the offering, and is intended to result in old Delanco Bancorp’s existing public shareholders owning 44.44% of new Delanco Bancorp common stock, which is based on the 45% ownership interest that existing public shareholders currently own of old Delanco Bancorp common stock adjusted to reflect the assets of Delanco MHC, without giving effect to cash paid in lieu of issuing fractional shares or shares that existing shareholders may purchase in the offering.

3

After the conversion and offering, our ownership structure will be as follows:

We may cancel the conversion and offering with the concurrence of the Federal Reserve Board. If canceled, orders for common stock already submitted will be canceled, subscribers’ funds will be promptly returned with interest calculated at Delanco Federal’s passbook savings rate and all deposit account withdrawal authorizations will be canceled.

The normal business operations of Delanco Federal will continue without interruption during the conversion and offering, and the same officers and directors who currently serve Delanco Federal in the mutual holding company structure will serve the new holding company and Delanco Federal in the fully converted stock form.

Reasons for the Conversion and Offering (page         )

Our primary reasons for the conversion and offering are the following:

• To improve our capital position to support our risk profile and to assure compliance with regulatory capital requirements and additional individual minimum capital requirements imposed on us by the OCC;

• To support controlled growth beyond levels possible utilizing only retained earnings; and

• To adopt the stock holding company structure, which is a more familiar form of organization and which we believe will make our common stock more appealing to investors and give us greater flexibility to access the capital markets through possible future equity and debt offerings. Our current mutual holding company structure limits our ability to raise capital because Delanco MHC must own at least 50.1% of the shares of old Delanco Bancorp. We currently have no plans, agreements or understandings regarding any additional securities offerings.

At March 31, 2013, Delanco Federal’s Tier 1 leverage ratio was 7.79%, which was not in compliance with the individual minimum capital requirement imposed by the OCC that requires Delanco Federal to maintain a Tier 1 leverage capital ratio of at least 8%. The proceeds from the offering will result in a pro forma Tier 1 leverage ratio of 9.21% at the minimum of the offering range and enable us to comply with the individual minimum capital requirement imposed by the OCC and the capital plan that we submitted to our regulators while allowing us to pursue modest growth.

Our board of directors considered current market conditions, the amount of capital needed for compliance with our regulatory requirements and continued growth, the amount of capital being raised in the offering and the interests of existing shareholders in deciding to conduct the conversion and offering at this time.

Terms of the Offering

We are offering between 451,563 and 610,938 shares of common stock in a subscription offering to eligible depositors and borrowers of Delanco Federal and to our tax-qualified employee benefit plans, including our employee stock ownership plan. To the extent shares remain available, we may offer shares in a community offering to natural persons residing in Burlington County, New Jersey, to our existing public shareholders and to the general public. With regulatory approval, we may increase the number of shares to be sold up to 702,579 shares without giving you further notice or the opportunity to change or cancel your order. In considering whether to increase the offering size, the Federal Reserve Board will consider the level of subscriptions, the views of our independent appraiser, our financial condition and results of operations, and changes in financial market conditions. Once submitted, orders are irrevocable unless the offering is terminated or is extended beyond [Date 2], 2013, or the number of shares of common stock to be sold is increased to more than 702,579 shares or decreased to less than 451,563 shares. If we extend the offering beyond [Date 2], 2013, all subscribers will be notified and given the opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will promptly return your funds with interest calculated at Delanco Federal’s passbook savings rate or cancel your deposit account withdrawal authorization. If we intend to sell fewer than 451,563 shares or more than 702,579 shares, we will promptly return all funds and set a new offering range. All subscribers will be notified and given the opportunity to place a new order.

4

Shares of our common stock not purchased in the subscription or community offerings may be sold in a syndicated community offering. We may begin the syndicated community offering at any time following commencement of the subscription offering.

The purchase price is $8.00 per share. All investors will pay the same purchase price per share. Investors will not be charged a commission to purchase shares of common stock in the offering. Keefe, Bruyette & Woods, our conversion advisor and marketing agent in the offering, will use its best efforts to assist us in selling shares of our common stock in the subscription, community and syndicated community offerings. Keefe, Bruyette & Woods is not obligated to purchase any shares of common stock in the subscription, community or syndicated community offerings.

Risks Relating to the Offering and Our Business (page         )

An investment in the common stock of new Delanco Bancorp involves a degree of risk, including the possible loss of principal. You should carefully read and consider the information set forth in “Risk Factors” before purchasing shares of new Delanco Bancorp common stock.

How We Determined the Offering Range and Exchange Ratio (page         )

Federal regulations require that the aggregate purchase price of the securities sold in the offering be based upon our estimated pro forma market value after the conversion (i.e., taking into account the expected receipt of proceeds from the sale of securities in the offering), as determined by an independent appraisal. In accordance with the regulations of the Federal Reserve Board, a valuation range is established which ranges from 15% below to 15% above this pro forma market value. We have retained RP Financial, LC., which is experienced in the evaluation and appraisal of financial institutions, to prepare the appraisal. RP Financial has indicated that in its valuation as of May 17, 2013, new Delanco Bancorp’s common stock’s estimated full market value was $7.6 million, resulting in a range from $6.5 million at the minimum to $8.8 million at the maximum. This results in an offering range of $3.6 million to $4.9 million, with a midpoint of $4.3 million. RP Financial will receive fees totaling $30,000 for its appraisal report, plus $5,000 for any appraisal updates (of which there will be at least one) and reimbursement of out-of-pocket expenses.

The appraisal was based in part upon old Delanco Bancorp’s financial condition and results of operations, the effect of the additional capital we will raise from the sale of common stock in this offering, and an analysis of a peer group of ten publicly traded savings and loan holding companies that RP Financial considered comparable to old Delanco Bancorp. A list of the appraisal peer group companies is set forth in “The Conversion and Offering—How We Determined the Offering Range and the $8.00 Purchase Price” on page         .

In preparing its appraisal, RP Financial considered the information in this prospectus, including our financial statements. RP Financial also considered the following factors, among others:

• our historical and projected operating results and financial condition, including, but not limited to, net interest income, the amount and volatility of interest income and interest expense relative to changes in market conditions and interest rates, asset quality, levels of loan loss provisions, the amount and sources of noninterest income, and the amount of noninterest expense;

• the economic, demographic and competitive characteristics of our market area, including, but not limited to, employment by industry type, unemployment trends, trends in the local real estate markets, size and growth of the population, trends in household and per capita income, and deposit market share;

• a comparative evaluation of our operating and financial statistics with those of other similarly-situated, publicly-traded savings associations and savings association holding companies, which included a comparative analysis of balance sheet composition, income statement and balance sheet ratios, credit and interest rate risk exposure;

• the effect of the capital raised in this offering on our net worth and earnings potential, including, but not limited to, the increase in consolidated equity resulting from the offering, the estimated increase in earnings resulting from the investment of the net proceeds of the offering; and

• the trading market for old Delanco Bancorp common stock and securities of comparable institutions and general conditions in the market for such securities.

Four measures that some investors use to analyze whether a stock might be a good investment are the ratio of the offering price to the issuer’s “book value” and “tangible book value” and the ratio of the offering price to the issuer’s earnings and “core earnings.” RP Financial considered these ratios in preparing its appraisal, among other factors. Book value is the same as total equity and represents the difference in value between the issuer’s assets and liabilities. Tangible book value is equal to total equity minus intangible assets. Core earnings, for purposes of the appraisal, was defined as net earnings after taxes, excluding the after-tax portion of income from non-recurring items.

5

In applying each of the valuation methods, RP Financial considered adjustments to our pro forma market value based on a comparison of new Delanco Bancorp with the peer group. RP Financial made moderate downward adjustments for financial condition and profitability, growth and viability of earnings and made slight downward adjustments for asset growth, dividends, liquidity of the shares, marketing of the issue, management, and effect of government regulations and regulatory reform. No adjustment was made for primary market area.

The following table presents a summary of selected pricing ratios for the peer group companies utilized by RP Financial in its appraisal and the pro forma pricing ratios for us as calculated by RP Financial in its appraisal report, based on financial data as of and for the twelve months ended March 31, 2013. The pricing ratios for new Delanco Bancorp are based on financial data as of or for the twelve months ended March 31, 2013. Price-to-earnings multiples were not meaningful for Delanco Bancorp because of operating losses.

	Price to Book Value Ratio			Price to Tangible Book Value Ratio
New Delanco Bancorp (pro forma):
Minimum		46.22	%		46.22	%
Midpoint		52.12	%		52.12	%
Maximum		57.55	%		57.55	%
Maximum, as adjusted		63.29	%		63.29	%
Pricing ratios of peer group companies as of May 17, 2013:
Average		80.53	%		81.17	%
Median		81.00	%		82.53	%

Compared to the average pricing ratios of the peer group, at the maximum of the offering range our common stock would be priced at a discount of 29% to the peer group on a price-to-book basis and on a price-to-tangible book basis. This means that, at the maximum of the offering range, a share of our common stock would be less expensive than the peer group on a book value and tangible book value basis. Comparison to the average pricing ratios of the peer group on a price to earnings basis is not possible because we have negative pro forma core earnings for the 12 months ended March 31, 2013.

Compared to the average pricing ratios of the peer group, at the minimum of the offering range our common stock would be priced at a discount of 43% to the peer group on a price-to-book basis and on a price-to-tangible book basis. This means that, at the minimum of the offering range, a share of our common stock would be less expensive than the peer group on an earnings, book value and tangible book value basis.

Our board of directors reviewed RP Financial’s appraisal report, including the methodology and the assumptions used by RP Financial, and determined that the offering range was reasonable and adequate. Our board of directors has decided to offer the shares for a price of $8.00 per share. The purchase price of $8.00 per share was determined by us, taking into account, among other factors, the market price of our stock before adoption of the plan of conversion, the requirement under Federal Reserve Board regulations that the common stock be offered in a manner that will achieve the widest distribution of the stock, and desired liquidity in the common stock after the offering. Our board of directors also established the formula for determining the exchange ratio. Based upon such formula and the offering range, the exchange ratio will range from a minimum of 0.4910 to a maximum of 0.6643 shares of new Delanco Bancorp common stock for each current share of old Delanco Bancorp common stock, with a midpoint of 0.5776. Based upon this exchange ratio, we expect to issue between 361,185 and 488,662 shares of new Delanco Bancorp common stock to the holders of old Delanco Bancorp common stock outstanding immediately before the completion of the conversion and offering.

Because of differences in important factors such as operating characteristics, location, financial performance, asset size, capital structure and business prospects between us and other fully converted institutions, you should not rely on these comparative valuation ratios as an indication as to whether or not our common stock is an appropriate investment for you. The appraisal is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing our common stock. The appraisal does not indicate market value. You should not assume or expect that the appraisal described above means that our common stock will trade at or above the $8.00 purchase price after the offering.

Our board of directors makes no recommendation of any kind as to the advisability of purchasing shares of common stock in the offering.

6

Possible Change in Offering Range

RP Financial will update its appraisal before we complete the conversion and offering. If, as a result of regulatory considerations, demand for the shares or changes in financial market conditions, RP Financial determines that our estimated pro forma market value has increased, we may sell up to 702,579 shares without further notice to you. If our pro forma market value at that time is either below $6.5 million or above $8.8 million, then, after consulting with the Federal Reserve Board, we may: terminate the offering and promptly return all funds; promptly return all funds, set a new offering range and give all subscribers the opportunity to place a new order; or take such other actions as may be permitted by the Federal Reserve Board and the Securities and Exchange Commission and any applicable state securities commissions.

The Exchange of Existing Shares of Old Delanco Bancorp Common Stock (page         )

If you are a shareholder of old Delanco Bancorp on the date we complete the conversion and offering, your existing shares will be canceled and exchanged for shares of new Delanco Bancorp. The number of shares you will receive will be based on an exchange ratio determined as of the completion of the conversion and offering that is intended to result in old Delanco Bancorp’s existing public shareholders owning approximately 44.44% of new Delanco Bancorp’s common stock, which is the same percentage of old Delanco Bancorp common stock currently owned by existing public shareholders as adjusted to reflect the assets of Delanco MHC. The following table shows how the exchange ratio will adjust, based on the number of shares sold in our offering. The table also shows how many shares a hypothetical owner of 100 shares of old Delanco Bancorp common stock would receive in the exchange, based on the number of shares sold in the offering.

	Shares to be Sold in the Offering					Shares to be Exchanged for Existing Shares of Old Delanco Bancorp					Total Shares of Common Stock to be Outstanding		Exchange Ratio		Equivalent per Share Value (1)		Equivalent Pro Forma Book Value per Exchanged Share (2)		Shares to be Received for 100 Existing Shares (3)
	Amount		Percent			Amount		Percent
Minimum		451,563		55.56	%		361,185		44.44	%		812,748		0.4910	$	3.93	$	8.50		49
Midpoint		531,250		55.56	%		424,924		44.44	%		956,174		0.5776	$	4.62	$	8.87		57
Maximum		610,938		55.56	%		488,662		44.44	%		1,099,600		0.6643	$	5.31	$	9.23		66
Maximum, as adjusted		702,579		55.56	%		561,962		44.44	%		1,264,541		0.7639	$	6.11	$	9.66		76

(1) Represents the value of shares of new Delanco Bancorp common stock received in the conversion by a holder of one share of old Delanco Bancorp common stock at the exchange ratio, assuming a market price of $8.00 per share.

(2) Represents the pro forma shareholders’ equity per share at each level of the offering range multiplied by the respective exchange ratio.

(3) Cash will be paid instead of issuing any fractional shares.

No fractional shares of new Delanco Bancorp common stock will be issued in the conversion and offering. For each fractional share that would otherwise be issued, we will pay cash in an amount equal to the product obtained by multiplying the fractional share interest to which the holder would otherwise be entitled by the $8.00 per share offering price.

How We Intend to Use the Proceeds of this Offering (page         )

The following table summarizes how we intend to use the proceeds of the offering, based on the sale of shares at the minimum and maximum of the offering range. We intend to contribute 80% of the net proceeds of the offering to Delanco Federal.

	451,563 Shares at $8.00 per Share		610,938 Shares at $8.00 per Share
	(In thousands)
Offering Proceeds	$	3,613	$	4,888
Less: offering expenses		870		870
Net offering proceeds		2,743		4,018
Less:
Proceeds contributed to Delanco Federal		2,194		3,214
Proceeds used for loan to employee stock ownership plan		163		220
Proceeds remaining for new Delanco Bancorp	$	386	$	584

Initially, we intend to invest the proceeds of the offering in short-term investments. In the future, new Delanco Bancorp may use the funds it retains to invest in securities, pay cash dividends, repurchase shares of its common stock (subject to regulatory restrictions), or for general corporate purposes. Delanco Federal intends to use the portion of the proceeds that it receives to fund new loans and to invest in securities. We expect that much of the loan growth will occur in our one- to four-family residential mortgage portfolio, but we have not allocated specific dollar amounts to any particular area of our loan portfolio. The amount of time that it will take to deploy the proceeds of the offering into loans will depend primarily on the level of loan demand.

7

Purchases by Directors and Executive Officers (page 81)

We expect that our directors and executive officers, together with their associates, will subscribe for 26,000 shares, which is 4.8% of the midpoint of the offering. Our directors and executive officers will pay the same $8.00 per share price as everyone else who purchases shares in the offering. Like all of our depositors, our directors and executive officers have subscription rights based on their deposits and, in the event of an oversubscription, their orders will be subject to the allocation provisions set forth in our plan of conversion. Purchases by our directors and executive officers will count towards the minimum number of shares we must sell to close the offering. Following the conversion and offering, and including shares received in exchange for shares of old Delanco Bancorp, our directors and executive officers, together with their associates, are expected to own 62,543 shares of new Delanco Bancorp common stock, which would equal 6.5% of our outstanding shares if shares are sold at the midpoint of the offering range.

Benefits of the Conversion to Management (pages      and __)

We intend to expand our employee stock ownership plan and grant stock options to our directors and certain key employees as described below. We do not intend to adopt a new equity incentive plan in the near future, as we have not yet made any grants under our 2008 Equity Incentive Plan. We will recognize additional compensation expense related to the expanded employee stock ownership plan and stock option grants. As reflected under “Pro Forma Data,” based upon assumptions set forth therein, the annual expense related to the employee stock ownership plan and stock options would have been $20 thousand for the year ended March 31, 2013 on an after-tax basis, assuming shares are sold at the maximum of the offering range. The actual expense for the employee stock ownership plan will depend on the market value of our common stock and will increase as the value of our common stock increases.

Employee Stock Ownership Plan. Our employee stock ownership plan intends to purchase an amount of shares equal to 4.5% of the shares sold in the offering. The plan will use the proceeds from a 14-year loan from new Delanco Bancorp to purchase these shares. We reserve the right to purchase shares of common stock in the open market following the offering to fund all or a portion of the employee stock ownership plan. As the loan is repaid and shares are released from collateral, the shares will be allocated to the accounts of employee participants. Allocations will be based on a participant’s individual compensation as a percentage of total plan compensation. Non-employee directors are not eligible to participate in the employee stock ownership plan. We will incur additional compensation expense as a result of this plan. See “Pro Forma Data” for an illustration of the effects of this plan.

Stock Option Awards. Upon completion of the conversion, options to purchase a total of 24,000 shares of common stock at the $8.00 offering price will be granted to our directors and certain of our key employees under our 2008 Equity Incentive Plan, which will be assumed by new Delanco Bancorp. Of this amount, options to purchase 1,000 shares will be granted to each of our non-employee directors and options will be granted to our executive officers as follows: James E. Igo, 10,000; and Eva Modi, 5,000. All of such options will expire on the tenth anniversary of the date of grant and will become exercisable in equal 20% installments on each anniversary of the grant date, commencing with the first anniversary thereof. We will incur additional compensation expense as a result of the stock option awards. See “Pro Forma Data” for an illustration of the effects of these awards. We do not intend to grant any restricted stock awards under the 2008 Equity Incentive Plan until we are able to repurchase shares in the open market to offset the awards.

The following table summarizes, at the maximum of the offering range, the total number and value of the shares of common stock that the employee stock ownership plan expects to acquire. At the maximum of the offering range, we will sell 610,938 shares and have 1,099,600 shares outstanding.

	Number of Shares to be Granted or Purchased								Total Estimated Value (000’s)
	At Maximum of Offering Range		As a % of Common Stock Sold			As a % of Common Stock Outstanding
Employee stock ownership plan (1)		27,492		4.5	%		2.5	%	$	220

(1) Assumes the value of new Delanco Bancorp common stock is $8.00 per share for determining the total estimated value.

The following table presents information regarding our existing employee stock ownership plan, options and restricted stock available under our 2008 Equity Incentive Plan, and additional shares to be purchased by our employee stock ownership plan. The table below assumes that 1,099,600 shares are outstanding after the offering, which includes the sale of 610,938 shares in the offering at the maximum of the offering range and the issuance of 488,662 shares in exchange for shares of old Delanco Bancorp using an exchange ratio of 0.6643. It is also assumed that the value of the stock is $8.00 per share.

8

Stock Benefit Plans	Eligible Participants	Number of Shares at Maximum of Offering Range			Estimated Value of Shares			Percentage of Shares Outstanding After the Conversion and Offering
	(Dollars in thousands)
Employee Stock Ownership Plan:	Employees
Shares purchased in 2007 offering (1)			42,569	(2)	$	340			3.9	%
Shares to be purchased in this offering			27,492			220			2.5	%
Total employee stock ownership plan			70,061		$	560			6.4	%
Restricted Stock Awards:	Directors and employees
2008 Equity Incentive Plan (1)			21,284	(3)	$	170	(4)		1.9	%
Stock Options:	Directors and employees
2008 Equity Incentive Plan (1)			53,211	(5)	$	98	(6)		4.8	%
Total stock benefit plans			144,556		$	828			13.2	%

(1) Number of shares has been adjusted for the 0.6643 exchange ratio at the maximum of the offering range.

(2) As of March 31, 2013, of these shares, 12,770 (19,224 before adjustment) have been allocated to the accounts of participants and 29,798 (44,857 before adjustment) remain unallocated.

(3) As of March 31, 2013, of these shares, no shares have been awarded.

(4) The actual value of restricted stock grants will be determined based on their fair value as of the date grants are made. For purposes of this table, fair value is assumed to be the same as the offering price of $8.00 per share.

(5) As of March 31, 2013, of these shares, no options have been awarded. Upon completion of the conversion, options to purchase a total of 24,000 shares of common stock at the offering price of $8.00 will be granted to our non-employee directors and certain key employees.

(6) For purposes of this table, the fair value of stock options to be granted under the new equity incentive plan has been estimated at $2.62 per option using the Black-Scholes option pricing model with the following assumptions: exercise price, $8.00; trading price on date of grant, $8.00; dividend yield, 0.0%; expected life, 10 years; expected volatility, 24.34%; and risk-free interest rate, 0.77%.

Persons Who Can Order Stock in the Subscription Offering (page __)

We are offering shares of new Delanco Bancorp common stock in a subscription offering to the following persons in the following order of priority:

1. Persons with aggregate balances of $50 or more on deposit at Delanco Federal as of the close of business on April 30, 2012.

2. Our employee stock ownership plan.

3. Persons with aggregate balances of $50 or more on deposit at Delanco Federal as of the close of business on June 30, 2013 who are not eligible in category 1 above.

4. Delanco Federal’s depositors as of the close of business on [record date], 2013, who are not in categories 1 or 3 above and borrowers of Delanco Federal as of November 14, 1994 who continue to be borrowers as of [record date], 2013.

If we receive subscriptions for more shares than are to be sold in this offering, we may be unable to fill or may only partially fill your order. Shares will be allocated in order of the priorities described above under a formula outlined in the plan of conversion. See “The Conversion and Offering—Subscription Offering and Subscription Rights” for a description of the allocation procedure.

Purchase Limitations (page __)

Pursuant to our plan of conversion, our board of directors has established limitations on the purchase of common stock in the offering. These limitations include the following:

• The minimum purchase is 25 shares.

9

• No individual (or individuals exercising subscription rights through a single qualifying account held jointly) may purchase more than $176,000 of common stock (which equals 22,000 shares) in the offering. In addition, if any of the following persons purchase shares of common stock, their purchases, in all categories of the offering combined, when aggregated with your purchases, cannot exceed $176,000 of common stock (which equals 22,000 shares):

• Any person who is related by blood or marriage to you and who either lives in your home or who is a director or officer of Delanco Federal;

• Companies or other entities in which you are an officer or partner or have a 10% or greater beneficial ownership interest; and

• Trusts or other estates in which you have a substantial beneficial interest or as to which you serve as a trustee or in another fiduciary capacity.

Unless we determine otherwise, persons having the same address and persons exercising subscription rights through qualifying accounts registered to the same address will be subject to this overall purchase limitation. We have the right to determine, in our sole discretion, whether prospective purchasers are associates or acting in concert.

• No individual, together with any associates, and no group of persons acting in concert may purchase shares of common stock so that, when combined with shares of new Delanco Bancorp common stock received in exchange for shares of old Delanco Bancorp common stock, such person or persons would hold more than 5.0% of the number of shares of new Delanco Bancorp common stock outstanding upon completion of the conversion and offering. This means that if you already own a significant number of shares, you may not be permitted to purchase the maximum number of shares in the offering. For example, if you currently own more than 37,957 shares of common stock (assuming we close the offering at the minimum of the offering range) or 49,646 shares of common stock (assuming we close the offering at the maximum of the offering range), you would not be able to purchase all of the 22,000 shares allowable under the plan of conversion. No person will be required to divest any shares of old Delanco Bancorp common stock or be limited in the number of shares of new Delanco Bancorp to be received in exchange for shares of old Delanco Bancorp common stock as a result of this purchase limitation.

Subject to the Federal Reserve Board’s approval, we may increase or decrease the purchase limitations at any time. If we increase the maximum purchase limitation to 5.0% of the shares of common stock sold in the offering, we may further increase the maximum purchase limitation to 9.99%, provided that orders for common stock exceeding 5.0% of the shares of common stock sold in the offering may not exceed in the aggregate 10.0% of the total shares of common stock sold in the offering. Our tax-qualified employee benefit plans, including our employee stock ownership plan, are authorized to purchase up to 10% of the shares sold in the offering, without regard to these purchase limitations.

Conditions to Completing the Conversion and Offering

We cannot complete the conversion and offering unless:

• the plan of conversion is approved by at least a majority of votes eligible to be cast by members of Delanco MHC;

• the plan of conversion is approved by at least two-thirds of the outstanding shares of old Delanco Bancorp, including shares held by Delanco MHC;

• the plan of conversion is approved by at least a majority of the votes eligible to be cast by shareholders of old Delanco Bancorp, excluding shares held by Delanco MHC;

• we sell at least the minimum number of shares offered; and

• we receive the final approval of the Federal Reserve Board to complete the conversion and offering.

Delanco MHC, which owns 55.0% of the outstanding shares of old Delanco Bancorp, intends to vote these shares in favor of the plan of conversion. In addition, as of March 31, 2013, directors and executive officers of old Delanco Bancorp and their associates beneficially owned 63,272 shares of old Delanco Bancorp or 3.9% of the outstanding shares. They intend to vote those shares in favor of the plan of conversion.

Steps We May Take if We Do Not Receive Orders for the Minimum Number of Shares

We must sell a minimum of 451,563 shares to complete the conversion and offering. Purchases by our directors and executive officers and our employee stock ownership plan will count towards the minimum number of shares we must sell to complete the offering. If we do not receive orders for at least 451,563 shares of common stock in the subscription and community offerings, we may increase the purchase limitations and/or seek regulatory approval to extend the offering beyond [Date 2], 2013 (provided that any such extension will require us to resolicit subscribers). Alternatively, we may terminate the offering, in which case we will promptly return your funds with interest calculated at Delanco Federal’s passbook savings rate, which is currently .10% per annum, and cancel all deposit account withdrawal authorizations.

10

How to Purchase Common Stock in the Subscription and Community Offerings (page         )

In the subscription and community offerings, including the syndicated community offering (if held), you may pay for your shares by:

1. personal check, bank check or money order made payable directly to “Delanco Bancorp, Inc.” (Delanco Federal lines of credit checks and third-party checks of any type will not be accepted); or

2. authorizing us to withdraw money from the types of Delanco Federal deposit accounts identified on the stock order form.

Delanco Federal is not permitted to lend funds (including funds drawn on a Delanco Federal line of credit) to anyone to purchase shares of common stock in the offering.

You may not designate on your stock order form a direct withdrawal from a retirement account at Delanco Federal. Additionally, you may not designate on your stock order form a direct withdrawal from Delanco Federal accounts with check-writing privileges. Instead, a check must be provided. If you request a direct withdrawal, we reserve the right to interpret that as your authorization to treat those funds as if we had received a check for the designated amount and we will immediately withdraw the amount from your checking account.

Personal checks will be immediately cashed, so the funds must be available within the account when your stock order form is received by us. Subscription funds submitted by check or money order will be held in a segregated account at Delanco Federal. We will pay interest calculated at Delanco Federal’s passbook savings rate from the date those funds are received until completion or termination of the offering. Withdrawals from certificate of deposit accounts at Delanco Federal to purchase common stock in the offering may be made without incurring an early withdrawal penalty. All funds authorized for withdrawal from deposit accounts with Delanco Federal must be available within the deposit accounts at the time the stock order form is received. A hold will be placed on the amount of funds designated on your stock order form. Those funds will be unavailable to you during the offering; however, the funds will not be withdrawn from the accounts until the offering is completed and will continue to earn interest at the applicable contractual deposit account rate until the completion of the offering.

You may submit your stock order form and payment in one of three ways: by mail using the stock order reply envelope provided; by overnight delivery to the Stock Information Center at the address noted on the stock order form; or by hand-delivery to Delanco Federal’s executive office located at 615 Burlington Avenue, Delanco, New Jersey. Hand-delivered stock order forms will only be accepted at this location. We will not accept stock order forms at any other banking office. Please do not mail stock order forms to Delanco Federal. Once submitted, your order is irrevocable. We are not required to accept copies or facsimiles of order forms.

Using IRA Funds to Purchase Shares in the Offering (page         )

You may be able to subscribe for shares of common stock using funds in your individual retirement account(s), or IRA. If you wish to use some or all of the funds in your Delanco Federal IRA or other retirement account, the applicable funds must first be transferred to a self-directed retirement account maintained by an unaffiliated institutional trustee or custodian, such as a brokerage firm. An annual fee may be payable to the new trustee. If you do not have such an account, you will need to establish one and transfer your funds before placing your stock order. Our Stock Information Center can give you guidance if you wish to place an order for stock using funds held in a retirement account at Delanco Federal or elsewhere. Because processing retirement account transactions takes additional time, we recommend that you contact our Stock Information Center promptly, preferably at least two weeks before the [Date 1], 2013 offering deadline. Whether you may use retirement funds for the purchase of shares in the offering will depend on timing constraints and, possibly, limitations imposed by the institution where the funds are held.

Deadline for Ordering Stock in the Subscription and Community Offerings

The subscription offering will end at 2:00 p.m., Eastern time, on [Date 1], 2013. If you wish to purchase shares, a properly completed and signed original stock order form, together with full payment for the shares of common stock, must be received (not postmarked) no later than this time. We expect that the community offering, if held, will terminate at the same time, although it may continue until [Date 2], 2013, or longer if the Federal Reserve Board approves a later date. No single extension may be for more than 90 days. We are not required to provide notice to you of an extension unless we extend the offering beyond [Date 2], 2013, in which case all subscribers in the subscription and community offerings will be notified and given the opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will promptly return your funds with interest calculated at Delanco Federal’s passbook savings rate or cancel your deposit account withdrawal authorization. If we intend to sell fewer than 451,563 shares or more than 702,579 shares, we will promptly return all funds and set a new offering range. All subscribers will be notified and given the opportunity to place a new order.

Market for New Delanco Bancorp’s Common Stock (page         )

Old Delanco Bancorp’s common stock is currently quoted on the OTC Bulletin Board under the symbol “DLNO” and we expect the common stock of new Delanco Bancorp will also be quoted on the OTC Bulletin Board under the symbol “DLNO.” Once shares of the common stock begin trading, you may contact a stock broker to buy or sell shares. There can be no assurance that persons purchasing the common stock in the offering will be able to sell their shares at or above the $8.00 offering price, and brokerage firms typically charge commissions related to the purchase or sale of securities.

11

Our Dividend Policy (page         )

Old Delanco Bancorp has never declared or paid a cash dividend on its common stock. We currently intend to retain any future earnings for use in the operation of our business and do not intend to declare or pay any cash dividends in the foreseeable future. Any determination to pay dividends on our common stock will depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our board of directors considers relevant. Our ability to pay dividends to shareholders may depend, in part, upon capital distributions we receive from Delanco Federal. Under the terms of its written agreement with the OCC, Delanco Federal is not permitted to pay dividends without prior regulatory approval. In addition, at the request of the Federal Reserve Board, old Delanco Bancorp has adopted resolutions that prohibit it from declaring or paying any dividends or taking any dividends or other distributions that would reduce the capital of Delanco Federal without the prior written consent of the Federal Reserve Board. See “Our Dividend Policy” for additional information.

Tax Consequences (page         )

As a general matter, the conversion will not be a taxable transaction for purposes of federal or state income taxes to us or persons who receive or exercise subscription rights. Existing shareholders of old Delanco Bancorp who receive cash in lieu of fractional share interests in shares of new Delanco Bancorp will recognize gain or loss equal to the difference between the cash received and the tax basis of the fractional share. Kilpatrick Townsend & Stockton LLP and Connolly, Grady & Cha, P.C. have issued us opinions to this effect, which are summarized on pages          through          of this prospectus.

Delivery of Prospectus

To ensure that each purchaser in the subscription and community offerings receives a prospectus at least 48 hours before the offering deadline, we may not mail prospectuses any later than five days before the offering deadline or hand-deliver prospectuses later than two days before that date. Stock order forms may only be delivered if accompanied or preceded by a prospectus. We are not obligated to deliver a prospectus or order form by means other than U.S. mail.

We will make reasonable attempts to provide a prospectus and offering materials to holders of subscription rights. The subscription offering and all subscription rights will expire at 2:00 p.m., Eastern time, on [Date 1], 2013 whether or not we have been able to locate each person entitled to subscription rights.

Delivery of Stock Certificates (page         )

Certificates representing shares of common stock issued in the subscription and community offerings will be mailed by regular mail by our transfer agent as soon as practicable following completion of the conversion and offering. Certificates will be mailed to purchasers at the registration address provided by them on the order form. All shares of common stock sold in the syndicated community offering will be in book entry form and paper stock certificates will not be issued. Until certificates for common stock are available and delivered to purchasers, purchasers may not be able to sell their shares, even though trading of the common stock will have commenced. Your ability to sell the shares of common stock before your receipt of the stock certificate will depend on arrangements you may make with your brokerage firm.

Subscription Rights are Not Transferable

You are not allowed to transfer your subscription rights and we will act to ensure that you do not do so. You will be required to certify that you are purchasing shares solely for your own account and that you have no agreement or understanding with another person to sell or transfer subscription rights or the shares that you purchase. We will not accept any stock orders that we believe involve the transfer of subscription rights. Eligible customers who enter into agreements to allow ineligible investors to participate in the subscription offering may be violating federal and state law and may be subject to civil enforcement actions or criminal prosecution.

Stock Information Center

Our banking office personnel may not, by law, assist with investment-related questions about the offering. If you have any questions regarding the offering, please call our Stock Information Center. The telephone number is (    )         -            . The Stock Information Center is open Monday through Friday from 10:00 a.m. to 4:00 p.m., Eastern time. The Stock Information Center will be closed weekends and bank holidays.

12

RISK FACTORS

You should consider carefully the following risk factors before purchasing shares of new Delanco Bancorp common stock.

Risks Related to Our Business

We have experienced net losses in each of the last two fiscal years and we may not return to profitability in the near future.

We have experienced net losses of $324 thousand and $494 thousand for the years ended March 31, 2013 and 2012, respectively. Our profitability has suffered due to lower net interest income resulting from the prolonged low interest rate environment, as well as heightened provisions for loan losses, expenses for and losses on the sale of real estate owned, and other problem loan expenses. For the year ended March 31, 2013, we incurred provision expenses of $640 thousand, real estate owned expenses and losses of $340 thousand, and other problem loan expenses of $448 thousand. For the year ended March 31, 2012, we incurred provision expenses of $1.6 million, real estate owned expenses and losses of $197 thousand, and other problem loan expenses of $203 thousand. At March 31, 2013, non-performing assets and troubled debt restructurings totaled $8.8 million, or 6.8% of total assets. As we work through our problem assets, we may incur additional expenses and losses on real estate owned and other problem loan expenses, while continued high levels of problem assets may result in additional provisions for loan losses, all of which would impede our return to profitability. In addition, our earnings have been adversely affected by a shrinking net interest margin caused by the protracted low interest rate environment and its impact on earning asset yields. Our net interest margin was 3.35% for the year ended March 31, 2013, as compared to 3.60% for the year ended March 31, 2012. Our average yield on earning assets declined to 4.22% for the year ended March 31, 2013, from 4.76% for the year ended March 31, 2012 as higher yielding loans were paid off or refinanced at lower market rates and higher yielding securities were called by the issuer and replaced with lower yielding investments. Continued low market interest rates could cause further declines in our net interest margin, as our ability to reduce our cost of funds to offset further reductions in asset yields is limited.

We are a party to a formal written agreement with the OCC and our failure to comply with that agreement may result in further regulatory enforcement actions, including restrictions on our operations.

Delanco Federal is a party to a formal written agreement with the OCC dated November 21, 2012. The written agreement supersedes and terminates the Order to Cease and Desist issued by the Office of Thrift Supervision on March 17, 2010. The written agreement requires Delanco Federal to take certain actions and implement certain policies and procedures aimed at improving Delanco Federal’s capital, earnings and asset quality. The written agreement does not require Delanco Federal to maintain any specific minimum regulatory capital ratios. However, by letter dated January 2, 2013, the OCC established higher individual minimum capital requirements for Delanco Federal. Specifically, Delanco Federal must maintain Tier 1 capital at least equal to 8% of adjusted total assets, Tier 1 capital at least equal to 12% of risk-weighted assets, and total capital at least equal to 13% of risk-weighted assets. At March 31, 2013, Delanco Federal’s Tier 1 leverage capital ratio, Tier 1 risk-based capital ratio and total risk based-capital ratio were 7.79%, 13.41% and 14.67%, respectively.

The written agreement will remain in effect until terminated, modified, or suspended in writing by the OCC. A failure to comply with the written agreement could result in the initiation of further enforcement actions by the OCC, including the imposition of civil monetary penalties. The written agreement has resulted in additional regulatory compliance expense for the Company. A detailed description of the written agreement can be found at “Regulation and Supervision—Regulatory Agreement.”

A return of recessionary conditions could result in increases in our level of non-performing loans and/or reduce demand for our products and services, which could have an adverse effect on our results of operations.

Although the U.S. economy has emerged from the severe recession that occurred in 2008 and 2009, economic growth has been slow and uneven, and unemployment levels remain high. Recovery by many businesses has been impaired by lower consumer spending. A return to prolonged deteriorating economic conditions could significantly affect the markets in which we do business, the value of our loans and investments, and our ongoing operations, costs and profitability. Further declines in real estate values and sales volumes and continued elevated unemployment levels may result in higher than expected loan delinquencies, increases in our non-performing and criticized classified assets and a decline in demand for our products and services. These events may cause us to incur losses and may adversely affect our financial condition and results of operations. As a result of the economic downturn, our non-performing assets and troubled debt restructurings jumped from $1.8 million at March 31, 2008 to $9.0 million at March 31, 2009 and then to $10.3 million at March 31, 2010. Since that time, the amount of non-performing assets and troubled debt restructurings has declined to $8.8 million at March 31, 2013. Reduction in problem assets has been slow, and the process has been exacerbated by the condition of some of the properties securing non-performing loans, the lengthy foreclosure process in New Jersey, and extended workout plans with certain borrowers. As we work through the resolution of these assets, the continued economic problems that exist in the financial markets could have a negative impact on the Company.

13

A return of recessionary conditions and/or continued negative developments in the domestic and international credit markets may significantly affect the markets in which we do business, the value of our loans and investments, and our ongoing operations, costs and profitability. Further declines in real estate values and sales volumes and continued high unemployment levels may result in higher than expected loan delinquencies and a decline in demand for our products and services. These negative events may cause us to incur losses and may adversely affect our capital, liquidity, and financial condition.

Adverse conditions in the local economy or real estate market could hurt our profits.

Our success depends to a large degree on the general economic conditions in Burlington County, New Jersey and the surrounding areas that comprise our market. Our market has experienced a significant downturn in which we have seen falling home prices, rising foreclosures and an increased level of commercial and consumer delinquencies. At March 31, 2013, 56.7% of our loan portfolio consisted of loans secured by real estate in Burlington County. We have relatively few loans outside of our market area, and, as a result, we have a greater risk of loan defaults and losses in the event of a further economic downturn in our market area, as adverse economic conditions may have a negative effect on the ability of our borrowers to make timely payments of their loans. Further significant decline in real estate values in our market would mean that the collateral for many of our loans would provide less security. As a result, we would be more likely to suffer losses on defaulted loans because our ability to fully recover on defaulted loans by selling the real estate collateral would be diminished.

Our local economy may affect our future growth possibilities and operations in our primary market area. Our future growth opportunities depend on the growth and stability of our regional economy and our ability to expand in our market area. Continued adverse conditions in our local economy may limit funds available for deposit and may negatively affect demand for loans, both of which could have an impact on our profitability.

An inability to maintain our regulatory capital position could require us to raise additional capital, which may not be available on favorable terms or at all.

At March 31, 2013, Delanco Federal’s Tier 1 leverage ratio was 7.79%, which was not in compliance with the individual minimum capital requirement imposed by the OCC that requires Delanco Federal to maintain a Tier 1 leverage ratio of at least 8%. Although the additional capital to be contributed to Delanco Federal from the proceeds of this offering will result in a pro forma Tier 1 leverage ratio of 9.21% at the minimum of the offering range, which is above the amount required by the OCC, losses on loans, impairments to securities, declines in earnings or a combination of these or other factors could change Delanco Federal’s capital position in a relatively short period of time. If we are unable to remain in compliance with the individual minimum capital requirement imposed by the OCC, we may be required to raise additional capital. The need to raise substantial additional funds may force our management to spend more time in managerial and financing related activities than in operational activities. We may not be able to secure the required funding or it may not be available on favorable terms. Additional offerings of our common stock will dilute the ownership interest and possibly the book value per share of our current shareholders. Following completion of the conversion, we will not be restricted from issuing additional common stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any future offerings.

Our allowance for loan losses may be inadequate, which could hurt our earnings.

When borrowers default and do not repay the loans that we make to them, we may lose money. The allowance for loan losses is the amount estimated by management as necessary to cover probable losses in the loan portfolio at the statement of financial condition date. The allowance is established through the provision for loan losses, which is charged to income. Determining the amount of the allowance for loan losses necessarily involves a high degree of judgment. Among the material estimates required to establish the allowance are: loss exposure at default; the amount and timing of future cash flows on impacted loans; value of collateral; and determination of loss factors to be applied to the various elements of the portfolio. If our estimates and judgments regarding such matters prove to be incorrect, our allowance for loan losses might not be sufficient, and additional loan loss provisions might need to be made. Depending on the amount of such loan loss provisions, the adverse impact on our earnings could be material. We might increase the allowance because of changing economic conditions. For example, in a rising interest rate environment, borrowers with adjustable-rate loans could see their payments increase. There may be a significant increase in the number of borrowers who are unable or unwilling to repay their loans, resulting in our charging off more loans and increasing our allowance. In addition, when real estate values decline, the potential severity of loss on a real estate-secured loan can increase significantly, especially in the case of loans with high combined loan-to-value ratios.

The economic downturn that began in 2007 has required us to make significant additions to our allowance for loan losses. For the year ended March 31, 2008 through the year ended March 31, 2013, provisions for loan losses totaled $6.4 million. During this same period, we had net charge-offs of $5.9 million. For our most recent fiscal year ended March 31, 2013, provisions for loan losses totaled $640 thousand and net charge-offs totaled $768 thousand. At March 31, 2013, the allowance for loan losses was $1.0 million, which represented 1.2% of total loans and 16.3% of non-performing loans. A large loss could deplete the allowance and require substantial provisions to replenish the allowance, which would negatively affect earnings.

14

In addition, bank regulators may require us to make a provision for loan losses or otherwise recognize further loan charge-offs following their periodic review of our loan portfolio, our underwriting procedures, and our loan loss allowance. Any increase in our allowance for loan losses or loan charge-offs as required by such regulatory authorities could have a material adverse effect on our financial condition and results of operations. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies – Allowance for Loan Losses” for a discussion of the procedures we follow in establishing our loan loss allowance.

Our previous emphasis on commercial lending may expose us to increased lending risks.

At March 31, 2013, $13.6 million, or 15.2%, of our loan portfolio consisted of commercial and multi-family real estate loans and commercial business loans, down from $18.6 million at March 31, 2012 and $32.2 million at March 31, 2008. Of these loans, $3.3 million were non-performing at March 31, 2013. These types of loans generally expose a lender to greater risk of non-payment and loss than one- to four-family residential mortgage loans because repayment of the loans often depends on the successful operation of the property or a business. These types of loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to one- to four-family residential mortgage loans. Commercial business loans expose us to additional risks since they typically are made on the basis of the borrower’s ability to make repayments from the cash flow of the borrower’s business and are secured by non-real estate collateral that may depreciate over time. In addition, since such loans generally entail greater risk than one- to four-family residential mortgage loans, we may need to increase our allowance for loan losses in the future to account for potential losses. We were restricted from making new commercial loans under the cease and desist order issued by the Office of Thrift Supervision on March 17, 2010. The written agreement with the OCC dated November 21, 2012 eliminated this lending restriction.

If our foreclosed real estate is not properly valued or if our reserves are insufficient, our earnings could be reduced.

We obtain updated valuations in the form of appraisals and broker price opinions when a loan has been foreclosed and the property taken in as foreclosed real estate and at certain other times during the holding period of the asset. Our net book value in the loan at the time of foreclosure and thereafter is compared to the updated fair value of the foreclosed property less estimated selling costs (fair value). A charge-off is recorded for any excess in the asset’s net book value over its fair value less estimated selling costs. If our valuation process is incorrect, or if property values decline, the fair value of our foreclosed real estate may not be sufficient to recover our carrying value in such assets, resulting in the need for additional charge-offs. In addition, bank regulators periodically review our foreclosed real estate and may require us to recognize further charge-offs. Significant charge-offs to our foreclosed real estate could have a material adverse effect on our financial condition and results of operations.

Historically low interest rates may adversely affect our net interest income and profitability.

In recent years it has been the policy of the Federal Reserve Board to maintain interest rates at historically low levels through its targeted federal funds rate and the purchase of mortgage-backed securities. As a result, market rates on the loans we have originated and the yields on securities we have purchased have been at lower levels than available prior to 2008. This has been a significant factor in the decrease in the amount of our net interest income to $4.0 million for the year ended March 31, 2013 from $4.5 million for the year ended March 31, 2012 and $4.8 million for the year ended March 31, 2011. Our ability to lower our interest expense to offset declines in asset yields is limited at current interest rate levels. The Federal Reserve Board has indicated its intention to maintain low interest rates in the near future. Accordingly, our net interest income (the difference between interest income earned on assets and interest expense paid on liabilities) may continue to decrease, which would have an adverse effect on our profitability.

Changes in interest rates may hurt our earnings and asset value.

Our net interest income is the interest we earn on loans and investment less the interest we pay on our deposits and borrowings. Our net interest margin is the difference between the yield we earn on our assets and the interest rate we pay for deposits and our other sources of funding. Changes in interest rates—up or down—could adversely affect our net interest margin and, as a result, our net interest income. Although the yield we earn on our assets and our funding costs tend to move in the same direction in response to changes in interest rates, one can rise or fall faster than the other, causing our net interest margin to expand or contract. Our liabilities tend to be shorter in duration than our assets, so they may adjust faster in response to changes in interest rates. As a result, when interest rates rise, our funding costs may rise faster than the yield we earn on our assets, causing our net interest margin to contract until the yield catches up. Changes in the slope of the “yield curve”—or the spread between short-term and long-term interest rates—could also reduce our net interest margin. Normally, the yield curve is upward sloping, meaning short-term rates are lower than long-term rates. Because our liabilities tend to be shorter in duration than our assets, when the yield curve flattens or even inverts, we could experience pressure on our net interest margin as our cost of funds increases relative to the yield we can earn on our assets. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Interest Rate Risk Management.”

15

If we conclude that the decline in value of any of our investment securities is other than temporary, we are required to write down the value of that security through a charge to earnings.

We review our investment securities portfolio at each quarter-end reporting period to determine whether the fair value is below the current carrying value. When the fair value of any of our investment securities has declined below its carrying value, we are required to assess whether the decline is other than temporary. If we conclude that the decline is other than temporary, we are required to write down the value of that security through a charge to earnings. As of March 31, 2013, our investment portfolio included securities with an amortized cost of $22.4 million and an estimated fair value of $22.5 million. Changes in the expected cash flows of these securities and/or prolonged price declines may result in our concluding in future periods that the impairment of these securities is other than temporary, which would require a charge to earnings to write down these securities to their fair value. Any charges for other-than-temporary impairment would not impact cash flow, tangible capital or liquidity.

Impairment of our deferred tax assets could require charges to earnings, which could result in a negative impact on our results of operations.

As a result of losses in prior years, we maintain a deferred tax asset (that is an asset recognized to reflect an expected benefit to be realized in the future) that may be used to reduce the amount of tax that we would otherwise be required to pay in future periods. Deferred tax assets are only recognized to the extent it is more likely than not they will be realized. Should our management determine it is not more likely than not that the deferred tax assets will be realized, a valuation allowance with a charge to earnings would be reflected in the period. At March 31, 2013, our net deferred tax asset was $1.2 million, which does not include a valuation allowance, and of which $1.1 million was disallowed for regulatory capital purposes. If we are required in the future to take a valuation allowance with respect to our deferred tax asset, our financial condition and results of operations would be negatively affected.

Strong competition within our market area could hurt our profits and slow growth.

We face intense competition in making loans, attracting deposits and hiring and retaining experienced employees. This competition has made it more difficult for us to make new loans and attract deposits. Price competition for loans and deposits sometimes results in us charging lower interest rates on our loans and paying higher interest rates on our deposits, which reduces our net interest income. Competition also makes it more difficult and costly to attract and retain qualified employees. At June 30, 2012, which is the most recent date for which data is available from the FDIC, we held 1.44% of the deposits in Burlington County, New Jersey. Many of the institutions with which we compete have substantially greater resources and lending limits than we have and may offer services that we do not provide. We expect competition to increase in the future as a result of legislative, regulatory and technological changes and the continuing trend of consolidation in the financial services industry. Our profitability depends upon our continued ability to compete successfully in our market area.

We are dependent upon the services of key executives and we could be harmed by the loss of their services.

We rely heavily on our President and Chief Executive Officer, James E. Igo, and on our Chief Financial Officer, Eva Modi. The loss of Mr. Igo or Ms. Modi could have a material adverse impact on our operations because, as a small company, we have fewer management-level personnel that have the experience and expertise to readily replace these individuals. Changes in key personnel and their responsibilities may be disruptive to our business and could have a material adverse effect on our business, financial condition, and results of operations. We do not have employment agreements with our executive officers. See “Our Management”.

If we do not rent the excess office space in our Cinnaminson branch building, it will negatively impact earnings.

Our Cinnaminson branch was designed and built to have rental units for third party tenants. Our inability to rent all of those units will necessitate that Delanco Federal cover some or all of the operating expenses for the building without the rental income to offset those expenses, thus having a negative impact on our earnings. Currently, two of the three rental units are occupied by third party tenants. The third office suite was formerly occupied by our employees is currently available for rent.

Regulation of the financial services industry is undergoing major changes, and future legislation could increase our cost of doing business or harm our competitive position.

In 2010 and 2011, in response to the financial crisis and recession that began in 2008, significant regulatory and legislative changes resulted in broad reform and increased regulation impacting financial institutions. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) has created a significant shift in the way financial institutions operate. The Dodd-Frank Act restructured the regulation of depository institutions by merging the Office of Thrift Supervision, which previously regulated Delanco Federal, into the OCC, and assigning the regulation of savings and loan holding companies, including Delanco Bancorp, to the Federal Reserve Board. The Dodd-Frank Act also created the Consumer Financial Protection Bureau to administer consumer protection and fair lending laws, a function that was formerly performed by the depository institution regulators. As required by the Dodd-Frank Act, the federal banking regulators have proposed new consolidated capital requirements that will limit our ability to borrow at the holding company level and invest the proceeds from such borrowings as capital in Delanco Federal that

16

could be leveraged to support additional growth. The Dodd-Frank Act contains various other provisions designed to enhance the regulation of depository institutions and prevent the recurrence of a financial crisis such as occurred in 2008-2009. The full impact of the Dodd-Frank Act on our business and operations will not be known for years until regulations implementing the statute are written and adopted. The Dodd-Frank Act may have a material impact on our operations, particularly through increased regulatory burden and compliance costs. Any future legislative changes could have a material impact on our profitability, the value of assets held for investment or collateral for loans. Future legislative changes could require changes to business practices or force us to discontinue businesses and potentially expose us to additional costs, liabilities, enforcement action and reputational risk.

We operate in a highly regulated environment and we may be adversely affected by changes in laws and regulations.

We are subject to extensive regulation, supervision and examination by the Federal Reserve Board and the OCC, our primary federal regulators, and by the FDIC, as insurer of our deposits. Such regulation and supervision governs the activities in which an institution and its holding company may engage and are intended primarily for the protection of the insurance fund and the depositors and borrowers of Delanco Federal rather than for holders of Delanco Bancorp common stock. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets and determination of the level of our allowance for loan losses. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material impact on our operations.

Our information systems may experience an interruption or breach in security.

We rely heavily on communications and information systems to conduct our business. Any failure, interruption, or breach in security or operational integrity of these systems could result in failures or disruptions in our customer relationship management, general ledger, deposit, loan, and other systems. While we have policies and procedures designed to prevent or limit the effect of the failure, interruption, or security breach of our information systems, we cannot assure you that any such failures, interruptions, or security breaches will not occur or, if they do occur, that they will be adequately addressed. The occurrence of any failures, interruptions, or security breaches of our information systems could damage our reputation, result in a loss of customer business, subject us to additional regulatory scrutiny, or expose us to civil litigation and possible financial liability, any of which could have a material adverse effect on our financial condition and results of operations.

Risks Related to the Offering

Our stock price may decline when trading commences.

If you purchase shares in the offering, you might not be able to sell them later at or above the $8.00 purchase price. After the shares of our common stock begin trading, the trading price of the common stock will be determined by the marketplace, and will be influenced by many factors outside of our control, including prevailing interest rates, investor perceptions and general industry, geopolitical and economic conditions.

There may be a limited market for our common stock, which may adversely affect our stock price.

Although our common stock is quoted on the OTC Bulletin Board and will be quoted on the OTC Bulletin Board following the conversion and offering, the shares are not currently actively traded and might not be actively traded in the future. If an active trading market for our common stock does not develop, you may not be able to sell all of your shares of common stock on short notice, and the sale of a large number of shares at one time could temporarily depress the market price. There also may be a wide spread between the bid and ask price for our common stock. When there is a wide spread between the bid and ask price, the price at which you may be able to sell our common stock may be significantly lower than the price at which you could buy it at that time.

Our share price may fluctuate, which may make it difficult for you to sell your common stock when you want or at prices you find attractive.

The market price of our common stock could be subject to significant fluctuations due to changes in sentiment in the market regarding our operations or business prospects. Factors that may affect market sentiment include:

• operating results that vary from the expectations of our management or investors;

• developments in our business or in the financial services sector generally;

• regulatory or legislative changes affecting our industry generally or our business and operations;

• operating and securities price performance of companies that investors consider to be comparable to us;

• announcements of strategic developments, acquisitions, dispositions, financings and other material events by us or our competitors; and

• changes in financial markets and national and local economies and general market conditions, such as interest rates and stock, commodity, credit or asset valuations or volatility.

17

Beginning in 2007 and through the present, the business environment for financial services firms has been extremely challenging. During this period, many publicly traded financial services companies have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance or prospects of such companies. We may experience market fluctuations that are not directly related to our operating performance but are influenced by the market’s perception of the state of the financial services industry in general and, in particular, the market’s assessment of general credit quality conditions, including default and foreclosure rates in the industry.

It is possible that further market and economic turmoil will occur in the near- or long-term, negatively affecting our business, financial condition and results of operations, as well as the price, trading volume and volatility of our common stock.

Additional expenses following the offering from equity benefit plans will adversely affect our profitability.

Following the offering, we will recognize additional annual employee compensation expenses stemming from additional shares purchased by our employee stock ownership plan and stock options granted to directors and executives under our 2008 Equity Incentive Plan. These additional expenses will adversely affect our profitability. We recognize expenses for our employee stock ownership plan when shares are committed to be released to participants’ accounts and will recognize expenses for stock options over the vesting period of awards made to recipients. Pro forma benefits expenses for the year ended March 31, 2013 were $20 thousand at the maximum of the offering range on an after-tax basis, as set forth in the pro forma financial information under “Pro Forma Data” assuming the $8.00 per share purchase price as fair market value. Actual expense for the employee stock ownership plan will be based on the fair market value of our common stock at the time shares are committed to be released to participants’ accounts, which may be higher or lower than $8.00 per share, and actual expense for stock options will be based on the fair value of the stock options at the time of grant. For further discussion of these plans, see “Our Management—Benefit Plans.”

We have broad discretion in allocating the proceeds of the offering. Our failure to effectively utilize such proceeds would reduce our profitability.

We intend to contribute approximately 80% of the net proceeds of the offering to Delanco Federal and to use approximately 4.5% of the net proceeds of the offering to fund the loan to the employee stock ownership plan. Delanco Federal may use the portion of the proceeds that it receives to fund new loans, invest in securities and expand its business activities. We have not allocated specific amounts of proceeds for any of these purposes, and we will have significant flexibility in determining how much of the net proceeds we apply to different uses and the timing of such applications. Our failure to utilize these funds effectively would reduce our profitability.

The certificate of incorporation and bylaws of new Delanco Bancorp and certain laws and regulations may prevent or make more difficult certain transactions, including a sale or merger of new Delanco Bancorp.

Provisions of the certificate of incorporation and bylaws of new Delanco Bancorp, state corporate law and federal banking regulations may make it more difficult for companies or persons to acquire control of new Delanco Bancorp. As a result, our shareholders may not have the opportunity to participate in such a transaction and the trading price of our common stock may not rise to the level of other institutions that are more vulnerable to hostile takeovers. The factors that may discourage takeover attempts or make them more difficult include:

• Certificate of incorporation and bylaws. Provisions of the certificate of incorporation and bylaws of new Delanco Bancorp may make it more difficult and expensive to pursue a takeover attempt that the board of directors opposes. Some of these provisions currently exist in the charter and bylaws of old Delanco Bancorp. These provisions also make more difficult the removal of current directors or management, or the election of new directors. These provisions include:

• a limitation on the right to vote shares;

• the election of directors to staggered terms of three years;

• provisions regarding the timing and content of shareholder proposals and nominations;

• provisions restricting the calling of special meetings of shareholders;

• the absence of cumulative voting by shareholders in the election of directors;

• the removal of directors only for cause; and

• supermajority voting requirements for changes to some provisions of the certificate of incorporation and bylaws.

• New Jersey anti-takeover statute. Under New Jersey law, any person who acquires more than 10% of a New Jersey corporation without approval of its board of directors is prohibited from engaging in any type of business combination with the corporation for a five-year period.

• Federal Reserve Board regulations. Federal Reserve Board regulations prohibit, for three years following the completion of a mutual-to-stock conversion, including a second-step conversion, the offer to acquire or the acquisition of more than 10% of any class of equity security of a converted institution without the prior approval of the Federal Reserve Board. See “Restrictions on Acquisition of New Delanco Bancorp.”

18

A WARNING ABOUT FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, which can be identified by the use of words such as “believes,” “expects,” “anticipates,” “estimates” or similar expressions. Forward-looking statements include, but are not limited to:

• statements of our goals, intentions and expectations;

• statements regarding our business plans, prospects, growth and operating strategies;

• statements regarding the quality of our loan and investment portfolios; and

• estimates of our risks and future costs and benefits.

These forward-looking statements are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements due to, among others, the following factors:

• our ability to maintain higher regulatory capital levels as imposed by the OCC and otherwise comply with our written agreement with the OCC;

• general economic conditions, either nationally or in our market area, that are worse than expected;

• changes in the interest rate environment that reduce our interest margins or reduce the fair value of financial instruments;

• increased competitive pressures among financial services companies;

• changes in consumer spending, borrowing and savings habits;

• legislative or regulatory changes that adversely affect our business;

• adverse changes in the securities markets; and

• changes in accounting policies and practices, as may be adopted by bank regulatory agencies or the Financial Accounting Standards Board.

Any of the forward-looking statements that we make in this prospectus and in other public statements we make may later prove incorrect because of inaccurate assumptions, the factors illustrated above or other factors that we cannot foresee. Consequently, no forward-looking statement can be guaranteed.

Further information on other factors that could affect us are included in the section captioned “Risk Factors.”

19

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The summary financial information presented below is derived in part from our consolidated financial statements. The following is only a summary and you should read it in conjunction with the consolidated financial statements and notes beginning on page F-1. The information at March 31, 2013 and 2012 and for the years then ended is derived in part from the audited consolidated financial statements that appear in this prospectus. The information at March 31, 2011 and for the year then ended is derived in part from the audited consolidated financial statements that do not appear in this prospectus. The information presented below does not include the financial condition, results of operations or other data of Delanco MHC.

	Years Ended March 31,
(Dollars in thousands, except per share data)	2013			2012			2011
Financial Condition Data:
Total assets	$	129,415		$	134,308		$	136,172
Investment securities		22,345			17,699			15,944
Loans receivable, net		88,419			99,432			103,867
Deposits		117,034			121,589			120,842
Borrowings		—			—			2,100
Total stockholders’ equity		11,395			11,743			12,213
Operating Data:
Interest income		5,101			5,891			6,693
Interest expense		1,057			1,431			1,890
Net interest income		4,044			4,460			4,803
Provision for loan losses		640			1,602			440
Net interest income after provision for loan losses		3,404			2,858			4,363
Noninterest income		49			150			134
Noninterest expenses		3,987			3,751			3,740
Income before taxes		(534	)		(743	)		757
Income tax benefit		(210	)		(249	)		289
Net income (loss)	$	(324	)	$	(494	)	$	468
Per Share Data:
Earnings (loss) per share, basic	$	(0.20	)	$	(0.31	)	$	0.30
Earnings (loss) per share, diluted		(0.20	)		(0.31	)		0.30
Weighted average shares – basic		1,589,868			1,586,664			1,583,460
Weighted average shares – diluted		1,589,868			1,586,664			1,583,460

20

	Years Ended March 31,
	2013			2012			2011
Performance Ratios:
Return on average assets		(0.25	)%		(0.37	)%		0.34	%
Return on average equity		(2.80	)		(4.04	)		3.89
Interest rate spread (1)		3.30			3.53			3.75
Net interest margin (2)		3.35			3.60			3.82
Noninterest expense to average assets		3.02			2.79			2.73
Efficiency ratio (3)		97.41			81.37			75.75
Average interest-earning assets to average interest-bearing liabilities		105.56			106.57			104.80
Average equity to average assets		8.77			9.10			8.76
Equity to assets at period end		8.80			8.74			8.97
Capital Ratios (4):
Tangible capital (to adjusted assets)		7.79			7.93			8.67
Core capital (to adjusted assets)		7.79			7.93			8.67
Total risk-based capital (to risk-weighted assets)		14.67			14.13			14.52
Asset Quality Ratios:
Allowance for loan losses as a percent of total loans		1.15			1.15			1.22
Allowance for loan losses as a percent of nonperforming loans		16.28			16.13			23.80
Net charge-offs to average outstanding loans during the period		0.81			1.68			0.15
Non-performing loans as a percent of total loans		7.08			7.16			5.14
Non-performing assets to total assets		6.81			7.06			6.33
Other Data:
Number of:
Full time equivalent employees		23			25			26
Offices		2			2			2

(1) Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of interest-bearing liabilities.

(2) Represents net interest income as a percent of average interest-earning assets.

(3) Represents noninterest expense divided by the sum of net interest income and noninterest income.

(4) Capital ratios are for Delanco Federal.

21

USE OF PROCEEDS

The following table shows how we intend to use the net proceeds of the offering. The actual net proceeds will depend on the number of shares of common stock sold in the offering and the expenses incurred in connection with the offering. Payments for shares made through withdrawals from deposit accounts at Delanco Federal will reduce Delanco Federal’s deposits and will not result in the receipt of new funds for investment. See “Pro Forma Data” for the assumptions used to arrive at these amounts.

	Minimum of Offering Range					Midpoint of Offering Range					Maximum of Offering Range					15% Above Maximum of Offering Range
(Dollars in thousands)	451,563 Shares at $8.00 per Share		Percent of Net Proceeds			531,250 Shares at $8.00 per Share		Percent of Net Proceeds			610,938 Shares at $8.00 per Share		Percent of Net Proceeds			702,579 Shares at $8.00 per Share		Percent of Net Proceeds
Offering proceeds	$	3,613				$	4,250				$	4,888				$	5,621
Less: offering expenses		870					870					870					870
Net offering proceeds		2,743		100	%		3,380		100	%		4,018		100	%		4,751		100	%
Less:
Proceeds contributed to Delanco Federal		2,194		80			2,704		80			3,214		80			3,801		80
Proceeds used for loan to employee stock ownership plan		163		6			191		6			220		6			253		5
Proceeds remaining for new Delanco Bancorp	$	386		14	%	$	485		14	%	$	584		14	%	$	697		15	%

We initially intend to invest the proceeds retained from the offering at new Delanco Bancorp in short-term investments, such as U.S. treasury and government agency securities and cash and cash equivalents. The actual amounts to be invested in different instruments will depend on the interest rate environment and new Delanco Bancorp’s liquidity requirements. In the future, new Delanco Bancorp may liquidate its investments and use those funds:

• to repurchase shares of its common stock, subject to regulatory restrictions;

• to pay dividends to shareholders, subject to regulatory restrictions; and

• for general corporate purposes, including contributing additional capital to Delanco Federal.

Under current Federal Reserve Board regulations, we may not repurchase shares of our common stock during the first year following completion of the conversion and offering, except to fund equity benefit plans other than stock options or, with prior regulatory approval, when extraordinary circumstances exist. In addition, at the request of the Federal Reserve Board, old Delanco Bancorp has adopted resolutions that prohibit it from repurchasing any shares of its stock without the prior approval of the Federal Reserve Board. New Delanco Bancorp will be subject to the resolutions upon completion of the conversion. For a discussion of our dividend policy and regulatory matters relating to the payment of dividends, see “Our Dividend Policy.”

We intend to contribute 80% of the net proceeds of the offering to Delanco Federal. Delanco Federal initially intends to invest the proceeds it receives from the offering, which is shown in the table above as the amount contributed to Delanco Federal, in short-term investments. Over time, Delanco Federal may use the proceeds that it receives from the offering:

• to fund new loans;

• to invest in securities; and

• for general corporate purposes.

We currently do not have any specific plans for any expansion or diversification activities that would require funds from this offering. Consequently, we currently anticipate that the proceeds of the offering contributed to Delanco Federal will be used to fund new loans. We expect that much of the loan growth will occur in our one—to four-family residential mortgage portfolio, but we have not allocated specific dollar amounts to any particular area of our portfolio. The amount of time that it will take to deploy the proceeds of the offering into loans will depend primarily on the level of loan demand.

Except as described above, we have no specific plans for the investment of the proceeds of the offering and have not allocated a specific portion of the proceeds to any particular use. For a discussion of our business reasons for undertaking the offering, see “The Conversion and Offering—Reasons for the Conversion and Offering.”

22

OUR DIVIDEND POLICY

Old Delanco Bancorp has never declared or paid a cash dividend on its common stock. We currently intend to retain any future earnings for use in the operation of our business and do not intend to declare or pay any cash dividends in the foreseeable future. Any determination to pay dividends on our common stock will depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our board of directors considers relevant.

New Delanco Bancorp is subject to New Jersey law, which generally permits a corporation to pay dividends on its common stock unless, after giving effect to the dividend, the corporation would be unable to pay its debts as they become due in the usual course of its business or the total assets of the corporation would be less than its total liabilities.

New Delanco Bancorp’s ability to pay dividends may depend, in part, on its receipt of dividends from Delanco Federal. The OCC and Federal Reserve Board regulations limit dividends and other distributions from Delanco Federal to us. No insured depository institution may make a capital distribution if, after making the distribution, the institution would be undercapitalized or if the proposed distribution raises safety and soundness concerns. In addition, any payment of dividends by Delanco Federal to new Delanco Bancorp that would be deemed to be drawn out of Delanco Federal’s bad debt reserves would require the payment of federal income taxes by Delanco Federal at the then current income tax rate on the amount deemed distributed. See “Federal and State Taxation—Federal Income Taxation” and note 14 of the notes to consolidated financial statements included elsewhere in this prospectus. New Delanco Bancorp does not contemplate any distribution by Delanco Federal that would result in this type of tax liability.

Under OCC regulations, an application to and the prior approval of the OCC is required prior to any capital distribution if the institution does not meet the criteria for “expedited treatment” of applications under applicable regulations (i.e., generally examination ratings in the top two categories), the total capital distributions for the calendar year exceed net income for that year plus the amount of retained net income for the preceding two years, the institution would be undercapitalized following the distribution or the distribution would otherwise be contrary to a statute, regulation or agreement with the OCC. If an application is not required, an institution must still provide prior notice to the Federal Reserve Board of the capital contribution if it is a subsidiary of a holding company. In such circumstances, notice must also be provided to the OCC. Under the terms of its written agreement with the OCC, Delanco Federal is not permitted to pay dividends without prior regulatory approval. In addition, at the request of the Federal Reserve Board, old Delanco Bancorp has adopted resolutions that prohibit it from declaring or paying any dividends or taking any dividends or other distributions that would reduce the capital of Delanco Federal without the prior written consent of the Federal Reserve Board. New Delanco Bancorp will be subject to these resolutions upon completion of the conversion.

23

MARKET FOR THE COMMON STOCK

The common stock of old Delanco Bancorp is currently quoted on the OTC Bulletin Board under the symbol “DLNO.” Upon completion of the conversion and offering, the shares of common stock of new Delanco Bancorp will replace old Delanco Bancorp’s common stock. After the offering, we intend to have the common stock of new Delanco Bancorp quoted on the OTC Bulletin Board under the symbol “DLNO.” The shares of common stock of old Delanco Bancorp and those of new Delanco Bancorp represent different economic interests and will reflect the effects of different financial results of operations and financial condition. Consequently, the market prices of the common stock of old Delanco Bancorp before the completion of the conversion and offering and the market prices of the common stock of new Delanco Bancorp after completion of the conversion and offering will be different.

The development of a public market having the desirable characteristics of depth, liquidity and orderliness depends on the existence of willing buyers and sellers, the presence of which is not within our control or that of any market maker. The number of active buyers and sellers of our common stock at any particular time may be limited, which may have an adverse effect on the price at which our common stock can be sold. There can be no assurance that persons purchasing the common stock will be able to sell their shares at or above the $8.00 price per share in the offering. Purchasers of our common stock should recognize that there are risks involved in their investment and that there may be a limited trading market in the common stock.

The following table sets forth high and low sales prices for old Delanco Bancorp’s common stock for the periods indicated.

	High		Low
Year Ending March 31, 2014:
Second Quarter	$		$
First Quarter
Year Ended March 31, 2013:
Fourth Quarter	$	5.50	$	3.10
Third Quarter		4.00		3.25
Second Quarter		4.50		3.60
First Quarter		5.00		3.10
Year Ended March 31, 2012:
Fourth Quarter	$	5.00	$	4.77
Third Quarter		5.75		4.77
Second Quarter		6.25		4.96
First Quarter		6.30		5.05

At March 31, 2013, old Delanco Bancorp had approximately 290 shareholders of record, not including those who hold shares in “street name.” On the effective date of the conversion, all publicly held shares of old Delanco Bancorp common stock, including shares held by our officers and directors, will be converted automatically into and become the right to receive a number of shares of new Delanco Bancorp common stock determined pursuant to the exchange ratio. See “The Conversion and Offering—Share Exchange Ratio for Current Shareholders.” The above table reflects actual prices and has not been adjusted to reflect the exchange ratio.

24

CAPITALIZATION

The following table presents the historical capitalization of old Delanco Bancorp at March 31, 2013 and the capitalization of new Delanco Bancorp reflecting the offering (referred to as “pro forma” information). The pro forma capitalization gives effect to the assumptions listed under “Pro Forma Data,” based on the sale of the number of shares of common stock indicated in the table. This table does not reflect the issuance of additional shares as a result of the exercise of options granted under the 2008 Equity Incentive Plan. A change in the number of shares to be issued in the offering may materially affect pro forma capitalization. We must sell a minimum of 451,563 shares to complete the offering. The information presented in the table below should be read in conjunction with the consolidated financial statements and notes thereto beginning at page F-1.

				Pro Forma Capitalization Based Upon the Sale of
	At March 31, 2013			Minimum of Offering Range 451,563 Shares at $8.00 per Share			Midpoint of Offering Range 531,250 Shares at $8.00 per Share			Maximum of Offering Range 610,938 Shares at $8.00 per Share			15% Above Maximum of Offering Range 702,579 Shares at $8.00 per Share
	(Dollars in thousands)
Deposits (1)	$	117,034		$	117,034		$	117,034		$	117,034		$	117,034
Borrowings		—			—			—			—			—
Total deposits and borrowed funds	$	117,034		$	117,034		$	117,034		$	117,034		$	117,034
Stockholders’ equity:
Preferred Stock:
5,000,000 shares, $0.01 par value per share authorized; none issued or outstanding	$	—		$	—		$	—		$	—		$	—
Common stock:
25,000,000 shares, $0.01 par value per share, authorized; specified number of shares assumed to be issued and outstanding (2)		16			8			10			11			13
Additional paid-in capital		6,571			9,322			9,958			10,594			11,326
Retained earnings (3)		5,333			5,333			5,333			5,333			5,333
Mutual holding company capital consolidation		—			96			96			96			96
Accumulated other comprehensive income (loss)		(77	)		(77	)		(77	)		(77	)		(77	)
Less:
Common stock acquired by employee stock ownership plan (4)		(449	)		(611	)		(640	)		(668	)		(701	)
Total stockholders’ equity	$	11,395		$	14,071		$	14,680		$	15,289		$	15,989
Total stockholders’ equity as a percentage of total assets		8.80	%		10.65	%		11.06	%		11.47	%		11.93	%

(1) Does not reflect withdrawals from deposit accounts for the purchase of common stock in the offering. Withdrawals to purchase common stock will reduce pro forma deposits by the amounts of the withdrawals.

(2) Reflects total issued and outstanding shares of 812,748, 956,174, 1,099,600 and 1,264,541 at the minimum, midpoint, maximum, and 15% above the maximum of the offering range, respectively.

(3) Retained earnings are restricted by applicable regulatory capital requirements.

(4) Assumes that 4.5% of the common stock sold in the offering will be acquired by the employee stock ownership plan with funds borrowed from new Delanco Bancorp. Under U.S. generally accepted accounting principles, the amount of common stock to be purchased by the employee stock ownership plan represents unearned compensation and, accordingly, is reflected as a reduction of capital. As shares are released to plan participants’ accounts, a compensation expense will be charged, along with related tax benefit, and a reduction in the charge against capital will occur. Since the funds are borrowed from new Delanco Bancorp, the borrowing will be eliminated in consolidation and no liability or interest expense will be reflected in the financial statements of new Delanco Bancorp. See “Our Management—Benefit Plans—Employee Stock Ownership Plan.”

25

REGULATORY CAPITAL COMPLIANCE

At March 31, 2013, Delanco Federal exceeded all regulatory capital requirements necessary to be considered a “well-capitalized” bank, but was classified as “adequately capitalized” because it was subject to a written agreement with the OCC. The following table presents Delanco Federal’s capital position relative to its regulatory capital requirements at March 31, 2013, on a historical and a pro forma basis. The amounts on the lines labeled “Requirement” reflect the amounts necessary to be considered “well-capitalized” under applicable federal regulations. Delanco Federal is subject to an individual minimum capital requirement imposed by the OCC that requires Delanco Federal to maintain a Tier 1 leverage capital ratio of at least 8%, a Tier 1 risk-based capital ratio of at least 12% and a total risk-based capital ratio of at least 13%. The table reflects receipt by Delanco Federal of 80% of the net proceeds of the offering. For purposes of the table, the amount expected to be borrowed by the employee stock ownership plan has been deducted from pro forma regulatory capital. For a discussion of the assumptions underlying the pro forma capital calculations presented below, see “Use of Proceeds,” “Capitalization” and “Pro Forma Data.” The definitions of the terms used in the table are those provided in the capital regulations issued by the OCC. For a discussion of the capital standards applicable to Delanco Federal, see “Regulation and Supervision—Federal Banking Regulation—Capital Requirements.”

						Pro Forma at March 31, 2013
	Historical at March 31, 2013					Minimum of Offering Range 451,563 Shares at $8.00 per Share						Midpoint of Offering Range 531,250 Shares at $8.00 per Share						Maximum of Offering Range 610,938 Shares at $8.00 per Share						15% Above Maximum of Offering Range 702,579 Shares at $8.00 per Share
	Amount		Percent of  Assets (1)			Amount			Percent of Assets			Amount			Percent of Assets			Amount			Percent of Assets			Amount			Percent of Assets
	(Dollars in thousands)
Total equity under generally accepted accounting principles	$	11,082		8.56	%	$	13,113			9.95	%	$	13,595			10.28	%	$	14,076			10.60	%	$	14,630			10.97	%
Tier 1 leverage capital:
Actual	$	10,007		7.79	%	$	12,038			9.21	%	$	12,520			9.55	%	$	13,001			9.87	%	$	13,555			10.25	%
Requirement		6,423		5.00			6,533			5.00			6,558			5.00			6,584			5.00			6,613			5.00
Excess	$	3,584		2.79	%	$	5,505			4.21	%	$	5,962			4.55	%	$	6,417			4.87	%	$	6,942			5.25	%
Tier 1 risk-based capital:
Actual (2)	$	10,007		13.41	%	$	12,038			16.04	%	$	12,520			16.66	%	$	13,001			17.28	%	$	13,555			17.99	%
Requirement		4,476		6.00			4,503			6.00			4,509			6.00			4,515			6.00			4,522			6.00
Excess	$	5,531		7.41	%	$	7,535			10.04	%	$	8,011			10.66	%	$	8,486			11.28	%	$	9,033			11.99	%
Total risk-based capital:
Actual (2)	$	10,941		14.67	%	$	12,972			17.29	%	$	13,454			17.90	%	$	13,935			18.52	%	$	14,489			19.23	%
Requirement		7,460		10.00			7,504			10.00			7,514			10.00			7,525			10.00			7,536			10.00
Excess	$	3,481		4.67	%	$	5,468			7.29	%	$	5,940			7.90	%	$	6,410			8.52	%	$	6,953			9.23	%
Reconciliation of capital contributed to Delanco Federal:
Net proceeds contributed to Delanco Federal						$	2,194					$	2,704					$	3,214					$	3,801
Less common stock acquired by ESOP							(163	)					(191	)					(220	)					(253	)
Pro forma increase in GAAP and regulatory capital						$	2,031					$	2,513					$	2,994					$	3,548

(1) Tier 1 leverage capital levels are shown as a percentage of adjusted total assets of $128.5 million. Risk-based capital levels are shown as a percentage of risk-weighted assets of $74.6 million.

(2) Pro forma amounts and percentages include capital contributed to Delanco Federal from the offering and assume net proceeds are invested in assets that carry a 20% risk-weighting.

26

PRO FORMA DATA

The following tables illustrate the pro forma impact of the conversion and offering on our net income and stockholders’ equity based on the sale of common stock at the minimum, the midpoint, the maximum and 15% above the maximum of the offering range. The actual net proceeds from the sale of the common stock cannot be determined until the offering is completed. Net proceeds indicated in the following tables are based upon the following assumptions, although actual expenses may vary from these estimates:

• All of the shares of common stock will be sold in the subscription and community offerings;

• Our employee stock ownership plan will purchase a number of shares equal to 4.5% of the shares sold in the offering with a loan from new Delanco Bancorp that will be repaid in equal installments over 14 years;

• Total expenses of the offering, including selling agent fees and expenses, will be approximately $870,000.

Pro forma net income for the year ended March 31, 2013 has been calculated as if the offering were completed at the beginning of the period, and the net proceeds had been invested at 0.77%, which represents the rate of the five-year United States Treasury security at March 31, 2013. We believe that the rate of the five-year United States Treasury security represents a more realistic yield on the investment of the offering proceeds than the arithmetic average of the weighted average yield earned on our interest-earning assets and the weighted average rate paid on our deposits, which is the reinvestment rate required by Federal Reserve Board regulations.

A pro forma after-tax return of 0.46% is used for the year ended March 31, 2013, after giving effect to a combined federal and state income tax rate of 40%. The actual rate experienced by new Delanco Bancorp may vary. Historical and pro forma per share amounts have been calculated by dividing historical and pro forma amounts by the number of shares of common stock indicated in the tables.

When reviewing the following tables you should consider the following:

• Since funds on deposit at Delanco Federal may be withdrawn to purchase shares of common stock, those funds will not result in the receipt of new funds for investment. The pro forma tables do not reflect withdrawals from deposit accounts.

• Historical per share amounts have been computed as if the shares of common stock expected to be issued in the offering had been outstanding at the beginning of the period covered by the table. However, neither historical nor pro forma stockholders’ equity has been adjusted to reflect the investment of the estimated net proceeds from the sale of the shares in the offering or the additional employee stock ownership plan expense.

• Pro forma stockholders’ equity (“book value”) represents the difference between the stated amounts of our assets and liabilities. Book value amounts do not represent fair market values or amounts available for distribution to shareholders in the unlikely event of liquidation. The amounts shown do not reflect the federal income tax consequences of the restoration to income of Delanco Federal’s special bad debt reserves for income tax purposes or liquidation accounts, which would be required in the unlikely event of liquidation. See “Federal and State Taxation.”

• The amounts shown as pro forma stockholders’ equity per share do not represent possible future price appreciation of our common stock.

The following pro forma data, which is based on old Delanco Bancorp’s stockholders’ equity at March 31, 2013 and net income for the year ended March 31, 2013, may not represent the actual financial effects of the offering or our operating results after the offering. The pro forma data relies exclusively on the assumptions outlined above and in the notes to the pro forma tables. The pro forma data does not represent the fair market value of our common stock, the current fair market value of our assets or liabilities, or the amount of money that would be available for distribution to shareholders if we were to be liquidated after the conversion.

27

At or For the Year Ended March 31, 2013

	Minimum of Offering Range			Midpoint of Offering Range			Maximum of Offering Range			15% Above Maximum of Offering Range
	451,563 Shares at $8.00 per Share			531,250 Shares at $8.00 per Share			610,938 Shares at $8.00 per Share			702,579 Shares at $8.00 per Share
	(Dollars in thousands, except per share amounts)
Gross proceeds	$	3,613		$	4,250		$	4,888		$	5,621
Plus: shares issued in exchange for shares of old Delanco Bancorp		2,889			3,399			3,909			4,496
Pro forma market capitalization		6,502			7,649			8,797			10,116
Gross proceeds	$	3,613		$	4,250		$	4,888		$	5,621
Less: estimated expenses		870			870			870			870
Estimated net proceeds		2,743			3,380			4,018			4,751
Less: common stock acquired by employee stock ownership plan (1)		(163	)		(191	)		(220	)		(253	)
Assets acquired from mutual holding company		96			96			96			96
Net proceeds	$	2,676		$	3,285		$	3,894		$	4,594
Pro Forma Net Income:
Pro forma net income (loss):
Historical	$	(324	)	$	(324	)	$	(324	)	$	(324	)
Pro forma income on net proceeds		12			15			18			21
Pro forma income on assets from mutual holding company		—			—			—			—
Less: pro forma employee stock ownership plan expense (1)		(7	)		(8	)		(9	)		(11	)
Less: pro forma stock option expense (2)		(11	)		(11	)		(11	)		(11	)
Pro forma net income (loss)	$	(330	)	$	(328	)	$	(327	)	$	(325	)
Pro forma net income per share:
Historical	$	(0.43	)	$	(0.37	)	$	(0.32	)	$	(0.27	)
Pro forma income on net proceeds		0.02			0.02			0.02			0.02
Less: pro forma employee stock ownership plan expense (1)		(0.01	)		(0.01	)		(0.01	)		(0.01	)
Less: pro forma stock option expense (2)		(0.01	)		(0.01	)		(0.01	)		(0.01	)
Pro forma net income (loss) per share	$	(0.43	)	$	(0.37	)	$	(0.32	)	$	(0.27	)
Offering price as a multiple of pro forma net income per share		N/M			N/M			N/M			N/M
Number of shares used to calculate pro forma net income (loss) per share (3)		761,740			896,166			1,030,590			1,185,180
Pro Forma Stockholders’ equity:
Pro forma stockholders’ equity (book value):
Historical	$	11,395		$	11,395		$	11,395		$	11,395
Assets received from mutual holding company		96			96			96			96
Estimated net proceeds		2,743			3,380			4,018			4,751
Less: common stock acquired by employee stock ownership plan (1)		(163	)		(191	)		(220	)		(253	)
Pro forma stockholders’ equity	$	14,071		$	14,680		$	15,289		$	15,989
Pro forma stockholders’ equity per share:
Historical	$	14.02		$	11.92		$	10.36		$	9.00
Assets received from mutual holding company		0.12			0.10			0.09			0.08
Estimated net proceeds		3.37			3.53			3.65			3.76
Less: common stock acquired by employee stock ownership plan (1)		(0.20	)		(0.20	)		(0.20	)		(0.20	)
Pro forma stockholders’ equity per share	$	17.31		$	15.35		$	13.90		$	12.64
Offering price as a percentage of pro forma stockholders’ equity per share		46.22	%		52.12	%		57.55	%		63.29	%
Number of shares used to calculate pro forma stockholders’ equity per share (3)		812,748			956,174			1,099,600			1,264,541

(1) Assumes that the employee stock ownership plan will acquire a number of shares of stock equal to 4.5% of the shares sold in the offering (20,320, 23,906, 27,492, and 31,616 shares at the minimum, midpoint, maximum and 15% above the maximum of the offering range, respectively). The employee stock ownership plan will borrow the funds to acquire these shares from the proceeds retained by new Delanco Bancorp. The amount of this borrowing has been reflected as a reduction from gross proceeds to determine estimated net proceeds. This borrowing will have an interest rate equal to the prime rate as published in The Wall Street Journal, which is currently 3.25%, which will be fixed at the time of the offering and be for a term of 14 years. Delanco Federal intends to make contributions to the employee stock ownership plan in amounts at least equal to the principal and interest requirement of the debt. As the debt is paid down, shares will be released for allocation to participants’ accounts and stockholders’ equity will be increased.

28

The adjustment to pro forma net income for the employee stock ownership plan reflects the after-tax compensation expense associated with the plan. Applicable accounting principles require that compensation expense for the employee stock ownership plan be based upon shares committed to be released and that unallocated shares be excluded from earnings per share computations. An equal number of shares (1/14 of the total, based on a 14-year loan) will be released each year over the term of the loan. The valuation of shares committed to be released would be based upon the average market value of the shares during the year, which, for purposes of the pro forma tables, was assumed to be equal to the $8.00 per share purchase price. If the average market value per share is greater than $8.00 per share, total employee stock ownership plan expense would be greater. See “Our Management—Benefit Plans—Employee Stock Ownership Plan.”

(2) The adjustment to pro forma net income for stock options reflects the after-tax compensation expense associated with the 24,000 stock options that will be granted under the 2008 Equity Incentive Plan upon completion of the conversion. Compensation cost relating to share-based payment transactions will be recognized in the financial statements over the period the employee is required to provide services for the award. The cost will be measured based on the fair value of the equity instruments issued. Applicable accounting standards do not prescribe a specific valuation technique to be used to estimate the fair value of employee stock options. For purposes of this table, the fair value of stock options to be granted upon completion of the conversion has been estimated at $2.62 per option using the Black-Scholes option pricing model with the following assumptions: exercise price, $8.00; trading price on date of grant, $8.00; dividend yield, 0%; expected life, 10 years; expected volatility, 24.34%; and risk-free interest rate, 0.77%. It is assumed that stock options granted under the 2008 Equity Incentive Plan vest 20% per year, that compensation expense is recognized on a straight-line basis over the vesting period so that 20% of the value of the options awarded was an amortized expense during each year, and that the combined federal and state income tax rate was 40%. We plan to use the Black-Scholes option-pricing formula; however, if the assumptions used in the option-pricing formula are different from those used in preparing this pro forma data, the value of the stock options and the related expense would be different. The issuance of authorized but unissued shares of common stock to satisfy option exercises instead of shares repurchased in the open market would dilute the ownership interests of existing shareholders by approximately 2.1% at the maximum of the offering range.

(3) The number of shares used to calculate pro forma net income per share is equal to the total number of shares to be outstanding upon completion of the conversion less the number of shares purchased by the employee stock ownership plan not committed to be released within the one year period following the offering as adjusted to effect a weighted average over the period. The total number of shares to be outstanding upon completion of the conversion and offering includes the number of shares sold in the offering plus the number of shares issued in exchange for outstanding shares of old Delanco Bancorp common stock held by persons other than Delanco MHC. The number of shares used to calculate pro forma stockholders’ equity per share is equal to the total number of shares to be outstanding upon completion of the offering. Earnings per share calculations for the year ended March 31, 2013 assume shares issued and outstanding of 812,748, 956,174, 1,099,600, and 1,264,541 at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively, and employee stock ownership plan shares that have not been committed to be released during the one year following March 31, 2013 of 51,008, 60,008, 69,010 and 79,361 at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively.

29

OUR BUSINESS

General

Old Delanco Bancorp was organized in 2002 as a federal corporation at the direction of Delanco Federal in connection with the reorganization of Delanco Federal from the mutual form of organization to the mutual holding company form of organization. The reorganization was completed in 2002. On March 30, 2007, old Delanco Bancorp completed a minority stock offering.

Old Delanco Bancorp’s business activity is the ownership of the outstanding capital stock of Delanco Federal. Old Delanco Bancorp does not own or lease any property but instead uses the premises, equipment and other property of Delanco Federal with the payment of appropriate rental fees, as required by applicable law and regulations, under the terms of an expense allocation agreement. In the future, new Delanco Bancorp may acquire or organize other operating subsidiaries; however, there are no current plans, arrangements, agreements or understandings, written or oral, to do so.

Delanco Federal operates as a community-oriented financial institution offering traditional financial services to consumers and businesses in our market area. We attract deposits from the general public and use those funds to originate a variety of consumer and business loans.

Our website address is www.delancofsb.com. Information on our website should not be considered a part of this prospectus.

Market Area

We are headquartered in Delanco Township, New Jersey. In addition to our main office, we operate a full-service branch office in Cinnaminson, New Jersey. Delanco and Cinnaminson are in western Burlington County, New Jersey, across the Delaware River from northeastern Philadelphia. We consider Burlington County to be our primary market area.

The population of Burlington County has remained steady in recent years, while unemployment has remained high, creating challenges for the growth of our business. The 2012 estimated population of Burlington County was approximately 451,000. Burlington County’s population is projected to remain steady through 2017. The Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metropolitan statistical area, of which Burlington County is a part, is the sixth largest in the United States as of July 2012 with an estimated population of 6.0 million. The city of Philadelphia is the fifth most populous city in the United States.

Burlington County’s per capita income was $36,101 in 2011, which is less than the per capita income of $48,723 for the Philadelphia metropolitan area and greater than the per capita income of $27,915 for the United States. In recent years, Burlington County has experienced higher unemployment rates compared to the Philadelphia metropolitan area and the United States. As of March 2013, Burlington County had an unemployment rate of 8.5%, compared to 8.2% for the Philadelphia metropolitan area and 7.6% for the United States.

According to the National Association of REALTORS, the median sales price for existing single-family homes in the Philadelphia metropolitan area decreased 10.6% from $234,900 in 2007 to $210,100 in 2011 before increasing 1.6% to $213,400 in 2012. In comparison, the median sales price for existing single-family homes in the United States decreased 23.4% from $217,900 in 2007 to $166,200 in 2011 before increasing 6.4% to $176,900 in 2012.

Competition

We face significant competition for the attraction of deposits and origination of loans. Our most direct competition for deposits has historically come from the many financial institutions operating in our market area and, to a lesser extent, from other financial service companies such as brokerage firms, credit unions and insurance companies. Several large banks operate in our market area, including Bank of America, Wells Fargo & Company (formerly known as Wachovia), TD Bank and PNC Bank. These institutions are significantly larger than us and, therefore, have significantly greater resources. We also face competition for customers’ funds from money market funds, mutual funds and other corporate and government securities. At June 30, 2012, which is the most recent date for which data is available from the FDIC, we held 1.44% of the deposits in Burlington County, New Jersey.

Our competition for loans comes primarily from financial institutions in our market area and, to a lesser extent, from other financial service providers, such as mortgage companies and mortgage brokers. Competition for loans also comes from non-depository financial service companies, such as insurance companies, securities companies and specialty finance companies.

We expect competition to remain intense in the future as a result of legislative, regulatory and technological changes and the continuing trend of consolidation in the financial services industry. Technological advances, for example, have lowered barriers to entry, allowed banks to expand their geographic reach by providing services over the Internet and made it possible for non-depository

30

institutions to offer products and services that traditionally have been provided by banks. Federal law permits affiliation among banks, securities firms and insurance companies, which promotes a competitive environment in the financial services industry. Competition for deposits and the origination of loans could limit our growth in the future.

Lending Activities

One- to Four-Family Residential Loans. We offer three types of residential mortgage loans: fixed-rate loans, balloon loans and adjustable-rate loans. We offer fixed-rate mortgage loans with terms of 15, 20 or 30 years and balloon mortgage loans with terms of five, ten or 15 years. We offer adjustable-rate mortgage loans with interest rates and payments that adjust annually after an initial fixed period of one or three years. Interest rates and payments on our adjustable-rate loans generally are adjusted to a rate equal to a percentage above the one year U.S. Treasury index. The maximum amount by which the interest rate may be increased or decreased is generally 2% per adjustment period and the lifetime interest rate cap is generally 6.0% over the initial interest rate of the loan. We generally retain all of the mortgage loans that we originate, although from time to time we have sold some of the 30-year, fixed-rate mortgage loans that we originated. If we choose to sell any mortgages in the future, it would be with the servicing of the loans retained by Delanco Federal.

Borrower demand for adjustable-rate or balloon loans compared to fixed-rate loans is a function of the level of interest rates, the expectations of changes in the level of interest rates, and the difference between the interest rates and loan fees offered for fixed-rate mortgage loans as compared to the interest rates and loan fees for adjustable-rate or balloon loans. The relative amount of fixed-rate, balloon and adjustable-rate mortgage loans that can be originated at any time is largely determined by the demand for each in a competitive environment. We have seen little demand for adjustable-rate loans in the low interest rate environment that has prevailed in recent years. The loan fees, interest rates and other provisions of mortgage loans are determined by us on the basis of our own pricing criteria and competitive market conditions.

While one- to four-family residential real estate loans are normally originated with up to 30-year terms, such loans typically remain outstanding for substantially shorter periods because borrowers often prepay their loans in full either upon sale of the property pledged as security or upon refinancing the original loan. Therefore, average loan maturity is a function of, among other factors, the level of purchase and sale activity in the real estate market, prevailing interest rates and the interest rates payable on outstanding loans. We do not offer loans with negative amortization and generally do not offer interest only loans.

We will make loans with loan-to-value ratios up to 95%; however, we require private mortgage insurance for loans with a loan-to-value ratio over 80%. We require all properties securing mortgage loans to be appraised by a board-approved independent appraiser. We generally require title insurance on all first mortgage loans. Borrowers must obtain hazard insurance, and flood insurance is required for loans on properties located in a flood zone.

Commercial and Multi-Family Real Estate Loans. We have traditionally offer fixed- and adjustable-rate mortgage loans secured by a variety of commercial and multi-family real estate, such as small office buildings, warehouses, retail properties and small apartment buildings. We originate a variety of fixed- and adjustable-rate commercial real estate and multi-family real estate loans generally for terms up to five to seven years and payments based on an amortization schedule of up to 25 years. Adjustable-rate loans are typically based on the Prime Rate and the Constant Maturity Treasury rate. Loans are secured by first mortgages, and amounts generally do not exceed 80% of the property’s appraised value.

During 2006 and 2007, we expanded our lending area to all of Pennsylvania and New Jersey, with a focus on Philadelphia and southwestern New Jersey. As a result of the economic downturn we experienced a significant increase in non-performing assets, particularly in our commercial real estate portfolio. Following a change in our senior management in 2009, we restricted our out-of-market commercial lending. We were restricted from making new commercial loans under the Cease and Desist Order issued by the Office of Thrift Supervision on March 17, 2010 and, as a result, we have made few commercial and multi-family real estate loans in recent years. The written agreement with the OCC dated November 21, 2012 eliminated this lending restriction.

Construction Loans. We originate loans to individuals to finance the construction of residential dwellings. We also make construction loans for small commercial development projects. Our construction loans generally provide for the payment of interest only during the construction phase, which is usually nine months for residential properties and 12 months for commercial properties. Upon completion of the construction phase, the loan typically converts to a permanent mortgage loan and is reclassified as such. Loans generally can be made with a maximum loan to value ratio of 90% on residential construction and 80% on commercial construction, based on appraised value as if complete. Before making a commitment to fund a construction loan, we require an appraisal of the property by an independent licensed appraiser. We also will require an inspection of the property before disbursement of funds during the term of the construction loan.

31

Commercial Loans. We offer commercial business loans to professionals, sole proprietorships and small businesses in our market area. We offer installment loans for capital improvements, equipment acquisition and long-term working capital. These loans are secured by business assets other than real estate, such as business equipment and inventory, or are backed by the personal guarantee of the borrower. We originate lines of credit to finance the working capital needs of businesses to be repaid by seasonal cash flows or to provide a period of time during which the business can borrow funds for planned equipment purchases. We also offer accounts receivable lines of credit.

When making commercial business loans, we consider the financial statements of the borrower, the borrower’s payment history of both corporate and personal debt, the debt service capabilities of the borrower, the projected cash flows of the business, the viability of the industry in which the customer operates and the value of the collateral.

Consumer Loans. Our consumer loans consist primarily of home equity loans and lines of credit. We occasionally make loans secured by passbook or certificate accounts and automobile loans.

We offer home equity loans with a maximum combined loan to value ratio of 80% or less. Home equity lines of credit have adjustable rates of interest that are indexed to the Prime Rate as published by The Wall Street Journal. Home equity loans have fixed interest rates and terms that typically range from five to 15 years. Some of our home equity loans are originated as five-year balloon loans with monthly payments based on a 20- to 30-year amortization schedule.

The procedures for underwriting consumer loans include an assessment of the applicant’s payment history on other debts and ability to meet existing obligations and payments on the proposed loan. Although the applicant’s creditworthiness is a primary consideration, the underwriting process also includes a comparison of the value of the collateral, if any, to the proposed loan amount.

Loan Originations, Purchases and Sales. Loan originations come from a number of sources. The primary sources of loan originations are existing customers, walk-in traffic, advertising and referrals from customers.

From time to time, we have purchased participations in loans from the Thrift Institutions Community Investment Corporation of New Jersey to supplement our lending portfolio. Loan participations totaled $144 thousand at March 31, 2013. Loan participations are also subject to the same credit analysis and loan approvals as loans we originate. We are permitted to review all of the documentation relating to any loan in which we participate. However, in a purchased participation loan, we do not service the loan and thus are subject to the policies and practices of the lead lender with regard to monitoring delinquencies, pursuing collections and instituting foreclosure proceedings.

In the past, we have sold some of the 30-year fixed rate loans that we originated to the Federal Home Loan Bank of New York for interest risk management purposes. In recent periods we have retained all of the loans that we have originated. We may sell loans from time to time in the future to help manage our asset/liability mix and limit our interest rate risk. We intend to retain the servicing on any loans sold.

Loan Approval Procedures and Authority. Our lending activities follow written, non-discriminatory, underwriting standards and loan origination procedures established by our board of directors and management. The board of directors has granted loan approval authority to our President and Chief Executive Officer and Vice President – Lending up to prescribed limits, based on the officer’s experience and tenure. All loans over $500,000 with respect to residential mortgage loans and smaller amounts with respect to other types of loans must be approved by the loan committee of the board of directors or the full board.

Loans to One Borrower. The maximum amount that we may lend to one borrower and the borrower’s related entities is limited, by regulation, to generally 15% of our stated capital and reserves. At March 31, 2013, our regulatory limit on loans to one borrower was $1.8 million. At that date, our largest lending relationship was $1.1 million and was secured by residential real estate. This loan was performing in accordance with it terms at March 31, 2013.

Loan Commitments. We issue commitments for fixed- and adjustable-rate mortgage loans conditioned upon the occurrence of certain events. Commitments to originate mortgage loans are legally binding agreements to lend to our customers. Generally, our loan commitments expire after 60 days.

Loan Underwriting Risks

Adjustable-Rate Loans. While we anticipate that adjustable-rate loans will better offset the adverse effects of an increase in interest rates as compared to fixed-rate mortgages, an increased monthly mortgage payment required of adjustable-rate loan borrowers in a rising interest rate environment could cause an increase in delinquencies and defaults. The marketability of the underlying property also may be adversely affected in a high interest rate environment. In addition, although adjustable-rate mortgage loans make our asset base more responsive to changes in interest rates, the extent of this interest sensitivity is limited by the annual and lifetime interest rate adjustment limits.

32

Construction Loans. Construction financing is generally considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the property’s value at completion of construction and the estimated cost (including interest) of construction. During the construction phase, a number of factors could result in delays and cost overruns. If the estimate of construction costs proves to be inaccurate, we may be required to advance funds beyond the amount originally committed to permit completion of the building. If the estimate of value proves to be inaccurate, we may be confronted, at or before the maturity of the loan, with a building having a value which is insufficient to assure full repayment. If we are forced to foreclose on a building before or at completion due to a default, there can be no assurance that we will be able to recover all of the unpaid balance of, and accrued interest on, the loan as well as related foreclosure and holding costs.

Commercial and Multi-Family Real Estate Loans. Loans secured by commercial and multi-family real estate generally have larger balances and involve a greater degree of risk than one- to four-family residential mortgage loans. Of primary concern in commercial and multi-family real estate lending is the borrower’s creditworthiness and the feasibility and cash flow potential of the project. Payments on loans secured by income properties often depend on successful operation and management of the properties. As a result, repayment of such loans may be subject to a greater extent than residential real estate loans, to adverse conditions in the real estate market or the economy. To monitor cash flows on income properties, we require borrowers and loan guarantors, if any, to provide annual financial statements on commercial and multi-family real estate loans. In reaching a decision on whether to make a commercial or multi-family real estate loan, we consider and review a global cash flow analysis of the borrower and consider the net operating income of the property, the borrower’s expertise, credit history and profitability and the value of the underlying property. We have generally required that the properties securing these real estate loans have debt service coverage ratios (the ratio of earnings before debt service to debt service) of at least 1.25x. An environmental survey or environmental risk insurance is obtained when the possibility exists that hazardous materials may have existed on the site, or the site may have been impacted by adjoining properties that handled hazardous materials.

Commercial Loans. Unlike residential mortgage loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment or other income, and which are secured by real property whose value tends to be more easily ascertainable, commercial loans are of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business. As a result, the availability of funds for the repayment of commercial loans may depend substantially on the success of the business itself. Further, any collateral securing such loans may depreciate over time, may be difficult to appraise and may fluctuate in value.

Consumer Loans. Consumer loans may entail greater risk than do residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly, such as motor vehicles. In the latter case, repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan and a small remaining deficiency often does not warrant further substantial collection efforts against the borrower. Consumer loan collections depend on the borrower’s continuing financial stability, and therefore are likely to be adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.

Investment Activities

We have legal authority to invest in various types of liquid assets, including U.S. Treasury obligations, securities of various federal agencies and of state and municipal governments, mortgage-backed securities and certificates of deposit of federally insured institutions. Within certain regulatory limits, we also may invest a portion of our assets in corporate securities and mutual funds. We also are required to maintain an investment in Federal Home Loan Bank of New York and Atlantic Central Bankers Bank stock.

At March 31, 2013, our investment portfolio totaled $22.3 million, or 17.3% of total assets, and consisted primarily of mortgage-backed securities and debt securities of government sponsored enterprises.

Our investment objectives are to provide and maintain liquidity, to establish an acceptable level of interest rate and credit risk, to provide an alternate source of low-risk investments when demand for loans is weak and to generate a favorable return. Our board of directors has the overall responsibility for the investment portfolio, including approval of our investment policy. The Asset/Liability Committee is responsible for implementation of the investment policy and monitoring our investment performance. Our board of directors reviews the status of our investment portfolio on a monthly basis, or more frequently if warranted.

33

Deposit Activities and Other Sources of Funds

General. Deposits, borrowings and loan repayments are the major sources of our funds for lending and other investment purposes. Scheduled loan repayments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are significantly influenced by general interest rates and money market conditions.

Deposit Accounts. Substantially all of our depositors are residents of New Jersey. Deposits are attracted from within our market area through the offering of a broad selection of deposit instruments, including non-interest-bearing demand deposits (such as checking accounts), interest-bearing demand accounts (such as NOW and money market accounts), savings accounts and certificates of deposit. In addition to accounts for individuals, we also offer commercial checking accounts designed for the businesses operating in our market area. We do not have any brokered deposits. From time to time we promote various accounts in an effort to increase deposits.

Deposit account terms vary according to the minimum balance required, the time periods the funds must remain on deposit and the interest rate, among other factors. In determining the terms of our deposit accounts, we consider the rates offered by our competition, our liquidity needs, profitability to us, and customer preferences and concerns. We generally review our deposit mix and pricing bi-weekly. Our deposit pricing strategy has generally been to offer competitive rates and to be towards the top of the local market for rates on all types of deposit products.

Borrowings. We have the ability to utilize advances from the Federal Home Loan Bank of New York, Atlantic Central Bankers Bank and the Federal Reserve Bank of Philadelphia to supplement our investable funds. The Federal Home Loan Bank functions as a central reserve bank providing credit for member financial institutions. As a member, we are required to own capital stock in the Federal Home Loan Bank and are authorized to apply for advances on the security of such stock and certain of our mortgage loans and other assets (principally securities which are obligations of, or guaranteed by, the United States), provided certain standards related to creditworthiness have been met. Advances are made under several different programs, each having its own interest rate and range of maturities. Depending on the program, limitations on the amount of advances are based either on a fixed percentage of an institution’s net worth or on the Federal Home Loan Bank’s assessment of the institution’s creditworthiness. Atlantic Central Bankers Bank provides correspondent banking services, both credit and noncredit, to financial institutions in the Mid-Atlantic region. As a member, we are required to own capital stock in Atlantic Central Bankers Bank and are authorized to apply for advances under an unsecured line of credit. The Federal Reserve Bank of Philadelphia functions as a central reserve bank providing credit for member financial institutions. We are authorized to apply for advances on the security of such stock and certain of our mortgage loans and other assets (principally securities which are obligations of, or guaranteed by, the United States), provided certain standards related to creditworthiness have been met. At March 31, 2013, we had arrangements to borrow up to $11.4 million from the Federal Home Loan Bank of New York and $1.0 million from the Atlantic Central Bankers Bank.

Personnel

As of March 31, 2013, we had 23 full-time equivalent employees, none of whom is represented by a collective bargaining unit. We believe our relationship with our employees is good.

Subsidiaries

The only subsidiary of old Delanco Bancorp is Delanco Federal. Delanco Federal has one active subsidiary, DFSB Properties, LLC, which is the title holder for repossessed real estate.

34

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The objective of this section is to help potential investors understand our views on our results of operations and financial condition. You should read this discussion in conjunction with the financial statements and notes to the financial statements that appear at the end of this prospectus.

Overview

Our principal business is to acquire deposits from individuals and businesses in the communities surrounding our offices and to use these deposits to fund loans. We focus on providing our products and services to two segments of customers: individuals and small businesses.

We have experienced net losses of $324 thousand and $494 thousand for the years ended March 31, 2013 and 2012, respectively. Our profitability has suffered due to lower net interest income resulting from the prolonged low interest rate environment, as well as heightened provisions for loan losses, expenses for real estate owned and other problem loan expenses. For the year ended March 31, 2013, we had net interest income of $4.0 million and incurred provision expenses of $640 thousand, real estate owned expenses and losses of $340 thousand, and other problem loan expenses of $448 thousand. For the year ended March 31, 2012, we had net interest income of $4.5 million and incurred provision expenses of $1.6 million, real estate owned expenses and losses of $197 thousand, and other problem loan expenses of $203 thousand. At March 31, 2013, non-performing assets and troubled debt restructurings totaled $8.8 million, or 6.8% of total assets.

Income. Our primary source of pre-tax income is net interest income. Net interest income is the difference between interest income, which is the income that we earn on our loans and investments, and interest expense, which is the interest that we pay on our deposits and borrowings. Changes in levels of interest rates affect our net interest income.

Our earnings have been adversely affected by a shrinking net interest margin caused by the protracted low interest rate environment and its impact on earning asset yields. Our net interest margin was 3.35% for the year ended March 31, 2013, as compared to 3.60% for the year ended March 31, 2012. Our average yield on earning assets declined to 4.22% for the year ended March 31, 2013, from 4.76% for the year ended March 31, 2012 as higher yielding loans were paid off or refinanced at lower market rates and higher yielding securities were called by the issuer and replaced with lower yielding investments.

A secondary source of income is non-interest income, which is revenue that we receive from providing products and services. The majority of our non-interest income generally comes from service charges (mostly from service charges on deposit accounts). In some years, we recognize income from the sale of loans and securities. Our facility in Cinnaminson includes space that we will rent to other businesses. Currently, two of the rental units are occupied.

Allowance for Loan Losses. The allowance for loan losses is a valuation allowance for probable losses inherent in the loan portfolio. We evaluate the need to establish allowances against losses on loans on a quarterly basis. When additional allowances are necessary, a provision for loan losses is charged to earnings.

Expenses. The noninterest expenses we incur in operating our business consist of salaries and employee benefits expenses, occupancy expenses, loan expenses, data processing expenses and other miscellaneous expenses, such as office supplies, telephone, postage, advertising and professional services.

Our largest noninterest expense is salaries and employee benefits, which consist primarily of salaries and wages paid to our employees, payroll taxes, and expenses for health insurance, retirement plans and other employee benefits. We have incurred additional noninterest expenses as a result of operating as a public company. These additional expenses consist primarily of legal and accounting fees and expenses of shareholder communications and meetings. In the future, we may recognize additional annual employee compensation expenses stemming from share-based compensation. We cannot determine the actual amount of this expense at this time because applicable accounting practices require that they be based on the fair market value of the shares of common stock at specific points in the future.

Occupancy expenses, which are the fixed and variable costs of buildings and equipment, consist primarily of depreciation charges, furniture and equipment expenses, maintenance, real estate taxes and costs of utilities.

35

Our Business Strategy

Our mission is to operate and grow a profitable, independent community-oriented financial institution serving primarily retail customers and small businesses in our market areas. In pursuing our mission, our goal is to improve our capital, earnings and asset quality so that we can be released from our written agreement with the OCC. The following are key elements of our business strategy:

• Improve asset quality. Working through our problem assets remains one of our top priorities. Non-performing loans spiked significantly during the recent recession and totaled $4.4 million at March 31, 2013. Real estate owned totaled $2.5 million at the same date. Total non-performing assets and troubled debt restructurings represented 6.8% of total assets at March 31, 2013. We continue to work with delinquent borrowers to restore loans to performing status where possible and to pursue foreclosure and disposition of collateral when it is not. In January 2013, we engaged an independent third party to conduct periodic loan portfolio reviews.

• Implementing a controlled growth strategy to prudently increase profitability. We intend to pursue a controlled growth strategy for the foreseeable future, with the goal of improving the profitability of our core business through increased net interest income. We anticipate moderate growth in our one- to four-family mortgage loan portfolio and in our investment securities portfolio. To a lesser extent, we also intend to originate multi-family and commercial real estate loans and commercial business loans to provide diversification to our loan portfolio.

• Continuing our community-oriented focus. As a community-oriented financial institution, we emphasize providing exceptional customer service as a means to attract and retain customers. We believe that our community orientation is attractive to our customers and distinguishes us from the large banks that operate in our market area.

• Improve our funding mix by attracting lower cost core deposits. Core deposits (demand, money market and savings accounts) comprised 53% of our total deposits at March 31, 2013, up from 47% at March 31, 2012. We value core deposits because they represent longer-term customer relationships and a lower cost of funding compared to certificates of deposit.

Critical Accounting Policies

In the preparation of our consolidated financial statements, we have adopted various accounting policies that govern the application of accounting principles generally accepted in the United States. Our significant accounting policies are described in the notes to our financial statements.

Certain accounting policies involve significant judgments and assumptions by us that have a material impact on the carrying value of certain assets and liabilities. We consider these accounting policies to be critical accounting policies. The judgments and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Actual results could differ from these judgments and estimates under different conditions, resulting in a change that could have a material impact on the carrying values of our assets and liabilities and our results of operations.

Allowance for Loan Losses. We consider the allowance for loan losses to be a critical accounting policy. The allowance for loan losses is the amount estimated by management as necessary to cover losses inherent in the loan portfolio at the balance sheet date. The allowance is established through the provision for loan losses, which is charged to income. Determining the amount of the allowance for loan losses involves a high degree of judgment. Among the material estimates required to establish the allowance are: loss exposure at default; the amount and timing of future cash flows on impacted loans; value of collateral; and determination of loss factors to be applied to the various elements of the portfolio. All of these estimates are susceptible to significant change. Management reviews the level of the allowance at least quarterly and establishes the provision for loan losses based upon an evaluation of the portfolio, past loss experience, current economic conditions and other factors related to the collectibility of the loan portfolio. Although we believe that we use the best information available to establish the allowance for loan losses, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluation. In addition, the OCC, as an integral part of its examination process, periodically reviews our allowance for loan losses. Such agency may require us to recognize adjustments to the allowance based on its judgments about information available to it at the time of its examination. A large loss could deplete the allowance and require increased provisions to replenish the allowance, which would adversely affect earnings. See note 2 of the notes to the financial statements included in this prospectus.

Deferred Income Taxes. We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. If current available information raises doubt as to the realization of the deferred tax assets, a valuation allowance is established. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We exercise significant judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets. These judgments require us to make projections of future taxable income. The judgments and estimates we make in determining our deferred tax assets, which are inherently subjective, are reviewed on a continual basis as regulatory and business factors change.

36

The calculation of deferred taxes for GAAP capital differs from the calculation of deferred taxes for regulatory capital. For regulatory capital, deferred tax assets that are dependent upon future taxable income for realization are limited to the lesser of either the amount of deferred tax assets that the institution expects to realize within one year of the calendar quarter-end date, or 10% of Delanco Federal’s Tier I capital. As a result of this variance, our Tier I regulatory capital ratio is lower than our GAAP capital ratio by 77 basis points.

Balance Sheet Analysis

Overview. Total assets at March 31, 2013 were $129.4 million, a decrease of $4.9 million, or 3.6%, from total assets of $134.3 million at March 31, 2012. The change in the asset composition primarily reflected decreases in outstanding loans offset by an increase in investments. Total liabilities were $118.0 million, a decrease of $4.6 million, or 3.8%, from total liabilities of $122.6 million at March 31, 2012. The change in liabilities primarily reflected a decrease in higher yielding certificates of deposit as we concentrated on increasing our core deposits and chose not to match competitors’ rates on certificates of deposit. Total stockholders’ equity decreased by $349 thousand, reflecting the net loss for the year.

Loans. At March 31, 2013, total loans, net, were $88.4 million, or 68.3% of total assets. During the year ended March 31, 2013, loans decreased by $11.0 million due primarily to payoffs of residential and commercial real estate loans and the transfer of loan assets to other real estate owned. Commercial and multi-family real estate loans decreased by $4.7 million, commercial loans decreased by $314 thousand and residential loans decreased by $3.6 million. Net loans have decreased $18.8 million since March 31, 2010 as we have curtailed our lending activities to focus on working out our problem assets and managing our asset size in order to maintain our capital ratios.

Table 1: Loan Portfolio Analysis

	2013						2012						2011
March 31, (Dollars in thousands)	Amount			Percent			Amount			Percent			Amount			Percent
Real estate loans:
Residential	$	66,597			74.4	%	$	70,192			69.7	%	$	70,310			66.8	%
Commercial and multi-family		12,403			13.8			17,130			17.0			21,866			20.8
Construction		83			0.1			839			0.8			374			0.4
Total real estate loans		79,083			88.3			88,611			87.6			92,550			88.0
Commercial loans		1,166			1.3			1,480			1.5			1,736			1.6
Consumer loans:
Home equity		8,361			9.3			9,987			9.9			9,912			9.4
Other		960			1.1			1,047			1.1			1,026			1.0
Total consumer loans		9,321			10.4			11,034			11.0			10,938			10.4
Total loans		89,570			100.0	%		100,675			100.0	%		105,224			100.0	%
Net deferred loan fees		(118	)					(82	)					(71	)
Allowance for losses		(1,033	)					(1,161	)					(1,286	)
Loans, net	$	88,419					$	99,432					$	103,867

The following table sets forth certain information at March 31, 2013 regarding the dollar amount of loan principal repayments becoming due during the periods indicated. The table does not include any estimate of prepayments which significantly shorten the average life of all loans and may cause our actual repayment experience to differ from that shown below. Demand loans having no stated schedule of repayments and no stated maturity are reported as due in one year or less. The amounts shown below exclude applicable loans in process, unearned interest in consumer loans and net deferred loan costs. Our adjustable-rate mortgage loans generally do not provide for downward adjustments below the initial discounted contract rate. When market interest rates rise, the interest rates on these loans may increase based on the contract rate (the index plus the margin) exceeding the initial interest rate floor.

37

Table 2: Contractual Maturities and Interest Rate Sensitivity

March 31, 2013 (Dollars in thousands)	Real Estate Loans		Commercial Loans		Consumer Loans		Total Loans
Amounts due in:
One year or less	$	7,999	$	1,112	$	2,456	$	11,567
More than one to five years		3,812		54		3,959		7,825
More than five years		67,179		—		3,041		70,220
Total	$	78,990	$	1,166	$	9,456	$	89,612
Interest rate terms on amounts due after one year:
Fixed-rate loans	$	68,567	$	54	$	2,407	$	71,028
Adjustable-rate loans		2,424		—		4,593		7,017
Total	$	70,991	$	54	$	7,000	$	78,045

Securities. The investment securities portfolio was $22.3 million, or 17.3% of total assets, at March 31, 2013. At that date, 9.1% of the investment portfolio was invested in mortgage-backed securities, while the remainder was invested primarily in U.S. Government agency and other debt securities. The portfolio increased $4.6 million in the year ended March 31, 2013 due to the purchase of U.S. Government agency securities.

Table 3: Investment Securities

	2013				2012				2011
March 31, (Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities available for sale:
Government sponsored enterprise securities	$	2,000	$	1,985		—		—		—		—
Mutual funds		217		222	$	237	$	242	$	249	$	248
Total available for sale		2,217		2,207		237		242		249		248
Securities held to maturity:
Government sponsored enterprise securities		18,035		18,044		14,441		14,401		8,746		8,506
Municipal securities		64		64		104		104		144		144
Mortgage-backed securities		2,039		2,178		2,912		3,101		6,806		7,031
Total held to maturity		20,138		20,286		17,457		17,606		15,696		15,681
Total	$	22,355	$	22,493	$	17,694	$	17,848	$	15,945	$	15,929

The following table sets forth the stated maturities and weighted average yields of our investment securities at March 31, 2013. Approximately $703 thousand of mortgage-backed securities have adjustable interest rates and will reprice annually within the various maturity ranges. These re-pricing schedules are not reflected in the table below.

Table 4: Investment Maturities Schedule

	One Year or Less					More than One Year to Five Years					More than Five  Years to Ten Years					More than Ten Years					Total
March 31, 2013 (Dollars in thousands)	Carrying Value		Weighted Average Yield			Carrying Value		Weighted Average Yield			Carrying Value		Weighted Average Yield			Carrying Value		Weighted Average Yield			Carrying Value		Weighted Average Yield
Securities available-for-sale:
Government sponsored enterprise securities		—		—			—		—			—		—		$	1,985		2.3	%	$	1,985		2.3	%
Mutual funds		—		—			—		—			—		—			—		—			222		—
Total available for sale		—		—			—		—			—		—			1,985		2.3			2,207		—
Securities held to maturity:
Government sponsored enterprise securities		—		—		$	1,000		1.3	%	$	6,422		1.9	%		10,613		2.7			18,035		2.3
Municipal securities	$	64		2.5	%		—		—			—		—			—		—			64		2.5
Mortgage-backed securities		—		—			5		10.4			—		—			2,034		3.8			2,039		3.9
Total held to maturity		64		2.5			1,005		1.3			6,422		1.9			12,647		2.8			20,138		2.5
Total	$	64		2.5	%	$	1,005		1.3	%	$	6,422		1.9	%	$	14,632		2.8	%	$	22,345		—

Deposits. Our deposit base is comprised of demand deposits, money market and passbook accounts and time deposits. We consider demand deposits and money market and passbook accounts to be core deposits. At March 31, 2013, core deposits were 53.3% of total deposits, up from 47.4% at March 31, 2012. We do not have any brokered deposits. Total deposits decreased by $4.6 million in the year ended March 31, 2013 as core deposits increased by $4.7 million and certificates of deposit decreased by $9.3 million. During the year ended March 31, 2013, we chose not to match the highest time deposit rates in our market in an effort to reduce our funding costs.

38

Table 5: Deposits

	2013					2012					2011
March 31, (Dollars in thousands)	Amount		Percent			Amount		Percent			Amount		Percent
Noninterest-bearing demand deposits	$	6,873		5.9	%	$	4,673		3.8	%	$	4,161		3.4	%
Interest-bearing demand deposits		14,882		12.7			13,086		10.8			13,136		10.9
Savings and money market accounts		40,596		34.7			39,877		32.8			39,550		32.7
Certificates of deposit		54,683		46.7			63,953		52.6			63,995		53.0
Total	$	117,034		100.0	%	$	121,589		100.0	%	$	120,842		100.0	%

Table 6: Time Deposit Maturities of $100,000 or more

March 31, 2013 (Dollars in thousands)	Certificates of Deposit
Maturity Period
Three months or less	$	2,700
Over three through six months		2,003
Over six through twelve months		4,690
Over twelve months		6,920
Total	$	16,313

Table 7: Time deposits by rate

March 31, (Dollars in thousands)	2013		2012		2011
0.00 – 0.99%	$	22,623	$	16,314	$	5,360
1.00 – 1.99%		19,220		33,312		34,758
2.00 – 2.99%		8,035		9,821		13,226
3.00 – 3.99%		1,560		1,899		10,646
4.00 – 4.99%		245		2,607		5
Total	$	54,683	$	63,953	$	63,995

Table 8: Time deposits by rate and maturity

	Amount Due												Percent of Total Certificate Accounts
(Dollars in thousands)	Less Than One Year		More Than One Year  to Two Years		More Than Two Years  to Three Years		More Than Three  Years to Four Years		More Than Four Years		Total at March 31, 2013
0.00 – 0.99%	$	21,860	$	3,487	$	276	$	—	$	—	$	25,623		46.9	%
1.00 – 1.99%		9,554		4,838		1,044		1,040		2,744		19,220		35.1
2.00 – 2.99%		1,355		1,991		2,076		2,613		—		8,035		14.7
3.00 – 3.99%		1,390		170		—		—		—		1,560		2.9
4.00 – 4.99%		243				—		—		2		245		0.4
Total	$	34,402	$	10,486	$	3,396	$	3,653	$	2,746	$	54,683		100.0	%

39

Borrowings. We have borrowing arrangements with the FHLB and Atlantic Central Banker’s Bank to provide an additional source of liquidity. At March 31, 2013, we had no borrowings outstanding.

Table 9: Borrowings

March 31, (Dollars in thousands)	2013		2012			2011
Maximum amount outstanding at any month end during the period:
Advances		—	$	2,500		$	2,100
Average amount outstanding during the period (1):
Advances		—		458			175
Weighted average interest rate during the period (1):
Advances		—		0.33	%		0.89	%
Balance outstanding at end of period:
Advances		—		—			2,100
Weighted average interest rate at end of period:
Advances		—		—			0.89	%

(1) Averages are based on month-end balances.

Results of Operations for the Years Ended March 31, 2013 and 2012

Financial Highlights. Net loss for the year ended March 31, 2013 was $324 thousand compared to net loss of $494 thousand for the year ended March 31, 2012. Our profitability has suffered due to heightened provisions for loan losses, expenses for real estate owned and other problem loan expenses. In addition, our earnings have been adversely affected by a shrinking net interest margin caused by the protracted low interest rate environment and its impact on earning asset yields. Our net interest margin was 3.35% for the year ended March 31, 2013, as compared to 3.60% for the year ended March 31, 2012. Our average yield on earning assets declined to 4.22% for the year ended March 31, 2013, from 4.76% for the year ended March 31, 2012 as higher yielding loans were paid off or refinanced at lower market rates and higher yielding securities were called by the issuer and replaced with lower yielding investments.

Table 10: Summary Income Statements

Year Ended March 31, (Dollars in thousands)	2013			2012			2013 v. 2012			% Change
Net interest income	$	4,045		$	4,460		$	(415	)		(9.3	)
Provision for loan losses		640			1,602			(962	)		(60.0	)
Noninterest income		49			150			(101	)		(67.3	)
Noninterest expenses		3,987			3,751			236			6.3
Net income (loss)		(324	)		(494	)		170			34.4
Return on average equity		(2.8	)%		(4.04	)%
Return on average assets		(0.25	)		(0.37	)

Net Interest Income. Net interest income for the year ended March 31, 2013 was $4.0 million compared to $4.5 million for the year ended March 31, 2012, a decrease of 9.3%. The net interest margin decreased 25 basis points to 3.35% for the year ended March 31, 2013, as average interest-earning assets decreased $3.1 million while average interest-bearing liabilities decreased $2.2 million. Also contributing to the decrease in the net interest margin was a 54 basis point decrease in the average yield on interest-earning assets, which exceeded the 31 basis point decrease in the average cost of interest-bearing liabilities.

For the year ended March 31, 2013, interest income declined 13.41% compared to the prior year. Interest income on loans decreased $855 thousand as the average balance declined $97 million and the average yield declined 37 basis points. Partially offsetting lower interest income on loans, interest income on investment securities increased $65 thousand, as growth of the investment portfolio exceeded the impact of lower yields.

For the year ended March 31, 2013, interest expense declined 26.1% compared to the prior year, as the average balance of deposits decreased $1.8 million and the average rate paid decreased 31 basis points. The decrease in deposits was driven by a decrease 31 basis points. The decrease in deposits was driven by a decrease of $3.6 million in certificates of deposit, which was partially offset by increases in demand deposits and savings and money market accounts.

40

Table 11: Analysis of Net Interest Income

Year Ended March 31, (Dollars in thousands)	2013			2012			2013 v. 2012			% Change
Components of net interest income
Loans	$	4,483		$	5,338		$	(855	)		(16.0	)%
Investment securities		618			553			65			11.8
Total interest income		5,101			5,891			(790	)		(13.4	)
Deposits		1,057			1,431			(374	)		(26.1	)
Borrowings		—			—			—			—
Total interest expense		1,057			1,431			(374	)		(26.1	)
Net interest income		4,044			4,460			(416	)		(9.3	)
Average yields and rates paid
Interest-earning assets		4.22	%		4.76	%		(54	)bp
Interest-bearing liabilities		0.92			1.23			(31	)
Interest rate spread		3.30			3.53			(23	)
Net interest margin		3.35			3.60			(25	)
Average balances
Loans	$	92,900		$	102,606		$	(9,706	)		(9.5	)%
Investment securities		22,392			16,717			5,675			33.9
Earning assets		120,754			123,850			(3,096	)		(2.5	)
Interest-bearing deposits		114,389			116,218			(1,829	)		(1.6	)

Provision for Loan Losses. The allowance for loan losses is a valuation allowance for probable losses inherent in the loan portfolio. We evaluate the need to establish allowances against losses on loans on a quarterly basis. When additional allowances are necessary, a provision for loan losses is charged to earnings. Provisions for loan losses were $640 thousand in the year ended March 31, 2013 compared to $1.6 million in the year ended March 31, 2012. The provision for loan losses was primarily attributable to management’s systematic evaluation of risk associated with the loan portfolio. We had $808 thousand in charge-offs in the year ended March 31, 2013, compared to $1.8 million in charge-offs in the year ended March 31, 2012.

The allowance for loan losses was $1.0 million, or 1.15% of total loans outstanding as of March 31, 2013 as compared with $1.2 million, or 1.15% as of March 31, 2012. An analysis of the changes in the allowance for loan losses is presented under “Risk Management – Analysis and Determination of the Allowance for Loan Losses.”

Noninterest Income. Noninterest income was $49 thousand for the year ended March 31, 2013 compared to $150 thousand for the prior year. The decrease in noninterest income from the prior year was primarily due to an increase in the loss on sale of foreclosed real estate.

Table 12: Noninterest Income Summary

Year Ended March 31, (Dollars in thousands)	2013			2012			$ Change			% Change
Service charges	$	133		$	145		$	(12	)		(8.3	)%
Loss on sale of real estate owned		(152	)		(37	)		(115	)		(310.8	)
Rental income		29			22			7			31.8
Income from bank owned life insurance		6			6			—			—
Other		33			14			19			135.7
Total	$	49		$	150		$	(101	)		(67.3	)%

41

Noninterest Expense. Noninterest expense was $4.0 million for the year ended March 31, 2013 compared to $3.8 million for the prior year. The increase in noninterest expense over the prior year was primarily due to increased loan and real estate owned expenses partially offset by a decrease in FDIC insurance premiums and lower write downs of real estate owned.

Table 13: Noninterest Expense Summary

Year Ended March 31, (Dollars in thousands)	2013		2012		$ Change			% Change
Salaries and employee benefits	$	1,565	$	1,583	$	(18	)		(1.1	)%
Advertising		22		25		(3	)		(12.0	)
Office supplies, telephone and postage		100		98		2			2.0
Loan expenses		448		203		245			120.7
Occupancy expense		654		649		5			0.8
Federal deposit insurance premiums		216		283		(67	)		(23.7	)
Real estate owned – impairment losses		56		104		(48	)		(46.2	)
Data processing expenses		217		215		2			0.9
ATM expenses		28		25		3			12.0
Bank charges and fees		70		77		(7	)		(9.1	)
Insurance and surety bond premiums		80		80		—			—
Dues and subscriptions		23		26		(3	)		(11.5	)
Professional fees		248		208		40			19.2
Real estate owned expense		131		56		75			133.9
Other		129		119		10			8.4
Total	$	3,987	$	3,751	$	236			6.3	%

Income Tax Expense (Benefit). The benefit for income taxes was $209,000 for 2013, compared to a benefit of $249,000 for 2012.

42

Average Balance Sheets and Related Yields and Rates

The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting annualized average yields and costs. The yields and costs for the periods indicated are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented. For purposes of this table, average balances have been calculated using month-end balances, and nonaccrual loans are included in average balances only. Management does not believe that use of month-end balances instead of daily average balances has caused any material differences in the information presented. Loan fees are included in interest income on loans and are insignificant.

Table 14: Average Balance Tables

	2013								2012
Year Ended March 31, (Dollars in thousands)	Average Balance			Interest and Dividends		Yield/ Cost			Average Balance			Interest and Dividends		Yield/ Cost
Assets:
Interest-earning assets:
Loans	$	92,900		$	4,483		4.83	%	$	102,606		$	5,338		5.20	%
Investment securities		22,392			605		2.70			16,717			542		3.24
Other interest-earning assets		5,462			13		0.24			4,527			11		0.24
Total interest-earning assets		120,754			5,101		4.22			123,850			5,891		4.76
Noninterest-earning assets		11,356								10,575
Total assets	$	132,110							$	134,425
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing demand deposits	$	13,532			36		0.27	%	$	12,342		$	54		0.44	%
Savings and money market accounts		41,080			186		0.45			40,516			270		0.67
Certificates of deposit		59,777			835		1.40			63,360			1,108		1.75
Total interest-bearing deposits		114,389			1,057		0.92			116,218			1,432		1.23
FHLB advances		—			—		—			335			—		—
Total interest-bearing liabilities		114,389			1,057		0.92			116,553			1,432		1.23
Noninterest-bearing demand deposits		5								4
Other noninterest-bearing liabilities		6,127								5,636
Total liabilities		120,521								122,193
Retained earnings		11,589								12,232
Total liabilities and retained earnings	$	132,110							$	134,425
Net interest income				$	4,044							$	4,459
Interest rate spread							3.30								3.53
Net interest margin							3.35								3.60
Average interest-earning assets to average interest-bearing liabilities		105.56	%							106.26	%

43

Rate/Volume Analysis. The following tables set forth the effects of changing rates and volumes on our net interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). Changes due to both volume and rate have been allocated proportionally to the volume and rate changes. The net column represents the sum of the prior columns.

Table 15: Net Interest Income – Changes Due to Rate and Volume

2013 Compared to 2012 (Dollars in thousands)	Volume			Rate			Net
Interest income:
Loans receivable	$	(511	)	$	(344	)	$	(855	)
Investment securities		184			(121	)		63
Other interest-earning assets		2			—			2
Total		(325	)		(465	)		(790	)
Interest expense:
Deposits		(23	)		(352	)		(375	)
FHLB advances		—			—			—
Total		(23	)		(352	)		(375	)
Increase (decrease) in net interest income	$	(302	)	$	(113	)	$	(415	)

Risk Management

Overview. Managing risk is an essential part of successfully managing a financial institution. Our most prominent risk exposures are credit risk, interest rate risk and market risk. Credit risk is the risk of not collecting the interest and/or the principal balance of a loan or investment when it is due. Interest rate risk is the potential reduction of interest income as a result of changes in interest rates. Market risk arises from fluctuations in interest rates that may result in changes in the values of financial instruments, such as available-for-sale securities that are accounted for on a mark-to-market basis. Other risks that we face are operational risks, liquidity risks and reputation risk. Operational risks include risks related to fraud, regulatory compliance, processing errors, technology and disaster recovery. Liquidity risk is the possible inability to fund obligations to depositors, lenders or borrowers. Reputation risk is the risk that negative publicity or press, whether true or not, could cause a decline in our customer base or revenue.

Credit Risk Management. Our strategy for credit risk management focuses on having well-defined credit policies and uniform underwriting criteria and providing prompt attention to potential problem loans. In January 2013, we engaged an independent third party to conduct periodic loan portfolio reviews. See “Regulation and Supervision—Regulatory Agreement” for further information on certain regulatory directives applicable to our credit functions.

When a borrower fails to make a required loan payment, we take a number of steps to have the borrower cure the delinquency and restore the loan to current status, including contacting the borrower by letter and phone at regular intervals. When the borrower is in default, we may commence collection proceedings. If a foreclosure action is instituted and the loan is not brought current, paid in full, or refinanced before the foreclosure sale, the real property securing the loan generally is acquired at foreclosure and subsequently sold. Generally, when a consumer loan becomes 60 days past due, we institute collection proceedings and attempt to repossess any personal property that secures the loan. Management informs the board of directors monthly of the amount of loans delinquent more than 30 days, all loans in foreclosure and repossessed property that we own.

Analysis of Nonperforming and Classified Assets. We consider repossessed assets and loans that are 90 days or more past due to be nonperforming assets. Loans are generally placed on nonaccrual status when they become 90 days delinquent at which time the accrual of interest ceases and the allowance for any uncollectible accrued interest is established and charged against operations. Typically, payments received on a nonaccrual loan are applied to the outstanding principal and interest as determined at the time of collection of the loan.

Real estate that we acquire as a result of foreclosure or by deed-in-lieu of foreclosure is classified as real estate owned until it is sold. When property is acquired it is recorded at the lower of its cost, which is the unpaid balance of the loan, plus foreclosure costs, or fair market value at the date of foreclosure. Holding costs and declines in fair value after acquisition of the property result in charges against income.

44

Table 16: Nonperforming Assets

March 31, (Dollars in thousands)	2013			2012			2011
Nonaccrual loans:
Residential real estate	$	1,543		$	2,989		$	2,784
Commercial and multi-family real estate		2,303			4,255			2,374
Construction		—			—			—
Commercial		235			—			46
Home equity		287			—			189
Consumer		—			—			11
Total		4,368			7,244			5,404
Accruing loans past due 90 days or more:
Residential real estate		—			—			—
Commercial and multi-family real estate		—			—			—
Construction		—			—			—
Commercial		—			—			—
Consumer		—			—			—
Total		—			—			—
Real estate owned		2,469			846			771
Total nonperforming assets		6,837			8,090			6,175
Troubled debt restructurings		1,978			1,387			2,438
Troubled debt restructurings and total nonperforming assets	$	8,815		$	9,477		$	8,613
Total nonperforming loans to total loans		4.87	%		7.16	%		5.14	%
Total nonperforming loans to total assets		3.38	%		5.39			3.97
Total nonperforming assets and troubled debt restructurings to total assets		6.81	%		7.06			6.33

Table 17: Loan Delinquencies

	2013				2012				2011
March 31, (Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		30-59 Days Past Due		60-89 Days Past Due		30-59 Days Past Due		60-89 Days Past Due
Residential real estate	$	1,746	$	931	$	507	$	554	$	560	$	564
Commercial real estate		314		231		572		785		286		524
Commercial		—		—		269		—		84		386
Home equity		204		—		—		42		9		44
Consumer		7		—		2		40		15		5
Total	$	2,271	$	1,162	$	1,350	$	1,421	$	954	$	1,523

At March 31, 2013, we had 25 loan relationships totaling $4.4 million in nonaccrual loans as compared to 25 relationships totaling $7.2 million at March 31, 2012. During the year ended March 31, 2013, we experienced a $2.9 million net decrease in nonaccrual loans. This change reflects the transfer to real estate owned of ten loans totaling $2.1 million, the partial charge-off of six of the relationships transferred to real estate owned of $524 thousand and the return of one loan totaling $442 thousand to accruing status. These changes were partially offset by the downgrading of 11 loan relationships to nonaccrual status totaling $922 thousand during the year ended March 31, 2013. The downgraded loans consisted of eight relationships representing residential mortgages and home equity loans totaling $712 thousand and three commercial loans totaling $210 thousand.

At March 31, 2013, our real estate owned consisted of ten single family homes with a total carrying value of $1.54 million, three mixed-used properties with a total carrying value of $612 thousand, one office building with a carrying value of $185 thousand and a building lot with a total carrying value of $140 thousand. At that same date, we had 19 loans in the process of foreclosure with respect to property that had an appraised value of $3.5 million.

Interest income that would have been recorded for the year ended March 31, 2013 had non-accruing loans been current according to their original terms amounted to $277 thousand. No uncollected interest related to nonaccrual loans was included in interest income for the year ended March 31, 2013.

Federal regulations require us to review and classify our assets on a regular basis. In addition, the OCC has the authority to identify problem assets and, if appropriate, require them to be classified. There are three classifications for problem assets: substandard, doubtful and loss. “Substandard assets” must have one or more defined weaknesses and are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. This category includes other real estate owned.

45

“Doubtful assets” have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a high possibility of loss. An asset classified “loss” is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted. The regulations also provide for a “special mention” category, described as assets which do not currently expose us to a sufficient degree of risk to warrant classification but do possess credit deficiencies or potential weaknesses deserving our close attention. These are considered criticized assets. If we classify an asset as loss, we charge off an amount equal to 100% of the portion of the asset classified loss.

Table 18: Criticized/Classified Assets

March 31, (Dollars in thousands)	2013		2012		2011
Special mention assets	$	902	$	1,045	$	1,026
Substandard assets		8,249		9,313		9,639
Doubtful assets		94		—		—
Loss assets		—		—		—
Total criticized/classified assets	$	9,026	$	10,358	$	10,665

Other than disclosed in the above tables, there are no other loans that management has serious doubts about the ability of the borrowers to comply with the present loan repayment terms.

Analysis and Determination of the Allowance for Loan Losses. The allowance for loan losses is a valuation allowance for probable losses inherent in the loan portfolio. We evaluate the need to establish allowances against losses on loans on a quarterly basis. When additional allowances are necessary, a provision for loan losses is charged to earnings.

Our methodology for assessing the appropriateness of the allowance for loan losses consists of: (1) a specific valuation allowance on identified problem loans; (2) a general valuation allowance on the remainder of the loan portfolio; and (3) an unallocated component. Although we determine the amount of each element of the allowance separately, the entire allowance for loan losses is available to absorb losses in the loan portfolio.

For loans that are classified as impaired, we establish an allowance when the discounted cash flows (or collateral value or observable market price) of the loan is lower than its carrying value. We also establish a specific allowance for classified loans that do not have an individual allowance. The evaluation is based on our asset review and classified loan list.

We establish a general allowance for loans that are not classified to recognize the inherent losses associated with lending activities. This general valuation allowance is determined by segregating the loans by loan category and assigning allowance percentages to each category. The allowance percentages have been derived using percentages commonly applied under the regulatory framework for Delanco Federal and other similarly-sized institutions. The percentages may be adjusted for significant factors that, in management’s judgment, affect the collectibility of the portfolio as of the evaluation date. These significant factors may include changes in lending policies and procedures, changes in existing general economic and business conditions affecting our primary lending areas, credit quality trends, collateral value, loan volumes and concentrations, seasoning of the loan portfolio, recent loss experience in particular segments of the portfolio, duration of the current business cycle and bank regulatory examination results. The applied loss factors are reevaluated periodically to ensure their relevance in the current economic environment. An unallocated component is maintained to cover uncertainties that could affect our estimate of probable losses.

We identify loans that may need to be charged off as a loss by reviewing all delinquent loans, classified loans and other loans that management may have concerns about collectability. For individually reviewed loans, the borrower’s inability to make payments under the terms of the loan or a shortfall in collateral value would result in our charging off the loan or the portion of the loan that was impaired.

The OCC, as an integral part of its examination process, periodically reviews our allowance for loan losses. The OCC may require us to make additional provisions for loan losses based on judgments different from ours.

At March 31, 2013, our allowance for loan losses represented 1.15% of total gross loans. The allowance for loan losses decreased 11.0% from March 31, 2012 to March 31, 2013. The decrease in the allowance was primarily attributable to the decreasing outstanding loan balances.

46

The following table sets forth the breakdown of the allowance for loan losses by loan category at the dates indicated.

Table 19: Allocation of Allowance of Loan Losses

	2013					2012					2011
March 31, (Dollars in thousands)	Amount		% of Loans in Category to Total Loans			Amount		% of Loans in Category to Total Loans			Amount		% of Loans in Category to Total Loans
Residential real estate	$	485		74.4	%	$	495		69.7	%	$	447		66.8	%
Commercial and multi-family real estate		378		13.8			469		17.0			596		20.8
Construction		—		0.1			—		1.3			—		0.4
Commercial		45		1.3			41		0.8			70		1.6
Home equity		48		9.3			58		9.9			60		9.4
Consumer		77		1.1			98		1.1			113		1.0
Unallocated		—		—			—		—			—		—
Total allowance for loan losses	$	1,033		100.0	%	$	1,161		100.0	%	$	1,286		100.0	%

Although we believe that we use the best information available to establish the allowance for loan losses, future adjustments to the allowance for loan losses may be necessary and our results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations. Furthermore, while we believe we have established our allowance for loan losses in conformity with generally accepted accounting principles, there can be no assurance that regulators, in reviewing our loan portfolio, will not require us to increase our allowance for loan losses. In addition, because future events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for loan losses is adequate or that increases will not be necessary should the quality of any loans deteriorate as a result of the factors discussed above. Any material increase in the allowance for loan losses may adversely affect our financial condition and results of operations.

Table 20: Analysis of Loan Loss Experience

Year Ended March 31, (Dollars in thousands)	2013			2012			2011
Allowance at beginning of period	$	1,161		$	1,286		$	999
Provision for loan losses		640			1,602			440
Charge offs:
Residential real estate loans		26			399			—
Commercial and multi-family real estate loans		606			770			92
Construction loans		80			—			—
Commercial loans		—			46			51
Home equity loans		29			137			31
Consumer loans		67			401			32
Total charge-offs		808			1,753			206
Recoveries		40			26			53
Net charge-offs		768			1,727			153
Allowance at end of period	$	1,033		$	1,161		$	1,286
Allowance to nonperforming loans		16.30	%		13.50	%		23.80	%
Allowance to total loans outstanding at the end of the period		1.15			1.15			1.22
Net charge-offs to average loans outstanding during the period		0.83			1.68			0.15

Interest Rate Risk Management. Our earnings and the market value of our assets and liabilities are subject to fluctuations caused by changes in the level of interest rates. We manage the interest rate sensitivity of our interest-bearing liabilities and interest-earning assets in an effort to minimize the adverse effects of changes in the interest rate environment. Deposit accounts typically react more quickly to changes in market interest rates than mortgage loans because of the shorter maturities of deposits. As a result, sharp increases in interest rates may adversely affect our earnings while decreases in interest rates may beneficially affect our earnings. To reduce the potential volatility of our earnings, we have sought to improve the match between asset and liability maturities and rates, while maintaining an acceptable interest rate spread. Our strategy for managing interest rate risk emphasizes originating balloon loans or loans with adjustable interest rates and promoting core deposit products and short-term time deposits.

47

We have an Asset/Liability Management Committee to coordinate all aspects involving asset/liability management. The committee establishes and monitors the volume, maturities, pricing and mix of assets and funding sources with the objective of managing assets and funding sources to provide results that are consistent with liquidity, growth, risk limits and profitability goals.

We use an interest rate sensitivity analysis prepared by a third party vendor to review our level of interest rate risk. Economic Value of Equity (EVE) is a measure of long-term interest rate risk. This analysis measures the difference between the market values of the assets and the liabilities. In this analysis the program calculates the discounted cash flow (market value) of each category on the balance sheet under each of five rate conditions. This analysis assesses the risk of loss in market risk sensitive instruments in the event of a sudden and sustained 100 to 300 basis point increase or a 100 basis point decreases in market interest rates with no effect given to any steps that we might take to counter the effect of that interest rate movement. We measure interest rate risk by modeling the changes in EVE over a variety of interest rate scenarios. The following table presents the change in our EVE at March 31, 2013 that would occur in the event of an immediate change in interest rates based on our assumptions, with no effect given to any steps that we might take to counteract that change.

Table 21: EVE Analysis

	Economic Value of Equity (Dollars in thousands)								Economic Value of Equity as % of Market Value of Assets
Basis Point (“bp”) Change in Rates	$ Amount		$ Change			% Change			NPV Ratio			Change
300		9,842		(3,737	)		(27.5	)%		7.43	%		(282	)bp
200		11,441		(2,138	)		(15.7	)%		8.64	%		(161	)
100		13,818		239			1.8	%		10.43	%		18
0		13,579		—			—			10.25	%		—
(100)		14,744		1,165			8.6	%		11.13	%		88

The program uses certain assumptions in assessing the interest rate risk of savings associations. These assumptions relate to interest rates, loan prepayment rates, deposit decay rates, and the market values of certain assets under differing interest rate scenarios, among others. As with any method of measuring interest rate risk, certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to re-pricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate mortgage loans, have features that restrict changes in interest rates on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, expected rates of prepayments on loans and early withdrawals from certificates could deviate significantly from those assumed in calculating the table.

Liquidity Management. Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, loan repayments, maturities of and payments on investment securities and borrowings from the Federal Home Loan Bank of New York, Atlantic Central Bankers Bank and the Federal Reserve Bank of Philadelphia. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition.

We regularly adjust our investments in liquid assets based upon our assessment of (1) expected loan demand, (2) expected deposit flows, (3) yields available on interest-earning deposits and securities and (4) the objectives of our asset/liability management policy.

Our most liquid assets are cash and cash equivalents. The levels of these assets depend on our operating, financing, lending and investing activities during any given period. At March 31, 2013, cash and cash equivalents totaled $6.7 million. At March 31, 2013, we had no outstanding borrowings and had arrangements to borrow up to $11.4 million from the Federal Home Loan Bank of New York and $1.0 million from Atlantic Central Bankers Bank.

At March 31, 2013, the majority of our investment securities were classified as held to maturity. We have classified our investments in this manner, rather than as available for sale, because they were purchased primarily to provide a source of income and not to provide liquidity. We have designated a portion of our investments as available for sale in order to give us greater flexibility in the management of our investment portfolio.

A significant use of our liquidity is the funding of loan originations. At March 31, 2013, we had $212 thousand in loan commitments outstanding. In addition, we had $5.8 million in unused lines of credit. Historically, many of the lines of credit expire without being fully drawn; therefore, the total commitment amounts do not necessarily represent future cash requirements. Another significant use of our liquidity is the funding of deposit withdrawals. Certificates of deposit due within one year of March 31, 2013

48

totaled $34.4 million, or 63% of certificates of deposit. The large percentage of certificates of deposit that mature within one year reflects customers’ hesitancy to invest their funds for long periods in the recent low interest rate environment. If these maturing deposits do not remain with us, we will be required to seek other sources of funds, such as other deposits and borrowings. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit due on or before March 31, 2014. We believe, however, based on past experience that a significant portion of our certificates of deposit will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.

Our primary investing activities are the origination and purchase of loans and the purchase of securities. Our primary financing activities consist of activity in deposit accounts and Federal Home Loan Bank advances. Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our local competitors and other factors. We generally manage the pricing of our deposits to be competitive. Occasionally, we offer promotional rates on certain deposit products to attract deposits.

Old Delanco Bancorp is a separate entity apart from Delanco Federal and must provide for its own liquidity. As of March 31, 2013, old Delanco Bancorp had $312 thousand in cash and cash equivalents compared to $296 thousand as of March 31, 2012. Substantially all of old Delanco Bancorp’s cash and cash equivalents were obtained from proceeds it retained from the stock offering completed in March 2007. In addition to its operating expenses, old Delanco Bancorp may utilize its cash position for the payment of dividends or to repurchase common stock, subject to applicable restrictions.

Old Delanco Bancorp can receive dividends from Delanco Federal. Payment of such dividends to old Delanco Bancorp by Delanco Federal is limited under federal law. The amount that can be paid in any calendar year, without prior regulatory approval, cannot exceed the retained net earnings (as defined) for the year plus the preceding two calendar years. Under the terms of its written agreement with the OCC, Delanco Federal is not permitted to pay dividends without prior regulatory approval. In addition, at the request of the Federal Reserve, old Delanco Federal has adopted resolutions that prohibit it from declaring or paying any dividends or taking any dividends or other distributions that would reduce the capital of Delanco Federal without the prior written consent of the Federal Reserve.

Capital Management. We are subject to various regulatory capital requirements administered by the OCC, including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. See “Regulation and Supervision—Regulation of Federal Savings Associations—Capital Requirements,” “Regulation and Supervision—Regulatory Agreement” and note 24 of the notes to the financial statements.

Off-Balance Sheet Arrangements. In the normal course of operations, we engage in a variety of financial transactions that, in accordance with generally accepted accounting principles are not recorded in our financial statements. These transactions involve, to varying degrees, elements of credit, interest rate and liquidity risk. Such transactions are used primarily to manage customers’ requests for funding and take the form of loan commitments and lines of credit. For information about our loan commitments and unused lines of credit, see note 21 of the notes to the financial statements.

For the year ended March 31, 2013, we did not engage in any off-balance sheet transactions reasonably likely to have a material effect on our financial condition, results of operations or cash flows.

49

OUR MANAGEMENT

Board of Directors

The board of directors of new Delanco Bancorp is comprised of five persons who are elected for terms of three years, approximately one-third of whom will be elected annually. The directors of new Delanco Bancorp are the same individuals that comprise the boards of directors of old Delanco Bancorp and Delanco Federal. All of our directors are independent under the current listing standards of the Nasdaq Stock Market, except for Mr. Igo who is the Chairman of the Board, President and Chief Executive Officer of new Delanco Bancorp, old Delanco Bancorp and Delanco Federal. Unless otherwise stated, each person has held his current occupation for the last five years. Ages presented are as of March 31, 2013.

The following directors have terms ending in 2013:

John A. Latimer is the President of two insurance brokers, including The Barclay Group and J.S. Braddock Agency since 1991 and 2000, respectively. Mr. Latimer has also served as a director of Proformance Insurance Company, a subsidiary of National Atlantic Holdings Corporation (Nasdaq: NAHC). Age 50. Director since 2006.

Mr. Latimer provides the Board with significant marketing and operational knowledge through his experience as president of insurance broker entities. Mr. Latimer has considerable experience in the insurance industry and the related risk assessment practice area necessary in banking operations.

James W. Verner, currently retired, served as a Section Supervisor with the New Jersey State Department of Education from 1979 until 2011. Age 61. Director of Delanco Federal since 1978 and director of Delanco MHC and Delanco Bancorp since their formation in 2002.

Mr. Verner’s career with the New Jersey Department of Education provides the Board with organizational understanding and expertise. In addition, as an active member of the community, Mr. Verner maintains contact with and is in touch with the local consumer environment.

The following directors have terms ending in 2014:

James E. Igo has served as President and Chief Executive Officer of Delanco MHC, Delanco Bancorp and Delanco Federal Savings Bank since March 2009 and previously served as Executive Vice President and Chief Operating Officer of Delanco Bancorp and Delanco Federal Savings Bank since April 2008. Mr. Igo was appointed Chairman of the Board of Delanco MHC, Delanco Bancorp and Delanco Federal Savings Bank in June 2010. Mr. Igo previously served as senior vice president and senior loan officer of Farmers & Mechanics Bank (“FMB”) from 1992 until FMB’s acquisition by Beneficial Bank in July 2007. Mr. Igo served as senior vice president of Beneficial Bank until April 2008. Age 56.

Mr. Igo’s extensive experience in the local banking industry and involvement in business and civic organizations in the communities in which Delanco Federal serves affords the Board valuable insight regarding the business and operation of Delanco Federal. Mr. Igo’s knowledge of our business, combined with his success and strategic vision, position him well to continue to serve as our Chairman, President and Chief Executive Officer.

Renee C. Vidal is a partner in the law firm of Flaster/Greenberg P.C. in Cherry Hill, New Jersey. Prior to joining Flaster/Greenberg P.C. in January 2008, Ms. Vidal served as a partner in the law firm of Cureton Caplan, PC. Ms. Vidal began her employment with Cureton Caplan in 1994. Age 45. Director since 2006.

Ms. Vidal’s expertise as a partner in a law firm and her involvement in business and civic organizations in the communities in which Delanco Federal serves provide the Board valuable insight. Ms. Vidal’s years of providing legal counsel position her well to continue to serve as a director for the Company.

The following directors have terms ending in 2015:

Thomas J. Coleman III has been a managing partner of the law firm of Raymond, Coleman, Heinhold & Norman, LLP since 2001. Age 49. Director since 2005.

Mr. Coleman’s expertise as a partner in a law firm and his involvement in business and civic organizations in the communities in which Delanco Federal serves provide the Board valuable insight. Mr. Coleman’s years of providing legal counsel and operating a law office position him well to continue to serve as a director for the Company.

50

Executive Officers

Our executive officers are elected annually by the board of directors and serve at the board’s discretion. The following individuals currently serve as old Delanco Bancorp’s executive officers and will serve in the same positions following the conversion and the offering. The executive officers of old Delanco Bancorp are:

Name	Position
James E. Igo	Chairman, President and Chief Executive Officer
Eva Modi	Senior Vice President and Chief Financial Officer

The executive officers and key employees of Delanco Federal are:

Name	Position
James E. Igo	Chairman, President and Chief Executive Officer
Eva Modi	Senior Vice President and Chief Financial Officer
Douglas R. Allen, Jr.	Senior Vice President

Below is information regarding our officers who are not also directors. Each officer has held his or her current position for at least the last five years, unless otherwise stated. Ages presented are as of March 31, 2013.

Eva Modi has been Senior Vice President and Chief Financial Officer of Delanco MHC, Delanco Bancorp and Delanco Federal Savings Bank since March, 2009. Ms. Modi served as Vice President – Accounting of Delanco Federal Savings Bank since December, 2007. Ms. Modi was previously employed by a public accounting firm from May 2002 until November 2007 as Senior Manager. Age 52.

Douglas R. Allen, Jr. has served as Senior Vice President since March, 2010 and previously served as President, Chief Executive Officer and Chief Financial Officer of Delanco MHC, Delanco Bancorp and Delanco Federal Savings Bank from January, 2008 until March, 2010. Mr. Allen joined Delanco Federal Savings Bank in 1976. Age 65.

New Delanco Bancorp’s board of directors endorses the view that one of its primary functions is to protect shareholders’ interests by providing independent oversight of management, including the Chief Executive Officer. However, the Board does not believe that mandating a particular structure, such as a separate Chairman and Chief Executive Officer, is necessary to achieve effective oversight. The board of directors of new Delanco Bancorp is currently comprised of five directors, four of whom are independent directors under the listing standards of the Nasdaq Stock Market. The Chairman of the Board has no greater nor lesser vote on matters considered by the Board than any other director, and the Chairman does not vote on any related party transaction. All directors of new Delanco Bancorp, including the Chairman, are bound by fiduciary obligations, imposed by law, to serve the best interests of the shareholders. Accordingly, separating the offices of Chairman and Chief Executive Officer would not serve to enhance or diminish the fiduciary duties of any director of new Delanco Bancorp. The Board does not currently have a lead director.

Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputation risk. Management is responsible for the day-to-day management of risks new Delanco Bancorp faces, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the board of directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. To do this, the Chairman of the Board meets regularly with management to discuss strategy and the risks facing new Delanco Bancorp. Senior management attends the Board meetings and is available to address any questions or concerns raised by the Board on risk management and any other matters. The Chairman of the Board and independent members of the Board work together to provide strong, independent oversight of new Delanco Bancorp’s management and affairs through its standing committees and, when necessary, special meetings of independent directors.

Meetings and Committees of the Board of Directors

Old Delanco Bancorp and Delanco Federal conduct business through meetings and activities of their boards of directors and their committees. During the year ended March 31, 2013, the board of directors of old Delanco Bancorp and the board of directors of Delanco Federal each held 12 meetings. No director attended fewer than 75% of the aggregate total meetings of old Delanco Bancorp’s and Delanco Federal’s respective board of directors and the committees on which such director served during the year ended March 31, 2013.

51

Old Delanco Bancorp and Delanco Federal each currently maintain an audit committee and a compensation committee. We do not maintain a separately designated nominating committee. Based on the number of independent directors currently serving on the Board, the Company believes that the functions customarily attributable to this committee are sufficiently performed by our full board of directors.

The board of directors is responsible for the annual selection of management’s nominees for election as directors and developing and implementing policies and practices relating to corporate governance.

In connection with the completion of the conversion and offering, new Delanco Bancorp will establish an audit committee and a compensation committee. Such committees will operate in accordance with written charters approved by the board of directors.

Audit Committee. Old Delanco Bancorp maintains an Audit Committee consisting of directors James W. Verner (Chairperson), John A. Latimer and Renee C. Vidal. The Audit Committee meets periodically with independent auditors and management to review accounting, auditing, internal control structure and financial reporting matters. Each member of the Audit Committee is independent in accordance with the listing standards of the Nasdaq Stock Market. The board of directors has determined that the Audit Committee does not have a member who is an “audit committee financial expert.” While the Board recognizes that no individual Board member meets the qualifications required of an “audit committee financial expert,” the Board believes that appointment of a new director to the Board and to the Audit Committee at this time is not necessary as the level of financial knowledge and experience of the current members of the Audit Committee, including the ability to read and understand fundamental financial statements, is cumulatively sufficient to discharge adequately the Audit Committee’s responsibilities. The Audit Committee held three (3) meetings during the last fiscal year. The Audit Committee operates under a written charter which is available to the public under “Investors” at www.delancofsb.com.

Compensation Committee. Old Delanco Bancorp maintains a Compensation Committee consisting of directors John A. Latimer (Chairperson) and Thomas J. Coleman III. The Compensation Committee is responsible for all matters regarding old Delanco Bancorp’s and Delanco Federal’s employee compensation and benefit programs. The Compensation Committee reviews all compensation components for the chief executive officer and other executive officers’ compensation including base salary, annual incentive, long-term incentives/equity, benefits and other perquisites. Our chief executive officer develops recommendations for the Compensation Committee regarding the appropriate range of annual salary increases of our employees. Our chief executive officer does not participate in Compensation Committee discussions or the review of Compensation Committee documents relating to the determination of his compensation. The Compensation Committee held one meeting during the last fiscal year. The Compensation Committee does not operate under a written charter.

Director Compensation

The following table provides information regarding the compensation received by individuals who served as non-employee directors of old Delanco Bancorp and Delanco Federal during the year ended March 31, 2013. The table excludes perquisites, which did not exceed $10,000 in the aggregate for any director.

Name	Fees Earned or Paid in Cash
Thomas J. Coleman III	$	7,425
William C. Jenkins (1)	$	4,550
John A. Latimer	$	7,875
James W. Verner	$	7,775
Renee C. Vidal	$	6,975

(1) Mr. Jenkins resigned from the Boards of Directors of old Delanco Bancorp and Delanco Federal effective October 25, 2012.

Director Retirement Plan. Delanco Federal sponsors a director retirement plan for the benefit of members of the board of directors. All directors serving on or after the plan’s effective date of January 1, 2002 participate in the plan. Under the plan, following their retirement from the board of directors (upon meeting certain criteria) directors receive a monthly retirement benefit equal to 4% of their fees (including any annual retainer) multiplied by their completed years of service, up to a maximum of 80% of the final fee amount. Directors must complete at least ten years of service as an employee and/or director in order to receive a retirement benefit under the plan. Director retirement benefits are payable in equal monthly installments during the director’s lifetime, unless the director elects to receive an actuarially equivalent benefit in the form of an annuity. No benefits are payable under the plan upon a participating director’s death, unless the participant selected the annuity form of payment, in which case the director’s designated beneficiary would receive continued payments in accordance with the director’s election.

52

Meeting Fees for Non-Employee Directors. The following table sets forth the applicable fees that are paid to non-employee directors for their service on the board of directors of Delanco Federal. Directors do not receive any fees for their service on the Boards of Directors of old Delanco Bancorp or Delanco MHC. Each director receives two paid absences on an annual basis.

Board of Directors of Delanco Federal:
Fee per Board Meeting	$	625
Fee per Committee Meeting:
Executive Committee	$	275
All Other Committees	$	175

Executive Compensation

The following information is furnished for the individuals serving as named executive officers during the 2013 fiscal year.

Name and Principal Position	Year		Salary ($)		Fees Earned  or Paid in Cash ($)(1)		All Other Compensation ($)(2)		Total ($)
James E. Igo Chairman, President and Chief Executive Officer		2013 2012	$	160,192 148,462	$	7,425 6,575	$	2,458 4,380	$	170,075 159,417
Eva Modi Chief Financial Officer		2013 2012	$	113,782 101,346	$	—   —	$	1,736 3,178	$	115,518 104,524

(1) Reflects the amount of fees earned for service as a director.

(2) Reflects the amount paid by old Delanco Bancorp for life insurance premiums and the market value of ESOP allocations.

Employment Agreements. We currently have no employment agreements with any of our employees.

Employee Severance Compensation Plan. Delanco Federal currently maintains the Delanco Federal Savings Bank Employee Severance Compensation Plan. The plan provides severance benefits to eligible employees who terminate employment in connection with a change in control of Delanco Federal or old Delanco Bancorp. Employees are eligible for severance benefits under the plan if they complete a minimum of one year of service and do not enter into an employment or change in control agreement with Delanco Federal or old Delanco Bancorp. Under the severance plan, if, within 12 months after a change in control, an employee is involuntarily terminated, or terminates voluntarily under specified circumstances, the terminated employee will receive a severance payment equal to two weeks of compensation for each year of service, up to a maximum of six months of base compensation; however, employees who hold the title of Vice President or above will receive a severance benefit equal to twelve months of base compensation.

Benefit Plans

Cash/Deferred Profit Sharing Plan. Delanco Federal currently maintains the Delanco Federal Savings Bank Cash/Deferred Profit Sharing Plan, a tax-qualified defined contribution plan, for substantially all employees of Delanco Federal who have attained age 21 and completed one year of service. Eligible employees may contribute up to 25% of their compensation to the plan on a pre-tax basis, subject to the limitations imposed by the Internal Revenue Code. For 2013, the limit is $17,500; provided, however, that participants over age 50 may contribute an additional $5,000 per year as “catch-up” contributions. Under the plan, Delanco Federal may make additional profit sharing contributions on an annual basis up to 10% of the annual compensation of each employee. No employer contributions have been made since 2006.

Employee Stock Ownership Plan. Delanco Federal sponsors the Delanco Federal Employee Stock Ownership Plan (the “ESOP”). Employees become eligible to participate in the ESOP upon the attainment of age 21 and the completion of one year of service.

The trustee, on behalf of the ESOP, will subscribe for up to 4.5% of the number of shares of common stock sold in the conversion (20,320, 23,906, 27,492 and 31,616 shares at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively). We anticipate that the ESOP will fund its purchase in the offering through a loan from new Delanco Bancorp. The loan amount will equal 100% of the aggregate purchase price of the common stock, and will be repaid principally through Delanco Federal’s contributions to the ESOP and dividends payable on common stock held by the ESOP over the anticipated 14-year term of the loan. The interest rate for the ESOP loan is expected to be the prime rate, as published in The Wall Street Journal on the closing date of the offering. See “Pro Forma Data.”

53

The trustee will hold the shares purchased by the ESOP in a loan suspense account. Shares will be released from the suspense account on a pro rata basis as Delanco Federal repays the ESOP loan. The trustee will allocate the shares released among participants on the basis of each participant’s proportional share of compensation. Participants vest in employer contributions over a six-year graded vesting schedule, at the rate of 10% during each of the first two years of service and 20% per year thereafter. Vesting credits for prior service will be given to reward long-term employees. Participants also fully vest upon their attainment of age 65, death or disability, a change in control, or the termination of the ESOP. Participants may receive distributions of their vested benefits from the ESOP upon leaving the employ of Delanco Federal. Any unvested shares forfeited upon a participant’s termination of employment will be reallocated among remaining participants in accordance with the terms of the ESOP.

Participants may direct the trustee regarding the voting of common stock allocated to their ESOP accounts. The trustee will vote all allocated shares held in the ESOP as instructed by participants. The trustee will vote unallocated shares, as well as allocated shares for which no participant instructions are received, in the same ratio as those shares for which participants provide timely instructions, subject to the overall fiduciary responsibilities of the trustee.

Under the terms of our ESOP, upon a change in control (as defined in the plan), the plan trustee will repay in full any outstanding acquisition loan. After repayment of the acquisition loan, all remaining shares of our stock held in the loan suspense account, all other stock or securities, and any cash proceeds from the sale or other disposition of any shares of our stock held in the loan suspense account will be allocated among the accounts of all participants in the plan who were employed by us on the date immediately preceding the effective date of the change in control. The allocations of shares or cash proceeds shall be credited to each eligible participant in proportion to the opening balances in their accounts as of the first day of the valuation period in which the change in control occurred.

Under applicable accounting requirements, Delanco Federal will record a compensation expense for the ESOP equal to the fair market value of the shares when they are committed to be released from the suspense account.

2008 Equity Incentive Plan

The Delanco Bancorp, Inc. 2008 Equity Incentive Plan was adopted by our board of directors and approved by our shareholders in August 2008. The 2008 Equity Incentive Plan authorized the granting of up to 80,101 stock options and 32,040 shares of restricted stock. The purpose of the 2008 Equity Incentive Plan is to promote old Delanco Bancorp’s success by linking the personal interests of its employees, officers and directors to those of old Delanco Bancorp’s shareholders, and by providing participants with an incentive for outstanding performance. The 2008 Equity Incentive Plan is further intended to provide flexibility to old Delanco Bancorp in its ability to motivate, attract, and retain the services of employees, officers and directors upon whose judgment, interest, and special effort the successful conduct of old Delanco Bancorp’s operation is largely dependent. The 2008 Equity Incentive Plan is administered by old Delanco Bancorp’s board of directors, which has the authority to determine the eligible directors or employees to whom awards are to be granted, the number of awards to be granted, the vesting of the awards and the conditions and limitations of the awards.

As of March 31, 2013, no options or stock awards had been granted under the 2008 Equity Incentive Plan and 80,101 stock options and 32,040 shares of restricted stock remained available for issuance. Upon completion of the conversion, options to purchase a total of 24,000 shares of common stock at the $8.00 offering price will be granted to our directors and certain of our key employees under our 2008 Equity Incentive Plan, which will be assumed by new Delanco Bancorp. Of this amount, options to purchase 1,000 shares will be granted to each of our non-employee directors and options will be granted to our executive officers as follows: James E. Igo, 10,000; and Eva Modi, 5,000. All of such options will expire on the tenth anniversary of the date of grant and will become exercisable in equal 20% installments on each anniversary of the grant date, commencing with the first anniversary thereof. We will incur additional compensation expense as a result of the stock option awards. See “Pro Forma Data” for an illustration of the effects of these awards. We do not intend to grant any restricted stock awards under the 2008 Equity Incentive Plan until we are able to repurchase shares in the open market to offset the awards. In the event that awards are made pursuant the 2008 Equity Incentive Plan, all participants fully vest in shares granted to them upon their death or disability and upon a change in control.

Transactions with Related Persons

The Sarbanes-Oxley Act of 2002 generally prohibits loans by new Delanco Bancorp to its executive officers and directors. However, the Sarbanes-Oxley Act contains a specific exemption from such prohibition for loans by Delanco Federal to its executive officers and directors in compliance with federal banking regulations. Federal regulations require that all loans or extensions of credit to executive officers and directors of insured financial institutions must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and must not involve more than the normal risk of repayment or present other unfavorable features. Delanco Federal is therefore prohibited from making any new loans or extensions of credit to executive officers and directors at different rates or terms than those offered to the general public. Notwithstanding this rule, federal regulations permit Delanco Federal to make loans to executive officers and directors at reduced interest rates if the loan is made under a benefit program generally available to all other employees and does not give preference to any executive officer or director over any other employee.

54

Delanco Federal maintains a program that enables all full-time employees to obtain a residential mortgage loan on a primary residence at a reduction of 1% from the rates available to the public for as long as the officer remains in the employ of Delanco Federal. Douglas R. Allen, Jr., Senior Vice President of Delanco Federal, has a mortgage loan from Delanco Federal that was made under this program at a rate of 2.875%. The largest amounts of principal outstanding during the 2012 and 2013 fiscal years on this loan were approximately $184,781 and $180,844, respectively, and the outstanding balances at March 31, 2012 and March 31, 2013 were $180,843 and $176,751, respectively. The total principal and interest paid on this loan during the 2012 and 2013 fiscal years was $3,937 and $7,091 and $4,093 and $6,936, respectively.

In accordance with banking regulations, the board of directors reviews all loans made to a director or executive officer in an amount that, when aggregated with the amount of all other loans to such person and his or her related interests, exceed the greater of $25,000 or 5% of Delanco Federal’s capital and surplus (up to a maximum of $500,000) and such loan must be approved in advance by a majority of the disinterested members of the board of directors.

Indemnification for Directors and Officers

New Delanco Bancorp’s certificate of incorporation provides that new Delanco Bancorp must indemnify all directors and officers of new Delanco Bancorp against all expenses and liabilities reasonably incurred by them in connection with or arising out of any action, suit or proceeding in which they may be involved by reason of their having been a director or officer of new Delanco Bancorp. Such indemnification may include the advancement of funds to pay for or reimburse reasonable expenses incurred by an indemnified party. Except insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of new Delanco Bancorp pursuant to its certificate of incorporation or otherwise, new Delanco Bancorp has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.

55

STOCK OWNERSHIP

The following table provides information as of June 1, 2013 about the persons known to us to be the beneficial owners of more than 5% of old Delanco Bancorp’s outstanding common stock. A person may be considered to beneficially own any shares of common stock over which he or she has, directly or indirectly, sole or shared voting or investing power.

Name and Address	Number of Shares Owned		Percent of Common Stock Outstanding
Delanco MHC		899,099		55.0	%
615 Burlington Avenue Delanco, New Jersey 08075

The following table provides information about the shares of old Delanco Bancorp common stock that may be considered to be owned by each director of old Delanco Bancorp, each executive officer named in the summary compensation table and by all directors and executive officers of old Delanco Bancorp as a group as of June 1, 2013. A person may be considered to own any shares of common stock over which he or she has, directly or indirectly, sole or shared voting or investment power. Unless otherwise indicated, each of the named individuals has sole voting and investment power with respect to the shares shown. The number of shares beneficially owned by all directors and executive officers as a group totaled 3.9% of our outstanding common stock as of June 1, 2013. Each director owned less than 1.0% of our outstanding common stock as of that date, except for Mr. Igo who owned 1.2% of our common stock.

Name	Number of Shares Owned
Thomas J. Coleman III		10,947
James E. Igo		19,076	(1)
John A. Latimer		7,500
Eva Modi		3,447	(1)
James W. Verner		10,400	(2)
Renee C. Vidal		5,000
All directors and executive officers as a group (7 persons)		63,272

(1) Includes 2,030 and 1,447 allocated shares held in ESOP trust for Mr. Igo and Ms. Modi, respectively, which are voted by the ESOP trustee.

(2) Includes 4,210 shares held by spouse’s IRA.

56

SUBSCRIPTIONS BY EXECUTIVE OFFICERS AND DIRECTORS

The table below sets forth, for each of our directors and named executive officers and for all of the directors and named executive officers as a group, the following information:

• the number of shares of new Delanco Bancorp common stock to be received in exchange for shares of old Delanco Bancorp common stock upon consummation of the conversion and the offering, based upon their beneficial ownership of old Delanco Bancorp common stock as of June 1, 2013;

• the proposed purchases of new Delanco Bancorp common stock, assuming sufficient shares are available to satisfy their subscriptions; and

• the total amount of new Delanco Bancorp common stock to be held upon consummation of the conversion and the offering.

In each case, it is assumed that shares are sold and the exchange ratio is calculated at the midpoint of the offering range. No individual has entered into a binding agreement to purchase these shares and, therefore, actual purchases could be more or less than indicated. Directors and executive officers and their associates may not purchase more than 33.0% of the shares sold in the offering. Like all of our depositors, our directors and officers have subscription rights based on their deposits. For purposes of the following table, sufficient shares are assumed to be available to satisfy subscriptions in all categories. See “The Conversion and Offering — Limitations on Purchases of Shares.”

	Number of Shares Received in Exchange for Shares of  Old Delanco Bancorp (1)		Proposed Purchases of Stock in the Offering				Total Common Stock to be Held
Name of Beneficial Owner			Number of Shares		Dollar Amount		Number of Shares (1)		Percentage of Total Outstanding
Directors:
Thomas J. Coleman III		6,322		6,000	$	48,000		12,322		1.3	%
James E. Igo		11,018		12,000	$	96,000		23,018		2.4	%
John A. Latimer		4,332		2,500	$	20,000		6,832		*
James W. Verner		6,007		3,000	$	24,000		9,007		*
Renee C. Vidal		2,888		2,000	$	16,000		4,888		*
Executive Officers Who are Not Also Directors:
Douglas R. Allen, Jr.		3,986		—		—		3,986		*
Eva Modi		1,990		500	$	4,000		2,490		*
All Directors and Executive Officers as a Group (7 persons)		36,543		26,000	$	208,000		62,543		6.5	%

* Less than 1.0%.

(1) Based on information presented in “Stock Ownership.”

57

REGULATION AND SUPERVISION

General

Delanco Federal, as a federal savings association, is currently subject to extensive regulation, examination and supervision by the OCC, as its primary federal regulator, and by the FDIC as the insurer of its deposits. Delanco Federal is a member of the Federal Home Loan Bank System and its deposit accounts are insured up to applicable limits by the Deposit Insurance Fund of the FDIC. Delanco Federal must file reports with the OCC concerning its activities and financial condition in addition to obtaining regulatory approvals before entering into certain transactions such as mergers with, or acquisitions of, other financial institutions. There are periodic examinations by the OCC to evaluate Delanco Federal’s safety and soundness and compliance with various regulatory requirements. This regulatory structure is intended primarily for the protection of the insurance fund and depositors. The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of an adequate allowance for loan losses for regulatory purposes. Any change in such policies, whether by the OCC, the FDIC or Congress, could have a material adverse impact on new Delanco Bancorp and Delanco Federal and their operations.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) made extensive changes to the regulation of Delanco Federal. Under the Dodd-Frank Act, the Office of Thrift Supervision was eliminated and responsibility for the supervision and regulation of federal savings associations such as Delanco Federal was transferred to the OCC on July 21, 2011. The OCC is the agency that is primarily responsible for the regulation and supervision of national banks. Additionally, the Dodd-Frank Act created a new Consumer Financial Protection Bureau as an independent bureau of the Federal Reserve Board. The Consumer Financial Protection Bureau assumed responsibility for the implementation of the federal financial consumer protection and fair lending laws and regulations and has authority to impose new requirements. However, institutions of less than $10 billion in assets, such as Delanco Federal, will continue to be examined for compliance with consumer protection and fair lending laws and regulations by, and be subject to the enforcement authority of, their prudential regulators.

Certain of the regulatory requirements that are or will be applicable to Delanco Federal and new Delanco Bancorp are described below. This description of statutes and regulations is not intended to be a complete explanation of such statutes and regulations and their effects on Delanco Federal and new Delanco Bancorp.

Federal Banking Regulation

Business Activities. The activities of federal savings banks, such as Delanco Federal, are governed by federal laws and regulations. Those laws and regulations delineate the nature and extent of the business activities in which federal savings banks may engage. In particular, certain lending authority for federal savings banks, e.g., commercial, non-residential real property loans and consumer loans, is limited to a specified percentage of the institution’s capital or assets.

Capital Requirements. The applicable capital regulations require savings associations to meet three minimum capital standards: a 1.5% tangible capital to total assets ratio, a 4% Tier 1 capital to total assets leverage ratio (3% for institutions receiving the highest rating on the CAMELS examination rating system) and an 8% risk-based capital ratio. In addition, the prompt corrective action standards discussed below also establish, in effect, a minimum 2% tangible capital standard, a 4% leverage ratio (3% for institutions receiving the highest rating on the CAMELS system) and, together with the risk-based capital standard itself, a 4% Tier 1 risk-based capital standard. The regulations also require that, in meeting the tangible, leverage and risk- based capital standards, institutions must generally deduct investments in and loans to subsidiaries engaged in activities as principal that are not permissible for a national bank.

The risk-based capital standard for savings associations requires the maintenance of Tier 1 (core) and total capital (which is defined as core capital and supplementary capital less certain specified deductions from total capital such as reciprocal holdings of depository institution capital instruments and equity investments) to risk-weighted assets of at least 4% and 8%, respectively. In determining the amount of risk-weighted assets, all assets, including certain off-balance sheet activities, recourse obligations, residual interests and direct credit substitutes, are multiplied by a risk-weight factor assigned by the capital regulation based on the risks believed inherent in the type of asset. Tier 1 (core) capital is generally defined as common stockholders’ equity (including retained earnings), certain noncumulative perpetual preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries, less intangibles other than certain mortgage servicing rights and credit card relationships. The components of supplementary capital (Tier 2 capital) include cumulative preferred stock, long-term perpetual preferred stock, mandatory convertible debt securities, subordinated debt and intermediate preferred stock, the allowance for loan and lease losses limited to a maximum of 1.25% of risk-weighted assets and up to 45% of unrealized gains on available-for-sale equity securities with readily determinable fair market values. Overall, the amount of supplementary capital included as part of total capital cannot exceed 100% of core capital.

58

The OCC also has authority to establish individual minimum capital requirements in appropriate cases upon a determination that an institution’s capital level is or may become inadequate in light of the particular risks or circumstances. See “—Regulatory Agreement” below for information on the individual minimum capital requirements currently applicable to Delanco Federal.

Savings and loan holding companies are not currently subject to specific regulatory capital requirements. The Dodd-Frank Act, however, requires the Federal Reserve Board to promulgate consolidated capital requirements for depository institution holding companies, including savings and loan holding companies, that are no less stringent, both quantitatively and in terms of components of capital, than those applicable to institutions themselves. On August 30, 2012, the federal banking agencies issued proposed rules that would implement the “Basel III” regulatory capital reforms and changes required by the Dodd-Frank Act. “Basel III” refers to two consultative documents released by the Basel Committee on Banking Supervision in December 2009, the rules text released in December 2010, and loss absorbency rules issued in January 2011, which include significant changes to bank capital, leverage and liquidity requirements.

The proposed rules include new risk-based capital and leverage ratios, which would be phased in from 2013 to 2019, and would revise the definition of what constitutes “capital” for purposes of calculating those ratios. The proposed new minimum capital level requirements applicable to new Delanco Bancorp and Delanco Federal under the proposals would be: (i) a new common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6% (increased from 4%); (iii) a total capital ratio of 8% (unchanged from current rules); and (iv) a Tier 1 leverage ratio of 4% for all institutions. The proposed rules would eliminate the inclusion of certain instruments, such as trust preferred securities, from Tier 1 capital. Instruments issued prior to May 19, 2010 will be grandfathered for companies with consolidated assets of $15 billion or less and phased out over a period of 10 years ending in 2022. The proposed rules would also establish a “capital conservation buffer” of 2.5% above the new regulatory minimum capital requirements, which must consist entirely of common equity Tier 1 capital and would result in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%, (ii) a Tier 1 capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. The new capital conservation buffer requirement would be phased in beginning in January 2016 at 0.625% of risk-weighted assets and would increase by that amount each year until fully implemented in January 2019. An institution would be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations would establish a maximum percentage of eligible retained income that could be utilized for such actions.

Prompt Corrective Regulatory Action. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept broker deposits. The OCC is required to take certain supervisory actions against undercapitalized institutions, the severity of which depends upon the institution’s degree of undercapitalization. In addition, numerous mandatory supervisory actions become immediately applicable to an undercapitalized institution, including, but not limited to, increased monitoring by regulators and restrictions on growth, capital distributions and expansion. The OCC could also take any one of a number of discretionary supervisory actions, including the issuance of a capital directive and the replacement of senior executive officers and directors. Significantly and critically undercapitalized institutions are subject to additional mandatory and discretionary measures.

Insurance of Deposit Accounts. Delanco Federal’s deposits are insured up to applicable limits by the Deposit Insurance Fund of the FDIC. Deposit insurance per account owner is currently $250,000. Under the FDIC’s risk-based assessment system, insured institutions are assigned a risk category based on supervisory evaluations, regulatory capital levels and certain other factors. An institution’s assessment rate depends upon the category to which it is assigned, and certain adjustments specified by FDIC regulations. Institutions deemed less risky pay lower assessments. The FDIC may adjust the scale uniformly, except that no adjustment can deviate more than two basis points from the base scale without notice and comment. No institution may pay a dividend if in default of the federal deposit insurance assessment.

The Dodd-Frank Act required the FDIC to revise its procedures to base its assessments upon each insured institution’s total assets less tangible equity instead of deposits. The FDIC finalized a rule, effective April 1, 2011, that set the assessment range at 2.5 to 45 basis points of total assets less tangible equity.

The FDIC has authority to increase insurance assessments. A significant increase in insurance premiums would likely have an adverse effect on the operating expenses and results of operations of Delanco Federal. Management cannot predict what insurance assessment rates will be in the future.

Loans to One Borrower. Federal law provides that savings associations are generally subject to the limits on loans to one borrower applicable to national banks. Generally, subject to certain exceptions, a savings association may not make a loan or extend credit to a single or related group of borrowers in excess of 15% of its unimpaired capital and surplus. An additional amount may be lent, equal to 10% of unimpaired capital and surplus, if secured by specified readily-marketable collateral.

Qualified Thrift Lender Test. Federal law requires savings associations to meet a qualified thrift lender test. Under the test, a savings association is required to either qualify as a “domestic building and loan association” under the Internal Revenue Code or maintain at least 65% of its “portfolio assets” (total assets less: (i) specified liquid assets up to 20% of total assets; (ii) intangibles, including goodwill; and (iii) the value of property used to conduct business) in certain “qualified thrift investments” (primarily residential mortgages and related investments, including certain mortgage-backed securities but also including education, credit card and small business loans) in at least nine months out of each 12-month period.

59

A savings association that fails the qualified thrift lender test is subject to certain operating restrictions and the Dodd-Frank Act also specifies that failing the qualified thrift lender test is a violation of law that could result in an enforcement action and dividend limitations. As of March 31, 2013, Delanco Federal maintained 87.6% of its portfolio assets in qualified thrift investments and, therefore, met the qualified thrift lender test.

Limitation on Capital Distributions. Federal regulations impose limitations upon all capital distributions by a savings association, including cash dividends, payments to repurchase its shares and payments to shareholders of another institution in a cash-out merger. Under the regulations, an application to and the prior approval of the OCC is required before any capital distribution if the institution does not meet the criteria for “expedited treatment” of applications under OCC regulations (i.e., generally, examination and Community Reinvestment Act ratings in the two top categories), the total capital distributions for the calendar year exceed net income for that year plus the amount of retained net income for the preceding two years, the institution would be undercapitalized following the distribution or the distribution would otherwise be contrary to a statute, regulation or agreement with the OCC. If an application is not required, the institution must still provide 30 days prior written notice to, and receive the nonobjection of, the Federal Reserve Board of the capital distribution if, like Delanco Federal, it is a subsidiary of a holding company, as well as an informational notice filing to the OCC. If Delanco Federal’s capital ever fell below its regulatory requirements or the OCC notified it that it was in need of increased supervision, its ability to make capital distributions could be restricted. In addition, the OCC could prohibit a proposed capital distribution by any institution, which would otherwise be permitted by the regulation, if the OCC determines that such distribution would constitute an unsafe or unsound practice.

Community Reinvestment Act. All federal savings associations have a responsibility under the Community Reinvestment Act and related regulations to help meet the credit needs of their communities, including low—and moderate-income neighborhoods. An institution’s failure to satisfactorily comply with the provisions of the Community Reinvestment Act could result in denials of regulatory applications. Responsibility for administering the Community Reinvestment Act, unlike other fair lending laws, is not being transferred to the Consumer Financial Protection Bureau. Delanco Federal received an “outstanding” Community Reinvestment Act rating in its most recently completed examination.

Transactions with Related Parties. Federal law limits Delanco Federal’s authority to engage in transactions with “affiliates” (e.g., any entity that controls or is under common control with Delanco Federal, including new Delanco Bancorp and Delanco MHC and their other subsidiaries). The aggregate amount of covered transactions with any individual affiliate is limited to 10% of the capital and surplus of the savings association. The aggregate amount of covered transactions with all affiliates is limited to 20% of the savings association’s capital and surplus. Certain transactions with affiliates are required to be secured by collateral in an amount and of a type specified by federal law. The purchase of low quality assets from affiliates is generally prohibited. Transactions with affiliates must generally be on terms and under circumstances that are at least as favorable to the institution as those prevailing at the time for comparable transactions with non-affiliated companies. In addition, savings associations are prohibited from lending to any affiliate that is engaged in activities that are not permissible for bank holding companies and no savings association may purchase the securities of any affiliate other than a subsidiary.

The Sarbanes-Oxley Act of 2002 generally prohibits loans by new Delanco Bancorp to its executive officers and directors. However, the law contains a specific exception for loans by a depository institution to its executive officers and directors in compliance with federal banking laws. Under such laws, Delanco Federal’s authority to extend credit to executive officers, directors and 10% shareholders (“insiders”), as well as entities such persons control, is limited. The laws limit both the individual and aggregate amount of loans that Delanco Federal may make to insiders based, in part, on Delanco Federal’s capital level and requires that certain board approval procedures be followed. Such loans are required to be made on terms substantially the same as those offered to unaffiliated individuals and not involve more than the normal risk of repayment. There is an exception for loans made pursuant to a benefit or compensation program that is widely available to all employees of the institution and does not give preference to insiders over other employees. Loans to executive officers are subject to additional limitations based on the type of loan involved.

Enforcement. The OCC currently has primary enforcement responsibility over savings associations and has authority to bring actions against the institution and all institution-affiliated parties, including shareholders, and any attorneys, appraisers and accountants who knowingly or recklessly participate in wrongful actions likely to have an adverse effect on an insured institution. Formal enforcement action may range from the issuance of a capital directive or cease and desist order to removal of officers and/or directors to institution of receivership, conservatorship or termination of deposit insurance. Civil penalties cover a wide range of violations and can amount to $25,000 per day, or even $1.0 million per day in especially egregious cases. The FDIC has the authority to recommend to the OCC that enforcement action be taken with respect to a particular savings association. If action is not taken by the OCC, the FDIC has authority to take such action under certain circumstances. Federal law also establishes criminal penalties for certain violations.

60

Federal Home Loan Bank System. Delanco Federal is a member of the Federal Home Loan Bank System, which consists of 12 regional Federal Home Loan Banks. The Federal Home Loan Bank provides a central credit facility primarily for member institutions. Delanco Federal, as a member of the Federal Home Loan Bank of New York, is required to acquire and hold shares of capital stock in that Federal Home Loan Bank. Delanco Federal was in compliance with this requirement with an investment in Federal Home Loan Bank stock at March 31, 2013 of $203 thousand.

Federal Reserve Board System. The Federal Reserve Board regulations require savings associations to maintain non-interest earning reserves against their transaction accounts (primarily Negotiable Order of Withdrawal (NOW) and regular checking accounts). For 2013, the regulations provided that reserves be maintained against aggregate transaction accounts as follows: a 3% reserve ratio is assessed on net transaction accounts up to and including $71.0 million; a 10% reserve ratio is applied above $71.0 million. The first $11.5 million of otherwise reservable balances (subject to adjustments by the Federal Reserve Board) are exempted from the reserve requirements. The amounts are adjusted annually and, for 2013, require a 3% ratio for up to $79.5 million and an exemption of $12.4 million. Delanco Federal complies with the foregoing requirements. In October 2008, the Federal Reserve Board began paying interest on certain reserve balances.

Other Regulations

Delanco Federal’s operations are also subject to federal laws applicable to credit transactions, including the:

• Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers;

• Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves;

• Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit;

• Fair Credit Reporting Act of 1978, governing the use and provision of information to credit reporting agencies;

• Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies; and

• rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.

The operations of Delanco Federal also are subject to laws such as the:

• Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records;

• Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; and

• Check Clearing for the 21st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check.

Holding Company Regulation

General. As a savings and loan holding company, old Delanco Bancorp is, and new Delanco Bancorp will be, subject to Federal Reserve Board regulations, examinations, supervision, reporting requirements and regulations regarding its activities. Among other things, this authority permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a serious risk to Delanco Federal.

Pursuant to federal law and regulations and policy, a savings and loan holding company such as new Delanco Bancorp may generally engage in the activities permitted for financial holding companies under Section 4(k) of the Bank Holding Company Act and certain other activities that have been authorized for savings and loan holding companies by regulation.

61

Federal law prohibits a savings and loan holding company from, directly or indirectly or through one or more subsidiaries, acquiring more than 5% of the voting stock of another savings association, or savings and loan holding company thereof, without prior written approval of the Federal Reserve Board or from acquiring or retaining, with certain exceptions, more than 5% of a non-subsidiary holding company or savings association. A savings and loan holding company is also prohibited from acquiring more than 5% of a company engaged in activities other than those authorized by federal law or acquiring or retaining control of a depository institution that is not insured by the FDIC. In evaluating applications by holding companies to acquire savings associations, the Federal Reserve Board must consider the financial and managerial resources and future prospects of the company and institution involved, the effect of the acquisition on the risk to the insurance funds, the convenience and needs of the community and competitive factors.

The Federal Reserve Board is prohibited from approving any acquisition that would result in a multiple savings and loan holding company controlling savings associations in more than one state, except: (i) the approval of interstate supervisory acquisitions by savings and loan holding companies; and (ii) the acquisition of a savings association in another state if the laws of the state of the target savings association specifically permit such acquisitions. The states vary in the extent to which they permit interstate savings and loan holding company acquisitions.

Source of Strength. The Dodd-Frank Act also extends the “source of strength” doctrine to savings and loan holding companies. The regulatory agencies must promulgate regulations implementing the “source of strength” policy that holding companies act as a source of strength to their subsidiary depository institutions by providing capital, liquidity and other support in times of financial stress.

Dividends. The Federal Reserve Board has the power to prohibit dividends by savings and loan holding companies if their actions constitute unsafe or unsound practices. The Federal Reserve Board has issued a policy statement on the payment of cash dividends by bank holding companies, which also applies to savings and loan holding companies and which expresses the Federal Reserve Board’s view that a holding company should pay cash dividends only to the extent that the company’s net income for the past year is sufficient to cover both the cash dividends and a rate of earnings retention that is consistent with the company’s capital needs, asset quality and overall financial condition. The Federal Reserve Board also indicated that it would be inappropriate for a holding company experiencing serious financial problems to borrow funds to pay dividends. Under the prompt corrective action regulations, the Federal Reserve Board may prohibit a bank holding company from paying any dividends if the holding company’s bank subsidiary is classified as “undercapitalized.”

Acquisition of New Delanco Bancorp. Under the Federal Change in Bank Control Act, a notice must be submitted to the Federal Reserve Board if any person (including a company), or group acting in concert, seeks to acquire direct or indirect “control” of a savings and loan holding company or savings association. Under certain circumstances, a change of control may occur, and prior notice is required, upon the acquisition of 10% or more of the outstanding voting stock of the company or institution, unless the Federal Reserve Board has found that the acquisition will not result in a change of control. Under the Change in Control Act, the Federal Reserve Board generally has 60 days from the filing of a complete notice to act, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the anti-trust effects of the acquisition. Any company that acquires control would then be subject to regulation as a savings and loan holding company.

Regulatory Agreement

Delanco Federal is a party to a formal written agreement with the OCC dated November 21, 2012. The written agreement supersedes and terminates the Order to Cease and Desist issued by the Office of Thrift Supervision on March 17, 2010.

The written agreement requires Delanco Federal to take the following actions:

• prepare a three-year strategic plan that establishes objectives for Delanco Federal’s overall risk profile, earnings performance, growth, balance sheet mix, liability structure, reduction in the volume of nonperforming assets, and product line development;

• prepare a capital plan that includes specific proposals related to the maintenance of adequate capital, identifies strategies to strengthen capital if necessary and includes detailed quarterly financial projections. If the OCC determines that Delanco Federal has failed to submit an acceptable capital plan or fails to implement or adhere to its capital plan, then the OCC may require Delanco Federal to develop a contingency capital plan detailing Delanco Federal’s proposal to sell, merge or liquidate Delanco Federal;

• prepare a criticized asset plan that will include strategies, targets and timeframes to reduce Delanco Federal’s level of criticized assets;

62

• implement a plan to improve Delanco Federal’s credit risk management and credit administration practices;

• implement programs and policies related to Delanco Federal’s allowance for loan and lease losses, liquidity risk management, independent loan review and other real estate owned;

• review the capabilities of Delanco Federal’s management to perform present and anticipated duties and to recommend and implement any changes based on such assessment;

• not pay any dividends or make any other capital distributions without the prior written approval of the OCC;

• not make any severance or indemnification payments without complying with regulatory requirements regarding such payments; and

• comply with prior regulatory notification requirements for any changes in directors or senior executive officers.

The written agreement will remain in effect until terminated, modified, or suspended in writing by the OCC.

We have submitted strategic and capital plans to the OCC and have developed the other plans and policies required by the written agreement. The written agreement will remain in effect until terminated, modified, or suspended in writing by the OCC.

The written agreement does not require Delanco Federal to maintain any specific minimum regulatory capital ratios. However, by letter dated January 2, 2013, the OCC established higher individual minimum capital requirements for Delanco Federal. Specifically, Delanco Federal must maintain Tier 1 capital at least equal to 8% of adjusted total assets, Tier 1 capital at least equal to 12% of risk-weighted assets, and total capital at least equal to 13% of risk-weighted assets. At March 31, 2013, Delanco Federal’s Tier 1 leverage capital ratio, Tier 1 risk-based capital ratio and total risk based-capital ratio were 7.79%, 13.41% and 14.67%, respectively.

63

FEDERAL AND STATE TAXATION

Federal Income Taxation

General. We report our income on a fiscal year basis using the accrual method of accounting. The federal income tax laws apply to us in the same manner as to other corporations with some exceptions, including particularly our reserve for bad debts discussed below. The following discussion of tax matters is intended only as a summary and does not purport to be a comprehensive description of the tax rules applicable to us. Our federal income tax returns have been either audited or closed under the statute of limitations through tax year 2008. For its 2013 fiscal year, old Delanco Bancorp’s maximum federal income tax rate was 34.0%.

New Delanco Bancorp and Delanco Federal will enter into a tax allocation agreement. Because new Delanco Bancorp will own 100% of the issued and outstanding capital stock of Delanco Federal, new Delanco Bancorp and Delanco Federal will be members of an affiliated group within the meaning of Section 1504(a) of the Internal Revenue Code, of which group new Delanco Bancorp is the common parent corporation. As a result of this affiliation, Delanco Federal may be included in the filing of a consolidated federal income tax return with new Delanco Bancorp and, if a decision to file a consolidated tax return is made, the parties agree to compensate each other for their individual share of the consolidated tax liability and/or any tax benefits provided by them in the filing of the consolidated federal income tax return.

Bad Debt Reserves. For fiscal years beginning before 1996, thrift institutions that qualified under certain definitional tests and other conditions of the Internal Revenue Code were permitted to use certain favorable provisions to calculate their deductions from taxable income for annual additions to their bad debt reserve. A reserve could be established for bad debts on qualifying real property loans, generally secured by interests in real property improved or to be improved, under the percentage of taxable income method or the experience method. The reserve for nonqualifying loans was computed using the experience method. Federal legislation enacted in 1996 repealed the reserve method of accounting for bad debts and the percentage of taxable income method for tax years beginning after 1995 and required savings institutions to recapture or take into income certain portions of their accumulated bad debt reserves.

Distributions. If Delanco Federal makes “non-dividend distributions” to new Delanco Bancorp, the distributions will be considered to have been made from Delanco Federal’s unrecaptured tax bad debt reserves, including the balance of its reserves as of December 31, 1987, to the extent of the “non-dividend distributions,” and then from Delanco Federal’s supplemental reserve for losses on loans, to the extent of those reserves, and an amount based on the amount distributed, but not more than the amount of those reserves, will be included in Delanco Federal’s taxable income. Non-dividend distributions include distributions in excess of Delanco Federal’s current and accumulated earnings and profits, as calculated for federal income tax purposes, distributions in redemption of stock, and distributions in partial or complete liquidation. Dividends paid out of Delanco Federal’s current or accumulated earnings and profits will not be so included in Delanco Federal’s taxable income.

The amount of additional taxable income triggered by a non-dividend distribution is an amount that, when reduced by the tax attributable to the income, is equal to the amount of the distribution. Therefore, if Delanco Federal makes a non-dividend distribution to new Delanco Bancorp, approximately one and one-half times the amount of the distribution not in excess of the amount of the reserves would be includable in income for federal income tax purposes, assuming a 34% federal corporate income tax rate. Delanco Federal does not intend to pay dividends that would result in a recapture of any portion of its bad debt reserves.

State Taxation

New Delanco Bancorp and old Delanco Bancorp are subject to the New Jersey’s Corporation Business Tax at the rate of 9% on their taxable income, before net operating loss deductions and special deductions for federal income tax purposes. For this purpose, “taxable income” generally means federal taxable income subject to certain adjustments (including addition of interest income on state and municipal obligations).

64

THE CONVERSION AND OFFERING

This conversion is being conducted pursuant to a plan of conversion approved by the boards of directors of Delanco MHC, old Delanco Bancorp and Delanco Federal. The Federal Reserve Board has conditionally approved the plan of conversion; however, such approval does not constitute a recommendation or endorsement of the plan of conversion by such agency.

General

On May 28, 2013, the boards of directors of Delanco MHC, old Delanco Bancorp and Delanco Federal unanimously adopted the plan of conversion. The second-step conversion that we are now undertaking involves a series of transactions by which we will convert our organization from the partially public mutual holding company form to the fully public stock holding company structure. Under the plan of conversion, Delanco Federal will convert from the mutual holding company form of organization to the stock holding company form of organization and become a wholly owned subsidiary of new Delanco Bancorp, a newly formed New Jersey corporation. Current shareholders of old Delanco Bancorp, other than Delanco MHC, will receive shares of new Delanco Bancorp common stock in exchange for their shares of old Delanco Bancorp common stock. Following the conversion and offering, old Delanco Bancorp and Delanco MHC will no longer exist.

The conversion to a stock holding company structure also includes the offering by new Delanco Bancorp of its common stock to eligible depositors and borrowers of Delanco Federal in a subscription offering and, if necessary, to members of the general public through a community offering and/or a syndicate of registered broker-dealers. The amount of capital being raised in the offering is based on an independent appraisal of new Delanco Bancorp. Most of the terms of the offering are required by the regulations of the Federal Reserve Board.

Consummation of the conversion and offering requires the approval of the Federal Reserve Board. In addition, pursuant to Federal Reserve Board regulations, consummation of the conversion and offering is conditioned upon the approval of the plan of conversion by (1) at least a majority of the total number of votes eligible to be cast by depositors and borrowers of Delanco Federal, (2) the holders of at least two-thirds of the outstanding shares of old Delanco Bancorp common stock and (3) the holders of at least a majority of the outstanding shares of common stock of old Delanco Bancorp, excluding shares held by Delanco MHC.

The Federal Reserve Board approved our plan of conversion, subject to, among other things, approval of the plan of conversion by Delanco MHC’s members (depositors and certain borrowers of Delanco Federal) and old Delanco Bancorp’s shareholders. Meetings of Delanco MHC’s members and old Delanco Bancorp’s shareholders have been called for this purpose on [Meeting Date], 2013.

Funds received before completion of the subscription and community offerings will be maintained in a segregated account at Delanco Federal. If we fail to receive the necessary shareholder or member approval, or if we cancel the conversion and offering for any reason, orders for common stock already submitted will be canceled, subscribers’ funds will be returned promptly with interest calculated at Delanco Federal’s passbook savings rate and all deposit account withdrawal holds will be canceled. We will not make any deduction from the returned funds for the costs of the offering.

The following is a brief summary of the pertinent aspects of the conversion and offering. A copy of the plan of conversion is available from Delanco Federal upon request and is available for inspection at the offices of Delanco Federal and at the Federal Reserve Board. The plan of conversion is also filed as an exhibit to the registration statement, of which this prospectus forms a part, that new Delanco Bancorp has filed with the Securities and Exchange Commission. See “Where You Can Find More Information.”

Reasons for the Conversion and Offering

After considering the advantages and disadvantages of the conversion and offering, the boards of directors of Delanco MHC, old Delanco Bancorp and Delanco Federal unanimously approved the conversion and offering as being in the best interests of old Delanco Bancorp and Delanco Federal and their respective shareholders and customers. The board of directors concluded that the conversion and offering provides a number of advantages that will be important to our future growth and performance and that outweigh the disadvantages of the conversion and offering.

By letter dated January 2, 2013, the OCC established higher individual minimum capital requirements for Delanco Federal. Specifically, Delanco Federal must maintain Tier 1 capital at least equal to 8% of adjusted total assets, Tier 1 capital at least equal to 12% of risk-weighted assets, and total capital at least equal to 13% of risk-weighted assets. At March 31, 2013, Delanco Federal’s Tier 1 leverage capital ratio, Tier 1 risk-based capital ratio and total risk based-capital ratio were 7.79%, 13.41% and 14.67%, respectively. The conversion and offering will improve our capital position to support our risk profile and to assure compliance with regulatory capital requirements and additional individual minimum capital requirements imposed on us by the OCC. In addition, the additional capital will support Delanco Federal’s future lending and operational growth.

65

After completion of the conversion and offering, the unissued common and preferred stock authorized by new Delanco Bancorp’s certificate of incorporation will permit us to raise additional capital through further sales of securities. Old Delanco Bancorp’s ability to raise additional is limited by the mutual holding company structure, which, among other things, requires that Delanco MHC hold a majority of the outstanding shares of old Delanco Bancorp common stock.

The disadvantage of the conversion and offering considered by board of directors is the fact that operating in the stock holding company form of organization could subject Delanco Federal to contests for corporate control. The board of directors determined that the advantages of the conversion and offering outweighed this disadvantage.

Description of the Conversion

New Delanco Bancorp has been incorporated under New Jersey law as a first-tier wholly owned subsidiary of old Delanco Bancorp. To effect the conversion, the following will occur:

• Delanco MHC will merge with and into old Delanco Bancorp, with old Delanco Bancorp as the surviving entity; and

• Old Delanco Bancorp will merge with and into new Delanco Bancorp, with new Delanco Bancorp as the surviving entity.

As a result of the series of mergers described above, Delanco Federal will become a wholly owned subsidiary of new Delanco Bancorp and the outstanding shares of old Delanco Bancorp common stock held by persons other than Delanco MHC (i.e., “public shareholders”) will be converted into a number of shares of new Delanco Bancorp common stock that will result in the holders of such shares owning in the aggregate approximately the same percentage of new Delanco Bancorp common stock to be outstanding upon the completion of the conversion and offering (i.e., the common stock issued in the offering plus the shares issued in exchange for shares of old Delanco Bancorp common stock) as the percentage of old Delanco Bancorp common stock owned by them in the aggregate immediately before consummation of the conversion and offering before giving effect to (1) the payment of cash in lieu of issuing fractional exchange shares and (2) any shares of common stock purchased by public shareholders in the offering.

Share Exchange Ratio for Current Shareholders

Federal Reserve Board regulations provide that in a conversion from mutual holding company to stock holding company form, the public shareholders will be entitled to exchange their shares for common stock of the stock holding company, provided that the mutual holding company demonstrates to the satisfaction of the Federal Reserve Board that the basis for the exchange is fair and reasonable. Under the plan of conversion, each publicly held share of old Delanco Bancorp common stock will, on the effective date of the conversion and offering, be converted automatically into and become the right to receive a number of new shares of new Delanco Bancorp common stock. The number of new shares of common stock will be determined pursuant to an exchange ratio that ensures that the public shareholders of old Delanco Bancorp common stock will own approximately the same percentage of common stock in new Delanco Bancorp after the conversion and offering as they held in old Delanco Bancorp immediately before the conversion and offering, adjusted to reflect the assets of the MHC and before giving effect to (1) the payment of cash in lieu of fractional shares and (2) their purchase of additional shares in the offering. At March 31, 2013, there were 1,634,725 shares of old Delanco Bancorp common stock outstanding, of which 735,626 were held by persons other than Delanco MHC. The exchange ratio is not dependent on the market value of old Delanco Bancorp common stock. It will be calculated based on the percentage of old Delanco Bancorp common stock held by the public, the appraisal of new Delanco Bancorp prepared by RP Financial and the number of shares sold in the offering.

The following table shows how the exchange ratio will adjust, based on the number of shares sold in the offering. The table also shows how many shares an owner of 100 shares of old Delanco Bancorp common stock would receive in the exchange, based on the number of shares sold in the offering.

	Shares to be Sold in the Offering					Shares to be Exchanged for Existing Shares of Old Delanco Bancorp					Total Shares of Common Stock to be Outstanding		Exchange Ratio		Equivalent per Share Value (1)		Equivalent Pro Forma Book Value per Exchanged Share (2)		Shares to be Received for 100 Existing Shares (3)
	Amount		Percent			Amount		Percent
Minimum		451,563		55.56	%		361,185		44.44	%		812,748		0.4910	$	3.93	$	8.50		49
Midpoint		531,250		55.56	%		424,924		44.44	%		956,174		0.5776	$	4.62	$	8.87		57
Maximum		610,938		55.56	%		488,662		44.44	%		1,099,600		0.6643	$	5.31	$	9.23		66
Maximum, as adjusted		702,579		55.56	%		561,962		44.44	%		1,264,541		0.7639	$	6.11	$	9.66		76

(1) Represents the value of shares of new Delanco Bancorp common stock received in the conversion by a holder of one share of old Delanco Bancorp common stock at the exchange ratio, assuming a market price of $8.00 per share.

66

(2) Represents the pro forma shareholders’ equity per share at each level of the offering range multiplied by the respective exchange ratio.

(3) Cash will be paid instead of issuing any fractional shares.

How We Determined the Offering Range and the $8.00 Purchase Price

Federal regulations require that the aggregate purchase price of the securities sold in connection with the offering be based upon our estimated pro forma market value after the conversion (i.e., taking into account the expected receipt of proceeds from the sale of securities in the offering), as determined by an appraisal by an independent person experienced and expert in corporate appraisal. We have retained RP Financial, LC., which is experienced in the evaluation and appraisal of business entities, to prepare the appraisal. RP Financial will receive fees totaling $30,000 for its appraisal report, plus $5,000 for each appraisal update (of which there will be at least one more) and reasonable out-of-pocket expenses. We have agreed to indemnify RP Financial under certain circumstances against liabilities and expenses, including legal fees, arising out of, related to, or based upon the offering. RP Financial has not received any other compensation from us in the past two years.

RP Financial prepared the appraisal taking into account the pro forma impact of the offering. For its analysis, RP Financial undertook substantial investigations to learn about our business and operations. We supplied financial information, including annual financial statements, information on the composition of assets and liabilities, and other financial schedules. In addition to this information, RP Financial reviewed our conversion application as filed with the Federal Reserve Board and our registration statement as filed with the Securities and Exchange Commission. Furthermore, RP Financial visited our facilities and had discussions with our management. RP Financial did not perform a detailed individual analysis of the separate components of our assets and liabilities. We did not impose any limitations on RP Financial in connection with its appraisal.

In connection with its appraisal, RP Financial reviewed the following factors, among others:

• the economic make-up of our primary market area;

• our financial performance and condition in relation to publicly traded, fully converted financial institution holding companies that RP Financial deemed comparable to us;

• the specific terms of the offering of our common stock;

• the pro forma impact of the additional capital raised in the offering;

• our proposed dividend policy and the stated intent that Delanco Bancorp will not pay dividends for the foreseeable future;

• conditions of securities markets in general; and

• the market for thrift institution common stock in particular.

RP Financial’s independent valuation also utilized certain assumptions as to the pro forma earnings of new Delanco Bancorp after the offering. These assumptions included estimated expenses, an assumed after-tax rate of return on the net offering proceeds, and expenses related to the stock-based benefit plans of new Delanco Bancorp, including the employee stock ownership plan and the granting of options under 2008 Equity Incentive Plan. The employee stock ownership plan is assumed to purchase 4.5% of the shares of new Delanco Bancorp common stock sold in the offering. See “Pro Forma Data” for additional information concerning these assumptions. The use of different assumptions may yield different results.

Consistent with Federal Reserve Board appraisal guidelines, RP Financial applied three primary methodologies to estimate the pro forma market value of our common stock: the pro forma price-to-book value approach applied to both reported book value and tangible book value; the pro forma price-to-earnings approach applied to reported and estimated core earnings; and the pro forma price-to-assets approach. The market value ratios applied in the three methodologies were based upon the current market valuations of a peer group of companies considered by RP Financial to be comparable to us, subject to valuation adjustments applied by RP Financial to account for differences between new Delanco Bancorp and the peer group.

In applying each of the valuation methods, RP Financial considered adjustments to our pro forma market value based on a comparison of new Delanco Bancorp with the peer group. RP Financial made moderate downward adjustments for financial condition and profitability, growth and viability of earnings and made slight downward adjustments for asset growth, dividends, liquidity of the shares, marketing of the issue, management, and effect of government regulations and regulatory reform. No adjustment was made for primary market area.

The peer group is comprised of publicly traded thrifts and savings and loan holding companies selected for inclusion in the valuation peer group based on consideration of some or all of the following factors: asset size, market area, recent earnings levels, asset quality and market capitalization. RP Financial placed primary emphasis on the price-to-tangible book value approach and placed lesser emphasis on the price-to-assets and price-to-earnings approaches in estimating pro forma market value. With regard to

67

the price-to-earnings approach, which is typically accorded significant weight in pro forma valuations of thrifts undertaking mutual-to-stock conversions, the pro forma price-to-earnings multiples for new Delanco Bancorp were not meaningful owing to the operating losses reported on a trailing twelve month basis, while the price-to-earnings multiples were not highly meaningful for the peer group either owing to losses or low earnings reported by the majority of the peer group companies.

The peer group consisted of ten publicly traded, fully converted, savings and loans or savings and loan holding companies based primarily in the Mid-Atlantic and New England regions of the United States, but several institutions based in the Midwest were included as well. The peer group included companies with:

• average assets of $487 million;

• average non-performing assets of 4.78% of total assets;

• average tangible equity of 13.69% of total assets.

The appraisal peer group consists of the companies listed below. Total assets are as of March 31, 2013, unless otherwise noted.

Company Name and Ticker Symbol	Exchange	Headquarters	Total Assets
			(In millions)
Severn Bancorp, Inc. (SVBI)	NASDAQ	Annapolis, MD	$	852	(1)
TF Financial Corp. (THRD)	NASDAQ	Newtown, PA	$	716
Hampden Bancorp, Inc. (HBNK)	NASDAQ	Springfield, MA	$	668
Colonial Financial Services, Inc. (COBK)	NASDAQ	Bridgeton, NJ	$	633
Naugatuck Valley Financial Corp. (NVSL)	NASDAQ	Naugatuck, CT	$	526	(1)
Alliance Bancorp, Inc. of Pennsylvania (ALLB)	NASDAQ	Broomall, PA	$	457
Athens Bancshares Corporation (AFCB)	NASDAQ	Athens, TN	$	296
Wolverine Bancorp, Inc. (WBKC)	NASDAQ	Midland, MI	$	290
Central Federal Corp. (CFBK)	NASDAQ	Fairlawn, OH	$	216
First Federal of Northen Michigan Bancorp, Inc. (FFNM)	NASDAQ	Alpena, MI	$	213

(1) Financial data as of December 31, 2012.

In accordance with the regulations of the Federal Reserve Board, a valuation range is established which ranges from 15% below to 15% above our pro forma market value. RP Financial has indicated that in its valuation as of May 17, 2013, our common stock’s estimated full market value was $7.7 million, resulting in a range from $6.5 million at the minimum to $8.8 million at the maximum. The aggregate offering price of the shares of common stock will be equal to the valuation range multiplied by 55.56%, which reflects the 55% ownership interest that Delanco MHC has in old Delanco Bancorp, adjusted to reflect the MHC’s assets of $96,000. The number of shares offered will be equal to the aggregate offering price divided by the price per share. Based on the valuation range, the percentage of old Delanco Bancorp common stock owned by Delanco MHC and the $8.00 price per share, the minimum of the offering range is 451,563 shares, the midpoint of the offering range is 531,250 shares, the maximum of the offering range is 610,938 shares and 15% above the maximum of the offering range is 702,579 shares. RP Financial will update its independent valuation before we complete our offering.

The following table presents a summary of selected pricing ratios for the peer group companies and for all publicly traded thrifts and the resulting pricing ratios for new Delanco Bancorp reflecting the pro forma impact of the offering, as calculated by RP Financial in its appraisal report of May 17, 2013. Compared to the median pricing ratios of the peer group, new Delanco Bancorp’s pro forma pricing ratios at the maximum of the offering range indicated a discount of 29% on a price-to-book value basis and on a price-to-tangible book value basis. Price-to-earnings multiples were not meaningful for Delanco Bancorp because of operating losses.

	Price to Book Value Ratio			Price to Tangible Book Value Ratio
New Delanco Bancorp (pro forma) (1):
Minimum		46.22	%		46.22	%
Midpoint		52.12	%		52.12	%
Maximum		57.55	%		57.55	%
Maximum, as adjusted		63.29	%		63.29	%
Pricing ratios of peer group companies as of May 17, 2013 (2):
Average		80.53	%		81.17	%
Median		81.00	%		82.53	%
All fully-converted, publicly-traded thrifts as of May 17, 2013 (2):
Average		97.00	%		104.63	%
Median		92.81	%		94.74	%

68

(1) Based on old Delanco Bancorp financial data as of and for the twelve months ended March 31, 2013.

(2) Based on earnings for the twelve months ended March 31, 2013 or the most recent date available and book value and tangible book value as of March 31, 2013 or the most recent date available.

Our board of directors reviewed RP Financial’s appraisal report, including the methodology and the assumptions used by RP Financial, and determined that the offering range was reasonable and adequate. Our board of directors has decided to offer the shares for a price of $8.00 per share. The purchase price of $8.00 per share was determined by us, taking into account, among other factors, the market price of our stock before adoption of the plan of conversion, the requirement under Federal Reserve Board regulations that the common stock be offered in a manner that will achieve the widest distribution of the stock, and desired liquidity in the common stock after the offering. Our board of directors also established the formula for determining the exchange ratio. Based upon such formula and the offering range, the exchange ratio ranged from a minimum of 0.4910 to a maximum of 0.6643 shares of new Delanco Bancorp common stock for each current share of Delanco Bancorp common stock, with a midpoint of 0.5776. Based upon this exchange ratio, we expect to issue between 361,185 and 488,662 shares of new Delanco Bancorp common stock to the holders of Delanco Bancorp common stock outstanding immediately before the completion of the conversion and offering.

Our board of directors considered the appraisal when recommending that shareholders and members approve the plan of conversion. However, our board of directors makes no recommendation of any kind as to the advisability of purchasing shares of common stock.

Since the outcome of the offering relates in large measure to market conditions at the time of sale, it is not possible for us to determine the exact number of shares that we will issue at this time. The offering range may be amended, with the approval of the Federal Reserve Board, if necessitated by developments following the date of the appraisal in, among other things, market conditions, our financial condition or operating results, regulatory guidelines or national or local economic conditions.

If, upon expiration of the offering, at least the minimum number of shares are subscribed for, RP Financial, after taking into account factors similar to those involved in its prior appraisal, will determine its estimate of our pro forma market value. If, as a result of regulatory considerations, demand for the shares or changes in market conditions, RP Financial determines that our pro forma market value has increased, we may sell up to 702,579 shares and issue up to 561,962 shares in the exchange without any further notice to you.

No shares will be sold unless RP Financial confirms that, to the best of its knowledge and judgment, nothing of a material nature has occurred that would cause it to conclude that the actual total purchase price of the shares on an aggregate basis was materially incompatible with its appraisal. If, however, the facts do not justify that statement, a new offering range may be set, in which case all funds would be promptly returned and holds funds authorized for withdrawal from deposit accounts will be released and all subscribers would be given the opportunity to place a new order. If the offering is terminated, all subscriptions will be canceled and subscription funds will be returned promptly with interest, and holds on funds authorized for withdrawal from deposit accounts will be released. If RP Financial establishes a new valuation range, it must be approved by the Federal Reserve Board.

In formulating its appraisal, RP Financial relied upon the truthfulness, accuracy and completeness of all documents we furnished to it. RP Financial also considered financial and other information from regulatory agencies, other financial institutions, and other public sources, as appropriate. While RP Financial believes this information to be reliable, RP Financial does not guarantee the accuracy or completeness of the information and did not independently verify the financial statements and other data provided by us or independently value our assets or liabilities. The appraisal is not intended to be, and must not be interpreted as, a recommendation of any kind as to the advisability of purchasing shares of common stock. Moreover, because the appraisal must be based on many factors that change periodically, there is no assurance that purchasers of shares in the offering will be able to sell shares after the offering at prices at or above the purchase price.

Copies of the appraisal report of RP Financial, including any amendments to the report, and the detailed memorandum of the appraiser setting forth the method and assumptions for such appraisal are available for inspection at our main office and the other locations specified under “Where You Can Find More Information.”

69

Subscription Offering and Subscription Rights

Under the plan of conversion, we have granted rights to subscribe for our common stock to the following persons in the following order of priority:

1. Persons with aggregate balances of $50 or more on deposit at Delanco Federal as of the close of business on April 30, 2012 (“eligible account holders”).

2. Our employee stock ownership plan.

3. Persons with aggregate balances of $50 or more on deposit at Delanco Federal as of the close of business on June 30, 2013 who are not eligible in category 1 above (“supplemental eligible account holders”).

4. Delanco Federal’s depositors as of the close of business on [record date], who are not in categories 1 or 3 above and borrowers of Delanco Federal as of November 14, 1994 who continue to be borrowers as of [record date] (“other members”).

The amount of common stock that any person may purchase will depend on the availability of the common stock after satisfaction of all subscriptions having prior rights in the subscription offering and to the maximum and minimum purchase limitations set forth in the plan of conversion. See “— Limitations on Purchases of Shares.” All persons on a single joint deposit account will be counted as a single subscriber to determine the maximum amount that may be subscribed for by an individual in the offering.

Priority 1: Eligible Account Holders. Subject to the purchase limitations as described below under “—Limitations on Purchases of Shares,” each eligible account holder has the right to subscribe for up to the greater of:

• $176,000 of common stock (which equals 22,000 shares); or

• one-tenth of 1% of the total offering of common stock; or

• 15 times the product, rounded down to the next whole number, obtained by multiplying the total number of shares of common stock to be sold by a fraction of which the numerator is the amount of qualifying deposits of the eligible account holder and the denominator is the total amount of qualifying deposits of all eligible account holders.

If there are insufficient shares to satisfy all subscriptions by eligible account holders, shares first will be allocated so as to permit each subscribing eligible account holder, if possible, to purchase a number of shares sufficient to make the person’s total allocation equal 100 shares or the number of shares actually subscribed for, whichever is less. After that, unallocated shares will be allocated among the remaining subscribing eligible account holders whose subscriptions remain unfilled in the proportion that the amounts of their respective qualifying deposits bear to the total qualifying deposits of all remaining eligible account holders whose subscriptions remain unfilled. Subscription rights of eligible account holders who are also executive officers or directors of old Delanco Bancorp or Delanco Federal or their associates will be subordinated to the subscription rights of other eligible account holders to the extent attributable to increased deposits in Delanco Federal in the one year period preceding April 30, 2012.

To ensure a proper allocation of stock, each eligible account holder must list on his or her stock order form all deposit accounts in which such eligible account holder had an ownership interest at April 30, 2012. Failure to list an account, or providing incomplete or incorrect information, could result in the loss of all or part of a subscriber’s stock allocation.

Priority 2: Tax-Qualified Employee Benefit Plans. Subject to the purchase limitations as described below under “— Limitations on Purchases of Shares,” our tax-qualified employee benefit plans (other than our 401(k) plan) have the right to purchase up to 10% of the shares of common stock issued in the offering. As a tax-qualified employee benefit plan, our employee stock ownership plan intends to purchase 4.5% of the shares sold in the offering. Subscriptions by the employee stock ownership plan will not be aggregated with shares of common stock purchased by any other participants in the offering, including subscriptions by our officers and directors, for the purpose of applying the purchase limitations in the plan of conversion. If we increase the number of shares offered above the maximum of the offering range, the employee stock ownership plan will have a first priority right to purchase any shares exceeding that amount up to the amount of its subscription. If the plan’s subscription is not filled in its entirety due to oversubscription or by choice, the employee stock ownership plan may purchase shares after the offering in the open market or directly from us, with the approval of the Federal Reserve Board.

Priority 3: Supplemental Eligible Account Holders. Subject to the purchase limitations as described below under “— Limitations on Purchases of Shares,” each supplemental eligible account holder has the right to subscribe for up to the greater of:

• $176,000 of common stock (which equals 22,000 shares); or

• one-tenth of 1% of the total offering of common stock; or

• 15 times the product, rounded down to the next whole number, obtained by multiplying the total number of shares of common stock to be sold by a fraction of which the numerator is the amount of qualifying deposits of the supplemental eligible account holder and the denominator is the total amount of qualifying deposits of all supplemental eligible account holders.

70

If eligible account holders and the employee stock ownership plan subscribe for all of the shares being sold, no shares will be available for supplemental eligible account holders. If shares are available for supplemental eligible account holders but there are insufficient shares to satisfy all subscriptions by supplemental eligible account holders, shares first will be allocated so as to permit each subscribing supplemental eligible account holder, if possible, to purchase a number of shares sufficient to make the person’s total allocation equal 100 shares or the number of shares actually subscribed for, whichever is less. After that, unallocated shares will be allocated among the remaining subscribing supplemental eligible account holders whose subscriptions remain unfilled in the proportion that the amounts of their respective qualifying deposits bear to the total qualifying deposits of all remaining supplemental eligible account holders whose subscriptions remain unfilled.

To ensure a proper allocation of stock, each supplemental eligible account holder must list on his or her stock order form all deposit accounts in which such supplemental eligible account holder had an ownership interest at June 30, 2013. Failure to list an account, or providing incomplete or incorrect information, could result in the loss of all or part of a subscriber’s stock allocation.

Priority 4: Other Members. Subject to the purchase limitations as described below under “—Limitations on Purchases of Shares,” each other member has the right to purchase up to the greater of $176,000 of common stock (which equals 22,000 shares) or one-tenth of 1% of the total offering of common stock. If eligible account holders, the employee stock ownership plan and supplemental eligible account holders subscribe for all of the shares being sold, no shares will be available for other members. If shares are available for other members but there are not sufficient shares to satisfy all subscriptions by other members, shares first will be allocated so as to permit each subscribing other member, if possible, to purchase a number of shares sufficient to make the person’s total allocation equal 100 shares or the number of shares actually subscribed for, whichever is less. After that, unallocated shares will be allocated among the remaining subscribing other members whose subscriptions remain unfilled in the proportion that each other member’s subscription bears to the total subscriptions of all such subscribing other members whose subscriptions remain unfilled.

To ensure a proper allocation of stock, each other member must list on his or her stock order form all deposit accounts and loans in which such other member had an ownership interest at [record date]. Failure to list an account or providing incomplete or incorrect information could result in the loss of all or part of a subscriber’s stock allocation.

Expiration Date for the Subscription and Community Offerings. The subscription offering, and all subscription rights under the plan of conversion, will terminate at 2:00 p.m., Eastern time, on [Date 1], 2013. We will not accept orders for common stock in the subscription offering received after that time. We will make reasonable attempts to provide a prospectus and related offering materials to holders of subscription rights; however, all subscription rights will expire on the expiration date whether or not we have been able to locate each person entitled to subscription rights.

If the sale of the common stock is not completed by [Date 2], 2013 and regulatory approval of an extension has not been granted, all funds received will be returned promptly in full with interest calculated at Delanco Federal’s passbook savings rate and without deduction of any fees and all withdrawal authorizations will be canceled. If we receive approval of the Federal Reserve Board to extend the time for completing the offering, we will notify all subscribers of the duration of the extension, and subscribers will have the right to confirm, change or cancel their purchase orders. If we do not receive a response from a subscriber to any resolicitation, the subscriber’s order will be rescinded and all funds received will be returned promptly with interest and withdrawal authorizations will be canceled. No single extension can exceed 90 days. The offering must be completed no later than 24 months after Delanco MHC’s members approve the plan of conversion.

Restrictions on Transfer of Subscription Rights and Shares. Subscription rights are nontransferable. You may not transfer, or enter into any agreement or understanding to transfer, the legal or beneficial ownership of your subscription rights issued under the plan of conversion or the shares of common stock to be issued upon exercise of your subscription rights. Your subscription rights may be exercised only by you and only for your own account. When registering your stock purchase on the order form, you should not add the name(s) of persons who have no subscription rights or who qualify in a lower purchase priority than you do. Doing so may jeopardize your subscription rights. If you exercise your subscription rights, you will be required to certify on the order form that you are purchasing shares solely for your own account and that you have no agreement or understanding regarding the sale or transfer of such shares. Federal regulations also prohibit any person from offering, or making an announcement of an offer or intent to make an offer, to purchase such subscription rights or a subscriber’s shares of common stock before the completion of the offering.

If you sell or otherwise transfer your rights to subscribe for common stock in the subscription offering or subscribe for common stock on behalf of another person, you may forfeit those rights and face possible further sanctions and penalties imposed by the Federal Reserve Board or another agency of the U.S. Government. Illegal transfers of subscription rights, including agreements made before completion of the offering to transfer shares after the offering, have been subject to enforcement actions by the Securities and Exchange Commission as violations of Rule 10b-5 of the Securities Exchange Act of 1934.

71

We intend to report to the Federal Reserve Board and the Securities and Exchange Commission anyone who we believe sells or gives away their subscription rights. We will pursue any and all legal and equitable remedies in the event we become aware of the transfer of subscription rights, and we will not honor orders that we believe involve the transfer of subscription rights.

Community Offering

To the extent that shares remain available for purchase after satisfaction of all subscriptions received in the subscription offering, we may, in our discretion, offer shares in a community offering. In the community offering, preference will be given first to natural persons and trusts of natural persons who are residents of Burlington County, New Jersey (“community residents”), second to shareholders of old Delanco Bancorp as of [record date] and finally to members of the general public.

We will consider a person to be resident of a particular county if he or she occupies a dwelling in the county, has the intent to remain for a period of time, and manifests the genuineness of that intent by establishing an ongoing physical presence together with an indication that such presence is something other than merely transitory in nature. We may utilize deposit or loan records or other evidence provided to us to make a determination as to a person’s resident status. In all cases, the determination of residence status will be made by us in our sole discretion.

Subject to the purchase limitations as described below under “— Limitations on Purchases of Shares,” purchasers in the community offering are eligible to purchase up to $176,000 of common stock (which equals 22,000 shares). If shares are available for community residents in the community offering but there are insufficient shares to satisfy all of their orders, the available shares will be allocated first to each community resident whose order we accept in an amount equal to the lesser of 100 shares or the number of shares ordered by each such subscriber, if possible. After that, unallocated shares will be allocated among the remaining community residents whose orders remain unsatisfied on an equal number of shares per order basis until all available shares have been allocated. If, after filling the orders of community residents in the community offering, shares are available for shareholders of old Delanco Bancorp in the community offering but there are insufficient shares to satisfy all orders, shares will be allocated in the same manner as for community residents. The same allocation method would apply if oversubscription occurred among the general public.

We expect that the community offering, if held, will terminate at the same time as the subscription offering, although it may continue without notice to you until [Date 2], 2013, or longer if the Federal Reserve Board approves a later date. No single extension may exceed 90 days. If we receive regulatory approval for an extension beyond [Date 2], 2013, all subscribers will be notified of the duration of the extension, and will have the right to confirm, change or cancel their orders. If we do not receive a response from a subscriber to any resolicitation, the subscriber’s order will be rescinded and all funds received will be promptly returned with interest.

The opportunity to subscribe for shares of common stock in the community offering is subject to our right to reject orders, in whole or part, either at the time of receipt of an order or as soon as practicable following the expiration date of the offering. If your order is rejected in part, you will not have the right to cancel the remainder of your order.

Syndicated Community Offering

All shares of common stock not purchased in the subscription and community offerings may be offered for sale to the general public in a syndicated community offering. Keefe, Bruyette & Woods may facilitate the syndicated community offering by making arrangements with other brokers-dealers who are member firms of the Financial Industry Regulatory Authority (“FINRA”) to act as assisting brokers in the syndicated community offering. Neither Keefe, Bruyette & Woods nor any registered broker-dealer will have any obligation to take or purchase any shares of the common stock in the syndicated community offering; however, Keefe, Bruyette & Woods has agreed to use its best efforts in the sale of shares in any syndicated community offering. The syndicated community offering would terminate no later than 45 days after the expiration of the subscription offering, unless extended by us, with approval of the Federal Reserve Board. See “—Community Offering” above for a discussion of rights of subscribers if an extension is granted.

Common stock sold in the syndicated community offering also will be sold at the $8.00 per share purchase price. Purchasers in the syndicated community offering are eligible to purchase up to $176,000 of common stock (which equals 22,000 shares). We may begin the syndicated community offering at any time following the commencement of the subscription offering.

The opportunity to subscribe for shares of common stock in the syndicated community offering is subject to our right in our sole discretion to accept or reject orders, in whole or part, either at the time of receipt of an order or as soon as practicable following the expiration date of the offering. If your order is rejected in part, you will not have the right to cancel the remainder of your order.

Persons participating in the syndicated community offering must submit a properly completed original stock order form and submit full payment for the shares subscribed for. See “—Procedures for Purchasing shares in the Subscription, Community and Syndicated community Offerings.”

72

If for any reason we cannot affect a syndicated community offering of shares of common stock not purchased in the subscription and community offerings, or in the event that there are a significant number of shares remaining unsold after such offerings, we will try to make other arrangements for the sale of unsubscribed shares, if possible. The Federal Reserve Board and the FINRA must approve any such arrangements. If other purchase arrangements cannot be made, we may: terminate the stock offering and promptly return all funds; promptly return all funds, set a new offering range and give all subscribers the opportunity to place a new order for shares of new Delanco Bancorp common stock; or take such other actions as may be permitted by the Federal Reserve Board, FINRA and the Securities and Exchange Commission.

In the event that Keefe, Bruyette & Woods sells shares of common stock through a group of broker-dealers in a syndicated community offering, Keefe Bruyette & Woods will be paid a fee not to exceed 6.0% of the aggregate purchase price of the shares of common stock sold in the syndicated community offering.

Limitations on Purchases of Shares

In addition to the purchase limitations described above under “—Subscription Offering and Subscription Rights,” “—Community Offering” and “—Syndicated community Offering,” the plan of conversion provides for the following purchase limitations:

• Except for our employee stock ownership plan, no individual (or individuals exercising subscription rights through a single qualifying account held jointly) may purchase more than $176,000 of common stock (which equals 22,000 shares), subject to increase as described below.

• Except for our employee stock ownership plan, no individual, together with any associates, and no group of persons acting in concert may purchase in all categories of the stock offering combined more than $176,000 of common stock (which equals 22,000 shares), subject to increase as described below.

• Each subscriber must subscribe for a minimum of 25 shares.

• Our directors and executive officers, together with their associates, may purchase in the aggregate up to 33.0% of the common stock sold in the offering.

• The maximum number of shares of new Delanco Bancorp common stock that may be subscribed for or purchased in all categories of the stock offering combined by any person, together with associates of, or persons acting in concert with, such person, when combined with any shares of new Delanco Bancorp common stock to be received in exchange for shares of old Delanco Bancorp common stock, may not exceed 5.0% of the total shares of new Delanco Bancorp common stock outstanding upon completion of the conversion and offering. This means that if you already own a significant number of shares, you may not be permitted to purchase the maximum number of shares in the offering. For example, if you currently own more than 37,957 shares of common stock (assuming we close the offering at the minimum of the offering range) or 49,646 shares of common stock (assuming we close the offering at the maximum of the offering range), you would not be able to purchase all of the 22,000 shares allowable under the plan of conversion. However, existing shareholders of old Delanco Bancorp will not be required to sell any shares of old Delanco Bancorp common stock or be limited from receiving any shares of new Delanco Bancorp common stock in exchange for their shares of old Delanco Bancorp common stock or have to divest themselves of any shares of new Delanco Bancorp common stock received in exchange for their shares of old Delanco Bancorp common stock as a result of this limitation.

We may, in our sole discretion, increase the individual and/or aggregate purchase limitations to up to 5.0% of the shares of common stock sold in the offering. We do not intend to increase the maximum purchase limitation unless market conditions warrant. If we decide to increase the purchase limitations, persons who subscribed in the subscription offering for the maximum number of shares of common stock and so indicate on their stock order forms, will be permitted to increase their subscriptions accordingly, subject to the rights and preferences of any person who has priority subscription rights.

Subject to approval by the Federal Reserve Board, if we increase the maximum purchase limitation to 5.0% of the shares of common stock sold in the offering, we may further increase the maximum purchase limitation to 9.9%, provided that orders for common stock exceeding 5.0% of the shares of common stock sold in the offering may not exceed in the aggregate 10.0% of the total shares of common stock sold in the offering.

73

The plan of conversion defines “acting in concert” to mean knowing participation in a joint activity or interdependent conscious parallel action towards a common goal whether or not by an express agreement or understanding; or a combination or pooling of voting or other interests in the securities of an issuer for a common purpose under any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise. In general, a person who acts in concert with another party will also be deemed to be acting in concert with any person who is also acting in concert with that other party. We may presume that certain persons are acting in concert based upon, among other things, joint account relationships and the fact that persons reside at the same address or may have filed joint Schedules 13D or 13G with the Securities and Exchange Commission with respect to other companies. For purposes of the plan of conversion, our directors are not deemed to be acting in concert solely by reason of their board membership.

The plan of conversion defines “associate,” with respect to a particular person, to mean:

• a corporation or organization other than Delanco MHC, old Delanco Bancorp or Delanco Federal or a majority-owned subsidiary of Delanco MHC, old Delanco Bancorp or Delanco Federal of which a person is a senior officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities of such corporation or organization;

• a trust or other estate in which a person has a substantial beneficial interest or as to which a person serves as a trustee or a fiduciary; and

• any person who is related by blood or marriage to such person and who lives in the same home as such person or who is a director or senior officer of Delanco MHC, old Delanco Bancorp or Delanco Federal or any of their subsidiaries.

For example, a corporation of which a person serves as an officer would be an associate of that person and, therefore, all shares purchased by the corporation would be included with the number of shares that the person could purchase individually under the purchase limitations described above. We have the right in our sole discretion to reject any order submitted by a person whose representations we believe to be false or who we otherwise believe, either alone or acting in concert with others, is violating or circumventing, or intends to violate or circumvent, the terms and conditions of the plan of conversion. Directors and officers are not treated as associates of each other solely by virtue of holding such positions. We have the sole discretion to determine whether prospective purchasers are “associates” or “acting in concert.”

Marketing Arrangements

To assist in the marketing of our common stock, we have retained Keefe, Bruyette & Woods, which is a broker-dealer registered with the FINRA. In its role as financial advisor, Keefe, Bruyette & Woods will assist us in the offering as follows:

• consulting with us as to the financial and securities market implications of the plan of conversion and reorganization;

• reviewing with our board of directors the financial impact of the offering on us, based upon the independent appraiser’s appraisal of the common stock;

• reviewing all offering documents, including the prospectus, stock order forms and related offering materials (we are responsible for the preparation and filing of such documents);

• assisting in the design and implementation of a marketing strategy for the offering;

• assisting management in scheduling and preparing for meetings with potential investors and/or other broker-dealers in connection with the offering; and

• providing such other general advice and assistance we may request to promote the successful completion of the offering.

For its services as financial advisor, Keefe, Bruyette & Woods will receive (i) a management fee of $25,000, $             of which we have already paid to Keefe, Bruyette & Woods, and which will be credited to the success fee, and (ii) a success fee of $160,000, $             of which we have already paid to Keefe, Bruyette & Woods. We will also reimburse Keefe, Bruyette & Woods for all reasonable, documented out-of-pocket expenses related to the offering, including attorney’s fees, up to a maximum of $95,000. The reimbursable expenses may be increased under certain circumstances, but in no event shall they exceed $135,000.

We will indemnify Keefe, Bruyette & Woods against liabilities and expenses, including legal fees, incurred in connection with certain claims or litigation arising out of or based upon untrue statements or omissions contained in the offering materials for the common stock, including liabilities under the Securities Act of 1933, as amended.

Some of our directors and executive officers may participate in the solicitation of offers to purchase common stock. These persons will be reimbursed for their reasonable out-of-pocket expenses incurred in connection with the solicitation. Other regular employees of Delanco Federal may assist in the offering, but only in ministerial capacities, and may provide clerical work in effecting a sales transaction. Sales activity will be conducted in a segregated area of Delanco Federal’s main office. Investment-related questions of prospective purchasers will be directed to executive officers or registered representatives of Keefe, Bruyette & Woods. Our other employees have been instructed not to solicit offers to purchase shares of common stock or provide advice regarding the

74

purchase of common stock. We will rely on Rule 3a4-1 under the Securities Exchange Act of 1934, as amended, and sales of common stock will be conducted within the requirements of Rule 3a4-1, so as to permit officers, directors and employees to participate in the sale of common stock. None of our officers, directors or employees will be compensated in connection with their participation in the offering.

In addition, we have engaged Keefe, Bruyette & Woods to act as our conversion agent in connection with the conversion and offering. In its role as conversion agent, Keefe, Bruyette & Woods will assist us in the offering as follows: (1) consolidation of deposit accounts and vote calculation; (2) design and preparation of order forms and proxy cards; (3) organization and supervision of the Stock Information Center; (4) assistance with proxy solicitation and special meeting services; and (5) subscription services. For these services, Keefe, Bruyette & Woods will receive a fee of $25,000, of which $             has been paid. In addition, Keefe, Bruyette & Woods will be reimbursed for its reasonable out of pocket expenses incurred in connection with its services as conversion agent up to $5,000. The reimbursable expenses may be increased under certain circumstances, but in no event shall they exceed $15,000.

Keefe, Bruyette & Woods has not prepared any report or opinion constituting a recommendation or advice to us or to persons who subscribe for common stock, nor have they prepared an opinion as to the fairness to us of the purchase price or the terms of the common stock to be sold in the conversion and offering. Keefe, Bruyette & Woods does not express any opinion as to the prices at which common stock to be issued may trade.

Lock-up Agreements

We and each of our directors and executive officers, have agreed, for a period beginning on the date of this prospectus and ending 90 days after completion of the offering and conversion, without the prior written consent of Keefe, Bruyette & Woods, directly or indirectly, not to (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any shares of common stock or any securities convertible into or exchangeable or exercisable for common stock, or file any registration statement under the Securities Act, as amended, with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of common stock, whether any such swap or transaction is to be settled by delivery of common stock or other securities, in cash or otherwise. The restricted period described above is subject to extension under limited circumstances. In the event that either (1) during the period that begins on the date that is 15 calendar days plus three (3) business days before the last day of the restricted period and ends on the last day of the restricted period, we issue an earnings release or material news or a material event relating to us occurs, or (2) prior to the expiration of the restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the restricted period, the restrictions set forth herein will continue to apply until the expiration of the date that a 15 calendar days plus three (3) business days after the date on which the earnings release is issued or the material news or event related to us occurs.

Prospectus Delivery

To ensure that each purchaser in the subscription and community offerings receives a prospectus at least 48 hours before the expiration date of the offering in accordance with Rule 15c2-8 of the Securities Exchange Act of 1934, we may not mail a prospectus any later than five days prior to the expiration date or hand deliver a prospectus any later than two days prior to that date. We are not obligated to deliver a prospectus or order form by means other than U.S. mail. Execution of an order form will confirm receipt of delivery of a prospectus in accordance with Rule 15c2-8. Stock order forms will be distributed only if preceded or accompanied by a prospectus.

Procedure for Purchasing Shares in the Subscription, Community and Syndicated community Offerings

Use of Order Forms. To purchase shares of common stock in the subscription offering, the community offering or the syndicated community offering, you must submit a properly completed original stock order form and remit full payment. Incomplete stock order forms or stock order forms that are not signed are not required to be accepted. We are not required to accept stock orders submitted on photocopied or facsimiled stock order forms. All stock order forms must be received (not postmarked) prior to 2:00 p.m. Eastern time, on [Date 1], 2013, provided that order forms submitted in the syndicated community offering must be received by the termination date of that offering. We are not required to accept stock order forms that are not received by that time, are executed defectively or are received without submitting full payment or without appropriate deposit account withdrawal instructions. We are not required to notify purchasers of incomplete or improperly executed stock order forms. We have the right to waive or permit the correction of incomplete or improperly executed stock order forms, but we do not represent that we will do so.

You may submit your stock order form and payment in one of three ways: by mail using the stock order reply envelope provided; by overnight delivery to the Stock Information Center at the address noted on the stock order form; or by hand-delivery to Delanco Federal’s executive office located at 615 Burlington Avenue, Delanco, New Jersey. Hand-delivered stock order forms will only be accepted at this location. We will not accept stock order forms at any other banking office. Please do not mail stock order forms to Delanco Federal. Once tendered, a stock order form cannot be modified or revoked without our consent. We reserve the absolute right, in our sole discretion, to reject orders received in the community offering or the syndicated community offering, in whole or in part, at the time of receipt or at any time prior to completion of the offering.

75

If you are ordering shares in the subscription offering, by signing the stock order form you are representing that you are purchasing shares for your own account and that you have no agreement or understanding with any person for the sale or transfer of the shares.

By signing the stock order form, you will be acknowledging that the common stock is not a deposit or savings account and is not federally insured or otherwise guaranteed by Delanco Federal or any federal or state government, and that you received a copy of this prospectus. However, signing the stock order form will not cause you to waive your rights under the Securities Act of 1933 or the Securities Exchange Act of 1934. We have the right to reject any order submitted in the offering by a person who we believe is making false representations or who we otherwise believe, either alone or acting in concert with others, is violating, evading, circumventing, or intends to violate, evade or circumvent the terms and conditions of the plan of conversion. Our interpretation of the terms and conditions of the plan of conversion and of the acceptability of the stock order forms will be final.

Payment for Shares. Payment for all shares of common stock will be required to accompany all completed order forms for the purchase to be valid. Payment for shares may be made only by:

• Personal check, bank check or money order made payable directly to “Delanco Bancorp, Inc.”; or

• Authorization of withdrawal from the types of Delanco Federal deposit accounts provided for on the stock order form.

Appropriate means for designating withdrawals from deposit accounts at Delanco Federal are provided on the order forms. The funds designated must be available in the account(s) at the time the stock order form is received. A hold will be placed on these funds, making them unavailable to the depositor. Funds authorized for withdrawal will continue to earn interest within the account at the applicable contract rate until the offering is completed, at which time the designated withdrawal will be made. Interest penalties for early withdrawal applicable to certificate of deposit accounts will not apply to withdrawals authorized for the purchase of shares of common stock during the offering; however, if a withdrawal results in a certificate of deposit account with a balance less than the applicable minimum balance requirement, the certificate of deposit will be canceled at the time of withdrawal without penalty and the remaining balance will earn interest calculated at the current passbook savings rate subsequent to the withdrawal.

If payment is made by personal check, funds must be available in the account. Payments made by check or money order will be immediately cashed and placed in a segregated account at Delanco Federal and will earn interest calculated at Delanco Federal’s passbook savings rate from the date payment is received until the offering is completed, at which time a subscriber will be issued a check for interest earned.

You may not remit Delanco Federal line of credit checks, and we will not accept wire transfers or third-party checks, including those payable to you and endorsed over to new Delanco Bancorp. You may not designate on your stock order form a direct withdrawal from a Delanco Federal retirement account. See “— Using Retirement Account Funds to Purchase Shares” for information on using such funds. Additionally, you may not designate on your stock order form a direct withdrawal from Delanco Federal deposit accounts with check-writing privileges. Instead, a check should be provided. If you request a direct withdrawal, we reserve the right to interpret that as your authorization to treat those funds as if we had received a check for the designated amount, and we will immediately withdraw the amount from your checking account(s). If permitted by the Federal Reserve Board, in the event we resolicit large subscribers, as described in “—Limitations on Purchases of Shares,” those purchasers who wish to increase their purchases will not be able to use personal checks to pay for the additional shares, but instead must pay for the additional shares using immediately available funds. Wire transfers may be allowed.

Once we receive your executed stock order form, it may not be modified, amended or rescinded without our consent, unless the offering is not completed by [Date 2], 2013, in which event purchasers may be given the opportunity to increase, decrease or rescind their orders for a specified period of time.

Regulations prohibit Delanco Federal from lending funds or extending credit to any persons to purchase shares of common stock in the offering.

The employee stock ownership plan will not be required to pay for shares at the time it subscribes, but rather may pay for shares upon the completion of the offering; provided that there is in force, from the time of its subscription until the completion of the offering, a loan commitment from an unrelated financial institution or from us to lend to the employee stock ownership plan, at that time, the aggregate purchase price of the shares for which it subscribed.

In the syndicated community offering payments must be made in immediately available funds (bank check, money order, Delanco Federal deposit account withdrawal authorization or wire transfer). Personal check will not be accepted.

We may, in our sole discretion, permit institutional investors to submit irrevocable orders together with a legally binding commitment for payment and to thereafter pay for such shares of common stock for which they subscribe in the community offering at any time prior to the 48 hours before the completion of the offering. This payment may be made by wire transfer.

76

Using Retirement Account Funds To Purchase Shares. A customer interested in using funds in his or her individual retirement account(s) (IRAs) or any other retirement account at Delanco Federal to purchase common stock must do so through a self-directed retirement account. Since we do not offer those accounts, before placing a stock order, a depositor must make a transfer of funds from Delanco Federal to a trustee (or custodian) offering a self-directed retirement account program (such as a brokerage firm). There will be no early withdrawal or Internal Revenue Service interest penalties for such transfers. The new trustee would hold the common stock in a self-directed account in the same manner as we now hold the depositor’s IRA funds. An annual administrative fee may be payable to the new trustee. Subscribers interested in using funds in a retirement account held at Delanco Federal or elsewhere to purchase common stock should contact the Stock Information Center for assistance at least two weeks before the [Date 1], 2013 offering expiration date, because processing such transactions takes additional time. Whether or not you may use retirement funds for the purchase of shares in the offering depends on timing constraints and, possibly, limitations imposed by the institution where the funds are held.

Termination of Offering. We reserve the right in our sole discretion to terminate the offering at any time and for any reason, in which case we will cancel any deposit account withdrawal authorizations and promptly return all funds submitted, with interest calculated at Delanco Federal’s passbook savings rate from the date of receipt.

Effects of Conversion on Deposits and Borrowers

General. Each depositor in Delanco Federal currently has both a deposit account in the institution and a pro rata ownership interest in the net worth of Delanco MHC based upon the balance in his or her account. However, this ownership interest is tied to the depositor’s account and has no value separate from such deposit account. Furthermore, this ownership interest may only be realized in the unlikely event that Delanco MHC is liquidated. In such event, the depositors of record at that time, as owners, would share pro rata in any residual surplus and reserves of Delanco MHC after other claims are paid. Any depositor who opens a deposit account at Delanco Federal obtains a pro rata ownership interest in the net worth of Delanco MHC without any additional payment beyond the amount of the deposit. A depositor who reduces or closes his or her account receives a portion or all of the balance in the account but nothing for his or her ownership interest in the net worth of Delanco MHC, which is lost to the extent that the balance in the account is reduced. When a mutual holding company converts to stock holding company form, depositors lose all rights to the net worth of the mutual holding company, except the right to claim a pro rata share of funds representing the liquidation account established in connection with the conversion.

Continuity. While the conversion and offering are being accomplished, the normal business of Delanco Federal will continue without interruption, including being regulated by the OCC. After the conversion and offering, Delanco Federal will continue to provide services for depositors and borrowers under its current policies by its present management and staff.

The directors of Delanco Federal at the time of conversion will serve as directors of Delanco Federal after the conversion and offering. The board of directors of new Delanco Bancorp is composed of the individuals who serve on the board of directors of old Delanco Bancorp. All officers of Delanco Federal at the time of conversion will retain their positions after the conversion and offering.

Deposit Accounts and Loans. The conversion and offering will not affect any deposit accounts or borrower relationships with Delanco Federal. All deposit accounts in Delanco Federal after the conversion and offering will continue to be insured up to the legal maximum by the FDIC in the same manner as such deposit accounts were insured immediately before the conversion and offering. The conversion and offering will not change the interest rate or the maturity of deposits at Delanco Federal.

After the conversion and offering, all loans of Delanco Federal will retain the same status that they had before the conversion and offering. The amount, interest rate, maturity and security for each loan will remain as they were contractually fixed before the conversion and offering.

Effect on Liquidation Rights. If Delanco MHC were to liquidate, all claims of Delanco MHC’s creditors would be paid first. Thereafter, if there were any assets remaining, members of Delanco MHC would receive such remaining assets, pro rata, based upon the deposit balances in their deposit accounts at Delanco Federal immediately before liquidation. In the unlikely event that Delanco Federal were to liquidate after the conversion and offering, all claims of creditors (including those of depositors, to the extent of their deposit balances) also would be paid first, followed by distribution of the “liquidation account” to certain depositors (see “—Liquidation Rights” below), with any assets remaining thereafter distributed to new Delanco Bancorp as the holder of Delanco Federal’s capital stock.

Liquidation Rights

Liquidation Before the Conversion. In the unlikely event of a complete liquidation of Delanco MHC or old Delanco Bancorp prior to the conversion, all claims of creditors of old Delanco Bancorp, including those of depositors of Delanco Federal (to the extent of their deposit balances), would be paid first. Thereafter, if there were any assets of old Delanco Bancorp remaining, these assets would be distributed to shareholders, including Delanco MHC. Then, if there were any assets of Delanco MHC remaining, members of Delanco MHC would receive those remaining assets, pro rata, based upon the deposit balances in their deposit account in Delanco Federal immediately prior to liquidation.

77

Liquidation Following the Conversion. In the unlikely event that new Delanco Bancorp and Delanco Federal were to liquidate after the conversion, all claims of creditors, including those of depositors, would be paid first, followed by distribution of the “liquidation account” maintained by new Delanco Bancorp pursuant to the plan of conversion to certain depositors, with any assets remaining thereafter distributed to new Delanco Bancorp as the holder of Delanco Federal capital stock.

The plan of conversion provides for the establishment, upon the completion of the conversion, of a liquidation account by new Delanco Bancorp for the benefit of eligible account holders and supplemental eligible account holders in an amount equal to Delanco MHC’s ownership interest in the retained earnings of old Delanco Bancorp as of the date of its latest balance sheet contained in this prospectus. The plan of conversion also provides that new Delanco Bancorp shall cause the establishment of a bank liquidation account.

The liquidation account established by new Delanco Bancorp is designed to provide payments to depositors of their liquidation interests in the event of a liquidation of new Delanco Bancorp and Delanco Federal or of Delanco Federal. Specifically, in the unlikely event that new Delanco Bancorp and Delanco Federal were to completely liquidate after the conversion, all claims of creditors, including those of depositors, would be paid first, followed by distribution to depositors as of April 30, 2012 and June 30, 2013 of the liquidation account maintained by new Delanco Bancorp. In a liquidation of both entities, or of Delanco Federal, when new Delanco Bancorp has insufficient assets to fund the distribution due to eligible account holders and Delanco Federal has positive net worth, Delanco Federal will pay amounts necessary to fund new Delanco Bancorp’s remaining obligations under the liquidation account. The plan of conversion also provides that if new Delanco Bancorp is sold or liquidated apart from a sale or liquidation of Delanco Federal, then the rights of eligible account holders in the liquidation account maintained by new Delanco Bancorp will be surrendered and treated as a liquidation account in Delanco Federal. Depositors will have an equivalent interest in the bank liquidation account and the bank liquidation account will have the same rights and terms as the liquidation account.

Pursuant to the plan of conversion, after two years from the date of conversion and upon the written request of the Federal Reserve Board, new Delanco Bancorp will eliminate or transfer the liquidation account and the interests in such account to Delanco Federal and the liquidation account shall thereupon become the liquidation account of Delanco Federal and not be subject in any manner or amount to new Delanco Bancorp’s creditors.

Also, under the rules and regulations of the Federal Reserve Board, no post-conversion merger, consolidation, or similar combination or transaction with another depository institution in which new Delanco Bancorp or Delanco Federal is not the surviving institution would be considered a liquidation and, in such a transaction, the liquidation account would be assumed by the surviving institution.

Each eligible account holder and supplemental eligible account holder would have an initial interest in the liquidation account for each deposit account, including savings accounts, transaction accounts such as negotiable order of withdrawal accounts, money market deposit accounts, and certificates of deposit, with a balance of $50 or more held in Delanco Federal on April 30, 2012 or June 30, 2013, as applicable. Each eligible account holder and supplemental eligible account holder would have a pro rata interest in the total liquidation account for each such deposit account, based on the proportion that the balance of each such deposit account on April 30, 2012 or June 30, 2013 bears to the balance of all deposit accounts in Delanco Federal on such date.

If, however, on any December 31 annual closing date commencing after the effective date of the conversion, the amount in any such deposit account is less than the amount in the deposit account on April 30, 2012 or June 30, 2013 or any other annual closing date, then the interest in the liquidation account relating to such deposit account would be reduced from time to time by the proportion of any such reduction, and such interest will cease to exist if such deposit account is closed. In addition, no interest in the liquidation account would ever be increased despite any subsequent increase in the related deposit account. Payment pursuant to liquidation rights of eligible account holders and supplemental eligible account holders would be separate and apart from the payment of any insured deposit accounts to such depositor. Any assets remaining after the above liquidation rights of eligible account holders and supplemental eligible account holders are satisfied would be distributed to new Delanco Bancorp as the sole shareholder of Delanco Federal.

Delivery of Stock Certificates

A certificate representing the common stock purchased in the subscription and community offerings will be mailed by regular mail, by our transfer agent to the registration address designated by the subscriber on the stock order form as soon as practicable following completion of the conversion and offering. All shares of common stock sold in the syndicated community offering will be in book entry form and paper stock certificates will not be issued. Our transfer agent will hold certificates returned as undeliverable until claimed by the persons legally entitled to the certificates or otherwise disposed of in accordance with applicable law. Until certificates for common stock are available and delivered to purchasers, purchasers may not be able to sell their shares, even though trading of the common stock will have commenced. Your ability to sell the shares of common stock before your receipt of the stock certificate will depend on arrangements you may make with your brokerage firm. If you are currently a shareholder of old Delanco Bancorp, see “— Share Exchange Ratio for Current Shareholders.”

78

Stock Information Center

Our banking office personnel may not, by law, assist with investment-related questions about the offering. If you have any questions regarding the offering, please call our Stock Information Center. The telephone number is (            )             . The Stock Information Center is open Monday through Friday from 10:00 a.m. to 4:00 p.m., Eastern time. The Stock Information Center will be closed weekends and bank holidays.

Restrictions on Repurchase of Stock

Under Federal Reserve Board regulations, for a period of one year from the date of the completion of the offering we may not repurchase any of our common stock from any person, except (1) in an offer made to all shareholders to repurchase the common stock on a pro rata basis, approved by the Federal Reserve Board, (2) the repurchase of qualifying shares of a director, or (3) repurchases to fund restricted stock plans or tax-qualified employee stock benefit plans. Where extraordinary circumstances exist, the Federal Reserve Board may approve the open market repurchase of up to 5% of our common stock during the first year following the conversion and offering. To receive such approval, we must establish compelling and valid business purposes for the repurchase to the satisfaction of the Federal Reserve Board. Based on the foregoing restrictions, we anticipate that we will not repurchase any shares of our common stock in the year following completion of the conversion and offering.

Restrictions on Transfer of Shares Applicable to Officers and Directors

Common stock purchased in the offering will be freely transferable, except for shares purchased by our directors and executive officers.

Shares of common stock purchased by our directors and executive officers may not be sold for a period of one year following the offering, except upon the death of the shareholder or unless approved by the Federal Reserve Board. Shares purchased by these persons in the open market after the offering will be free of this restriction. Shares of common stock issued to directors and executive officers and their associates will bear a legend giving appropriate notice of the restriction and, in addition, we will give appropriate instructions to our transfer agent with respect to the restriction on transfers. Any shares issued to directors and executive officers as a stock dividend, stock split or otherwise with respect to restricted common stock will be similarly restricted.

Persons affiliated with us, including our directors and executive officers, received subscription rights based only on their accounts with Delanco Federal as account holders. While this aspect of the offering makes it difficult, if not impossible, for insiders to purchase stock for the explicit purpose of meeting the minimum of the offering, any purchases made by persons affiliated with us for the explicit purpose of meeting the minimum of the offering must be made for investment purposes only, and not with a view towards redistribution. Furthermore, as set forth above, Federal Reserve Board regulations restrict sales of common stock purchased in the offering by directors and executive officers for a period of one year following the offering.

Purchases of outstanding shares of our common stock by directors, officers, or any person who becomes an executive officer or director after adoption of the plan of conversion, and their associates, during the three-year period following the offering may be made only through a broker or dealer registered with the Securities and Exchange Commission, except with the prior written approval of the Federal Reserve Board. This restriction does not apply, however, to negotiated transactions involving more than 1% of our outstanding common stock or to the purchase of stock under stock benefit plans.

79

We have filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933 for the registration of the common stock to be issued in the offering. This registration does not cover the resale of the shares. Shares of common stock purchased by persons who are not affiliates of us may be resold without registration. Shares purchased by an affiliate of us will have resale restrictions under Rule 144 of the Securities Act. If we meet the current public information requirements of Rule 144, each affiliate of ours who complies with the other conditions of Rule 144, including those that require the affiliate’s sale to be aggregated with those of certain other persons, would be able to sell in the public market, without registration, a number of shares not to exceed, in any three-month period, the greater of 1% of our outstanding shares or the average weekly volume of trading in the shares during the preceding four calendar weeks. We may make future provision to permit affiliates to have their shares registered for sale under the Securities Act under certain circumstances.

Accounting Treatment

The conversion will be accounted for as a change in legal organization and form and not a business combination. Accordingly, the carrying amount of the assets and liabilities of Delanco Federal will remain unchanged from their historical cost basis.

Material Income Tax Consequences

Although the conversion may be effected in any manner approved by the Federal Reserve Board that is consistent with the purposes of the plan of conversion and applicable law, regulations and policies, it is intended that the conversion will be effected through various mergers. Completion of the conversion and offering is conditioned upon prior receipt of either a ruling or an opinion of counsel with respect to federal tax laws, and either a ruling or an opinion with respect to New Jersey tax laws, that no gain or loss will be recognized by Delanco Federal, old Delanco Bancorp or Delanco MHC as a result of the conversion or by account holders receiving subscription rights, except to the extent, if any, that subscription rights are deemed to have fair market value on the date such rights are issued. We believe that the tax opinions summarized below address all material federal income tax consequences that are generally applicable to Delanco Federal, old Delanco Bancorp, Delanco MHC, new Delanco Bancorp, persons receiving subscription rights and shareholders of old Delanco Bancorp.

Kilpatrick Townsend & Stockton LLP has issued an opinion to old Delanco Bancorp, Delanco MHC and new Delanco Bancorp that, for federal income tax purposes:

1. The merger of Delanco MHC with and into old Delanco Bancorp (the mutual holding company merger) will qualify as a tax-free reorganization within the meaning of Section 368(a)(1)(A) of the Internal Revenue Code. (Section 368(a)(l)(A) of the Internal Revenue Code.)

2. Delanco MHC will not recognize any gain or loss on the transfer of its assets to old Delanco Bancorp and old Delanco Bancorp’s assumption of its liabilities, if any, in constructive exchange for a liquidation interest in old Delanco Bancorp or on the constructive distribution of such liquidation interest to Delanco MHC’s members who remain depositors of Delanco Federal. (Sections 361(a), 361(c) and 357(a) of the Internal Revenue Code.)

3. No gain or loss will be recognized by old Delanco Bancorp upon the receipt of the assets of Delanco MHC in the mutual holding company merger in exchange for the constructive transfer to the members of Delanco MHC of a liquidation interest in old Delanco Bancorp (Section 1032(a) of the Internal Revenue Code.)

4. Persons who have an interest in Delanco MHC will recognize no gain or loss upon the constructive receipt of a liquidation interest in old Delanco Bancorp in exchange for their voting and liquidation rights in Delanco MHC. (Section 354(a) of the Internal Revenue Code.)

5. The basis of the assets of Delanco MHC (other than stock in old Delanco Bancorp) to be received by old Delanco Bancorp will be the same as the basis of such assets in the hands of Delanco MHC immediately prior to the transfer. (Section 362(b) of the Internal Revenue Code.)

6. The holding period of the assets of Delanco MHC in the hands of old Delanco Bancorp will include the holding period of those assets in the hands of Delanco MHC. (Section 1223(2) of the Internal Revenue Code.)

7. The merger of old Delanco Bancorp with and into new Delanco Bancorp (the holding company merger) will constitute a mere change in identity, form or place of organization within the meaning of Section 368(a)(1)(F) of the Internal Revenue Code and therefore will qualify as a tax-free reorganization within the meaning of Section 368(a)(1)(F) of the Internal Revenue Code. (Section 368(a)(1)(F) of the Internal Revenue Code.)

80

8. Old Delanco Bancorp will not recognize any gain or loss on the transfer of its assets to new Delanco Bancorp and new Delanco Bancorp’s assumption of its liabilities in exchange for shares of common stock in new Delanco Bancorp or on the constructive distribution of such stock to shareholders of old Delanco Bancorp other than Delanco MHC and the liquidation accounts to the eligible account holders and supplemental eligible account holders. (Sections 361(a), 361(c) and 357(a) of the Internal Revenue Code.)

9. No gain or loss will be recognized by new Delanco Bancorp upon the receipt of the assets of old Delanco Bancorp in the holding company merger. (Section 1032(a) of the Internal Revenue Code.)

10. The basis of the assets of old Delanco Bancorp (other than stock in Delanco Federal) to be received by new Delanco Bancorp will be the same as the basis of such assets in the hands of old Delanco Bancorp immediately prior to the transfer. (Section 362(b) of the Internal Revenue Code.)

11. The holding period of the assets of old Delanco Bancorp (other than stock in Delanco Federal) to be received by new Delanco Bancorp will include the holding period of those assets in the hands of old Delanco Bancorp immediately prior to the transfer. (Section 1223(2) of the Internal Revenue Code.)

12. Old Delanco Bancorp shareholders will not recognize any gain or loss upon their exchange of old Delanco Bancorp common stock for new Delanco Bancorp common stock. (Section 354 of the Internal Revenue Code.)

13. Eligible account holders and supplemental eligible account holders will not recognize any gain or loss upon their constructive exchange of their liquidation interests in old Delanco Bancorp for the liquidation accounts in new Delanco Bancorp (Section 354 of the Internal Revenue Code.)

14. The payment of cash to shareholders of old Delanco Bancorp in lieu of fractional shares of new Delanco Bancorp common stock will be treated as though the fractional shares were distributed as part of the holding company merger and then redeemed by new Delanco Bancorp. The cash payments will be treated as distributions in full payment for the fractional shares deemed redeemed under Section 302(a) of the Internal Revenue Code, with the result that such shareholders will have short-term or long-term capital gain or loss to the extent that the cash they receive differs from the basis allocable to such fractional shares. (Rev. Rul. 66-365, 1966-2 C.B. 116 and Rev. Proc. 77-41, 1977-2 C.B. 574.)

15. It is more likely than not that the fair market value of the nontransferable subscription rights to purchase old Delanco Bancorp common stock is zero. Accordingly, it is more likely than not that no gain or loss will be recognized by eligible account holders, supplemental eligible account Holders and other voting members upon distribution to them of nontransferable subscription rights to purchase shares of old Delanco Bancorp common stock. (Section 356(a) of the Internal Revenue Code.) Eligible account holders, supplemental eligible account holders and other voting members will not realize any taxable income as the result of the exercise by them of the nontransferable subscriptions rights. (Rev. Rul. 56-572, 1956-2 C.B. 182.)

16. It is more likely than not that the fair market value of the benefit provided by the bank liquidation account supporting the payment of the liquidation account in the event new Delanco Bancorp lacks sufficient net assets is zero. Accordingly, it is more likely than not that no gain or loss will be recognized by eligible account holders and supplemental eligible account holders upon the constructive distribution to them of such rights in the bank liquidation account as of the effective date of the holding company merger. (Section 356(a) of the Internal Revenue Code.)

17. It is more likely than not that the basis of common stock purchased in the offering by the exercise of the nontransferable subscription rights will be the purchase price thereof. (Section 1012 of the Internal Revenue Code.)

18. Each shareholder’s holding period in his or her new Delanco Bancorp common stock received in the exchange will include the period during which the common stock surrendered was held, provided that the common stock surrendered is a capital asset in the hands of the shareholder on the date of the exchange. (Section 1223(1) of the Internal Revenue Code.)

19. The holding period of the common stock purchased pursuant to the exercise of subscriptions rights shall commence on the date on which the right to acquire such stock was exercised. (Section 1223(5) of the Internal Revenue Code.)

20. No gain or loss will be recognized by new Delanco Bancorp on the receipt of money in exchange for common stock sold in the offering. (Section 1032 of the Internal Revenue Code.)

The statements set forth in paragraph (15) above are based on the position that the subscription rights do not have any market value at the time of distribution or at the time they are exercised. Whether subscription rights have a market value for federal income tax purposes is a question of fact, depending upon all relevant facts and circumstances. According to our counsel, the Internal Revenue Service will not issue rulings on whether subscription rights have a market value. Counsel has also advised us that they are unaware of

81

any instance in which the Internal Revenue Service has taken the position that nontransferable subscription rights have a market value. Counsel also noted that the subscription rights will be granted at no cost to the recipients, will be nontransferable and of short duration, and will afford the recipients the right only to purchase our common stock at a price equal to its estimated fair market value, which will be the same price as the purchase price for the unsubscribed shares of common stock.

The statements set forth in paragraph (16) above are based on the position that the benefit provided by the bank liquidation account supporting the payment of the liquidation account if new Delanco Bancorp lacks sufficient net assets has a fair market value of zero. According to our counsel: (1) there is no history of any holder of a liquidation account receiving any payment attributable to a liquidation account; (2) the interests in the liquidation account and bank liquidation account are not transferable; (3) the amounts due under the liquidation account with respect to each eligible account holder and supplemental eligible account holder will be reduced as their deposits in Delanco Federal are reduced as described in the plan of conversion; and (4) the bank liquidation account payment obligation arises only if new Delanco Bancorp lacks sufficient net assets to fund the liquidation account. If such bank liquidation account rights are subsequently found to have an economic value, income may be recognized by each eligible account holder and supplemental eligible account holder in the amount of such fair market value as of the effective date of the holding company merger.

Connolly, Grady & Cha, P.C. has issued an opinion to us to the effect that, more likely than not, the income tax consequences under New Jersey law of the conversion are not materially different than for federal tax purposes.

Unlike a private letter ruling issued by the Internal Revenue Service, an opinion of counsel is not binding on the Internal Revenue Service and the Internal Revenue Service could disagree with the conclusions reached in the opinion. If there is a disagreement, no assurance can be given that the conclusions reached in an opinion of counsel would be sustained by a court if contested by the Internal Revenue Service.

The opinions of Kilpatrick Townsend & Stockton LLP and Connolly, Grady & Cha, P.C. are filed as exhibits to the registration statement that we have filed with the Securities and Exchange Commission. See “Where You Can Find More Information.”

Interpretation, Amendment and Termination

All interpretations of the plan of conversion by our board of directors will be final, subject to the authority of the Federal Reserve Board. The plan of conversion provides that, if deemed necessary or desirable by the board of directors, the plan of conversion may be substantively amended by a majority vote of the board of directors as a result of comments from regulatory authorities or otherwise, at any time before the submission of proxy materials to the members of Delanco MHC and shareholders of old Delanco Bancorp. Amendment of the plan of conversion thereafter requires a majority vote of the board of directors, with the concurrence of the Federal Reserve Board. The plan of conversion may be terminated by a majority vote of the board of directors at any time before the earlier of the date of the special meeting of shareholders and the date of the annual meeting of members of Delanco MHC, and may be terminated by the board of directors at any time thereafter with the concurrence of the Federal Reserve Board. The plan of conversion will terminate if the conversion and offering are not completed within 24 months from the date on which the members of Delanco MHC approved the plan of conversion, and may not be extended by us or the Federal Reserve Board.

82

COMPARISON OF SHAREHOLDERS’ RIGHTS

As a result of the conversion, current holders of old Delanco Bancorp common stock will become shareholders of new Delanco Bancorp. There are certain differences in shareholder rights arising from distinctions between the federal stock charter and bylaws of old Delanco Bancorp and the certificate of incorporation and bylaws of new Delanco Bancorp and from distinctions between laws with respect to federally chartered savings and loan holding companies and New Jersey law.

In some instances, the rights of shareholders of new Delanco Bancorp will be less than the rights shareholders of old Delanco Bancorp currently have. The decrease in shareholder rights under the New Jersey certificate of incorporation and bylaws are not mandated by New Jersey law but have been chosen by management as being in the best interest of new Delanco Bancorp. In some instances, the differences in shareholder rights may increase management rights. In other instances, the provisions in new Delanco Bancorp’s certificate of incorporation and bylaws described below may make it more difficult to pursue a takeover attempt that management opposes. These provisions will also make the removal of the board of directors or management, or the appointment of new directors, more difficult. We believe that the provisions described below are prudent and will enhance our ability to remain an independent financial institution and reduce our vulnerability to takeover attempts and certain other transactions that have not been negotiated with and approved by our board of directors. These provisions also will assist us in the orderly deployment of the conversion proceeds into productive assets and allow us to implement our business plan during the initial period after the conversion. We believe these provisions are in the best interests of new Delanco Bancorp and its shareholders.

The following discussion is not intended to be a complete statement of the differences affecting the rights of shareholders, but rather summarizes the more significant differences and certain important similarities. The discussion herein is qualified in its entirety by reference to the certificate of incorporation and bylaws of new Delanco Bancorp.

Authorized Capital Stock. The authorized capital stock of old Delanco Bancorp consists of 7,000,000 shares of common stock, par value $0.01 per share, and 3,000,000 shares of preferred stock, par value $0.01 per share. The authorized capital stock of the new Delanco Bancorp will consist of 20,000,000 shares of common stock, par value $0.01 per share and 5,000,000 shares of preferred stock, par value $0.01 per share.

Old Delanco Bancorp’s charter and new Delanco Bancorp’s certificate of incorporation both authorize the board of directors to establish one or more series of preferred stock and, for any series of preferred stock, to determine the terms and rights of the series, including voting rights, dividend rights, conversion and redemption rates and liquidation preferences. Although neither board of directors has any intention at the present time of doing so, it could issue a series of preferred stock that could, depending on its terms, impede a merger, tender offer or other takeover attempt.

Issuance of Capital Stock. Currently, pursuant to applicable laws and regulations, Delanco MHC is required to own not less than a majority of the outstanding common stock of old Delanco Bancorp. There will be no such restriction applicable to new Delanco Bancorp following consummation of the conversion, as Delanco MHC will cease to exist.

New Delanco Bancorp’s certificate of incorporation does not contain restrictions on the issuance of shares of capital stock to the directors, officers or controlling persons of new Delanco Bancorp, whereas old Delanco Bancorp’s federal stock charter provides that no shares may be issued to directors, officers or controlling persons other than as part of a general public offering, or to directors for purposes of qualifying for service as directors, unless the share issuance or the plan under which they would be issued has been approved by a majority of the total votes eligible to be cast at a legal meeting. Thus, new Delanco Bancorp could adopt stock-related compensation plans such as stock option plans without shareholder approval and shares of the capital stock of new Delanco Bancorp could be issued directly to directors or officers without shareholder approval. However, although generally not required, shareholder approval of stock-related compensation plans may be sought in certain instances to qualify such plans for favorable treatment under current federal income tax laws and regulations.

Neither the federal stock charter and bylaws of old Delanco Bancorp nor the certificate of incorporation and bylaws of new Delanco Bancorp provide for preemptive rights to shareholders in connection with the issuance of capital stock.

Voting Rights. Neither the federal stock charter of old Delanco Bancorp nor the certificate of incorporation of new Delanco Bancorp permits cumulative voting in the election of directors. Cumulative voting entitles you to a number of votes equaling the number of shares you hold multiplied by the number of directors to be elected. Cumulative voting allows you to cast all your votes for a single nominee or apportion your votes among any two or more nominees. For example, when two directors are to be elected, cumulative voting allows a holder of 100 shares to cast 200 votes for a single nominee, apportion 100 votes for each nominee, or apportion 200 votes in any other manner.

83

Payment of Dividends. The ability of Delanco Federal to pay dividends on its capital stock is restricted by OCC and Federal Reserve Board regulations and by tax considerations related to savings associations. Delanco Federal will continue to be subject to these restrictions after the conversion, and such restrictions will indirectly affect new Delanco Bancorp because dividends from Delanco Federal will be a primary source of funds for the payment of dividends to the shareholders of new Delanco Bancorp.

New Jersey law generally provides that, unless otherwise restricted in a corporation’s certificate of incorporation, a corporation’s board of directors may authorize and a corporation may pay dividends to shareholders. However, a distribution may not be made if, after giving effect thereto, the corporation would not be able to pay its debts as they become due in the usual course of business or the corporation’s total assets would be less than its total liabilities.

Board of Directors. The bylaws of old Delanco Bancorp and the certificate of incorporation of new Delanco Bancorp each require the board of directors to be divided into three classes as nearly equal in number as possible and that the members of each class be elected for a term of three years and until their successors are elected and qualified, with one class being elected annually. Under both the bylaws of old Delanco Bancorp and the bylaws of new Delanco Bancorp, any vacancy occurring in the board of directors, however caused, may be filled by an affirmative vote of the majority of the directors then in office, whether or not a quorum is present. Any director of old Delanco Bancorp so chosen shall hold office until the next annual meeting of shareholders, and any director of new Delanco Bancorp so chosen shall hold office until the next annual meeting of shareholders and until his or her successor shall have been elected and qualified.

The bylaws of new Delanco Bancorp provide that to be eligible to serve on the board of directors a person must not: (1) be under indictment for, or ever have been convicted of, a criminal offense involving dishonesty or breach of trust and the penalty for such offense could be imprisonment for more than one year, (2) be a person against whom a banking agency has, within the past ten years, issued a cease and desist order for conduct involving dishonesty or breach of trust and that order is final and not subject to appeal, or (3) have been found either by a regulatory agency whose decision is final and not subject to appeal or by a court to have (i) breached a fiduciary duty involving personal profit, or (ii) committed a willful violation of any law, rule or regulation governing banking, securities, commodities or insurance, or any final cease and desist order issued by a banking, securities, commodities or insurance regulatory agency.

In addition, the bylaws of new Delanco Bancorp require that a majority of the directors reside in New Jersey. This provision may prevent shareholders from nominating themselves or persons of their choosing for election to the board of directors.

Under the bylaws of old Delanco Bancorp, directors may be removed only for cause at a meeting of shareholders called for such purpose by the vote of the holders of a majority of the shares of stock entitled to vote at an election of directors. The certificate of incorporation of new Delanco Bancorp provides that any director may be removed by shareholders only for cause upon the affirmative vote of the holders of not less than 80% of the shares entitled to vote in the election of directors. The higher vote threshold will make it more difficult for shareholders to remove directors and replace them with their own nominees.

Limitations on Liability. The certificate of incorporation of new Delanco Bancorp provides that, to the fullest extent permitted under New Jersey law, the directors and officers of new Delanco Bancorp shall have no personal liability to new Delanco Bancorp or its shareholders for damages for breach of any duty owed to new Delanco Bancorp or its shareholders, provided that no director or officer shall be relieved from liability for any breach of duty based upon an act or omission (1) in breach of the director’s or officer’s duty of loyalty to new Delanco Bancorp or its shareholders, (2) not in good faith or involving a knowing violation of law, or (3) resulting in receipt by such person of an improper personal benefit.

Currently, federal law does not permit federally chartered savings and loan holding companies like old Delanco Bancorp to limit the personal liability of directors in the manner provided by New Jersey law and the laws of many other states.

Indemnification of Directors, Officers, Employees and Agents. Federal regulations provide that old Delanco Bancorp must indemnify its directors, officers and employees for any costs incurred in connection with any action involving any such person’s activities as a director, officer or employee if such person obtains a final judgment on the merits in his or her favor. In addition, indemnification is permitted in the case of a settlement, a final judgment against such person or final judgment other than on the merits, if a majority of disinterested directors determines that such person was acting in good faith within the scope of his or her employment as he or she could reasonably have perceived it under the circumstances and for a purpose he or she could reasonably have believed under the circumstances was in the best interest of old Delanco Bancorp or its shareholders. Old Delanco Bancorp also is permitted to pay ongoing expenses incurred by a director, officer or employee if a majority of disinterested directors concludes that such person may ultimately be entitled to indemnification. Before making any indemnification payment, old Delanco Bancorp is required to notify the Federal Reserve Board of its intention and such payment cannot be made if the Federal Reserve Board objects thereto.

84

The certificate of incorporation of new Delanco Bancorp provides that it will indemnify its directors and officers, whether serving it or at its request any other entity, to the fullest extent required or permitted under New Jersey law. Such indemnification includes the advancement of expenses. The certificate of incorporation of new Delanco Bancorp also provides that new Delanco Bancorp will indemnify its employees and agents and any director, officer, employee or agent of any other entity to such extent as shall be authorized by the board of directors and be permitted by law.

Special Meetings of Shareholders. The bylaws of old Delanco Bancorp provide that special meetings of the shareholders of old Delanco Bancorp may be called by the Chairman, President, a majority of the board of directors or the holders of not less than one-tenth of the outstanding capital stock of old Delanco Bancorp entitled to vote at the meeting. The bylaws of new Delanco Bancorp provide that special meetings of shareholders may be called by the Chairman, the President or a majority of the board of directors. In addition, New Jersey law provides that a special meetings of shareholders may be called by a court upon the application of the holders of not less than 10% of all the shares entitled to vote at a meeting.

Shareholder Nominations and Proposals. The bylaws of old Delanco Bancorp provide an advance notice procedure for shareholders to nominate directors or bring other business before an annual or special meeting of shareholders of old Delanco Bancorp. A person may not be nominated for election as a director unless that person is nominated by or at the direction of the old Delanco Bancorp board of directors or by a shareholder who has given appropriate notice to old Delanco Bancorp before the meeting. Similarly, a shareholder may not bring business before an annual meeting unless the shareholder has given old Delanco Bancorp appropriate notice of its intention to bring that business before the meeting.

New Delanco Bancorp’s bylaws establish a more comprehensive advance notice procedure for shareholders to nominate directors at an annual or special meeting of shareholders or bring other business before an annual meeting of shareholders. A person may not be nominated for election as a director unless that person is nominated by or at the direction of the new Delanco Bancorp board of directors or by a shareholder who has given appropriate notice to new Delanco Bancorp before the meeting. Similarly, a shareholder may not bring business before an annual meeting unless the shareholder has given new Delanco Bancorp appropriate notice of its intention to bring that business before the meeting. New Delanco Bancorp’s secretary must receive notice of the nomination or proposal not less than 90 days nor more than 120 days prior to the first anniversary of the previous year’s annual meeting; provided, however, that if the date of the annual meeting is more than 30 days before or more than 60 days after the anniversary date of the previous year’s annual meeting, notice must be received no earlier than 120 days and no later than the later of the 90^th day prior to the annual meeting or, if public disclosure of the annual meeting is made less than 100 days prior to the annual meeting, the 10th day following the day on which such public notice of the date of the annual meeting was made. A shareholder who desires to raise new business must provide certain information to new Delanco Bancorp concerning the nature of the new business, the shareholder and the shareholder’s interest in the business matter. Similarly, a shareholder wishing to nominate any person for election as a director must provide new Delanco Bancorp with certain information concerning the nominee and the proposing shareholder.

Advance notice of nominations or proposed business by shareholders gives new Delanco Bancorp’s board of directors time to consider the qualifications of the proposed nominees, the merits of the proposals and, to the extent deemed necessary or desirable by the board of directors, to inform shareholders and make recommendations about those matters.

Shareholder Action Without a Meeting. Under New Jersey law, action may be taken by shareholders of new Delanco Bancorp without a meeting if all shareholders entitled to vote on the action give written consent to taking such action without a meeting. Similarly, the Bylaws of new Delanco Bancorp provide that action may be taken by shareholders without a meeting if all shareholders entitled to vote on the matter consent to the taking of such action without a meeting.

Shareholder’s Right to Examine Books and Records. A federal regulation, which is currently applicable to old Delanco Bancorp, provides that shareholders holding of record at least $100,000 of stock or at least 1% of the total outstanding voting shares may inspect and make extracts from specified books and records of a federally chartered savings and loan association after proper written notice for a proper purpose.

Under New Jersey law, a shareholder who has been a shareholder for at least six months or who holds, or is authorized in writing by holders of, at least 5% of the outstanding shares of any class or series of stock of a corporation has the right, for any proper purpose and upon at least five days’ written notice, to inspect in person or by agent or attorney the minutes of the proceedings of the corporation’s shareholders and its record of shareholders. Irrespective of the period such shareholder has held new Delanco Bancorp stock or the amount of stock such shareholder holds, a court may, upon proof of proper purpose, compel production for examination by the shareholder of the books and records of account, minutes and record of shareholders of new Delanco Bancorp.

85

Limitations on Voting Rights. The certificate of incorporation of new Delanco Bancorp provides that in no event will any record owner of any outstanding common stock which is beneficially owned, directly or indirectly, by a person who, as of any record date for the determination of shareholders entitled to vote on any matter, beneficially owns in excess of 10% of the then-outstanding shares of common stock, be entitled, or permitted to any vote in respect of the shares held in excess of the limit. This limitation does not apply to any director or officer acting solely in their capacities as directors and officers, or any employee benefit plans of new Delanco Bancorp or any subsidiary or a trustee of a plan.

In addition, Federal Reserve Board regulations provide that for a period of three years following the date of the completion of the offering, no person, acting singly or together with associates in a group of persons acting in concert, may directly or indirectly offer to acquire or acquire the beneficial ownership of more than 10% of a class of new Delanco Bancorp’s equity securities without the prior written approval of the Federal Reserve Board. Where any person acquires beneficial ownership of more than 10% of a class of our equity securities without the prior written approval of the Federal Reserve Board, the securities beneficially owned by such person in excess of 10% may not be voted by any person or counted as voting shares in connection with any matter submitted to the shareholders for a vote, and will not be counted as outstanding for purposes of determining the affirmative vote necessary to approve any matter submitted to the shareholders for a vote.

The charter of old Delanco Bancorp provides that no person, other than Delanco MHC, shall directly or indirectly offer to acquire or acquire more than 10% of the then-outstanding shares of common stock. The foregoing restriction does not apply to:

• the purchase of shares by underwriters in connection with a public offering; or

• the purchase of shares by any employee benefit plans of old Delanco Bancorp or any subsidiary.

Mergers, Consolidations and Sales of Assets. Federal regulations currently require the approval of two-thirds of the board of directors of old Delanco Bancorp and the holders of two-thirds of the outstanding stock of old Delanco Bancorp entitled to vote thereon for mergers, consolidations and sales of all or substantially all of its assets. Such regulation permits old Delanco Bancorp to merge with another corporation without obtaining the approval of its shareholders if:

• it does not involve an interim savings institution;

• the charter of old Delanco Bancorp is not changed;

• each share of old Delanco Bancorp stock outstanding immediately before the effective date of the transaction is to be an identical outstanding share or a treasury share of old Delanco Bancorp after such effective date; and

• either: (a) no shares of voting stock of old Delanco Bancorp and no securities convertible into such stock are to be issued or delivered under the plan of combination or (b) the authorized unissued shares or the treasury shares of voting stock of old Delanco Bancorp to be issued or delivered under the plan of combination, plus those initially issuable upon conversion of any securities to be issued or delivered under such plan, do not exceed 15% of the total shares of voting stock of old Delanco Bancorp outstanding immediately before the effective date of the transaction.

The certificate of incorporation of new Delanco Bancorp requires the affirmative vote of at least two-thirds of the votes entitled to be cast by the holders of shares of capital stock of new Delanco Bancorp to enter into any merger, consolidation, liquidation or dissolution or any action that would result in the sale or other disposition of all or substantially all of the assets of new Delanco Bancorp unless the transaction is approved by two-thirds of the entire board of directors, in which case such transactions shall only require the shareholder vote, if any, as would be required under New Jersey law. Under New Jersey law, a merger or consolidation of new Delanco Bancorp requires approval of a majority of the votes cast by shareholders, except that no approval by shareholders is required for a merger if:

• the plan of merger does not make an amendment of the certificate of incorporation that would be required to be approved by the shareholders;

• each shareholder of the surviving corporation whose shares were outstanding immediately before the effective date of the merger will hold the same number of shares, with identical designations, preferences, limitations, and rights, immediately after;

• the number of shares that entitle their holders to vote unconditionally in the election of directors (“voting shares”) outstanding immediately after the merger, plus the number of voting shares issuable on conversion of other securities or on exercise of rights and warrants issued pursuant to the merger, will not exceed by more than 40% the total number of voting shares outstanding immediately before the merger; and

86

• the number of shares entitling holders to participate in distributions without limitation (“participating shares”) outstanding immediately after the merger, plus the number of participating shares issuable on conversion of other securities or on exercise of rights and warrants issued pursuant to the merger, will not exceed by more than 40% the total number of participating shares outstanding immediately before the merger.

In addition, under certain circumstances the approval of the shareholders shall not be required to authorize a merger with or into a 90% owned subsidiary of new Delanco Bancorp.

Under New Jersey law, a sale of all or substantially all of new Delanco Bancorp’s assets other than in the ordinary course of business, or a voluntary dissolution of new Delanco Bancorp, requires the approval of its board of directors and the affirmative vote of a majority of the votes cast by the shareholders entitled to vote thereon.

Business Combinations with Interested Stockholders. New Jersey law prohibits any merger, consolidation, sale, liquidation, or dissolution with any “interested stockholder” for a period of five years following the interested stockholder’s stock acquisition date unless (i) the business combination is approved by the board of directors prior to the stock acquisition date or (ii) the business combination which caused the person to become an interested stockholder was approved by the board of directors prior to that interested stockholder’s stock acquisition date and any subsequent business combinations with that interested stockholder are approved by the board of directors, provided that any such subsequent business combination is approved by (1) the board of directors, or a committee of that board, consisting solely of persons who are not employees, officers, directors, stockholders, affiliates or associates of that interested stockholder, and (2) the affirmative vote of the holders of a majority of the voting stock not beneficially owned by such interested stockholder at a meeting called for such purpose. An interested stockholder is any person who, directly or indirectly, has the right to vote or to sell 10% or more of the outstanding shares. Affiliates and associates of an interested stockholder are also considered to be interested stockholders. In addition, new Delanco Bancorp’s certificate of incorporation requires that at least one of the following conditions be met to engage in a business combination with an interested stockholder: (i) approval by the board of directors prior to the interested stockholder’s stock acquisition date and thereafter approval by shareholders; (ii) approval by the affirmative vote of the holders of at least two-thirds of the voting shares not beneficially owned by that interested stockholder at a meeting called for such purpose; or (iii) satisfaction of certain minimum price conditions, as set forth in the certificate of incorporation.

Neither the charter or bylaws of old Delanco Bancorp nor the federal laws and regulations applicable to old Delanco Bancorp contain a provision that restricts business combinations between old Delanco Bancorp and any interested stockholder in the manner set forth above.

Dissenters’ Rights of Appraisal. Under New Jersey law, shareholders of new Delanco Bancorp have the right to dissent from any plan of merger or consolidation to which new Delanco Bancorp is a party, and to demand payment for the fair value of their shares. However, unless the certificate of incorporation otherwise provides, New Jersey law provides that shareholders do not have a right to dissent from any plan of merger or consolidation with respect to shares (1) of a class or series which is listed on a national securities exchange or is held of record by not less than 1,000 holders; or (2) for which, pursuant to the plan of merger or consolidation, such shareholder will receive (x) cash, (y) shares, obligations or other securities which, upon consummation of the merger or consolidation, will either be listed on a national securities exchange or held of record by not less than 1,000 holders, or (z) cash and such securities. In addition, New Jersey law provides that, unless the certificate of incorporation provides otherwise, shareholders of a surviving corporation do not have the right to dissent from a plan of merger if the merger did not require for its approval the vote of such shareholders. In addition, unless a corporation’s certificate of incorporation provides otherwise, New Jersey law provides that shareholders do not have a right to dissent from any sale, lease, exchange or other disposition of all or substantially all of the assets of a corporation (1) with respect to shares of a class or series which is listed on a national securities exchange or is held of record by not less than 1,000 holders; (2) from a transaction pursuant to a plan of dissolution of the corporation which provides for distribution of substantially all of its net assets to shareholders in accordance with their respective interests within one year after the date of such transaction, where such transaction is wholly for (x) cash or (y) shares, obligations or other securities which, upon consummation of the plan of dissolution, will either be listed on a national securities exchange or held of record by not less than 1,000 holders, or (z) cash and such securities; or (3) from a sale pursuant to an order of a court having jurisdiction. New Delanco Bancorp’s certificate of incorporation and bylaws are silent as to dissenters’ rights.

Evaluation of Offers; Other Corporate Constituencies. The certificate of incorporation of new Delanco Bancorp provides that its directors, in discharging their duties to new Delanco Bancorp and in determining what they reasonably believe to be in the best interest of new Delanco Bancorp, may, in addition to considering the effects of any action on shareholders, consider any of the following: (a) the effects of the action on new Delanco Bancorp’s employees, suppliers, creditors and customers; (b) the effects of the action on the communities in which new Delanco Bancorp operates; and (c) the long-term as well as the short-term interests of new Delanco Bancorp and its shareholders, including the possibility that these interests may best be served by the continued independence of new Delanco Bancorp. If on the basis of these factors the board of directors determines that any proposal or offer to acquire new Delanco Bancorp is not in the best interest of new Delanco Bancorp, it may reject such proposal or offer. If the board of directors determines to reject any such proposal or offer, the board of directors shall have no obligation to facilitate, remove any barriers to, or refrain from impeding the proposal or offer.

87

By having these standards in the certificate of incorporation of new Delanco Bancorp, the board of directors may be in a stronger position to oppose such a transaction if the board of directors concludes that the transaction would not be in the best interest of new Delanco Bancorp, even if the price offered is significantly greater than the market price of any equity security of new Delanco Bancorp.

Amendment of Governing Instruments. No amendment of the charter of old Delanco Bancorp may be made unless it is first proposed by the board of directors, then preliminarily approved by the Federal Reserve Board, and thereafter approved by the holders of a majority of the total votes eligible to be cast at a legal meeting. The certificate of incorporation of new Delanco Bancorp generally may be amended by the holders of a majority of the shares entitled to vote, provided that any amendment of Sections 3.04 (limitation on common stock voting rights), 5.04 (classification of board of directors and director terms) or 5.06 (director considerations in evaluating offers), or Articles VI (certain shareholder voting requirements), VII (elimination of director and officer liability), VIII (indemnification of directors, officers, employees and agents) and IX (amendment of bylaws), must be approved by the affirmative vote of the holders of at least two-thirds of the votes entitled to be cast by the holders of shares of capital stock of new Delanco Bancorp, except that the board of directors may amend the certificate of incorporation without any action by the shareholders to the fullest extent allowed under New Jersey law.

The bylaws of old Delanco Bancorp may be amended in a manner consistent with regulations of the Federal Reserve Board and shall be effective after (1) approval of the amendment by a majority vote of the authorized board of directors, or by a majority of the votes cast by the shareholders of old Delanco Bancorp at any legal meeting and (2) receipt of applicable regulatory approval. The bylaws of new Delanco Bancorp may be amended by the affirmative vote of two-thirds of the full board of directors or by the vote of the holders of not less than two-thirds of the votes cast by holders of the capital stock of new Delanco Bancorp entitled to vote generally in the election of directors (considered for this purpose as one class) at a meeting of the shareholders called for that purpose at which a quorum is present (provided that notice of such proposed amendment is included in the notice of such meeting).

88

RESTRICTIONS ON ACQUISITION OF NEW DELANCO BANCORP

General

Certain provisions in the certificate of incorporation and bylaws of new Delanco Bancorp may have antitakeover effects. In addition, regulatory restrictions may make it more difficult for persons or companies to acquire control of us.

Certificate of Incorporation and Bylaws of New Delanco Bancorp

Although our board of directors is not aware of any effort that might be made to obtain control of us after the offering, the board of directors believed it appropriate to adopt certain provisions permitted by federal and state regulations that may have the effect of deterring a future takeover attempt that is not approved by our board of directors. The following description of these provisions is only a summary and does not provide all of the information contained in our certificate of incorporation and bylaws. See “Where You Can Find More Information” as to where to obtain a copy of these documents.

Limitation on Voting Rights. Our certificate of incorporation provides that in no event will any record owner of any outstanding common stock which is beneficially owned, directly or indirectly, by a person who, as of any record date for the determination of shareholders entitled to vote on any matter, beneficially owns in excess of 10% of the then-outstanding shares of common stock, be entitled, or permitted to any vote in respect of the shares held in excess of the limit. This limitation does not apply to any director or officer acting solely in their capacities as directors and officers, or any employee benefit plans of new Delanco Bancorp or any subsidiary or a trustee of a plan.

Classified Board. Our board of directors is divided into three classes as nearly as equal in number as possible. The shareholders elect one class of directors each year for a term of three years. The classified board makes it more difficult and time consuming for a shareholder group to fully use its voting power to gain control of the board of directors without the consent of the incumbent board of directors of new Delanco Bancorp.

Filling of Vacancies; Removal. Our certificate of incorporation provides that any vacancy occurring in the board of directors, including a vacancy created by an increase in the number of directors, may be filled by a vote of a majority of the directors then in office. A person elected to fill a vacancy on the board of directors will serve until the next annual meeting of shareholders and until his or her successor shall have been elected and qualified. Our certificate of incorporation provides that a director may be removed from the board of directors before the expiration of his or her term only for cause and only upon the vote of 80% of the shares entitled to vote in the election of director. These provisions make it more difficult for shareholders to remove directors and replace them with their own nominees.

Qualification. Our bylaws provide that to be eligible to serve on the board of directors a person must not: (1) be under indictment for, or ever have been convicted of, a criminal offense involving dishonesty or breach of trust and the penalty for such offense could be imprisonment for more than one year, (2) be a person against whom a banking agency has, within the past ten years, issued a cease and desist order for conduct involving dishonesty or breach of trust and that order is final and not subject to appeal, or (3) have been found either by a regulatory agency whose decision is final and not subject to appeal or by a court to have (i) breached a fiduciary duty involving personal profit, or (ii) committed a willful violation of any law, rule or regulation governing banking, securities, commodities or insurance, or any final cease and desist order issued by a banking, securities, commodities or insurance regulatory agency. In addition, our bylaws require that a majority of the directors must reside in New Jersey. These provisions contained in our bylaws may prevent shareholders from nominating themselves or persons of their choosing for election to the board of directors.

Elimination of Cumulative Voting. Our certificate of incorporation provides that no shares will be entitled to cumulative voting. The elimination of cumulative voting makes it more difficult for a shareholder group to elect a director nominee.

Special Meetings of Shareholders. Our shareholders must act only through an annual or special meeting. Special meetings of shareholders may only be called by the Chairman, the President, a majority of the board of directors or by a court upon the application of the holders of not less than 10% of all the shares entitled to vote at a meeting. The limitations on the calling of special meetings of shareholders may have the effect of delaying consideration of a shareholder proposal until the next annual meeting.

Amendment of Certificate of Incorporation. Our certificate of incorporation provides that certain amendments to our certificate of incorporation relating to a change in control of us must be approved by the affirmative vote of at least two-thirds of the votes entitled to be cast by the holders of shares of capital stock entitled to vote.

Advance Notice Provisions for Shareholder Nominations and Proposals. Our bylaws establish an advance notice procedure for shareholders to nominate directors at an annual or special meeting of shareholders or bring other business before an annual meeting of shareholders. A person may not be nominated for election as a director unless that person is nominated by or at the direction of our board of directors or by a shareholder who has given appropriate notice to us before the meeting. Similarly, a shareholder may not

89

bring business before an annual meeting unless the shareholder has given us appropriate notice of the shareholder’s intention to bring that business before the meeting. Our Secretary must receive notice of the nomination or proposal not less than 90 days nor more than 120 days prior to the first anniversary of the previous year’s annual meeting; provided, however, that if the date of the annual meeting is more than 30 days before or more than 60 days after the anniversary date of the previous year’s annual meeting, notice must be received no earlier than 120 days and no later than the later of the 90th day prior to the annual meeting or, if public disclosure of the annual meeting is made less than 100 days prior to the annual meeting, the 10th day following the day on which such public notice of the date of the annual meeting was made. A shareholder who desires to raise new business must provide certain information to us concerning the nature of the new business, the shareholder and the shareholder’s interest in the business matter. Similarly, a shareholder wishing to nominate any person for election as a director must provide us with certain information concerning the nominee and the proposing shareholder.

Advance notice of nominations or proposed business by shareholders gives our board of directors time to consider the qualifications of the proposed nominees, the merits of the proposals and, to the extent deemed necessary or desirable by our board of directors, to inform shareholders and make recommendations about those matters.

Authorized but Unissued Shares of Capital Stock. Following the offering, we will have authorized but unissued shares of common and preferred stock. Our certificate of incorporation authorizes the board of directors to establish one or more series of preferred stock and, for any series of preferred stock, to determine the terms and rights of the series, including voting rights, dividend rights, conversion and redemption rates, and liquidation preferences. Such shares of common and preferred stock could be issued by the board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise.

New Jersey State Law

New Jersey law prohibits any merger, consolidation, sale, liquidation, or dissolution with any “interested stockholder” for a period of five years following the interested stockholder’s stock acquisition date unless (i) the business combination is approved by the board of directors prior to the stock acquisition date or (ii) the business combination which caused the person to become an interested stockholder was approved by the board of directors prior to that interested stockholder’s stock acquisition date and any subsequent business combinations with that interested stockholder are approved by the board of directors, provided that any such subsequent business combination is approved by (1) the board of directors, or a committee of that board, consisting solely of persons who are not employees, officers, directors, stockholders, affiliates or associates of that interested stockholder, and (2) the affirmative vote of the holders of a majority of the voting stock not beneficially owned by such interested stockholder at a meeting called for such purpose. An interested stockholder is any person who, directly or indirectly, has the right to vote or to sell 10% or more of the outstanding shares. Affiliates and associates of an interested stockholder are also considered to be interested stockholders. New Jersey law also requires that at least one of the following conditions be met to engage in a business combination with an interested stockholder: (i) approval by the board of directors prior to the interested stockholder’s stock acquisition date and thereafter approval by shareholders; (ii) approval by the affirmative vote of the holders of at least two-thirds of the voting shares not beneficially owned by that interested stockholder at a meeting called for such purpose; or (iii) satisfaction of certain minimum price conditions.

Regulatory Restrictions

Federal Reserve Board Regulations. Federal Reserve Board regulations provide that for a period of three years following the date of the completion of the offering, no person, acting singly or together with associates in a group of persons acting in concert, may directly or indirectly offer to acquire or acquire the beneficial ownership of more than 10% of a class of our equity securities without the prior written approval of the Federal Reserve Board. Where any person acquires beneficial ownership of more than 10% of a class of our equity securities without the prior written approval of the Federal Reserve Board, the securities beneficially owned by such person in excess of 10% may not be voted by any person or counted as voting shares in connection with any matter submitted to the shareholders for a vote, and will not be counted as outstanding for purposes of determining the affirmative vote necessary to approve any matter submitted to the shareholders for a vote.

The acquisition of 10% or more of our outstanding common stock may trigger provisions of the Bank Holding Company Act, the Change in Bank Control Act of 1978, the Federal Reserve Board’s Regulation Y and OCC regulations. The Federal Reserve Board and OCC also require persons who at any time intend to acquire control of a federally chartered savings association or its holding company to provide 60 days prior written notice and certain financial and other information to the Federal Reserve Board and the OCC.

The 60-day notice period does not commence until the information is deemed to be substantially complete. Control for these purposes exists in situations in which the acquiring party has voting control of at least 25% of any class of our voting stock or the power to direct our management or policies. However, under Federal Reserve Board and OCC regulations, control is presumed to exist where the acquiring party has voting control of at least 10% of any class of our voting securities if specified “control factors” are present. The statute and underlying regulations authorize the Federal Reserve Board and the OCC to disapprove a proposed acquisition on certain specified grounds.

90

DESCRIPTION OF NEW DELANCO BANCORP CAPITAL STOCK

The common stock of new Delanco Bancorp represents nonwithdrawable capital, is not an account of any type, and is not insured by the FDIC or any other government agency.

General

New Delanco Bancorp is authorized to issue 25,000,000 shares of common stock having a par value of $0.01 per share and 5,000,000 shares of preferred stock having a par value of $0.01. Each share of new Delanco Bancorp’s common stock has the same relative rights as, and is identical in all respects with, each other share of common stock. Upon payment of the purchase price for the common stock, as required by the plan of conversion, all stock will be duly authorized, fully paid and nonassessable. New Delanco Bancorp will not issue any shares of preferred stock in the conversion and offering.

Common Stock

Dividends. New Delanco Bancorp can pay dividends if, as and when declared by its board of directors. The payment of dividends by new Delanco Bancorp is limited by law and applicable regulation. See “Our Dividend Policy.” The holders of common stock of new Delanco Bancorp will be entitled to receive and share equally in dividends declared by the board of directors of new Delanco Bancorp. If new Delanco Bancorp issues preferred stock, the holders of the preferred stock may have a priority over the holders of the common stock with respect to dividends.

Voting Rights. The holders of common stock of new Delanco Bancorp will possess exclusive voting rights in new Delanco Bancorp. They will elect new Delanco Bancorp’s board of directors and act on other matters as are required to be presented to them under New Jersey law or as are otherwise presented to them by the board of directors. Except as discussed in “Restrictions on Acquisition of New Delanco Bancorp,” each holder of common stock will be entitled to one vote per share and will not have any right to cumulate votes in the election of directors. If new Delanco Bancorp issues preferred stock, holders of new Delanco Bancorp preferred stock may also possess voting rights.

Liquidation. If there is any liquidation, dissolution or winding up of Delanco Federal, new Delanco Bancorp, as the sole holder of Delanco Federal’s capital stock, would be entitled to receive all of Delanco Federal’s assets available for distribution after payment or provision for payment of all debts and liabilities of Delanco Federal, including all deposit accounts and accrued interest. Upon liquidation, dissolution or winding up of new Delanco Bancorp, the holders of its common stock would be entitled to receive all of the assets of new Delanco Bancorp available for distribution after payment or provision for payment of all its debts and liabilities. If new Delanco Bancorp issues preferred stock, the preferred stock holders may have a priority over the holders of the common stock upon liquidation or dissolution.

Preemptive Rights; Redemption. Holders of the common stock of new Delanco Bancorp will not be entitled to preemptive rights with respect to any shares that may be issued. The common stock cannot be redeemed.

Preferred Stock

New Delanco Bancorp will not issue any preferred stock in the conversion and offering and it has no current plans to issue any preferred stock after the conversion and offering. Preferred stock may be issued with designations, powers, preferences and rights as the board of directors may from time to time determine. The board of directors can, without shareholder approval, issue preferred stock with voting, dividend, liquidation and conversion rights that could dilute the voting strength of the holders of the common stock and may assist management in impeding an unfriendly takeover or attempted change in control.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the common stock of new Delanco Bancorp will be Registrar and Transfer Company, Cranford, New Jersey.

REGISTRATION REQUIREMENTS

In connection with the conversion and offering, we will register our common stock with the Securities and Exchange Commission under Section 12(b) of the Securities Exchange Act of 1934, as amended, and will not deregister our common stock for a period of at least three years following the conversion and offering. As a result of registration, the proxy and tender offer rules, insider trading reporting and restrictions, annual and periodic reporting and other requirements of that statute will apply.

91

LEGAL AND TAX OPINIONS

The legality of our common stock has been passed upon for us by Kilpatrick Townsend & Stockton LLP, Washington, D.C. The federal income tax consequences of the conversion have been opined upon by Kilpatrick Townsend & Stockton LLP. Connolly, Grady & Cha, P.C. has provided an opinion to us regarding the New Jersey income tax consequences of the conversion. Kilpatrick Townsend & Stockton LLP and Connolly, Grady & Cha, P.C. have consented to the references to their opinions in this prospectus. Certain legal matters will be passed upon for Keefe, Bruyette & Woods by Luse Gorman Pomerenk & Schick, P.C., Washington, D.C.

EXPERTS

The consolidated financial statements of old Delanco Bancorp and subsidiary as of March 31, 2013 and 2012, and for each of the years then ended, have been included herein in reliance upon the report of Connolly, Grady & Cha, P.C., an independent registered public accounting firm, which is included herein and upon the authority of said firm as experts in accounting and auditing.

RP Financial has consented to the summary in this prospectus of its report to us setting forth its opinion as to our estimated pro forma market value and to the use of its name and statements with respect to it appearing in this prospectus.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933, as amended, that registers the common stock offered in the offering. This prospectus forms a part of the registration statement. The registration statement, including the exhibits, contains additional relevant information about us and our common stock. The rules and regulations of the Securities and Exchange Commission allow us to omit certain information included in the registration statement from this prospectus. You may read and copy the registration statement at the Securities and Exchange Commission’s public reference room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the Securities and Exchange Commission’s public reference rooms. The registration statement also is available to the public from commercial document retrieval services and at the Internet World Wide Web site maintained by the Securities and Exchange Commission at “http://www.sec.gov.”

Delanco MHC has filed an application for approval of the plan of conversion with the Federal Reserve Board. This prospectus omits certain information contained in the application. The application may be inspected, without charge, at the offices of the Board of Governors of the Federal Reserve Board System, 20^th Street and Constitution Avenue, NW, Washington, DC 20551 and at the Federal Reserve Board Bank of Philadelphia, Ten Independence Mall, Philadelphia, Pennsylvania 19106.

A copy of the plan of conversion is available without charge from Delanco Federal by contacting the Stock Information Center.

The appraisal report of RP Financial has been filed as an exhibit to our registration statement and to our application to the Board of Governors of the Federal Reserve Board. Portions of the appraisal report were filed electronically with the Securities and Exchange Commission and are available on its Web site as described above. The entire appraisal report is available at the public reference room of the Securities and Exchange Commission and the offices of the Federal Reserve Board as described above.

92

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF DELANCO BANCORP, INC.

	Page
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets at March 31, 2013 and 2012		F-2
Consolidated Statements of Income (Loss) for the Years Ended March 31, 2013 and 2012		F-3
Consolidated Statements of Comprehensive Income for the Years Ended March 31, 2013 and 2012		F-4
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended March  31, 2013 and 2012		F-5
Consolidated Statements of Cash Flows for the Years Ended March 31, 2013 and 2012		F-6
Notes to Consolidated Financial Statements		F-7

*   *   *

All schedules are omitted as the required information either is not applicable or is included in the financial statements or related notes.

Separate financial statements for new Delanco Bancorp have not been included in this prospectus because new Delanco Bancorp, which has engaged only in organizational activities to date, has no significant assets, contingent or other liabilities, revenues or expenses.

93

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Delanco Bancorp, Inc.

615 Burlington Avenue

Delanco, New Jersey 08075

We have audited the accompanying consolidated statements of financial condition of Delanco Bancorp, Inc. and subsidiary (the Company) as of March 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Delanco Bancorp, Inc. and subsidiary as of March 31, 2013 and 2012, and the results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

Certified Public Accountants

Philadelphia, Pennsylvania

June 7, 2013

F-1

Delanco Bancorp, Inc. and Subsidiary

Consolidated Statements of Financial Condition

	March 31,
	2013			2012
Assets
Cash and amount due from depository institutions	$	506,921		$	569,884
Interest-bearing deposits in other banks		6,215,845			6,079,801
Total cash and cash equivalents		6,722,766			6,649,685
Investment securities
Securities held-to-maturity (fair value of $20,285,670 and $17,606,748 at March 31, 2013 and 2012, respectively)		20,137,886			17,457,498
Securities available-for-sale (amortized cost of $2,217,032 and $237,096 at March 31, 2013 and 2012, respectively)		2,207,018			241,826
Total investment securities		22,344,904			17,699,324
Loans, net of allowance for loan losses of $1,032,818 and $1,160,535 at March 31, 2013 and 2012, respectively		88,419,084			99,431,618
Accrued interest receivable		427,736			417,102
Premises and equipment, net		6,855,000			7,131,980
Federal Home Loan Bank stock, at cost		202,500			219,100
Deferred income taxes, net		1,228,400			991,000
Bank-owned life insurance		153,588			147,508
Prepaid and refundable income taxes					160,250
Real estate owned		2,469,800			845,669
Other assets		590,804			615,383
Total Assets	$	129,414,582		$	134,308,619
Liabilities and Stockholders’ Equity
Liabilities
Deposits
Non-interest bearing deposits	$	6,872,713		$	4,673,349
Interest-bearing deposits		110,161,401			116,915,542
Total deposits		117,034,114			121,588,891
Accrued interest payable		9,025			15,912
Advance payments by borrowers for taxes and insurance		366,604			399,920
Other liabilities		610,259			560,432
Total liabilities		118,020,002			122,565,155
Commitments and Contingencies (Note 21)
Stockholders’ Equity
Preferred stock, $.01 par value, 3,000,000 shares authorized; None issued Common stock, $.01 par value, 7,000,000 shares authorized; 1,634,725 shares issued and outstanding as of March 31, 2013 and 2012		16,347			16,347
Additional paid-in capital		6,570,852			6,590,557
Retained earnings, substantially restricted		5,332,716			5,656,867
Unearned common stock held by employee stock ownership plan		(448,567	)		(480,608	)
Accumulated other comprehensive loss		(76,768	)		(39,699	)
Total stockholders’ equity		11,394,580			11,743,464
Total Liabilities and Stockholders’ Equity	$	129,414,582		$	134,308,619

See accompanying notes to consolidated financial statements.

F-2

Delanco Bancorp, Inc. and Subsidiary

Consolidated Statements of Operations

	Years Ended March 31,
	2013			2012
Interest Income
Loans	$	4,483,176		$	5,338,028
Investment securities		618,317			553,237
Total interest income		5,101,493			5,891,265
Interest Expense
Interest-bearing checking accounts		35,634			54,092
Passbook and money market accounts		186,335			269,568
Certificates of deposits		834,960			1,107,622
Advances from Federal Home Loan Bank					236
Total interest expense		1,056,929			1,431,518
Net interest income		4,044,564			4,459,747
Provision for loan losses		640,200			1,601,892
Net interest income after provision for loan losses		3,404,364			2,857,855
Non-Interest Income
Service charges		132,561			145,301
Income from bank-owned life insurance		6,081			5,805
Rental income		29,000			21,958
Other		33,399			13,642
Net loss on sale of real estate owned		(152,276	)		(36,382	)
Total non-interest income		48,765			150,324
Non-Interest Expense
Salaries and employee benefits		1,564,734			1,583,294
Advertising		21,862			24,730
Office supplies, telephone and postage		100,406			97,549
Loan expense		447,706			203,126
Occupancy expense		654,424			648,635
Federal insurance premiums		216,123			282,555
Real estate owned – impairment losses		56,493			104,316
Data processing expenses		217,252			215,240
ATM expenses		27,654			24,810
Bank charges and fees		69,528			77,425
Insurance and surety bond premium		79,526			80,170
Dues and subscriptions		22,942			25,863
Professional fees		248,522			208,175
Real estate owned expenses		130,906			56,368
Other		128,640			118,919
Total non-interest expense		3,986,718			3,751,175
Loss Before Income Tax Benefit		(533,589	)		(742,996	)
Income tax benefit		(209,438	)		(249,052	)
Net Loss	$	(324,151	)	$	(493,944	)
Loss per share
Basic	$	(0.20	)	$	(0.31	)
Diluted	$	(0.20	)	$	(0.31	)
Weighted average shares outstanding
Basic		1,589,868			1,586,664
Diluted		1,589,868			1,586,664

See accompanying notes to consolidated financial statements.

F-3

Delanco Bancorp, Inc. and Subsidiary

Consolidated Statements of Comprehensive Income (Loss)

Years Ended March 31, 2013 and 2012

	March 31,
	2013			2012
Net (loss)	$	(324,151	)	$	(493,944	)
Other comprehensive income (loss), net of tax:
Postretirement benefit plan adjustment, net of deferred taxes (benefit) of ($18,815) and $2,993 in 2013 and 2012, respectively		(28,222	)		4,489
Unrealized gains (loss) available-for-sale:
Unrealized holding gains (loss), net of deferred taxes (benefits) of ($5,898) and $2,385 in 2013 and 2012, respectively		(8,847	)		3,578
Other comprehensive income (loss)		(37,069	)		8,067
Total Comprehensive (Loss)	$	(361,220	)	$	(485,877	)

See accompanying notes to consolidated financial statements.

F-4

Delanco Bancorp, Inc. and Subsidiary

Consolidated Statements of Changes in Stockholders’ Equity

Years Ended March 31, 2013 and 2012

	Common Stock
	Shares		Amount		Additional Paid-in Capital			Retained Earnings			Common Stock Held By ESOP			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
BALANCES, MARCH 31, 2011		1,634,725	$	16,347	$	6,606,577		$	6,150,811		$	(512,648	)	$	(47,766	)	$	12,213,321
Net loss									(493,944	)								(493,944	)
Other comprehensive income, net of tax															8,067			8,067
3204.05 shares of common stock transferred to ESOP for services						(16,020	)					32,040						16,020
BALANCES, MARCH 31, 2012		1,634,725	$	16,347	$	6,590,557		$	5,656,867		$	(480,608	)	$	(39,699	)	$	11,743,464
Net loss									(324,151	)								(324,151	)
Other comprehensive (loss), net of tax															(37,069	)		(37,069	)
3204.05 shares of common stock transferred to ESOP for services						(19,705	)					32,041						12,336
BALANCES, MARCH 31, 2013		1,634,725	$	16,347	$	6,570,852		$	5,332,716		$	(448,567	)	$	(76,768	)	$	11,394,580

See accompanying notes to consolidated financial statements.

F-5

Delanco Bancorp, Inc. and Subsidiary

Consolidated Statements of Cash Flows

	Years Ended March 31,
	2013			2012
Cash Flows from Operating Activities
Net loss	$	(324,151	)	$	(493,944	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization of ESOP		19,705			16,020
Deferred income tax (benefit)		(270,150	)		(240,996	)
Depreciation		299,995			325,603
Amortization of premiums and accretion of discounts on securities, net		1,528			(2,859	)
Income from bank owned life insurance		(6,081	)		(5,805	)
Loss on sale of real estate owned		152,276			36,382
Provision for loan losses		640,200			1,601,892
Changes in operating assets and liabilities
(Increase) decrease in:
Accrued interest receivable		(10,634	)		41,422
Other assets		24,579			291,451
Prepaid and refundable income taxes		160,250			(160,250	)
Increase (decrease) in:
Accrued interest payable		(6,887	)		(6,746	)
Other liabilities		49,828			(38,714	)
Net cash provided by operating activities		730,458			1,363,456
Cash Flows from Investing Activities
Proceeds from sale of securities available-for-sale		20,064			12,199
Purchases of securities available-for-sale		(2,000,000	)
Purchases of securities held-to-maturity		(21,645,000	)		(19,000,000	)
Proceeds from maturities and principal repayments of securities held-to-maturity		18,966,140			17,241,424
Redemption of Federal Home Loan Bank stock		16,600			55,600
Net decrease in loans		7,825,270			2,310,406
Proceeds from sale of real estate owned		770,657			412,002
Purchases of premises and equipment		(23,015	)		(59,568	)
Net cash provided by investing activities		3,930,716			972,063
Cash Flows from Financing Activities
Net increase (decrease) in deposits		(4,554,777	)		746,481
Net increase (decrease) in advance payments by borrowers for taxes and insurance		(33,316	)		5,056
(Payments) borrowing on line of credit from Atlantic Central Bankers Bank					(1,000,000	)
(Payments on) advances from Federal Home Loan Bank					(1,100,000	)
Net cash used in financing activities		(4,588,093	)		(1,348,463	)
Net Increase in Cash and Cash Equivalents	$	73,081		$	987,056
Cash and Cash Equivalents, Beginning of Year		6,649,685			5,662,629
Cash and Cash Equivalents, End of Year	$	6,722,766		$	6,649,685
Supplemental Disclosures of Cash Flow Information
Cash paid during the year for interest	$	1,063,816		$	1,438,264
Cash paid during the year for income taxes	$	1,500		$	161,920
Supplemental Disclosure of Noncash Items
Loans transferred to real estate owned	$	2,547,064		$	523,414

See accompanying notes to consolidated financial statements.

F-6

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

1. NATURE OF OPERATIONS

Delanco Bancorp, Inc. (the “Company”) is a federally-chartered subsidiary holding company whose principal activity is the ownership and management of its wholly-owned subsidiary, Delanco Federal Savings Bank (the “Bank”), and its wholly-owned subsidiaries, Delanco Financial Services Corporation, an inactive subsidiary, and DFSB Properties, LLC, a real estate company that holds other real estate acquired in foreclosure. The Company is majority owned by Delanco MHC, a federally chartered mutual holding company. Delanco MHC has virtually no operations or assets other than an investment in the Company, and is not included in these financial statements. The Bank provides a variety of financial services to individual and business customers located primarily in Southern New Jersey and Southeastern Pennsylvania. The Bank’s primary source of revenue is from single-family residential, commercial and multi-family real estate loans. The Bank is subject to regulation by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Consolidation

The accounting and reporting policies of the Company conform with U.S. generally accepted accounting principles (“GAAP”) and predominant practices within the banking industry. The consolidated financial statements of the Company include the accounts of Delanco Federal Savings Bank and its subsidiaries. Intercompany balances and transactions are eliminated in consolidation.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Material estimates and assumptions that are particularly susceptible to significant changes relate to the determination of the allowance for losses on loans, the fair value of financial instruments, the valuation of foreclosed real estate and the valuation of deferred tax assets. In connection with the determination of the estimated losses on loans and foreclosed real estate, management obtains independent appraisals for significant properties.

A majority of the Bank’s loan portfolio consists of single-family residential, commercial and multi-family real estate loans in Southern New Jersey and Southeastern Pennsylvania. Accordingly, the ultimate collectibility of a substantial portion of the Bank’s loan portfolio and the recovery of a substantial portion of the carrying amount of foreclosed real estate are susceptible to changes in local market conditions.

While management uses available information to recognize losses on loans and foreclosed real estate, further reductions in the carrying amounts of loans and foreclosed assets may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans and foreclosed real estate. Such agencies may require the Bank to recognize additional losses based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the estimated losses on loans and foreclosed real estate may change materially in the near term. However, the amount of the change that is reasonably possible cannot be estimated.

F-7

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Investment Securities

Securities Held-to-Maturity: Securities that management has the positive intent and ability to hold to maturity are reported at cost, adjusted for amortization of premiums and accretion of discounts that are recognized in interest income using methods approximating the interest method over the period to maturity. Mortgage-backed securities represent participating interests in pools of long-term first mortgage loans originated and serviced by issuers of the securities. Mortgage-backed securities are carried at unpaid principal balances, adjusted for unamortized premiums and unearned discounts. Premiums and discounts are amortized using methods approximating the interest method over the remaining period to contractual maturity, adjusted for anticipated prepayments.

Securities Available-for-Sale: Available-for-sale securities consist of investment securities not classified as trading securities nor as held-to-maturity securities. Unrealized holding gains and losses, net of tax, on available-for-sale securities are included in other comprehensive income. Realized gains (losses) on available-for-sale securities are included in other income (expense) and, when applicable, are reported as a reclassification adjustment, net of tax, in other comprehensive income. Gains and losses on the sale of available-for-sale securities are determined using the specific-identification method. The amortization of premiums and the accretion of discounts are recognized in interest income using methods approximating the interest method over the period of maturity.

Declines in the fair value of individual held-to-maturity and available-for-sale securities below their cost that are other than temporary result in write-downs of the individual securities to their fair value. The related write-downs are included in earnings as realized losses. In estimating other than temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Bank to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

Loans and Allowance for Loan Losses

The Bank grants mortgage, commercial, consumer and lines of credit loans to customers. A substantial portion of the loan portfolio is represented by mortgage, commercial and multi-family real estate loans in Southern New Jersey and Southeastern Pennsylvania. The ability of the Bank’s debtors to honor their contracts is dependent upon the real estate and general economic conditions in these areas.

Loans are stated at unpaid principal balances, less the allowance for loan losses and net deferred loan fees and unearned discounts.

Loan origination and commitment fees, as well as certain direct origination costs, are deferred and amortized as a yield adjustment over the lives of the related loans using the interest method. Amortization of deferred loan fees is discontinued when a loan is placed on nonaccrual status.

The recognition of income on a loan is discontinued and previously accrued interest is reversed, when interest or principal payments become ninety (90) days past due unless, in the opinion of management, the outstanding interest remains collectible. Past due status is determined based on contractual terms. Interest is subsequently recognized only as received until the loan is returned to accrual status. A loan is restored to accrual status when all interest and principal payments are current and the borrower has demonstrated to management the ability to make payments of principal and interest as scheduled. The Bank’s practice is to charge off any loan or portion of a loan when the loan is determined by management to be uncollectible due to the borrower’s failure to meet repayment terms, the borrower’s deteriorating or deteriorated financial condition, the depreciation of the underlying collateral, the loan’s classification as a loss by regulatory examiners, or for other reasons.

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

F-8

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of specific, general, and unallocated components. The specific component relates to loans that are classified as doubtful, substandard, or special mention. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers non-classified loans and is based on historical loss experience adjusted for qualitative factors. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reason for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial real estate loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment.

Troubled Debt Restructurings

In situations where, for economic or legal reasons related to a customer’s financial difficulties, the Bank grants a concession for other than an insignificant period of time to the customer that the Bank would not otherwise consider, the related loan is classified as a troubled debt restructuring (TDR). The Bank strives to identify customers in financial difficulty early and work with them to modify to more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where the Bank grants the customer new terms that provide for a reduction of either interest or principal, the Bank measures any impairment on the restructuring as previously noted for impaired loans.

Bank-Owned Life Insurance

The Bank owns a life insurance policy on the life of a retired member of the Board of Directors. The cash surrender value of the policy is recorded as an asset of the bank and changes in this value are reflected in non-interest income. Death benefit proceeds in excess of the policy’s cash surrender value will be recognized as income upon receipt. There are no policy loans offset against the cash surrender value or restrictions on the use of the proceeds.

F-9

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Premises and Equipment

Land is carried at cost. Other premises and equipment are recorded at cost and are depreciated on the straight-line method. Charges for maintenance and repairs are expensed as incurred. Depreciation and amortization are provided over the estimated useful lives of the respective assets.

Real Estate Owned

Real estate owned is comprised of properties acquired through foreclosure proceedings or acceptance of a deed in lieu of foreclosure. Real estate owned is recorded at the lower of the carrying value of the loan or the fair value of the property, net of estimated selling costs. Costs relating to the development or improvement of the properties are capitalized while expenses related to the operation and maintenance of properties are recorded as an expense as incurred. Gains or losses upon dispositions are reflected in earnings as realized. The Company had $2,469,800and $845,669 in realestateowned atMarch 31, 2013 and 2012, respectively. The Company recorded losses of $152,276 and $36,382 on sale of real estate owned for the years ended March 31, 2013 and 2012, respectively.

Income Taxes

Income taxes are provided for the tax effects of the transactions reported in the financial statements and consist of taxescurrently due plus deferred taxes related primarily to tax net operating loss carryforwards and differences between the basis of available-for-sale securities, allowancefor loan losses, estimated losses on real estate owned, accumulated depreciation, and accrued employee benefits for financial and income tax reporting.

The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when assets and liabilities are recovered or settled, as well as operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established against deferred tax assets when in the judgment of management, it is more likely than not that such deferred tax assets will not become available. Because the judgment about the level of future taxable income is dependent to a great extent on matters that may, at least in part be beyond the Company’s control, it is at least reasonably possible that management’s judgment about the need for a valuation allowance for deferred taxes could change in the near term.

Statements of Cash Flows

The Company considers all cash and amounts due from depository institutions and interest-bearing deposits in other banks with original maturities of less than 90 days to be cash equivalents for purposes of the statements of cash flows.

Advertising Costs

Advertising costs are expensed as incurred. Advertising expenses totaled $21,862 and $24,730 for the years ended March 31, 2013 and 2012, respectively.

Employee Stock Ownership Plan (“ESOP”)

The Company accounts for its ESOP based on guidance by FASB ASC 718-40-50. Shares are released to participants proportionately as the loan is repaid. If the Company declares a dividend, the dividends on the allocated shares would be recorded as dividends and charged to retained earnings. Dividends declared on common stock held by the ESOP and not allocated to the account of a participant can be used to repay the loan. Allocation of shares to the ESOP participants is contingent upon the repayment of the loan to the Company.

F-10

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Earnings Per Share

Basic earnings per share is calculated on the basis of net income divided by the weighted average number of shares outstanding. Diluted earnings per share includes dilutive potential shares as computed under the treasury stock method using average common stock prices. Diluted earnings per share is calculated on the basis of the weighted average number of shares outstanding plus the weighted average number of additional dilutive shares.

Reclassifications

Certain amounts as of and for the year ended March 31, 2012 have been reclassified to conform to the current year’s presentation. These changes had no effect on the Company’s results of operations or financial position.

3. RECENT ACCOUNTING PRONOUNCEMENTS

Below is a discussion of recent accounting pronouncements. Recent pronouncements not discussed below were deemed to not be applicable to the Company.

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (Topic 220): The amendments in this update aim to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments in this update seek to attain that objective by requiring an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is reclassified to a balance sheet account instead of directly to income or expense in the same reporting period. For public entities, the amendments are effective prospectively for reporting periods beginning after December 15, 2012. The adoption of this pronouncement did not have a material impact on the Company’s financial condition or results of operations.

In December 2011, the FASB issued ASU 2011-12, Comprehensive Income (Topic 220): The amendments in this update supersede certain pending paragraphs in ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, to effectively defer only those changes in ASU 2011-05 that relate to the presentation of reclassification adjustments out of accumulated other comprehensive income. The amendments will be temporary to allow the Board time to deliberate the presentation requirements for reclassifications out of accumulated other comprehensive income for annual and interim financial statements for public, private and nonprofit entities. The amendments in this update are effective for public entities for fiscal years, and interim annual periods within those years, beginning after December 15, 2011, consistent with ASU 2011-05. The adoption of this pronouncement did not have a material impact on the Company’s financial condition or results of operations.

In December 2011, the FASB issued ASU 2011-11, Balance Sheet, Disclosure about Offsetting Assets and Liabilities (Topic 210): The objective of this update is to provide enhanced disclosures that will enable users of its financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position. This includes the effect or potential effect of rights of setoff associated with an entity’s recognized assets and recognized liabilities within the scope of this Update. The amendments require enhancement disclosures by requiring improved information about financial instruments and derivative instruments that are either (1)offset in accordance with either Section210-20-45 or Section815-10-45 or (2)subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they offset in accordance with either Section210-20-45 or Sections 815-10-45. These amendments are effective for annual periods beginning on or after January3, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The Company does not anticipate any material impact to the consolidated financial statements related to this guidance.

F-11

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

3. RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

In December 2011, the FASB issued ASU 2011-10, Property, Plant and Equipment (Topic 360): The objective of this update is to resolve the diversity in practice about whether the guidance in the Subtopic 360-20, Property, Plant and Equipment – Real Estate Sales, applies to a parent that ceases to have a controlling financial interest (as described in Subtopic 810-10 Consolidation – Overall) in a subsidiary that is in substance real estate as a result of default on the subsidiary’s nonrecourse debt. This update does not address whether the guidance in Subtopic 360-20 would apply to other circumstances when parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company does not anticipate any material impact to the consolidated financial statements related to this guidance.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. This ASU amends the FASB Accounting Standards Codification (Codification) to allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholder’s equity. The amendments to the Codification in the ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. ASU 2011-05 should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this pronouncement did not have a material impact on the Company’s financial condition or results of operations.

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to achieve Common Fair Value Measurement (Topic 820) and Disclosure Requirement in U.S. GAAP and IFRSs. This ASU represents the converged guidance of the FASB and the IASB (the “Boards”) on fair value measurement. The collective efforts of the Boards and their staff, reflected in ASU 2011-04, have resulted in common requirements for measuring fair value and for disclosing information about fair value measurement, including a consistent meaning of the term “fair value”. The Boards have concluded the common requirements will result in greater comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and IFRS. The amendments in this update apply to all reporting entities that are required or permitted to measure or disclose the fair value of an asset, a liability, or an instrument classified in a reporting entity’s shareholders’ equity in the financial statements. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. The adoption of this pronouncement did not have a material impact on the Company’s financial condition on results of operations.

In April 2011, the FASB issued ASU 2011-03, Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements. The ASU is intended to improve financial reporting of repurchase agreements (“repos”) and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The amendments to the Codification in this ASU are intended to improve the accounting for these transactions by removing from the assessment of effective control the criterion requiring the transferor to have the ability to purchase or redeem the financial assets. The amendments in this update apply to all entities, both public and nonpublic. This ASU is effective for the first interim or annual periods beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modification of existing transactions that occur on or after the effective date. Early adoption is not permitted. The adoption of this pronouncement did not have a material impact on the Company’s financial condition on results ofoperations.

4. RESTRICTIONS ON CASH AND DUE FROM BANKS

The Bank is required to maintain reserve funds in vault cash or on deposit with the Federal Reserve Bank. The Bank’s vault cash satisfied the required reserve at March 31, 2013 and 2012.

F-12

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

5. INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses, and fair value of the Company’s investment securities held-to-maturity and available-for-sale are as follows:

	Held-to-Maturity
	March 31,2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Federal Home Loan Bank Bonds	$	4,590,643	$	4,625	$	(17,525	)	$	4,577,743
Federal Farm Credit Bonds		3,444,266		1,324		(16,560	)		3,429,030
Federal Home Loan Mortgage Corporation Bonds		500,000				(2,198	)		497,802
Federal National Mortgage Association		9,499,365		48,995		(9,546	)		9,538,814
Municipal Bond		64,320		64,320
		18,098,594		54,944		(45,829	)		18,107,709
Mortgage-Backed Securities:
Federal Home Loan Mortgage Corporation		965,204		64,850					1,030,054
Federal National Mortgage Association		780,572		64,261					844,833
Government National Mortgage Corporation		293,516		10,471		(913	)		303,074
		2,039,292		139,582		(913	)		2,177,961
Total	$	20,137,886	$	194,526	$	(46,742	)	$	20,285,670

	Held-to-Maturity
	March 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Federal Home Loan Bank Bonds	$	3,944,679	$	5,438	$	(8,455	)	$	3,941,662
Federal Farm Credit Bonds		3,000,000		2,330		(25,440	)		2,976,890
Federal Home Loan Mortgage Corporation Bonds		1,499,258				(6,153	)		1,493,105
Federal National Mortgage Association		5,997,304		25,730		(33,549	)		5,989,485
Municipal Bond		104,320							104,320
		14,545,561		33,498		(73,597	)		14,505,462
Mortgage-Backed Securities:
Federal Home Loan Mortgage Corporation		1,429,534		89,059		(1,932	)		1,516,661
Federal National Mortgage Association		1,146,163		90,220		(243	)		1,236,140
Government National Mortgage Corporation		336,240		13,238		(993	)		348,485
		2,911,937		192,517		(3,168	)		3,101,286
Total	$	17,457,498	$	226,015	$	(76,765	)	$	17,606,748

F-13

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

5. INVESTMENT SECURITIES (Continued)

	Available-for-Sale
	March 31, 2013
	Amortized Cost		Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Federal Home Loan Bank Bonds	$	1,500,000	$	1,175		$	(4,795	)	$	1,496,380
Federal National Mortgage Association		500,000		(11,562	)		488,438
Mutual Fund Shares		217,032		5,168			222,200
Total	$	2,217,032	$	6,343		$	(16,357	)	$	2,207,018

	Available-for-Sale
	March 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses	Fair Value
Mutual Fund Shares	$	237,096	$	4,730	$	$	241,826

F-14

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

5. INVESTMENT SECURITIES (Continued)

The following is a summary of the amortized cost and fair value of the Company’s investment securities held-to-maturity and available-for-sale by contractual maturity as of March 31, 2013 and 2012.

	March 31, 2013
	Held-to-maturity				Available-for-sale
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Amounts maturing in:
One year or less	$	64,320	$	64,320	$		$
After one year through five years		1,005,098		1,028,678
After five years through ten years		6,421,666		6,417,558
After ten years		12,646,802		12,775,114		2,000,000		1,984,818
Equity securities						217,032		222,200
	$	20,137,886	$	20,285,670	$	2,217,032	$	2,207,018

	March 31, 2012
	Held-to-Maturity				Available-for-Sale
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
One year or less	$	104,450	$	104,450	$		$
After one year through five years		510,271		531,593
After five years through ten years		3,444,444		3,449,467
After ten years		13,398,333		13,521,238
Equity securities						237,096		241,826
	$	17,457,498	$	17,606,748	$	237,096	$	241,826

The amortized cost and fair value of mortgage-backed securities are presented in the held-to-maturity category by contractual maturity in the preceding table. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations without call or prepayment penalties.

F-15

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

5. INVESTMENT SECURITIES (Continued)

Information pertaining to securities with gross unrealized losses at March 31, 2013 and 2012, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:

	Less Than 12 Months					12 Months or Greater					Total
March 31, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Federal Home Loan Bank Bonds	$	2,454,531	$	(22,320	)	$		$			$	2,454,531	$	(22,320	)
Federal Farm Credit Bonds		2,427,706		(16,560	)							2,427,706		(16,560	)
Federal Home Loan Mortgage Corporation		497,802		(2,198	)							497,802		(2,198	)
Federal National Mortgage Association		1,978,892		(21,108	)							1,978,892		(21,108	)
		7,358,931		(62,186	)							7,358,931		(62,186	)
Mortgage-Backed Securities:
Government National Mortgage Association							31,562		(913	)		31,562		(913	)
							31,562		(913	)		31,562		(913	)
Total	$	7,358,931	$	(62,186	)	$	31,562	$	(913	)	$	7,390,493	$	(63,099	)

	Less Than 12 Months					12 Months or Greater		Total
March 31, 2012	Fair Value		Gross Unrealized Losses			Fair Value	Gross Unrealized Losses	Fair Value		Gross Unrealized Losses
Federal Home Loan Bank Bonds	$	2,000,000	$	(8,455	)	$	$	$	2,000,000	$	(8,455	)
Federal Farm Credit Bonds		2,500,000		(25,440	)				2,500,000		(25,440	)
Federal Home Loan Mortgage Corporation		1,499,258		(6,153	)				1,499,258		(6,153	)
Federal National Mortgage Association		4,497,304		(33,549	)				4,497,304		(33,549	)
		10,496,562		(73,597	)				10,496,562		(73,597	)

F-16

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

5. INVESTMENT SECURITIES (Continued)

	Less Than 12 Months					12 Months or Greater		Total
March 31, 2012	Fair Value		Gross Unrealized Losses			Fair Value	Gross Unrealized Losses	Fair Value		Gross Unrealized Losses
Mortgage-Backed Securities:
Federal Home Loan Mortgage Corporation	$	374,299	$	(1,932	)	$	$	$	374,299	$	(1,932	)
Federal National Mortgage Association		345,832		(243	)				345,832		(243	)
Government National Mortgage Association		39,060		(993	)				39,060		(993	)
		759,191		(3,168	)				759,191		(3,168	)
Total	$	11,255,753	$	(76,765	)	$	$	$	11,255,753	$	(76,765	)

Management evaluates securities for other-than-temporary impairment (OTTI) at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Bank to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At March 31, 2013, the seventeen debt securities with unrealized losses have depreciated 0.86% from the Bank’s amortized cost basis. These unrealized losses relate principally to market changes in interest rates for similar types of securities. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government, its agencies, or other governments, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. As management has the ability to hold debt securities until maturity, or for the foreseeable future if classified as available-for-sale, no declines are deemed to be other-than-temporary.

The Bank has pledged investment securities with a carrying amount of approximately $6,500,000 and $500,000 at March 31, 2013 and 2012, respectively, to the New Jersey Commissioner of Banking and Insurance under the provisions of the Government Unit Deposit Protection Act that enables the Bank to act as a public depository.

6. LOANS

The Bank monitors and assesses the credit risk of its loan portfolio using the classes set forth below. These classes also represent the segments by which the Bank monitors the performance of its loan portfolio and estimates its allowance for loan losses.

F-17

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

6. LOANS (Continued)

Residential real estate loans consist of loans secured by one-to four-family residences located in the Bank’s market area. The Bank has originated one-to four-family residential mortgage loans in amounts up to 80% of the lesser of the appraised value or selling price of the mortgaged property without requiring mortgage insurance. A mortgage loan originated by the Bank, for owner and non-owner occupied property, whether fixed rate or adjustable rate, can have a term of up to 30 years. Adjustable rate loan terms limit the periodic interest rate adjustment and the minimum and maximum rates that may be charged over the term of the loan based on the type of loan.

Commercial and multi-family real estate loans are generally originated in amounts up to the lower of 80% of the appraised value or cost of the property and are secured by improved property such as multi-family dwelling units, office buildings, retail stores, warehouses, church buildings and other non-residential buildings, most of which are located in the Bank’s market area. Commercial and multi-family real estate loans are generally made with fixed interest rates which mature or re-price in 5 to 7 years with principal amortization of up to 25 years.

Commercial loans include short and long-term business loans and commercial lines of credit for the purposes of providing working capital, supporting accounts receivable, purchasing inventory and acquiring fixed assets. The loans generally are secured by these types of assets as collateral and /or by personal guarantees provided by principals of the borrowers.

Construction loans will be made only if there is a permanent mortgage commitment in place. Interest rates on commercial construction loans are typically in line with normal commercial mortgage loan rates, while interest rates on residential construction loans are slightly higher than normal residential mortgage loan rates. These loans usually are adjustable rate loans and generally have terms of up to one year.

Consumer loans include installment loans and home equity loans, secured by first or second mortgages on homes owned or being purchased by the loan applicant. Home equity term loans and credit lines are credit accommodations secured by either a first or second mortgage on the borrower’s residential property. Interest rates charged on home equity term loans are generally fixed; interest on credit lines is usually a floating rate related to the prime rate. The Bank generally requires a loan to value ratio of less than or equal to 80% of the appraised value, including any outstanding prior mortgage balance.

Loans at March 31, 2013 and 2012 are summarized as follows:

	March 31,
	2013			2012
Residential (one to four family) real estate	$	66,597,885		$	70,191,726
Multi-family and commercial real estate		12,402,532			17,130,030
Commercial		1,165,774			1,480,322
Home equity		8,361,492			9,986,541
Consumer		959,771			1,046,744
Construction		82,849			838,841
Total loans		89,570,303			100,674,204
Net deferred loan origination fees		(118,401	)		(82,051	)
Allowance for loan losses		(1,032,818	)		(1,160,535	)
		(1,151,219	)		(1,242,586	)
Loans, net	$	88,419,084		$	99,431,618

F-18

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

6. LOANS (Continued)

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act) made extensive changes to the regulation of the Bank. Under the Dodd-Frank Act, the Office of Thrift Supervision (OTS) was eliminated and responsibility for the supervision and regulation of federal savings associations such as the Bank was transferred to the Office of the Comptroller of the Currency (OCC) on July 21, 2011. Under the authority issued to the OTS and now assumed by the OCC under the Home Owners Loan Act (HOLA) in 12 U.S.C. 1462 et seg. Subpart A, Section 560.93, the Bank is subject to a loans-to-one borrower limitation of 15% of capital funds. At March 31, 2013, the loans-to-one-borrower limitation was $1.8 million; this excluded an additional 10% of adjusted capital funds or approximately $1.2 million, which may be loaned if collateralized by readily marketable securities. At March 31, 2013, there were no loans outstanding or committed to any one borrower, which individually or in the aggregate exceeded the Bank’s loans-to-one-borrower limitations of 15% of capital funds.

A summary of the Bank’s credit quality indicators is as follows:

Pass – A credit which is assigned a rating of Pass shall exhibit some or all of the following characteristics:

a. Loans that present an acceptable degree of risk associated with the financing being considered as measured against earnings and balance sheet trends, industry averages, etc. Actual and projected indicators and market conditions provide satisfactory evidence that the credit will perform as agreed.

b. Loans to borrowers that display acceptable financial conditions and operating results. Debt service capacity is demonstrated and future prospects are considered good.

c. Loans to borrowers where a comfort level is achieved by the strength of the cash flows from the business or project and the strength and quantity of the collateral or security position (i.e.; receivables, inventory and other readily marketable securities) as supported by a current valuation and/or the strong capabilities of a guarantor.

Special Mention – Loans on which the credit risk requires more than ordinary attention by the Loan Officer. This may be the result of some erosion in the borrower’s financial condition, the economics of the industry, the capability of management, or changes in the original transaction. Loans which are currently sound yet exhibit potentially unacceptable credit risk or deteriorating long term prospects, will receive this classification. Loans which deviate from loan policy or regulations will not generally be classified in this category, but will be separately reported as an area of concern.

Classified – Classified loans include those considered by the Bank to be substandard, doubtful or loss.

An asset is considered “substandard” if it involves more than an acceptable level of risk due to a deteriorating financial condition, unfavorable history of the borrower, inadequate payment capacity, insufficient security or other negative factors within the industry, market or management. Substandard loans have clearly defined weaknesses which can jeopardize the timely payment of the loan.

Assets classified as “doubtful” exhibit all of the weaknesses defined under the substandard category but with enough risk to present a high probability of some principal loss on the loan, although not yet fully ascertainable in amount.

Assets classified as “loss” are those considered uncollectible or of little value, even though a collection effort may continue after the classification and potential charge-off.

F-19

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

6. LOANS (Continued)

Non-Performing Loans

Non-performing loans consist of non-accrual loans (loans on which the accrual of interest has ceased), loans over ninety days delinquent and still accruing interest, renegotiated loans and impaired loans. Loans are generally placed on non-accrual status if, in the opinion of management, collection is doubtful, or when principal or interest is past due 90 days or more, unless the collateral is considered sufficient to cover principal and interest and the loan is in the process of collection.

The following table represents loans by credit quality indicator at March 31, 2013:

	Pass		Special Mention Loans		Classified Loans		Non- Performing Loans		Total
Residential real estate	$	63,418,245	$	304,427	$	199,966	$	2,675,247	$	66,597,885
Multi-family and commercial real estate		8,719,717		119,950		465,287		3,097,578		12,402,532
Commercial		642,693		254,084		34,096		234,901		1,165,774
Home equity		8,074,576						286,916		8,361,492
Consumer		959,771								959,771
Construction		31,856						50,993		82,849
	$	81,846,858	$	678,461	$	699,349	$	6,345,635	$	89,570,303

The following table represents past-due loans as of March 31, 2013:

	30-89 Days Past Due and Still Accruing			90 Days or More Past - Due and Still Accruing			Total Past Due and Still Accruing			Accruing Current Balances			Non Accrual Balances			Total Loan Balances
Residential real estate	$	2,676,307		$			$	2,676,307		$	62,379,000		$	1,542,578		$	66,597,885
Multi-family and commercial real estate		545,656						545,656			9,553,648			2,303,228			12,402,532
Commercial											930,873			234,901			1,165,774
Home equity		204,467						204,467			7,870,109			286,916			8,361,492
Consumer		6,738						6,738			953,033						959,771
Construction											82,849						82,849
Total Loans	$	3,433,168		$			$	3,433,168		$	81,769,512		$	4,367,623		$	89,570,303
Percentage of Total Loans		3.83	%		N/A	%		3.83	%		91.29	%		4.88	%		100.0	%

F-20

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

6. LOANS (Continued)

The following table represents loans by credit quality indicator at March 31, 2012:

	Pass		Special Mention Loans		Classified Loans		Non- Performing Loans		Total
Residential real estate	$	66,164,553	$	307,900	$	201,373	$	3,517,900	$	70,191,726
Multi-family and commercial real estate		11,245,514		248,424		576,490		5,059,602		17,130,030
Commercial		1,184,731		261,371		34,220				1,480,322
Home equity		9,986,541								9,986,541
Consumer		1,046,744								1,046,744
Construction		785,602						53,239		838,841
	$	90,413,685	$	817,695	$	812,083	$	8,630,741	$	100,674,204

The following table represents past-due loans as of March 31, 2012:

	30-89 Days Past Due and Still Accruing			90 Days or More Past Due and Still Accruing			Total Past Due and Still Accruing			Accruing Current Balances			Non- Accrual Balances			Total Loan Balances
Residential real estate	$	1,262,391		$			$	1,262,391		$	65,940,824		$	2,988,511		$	70,191,726
Multi-family and commercial real estate		1,204,668						1,204,668			11,670,336			4,255,026			17,130,030
Commercial		220,673						220,673			1,259,649						1,480,322
Home equity		41,983						41,983			9,944,558						9,986,541
Consumer		41,438						41,438			1,005,306						1,046,744
Construction											838,841						838,841
Total Loans	$	2,771,153		$			$	2,771,153		$	90,659,514		$	7,243,537		$	100,674,204
Percentage of Total Loans		2.75	%		N/A	%		2.75	%		90.05	%		7.20	%		100.0	%

The Bank determines whether a restructuring of debt constitutes a troubled debt restructuring (“TDR”) in accordance with guidance under FASB ASC Topic 310 Receivables. The Company considers a loan a TDR when the borrower is experiencing financial difficulty and the Bank grants a concession that they would not otherwise consider but for the borrower’s financial difficulties. A TDR includes a modification of debt terms or assets received in satisfaction of the debt (including a foreclosure or a deed in lieu of foreclosure) or a combination of types. The Bank evaluates selective criteria to determine if a borrower is experiencing financial difficulty, including the ability of the borrower to obtain funds from sources other than the Bank at market rates. The Bank considers all TDR loans as impaired loans and, generally, they are put on non-accrual status. The Bank will not consider the loan a TDR if the loan modification was made for customer retention purposes. The Bank’s policy for returning a loan to accruing status requires the preparation of a well documented credit evaluation which includes the following:

• A review of the borrower’s current financial condition in which the borrower must demonstrate sufficient cash flow to support the repayment of all principal and interest including any amounts previously charged-off;

• An updated appraisal or home valuation which must demonstrate sufficient collateral value to support the debt;

• Sustained performance based on the restructured terms for at least six consecutive months;

• Approval by senior management.

F-21

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

6. LOANS (Continued)

The Bank had 15 loans totaling $3,529,218 and 15 loans totaling $3,694,879 whose terms were modified in a manner that met the criteria for a TDR as of March 31, 2013 and 2012, respectively. As of March 31, 2013, six of the TDRs were commercial real estate loans with an aggregate outstanding balance of $1,795,150; one residential construction loan with an aggregate outstanding balance of $50,993, eight were residential real estate loans with an aggregate outstanding balance of $1,683,075., The Company had one accruing TDR in the amount of $135,609 as of March 31, 2013 that was modified during the year. As of March 31, 2012, seven of the of the TDRs were commercial real estate loans with an aggregate outstanding balance of $2,702,026, one was a residential construction loan with an outstanding balance of $53,239 and the remaining loans were residential real estate loans with an aggregate outstanding balance of $1,209,614.

Impaired loans are measured based on the present value of expected future discounted cash flows, the fair value of the loan or the fair value of the underlying collateral if the loan is collateral dependent. The recognition of interest income on impaired loans is the same for non-accrual loans discussed above. At March 31, 2013, the Bank had 25 loan relationships totaling $4,367,623 in non-accrual loans as compared to 25 relationships totaling $7,243,537 at March 31, 2012. At March 31, 2013, the Bank had no impaired loan relationships in which impaired loans had a related allowance for credit losses. The average balance of impaired loans totaled $7,244,941 for 2013 as compared to $8,545,736 for 2012, and interest income recorded on impaired loans during the year ended March 31, 2013 totaled $168,207 as compared to $152,910 for March 31, 2012.

The following table represents data on impaired loans at March 31, 2013 and 2012:

	March 31,
	2013		2012
Impaired loans for which a valuation allowance has been provided	$		$
Impaired loans for which no valuation allowance has been provided		6,345,635		8,630,741
Total loans determined to be impaired	$	6,345,635	$	8,630,741
Allowance for loans losses related to impaired loans	$		$
Average recorded investment in impaired loans	$	7,244,941	$	8,545,736
Cash basis interest income recognized on impaired loans	$	168,207	$	152,910

The following table presents impaired loans with no valuation allowance at March 31, 2013:

	Recorded Investment		Unpaid Principal Balance		Related Valuation Allowance	Average Annual Recorded Investment		Interest Income Recognized While On Impaired Status
Impaired loans with no valuation allowance:
Residential real estate	$	2,254,806	$	2,222,651	$	$	2,773,512	$	83,173
Multi-family and commercial real estate		3,550,177		3,550,177			4,105,741		61,604
Commercial		234,898		234,898			172,181		8,211
Home equity		286,916		286,916			137,938		11,486
Consumer							3,235
Construction		50,993		50,993			52,334		3,733
Subtotal	$	6,377,790	$	6,345,635	$	$	7,244,941	$	168,207

F-22

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

6. LOANS (Continued)

	Recorded Investment		Unpaid Principal Balance		Related Valuation Allowance	Average Annual Recorded Investment		Interest Income Recognized While On Impaired Status
Total impaired loans:
Residential real estate	$	2,254,806	$	2,222,651	$	$	2,773,512	$	83,173
Multi-family and commercial real estate		3,550,177		3,550,177			4,105,741		61,604
Commercial		234,898		234,898			172,181		8,211
Home equity		286,916		286,916			137,938		11,486
Consumer				3,235
Construction		50,993		50,993			52,334		3,733
Total	$	6,377,790	$	6,345,635	$	$	7,244,941	$	168,207

The following table presents impaired loans with no valuation allowance by portfolio class at March 31, 2012:

	Recorded Investment		Unpaid Principal Balance		Related Valuation Allowance	Average Annual Recorded Investment		Interest Income Recognized While On Impaired Status
Impaired loans with no valuation allowance:
Residential real estate	$	3,357,392	$	3,343,613	$	$	3,442,636	$	66,366
Multi-family and commercial real estate		5,287,128		5,287,128			4,852,947		86,544
Commercial							19,363
Home equity							111,121
Consumer							119,669
Construction
Subtotal	$	8,644,520	$	8,630,741	$	$	8,545,736	$	152,910
Total impaired loans:
Residential real estate	$	3,357,392	$	3,343,613	$	$	3,442,636	$	66,366
Multi-family and commercial real estate		5,287,128		5,287,128			4,852,947		86,544
Commercial							19,363
Home equity							111,121
Consumer							119,669
Construction
Total	$	8,644,520	$	8,630,741	$	$	8,545,736	$	152,910

F-23

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

6. LOANS (Continued)

	March 31,
	2013			2012
Non-accrual loans:
Residential real estate	$	1,542,578		$	2,988,511
Multi-family and commercial real estate		2,303,228			4,255,026
Commercial		234,901
Home equity		286,916
Consumer
Construction
Total non-accrual loans		4,367,623			7,243,537
Troubled debt restructurings		1,978,012			1,387,204
Total non-performing loans		6,345,635			8,630,741
Real estate owned		2,469,800			845,669
Total non-performing assets	$	8,815,435		$	9,476,410
Non-performing loans as a percentage of loans		7.08	%		8.57	%
Non-performing assets as a percentage of loans and real estate owned		9.58	%		9.34	%
Non-performing assets as a percentage of total assets		6.81	%		7.06	%

At March 31, 2013, we had 25 loan relationships totaling $4.4 million in nonaccrual loans as compared to 25 relationships totaling $7.2 million at March 31, 2012. During the year ended March 31, 2013, we experienced a $2.9 million net decrease in nonaccrual loans. This change reflects the transfer to real estate owned of ten loans totaling $2.1 million, the partial charge-off of six of the relationships transferred to real estate owned of $524 thousand and the return of one loan totaling $442 thousand to accruing status. These changes were partially offset by the downgrading of 11 loan relationships to nonaccrual status totaling $922 thousand during the year ended March 31, 2013. The downgraded loans consisted of eight relationships representing residential mortgages and home equity loans totaling $712 thousand and three commercial loans totaling $210 thousand.

The following table sets forth with respect to the Bank’s allowance for losses on loans:

	March 31,
	2013		2012
Balance at beginning of year	$	1,160,535	$	1,286,301
Provision:
Commercial		3,783		(3,670	)
Multi-family and commercial real estate		587,288		642,863
Residential real estate		15,827		446,174
Home equity loans		18,827		134,486
Consumer		14,475		382,039
Total Provision	$	640,200	$	1,601,892

F-24

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

6. LOANS (Continued)

	March 31,
	2013			2012
Charge-Offs:
Commercial	$	686,293		$	816,329
Residential real estate		26,757			399,186
Home equity		28,649			137,347
Consumer		66,510			400,552
Recoveries		(40,292	)		(25,756	)
Total Net Charge-Offs		767,917			1,727,658
Balance at end of year	$	1,032,818		$	1,160,535
Year-end loans outstanding	$	89,570,303		$	100,674,204
Average loans outstanding	$	95,122,254		$	102,605,642
Allowance as a percentage of year-end loans		1.15	%		1.15	%
Net charge-offs as a percentage of average loans		0.81	%		1.68	%

Additional details for changes in the allowance for loan by loan portfolio as of March 31, 2013 are as follows:

Allowance for Loan Losses

	Multi- Family and Commercial		Commercial Real Estate			Residential Real Estate			Home Equity			Consumer			Total
Balance, beginning of year	$	40,516	$	468,834		$	495,435		$	57,576		$	98,174		$	1,160,535
Loan charge-offs				(686,293	)		(26,757	)		(28,649	)		(66,510	)		(808,209	)
Recoveries				8,460			837						30,995			40,292
Provision for loan losses		3,783		587,288			15,827			18,827			14,475			640,200
Balance, end of year	$	44,299	$	378,289		$	485,342		$	47,754		$	77,134		$	1,032,818

Additional details for changes in the allowance for loan by loan portfolio as of March 31, 2012 are as follows:

Allowance for Loan Losses

	Multi- Family and Commercial			Commercial Real Estate			Residential Real Estate			Home Equity			Consumer			Total
Balance, beginning of year	$	70,422		$	595,828		$	447,099		$	60,437		$	112,515		$	1,286,301
Loan charge-offs		(46,472	)		(769,857	)		(399,186	)		(137,347	)		(400,552	)		(1,753,414	)
Recoveries		20,236						1,348						4,172			25,756
Provision for loan losses		3,670			642,863			446,174			134,486			382,039			1,601,892
Balance, end of year	$	40,516		$	468,834		$	495,435		$	57,576		$	98,174		$	1,160,535

F-25

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

6. LOANS (Continued)

The Bank prepares an allowance for loan loss model on a quarterly basis to determine the adequacy of the allowance. Management considers a variety of factors when establishing the allowance, such as the impact of current economic conditions, diversification of the loan portfolio, delinquency statistics, results of independent loan review and related classifications. The Bank’s historic loss rates and the loss rates of peer financial institutions are also considered. In evaluating the Bank’s allowance for loan loss, the Bank maintains a loan committee consisting of senior management and the Board of Directors that monitors problem loans and formulates collection efforts and resolution plans for each borrower. On a monthly basis, the loan committee meets to review each problem loan and determine if there has been any change in collateral value due to changes in market conditions. Each quarter, when calculating the allowance for loan loss, the loan committee reviews an updated loan impairment analysis on each problem loan to determine if a specific provision for loan loss is warranted. Management reviews the most recent appraisal on each loan adjusted for holding and selling costs. In the event there is not a recent appraisal on file, the Bank will use the aged appraisal and apply a discount factor to the appraisal and then adjust the holding and selling costs from the discounted appraisal value. At March 31, 2013, the Bank maintained an allowance for loan loss ratio of 1.15% to year end loans outstanding. On a linked basis, non-performing assets have decreased by $660,974 over their stated levels at March 31, 2012 representing a non-performing asset to total asset ratio of 6.81% at March 31, 2013 as compared to a non-performing asset to total asset ratio of 7.06% at March 31, 2012.

The Bank’s charge-off policy states that any asset classified loss shall be charged-off within thirty days of such classification unless the asset has already been eliminated from the books by collection or other appropriate entry. On a quarterly basis, the loan committee will review past due, classified, non-performing and other loans, as it deems appropriate, to determine the collectability of such loans. If the loan committee determines a loan to be uncollectable, the loan shall be charged to the allowance for loan loss. In addition, upon reviewing the collectability, the loan committee may determine a portion of the loan to be uncollectable; in which case that portion of the loan deemed uncollectable will be partially charged-off against the allowance for loan loss.

For the year ending March 31, 2013, the Bank experienced two charge-offs relating to two loan relationships totaling $66,510 and twelve partial charge-offs relating to twelve loan relationships totaling $741,699 as compared to seven charge-offs relating to seven loan relationships totaling $447,023 and nineteen partial charge-offs relating to nineteen loan relationships totaling $1,306,391 for the year ended March 31, 2012.

In the ordinary course of business, the Bank has and expects to continue to have transactions, including borrowings, with its officers and directors. In the opinion of management, transactions with directors were on substantially the same terms, including interest rates and collateral, as those prevailing at the time of comparable transactions with other persons and did not involve more than a normal risk of collectability or present any other unfavorable features to the Bank. Officers of the Company are entitled to 1% loan discount, under a Bank-wide employee discount program, from those prevailing at the time of comparable transactions with other persons and did not involve more than a normal risk of collectability or present any other unfavorable features to the Bank. Loans to such borrowers are summarized as follows:

	March 31,
	2013			2012
Balance, beginning of year	$	584,413		$	575,866
Payments		(86,905	)		(65,953	)
Borrowings		175,774			74,500
Balance, end of year	$	673,282		$	584,413

F-26

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

7. LOAN SERVICING

Mortgage loans serviced for others are not included in the accompanying statement of financial condition. The unpaid principal balances of these loans at March 31, 2013 and 2012 are summarized as follows:

	March 31,
	2013		2012
Mortgage Loan Servicing Portfolio:
Mortgage Partnership Finance FHLB New York	$	393,480	$	405,618

8. ACCRUED INTEREST RECEIVABLE

Accrued interest receivable at March 31, 2013 and 2012 consists of the following:

	March 31,
	2013		2012
Loans	$	309,057	$	347,466
Investment securities		84,614		57,592
Mortgage backed securities		34,065		12,044
	$	427,736	$	417,102

9. PREMISES AND EQUIPMENT

Premises and equipment at March 31, 2013 and 2012 consists of the following:

	March 31,
	2013			2012
Land	$	1,451,203		$	1,451,203
Buildings		6,848,967			6,848,967
Furniture, fixtures and equipment		1,915,323			1,900,900
		10,215,493			10,201,070
Accumulated depreciation		(3,360,493	)		(3,069,090	)
	$	6,855,000		$	7,131,980

Depreciation expense amounted to $299,995 and $325,603 for the years ended March 31, 2013 and 2012, respectively.

10. FEDERAL HOME LOAN BANK STOCK

The Bank is a member of the Federal Home Loan Bank System. As a member, the Bank maintains an investment in the capital stock of the Federal Home Loan Bank of New York in an amount not less than 1% of its outstanding home loans or 1/20 of its outstanding notes payable, if any, to the Federal Home Loan Bank of New York, whichever is greater, as calculated December 31 of each year.

F-27

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

11. DEPOSITS

Deposit account balances at March 31, 2013 and 2012 are summarized as follows:

	March 31, 2013
	Amount		Weighted Average Interest Rate			Percent of Portfolio
Non interest bearing accounts	$	6,872,713					5.87
Interest bearing checking accounts		14,881,992		0.25	%		12.72
Passbook savings accounts		15,435,874		0.10			13.19
Money Market accounts		25,019,142		0.49			21.38
Club accounts		141,351		0.39			0.12
		62,351,072					53.28
Certificates of Deposits:
0.10% to 0.99%		25,622,818		0.54			21.89
1.00% to 1.99%		19,219,919		1.44			16.42
2.00% to 2.99%		8,035,364		2.44			6.87
3.00% to 3.99%		1,559,790		3.22			1.33
4.00% & Over		245,151		4.69			0.21
		54,683,042					46.72
		$117,034,114					100.0	%

	March 31, 2012
	Amount		Weighted Average Interest Rate			Percent of Portfolio
Non interest bearing accounts	$	4,673,349					3.84
Interest bearing checking accounts		13,086,105		0.32	%		10.76
Passbook savings accounts		14,491,025		0.20			11.92
Money Market accounts		25,244,199		0.74			20.76
Club accounts		141,683		0.40			0.12
		57,636,361					47.40
Certificates of Deposits:
0.10% to 0.99%		16,313,120		0.69			13.42
1.00% to 1.99%		9,820,787		2.40			8.08
2.00% to 2.99%		9,820,787		1.34			27.40
3.00% to 3.99%		1,899,423		3.32			1.56
4.00% & Over		2,607,328		4.00			2.14
		63,952,530					52.60
	$	121,588,891					100.0	%

The aggregate amount of time deposits including certificates of deposits with a minimum denomination of $100,000 or more was approximately $25,001,000 and $19,172,000 at March 31, 2013 and 2012, respectively.

F-28

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

11. DEPOSITS (Continued)

Scheduled maturities of certificates of deposits at March 31, 2013 and 2012 are as follows:

	March 31,
	2013		2012
2013	$		$	35,483,437
2014		34,402,410		15,021,129
2015		10,485,591		7,108,129
2016		3,395,872		2,124,385
2017		3,653,130		3,725,308
2018		2,746,039		490,002
	$	54,683,042	$	63,952,530

The Bank held deposits from officers and directors of approximately $479,000 and $369,000 at March 31, 2013 and 2012, respectively. These transactions were on the same terms as those prevailing at the time of comparable transactions with other persons.

12. LINE OF CREDIT FROM ATLANTIC CENTRAL BANKERS BANK

The Bank maintains a line of credit with Atlantic Central Bankers Bank at a rate to be determined by the lender when funds are borrowed. At March 31, 2013 and 2012, the outstanding balance on the unsecured line of credit was $ -0-.

13. ADVANCES FROM FEDERAL HOME LOAN BANK

As of March 31, 2013, the Bank had a borrowing capacity in a combination of term advances and overnight borrowings of up to $11,383,000 at the FHLB of New York.

Specific repos and other securities, with balances approximating $11,900,000 and $11,700,000 at March 31, 2013 and 2012, respectively, were pledged to the FHLB of New York as collateral.

14. INCOME TAXES

The Company is subject to federal income tax and New Jersey state income tax.

The Company and subsidiaries file a consolidated federal income tax return. The Company’s consolidated provision for income taxes for the years ended March 31, 2013 and 2012 consists of the following:

	Years Ended March 31,
	2013			2012
Income Tax Expense (benefit)
Current federal tax expense
Federal	$			$
State		3,000			3,000
Deferred tax (benefit)
Federal		(165,538	)		(196,352	)
State		(46,900	)		(55,700	)
Total	$	(209,438	)	$	(249,052	)

F-29

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

14. INCOME TAXES (Continued)

Valuation Allowance

Since the year ending March 31, 2007, the Company reported significant cumulative losses and generated substantial net operating losses for federal and state income tax purposes. To date, the Company has been able to utilize a substantial portion of its federal net operating losses by carrying these losses back five years. The remaining unused federal net operating losses can be carried forward for a maximum of twenty years. Due to the extensive carryforward period, among other things, the Company concluded that it was more likely than not that the federal net operating loss carryforwards would eventually be realized.

The consolidated provision for income taxes for the years ended March 31, 2013 and 2012 differs from that computed by applying federal statutory rates to income before federal income tax expense, as indicated in the following analysis:

	Years Ended March 31,
	2013			2012
Expected federal tax provision (benefit) at 34% rate	$	(181,420	)	$	(252,619	)
State income tax effect		(27,881	)		3,709
Municipal bond interest		(137	)		(142	)
Income tax (benefit)	$	(209,438	)	$	(249,052	)
Effective tax rate (benefit)		(39.3	%)		(33.5	%)

A summary of deferred tax assets and liabilities as of March 31, 2013 and 2012 are as follows:

	March 31,
	2013			2012
Deferred tax assets:
Accrued pension costs	$	5,500		$	4,200
Accrued post retirement medical plan					1,700
Accrued retirement plan		9,400			15,700
Allowance for loan losses		333,800			413,100
Directors’ benefit plans		125,000			119,400
FASB 158 – unrecognized transition costs		47,200			28,400
Net operating loss carryforward		726,200			438,700
Unrealized losses on securities available-for-sale		4,000
Non accrual interest		39,100			44,000
Total deferred tax assets	$	1,290,200		$	1,065,200
Deferred tax liabilities:
Accumulated depreciation	$	(61,800	)	$	(72,300	)
Unrealized gains on securities available-for-sale					(1,900	)
Total deferred tax liabilities		(61,800	)		(74,200	)
NET DEFERRED TAX ASSETS	$	1,228,400		$	991,000

F-30

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

14. INCOME TAXES (Continued)

The Company accounts for uncertainties in income taxes in accordance with FASB ASC Topic 740 “Accounting for Uncertainty in Income Taxes”. ASC Topic 740 prescribes a threshold and measurement process for recognizing in the financial statements a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company has determined that there are no significant uncertain tax positions requiring recognition in its financial statements.

In the event the Company is assessed for interest and/or penalties by taxing authorities, such assessed amounts will be classified in the financial statements as income tax expense. Tax years 2009 through 2012 remain subject to examination by Federal and New Jersey taxing authorities.

The Company believes that it is more likely than not that the deferred tax assets will be realized through taxable earnings or alternative tax strategies. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible; the Company believes the net deferred tax assets are more likely than not to be realized.

The Company has federal net operating loss carryforwards of approximately $1,368,000 and state net operating loss carryforwards of approximately $3,357,000 at March 31, 2013.

15. EMPLOYEE BENEFITS

Cash/Deferred Profit Sharing Plan

The Bank maintains a cash/deferred profit sharing plan covering all full time employees with one year of service and who are at least twenty-one years of age. Participants enter the Plan on the 1st of January or 1st of July subsequent to meeting the above requirements.

The Bank may contribute up to 10% of the annual compensation of each eligible employee. The Bank’s contribution to the plan was

$-0- for the years ended March 31, 2013 and 2012.

Retirement Incentive Plan

A retired officer of the Bank is covered by a Retirement Incentive Plan that pays him $1,416.67 per month for ten years from the date of retirement at age sixty-five.

To fund the above benefit, the Bank has purchased and is the sole beneficiary of a life insurance policy on the life of the officer. The cash surrender value of this policy was $153,588 and $147,508 as of March 31, 2013 and 2012, respectively, and is reflected on the consolidated statement of financial position as Bank-owned life insurance.

Delanco Bancorp, Inc. 2008 Equity Incentive Plan

On May 19, 2008, the Board of Directors adopted, and the stockholders approved on August 18, 2008, the Delanco Bancorp, Inc. 2008 Equity Incentive Plan.

The Board of Directors has reserved a total of 112,141 shares of common stock for issuance upon the grant or exercise of awards made pursuant to the 2008 Plan. All the Company’s employees, officers, and directors are eligible to participate in the 2008 Plan. As of March 31, 2013, no awards have been made under the 2008 Plan.

F-31

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

16. BOARD OF DIRECTORS’ RETIREMENT PLAN

The Bank established a Defined Benefit Retirement Plan for the Bank’s Board of Directors on January 1, 2002. This plan provides a monthly retirement benefit equal to 4% of the board fees payable as of their retirement date, multiplied by their completed years of service, up to a maximum of 80% of the final fee amount. Directors must complete at least ten years of service in order to receive a retirement benefit under the plan. Director retirement benefits are payable in equal monthly installments during the director’s lifetime, unless the director elects to receive a life annuity with the first 129 months guaranteed or a life annuity with either 50% or 100% (joint and survivor benefits) continuing for the spouse’s lifetime after the Director dies. Under these other options, the retirement benefit is reduced to account for the value of the potential additional payments.

The estimated past service liability that will be amortized from accumulated other comprehensive income into net periodic pension costs over the next fiscal year is zero.

Net pension expense was $45,032 and $40,992 for years ended March 31, 2013 and 2012, respectively. The components of net pension cost are as follows:

	Years Ended March 31,
	2013		2012
Service cost	$	8,488	$	5,044
Interest cost		20,056		20,228
Return on assets		4,804		528
Net amortization and deferral		11,684		15,192
Net periodic pension cost	$	45,032	$	40,992

The following table presents a reconciliation of the funded status of the defined benefit pension plan at March 31, 2013 and 2012:

	March 31,
	2013		2012
Accumulated benefit obligation	$	423,368	$	408,263
Projected benefit obligation		438,352		416,352
Fair value of plan assets
Unfunded projected benefit obligation		438,352		416,352

The following table presents a reconciliation of benefit obligations and plan assets:

	March 31,
	2013			2012
Change in Benefit Obligation
Projected benefit obligation at beginning of year	$	416,352		$	349,374
Service cost		8,488			5,044
Interest cost		20,056			20,228
Actuarial (gain) loss		24,587			62,757
Benefits paid		(31,131	)		(21,051	)
Benefit obligation at end of year	$	438,352		$	416,352

F-32

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

16. BOARD OF DIRECTORS’ RETIREMENT PLAN (Continued)

	March 31,
	2013			2012
Change in Plan Assets
Fair value of Plan assets at beginning of year	$			$
Actual return on Plan assets
Employer contributions		31,131			21,051
Benefits paid		(31,131	)		(21,051	)
Fair value of Plan assets at end of year	$			$

Actuarial assumptions used in determining pension amounts are as follows:

	Years Ended March 31,
	2013			2012
Discount rate for periodic pension cost		5.00	%		6.00	%
Discount rate for benefit obligation		4.50	%		5.00	%
Rate of increase in compensation levels and social security wage base		2.00	%		2.00	%
Expected long-term rate of return on plan assets		N/A			N/A

17. EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)

In March 2007, the Company established an Employee Stock Ownership Plan (“ESOP”) covering all eligible employees as defined by the ESOP. The ESOP is a tax-qualified plan, designed to invest in the Company’s common stock, which provides employees with the opportunity to receive a funded retirement benefit based primarily on the value of the Company’s common stock. The Company accounts for its ESOP in accordance with FASB ASC 718-40-50.

To purchase the Company’s common stock, the ESOP borrowed $640,810 from the Company to purchase 64,081 shares of the Company’s common stock in the Company’s initial public offering. The ESOP loan is being repaid principally from the Bank’s contributions to the ESOP over a period of up to 20 years. Dividends declared on common stock held by the ESOP and not allocated to the account of a participant can be used to repay the loan. Compensation expense is recognized in accordance with FASB ASC Topic 718 for Compensation – Stock Compensation. The number of shares released annually is based upon the ratio that the current principal and interest payment bears to the current and all remaining scheduled future principal and interest payments.

All shares that have not been released for allocation to participants are held in a suspense account by the ESOP for future allocation as the loan is repaid. Unallocated common stock purchased by the ESOP is recorded as a reduction of stockholders’ equity at cost. As of March 31, 2013, the Company had allocated a total of 19,224 shares from the suspense account to participants. The Company recognized compensation expense related to the ESOP of $12,336 and $16,020 for the years ended March 31, 2013 and 2012, respectively.

F-33

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

18. EARNINGS PER SHARE

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share calculation for the years ended March 31, 2013 and 2012:

	2013			2012
Numerator:
Net loss	$	(324,151	)	$	(493,944	)
Denominator:
Basic number of shares		1,589,868			1,586,664
Dilutive effect of options
Diluted number of shares		1,589,868			1,586,664
Loss per share:
Basic loss per share	$	(0.20	)	$	(0.31	)
Diluted loss per share	$	(0.20	)	$	(0.31	)

As of March 31, 2013, the Company did not have any outstanding stock options.

19. FAIR VALUE MEASUREMENT

The fair value estimates presented herein are based on pertinent information available to management as of March 31, 2013 and 2012, respectively. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and, therefore, current estimates of fair value may differ significantly from the amounts presented herein.

Generally accepted accounting principles used in the United States establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value.

The three broad levels of hierarchy are as follows:

Level 1:  Quoted prices in active markets for identical assets or liabilities.

Level 2:  Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3:  Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Those assets as of March 31, 2013 which are to be measured at fair value on a recurring basis are as follows:

	Category Used for Fair Value Measurement
	Level 1		Level 2		Level 3	Totals
Assets:
Securities available for sale:
Federal Home Loan Bank Bonds	$		$	1,496,380	$	$	1,496,380
Federal National Mortgage Association				488,438			488,438
Mutual Fund Shares		222,200					222,200
Totals	$	222,200	$	1,984,818	$	$	2,207,018

F-34

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

19. FAIR VALUE MEASUREMENT (Continued)

Those assets as of March 31, 2012 which are to be measured at fair value on a recurring basis are as follows:

	Category Used for Fair Value Measurement
	Level 1		Level 2	Level 3	Totals
Assets:
Securities available for sale:
Mutual Fund Shares	$	241,826	$	$	$	241,826

Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The Company measures impaired loans and real estate owned at fair value on a non-recurring basis.

Impaired Loans

The Company considers loans to be impaired when it becomes more likely than not that the Company will be unable to collect all amounts due in accordance with the contractual terms of the loan agreements. Collateral dependent impaired loans are based on the fair value of the collateral which is based on appraisals and would be categorized as Level 2 measurement. In some cases, adjustments are made to the appraised values for various factors including the age of the appraisal, age of the comparables included in the appraisal, and known changes in the market and in the collateral. These adjustments are based upon unobservable inputs, and therefore, the fair value measurement has been categorized as a Level 3 measurement. These loans are reviewed for impairment and written down to their net realizable value by charges against the allowance for loan losses.

Real Estate Owned

Once an asset is determined to be uncollectible, the underlying collateral is repossessed and reclassified to foreclosed real estate and repossessed assets. These assets are carried at the lower of cost or fair value of the collateral, based on independent appraisals, less cost to sell and would be categorized as Level 2 measurement. In some cases, adjustments are made to the appraised values for various factors including age of the appraisal, age of the comparables included in the appraisal, and known changes in the market and in the collateral. Thus the evaluations are based upon unobservable inputs, and therefore, the fair value measurement has been categorized as a Level 3 measurement.

Summary of Non-Recurring Fair Value Measurements

	At March 31, 2013
	Level 1	Level 2		Level 3	Total
Impaired loans	$	$	6,345,635	$	$	6,345,635
Real estate owned			2,469,800			2,469,800
Total	$	$	8,815,435	$	$	8,815,435

	At March 31, 2012
	Level 1	Level 2		Level 3	Total
Impaired loans	$	$	8,630,741	$	$	8,630,741
Real estate owned			845,669			845,669
Total	$	$	9,476,410	$	$	9,476,410

F-35

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

19. FAIR VALUE MEASUREMENT (Continued)

The fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop the estimates of fair value.

Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

	Carrying		Fair		Fair Value Measurements at March 31, 2013
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents	$	6,722,766	$	6,722,766	$	6,722,766	$		$
Investment and mortgage-backed securities held to maturity		20,137,886		20,285,670				20,285,670
Investment and mortgage-backed securities available for sale		2,217,032		2,207,018				2,207,018
Loans receivable, net		88,419,084		91,300,000						91,300,000
Accrued interest receivable		427,736		427,736		427,736
Federal Home Loan Bank stock		202,500		202,500		202,500
Bank owned life insurance		153,588		153,588		153,588
Liabilities:
Deposits – non-interest bearing		6,872,713		6,872,713		6,872,713
Deposits – interest bearing		110,161,401		111,233,000				111,233,000
Accrued interest payable		9,025		9,025		9,025
Advances from borrowers for taxes and insurance		366,604		366,604		366,604

	March 31, 2012
	Carrying Amount		Fair Value
Assets:
Cash and cash equivalents	$	6,649,685	$	6,649,685
Investment and mortgage-backed securities held to maturity		17,457,498		17,606,748
Investment and mortgage-backed securities available for sale		237,096		241,826
Loans receivable, net		99,431,618		103,700,000
Accrued interest receivable		417,102		417,102
Federal Home Loan Bank stock		219,100		219,100
Bank owned life insurance		147,508		147,508
Liabilities:
Deposits – non-interest bearing		4,673,349		4,673,349
Deposits – interest bearing		116,915,542		117,530,651
Accrued interest payable		15,912		15,912
Advances from borrowers for taxes and insurance		399,920		399,920

Cash and Cash Equivalents – For cash and cash equivalents, the carrying amount is a reasonable estimate of fair value.

F-36

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

19. FAIR VALUE MEASUREMENT (Continued)

Investments and Mortgage-Backed Securities – The fair value of investment securities and mortgage-backed securities is based on quoted market prices, dealer quotes, and prices obtained from independent pricing services.

Loans Receivable – The fair value of loans is estimated based on present value using the current market rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The carrying value that fair value is compared to is net of the allowance for loan losses and other associated premiums and discounts. Due to the significant judgment involved in evaluating credit quality, loans are classified within level 3 of the fair value hierarchy.

Accrued Interest Receivable – For accrued interest receivable, the carrying amount is a reasonable estimate of fair value.

Federal Home Loan Bank (FHLB) Stock – Although FHLB stock is an equity interest in an FHLB, it is carried at cost because it does not have a readily determinable fair value as its ownership is restricted and it lacks a market. The estimated fair value approximates the carrying amount.

Bank Owned Life Insurance – The fair value of bank owned life insurance is based on the cash surrender value obtained from an independent advisor that are derivable from observable market inputs.

Deposits – The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, savings, and NOW and money market accounts, is equal to the amount payable on demand. The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities.

Accrued Interest Payable – For accrued interest payable, the carrying amount is a reasonable estimate of fair value.

Advances from Borrowers for Taxes and Insurance – For advances from borrowers for taxes and insurance, the carrying amount is a reasonable estimate of fair value.

Commitments to Extend Credit and Letters of Credit – The majority of the Bank’s commitments to extend credit and letters of credit carry current market interest rates if converted to loans. Because commitments to extend credit and letters of credit are generally unassignable by either the Bank or the borrower, they only have value to the Bank and the borrower.

20. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

In the normal course of business, the Bank has outstanding commitments and contingent liabilities, such as commitments to extend credit and standby letters of credit, which are not included in the accompanying consolidated financial statements. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Bank uses the same credit policies in making such commitments as it does for instruments that are included in the consolidated balance sheet.

Financial instruments whose contract amount represents credit risk were as follows:

	March 31,
Commitments to Extend Credit	2013		2012
Home equity lines of credit	$	4,783,000	$	4,319,000
Commercial lines of credit		1,060,000		968,000
Standby letters of credit		50,000		50,000
	$	5,893,000	$	5,337,000

F-37

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

20. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Continued)

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include accounts receivable, inventory, property and equipment, and income-producing commercial properties.

Standby letters of credit are conditional lending commitments issued by the Bank to guarantee the performance of a customer to a third party. Standby letters of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank’s policy for obtaining collateral, and the nature of such collateral, is essentially the same as that involved in making commitments to extend credit.

The Bank has not been required to perform on any financial guarantees during the past two years. The Bank did not incur any losses on its commitments in either 2013 or 2012.

21. COMMITMENTS AND CONTINGENT LIABILITIES

The Bank is subject to claims and lawsuits which arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position of the Company.

The Bank had outstanding commitment to originate loans as of March 31, 2013 as follows:

	March 31, 2013
	Fixed- Rate		Variable- Rate	Total
Construction	$	42,435	$	$	42,435

22. RELATED PARTY TRANSACTIONS

The Bank obtained legal services, insurance products and website services from other entities which were affiliated with Directors of the Bank. The aggregate payment for these products and services amounted to $127,366 and $130,551, for the years ended March 31, 2013 and 2012, respectively. The Bank also recognized management fee income from a related party of $16,200 and $ -0- for the years ended March 31, 2013 and 2012, respectively.

23. REGULATORY CAPITAL

The Bank is subject to various regulatory capital requirements administered by its primary federal regulator, the Office of the Comptroller of Currency (OCC). Failure to meet the minimum regulatory capital requirements can initiate certain mandatory, and possible additional discretionary actions by regulators, that if undertaken, could have a direct material effect on the Bank and the consolidated financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines involving quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification under the prompt corrective action guidelines are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

F-38

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

23. REGULATORY CAPITAL (Continued)

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of: total risk-based capital and Tier I capital to risk-weighted assets (as defined in the regulations), Tier I capital to adjusted total assets (as defined), and tangible capital to adjusted total assets (as defined). Management believes that, as of March 31, 2013, the Bank met all capital adequacy requirements to which it was subject.

As of March 31, 2013, the Bank exceeded all regulatory capital requirements necessary to be considered a “well capitalized” bank, but was classified as “adequately capitalized” because it was subject to a written agreement with the OCC. To remain categorized as adequately capitalized, the Bank would have to maintain minimum total risk-based, Tier I risk-based, Tier I leverage and Tangible Capital to adjusted total assets ratios as disclosed in the table below.

The Bank’s actual and required capital amounts and ratios as of March 31, 2013 and 2012 are as follows:

	Actual					For Capital Adequacy Purposes and to Be Adequately Capitalized Under the Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio
As of March 31, 2013:
Total Risk-Based Capital (to Risk-Weighted Assets)	$	10,941,000		14.67	%	³	$  5,968,320	³	8.0	%
Tier I Capital (to Risk-Weighted Assets)		10,007,000		13.41	%	³	2,984,160	³	4.0	%
Tier I Capital (to Adjusted Total Assets)		10,007,000		7.79	%	³	5,138,360	³	4.0	%
Tangible Capital (to Adjusted Total Assets)		10,007,000		7.79	%	³	1,926,885	³	1.5	%

	Actual					For Capital Adequacy Purposes and to Be Adequately Capitalized Under the Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio
As of March 31, 2012:
Total Risk-Based Capital (to Risk-Weighted Assets)	$	11,615,000		14.13	%	³	$  6,576,160	³	8.0	%
Tier I Capital (to Risk-Weighted Assets)		10,586,000		12.88	%	³	3,288,080	³	4.0	%
Tier I Capital (to Adjusted Total Assets)		10,586,000		7.93	%	³	5,342,400	³	4.0	%
Tangible Capital (to Adjusted Total Assets)		10,586,000		7.93	%	³	2,003,400	³	1.5	%

F-39

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

23. REGULATORY CAPITAL (Continued)

Federal regulations place certain restrictions on dividends paid by the Bank to the Company. The total amount of dividends that may be paid at any date is generally limited to the earnings of the Bank year to date plus retained earnings for the prior two fiscal years, net of any prior capital distributions. In addition, dividends paid by the Bank to the Company would be prohibited if the distribution would cause the Bank’s capital to be reduced below the applicable minimum capital requirements.

24. REGULATORY MATTERS

The Bank is party to a formal written agreement (the “Agreement”) with the Office of the Comptroller of the Currency (the “OCC”) dated November 21, 2012. The Agreement supersedes and terminates the Order to Cease and Desist issued by the Office of Thrift Supervision on March 17, 2010.

The Agreement requires the Bank to take the following actions:

• prepare a three-year strategic plan that establishes objectives for the Bank’s overall risk profile, earnings performance, growth, balance sheet mix, liability structure, reduction in the volume of nonperforming assets, and product line development;

• prepare a capital plan that includes specific proposals related to the maintenance of adequate capital, identifies strategies to strengthen capital if necessary and includes detailed quarterly financial projections. If the OCC determines that the Bank has failed to submit an acceptable capital plan or fails to implement or adhere to its capital plan, then the OCC may require the Bank to develop a contingency capital plan detailing the Bank’s proposal to sell, merge or liquidate the Bank;

• prepare a criticized asset plan that will include strategies, targets, and timeframes to reduce the Bank’s level of criticized assets;

• implement a plan to improve the Bank’s credit risk management and credit administration practices;

• implement programs and policies related to the Bank’s allowance for loan and lease losses, liquidity risk management, independent loan review and other real estate owned;

• review the capabilities of the Bank’s management to perform present and anticipated duties and to recommend and implement any changes based on such assessment;

• not pay any dividends or make any other capital distributions without the prior written approval of the OCC;

• not make any severance or indemnification payments without complying with regulatory requirements regarding such payments; and

• comply with prior regulatory notification requirements for any changes in directors or senior executive officers.

The Agreement will remain in effect until terminated, modified, or suspended in writing by the OCC.

The written agreement does not require the Bank to maintain any specific minimum regulatory capital ratios. However, by letter dated January 2, 2013, the OCC established higher individual minimum capital requirements for the Bank. Specifically, the Bank must maintain Tier 1 capital at least equal to 8% of adjusted total assets, Tier 1 capital at least equal to 12% of risk-weighted assets, and total capital at least equal to 13% of risk-weighted assets. At March 31, 2013, the Bank’s Tier 1 leverage capital ratio, Tier 1 risk-based capital ratio and total risk based-capital ratio were 7.79%, 13.41% and 14.67%, respectively.

F-40

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

25. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BALANCES

The following presents the changes in the accumulated balances for each component of other comprehensive income (loss):

	Unrealized Gains (Loss) on Securities			Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
Beginning balance	$	2,838		$	(42,537	)	$	(39,699	)
Current year other comprehensive loss		(8,847	)		(28,222	)		(37,069	)
Ending balance	$	(6,009	)	$	(70,759	)	$	(76,768	)

26. SUBSEQUENT EVENT – CONVERSION AND STOCK OFFERING

On May 28, 2013, the Company, the Bank and Delanco MHC adopted a Plan of Conversion and Reorganization (the “Plan of Conversion”) pursuant to which the Bank will reorganize from the two-tier mutual holding company structure to the stock holding company structure. Pursuant to the Plan of Conversion, (i) Delanco MHC will merge with and into the Company with the Company as surviving entity (the “MHC Merger”), (ii) the Company will merge with and into new Delanco Bancorp, Inc. (the “Holding Company”), a newly formed New Jersey corporation, with the Holding Company as the surviving entity, (iii) the Bank will become a wholly-owned subsidiary of the Holding Company, (iv) the shares of common stock of the Company held by persons other than Delanco MHC will be converted into shares of common stock of the Holding Company pursuant to an exchange ratio designed to preserve the percentage ownership interests of such persons, (v) the Holding Company will offer and sell shares of common stock to certain depositors and borrowers of the Bank and others in the manner and subject to the priorities set forth in the Plan of Conversion.

In connection with the conversion and offering, shares of the Company’s common stock currently owned by Delanco MHC will be canceled and new shares of common stock, representing the 55.0% ownership interest of Delanco MHC, will be offered for sale by the Holding Company. Concurrent with the completion of the conversion and offering, the Company’s existing public shareholders will receive shares of the Holding Company’s common stock for each share of the Company’s common stock they own at that date, based on an exchange ratio to ensure that they will own approximately the same percentage of the Holding Company’s common stock as they owned of the Company’s common stock immediately prior to the conversion and offering.

At the time of conversion, liquidation accounts shall be established in an amount equal to the percentage of the outstanding shares of the Company owned by Delanco MHC before the MHC Merger, multiplied by the Company’s total stockholders’ equity as reflected in the latest statement of financial condition contained in the final offering prospectus for the conversion, plus the value of the net assets of Delanco MHC as reflected in the latest statement of financial condition of Delanco MHC before the effective date of the conversion. The liquidation account will be maintained for the benefit of eligible account holders and supplemental eligible account holders (collectively, “eligible depositors”) who continue to maintain their deposit accounts in the Bank after the conversion. In the event of a complete liquidation of the Bank or the Bank and the Holding Company (and only in such event), eligible depositors who continue to maintain accounts shall be entitled to receive a distribution from the liquidation account before any liquidation may be made with respect to common stock. Neither the Holding Company nor the Bank may declare or pay a cash dividend if the effect thereof would cause its equity to be reduced below either the amount required for the liquidation account or the regulatory capital requirements applicable to the Bank or the Holding Company.

F-41

Delanco Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

March 31, 2013 and 2012

26. SUBSEQUENT EVENT – CONVERSION AND STOCK OFFERING (Continued)

The transactions contemplated by the Plan of Conversion are subject to approval by the shareholders of the Company, the members of Delanco MHC and the Board of Governors of the Federal Reserve System. Meetings of the Company’s shareholders and Delanco MHC’s members are expected to be held to approve the Plan of Conversion in the third calendar quarter of 2013. If the conversion and offering are completed, eligible conversion and offering costs will be netted against the offering proceeds. If the conversion and offering are terminated, such costs will be expensed.

F-42

You should rely only on the information contained in this prospectus. Neither Delanco Federal nor Delanco Bancorp, Inc. has authorized anyone to provide you with different information. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered by this prospectus to any person or in any jurisdiction in which an offer or solicitation is not authorized or in which the person making an offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make an offer or solicitation in those jurisdictions. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of common stock.

[LOGO]

(Proposed Holding Company for Delanco Federal)

Up to

610,938 Shares

(subject to increase to 702,579 shares)

COMMON STOCK

Prospectus

Keefe, Bruyette & Woods

a Stifel Company

                    , 2013

Until                     , 2013, all dealers effecting transactions in the registered securities, whether or not participating in this distribution, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

ALTERNATE PROSPECTUS FOR EXCHANGE OFFER

Explanatory Note

Delanco Bancorp, Inc., a recently formed New Jersey corporation, is offering shares of its common stock for sale to eligible depositors, certain borrowers and the public in connection with the conversion of Delanco Federal Savings Bank from the mutual holding company structure to the stock holding company structure. Concurrent with the completion of the conversion and the offering, shares of common stock of existing Delanco Bancorp, Inc., a federal corporation, owned by persons other than Delanco MHC will be canceled and exchanged for shares of new Delanco Bancorp, Inc. This alternate prospectus serves as the proxy statement for the annual meeting of shareholders of the existing Delanco Bancorp, Inc., at which meeting shareholders will be asked to approve the plan of conversion, and the prospectus for the shares of new Delanco Bancorp, Inc. to be issued in the exchange offer. As indicated in this alternate prospectus, portions of the alternate prospectus will be identical to portions of the offering prospectus.

This explanatory note will not appear in the final proxy statement/prospectus.

DELANCO BANCORP, INC.

(Proposed Holding Company for Delanco Federal Savings Bank)

PROSPECTUS OF DELANCO BANCORP, INC. (NEW)

PROXY STATEMENT OF DELANCO BANCORP, INC.

Delanco Federal Savings Bank is converting from a mutual holding company structure to a fully-public ownership structure. Currently, Delanco Federal is a wholly-owned subsidiary of Delanco Bancorp, Inc., a federal corporation that is referred to as old Delanco Bancorp throughout this document, and Delanco MHC owns 55.0% of old Delanco Bancorp’s common stock. The remaining 45.0% of old Delanco Bancorp’s common stock is owned by public shareholders. As a result of the conversion, our newly formed company, also called Delanco Bancorp, Inc., will become the parent of Delanco Federal. Each share of old Delanco Bancorp common stock owned by the public will be exchanged for between 0.4910 and 0.6643 shares of common stock of new Delanco Bancorp so that old Delanco Bancorp’s existing public shareholders will own approximately the same percentage of new Delanco Bancorp common stock as they owned of old Delanco Bancorp’s common stock immediately before the conversion. The actual number of shares that you will receive will depend on the percentage of old Delanco Bancorp common stock held by the public at the completion of the conversion, the final independent appraisal of new Delanco Bancorp and the number of shares of new Delanco Bancorp common stock sold in the offering described in the following paragraph. The exchange ratio will not depend on the market price of old Delanco Bancorp common stock. See “Proposal 1—Approval of the Plan of Conversion—Share Exchange Ratio” for a discussion of the exchange ratio.

Concurrently with the exchange offer, we are offering up to 610,938 shares of common stock (subject to increase to 702,579 shares) for sale on a best efforts basis, subject to certain conditions. We must sell a minimum of 451,563 shares to complete the offering. All shares are offered at a price of $8.00 per share. The shares we are offering represent the 55.0% ownership interest in old Delanco Bancorp, a federal corporation, now owned by Delanco MHC. We are offering the shares of common stock in a “subscription offering” to eligible depositors and certain borrowers of Delanco Federal. Shares of common stock not purchased in the subscription offering may be offered for sale to the general public in a “community offering,” with a preference given to our local communities and the shareholders of old Delanco Bancorp. We also may offer for sale shares of common stock not purchased in the subscription offering or community offering in a “syndicated community offering” through a syndicate of selected dealers.

The conversion of Delanco MHC and the offering and exchange of common stock by new Delanco Bancorp is referred to herein as the “conversion and offering.” After the conversion and offering are completed, Delanco Federal will be a wholly-owned subsidiary of new Delanco Bancorp, and 100% of the common stock of new Delanco Bancorp will be owned by public shareholders. As a result of the conversion and offering, the present old Delanco Bancorp and Delanco MHC will cease to exist.

Old Delanco Bancorp’s common stock is currently listed on the OTC Bulletin Board under the symbol “DLNO” and we expect that new Delanco Bancorp’s common stock will also be quoted on the OTC Bulletin Board under the symbol “DLNO.”

The conversion and offering will be conducted pursuant to the plan of conversion and reorganization (the “plan of conversion”) of Delanco Federal, old Delanco Bancorp and Delanco MHC. The conversion and offering cannot be completed unless the shareholders of old Delanco Bancorp approve the plan of conversion. Shareholders of old Delanco Bancorp will consider and vote upon the plan of conversion at old Delanco Bancorp’s annual meeting of shareholders at                     ,             , New Jersey, on                     , 2013 at     :00     .m., local time. Old Delanco Bancorp’s board of directors unanimously recommends that shareholders vote “FOR” the plan of conversion.

This document serves as the proxy statement for the annual meeting of shareholders of old Delanco Bancorp and the prospectus for the shares of new Delanco Bancorp common stock to be issued in exchange for shares of old Delanco Bancorp common stock. We urge you to read this entire document carefully. You can also obtain information about our companies from documents that we have filed with the Securities and Exchange Commission and the Federal Reserve Board. This document does not serve as the prospectus relating to the offering by new Delanco Bancorp of its shares of common stock in the offering, which will be made pursuant to a separate prospectus.

This proxy statement/prospectus contains information that you should consider in evaluating the plan conversion. In particular, you should carefully read the section captioned “Risk Factors” beginning on page         for a discussion of certain risk factors relating to the conversion and offering.

These securities are not deposits or savings accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

None of the Securities and Exchange Commission, the Board of Governors of the Federal Reserve System or any state securities regulator has approved or disapproved of these securities or determined if this proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The date of this proxy statement/prospectus is             , 2013, and is first being mailed to shareholders of old Delanco Bancorp on or about             , 2013.

Table of Contents

	Page
Questions and Answers		i
Summary		1
Risk Factors		6
A Warning About Forward-Looking Statements		8
Selected Consolidated Financial and Other Data		9
Annual Meeting of Old Delanco Bancorp Shareholders		10
Proposal 1—Approval of the Plan of Conversion		13
Proposals 2a and 2b—Informational Proposals Related to the Certificate of Incorporation of New Delanco Bancorp		16
Proposal 3—Election of Directors		18
Proposal 4—Ratification of the Independent Registered Public Accounting Firm		20
Proposal 5—Adjournment of the Annual Meeting		20
Use of Proceeds		21
Our Dividend Policy		21
Market for the Common Stock		22
Capitalization		23
Regulatory Capital Compliance		24
Pro Forma Data		25
Our Business		26
Management’s Discussion and Analysis of Results of Operations and Financial Condition		27
Corporate Governance and Board Matters		28
Executive Compensation		34
Stock Ownership		35
Subscriptions by Executive Officers and Directors		36
Regulation and Supervision		37
Federal and State Taxation		37
Comparison of Shareholders’ Rights		38
Restrictions on Acquisition of New Delanco Bancorp		39
Description of New Delanco Bancorp Capital Stock		40
Transfer Agent and Registrar		40
Registration Requirements		40
Legal and Tax Opinions		40
Experts		40
Other Information Relating to Directors and Executive Officers		41
Submission of Business Proposals and Shareholder Nominations		42
Shareholder Communications		42
Miscellaneous		42
Where You Can Find More Information		43
Index to Financial Statements of Old Delanco Bancorp		44

Delanco Bancorp, Inc.

615 Burlington Avenue

Delanco, New Jersey 08075

(856) 461-8611

Notice of Annual Meeting of Shareholders

On [MEETINGDATE], 2013, old Delanco Bancorp, Inc. will hold its annual meeting of shareholders at                     ,             , New Jersey. The meeting will begin at     :00     .m., local time. At the meeting, shareholders will consider and act on the following:

1. The approval of a plan of conversion and reorganization pursuant to which: (A) Delanco MHC, which currently owns approximately 55.0% of the common stock of old Delanco Bancorp, will merge with and into old Delanco Bancorp, with old Delanco Bancorp being the surviving entity; (B) old Delanco Bancorp will merge with and into new Delanco Bancorp, a New Jersey corporation recently formed to be the holding company for Delanco Federal, with new Delanco Bancorp being the surviving entity; (C) the outstanding shares of old Delanco Bancorp, other than those held by Delanco MHC, will be converted into shares of common stock of new Delanco Bancorp; and (D) new Delanco Bancorp will offer shares of its common stock for sale in a subscription offering and, if necessary, in a direct community offering and/or syndicated community offering.

2. The following informational proposals:

2a Approval of a provision in new Delanco Bancorp’s certificate of incorporation requiring a super-majority vote to approve certain amendments to new Delanco Bancorp’s certificate of incorporation; and

2b Approval of a provision in new Delanco Bancorp’s certificate of incorporation to limit the voting rights of shares beneficially owned in excess of 10% of new Delanco Bancorp’s outstanding voting stock.

3. The election of two directors for terms of three years each.

4. The ratification of the appointment of Connolly, Grady & Cha, P.C. as independent registered public accountants for the fiscal year ending March 31, 2013.

5. The approval of the adjournment of the annual meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the annual meeting to approve the plan of conversion.

6. Such other business that may properly come before the meeting.

NOTE: The board of directors is not aware of any other business to come before the meeting.

The provisions of new Delanco Bancorp’s certificate of incorporation which are summarized as informational proposals 2a and 2b were approved as part of the process in which the board of directors of old Delanco Bancorp approved the plan of conversion. These proposals are informational in nature only, because the Federal Reserve Board’s regulations governing mutual-to-stock conversions do not provide for votes on matters other than the plan of conversion. While we are asking you to vote with respect to each of the informational proposals listed above, the proposed provisions for which an informational vote is requested will become effective if shareholders approve the plan of conversion, regardless of whether shareholders vote to approve any or all of the informational proposals.

Only shareholders as of [RECORDDATE], 2013 are entitled to receive notice of the meeting and to vote at the meeting and any adjournments or postponements of the meeting.

Please complete and sign the enclosed form of proxy, which is solicited by the board of directors, and mail it promptly in the enclosed envelope. The proxy will not be used if you attend the meeting and vote in person.

BY ORDER OF THE BOARD OF DIRECTORS

Douglas R. Allen, Jr.

Corporate Secretary

Delanco, New Jersey

                    , 2013

Questions and Answers

You should read this document for more information about the conversion and offering. The plan of conversion described in this document has been conditionally approved by the Federal Reserve Board.

The Proxy Vote

Q. What am I being asked to approve?

A. Old Delanco Bancorp shareholders as of [RECORDDATE], 2013 are asked to vote on the plan of conversion. Under the plan of conversion, Delanco Federal will convert from the mutual holding company form of organization to the stock holding company form, and as part of such conversion, new Delanco Bancorp will offer for sale, in the form of shares of its common stock, Delanco MHC’s 55.0% ownership interest in old Delanco Bancorp. In addition to the shares of common stock to be issued to those who purchase shares in the offering, public shareholders of old Delanco Bancorp as of the completion of the conversion and offering will receive shares of new Delanco Bancorp common stock in exchange for their existing shares of old Delanco Bancorp common stock based on an exchange ratio that will result in old Delanco Bancorp’s existing public shareholders owning approximately the same percentage of new Delanco Bancorp common stock as they owned of old Delanco Bancorp immediately prior to the conversion and offering.

Shareholders also are asked to vote on the following informational proposals with respect to the certificate of incorporation of new Delanco Bancorp:

• Approval of a provision in new Delanco Bancorp’s certificate of incorporation requiring a super-majority vote to approve certain amendments to new Delanco Bancorp’s certificate of incorporation; and

• Approval of a provision in new Delanco Bancorp’s certificate of incorporation to limit the voting rights of shares beneficially owned in excess of 10% of new Delanco Bancorp’s outstanding voting stock.

The provisions of new Delanco Bancorp’s certificate of incorporation which are summarized as informational proposals were approved as part of the process in which the board of directors of old Delanco Bancorp approved the plan of conversion. These proposals are informational in nature only, because the Federal Reserve Board’s regulations governing mutual-to-stock conversions do not provide for votes on matters other than the plan of conversion. While we are asking you to vote with respect to each of the informational proposals listed above, the proposed provisions for which an informational vote is requested will become effective if shareholders approve the plan of conversion, regardless of whether shareholders vote to approve any or all of the informational proposals. The provisions of new Delanco Bancorp’s certificate of incorporation which are summarized as informational proposals may have the effect of deterring or rendering more difficult attempts by third parties to obtain control of new Delanco Bancorp, if such attempts are not approved by the board of directors, or may make the removal of the board of directors or management, or the appointment of new directors, more difficult.

In addition, shareholders will vote on the election of directors, the ratification of the appointment of auditors, and a proposal to adjourn the annual meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the annual meeting to approve the plan of conversion.

i

Q. What is the conversion?

A. Delanco Federal is converting from a mutual holding company structure to a fully-public stock holding company ownership structure. Currently, Delanco MHC owns 55.0% of old Delanco Bancorp’s common stock. The remaining 45.0% of old Delanco Bancorp’s common stock is owned by public shareholders. As a result of the conversion, our newly formed company, also called Delanco Bancorp, will become the parent of Delanco Federal.

Shares of common stock of new Delanco Bancorp, representing the 55.0% ownership interest of Delanco MHC in old Delanco Bancorp, are being offered for sale to eligible depositors of Delanco Federal and, possibly, to the public. At the completion of the conversion and offering, public shareholders of old Delanco Bancorp will exchange their shares of old Delanco Bancorp common stock for shares of common stock of new Delanco Bancorp.

After the conversion and offering are completed, Delanco Federal will be a wholly-owned subsidiary of new Delanco Bancorp, and 100% of the common stock of new Delanco Bancorp will be owned by public shareholders. As a result of the conversion and offering, old Delanco Bancorp and Delanco MHC will cease to exist.

See “Proposal 1 – Approval of the Plan of Conversion” beginning on page             of this proxy statement/prospectus, for more information about the conversion and offering.

Q. What are reasons for the conversion and offering?

A. Our primary reasons for the conversion and offering are the following:

• To improve our capital position to support our risk profile and to assure compliance with regulatory capital requirements and additional individual minimum capital requirements imposed on us by the Office of the Comptroller of the Currency (“OCC”);

• To support controlled growth beyond levels possible utilizing only retained earnings; and

• To adopt the stock holding company structure, which is a more familiar form of organization and which we believe will make our common stock more appealing to investors and give us greater flexibility to access the capital markets through possible future equity and debt offerings. Our current mutual holding company structure limits our ability to raise capital because Delanco MHC must own at least 50.1% of the shares of old Delanco Bancorp. We currently have no plans, agreements or understandings regarding any additional securities offerings.

Q. Why should I vote?

A. You are not required to vote, but your vote is very important. In order for us to implement the plan of conversion, we must receive the affirmative vote of (1) the holders of at least two-thirds of the outstanding shares of old Delanco Bancorp common stock, including shares held by Delanco MHC and (2) the holders of a majority of the outstanding shares of old Delanco Bancorp common stock entitled to vote at the annual meeting, excluding shares held by Delanco MHC. Your board of directors recommends that you vote “FOR” the plan of conversion.

Q. What happens if I don’t vote?

A. Your prompt vote is very important. Not voting will have the same effect as voting “Against” the plan of conversion. Without sufficient favorable votes “FOR” the plan of conversion, we will not proceed with the conversion and offering.

ii

Q. How do I vote?

A. You should sign your proxy card and return it in the enclosed proxy reply envelope. PLEASE VOTE PROMPTLY. NOT VOTING HAS THE SAME EFFECT AS VOTING “AGAINST” THE PLAN OF CONVERSION.

Q. If my shares are held in street name, will my broker automatically vote on my behalf?

A. No. Your broker will not be able to vote your shares without instructions from you. You should instruct your broker to vote your shares, using the directions that your broker provides to you.

Q. What if I do not give voting instructions to my broker?

A. Your vote is important. If you do not instruct your broker to vote your shares, the unvoted proxy will have the same effect as a vote against the plan of conversion.

The Exchange

Q: I currently own shares of old Delanco Bancorp common stock. What will happen to my shares as a result of the conversion?

A: At the completion of the conversion, your shares of old Delanco Bancorp common stock will be canceled and exchanged for shares of common stock of new Delanco Bancorp, a newly formed New Jersey corporation. The number of shares you will receive will be based on an exchange ratio determined as of the closing of the conversion and offering that is intended to result in old Delanco Bancorp’s existing public shareholders owning approximately 45.0% of new Delanco Bancorp’s common stock, which is the same percentage of old Delanco Bancorp common stock currently owned by existing public shareholders.

Q: Does the exchange ratio depend on the market price of old Delanco Bancorp common stock?

A: No, the exchange ratio will not be based on the market price of old Delanco Bancorp common stock. Therefore, changes in the price of old Delanco Bancorp common stock between now and the completion of the conversion and offering will not affect the calculation of the exchange ratio.

Q: How will the actual exchange ratio be determined?

A: Because the purpose of the exchange ratio is to maintain the ownership percentage of the existing public shareholders of old Delanco Bancorp, the actual exchange ratio will depend on the number of shares of new Delanco Bancorp’s common stock sold in the offering and, therefore, cannot be determined until the completion of the conversion and offering.

Q: How many shares will I receive in the exchange?

A: You will receive between 0.4910 and 0.6643 (subject to increase to 0.7639) shares of new Delanco Bancorp common stock for each share of old Delanco Bancorp common stock you own on the date of the completion of the conversion and offering. For example, if you own 100 shares of old Delanco Bancorp common stock, and the exchange ratio is 0.5776 (at the midpoint of the offering range), after the conversion and offering you will receive 57 shares of new Delanco Bancorp common stock and $4.80 in cash, the value of the fractional share, based on the $8.00 per share purchase price in the offering. Shareholders who hold shares in street-name at a brokerage firm will receive these funds in their brokerage account. Shareholders with stock certificates will receive checks when they receive their new stock certificates.

iii

Q. Should I submit my stock certificates now?

A. No. If you hold a stock certificate for old Delanco Bancorp common stock, instructions for exchanging your certificate will be sent to you after completion of the conversion and offering. Until you submit the transmittal form and certificate, you will not receive your new certificate and check for cash in lieu of fractional shares, if any. If your shares are held in street name at a brokerage firm, the share exchange will occur automatically upon completion of the conversion and offering, without any action on your part. Please do not send in your stock certificate until you receive a transmittal form and instructions.

Q. Do I have dissenters’ and appraisal rights?

A. No. Shareholders of old Delanco Bancorp do not have dissenters’ rights in connection with the conversion and offering.

Stock Offering

Q. May I place an order to purchase shares in the offering, in addition to the shares that I will receive in the exchange?

A. Yes. Eligible depositors and borrowers of Delanco Federal have priority subscription rights allowing them to purchase common stock in the subscription offering. Shares not purchased in the subscription offering may be available for sale to the public in a community offering. Old Delanco Bancorp shareholders have a preference in the community offering after orders submitted by residents of our communities. If you would like to receive a prospectus and stock order form, please call our Stock Information Center toll-free at (            )             from 10:00 a.m. to 4:00 p.m. Eastern time, Monday through Friday. Order forms must be received (not postmarked) no later than 2:00 p.m., Eastern time on [DATE1], 2013.

Other Questions?

For answers to other questions, please read this proxy statement/prospectus. Questions about voting may be directed to our proxy information agent,                     , by calling toll-free (            )             -            . A copy of the plan of conversion is available from Delanco Federal Savings Bank upon written request to the Corporate Secretary and is available for inspection at the offices of Delanco Federal Savings Bank and the Federal Reserve Board.

iv

Summary

This summary highlights material information from this document and may not contain all the information that is important to you. To understand the conversion and offering fully, you should read this entire document carefully.

Annual Meeting of Shareholders

Date, Time and Place; Record Date

The annual meeting of old Delanco Bancorp shareholders is scheduled to be held at                     ,             , New Jersey at     :00     .m., local time, on [MEETINGDATE], 2013. Only old Delanco Bancorp shareholders of record as of the close of business on [RECORDDATE], 2013 are entitled to notice of, and to vote at, the annual meeting of shareholders and any adjournments or postponements of the meeting.

Purpose of the Meeting

Shareholders will be voting on the following proposals at the annual meeting:

1. Approval of the plan of conversion;

2. The following informational proposals:

2a Approval of a provision in new Delanco Bancorp’s certificate of incorporation requiring a super-majority vote to approve certain amendments to new Delanco Bancorp’s certificate of incorporation; and

2b Approval of a provision in new Delanco Bancorp’s certificate of incorporation to limit the voting rights of shares beneficially owned in excess of 10% of new Delanco Bancorp’s outstanding voting stock;

3. The election of two directors for terms of three years each;

4. The ratification of the appointment of Connolly, Grady & Cha, P.C. as independent registered public accountants for the fiscal year ending March 31, 2013; and

5. The approval of the adjournment of the annual meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the annual meeting to approve the plan of conversion.

The provisions of new Delanco Bancorp’s certificate of incorporation which are summarized as informational proposals 2a and 2b were approved as part of the process in which the board of directors of old Delanco Bancorp approved the plan of conversion. These proposals are informational in nature only, because the Federal Reserve Board’s regulations governing mutual-to-stock conversions do not provide for votes on matters other than the plan of conversion. While we are asking you to vote with respect to each of the informational proposals listed above, the proposed provisions for which an informational vote is requested will become effective if shareholders approve the plan of conversion, regardless of whether shareholders vote to approve any or all of the informational proposals. The provisions of new Delanco Bancorp’s certificate of incorporation which are summarized as informational proposals may have the effect of deterring or rendering more difficult attempts by third parties to obtain control of new Delanco Bancorp, if such attempts are not approved by the board of directors, or may make the removal of the board of directors or management, or the appointment of new directors, more difficult.

1

Vote Required

Proposal 1: Approval of the Plan of Conversion. Approval of the plan of conversion requires the affirmative vote of holders of at least two-thirds of the outstanding shares of old Delanco Bancorp, including shares held by Delanco MHC and a majority of the votes eligible to be cast by shareholders of old Delanco Bancorp, excluding shares held by Delanco MHC.

Informational Proposals 2a and 2b. While we are asking you to vote with respect to each of the informational proposals listed above, the proposed provisions for which an informational vote is requested will become effective if shareholders approve the plan of conversion, regardless of whether shareholders vote to approve any or all of the informational proposals.

Proposal 3: Election of Directors. Directors are elected by a plurality of the votes cast at the annual meeting. This means that the nominees receiving the greatest number of votes will be elected.

Proposal 4: Ratification of Auditor. Ratification of the selection of Connolly, Grady & Cha, P.C. as our independent registered public accounting firm for fiscal 2013 requires the affirmative vote of a majority of the votes represented at the annual meeting and entitled to vote.

Proposal 5: Approval of the adjournment of the annual meeting. We must obtain the affirmative vote of the majority of the votes represented at the annual meeting and entitled to vote to adjourn the annual meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the annual meeting to approve the proposal to approve the plan of conversion.

As of the record date, there were 1,634,725 shares of old Delanco Bancorp common stock outstanding, of which Delanco MHC owned 899,099. The directors and executive officers of old Delanco Bancorp (and their affiliates), as a group, beneficially owned             shares of old Delanco Bancorp common stock, representing             % of the outstanding shares of old Delanco Bancorp common stock and             % of the shares held by persons other than Delanco MHC as of such date. Delanco MHC and our directors and executive officers intend to vote their shares in favor of the plan of conversion.

Our Company

Old Delanco Bancorp is, and new Delanco Bancorp following the completion of the conversion and offering will be, the unitary savings and loan holding company for Delanco Federal, a federally chartered savings bank. Delanco Federal is headquartered in Delanco, New Jersey and operates two full-service locations in Delanco Township and Cinnaminson, New Jersey. Our common stock is listed on the OTC Bulletin Board under the symbol “DLNO.”

At March 31, 2013, old Delanco Bancorp had consolidated total assets of $129.4 million, net loans of $88.4 million, total deposits of $117.0 million and total stockholders’ equity of $11.4 million. Our principal executive offices are located at 615 Burlington Avenue, Delanco, New Jersey 08075 and our telephone number is (856) 461-0611. Our web site address is www.delancofsb.com. Information on our website should not be considered a part of this proxy statement.

2

The Conversion

Description of the Conversion (page     )

[Same as Prospectus]

Reasons for the Conversion and Offering (page     )

[Same as Prospectus]

Conditions to Completing the Conversion and Offering

[Same as Prospectus]

The Exchange of Existing Shares of Old Delanco Bancorp Common Stock (page     )

[Same as Prospectus]

Effect of the Conversion on Shareholders of Old Delanco Bancorp

The following table compares historical information for old Delanco Bancorp with similar information on a pro forma and per equivalent old Delanco Bancorp share basis. The information listed as “per equivalent old Delanco Bancorp share” was obtained by multiplying the pro forma amounts by the exchange ratio indicated in the table. Dividends per share have been omitted from this table because old Delanco Bancorp does not currently pay a cash dividend on its common stock.

	Old Delanco Bancorp Historical			Pro Forma			Exchange Ratio		Per Equivalent Old Delanco Bancorp Share
Book value per share at March 31, 2013:
Sale of 451,563 shares	$	6.97		$	17.31			0.4910	$	8.50
Sale of 531,250 shares		6.97			15.35			0.5776		8.87
Sale of 610,938 shares		6.97			13.90			0.6643		9.23
Sale of 702,579 shares		6.97			12.64			0.7639		9.66
Earnings per share for the year ended March 31, 2013:
Sale of 451,563 shares	$	(0.20	)		(0.43	)		0.4910	$	(0.21	)
Sale of 531,250 shares		(0.20	)		(0.37	)		0.5776		(0.21	)
Sale of 610,938 shares		(0.20	)		(0.32	)		0.6643		(0.21	)
Sale of 702,579 shares		(0.20	)		(0.27	)		0.7639		(0.21	)
Price per share (1):
Sale of 451,563 shares				$	8.00			0.4910
Sale of 531,250 shares					8.00			0.5776
Sale of 610,938 shares					8.00			0.6643
Sale of 702,579 shares					8.00			0.7639

(1) At May 28, 2013, which was the day of the adoption of the plan of conversion.

How We Determined the Offering Range and Exchange Ratio (page     )

[Same as Prospectus]

3

Possible Change in Offering Range

[Same as Prospectus]

How We Intend to Use the Proceeds of the Offering (page     )

[Same as Prospectus]

Benefits of the Conversion to Management (page     )

[Same as Prospectus]

Purchases by Directors and Executive Officers (page     )

[Same as Prospectus]

Market for New Delanco Bancorp’s Common Stock (page     )

[Same as Prospectus]

Our Dividend Policy (page     )

[Same as Prospectus]

Dissenters’ Rights (page     )

Shareholders of old Delanco Bancorp do not have dissenters’ rights in connection with the conversion and offering.

Differences in Shareholder Rights (page     )

As a result of the conversion, existing shareholders of old Delanco Bancorp will become shareholders of new Delanco Bancorp. In some instances, the rights of shareholders of new Delanco Bancorp will be less than the rights shareholders currently have. The decrease in shareholder rights results from differences between the certificate of incorporation and bylaws of new Delanco Bancorp and the charter and bylaws of old Delanco Bancorp and from distinctions between New Jersey and federal law. The differences in shareholder rights under the certificate of incorporation and bylaws of new Delanco Bancorp are not mandated by New Jersey law but have been chosen by management as being in the best interests of the corporation and all of its shareholders. However, the provisions in new Delanco Bancorp’s certificate of incorporation and bylaws may make it more difficult to pursue a takeover attempt that management opposes. These provisions will also make the removal of the board of directors or management, or the appointment of new directors, more difficult.

The differences in shareholder rights include the following:

• supermajority voting requirements for certain business combinations and changes to some provisions of the certificate of incorporation and bylaws;

• limitation on the right to vote shares;

• shareholders must apply to a court to call special meetings of shareholders; and

• greater lead time required for shareholders to submit business proposals or director nominations.

4

Tax Consequences (page     )

[Same as Prospectus]

Questions

Questions about voting may be directed to our proxy information agent,                     , at (            )             .

5

Risk Factors

You should consider carefully the following risk factors when deciding how to vote on the conversion and before purchasing shares of new Delanco Bancorp common stock.

Risks Related to Our Business

[same as prospectus]

6

Risks Related to the Offering and Share Exchange

The market value of new Delanco Bancorp common stock received in the share exchange may be less than the market value of old Delanco Bancorp common stock exchanged.

The number of shares of new Delanco Bancorp common stock you receive will be based on an exchange ratio that will be determined as of the date of completion of the conversion and offering. The exchange ratio will be based on the percentage of old Delanco Bancorp common stock held by the public before the completion of the conversion and offering, the final independent appraisal of new Delanco Bancorp common stock prepared by RP Financial, LC. and the number of shares of common stock sold in the offering. The exchange ratio will ensure that existing public shareholders of old Delanco Bancorp common stock will own approximately the same percentage of new Delanco Bancorp common stock after the conversion and offering as they owned of old Delanco Bancorp common stock immediately prior to completion of the conversion and offering, exclusive of the effect of their purchase of additional shares in the offering and the receipt of cash in lieu of fractional shares. The exchange ratio will not depend on the market price of old Delanco Bancorp common stock.

The exchange ratio ranges from a minimum of 0.4910 to a maximum of 0.6643 shares of new Delanco Bancorp common stock per share of old Delanco Bancorp common stock (subject to increase to 0.7639 shares). Shares of new Delanco Bancorp common stock issued in the share exchange will have an initial value of $8.00 per share. Depending on the exchange ratio and the market value of old Delanco Bancorp common stock at the time of the exchange, the initial market value of the new Delanco Bancorp common stock that you receive in the share exchange could be less than the market value of the old Delanco Bancorp common stock that you currently own. See “Proposal 1 – Approval of the Plan of Conversion—The Share Exchange Ratio.”

7

A Warning About Forward-Looking Statements

This proxy statement/prospectus contains forward-looking statements, which can be identified by the use of words such as “believes,” “expects,” “anticipates,” “estimates” or similar expressions. Forward-looking statements include, but are not limited to:

• statements of our goals, intentions and expectations;

• statements regarding our business plans, prospects, growth and operating strategies;

• statements regarding the quality of our loan and investment portfolios; and

• estimates of our risks and future costs and benefits.

These forward-looking statements are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements due to, among others, the following factors:

• general economic conditions, either nationally or in our market area, that are worse than expected;

• changes in the interest rate environment that reduce our interest margins or reduce the fair value of financial instruments;

• increased competitive pressures among financial services companies;

• changes in consumer spending, borrowing and savings habits;

• legislative or regulatory changes that adversely affect our business;

• adverse changes in the securities markets; and

• changes in accounting policies and practices, as may be adopted by the bank regulatory agencies or the Financial Accounting Standards Board.

Any of the forward-looking statements that we make in this proxy statement/prospectus and in other public statements we make may later prove incorrect because of inaccurate assumptions, the factors illustrated above or other factors that we cannot foresee. Consequently, no forward-looking statement can be guaranteed.

Further information on other factors that could affect us are included in the section captioned “Risk Factors.”

8

Selected Consolidated Financial and Other Data

[Same as Prospectus]

9

Annual Meeting of Old Delanco Bancorp Shareholders

Date, Place, Time and Purpose

Old Delanco Bancorp’s board of directors is sending you this document for the purpose of requesting that you allow your shares of old Delanco Bancorp to be represented at the annual meeting by the persons named in the enclosed proxy card. At the annual meeting, the old Delanco Bancorp board of directors will ask you to vote on a proposal to approve the plan of conversion. You will also be asked to vote on informational provisions regarding new Delanco Bancorp’s certificate of incorporation, the election of directors, and the ratification of the appointment of auditors. You also may be asked to vote on a proposal to adjourn the annual meeting if necessary to permit further solicitation of proxies if there are not sufficient votes at the time of the meeting to approve the plan of conversion. The annual meeting will be held at                     ,             , New Jersey, at     :00     .m., local time, on [MEETINGDATE], 2013.

Who Can Vote at the Meeting

You are entitled to vote your old Delanco Bancorp common stock if our records show that you held your shares as of the close of business on [RECORDDATE], 2013. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in street name and these proxy materials are being forwarded to you by your broker or nominee. As the beneficial owner, you have the right to direct your broker or nominee how to vote.

As of the close of business on [RECORDDATE], 2013, there were             shares of old Delanco Bancorp common stock outstanding. Each share of common stock has one vote. Old Delanco Bancorp’s charter provide that a record owner of old Delanco Bancorp common stock (other than Delanco MHC) who beneficially owns, either directly or indirectly, in excess of 10% of old Delanco Bancorp’s outstanding shares, is not entitled to vote the shares held in excess of the 10% limit.

Attending the Meeting

If you are a shareholder as of the close of business on [RECORDDATE], 2013, you may attend the meeting. However, if you hold your shares in street name, you will need proof of ownership to be admitted to the meeting. A recent brokerage statement or a letter from a bank or broker are examples of proof of ownership. If you want to vote your shares of old Delanco Bancorp common stock held in street name in person at the meeting, you will have to get a written proxy in your name from the broker, bank or other nominee who holds your shares.

Vote Required

The annual meeting will be held only if there is a quorum. A quorum exists if a majority of the outstanding shares of common stock entitled to vote, represented in person or by proxy, is present at the meeting. If you return valid proxy instructions or attend the meeting in person, your shares will be counted for purposes of determining whether there is a quorum, even if you abstain from voting. Broker non-votes also will be counted for purposes of determining the existence of a quorum. A broker non-vote occurs when a broker, bank or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner.

Proposal 1: Approval of the Plan of Conversion. To be approved, the plan of conversion requires the affirmative vote of at least two-thirds of the outstanding shares of old Delanco Bancorp common stock, including the shares held by Delanco MHC, and the affirmative vote of a majority of votes eligible to be cast at the meeting, excluding shares of Delanco MHC. Abstentions and broker non-votes will have the same effect as a vote against the plan of conversion.

Informational Proposals 2a and 2b: Approval of Certain Provisions in New Delanco Bancorp’s Articles of Incorporation. While we are asking you to vote with respect to each of the informational proposals, the proposed provisions for which an informational vote is requested will become effective if shareholders approve the plan of conversion, regardless of whether shareholders vote to approve any or all of the informational proposals.

10

Proposal 3: Election of Directors. At the annual meeting, shareholders will be asked to elect two directors to serve for a term of three years. In voting on the election of directors, you may vote in favor of the nominees, withhold votes as to all nominees or withhold votes as to specific nominees. There is no cumulative voting for the election of directors. Directors must be elected by a plurality of the votes cast at the annual meeting. This means that the nominees receiving the greatest number of votes will be elected.

Proposal 4: Ratification of Appointment of Independent Registered Public Accounting Firm. In voting on the ratification of the appointment of Connolly, Grady & Cha, P.C. as old Delanco Bancorp’s independent registered public accounting firm, you may vote in favor of the proposal, vote against the proposal or abstain from voting. To ratify the selection of Connolly, Grady & Cha, P.C. as old Delanco Bancorp’s independent registered public accounting firm for fiscal 2013, the affirmative vote of a majority of the shares represented at the annual meeting and entitled to vote at the annual meeting is required.

Proposal 5: Approval of the adjournment of the annual meeting. We must obtain the affirmative vote of the majority of the shares represented at the annual meeting and entitled to vote to adjourn the annual meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the annual meeting to approve the proposal to approve the plan of conversion.

Shares Held by Delanco MHC and Our Officers and Directors

As of [RECORDDATE], 2013, Delanco MHC beneficially owned 899,099 shares of old Delanco Bancorp common stock. This equals 55.0% of our outstanding shares. Delanco MHC intends to vote all of its shares in favor of the plan of conversion.

As of [RECORDDATE], 2013, our officers and directors beneficially owned             shares of old Delanco Bancorp common stock. This equals             % of our outstanding shares and             % of shares held by persons other than Delanco MHC.

Voting by Proxy

Our board of directors is sending you this proxy statement to request that you allow your shares of old Delanco Bancorp common stock to be represented at the annual meeting by the persons named in the enclosed proxy card. All shares of old Delanco Bancorp common stock represented at the meeting by properly executed and dated proxies will be voted according to the instructions indicated on the proxy card. If you sign, date and return a proxy card without giving voting instructions, your shares will be voted as recommended by our board of directors. Our board of directors recommends that you vote “FOR” approval of the plan of conversion and reorganization, “FOR” each of the Informational Proposals 2a and 2b, “FOR” the election of directors, “FOR” the ratification of the appointment of auditors, and “FOR” approval of the adjournment of the annual meeting.

If any matters not described in this proxy statement are properly presented at the annual meeting, the persons named in the proxy card will use their judgment to determine how to vote your shares. We do not know of any other matters to be presented at the annual meeting.

You may revoke your proxy at any time before the vote is taken at the meeting. To revoke your proxy, you must either advise the Corporate Secretary of old Delanco Bancorp in writing before your common stock has been voted at the annual meeting, deliver a later-dated proxy or attend the annual meeting and vote your shares in person. Attendance at the annual meeting will not in itself constitute revocation of your proxy.

If your old Delanco Bancorp common stock is held in street name, you will receive instructions from your broker, bank or other nominee that you must follow to have your shares voted. Your broker, bank or other nominee may allow you to deliver your voting instructions via the telephone or the Internet. Please see the instruction form provided by your broker, bank or other nominee that accompanies this proxy statement/prospectus.

11

Solicitation of Proxies

Old Delanco Bancorp will pay for this proxy solicitation. In addition to soliciting proxies by mail, directors, officers and employees of old Delanco Bancorp may solicit proxies personally and by telephone. None of these persons will receive additional or special compensation for soliciting proxies. Old Delanco Bancorp will, upon request, reimburse brokers, banks and other nominees for their expenses in sending proxy materials to their customers who are beneficial owners and obtaining their voting instructions. Old Delanco Bancorp has retained             , a proxy solicitation firm, to assist it in soliciting proxies and has agreed to pay them a fee of $            plus reasonable expenses for these services.

Participants in the ESOP

If you participate in the ESOP, you will receive a voting instruction card for the ESOP that will reflect all the shares that you may direct the trustee to vote on your behalf under the ESOP. Under the terms of the ESOP, all allocated shares of old Delanco Bancorp common stock held by the ESOP are voted by the ESOP trustee, as directed by plan participants. All unallocated shares of old Delanco Bancorp common stock held by the ESOP and all allocated shares for which no timely voting instructions are received are voted by the ESOP trustee in the same proportion as shares for which the trustee has received voting instructions, subject to the exercise of its fiduciary duties. The deadline for returning your voting instruction card is             , 2013.

12

Proposal 1—Approval of the Plan of Conversion

This conversion is being conducted pursuant to a plan of conversion approved by the boards of directors of Delanco MHC, old Delanco Bancorp and Delanco Federal. The Federal Reserve Board has conditionally approved the plan of conversion; however, such approval does not constitute a recommendation or endorsement of the plan of conversion by such agency.

General

On May 28, 2013, the boards of directors of Delanco MHC, old Delanco Bancorp and Delanco Federal unanimously adopted the plan of conversion. The second-step conversion that we are now undertaking involves a series of transactions by which we will convert our organization from the partially public mutual holding company form to the fully public stock holding company structure. Under the plan of conversion, Delanco Federal will convert from the mutual holding company form of organization to the stock holding company form of organization and become a wholly owned subsidiary of new Delanco Bancorp, a newly formed New Jersey corporation. Current shareholders of old Delanco Bancorp, other than Delanco MHC, will receive shares of new Delanco Bancorp common stock in exchange for their shares of old Delanco Bancorp common stock. Following the conversion and offering, old Delanco Bancorp and Delanco MHC will no longer exist.

The conversion to a stock holding company structure also includes the offering by new Delanco Bancorp of its common stock to eligible depositors and certain borrowers of Delanco Federal in a subscription offering and, if necessary, to members of the general public through a community offering and/or a syndicate of registered broker-dealers. The amount of capital being raised in the offering is based on an independent appraisal of new Delanco Bancorp. Most of the terms of the offering are required by the regulations of the Federal Reserve Board.

Consummation of the conversion and offering requires the approval of the Federal Reserve Board. In addition, pursuant to Federal Reserve Board regulations, consummation of the conversion and offering is conditioned upon the approval of the plan of conversion by (1) at least a majority of the total number of votes eligible to be cast by depositors and certain borrowers of Delanco Federal, (2) the holders of at least two-thirds of the outstanding shares of old Delanco Bancorp common stock and (3) the holders of at least a majority of the outstanding shares of common stock of old Delanco Bancorp, excluding shares held by Delanco MHC.

The Federal Reserve Board approved our plan of conversion, subject to, among other things, approval of the plan of conversion by Delanco MHC’s members (depositors and certain borrowers of the Delanco Federal) and old Delanco Bancorp’s shareholders. Meetings of Delanco MHC’s members and old Delanco Bancorp’s shareholders have been called for this purpose on             , 2013.

Funds received before completion of the offering will be maintained in a segregated account at Delanco Federal or, at our discretion, in an escrow account at an independent insured depository institution. If we fail to receive the necessary shareholder or member approval, or if we cancel the conversion and offering for any reason, orders for common stock already submitted will be canceled, subscribers’ funds will be returned promptly with interest calculated at Delanco Federal’s passbook savings rate and all deposit account withdrawal holds will be cancelled. We will not make any deduction from the returned funds for the costs of the offering.

The following is a brief summary of the pertinent aspects of the conversion and offering. A copy of the plan of conversion is available from old Delanco Bancorp upon request and is available for inspection at the offices of Delanco Federal and at the Federal Reserve Board. The plan of conversion is also filed as an exhibit to the registration statement, of which this prospectus forms a part, that new Delanco Bancorp has filed with the Securities and Exchange Commission. See “Where You Can Find More Information.”

The board of directors recommends that you vote “FOR” the adoption of the plan of conversion.

13

Reasons for the Conversion and Offering

[Same as Prospectus]

Description of the Conversion

[Same as Prospectus]

Share Exchange Ratio for Current Shareholders

[Same as Prospectus]

How We Determined the Offering Range and the $8.00 Purchase Price

[Same as Prospectus]

Purchase of Shares

Eligible depositors and certain borrowers of Delanco Federal have priority subscription rights allowing them to purchase common stock in the subscription offering. Shares not purchased in the subscription offering may be available for sale to the public in a community offering. You, as a shareholder on the record date, will be given a preference in the community offering after natural persons residing in Burlington County, New Jersey. For more information regarding the purchase of shares of common stock of new Delanco Bancorp you may also call our Stock Information Center at             , Monday through Friday, between 10:00 a.m. and 4:00 p.m., Eastern time. The Stock Information Center will be closed on weekends and bank holidays.

Marketing Arrangements

[Same as Prospectus]

Delivery of Certificates

After completion of the conversion, each holder of a certificate(s) evidencing shares of old Delanco Bancorp common stock (other than Delanco MHC), upon surrender of the certificate to our transfer agent, which is anticipated to serve as the exchange agent for the conversion, will receive a certificate(s) representing the number of full shares of new Delanco Bancorp common stock into which the holder’s shares have been converted based on the exchange ratio. Promptly following the consummation of the conversion, the exchange agent will mail to each such holder of record of an outstanding certificate evidencing shares of old Delanco Bancorp common stock a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to such certificate shall pass, only upon delivery of such certificate to the exchange agent) advising such holder of the terms of the exchange and of the procedure for surrendering to the exchange agent such certificate in exchange for a certificate(s) evidencing new Delanco Bancorp common stock. Old Delanco Bancorp shareholders should not forward their certificates to old Delanco Bancorp or the exchange agent until they have received the transmittal letter. If you hold shares of old Delanco Bancorp common stock in street name, your account should automatically be credited with shares of new Delanco Bancorp common stock following consummation of the conversion. No transmittal forms will be mailed relating to shares held in street name.

We will not issue any fractional shares of new Delanco Bancorp common stock. For each fractional share that would otherwise be issued as a result of the exchange of new Delanco Bancorp common stock for old Delanco Bancorp common stock, we will pay an amount equal to the product obtained by multiplying the fractional share interest to which the former old Delanco Bancorp shareholder would otherwise be entitled by $8.00. Payment for fractional shares will be made as soon as practicable after receipt by the exchange agent of surrendered old Delanco Bancorp stock certificates. If you hold shares of old Delanco Bancorp common stock in street name, your account should automatically be credited with cash in lieu of fractional shares.

14

No holder of a certificate representing shares of old Delanco Bancorp common stock will be entitled to receive any dividends on old Delanco Bancorp common stock until the certificate representing such holder’s shares of old Delanco Bancorp common stock is surrendered in exchange for certificates representing shares of new Delanco Bancorp common stock. If we declare dividends after the conversion but before surrender of certificates representing shares of old Delanco Bancorp common stock, dividends payable on shares of old Delanco Bancorp common stock not then issued shall accrue without interest. Any such dividends shall be paid without interest upon surrender of the certificates representing shares of old Delanco Bancorp common stock. We will be entitled, after the completion of the conversion, to treat certificates representing shares of old Delanco Bancorp common stock as evidencing ownership of the number of full shares of new Delanco Bancorp common stock into which the shares of old Delanco Bancorp common stock represented by such certificates shall have been converted, notwithstanding the failure on the part of the holder thereof to surrender such certificates.

We will not be obligated to deliver a certificate(s) representing shares of new Delanco Bancorp common stock to which a holder of old Delanco Bancorp common stock would otherwise be entitled as a result of the conversion until such holder surrenders the certificate(s) representing the shares of old Delanco Bancorp common stock for exchange as provided above, or provides an appropriate affidavit of loss and indemnity agreement and/or a bond. If any certificate evidencing shares of old Delanco Bancorp common stock is to be issued in a name other than that in which the certificate evidencing old Delanco Bancorp common stock surrendered in exchange therefor is registered, it shall be a condition of the issuance that the certificate so surrendered shall be properly endorsed and otherwise be in proper form for transfer and that the person requesting such exchange pay to the exchange agent any transfer or other tax required by reason of the issuance of a certificate for shares of common stock in any name other than that of the registered holder of the certificate surrendered or otherwise establish to the satisfaction of the exchange agent that such tax has been paid or is not payable.

Restrictions on Repurchase of Stock

[Same as Prospectus]

Effects of Conversion on Depositors and Borrowers

[Same as Prospectus]

Liquidation Rights

[Same as Prospectus]

Material Income Tax Consequences

[Same as Prospectus]

Accounting Consequences

[Same as Prospectus]

Interpretation, Amendment and Termination

[Same as Prospectus]

15

Proposals 2a and 2b—Informational Proposals Related to the

Certificate of Incorporation of New Delanco Bancorp

By their approval of the plan of conversion as set forth in Proposal 1, the board of directors of old Delanco Bancorp has approved each of the informational proposals numbered 2a and 2b, both of which relate to provisions included in the certificate of incorporation of new Delanco Bancorp. Each of these informational proposals is discussed in more detail below.

As a result of the conversion, the public shareholders of old Delanco Bancorp, whose rights are presently governed by the charter and bylaws of old Delanco Bancorp, will become shareholders of new Delanco Bancorp, whose rights will be governed by the certificate of incorporation and bylaws of new Delanco Bancorp. The following informational proposals address the material differences between the governing documents of the two companies. This discussion is qualified in its entirety by reference to the certificate of incorporation of old Delanco Bancorp and the certificate of incorporation of new Delanco Bancorp. See “Where You Can Find Additional Information” for procedures for obtaining a copy of those documents.

The provisions of new Delanco Bancorp’s certificate of incorporation which are summarized as informational proposals 2a and 2b were approved as part of the process in which the board of directors of old Delanco Bancorp approved the plan of conversion. These proposals are informational in nature only, because the Federal Reserve Board’s regulations governing mutual-to-stock conversions do not provide for votes on matters other than the plan of conversion. Old Delanco Bancorp’s shareholders are not being asked to approve these informational proposals at the annual meeting. While we are asking you to vote with respect to each of the informational proposals set forth below, the proposed provisions for which an informational vote is requested will become effective if shareholders approve the plan of conversion, regardless of whether shareholders vote to approve any or all of the informational proposals. The provisions of new Delanco Bancorp’s certificate of incorporation which are summarized as informational proposals may have the effect of deterring or rendering more difficult attempts by third parties to obtain control of new Delanco Bancorp, if such attempts are not approved by the board of directors, or may make the removal of the board of directors or management, or the appointment of new directors, more difficult.

Informational Proposal 2a – Approval of a Provision in new Delanco Bancorp’s Articles of Incorporation Requiring a Super-Majority Vote to Approve Certain Amendments to new Delanco Bancorp’s Articles of incorporation. No amendment of the charter of old Delanco Bancorp may be made unless it is first proposed by the board of directors, then preliminarily approved by the Federal Reserve Board, and thereafter approved by the holders of a majority of the total votes eligible to be cast at a legal meeting. The certificate of incorporation of new Delanco Bancorp generally may be amended by the holders of a majority of the shares entitled to vote; provided, however, that any amendment of Section 3.04 (limitation on common stock voting rights), Section 5.04 (classification of board of directors and director terms), Section 5.06 (duties of directors), Article VI (amendment of certificate of incorporation), Article VII (elimination of directors’ and officers’ liability), Article VIII (indemnification) and Article IX (amendment of bylaws), must be approved by the affirmative vote of the holders of at least two-thirds of the outstanding shares entitled to vote, except that the board of directors may amend the certificate of incorporation without any action by the shareholders to the fullest extent allowed under New Jersey law.

These limitations on amendments to specified provisions of new Delanco Bancorp’s certificate of incorporation are intended to ensure that the referenced provisions are not limited or changed upon a simple majority vote. While this limits the ability of shareholders to amend those provisions, Delanco MHC, as the holder of a majority of the outstanding shares of old Delanco Bancorp, currently can effectively block any shareholder proposed change to the charter.

This provision in new Delanco Bancorp’s certificate of incorporation could have the effect of discouraging a tender offer or other takeover attempt where to ability to make fundamental changes through amendments to the certificate of incorporation is an important element of the takeover strategy of the potential acquiror. The board of directors believes that the provisions limiting certain amendments to the certificate of incorporation will put the board of directors in a stronger position to negotiate with third parties with respect to transactions potentially affecting the corporate structure of new Delanco Bancorp and the fundamental rights of its shareholders, and to preserve the ability of all shareholders to have an effective voice in the outcome of such matters.

16

The board of directors recommends that you vote “FOR” the approval of a provision in new Delanco Bancorp’s certificate of incorporation requiring a super-majority vote to approve certain amendments to new Delanco Bancorp’s certificate of incorporation.

Informational Proposal 2b. – Approval of a Provision in new Delanco Bancorp’s Articles of Incorporation to Limit the Voting Rights of Shares Beneficially Owned in Excess of 10% of new Delanco Bancorp’s Outstanding Voting Stock. The certificate of incorporation of new Delanco Bancorp provide that in no event shall any person who directly or indirectly beneficially owns in excess of 10% of the then-outstanding shares of common stock as of the record date for the determination of shareholders entitled or permitted to vote on any matter (the “10% limit”) be entitled or permitted to any vote in respect of the shares held in excess of the 10% limit. This 10% limit restriction does not apply if the beneficial owner’s ownership of shares in excess of the 10% limit was approved by a majority of unaffiliated directors. Beneficial ownership is determined pursuant to the federal securities laws and includes, but is not limited to, shares as to which any person and his or her affiliates (1) have the right to acquire upon the exercise of conversion rights, exchange rights, warrants or options and (2) have or share investment or voting power (but shall not be deemed the beneficial owner of any voting shares solely by reason of a revocable proxy granted for a particular meeting of shareholders, and that are not otherwise beneficially, or deemed by new Delanco Bancorp to be beneficially, owned by such person and his or her affiliates).

The foregoing restriction does not apply to:

• any director or officer acting solely in their capacities as directors and officers; or

• any employee benefit plans of new Delanco Bancorp or any subsidiary or a trustee of a plan.

The board of directors recommends that you vote “FOR” the approval of a provision in new Delanco Bancorp’s certificate of incorporation to limit the voting rights of shares beneficially owned in excess of 10% of new Delanco Bancorp’s outstanding voting stock.

17

Proposal 3—Election of Directors

The board of directors of old Delanco Bancorp consists of five members. The board is divided into three classes with three-year staggered terms, with approximately one-third of the directors elected each year. The board of directors’ nominees for election this year, to serve for a three-year term or until their respective successors have been elected and qualified are John A. Latimer and James W. Verner.

Unless you indicate otherwise on the proxy card, the board of directors intends that the proxies solicited by it will be voted for the election of the board’s nominees. If any nominee is unable to serve, the persons named in the proxy card would vote your shares to approve the election of any substitute proposed by the board of directors. At this time, the board of directors knows of no reason why any of the nominees might be unable to serve.

The board of directors recommends a vote “FOR” the election of John A. Latimer and James W. Verner.

Information regarding the board of directors’ nominees and the directors continuing in office is provided below. Unless otherwise stated, each individual has held his current occupation for the last five years. The age indicated for each individual is as of March 31, 2013. The indicated period of service as a director includes the period of service as a director of Delanco Federal.

Board Nominees for Election of Directors

The following directors are nominees for election for term ending in 2013:

John A. Latimer is the President of two insurance brokers, including The Barclay Group and J.S. Braddock Agency since 1991 and 2000, respectively. Mr. Latimer has also served as a director of Proformance Insurance Company, a subsidiary of National Atlantic Holdings Corporation (Nasdaq: NAHC). Age 50. Director since 2006.

Mr. Latimer provides the Board with significant marketing and operational knowledge through his experience as president of insurance broker entities. Mr. Latimer has considerable experience in the insurance industry and the related risk assessment practice area necessary in banking operations.

James W. Verner, currently retired, served as a Section Supervisor with the New Jersey State Department of Education from 1979 until 2011. Age 60. Director since 1978 and director of Delanco MHC and old Delanco Bancorp since their formation in 2002.

Mr. Verner’s career with the New Jersey Department of Education provides the Company with organizational understanding and expertise. In addition, as an active member of the community, Mr. Verner maintains contact with and is in touch with the local consumer environment.

Directors Continuing in Office

The following directors have terms ending in 2014:

James E. Igo has served as President and Chief Executive Officer of Delanco MHC, old Delanco Bancorp and Delanco Federal Savings Bank since March 4, 2009 and previously served as Executive Vice President and Chief Operating Officer of old Delanco Bancorp and Delanco Federal Savings Bank since April, 2008. Mr. Igo was appointed Chairman of the Board of Delanco MHC, old Delanco Bancorp and Delanco Federal Savings Bank in June, 2010. Mr. Igo previously served as senior vice president and senior loan officer of Farmers & Mechanics Bank (“FMB”) from 1992 until FMB’s acquisition by Beneficial Bank in July 2007. Mr. Igo served as senior vice president of Beneficial Bank until April, 2008. Age 55.

Mr. Igo’s extensive experience in the local banking industry and involvement in business and civic organizations in the communities in which the Bank serves affords the Board valuable insight regarding the business and operation of the Bank. Mr. Igo’s knowledge of the Company’s and the Bank’s business and history, combined with his success and strategic vision, position him well to continue to serve as our Chairman, President and Chief Executive Officer.

18

Renee C. Vidal is a partner in the law firm of Flaster/Greenberg P.C. in Cherry Hill, New Jersey. Prior to joining Flaster/Greenberg P.C. in January, 2008, Ms. Vidal served as a partner in the law firm of Cureton Caplan, PC. Ms. Vidal began her employment with Cureton Caplan in 1994. Age 44. Director since 2006.

Ms. Vidal’s expertise as a partner in a law firm and her involvement in business and civic organizations in the communities in which the Bank serves provide the Board valuable insight. Ms. Vidal’s years of providing legal counsel position her well to continue to serve as a director for the Company.

The following director has a term ending in 2015:

Thomas J. Coleman III has been a managing partner of the law firm of Raymond, Coleman, Heinhold & Norman, LLP since 2001. Age 48. Director since 2005.

Mr. Coleman’s expertise as a partner in a law firm and his involvement in business and civic organizations in the communities in which the Bank serves provide the Board valuable insight. Mr. Coleman’s years of providing legal counsel and operating a law office position him well to continue to serve as a director for the Company.

19

Proposal 4—Ratification of the Independent

Registered Public Accounting Firm

The Audit Committee of the board of directors has appointed Connolly, Grady & Cha, P.C. to be old Delanco Bancorp’s independent auditors for the 2013 fiscal year, subject to ratification by shareholders. A representative of Connolly, Grady & Cha, P.C. is expected to be present at the annual meeting to respond to appropriate questions from shareholders and will have the opportunity to make a statement should he or she desire to do so.

If the ratification of the appointment of the independent auditors is not approved by a majority of the votes represented at the meeting and entitled to vote at the annual meeting, the Audit Committee will consider other independent auditors.

The board of directors recommends that shareholders vote “FOR” the ratification of the appointment of independent auditors.

Proposal 5—Adjournment of the Annual Meeting

If there are not sufficient votes to constitute a quorum or to approve the plan of conversion at the time of the annual meeting, the plan of conversion may not be approved unless the annual meeting is adjourned to a later date or dates in order to permit further solicitation of proxies. In order to allow proxies that have been received by old Delanco Bancorp at the time of the annual meeting to be voted for an adjournment, if necessary, old Delanco Bancorp has submitted the question of adjournment to its shareholders as a separate matter for their consideration. The board of directors of old Delanco Bancorp recommends that shareholders vote “FOR” the adjournment proposal. If it is necessary to adjourn the annual meeting, no notice of the adjourned annual meeting is required to be given to shareholders (unless the adjournment is for more than 30 days or if a new record date is fixed), other than an announcement at the annual meeting of the hour, date and place to which the annual meeting is adjourned.

The board of directors recommends that you vote “FOR” the adjournment of the annual meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the annual meeting to approve the proposal to approve the plan of conversion.

20

Use of Proceeds

[Same as Prospectus]

Our Dividend Policy

[Same as Prospectus]

21

Market for the Common Stock

[Same as Prospectus]

22

Capitalization

[Same as Prospectus]

23

Regulatory Capital Compliance

[Same as Prospectus]

24

Pro Forma Data

[Same as Prospectus]

25

Our Business

[Same as Prospectus]

26

Management’s Discussion and Analysis of

Results of Operations and Financial Condition

[Same as Prospectus]

27

Corporate Governance and Board Matters

Director Independence

Old Delanco Bancorp’s Board of Directors currently consists of five members, all of whom are independent under the listing standards of The NASDAQ Stock Market, except for James E. Igo, who is employed by old Delanco Bancorp and Delanco Federal as Chairman, President and Chief Executive Officer. In determining the independence of its directors, the Board considered transactions, relationships and arrangements between old Delanco Bancorp and its directors that are not required to be disclosed in this proxy statement/prospectus under the heading “Transactions with Related Persons,” including loans or lines of credit that Delanco Federal has directly or indirectly made to Director Renee C. Vidal. The business relationships between old Delanco Bancorp and its directors or the directors’ affiliated companies that were considered by the Board were: the law firm of Raymond, Coleman, Heinhold & Norman, LLP, of which Thomas J. Coleman III is a partner, provided legal services to the Company; and John A. Latimer is employed by The Barclay Group, Delanco Federal’s insurance broker.

Board Leadership Structure and Board’s Role in Risk Oversight

Old Delanco Bancorp’s Board of Directors endorses the view that one of its primary functions is to protect stockholders’ interests by providing independent oversight of management, including the Chief Executive Officer. However, the Board does not believe that mandating a particular structure, such as a separate Chairman and Chief Executive Officer, is necessary to achieve effective oversight. The Board of the Company is currently comprised of five directors, four of whom are independent directors under the listing standards of The NASDAQ Stock Market. The Chairman of the Board has no greater or lesser vote on matters considered by the Board than any other director, and the Chairman does not vote on any related party transaction. All directors of old Delanco Bancorp, including the Chairman, are bound by fiduciary obligations, imposed by law, to serve the best interests of the stockholders. Accordingly, separating the offices of Chairman and Chief Executive Officer would not serve to enhance or diminish the fiduciary duties of any director of old Delanco Bancorp. The Board does not currently have a lead director.

Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputation risk. Management is responsible for the day-to-day management of risks that old Delanco Bancorp faces, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the Board of Directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. Senior management attends the Board meetings and is available to address any questions or concerns raised by the Board on risk management and any other matters. The Chairman of the Board and independent members of the Board work together to provide strong, independent oversight of old Delanco Bancorp’s management and affairs through its standing committees and, when necessary, special meetings of independent directors.

Committees of the Board of Directors

Audit Committee. Old Delanco Bancorp maintains an Audit Committee consisting of directors James W. Verner (Chairperson), John W. Latimer and Renee C. Vidal. The Audit Committee meets periodically with independent auditors and management to review accounting, auditing, internal control structure and financial reporting matters. Each member of the Audit Committee is independent in accordance with the listing standards of The NASDAQ Stock Market. The Board of Directors has determined that the Audit Committee does not have a member who is an “audit committee financial expert.” While the Board recognizes that no individual Board member meets the qualifications required of an “audit committee financial expert,” the Board believes that appointment of a new director to the Board and to the Audit Committee at this time is not necessary as the level of financial knowledge and experience of the current members of the Audit Committee, including the ability to read and understand fundamental financial statements, is cumulatively sufficient to discharge adequately the Audit Committee’s responsibilities. The Audit Committee held five (5) meetings during the last fiscal year. The Audit Committee operates under a written charter which is available to the public under “Investors” at www.delancofsb.com.

28

Compensation Committee. The Company maintains a Compensation Committee consisting of directors John A. Latimer (Chairperson) and Thomas J. Coleman III. The Compensation Committee is responsible for all matters regarding the Company’s and the Bank’s employee compensation and benefit programs. The Compensation Committee reviews all compensation components for the Company’s Chief Executive Officer (“CEO”) and other executive officers’ compensation including base salary, annual incentive, long-term incentives/equity, benefits and other perquisites. Our CEO develops recommendations for the Compensation Committee regarding the appropriate range of annual salary increases of our employees. Our CEO does not participate in Compensation Committee discussions or the review of Compensation Committee documents relating to the determination of his compensation. The Compensation Committee held one meeting during the last fiscal year. The Compensation Committee does not operate under a written charter.

The Company does not maintain a separately designated nominating committee. Based on the number of independent directors currently serving on the Board, old Delanco Bancorp believes that the functions customarily attributable to this committee are sufficiently performed by our full Board of Directors.

The Board of Directors is responsible for the annual selection of management’s nominees for election as directors and developing and implementing policies and practices relating to corporate governance. See “—Nominating Procedures.”

Nominating Procedures

It is the policy of the Board of Directors of old Delanco Bancorp to consider director candidates recommended by stockholders who appear to be qualified to serve on old Delanco Bancorp’s Board of Directors. The Board may choose not to consider an unsolicited recommendation if no vacancy exists on the Board of Directors and the Board does not perceive a need to increase the size of the Board of Directors. To avoid the unnecessary use of the Board’s resources, the Board will consider only those director candidates recommended in accordance with the procedures set forth below.

Procedures to be Followed by Stockholders. To submit a recommendation of a director candidate to the Board of Directors, a stockholder should submit the following information in writing, addressed to the Chairperson of the Board, care of the Corporate Secretary, at the main office of old Delanco Bancorp:

1. The name of the person recommended as a director candidate;

2. All information relating to such person that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934;

3. The written consent of the person being recommended as a director candidate to being named in the proxy statement as a nominee and to serving as a director if elected;

4. The name and address of the stockholder making the recommendation, as they appear on old Delanco Bancorp’s books; provided, however, that if the stockholder is not a registered holder of old Delanco Bancorp’s common stock, the stockholder should submit his or her name and address along with a current written statement from the record holder of the shares that reflects ownership of old Delanco Bancorp’s common stock; and

5. A statement disclosing whether such stockholder is acting with or on behalf of any other person and, if applicable, the identity of such person.

In order for a director candidate to be considered for nomination at old Delanco Bancorp’s annual meeting of stockholders, the recommendation must be received by the Board of Directors at least 30 days before the date of the annual meeting.

29

Process for Identifying and Evaluating Nominees. The process that the Board follows when it identifies and evaluates individuals to be nominated for election to the Board of Directors is as follows:

Identification. For purposes of identifying nominees for the Board of Directors, the Board relies on personal contacts of the members of the Board of Directors, as well as their knowledge of members of the communities served by old Delanco Bancorp. The Board also will consider director candidates recommended by stockholders in accordance with the policy and procedures set forth above. The Board has not used an independent search firm to identify nominees.

Evaluation. In evaluating potential nominees, the Board determines whether the candidate is eligible and qualified for service on the Board of Directors by evaluating the candidate under the selection criteria, which are discussed in more detail below. If such individual fulfills these criteria, the Board will conduct a check of the individual’s background and interview the candidate to further assess the qualities of the prospective nominee and the contributions he or she would make to the Board.

Minimum Qualifications. The Board has adopted a set of criteria that it considers when it selects individuals not currently on the Board of Directors to be nominated for election to the Board of Directors. A candidate must meet the eligibility requirements set forth in old Delanco Bancorp’s Bylaws, which include a stock ownership requirement and a requirement that the candidate not have been subject to certain criminal or regulatory actions. A candidate must also meet any qualification requirements set forth in any Board or committee governing documents.

If the candidate is deemed eligible for election to the Board of Directors, the Board will then evaluate the prospective nominee to determine if he or she possesses the following qualifications, qualities or skills:

• contributions to the range of talent, skill and expertise appropriate for the Board;

• financial, regulatory and business experience, knowledge of the banking and financial service industries, familiarity with the operations of public companies and ability to read and understand financial statements;

• familiarity with old Delanco Bancorp’s market area and participation in and ties to local businesses and local civic, charitable and religious organizations;

• personal and professional integrity, honesty and reputation;

• the ability to represent the best interests of the stockholders of old Delanco Bancorp and the best interests of the institution;

• the ability to devote sufficient time and energy to the performance of his or her duties;

• independence under applicable Securities and Exchange Commission and listing definitions; and

• current equity holdings in old Delanco Bancorp.

The Board will also consider any other factors it deems relevant, including age, size of the Board of Directors and regulatory disclosure obligations. Further, when identifying nominees to serve as director, the Board seeks to create a Board that is strong in its collective knowledge and has a diversity of skills and experience with respect to accounting and finance, management and leadership, vision and strategy, business operations, business judgment, industry knowledge and corporate governance.

With respect to nominating an existing director for re-election to the Board of Directors, the Board will consider and review an existing director’s Board and committee attendance and performance; length of Board service; experience, skills and contributions that the existing director brings to the Board; and independence.

30

Directors’ Compensation

The following table provides information regarding the compensation received by individuals who served as non-employee directors of old Delanco Bancorp and Delanco Federal during the year ended March 31, 2013. The table excludes perquisites, which did not exceed $10,000 in the aggregate for any director.

Name	Fees Earned or Paid in Cash
Thomas J. Coleman III	$	7,425
William C. Jenkins (1)	$	4,550
John A. Latimer	$	7,875
James W. Verner	$	7,775
Renee C. Vidal	$	6,975

(1) Mr. Jenkins resigned from the Boards of Directors of old Delanco Bancorp and Delanco Federal effective October 25, 2012.

Director Retirement Plan. Delanco Federal sponsors a director retirement plan for the benefit of members of the Board of Directors. All directors serving on or after the plan’s effective date of January 1, 2002 participate in the plan. Under the plan, following their retirement from the Board of Directors (upon meeting certain criteria) directors receive a monthly retirement benefit equal to 4% of their fees (including any annual retainer) multiplied by their completed years of service, up to a maximum of 80% of the final fee amount. Directors must complete at least ten years of service as an employee and/or director in order to receive a retirement benefit under the plan. Director retirement benefits are payable in equal monthly installments during the director’s lifetime, unless the director elects to receive an actuarially equivalent benefit in the form of an annuity. No benefits are payable under the plan upon a participating director’s death, unless the participant selected the annuity form of payment, in which case the director’s designated beneficiary would receive continued payments in accordance with the director’s election.

Meeting Fees for Non-Employee Directors. The following table sets forth the applicable fees that are paid to non-employee directors for their service on the Board of Directors of Delanco Federal. Directors do not receive any fees for their service on the Boards of Directors of old Delanco Bancorp or Delanco MHC. Each director receives two paid absences on an annual basis.

Board of Directors of Delanco Federal:
Fee per Board Meeting	$	625
Fee per Committee Meeting:
Executive Committee	$	275
All Other Committees	$	175

Board and Committee Meetings

During the year ended March 31, 2013, the board of directors of old Delanco Bancorp and Delanco Federal held 12 meetings, respectively. No director attended fewer than 75% of the aggregate total meetings of old Delanco Bancorp’s and Delanco Federal’s respective board of directors and the committees on which such director served during the year ended March 31, 2013.

Director Attendance at Annual Meeting of Shareholders

The board of directors encourages directors to attend the annual meeting of shareholders. All of the directors of old Delanco Bancorp attended the 2012 annual meeting of shareholders.

31

Code of Ethics and Business Conduct

The Board of Directors has adopted a Code of Ethics that applies to all employees of the old Delanco Bancorp. A copy of the code of ethics can be obtained, without charge, upon written request to James E. Igo, Delanco Bancorp, Inc., 615 Burlington Avenue, Delanco, New Jersey 08075.

Audit Related Matters

Report of the Audit Committee

Old Delanco Bancorp’s management is responsible for old Delanco Bancorp’s internal control over financial reporting. The independent registered public accounting firm is responsible for performing an independent audit of old Delanco Bancorp’s consolidated financial statements and issuing an opinion on the conformity of those financial statements with U.S. generally accepted accounting principles. The Audit Committee oversees old Delanco Bancorp’s internal control over financial reporting on behalf of the Board of Directors.

In this context, the Audit Committee has met and held discussions with management and the independent registered public accounting firm. Management represented to the Audit Committee that old Delanco Bancorp’s consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee discussed with the independent registered public accounting firm the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1 AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T, including the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the financial statements.

In addition, the Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm the firm’s independence from old Delanco Bancorp and its management. In concluding that the independent registered public accounting firm is independent, the Audit Committee considered, among other factors, whether the non-audit services provided by the firm were compatible with its independence.

The Audit Committee discussed with old Delanco Bancorp’s independent registered public accounting firm the overall scope and plans for their audit. The Audit Committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of their examination, their evaluation of old Delanco Bancorp’s internal control over financial reporting and the overall quality of old Delanco Bancorp’s financial reporting process.

In performing all of these functions, the Audit Committee acts only in an oversight capacity. In its oversight role, the Audit Committee relies on the work and assurances of old Delanco Bancorp’s management, which has the primary responsibility for financial statements and reports, and of the independent registered public accounting firm who, in their report, express an opinion on the conformity of old Delanco Bancorp’s financial statements to U.S. generally accepted accounting principles. The Audit Committee’s oversight does not provide it with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal control over financial reporting designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions with management and the independent registered public accounting firm do not assure that old Delanco Bancorp’s financial statements are presented in accordance with generally accepted accounting principles, that the audit of the Company’s financial statements has been carried out in accordance with the standards of the Public Company Accounting Oversight Board (United States) or that the Company’s independent registered public accounting firm is in fact “independent.”

32

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited consolidated financial statements be included in old Delanco Bancorp’s Annual Report on Form 10-K for the year ended March 31, 2013 for filing with the Securities and Exchange Commission. The Audit Committee has appointed Connolly, Grady & Cha, P.C. to be old Delanco Bancorp’s independent registered public accounting firm for the 2013 fiscal year, subject to stockholder ratification.

Audit Committee of the Delanco Bancorp, Inc. Board of Directors

James W. Verner – Chairperson

John A. Latimer

Renee C. Vidal

Audit Fees

The following table sets forth the fees billed to old Delanco Bancorp for the years ended March 31, 2013 and 2012 by Connolly, Grady & Cha, P.C.:

	2013		2012
Audit Fees	$	63,065	$	62,535
Audit Related Fees(1)		15,964		15,667
Tax Fees(2)		6,372		7,401
All Other Fees		—		—

(1) Include fees for the review of annual and quarterly reports.

(2) Represents services rendered for tax compliance, tax advice and tax planning, including the preparation of the annual tax returns and quarterly tax payments.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services by the Independent Registered Public Accounting Firm.

The Audit Committee is responsible for appointing, setting compensation and overseeing the work of the independent registered public accounting firm. In accordance with its charter, the Audit Committee approves, in advance, all audit and permissible non-audit services to be performed by the independent registered public accounting firm. Such approval process ensures that the external auditor does not provide any non-audit services to old Delanco Bancorp that are prohibited by law or regulation.

In addition, the Audit Committee has established a policy regarding pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm. Requests for services by the independent registered public accounting firm for compliance with the auditor services policy must be specific as to the particular services to be provided.

The request may be made with respect to either specific services or a type of service for predictable or recurring services.

During the year ended March 31, 2013, all services were approved, in advance, by the Audit Committee in compliance with these procedures.

33

Executive Compensation

[Same as Prospectus]

34

Stock Ownership

[Same as Prospectus]

35

Subscriptions by Executive Officers and Directors

[Same as Prospectus]

36

Regulation and Supervision

[Same as Prospectus]

Federal and State Taxation

[Same as Prospectus]

37

Comparison of Shareholders’ Rights

[Same as Prospectus]

38

Restrictions on Acquisition of New Delanco Bancorp

[Same as Prospectus]

39

Description of New Delanco Bancorp Capital Stock

[same as offering prospectus]

Transfer Agent and Registrar

The transfer agent and registrar for the common stock of new Delanco Bancorp will be Registrar and Transfer Company, Cranford, New Jersey.

Registration Requirements

In connection with the conversion and offering, we will register our common stock with the Securities and Exchange Commission under Section 12(b) of the Securities Exchange Act of 1934, as amended, and will not deregister our common stock for a period of at least three years following the conversion and offering. As a result of registration, the proxy and tender offer rules, insider trading reporting and restrictions, annual and periodic reporting and other requirements of that statute will apply.

Legal and Tax Opinions

The legality of our common stock has been passed upon for us by Kilpatrick Townsend & Stockton LLP, Washington, D.C. The federal income tax consequences of the conversion have been opined upon by Kilpatrick Townsend & Stockton LLP. Connolly, Grady & Cha, P.C. has provided an opinion to us regarding the Pennsylvania income tax consequences of the conversion. Kilpatrick Townsend & Stockton LLP and Connolly, Grady & Cha, P.C. have consented to the references to their opinions in this proxy statement/prospectus.

Experts

The consolidated financial statements of old Delanco Bancorp and subsidiary as of March 31, 2013 and 2012, and for each of the years in the three-year period ended March 31, 2013, have been included herein in reliance upon the report of Connolly, Grady & Cha, P.C., independent registered public accounting firm, which is included herein and upon the authority of said firm as experts in accounting and auditing.

RP Financial, LC. has consented to the summary in this proxy statement/prospectus of its report to us setting forth its opinion as to our estimated pro forma market value and to the use of its name and statements with respect to it appearing in this proxy statement/prospectus.

40

Other Information Relating to Directors and Executive Officers

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires old Delanco Bancorp’s executive officers and directors, and persons who own more than 10% of any registered class of old Delanco Bancorp’s equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. These individuals are required by regulation to furnish old Delanco Bancorp with copies of all Section 16(a) reports they file.

Based solely on its review of the copies of the reports it has received and written representations provided to old Delanco Bancorp from the individuals required to file the reports, old Delanco Bancorp believes that each of its executive officers and directors has complied with applicable reporting requirements for transactions in Company common stock during the fiscal year ended March 31, 2013.

Transactions with Related Persons

The Sarbanes-Oxley Act of 2002 generally prohibits loans by new Delanco Bancorp to its executive officers and directors. However, the Sarbanes-Oxley Act contains a specific exemption from such prohibition for loans by Delanco Federal to its executive officers and directors in compliance with federal banking regulations. Federal regulations require that all loans or extensions of credit to executive officers and directors of insured financial institutions must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and must not involve more than the normal risk of repayment or present other unfavorable features. Delanco Federal is therefore prohibited from making any new loans or extensions of credit to executive officers and directors at different rates or terms than those offered to the general public. Notwithstanding this rule, federal regulations permit Delanco Federal to make loans to executive officers and directors at reduced interest rates if the loan is made under a benefit program generally available to all other employees and does not give preference to any executive officer or director over any other employee.

Delanco Federal maintains a program that enables all full-time employees to obtain a residential mortgage loan on a primary residence at a reduction of 1% from the rates available to the public for as long as the officer remains in the employ of Delanco Federal. Douglas R. Allen, Jr., Senior Vice President of Delanco Federal, has a mortgage loan from Delanco Federal that was made under this program at a rate of 2.875%. The largest amounts of principal outstanding during the 2012 and 2013 fiscal years on this loan were approximately $184,781 and $180,844, respectively, and the outstanding balances at March 31, 2012 and March 31, 2013 were $180,843 and $176,751, respectively. The total principal and interest paid on this loan during the 2012 and 2013 fiscal years was $3,937 and $7,091 and $4,093 and $6,936, respectively.

In accordance with banking regulations, the Board of Directors reviews all loans made to a director or executive officer in an amount that, when aggregated with the amount of all other loans to such person and his or her related interests, exceed the greater of $25,000 or 5% of Delanco Federal’s capital and surplus (up to a maximum of $500,000) and such loan must be approved in advance by a majority of the disinterested members of the Board of Directors.

41

Submission of Business Proposals and Shareholder Nominations

Old Delanco Bancorp must receive proposals that shareholders seek to include in the proxy statement for old Delanco Bancorp’s next annual meeting no later than             . If next year’s annual meeting is held on a date more than 30 calendar days from             , a shareholder proposal must be received by a reasonable time before old Delanco Bancorp begins to print and mail its proxy solicitation for such annual meeting. Any shareholder proposals will be subject to the requirements of the proxy rules adopted by the Securities and Exchange Commission.

Old Delanco Bancorp’s Bylaws provide that, to make nominations for the election of directors or proposals for business to be brought before the annual meeting, a shareholder must deliver notice of such nominations and/or proposals to the Secretary not less than 30 days before the date of the annual meeting. However, if less than 40 days’ notice or prior public disclosure of the date of the annual meeting is given to shareholders, such notice must be received not later than the close of business of the tenth day following the day on which notice of the date of the annual meeting was mailed to shareholders or prior public disclosure of the meeting date was made. A copy of the Bylaws may be obtained from old Delanco Bancorp.

Shareholder Communications

Old Delanco Bancorp encourages stockholder communications to the Board of Directors and/or individual directors. Stockholders who wish to communicate with the Board of Directors or an individual director should send their communications to the care of Douglas R. Allen, Jr., Corporate Secretary, Delanco Bancorp, Inc., 615 Burlington Avenue, Delanco, New Jersey 08075. Communications regarding financial or accounting policies should be sent to the attention of the Chairperson of the Audit Committee.

Miscellaneous

Old Delanco Bancorp will pay the cost of this proxy solicitation. Old Delanco Bancorp will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to the beneficial owners of old Delanco Bancorp. Additionally, directors, officers and other employees of old Delanco Bancorp may solicit proxies personally or by telephone. None of these persons will receive additional compensation for these activities. Old Delanco Bancorp has retained             , a proxy solicitation firm, to assist it in soliciting proxies and has agreed to pay them a fee of $            plus reasonable expenses for these services.

Old Delanco Bancorp’s Annual Report to Shareholders has been included with this proxy statement. Any shareholder who has not received a copy of the Annual Report may obtain a copy by writing to the Corporate Secretary of old Delanco Bancorp. The Annual Report is not to be treated as part of the proxy solicitation material or as having been incorporated by reference into this proxy statement.

If you and others who share your address own your shares in “street name,” your broker or other holder of record may be sending only one annual report and proxy statement to your address. This practice, known as “householding,” is designed to reduce our printing and postage costs. However, if a shareholder residing at such an address wishes to receive a separate annual report or proxy statement in the future, he or she should contact the broker or other holder of record. If you own your shares in “street name” and are receiving multiple copies of our annual report and proxy statement, you can request householding by contacting your broker or other holder of record.

If you and others who share your address own your shares in street name, your broker or other holder of record may be sending only one Annual Report and proxy statement to your address. This practice, known as “householding,” is designed to reduce our printing and postage costs. However, if a shareholder residing at such an address wishes to receive a separate Annual Report or proxy statement in the future, he or she should contact the broker or other holder of record. If you own your shares in street name and are receiving multiple copies of our Annual Report and proxy statement, you can request householding by contacting your broker or other holder of record.

42

Where You Can Find More Information

We have filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933, as amended, that registers the common stock to be issued in exchange for shares of old Delanco Bancorp common stock. This proxy statement/prospectus forms a part of the registration statement. The registration statement, including the exhibits, contains additional relevant information about us and our common stock. The rules and regulations of the Securities and Exchange Commission allow us to omit certain information included in the registration statement from this proxy statement/prospectus. You may read and copy the registration statement at the Securities and Exchange Commission’s public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the Securities and Exchange Commission’s public reference rooms. The registration statement also is available to the public from commercial document retrieval services and at the Internet World Wide Web site maintained by the Securities and Exchange Commission at “http://www.sec.gov.”

Delanco MHC has filed an application for approval of the plan of conversion with the Federal Reserve Board. This proxy statement/prospectus omits certain information contained in the application. The application may be inspected, without charge, at the offices of the Board of Governors of the Federal Reserve System, 20^th Street and Constitution Avenue, NW, Washington, DC 20551 and at The Federal Reserve Bank of Philadelphia, Ten Independence Mall, Philadelphia, PA 19106.

A copy of the plan of conversion is available without charge from Delanco Federal.

The appraisal report of RP Financial, LC. has been filed as an exhibit to our registration statement and to our application to the Federal Reserve Board. Portions of the appraisal report were filed electronically with the Securities and Exchange Commission and are available on its Web site as described above. The entire appraisal report is available at the public reference room of the Securities and Exchange Commission and the offices of the Federal Reserve Board as described above.

43

Index to Financial Statements of

Old Delanco Bancorp

The financial statements to be included in the proxy statement/prospectus will be identical to those included in the offering prospectus included in this Registration Statement.

44

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth our anticipated expenses of the offering:

SEC filing fee (1)	$	1,380
FINRA filing fee (1)		2,017
Blue sky fees and expenses		25,000
EDGAR, printing, postage and mailing		100,000
Legal fees and expenses		355,000
Accounting fees and expenses		40,000
Appraiser’s fees and expenses		36,000
Marketing firm expenses (including legal fees) (2)		240,000
Conversion agent fees and expenses		26,000
Business plan fees and expenses		30,000
Transfer agent and registrar fees and expenses		10,000
Certificate printing		2,000
Miscellaneous		2,603
TOTAL	$	870,000

(1) Based on the registration of $10,116,328 of common stock.

(2) In addition, Keefe, Bruyette & Woods, a Stifel Company will receive 6.0% of the aggregate price of shares sold in the syndicated community offering, if any.

Item 14. Indemnification of Directors and Officers.

Section 14A:2-7(3) of the New Jersey Business Corporation Act permits a corporation to provide in its certificate of incorporation that a director or officer shall not be personally liable, or shall be liable only to the extent therein provided, to the corporation or its shareholders for damages for breach of any duty owed to the corporation or its shareholders, except that such provision shall not relieve a director or officer from liability for any breach of duty based upon an act or omission (a) in breach of such person’s duty of loyalty to the corporation or its shareholders, (b) not in good faith or involving a knowing violation of law or (c) resulting in receipt by such person of an improper personal benefit. Delanco Bancorp, Inc.’s certificate of incorporation provides for such limitation of liability.

Section 14A:3-5 of the New Jersey Business Corporation Act empowers a corporation to indemnify any current or former director or officer made a party to a proceeding because he or she is or was a director or officer against liability incurred in the proceeding; provided that such director or officer acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal proceeding, such director or officer had no reasonable cause to believe his conduct was unlawful

Delanco Bancorp, Inc.’s certificate of incorporation provides that the corporation must indemnify its directors and officers to the fullest extent authorized by law. Delanco Bancorp, Inc. is also expressly required to advance certain expenses to its directors and officers. Delanco Bancorp, Inc. believes that these indemnification provisions are useful to attract and retain qualified directors and executive officers.

Item 15. Recent Sales of Unregistered Securities.

None.

Item 16. Exhibits and Financial Statement Schedules.

The exhibits filed as a part of this Registration Statement are as follows:

(a) List of Exhibits

Exhibit	Description	Location
1.1	Engagement Letter by and between Delanco Bancorp, Inc., Delanco Federal Savings Bank, Delanco MHC and Keefe, Bruyette & Woods, Inc., as financial advisor	Filed herewith
1.2	Engagement Letter by and between Delanco Bancorp, Inc., Delanco Federal Savings Bank, Delanco MHC and Keefe, Bruyette & Woods, Inc., as conversion agent	Filed herewith
1.3	Agency Agreement between Delanco MHC, Delanco Bancorp, Inc., Delanco Federal Savings Bank, Delanco Bancorp, Inc. and Keefe, Bruyette & Woods, Inc.	To be filed by amendment
2.0	Plan of Conversion and Reorganization	Filed herewith
3.1	Certificate of Incorporation of Delanco Bancorp, Inc.	Filed herewith
3.2	Bylaws of Delanco Bancorp, Inc.	Filed herewith
4.0	Specimen Common Stock Certificate of Delanco Bancorp, Inc.	Filed herewith
5.0	Opinion of Kilpatrick Townsend & Stockton LLP re: Legality	To be filed by amendment
8.1	Form of Opinion of Kilpatrick Townsend & Stockton LLP re: Federal Tax Matters	To be filed by amendment
8.2	Form of Opinion of Connolly, Grady & Cha, P.C. re: State Tax Matters	To be filed by amendment
10.1	+ Form of ESOP Loan Documents	Filed herewith
10.2	+ Delanco Federal Savings Bank Employee Severance Compensation Plan	Incorporated herein by reference to Exhibit 10.5 to the Delanco Bancorp, Inc. (File No. 000-52517) Annual Report on Form 10-KSB filed for the year ended March 31, 2007, filed with the Securities and Exchange Commission on July 13, 2007
10.3	+ Delanco Federal Savings Bank Directors Retirement Plan	Incorporated herein by reference to Exhibit 10.5 to the Delanco Bancorp, Inc. (File No. 333-139339) Registration Statement on Form SB-2, filed with the Securities and Exchange Commission on December 14, 2006
10.4	+ Delanco Bancorp, Inc. 2008 Equity Incentive Plan	Incorporated herein by reference to Delanco Bancorp, Inc.’s definitive proxy materials (File No. 000-52517) for the Annual Meeting of Stockholders, filed with the Securities and Exchange Commission on July 17, 2008

II-2

Exhibit	Description	Location
21.0	Subsidiaries	Filed herewith
23.1	Consent of Kilpatrick Townsend & Stockton LLP	Contained in Exhibits 5.0 and 8.1
23.2	Consent of Connolly, Grady & Cha, P.C.	Filed herewith
23.3	Consent of RP Financial, LC.	Filed herewith
24.0	Powers of Attorney	Included on the signature page
99.1	Appraisal Report of RP Financial, LC. (P)	Filed herewith
99.2	Marketing Materials	To be filed by amendment
99.3	Subscription Order Form and Instructions	To be filed by amendment
99.4	Form of Proxy for Delanco Bancorp, Inc. Special Meeting of Shareholders	To be filed by amendment

+ Management contract or compensation plan or arrangement.

(P) The supporting financial schedules are filed in paper pursuant to Rule 202 of Regulation S-T.

(b) Financial Statement Schedules

All schedules have been omitted as not applicable or not required under the rules of Regulation S-X.

Item 17. Undertakings.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the forgoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

II-3

(4) That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(5) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Delanco, State of New Jersey on June 11, 2013.

Delanco Bancorp, Inc.
By:	/s/ James E. Igo
	James E. Igo
	Chairman, President and Chief Executive Officer

POWER OF ATTORNEY

We, the undersigned directors and officers of Delanco Bancorp, Inc. (the “Company”) hereby severally constitute and appoint James E. Ego and Eva Modi with full power of substitution, our true and lawful attorney-in-fact and agent, to do any and all things in our names in the capacities indicated below which said James E. Igo and Eva Modi may deem necessary or advisable to enable Delanco Bancorp, Inc. to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with the registration statement on Form S-1 of Delanco Bancorp, Inc., including specifically but not limited to, power and authority to sign for us in our names in the capacities indicated below, the registration statement and any and all amendments (including post-effective amendments) thereto; and we hereby ratify and confirm all that said James E. Igo and Eva Modi shall lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Name	Title	Date
/s/ James E. Igo	Chairman, President, Chief Executive Officer and Director (principal executive officer)	June 11, 2013
James E. Igo
/s/ Eva Modi	Senior Vice President and Chief Financial Officer (principal financial and accounting officer)	June 11, 2013
Eva Modi
/s/ Thomas J. Coleman	Director	June 11, 2013
Thomas J. Coleman
/s/ John A. Latimer	Director	June 11, 2013
John A. Latimer
/s/ James W. Verner	Director	June 11, 2013
James W. Verner
/s/ Renee C. Vidall	Director	June 11, 2013
Renee C. Vidal

EX-1.1

Exhibit 1.1

April 5, 2013

Delanco Mutual Holding Company

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

615 Burlington Avenue

Delanco, NJ 08075

Attention: Mr. James E. Igo

Chairman, President & Chief Executive Officer

Ladies and Gentlemen:

This letter confirms the engagement of Keefe, Bruyette & Woods, Inc. (“KBW”) to act as the financial advisor to Delanco Mutual Holding Company (the “MHC”), Delanco Bancorp, Inc. (the “Bancshares”), and Delanco Federal Savings Bank (the “Bank”) in connection with the proposed conversion and reorganization from the mutual holding company form of organization to a stock holding company form of organization pursuant to a Plan of Conversion and Reorganization to be adopted by the MHC, the Bancshares, and the Bank (the “Reorganization”). In order to effect the Reorganization, it is contemplated that the MHC will merge into the Bancshares and the Bancshares will merge into a new stock holding company (the “Holding Company”) and that the Holding Company will offer and sell shares of its common stock (the “Common Stock”) to eligible persons in a Subscription Offering, with any remaining shares offered to the general public in a Community Offering and if necessary, through a syndicate of broker-dealers organized by KBW (a “Syndicated Community Offering”) (the Subscription Offering, the direct Community Offering and any Syndicated Community Offering are collectively referred to herein as the “Offerings”). In addition, KBW will act as Conversion Agent in connection with the Offerings pursuant to the terms of a separate agreement between the MHC, the Bancshares, the Bank and KBW. The MHC, the Bancshares, the Bank and the Holding Company are collectively referred to herein as the “Company”. This letter sets forth the terms and conditions of our engagement as financial advisor to the Company.

Keefe, Bruyette & Woods • 787 Seventh Avenue • New York, NY 10019

212.887.7777 • Toll Free: 800.966.1559 • www.kbw.com

Delanco Mutual Holding Company

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

April 5, 2013

Page 2

1. Advisory/Offering Services

As the Company’s financial advisor, KBW will provide financial advice to the Company and will assist the Company’s management, legal counsel, accountants and other advisors in connection with the Conversion and related issues. We anticipate our services will include the following, each as may be necessary and as the Company may reasonably request:

1. Providing advice on the financial and securities market implications of the Plan of Conversion and Reorganization and any related corporate documents, including the Company’s Business Plan;

2. Assisting in structuring the Offerings, including developing and assisting in implementing a marketing strategy for the Offerings;

3. Reviewing all offering documents, including the Prospectus, stock order forms, letters, brochures and other related offering materials (it being understood that preparation and filing of such documents will be the responsibility of the Company and its counsel);

4. Assisting the Company in preparing for and scheduling meetings with potential investors and broker-dealers, as necessary;

5. Assisting the Company in analyzing proposals from outside vendors retained in connection with the Offerings, including printers, transfer agents and appraisal firms;

6. Assisting the Company in the drafting and distribution of press releases as required or appropriate in connection with the Offerings;

7. Meeting with the Board of Directors and/or management of the Company to discuss any of the above services; and

8. Providing such other financial advisory and investment banking services m connection with the Offerings as may be agreed upon by KBW and the Company.

2. Due Diligence Review

The Company acknowledges and agrees that KBW’s obligation to perform the services contemplated by this agreement shall be subject to the satisfactory completion of such investigations and inquiries relating to the Company, and its directors, officers, agents and employees, as KBW and their counsel in their reasonable discretion my deem appropriate under the circumstances. The Company agrees it will make available to KBW all relevant information, whether or not publicly available, which KBW reasonably requests, and will permit KBW to discuss with the board of directors and management the operations and prospects of the Company. KBW will treat all material non-public information as confidential. The Company recognizes and confirms that KBW (a) will use and rely on such information in performing the services contemplated by this agreement without having independently verified the same, (b) does not assume responsibility for the accuracy or completeness of the information, and (c) will not conduct any independent verification or any appraisal or physical inspection of properties or assets. KBW will assume that all financial forecasts have been reasonably prepared and reflect the best then currently available estimates and judgments of the Company’s management as to the expected future financial performance of the Company.

Delanco Mutual Holding Company

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

April 5, 2013

Page 3

3. Regulatory Filings

If the Company proceeds with the Offerings, the Company will cause appropriate Offering documents to be filed with all regulatory agencies including the Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), and the appropriate federal and/or state bank regulatory agencies. In addition, the Company and KBW agree that the Company’s counsel shall serve as counsel with respect to blue sky matters in connection with the Offerings, and that the Company shall cause such counsel to prepare a Blue Sky Memorandum related to the Offerings including KBW’s participation therein and shall furnish KBW a copy thereof addressed to KBW or upon which counsel shall state KBW may rely.

4. Fees

For the services hereunder, the Company shall pay the following fees to KBW at closing unless stated otherwise:

(a) Management Fee: A Management Fee of $25,000 payable as follows: $12,500 upon the signing of this agreement and $12,500 upon the filing of the initial Registration Statement. Such fees shall be deemed to have been earned when due. Should the Offering be terminated for any reason not attributable to the action or inaction of KBW, KBW shall have earned and be entitled to be paid fees accruing through the stage at which point the termination occurred.

(b) Success Fee: A Success Fee of $160,000 shall be paid for KBW’s services in relation to the Subscription Offering and Direct Community Offering. The Management Fee described in 4(a) will be credited against the Success Fee paid pursuant to this paragraph.

(c) Syndicated Community Offering: If any shares of the Company’s stock remain available after the Subscription Offering and Direct Community Offering, at the request of the Company, KBW will seek to form a syndicate of registered broker- dealers to assist in the sale of such common stock on a best efforts basis, subject to the terms and conditions set forth in a selected dealers agreement to be entered into between the Company and KBW. KBW will endeavor to distribute the common stock among dealers in a fashion which best meets the distribution objectives of the Company and the Plan. KBW will be paid a fee not to exceed 6.0% of the aggregate purchase price of the shares of common stock sold in the Syndicated Community Offering. From this fee, KBW will pass onto selected broker-dealers, who assist in the Syndicated Community Offering, an amount

Delanco Mutual Holding Company

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

April 5, 2013

Page 4

competitive with gross underwriting discounts charged at such time for comparable amounts of stock sold at a comparable price per share in a similar market environment. Fees with respect to purchases affected with the assistance of a broker/dealer other than KBW shall be transmitted by KBW to such broker/dealer.

5. Expenses

The Company will bear those expenses of the proposed Offering customarily borne by issuers, including, without limitation, regulatory filing fees, SEC, “Blue Sky,” and FINRA filing and registration fees; the fees of the Company’s accountants, attorneys, appraiser, transfer agent and registrar, printing, mailing and marketing and syndicate expenses associated with the Offering; the fees set forth in Section 4; and fees for “Blue Sky” legal work. If KBW incurs expenses on behalf of Company, the Company will reimburse KBW for such expenses; provided, however, KBW agrees that it will not incur expenses on behalf of the Company without the Company’s prior written consent.

KBW shall be reimbursed for its reasonable, documented out-of-pocket expenses related to the Offering, including costs of travel, meals and lodging, photocopying, telephone, facsimile, couriers, etc., which will not exceed $20,000. In addition KBW will be reimbursed for reasonable documented fees and expenses of its counsel not to exceed $75,000. These expenses assume no unusual circumstances or delays, or are-solicitation in connection with the Offerings. KBW and the Company acknowledge that such expense cap may be increased by mutual consent, including in the event of a material delay in the Offering which would require an update of the financial information in tabular form to reflect a period later than that set forth in the original filing of the offering document. In the event of this occurrence, the fees for out-of-pocket expenses will not exceed $15,000 and the legal fees will not exceed $120,000. The provisions of this paragraph are not intended to apply to or in any way impair or limit the indemnification provisions contained herein.

6. Limitations

The Company acknowledges that all opinions and advice (written or oral) given by KBW to the Company in connection with KBW’s engagement are intended solely for the benefit and use of the Company for the purposes of its evaluation of the proposed Offerings. Unless otherwise expressly stated in an opinion letter issued by KBW or otherwise expressly agreed, no one other than the Company is authorized to rely upon this engagement of KBW or any statements or conduct by KBW. The Company agrees that no such opinion or advice shall be used, reproduced, disseminated, quoted or referred to at any time, in any manner, or for any purpose, without the prior written consent of KBW.

The Company acknowledges and agrees that KBW has been retained to act solely as financial advisor to the Company and not as an advisor to or agent of any other person, and the

Delanco Mutual Holding Company

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

April 5, 2013

Page 5

Company’s engagement of KBW is not intended to confer rights upon any person not a party to this Agreement (including shareholders, employees or creditors of the Company) as against KBW or its affiliates, or their respective directors, officers, employees or agents. In such capacity, KBW shall act as an independent contractor, and any duties arising out of its engagement shall be owed solely to the Company. It is understood that KBW’s responsibility to the Company is solely contractual in nature and KBW does not owe the Company, or any other party, any fiduciary duty as a result of this Agreement.

7. Benefit

This letter agreement shall inure to the benefit of the parties hereto and their respective successors, and the obligations and liabilities assumed hereunder by the parties hereto shall be binding upon their respective successors; provided, however, that this letter agreement shall not be assignable by KBW.

8. Confidentiality

KBW acknowledges that the information provided to it by the Company may contain confidential and proprietary business information concerning the Company. KBW agrees that, except as contemplated in connection with the performance of its services under this agreement, as authorized by the Company or as required by law, regulation or legal process, it will treat as confidential all material, non-public information relating to the Company obtained in connection with its engagement hereunder (the “Confidential Information); provided, however, that KBW may disclose such Confidential Information to its agents and advisors who are assisting or advising KBW in performing its services hereunder and who have agreed to be bound by the terms and conditions of this paragraph. As used in this paragraph, the term “Confidential Information” shall not include information which (a) is or becomes generally available to the public other than as a result of a disclosure by KBW, (b) was available to KBW on a non-confidential basis prior to its disclosure to KBW by the Company, or (c) becomes available to KBW on a non-confidential basis from a person other than the Company who is not otherwise known to KBW to be bound not to disclose such information pursuant to a contractual, legal or fiduciary obligation.

The Company hereby acknowledges and agrees that the presentation materials and financial models used by KBW in performing its services hereunder have been developed by and are proprietary to KBW. The Company agrees that it will not reproduce or distribute all or any portion of such models or presentations without the prior written consent of KBW.

9. Indemnification

As KBW will be acting on behalf of the Company in connection with the Offerings, the Company agrees to indemnify and hold harmless KBW and its affiliates, the respective partners, directors, officers, employees and agents of KBW and its affiliates and each other person, if any,

Delanco Mutual Holding Company

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

April 5, 2013

Page 6

controlling KBW or any of its affiliates and each of their successors and assigns (KBW and each such person being an “Indemnified Party”) to the fullest extent permitted by law, from and against any and all losses, claims, damages and liabilities, joint or several, to which such Indemnified Party may become subject under applicable federal or state law, or otherwise related to or arising out of the Offerings or the engagement of KBW pursuant to, or the performance by KBW of the services contemplated by, this letter, and will reimburse any Indemnified Party for all expenses (including reasonable legal fees and expenses) as they are incurred, including expenses incurred in connection with the investigation, preparing for or defending any such action or claim whether or not in connection with pending or threatened litigation, or any action or proceeding arising therefrom, whether or not KBW is a party; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage, liability or expense (a) arises out of or is based upon any untrue statement of a material fact or the omission of a material fact required to be stated therein or necessary to make not misleading any statements contained in any final prospectus, or any amendment or supplement thereto, made in reliance on and in conformity with written information furnished to the Company by KBW expressly for use therein or (b) to the extent that any loss, claim, damage, liability or expense is found in a final judgment by a court of competent jurisdiction to have resulted primarily from the gross negligence or bad faith of KBW.

If the indemnification provided for in the foregoing paragraph is judicially determined to be unavailable (other than in accordance with the terms hereof) to any person otherwise entitled to indemnity in respect of any losses, claims, damages or liabilities referred to herein, then, in lieu of indemnifying such person hereunder, the Company shall contribute to the amount paid or payable by such person as a result of such losses, claims, damages or liabilities (and expenses relating thereto) (i) in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and KBW, on the other hand, of the engagement provided for in this Agreement or (ii) if the allocation provided for in clause (i) above is not available, in such proportion as is appropriate to reflect not only the relative benefits referred to in such clause (i) but also the relative fault of each of the Company and KBW, as well as any other relevant equitable considerations; provided, however, in no event shall KBW’s aggregate contribution to the amount paid or payable exceed the aggregate amount of fees actually received by KBW under this Agreement. For the purposes of this Agreement, the relative benefits to the Company and to KB W of the engagement under this Agreement shall be deemed to be in the same proportion as (a) the total value paid or contemplated to be paid or received or contemplated to be received by the Company in the Conversion and the Offerings that are the subject of the engagement hereunder, whether or not consummated, bears to (b) the fees paid or to be paid to KBW under this Agreement.

10. Definitive Agreement

This letter agreement reflects KBW’s present intention of proceeding to work with the Company on its proposed Offerings. No legal and binding obligation is created on the part of the Company or KBW with respect to the subject matter hereof, except as to (i) the agreement to

Delanco Mutual Holding Company

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

April 5, 2013

Page 7

maintain the confidentiality of Confidential Information set forth in Section 8, (ii) the payment of certain fees as set forth in Section 4, (iii) the payment of expenses as set forth in Section 5, (iv) the limitations set forth in Section 6, (v) the indemnification and contribution provisions set forth in Section 9 and (iv) those terms set forth in a mutually agreed upon Agency Agreement between KBW and the Company to be executed prior to commencement of the Offerings, all of which shall constitute the binding obligations of the parties hereto and which shall survive the termination of this letter agreement or the completion of the services furnished hereunder and shall remain operative and in full force and effect.

KBW’s execution of such Agency Agreement shall also be subject to (a) KBW’s satisfaction with Due Diligence Review, (b) preparation of offering materials that are satisfactory to KBW, (c) compliance by the Company with all relevant legal and regulatory requirements to the reasonable satisfaction of KBW and its counsel, (d) agreement that the price established by the independent appraiser is reasonable, and (e) market conditions at the time of the proposed Offering.

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and can be altered only by written consent signed by the parties. This Agreement shall be construed and enforced in accordance with the laws of the State of New York, without regard to the conflicts of laws principles thereof. Any right to trial by jury with respect to any claim or action arising out of this agreement or conduct in connection with the engagement is hereby waived by the parties hereto.

Delanco Mutual Holding Company

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

April 5, 2013

Page 8

If the foregoing correctly sets forth our mutual understanding, please so indicate by signing and returning the original copy of this letter to the undersigned.

Very truly yours,

KEEFE, BRUYETTE & WOODS, INC.
By:
	Robin P. Suskind
	Managing Director

DELANCO MUTUAL HOLDING COMPANY
DELANCO BANCORP, INC.
DELANCO FEDERAL SAVINGS BANK
By:		Date:	5/31/13
	James E. Igo
	Chairman, President & Chief Executive Officer

EX-1.2

Exhibit 1.2

April 5, 2013

Delanco Mutual Holding Company

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

615 Burlington Avenue

Delanco, NJ 08075

Attention: Mr. James E. Igo

Chairman, President & Chief Executive Officer

Ladies and Gentlemen:

This letter confirms the engagement of Keefe, Bruyette & Woods, Inc. (“KBW”) to act as the conversion agent to Delanco Mutual Holding Company (the “MHC”), Delanco Bancorp, Inc. (the “Bancshares”), and Delanco Federal Savings Bank (the “Bank”) in connection with the proposed conversion and reorganization from the mutual holding company form of organization to a stock holding company form of organization pursuant to a Plan of Conversion and Reorganization to be adopted by the MHC, the Bancshares, and the Bank (the “Reorganization”). In order to effect the Reorganization, it is contemplated that the MHC will merge into the Bancshares and the Bancshares will merge into a new stock holding company (the “Holding Company”) and that the Holding Company will offer and sell shares of its common stock (the “Common Stock”) to eligible persons in a Subscription Offering, with any remaining shares offered to the general public in a Community Offering and if necessary, through a syndicate of broker-dealers organized by KB W (a “Syndicated Community Offering”) (the Subscription Offering, the direct Community Offering and any Syndicated Community Offering are collectively referred to herein as the “Offerings”). This letter sets forth the terms and conditions of our engagement as conversion agent to the MHC, Bancorp and the Bank, all collectively referred to as the “Company”.

Keefe, Bruyette & Woods • 787 Seventh Avenue • New York, NY 10019

212.887.7777 • Toll Free: 800.966.1559 • www.kbw.com

Delanco Mutual Holding Company

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

April 5, 2013

Page 2

Conversion Agent Services: As Conversion Agent, and as the Company may reasonably request, KBW will provide the following services:

1. Consolidation of Accounts and Development of a Central File, including, but not limited to the following:

• Consolidate accounts having the same ownership and separate the consolidated file information into necessary groupings to satisfy mailing requirements;

• Create the master file of account holders as of key record dates; and

• Provide software for the operation of the Company’s Stock Information Center, including subscription management and proxy solicitation efforts.

2. Preparation of Proxy Forms; Proxy Solicitation and Special Meeting Services, including, but not limited to the following:

• Assist the Company’s financial printer with labeling of proxy materials for voting and subscribing for stock;

• Provide support for any follow-up mailings to members, as needed, including proxy grams and additional solicitation materials;

• Proxy and ballot tabulation; and

• Act as Inspector of Election for the Company’s special meeting of members, if requested, and the election is not contested.

3. Subscription Services, including, but not limited to the following:

• Assist the Company’s financial printer with labeling of stock offering materials for mailing to persons eligible to subscribe for stock;

• Provide support for any follow-up mailings to members, as needed, including additional solicitation materials;

• Stock order form processing and production of daily reports and analysis;

• Provide supporting account information to the Company’s legal counsel for ‘blue sky’ research and applicable registration;

• Assist the Company’s transfer agent with the generation and mailing of stock certificates;

• Perform interest and refund calculations and provide a file to enable the Company to generate interest and refund checks;

• Create 1099-INT forms for interest reporting, as well as magnetic media reporting to the IRS, for subscribers paid $1 0 or more in interest for subscriptions paid by check.

Fees: For the conversion agent services outlined above, the Company agrees to pay KBW a fee of $25,000. This fee is based upon the requirements of current banking regulations, the Company’s Plan of Conversion and Reorganization as currently contemplated, and the expectation that member data will be processed as of three key record dates. Any material changes in regulations or the Plan of Conversion and Reorganization, or delays requiring duplicate or replacement processing due to changes to record dates, may result in additional fees. All fees under this agreement shall be payable as follows: $5,000 payable upon execution of this agreement, which shall be non-refundable and the balance upon the completion of the Offering.

Delanco Mutual Holding Company

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

March 28, 2013

Page 3

Costs and Expenses: In addition to any fees that may be payable to KBW hereunder, the Company agrees to reimburse KBW, upon request made from time to time, for its reasonable out-of-pocket expenses incurred in connection with its engagement hereunder, regardless of whether the Offering is consummated, including travel, lodging, food, telephone, postage, listings, forms and other similar expenses up to $5,000; provided, however, that KBW shall document such expenses to the reasonable satisfaction of the Company. KBW and the Company acknowledge that such expense cap may be increased by mutual consent in an amount not to exceed $10,000 for additional out-of-pocket expenses in the event of a resolicitation of the Offering. In no event shall expenses exceed $15,000. The provisions of this paragraph are not intended to apply to or in any way impair the indemnification provisions of this letter.

Reliance on Information Provided: The Company agrees to provide KBW with such information as KBW may reasonably require to carry out its services under this agreement. The Company recognizes and confirms that KBW (a) will use and rely on such information in performing the services contemplated by this agreement without having independently verified the same, and (b) does not assume responsibility for the accuracy or completeness of the information or conduct any independent verification or any appraisal or physical inspection of properties or assets.

Limitations: KBW, as Conversion Agent hereunder, (a) shall have no duties or obligations other than those specifically set forth herein; (b) will be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness of any order form or any stock certificates or the shares represented thereby, and will not be required to and will make no representations as to the validity, value or genuineness of the order; (c) shall not be obliged to take any legal action hereunder which might in its judgment involve any expense or liability, unless it shall have been furnished with reasonable indemnity satisfactory to it; and (d) may rely on and shall be protected in acting in reliance upon any certificate, instrument, opinion, notice, letter, telex, telegram, or other document or security delivered to it and in good faith believed by it to be genuine and to have been signed by the proper party or parties.

The Company also agrees neither KBW, nor any of its affiliates nor any officer, director, employee or agent of KBW or any of its affiliates, nor any person controlling KBW or any of its affiliates, shall be liable to any person or entity, including the Company, by reason of any error of judgment, or for any act done by it in good faith, or for any mistake of law or fact in connection with this agreement and the performance hereof, unless caused by or arising primarily out of KBW’s bad faith or gross negligence. The foregoing agreement shall be in addition to any rights that KBW, the Company or any Indemnified Party (as defined herein) may have at common law or otherwise, including, but not limited to, any right to contribution.

Anything in this agreement to the contrary notwithstanding, in no event shall KBW be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if KBW has been advised of the likelihood of such loss or damage and regardless of the form of action.

Indemnification: The Company agrees to indemnify and hold harmless KBW and its affiliates, the respective partners, directors, officers, employees, and agents of KBW and its affiliates and each other person, if any, controlling KBW or any of its affiliates and each of their successors and assigns (KBW and each such person being an “Indemnified Party”) to the fullest extent

Delanco Mutual Holding Company

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

March 28, 2013

Page 4

permitted by law, from and against any and all losses, claims, damages and liabilities, joint or several, to which such Indemnified Party may become subject under applicable federal or state law, or otherwise, related to or arising out of the engagement of KBW pursuant to, and the performance by KBW of the services contemplated by, this letter, and will reimburse any Indemnified Party for all expenses (including counsel fees and expenses) as they are incurred, including expenses incurred in connection with investigation, preparing for or defending any such action or claim whether or not in connection with pending or threatened litigation, or any action or proceeding arising therefrom, whether or not KBW is a Party. The Company will not be liable under the foregoing indemnification provision to the extent that any loss, claim, damage, liability or expense is found in a final judgment by a court of competent jurisdiction to have resulted primarily from KBW’s bad faith or gross negligence.

If the indemnification provided for in the foregoing paragraph is judicially determined to be unavailable (other than in accordance with the terms hereof) to any person otherwise entitled to indemnity in respect of any losses, claims, damages or liabilities referred to herein, then, in lieu of indemnifying such person hereunder, the Company shall contribute to the amount paid or payable by such person as a result of such losses, claims, damages or liabilities (and expenses relating thereto) (i) in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and KBW, on the other hand, of the engagement provided for in this Agreement or (ii) if the allocation provided for in clause (i) above is not available, in such proportion as is appropriate to reflect not only the relative benefits referred to in such clause (i) but also the relative fault of each of the Company and KBW, as well as any other relevant equitable considerations; provided, however, in no event shall KBW’s aggregate contribution to the amount paid or payable exceed the aggregate amount of fees actually received by KBW from the Company in connection with the Offerings. For the purposes of this Agreement, the relative benefits to the Company and to KBW of the engagement under this Agreement shall be deemed to be in the same proportion as (a) the total value paid or contemplated to be paid or received or contemplated to be received by the Company in the Conversion and the Offerings that are the subject of the engagement hereunder, whether or not consummated, bears to (b) the fees paid or to be paid to KBW by the company in connection with the Offering.

This letter constitutes the entire Agreement between the parties with respect to the subject matter hereof and can be altered only by written consent signed by the parties. This Agreement is governed by the laws of the State of New York applicable to contracts executed in and to be performed in that state, without regard to such state’s rules concerning conflicts of laws. Any right to trial by jury with respect to any claim or action arising out of this agreement or conduct in connection with the engagement is hereby waived by the parties hereto.

Delanco Mutual Holding Company

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

March 28, 2013

Page 5

If the foregoing correctly sets forth our mutual understanding, please so indicate by signing and returning the original copy of this letter to the undersigned.

Very truly yours,

KEEFE, BRUYETTE & WOODS, INC.
By:
	Robin P. Suskind
	Managing Director

DELANCO MUTUAL HOLDING COMPANY
DELANCO BANCORP, INC.
DELANCO FEDERAL SAVINGS BANK
By:		Date:	5/31/13
	James E. Igo
	Chairman, President & Chief Executive Officer

EX-2.0

Exhibit 2.0

PLAN OF CONVERSION AND REORGANIZATION

of

DELANCO MHC,

DELANCO BANCORP, INC.

and

DELANCO FEDERAL SAVINGS BANK

TABLE OF CONTENTS

		PAGE
1.	Introduction		1
2.	Definitions		2
3.	General Procedure for the Conversion and Reorganization		7
4.	Total Number of Shares and Purchase Price of Conversion Stock		10
5.	Subscription Rights of Eligible Account Holders (First Priority)		11
6.	Subscription Rights of Tax-Qualified Employee Stock Benefit Plans (Second Priority)		11
7.	Subscription Rights of Supplemental Eligible Account Holders (Third Priority)		12
8.	Subscription Rights of Other Members (Fourth Priority)		12
9.	Community Offering, Syndicated Community Offering, Public Offering and Other Offerings		13
10.	Limitations on Subscriptions and Purchases of Common Stock		14
11.	Timing of Subscription Offering; Manner of Exercising Subscription Rights and Order Forms		16
12.	Payment for Common Stock		17
13.	Account Holders in Nonqualified States or Foreign Countries		18
14.	Voting Rights of Stockholders		18
15.	Liquidation Account		19
16.	Transfer of Deposit Accounts		21
17.	Requirements Following the Stock Issuance for Registration, Market Making and Stock Exchange Listing		21
18.	Completion of the Stock Offering		21
19.	Requirements for Stock Purchases by Directors and Officers Following the Conversion and Reorganization		21
20.	Restrictions on Transfer of Stock		22
21.	Tax Rulings or Opinions		22
22.	Stock Compensation Plans; Employment and Severance Agreements		22
23.	Dividend and Repurchase Restrictions on Stock		23
24.	Amendment or Termination of the Plan		23
25.	Interpretation of the Plan		23

i

1. INTRODUCTION.

For purposes of this section, all capitalized terms have the meanings ascribed to them in Section 2.

On November 15, 2002, Delanco Federal Savings Bank, a federally chartered savings bank (the “Bank”), reorganized into the mutual holding company form of organization whereby the Bank converted to a stock savings bank and became the wholly-owned subsidiary of Delanco Bancorp, Inc. (the “Mid-Tier Holding Company”). On March 30, 2007, the Mid-Tier Holding Company issued 735,626 shares of Mid-Tier Holding Company Common Stock to eligible Members, the Delanco Federal Savings Bank Employee Stock Ownership Plan and the general public and 899,099 shares to Delanco MHC, a federally chartered mutual holding company (the “MHC). As of the date hereof, the MHC beneficially and of record owns 899,099 shares of Mid-Tier Holding Company Common Stock, representing approximately 55.0% of the outstanding voting stock of the Mid-Tier Holding Company, and the remaining shares of Mid-Tier Holding Company Common Stock are owned by persons other than the MHC.

The Boards of Directors of the MHC, the Mid-Tier Holding Company and the Bank believe that a conversion of the Bank to the stock holding company form pursuant to this Plan of Conversion and Reorganization is in the best interests of the MHC, the Mid-Tier Holding Company and the Bank, as well as the best interests of Members and Stockholders. The Boards of Directors determined that this Plan equitably provides for the interests of Members through the granting of subscription rights and the establishment of a liquidation account. The Conversion and Reorganization will result in the raising of additional capital for the Bank and the Holding Company and is expected to result in a more active and liquid market for the Holding Company Common Stock than currently exists for Mid-Tier Holding Company Common Stock. In addition, the Conversion and Reorganization have been structured as a tax-free reorganization. Finally, the Conversion and Reorganization is expected to enable the Bank and the Holding Company to more effectively compete in the financial services marketplace.

The Bank is committed to growth and diversification. The additional funds received in the Conversion and Reorganization will facilitate the Bank’s ability to continue to grow in accordance with its business plan. The Bank believes that the Conversion and Reorganization will support its ability to more fully serve the borrowing and other financial needs of the communities it serves. In light of the foregoing, the Boards of Directors of the MHC, the Mid-Tier Holding Company and the Bank believe that it is in the best interests of such companies and Members and Stockholders to raise additional capital at this time, and that the most feasible way to do so is through the Conversion and Reorganization.

As described in more detail in Section 3, the Bank will convert from the mutual holding company form of organization to the stock holding company form of organization through a series of substantially simultaneous mergers pursuant to which (i) the MHC will cease to exist and a liquidation account will be established by the Bank for the benefit of Members as of specified dates and (ii) the Bank will become a wholly owned subsidiary of the Holding Company. In connection therewith, each share of Mid-Tier Holding Company Common Stock outstanding immediately prior to the effective time thereof shall be automatically converted, without further action by the holder thereof, into and become the right to receive shares of Holding Company Common Stock based on the Exchange Ratio, plus cash in lieu of any fractional share interest.

In connection with the Conversion and Reorganization, the Holding Company will offer shares of Conversion Stock in the Offerings as provided herein. Shares of Conversion Stock will be offered in a Subscription Offering in descending order of priority to Eligible Account Holders, Tax-Qualified Employee Stock Benefit Plans, Supplemental Eligible Account Holders and Other Members. The

1

Subscription Rights granted in connection with the Subscription Offering are non-transferable. Any shares of Conversion Stock remaining unsold after the Subscription Offering may be offered for sale to the public through a Community Offering and Syndicated Community Offering or Public Offering, as determined by the Board of Directors of the Holding Company in its sole discretion.

After careful study and consideration, the Boards of Directors of the Mid-Tier Holding Company, the MHC and the Bank adopted this Plan. The Plan must be approved by: (1) the affirmative vote of a majority of the total number of votes eligible to be cast by Members; (2) by the holders of at least two-thirds of the outstanding shares of Mid-Tier Holding Company Common Stock eligible to vote; and (3) by the holders of a majority of the outstanding shares of Mid-Tier Holding Company Common Stock owned by Minority Stockholders. After the Conversion and Reorganization, the Bank will be regulated by the OCC and by the FDIC. The Holding Company will be regulated by the FRB. In addition, the Bank will continue to be a member of the Federal Home Loan Bank System and all insured savings deposits will continue to be insured by the FDIC up to the maximum provided by law.

2. DEFINITIONS.

As used in this Plan, the terms set forth below have the following meaning:

ACTING IN CONCERT means (i) knowing participation in a joint activity or interdependent conscious parallel action towards a common goal whether or not pursuant to an express agreement or understanding; or (ii) a combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise. A Person which acts in concert with another Person (“other party”) shall also be deemed to be acting in concert with any Person who is also acting in concert with that other party, except that any Tax-Qualified Employee Stock Benefit Plan will not be deemed to be acting in concert with its trustee or a person who serves in a similar capacity solely for the purpose of determining whether stock held by the trustee and stock held by the plan will be aggregated and participants or beneficiaries of any such Tax-Qualified Employee Stock Benefit Plan will not be deemed to be acting in concert solely as a result of their common interests as participants or beneficiaries. When Persons act together for such purpose, their group is deemed to have acquired their stock. The determination of whether a group is Acting in Concert shall be made solely by the Board of Directors of the Holding Company or Officers delegated by such Board and may be based on any evidence upon which the Board or such delegatee chooses to rely, including, without limitation, joint account relationships or the fact that such Persons share a common address (whether or not related by blood or marriage) or have filed joint Schedules 13D or Schedules 13G with the SEC with respect to other companies. Directors of the Holding Company, the Bank and the MHC shall not be deemed to be Acting in Concert solely as a result of their membership on any such board or boards.

AFFILIATE means a Person who, directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with the Person specified.

ASSOCIATE of a Person means (i) a corporation or organization (other than the MHC, the Mid-Tier Holding Company, the Bank or a majority-owned subsidiary of the MHC, the Mid-Tier Holding Company or the Bank), if the Person is a senior officer or partner or beneficially owns, directly or indirectly, 10% or more of any class of equity securities of the corporation or organization, (ii) a trust or other estate, if the Person has a substantial beneficial interest in the trust or estate or is a trustee or fiduciary of the trust or estate, provided, however, that such term shall not include any Tax-Qualified Employee Stock Benefit Plan of the MHC, the Mid-Tier Holding Company or the Bank in which such Person has a substantial beneficial interest or serves as a trustee or in a similar fiduciary capacity, and (iii) any person who is related by blood or marriage to such Person and who lives in the same home as the Person or who is a director or senior officer of the MHC, the Mid-Tier Holding Company or the Bank or any of their subsidiaries.

2

BANK means Delanco Federal Savings Bank.

BANK BENEFIT PLAN(S) includes, but is not limited to, Tax Qualified Employee Stock Benefit Plans and Non-Tax Qualified Employee Stock Benefit Plans.

BANK LIQUIDATION ACCOUNT means the Liquidation Account established in the Bank as part of the Conversion and Reorganization.

CODE means the Internal Revenue Code of 1986, as amended.

COMMUNITY MEMBERS means, for purposes of any Community Offering, natural persons and trusts of natural persons residing in Burlington County in New Jersey.

COMMUNITY OFFERING means the offering for sale by the Holding Company of any shares of Conversion Stock not subscribed for in the Subscription Offering to such Persons as may be selected by the Holding Company in its sole discretion and to whom a copy of the Prospectus is delivered by or on behalf of the Holding Company.

CONTROL (including the terms “controlling,” “controlled by,” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

CONVERSION AND REORGANIZATION means the series of transactions provided for in this Plan, including but not limited to (i) the merger of the MHC with and into the Mid-Tier Holding Company pursuant to which the MHC will cease to exist, (ii) the merger of the Mid-Tier Holding Company with the Holding Company, pursuant to which the Mid-Tier Holding Company will cease to exist and, in connection therewith, each share of Mid-Tier Holding Company Common Stock outstanding immediately prior to the effective time thereof shall automatically be converted into and become the right to receive shares of Holding Company Common Stock based on the Exchange Ratio, plus cash in lieu of any fractional share interest, and (iii) the issuance of Conversion Stock by the Holding Company in the Offerings as provided herein. All such transactions shall occur substantially simultaneously.

CONVERSION STOCK means the Holding Company Common Stock to be issued and sold in the Offerings pursuant to the Plan. For the avoidance of doubt, Conversion Stock does not include the Exchange Shares.

DEPOSIT ACCOUNT means any withdrawable account as defined in Part 161.42 of the Rules and Regulations of the OCC, including a demand account as defined in Part 161.16 of the Rules and Regulations of the OCC; provided, however, that the term “Deposit Account” shall not include any escrow accounts maintained at the Bank.

DEPOSITOR means the holder of a Deposit Account.

ELIGIBLE ACCOUNT HOLDER means any Person holding a Qualifying Deposit on the Eligibility Record Date for purposes of determining Subscription Rights.

3

ELIGIBILITY RECORD DATE means the date for determining Qualifying Deposits of Eligible Account Holders and is the close of business on April 30, 2012.

ESOP means the Delanco Federal Savings Bank Employee Stock Ownership Plan or such other Tax Qualified Employee Stock Benefit Plan adopted by the Holding Company or the Bank in connection with the Conversion and Reorganization, the purpose of which shall be to hold Holding Company Common Stock.

ESTIMATED PRICE RANGE means the range of the estimated aggregate pro forma market value of the total number of shares of Conversion Stock to be issued in the Offerings, as determined by the Independent Appraiser in accordance with Section 4 hereof.

EXCHANGE RATIO means the rate at which shares of Holding Company Common Stock will be issued in exchange for shares of Mid-Tier Holding Company Common Stock held by the Minority Stockholders in connection with the Mid-Tier Holding Company Merger. The exact rate (which shall be rounded to four decimal places) shall be determined by the MHC, the Mid-Tier Holding Company and the Bank in order to ensure that upon consummation of the Conversion and Reorganization, the Minority Stockholders will own in the aggregate approximately the same percentage of the Holding Company Common Stock to be outstanding upon completion of the Conversion and Reorganization as the percentage of Mid-Tier Holding Company Common Stock owned by them in the aggregate immediately prior to consummation of the Conversion and Reorganization, subject to adjustment to reflect the assets of the MHC other than Mid-Tier Holding Company Common Stock and before giving effect to (a) cash paid in lieu of any fractional interests of Holding Company Common Stock and (b) any shares of Conversion Stock purchased by the Minority Stockholders in the Offerings.

EXCHANGE SHARES mean the shares of Holding Company Common Stock to be issued to the Minority Stockholders in connection with the Mid-Tier Holding Company Merger.

FDIC means the Federal Deposit Insurance Corporation or any successor thereto.

FRB means the Board of Governors of the Federal Reserve System or any successor thereto.

HOLA means the Home Owners’ Loan Act, as amended.

HOLDING COMPANY means Delanco Bancorp, Inc., a stock corporation to be organized under the laws of the State of New Jersey.

HOLDING COMPANY COMMON STOCK means the shares of common stock, par value $0.01 per share, of the Holding Company. The Holding Company Common Stock is not insured by the FDIC.

INDEPENDENT APPRAISER means the independent investment banking or financial consulting firm retained by the Mid-Tier Holding Company and the Bank to prepare an appraisal of the estimated pro forma market value of the Conversion Stock.

LIQUIDATION ACCOUNT means the account representing the liquidation interests received by Eligible Account Holders and Supplemental Eligible Account Holders in exchange for their interest in the MHC in connection with the Conversion and Reorganization, as in accordance with Section 15 hereof.

4

MANAGEMENT PERSON means any Officer or director of the Bank or the Mid-Tier Holding Company or any Affiliate of the Bank or the Mid-Tier Holding Company and any person Acting in Concert with such Officer or director.

MEETING OF STOCKHOLDERS means the meeting of the Stockholders of the Mid-Tier Holding Company, which may be an annual meeting or a special meeting, at which this Plan is submitted to the Stockholders for their approval, including any adjournments of such meeting.

MEMBER means any Person qualifying as a member of the MHC in accordance with its mutual charter and bylaws and the laws of the United States.

MHC means Delanco MHC.

MHC MERGER means the merger of the MHC with and into the Mid-Tier Holding Company pursuant to the Plan of Merger included as Annex A hereto.

MID-TIER HOLDING COMPANY means Delanco Bancorp, Inc., an existing federal corporation.

MID-TIER HOLDING COMPANY COMMON STOCK means the shares of common stock, par value $0.01 per share, of the Mid-Tier Holding Company. The Mid-Tier Holding Company Common Stock is not insured by the FDIC.

MID-TIER HOLDING COMPANY MERGER means the merger of the Mid-Tier Holding Company with and into the Holding Company pursuant to the Plan of Merger included as Annex B hereto.

MINORITY STOCKHOLDER means any owner of the Mid-Tier Holding Company Common Stock other than the MHC.

OCC mean the Office of the Comptroller of the Currency or any successor thereto.

OFFERINGS mean the offering of Conversion Stock to Persons other than the MHC in the Subscription Offering, the Community Offering and the Syndicated Community or Public Offering.

OFFICER means the president, chief executive officer, vice-president, secretary, treasurer or principal financial officer, comptroller or principal accounting officer and any other person performing similar functions with respect to any organization whether incorporated or unincorporated.

ORDER FORM means the form or forms to be provided by the Holding Company, containing all such terms and provisions as set forth in Section 11 hereof, to a Participant or other Person by which Conversion Stock may be ordered in the Subscription Offering and in the Community Offering.

OTHER MEMBER means a Voting Member who is not an Eligible Account Holder or a Supplemental Eligible Account Holder.

PARTICIPANT means any Eligible Account Holder, Tax-Qualified Employee Stock Benefit Plan, Supplemental Eligible Account Holder or Other Member, but does not include the MHC.

5

PERSON means an individual, a corporation, a partnership, an association, a joint-stock company, a limited liability company, a trust, an unincorporated organization or a government or political subdivision of a government.

PLAN and PLAN OF CONVERSION AND REORGANIZATION mean this Plan of Conversion and Reorganization as adopted by the Boards of Directors of the MHC, the Mid-Tier Holding Company and the Bank and any amendment hereto approved as provided herein. The Board of Directors of the Holding Company shall adopt this Plan as soon as practicable following its organization.

PRIMARY PARTIES mean the MHC, the Mid-Tier Holding Company, the Bank and the Holding Company.

PROSPECTUS means the one or more documents to be used in offering the Conversion Stock in the Offerings.

PUBLIC OFFERING means an underwritten firm commitment offering to the public through one or more underwriters.

PURCHASE PRICE means the price per share at which the Conversion Stock is sold by the Holding Company in the Offerings in accordance with the terms hereof.

QUALIFYING DEPOSIT means the aggregate balance of all Deposit Accounts in the Bank of (i) an Eligible Account Holder at the close of business on the Eligibility Record Date, provided such aggregate balance is not less than $50.00, and (ii) a Supplemental Eligible Account Holder at the close of business on the Supplemental Eligibility Record Date, provided such aggregate balance is not less than $50.00.

SEC means the United States Securities and Exchange Commission.

SPECIAL MEETING OF MEMBERS means the Special Meeting of Members called for the purpose of submitting this Plan to the Voting Members for their approval, including any adjournments of such meeting.

STOCKHOLDERS mean those Persons who own shares of Mid-Tier Holding Company Common Stock.

STOCKHOLDER VOTING RECORD DATE means the date for determining the eligibility of Stockholders to vote at the Meeting of Stockholders, as determined by the Board of Directors of the Mid-Tier Holding Company.

SUBSCRIPTION OFFERING means the offering of the Conversion Stock to Participants.

SUBSCRIPTION RIGHTS mean nontransferable rights to subscribe for Conversion Stock granted to Participants pursuant to the terms of this Plan.

SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER means any Person, except directors and Officers of the Bank, the Mid-Tier Holding Company or the MHC (unless the FRB grants a waiver to permit a director or Officer to be included) and their Associates, holding a Qualifying Deposit at the close of business on the Supplemental Eligibility Record Date.

6

SUPPLEMENTAL ELIGIBILITY RECORD DATE, if applicable, means the date for determining Supplemental Eligible Account Holders and shall be required if the Eligibility Record Date is more than 15 months prior to the date of the approval of the Plan by the FRB. If applicable, the Supplemental Eligibility Record Date shall be the last day of the calendar quarter preceding approval by the FRB of the Plan.

SYNDICATED COMMUNITY OFFERING means the offering for sale by a syndicate of broker-dealers to the general public of shares of Conversion Stock not purchased in the Subscription Offering and the Community Offering.

TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLAN means any defined benefit plan or defined contribution plan, such as an employee stock ownership plan, stock bonus plan, profit-sharing plan or other plan, which is established for the benefit of the employees of the Holding Company and/or the Bank and any Affiliate thereof and which, with its related trust, meets the requirements to be “qualified” under Section 401 of the Code as from time to time in effect. A “Non-Tax-Qualified Employee Stock Benefit Plan” is any defined benefit plan or defined contribution stock benefit plan that is not so qualified.

VOTING MEMBER means a Person who, at the close of business on the Voting Record Date, is entitled to vote as a Member of the MHC in accordance with is charter and bylaws.

VOTING RECORD DATE means the date for determining the eligibility of Members to vote at the Special Meeting of Members.

3. GENERAL PROCEDURE FOR THE CONVERSION AND REORGANIZATION.

A. Steps for Conversion and Reorganization

The Conversion and Reorganization may be effected in the manner set forth herein or in any manner approved by the FRB that is consistent with the purposes of this Plan and applicable law and regulations. This Plan is subject to the approval of the FRB and must be adopted by (1) at least a majority of the total number of votes eligible to be cast by Voting Members at the Special Meeting of Members, (2) the holders of at least two-thirds of the outstanding shares of Mid-Tier Holding Company Common Stock eligible to vote; and (3) the holders of a majority of the outstanding shares of Mid-Tier Holding Company Common Stock owned by Minority Stockholders. It is currently anticipated that the Conversion and Reorganization will be effected in accordance with the procedures specified below. At the effective date of the Conversion and Reorganization, the following transactions will occur:

(i) The Holding Company shall be organized as a subsidiary of the Mid-Tier Holding Company. The Certificate of Incorporation and Bylaws of the Holding Company shall read in the form of Annexes C and D, respectively. The MHC shall merge with and into the Mid-Tier Holding Company in the MHC Merger with the Mid-Tier Holding Company being the surviving institution. Immediately thereafter, the Mid-Tier Holding Company shall merge with and into the Holding Company in the Mid-Tier Holding Company Merger, with the Holding Company being the surviving institution. As a result of the MHC Merger and the Mid-Tier Holding Company Merger, (x) the shares of Mid-Tier Holding Company Common Stock held by the MHC shall be extinguished and (y) the liquidation interests in the Mid-Tier Holding Company constructively received by certain Members immediately before the Conversion and Reorganization will automatically, without further action on the part of the holders thereof, be exchanged for an interest in the Liquidation Account. As a result of the Mid-Tier Holding Company Merger, (x) the shares of Mid-Tier Holding Company Common Stock held by the Minority Stockholders shall be converted into the right to receive shares of Holding Company Common

7

Stock based upon the Exchange Ratio, plus cash in lieu of any fractional share interest based upon the Purchase Price; and (y) the shares of Bank common stock held by the Mid-Tier Holding Company shall be owned by the Holding Company, with the result that the Bank shall become a wholly owned subsidiary of the Holding Company. In exchange for common stock of the Bank and the Bank Liquidation Account, the Holding Company shall contribute to the Bank an amount of the net proceeds received by the Holding Company for the sale of the Conversion Stock as shall be determined by the Boards of Directors of the Holding Company and the Bank and as shall be approved by the FRB, but not less than fifty percent (50%) of the net proceeds received by the Holding Company for the sale of the Conversion Stock, unless otherwise approved by the FRB. In addition, as a result of the Mid-Tier Holding Company Merger, options to purchase shares of Mid-Tier Holding Company Common Stock which are outstanding immediately prior to consummation of the Conversion and Reorganization shall be converted into options to purchase shares of Holding Company Common Stock, with the number of shares subject to the option and the exercise price per share to be adjusted based upon the Exchange Ratio so that the aggregate exercise price remains unchanged, and with the duration of the option remaining unchanged.

(ii) The Holding Company shall sell the Conversion Stock in the Offerings, as provided herein.

The effective date of the Conversion and Reorganization shall be the date upon which the last of the following actions occurs: (i) the filing of a Certificate of Merger with the New Jersey Secretary of State with respect to the Mid-Tier Holding Company Merger, (ii) the filing of Articles of Combination with the FRB with respect to the MHC Merger and (iii) the closing of the issuance of the shares of Conversion Stock in the Offerings. The filing of Articles of Combination and the Certificate of Merger relating to the MHC Merger and the Mid-Tier Holding Company Merger and the closing of the issuance of shares of Conversion Stock in the Offerings shall not occur until all requisite regulatory, Member and Stockholder approvals have been obtained, all applicable waiting periods have expired and sufficient subscriptions and orders for the Conversion Stock have been received. It is intended that the closing of the MHC Merger and the Mid-Tier Holding Company Merger and the sale of shares of Conversion Stock in the Offerings shall occur consecutively and substantially simultaneously.

B. Regulatory Filings

(i) To the extent required by applicable laws and regulations, or as the FRB may otherwise require, the MHC, the Mid-Tier Holding Company and the Bank shall provide public notice of the adoption of the Plan. Such notice shall be made by means of the placing of an advertisement in a newspaper of general circulation in each community where the Bank maintains an office. In addition, the Bank shall cause copies of the Plan to be made available at each of its offices for inspection by Members.

(ii) An application for the Conversion and Reorganization, including the Plan and all other requisite material (the “Application for Conversion”), shall be submitted to the FRB for approval. The MHC, the Mid-Tier Holding Company and the Bank will again cause to be published, in accordance with the requirements of applicable regulations of the FRB, a notice of the filing with the FRB of an application to convert the MHC and will post the notice of the filing for the Application for Conversion in each of the Bank’s offices.

(iii) The Primary Parties shall submit or cause to be submitted to the FRB all holding company, merger, and other applications or notices necessary for the Conversion and Reorganization. All notices required to be published in connection with such applications shall be published at the times required.

8

(iv) The Holding Company shall file one or more Registration Statements with the SEC to register the Holding Company Common Stock to be issued in the Conversion and Reorganization under the Securities Act of 1933, as amended, and, where required, shall register such Holding Company Common Stock under any applicable state securities laws. Upon registration and after the receipt of all required regulatory approvals, the Conversion Stock shall be first offered for sale in a Subscription Offering to Eligible Account Holders, the Tax-Qualified Employee Stock Benefit Plan, Supplemental Eligible Account Holders, if any, and Other Members. It is anticipated that any shares of Conversion Stock remaining unsold after the Subscription Offering will be sold through a Community Offering and a Syndicated Community Offering or a Public Offering. The purchase price per share for the Conversion Stock shall be a uniform price determined in accordance with Section 4 hereof and shall be set forth in the Prospectus.

C. Approval of Plan By Voting Members; The Special Meeting of Members

(i) The MHC shall file preliminary proxy materials with the FRB, as required. Promptly following receipt of requisite approval of the FRB, this Plan will be submitted to the Voting Members for their consideration and approval at the Special Meeting of Members. The Plan must be approved by a majority of the total number of votes eligible to be cast by Voting Members at the Special Meeting of Members. The MHC will mail to all Members as of the Voting Record Date, at their last known address appearing on the records of the Bank as of the Voting Record Date, a notice of special meeting and a proxy statement describing the Plan.

(ii) At the Special Meeting of Members, each Voting Member shall be entitled to cast one vote in person or by proxy for every $100.00 of Deposit Accounts, or fraction thereof, such Voting Member had at the Bank as of the Voting Record Date. Each Voting Member whose loan was outstanding at the Bank on November 14, 1994, which loan continues to be outstanding as of the Voting Record Date, will be entitled to one vote in addition to any other vote the Voting Member may otherwise have. No Voting Member may cast more than 1,000 votes at the Special Meeting of Members. Deposits held in trust or other fiduciary capacity may be voted by the trustee or other fiduciary to whom voting rights are provided under the trust instrument or other governing document or applicable law. Deposits held in an Individual Retirement Account or Keogh Account may be voted by the MHC if no other instructions are received in the same proportion as the votes cast by all other Voting Members.

D. Approval of Plan By Stockholders; The Meeting of Stockholders

(i) The Holding Company shall file a Registration Statement with the SEC to register the Exchange Shares. A prospectus contained in such Registration Statement shall also constitute proxy materials of the Mid-Tier Holding Company with respect to the Meeting of Stockholders. Promptly following the effectiveness of such Registration Statement and the receipt of any other requisite approval of the FRB, this Plan will be submitted to the Stockholders for their consideration and approval at the Meeting of Stockholders. The Plan must be approved by (1) the holders of at least two-thirds of the outstanding shares of Mid-Tier Holding Company Common Stock eligible to vote and (2) the holders of a majority of the outstanding shares of Mid-Tier Holding Company Common Stock owned by Minority Stockholders. The Mid-Tier Holding Company will mail to all Stockholders as of the Stockholder Voting Record Date, at their last known address appearing on the records of the Mid-Tier Holding Company, a notice of meeting and definitive prospectus/proxy statement describing the Plan.

(ii) The Meeting of Stockholders shall be held upon written notice given no less than 20 no more than 50 days prior to the date of the Meeting of Stockholders. At the Meeting of Stockholders, each Stockholder eligible to vote shall be entitled to cast one vote in person or by proxy for each share of Mid-Tier Holding Company Common Stock owned by such Stockholder as of the Stockholder Voting Record Date.

9

E. Expenses

The Primary Parties may retain and pay for the services of financial and other advisors and investment bankers to assist in connection with any or all aspects of the Conversion and Reorganization, including the payment of fees to brokers for assisting Persons in completing and/or submitting Order Forms. The Primary Parties shall use their best efforts to ensure that all fees, expenses, retainers and similar items shall be reasonable.

F. Certificate of Incorporation and Bylaws

By voting to adopt this Plan, Voting Members and Stockholders will be voting to adopt the Certificate of Incorporation and Bylaws for the Holding Company attached as Annexes C and D to this Plan.

4. TOTAL NUMBER OF SHARES AND PURCHASE PRICE OF CONVERSION STOCK.

(a) The aggregate amount of shares of Conversion Stock to be offered in the Offerings shall be stated in terms of a range (the Estimated Price Range), which shall be based on a pro forma valuation of the aggregate market value of the to-be-outstanding Holding Company Common Stock multiplied by the percentage equal to the MHC’s percentage ownership interest in all outstanding shares of Mid-Tier Holding Company Common Stock, as adjusted to reflect the assets of the MHC other than Mid-Tier Holding Company Common Stock. The valuation, which shall be prepared by the Independent Appraiser, shall be based on financial information relating to the MHC, the Mid-Tier Holding Company and the Bank; market, financial and economic conditions; a comparison of the Mid-Tier Holding Company and the Bank with selected publicly-held financial institutions and holding companies and with comparable financial institutions and holding companies; and such other factors as the Independent Appraiser may deem to be important, including, but not limited to, the projected operating results and financial condition of the Holding Company and Bank. The valuation shall be stated in terms of an Estimated Price Range, the maximum of which shall be no more than 15% above the average of the minimum and maximum of such price range and the minimum of which shall be no more than 15% below such average. The valuation shall be updated during the Conversion and Reorganization as market and financial conditions warrant and as may be required by the FRB.

(b) Based upon the independent valuation, the Board of Directors of the Holding Company shall fix the Purchase Price and the number of shares of Conversion Stock to be offered in the Offerings. The Purchase Price for the Conversion Stock shall be a uniform price determined in accordance with applicable laws and regulations. The total number of shares of Conversion Stock to be issued in the Offerings shall be determined by the Board of Directors of the Holding Company upon conclusion of the Offerings in consultation with the Independent Appraiser and any financial advisor or investment banker retained by the Primary Parties in connection with the Offerings.

(c) Subject to the approval of the FRB, the Estimated Price Range may be increased or decreased to reflect market, financial and economic conditions prior to completion of the Conversion and Reorganization, and under such circumstances the Holding Company may increase or decrease the total number of shares of Conversion Stock to be issued in the Conversion and Reorganization to reflect any such change. Notwithstanding anything to the contrary contained in this Plan, no resolicitation of subscribers shall be required and subscribers shall not be permitted to modify or cancel their subscriptions unless the gross proceeds from the sale of the Conversion Stock in the Offerings are less than the minimum or more than 15% above the maximum of the Estimated Price Range set forth in the Prospectus.

10

5. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY).

(a) Each Eligible Account Holder shall receive, as first priority and without payment, Subscription Rights to purchase up to the greater of (i) $176,000 of Conversion Stock (or such maximum purchase limitation as may be established for the Community Offering and/or Syndicated Community Offering), (ii) one-tenth of 1% of the total offering of shares in the Subscription Offering, or (iii) 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of Conversion Stock offered in the Subscription Offering by a fraction, of which the numerator is the amount of the Qualifying Deposit of the Eligible Account Holder and the denominator is the total amount of all Qualifying Deposits of all Eligible Account Holders, in each case subject to Section 10 hereof.

(b) In the event of an oversubscription for shares of Conversion Stock pursuant to Section 5(a), available shares shall be allocated among subscribing Eligible Account Holders so as to permit each such Eligible Account Holder, to the extent possible, to purchase a number of shares which will make his or her total allocation equal to the lesser of the number of shares subscribed for or 100 shares. Any available shares remaining after each subscribing Eligible Account Holder has been allocated the lesser of the number of shares subscribed for or 100 shares shall be allocated among the subscribing Eligible Account Holders whose subscriptions remain unsatisfied in the proportion that the Qualifying Deposit of each such subscribing Eligible Account Holder bears to the total Qualifying Deposits of all such subscribing Eligible Account Holders whose orders are unfilled, provided that no fractional shares shall be issued.

(c) Subscription Rights of Eligible Account Holders who are also directors or Officers of the Mid-Tier Holding Company or the Bank and their Associates shall be subordinated to those of other Eligible Account Holders to the extent that they are attributable to increased deposits during the one-year period preceding the Eligibility Record Date.

6. SUBSCRIPTION RIGHTS OF TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLANS (SECOND PRIORITY).

Tax-Qualified Employee Stock Benefit Plans (excluding the Bank’s Employee Savings/401(k) Plan) shall receive, without payment, Subscription Rights to purchase in the aggregate up to 10% of the Conversion Stock. The subscription rights granted to Tax-Qualified Employee Stock Benefit Plans shall be subject to the availability of shares of Conversion Stock after taking into account the shares of Conversion Stock purchased by Eligible Account Holders; provided, however, that if the total number of shares of Common Stock is increased to any amount greater than the number of shares representing the maximum of the Estimated Price Range as set forth in the Prospectus (“Maximum Shares”), the ESOP shall have a first priority right to purchase any such shares exceeding the Maximum Shares. Shares of Conversion Stock purchased by any individual participant (“Plan Participant”) in a Tax-Qualified Employee Stock Benefit Plan using funds therein pursuant to the exercise of subscription rights granted to such Participant in his individual capacity as an Eligible Account Holder, Supplemental Eligible Account Holder and/or Other Member and/or purchases by such Plan Participant in the Community Offering shall not be deemed to be purchases by a Tax-Qualified Employee Stock Benefit Plan for purposes of calculating the maximum amount of Conversion Stock that Tax-Qualified Employee Stock Benefit Plans may purchase pursuant to the first sentence of this Section 6 if the individual Plan Participant controls or directs the investment authority with respect to such account or subaccount. Consistent with applicable laws and regulations and policies and practices of the FRB, the Tax-Qualified Employee Stock Benefit Plans may use funds contributed by the Holding Company or the Bank and/or borrowed from an

11

independent financial institution to exercise such Subscription Rights, and the Holding Company and the Bank may make scheduled discretionary contributions thereto, provided that such contributions do not cause the Bank to fail to meet any applicable regulatory capital requirement. The Tax-Qualified Employee Stock Benefit Plans may, in whole or in part, fill their orders through open market purchases subsequent to the closing of the Offerings, subject to approval of the FRB.

The Tax-Qualified Employee Stock Benefit Plans shall not be deemed to be an Associate or Affiliate of or Person Acting in Concert with any Management Person.

7. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD PRIORITY).

(a) In the event that the Eligibility Record Date is more than 15 months prior to the date of approval of the Plan by the FRB, then, and only in that event, a Supplemental Eligibility Record Date shall be set and each Supplemental Eligible Account Holder shall receive, without payment, Subscription Rights to purchase up to the greater of (i) $176,000 of Conversion Stock (or such maximum purchase limitation as may be established for the Community Offering and/or Syndicated Community Offering), (ii) one-tenth of 1% of the total offering of shares in the Subscription Offering and (iii) 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of Conversion Stock offered in the Subscription Offering by a fraction, of which the numerator is the amount of the Qualifying Deposits of the Supplemental Eligible Account Holder and the denominator is the total amount of all Qualifying Deposits of all Supplemental Eligible Account Holders, in each case subject to Section 10 hereof and the availability of shares of Conversion Stock for purchase after taking into account the shares of Conversion Stock purchased by Eligible Account Holders and Tax-Qualified Employee Stock Benefit Plans through the exercise of Subscription Rights under Sections 5 and 6 hereof.

(b) In the event of an oversubscription for shares of Conversion Stock pursuant to Section 7(a), available shares shall be allocated among subscribing Supplemental Eligible Account Holders so as to permit each such Supplemental Eligible Account Holder, to the extent possible, to purchase a number of shares sufficient to make his or her total allocation equal to the lesser of the number of shares subscribed for or 100 shares. Any remaining available shares shall be allocated among subscribing Supplemental Eligible Account Holders whose subscriptions remain unsatisfied in the proportion that the amount of their respective Qualifying Deposit bears to the total amount of the Qualifying Deposits of all such subscribing Supplemental Eligible Account Holders whose orders are unfilled, provided that no fractional shares shall be issued.

8. SUBSCRIPTION RIGHTS OF OTHER MEMBERS (FOURTH PRIORITY).

(a) Each Other Member shall receive, without payment, Subscription Rights to purchase up to the greater of (i) $176,000 of Conversion Stock (or such maximum purchase limitation as may be established for the Community Offering and/or Syndicated Community Offering) and (ii) one-tenth of 1% of the total offering of shares in the Subscription Offering, subject to Section 10 hereof and the availability of shares of Conversion Stock for purchase after taking into account the shares of Conversion Stock purchased by Eligible Account Holders, Tax-Qualified Employee Stock Benefit Plans and Supplemental Eligible Account Holders, if any, through the exercise of Subscription Rights under Sections 5, 6 and 7 hereof.

(b) If, pursuant to this Section 8, Other Members subscribe for a number of shares of Conversion Stock in excess of the total number of shares of Conversion Stock remaining, available shares shall be allocated among subscribing Other Members so as to permit each such Other Member, to the extent possible, to purchase a number of shares which will make his or her total allocation equal to the

12

lesser of the number of shares subscribed for or 100 shares. Any remaining available shares shall be allocated among subscribing Other Members whose subscriptions remain unsatisfied on a pro rata basis in the same proportion as each such Other Member’s subscription bears to the total subscriptions of all such subscribing Other Members, provided that no fractional shares shall be issued.

9. COMMUNITY OFFERING, SYNDICATED COMMUNITY OFFERING, PUBLIC OFFERING AND OTHER OFFERINGS.

(a) If less than the total number of shares of Conversion Stock offered by the Holding Company are sold in the Subscription Offering, it is anticipated that all remaining shares of Conversion Stock shall, if practicable, be sold in a Community Offering. Subject to the requirements set forth herein, the manner in which the Conversion Stock is sold in the Community Offering shall have as the objective the achievement of the widest possible distribution of such stock. The Holding Company may commence the Community Offering concurrently with, at any time during, or as soon as practicable after the end of, the Subscription Offering, and the Community Offering must be completed within 45 days after the completion of the Subscription Offering, unless extended by the Holding Company with any required regulatory approval.

(b) In the event of a Community Offering, shares of Conversion Stock that are not subscribed for in the Subscription Offering shall be offered for sale by means of a direct community marketing program, which may provide for the use of brokers, dealers or investment banking firms experienced in the sale of securities of financial institutions. Shares not subscribed for in the Subscription Offering will be available for purchase by members of the general public to whom a Prospectus is delivered by the Holding Company or on its behalf, with preference given first to Community Members and second to Minority Stockholders as of the Stockholder Voting Record Date.

(c) A Prospectus and Order Form shall be furnished to such Persons as the Holding Company may select in connection with the Community Offering, and each order for Conversion Stock in the Community Offering shall be subject to the absolute right of the Primary Parties to accept or reject any such order in whole or in part either at the time of receipt of an order or as soon as practicable following completion of the Community Offering. In the event of an oversubscription for shares in the Community Offering, available shares will be allocated first to each Community Member whose order is accepted in an amount equal to the lesser of 100 shares or the number of shares subscribed for by each such Community Member, if possible. Thereafter, unallocated shares shall be allocated among the Community Members whose accepted orders remain unsatisfied on an equal number of shares basis per order until all available shares have been allocated, provided that no fractional shares shall be issued. If there are any shares remaining after all accepted orders by Community Members have been satisfied, such remaining shares shall be allocated next to Minority Stockholders as of the Stockholder Voting Record Date and then to other members of the general public who purchase in the Community Offering, applying the same allocation described above for Community Members.

(d) No Person may purchase more than $176,000 of Conversion Stock in the Community Offering; provided, however, that this amount may be increased to up to 5% of the shares sold in the Offerings or decreased to less than $176,000 upon resolution of the Boards of Directors of the Primary Parties, subject to any required regulatory approval but without the further approval of Members or Minority Stockholders or the resolicitation of subscribers.

(e) Subject to such terms, conditions and procedures as may be determined by the Primary Parties, shares of Conversion Stock not subscribed for in the Subscription Offering or ordered in the Community Offering may be sold by a syndicate of broker-dealers to the general public in a Syndicated Community Offering. Each order for Conversion Stock in the Syndicated Community Offering shall be

13

subject to the absolute right of the Primary Parties to accept or reject any such order in whole or in part either at the time of receipt of an order or as soon as practicable after completion of the Syndicated Community Offering. The amount of Conversion Stock that any Person may purchase in the Syndicated Community Offering shall not exceed $176,000 of Conversion Stock, provided, however, that this amount may be increased to up to 5% of the total offering of shares of Conversion Stock or decreased to less than $176,000 upon resolution of the Boards of Directors of the Primary Parties, subject to any required regulatory approval but without the further approval of Members or Minority Stockholders or the resolicitation of subscribers; and provided further that, to the extent applicable, and subject to the limitations on purchases of Conversion Stock set forth in this Section 9(e) and Section 10 of this Plan, in the event of an oversubscription for shares in the Syndicated Community Offering, orders for Conversion Stock in the Syndicated Community Offering, unless the FRB permits otherwise, shall first be filled to a maximum of 2% of the total number of shares of Conversion Stock sold in the Offerings. The Holding Company may commence the Syndicated Community Offering concurrently with, at any time during, or as soon as practicable after the end of, the Subscription Offering, and the Syndicated Community Offering must be completed within 45 days after the completion of the Subscription Offering, unless extended by the Holding Company with any required regulatory approval.

(f) The Holding Company may sell any shares of Conversion Stock remaining following the Subscription Offering and Community Offering in a Public Offering instead of a Syndicated Community Offering. The provisions of Section 10 hereof shall not be applicable to the sales to underwriters for purposes of the Public Offering but shall be applicable to sales by the underwriters to the public. The price to be paid by the underwriters in such an offering shall be equal to the Purchase Price less an underwriting discount to be negotiated among such underwriters and the Holding Company, subject to any required regulatory approval or consent.

(g) If for any reason a Syndicated Community Offering or Public Offering of shares of Conversion Stock not sold in the Subscription Offering and the Community Offering cannot be effected, or if any insignificant residue of shares of Conversion Stock is not sold in the Offerings, the Holding Company shall use its best efforts to obtain other purchasers for such shares in such manner and upon such conditions as may be satisfactory to the FRB.

10. LIMITATIONS ON SUBSCRIPTIONS AND PURCHASES OF CONVERSION STOCK.

The following limitations shall apply to all purchases of Conversion Stock in the Offerings:

(a) Except in the case of Tax-Qualified Employee Stock Benefit Plans in the aggregate, as set forth in Section 10(e) hereof, and in addition to the other restrictions and limitations set forth herein, no Person (or group of Persons exercising Subscription Rights through a single Deposit Account) and no Person together with any Associates or Persons otherwise Acting in Concert may, directly or indirectly, subscribe for or purchase more than $176,000 of Conversion Stock in the Offerings.

(b) No Person may purchase fewer than 25 shares of Conversion Stock in the Offerings, to the extent such shares are available; provided, however, that if the Purchase Price is greater than $20.00 per share, such minimum number of shares shall be adjusted so that the aggregate Purchase Price for such minimum shares will not exceed $500.00.

(c) Except in the case of Tax-Qualified Employee Stock Benefit Plans in the aggregate, as set forth in Section 10(e) hereof, and in addition to the other restrictions and limitations set forth herein, the maximum aggregate amount of Conversion Stock which any Person together with any Associate or Persons Acting in Concert may, directly or indirectly, subscribe for or purchase in the Offerings, when combined with any Exchange Shares received by such Person(s), shall not exceed 5.0% of the total

14

number of shares of Holding Company Common Stock to be outstanding upon consummation of the Conversion and Reorganization; provided, however, that nothing herein shall require any Minority Stockholder to divest any Exchange Shares or otherwise limit the amount of Exchange Shares to be issued to a Minority Stockholder.

(d) The number of shares of Conversion Stock that directors and Officers and their Associates may purchase in the aggregate in the Offerings shall not exceed 33% of the total number of shares of Conversion Stock sold in the Offerings, including any shares which may be issued in the event of an increase in the maximum of the Estimated Price Range to reflect changes in market, financial and economic conditions after commencement of the Subscription Offering and prior to completion of the Offerings.

(e) The maximum number of shares of Conversion Stock that may be purchased in the Offerings by the ESOP shall not exceed 8% and all Tax-Qualified Employee Stock Benefit Plans shall not exceed 10% of the total number of shares of Conversion Stock sold in the Offerings; provided, however, that purchases of Conversion Stock which are made by Plan Participants pursuant to the exercise of subscription rights granted to such Plan Participant in his or her individual capacity as a Participant or purchases by a Plan Participant in the Community Offering using the funds thereof held in Tax-Qualified Employee Stock Benefit Plans shall not be deemed to be purchases by a Tax-Qualified Employee Stock Benefit Plan for purposes of this Section 10(e).

(f) For purposes of the foregoing limitations and the determination of Subscription Rights, (i) directors, Officers and employees of the MHC, the Mid-Tier Holding Company, the Bank or their subsidiaries shall not be deemed to be Associates or a group Acting in Concert solely as a result of their capacities as such, (ii) shares purchased by Tax-Qualified Employee Stock Benefit Plans shall not be attributable to the individual trustees or beneficiaries of any such plan for purposes of determining compliance with the limitations set forth in Section 10(a) or Section 10(d) hereof, and (iii) shares purchased by a Tax-Qualified Employee Stock Benefit Plan pursuant to instructions of an individual in an account in such plan in which the individual has the right to direct the investment, including any plan of the Bank qualified under Section 401(k) of the Code, shall be aggregated and included in that individual’s purchases and not attributed to the Tax-Qualified Employee Stock Benefit Plan.

(g) Subject to any required regulatory approval and the requirements of applicable laws and regulations, but without the further approval of Members or Minority Stockholders or the resolicitation of subscribers, the Primary Parties may increase or decrease any of the individual or aggregate purchase limitations set forth herein to a percentage which does not exceed 5% of the shares sold in the Offerings whether prior to, during or after the Subscription Offering, Community Offering and/or Syndicated Community Offering. If an individual purchase limitation is increased after commencement of the Subscription Offering or any other offering, the Primary Parties shall permit any Participant who subscribed for the maximum number of shares of Conversion Stock to subscribe for an additional number of shares, so that such Participant shall be permitted to subscribe for the then maximum number of shares permitted to be subscribed for by such Participant. If any of the individual or aggregate purchase limitations are decreased after commencement of the Subscription Offering or any other offering, the orders of any Participant who subscribed for more than the new purchase limitation shall be decreased by the minimum amount necessary so that such Participant shall be in compliance with the then maximum number of shares permitted to be subscribed for by such Participant. If the maximum purchase limitation is increased to 5% of the shares sold in the Offerings, such limitation may be further increased to 9.99%, provided that orders for Conversion Stock exceeding 5% of the shares of Conversion Stock sold in the Offerings shall not exceed in the aggregate 10% of the total shares of Conversion Stock sold in the Offerings.

15

(h) The Primary Parties shall have the right to take all such action as they may, in their sole discretion, deem necessary, appropriate or advisable to monitor and enforce the terms, conditions, limitations and restrictions contained in this Section 10 and elsewhere in this Plan and the terms, conditions and representations contained in the Order Form, including, but not limited to, the absolute right (subject only to any necessary regulatory approvals or concurrences) to reject, limit or revoke acceptance of any subscription or order and to delay, terminate or refuse to consummate any sale of Conversion Stock that they believe might violate, or is designed to, or is any part of a plan to, evade or circumvent such terms, conditions, limitations, restrictions and representations. Any such action shall be final, conclusive and binding on all persons, and the Primary Parties and their respective Boards shall be free from any liability to any Person on account of any such action.

11. TIMING OF SUBSCRIPTION OFFERING; MANNER OF EXERCISING SUBSCRIPTION RIGHTS AND ORDER FORMS.

(a) The Subscription Offering may be commenced concurrently with or at any time after the mailing to Stockholders of the proxy materials to be used in connection with the Meeting of Stockholders and the mailing to Voting Members of the proxy materials to be used in connection with the Special Meeting of Members. The Subscription Offering may be closed before the Special Meeting of Members and the Meeting of Stockholders, provided that the offer and sale of the Conversion Stock shall be conditioned upon the approval of the Plan by the Voting Members at the Special Meeting of Members and by the Stockholders at the Meeting of Stockholders.

(b) The exact timing of the commencement of the Subscription Offering shall be determined by the Primary Parties in consultation with the Independent Appraiser and any financial advisory or investment banking firm retained by it in connection with the Conversion and Reorganization. The Primary Parties may consider a number of factors, including, but not limited to, the Bank’s current and projected future earnings, local and national economic conditions, and the prevailing market for stocks in general and stocks of financial institutions in particular. The Primary Parties shall have the right to withdraw, terminate, suspend, delay, revoke or modify any such Subscription Offering, at any time and from time to time, as they in their sole discretion may determine, without liability to any Person, subject to compliance with applicable securities laws and any necessary regulatory approval or concurrence.

(c) Promptly after the SEC has declared the Registration Statement, which includes the Prospectus, effective and all required regulatory approvals have been obtained, the Holding Company shall, distribute or make available the Prospectus, together with Order Forms for the purchase of Conversion Stock, to all Participants for the purpose of enabling them to exercise their respective Subscription Rights, subject to Section 13 hereof.

(d) A single Order Form for all Deposit Accounts maintained with the Bank by any Eligible Account Holder, Supplemental Eligible Account Holder or Other Member may be furnished, irrespective of the number of Deposit Accounts maintained with the Bank on the Eligibility Record Date, the Supplemental Eligibility Record Date or the date for determining Other Members, respectively. No person holding a Subscription Right may exceed any otherwise applicable purchase limitation by submitting multiple orders for Conversion Stock. Multiple orders are subject to adjustment, as appropriate and deposit balances will be divided on a pro rata basis among such orders in allocating shares in the event of an oversubscription.

(e) The recipient of an Order Form shall have no less than 20 days and no more than 45 days from the date of mailing of the Order Form (with the exact termination date to be set forth on the Order Form) to properly complete and execute the Order Form and deliver it to the Holding Company. The Holding Company may extend such period by such amount of time as it determines is appropriate.

16

Failure of any Participant to deliver a properly executed Order Form to the Holding Company, along with full payment (or authorization for full payment by withdrawal from a Deposit Account) for the shares of Conversion Stock subscribed for, within the time limits prescribed, shall be deemed a waiver and release by such person of any rights to subscribe for shares of Conversion Stock. Each Participant shall be required to confirm to the Holding Company by executing an Order Form that such Person has fully complied with all of the terms, conditions, limitations and restrictions in the Plan.

(f) The Primary Parties shall have the absolute right, in their sole discretion and without liability to any Participant or other Person, to reject any Order Form that, among other things, is (i) improperly completed or executed; (ii) not timely received; (iii) not accompanied by the proper and full payment (or authorization of withdrawal for full payment) or, if provided for by the Holding Company, in the case of institutional investors in the Community Offering, not accompanied by an irrevocable order together with a legally binding commitment to pay the full amount of the purchase price prior to 48 hours before the completion of the Offerings; or (iv) submitted by a Person whose representations the Primary Parties believe to be false or who they otherwise believe, either alone, or Acting in Concert with others, is violating, evading or circumventing, or intends to violate, evade or circumvent, the terms and conditions of the Plan. Furthermore, in the event Order Forms (i) are not delivered by the United States Postal Service or (ii) are not mailed pursuant to a “no mail” order placed in effect by the account holder, the Subscription Rights of the Person to which such rights have been granted will lapse as though such Person failed to return the contemplated Order Form within the time period specified thereon. The Primary Parties may, but will not be required to, waive any irregularity on any Order Form or may require the submission of corrected Order Forms or the remittance of full payment for shares of Conversion Stock by such date as it may specify. The interpretation of the Primary Parties of the terms and conditions of the Order Forms shall be final and conclusive.

12. PAYMENT FOR CONVERSION STOCK.

(a) Payment for shares of Conversion Stock subscribed for by Participants in the Subscription Offering and payment for shares of Conversion Stock ordered by Persons in the Community Offering shall be equal to the Purchase Price multiplied by the number of shares that are being subscribed for or ordered, respectively. Such payment may be made by personal check, bank draft or money order at the time the Order Form is delivered to the Holding Company, provided that checks will only be accepted subject to collection. The Holding Company, in its sole and absolute discretion, may also elect to receive payment for shares of Conversion Stock by wire transfer. In addition, the Holding Company may elect to provide Participants and/or other Persons who have a Deposit Account with the Bank the opportunity to pay for shares of Conversion Stock by authorizing the Bank to withdraw from the types of Deposit Accounts provided for on the Order Form in the amount equal to the aggregate Purchase Price of such shares. Payment may also be made by a Participant or other Person using funds held for such Participant’s benefit by a Bank Benefit Plan to the extent that such plan allows participants or any related trust established for the benefit of such participants to direct that some or all of their individual accounts or sub-accounts be invested in Conversion Stock.

(b) Notwithstanding the above, if the Tax-Qualified Employee Stock Benefit Plans subscribe for shares during the Subscription Offering, such plans will not be required to pay for the shares at the time they subscribe but rather may pay for such shares of Conversion Stock subscribed for by such plans upon consummation of the Offerings, provided that, in the case of the ESOP, there is in force from the time of its subscription until the consummation of the Offerings, a loan commitment to lend to the ESOP, at such time, the aggregate price of the shares for which it subscribed.

(c) If a Participant or other Person authorizes the Bank to withdraw the amount of the aggregate Purchase Price from his or her Deposit Account, the Bank shall have the right to make such

17

withdrawal or to freeze funds equal to the aggregate Purchase Price upon receipt of the Order Form. Notwithstanding any regulatory provisions regarding penalties for early withdrawals from certificate accounts, the Bank may allow payment by means of withdrawal from certificate accounts without the assessment of such penalties. In the case of an early withdrawal of only a portion of such account, the certificate evidencing such account shall be canceled if any applicable minimum balance requirement ceases to be met. In such case, the remaining balance will earn interest at the regular statement savings rate. However, where any applicable minimum balance is maintained in such certificate account, the rate of return on the balance of the certificate account shall remain the same as prior to such early withdrawal. This waiver of the early withdrawal penalty applies only to withdrawals made in connection with the purchase of Conversion Stock and is entirely within the discretion of the Holding Company and the Bank.

(d) The subscription funds will be held by the Bank or, in the Bank’s discretion, in an escrow account at an unaffiliated insured financial institution. The Holding Company shall pay interest, at not less than the Bank’s statement savings rate, for all amounts paid by check, bank draft or money order to purchase shares of Conversion Stock in the Subscription Offering and the Community Offering from the date payment is received until the date the Offerings are completed or terminated.

(e) The Holding Company will not knowingly offer or sell any of the Conversion Stock proposed to be issued to any Person whose purchase would be financed by funds loaned, directly or indirectly, to the Person by the Bank.

(f) Each share of Conversion Stock shall be non-assessable upon payment in full of the Purchase Price.

13. ACCOUNT HOLDERS IN NONQUALIFIED STATES OR FOREIGN COUNTRIES.

The Holding Company shall make reasonable efforts to comply with the securities laws of all jurisdictions in the United States in which Participants reside. However, the Holding Company may elect that no Participant will be offered or receive any Conversion Stock under the Plan if such Participant resides in a foreign country. Further, subject to the written approval or non-objection of the FRB, the Holding Company may elect that no Participant will be offered or receive any Conversion Stock under the Plan if such Participant resides in a jurisdiction of the United States with respect to which any of the following apply: (a) there are few Participants otherwise eligible to subscribe for shares under this Plan who reside in such jurisdiction; (b) the granting of Subscription Rights or the offer or sale of shares of Conversion Stock to such Participants would require any of the Holding Company or the Bank or their respective directors and Officers, under the laws of such jurisdiction, to register as a broker-dealer, salesman or selling agent or to register or otherwise qualify the Conversion Stock for sale in such jurisdiction, or any of the Holding Company or the Bank would be required to qualify as a foreign corporation or file a consent to service of process in such jurisdiction; or (c) such registration, qualification or filing in the judgment of the Primary Parties would be impracticable or unduly burdensome for reasons of cost or otherwise.

14. VOTING RIGHTS OF STOCKHOLDERS.

Following consummation of the Conversion and Reorganization, voting rights with respect to the Bank shall be held and exercised exclusively by the Holding Company as holder of all of the Bank’s outstanding voting capital stock, and voting rights with respect to the Holding Company shall be held and exercised exclusively by the holders of the Holding Company’s voting capital stock.

18

15. LIQUIDATION ACCOUNT.

(a) At the time of the MHC Merger, the Holding Company shall establish the Liquidation Account in an amount equal to the percentage of the outstanding shares of the Mid-Tier Holding Company Common Stock owned by the MHC before the MHC Merger, multiplied by the Mid-Tier Holding Company’s total stockholders’ equity as reflected in its latest statement of financial condition contained in the final Prospectus utilized in the Conversion and Reorganization, plus the value of the net assets of the MHC as reflected in the latest statement of financial condition of the MHC prior to the effective date of the Conversion and Reorganization (excluding its ownership of Mid-Tier Holding Company Common Stock). The function of the Liquidation Account will be to preserve the rights of certain holders of Deposit Accounts in the Bank who maintain such accounts in the Bank following the Conversion and Reorganization to a priority to distributions in the unlikely event of a liquidation of the Bank subsequent to the Conversion and Reorganization.

(b) The Liquidation Account shall be maintained for the benefit of Eligible Account Holders and Supplemental Eligible Account Holders, if any, who maintain their Deposit Accounts in the Bank after the Conversion and Reorganization. Each such account holder will, with respect to each Deposit Account held, have a related inchoate interest in a portion of the Liquidation Account balance, which interest will be referred to in this Section 15 as the “subaccount balance.” All Deposit Accounts having the same social security number will be aggregated for purposes of determining the initial subaccount balance with respect to such Deposit Accounts, except as provided in Section 15(d) hereof. As a part of the Conversion and Reorganization, the Holding Company shall cause the Bank to establish and maintain a liquidation account for the benefit of Eligible Account Holders and Supplemental Eligible Account Holders, if any, who maintain their Deposit Accounts in the Bank after the Conversion and Reorganization.

(c) (i) In the event of a complete liquidation of (x) the Bank or (y) the Bank and the Holding Company subsequent to the Conversion and Reorganization (and only in such event) following all liquidation payments to creditors of the Bank (including those to Account Holders to the extent of their Deposit Accounts), each Eligible Account Holder and Supplemental Eligible Account Holder, if any, shall be entitled to receive a liquidation distribution from the Liquidation Account in the amount of the then current subaccount balances for Deposit Accounts then held (adjusted as described below) before any liquidation distribution may be made with respect to the capital stock of the Holding Company. No merger, consolidation, sale of bulk assets or similar combination transaction with another FDIC-insured institution in which the Bank or the Holding Company is not the surviving entity shall be considered a complete liquidation for this purpose. In any such transaction, the Liquidation Account or Bank Liquidation Account, as applicable, shall be assumed by the surviving entity.

(ii) In the unlikely event of a complete liquidation of (x) the Bank or (y) the Bank and the Holding Company subsequent to the Conversion and Reorganization (and only in such event) following all liquidation payments to creditors of the Bank (including those to Eligible Account Holders and Supplemental Eligible Account Holders to the extent of their Deposit Accounts), at a time when the Bank has a positive net worth, and the Holding Company does not have sufficient assets (other than the stock of the Bank) at the time of the liquidation to fund the distribution due with respect to the Liquidation Account, the Bank with respect to the Bank Liquidation Account shall immediately pay directly to Eligible Account Holders and Supplemental Eligible Account Holders an amount necessary to fund the Holding Company’s remaining obligations under the Liquidation Account, before any liquidation distribution may be made to any holders of the Bank’s capital stock and without making such amount subject to the Holding Company’s creditors. Each Eligible Account Holder and Supplemental Eligible Account Holder shall be entitled to receive a distribution from the Liquidation Account with

19

respect to the Holding Company, in the amount of the then adjusted subaccount balance then held, before any distribution may be made to any holders of the Holding Company’s capital stock. No merger, consolidation, sale of bulk assets or similar combination transaction with another FDIC-insured institution, in which the Bank or the Holding Company is not the surviving entity shall be considered a complete liquidation for this purpose. In any such transaction, the Liquidation Account or Bank Liquidation Account, as applicable, shall be assumed by the surviving entity.

(iii) In the event of the complete liquidation of the Holding Company where the Bank is not also completely liquidating, or in the event of a sale or other disposition of the Holding Company apart from the Bank, each Eligible Account Holder and Supplemental Eligible Account Holder shall be treated as surrendering the rights to his or her Liquidation Account and receiving from the Holding Company an equivalent interest in the Bank Liquidation Account. Each such holder’s interest in the Bank Liquidation Account shall be subject to the same rights and terms as if the Bank Liquidation Account was the Liquidation Account (except that the Holding Company shall cease to exist).

(d) The initial subaccount balance for a Deposit Account held by an Eligible Account Holder and Supplemental Eligible Account Holder, if any, shall be determined by multiplying the opening balance in the Liquidation Account by a fraction, of which the numerator is the amount of the Qualifying Deposits of such account holder and the denominator is the total amount of Qualifying Deposits of all Eligible Account Holders and Supplemental Eligible Account Holders, if any. For Deposit Accounts in existence at both the Eligibility Record Date and the Supplemental Eligibility Record Date, if any, separate initial subaccount balances shall be determined on the basis of the Qualifying Deposits in such Deposit Accounts on each such record date. Initial subaccount balances shall not be increased, and shall be subject to downward adjustment as provided below.

(e) If the aggregate deposit balance in the Deposit Account(s) of any Eligible Account Holder or Supplemental Eligible Account Holder, if any, at the close of business on any annual closing date, commencing on or after the effective date of the Conversion and Reorganization, is less than the lesser of (a) the aggregate deposit balance in such Deposit Account(s) at the close of business on any other annual closing date subsequent to such record dates or (b) the aggregate deposit balance in such Deposit Account(s) as of the Eligibility Record Date or the Supplemental Eligibility Record Date, if any, the subaccount balance for such Deposit Account(s) shall be adjusted by reducing such subaccount balance in an amount proportionate to the reduction in such deposit balance. In the event of such a downward adjustment, the subaccount balance shall not be subsequently increased, notwithstanding any subsequent increase in the deposit balance of the related Deposit Account(s). The subaccount balance of an Eligible Account Holder or Supplemental Eligible Account Holder, if any, will be reduced to zero if the account holder ceases to maintain a Deposit Account at the Bank that has the same social security number as appeared on his Deposit Account(s) at the Eligibility Record Date or, if applicable, the Supplemental Eligibility Record Date.

(f) Subsequent to the Conversion and Reorganization, neither the Holding Company nor the Bank may pay cash dividends generally on deposit accounts and/or capital stock of the Holding Company or the Bank, or repurchase any of the capital stock of the Holding Company or the Bank, if such dividend or repurchase would reduce the Holding Company’s and/or Bank’s capital below: (i) the amount required for the Liquidation Account or Bank Liquidation Account as applicable; or (ii) the regulatory capital requirements of the Holding Company (to the extent applicable) or the Bank; otherwise, the existence of the Liquidation Account and the Bank Liquidation Account shall not operate to restrict the use or application of any of the net worth accounts of the Bank.

(g) The amount of the Bank Liquidation Account shall equal at all times the amount of the Liquidation Account. In no event will any Eligible Account Holder or Supplemental Eligible Account Holder be entitled to a distribution exceeding such holder’s subaccount balance in the Liquidation Account.

20

(h) For the two-year period following the completion of the Conversion and Reorganization, the Holding Company will not, except with the prior written approval of the FRB, (i) liquidate or sell the Holding Company, or (ii) cause the Bank to be liquidated or sold. Thereafter, upon the written request of the FRB, the Holding Company shall eliminate or transfer the Liquidation Account to the Bank and the Liquidation Account shall be assumed by the Bank, at which time the interests of Eligible Account Holders and Supplemental Eligible Account Holders will be solely, exclusively and directly in the Liquidation Account established in the Bank. If such transfer occurs, the Holding Company shall be deemed to have transferred the Liquidation Account to the Bank and such Liquidation Account shall become the liquidation account of the Bank and shall not be subject in any manner or amount to the claims of the Holding’s Company’s creditors. Approval of the Plan of Conversion shall constitute approval of the transactions described herein by the Members of the MHC and any other person or entity required to approve the Plan.

(i) For purposes of this Section 15, a Deposit Account includes a predecessor or successor account which is held by an account holder with the same social security number.

16. TRANSFER OF DEPOSIT ACCOUNTS.

Each Person holding a Deposit Account at the Bank at the time of the Conversion and Reorganization shall retain an identical Deposit Account at the Bank following the Conversion and Reorganization in the same amount (as adjusted to give effect to any withdrawal made for the purchase of Conversion Stock) and subject to the same terms and conditions (except as to voting and liquidation rights).

17. REQUIREMENTS FOLLOWING THE CONVERSION AND REORGANIZATION FOR REGISTRATION, MARKET MAKING AND STOCK EXCHANGE LISTING.

In connection with the Conversion and Reorganization, the Holding Company shall register the Holding Company Common Stock pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, and shall undertake not to deregister the Holding Company Common Stock for a period of three years following the Conversion and Reorganization without the prior written approval of the FRB. The Holding Company also shall use its best efforts to (i) encourage and assist a market maker to establish and maintain a market for the Holding Company Common Stock, and (ii) list the Holding Company Common Stock on a national or regional securities exchange or to have quotations for such stock disseminated on the OTC Bulletin Board or other interdealer quotation service.

18. COMPLETION OF THE STOCK OFFERING.

The Offerings will be terminated if not completed within 45 days after the last day of the Subscription Offering, unless an extension is approved by the FRB.

19. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING THE CONVERSION AND REORGANIZATION.

For a period of three years following the Conversion and Reorganization, the directors and Officers of the Holding Company and the Bank and their Associates may not purchase Holding Company Common Stock without the prior written approval of the FRB except from a broker-dealer registered with the SEC. This prohibition shall not apply, however, to (i) a negotiated transaction involving more than

21

1% of the outstanding Holding Company Common Stock, and (ii) purchases of stock made by and held by any Tax-Qualified Employee Stock Benefit Plan (and purchases of stock made by and held by any Non-Tax-Qualified Employee Stock Benefit Plan following the receipt of stockholder approval of such plan) even if such Holding Company Common Stock may be attributable to individual Officers or directors and their Associates. The foregoing restriction on purchases of Holding Company Common Stock shall be in addition to any restrictions that may be imposed by federal and state securities laws.

20. RESTRICTIONS ON TRANSFER OF STOCK.

All shares of Conversion Stock that are purchased by Persons other than directors and Officers of the Holding Company or the Bank shall be transferable without restriction. Shares of Conversion Stock purchased by directors and Officers of the Holding Company or the Bank on original issue from the Holding Company (by subscription or otherwise) shall be subject to the restriction that such shares shall not be sold or otherwise disposed of for value for a period of one year following the date of purchase, except for any disposition of such shares following the death of the original purchaser. The shares of Conversion Stock issued by the Holding Company to such directors and Officers shall bear the following legend giving appropriate notice of such one-year restriction:

“The shares of stock evidenced by this Certificate are restricted as to transfer for a period of one year from the date of this Certificate. These shares may not be sold during such one-year period without a legal opinion of counsel for the Company that said transfer is permissible under the provisions of applicable law and regulation. This restrictive legend shall be deemed null and void after one year from the date of this Certificate.”

In addition, the Holding Company shall give appropriate instructions to the transfer agent for the Holding Company with respect to the applicable restrictions relating to the transfer of restricted stock. Any shares issued at a later date as a stock dividend, stock split or otherwise with respect to any such restricted stock shall be subject to the same holding period restrictions as may then be applicable to such restricted stock. The foregoing restriction on transfer shall be in addition to any restrictions on transfer that may be imposed by federal and state securities laws.

21. TAX RULINGS OR OPINIONS.

Consummation of the Conversion and Reorganization is conditioned upon prior receipt by the Primary Parties of either a ruling or an opinion of counsel with respect to federal tax laws to the effect that consummation of the transactions contemplated hereby will not result in a taxable reorganization under the provisions of the applicable codes or otherwise result in any adverse tax consequences to the Primary Parties or to account holders receiving Subscription Rights before or after the Conversion and Reorganization, except in each case to the extent, if any, that Subscription Rights are deemed to have fair market value on the date such rights are issued.

22. STOCK COMPENSATION PLANS; EMPLOYMENT AND SEVERANCE AGREEMENTS.

(a) The Holding Company and the Bank are authorized to adopt Tax-Qualified Employee Stock Benefit Plans in connection with the Conversion and Reorganization, including without limitation an employee stock ownership plan.

22

(b) Subsequent to the Conversion and Reorganization, the Holding Company and the Bank are authorized to adopt Non-Tax Qualified Employee Stock Benefit Plans, including without limitation, stock option plans and restricted stock plans, provided however that any such plan implemented during the one-year period subsequent to the date of consummation of the Conversion and Reorganization: (i) shall be disclosed in the Prospectus; (ii) in the case of stock option plans and employee recognition or grant plans, shall be submitted for approval by the holders of the Common Stock no earlier than six months following consummation of the Conversion and Reorganization; and (iii) shall comply with all other applicable requirements of the FRB.

(c) Existing, as well as any newly-created, Tax-Qualified Employee Stock Benefit Plans may purchase shares of Conversion Stock in the Offerings, to the extent permitted by the terms of such benefit plans and this Plan.

(d) The Holding Company and the Bank are authorized to enter into employment or severance agreements with their executive officers.

23. DIVIDEND AND REPURCHASE RESTRICTIONS ON STOCK.

(a) Following consummation of the Conversion and Reorganization, any repurchases of shares of capital stock by the Holding Company will be made in accordance with then applicable laws and regulations.

(b) The Bank may not declare or pay a cash dividend on, or repurchase any of, its capital stock if the effect thereof would cause the regulatory capital of the Bank to be reduced below the amount required for the liquidation account. Any dividend declared or paid on, or repurchase of, the Bank’s capital stock also shall be in compliance with then applicable laws and regulations.

24. AMENDMENT OR TERMINATION OF THE PLAN.

If deemed necessary or desirable by the Boards of Directors of the Primary Parties, this Plan may be substantively amended, as a result of comments from regulatory authorities or otherwise, at any time before the solicitation of proxies from the Members and the Stockholders to vote on the Plan and at any time thereafter with the concurrence of the FRB. Any amendment to this Plan made after approval by the Members and the Stockholders shall not necessitate further approval by the Members and the Stockholders unless otherwise required by the FRB. This Plan shall terminate if the sale of all shares of Conversion Stock is not completed within 24 months from date of the Special Meeting of Members. Before the earlier of the Meeting of Stockholders and the Special Meeting of Members, this Plan may be terminated by the Boards of Directors of the Primary Parties without approval of the FRB. After the earlier of the Meeting of Stockholders and the Special Meeting of Members, the Primary Parties may terminate this Plan only with the concurrence of the FRB.

25. INTERPRETATION OF THE PLAN.

All interpretations of this Plan and application of its provisions to particular circumstances by a majority of the Boards of Directors of the Primary Parties shall be final, subject to the authority of the FRB.

23

Annex A

AGREEMENT AND

PLAN OF MERGER

This Agreement and Plan of Merger, dated as of [            ], 2013, is made by and between Delanco MHC, a federally chartered mutual holding company (the “MHC”), and Delanco Bancorp, Inc., a federally chartered mid-tier holding company (the “Mid-Tier Holding Company” or the “Surviving Corporation”) (collectively, the “Constituent Corporations”).

WITNESSETH:

WHEREAS, the MHC, the Mid-Tier Holding Company and Delanco Federal Savings Bank, a federally chartered savings bank (the “Bank”) have adopted a Plan of Conversion and Reorganization pursuant to which: (i) the MHC will merge with and into the Mid-Tier Holding Company, with the Mid-Tier Holding Company as the surviving entity (the “MHC Merger”); (ii) the Mid-Tier Holding Company will merge with and into a newly formed stock corporation (the “Holding Company”), with the Holding Company as the surviving entity (the “Mid-Tier Holding Company Merger”); and (iii) the Holding Company will offer shares of its common stock in the manner set forth in the Plan of Conversion and Reorganization (collectively, the “Conversion and Reorganization”); and

WHEREAS, the Constituent Corporations desire to provide for the terms and conditions of the MHC Merger.

NOW, THEREFORE, the Constituent Corporations hereby agree as follows:

1. EFFECTIVE TIME. The MHC Merger shall not be effective unless and until the MHC Merger receives any necessary approvals from the Board of Governors of the Federal Reserve System or such other later time specified on the articles of combination or similar document filed with the Board of Governors of the Federal Reserve System (the “Effective Time”).

2. THE MHC MERGER AND EFFECT THEREOF. Subject to the terms and conditions set forth herein and in the Plan of Conversion and Reorganization and the expiration of all applicable waiting periods, the MHC shall merge with and into the Mid-Tier Holding Company, which shall be the Surviving Corporation. Upon consummation of the MHC Merger, the Surviving Corporation shall be considered the same business and corporate entity as each of the Constituent Corporations and the Surviving Corporation shall be subject to and be deemed to have assumed all of the property, rights, privileges, powers, franchises, debts, liabilities, obligations, duties and relationships of each of the Constituent Corporations and shall have succeeded to all of each of their relationships, fiduciary or otherwise, as fully and to the same extent as if such property, rights, privileges, powers, franchises, debts, obligations, duties and relationships had been originally acquired, incurred or entered into by the Surviving Corporation. In addition, any reference to either of the Constituent Corporations in any contract or document, whether executed or taking effect before or after the Effective Time, shall be considered a reference to the Surviving Corporation if not inconsistent with the other provisions of the contract or document; and any pending action or other judicial proceeding to which either of the Constituent Corporations is a party shall not be deemed to have abated or to have been discontinued by reason of the MHC Merger, but may be prosecuted to final judgment, order or decree in the same manner as if the MHC Merger had not occurred or the Surviving Corporation may be substituted as a party to such action or proceeding, and any judgment, order or decree may be rendered for or against it that might have been rendered for or against either of the Constituent Corporations if the MHC Merger had not occurred.

A-1

3. TREATMENT OF MID-TIER HOLDING COMPANY COMMON STOCK AND MEMBER INTERESTS; LIQUIDATION ACCOUNT.

At the Effective Time:

(a) each share of common stock, $0.01 par value per share, of the Mid-Tier Holding Company (the “Mid-Tier Holding Company Common Stock”) issued and outstanding immediately prior to the Effective Time and held by the MHC shall, by virtue of the MHC Merger and without any action on the part of the holder thereof, be canceled;

(b) the interests in the MHC of any person, firm or entity who or which qualified as a member of the MHC in accordance with its mutual charter and bylaws and the laws of the United States before the MHC’s conversion from mutual to stock form (“Members”) shall, by virtue of the MHC Merger and without any action on the part of any Member, be canceled; and

(c) the Mid-Tier Holding Company shall establish a liquidation account on behalf of each depositor Member as provided for in the Plan of Conversion and Reorganization.

4. RIGHTS OF DISSENT AND APPRAISAL ABSENT. No member of the MHC shall have any dissenter or appraisal rights in connection with the MHC Merger.

5. NAME OF SURVIVING CORPORATION. The name of the Surviving Corporation shall be “Delanco Bancorp, Inc.”

6. DIRECTORS OF THE SURVIVING CORPORATION. Upon and after the Effective Time, until changed in accordance with the Charter and Bylaws of the Surviving Corporation and applicable law, the number of directors of the Surviving Corporation shall be six. The names of those persons who, upon and after the Effective Time, shall be directors of the Surviving Corporation are set forth below. Each such director shall serve for the term which expires at the annual meeting of stockholders of the Surviving Corporation in the year set forth after his or her respective name, and until a successor is elected and qualified.

Name Residence Address Year Term Expires

7. OFFICERS OF THE SURVIVING CORPORATION. Upon and after the Effective Time, until changed in accordance with the Charter and Bylaws of the Surviving Corporation and applicable law, the officers of the Mid-Tier Holding Company immediately prior to the Effective Time shall be the officers of the Surviving Corporation.

A-2

8. OFFICES. Upon the Effective Time, all offices of the Mid-Tier Holding Company shall be offices of the Surviving Corporation. As of the Effective Time, the home office of the Surviving Corporation shall remain at 615 Burlington Avenue, Delanco, New Jersey 08075.

9. CHARTER AND BYLAWS. On and after the Effective Time, the Charter of the Mid-Tier Holding Company as in effect immediately before the Effective Time shall be the Charter of the Surviving Corporation until amended in accordance with the terms thereof and applicable law. On and after the Effective Time, the Bylaws of the Mid-Tier Holding Company as in effect immediately before the Effective Time shall be the Bylaws of the Surviving Corporation until amended in accordance with the terms thereof and applicable law.

10. STOCKHOLDER AND MEMBER APPROVALS. The affirmative votes of the holders of Mid-Tier Holding Company Common Stock and of the members of the MHC as set forth in the Plan of Conversion and Reorganization shall be required to approve the Plan of Conversion and Reorganization, of which this Agreement and Plan of Merger is a part, on behalf of the Mid-Tier Holding Company and the MHC, respectively

11. DIRECTOR APPROVAL. At least two-thirds of the members of the Board of Directors of each of the Constituent Corporations have approved this Agreement and Plan of Merger.

12. ABANDONMENT OF PLAN. This Agreement and Plan of Merger may be abandoned by either the MHC or the Mid-Tier Holding Company at any time before the Effective Time in the manner set forth in the Plan of Conversion and Reorganization.

13. AMENDMENTS. This Agreement and Plan of Merger may be amended by a subsequent writing signed by the parties hereto.

14. SUCCESSORS. This Agreement shall be binding on the successors of the Constituent Corporations.

15. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the United States of America.

[Signatures on following page]

A-3

IN WITNESS WHEREOF, the Constituent Corporations have caused this Agreement and Plan of Merger to be executed by their duly authorized officers as of the day and year first above written.

Attest:	DELANCO MHC
	By:
Douglas R. Allen, Jr.		James E. Igo
Corporate Secretary		President and Chief Executive Officer
Attest:	DELANCO BANCORP, INC.
	By:
Douglas R. Allen, Jr.		James E. Igo
Corporate Secretary		President and Chief Executive Officer

A-4

Annex B

AGREEMENT AND

PLAN OF MERGER

This Agreement and Plan of Merger, dated as of [            ], 2013, is made by and between Delanco Bancorp, Inc., a federal corporation (the “Mid-Tier Holding Company”), and Delanco Bancorp, Inc., a New Jersey corporation (the “Holding Company” or the “Surviving Corporation”) (collectively, the “Constituent Corporations”).

WITNESSETH:

WHEREAS, Delanco MHC, a federally chartered mutual holding company (the “MHC”), the Mid-Tier Holding Company, and Delanco Federal Savings Bank, a federally-chartered savings bank (the “Bank”) have adopted a Plan of Conversion and Reorganization pursuant to which: (i) the MHC will merge with and into the Mid-Tier Holding Company, with the Mid-Tier Holding Company as the surviving entity; (ii) the Mid-Tier Holding Company will merge with and into the Holding Company, with the Holding Company as the surviving entity (the “Mid-Tier Holding Company Merger”); and (iii) the Holding Company will offer shares of its common stock in the manner set forth in the Plan of Conversion and Reorganization (collectively, the “Conversion and Reorganization”); and

WHEREAS, the Constituent Corporations desire to provide for the terms and conditions of the Holding Company Merger.

NOW, THEREFORE, the Constituent Corporations hereby agree as follows:

1. EFFECTIVE TIME. The Mid-Tier Holding Company Merger shall not be effective unless and until the Mid-Tier Holding Company Merger receives any necessary approvals from the Board of Governors of the Federal Reserve System or such other later time specified on the Certificate of Merger filed with the New Jersey Secretary of State (the “Effective Time”).

2. THE MID-TIER HOLDING COMPANY MERGER AND EFFECT THEREOF. Subject to the terms and conditions set forth herein and in the Plan of Conversion and Reorganization and the expiration of all applicable waiting periods, the Mid-Tier Holding Company shall merge with and into the Holding Company, which shall be the Surviving Corporation. Upon consummation of the Mid-Tier Holding Company Merger, the Surviving Corporation shall be considered the same business and corporate entity as each of the Constituent Corporations and the Surviving Corporation shall be subject to and be deemed to have assumed all of the property, rights, privileges, powers, franchises, debts, liabilities, obligations, duties and relationships of each of the Constituent Corporations and shall have succeeded to all of each of their relationships, fiduciary or otherwise, as fully and to the same extent as if such property, rights, privileges, powers, franchises, debts, obligations, duties and relationships had been originally acquired, incurred or entered into by the Surviving Corporation. In addition, any reference to either of the Constituent Corporations in any contract or document, whether executed or taking effect before or after the Effective Time, shall be considered a reference to the Surviving Corporation if not inconsistent with the other provisions of the contract or document; and any pending action or other judicial proceeding to which either of the Constituent Corporations is a party shall not be deemed to have abated or to have been discontinued by reason of the Mid-Tier Holding Company Merger, but may be prosecuted to final judgment, order or decree in the same manner as if the Mid-Tier Holding Company

B-1

Merger had not occurred or the Surviving Corporation may be substituted as a party to such action or proceeding, and any judgment, order or decree may be rendered for or against it that might have been rendered for or against either of the Constituent Corporations if the Mid-Tier Holding Company Merger had not occurred.

3. CONVERSION OF STOCK.

(a) At the Effective Time:

(i) each share of Mid-Tier Holding Company Common Stock issued and outstanding immediately prior to the Effective Time shall, by virtue of the Mid-Tier Holding Company Merger and without any action on the part of the holder thereof, be converted into the right to receive Holding Company Common Stock based on the Exchange Ratio, as defined in the Plan of Conversion and Reorganization, plus the right to receive cash in lieu of any fractional share interest, as determined in accordance with Section 3(b) hereof;

(ii) each share of Holding Company Common Stock issued and outstanding immediately prior to the Effective Time shall, by virtue of the Mid-Tier Holding Company Merger and without any action on the part of the holder thereof, be canceled and no consideration shall be exchanged therefor; and

(iii) the Holding Company shall establish a liquidation account on behalf of each depositor Member as provided for in the Plan of Conversion and Reorganization.

(b) Notwithstanding any other provision hereof, no fractional shares of Holding Company Common Stock shall be issued to holders of Mid-Tier Holding Company Common Stock. In lieu thereof, each holder of shares of Mid-Tier Holding Company Common Stock entitled to a fraction of a share of Holding Company Common Stock shall, at the time of surrender of the certificate or certificates representing such holder shares, receive an amount of cash equal to the product arrived at by multiplying such fraction of a share of Holding Company Common Stock by the Purchase Price, as defined in the Plan of Conversion and Reorganization. No such holder shall be entitled to dividends, voting rights or any other rights in respect of any fractional share.

4. EXCHANGE OF SHARES.

(a) At or after the Effective Time, each holder of a certificate or certificates theretofore evidencing issued and outstanding shares of Mid-Tier Holding Company Common Stock, upon surrender of the same to an agent, duly appointed by the Holding Company (the “Exchange Agent”), shall be entitled to receive in exchange therefor certificate(s) representing the number of full shares of Holding Company Common Stock for which the shares of Mid-Tier Holding Company Common Stock theretofore represented by the certificate or certificates so surrendered shall have been converted as provided in Section 3(a) hereof. The Exchange Agent shall mail to each holder of record of an outstanding certificate that immediately before the Effective Time evidenced shares of Mid-Tier Holding Company Common Stock, and that is to be exchanged for Holding Company Common Stock as provided in Section 3(a) hereof, a form of letter of transmittal that shall specify that delivery shall be effected, and risk of loss and title to such certificate shall pass, only upon delivery of such certificate to the Exchange Agent advising such holder of the terms of the exchange effected by the Mid-Tier Holding Company Merger and of the procedure for surrendering to the Exchange Agent such certificate in exchange for certificate or certificates evidencing Holding Company Common Stock.

B-2

(b) No holder of a certificate theretofore representing shares of Mid-Tier Holding Company Common Stock shall be entitled to receive any dividends in respect of the Holding Company Common Stock into which such shares shall have been converted by virtue of the Mid-Tier Holding Company Merger until the certificate representing such shares of Mid-Tier Holding Company Common Stock is surrendered in exchange for certificates representing shares of Holding Company Common Stock. If dividends are declared and paid by the Holding Company in respect of Holding Company Common Stock after the Effective Time but before surrender of certificates representing shares of Mid-Tier Holding Company Common Stock, dividends payable in respect of shares of Holding Company Common Stock not then issued shall accrue (without interest). Any such dividends shall be paid (without interest) upon surrender of the certificates representing such shares of Mid-Tier Holding Company Common Stock. The Holding Company shall be entitled, after the Effective Time, to treat certificates representing shares of Mid-Tier Holding Company Common Stock as evidencing ownership of the number of full shares of Holding Company Common Stock into which the shares of Mid-Tier Holding Company Common Stock represented by such certificates shall have been converted, notwithstanding the failure on the part of the holder thereof to surrender such certificates.

(c) The Holding Company shall not be obligated to deliver a certificate or certificates representing shares of Holding Company Common Stock to which a holder of Mid-Tier Holding Company Common Stock would otherwise be entitled as a result of the Mid-Tier Holding Company Merger until such holder surrenders the certificate or certificates representing the shares of Mid-Tier Holding Company Common Stock for exchange as provided in this Section 4, or, in default thereof, an appropriate affidavit of loss and indemnification agreement and/or an indemnity bond as may be required in each case by the Holding Company. If any certificate evidencing shares of Holding Company Common Stock is to be issued in a name other than that in which the certificate evidencing Mid-Tier Holding Company Common Stock surrendered in exchanged therefor is registered, it shall be a condition of the issuance thereof that the certificate so surrendered shall be properly endorsed and otherwise in proper form for transfer and that the person requesting such exchange pay to the Exchange Agent any transfer or other tax required by reason of the issuance of a certificate for shares of Holding Company Common Stock in any name other than that of the registered holder of the certificate surrendered or otherwise establish to the satisfaction of the Exchange Agent that such tax has been paid or is not payable.

5. RIGHTS OF DISSENT AND APPRAISAL ABSENT. Holders of Mid-Tier Holding Company Common Stock shall not have any dissenter or appraisal rights in connection with the Mid-Tier Holding Company Merger.

6. NAME OF SURVIVING CORPORATION. The name of the Surviving Corporation shall be “Delanco Bancorp, Inc.”

7. DIRECTORS OF THE SURVIVING CORPORATION. Upon and after the Effective Time, until changed in accordance with the Certificate of Incorporation and Bylaws of the Surviving Corporation and applicable law, the number of directors of the Surviving Corporation shall be six. The names of those persons who, upon and after the Effective Time, shall be directors of the Surviving Corporation are set forth below. Each such director shall serve for the term which expires at the annual meeting of stockholders of the Surviving Corporation in the year set forth after his or her respective name, and until a successor is elected and qualified.

B-3

Name Residence Address Year Term Expires

8. OFFICERS OF THE SURVIVING CORPORATION. Upon and after the Effective Time, until changed in accordance with the Certificate of Incorporation and Bylaws of the Surviving Corporation and applicable law, the officers of the Holding Company immediately prior to the Effective Time shall be the officers of the Surviving Corporation.

9. OFFICES. Upon the Effective Time, all offices of the Holding Company shall be offices of the Surviving Corporation. As of the Effective Time, the home office of the Surviving Corporation shall remain at 615 Burlington Avenue, Delanco, New Jersey 08075.

10. CERTIFICATE OF INCORPORATION AND BYLAWS. On and after the Effective Time, the Certificate of Incorporation of the Holding Company as in effect immediately before the Effective Time shall be the Certificate of Incorporation of the Surviving Corporation until amended in accordance with the terms thereof and applicable law. On and after the Effective Time, the Bylaws of the Holding Company as in effect immediately prior to the Effective Time shall be the Bylaws of the Surviving Corporation until amended in accordance with the terms thereof and applicable law.

11. STOCK COMPENSATION PLANS.

(a) As of the Effective Time, options outstanding under the Delanco Bancorp, Inc. 2008 Equity Incentive Plan shall be assumed by the Holding Company and thereafter shall be options only for shares of Holding Company Common Stock, with each such option being for a number of shares of Holding Company Common Stock equal to the number of shares of Mid-Tier Holding Company Common Stock that were available thereunder immediately before the Effective Time multiplied by the Exchange Ratio, as defined in the Plan of Conversion and Reorganization, and the price of each such option shall be adjusted to reflect the Exchange Ratio and so that the aggregate purchase price of the option is unaffected, but with no change in any other term or condition of such option.

(b) At the Effective Time, (i) the Holding Company shall assume and succeed to all rights, privileges, liabilities and duties of the Mid-Tier Holding Company under the Delanco Bancorp, Inc. 2008 Equity Incentive Plan (and any option agreements thereunder), including the ability to issue or grant additional options, shares or other awards, (ii) the Board of Directors of the Holding Company and any designated committee thereof shall be substituted for the Board of Directors of the Mid-Tier Holding Company and any designated committee thereof for purposes of administration of such plan, and (iii) all references in such plans (and any option agreements thereunder) to the Mid-Tier Holding Company and Mid-Tier Holding Company Common Stock shall be deemed to refer instead to the Holding Company and Holding Company Common Stock.

12. STOCKHOLDER AND DEPOSITOR APPROVALS. The affirmative votes of the holders of Mid-Tier Holding Company Common Stock and of the members of the MHC as set forth in the Plan of Conversion and Reorganization shall be required to approve the Plan of Conversion and Reorganization, of which this Agreement and Plan of Merger is a part, on behalf of the Mid-Tier Holding Company and the MHC, respectively.

B-4

13. DIRECTOR APPROVAL. At least two-thirds of the members of the Board of Directors of each of the Constituent Corporations have approved this Agreement and Plan of Merger.

14. REGISTRATION; OTHER APPROVALS. In addition to the approvals set forth in Sections 1, 12 and 13 hereof and in the Plan of Conversion and Reorganization, the obligations of the parties hereto to consummate the Mid-Tier Holding Company Merger shall be subject to the Holding Company Common Stock to be issued hereunder in exchange for Mid-Tier Holding Company Common Stock being registered under the Securities Act of 1933, as amended, and registered or qualified under applicable state securities laws, as well as the receipt of all other approvals, consents or waivers as the parties may deem necessary or advisable.

15. ABANDONMENT OF PLAN. This Agreement and Plan of Merger may be abandoned by either the Mid-Tier Holding Company or the Holding Company at any time before the Effective Time in the manner set forth in the Plan of Conversion and Reorganization.

16. AMENDMENTS. This Agreement and Plan of Merger may be amended in the by a subsequent writing signed by the parties hereto.

17. SUCCESSORS. This Agreement shall be binding on the successors of the Constituent Corporations.

18. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the United States of America.

[Signatures on following page]

B-5

IN WITNESS WHEREOF, the Constituent Corporations have caused this Agreement and Plan of Merger to be executed by their duly authorized officers as of the day and year first above written.

Attest:	DELANCO BANCORP, INC.
	(a federal corporation)
	By:
Douglas R. Allen, Jr.		James E. Igo
Corporate Secretary		President and Chief Executive Officer
Attest:	DELANCO BANCORP, INC.
	(a New Jersey corporation)
	By:
Douglas R. Allen, Jr.		James E. Igo
Corporate Secretary		President and Chief Executive Officer

B-6

Annex C

CERTIFICATE OF INCORPORATION

OF

DELANCO BANCORP INC.

ARTICLE I

Name

The name of the corporation is Delanco Bancorp Inc. (the “Corporation”).

ARTICLE II

Purpose

The purpose of the Corporation is to engage in any activity within the purposes for which corporations may be organized under the New Jersey Business Corporation Act (“BCA”).

ARTICLE III

Capital Stock

Section 3.01. Authorized Stock. The aggregate number of shares of all classes of capital stock which the Corporation has authority to issue is 25,000,000, of which 20,000,000 are to be shares of common stock, $0.01 par value per share, and of which 5,000,000 are to be shares of serial preferred stock, $0.01 par value per share. Authorized shares may be issued by the Corporation without the approval of shareholders except as otherwise provided in this Article III or the rules of a national securities exchange, if applicable. Shares may be issued for such consideration as shall be fixed from time to time by the board of directors.

A description of the different classes and series of the Corporation’s capital stock, and a statement of the relative powers, designations, preferences and rights of the shares of each class and series of capital stock, and the relative voting, dividend, liquidation and other rights, preferences, and limitations thereof, are as follows:

Section 3.02. Common Stock. Except as provided in this Certificate of Incorporation (this “Certificate”), the holders of the common stock shall exclusively possess all voting power and each holder of shares of common stock shall be entitled to one vote for each share held by such holder.

Whenever there shall have been paid, or declared and set aside for payment, to the holders of the outstanding shares of any class of stock having preference over the common stock as to the payment of dividends, the full amount of dividends and sinking fund or retirement fund or other retirement payments, if any, to which such holders are respectively entitled in preference to the common stock, the Corporation may, by resolution of its board of directors, pay dividends on its shares in cash, in its own shares, in its bonds or in other property, including the shares or bonds of other corporations.

In the event of any liquidation, dissolution or winding up of the Corporation, after there shall have been paid, or declared and set aside for payment, to the holders of the outstanding shares of any class having preference over the common stock, the full preferential amounts to which they are respectively entitled, the holders of the common stock and of any class or series of stock entitled to participate therewith, in whole or in part, as to distribution of assets shall be entitled, after payment or provision for payment of all debts and liabilities of the Corporation, to receive the remaining assets of the Corporation available for distribution, in cash or in kind.

C-1

Section 3.03. Preferred Stock. The shares of preferred stock may be issued from time to time in one or more series. The board of directors of the Corporation is authorized to divide the preferred stock into series and to determine the designation, number, relative rights, preferences and limitations of any series of preferred stock by amendment to this Certificate. The board of directors may change the designation or number of shares, or the relative rights, preferences and limitations of the shares of any theretofore established series no shares of which have been issued.

Section 3.04. Limitation on Voting Rights.

1. Notwithstanding any other provision of this Certificate, in no event shall any record owner of any outstanding common stock which is Beneficially Owned, directly or indirectly, by a person who, as of any record date for the determination of shareholders entitled to vote on any matter, Beneficially Owns in excess of 10% of the then-outstanding shares of common stock (the “Limit”), be entitled, or permitted to any vote in respect of the shares held in excess of the Limit, unless a majority of the Unaffiliated Directors (as hereinafter defined) shall have by resolution granted in advance such entitlement or permission. The number of votes which may be cast by any record owner by virtue of the provisions hereof in respect of common stock Beneficially Owned by such person owning shares in excess of the Limit shall be a number equal to the total number of votes which a single record owner of all common stock owned by such person would be entitled to cast, multiplied by a fraction, the numerator of which is the number of shares of such class or series which are both Beneficially Owned by such person and owned of record by such record owner and the denominator of which is the total number of shares of common stock Beneficially Owned by such person owning shares in excess of the Limit.

2. The following definitions shall apply to this Section 3.04.

(a) “Affiliate” shall have the meaning ascribed to it in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on the date of filing of this Certificate.

(b) “Beneficial Ownership” shall be determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934 (or any successor rule or statutory provision), or, if said Rule 13d-3 shall be rescinded and there shall be no successor rule or provision thereto, pursuant to said Rule 13d-3 as in effect on the date of filing of this Certificate; provided, however, that a person shall, in any event, also be deemed the “Beneficial Owner” of any common stock:

(1) which such person or any of its Affiliates Beneficially Owns, directly or indirectly; or

(2) which such person or any of its Affiliates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants, or options or otherwise, or (ii) sole or shared voting or investment power with respect thereto pursuant to any agreement, arrangement, understanding, relationship or otherwise (but shall not be deemed to be the Beneficial Owner of any voting shares solely by reason of a revocable proxy granted for a particular meeting of shareholders, pursuant to a public solicitation of proxies for such meeting, with respect to shares of which neither such person nor any such Affiliate is otherwise deemed the Beneficial Owner); or

C-2

(3) which are Beneficially Owned, directly or indirectly, by any other person with which such first mentioned person or any of its Affiliates acts as a partnership, limited partnership, syndicate or other group pursuant to any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of capital stock of this Corporation; and provided further, however, that (i) no director or officer of this Corporation (or any Affiliate of any such director or officer) shall, solely by reason of any or all of such directors or officers acting in their capacities as such, be deemed, for any purposes hereof, to Beneficially Own any common stock Beneficially Owned by any other such director or officer (or any Affiliate thereof), and (ii) neither any employee stock ownership or similar plan of this Corporation or any subsidiary of this Corporation, nor any trustee with respect thereto or any Affiliate of such trustee (solely by reason of such capacity of such trustee), shall be deemed, for any purposes hereof, to Beneficially Own any common stock held under any such plan.

For purposes of computing the percentage Beneficial Ownership of common stock of a person, the outstanding common stock shall include shares deemed owned by such person through application of this subparagraph 2(b), but shall not include any other common stock which may be issuable by the Corporation pursuant to any agreement or upon exercise of conversion rights, warrants or options, or otherwise. For all other purposes, the outstanding common stock shall include only common stock then outstanding and shall not include any common stock which may be issuable by the Corporation pursuant to any agreement, or upon the exercise of conversion rights, warrants or options, or otherwise.

(c) A “person” shall mean any individual, firm, corporation, or other entity.

(d) “Unaffiliated Director” means any member of the board of directors who is not an Affiliate of the person Beneficially Owning shares in excess of the Limit and was a member of the board of directors prior to the time that such person Beneficially Owned shares in excess of the Limit, and any director who is thereafter chosen to fill any vacancy of the board of directors or who is elected and who, in either event, is not an Affiliate of the person Beneficially Owning shares in excess of the Limit and in connection with his or her initial assumption of office is recommended for appointment or election by a majority of the Unaffiliated Directors then on the board of directors.

3. The board of directors shall have the power to construe and apply the provisions of this Section 3.04 and to make all determinations necessary or desirable to implement such provisions, including but not limited to matters with respect to (i) the number of shares of common stock Beneficially Owned by any person, (ii) whether a person is an Affiliate of another, (iii) whether a person has an agreement, arrangement, or understanding with another as to the matters referred to in the definition of Beneficial Ownership, (iv) the application of any other definition or operative provision of this Section 3.04 to the given facts, or (v) any other matter relating to the applicability or effect of this Section 3.04.

4. The board of directors shall have the right to demand that any person who is reasonably believed to Beneficially Own common stock in excess of the Limit (or holds of record common stock Beneficially Owned by any person in excess of the Limit) supply this Corporation with complete information as to (i) the record owner(s) of all shares Beneficially Owned by such person who is reasonably believed to own shares in excess of the Limit, and (ii) any other factual matter relating to the applicability or effect of this Section 3.04 as may reasonably be required of such person.

C-3

5. Except as otherwise provided by law or expressly provided in this Section 3.04, the presence, in person or by proxy, of the holders of record of shares of capital stock of this Corporation entitling the holders thereof to cast a majority of the votes (after giving effect, if required, to the provisions of this Section 3.04) entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote shall constitute a quorum at all meetings of the shareholders.

6. Any constructions, applications, or determinations made by the board of directors pursuant to this Section 3.04 in good faith and on the basis of such information and assistance as was then reasonably available for such purpose shall be conclusive and binding upon this Corporation and its shareholders.

7. If any provision (or portion thereof) of this Section 3.04 shall be found to be invalid, prohibited or unenforceable for any reason, the remaining provisions (or portions thereof) of this Section 3.04 shall remain in full force and effect, and shall be construed as if such invalid, prohibited or unenforceable provision had been stricken here from or otherwise rendered inapplicable, it being the intent of this Corporation and its shareholders that each such remaining provision (or portion thereof) of this Section 3.04 remain, to the fullest extent permitted by law, applicable and enforceable as to all shareholders, including shareholders owning an amount of stock over the Limit, notwithstanding any such finding.

ARTICLE IV

Non-Unanimous Shareholder Consents; Cumulative Voting

The power of shareholders to take action by non-unanimous consent is specifically denied. There shall be no cumulative voting by shareholders of any class or series in the election of directors of the Corporation.

ARTICLE V

Directors

Section 5.01. General. The business and affairs of the Corporation shall be managed by or under the direction of its board of directors, except as this Certificate or the BCA otherwise provides; provided that any limitations on the board of director’s management or direction of the affairs of the Corporation shall reserve the directors’ full power to discharge their fiduciary duties.

Section 5.02. Number. Except as to the number of directors constituting the first board of directors, the number of directors of the Corporation shall be fixed from time to time exclusively by the board of directors by resolution adopted by a majority of the total number of the Corporation’s directors; provided that a decrease in the number of directors shall not have the effect of shortening the term of any incumbent director.

Section 5.03. Initial Directors. The number of directors constituting the first board of directors shall be five. The names of the persons who are to serve as the members of the first board of directors, until the first annual meeting of shareholders and until their successors shall have been elected and qualified, are:

C-4

James E. Igo

Thomas J. Coleman

John A. Latimer

James W. Verner

Renee C. Vidal

The mailing address of each initial director is 615 Burlington Avenue, Delanco, New Jersey, 08075.

Section 5.04. Classified Board; Terms. At the first annual meeting of shareholders for the election of directors, the directors shall be divided into three classes, as nearly equal in number as reasonably possible, with the term of office of the first class to expire at the first annual meeting of the shareholders after their election, the term of office of the second class to expire at the second annual meeting of shareholders after their election, and the term of office of the third class to expire at the third annual meeting of shareholders after their election. At each annual meeting of the shareholders following the initial classification and election, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of shareholders after their election, or for such term of office as the board of directors may determine is required to maintain the classes as nearly equal in number as reasonably possible. Each director shall hold office for the term he or she was elected and until his or her successor shall have been duly elected and qualified.

Section 5.05. Removal. Notwithstanding any other provision of this Certificate or the Bylaws of the Corporation, one or more or all of the directors of the Corporation may be removed for cause, at any time, by the affirmative vote of at least 80% of the votes entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) cast at a meeting of the shareholders called for that purpose. In addition, the board of directors shall have the power to remove directors for cause and to suspend directors pending a final determination that cause exists for removal. Directors may not be removed without cause.

Section 5.06. Certain Duties of Directors. In discharging his or her duties to the Corporation and in determining what he or she reasonably believes to be in the best interest of the Corporation, a director may, in addition to considering the effects of any action on shareholders, consider any of the following: (a) the effects of the action on the Corporation’s employees, suppliers, creditors and customers; (b) the effects of the action on the communities in which the Corporation operates; and (c) the long-term as well as the short-term interests of the Corporation and its shareholders, including the possibility that these interests may best be served by the continued independence of the Corporation. If on the basis of the factors described in this Section 5.06 the board of directors determines that any proposal or offer to acquire the Corporation is not in the best interest of the Corporation, it may reject such proposal or offer. If the board of directors determines to reject any such proposal or offer, the board of directors shall have no obligation to facilitate, remove any barriers to, or refrain from impeding the proposal or offer.

ARTICLE VI

Certain Shareholder Vote Requirements

Section 6.01. Amendment of Certificate of Incorporation. Except as otherwise required by the BCA, the affirmative vote of the holders of a majority of the issued and outstanding shares of capital stock entitled to vote shall be required to approve the amendment of this Certificate, except that (a) any amendment of Sections 3.04, 5.04 or 5.06, or Articles VI, VII, VIII or IX of this Certificate shall require

C-5

the affirmative vote of at least two thirds of the votes entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote (considered for this purpose as one class), and (b) the board of directors, without any action by the shareholders, may amend this Certificate to the fullest extent allowed under the BCA.

Section 6.02. Business Combinations. To the extent that shareholder approval is required by the BCA, any merger, consolidation, liquidation, or dissolution of the Corporation or any action that would result in the sale or other disposition of all or substantially all of the assets of the Corporation (for purposes of this Section 6.02, a “Business Combination”) shall require the affirmative vote of the holders of at least two thirds of the votes entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote. The provisions of this Section 6.02 shall not apply to a particular Business Combination, and such Business Combination shall require only such shareholder vote, if any, as would be required under the BCA, if such Business Combination is approved by two-thirds of the entire board of directors of the Corporation.

ARTICLE VII

Elimination of Directors’ and Officers’ Liability

Directors and officers of the Corporation shall have no personal liability to the Corporation or its shareholders for damages for breach of any duty owed to the Corporation or its shareholders, provided that this Article VII shall not relieve a director or officer from liability for any breach of duty based upon an act or omission (i) in breach of the director’s or officer’s duty of loyalty to the Corporation or its shareholders, (ii) not in good faith or involving a knowing violation of law, or (iii) resulting in receipt by such person of an improper personal benefit. Any repeal or modification of this Article VII by the shareholders of the Corporation shall not adversely affect any right or protection of a director or officer of the Corporation hereunder or otherwise with respect to any act or omission occurring before such repeal or modification is effective. If the BCA is amended to further limit the personal liability of directors and officers, then such liability will be limited to the fullest extent permitted under the law.

ARTICLE VIII

Indemnification

The Corporation shall indemnify to the fullest extent required or permitted by law any person made or threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person or such person’s testator, intestate, personal representative or spouse is or was a director or officer of the Corporation, is or was a director, officer, trustee, member, partner, incorporator or liquidator of a Subsidiary of the Corporation, or serves or served at the request of the Corporation as a director, officer, trustee, member, partner, incorporator or liquidator of or in any other capacity for any other enterprise. Expenses, including attorneys’ fees, incurred by any such person in defending any such action, suit or proceeding shall be paid or reimbursed by the Corporation promptly upon demand by such person and, if any such demand is made in advance of the final disposition of any such action, suit or proceeding, promptly upon receipt by the Corporation of an undertaking of such person to repay such expenses if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation. The rights provided to any person by this Article VIII shall be enforceable against the Corporation by such person, who shall be presumed to have relied upon it in serving or continuing to serve as a director or officer or in such other capacity as provided above. In addition, the rights provided to any person by this Article VIII shall survive the termination of such person as any such director, officer, trustee, member, partner, incorporator or liquidator and, insofar as such person served at the request of the Corporation as a director, officer, trustee, member, partner,

C-6

incorporator or liquidator of or in any other capacity for any other enterprise, shall survive the termination of such request as to service prior to termination of such request. No amendment of this Article VIII shall impair the rights of any person arising at any time with respect to events occurring prior to such amendment.

Notwithstanding anything contained in this Article VIII, except for proceedings to enforce rights provided in this Article VIII, the Corporation shall not be obligated under this Article VIII to provide any indemnification or any payment or reimbursement of expenses to any director, officer or other person in connection with a proceeding (or part thereof) initiated by such person (which shall not include counterclaims or crossclaims initiated by others) unless the board of directors has authorized or consented to such proceeding (or part thereof) in a resolution adopted by the board.

For purposes of this Article VIII, the term “Subsidiary” shall mean any corporation, partnership, limited liability company or other entity in which the Corporation owns, directly or indirectly, a majority of the economic or voting ownership interest; the term “other enterprise” shall include any corporation, partnership, limited liability company, joint venture, trust, association or other unincorporated organization or other entity and any employee benefit plan; the term “officer,” when used with respect to the Corporation, shall refer to any officer elected or appointed pursuant to the Corporation’s Bylaws, when used with respect to a Subsidiary or other enterprise that is a corporation, shall refer to any person elected or appointed pursuant to the bylaws of such Subsidiary or other enterprise or chosen in such manner as is prescribed by the bylaws of such Subsidiary or other enterprise or determined by the board of directors of such Subsidiary or other enterprise, and when used with respect to a Subsidiary or other enterprise that is not a corporation or is organized in a foreign jurisdiction, the term “officer” shall include in addition to any officer of such entity, any person serving in a similar capacity or as the manager of such entity; service “at the request of the Corporation” shall include service as a director or officer of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; any excise taxes assessed on a person with respect to an employee benefit plan shall be deemed to be indemnifiable expenses; and action by a person with respect to an employee benefit plan which such person reasonably believes to be in the interest of the participants and beneficiaries of such plan shall be deemed to be action not opposed to the best interests of the Corporation.

To the extent authorized from time to time by the board of directors, the Corporation may provide to (i) any one or more employees and other agents of the Corporation, (ii) any one or more officers, employees and other agents of any Subsidiary and (iii) any one or more directors, officers, employees and other agents of any other enterprise, rights of indemnification and to receive payment or reimbursement of expenses, including attorneys’ fees, that are similar to the rights conferred in this Article VIII on directors and officers of the Corporation or any Subsidiary or other enterprise. Any such rights shall have the same force and effect as they would have if they were conferred in this Article VIII. Nothing in this Article VIII shall limit the power of the Corporation or the board of directors to provide rights of indemnification and to make payment and reimbursement of expenses, including attorneys’ fees, to directors, officers, employees, agents and other persons otherwise than pursuant to this Article VIII.

ARTICLE IX

Amendment of Bylaws

In furtherance and not in limitation of the powers conferred by statute, the board of directors of the Corporation is expressly authorized to make, repeal, alter, amend and rescind the Bylaws of the Corporation by a vote of two-thirds of the full board of directors present at a legal meeting held in

C-7

accordance with the provisions of the Bylaws. Notwithstanding any other provision of this Certificate or the Bylaws of the Corporation (and notwithstanding the fact that some lesser percentage may be specified by law), the Bylaws shall not be made, repealed, altered, amended or rescinded by the shareholders of the Corporation except by the affirmative vote of at least two thirds of the votes entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote (considered for this purpose as one class) cast at a meeting of the shareholders called for that purpose (provided that notice of such proposed adoption, repeal, alteration, amendment or rescission is included in the notice of such meeting), or, as set forth above, by the board of directors.

ARTICLE X

Registered Office

The address of the Corporation’s registered office in the State of New Jersey is 615 Burlington Avenue, Delanco, New Jersey 08075. The name of the Corporation’s registered agent at such address is James E. Igo.

ARTICLE XI

Incorporator

The name and mailing address of the incorporator is Aaron M. Kaslow, Esq., c/o Kilpatrick Townsend & Stockton LLP, 607 14^th Street, Suite 900, Washington, DC 20005.

C-8

THE UNDERSIGNED, being the Incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the New Jersey Business Corporation Act, does make this Certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly has hereunto set my hand this the [    ] day of [            ], 2013.

Incorporator

C-9

Annex D

BYLAWS

OF

DELANCO BANCORP INC.

ARTICLE I - Shareholders

Section 1. Place of Meetings. All annual and special meetings of shareholders shall be held at any office of Delanco Bancorp Inc. (the “Corporation”) or at such other place as the board of directors may determine.

Section 2. Annual Meeting. A meeting of the shareholders of the Corporation for the election of directors and for the transaction of any other business of the Corporation shall be held annually at such date and time as the board of directors may determine.

Section 3. Special Meetings. Except as otherwise required by the New Jersey Business Corporation Act (“BCA”), special meetings of the shareholders may only be called by the president, the chairman of the board or a majority of the board of directors. Business transacted at any special meeting shall be confined to the purpose or purposes stated in the notice of such meeting.

Section 4. Conduct of Meetings. Annual and special meetings shall be conducted by the chairman of the meeting in accordance with rules and procedures adopted by the board of directors.

Section 5. Notice of Meetings. Written notice of the time, place and purpose or purposes of every meeting of shareholders shall be given not less than 10 nor more than 60 days before the date of the meeting, either personally or by mail, to each shareholder of record entitled to vote at the meeting. When a meeting is adjourned to another time or place, it shall not be necessary to give notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken and at the adjourned meeting only such business is transacted as might have been transacted at the original meeting. However, if after the adjournment the board fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record on the new record date entitled to notice.

Section 6. Fixing of Record Date. The board shall fix, in advance, a date as the record date for determining the Corporation’s shareholders with regard to any corporate action or event and, in particular, for determining the shareholders entitled to (i) notice of or to vote at any meeting of shareholders or any adjournment thereof; (ii) give a written consent to any action without a meeting; or (iii) receive payment of any dividend or allotment of any right. The record date may in no case be more than 60 days prior to the shareholders’ meeting or other corporate action or event to which it relates. The record date for a shareholders’ meeting may not be less than 10 days before the date of the meeting. The record date to determine shareholders entitled to give a written consent may not be more than 60 days before the date fixed for tabulation of the consents or, if no date has been fixed for tabulation, more than 60 days before the last day on which consents received may be counted.

Section 7. Voting Lists; Shareholder Lists. A list of the shareholders entitled to vote at a shareholders’ meeting shall be available at the time and place of the meeting, using any means that permits the visual display of the information, and subject to inspection of any shareholder for any proper purpose for reasonable periods during the meeting. The list shall be arranged alphabetically within each class, series, or group of shareholders, and shall contain the address of, and the number of shares held by, each shareholder.

D-1

The Corporation shall maintain at its principal office, its registered office, or at the office of its transfer agent, a record or records containing the names and addresses of all shareholders, the number, class and series of shares held by each and the dates when they respectively became the owners of record thereof. The list may be in written form or in any other form capable of being converted into readable form within a reasonable time. Any person who shall have been a shareholder of record of the Corporation for at least six months immediately preceding his demand, or any person holding, or so authorized in writing by the holders of, at least 5% of the outstanding shares of any class or series, upon at least five days’ written demand shall have the right for any proper purpose to examine in person or by agent or attorney, during usual business hours, the list of shareholders and to make extracts therefrom, at the places where such records are maintained.

Section 8. Quorum. Unless otherwise required by the BCA in the case of a special meeting, the holders of shares entitled to cast a majority of the votes at an annual or special meeting of shareholders shall constitute a quorum at such meeting. The shareholders present in person or by proxy at a duly organized meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Less than a quorum may adjourn.

Section 9. Proxies. Every shareholder entitled to vote at a meeting of shareholders or to express consent without a meeting may authorize another person or persons to act for him by proxy. Every proxy shall be executed in writing by the shareholder or his agent, except that a proxy may be given by a shareholder or his agent by telegram, cable, telephonic transmission or by any other means of electronic communication so long as that telegram, cable, telephonic transmission or other means of electronic communication either sets forth or is submitted with information from which it can be determined that the proxy was authorized by the shareholder or his agent. No proxy shall be valid for more than 11 months, unless a longer time is expressly provided therein. Proxies solicited on behalf of the management shall be voted as directed by the shareholder or, in the absence of such direction, as determined by a majority of the board of directors.

Section 10. Voting. Each outstanding share shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders, except as otherwise provided in the Certificate of Incorporation. Whenever any action, other than the election of directors, is to be taken by vote of the shareholders, it shall be authorized by a majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon, unless a greater plurality is required by the Certificate of Incorporation or the BCA. Directors shall be elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting of shareholders at which a quorum is present.

Section 11. Voting of Shares in the Name of Two or More Persons. Shares held by two or more persons as joint tenants or as tenants in common may be voted at any meeting of the shareholders by any one of such persons, unless another joint tenant or tenant in common seeks to vote any of such shares in person or by proxy. In the latter event, the written agreement, if any, which governs the manner in which such shares shall be voted, shall control if presented at the meeting. If no such agreement is presented at the meeting, the majority in number of such joint tenants or tenants in common present shall control the manner of voting. If there is no such majority, or if there are two such joint tenants or tenants in common, both of whom seek to vote such shares, the shares shall, for the purpose of voting, be divided equally among such joint tenants or tenants in common present.

Section 12. Voting of Shares of Certain Holders. Shares standing in the name of another corporation may be voted by any officer or agent, or by proxy appointed by any of them, unless some

D-2

other person, by resolution of such other corporation’s board or pursuant to its bylaws, shall be appointed to vote such shares. Shares held by any person in any representative or fiduciary capacity may be voted by such fiduciary without a transfer of such shares into his name. Where shares are held jointly by any number of fiduciaries, and the instrument or order appointing such fiduciaries does not otherwise direct, such shares shall be voted as the majority of such fiduciaries shall determine. If the fiduciaries are equally divided as to how the shares shall be voted, any court having jurisdiction may, in an action brought by any of such fiduciaries or by any beneficiary, appoint an additional person to act with such fiduciaries in such matter, and the stock shall be voted by the majority of such fiduciaries and such additional person. The court may proceed in the action in a summary manner or otherwise.

Section 13. Voting of Pledged Shares. A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee or a nominee of the pledgee, and thereafter, the pledgee shall be entitled to vote the shares so transferred.

Section 14. Voting by the Corporation. Shares of the Corporation that are held by the Corporation shall not be voted at any meeting and those shares shall not be counted in determining the total number of outstanding shares at any given time. If the Corporation holds a majority of the shares entitled to vote for the election of directors of another corporation, shares of the Corporation held by such other corporation shall not be voted at any meeting or counted in determining the total number of outstanding shares at any given time.

Section 15. Inspectors of Election. In advance of any meeting of shareholders, the board of directors may appoint any persons, other than nominees for election as directors, as inspectors of election to act at such meeting or any adjournment. The number of inspectors shall be either one or three. Any such appointment shall not be altered at the meeting except as provided in these Bylaws. If inspectors of election are not so appointed, the chairman of the meeting, the chairman of the board or the president may make such appointment at the meeting. In case any person appointed as inspector fails to appear or fails or refuses or is otherwise unable to act, the vacancy may be filled by appointment by the board of directors in advance of the meeting or at the meeting by the chairman of the meeting or the chairman of the board or the president.

Unless otherwise prescribed by resolution of the board of directors, the duties of such inspectors shall include: determining the number of outstanding shares and the voting power of each share, the shares represented at the meeting, the existence of a quorum, and the validity and effect of proxies; receiving votes, ballots, or consents; hearing and determining all challenges and questions in any way arising in connection with the right to vote; counting and tabulating all votes or consents; determining the result; and such acts as may be proper to conduct the election or vote with fairness to all shareholders. If there are three inspectors, the act of a majority shall govern.

Section 16. Advance Notice of Shareholder Business and Nominations.

(A) Annual Meeting of Shareholders. Without qualification or limitation, for any nominations or any other business to be properly brought before an annual meeting by a shareholder, the shareholder must have given timely notice thereof and timely updates and supplements thereof in writing to the Secretary and such other business must otherwise be a proper matter for shareholder action.

To be timely, a shareholder’s notice (including the completed and signed questionnaire, representation and agreement required by Section 17 of these Bylaws) shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the shareholder must be

D-3

so delivered not earlier than the close of business on the 120th day prior to the date of such annual meeting and not later than the close of business on the later of the 90th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th calendar day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall any adjournment or postponement of an annual meeting, or the public announcement thereof, commence a new time period for the giving of a shareholder’s notice as described above.

In addition, to be timely, a shareholder’s notice shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for the meeting and as of the date that is 10 business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to the Secretary at the principal executive offices of the Corporation not later than five business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight business days prior to the date for the meeting, or any adjournment or postponement thereof, in the case of the update and supplement required to be made as of 10 business days prior to the meeting or any adjournment or postponement thereof.

(B) Special Meetings of Shareholders. In the event the Corporation calls a special meeting of shareholders for the purpose of electing one or more directors to the board of directors, any such shareholder may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, provided that the shareholder’s notice with respect to any nomination (including the completed and signed questionnaire, representation and agreement required by Section 17 of this Article I) shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to the date of such special meeting and not later than the close of business on the later of the 90th day prior to the date of such special meeting or, if the first public announcement of the date of such special meeting is less than 100 days prior to the date of such special meeting, the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the board of directors to be elected at such meeting. In no event shall any adjournment or postponement of a special meeting, or the public announcement thereof, commence a new time period for the giving of a shareholder’s notice as described above.

(C) Disclosure Requirements.

(1) To be in proper form, a shareholder’s notice to the Secretary must include the following, as applicable.

(a) As to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, a shareholder’s notice must set forth: (i) the name and address of such shareholder, as they appear on the Corporation’s books, of such beneficial owner, if any, and of their respective affiliates or associates or others acting in concert therewith, (ii) (A) the class or series and number of shares of the Corporation which are, directly or indirectly, owned beneficially and of record by such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, (B) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, any derivative or synthetic arrangement having the characteristics of a long position in any class or series of shares of the Corporation, or any contract, derivative, swap or other transaction or series of transactions designed to produce economic benefits and risks that correspond substantially to the ownership of any class or series of shares of the Corporation (a

D-4

“Derivative Instrument”) directly or indirectly owned beneficially by such shareholder, the beneficial owner, if any, or any affiliates or associates or others acting in concert therewith and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation, (C) any proxy, contract, arrangement, understanding, or relationship pursuant to which such shareholder has a right to vote any class or series of shares of the Corporation, (D) any agreement, arrangement, understanding, relationship or otherwise, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly, by such shareholder, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of the shares of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such shareholder with respect to any class or series of the shares of the Corporation, or which provides, directly or indirectly, the opportunity to profit or share in any profit derived from any decrease in the price or value of any class or series of the shares of the Corporation (“Short Interests”), (E) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such shareholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership, (F) any performance-related fees (other than an asset-based fee) that such shareholder is entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, including without limitation any such interests held by members of such shareholder’s immediate family sharing the same household, (G) any significant equity interests or any Derivative Instruments or Short Interests in any principal competitor of the Corporation held by such shareholder and (H) any direct or indirect interest of such shareholder in any contract with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement) and (iii) any other information relating to such shareholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder;

(b) If the notice relates to any business other than a nomination of a director or directors that the shareholder proposes to bring before the meeting, a shareholder’s notice must, in addition to the matters set forth in paragraph (a) above, also set forth: (i) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such shareholder and beneficial owner, if any, in such business, (ii) the text of the proposal or business (including the text of any resolutions proposed for consideration) and (iii) a description of all agreements, arrangements and understandings between such shareholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such shareholder;

(c) As to each person, if any, whom the shareholder proposes to nominate for election or reelection to the board of directors, a shareholder’s notice must, in addition to the matters set forth in paragraph (a) above, also set forth: (i) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected) and (ii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such shareholder and beneficial

D-5

owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the shareholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; and

(d) With respect to each person, if any, whom the shareholder proposes to nominate for election or reelection to the board of directors, a shareholder’s notice must, in addition to the matters set forth in paragraphs (a) and (c) above, also include a completed and signed questionnaire, representation and agreement required by Section 17 of this Article I. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such nominee.

(2) For purposes of this Bylaw, “public announcement” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.

(3) Notwithstanding the foregoing provisions of this Bylaw, in the event that the Corporation is registered under the Exchange Act, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw; provided, however, that any references in this Bylaw to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to be considered at an annual or special meeting of shareholders. Nothing in this Bylaw shall be deemed to affect any rights (i) of shareholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act, if applicable, or (ii) of the holders of any series of Preferred Stock if and to the extent provided for under law, the Certificate of Incorporation or these Bylaws. Subject to Rule 14a-8 under the Exchange Act, if applicable, nothing in these Bylaws shall be construed to permit any shareholder, or give any shareholder the right, to include or have disseminated or described in the Corporation’s proxy statement any nomination of director or directors or any other business proposal.

Section 17. Submission of Questionnaire, Representation and Agreement. To be eligible to be a nominee for election or reelection as a director of the Corporation, a person must deliver (in accordance with the time periods prescribed for delivery of notice under Section 16 of these Bylaws) to the Secretary at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request), and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (A) is not and will not become a party to (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (2) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (B) is not and will not become

D-6

a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein and (C) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.

ARTICLE II - Board of Directors

Section 1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of its board of directors, except as provided in the BCA and the Corporation’s Certificate of Incorporation. The board of directors shall annually elect a chairman of the board and may also elect a vice chairman of the board from among its members and shall designate, when present, either the chairman of the board or the vice chairman of the board to preside at its meetings.

Section 2. Place of Meeting. All regular and special meetings of the board of directors shall be held at the principal office of the Corporation or at such other place within or outside the State in which the principal office of the Corporation is located as the board of directors may determine.

Members of the board of directors may participate in regular and special meetings by means of conference telephone or any means of communication by which all persons participating in the meeting are able to hear each other. Such participation shall constitute presence in person for all purposes.

Section 3. Regular Meetings. The board of directors may, by resolution, providee the time and place for the holding of regular meetings without other notice than such resolution.

Section 4. Special Meetings. Special meetings of the board of directors may be called by or at the request of the chairman of the board, the president or by three of the directors. The persons authorized to call special meetings of the board of directors may fix any place, as the place for holding any special meeting of the board of directors called by such persons.

Section 5. Notice of Special Meeting. Oral or written notice of any special meeting shall be given to each director at least 24 hours in advance of the meeting. Oral notice may be communicated in person, by telephone or any other comprehensible manner, and is effective when communicated. Written notice may be transmitted by mail, private carrier, personal delivery, facsimile or any other reasonable means, and is effective at the earliest of the following: (i) when received; (ii) four days after its deposit in the U.S. mail if mailed with first-class postage, to the address provided to the Corporation by the director where the director is most likely to be reached; or (c) on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee. Any director may waive notice of any meeting by a writing filed with the Secretary, either before or after the meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting. Neither the business to be transacted at, nor the purpose of, any meeting of the board need be specified in the notice or waiver of notice of such meeting.

Section 6. Quorum. The participation of directors with a majority of the votes of the entire board, or of any committee thereof, shall constitute a quorum for the transaction of business. If less than such majority is present at a meeting, a majority of the directors present may adjourn the meeting from time to time. Notice of any adjourned meeting shall be given in the same manner as prescribed by Section 5 of this Article II.

D-7

Section 7. Manner of Acting. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors, unless the BCA, the Certificate of Incorporation or these Bylaws require a greater proportion.

Section 8. Action Without a Meeting. Any action required or permitted to be taken pursuant to authorization voted at a meeting of the board of directors or any committee thereof, may be taken without a meeting if, prior or subsequent to the action, all members of the board or of such committee, as the case may be, consent thereto in writing and the written consents are filed with the minutes of the proceedings of the board or committee. Such consent shall have the same effect as a unanimous vote of the board or committee for all purposes.

Section 9. Newly Created Directorships and Vacancies. Any directorship not filled at the annual meeting, any vacancy, however caused, occurring in the board of directors, and newly created directorships resulting from an increase in the authorized number of directors, may be filled by the affirmative vote of a majority of the remaining directors even though less than a quorum of the board, or by a sole remaining director. A director so elected by the board of directors shall hold office until the next succeeding annual meeting of shareholders and until his or her successor shall have been elected and qualified.

When one or more directors shall resign from the board of directors effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office until the next succeeding annual meeting of shareholders and until his or her successor shall have been elected and qualified.

Section 10. Resignation. Any director may resign by written notice to the Corporation. The resignation shall be effective upon receipt thereof by the Corporation or at such subsequent time as shall be specified in the notice of resignation.

Section 11. Compensation. Directors, as such, may receive a stated salary or retainer for their services or may receive a reasonable fixed sum, and reasonable expenses of attendance, if any, for attendance at each regular or special meeting of the board of directors. Members of either standing or special committees may be allowed such compensation for attendance at committee meetings as the board of directors may determine.

Section 12. Residency Requirement. The majority of the directors of the Corporation must reside within the State of New Jersey.

Section 13. Integrity of Directors. A person is not qualified to serve as director if he or she: (1) is under indictment for, or has ever been convicted of, a criminal offense involving dishonesty or breach of trust and the penalty for such offense could be imprisonment for more than one year, (2) is a person against whom a banking agency has, within the past ten years, issued a cease and desist order for conduct involving dishonesty or breach of trust and that order is final and not subject to appeal, or (3) has been found either by a regulatory agency whose decision is final and not subject to appeal or by a court to have (i) breached a fiduciary duty involving personal profit, or (ii) committed a willful violation of any law, rule or regulation governing banking, securities, commodities or insurance, or any final cease and desist order issued by a banking, securities, commodities or insurance regulatory agency.

D-8

ARTICLE III - Executive And Other Committees

Section 1. Appointment. The board of directors, by resolution adopted by a majority of the entire board, may appoint from among its members an executive committee and one or more other committees, each of which shall have one or more members. The designation of any committee and the delegation thereto of authority shall not operate to relieve the board, or any member thereof, of any responsibility imposed by law.

Section 2. Authority.

(a) Except as provided in Section 2(b) of this Article III, the executive committee, when the board of directors is not in session, shall have and may exercise all of the authority of the board of directors except to the extent, if any, that such authority shall be limited by the resolution appointing the executive committee, and any other committee, to the extent provided in the board resolution appointing such committee, the Certificate of Incorporation or these Bylaws, shall have and may exercise all the authority of the board.

(b) No committee of the board of directors shall (i) make, alter or repeal any bylaw of the Corporation; (ii) elect or appoint any director, or remove any officer or director; (iii) submit to shareholders any action that requires shareholders’ approval; or (iv) amend or repeal any resolution theretofore adopted by the board which by its terms is amendable or repealable only by the board.

Section 3. Vacancies; Alternate Committee Members; Tenure; Resignation. The board of directors, by resolution adopted by a majority of the entire board, may (i) fill any vacancy in any committee; (ii) appoint one or more directors to serve as alternate members of any committee, to act in the absence or disability of members of such committee with all the powers of such absent or disabled members; (iii) abolish any such committee at its pleasure; or (iv) remove any director from membership on such committee at any time, with or without cause. Any member of a committee may resign from such committee at any time by giving written notice to the chairman, president or secretary of the Corporation. Unless otherwise specified, such resignation shall take effect upon its receipt; the acceptance of such resignation shall not be necessary to make it effective.

Section 4. Reports to the Board. Each committee of the board shall keep regular minutes of its proceedings, and actions taken at a meeting of any committee shall be reported to the board at its next meeting following such committee meeting; except that, when the meeting of the board is held within two days after the committee meeting, such report shall, if not made at the first meeting, be made to the board at its second meeting following such committee meeting.

Section 5. Procedure. The chairman of the board shall be the presiding officer of the executive committee, and the executive committee may fix its own rules of procedure which shall not be inconsistent with these Bylaws. The board of directors may by resolution establish the composition, duties, constitution, and procedures of any other committee.

ARTICLE IV - Officers

Section 1. Positions. The officers of the Corporation shall consist of a president, a secretary, a treasurer and, if desired, one or more vice presidents. The board of directors may designate one or more vice presidents as executive vice president or senior vice president. The board of directors may also elect or authorize the appointment of such other officers as the business of the Corporation may require. All officers of the Corporation, as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as provided in these Bylaws and as the board

D-9

of directors may from time to time authorize or determine. In the absence of any such bylaw provision or action by the board of directors, the officers shall have such powers and duties as generally pertain to their respective offices. Any two or more offices may be held by the same person but no officer shall execute, acknowledge, or verify any instrument in more than one capacity if such instrument is required by law or these Bylaws to be executed, acknowledged, or verified by two or more officers.

Section 2. Election and Term of Office. The officers of the Corporation shall be elected annually at the first meeting of the board of directors held after each annual meeting of the shareholders. If the election of officers is not held at such meeting, such election shall be held as soon thereafter as possible. Each officer shall hold office for the term for which he is so elected and until a successor is elected and has qualified, subject to earlier termination by removal or resignation. Election or appointment of an officer, employee, or agent shall not of itself create contractual rights. The board of directors may authorize the Corporation to enter into an employment contract with any officer, but no such contract shall impair the right of the board of directors to remove any officer at any time in accordance with Section 3 of this Article IV.

Section 3. Removal. Any officer may be removed by the board of directors whenever in the board’s judgment the best interests of the Corporation will be served thereby, but such removal, other than for cause, shall be without prejudice to the contractual rights, if any, of the person so removed.

Section 4. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, or otherwise may be filled by the board of directors for the unexpired portion of the term.

Section 5. Remuneration. The remuneration of the officers shall be fixed from time to time by the board of directors, by employment contracts or otherwise.

Section 6. President. The president shall have the authority and the duty to manage the affairs of the Corporation and shall have such other powers and perform such other duties as are delegated to him by the board of directors or as are incidental to his office.

Section 7. Vice President. The vice president or vice presidents, if any, shall perform the duties of the president in his absence or during his disability to act. In addition, the vice presidents shall perform the duties and exercise the powers usually incident to their respective offices and/or such other duties and powers as may be properly assigned to them from time to time by the board of directors or the president.

Section 8. Secretary. The secretary shall have custody of the minutes and records of the Corporation. The secretary shall keep the minutes of all meetings of the shareholders and of the board of directors, shall give such notice as may be required for all such meetings and shall have such other powers and perform such other duties as are delegated to him or her by the board of directors or the president or as are incidental to the office of secretary.

Section 9. Treasurer. The treasurer shall keep correct and complete books of account in accordance with the accounting methods adopted by the board of directors, showing the financial condition of the Corporation and the results of its operations. The treasurer shall have custody of all monies, securities, and other certificates evidencing intangible personal property belonging to the Corporation. He or she shall upon request furnish statements of the current financial condition and the current results of operations of the Corporation and shall have such other powers and perform such other duties as are delegated to him or her by the board of directors or the president or as are incidental to the office of treasurer.

D-10

Section 10. Other Offices. All other officers shall have such powers and perform such duties as are delegated to them by the board of directors or the president.

ARTICLE V - Contracts, Checks, and Deposits

Section 1. Contracts. To the extent permitted by applicable law, the Certificate of Incorporation or these Bylaws, the board may authorize any officer, employee or agent of the Corporation to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation. Such authority may be general or confined to specific instances.

Section 2. Checks, Drafts, Etc. All checks, drafts, or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the Corporation shall be signed by one or more officers, employees, or agents of the Corporation, which may include facsimile signatures, in such manner as shall from time to time be determined by the board of directors.

Section 3. Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in any duly authorized depositories as the board of directors may select.

ARTICLE VI - Certificates for Shares and Their Transfer

Section 1. Certificates for Shares. Certificates representing shares of capital stock of the Corporation shall be in such form as determined by the board of directors in accordance with the requirements of the BCA. Such certificates shall be signed by, or in the name of the Corporation by, the chairman or vice-chairman of the board, or the president or a vice-president, and may be countersigned by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the Corporation and may be sealed with the seal of the Corporation or a facsimile thereof. Any or all signatures upon a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon such certificate, shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of its issue.

Notwithstanding the foregoing, the Board may provide by resolution that some or all of any or all classes or series of the Corporation’s common stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. In the event that any shares of the Corporation’s capital stock are issued without a certificate, within a reasonable time after the issue or transfer of shares without certificates, the Corporation shall send the shareholder a written statement that includes the information that would be required by the BCA to be stated on a certificate representing the shares.

In the case of a lost or destroyed certificate, a new certificate or uncertificated shares may be issued upon such terms and indemnity to the Corporation as the board of directors may prescribe.

Section 2. Transfer of Shares. Transfer of shares of capital stock of the Corporation shall be made only on its stock transfer books. Authority for such transfer shall be given only by the holder of record thereof or by his legal representative, who shall furnish proper evidence of such authority, or by his attorney thereunto duly authorized by power of attorney duly executed and filed with the Corporation. Such transfer shall be made only, in the case of certificated shares, on surrender for cancellation of the certificate for such shares or, in the case of uncertificated shares, on delivery of proper transfer instructions for the number of shares involved. The person in whose name shares of capital stock stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes.

D-11

Section 3. Payment for Shares. No certificate shall be issued for any shares until such shares are fully paid.

ARTICLE VII - Fiscal Year

The fiscal year of the Corporation shall end on the 31st day of March of each year.

ARTICLE VIII - Dividends

Subject only to the terms of the Corporation’s Certificate of Incorporation and applicable law, the board of directors may from time to time declare and the Corporation may pay dividends on its outstanding classes of capital stock which are eligible for dividends.

ARTICLE IX - Corporate Seal

The corporate seal of the Corporation, if any, shall be in such form as the board of directors shall prescribe.

ARTICLE X - Amendments

These Bylaws may be amended only as specified in the Corporation’s Certificate of Incorporation.

D-12

EX-3.1

Exhibit 3.1

CERTIFICATE OF INCORPORATION

OF

DELANCO BANCORP INC.

ARTICLE I

Name

The name of the corporation is Delanco Bancorp Inc. (the “Corporation”).

ARTICLE II

Purpose

The purpose of the Corporation is to engage in any activity within the purposes for which corporations may be organized under the New Jersey Business Corporation Act (“BCA”).

ARTICLE III

Capital Stock

Section 3.01. Authorized Stock. The aggregate number of shares of all classes of capital stock which the Corporation has authority to issue is 25,000,000, of which 20,000,000 are to be shares of common stock, $0.01 par value per share, and of which 5,000,000 are to be shares of serial preferred stock, $0.01 par value per share. Authorized shares may be issued by the Corporation without the approval of shareholders except as otherwise provided in this Article III or the rules of a national securities exchange, if applicable. Shares may be issued for such consideration as shall be fixed from time to time by the board of directors.

A description of the different classes and series of the Corporation’s capital stock, and a statement of the relative powers, designations, preferences and rights of the shares of each class and series of capital stock, and the relative voting, dividend, liquidation and other rights, preferences, and limitations thereof, are as follows:

Section 3.02. Common Stock. Except as provided in this Certificate of Incorporation (this “Certificate”), the holders of the common stock shall exclusively possess all voting power and each holder of shares of common stock shall be entitled to one vote for each share held by such holder.

Whenever there shall have been paid, or declared and set aside for payment, to the holders of the outstanding shares of any class of stock having preference over the common stock as to the payment of dividends, the full amount of dividends and sinking fund or retirement fund or other retirement payments, if any, to which such holders are respectively entitled in preference to the common stock, the Corporation may, by resolution of its board of directors, pay dividends on its shares in cash, in its own shares, in its bonds or in other property, including the shares or bonds of other corporations.

In the event of any liquidation, dissolution or winding up of the Corporation, after there shall have been paid, or declared and set aside for payment, to the holders of the outstanding shares of any class having preference over the common stock, the full preferential amounts to which they are respectively entitled, the holders of the common stock and of any class or series of stock entitled to participate therewith, in whole or in part, as to distribution of assets shall be entitled, after payment or provision for payment of all debts and liabilities of the Corporation, to receive the remaining assets of the Corporation available for distribution, in cash or in kind.

Section 3.03. Preferred Stock. The shares of preferred stock may be issued from time to time in one or more series. The board of directors of the Corporation is authorized to divide the preferred stock into series and to determine the designation, number, relative rights, preferences and limitations of any series of preferred stock by amendment to this Certificate. The board of directors may change the designation or number of shares, or the relative rights, preferences and limitations of the shares of any theretofore established series no shares of which have been issued.

Section 3.04. Limitation on Voting Rights.

1. Notwithstanding any other provision of this Certificate, in no event shall any record owner of any outstanding common stock which is Beneficially Owned, directly or indirectly, by a person who, as of any record date for the determination of shareholders entitled to vote on any matter, Beneficially Owns in excess of 10% of the then-outstanding shares of common stock (the “Limit”), be entitled, or permitted to any vote in respect of the shares held in excess of the Limit, unless a majority of the Unaffiliated Directors (as hereinafter defined) shall have by resolution granted in advance such entitlement or permission. The number of votes which may be cast by any record owner by virtue of the provisions hereof in respect of common stock Beneficially Owned by such person owning shares in excess of the Limit shall be a number equal to the total number of votes which a single record owner of all common stock owned by such person would be entitled to cast, multiplied by a fraction, the numerator of which is the number of shares of such class or series which are both Beneficially Owned by such person and owned of record by such record owner and the denominator of which is the total number of shares of common stock Beneficially Owned by such person owning shares in excess of the Limit.

2. The following definitions shall apply to this Section 3.04.

(a) “Affiliate” shall have the meaning ascribed to it in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on the date of filing of this Certificate.

(b) “Beneficial Ownership” shall be determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934 (or any successor rule or statutory provision), or, if said Rule 13d-3 shall be rescinded and there shall be no successor rule or provision thereto, pursuant to said Rule 13d-3 as in effect on the date of filing of this Certificate; provided, however, that a person shall, in any event, also be deemed the “Beneficial Owner” of any common stock:

(1) which such person or any of its Affiliates Beneficially Owns, directly or indirectly; or

(2) which such person or any of its Affiliates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants, or options or otherwise, or (ii) sole or shared voting or investment power with respect thereto pursuant to any agreement, arrangement, understanding, relationship or otherwise (but shall not be deemed to be the Beneficial Owner of any voting shares solely by reason of a revocable proxy granted for a particular meeting of shareholders, pursuant to a public solicitation of proxies for such meeting, with respect to shares of which neither such person nor any such Affiliate is otherwise deemed the Beneficial Owner); or

2

(3) which are Beneficially Owned, directly or indirectly, by any other person with which such first mentioned person or any of its Affiliates acts as a partnership, limited partnership, syndicate or other group pursuant to any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of capital stock of this Corporation; and provided further, however, that (i) no director or officer of this Corporation (or any Affiliate of any such director or officer) shall, solely by reason of any or all of such directors or officers acting in their capacities as such, be deemed, for any purposes hereof, to Beneficially Own any common stock Beneficially Owned by any other such director or officer (or any Affiliate thereof), and (ii) neither any employee stock ownership or similar plan of this Corporation or any subsidiary of this Corporation, nor any trustee with respect thereto or any Affiliate of such trustee (solely by reason of such capacity of such trustee), shall be deemed, for any purposes hereof, to Beneficially Own any common stock held under any such plan.

For purposes of computing the percentage Beneficial Ownership of common stock of a person, the outstanding common stock shall include shares deemed owned by such person through application of this subparagraph 2(b), but shall not include any other common stock which may be issuable by the Corporation pursuant to any agreement or upon exercise of conversion rights, warrants or options, or otherwise. For all other purposes, the outstanding common stock shall include only common stock then outstanding and shall not include any common stock which may be issuable by the Corporation pursuant to any agreement, or upon the exercise of conversion rights, warrants or options, or otherwise.

(c) A “person” shall mean any individual, firm, corporation, or other entity.

(d) “Unaffiliated Director” means any member of the board of directors who is not an Affiliate of the person Beneficially Owning shares in excess of the Limit and was a member of the board of directors prior to the time that such person Beneficially Owned shares in excess of the Limit, and any director who is thereafter chosen to fill any vacancy of the board of directors or who is elected and who, in either event, is not an Affiliate of the person Beneficially Owning shares in excess of the Limit and in connection with his or her initial assumption of office is recommended for appointment or election by a majority of the Unaffiliated Directors then on the board of directors.

3. The board of directors shall have the power to construe and apply the provisions of this Section 3.04 and to make all determinations necessary or desirable to implement such provisions, including but not limited to matters with respect to (i) the number of shares of common stock Beneficially Owned by any person, (ii) whether a person is an Affiliate of another, (iii) whether a person has an agreement, arrangement, or understanding with another as to the matters referred to in the definition of Beneficial Ownership, (iv) the application of any other definition or operative provision of this Section 3.04 to the given facts, or (v) any other matter relating to the applicability or effect of this Section 3.04.

4. The board of directors shall have the right to demand that any person who is reasonably believed to Beneficially Own common stock in excess of the Limit (or holds of record common stock Beneficially Owned by any person in excess of the Limit) supply this Corporation with complete information as to (i) the record owner(s) of all shares Beneficially Owned by such person who is reasonably believed to own shares in excess of the Limit, and (ii) any other factual matter relating to the applicability or effect of this Section 3.04 as may reasonably be required of such person.

5. Except as otherwise provided by law or expressly provided in this Section 3.04, the presence, in person or by proxy, of the holders of record of shares of capital stock of this Corporation entitling the holders thereof to cast a majority of the votes (after giving effect, if required, to the provisions of this Section 3.04) entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote shall constitute a quorum at all meetings of the shareholders.

3

6. Any constructions, applications, or determinations made by the board of directors pursuant to this Section 3.04 in good faith and on the basis of such information and assistance as was then reasonably available for such purpose shall be conclusive and binding upon this Corporation and its shareholders.

7. If any provision (or portion thereof) of this Section 3.04 shall be found to be invalid, prohibited or unenforceable for any reason, the remaining provisions (or portions thereof) of this Section 3.04 shall remain in full force and effect, and shall be construed as if such invalid, prohibited or unenforceable provision had been stricken here from or otherwise rendered inapplicable, it being the intent of this Corporation and its shareholders that each such remaining provision (or portion thereof) of this Section 3.04 remain, to the fullest extent permitted by law, applicable and enforceable as to all shareholders, including shareholders owning an amount of stock over the Limit, notwithstanding any such finding.

ARTICLE IV

Non-Unanimous Shareholder Consents; Cumulative Voting

The power of shareholders to take action by non-unanimous consent is specifically denied. There shall be no cumulative voting by shareholders of any class or series in the election of directors of the Corporation.

ARTICLE V

Directors

Section 5.01. General. The business and affairs of the Corporation shall be managed by or under the direction of its board of directors, except as this Certificate or the BCA otherwise provides; provided that any limitations on the board of director’s management or direction of the affairs of the Corporation shall reserve the directors’ full power to discharge their fiduciary duties.

Section 5.02. Number. Except as to the number of directors constituting the first board of directors, the number of directors of the Corporation shall be fixed from time to time exclusively by the board of directors by resolution adopted by a majority of the total number of the Corporation’s directors; provided that a decrease in the number of directors shall not have the effect of shortening the term of any incumbent director.

Section 5.03. Initial Directors. The number of directors constituting the first board of directors shall be five. The names of the persons who are to serve as the members of the first board of directors, until the first annual meeting of shareholders and until their successors shall have been elected and qualified, are:

James E. Igo

Thomas J. Coleman

John A. Latimer

James W. Verner

Renee C. Vidal

4

The mailing address of each initial director is 615 Burlington Avenue, Delanco, New Jersey, 08075.

Section 5.04. Classified Board; Terms. At the first annual meeting of shareholders for the election of directors, the directors shall be divided into three classes, as nearly equal in number as reasonably possible, with the term of office of the first class to expire at the first annual meeting of the shareholders after their election, the term of office of the second class to expire at the second annual meeting of shareholders after their election, and the term of office of the third class to expire at the third annual meeting of shareholders after their election. At each annual meeting of the shareholders following the initial classification and election, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of shareholders after their election, or for such term of office as the board of directors may determine is required to maintain the classes as nearly equal in number as reasonably possible. Each director shall hold office for the term he or she was elected and until his or her successor shall have been duly elected and qualified.

Section 5.05. Removal. Notwithstanding any other provision of this Certificate or the Bylaws of the Corporation, one or more or all of the directors of the Corporation may be removed for cause, at any time, by the affirmative vote of at least 80% of the votes entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) cast at a meeting of the shareholders called for that purpose. In addition, the board of directors shall have the power to remove directors for cause and to suspend directors pending a final determination that cause exists for removal. Directors may not be removed without cause.

Section 5.06. Certain Duties of Directors. In discharging his or her duties to the Corporation and in determining what he or she reasonably believes to be in the best interest of the Corporation, a director may, in addition to considering the effects of any action on shareholders, consider any of the following: (a) the effects of the action on the Corporation’s employees, suppliers, creditors and customers; (b) the effects of the action on the communities in which the Corporation operates; and (c) the long-term as well as the short-term interests of the Corporation and its shareholders, including the possibility that these interests may best be served by the continued independence of the Corporation. If on the basis of the factors described in this Section 5.06 the board of directors determines that any proposal or offer to acquire the Corporation is not in the best interest of the Corporation, it may reject such proposal or offer. If the board of directors determines to reject any such proposal or offer, the board of directors shall have no obligation to facilitate, remove any barriers to, or refrain from impeding the proposal or offer.

ARTICLE VI

Certain Shareholder Vote Requirements

Section 6.01. Amendment of Certificate of Incorporation. Except as otherwise required by the BCA, the affirmative vote of the holders of a majority of the issued and outstanding shares of capital stock entitled to vote shall be required to approve the amendment of this Certificate, except that (a) any amendment of Sections 3.04, 5.04 or 5.06, or Articles VI, VII, VIII or IX of this Certificate shall require the affirmative vote of at least two thirds of the votes entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote (considered for this purpose as one class), and (b) the board of directors, without any action by the shareholders, may amend this Certificate to the fullest extent allowed under the BCA.

5

Section 6.02. Business Combinations. To the extent that shareholder approval is required by the BCA, any merger, consolidation, liquidation, or dissolution of the Corporation or any action that would result in the sale or other disposition of all or substantially all of the assets of the Corporation (for purposes of this Section 6.02, a “Business Combination”) shall require the affirmative vote of the holders of at least two thirds of the votes entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote. The provisions of this Section 6.02 shall not apply to a particular Business Combination, and such Business Combination shall require only such shareholder vote, if any, as would be required under the BCA, if such Business Combination is approved by two-thirds of the entire board of directors of the Corporation.

ARTICLE VII

Elimination of Directors’ and Officers’ Liability

Directors and officers of the Corporation shall have no personal liability to the Corporation or its shareholders for damages for breach of any duty owed to the Corporation or its shareholders, provided that this Article VII shall not relieve a director or officer from liability for any breach of duty based upon an act or omission (i) in breach of the director’s or officer’s duty of loyalty to the Corporation or its shareholders, (ii) not in good faith or involving a knowing violation of law, or (iii) resulting in receipt by such person of an improper personal benefit. Any repeal or modification of this Article VII by the shareholders of the Corporation shall not adversely affect any right or protection of a director or officer of the Corporation hereunder or otherwise with respect to any act or omission occurring before such repeal or modification is effective. If the BCA is amended to further limit the personal liability of directors and officers, then such liability will be limited to the fullest extent permitted under the law.

ARTICLE VIII

Indemnification

The Corporation shall indemnify to the fullest extent required or permitted by law any person made or threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person or such person’s testator, intestate, personal representative or spouse is or was a director or officer of the Corporation, is or was a director, officer, trustee, member, partner, incorporator or liquidator of a Subsidiary of the Corporation, or serves or served at the request of the Corporation as a director, officer, trustee, member, partner, incorporator or liquidator of or in any other capacity for any other enterprise. Expenses, including attorneys’ fees, incurred by any such person in defending any such action, suit or proceeding shall be paid or reimbursed by the Corporation promptly upon demand by such person and, if any such demand is made in advance of the final disposition of any such action, suit or proceeding, promptly upon receipt by the Corporation of an undertaking of such person to repay such expenses if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation. The rights provided to any person by this Article VIII shall be enforceable against the Corporation by such person, who shall be presumed to have relied upon it in serving or continuing to serve as a director or officer or in such other capacity as provided above. In addition, the rights provided to any person by this Article VIII shall survive the termination of such person as any such director, officer, trustee, member, partner, incorporator or liquidator and, insofar as such person served at the request of the Corporation as a director, officer, trustee, member, partner, incorporator or liquidator of or in any other capacity for any other enterprise, shall survive the termination of such request as to service prior to termination of such request. No amendment of this Article VIII shall impair the rights of any person arising at any time with respect to events occurring prior to such amendment.

6

Notwithstanding anything contained in this Article VIII, except for proceedings to enforce rights provided in this Article VIII, the Corporation shall not be obligated under this Article VIII to provide any indemnification or any payment or reimbursement of expenses to any director, officer or other person in connection with a proceeding (or part thereof) initiated by such person (which shall not include counterclaims or crossclaims initiated by others) unless the board of directors has authorized or consented to such proceeding (or part thereof) in a resolution adopted by the board.

For purposes of this Article VIII, the term “Subsidiary” shall mean any corporation, partnership, limited liability company or other entity in which the Corporation owns, directly or indirectly, a majority of the economic or voting ownership interest; the term “other enterprise” shall include any corporation, partnership, limited liability company, joint venture, trust, association or other unincorporated organization or other entity and any employee benefit plan; the term “officer,” when used with respect to the Corporation, shall refer to any officer elected or appointed pursuant to the Corporation’s Bylaws, when used with respect to a Subsidiary or other enterprise that is a corporation, shall refer to any person elected or appointed pursuant to the bylaws of such Subsidiary or other enterprise or chosen in such manner as is prescribed by the bylaws of such Subsidiary or other enterprise or determined by the board of directors of such Subsidiary or other enterprise, and when used with respect to a Subsidiary or other enterprise that is not a corporation or is organized in a foreign jurisdiction, the term “officer” shall include in addition to any officer of such entity, any person serving in a similar capacity or as the manager of such entity; service “at the request of the Corporation” shall include service as a director or officer of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; any excise taxes assessed on a person with respect to an employee benefit plan shall be deemed to be indemnifiable expenses; and action by a person with respect to an employee benefit plan which such person reasonably believes to be in the interest of the participants and beneficiaries of such plan shall be deemed to be action not opposed to the best interests of the Corporation.

To the extent authorized from time to time by the board of directors, the Corporation may provide to (i) any one or more employees and other agents of the Corporation, (ii) any one or more officers, employees and other agents of any Subsidiary and (iii) any one or more directors, officers, employees and other agents of any other enterprise, rights of indemnification and to receive payment or reimbursement of expenses, including attorneys’ fees, that are similar to the rights conferred in this Article VIII on directors and officers of the Corporation or any Subsidiary or other enterprise. Any such rights shall have the same force and effect as they would have if they were conferred in this Article VIII.

Nothing in this Article VIII shall limit the power of the Corporation or the board of directors to provide rights of indemnification and to make payment and reimbursement of expenses, including attorneys’ fees, to directors, officers, employees, agents and other persons otherwise than pursuant to this Article VIII.

ARTICLE IX

Amendment of Bylaws

In furtherance and not in limitation of the powers conferred by statute, the board of directors of the Corporation is expressly authorized to make, repeal, alter, amend and rescind the Bylaws of the Corporation by a vote of two-thirds of the full board of directors present at a legal meeting held in accordance with the provisions of the Bylaws. Notwithstanding any other provision of this Certificate or the Bylaws of the Corporation (and notwithstanding the fact that some lesser percentage may be specified by law), the Bylaws shall not be made, repealed, altered, amended or rescinded by the shareholders of the Corporation except by the affirmative vote of at least two thirds of the votes entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote (considered for this purpose as one

7

class) cast at a meeting of the shareholders called for that purpose (provided that notice of such proposed adoption, repeal, alteration, amendment or rescission is included in the notice of such meeting), or, as set forth above, by the board of directors.

ARTICLE X

Registered Office

The address of the Corporation’s registered office in the State of New Jersey is 615 Burlington Avenue, Delanco, New Jersey 08075. The name of the Corporation’s registered agent at such address is James E. Igo.

ARTICLE XI

Incorporator

The name and mailing address of the incorporator is Aaron M. Kaslow, Esq., c/o Kilpatrick Townsend & Stockton LLP, 607 14^th Street, Suite 900, Washington, DC 20005.

8

THE UNDERSIGNED, being the Incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the New Jersey Business Corporation Act, does make this Certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly has hereunto set my hand this the 3rd day of June, 2013.

/s/ Aaron M. Kaslow

Aaron M. Kaslow

Incorporator

9

EX-3.2

Exhibit 3.2

BYLAWS

OF

DELANCO BANCORP INC.

ARTICLE I - Shareholders

Section 1. Place of Meetings. All annual and special meetings of shareholders shall be held at any office of Delanco Bancorp Inc. (the “Corporation”) or at such other place as the board of directors may determine.

Section 2. Annual Meeting. A meeting of the shareholders of the Corporation for the election of directors and for the transaction of any other business of the Corporation shall be held annually at such date and time as the board of directors may determine.

Section 3. Special Meetings. Except as otherwise required by the New Jersey Business Corporation Act (“BCA”), special meetings of the shareholders may only be called by the president, the chairman of the board or a majority of the board of directors. Business transacted at any special meeting shall be confined to the purpose or purposes stated in the notice of such meeting.

Section 4. Conduct of Meetings. Annual and special meetings shall be conducted by the chairman of the meeting in accordance with rules and procedures adopted by the board of directors.

Section 5. Notice of Meetings. Written notice of the time, place and purpose or purposes of every meeting of shareholders shall be given not less than 10 nor more than 60 days before the date of the meeting, either personally or by mail, to each shareholder of record entitled to vote at the meeting. When a meeting is adjourned to another time or place, it shall not be necessary to give notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken and at the adjourned meeting only such business is transacted as might have been transacted at the original meeting. However, if after the adjournment the board fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record on the new record date entitled to notice.

Section 6. Fixing of Record Date. The board shall fix, in advance, a date as the record date for determining the Corporation’s shareholders with regard to any corporate action or event and, in particular, for determining the shareholders entitled to (i) notice of or to vote at any meeting of shareholders or any adjournment thereof; (ii) give a written consent to any action without a meeting; or (iii) receive payment of any dividend or allotment of any right. The record date may in no case be more than 60 days prior to the shareholders’ meeting or other corporate action or event to which it relates. The record date for a shareholders’ meeting may not be less than 10 days before the date of the meeting. The record date to determine shareholders entitled to give a written consent may not be more than 60 days before the date fixed for tabulation of the consents or, if no date has been fixed for tabulation, more than 60 days before the last day on which consents received may be counted.

Section 7. Voting Lists; Shareholder Lists. A list of the shareholders entitled to vote at a shareholders’ meeting shall be available at the time and place of the meeting, using any means that permits the visual display of the information, and subject to inspection of any shareholder for any proper purpose for reasonable periods during the meeting. The list shall be arranged alphabetically within each class, series, or group of shareholders, and shall contain the address of, and the number of shares held by, each shareholder.

The Corporation shall maintain at its principal office, its registered office, or at the office of its transfer agent, a record or records containing the names and addresses of all shareholders, the number, class and series of shares held by each and the dates when they respectively became the owners of record thereof. The list may be in written form or in any other form capable of being converted into readable form within a reasonable time. Any person who shall have been a shareholder of record of the Corporation for at least six months immediately preceding his demand, or any person holding, or so authorized in writing by the holders of, at least 5% of the outstanding shares of any class or series, upon at least five days’ written demand shall have the right for any proper purpose to examine in person or by agent or attorney, during usual business hours, the list of shareholders and to make extracts therefrom, at the places where such records are maintained.

Section 8. Quorum. Unless otherwise required by the BCA in the case of a special meeting, the holders of shares entitled to cast a majority of the votes at an annual or special meeting of shareholders shall constitute a quorum at such meeting. The shareholders present in person or by proxy at a duly organized meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Less than a quorum may adjourn.

Section 9. Proxies. Every shareholder entitled to vote at a meeting of shareholders or to express consent without a meeting may authorize another person or persons to act for him by proxy. Every proxy shall be executed in writing by the shareholder or his agent, except that a proxy may be given by a shareholder or his agent by telegram, cable, telephonic transmission or by any other means of electronic communication so long as that telegram, cable, telephonic transmission or other means of electronic communication either sets forth or is submitted with information from which it can be determined that the proxy was authorized by the shareholder or his agent. No proxy shall be valid for more than 11 months, unless a longer time is expressly provided therein. Proxies solicited on behalf of the management shall be voted as directed by the shareholder or, in the absence of such direction, as determined by a majority of the board of directors.

Section 10. Voting. Each outstanding share shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders, except as otherwise provided in the Certificate of Incorporation. Whenever any action, other than the election of directors, is to be taken by vote of the shareholders, it shall be authorized by a majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon, unless a greater plurality is required by the Certificate of Incorporation or the BCA. Directors shall be elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting of shareholders at which a quorum is present.

Section 11. Voting of Shares in the Name of Two or More Persons. Shares held by two or more persons as joint tenants or as tenants in common may be voted at any meeting of the shareholders by any one of such persons, unless another joint tenant or tenant in common seeks to vote any of such shares in person or by proxy. In the latter event, the written agreement, if any, which governs the manner in which such shares shall be voted, shall control if presented at the meeting. If no such agreement is presented at the meeting, the majority in number of such joint tenants or tenants in common present shall control the manner of voting. If there is no such majority, or if there are two such joint tenants or tenants in common, both of whom seek to vote such shares, the shares shall, for the purpose of voting, be divided equally among such joint tenants or tenants in common present.

Section 12. Voting of Shares of Certain Holders. Shares standing in the name of another corporation may be voted by any officer or agent, or by proxy appointed by any of them, unless some other person, by resolution of such other corporation’s board or pursuant to its bylaws, shall be appointed to vote such shares. Shares held by any person in any representative or fiduciary capacity may be voted

2

by such fiduciary without a transfer of such shares into his name. Where shares are held jointly by any number of fiduciaries, and the instrument or order appointing such fiduciaries does not otherwise direct, such shares shall be voted as the majority of such fiduciaries shall determine. If the fiduciaries are equally divided as to how the shares shall be voted, any court having jurisdiction may, in an action brought by any of such fiduciaries or by any beneficiary, appoint an additional person to act with such fiduciaries in such matter, and the stock shall be voted by the majority of such fiduciaries and such additional person. The court may proceed in the action in a summary manner or otherwise.

Section 13. Voting of Pledged Shares. A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee or a nominee of the pledgee, and thereafter, the pledgee shall be entitled to vote the shares so transferred.

Section 14. Voting by the Corporation. Shares of the Corporation that are held by the Corporation shall not be voted at any meeting and those shares shall not be counted in determining the total number of outstanding shares at any given time. If the Corporation holds a majority of the shares entitled to vote for the election of directors of another corporation, shares of the Corporation held by such other corporation shall not be voted at any meeting or counted in determining the total number of outstanding shares at any given time.

Section 15. Inspectors of Election. In advance of any meeting of shareholders, the board of directors may appoint any persons, other than nominees for election as directors, as inspectors of election to act at such meeting or any adjournment. The number of inspectors shall be either one or three. Any such appointment shall not be altered at the meeting except as provided in these Bylaws. If inspectors of election are not so appointed, the chairman of the meeting, the chairman of the board or the president may make such appointment at the meeting. In case any person appointed as inspector fails to appear or fails or refuses or is otherwise unable to act, the vacancy may be filled by appointment by the board of directors in advance of the meeting or at the meeting by the chairman of the meeting or the chairman of the board or the president.

Unless otherwise prescribed by resolution of the board of directors, the duties of such inspectors shall include: determining the number of outstanding shares and the voting power of each share, the shares represented at the meeting, the existence of a quorum, and the validity and effect of proxies; receiving votes, ballots, or consents; hearing and determining all challenges and questions in any way arising in connection with the right to vote; counting and tabulating all votes or consents; determining the result; and such acts as may be proper to conduct the election or vote with fairness to all shareholders. If there are three inspectors, the act of a majority shall govern.

Section 16. Advance Notice of Shareholder Business and Nominations.

(A) Annual Meeting of Shareholders. Without qualification or limitation, for any nominations or any other business to be properly brought before an annual meeting by a shareholder, the shareholder must have given timely notice thereof and timely updates and supplements thereof in writing to the Secretary and such other business must otherwise be a proper matter for shareholder action.

To be timely, a shareholder’s notice (including the completed and signed questionnaire, representation and agreement required by Section 17 of these Bylaws) shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the shareholder must be so delivered not earlier than the close of business on the 120th day prior to the date of such annual meeting and not later than the close of business on the later of the 90th day prior to the date of such

3

annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th calendar day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall any adjournment or postponement of an annual meeting, or the public announcement thereof, commence a new time period for the giving of a shareholder’s notice as described above.

In addition, to be timely, a shareholder’s notice shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for the meeting and as of the date that is 10 business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to the Secretary at the principal executive offices of the Corporation not later than five business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight business days prior to the date for the meeting, or any adjournment or postponement thereof, in the case of the update and supplement required to be made as of 10 business days prior to the meeting or any adjournment or postponement thereof.

(B) Special Meetings of Shareholders. In the event the Corporation calls a special meeting of shareholders for the purpose of electing one or more directors to the board of directors, any such shareholder may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, provided that the shareholder’s notice with respect to any nomination (including the completed and signed questionnaire, representation and agreement required by Section 17 of this Article I) shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to the date of such special meeting and not later than the close of business on the later of the 90th day prior to the date of such special meeting or, if the first public announcement of the date of such special meeting is less than 100 days prior to the date of such special meeting, the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the board of directors to be elected at such meeting. In no event shall any adjournment or postponement of a special meeting, or the public announcement thereof, commence a new time period for the giving of a shareholder’s notice as described above.

(C) Disclosure Requirements.

(1) To be in proper form, a shareholder’s notice to the Secretary must include the following, as applicable.

(a) As to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, a shareholder’s notice must set forth: (i) the name and address of such shareholder, as they appear on the Corporation’s books, of such beneficial owner, if any, and of their respective affiliates or associates or others acting in concert therewith, (ii) (A) the class or series and number of shares of the Corporation which are, directly or indirectly, owned beneficially and of record by such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, (B) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, any derivative or synthetic arrangement having the characteristics of a long position in any class or series of shares of the Corporation, or any contract, derivative, swap or other transaction or series of transactions designed to produce economic benefits and risks that correspond substantially to the ownership of any class or series of shares of the Corporation (a “Derivative Instrument”) directly or indirectly owned beneficially by such shareholder, the beneficial owner, if any, or any affiliates or associates or others acting in concert therewith and

4

any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation, (C) any proxy, contract, arrangement, understanding, or relationship pursuant to which such shareholder has a right to vote any class or series of shares of the Corporation, (D) any agreement, arrangement, understanding, relationship or otherwise, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly, by such shareholder, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of the shares of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such shareholder with respect to any class or series of the shares of the Corporation, or which provides, directly or indirectly, the opportunity to profit or share in any profit derived from any decrease in the price or value of any class or series of the shares of the Corporation (“Short Interests”), (E) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such shareholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership, (F) any performance-related fees (other than an asset-based fee) that such shareholder is entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, including without limitation any such interests held by members of such shareholder’s immediate family sharing the same household, (G) any significant equity interests or any Derivative Instruments or Short Interests in any principal competitor of the Corporation held by such shareholder and (H) any direct or indirect interest of such shareholder in any contract with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement) and (iii) any other information relating to such shareholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder;

(b) If the notice relates to any business other than a nomination of a director or directors that the shareholder proposes to bring before the meeting, a shareholder’s notice must, in addition to the matters set forth in paragraph (a) above, also set forth: (i) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such shareholder and beneficial owner, if any, in such business, (ii) the text of the proposal or business (including the text of any resolutions proposed for consideration) and (iii) a description of all agreements, arrangements and understandings between such shareholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such shareholder;

(c) As to each person, if any, whom the shareholder proposes to nominate for election or reelection to the board of directors, a shareholder’s notice must, in addition to the matters set forth in paragraph (a) above, also set forth: (i) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected) and (ii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such shareholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates,

5

or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the shareholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; and

(d) With respect to each person, if any, whom the shareholder proposes to nominate for election or reelection to the board of directors, a shareholder’s notice must, in addition to the matters set forth in paragraphs (a) and (c) above, also include a completed and signed questionnaire, representation and agreement required by Section 17 of this Article I. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such nominee.

(2) For purposes of this Bylaw, “public announcement” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.

(3) Notwithstanding the foregoing provisions of this Bylaw, in the event that the Corporation is registered under the Exchange Act, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw; provided, however, that any references in this Bylaw to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to be considered at an annual or special meeting of shareholders. Nothing in this Bylaw shall be deemed to affect any rights (i) of shareholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act, if applicable, or (ii) of the holders of any series of Preferred Stock if and to the extent provided for under law, the Certificate of Incorporation or these Bylaws. Subject to Rule 14a-8 under the Exchange Act, if applicable, nothing in these Bylaws shall be construed to permit any shareholder, or give any shareholder the right, to include or have disseminated or described in the Corporation’s proxy statement any nomination of director or directors or any other business proposal.

Section 17. Submission of Questionnaire, Representation and Agreement. To be eligible to be a nominee for election or reelection as a director of the Corporation, a person must deliver (in accordance with the time periods prescribed for delivery of notice under Section 16 of these Bylaws) to the Secretary at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request), and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (A) is not and will not become a party to (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (2) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (B) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in

6

connection with service or action as a director that has not been disclosed therein and (C) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.

ARTICLE II - Board of Directors

Section 1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of its board of directors, except as provided in the BCA and the Corporation’s Certificate of Incorporation. The board of directors shall annually elect a chairman of the board and may also elect a vice chairman of the board from among its members and shall designate, when present, either the chairman of the board or the vice chairman of the board to preside at its meetings.

Section 2. Place of Meeting. All regular and special meetings of the board of directors shall be held at the principal office of the Corporation or at such other place within or outside the State in which the principal office of the Corporation is located as the board of directors may determine.

Members of the board of directors may participate in regular and special meetings by means of conference telephone or any means of communication by which all persons participating in the meeting are able to hear each other. Such participation shall constitute presence in person for all purposes.

Section 3. Regular Meetings. The board of directors may, by resolution, providee the time and place for the holding of regular meetings without other notice than such resolution.

Section 4. Special Meetings. Special meetings of the board of directors may be called by or at the request of the chairman of the board, the president or by three of the directors. The persons authorized to call special meetings of the board of directors may fix any place, as the place for holding any special meeting of the board of directors called by such persons.

Section 5. Notice of Special Meeting. Oral or written notice of any special meeting shall be given to each director at least 24 hours in advance of the meeting. Oral notice may be communicated in person, by telephone or any other comprehensible manner, and is effective when communicated. Written notice may be transmitted by mail, private carrier, personal delivery, facsimile or any other reasonable means, and is effective at the earliest of the following: (i) when received; (ii) four days after its deposit in the U.S. mail if mailed with first-class postage, to the address provided to the Corporation by the director where the director is most likely to be reached; or (c) on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee. Any director may waive notice of any meeting by a writing filed with the Secretary, either before or after the meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting. Neither the business to be transacted at, nor the purpose of, any meeting of the board need be specified in the notice or waiver of notice of such meeting.

Section 6. Quorum. The participation of directors with a majority of the votes of the entire board, or of any committee thereof, shall constitute a quorum for the transaction of business. If less than such majority is present at a meeting, a majority of the directors present may adjourn the meeting from time to time. Notice of any adjourned meeting shall be given in the same manner as prescribed by Section 5 of this Article II.

7

Section 7. Manner of Acting. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors, unless the BCA, the Certificate of Incorporation or these Bylaws require a greater proportion.

Section 8. Action Without a Meeting. Any action required or permitted to be taken pursuant to authorization voted at a meeting of the board of directors or any committee thereof, may be taken without a meeting if, prior or subsequent to the action, all members of the board or of such committee, as the case may be, consent thereto in writing and the written consents are filed with the minutes of the proceedings of the board or committee. Such consent shall have the same effect as a unanimous vote of the board or committee for all purposes.

Section 9. Newly Created Directorships and Vacancies. Any directorship not filled at the annual meeting, any vacancy, however caused, occurring in the board of directors, and newly created directorships resulting from an increase in the authorized number of directors, may be filled by the affirmative vote of a majority of the remaining directors even though less than a quorum of the board, or by a sole remaining director. A director so elected by the board of directors shall hold office until the next succeeding annual meeting of shareholders and until his or her successor shall have been elected and qualified.

When one or more directors shall resign from the board of directors effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office until the next succeeding annual meeting of shareholders and until his or her successor shall have been elected and qualified.

Section 10. Resignation. Any director may resign by written notice to the Corporation. The resignation shall be effective upon receipt thereof by the Corporation or at such subsequent time as shall be specified in the notice of resignation.

Section 11. Compensation. Directors, as such, may receive a stated salary or retainer for their services or may receive a reasonable fixed sum, and reasonable expenses of attendance, if any, for attendance at each regular or special meeting of the board of directors. Members of either standing or special committees may be allowed such compensation for attendance at committee meetings as the board of directors may determine.

Section 12. Residency Requirement. The majority of the directors of the Corporation must reside within the State of New Jersey.

Section 13. Integrity of Directors. A person is not qualified to serve as director if he or she: (1) is under indictment for, or has ever been convicted of, a criminal offense involving dishonesty or breach of trust and the penalty for such offense could be imprisonment for more than one year, (2) is a person against whom a banking agency has, within the past ten years, issued a cease and desist order for conduct involving dishonesty or breach of trust and that order is final and not subject to appeal, or (3) has been found either by a regulatory agency whose decision is final and not subject to appeal or by a court to have (i) breached a fiduciary duty involving personal profit, or (ii) committed a willful violation of any law, rule or regulation governing banking, securities, commodities or insurance, or any final cease and desist order issued by a banking, securities, commodities or insurance regulatory agency.

8

ARTICLE III - Executive And Other Committees

Section 1. Appointment. The board of directors, by resolution adopted by a majority of the entire board, may appoint from among its members an executive committee and one or more other committees, each of which shall have one or more members. The designation of any committee and the delegation thereto of authority shall not operate to relieve the board, or any member thereof, of any responsibility imposed by law.

Section 2. Authority.

(a) Except as provided in Section 2(b) of this Article III, the executive committee, when the board of directors is not in session, shall have and may exercise all of the authority of the board of directors except to the extent, if any, that such authority shall be limited by the resolution appointing the executive committee, and any other committee, to the extent provided in the board resolution appointing such committee, the Certificate of Incorporation or these Bylaws, shall have and may exercise all the authority of the board.

(b) No committee of the board of directors shall (i) make, alter or repeal any bylaw of the Corporation; (ii) elect or appoint any director, or remove any officer or director; (iii) submit to shareholders any action that requires shareholders’ approval; or (iv) amend or repeal any resolution theretofore adopted by the board which by its terms is amendable or repealable only by the board.

Section 3. Vacancies; Alternate Committee Members; Tenure; Resignation. The board of directors, by resolution adopted by a majority of the entire board, may (i) fill any vacancy in any committee; (ii) appoint one or more directors to serve as alternate members of any committee, to act in the absence or disability of members of such committee with all the powers of such absent or disabled members; (iii) abolish any such committee at its pleasure; or (iv) remove any director from membership on such committee at any time, with or without cause. Any member of a committee may resign from such committee at any time by giving written notice to the chairman, president or secretary of the Corporation. Unless otherwise specified, such resignation shall take effect upon its receipt; the acceptance of such resignation shall not be necessary to make it effective.

Section 4. Reports to the Board. Each committee of the board shall keep regular minutes of its proceedings, and actions taken at a meeting of any committee shall be reported to the board at its next meeting following such committee meeting; except that, when the meeting of the board is held within two days after the committee meeting, such report shall, if not made at the first meeting, be made to the board at its second meeting following such committee meeting.

Section 5. Procedure. The chairman of the board shall be the presiding officer of the executive committee, and the executive committee may fix its own rules of procedure which shall not be inconsistent with these Bylaws. The board of directors may by resolution establish the composition, duties, constitution, and procedures of any other committee.

ARTICLE IV - Officers

Section 1. Positions. The officers of the Corporation shall consist of a president, a secretary, a treasurer and, if desired, one or more vice presidents. The board of directors may designate one or more vice presidents as executive vice president or senior vice president. The board of directors may also elect or authorize the appointment of such other officers as the business of the Corporation may require. All officers of the Corporation, as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as provided in these Bylaws and as the board

9

of directors may from time to time authorize or determine. In the absence of any such bylaw provision or action by the board of directors, the officers shall have such powers and duties as generally pertain to their respective offices. Any two or more offices may be held by the same person but no officer shall execute, acknowledge, or verify any instrument in more than one capacity if such instrument is required by law or these Bylaws to be executed, acknowledged, or verified by two or more officers.

Section 2. Election and Term of Office. The officers of the Corporation shall be elected annually at the first meeting of the board of directors held after each annual meeting of the shareholders. If the election of officers is not held at such meeting, such election shall be held as soon thereafter as possible. Each officer shall hold office for the term for which he is so elected and until a successor is elected and has qualified, subject to earlier termination by removal or resignation. Election or appointment of an officer, employee, or agent shall not of itself create contractual rights. The board of directors may authorize the Corporation to enter into an employment contract with any officer, but no such contract shall impair the right of the board of directors to remove any officer at any time in accordance with Section 3 of this Article IV.

Section 3. Removal. Any officer may be removed by the board of directors whenever in the board’s judgment the best interests of the Corporation will be served thereby, but such removal, other than for cause, shall be without prejudice to the contractual rights, if any, of the person so removed.

Section 4. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, or otherwise may be filled by the board of directors for the unexpired portion of the term.

Section 5. Remuneration. The remuneration of the officers shall be fixed from time to time by the board of directors, by employment contracts or otherwise.

Section 6. President. The president shall have the authority and the duty to manage the affairs of the Corporation and shall have such other powers and perform such other duties as are delegated to him by the board of directors or as are incidental to his office.

Section 7. Vice President. The vice president or vice presidents, if any, shall perform the duties of the president in his absence or during his disability to act. In addition, the vice presidents shall perform the duties and exercise the powers usually incident to their respective offices and/or such other duties and powers as may be properly assigned to them from time to time by the board of directors or the president.

Section 8. Secretary. The secretary shall have custody of the minutes and records of the Corporation. The secretary shall keep the minutes of all meetings of the shareholders and of the board of directors, shall give such notice as may be required for all such meetings and shall have such other powers and perform such other duties as are delegated to him or her by the board of directors or the president or as are incidental to the office of secretary.

Section 9. Treasurer. The treasurer shall keep correct and complete books of account in accordance with the accounting methods adopted by the board of directors, showing the financial condition of the Corporation and the results of its operations. The treasurer shall have custody of all monies, securities, and other certificates evidencing intangible personal property belonging to the Corporation. He or she shall upon request furnish statements of the current financial condition and the current results of operations of the Corporation and shall have such other powers and perform such other duties as are delegated to him or her by the board of directors or the president or as are incidental to the office of treasurer.

10

Section 10. Other Offices. All other officers shall have such powers and perform such duties as are delegated to them by the board of directors or the president.

ARTICLE V - Contracts, Checks, and Deposits

Section 1. Contracts. To the extent permitted by applicable law, the Certificate of Incorporation or these Bylaws, the board may authorize any officer, employee or agent of the Corporation to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation. Such authority may be general or confined to specific instances.

Section 2. Checks, Drafts, Etc. All checks, drafts, or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the Corporation shall be signed by one or more officers, employees, or agents of the Corporation, which may include facsimile signatures, in such manner as shall from time to time be determined by the board of directors.

Section 3. Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in any duly authorized depositories as the board of directors may select.

ARTICLE VI - Certificates for Shares and Their Transfer

Section 1. Certificates for Shares. Certificates representing shares of capital stock of the Corporation shall be in such form as determined by the board of directors in accordance with the requirements of the BCA. Such certificates shall be signed by, or in the name of the Corporation by, the chairman or vice-chairman of the board, or the president or a vice-president, and may be countersigned by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the Corporation and may be sealed with the seal of the Corporation or a facsimile thereof. Any or all signatures upon a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon such certificate, shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of its issue.

Notwithstanding the foregoing, the Board may provide by resolution that some or all of any or all classes or series of the Corporation’s common stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. In the event that any shares of the Corporation’s capital stock are issued without a certificate, within a reasonable time after the issue or transfer of shares without certificates, the Corporation shall send the shareholder a written statement that includes the information that would be required by the BCA to be stated on a certificate representing the shares.

In the case of a lost or destroyed certificate, a new certificate or uncertificated shares may be issued upon such terms and indemnity to the Corporation as the board of directors may prescribe.

Section 2. Transfer of Shares. Transfer of shares of capital stock of the Corporation shall be made only on its stock transfer books. Authority for such transfer shall be given only by the holder of record thereof or by his legal representative, who shall furnish proper evidence of such authority, or by his attorney thereunto duly authorized by power of attorney duly executed and filed with the Corporation. Such transfer shall be made only, in the case of certificated shares, on surrender for cancellation of the certificate for such shares or, in the case of uncertificated shares, on delivery of proper transfer instructions for the number of shares involved. The person in whose name shares of capital stock stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes.

11

Section 3. Payment for Shares. No certificate shall be issued for any shares until such shares are fully paid.

ARTICLE VII - Fiscal Year

The fiscal year of the Corporation shall end on the 31st day of March of each year.

ARTICLE VIII - Dividends

Subject only to the terms of the Corporation’s Certificate of Incorporation and applicable law, the board of directors may from time to time declare and the Corporation may pay dividends on its outstanding classes of capital stock which are eligible for dividends.

ARTICLE IX - Corporate Seal

The corporate seal of the Corporation, if any, shall be in such form as the board of directors shall prescribe.

ARTICLE X - Amendments

These Bylaws may be amended only as specified in the Corporation’s Certificate of Incorporation.

12

EX-4.0

Exhibit 4.0

COMMON STOCK	COMMON STOCK
CERTIFICATE NO.	SEE REVERSE FOR CERTAIN DEFINITIONS
	CUSIP

DELANCO BANCORP, INC.

INCORPORATED UNDER THE LAWS OF THE STATE OF NEW JERSEY

THIS CERTIFIES THAT [SPECIMEN]

is the owner of:

FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK,

$0.01 PAR VALUE PER SHARE, OF DELANCO BANCORP, INC.

The shares represented by this certificate are transferable only on the stock transfer books of Delanco Bancorp, Inc. (the “Company”) by the holder of record hereof, or by his duly authorized attorney or legal representative, upon the surrender of this certificate properly endorsed. This certificate and the shares represented hereby are issued and shall be held subject to all the provisions of the Certificate of Incorporation of the Company and any amendments thereto (copies of which are on file with the Corporate Secretary of the Company), to all of which provisions the holder by acceptance hereof, assents. This certificate is not valid until countersigned and registered by the Company’s Transfer Agent and Registrar.

The shares evidenced by this certificate are not of an insurable type and are not insured by the Federal Deposit Insurance Corporation.

IN WITNESS WHEREOF, DELANCO BANCORP, INC. has caused this certificate to be executed by the facsimile signatures of its duly authorized officers and has caused a facsimile of its corporate seal to be hereunto affixed.

Dated:	[SEAL]
President and Chief Executive Officer		Corporate Secretary

The shares represented by this certificate are subject to a limitation contained in the Certificate of Incorporation to the effect that in no event shall any record owner of any outstanding common stock which is beneficially owned, directly or indirectly, by a person who beneficially owns in excess of 10% of the outstanding shares of common stock (the “Limit”) be entitled or permitted to any vote in respect of shares held in excess of the Limit.

The Board of Directors of the Company is authorized by resolution(s), from time to time adopted, to provide for the issuance of serial preferred stock in series and to fix and state the voting powers, designations, preferences and relative, participating, optional, or other special rights of the shares of each such series and the qualifications, limitations and restrictions thereof. The Company will furnish to any shareholder upon request and without charge a full description of each class of stock and any series thereof.

The shares represented by this Certificate may not be cumulatively voted on any matter.

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM - as tenants in common		UNIF GIFTS MIN ACT -		custodian
			(Cust)		(Minor)
TEN ENT - as tenants by the entireties		under Uniform Gifts to Minors Act
					(State)
JT TEN -	as joint tenants with right of survivorship and not as tenants in common

Additional abbreviations may also be used though not in the above list.

For value received                      hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFICATION NUMBER OF ASSIGNEE

Please print or typewrite name and address including postal zip code of assignee.

                shares of the common stock represented by this certificate and do hereby irrevocably constitute and appoint                     , attorney, to transfer the said stock on the books of the within-named corporation with full power of substitution in the premises.

DATED
	NOTICE: The signature to this assignment must correspond with the name as written upon the face of the certificate in every particular without alteration or enlargement or any change whatever.

SIGNATURE GUARANTEED:
	THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15

EX-10.1

Exhibit 10.1

FORM OF

ESOP LOAN AGREEMENT

THIS LOAN AGREEMENT (“Loan Agreement”) is made and entered into as of the [#] day of [month, year], by and between the DELANCO FEDERAL SAVINGS BANK EMPLOYEE STOCK OWNERSHIP PLAN TRUST (“Borrower”), a trust forming part of the Delanco Federal Savings Bank Employee Stock Ownership Plan (“ESOP”); and DELANCO BANCORP, INC. (“Lender”), a corporation organized and existing under the laws of New Jersey.

W I T N E S S E T H

WHEREAS, the Borrower is authorized to purchase shares of common stock of Delanco Bancorp, Inc. (“Common Stock”), either directly from Delanco Bancorp, Inc. or in open market purchases in an amount not to exceed [amount] shares of Common Stock.

WHEREAS, the Borrower is authorized to borrow funds from the Lender for the purpose of financing authorized purchases of Common Stock; and

WHEREAS, the Lender is willing to make a loan to the Borrower for such purpose.

NOW, THEREFORE, the parties agree hereto as follows:

ARTICLE I

DEFINITIONS

The following definitions shall apply for purposes of this Loan Agreement, except to the extent that a different meaning is plainly indicated by the context:

“Business Day” means any day other than a Saturday, Sunday or other day on which banks are authorized or required to close under federal or local law or regulation.

“Code” means the Internal Revenue Code of 1986, as amended (including the corresponding provisions of any succeeding law).

“Default” means an event or condition which would constitute an Event of Default. The determination as to whether an event or condition would constitute an Event of Default shall be determined without regard to any applicable requirements of notice or lapse of time.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended (including the corresponding provisions of any succeeding law).

“Event of Default” means an event or condition described in Article 5 of this Loan Agreement.

“Loan” means the loan described in Section 2.1 of this Loan Agreement.

“Loan Documents” means, collectively, the Loan Agreement, the Promissory Note and the Pledge Agreement and all other documents now or hereafter executed and delivered in connection with such documents, including all amendments, modifications and supplements of or to all such documents.

“Pledge Agreement” means the agreement described in Section 2.8(a) of this Loan Agreement.

1

“Principal Amount” means the face amount of the Promissory Note, determined as set forth in Section 2.1(c) of this Loan Agreement.

“Promissory Note” means the promissory note described in Section 2.3 of this Loan Agreement.

“Register” means the register described in Section 2.9 of this Loan Agreement.

ARTICLE II

THE LOAN; PRINCIPAL AMOUNT;

INTEREST; SECURITY; INDEMNIFICATION

Section 2.1 The Loan; Principal Amount.

(a) The Lender hereby agrees to lend to the Borrower such amount, and at such time, as shall be determined under this Section 2.1; provided, however, that in no event shall the aggregate amount lent under this Loan Agreement from time to time exceed the greater of (i) [amount] or (ii) the aggregate amount paid by the Borrower to purchase up to [number] shares of Common Stock.

(b) Subject to the limitations of Section 2.1(a), the Borrower shall determine the amounts borrowed under this Agreement, and the time at which such borrowings are effected. Each such determination shall be evidenced in a writing which shall set forth the amount to be borrowed and the date on which the Lender shall disburse such amount, and such writing shall be furnished to the Lender by notice from the Borrower. The Lender shall disburse to the Borrower the amount specified in each such notice on the date specified therein or, if later, as promptly as practicable following the Lender’s receipt of such notice; provided, however, that the Lender shall have no obligation to disburse funds pursuant to this Agreement following the occurrence of a Default or an Event of Default until such time as such Default or Event of Default shall have been cured.

(c) For all purposes of this Loan Agreement, the Principal Amount on any date shall be equal to the excess, if any, of:

(i) the aggregate amount disbursed by the Lender pursuant to Section 2.1(b) on or before such date; over

(ii) the aggregate amount of any repayments of such amounts made before such date.

The Lender shall maintain on the Register a record of, and shall record in the Promissory Note, the Principal Amount, any changes in the Principal Amount and the effective date of any changes in the Principal Amount.

Section 2.2 Interest.

(a) The Borrower shall pay to the Lender interest on the Principal Amount, for the period commencing with the first disbursement of funds under this Loan Agreement and continuing until the Principal Amount shall be paid in full, at the rate of [rate] per annum. Interest payable under this Agreement shall be computed on the basis of a year of 365 days and actual days elapsed (including the first day but excluding the last) occurring during the period to which the computation relates.

(b) Accrued interest on the Principal Amount shall be payable by the Borrower on the dates set forth in Schedule I to the Promissory Note. All interest on the Principal Amount shall be paid by the Borrower in immediately available funds.

2

(c) Anything in this Loan Agreement or the Promissory Note to the contrary notwithstanding, the obligation of the Borrower to make payments of interest shall be subject to the limitation that payments of interest shall not be required to be made to the Lender to the extent that the Lender’s receipt thereof would not be permissible under the law or laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Any such payment referred to in the preceding sentence shall be made by the Borrower to the Lender on the earliest interest payment date or dates on which the receipt thereof would be permissible under the laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Such deferred interest shall not bear interest.

Section 2.3 Promissory Note.

The Loan shall be evidenced by the Promissory Note of the Borrower attached hereto as an exhibit payable to the order of the lender in the Principal Amount and otherwise duly completed.

Section 2.4 Payment of Trust Loan.

The Principal Amount of the Loan shall be repaid in accordance with Schedule I to the Promissory Note on the dates specified therein until fully paid.

Section 2.5 Prepayment.

The Borrower shall be entitled to prepay the Loan in whole or in part, at any time and from time to time; provided, however, that the Borrower shall give notice to the Lender of any such prepayment; and provided, further, that any partial prepayment of the Loan shall be in an amount not less than $1,000. Any such prepayment shall be: (a) permanent and irrevocable; (b) accompanied by all accrued interest through the date of such prepayment; (c) made without premium or penalty; and (d) applied on the inverse order of the maturity of the installment thereof unless the Lender and the Borrower agree to apply such prepayments in some other order.

Section 2.6 Method of Payments.

(a) All payments of principal, interest, other charges (including indemnities) and other amounts payable by the Borrower hereunder shall be made in lawful money of the United States, in immediately available funds, to the Lender at the address specified in or pursuant to this Loan Agreement for notices to the Lender, on the date on which such payment shall become due. Any such payment made on such date but after such time shall, if the amount paid bears interest, and except as expressly provided to the contrary herein, be deemed to have been made on, and interest shall continue to accrue and be payable thereon until, the next succeeding Business Day. If any payment of principal or interest becomes due on a day other than a Business Day, such payment may be made on the next succeeding Business Day, and when paid, such payment shall include interest to the day on which payment is in fact made.

(b) Notwithstanding anything to the contrary contained in this Loan Agreement or the Promissory Note, the Borrower shall not be obligated to make any payment, repayment or pre-payment on the Promissory Note if doing so would cause the ESOP to cease to be an employee stock ownership plan within the meaning of Section 4975(e)(7) of the Code or qualified under Section 401(a) of the Code or cause the Borrower to cease to be a tax exempt trust under Section 501(a) of the Code or if such act or failure to act would cause the Borrower to engage in any “prohibited transaction” as such term is defined in the Section 4975(c) of the Code and the regulations promulgated thereunder which is not exempted by Section 4975(c)(2) or (d) of the Code and the regulations promulgated thereunder or in Section 406 of ERISA and the regulations promulgated thereunder which is not exempted by Section 408(b) of ERISA and the regulations promulgated thereunder; provided, however, that in each case, the Borrower, may act or refrain from acting pursuant to this Section 2.6(b) on the basis of an opinion of counsel. The Borrower may consult with counsel, and any opinion of such counsel shall be full and complete authorization and

3

protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance with such opinion of counsel. Nothing contained in this Section 2.6(b) shall be construed as imposing a duty on the Borrower to consult with counsel. Any obligation of the Borrower to make any payment, repayment or prepayment on the Promissory Note or refrain from taking any other act hereunder or under the Promissory Note which is excused pursuant to this Section 2.6(b) shall be considered a binding obligation of the Borrower, or both, as the case may be, for the purposes of determining whether a Default or Event of Default has occurred hereunder or under the Promissory Note and nothing in this Section 2.6(b) shall be construed as providing a defense to any remedies otherwise available upon a Default or an Event of Default hereunder (other than the remedy of specific performance).

Section 2.7 Use of Proceeds of Loan.

The entire proceeds of the Loan shall be used solely for acquiring shares of Common Stock, and for no other purpose whatsoever.

Section 2.8 Security.

(a) In order to secure the due payment and performance by the Borrower of all of its obligations under this Loan Agreement, simultaneously with the execution and delivery of this Loan Agreement by the Borrower, the Borrower shall:

(i) pledge to the Lender as Collateral (as defined in the Pledge Agreement), and grant to the Lender a first priority lien on and security interest in, the Common Stock purchased with the Principal Amount, by the execution and delivery to the lender of the Pledge Agreement attached hereto as an exhibit; and

(ii) execute and deliver, or cause to be executed and delivered, such other agreement, instruments and documents as the Lender may reasonably require in order to effect the purposes of the Pledge Agreement and this Loan Agreement.

(b) The Lender shall release from encumbrance under the Pledge Agreement and transfer to the Borrower, as of the date on which any payment or repayment of the Principal Amount is made, a number of shares of Common Stock held as Collateral determined pursuant to the applicable provisions of the ESOP.

Section 2.9 Registration of the Promissory Note.

(a) The Lender shall maintain a Register providing for the registration of the Principal Amount and any stated interest and of transfer and exchange of the Promissory Note. Transfer of the Promissory Note may be effected only by the surrender of the old instrument and either the reissuance by the Borrower of the old instrument to the new holder or the issuance by the Borrower of a new instrument to the new holder. The old Promissory Note so surrendered shall be canceled by the Lender and returned to the Borrower after such cancellation.

(b) Any new Promissory Note issued pursuant to Section 2.9(a) shall carry the same rights to interest (unpaid and to accrue) carried by the Promissory Note so transferred or exchanged so that there will not be any loss or gain of interest on the note surrender. Such new Promissory Note shall be subject to all of the provisions and entitled to all of the benefits of this Agreement. Prior to due presentment for registration or transfer, the Borrower may deem and treat the registered holder of any Promissory Note as the holder thereof for purposes of payment and other purposes. A notation shall be made on each new Promissory Note of the amount of all payments of principal and interest theretofore paid.

4

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE BORROWER

The Borrower hereby represents and warrants to the Lender as follows:

Section 3.1 Power, Authority, Consents.

The Borrower has the power to execute, deliver and perform this Loan Agreement, the Promissory Note and Pledge Agreement, all of which have been duly authorized by all necessary and proper corporate or other action.

Section 3.2 Due Execution, Validity, Enforceability.

Each of the Loan Documents, including, without limitation, this Loan Agreement, the Promissory Note and the Pledge Agreement, has been duly executed and delivered by the Borrower; and each constitutes the valid and legally binding obligation of the Borrower, enforceable in accordance with its terms.

Section 3.3 Properties, Priority of Liens.

The liens which have been created and granted by the Pledge Agreement constitute valid, first liens on the properties and assets covered by the Pledge Agreement, subject to no prior or equal lien.

Section 3.4 No Defaults, Compliance with Laws.

The Borrower is not in default in any material respect under any agreement, ordinance, resolution, decree, bond, note, indenture, order or judgment to which it is a party or by which it is bound, or any other agreement or other instrument by which any of the properties or assets owned by it is materially affected.

Section 3.5 Purchase of Common Stock.

Upon consummation of any purchase of Common Stock by the Borrower with the proceeds of the Loan, the Borrower shall acquire valid, legal and marketable title to all of the Common Stock so purchased, free and clear of any liens, other than a pledge to the Lender of the Common Stock so purchased pursuant to the Pledge Agreement. Neither the execution and delivery of the Loan Documents nor the performance of any obligation thereunder violates any provisions of law or conflicts with or results in a breach of or creates (with or without the giving of notice of lapse of time, or both) a default under any agreement to which the Borrower is a party or by which it is bound or any of its properties is affected. No consent of any federal, state, or local governmental authority, agency, or other regulatory body, the absence of which could have a materially adverse effect on the Borrower or the Trustee, is or was required to be obtained in connection with the execution, delivery, or performance of the Loan Documents and the transaction contemplated therein or in connection therewith, including without limitation, with respect to the transfer of the shares of Common Stock purchased with the proceeds of the Loan pursuant thereto.

Section 3.6 ESOP; Contributions.

The ESOP will qualify as an “employee stock ownership plan” as defined in Section 4975(e)(7) of the Code. The ESOP provides that the ESOP sponsor may make contributions to the ESOP in an amount necessary to enable the Trustee to amortize the Loan in accordance with the terms of the Promissory Note; provided, however, that no such contributions shall be required if they would adversely affect the qualification of the ESOP under Section 401(a) of the Code.

5

Section 3.7 Trustee.

The trustee of the ESOP has been duly appointed by the ESOP sponsor.

Section 3.8 Compliance with Laws; Actions.

Neither the execution and delivery by the Borrower of this Loan Agreement or any instruments required thereby, nor compliance with the terms and provisions of any such documents by the lender, constitutes a violation of any provision of any law or any regulation, order, writ, injunction or decree of any court or governmental instrumentality, or an event of default under any agreement, to which the Borrower is a party, to which the Borrower is bound or to which the Borrower is subject, which violation or event of default would have a material adverse effect on the Borrower. There is no action or proceeding pending or threatened against either the ESOP or the Borrower before any court or administrative agency.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE LENDER

The Lender hereby represents and warrants to the Borrower as follows:

Section 4.1 Power, Authority, Consents.

The Lender has the power to execute, deliver and perform this Loan Agreement, the Pledge Agreement and all documents executed by the Lender in connection with the Loan, all of which have been duly authorized by all necessary and proper corporate or other action. No consent, authorization or approval or other action by any governmental authority or regulatory body, and no notice by the Lender to, or filing by the Lender with, any governmental authority or regulatory body is required for the due execution, delivery and performance of this Loan Agreement.

Section 4.2 Due Execution, Validity, Enforceability.

This Loan Agreement and the Pledge Agreement have been duly executed and delivered by the Lender, and each constitutes a valid and legally binding obligation of the Lender, enforceable in accordance with its terms.

ARTICLE V

EVENTS OF DEFAULT

Section 5.1 Events of Default under Loan Agreement.

Each of the following events shall constitute an “Event of Default” hereunder:

(a) Failure to make any payment or mandatory prepayment of principal of the Promissory Note when due, or failure to make any payment of interest on the Promissory Note not later than five (5) Business Days after the date when due.

(b) Failure by the Borrower to perform or observe any term, condition or covenant of this Loan Agreement or of any of the other Loan Documents, including, without limitation, the Promissory Note and the Pledge Agreement.

(c) Any representation or warranty made in writing to the Lender in any of the Loan Documents, or any certificate, statement or report made or delivered in compliance with this Loan Agreement, shall have been false or misleading in any material respect when made or delivered.

6

Section 5.2 Lender’s Rights upon Event of Default.

If an Event of Default under this Loan Agreement shall occur and be continuing, the Lender shall have no rights to assets of the Borrower other than: (a) contributions (other than contributions of Common Stock) that are made by the ESOP sponsor to enable the Borrower to meet its obligations pursuant to this Loan Agreement and earnings attributable to the investment of such contributions and (b) “Eligible Collateral” (as defined in the Pledge Agreement); provided, however, that: (i) the value of the Borrower’s assets transferred to the Lender following an Event of Default in satisfaction of the due and unpaid amount of the Loan shall not exceed the amount in default (without regard to amounts owing solely as a result of any acceleration of the Loan); (ii) the Borrower’s assets shall be transferred to the Lender following an Event of Default only to the extent of the failure of the Borrower to meet the payment schedule of the Loan; and (iii) all rights of the Lender to the Common Stock purchased with the proceeds of the Loan covered by the Pledge Agreement following an Event of Default shall be governed by the terms of the Pledge Agreement.

ARTICLE VI

MISCELLANEOUS PROVISIONS

Section 6.1 Payments Due to the Lender.

If any amount is payable by the Borrower to the Lender pursuant to any indemnity obligation contained herein, then the Borrower shall pay, at the time or times provided therefor, any such amount and shall indemnify the Lender against and hold it harmless from any loss or damage resulting from or arising out of the nonpayment or delay in payment of any such amount. If any amounts as to which the Borrower has so indemnified the Lender hereunder shall be assessed or levied against the Lender, the Lender may notify the Borrower and make immediate payment thereof, together with interest or penalties in connection therewith, and shall thereupon be entitled to and shall receive immediate reimbursement therefor from the Borrower, together with interest on each such amount as provided for in Section 2.2(c) of this Loan Agreement. Notwithstanding any other provision contained in this Loan Agreement, the covenants and agreements of the Borrower contained in this Section 6.1 shall survive: (a) payment of the Promissory Note and (b) termination of this Loan Agreement.

Section 6.2 Payments.

All payments hereunder and under the Promissory Note shall be made without set-off or counterclaim and in such amounts as may be necessary in order that all such payments shall not be less than the amounts otherwise specified to be paid under this Loan Agreement and the Promissory Note, subject to any applicable tax withholding requirements. Upon payment in full of the Promissory Note, the Lender shall mark such Promissory Note “Paid” and return it to the Borrower.

Section 6.3 Survival.

All agreements, representations and warranties made herein shall survive the delivery of this Loan Agreement and the Promissory Note.

Section 6.4 Modifications, Consents and Waivers; Entire Agreement.

No modification, amendment or waiver of or with respect to any provision of this Loan Agreement, the Promissory Note, the Pledge Agreement, or any of the other Loan Documents, nor consent to any departure from any of the terms or conditions thereof, shall in any event be effective unless it shall be in writing and signed by the party against whom enforcement thereof is sought. Any such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No consent to or demand on a party in any case shall, of itself, entitle it to any other or further notice or

7

demand in similar or other circumstances. This Loan Agreement embodies the entire agreement and understanding between the Lender and the Borrower and supersedes all prior agreements and understandings relating to the subject matter hereof.

Section 6.5 Remedies Cumulative.

Each and every right granted to the Lender hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of the Lender or the holder of the Promissory Note to exercise, and no delay in exercising, any right shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or future exercise thereof or the exercise of any other right. The due payment and performance of the obligations under the Loan Documents shall be without regard to any counterclaim, right of offset or any other claim whatsoever which the Borrower may have against the Lender and without regard to any other obligation of any nature whatsoever which the Lender may have to the Borrower, and no such counterclaim or offset shall be asserted by the Borrower in any action, suit or proceeding instituted by the Lender for payment or performance of such obligations.

Section 6.6 Further Assurances; Compliance with Covenants.

At any time and from time to time, upon the request of the Lender, the Borrower shall execute, deliver and acknowledge or cause to be executed, delivered and acknowledged, such further documents and instruments and do such other acts and things as the Lender may reasonably request in order to fully effect the terms of this Loan Agreement, the Promissory Note, the Pledge Agreement, the other Loan Documents and any other agreements, instruments and documents delivered pursuant hereto or in connection with the Loan.

Section 6.7 Notices.

Except as otherwise specifically provided for herein, all notices, requests, reports and other communications pursuant to this Loan Agreement shall be in writing, either by letter (delivered by hand or commercial messenger service or sent by registered or certified mail, return receipt requested, except for routine reports delivered in compliance with Article VI hereof which may be sent by ordinary first-class mail) or telex or telecopier addressed as follows:

(a) If to the Borrower:

Delanco Federal Savings Bank Employee Stock Ownership Plan Trust

c/o Home Federal Bank, Trustee

501 Washington Street

P.O. Box 408

Columbus, Indiana 47202-0408

(b) If to the Lender:

Delanco Bancorp, Inc.

615 Burlington Avenue

Delanco, New Jersey 08075

Any notice, request or communication hereunder shall be deemed to have been given on the day on which it is delivered by hand or by commercial messenger service, or sent by telex or telecopier, to such party at its address specified above, or, if sent by mail, on the third Business Day after the day deposited in the mail, postage prepaid, addressed as aforesaid. Any party may change the person or address to whom or which notices are to be given hereunder, by notice duly given hereunder; provided, however, that any such notice shall be deemed to have been given only when actually received by the party to whom it is addressed.

8

Section 6.8 Counterparts.

This Loan Agreement may be signed in any number of counterparts which, when taken together, shall constitute one and the same document.

Section 6.9 Construction; Governing Law.

The headings used in the table of contents and in this Loan Agreement are for convenience only and shall not be deemed to constitute a part hereof. All uses herein of any gender or of singular or plural terms shall be deemed to include uses of the other genders or plural or singular terms, as the context may require. All references in this Loan Agreement of an Article or Section shall be to an Article or Section of this Loan Agreement, unless otherwise specified. This Loan Agreement, the Promissory Note, the Pledge Agreement and the other Loan Documents shall be governed by, and construed and interpreted in accordance with, the laws of the State of New Jersey.

Section 6.10 Severability.

Wherever possible, each provision of this Loan Agreement shall be interpreted in such manner as to be effective and valid under applicable law; however, the provisions of this Loan Agreement are severable, and if any clause or provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provisions in this Loan Agreement in any jurisdiction. Each of the covenants, agreements and conditions contained in this Loan Agreement are independent, and compliance by a party with any of them shall not excuse non-compliance by such party with any other. The Borrower shall not take any action the effect of which shall constitute a breach or violation of any provision of this Loan Agreement.

Section 6.11 Binding Effect: No Assignment or Delegation.

This Loan Agreement shall be binding upon and inure to the benefit of the Borrower and its successors and the Lender and its successors and assigns. The rights and obligations of the Borrower under this Agreement shall not be assigned or delegated without the prior written consent of the Lender, and any purported assignment or delegation without such consent shall be void.

[Signature page follows]

9

IN WITNESS WHEREOF, the parties have caused this Loan Agreement to be executed as of the date first written above.

DELANCO FEDERAL SAVINGS BANK EMPLOYEE STOCK OWNERSHIP PLAN TRUST
Authorized Trust Officer
DELANCO BANCORP, INC.
By:
	James E. Igo

10

FORM OF

ESOP PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT (“Pledge Agreement”) is made as of the [#] day of [month, year], by and between the DELANCO FEDERAL SAVINGS BANK EMPLOYEE STOCK OWNERSHIP PLAN TRUST (“Pledgor”), and DELANCO BANCORP, INC. (“Pledgee”).

W I T N E S S E T H

WHEREAS, this Pledge Agreement is being executed and delivered to the Pledgee pursuant to the terms of a Loan Agreement (“Loan Agreement”), by and between the Pledgor and the Pledgee;

NOW, THEREFORE, in consideration of the mutual agreements contained herein and in the Loan Agreement, the parties hereto do hereby covenant and agree as follows:

Section 1. Definitions. The following definitions shall apply for purposes of this Pledge Agreement, except to the extent that a different meaning is plainly indicated by the context; all capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Loan Agreement:

“Collateral” shall mean the Pledged Shares and, subject to Section 5 hereof, and to the extent permitted by applicable law, all rights with respect thereto, and all proceeds of such Pledged Shares and rights.

“ESOP” shall mean the Delanco Federal Savings Bank Employee Stock Ownership Plan.

“Event of Default” shall mean an event so defined in the Loan Agreement.

“Liabilities” shall mean all the obligations of the Pledgor to the Pledgee, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, under the Loan Agreement and the Promissory Note.

“Pledged Shares” shall mean all the Shares of Common Stock of the Pledgee purchased by the Pledgor with the proceeds of the loan made by the Pledgee to the Pledgor pursuant to the Loan Agreement, but excluding any such shares previously released pursuant to Section 4 of this Pledge Agreement.

Section 2. Pledge. To secure the payment of and performance of all the Liabilities, the Pledgor hereby pledges to the Pledgee, and grants to the Pledgee, a security interest in, and lien upon, the Collateral.

Section 3. Representations and Warranties of the Pledgor. The Pledgor represents, warrants, and covenants to the Pledgee as follows:

(a) the execution, delivery and performance of this Pledge Agreement and the pledging of the Collateral hereunder do not and will not conflict with, result in a violation of, or constitute a default under, any agreement binding upon the Pledgor;

(b) the Pledged Shares are and will continue to be owned by the Pledgor free and clear of any liens or rights of any other person except the lien hereunder and under the Loan Agreement in favor of the Pledgee, and the security interest of the Pledgee in the Pledged Shares and the proceeds thereof is and will continue to be prior to and senior to the rights of all others;

(c) this Pledge Agreement is the legal, valid, binding and enforceable obligation of the Pledgor in accordance with its terms;

(d) the Pledgor shall, from time to time, upon request of the Pledgee, promptly deliver to the Pledgee such stock powers, proxies, and similar documents, satisfactory in form and substance to the Pledgee, with respect to the Collateral as the Pledgee may reasonably request; and

(e) subject to the first sentence of Section 4(b) of this Pledge Agreement, the Pledgor shall not, so long as any Liabilities are outstanding, sell, assign, exchange, pledge or otherwise transfer or encumber any of its rights in and to any of the Collateral.

Section 4. Eligible Collateral.

(a) As used herein the term “Eligible Collateral” shall mean the amount of Collateral which has an aggregate fair market value equal to the amount by which the Pledgor is in default (without regard to any amounts owing solely as the result of an acceleration of the Loan Agreement) or such lesser amount of Collateral as may be required pursuant to Section 13 of this Pledge Agreement.

(b) The Pledged Shares shall be released from this Pledge Agreement in a manner conforming to the requirements of Treasury Regulations Section 54.4975-7(b)(8), as the same may be from time to time amended or supplemented, and the applicable provisions of the ESOP. Subject to the Treasury Regulations, the Pledgee may from time to time, after any Default or Event of Default, and without prior notice to the Pledgor, transfer all or any part of the Eligible Collateral in the name of the Pledgee or its nominee, without disclosing that such Eligible Collateral is subject to any rights of the Pledgor and may from time to time, whether before or after any of the Liabilities shall become due and payable, without notice to the Pledgor, take all or any of the following actions: (i) notify the parties obligated on any of the Eligible Collateral to make payment to the Pledgee of any amounts due or due to become due thereunder, (ii) release or exchange all or any part of the Eligible Collateral, or compromise or extend or renew for any period (whether or not longer than the original period) any obligations of any nature of any party with respect thereto, and (iii) take control of any proceeds of the Eligible Collateral.

Section 5. Delivery.

(a) The Pledgor shall deliver to the Pledgee upon execution of this Pledge Agreement (i) either (A) certificates for the Pledged Shares, each certificate duly signed in blank by the Pledgor or accompanied by a stock transfer power duly signed in blank by the Pledgor and each such certificate accompanied by all required documentary or stock transfer tax stamps or (B) if the Trustee does not yet have possession of the Pledged Shares, an assignment by the Pledgor of all the Pledgor’s rights to and interest in the Pledged Shares and (ii) an irrevocable proxy, in form and substance satisfactory to the Pledgee, signed by the Pledgor with respect to the Pledged Shares.

(b) Subject to Section 6 of this Pledge Agreement, (i) the Pledgor shall be entitled to exercise any and all voting and other rights pertaining to the Collateral or any part thereof for any purpose not inconsistent with the terms of this Pledge Agreement, and (ii) the Pledgor shall be entitled to receive any and all cash dividends or other distributions paid in respect of the Collateral.

Section 6. Events of Default.

(a) If a Default or Event of Default shall be existing, in addition to the rights it may have under the Loan Agreement, the Promissory Note, and this Pledge Agreement, or by virtue of any other instrument, (i) the Pledgee may exercise, with respect to the Eligible Collateral, from time to time, any rights and remedies available to it under the Uniform Commercial Code as in effect from time to time in the Commonwealth of Pennsylvania or otherwise available to it and (ii) the Pledgee shall have the right, for and in the name, place and stead of the Pledgor, to execute endorsement, assignments, stock powers

2

and other instruments of conveyance or transfer with respect to all or any of the Eligible Collateral. Written notification of intended disposition of any of the Eligible Collateral shall be given by the Pledgee to the Pledgor at least three (3) Business Days before such disposition. No action of the Pledgee permitted hereunder shall impair or affect its rights in and to the Eligible Collateral. All rights and remedies of the Pledgee expressed hereunder are in addition to all other rights and remedies possessed by it, including, without limitation, those contained in the documents referred to in the definition of Liabilities in Section 1 hereof.

(b) In any sale of any of the Eligible Collateral after a Default or an Event of Default shall have occurred, the Pledgee is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary in order to avoid violation of applicable law (including, without limitation, compliance with such procedures as may restrict the number of prospective bidders and purchasers or further restrict such prospective bidders or purchasers to persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Eligible Collateral), or in order to obtain such required approval of the sale or of the purchase by any governmental regulatory authority or official, and the Pledgor further agrees that such compliance shall not result in such sale being considered or deemed not to have been made in a commercially reasonable manner, nor shall the Pledgee be liable or accountable to the Pledgor for any discount allowed by reason of the fact that such Eligible Collateral is sold in compliance with any such limitation or restriction.

Section 7. Payment in Full. Upon the payment in full of all outstanding Liabilities, this Pledge Agreement shall terminate and the Pledgee shall forthwith assign, transfer and deliver to the Pledgor, against receipt and without recourse to the Pledgee, all Collateral then held by the Pledgee pursuant to the Pledge Agreement.

Section 8. No Waiver. No failure or delay on the part of the Pledgee in exercising any right or remedy hereunder or under any other document which confers or grants any rights to the Pledgee in respect of the Liabilities shall operate as a waiver thereof nor shall any single or partial exercise of any such rights or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy of the Pledgee.

Section 9. Binding Effect; No Assignment or Delegation. This Pledge Agreement shall be binding upon and inure to the benefit of the Pledgor, the Pledgee and their respective successors and assigns, except that the Pledgor may not assign or transfer its rights hereunder without the prior written consent of the Pledgee (which consent shall not unreasonably be withheld). Each duty or obligation of the Pledgor to the Pledgee pursuant to the provisions of this Pledge Agreement shall be performed in favor of any person or entity designated by the Pledgee, and any duty or obligation of the Pledgee to the Pledgor may be performed by any other person or entity designated by the Pledgee.

Section 10. Governing Law. This Pledge Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey applicable to agreements to be performed wholly within the State of New Jersey.

Section 11. Notices. All notices, requests, instructions or documents hereunder shall be in writing and delivered personally or sent by United States mail, registered or certified, return receipt requested, with proper postage prepaid as follows:

(a) If to the Pledgee:

Delanco Bancorp, Inc.

615 Burlington Avenue

Delanco, New Jersey 08075

3

(b) If to the Pledgor:

Delanco Federal Savings Bank Employee Stock Ownership Plan Trust

c/o Home Federal Bank, Trustee

501 Washington Street

P.O. Box 408

Columbus, Indiana 47202-0408

or at such other address as either of the parties may designate by written notice to the other party. If delivered personally, the date on which a notice, request, instruction or document is delivered shall be the date on which such delivery is made, and, if delivered by mail, the date on which such notice, request, instruction, or document is deposited in the mail shall be the date of delivery. Each notice, request, instruction or document shall bear the date on which it is delivered.

Section 12. Interpretation. Wherever possible each provision of this Pledge Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision herein shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions hereof.

Section 13. Construction. All provisions hereof shall be construed so as to maintain (a) the ESOP as a tax-qualified leveraged employee stock ownership plan under Sections 401(a) and 4975(e)(7) of the Internal Revenue Code of 1986 (the “Code”), (b) the Trust as exempt from taxation under Section 501(a) of the Code and (c) the loan as an exempt loan under Section 54.4975-7(b) of the Treasury Regulations and as described in Department of Labor Regulation Section 2550.408b-3.

[Signature page follows]

4

IN WITNESS WHEREOF, this Pledge Agreement has been duly executed by the parties hereto as of the day and year first above written.

DELANCO FEDERAL SAVINGS BANK
EMPLOYEE STOCK OWNERSHIP PLAN TRUST
Authorized Trust Officer
DELANCO BANCORP, INC.
By:
	James E. Igo

5

FORM OF

ESOP PROMISSORY NOTE

FOR VALUE RECEIVED, the undersigned, the DELANCO FEDERAL SAVINGS BANK EMPLOYEE STOCK OWNERSHIP PLAN TRUST (the “Borrower”), hereby promises to pay to the order of DELANCO BANCORP, INC. (the “Lender”) up to $[amount] payable in accordance with the Loan Agreement made and entered into between the Borrower and the Lender of even date herewith (“Loan Agreement”) pursuant to which this Promissory Note is issued.

The Principal Amount of this Promissory Note shall be payable in accordance with the schedule attached hereto (“Schedule I”).

This Promissory Note shall bear interest at the rate per annum set forth or established under the Loan Agreement, such interest to be payable in accordance with Schedule I.

Anything herein to the contrary notwithstanding, the obligation of the Borrower to make payments of interest shall be subject to the limitation that payments of interest shall not be required to be made to the Lender to the extent that the Lender’s receipt thereof would not be permissible under the law or laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Any such payments of interest which are not made as a result of the limitation referred to in the preceding sentence shall be made by the Borrower to the Lender on the earliest interest payment date or dates on which the receipt thereof would be permissible under the laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Such deferred interest shall not bear interest.

Payments of both principal and interest on this Promissory Note are to be made at the principal office of the Lender or such other place as the holder hereof shall designate to the Borrower in writing, in lawful money of the United States of America in immediately available funds.

Failure to make any payments of principal on this Promissory Note when due, or failure to make any payment of interest on this Promissory Note not later than five (5) Business Days after the date when due, shall constitute a default hereunder, whereupon the principal amount of accrued interest on this Promissory Note shall immediately become due and payable in accordance with the terms of the Loan Agreement.

This Promissory Note is secured by a Pledge Agreement between the Borrower and the Lender of even date herewith and is entitled to the benefits thereof.

DELANCO FEDERAL SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN TRUST

Authorized Trust Officer

EX-21.0

Exhibit 21.0

LIST OF SUBSIDIARIES

Registrant:            Delanco Bancorp, Inc.

Subsidiaries	Percentage     Ownership	Jurisdiction or     State of Incorporation
Delanco Federal Savings Bank	100%	United States
DFSB Properties, LLC (1)	100%	New Jersey

(1) Wholly-owned subsidiary of Delanco Federal Savings Bank.

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use in this Registration Statement on Form S-1 filed with the Securities and Exchange Commission and the Application for Conversion on Form AC (“Form AC”) filed with the Board of Governors of the Federal Reserve System of our report dated June 7, 2013 on the financial statements of Delanco Bancorp, Inc. We also consent to the references to us under the heading “Experts” in this Registration Statement on Form S-1 and Form AC.

Philadelphia, Pennsylvania

June 11, 2013

EX-23.3

Exhibit 23.3

June 11, 2013

Boards of Directors

Delanco MHC

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

615 Burlington Avenue

Delanco, New Jersey 08075

Members of the Boards of Directors:

We hereby consent to the use of our firm’s name in the Form AC Application for Conversion for Delanco, MHC, and in the Form S-1 Registration Statement for Delanco Bancorp, Inc., in each case as amended and supplemented. We also hereby consent to the inclusion of, summary of and reference to our Appraisal and our statements concerning subscription rights and liquidation rights in such filings including the prospectus of Delanco Bancorp, Inc. and to the reference to our firm under the heading “Experts” in the prospectus.

Sincerely,

RP^® FINANCIAL, LC.

Washington Headquarters
Three Ballston Plaza	Telephone: (703) 528-1700
1100 North Glebe Road, Suite 600	Fax No.: (703) 528-1788
Arlington, VA 22201	Toll-Free No.: (866) 723-0594
www.rpfinancial.com	E-Mail: mail@rpfinancial.com

EX-99.1

Exhibit 99.1

PRO FORMA VALUATION REPORT

DELANCO BANCORP, INC.

Delanco, New Jersey

PROPOSED HOLDING COMPANY FOR:

DELANCO FEDERAL SAVINGS BANK

Delanco, New Jersey

Dated As Of:

May 17, 2013

Prepared By:

RP^® Financial, LC.

1100 North Glebe Road

Suite 600

Arlington, Virginia 22201

May 17, 2013

Boards of Directors

Delanco MHC

Delanco Bancorp, Inc.

Delanco Federal Savings Bank

615 Burlington Avenue

Delanco, New Jersey 08075

Members of the Boards of Directors:

At your request, we have completed and hereby provide an independent appraisal (“Appraisal”) of the estimated pro forma market value of the common stock which is to be issued in connection with the mutual-to-stock conversion transaction described below.

This Appraisal is furnished pursuant to the requirements of the Code of Federal Regulations 563b.7 and has been prepared in accordance with the “Guidelines for Appraisal Reports for the Valuation of Savings and Loan Associations Converting from Mutual to Stock Form of Organization” of the Office of Thrift Supervision (“OTS”) and reissued by the Office of the Comptroller of the Currency (“OCC”), and applicable regulatory interpretations thereof. Such Valuation Guidelines are relied upon by the Federal Reserve Board (“FRB”) in the absence of separate written valuation guidelines.

Description of Plan of Conversion and Reorganization

On May 28, 2013, the respective Boards of Directors of Delanco MHC (the “MHC”) and Delanco Bancorp, Inc., a federal corporation, adopted the plan of conversion and reorganization (the “Plan of Conversion”), whereby the MHC will convert to stock form. As a result of the conversion, Delanco Bancorp, Inc., which currently owns all of the issued and outstanding common stock of Delanco Federal Savings Bank (the “Bank”), will be succeeded by a New Jersey corporation with the same name of Delanco Bancorp, Inc. (“Delanco Bancorp” or the “Company”). Following the conversion, the MHC will no longer exist. For purposes of this document, the existing consolidated entity will hereinafter be referred to as Delanco Bancorp or the Company. As of March 31, 2013 the MHC had a majority ownership interest in, and its principal asset consisted of, approximately 55% of the common stock (the “MHC Shares”) of Delanco Bancorp. The remaining 45% of Delanco Bancorp’s common stock was owned by public shareholders.

It is It is our understanding that Delanco Bancorp will offer its stock, representing the majority ownership interest held by the MHC, in a subscription offering to Eligible Account Holders, Tax-Qualified Employee Benefit Plans, Supplemental Eligible Account Holders and Other Members, as such terms are defined for purposes of applicable federal regulatory requirements governing mutual-to-stock conversions. To the extent that shares remain available for purchase after satisfaction of all orders received in the subscription offering, the

Washington Headquarters
Three Ballston Plaza	Telephone: (703) 528-1700
1100 North Glebe Road, Suite 600	Fax No.: (703) 528-1788
Arlington, VA 22201	Toll-Free No.: (866) 723-0594
www.rpfinancial.com	E-Mail: mail@rpfinancial.com

Boards of Directors

May 17, 2013

Page 2

share may be offered for sale to the public at large in a community offering and a syndicated community offering. Upon completing the mutual-to-stock conversion and stock offering (the “Second Step Conversion”), the Company will be 100% owned by public shareholders, the publicly-held shares of Delanco Bancorp will be exchanged for shares in the Company at a ratio that retains their ownership interest at the time the conversion is completed and the MHC assets will be consolidated with the Company.

RP^® Financial, LC.

RP^® Financial, LC. (“RP Financial”) is a financial consulting firm serving the financial services industry nationwide that, among other things, specializes in financial valuations and analyses of business enterprises and securities, including the pro forma valuation for savings institutions converting from mutual-to-stock form. The background and experience of RP Financial is detailed in Exhibit V-1. We believe that, except for the fee we will receive for our appraisal, we are independent of the Company, the Bank, the MHC and the other parties engaged by the Bank or the Company to assist in the stock conversion process.

Valuation Methodology

In preparing our Appraisal, we have reviewed the regulatory applications of the Company, the Bank and the MHC, including the prospectus as filed with the FRB and the Securities and Exchange Commission (“SEC”). We have conducted a financial analysis of the Company, the Bank and the MHC that has included a review of audited financial information for the fiscal years ended March 31, 2009 through March 31, 2012 and a review of draft audited financial information, as well as internal financial reports through the fiscal year ended March 31, 2013, and due diligence related discussions with the Company’s management; Connolly, Grady & Cha, PC, the Company’s independent auditor; Kilpatrick Townsend & Stockton, LLP, the Company’s conversion counsel and Keefe, Bruyette, & Woods, Inc., the Company’s marketing advisor in connection with the subscription and community offerings. All assumptions and conclusions set forth in the Appraisal were reached independently from such discussions. In addition, where appropriate, we have considered information based on other available published sources that we believe are reliable. While we believe the information and data gathered from all these sources are reliable, we cannot guarantee the accuracy and completeness of such information.

We have investigated the competitive environment within which Delanco Bancorp operates and have assessed Delanco Bancorp’s relative strengths and weaknesses. We have kept abreast of the changing regulatory and legislative environment for financial institutions and analyzed the potential impact on Delanco Bancorp and the industry as a whole. We have analyzed the potential effects of the stock conversion on Delanco Bancorp’s operating characteristics and financial performance as they relate to the pro forma market value of Delanco Bancorp. We have analyzed the assets held by the MHC, which will be consolidated with Delanco Bancorp’s assets and equity pursuant to the completion of the Second Step Conversion. We have reviewed the economic and demographic characteristics of the Company’s primary market area. We have compared Delanco Bancorp’s financial performance and condition with selected publicly-traded thrifts in accordance with the Valuation Guidelines, as well as all publicly-traded thrifts and thrift holding companies. We have reviewed the current conditions in the securities markets in general and the market for thrift stocks in particular, including the market for existing thrift issues, initial public offerings by thrifts and thrift holding companies, and second step conversion offerings. We have excluded from such analyses thrifts subject to announced or rumored acquisition, and/or institutions that exhibit other unusual characteristics.

Boards of Directors

May 17, 2013

Page 3

The Appraisal is based on Delanco Bancorp’s representation that the information contained in the regulatory applications and additional information furnished to us by Delanco Bancorp and its independent auditor, legal counsel and other authorized agents are truthful, accurate and complete. We did not independently verify the financial statements and other information provided by Delanco Bancorp, or its independent auditor, legal counsel and other authorized agents nor did we independently value the assets or liabilities of Delanco Bancorp. The valuation considers Delanco Bancorp only as a going concern and should not be considered as an indication of Delanco Bancorp’s liquidation value.

Our appraised value is predicated on a continuation of the current operating environment for Delanco Bancorp and for all thrifts and their holding companies. Changes in the local, state and national economy, the legislative and regulatory environment for financial institutions and mutual holding companies, the stock market, interest rates, and other external forces (such as natural disasters or significant world events) may occur from time to time, often with great unpredictability and may materially impact the value of thrift stocks as a whole or the value of Delanco Bancorp’s stock alone. It is our understanding that there are no current plans for selling control of Delanco Bancorp following completion of the Second Step Conversion. To the extent that such factors can be foreseen, they have been factored into our analysis.

The estimated pro forma market value is defined as the price at which Delanco Bancorp’s common stock, immediately upon completion of the second step stock offering, would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

Valuation Conclusion

It is our opinion that, as of May 17, 2013, the estimated aggregate pro forma valuation of the shares of the Company to be issued and outstanding at the end of the conversion offering – including (1) the shares to be issued publicly representing the MHC’s current ownership interest in the Company; and, (2) exchange shares issued to existing public shareholders of Delanco Bancorp – was $7,649,392 at the midpoint, equal to 956,174 shares at a per share value of $8.00, as shown in the table on the following page.

Based on this valuation and taking into account the ownership interest represented by the shares owned by the MHC, the midpoint of the offering range is $4,250,000, equal to 531,250 shares at $8.00 per share. The resulting range of value, the range of the offering amount, and pro forma shares, are all based on $8.00 per share.

Establishment of the Exchange Ratio

OCC regulations provide that in a conversion of a mutual holding company, the minority shareholders are entitled to exchange the public shares for newly issued shares in the fully converted company. The Boards of Directors of the MHC, Delanco Bancorp, and the Bank have independently determined the exchange ratio, which has been designed to preserve the current aggregate percentage ownership in the Company held by the public shareholders after adjustment for the dilutive impact of consolidation of the net assets of the MHC utilizing a methodology consistent with FRB policy in this regard. The exchange ratio to be received by the existing minority shareholders of the Company will be determined at the end of the offering, based on the total number of shares sold in the offering and the final appraisal. Based on the

Boards of Directors

May 17, 2013

Page 4

valuation conclusion herein, the resulting offering value and the $8.00 per share offering price, the indicated exchange ratio at the midpoint is 0.5776 shares of the Company’s stock for every one share held by public shareholders. Furthermore, based on the offering range of value, the indicated exchange ratio is 0.4910 at the minimum, 0.6643 at the maximum, and 0.7639 at the supermaximum. RP Financial expresses no opinion on the proposed exchange of newly issued Company shares for the shares held by the public shareholders or on the proposed exchange ratio. The resulting range of value pursuant to regulatory guidelines, the corresponding number of shares based on the Board approved $8.00 per share offering price, and the resulting exchange ratios are shown in the table below.

	Total Shares			Offering Shares			Exchange Shares Issued to Public Shareholders			Exchange Ratio
Shares (1)
Maximum, as Adjusted		1,264,541			702,579			561,962			0.7639
Maximum		1,099,600			610,938			488,662			0.6643
Midpoint		956,174			531,250			424,924			0.5776
Minimum		812,748			451,563			361,185			0.4910
Distribution of Shares (2)
Maximum, as Adjusted		100.00	%		55.56	%		44.44	%
Maximum		100.00	%		55.56	%		44.44	%
Midpoint		100.00	%		55.56	%		44.44	%
Minimum		100.00	%		55.56	%		44.44	%
Aggregate Market Value at $8 per share
Maximum, as Adjusted	$	10,116,328		$	5,620,632		$	4,495,696
Maximum	$	8,796,800		$	4,887,504		$	3,909,300
Midpoint	$	7,649,392		$	4,250,000		$	3,399,388
Minimum	$	6,501,984		$	3,612,504		$	2,889,483

(1) Based on an $8.00 per share IPO price.

(2) Ownership ratios adjusted for dilution for MHC assets.

Limiting Factors and Considerations

The valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing shares of the common stock. Moreover, because such valuation is determined in accordance with applicable OCC regulatory guidelines and is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons who purchase shares of common stock in the conversion offering, or prior to that time, will thereafter be able to buy or sell such shares at prices related to the foregoing valuation of the estimated pro forma market value thereof.

Boards of Directors

May 17, 2013

Page 5

The appraisal reflects only a valuation range as of this date for the pro forma market value of Delanco Bancorp immediately upon issuance of the stock and does not take into account any trading activity with respect to the purchase and sale of common stock in the secondary market on the date of issuance of such securities or at anytime thereafter following the completion of the Second Step Conversion.

RP Financial’s valuation was based on the financial condition, operations and shares outstanding of Delanco Bancorp as of March 31, 2013, the date of the financial data included in the prospectus. The proposed exchange ratio to be received by the current public shareholders of Delanco Bancorp and the exchange of the public shares for newly issued shares of Delanco Bancorp’s common stock as a full public company was determined independently by the Boards of Directors of the MHC, the Company, and the Bank. RP Financial expresses no opinion on the proposed exchange ratio to public shareholders or the exchange of public shares for newly issued shares.

RP Financial is not a seller of securities within the meaning of any federal and state securities laws and any report prepared by RP Financial shall not be used as an offer or solicitation with respect to the purchase or sale of any securities. RP Financial maintains a policy which prohibits RP Financial, its principals or employees from purchasing stock of its client institutions.

This valuation will be updated as provided for in the conversion regulations and guidelines. These updates will consider, among other things, any developments or changes in the financial performance and condition of Delanco Bancorp, management policies, and current conditions in the equity markets for thrift shares, both existing issues and new issues. These updates may also consider changes in other external factors which impact value including, but not limited to: various changes in the legislative and regulatory environment for financial institutions, the stock market and the market for thrift stocks, and interest rates. Should any such new developments or changes be material, in our opinion, to the valuation of the shares, appropriate adjustments to the estimated pro forma market value will be made. The reasons for any such adjustments will be explained in the update at the date of the release of the update. The valuation will also be updated at the completion of Delanco Bancorp’s stock offering.

Respectfully submitted,

RP^® FINANCIAL, LC.

James P. Hennessey

Director

RP® Financial, LC.	TABLE OF CONTENTS
	i

TABLE OF CONTENTS

DELANCO BANCORP, INC.

DELANCO FEDERAL SAVINGS BANK

Delanco, New Jersey

DESCRIPTION	PAGE NUMBER
CHAPTER ONE                     OVERVIEW AND FINANCIAL ANALYSIS
Introduction		I.1
Plan of Conversion and Reorganization		I.3
Purpose of the Reorganization		I.3
Delanco Mutual Holding Company		I.4
Strategic Overview		I.5
Regulatory Agreement		I.8
Balance Sheet Trends		I.9
Income and Expense Trends		I.14
Interest Rate Risk Management		I.18
Lending Activities and Strategy		I.19
Asset Quality		I.22
Funding Composition and Strategy		I.23
Legal Proceedings		I.24
CHAPTER TWO                     MARKET AREA ANALYSIS
Introduction		II.1
National Economic Factors		II.2
Interest Rate Environment		II.3
Market Area Demographic and Economic Characteristics		II.4
Regional/Local Economy		II.6
Market Area Employment Sectors		II.7
Unemployment Trends		II.8
Real Estate Trends		II.9
Market Area Deposit Characteristics		II.10
Deposit Competition		II.11
CHAPTER THREE                     PEER GROUP ANALYSIS
Peer Group Selection		III.1
Financial Condition		III.8
Income and Expense Components		III.11
Loan Composition		III.14
Credit Risk		III.14
Interest Rate Risk		III.14
Summary		III.18

RP® Financial, LC.	TABLE OF CONTENTS
	ii

TABLE OF CONTENTS

DELANCO BANCORP, INC.

DELANCO FEDERAL SAVINGS BANK

Delanco, New Jersey

(continued)

DESCRIPTION	PAGE NUMBER
CHAPTER FOUR                     VALUATION ANALYSIS
Introduction		IV.1
Appraisal Guidelines		IV.1
RP Financial Approach to the Valuation		IV.1
Valuation Analysis		IV.2
1. Financial Condition		IV.3
2. Profitability, Growth and Viability of Earnings		IV.4
3. Asset Growth		IV.5
4. Primary Market Area		IV.6
5. Dividends		IV.7
6. Liquidity of the Shares		IV.7
7. Marketing of the Issue		IV.8
A. The Public Market		IV.8
B. The New Issue Market		IV.12
C. The Acquisition Market		IV.16
D. Trading in Delanco Bancorp’s Stock		IV.16
8. Management		IV.17
9. Effect of Government Regulation and Regulatory Reform		IV.17
Summary of Adjustments		IV.17
Valuation Approaches		IV.18
1. Price-to-Earnings (“P/E”)		IV.21
2. Price-to-Book (“P/B”)		IV.23
3. Price-to-Assets (“P/A”)		IV.23
Comparison to Recent Offerings		IV.23
Valuation Conclusion		IV.24
Establishment of the Exchange Ratio		IV.25

RP® Financial, LC.	LIST OF TABLES
	iii

LIST OF TABLES

DELANCO BANCORP, INC.

DELANCO FEDERAL SAVINGS BANK

Delanco, New Jersey

TABLE NUMBER	DESCRIPTION	PAGE
1.1	Historical Balance Sheets		I.10
1.2	Historical Income Statements		I.15
2.1	Summary Demographic Data		II.5
2.2	Largest Employers in Burlington County		II.6
2.3	Primary Market Area Employment Sectors		II.8
2.4	Unemployment Trends		II.9
2.5	Deposit Summary		II.11
2.6	Market Area Deposit Competitors		II.12
3.1	Peer Group of Publicly-Traded Thrifts		III.3
3.2	Balance Sheet Composition and Growth Rates		III.9
3.3	Income as a % of Average Assets and Yields, Costs, Spreads		III.12
3.4	Loan Portfolio Composition and Related Information		III.15
3.5	Credit Risk Measures and Related Information		III.16
3.6	Interest Rate Risk Measures and Net Interest Income Volatility		III.17
4.1	Recent Conversions Completed in Last Three Months		IV.13
4.2	Market Pricing Comparatives		IV.15
4.3	Public Market Pricing Versus Peer Group		IV.22

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.1

I. OVERVIEW AND FINANCIAL ANALYSIS

Introduction

Delanco Bancorp, Inc. (“Delanco Bancorp” or the “Company”) is a federally chartered mid-tier holding company organized in 2002 as the holding company for Delanco Federal Savings Bank (the “Bank”), a federally chartered savings bank. The Bank was originally organized in 1890 under the name Delanco Building and Loan Association and has operated continuously in Burlington County, New Jersey, since its founding. In 1951, Delanco Building and Loan Association changed its name to Delanco Savings and Loan Association and in 1994, the Bank converted from a state-chartered mutual savings and loan association to a federally chartered mutual savings bank and simultaneously changed to the current name of Delanco Federal Savings Bank.

The Bank is headquartered in Delanco Township, New Jersey and conducts business through the headquarters office and one full-service branch office in Cinnaminson, New Jersey, which are both in western Burlington County, New Jersey, across the Delaware River from northeastern Philadelphia, Pennsylvania. The majority of the Company’s retail depository activities are conducted within southwestern New Jersey and while lending operations are also focused in New Jersey, the Company will make loans across the greater Philadelphia metropolitan area.

In addition to the traditional retail branches, the Company delivers its banking products and services through alternative delivery methods including ATMs (through the Star and Plus ATM networks), free online banking, online bill-pay, and a 24 hour Direct Teller (bank-by-phone). Delanco Bancorp’s primary business has been the origination of 1-4 family residential loans and commercial real estate (including multi-family) loans funded by retail deposits and, to a lesser extent, borrowed funds. The Company also invests in securities, primarily mortgage-backed securities (“MBS”), US Government agency securities, and other debt securities.

The Bank reorganized into the mutual holding company structure on November 15, 2002, by forming Delanco MHC (the “MHC”), a federally chartered mutual holding company and Delanco Bancorp, a federally chartered mid-tier holding company. As part of the reorganization, the Bank became wholly-owned by the Company, while the Company became wholly-owned by the MHC. The Company’s principal activity is the ownership and management of its wholly-owned subsidiary, the Bank. Delanco MHC has virtually no operations or assets other than an investment in the Company.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.2

On March 30, 2007, Delanco Bancorp sold a minority interest in the Company’s common stock to eligible depositors of the Bank, the employee stock ownership plan (“ESOP”), and members of the general public in a subscription and community offering. Delanco Bancorp sold 735,626 shares of common stock at $10.00 per share in an offering that closed in between the minimum and the midpoint of the offering range. The shares sold in the offering represented 45.0% of the total shares outstanding following the reorganization of 1,634,725, as the majority of Delanco Bancorp’s shares, or 55.0%, were issued to the MHC. Net proceeds from the common stock offering amounted to approximately $6.7 million. As of March 31, 2013, the assets of the MHC other than the common stock of Delanco Bancorp totaled $96,000 of cash and the MHC does not engage in any significant business activity.

At March 31, 2013, the Company had 1,634,725 shares of common stock outstanding, whereby the MHC owns 899,099 shares or 55.0% of the common stock outstanding of Delanco Bancorp and the minority public shareholders own the remaining 735,626 shares or 45.0% of the outstanding shares. The public shares are currently traded on the OTC Bulletin Board under the trading symbol “DLNO”. The Bank is a member of the Federal Home Loan Bank (“FHLB”) system and its deposits are insured up to the regulatory maximums by the Federal Deposit Insurance Corporation (“FDIC”). The Bank is subject to extensive regulation, supervision and examination by the Office of the Comptroller of the Currency (“OCC”). The MHC and the Company are subject to regulation and supervision by the Federal Reserve Board (“FRB”).

The Company operates as a community-oriented financial institution offering traditional financial services to consumers and businesses in the regional market area, thereby attracting deposits from the general public and using those funds to originate loans to their customers and invest in securities such as U.S. Government agency securities and MBS. At March 31, 2013, the Company had $129.4 million of total assets, $88.4 million in net loans, $117.0 million of total deposits, and stockholders’ equity equal to $11.4 million, equal to 8.80% of total assets. At the same date, the Company’s tangible stockholder’s equity equaled the same balance, as the Company does not have any intangible assets on the balance sheet. For the fiscal year ended March 31, 2013, the Company reported a net loss equal to $324,000, for a return on average assets equal to 0.25%. The Company’s audited financial statements are included by reference as Exhibit I-1 and key operating ratios are shown in Exhibit I-2.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.3

Plan of Conversion and Reorganization

On May 28, 2013, Delanco Bancorp announced that the Boards of Directors of the MHC, Delanco Bancorp and the Bank unanimously adopted a Plan of Conversion and Reorganization (the “Plan of Conversion”), pursuant to which Delanco Bancorp will convert from the three-tier MHC structure to the full stock holding company structure and concurrently conduct a second step conversion offering (“Second Step Conversion” or “Offering”) that will include the sale of the MHC’s ownership interest in Delanco Bancorp. Pursuant to the Plan of Conversion, the Company will be succeeded by a newly formed state-chartered corporation which will also be known as Delanco Bancorp, Inc. Following the conversion, the MHC will no longer exist.

Pursuant to the Second Step Conversion, Delanco Bancorp will sell shares of its common stock in a subscription offering in descending order of priority to the Bank’s members and other stakeholders as follows: Eligible Account Holders; Tax-Qualified Employee Benefit Plans; Supplemental Eligible Account Holders; and Other Members. Any shares of stock not subscribed for by the foregoing classes of persons will be offered for sale to certain members of the public through a community offering. Shares not purchased in the subscription and community offerings may be offered for sale to the general public in a syndicated community offering. The Company will also issue exchange shares of its common stock to the current public shareholders in the Second Step Conversion transaction pursuant to an exchange ratio that will result in the same aggregate ownership percentage as immediately before the Offering, taking into account the impact of MHC assets in the Second Step Conversion, consistent with FRB policy with respect to the treatment of MHC assets. The dilution of the current minority ownership position to account for the MHC assets will be discussed in greater detail in the valuation analysis to follow (Section IV).

Purpose of the Reorganization

The Second Step Conversion will increase the capital level to facilitate the Bank’s compliance with its capital requirements as required by regulations and certain agreements with the regulatory authorities, as well as lower the risk profile of the Company, improve the overall competitive position of the Company in the local market area, improve profitability and reduce interest rate risk. Importantly, the enhanced equity position will provide a cushion over the near-term for potential losses incurred as a result of longstanding asset quality problems. Over the longer-term, the additional equity will provide a larger capital base for future growth and diversification. Future growth opportunities are expected through the current branch network

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.4

and over the long term, potentially through de novo branching in the regional markets served if opportunities arise though, no new branches are anticipated at this time. Further, the Second Step Conversion will increase the public ownership, which is expected to improve the liquidity of the common stock.

The projected use of stock proceeds is highlighted below.

• The Company. The Company is expected to retain up to 20% of the net conversion proceeds. At present, Company funds, net of the loan to the ESOP, are expected to be invested initially into high quality investment securities with short- to intermediate-term maturities, generally consistent with the current investment mix. Over time, Company funds are anticipated to be utilized for various corporate purposes, possibly including acquisitions, infusing additional equity into the Bank, repurchases of common stock, and the payment of regular and/or special cash dividends.

• The Bank. The balance of the net conversion proceeds will be infused into the Bank. Cash proceeds (i.e., net proceeds less deposits withdrawn to fund stock purchases) infused into the Bank are anticipated to become part of general operating funds, and are expected to initially be invested in short-term investments pending longer-term deployment, i.e., funding lending activities, general corporate purposes and/or expansion and diversification.

Over the near term, the Company expects to continue to preserve its capital position, limiting growth and focusing on resolving problem assets with the objective of minimizing the Company’s credit risk exposure. Over the intermediate to longer term, the Company will seek to undertake modest loan and deposit growth and other strategies to enhance Delanco Bancorp’s long term earnings potential and shareholder returns.

Delanco Mutual Holding Company

Pursuant to the Plan of Conversion and Reorganization, the assets and liabilities of the MHC will be merged with the Company. As of March 31, 2013, the MHC had unconsolidated net assets of $96,000 (i.e., net assets excluding the value of the investment in Delanco Bancorp), which includes cash on deposit at the Bank in the amount of $96,000. While the consolidation of the net assets of the MHC will increase the pro forma value of the Company, it will also result in pro forma ownership dilution for the minority shareholders’ ownership interests pursuant to the application of the applicable regulatory policies. The dilution of the current minority ownership position to account for the MHC assets will be discussed in greater detail in the valuation analysis to follow (Section IV).

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.5

Strategic Overview

Throughout much of its corporate history, the Company’s strategic focus has been that of a community-oriented financial institution with a primary focus on meeting the borrowing, savings, and other financial needs of its local customers in Burlington County of southwestern New Jersey. In this regard, the Company has historically pursued a portfolio residential lending strategy typical of a thrift institution, with a moderate level of diversification into commercial real estate lending.

Beginning in late fiscal 2005, the Company began to emphasize commercial lending in order to grow the loan portfolio and increase the average yield, which was primarily the result of the business development efforts of several senior officers of the Bank. Growth was sought primarily in commercial and multi-family real estate, including residential investment properties, and, to a lesser extent, commercial business loans. Delanco Bancorp also expanded the lending area at that time to all of Pennsylvania and New Jersey, with a focus on Philadelphia and southwestern New Jersey. From 2005 to 2009, the Company sought to expand and diversify the loan portfolio with the objective of leveraging the capital raised from the initial public offering in 2007. However, in retrospect, the commercial and multi-family mortgage loans originated in this timeframe were poorly underwritten, which, coupled with the economic recession in subsequent years, resulted in an increase in non-performing assets (“NPAs”) (i.e., NPAs increased from 0.51% as of March 31, 2007 to 6.92% of assets as of March 31, 2009) and realization of credit-related loan losses. NPAs remain elevated and currently equal 6.82% of assets as of March 31, 2013, notwithstanding the efforts of management to improve asset quality.

The economic recession experienced nationally has impacted the Company’s markets, both in terms of job losses and increasing rates of unemployment, which in turn has resulted in increased loan delinquency rates and loan foreclosures. Additionally, real estate prices, including the prices of residential and commercial properties, have diminished, eroding the collateral value of the properties securing the Company’s mortgage loans. The deterioration of asset quality, reported losses, and decline in equity, prompted the Office of Thrift Supervision (“OTS”) to enter into an Order to Cease & Desist (the “Order”) with the Bank, as of December 2010, which has been superseded by an agreement with the OCC in December 2012, the Bank’s current primary regulator.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.6

Since 2010, management’s focus has been primarily on addressing the high levels of non-performing loans (“NPLs”) in the portfolio and lending activity has been limited to first lien 1-4 family mortgage loans as the Bank was restricted from originating new commercial loans under the Order. As a result, total assets have diminished from the 2010 peak level, decreasing by 7.5% through March 31, 2013, to equal $129.4 million. The objective of the balance sheet shrinkage was to reduce assets and preserve regulatory capital ratios in face of operating losses.

In an effort to improve asset quality over the last four years, management and staff of the Company have been evaluated and replaced, as necessary, with more experienced and seasoned individuals. Additionally, credit underwriting policies and procedures have been improved and the Company has outsourced key functions in the areas of internal audit, compliance, and loan review, to assure quality credit going forward. Notwithstanding the Company’s efforts to resolve outstanding asset quality problems, NPAs remain high as Delanco’s efforts have been hampered by a slow judicial system which limits the ability to obtain foreclosures quickly on non-performing loans.

The Company has reported operating losses over the last two fiscal years and in three of the last five fiscal years with fiscal 2010 and 2011 being the only profitable years over this period. The recent losses are the result of high loan loss provisions and high operating expenses related to increased loan and real estate owned expenses related to the resolution of problem assets. Furthermore, the elevated level of NPAs has adversely impacted the Company’s net interest margin (i.e., the high level of NPAs has increased non-interest earning assets).

The post-Offering business plan of the Company is expected to focus on near-term problem asset resolution and modest growth of loans and core deposits. The capital infusion will bolster the Bank’s regulatory capital ratios and ability to address problem assets resolution. Importantly, the Company believes that its status as a well-capitalized publicly traded company will enhance the ability to expand business lines and grow the balance sheet over the long term.

Key elements of the post-conversion business plan include the following:

• Reduce Loan Delinquencies and Lower the Company’s Risk Profile. The resolution of NPAs and improvement of asset quality is the highest priority of management over the near term. The Company has put into place policies and procedures which facilitate management’s efforts to proactively identify and mitigate credit risks within the loan portfolio. In addition, the Company has implemented more stringent loan underwriting policies and procedures and

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.7

conducts regular external loan reviews. In recent periods, the Company has limited commercial lending as the commercial lending staff focused on resolving problem credits within the portfolio and the Order restricted the origination of new commercial loans. The Company will continue to reduce classified assets based on management’s asset migration schedule with the reduction driven by planned sales of properties and chargeoffs. Delanco Bancorp is committed to employing additional resources towards strengthening asset quality, as necessary, and continues to work through problem asset resolutions and reducing NPAs, including other real estate owned.

• Build Community Bank Franchise. The Company will seek to continue to offer products and services consistent with its efforts to more fully develop a strong community bank franchise surrounding its two branch office network within Delanco and Cinnaminson Townships, while also financing properties along the Jersey Shore, on a limited basis. In this regard, the Company will continue to expand residential real estate lending activities, while resuming commercial lending at a modest pace. The Company’s approach will be to develop comprehensive customer relationships to the extent possible, including both loan and deposit relationships, and to attract and retain customers from an increasing population of potential customers dislocated as a result of local bank consolidations in the market area. The Company also intends to gradually offer more online and mobile services to enhance overall customer convenience and experience. Overall, the Company believes that building strong ties to the community and deep customer relationships will facilitate the dual objectives of providing strong returns to shareholders and remaining community-oriented, particularly as the Company is one of the few local community banks remaining.

• Resume Commercial Lending and Continue Residential Lending. The Company will be seeking to resume commercial lending (mortgage and non-mortgage), at a modest pace as a means to deploying investable funds profitably, while also maintaining a focus on residential real estate, including home equity lending. Lending growth is expected to come from internal loan originations as the Company has employed experienced lending personnel in key management and staff positions and believes it is well postured to be competitive in the local lending market, particularly if NPAs continue to diminish, as targeted, and as Delanco Bancorp’s capital base is enhanced through the successful completion of the Second Step Conversion.

• Expand the Base of Low-Cost Core Deposits. Over the past several years, Delanco Bancorp has focused on reducing the reliance on higher costing certificates of deposit, in order to reduce the cost of funds, and overall expenses. The Company will continue to concentrate on increasing the core deposit base of savings and transaction accounts by continuing existing and/or implementing new marketing and promotional programs, gradually offering more online and mobile services to current and prospective customers, and broadening banking relationships with lending customers. Delanco Bancorp also intends to increase municipal deposits as an avenue to realize targeted deposit growth.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.8

• Managed Growth. The Company’s management believes that managed growth subject to market constraints, will facilitate efforts to improve profitability by leveraging a management and overhead infrastructure which can operate an institution of a larger size. In the future, the Company will continue, subject to market and economic conditions, to explore ways to grow the banking franchise through internal growth in order to improve efficiency of the bank operations.

Regulatory Agreement

Primarily as a result of the aforementioned operating losses and adverse trends with respect to the Company’s asset quality, the MHC, Delanco Bancorp and the Bank have become subject to increased regulatory scrutiny and oversight. On December 17, 2012, the Bank entered into an agreement (the “Agreement”) with the OCC requiring the Bank to address certain areas of operations. This Agreement superseded and terminated the Order entered into by and between the Bank and the OTS on March 17, 2010. Under the Agreement, the Bank is required to:

(1) Prepare a three-year strategic plan that establishes objectives for the Bank’s overall risk profile, earnings performance, growth, balance sheet mix, liability structure, reduction in the volume of nonperforming assets, and product line development;

(2) Prepare a capital plan that includes specific proposals related to the maintenance of adequate capital, identifies strategies to strengthen capital if necessary and includes detailed quarterly financial projections;

(3) Prepare a criticized asset plan that will include strategies, targets and timeframes to reduce the Bank’s level of criticized assets;

(4) Implement a plan to improve the Bank’s credit risk management and credit administration practices;

(5) Implement programs and policies related to the Bank’s allowance for loan and lease losses, liquidity risk management, independent loan review and other real estate owned;

(6) Review the capabilities of the Bank’s management to perform present and anticipated duties and to recommend and implement any changes based on such assessment;

(7) Not pay any dividends or make any other capital distributions without the prior written approval of the OCC;

(8) Not make any severance or indemnification payments without complying with regulatory requirements regarding such payments; and,

(9) Comply with prior regulatory notification requirements for any changes in directors or senior executive officers.

The Agreement does not require the Bank to maintain any specific minimum regulatory capital ratios. However, in connection with its most recent examination, the OCC established higher individual minimum capital ratios (“IMCRs”) for the Bank. Specifically, the Bank must maintain a Tier 1 capital to adjusted total assets ratio of at least 8%, a Tier 1 capital to risk-

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.9

weighted assets ratio of at least 12%, and a total capital to risk-weighted assets ratio of at least 13%. The Bank’s ratios of Tier 1 capital to adjusted total assets, Tier 1 capital to risk-weighted assets, and total capital to risk-weighted assets at March 31, 2013 were 7.79%, 13.41% and 14.67%, respectively, thereby the Bank’s Tier 1 capital to adjusted total assets ratio as of March 31, 2013 is below the IMCR of 8%.

The Bank recently submitted the required business and capital plans. The OCC continues to enforce the Agreement and the Company expects that the terms of the Agreement will be enforced prospectively.

Balance Sheet Trends

Growth Trends

Table 1.1 shows the Company’s historical balance sheet data for the most recent five fiscal years ended March 31, 2013. Over this time period, total assets decreased at a nominal annual rate of 0.2%, as assets shrank from $130.5 million in fiscal 2009 to $129.4 million for fiscal 2013. The Company continued to pursue asset growth from fiscal 2009 to 2010, but began intentionally reducing assets during fiscal 2011 as NPA levels began to significantly increase and as the Bank became subject to the Order. Modest asset shrinkage has continued through fiscal 2013, as assets declined from a peak level of $139.9 million in fiscal 2010 to $129.4 million for fiscal 2013. Asset shrinkage has continually been pursued primarily to reduce the Bank’s capital requirements in the face of elevated levels of loan losses and net losses recorded. In this regard, the Company has been seeking to maintain compliance with the minimum required capital ratios established by the OCC pursuant to the IMCRs.

Over the last five fiscal years, the composition of assets has shifted, as loans receivable has steadily declined from 79.4% of assets in fiscal 2009 to 68.3% of assets in fiscal 2013. The relatively stable asset base has been maintained as the Company redeployed cash flows from the loan portfolio into cash and equivalents and investment securities, both held-to maturity (“HTM”) and available for sale (“AFS”), including MBS, U.S. government agency securities, and other debt securities.

Loans receivable have declined by $15.2 million, or 14.7%, over the time period shown, as a result of lower loan demand in the local market area (as a result of the economic recession), a focus of the Company personnel in addressing problem loans, and the Order, which restricted the Bank from originating new commercial loans until the most recent fiscal year.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.10

Table 1.1

Delanco Bancorp, Inc.

Historical Balance Sheets

	As of March 31,																														3/31/2009- 3/31/2013 Annual.
	2009						2010						2011						2012						2013						Growth Rate
	Amount			Pct(1)			Amount			Pct(1)			Amount			Pct(1)			Amount			Pct(1)			Amount			Pct(1)			Pct
	($000)			(%)			($000)			(%)			($000)			(%)			($000)			(%)			($000)			(%)			(%)
Total Amount of:
Assets	$	130,468			100.00	%	$	139,922			100.00	%	$	136,172			100.00	%	$	134,309			100.00	%	$	129,415			100.00	%		-0.20	%
Loans Receivable (net)	$	103,624			79.42	%	$	107,204			76.62	%	$	103,867			76.28	%	$	99,432			74.03	%	$	88,419			68.32	%		-3.89	%
Cash and Equivalents		1,717			1.32	%		4,884			3.49	%		5,663			4.16	%		6,650			4.95	%		6,723			5.19	%		40.67	%
Investment Securities—HTM		14,282			10.95	%		16,360			11.69	%		15,696			11.53	%		17,457			13.00	%		20,138			15.56	%		8.97	%
Investment Securities—AFS		223			0.17	%		258			0.18	%		248			0.18	%		242			0.18	%		2,207			1.71	%		77.42	%
Total Investment Securities		14,505			11.12	%		16,618			11.88	%		15,944			11.71	%		17,699			13.18	%		22,345			17.27	%		11.41	%
FHLB Stock	$	346			0.27	%	$	207			0.15	%	$	275			0.20	%	$	219			0.16	%	$	203			0.16	%		-12.53	%
Bank-Owned Life Insurance		130			0.10	%		136			0.10	%		142			0.10	%		148			0.11	%		154			0.12	%		4.25	%
Deferred Income Taxes		561			0.43	%		1,029			0.74	%		748			0.55	%		991			0.74	%		1,228			0.95	%		21.64	%
Real Estate Owned		0			0.00	%		413			0.30	%		771			0.57	%		846			0.63	%		2,483			1.92	%		NM
Fixed Assets		8,024			6.15	%		7,724			5.52	%		7,398			5.43	%		7,132			5.31	%		6,855			5.30	%		-3.86	%
Other Assets		1,561			1.20	%		1,708			1.22	%		1,365			1.00	%		1,193			0.89	%		1,005			0.78	%		-10.42	%
Deposits	$	113,983			87.36	%	$	127,164			90.88	%	$	120,842			88.74	%	$	121,589			90.53	%	$	117,034			90.43	%		0.66	%
FHLB Advances, Other Borrowed Funds		3,750			2.87	%		0			0.00	%		2,100			1.54	%		0			0.00	%		0			0.00	%		-100.00	%
Other Liabilities		1,214			0.93	%		1,024			0.73	%		1,017			0.75	%		976			0.73	%		986			0.76	%		-5.07	%
Stockholders’ Equity	$	11,521			8.83	%	$	11,735			8.39	%	$	12,213			8.97	%	$	11,743			8.74	%	$	11,395			8.80	%		-0.28	%
AFS Adjustment	($	70	)		-0.05	%	($	46	)		-0.03	%	($	48	)		-0.04	%	($	40	)		-0.03	%	($	77	)		-0.06	%		—
Shares Outstanding/Ownership Percentages:
Public Shares Outstanding		735,626			45.00	%		735,626			45.00	%		735,626			45.00	%		735,626			45.00	%		735,626			45.00	%		—
MHC Shares Outstanding		899,099			55.00	%		899,099			55.00	%		899,099			55.00	%		899,099			55.00	%		899,099			55.00	%		—
Shares Outstanding		1,634,725			100.00	%		1,634,725			100.00	%		1,634,725			100.00	%		1,634,725			100.00	%		1,634,725			100.00	%		—
Tangible Book Value/Share	$	7.05					$	7.18					$	7.47					$	7.18					$	6.97						—
Offices Open		2						2						2						2						2						—

(1) Ratios are as a percent of ending assets.

Source: Audited financial statements, 10Ks, and RP Financial calculations.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.11

Specifically, commercial real estate and multi-family loans declined from a high of $26.1 million, or 24.7% of loans in fiscal 2009 to $12.4 million or 13.8% of loans in fiscal 2013. While restricted from commercial lending, the Company more intensively focused on residential first mortgage lending, which increased from $46.7 million, or 44.3% of loans to $66.6 million, or 74.3% of loans over the last five fiscal years. Residential first mortgage lending slightly declined over the most recent fiscal year, however, as the Company resisted the origination of long-term, fixed rate loans due to interest rate risk considerations.

The Company’s assets have been funded through a combination of deposits, borrowings and retained earnings over the past five fiscal years. Deposits have always comprised the majority of funding liabilities and increased at a minimal 0.7% annual rate since fiscal 2009, fluctuating over the five year period. The Company has generally restricted deposit growth in order to lower the cost of funds in efforts to increase profitability. Deposits totaled $117.0 million, or 90.4% of assets as of March 31, 2013. Borrowings serve as an alternative funding source for the Company to address funding needs for growth and to support management of deposit costs and interest rate risk. The Company has occasionally used short-term Federal Home Loan Bank and Atlantic Central Banker’s Bank advances as an additional source of liquidity. Specifically, borrowings which had a balance of $2.1 million as of March 31, 2011, were fully repaid during fiscal 2012, and the Company has not employed borrowed funds since that time.

Equity has diminished at a minimal 0.3% annual pace since the end of fiscal 2009 or by 1.1% in the aggregate, reflecting the impact of operating losses incurred in three of the last five fiscal years. Based on these minimal changes in equity and assets over the same time period, the Company’s equity ratio has remained relatively stable, staying within the range of approximately 8.5% to 9.0% of assets, and equaling 8.8% of assets as of March 31, 2013. Going forward, the post-Offering equity growth rate will largely be a function of the Company’s ability to improve asset quality and stem the level of loan loss provisions. Moreover, the post-Offering equity growth rate is expected to be impacted by a number of factors including the higher level of equity, the reinvestment and leveraging of the Offering proceeds, and the expense of the stock benefit plans.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.12

Loans Receivable

The Company’s loan portfolio balance has been diminishing since the end of fiscal 2009, as Delanco Bancorp has retrenched from lending as the level of classified assets and NPAs were high, combined with the intention of shrinking the balance sheet in order to maintain compliance with the capital levels required pursuant to the IMCRs. Reflecting the magnitude of problem loans in the commercial loan portfolio, as well as the impact of the restrictions on commercial lending in place through 2012, the balance of non-residential mortgage and non-mortgage loans has been declining since the end of fiscal 2009. The residential first mortgage loan portfolio is the only component of the Company’s loan portfolio to grow over the past five fiscal years, albeit at a moderate pace.

The loan portfolio reflects the Company’s historical concentration and recent primary emphasis in residential lending, including 1-4 family and home equity loans and lines of credit, as these loans comprised 83.7% of total loans as of March 31, 2013, while commercial loans, including commercial real estate, multi-family loans, and commercial business loans equaled 15.1% of total loans at the same date. Construction/land and consumer loans made up the remaining portion of the loan portfolio at a minimal 0.1% and 1.1% of total loans at March 31, 2013.

Cash, Investments and Mortgage-Backed Securities

Delanco Bancorp’s preference is to deploy the majority of assets into loans while maintaining required liquidity. The Company anticipates initially reinvesting the net offering proceeds into investments with short-to-intermediate maturities, pending longer-term deployment primarily into loans.

As of March 31, 2013, the Company’s portfolio of cash and cash equivalents totaled $6.7 million, equal to 5.2% of assets. As of the same date, the investment portfolio totaled $22.3 million, equal to 17.3% of assets, with the majority of investments classified as held to maturity ($20.1 million or 15.6% of assets) and the remaining securities classified as available for sale totaling $2.2 million, or 1.7% of assets (see Exhibit I-3 for the investment portfolio composition).

Government sponsored agency securities comprised the largest segment of the investment portfolio, totaling $20.1 million, or 15.5% of assets and 89.9% of investment securities as of March 31, 2013. The majority of agency securities were classified as HTM and consisted of a mix of step up and fixed rate agency bonds. The balance of the investment portfolio was comprised of HTM mortgage-backed securities ($2.0 million) and AFS mutual funds ($222,000).

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.13

No major changes to the composition and practices with respect to the management of the investment portfolio are anticipated over the near term, except that the level of cash and investments is anticipated to increase initially following the Second Step Conversion. Over the longer term, it is the Company’s intent to leverage the proceeds with loans to a greater extent than investment securities. However, management has indicated that leveraging of the expanded capital base by utilizing investment securities, including MBS, will continue to be evaluated based on market, profitability, interest rate risk, and other similar considerations.

Bank Owned Life Insurance

As of March 31, 2013, the balance of bank owned life insurance (“BOLI”) totaled $154,000, which reflects a modest increase over the last five fiscal years owing to increases in the cash surrender value of the policies. The balance of BOLI reflects the value of life insurance contracts on selected members of the Company’s management and has been purchased with the intent to offset various benefit program expenses on a tax advantaged basis. The increase in the cash surrender value of the BOLI is recognized as an addition to non-interest income on an annual basis.

Funding Structure

Retail deposits have generally met the substantial portion of the Company’s funding needs supplemented with a modest amount of borrowed funds from the Federal Home Loan Bank of New York utilized on an as needed basis. During fiscal 2012, all of Delanco Bancorp’s outstanding FHLB advances had been retired, as the need for funds outside of deposits has diminished with the recent asset shrinkage realized by the Company.

The composition of deposits has changed modestly over the past five fiscal years, as core accounts have gradually increased and time deposits have declined, due to the Company’s increased focus on growing core deposit accounts and reducing reliance on higher costing certificates of deposit (“CDs”). Since the end of fiscal 2011, the proportion of transaction and savings accounts has increased from 47.0% to 53.3%, while conversely, the proportion of CDs to total deposits has diminished from 53.0% to 46.7%.

Equity

Stockholder’s equity totaled $11.4 million, equal to 8.80% of assets on a reported basis as of March 31, 2013. Delanco Bancorp’s capital base has decreased from its peak level of $12.2 million as of March 31, 2011 to the current low of $11.4 million. The reduction in equity over this time period reflects the impact of operating losses which have primarily resulted from

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.14

deteriorating asset quality which has led to relatively high loan loss provisions, loan chargeoffs, and elevated operating expenses. The Offering proceeds will serve to further strengthen the Company’s regulatory capital position and ability to address the elevated level of non-performing assets.

At March 31 2013, the Bank’s core capital equaled $10.0 million, or 7.79% of adjusted total assets, which is below the IMCR level of 8.00% as established by the OCC and as adopted by the Board as internal minimal levels of capital. The significant disparity between the Company’s reported GAAP capital balance ($11.4 million) and the Tier 1 capital level is primarily attributable to two elements, including unrealized gains on securities ($77,000) and disallowed deferred tax assets ($1.2 million).

Income and Expense Trends

Table 1.2 shows the Company’s historical income statements for the past five fiscal years ended March 31, 2013. The Company reported its largest net loss over this time period during fiscal 2009 ($1.2 million or 0.95% of average assets) due to the significant increase in NPAs and relative increase in loan loss provisions. The Company returned to profitability during fiscal 2010, largely due to the income tax benefit recorded, while Delanco Bancorp continued to report positive earnings in fiscal 2011 as loan loss provisions diminished relative to fiscal 2010.

Loan loss provisions and chargeoffs adversely impacted Delanco Bancorp’s operations in fiscal 2012 and 2013, which, coupled with asset quality related operating expenses, contributed to the Company reporting operating losses in both fiscal 2012 and fiscal 2013. Specifically, Delanco Bancorp reported a net loss equal to $494,000 (0.37% of average assets) in fiscal 2012 and $324,000 (0.25% of average assets) for fiscal 2013.

Net Interest Income

Over the period from fiscal 2009 to fiscal 2011, net interest income steadily increased, notwithstanding the aforementioned balance sheet shrinkage, as the Company’s spreads improved as funding costs diminished more rapidly than asset yields. Conversely, the Company’s spreads subsequently decreased over the fiscal 2011 to fiscal 2013 period, as asset yields declined more rapidly than funding costs, particularly as the balance of loans diminished and the level of NPAs was high, as shown in Exhibit I-4.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.15

Table 1.2

Delanco Bancorp, Inc.

Historical Income Statements

	For the Fiscal Year Ended March 31,
	2009						2010						2011						2012						2013
	Amount			Pct(1)			Amount			Pct(1)			Amount			Pct(1)			Amount			Pct(1)			Amount			Pct(1)
	($000)			(%)			($000)			(%)			($000)			(%)			($000)			(%)			($000)			(%)
Interest Income	$	6,793			5.24	%	$	6,973			4.95	%	$	6,693			4.86	%	$	5,891			4.41	%	$	5,101			3.93	%
Interest Expense		(3,578	)		-2.76	%		(2,640	)		-1.87	%		(1,890	)		-1.37	%		(1,432	)		-1.07	%		(1,057	)		-0.82	%
Net Interest Income	$	3,215			2.48	%	$	4,333			3.08	%	$	4,803			3.49	%	$	4,460			3.34	%	$	4,045			3.12	%
Provision for Loan Losses		(1,127	)		-0.87	%		(1,140	)		-0.81	%		(440	)		-0.32	%		(1,602	)		-1.20	%		(640	)		-0.49	%
Net Interest Income after Provisions	$	2,088			1.61	%	$	3,193			2.27	%	$	4,363			3.17	%	$	2,858			2.14	%	$	3,404			2.63	%
Other Income	$	188			0.14	%	$	159			0.11	%	$	161			0.12	%	$	187			0.14	%	$	342			0.26	%
Operating Expense		(4,010	)		-3.09	%		(3,666	)		-2.60	%		(3,740	)		-2.72	%		(3,751	)		-2.81	%		(4,127	)		-3.18	%
Net Operating Income	($	1,734	)		-1.34	%	($	314	)		-0.22	%	$	784			0.57	%	($	707	)		-0.53	%	($	381	)		-0.29	%
Gain (Loss) on Sale of Securities	$	0			0.00	%	$	15			0.01	%	$	0			0.00	%	$	0			0.00	%	$	0			0.00	%
Gain (Loss) on Sale of Real Estate Owned		0			0.00	%		0			0.00	%		(27	)		-0.02	%		(36	)		-0.03	%		(152	)		-0.12	%
Total Non-Operating Income/(Expense)	$	0			0.00	%	$	15			0.01	%	($	27	)		-0.02	%	($	36	)		-0.03	%	($	152	)		-0.12	%
Net Income Before Tax	($	1,734	)		-1.34	%	($	299	)		-0.21	%	$	757			0.55	%	($	743	)		-0.56	%	($	534	)		-0.41	%
Income Taxes		503			0.39	%		482			0.34	%		(289	)		-0.21	%		249			0.19	%		209			0.16	%
Net Income (Loss)	($	1,231	)		-0.95	%	$	183			0.13	%	$	468			0.34	%	($	494	)		-0.37	%	($	324	)		-0.25	%
Adjusted Earnings
Net Income	($	1,231	)		-0.95	%	$	183			0.13	%	$	468			0.34	%	($	494	)		-0.37	%	($	324	)		-0.25	%
Add(Deduct): Non-Operating (Inc)/Exp		0			0.00	%		(15	)		-0.01	%		27			0.02	%		36			0.03	%		152			0.12	%
Tax Effect (2)		0			0.00	%		6			0.00	%		(11	)		-0.01	%		(15	)		-0.01	%		(61	)		-0.05	%
Adjusted Earnings	($	1,231	)		-0.95	%	$	174			0.12	%	$	484			0.35	%	($	472	)		-0.35	%	($	233	)		-0.18	%
Avg. Diluted Shares Outst.		1,577,052						1,580,256						1,583,460						1,586,664						1,589,868
Reported Earnings Per Share	($	0.78	)				$	0.12					$	0.30					($	0.31	)				($	0.20	)
Adjusted Earnings Per Share	($	0.78	)				$	0.11					$	0.31					($	0.30	)				($	0.15	)
Expense Coverage Ratio		80.2	%					118.2	%					128.4	%					118.9	%					98.0	%
Efficiency Ratio		117.9	%					81.6	%					75.3	%					80.7	%					94.1	%
Effective Tax Rate (Benefit)		-29.0	%					-161.2	%					38.2	%					-33.5	%					-39.3	%
Return on Avg. Equity		-9.97	%					1.59	%					3.89	%					-4.04	%					-2.80	%

(1) Ratios are as a percent of average assets.

(2) Reflects a tax effect at an estimated 40% marginal tax rate.

Source: Audited financial statements, 10Ks, and RP Financial calculations.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.16

The impact of declining interest rates is more fully evidenced in the detailed financial data shown in Table 1.2, as interest income diminished from $6.8 million (5.24% of average assets) in fiscal 2009 to $5.1 million (3.93% of average assets) for fiscal 2013. Over the corresponding timeframe, the Company’s annual interest expense diminished, from $3.6 million (2.76% of average assets) to $1.1 million (0.82% of average assets) for fiscal 2013. Overall, recent trends with regard to net interest income have been unfavorable as net interest income peaked at a level of $4.8 million in fiscal 2011, and has subsequently declined to $4.0 million or 3.12% of average assets in fiscal 2013.

Several factors may impact the Company’s future spreads and net interest income. First, the benefit of declining funding costs appears to be diminishing as the overall cost of funds equaled 0.82% for fiscal 2013, and the potential for further improvement is limited as deposit costs approach zero. At the same time, the reduction of NPAs is a key strategy of management over the near term and the ratio of NPAs has reflected modest improvement since fiscal 2012 — to the extent NPAs can be returned to an earning form, interest income may realize improvement. Last, the completion of the Second Step Conversion will have a dual benefit of providing the Company with additional interest-free funds to reinvest while over the longer term, the Company has indicated the intent to use the additional capital to support modest balance sheet growth including expansion of interest-earning assets at a positive spread.

Loan Loss Provisions

The level of provisions for loan losses has generally been high over the past five fiscal years, fluctuating with the level of NPAs and loan chargeoffs over the time period. Specifically, loan loss provisions reported by the Company increased from $1.1 million or 0.87% of average assets in fiscal 2009 to a peak level of $1.6 million or 1.20% of average assets for fiscal 2012. Loan loss provisions declined to $640,000 or 0.49% of average assets for fiscal 2013, as the Company believes that prior years provisions captured the impact of deteriorating real estate values in the local market and real estate values locally appear to be stabilizing.

At March 31, 2013, the Company maintained valuation allowances of $1.0 million, equal to 1.17% of total loans and 16.28% of non-performing loans (includes nonaccrual loans and performing troubled debt restructurings). Exhibit I-5 sets forth the Company’s loan loss allowance activity during the review period. Going forward, the Company will continue to evaluate the adequacy of the level of general valuation allowances (“GVAs”) on a regular basis and establish additional loan loss provisions in accordance with the Company’s asset classification and loss reserve policies.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.17

Non-Interest Income

Non-interest operating income is a limited contributor to the Company’s total revenues and primarily consists of fee income, rental income, and income from BOLI. Overall, non-interest income reported by the Company increased from $188,000 (0.14% of average assets) in fiscal 2009 to $342,000 (0.26% of average assets) in fiscal 2013. The significant increase in non-interest income in the most recent fiscal year (from $187,000 to $342,000) is attributable to an increase in rental income, as the Company started to collect rental payments from tenants of delinquent loan and other real estate owned (“OREO”) properties.

Operating Expenses

The Company’s operating expenses have fluctuated in a relatively narrow range from fiscal 2010 through fiscal 2012. Over this time period, the Company has undertaken various cost cutting initiatives, including staffing reductions. Mitigating the benefit of these initiatives, the Company’s recent level of operating expenses have been impacted by expenses related to problem assets and the costs to improve credit quality currently and going forward. Specifically, operating expenses ranged from a low of $3.66 million (2.60% of average assets) to a high of $3.75 million (2.81% of average assets) over the fiscal 2009 to fiscal 2012 timeframe. During fiscal 2013, the Company’s operating costs increased in the range of $500,000 as a result of increased maintenance costs due to the payment of back taxes, curing of deferred maintenance and professional, management, and other fees related to the Company’s delinquent loans and OREO properties. As a result, operating expenses increased to $4.13 million, equal to 3.18% of average assets in fiscal 2013.

Operating expenses are expected to increase on a post-Offering basis as a result of the expense of the additional stock-related benefit plans. At the same time, Delanco Bancorp will seek to offset anticipated growth in expenses from a profitability standpoint through gradual balance sheet growth and by reinvestment of the Offering proceeds into investment securities over the near term (following the Second Step Conversion) and into loans over the longer term.

Non-Operating Income/Expense

Net non-operating losses associated with the Company’s asset quality problems, also contributed to the Company’s operating losses over the past two fiscal years, due to losses on the sale of OREO. For fiscal 2013, non-operating losses amounted to $152,000, or 0.12% of average assets and consisted of losses on the sale of OREO. In general, the gains and losses recorded by the Company are not viewed as part of the Company’s core or recurring earnings.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.18

Taxes

The Company is in a fully taxable position on a GAAP accounting basis and as a result, has been recording a net tax benefit and an increase in its net deferred tax asset, in recent years, as Delanco Bancorp has reported operating losses. Specifically, the Company recorded tax benefits in four of the past five fiscal years. In fiscal 2013, Delanco Bancorp reported a tax benefit of $209,000 on pre-tax operating losses equal to $534,000.

As of March 31, 2013, the Company’s deferred tax asset totaled $1.2 million. For regulatory capital purposes, the deferred tax asset balance is excluded from Tier 1 capital, net of the estimated amount which can be utilized over the next 12 months. As of March 31, 2013, the Company has net operating loss carryforwards (“NOLs”) of $2.0 million. Accordingly, to the extent Delanco Bancorp reports earnings in the future, the substantial NOLs will be available to offset future taxable income and earnings could potentially result in the reversal of the valuation allowance on the deferred tax asset balance, positively impacting regulatory capital.

Interest Rate Risk Management

The primary aspects of the Company’s interest rate risk management include:

• Diversifying portfolio loans into other types of shorter-term or adjustable rate loan products, including adjustable rate or balloon feature residential and commercial real estate/multi-family lending;

• Utilizing a short-to-intermediate term investment portfolio which more closely matches the duration of funding liabilities;

• Promoting savings and transaction accounts which have relatively low interest costs and generate non-interest fee income;

• Utilizing longer-term borrowings when such funds are attractively priced relative to deposits and prevailing reinvestment opportunities;

• Maintaining strong capital which provides a favorable level of interest-earning assets relative to interest-bearing liabilities (the Second Step Conversion will facilitate this effort); and,

• Limiting investment in fixed assets and other non-earning assets and seeking to resolve existing non-performing assets as quickly as possible.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.19

The rate shock analysis as of March 31, 2013 (see Exhibit I-6) reflects that in the event of a further decline in interest rates from the current low levels, Delanco Bancorp’s economic value of equity (“EVE”) would increase. Conversely, rising interest rates are estimated to have an unfavorable impact on the Company’s EVE. A 100 basis point decrease in interest rates would increase EVE by 8.6%, while a 300 basis point increase in interest rates would decrease EVE by 27.5%. Accordingly, Delanco Bancorp is in a liability sensitive position and earnings may likely be adversely impacted by rising interest rates.

Lending Activities and Strategy

Over the last several fiscal years, the Company has been primarily emphasizing real estate lending, primarily 1-4 family residential mortgage loans, as commercial and multi-family mortgage lending had been restricted. To a lesser extent, the Company offers commercial business, consumer, and construction/land loans. Details regarding the Company’s loan portfolio composition are included in Exhibits I-7 and I-8.

Residential Lending

As of March 31, 2013, residential mortgage loans approximated $66.6 million, or 74.3% of total loans. Delanco Bancorp originates fixed rate, balloon, and adjustable rate 1-4 family mortgage loans. Fixed rate mortgage loans are typically offered with terms of 15 to 30 years and balloon mortgage loans with terms of 5 to 15 years. The adjustable-rate (“ARM”) loans carry an initial fixed rate of interest for either the first one or three years, which then convert to an interest rate that is adjusted to a rate equal to a percentage above the one year US Treasury Index. Adjustable rate loans are adjusted to a maximum of 200 basis points per adjustment period with a lifetime interest rate cap of generally 600 basis points over the initial interest rate of the loan. As of March 31, 2013, Delanco Bancorp’s ARM loans equaled $776,000, or approximately 1.2% of total residential loans in the portfolio.

Delanco Bancorp originates one-to-four family loans up to a loan-to-value (“LTV”) ratio of 95%, with private mortgage insurance (“PMI”) being required for loans in excess of an 80% LTV ratio. The Company does not offer loans with negative amortization and generally do not offer interest only loans. The majority of the 1-4 family mortgage loans which have been originated or purchased by the Company are secured by residences within New Jersey.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.20

The Company generally retains all of the mortgage loans that are originated, although in the past, the Company has sold some of their 30 year fixed rate mortgage loans through a correspondent relationship with the Federal Home Loan Bank of New York for interest rate risk management purposes, as most loans are originated to conform to the secondary market guidelines. In the future, if the Company chooses to sell any mortgages, it would be with the servicing of the loans retained by Delanco Bancorp.

Additionally, the Company will purchase participations in loans from the Thrift Institutions Community Investment Corporation of New Jersey to supplement the lending portfolio, if necessary. Loan participations totaled $144,000 as of March 31, 2013.

Commercial Mortgage and Multi-Family Mortgage Lending

Commercial real estate and multi-family mortgage loans totaled $12.4 million, equal to 13.8% of total loans as of March 31, 2013, which represents a decrease from $26.1 million, equal to 24.7% of total loans as of March 31, 2009, reflecting the restrictions from the Order and management’s focus on resolving problem assets.

Commercial real estate and multi-family loans originated by Delanco Bancorp are typically secured by small office buildings, warehouses, retail properties, churches, and small apartment buildings, most of which are located in the Company’s market area. Many of the loans originated during the growth period from 2005 to 2010 were secured by investor owned residential and multi-family rental properties. As previously described, a significant portion of the Company’s recent asset quality problems and loan loss provisions are attributable to such loans.

Commercial and multi-family mortgage loans are originated in amounts up to an 80% LTV and generally require a debt to income ratio of at least 1.25. The Company originates fixed and adjustable rate commercial real estate and multi-family real estate loans generally for terms of up to five to seven years and an amortization period of up to 25 years. Adjustable rate loans are typically tied to the Prime Rate or the US Treasury rate.

Home Equity Loans and Lines of Credit

Delanco Bancorp originates home equity loans and lines of credit, which totaled $8.4 million or 9.3% of total loans as of March 31, 2013. Home equity loans and home equity lines of credit (“HELOCs”) are offered by Delanco Bancorp as part of the residential lending activities and provide interest rate risk and yield enhancement benefits. This lending activity has been declining over the past several years as home values have declined in the local market area limiting the potential lending opportunities under Delanco Bancorp’s underwriting guidelines. However, the Company will reengage in home equity lending as market and economic conditions improve and loan demand increases.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.21

Home equity loans have fixed interest rates and terms that typically range from 5 to 15 years. Some home equity loans are originated as five-year balloon loans with monthly payments based on a 20 to 30 year amortization schedule. The maximum combined LTV (first and second liens) for these loans is limited to 80% or less of the appraised value. HELOCs are originated with adjustable rates indexed to the Prime Rate.

Commercial Business

Delanco Bancorp originates commercial business loans to professionals, sole proprietorships, and small businesses that operate in the primary market area. Installment loans are offered for capital improvements, equipment acquisition, and long-term working capital and are secured by business assets, such as business equipment and inventory, or are backed by the personal guarantee of the borrower. Lines of credit are also offered to finance the working capital needs of businesses or to provide a period of time during which the business can borrow funds for planned equipment purchases. Accounts receivable lines of credit are also offered. Commercial business loans usually have shorter maturity terms and higher interest rates than real estate loans, but typically involve more credit risk because of the type and nature of the collateral. As of March 31, 2013, the Company reported $1.2 million of commercial business loans in portfolio, equal to 1.3% of total portfolio loans. This represents a decrease from $4.6 million, or 4.4% of loans as of March 31, 2009, reflecting the trend of the overall decline in commercial loans.

Construction and Land Loans

Construction and land loans comprised a minimal balance of the Company’s loan portfolio, amounting to $125,000 (0.1% of total loans) at March 31, 2013. Construction loans are made only if there is a permanent mortgage commitment in place and are generally made with a maximum LTV ratio of 90% on residential construction and 80% on commercial construction. These loans are typically attractive due to the relatively short average duration and attractive yields, but also involve a higher degree of credit risk. The Company originates loans to individuals, and to a lesser extent, builders to finance the construction of residential dwellings and small commercial development projects.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.22

Consumer Loans

The Company offers consumer loans generally as a convenience to customers but does not emphasize such loans in marketing efforts. Delanco Bancorp’s consumer loan portfolio totaled $960,000 as of March 31, 2013 (1.1% of total loans) and consisted of loans secured by passbook or certificate accounts and automobile loans.

Loan Originations, Purchases and Sales

Loan originations primarily come from existing customers, walk-in traffic, advertising, and referrals from customers. Total loans originated decreased from $13.9 million in calendar year 2010 to $9.7 million in calendar year 2012, and totaled $3.1 million for calendar year 2013.

The Company has also purchased participations in loans to supplement the lending portfolio, which totaled $144,000 as of March 31, 2013. In the past, the Company has also sold 30 year fixed rate mortgage loans to the FHLB of New York for interest rate risk management purposes. The Company currently originates their loans conforming to FHLB standards; however the Company has no plans to sell originated loans in the future.

Asset Quality

The Company’s asset quality was historically strong and the level of NPAs generally modest at a level typically below 1% of assets. However, with the onset of the economic recession, Delanco Bancorp realized an increase in the level of NPAs, which have remained elevated since fiscal 2009. The delinquencies were realized in both the residential and commercial mortgage portfolios with NPAs increasing from 0.51% of assets as of March 31, 2007 to a peak level of 7.06% of asset as of the end of fiscal 2012. Importantly, progress in reducing the level of NPAs has been hindered by the inability of the Company to gain default and foreclosure judgments owing to a slow judicial process. As a result, the Company’s NPAs, including nonaccrual loans, performing troubled debt restructurings (“TDRs”), and OREO, remain elevated at 6.82% of assets as of March 31, 2013.

As reflected in Exhibit I-9, the balance of NPAs as of March 31, 2013, was $8.8 million, equal to 6.82% of assets, consisting primarily of non-accruing loans and OREO. The ratio of allowances to total loans equaled 1.17%, while reserve coverage in relation to NPLs equaled 16.28% (see Exhibit I-5) and reserve coverage in relation to NPAs equaled 11.70%.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.23

The Company has taken several steps to address the deterioration in asset quality which is largely the result of: (1) credit underwriting weaknesses; (2) erosion of real estate values which has impacted the collateral value of the Company’s loans; and (3) the recession economic environment, which resulted in job losses and lower personal income levels, both of which have adversely impacted borrower’s ability to repay their loans with the Company. Management has instituted a proactive strategy to aggressively reduce non-performing assets through accelerated charge-offs, loan work out programs, and the employment of enhanced collection practices. Additionally, the Company believes it has enhanced its internal risk management processes. In this regard, Delanco Bancorp has evaluated and replaced management and staffing, as necessary, to experienced and seasoned individuals. Delanco Bancorp has enhanced their collections efforts in order to quickly identify potential loan delinquencies as they occur and to develop resolutions strategies with respect to problem borrowers. Overall, credit underwriting, management, and staff have been improved to assure quality credit going forward.

Funding Composition and Strategy

Deposits have consistently served as the Company’s primary funding source. Exhibit I-10 sets forth the Company’s deposit composition for the past three fiscal years and Exhibit I-11 provides the interest rate and maturity composition of the CD portfolio at March 31, 2013. Over the past several years, the Company has concentrated on growing lower cost core deposits, in the form of checking, savings, and money market accounts, to lower their reliance on higher costing certificates of deposit, which is evident in Exhibit I-10. As of March 31, 2013, the balance of the Company’s savings and transaction accounts was $62.4 million or 53.3% of total deposits. Comparatively, the balance of savings and transaction accounts was $56.8 million or 47.0% of total deposits for fiscal year 2011. Thus, shrinkage in the balance of deposits was primarily realized in CDs reflecting the stated objectives of management.

As noted above, CDs represent a shrinking portion of the deposit base, having diminished from $64.0 million (53.0% of deposits) as of March 31, 2011, to $54.7 million (46.7% of deposits) as of March 31, 2013. As of March 31, 2013, jumbo CDs (CD accounts with balances of $100,000 or more) amounted to $16.3 million or 29.8% of total CDs. The Company does not have any brokered deposits.

RP® Financial, LC.	OVERVIEW AND FINANCIAL ANALYSIS
	I.24

Borrowings serve as an alternative funding source for the Company to facilitate management of funding costs and interest rate risk. However, Delanco Bancorp has not utilized borrowed funds since fiscal 2011 as the Company retrenched from lending and did not need additional funds. Delanco Bancorp has the availability of funds from the Federal Home Loan Bank of New York, Atlantic Central Bankers Bank, and the Federal Reserve Bank of Philadelphia, if the need for additional funds arises. Exhibit I-12 provides further detail of the Company’s borrowings activities over the past three fiscal years.

Legal Proceedings

The Company is not currently party to any pending legal proceedings that the Company’s management believes would have a material adverse effect on the Company’s financial condition, results of operations, or cash flows.

RP® Financial, LC.	MARKET AREA ANALYSIS
	II.1

II. MARKET AREA ANALYSIS

Introduction

Delanco Bancorp is headquartered in Delanco Township of Burlington County, New Jersey, and serves the southwestern New Jersey region through a headquarters office and single full-service branch office. The main office and branch office are both located in Burlington County within the Delanco and Cinnaminson Townships of New Jersey. Details regarding the Company’s offices are set forth in Exhibit II-1.

The primary market area of Burlington County is located in southwestern New Jersey, and stretches the entire horizontal length of the state from the Pennsylvania border to the Atlantic Ocean, making it the largest county, in terms of size, in New Jersey. Burlington County is centrally located in the Northeast Corridor and approximately 15 miles from Center City Philadelphia, making it an attractive residential area for many commuters working in Philadelphia and its suburbs owing to the close proximity to the city, as well as the lowest property tax burden in the Philadelphia region. With more acres devoted to farming than any other New Jersey county, Burlington County is among the nation’s leaders in the agriculture industry. Yet in addition to its strong agricultural presence, Burlington County also offers various residential and commercial regions. The suburban townships of Delanco and Cinnaminson in western Burlington County are primarily residential yet also have many thriving businesses, as well, balancing industrial business and suburban residents.

The regional economy has a strong manufacturing history that is still prominent in the area’s economy, however services, health care, and finance/insurance/real estate sectors, as well as the government sector play the leading roles in the regional economy. The regional banking environment is highly competitive, and includes a wide range of thrifts, commercial banks, credit unions and other financial services companies, some of which have a national presence.

Future business and growth opportunities will be partially influenced by economic and demographic characteristics of the markets served by the Company, particularly the future growth and stability of the regional economy, demographic growth trends, and the nature and intensity of the competitive environment for financial institutions. These factors have been examined to help determine the growth potential that exists for the Company, the relative economic health of the Company’s market area, and the impact on market value.

RP® Financial, LC.	MARKET AREA ANALYSIS
	II.2

National Economic Factors

The business potential of a financial institution is partially dependent on the future operating environment and growth opportunities for the banking industry and the economy as a whole. The national economy experienced a severe downturn during 2008 and 2009, as the fallout of the housing crisis caused the wider economy to falter, with most significant indicators of economic activity declining by substantial amounts. The overall economic recession was the worst since the great depression of the 1930s. Approximately 8 million jobs were lost during the recession, as consumers cut back on spending, causing a reduction in the need for many products and services. Total personal wealth declined notably due to the housing crisis and the drop in real estate values. As measured by the nation’s gross domestic product (“GDP”), the recession officially ended in the fourth quarter of 2009, after the national GDP expanded for two consecutive quarters (1.7% annualized growth in the third quarter of 2009 and 3.8% annualized growth in fourth quarter of 2009). The economic expansion has continued since that date, with GDP growth of 3.1% for calendar year 2010, 1.8% for calendar year 2011 and 2.2% for calendar year 2012. Notably, a large portion of GDP growth during 2009 through 2012 was generated through federal stimulus programs, bringing into question the sustainability of the recovery without government support.

For 2012, the national inflation rate equaled 2.07% and through the three months ended March 2013 averaged an even lower rate of 1.68%. Indicating a level of improvement, the national unemployment rate equaled 7.5% as of April 2013, a moderate decline from 8.1% as of April 2012, but still high compared to the long term average and well above the rate for full employment. There remains uncertainty about the near term future, particularly in terms of the speed at which the economy will recover, the impact of the housing crisis on longer term economic growth, and the near-term future performance of the real estate industry, including both residential and commercial real estate prices, all of which have the potential to impact future economic growth. The current and projected size of government spending and deficits also has the ability to impact the longer-term economic performance of the country.

The major stock exchange indices have increased over the last 12 months. As an indication of the changes in the nation’s stock markets over the last 12 months, as of May 17, 2013, the Dow Jones Industrial Average closed at 15,354.40, an increase of 23.4% from May 17, 2012, while the NASDAQ Composite Index stood at 3,498.97, an increase of 24.4% over the same time period. The Standard & Poors 500 Index totaled 1,667.47 as of May 17, 2013, an increase of 27.8% from May 17, 2012.

RP® Financial, LC.	MARKET AREA ANALYSIS
	II.3

Based on the consensus outlook of economists surveyed by The Wall Street Journal in April 2013, economic growth is expected to increase slightly in 2013 compared to 2012, but remain somewhat lackluster overall. The economists forecast calls for GDP growth of 2.5% for 2013, compared to 1.5% for 2012. A 7.4% unemployment rate is forecasted for the end of 2013, and 176,000 jobs are expected to be added per month over the next year. On average, the economists did not expect the Federal Reserve to begin raising its target rate until 2014 at the earliest and the 10-year Treasury yield would increase to 2.34% by the end of 2013. The surveyed economists also forecasted home prices would rise slightly in 2013 and housing starts would pick-up in 2013.

The 2013 housing forecast from the Mortgage Bankers Association (the “MBA”) was for existing home sales to increase by approximately 4.9% and new home sales to increase by 11.5% compared to 2012 existing and new home sales. The MBA forecast projected the median sales price for existing and new homes would increase by 5.6% and 4.7%, respectively, in 2013. Total mortgage production was forecasted to decline to $1.410 trillion in 2013 compared to $1.750 trillion in 2012. The forecasted reduction in 2013 originations was due to a 34% reduction in refinancing volume, with refinancing volume forecasted to total $818 billion in 2013. Comparatively, house purchase mortgage originations were predicted to increase by 17.7% in 2013, with purchase lending forecasted to total $592 billion in 2013.

Interest Rate Environment

Reflecting a strengthening economy which could lead to inflation, the Federal Reserve increased interest rates a total of 17 times from 2004 to 2006, with the Federal Funds rate and discount rate peaking at 5.25% and 6.25% in 2006. The Federal Reserve then held these two interest rates steady until mid-2007, at which time the downturn in the economy was evident, and the Federal Reserve began reacting to the increasingly negative economic news. Beginning in August 2007 and through December 2008, the Federal Reserve decreased market interest rates a total of 12 times in an effort to stimulate the economy.

As of January 2009, the Discount Rate had been lowered to 0.50%, and the Federal Funds rate target was 0.00% to 0.25%. These historically low rates were intended to enable a faster recovery of the housing industry, while at the same time lower business borrowing costs, and such rates remained in effect through early 2010. In February 2010, the Fed increased the discount rate to 0.75%, reflecting a slight change to monetary strategy. The effect of the interest rate decreases since mid-2008 has been most evident in short term rates, which

RP® Financial, LC.	MARKET AREA ANALYSIS
	II.4

decreased more than longer term rates, increasing the slope of the yield curve. This low interest rate environment has been maintained as part of a strategy to stimulate the economy by keeping both personal and business borrowing costs as low as possible. The strategy has achieved its goals, as borrowing costs for residential housing have been at historical lows, and the prime rate of interest remains at a low level. As of May 17, 2013, one- and ten-year U.S. government bonds were yielding 0.12% and 1.95%, compared to 0.20% and 1.70%, respectively, as of May 17, 2012. This has had a mixed impact on the net interest margins of many financial institutions, as they rely on a spread between the yields on longer term assets and the costs of shorter term funding sources. However, institutions who originate substantial volumes of prime-based loans have given up some of this pickup in yield as the prime rate declined from 5.00% as of June 30, 2008 to 3.25% as of December 31, 2008, and has remained at that level since that date. Data on historical interest rate trends is presented in Exhibit II-2.

Market Area Demographic and Economic Characteristics

Table 2.1 presents information regarding the demographic and economic trends for the Company’s market area from 2010 to 2012 and projected through 2017. Data for the nation and the State of New Jersey is included for comparative purposes.

As shown in Table 2.1, the Company’s primary market area of Burlington County contains a relatively large population base of 449,000, which ranks it as the eleventh most populous county in the nation. Despite the large population base, the county has only grown at a minimal annualized rate of 0.1% over the last two years, which is expected to continue over the next five years through 2017. The number of households in Burlington County has declined slightly over the last two years, but is expected to mirror the population growth trends over the next five years. These slow growth rates are relatively comparable to statewide averages, but are well below the nationwide averages.

The southern counties of New Jersey, including Burlington County experienced strong growth during the 2000-2010 period, as a result of the housing boom, which made southern New Jersey the fastest-growing part of the state, as households could afford bigger homes at an affordable price. However, recently, homeownership rates have been declining and more of the new development is rental units in or near cities, resulting in faster growth in the northern counties of New Jersey.

Income figures for the Company’s market area show that Burlington County has a median household income of $74,573 for 2012, which is above the state and national

RP® Financial, LC.	MARKET AREA ANALYSIS
	II.5

Table 2.1

Delanco Bancorp Inc.

Summary Demographic Data

	Year						Growth Rate
	2010		2012		2017		2010-2012			2012-2017
							(%)			(%)
Population (000)
USA		308,746		313,129		323,986		0.7	%		0.7	%
New Jersey		8,792		8,830		8,936		0.2	%		0.2	%
Burlington County		449		449		451		0.1	%		0.1	%
Households (000)
USA		116,716		118,209		122,665		0.6	%		0.7	%
New Jersey		3,214		3,228		3,269		0.2	%		0.3	%
Burlington County		166		166		167		-0.1	%		0.1	%
Median Household Income ($)
USA		NA		50,157		56,895		NA			2.6	%
New Jersey		NA		66,950		79,584		NA			3.5	%
Burlington County		NA		74,573		83,940		NA			2.4	%
Per Capita Income ($)
USA		NA		26,409		29,882		NA			2.5	%
New Jersey		NA		33,924		39,270		NA			3.0	%
Burlington County		NA		34,714		39,498		NA			2.6	%

	0-14 Yrs.		15-34 Yrs.		35-54 Yrs.		55-69 Yrs.		70+ Yrs.
2012 Age Distribution (%)
USA		19.6		27.4		27.1		16.6		9.2
New Jersey		19.1		25.6		28.9		16.7		9.7
Burlington County		18.7		24.1		29.9		17.4		10.0

	Less Than $25,000		$25,000 to 50,000		$50,000 to 100,000		$100,000+
2012 HH Income Dist. (%)
USA		24.7		25.1		29.9		20.3
New Jersey		17.6		19.6		29.7		33.1
Burlington County		12.6		19.0		33.8		34.5

Source: SNL Financial, Inc.

RP® Financial, LC.	MARKET AREA ANALYSIS
	II.6

aggregates. Per capita income is also higher in Burlington County, as compared to the State of New Jersey, as well as the nation. Additionally, Burlington County has a high percentage of households earning over $100,000, indicating the relative affluent nature of the area. The Company’s primary market area county maintains a relatively lower percentage of younger residents (under 34 years old) and a higher percentage of residents over 55 years old, as compared to the state and national figures.

Regional/Local Economy

Table 2.2 presents a list of the largest employers in the market area. The Company’s market area contains a cross section of employment sectors, with a mix of services, manufacturing, wholesale/retail trade, federal and local government, health care facilities and finance related employment. Throughout Burlington County there are also growing industries within the retail, agriculture, technology, and military sectors, which are contributing to the local economy.

Table 2.2

Delanco Bancorp Inc.

Largest Employers in Burlington County

Company/Institution	Industry	Employees
Virtua Memorial Hospital	Healthcare		3,300
Lockheed Martin	Defense		3,000
Burlington Coat Factory	Retail		2,000
Viking Yacht Club	Other		1,400
PHH Mortgage	Financial Services		1,300
Deborah Heart and Lung Center	Healthcare		6,000
Lourdes Medical Center	Healthcare		1,300
CVS Corporation	Retail		1,200
MEDCO	Healthcare		1,000
Nade Auto Auction	Automobile		813

Source: Burlington County, New Jersey.

The proximity to the Delaware River has given rise to a significant manufacturing industry, with companies like Ocean Spray Cranberries, Inc. and Viking Yacht Club occupying manufacturing space in the area. Additionally, the military has a strong presence in Burlington County, as Lockheed Martin is one of the top employers in the area and as it is also home to the nation’s only tri-service joint base. Together, McGuire Air Force Base, Fort Dix Army Base, and

RP® Financial, LC.	MARKET AREA ANALYSIS
	II.7

Lakehurst Naval Engineering Station occupy 42,000 acres, a portion of which is located in neighboring Ocean County. More than 40,000 military and civilian personnel and their families live and work on or near the base. Additionally new construction projects totaling approximately $300 million are expected to result from the base, along with 1,200 new permanent jobs. As shown in Table 2.2, the healthcare industry is well represented on the list, with four firms in the top ten of the largest employers in the area. Lockheed Martin, the second largest employer, has maintained a high number of employees in Burlington County in recent years, and recently announced a $100 million contract with the U.S. Navy, which will ensure their continued presence in the county.

Market Area Employment Sectors

As noted previously, the Company’s market area economy is based on a variety of employment sectors with notable diversification in non-service industries. Employment data presented in Table 2.3 indicates that similar to many areas of the country, services are the most prominent sector for the State of New Jersey and Burlington County, comprising 29% and 26% of total employment. Also, Burlington County reported an additional 17% of employment concentrated in the healthcare industry, which accounts for the four of the top ten largest employers in the area being a part of this industry. Particularly, Virtua Memorial Hospital, the largest employer in Burlington County, has recently spent over $1 billion on infrastructure and has created thousands of jobs for the local economy. Furthermore, the Delaware Valley is home to six medical schools, three pharmacy schools, and 101 colleges and universities as well as 197 hospitals and 15 major health systems.

Finance, insurance, and real estate (14.0% of county employment), government (13.6% of county employment), and wholesale and retail trade (10.8% of county employment) are also notable areas of employment within Burlington County, which is also revealed in Table 2.2, with PHH Mortgage, Lockheed Martin, and Burlington County Factory serving as top employers in the county.

Importantly, however, many residents of Burlington County commute to Philadelphia or its nearby suburbs. The Philadelphia metropolitan area’s prominent employment sectors are comparable to Burlington County, as education and healthcare services constitute the most prominent employment sector, followed by trade, transportation, and professional and business services.

RP® Financial, LC.	MARKET AREA ANALYSIS
	II.8

Table 2.3

Delanco Bancorp Inc.

Primary Market Area Employment Sectors

(Percent of Labor Force)

				Burlington
Employment Sector	New Jersey			County
	(% of Total Employment)
Services		28.5	%		26.2	%
Wholesale/Retail Trade		11.7	%		10.8	%
Government		12.6	%		13.6	%
Healthcare		15.1	%		16.5	%
Finance/Insurance/Real Estate		12.3	%		14.0	%
Manufacturing		5.3	%		6.2	%
Transportation/Utility		4.2	%		4.2	%
Construction		1.8	%		1.3	%
Information		4.2	%		3.6	%
Agriculture		0.3	%		0.5	%
Other		4.0	%		3.0	%
		100.0	%		100.0	%

Source: Bureau of Economic Analysis, 2011

Unemployment Trends

Comparative unemployment rates for Burlington County, as well as for the U.S. and New Jersey are shown in Table 2.4. Importantly, Burlington County experienced a significant downturn in the local and regional economy during the recession of 2008 to 2009. Home prices dropped steadily between 2007 and 2011, which led to slowed consumer spending, high unemployment, and other economic problems. The recovery has been slow throughout the county, but home prices and unemployment are both improving in 2013. As shown in Table 2.4, as of March 2013, Burlington County reported an unemployment rate below the State of New Jersey, but materially above the nationwide aggregate. The March 2013 unemployment rates were lower in Burlington County compared to a year ago, which corresponds with national and state unemployment trends which declined over the same time period, indicating improvement to the Company’s primary market area.

RP® Financial, LC.	MARKET AREA ANALYSIS
	II.9

Table 2.4

Delanco Bancorp Inc.

Unemployment Trends

	March 2012			March 2013
Region	Unemployment			Unemployment
USA		8.2	%		7.6	%
New Jersey		9.3	%		8.9	%
Burlington County		9.0	%		8.5	%

Source: U.S. Bureau of Labor Statistics.

Real Estate Trends

1. Home Sales

Home sales activity across New Jersey during the first quarter of 2013 surpassed the mark posted during the same period in 2012, a positive indicator for an industry that has been impacted by the recession that commenced in 2008. According to statistics provided by the New Jersey Association of Realtors (“NJAR”), existing single-family home sales during the quarter ended March 2013 totaled 19,100, a 11.1% increase from the same period posted in 2012 (when the market recorded 17,200 sales). The median sales price decreased by a minimal 0.4% (to $262,300) for the first quarter of 2013, from the level for the first quarter of 2012 ($263,400).

Similarly, home sales in the Company’s market area reflected an improving trend. In Burlington County, first quarter 2013 home sales totaled 680, up 7.6% from the 632 homes sold during the same quarter a year prior. Home prices mirrored the statewide trend, reflecting a decreasing trend in the Company’s market area over the first quarter of 2013, as the median sales price for existing single-family homes in Burlington County was $197,400 for the first quarter of 2013, down 5.9% from $209,800 for the first quarter 2012. The decreasing trend in sales price may be attributable to the lengthy judicial foreclosure process in New Jersey that has affected Delanco Bancorp and has stalled foreclosure resolutions.

RP® Financial, LC.	MARKET AREA ANALYSIS
	II.10

2. Foreclosure Trends

During April 2013, foreclosure filings fell 23% from a year earlier to the lowest level in over six years across the nation. In contrast, foreclosure filings in New Jersey increased to the highest levels in more than two years. New Jersey has one of the longest foreclosure processing periods in the country at 1,002 days on average, covering the period from foreclosure start to bank repossession. The state experienced a 138% rise in property foreclosures from 1,227 in March 2013 to 2,917 in April 2013, which was the largest month-to-month increase in the country. At the same time, New Jersey ranked 15th in the country in total foreclosure filings with 3,934 notices, or one for every 901 homes, as reported by RealtyTrac, a company specializing in real estate foreclosure data. Furthermore, the state had the second highest foreclosure inventory of 7.3% of mortgaged homes for the first quarter of 2013, as reported by Corelogic, a property information, analytics and services provider.

Locally, foreclosures trended downward over the first four months of 2013. As of April 2013, Burlington County reported one in every 743 housing units with a foreclosure filing, compared to one in every 960 housing units with a foreclosure filing in December 2012. This is a positive trend for the Company’s local market area and for Delanco Bancorp, however the long foreclosure process, which continues to impact the entire state, may likely continue to delay the Company’s progress in improving asset quality.

Market Area Deposit Characteristics

The Company’s retail deposit base is closely tied to the economic fortunes of Burlington County and, in particular, the areas that are nearby to each of the office facilities. Table 2.5 displays deposit market trends from June 30, 2008 through June 30, 2012 for Burlington County and the State of New Jersey. New Jersey bank and thrift deposits increased at a 4.3% annual rate during the four year period, with savings institutions declining by 0.6% and commercial banks reporting annual deposit growth of 6.3%. The decline in savings institution deposits over the four year time period was largely due to deposit declines in certain larger institutions in troubled condition and less aggressive growth strategies of institutions in general given the adverse economic conditions that have existed since 2008. Overall, savings institutions held a market share of 26.0% of total deposits statewide as of June 30, 2012. On the other hand, Burlington County experienced a decline in total county deposits at an annual rate of 1.9% over the four year period.

Due to the large size of Burlington County and presence in the Philadelphia metropolitan area, Delanco Bancorp maintains a relatively modest market share in terms of market area deposits. The Company’s deposit market share in Burlington County of $122.5 million of deposits represented 1.4% market share of bank and thrift deposits at June 30, 2012.

RP® Financial, LC.	MARKET AREA ANALYSIS
	II.11

Table 2.5

Delanco Bancorp Inc.

Deposit Summary

	As of June 30,
	2008							2012							Deposit
			Market			No. of				Market			No. of		Growth Rate
	Deposits		Share			Branches		Deposits		Share			Branches		2008-2012
			(Dollars in Thousands)												(%)
New Jersey	$	227,188,713		100.0	%		3,381	$	268,372,548		100.0	%		3,276		4.3	%
Commercial Banks		155,743,621		68.6	%		2,415		198,518,944		74.0	%		2,511		6.3	%
Savings Institutions		71,445,092		31.4	%		966		69,853,604		26.0	%		765		-0.6	%
Burlington County	$	9,168,029		100.0	%		143	$	8,483,578		100.0	%		129		-1.9	%
Commercial Banks		7,354,944		80.2	%		87		5,927,198		69.9	%		80		-5.3	%
Savings Institutions		1,813,085		19.8	%		56		2,556,380		30.1	%		49		9.0	%
Delanco Federal SB		116,187		1.3	%		2		122,452		1.4	%		2		1.3	%

Source: FDIC

Deposit Competition

The competitive environment for financial institution products and services on a national, regional and local level can be expected to become even more competitive in the future. Consolidation in the banking and thrift industries provides economies of scale to the larger institutions, while the increased presence of investment options provides consumers with attractive investment alternatives to financial institutions. Delanco Bancorp faces notable competition in both deposit gathering and lending activities, including direct competition with financial institutions that primarily have a local, regional or national presence. Securities firms and mutual funds also represent major sources of competition in raising deposits. In many cases, these competitors are also seeking to provide some or all of the community-oriented services as the Company. With regard to lending competition, Delanco Bancorp encounters the most significant competition from the same institutions providing deposit services. In addition, the Company competes with mortgage companies, independent mortgage brokers, and credit unions.

From a competitive standpoint, the Company benefits from its status of a locally-owned financial institution, longstanding customer relationships, and continued efforts to offer competitive products and services. However, competitive pressures will also likely continue to build as the financial services industry continues to consolidate and as additional non-bank investment options for consumers become available. Table 2.6 below lists the Company’s largest competitors in Burlington County. Among the Company’s competitors are much larger

RP® Financial, LC.	MARKET AREA ANALYSIS
	II.12

and more diversified institutions which have greater resources than maintained by the Company, including Toronto-Dominion Bank and Wells Fargo Bank. In Burlington County, Delanco Bancorp is ranked 13th in deposit market share, maintaining a modest 1.4% market share.

Table 2.6

Delanco Bancorp Inc.

Market Area Deposit Competitors

Name	Market Share			Rank
Toronto-Dominion Bank		25.08	%		1
Wells Fargo & Co.		15.46	%		2
Beneficial Mutual Bancorp		15.23	%		3
PNC		10.16	%		4
Bank of America Corp.		6.40	%		5
Delanco Bancorp Inc.		1.40	%		13 out of 21

Source: SNL Financial, Inc.

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.1

III. PEER GROUP ANALYSIS

This chapter presents an analysis of Delanco Bancorp’s operations versus a group of comparable savings institutions (the “Peer Group”) selected from the universe of all publicly-traded savings institutions in a manner consistent with the regulatory valuation guidelines and other regulatory guidance. The basis of the pro forma market valuation of Delanco Bancorp is derived from the pricing ratios of the Peer Group institutions, incorporating valuation adjustments to account for key differences in relation to the Peer Group. Since no Peer Group can be exactly comparable to Delanco Bancorp, individually or as a whole, key areas examined for differences to determine if valuation adjustments are appropriate were in the following areas: financial condition; profitability, growth and viability of earnings; asset growth; primary market area; dividends; liquidity of the shares; marketing of the issue; management; and, effect of government regulations and regulatory reform.

Peer Group Selection

The Peer Group selection process is governed by the general parameters set forth in the regulatory valuation guidelines and other regulatory guidance. The Peer Group is comprised of only those publicly-traded thrifts whose common stock is either listed on a national exchange (NYSE or AMEX) or is NASDAQ listed, since their stock trading activity is regularly reported and generally more frequent than “non-listed thrifts” i.e., those listed on the Over-the-Counter Bulletin Board or Pink Sheets, as well as those that are non-publicly traded and closely-held. Non-listed institutions are inappropriate since the trading activity for thinly-traded or closely-held stocks is typically highly irregular in terms of frequency and price and thus may not be a reliable indicator of market value. We have also excluded from the Peer Group those companies under acquisition or subject to rumored acquisition, mutual holding companies, and recent conversions, since their pricing ratios are subject to unusual distortion and/or have limited trading history. We typically exclude those companies that were converted less than one year as their financial results do not reflect a full year of reinvestment benefit and since the stock trading activity is not seasoned. A recent listing of the universe of all publicly-traded savings institutions is included as Exhibit III-1.

Ideally, the Peer Group should be comprised of locally or regionally-based institutions with relatively comparable resources, strategies and financial characteristics. There are 128 publicly-traded thrift institutions nationally, which includes 18 publicly-traded MHCs. Given the limited number of public full stock thrifts, it is typically the case that the Peer Group will be

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.2

comprised of institutions which are not directly comparable, but the overall group will still be the “best fit” group. To the extent that key differences exist between the converting institution and the Peer Group, valuation adjustments will be applied to account for such key differences. Since Delanco Bancorp will be a full stock public company upon completion of the Second Step Conversion, we considered only full stock companies to be viable candidates for inclusion in the Peer Group, excluding those in MHC form.

Based on the foregoing, from the universe of publicly-traded thrifts, we selected ten institutions with characteristics similar to those of Delanco Bancorp. In the selection process, we applied the following two screens to the universe of all public thrifts that were eligible for consideration:

Screen #1

• Operating in the Mid-Atlantic and New England regions of the US;

• Total assets less than $1.0 billion; and,

• NPAs/assets greater than 2%.

Screen #2

• Nationwide (other than the Mid-Atlantic and New England regions);

• Total assets less than $300 million; and,

• NPAs/assets greater than 3%.

In addition, we considered the presence of a regulatory agreement, in terms of selecting Peer Group companies, as the Bank is currently subject to the Agreement, which will continue to be in effect following the Second Step Conversion. Likewise, three of the ten Peer Group institutions have also indicated in their public disclosures that they are subject to various forms of agreements with their primary regulators (see the rightmost columns in Table 3.1). While no two regulatory agreements are the same in terms of their requirements and impact on the subject financial institution, they typically limit the operating flexibility of a financial institution and can result in greater regulatory sanctions if the terms of the agreements are not met. Moreover, regulatory agreements can impact shareholder value as a result of the costs of compliance and the reduced operating flexibility and more limited ability to grow.

Eleven companies met the foregoing selection parameters for inclusion in the Peer Group and ten companies were included in the Peer Group, as shown in Table 3.1. The only company meeting the foregoing selection criteria which was excluded was Carver Bancorp, Inc.

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.3

Table 3.1

Peer Group of Publicly-Traded Thrifts

									As of May 17, 2013				Status of Regulatory Agreements With Primary Regulator
Ticker	Financial Institution	Exchange		Primary Market	Total Assets (1)		Offices		Stock Price		Market Value		Type of Agreement (2)		Date of Action
					($Mil)				($)		($Mil)
SVBI	Severn Bancorp, Inc. of MD		NASDAQ	Annapolis, MD	$	852		4	$	4.60	$	46		Consent Order		04/13
THRD	TF Fin. Corp. of Newtown PA		NASDAQ	Newtown, PA		716		15		25.13		71		None Disclosed		—
HBNK	Hampden Bancorp, Inc. of MA		NASDAQ	Springfield, MA		668		10		15.28		88		None Disclosed		—
COBK	Colonial Financial Serv. of NJ		NASDAQ	Bridgeton, NJ		633		9		13.50		52		None Disclosed		—
NVSL	Naugatuck Valley Fin Crp of CT		NASDAQ	Naugatuck, CT		526		10		7.20		50		Consent Order		01/12
ALLB	Alliance Bancorp, Inc. of PA		NASDAQ	Broomall, PA		457		9		13.70		71		None Disclosed		—
AFCB	Athens Bancshares Corp. of TN		NASDAQ	Athens, TN		296		7		18.44		41		None Disclosed		—
WBKC	Wolverine Bancorp, Inc. of MI		NASDAQ	Midland, MI		290		4		18.82		46		None Disclosed		—
CFBK	Central Federal Corp. of OH		NASDAQ	Fairlawn, OH		216		4		1.50		24		Cease & Desist		05/11
FFNM	First Fed of N. Michigan of MI		NASDAQ	Alpena, MI		213		8		4.64		13		None Disclosed		—

NOTES: (1) Most recent quarter end available.

Source: SNL Financial, LC.

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.4

of New York (“Carver Bancorp”), owing to its urban location in the heart of New York City and minority ownership, management, and customer base. As a result, Carver Bancorp has an operating and risk profile which differentiates it from the Company and most of the Peer Group companies conducting business pursuant to more traditional community bank operating strategies in smaller, more suburban markets. Table 3.1 shows the general characteristics of each of the ten Peer Group companies and Exhibit III-2 provides summary demographic and deposit market share data for the primary market areas served by each of the Peer Group companies. While there are expectedly some differences between the Peer Group companies and Delanco Bancorp, we believe that the Peer Group companies, on average, provide a good basis for valuation subject to valuation adjustments. The following sections present a comparison of Delanco Bancorp’s financial condition, income and expense trends, loan composition, interest rate risk, and credit risk versus the Peer Group as of the most recent publicly available date.

In addition to the selection criteria used to identify the Peer Group companies, a summary description of the key comparable characteristics of each of the Peer Group companies is detailed below.

• Severn Bancorp, Inc. of MD (“SVBI”) is the largest company, in terms of asset size, in the Peer Group and operates through 4 retail banking offices throughout central Maryland along the Chesapeake Bay. SVBI’s asset structure reflects broadly similar proportions of loans, investments, deposits, and borrowings, as compared to the Peer Group. The majority of loans are invested in 1-4 family loans (inclusive of an investment in MBS), however the loan portfolio is diversified into commercial and construction/land loans, with SVBI reporting the highest percentage of construction/land loans of the Peer Group, resulting in the second highest risk-weighted assets to assets ratio of the Peer Group. In addition, SVBI reported the highest level of NPAs/assets of the Peer Group, which contributed to the Consent Order issued to the Company’s subsidiary bank in April 2013. At December 31, 2012 (most recent date available), SVBI had total assets of $852 million and a tangible equity-to-assets ratio of 12.8%. For the twelve months ended December 31, 2012, SVBI reported net income equal to 0.39% of average assets. SVBI had a market capitalization of $46 million at May 17, 2013.

• TF Fin. Corp. of Newtown PA (“THRD”) is the second largest company in the Peer Group, in terms of total assets, and operates through a total of 13 offices in southeast Pennsylvania and southern New Jersey, and thus, THRD operates in the Company’s regional market. THRD’s asset composition reflected a similar proportion of loans and slightly higher investment in cash and investment securities, while THRD’s funding composition was less dependent upon borrowings in comparison to the Peer Group averages. Lending operations were more heavily focused on residential lending (inclusive of investment in MBS) in comparison to the Peer Group average, which resulted in a lower risk-weighted assets-to-assets ratio in comparison to the Peer Group range. THRD also maintained one of the largest loans serviced for others portfolios of the Peer Group. THRD recorded asset quality ratios and reserve coverage ratios more

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.5

favorable than the Peer Group averages and THRD’s ROA was above the Peer Group average supported by a higher yield cost spread. At March 31, 2013, THRD reported total assets of $716 million and a tangible equity-to-assets ratio of 11.0%. For the twelve months ended March 31, 2013, THRD reported net income equal to 0.78% of average assets. THRD had a market capitalization of $71 million at May 17, 2013.

• Hampden Bancorp, Inc. of MA (“HBNK”) operates through 10 retail banking offices in western Massachusetts. Assets were funded with a lower level of deposits and a higher level of borrowed funds, reflecting a tangible equity ratio similar to the Peer Group average. Earning assets were mainly concentrated in investment securities, as loans as a percent of assets fell below the Peer Group average. HBNK recorded the highest asset growth of all Peer Group members over the last twelve months, funded with additional deposits and borrowings, with the funds placed mostly into investment securities, but also loans. The loan portfolio reflects the highest concentration in MBS in comparison to the Peer Group companies individually, while the loan portfolio reflects a comparable level of diversification in comparison to the Peer Group averages. Asset quality ratios were the most favorable of all Peer Group members in terms of the NPA/Assets ratio, while reserve coverage ratios were lower than Peer averages. Earnings were slightly above the Peer Group average, supported by a modest level of loan loss provisions. At March 31, 2013, HBNK had total assets of $668 million and a tangible equity-to-assets ratio of 13.0%. For the twelve months ended March 31, 2013, HBNK reported earnings of 0.51% of average assets. HBNK had a market capitalization of $668 million at May 17, 2013.

• Colonial Financial Serv. Of NJ (“COBK”) operates through 9 retail banking offices in southern New Jersey, in markets adjoining the Company’s primary market area. COBK’s balance sheet reflects the lowest loans/assets ratio and the highest investments/assets ratio of all the Peer Group companies, funded mostly by an above average level of deposits with limited use of borrowings in comparison to the Peer Group average. The loan portfolio composition reflects diversification into all areas of lending, although residential lending (inclusive of investment in MBS) represent the largest segment of the portfolio. Asset quality ratios for COBK were less favorable than the Peer Group in terms of NPAs/assets and the reserve coverage ratios. Moreover, loan loss provisions were higher and COBK reported a net loss over the recent twelve months period. At March 31, 2013, COBK reported total assets of $633 million and a tangible equity-to-assets ratio of 10.7%. For the twelve months ended March 31, 2013, COBK reported a net loss equal to 0.24% of average assets. COBK had a market capitalization of $52 million at May 17, 2013.

• Naugatuck Valley Fin Corp of CT (“NVSL”) operates through 10 retail banking offices in south-central Connecticut. The balance sheet reflects a broadly similar asset and funding mix relative to the Peer Group average, with a slightly higher proportion of loans as a percent of assets. NVSL’s lending strategy is focused on residential and commercial lending, as well as construction/land and non-mortgage commercial loans, and operated with a more diversified loan portfolio than the Peer Group, overall. The ratio of NPAs/assets is above the average and median of the Peer Group, while reserve coverage ratios are also above the Peer Group ratios. NVSL reported an operating loss due to the elevated NPAs, which was a factor leading to the Consent Order entered into by the Company’s bank subsidiary in January 2012. At March 31, 2013, NVSL had total assets of $526 million and a tangible equity-to-assets ratio of 12.7%. For the twelve months ended March 31, 2013, NVSL reported a net loss equal to 2.44% of average assets. NVSL had a market capitalization of $50 million at May 17, 2013.

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.6

• Alliance Bancorp, Inc., of PA (“ALLB”) operates 9 branch offices in southeast Pennsylvania within the Philadelphia metropolitan area. Compared to the Peer Group averages, ALLB operates with a higher proportion of cash and equivalents (highest of the Peer Group), as well as a lower level of loans funded primarily be deposits. ALLB maintains a loan portfolio primarily focused on mortgage loans (both residential and commercial), which resulted in the second lowest risk-weighted assets-to-assets ratio of the Peer Group range. In terms of asset quality ratios, ALLB reported a lower NPA/Assets ratio then the Peer Group average, but the reserve coverage ratios were also lower than the Peer Group averages. Net income was higher than the Peer Group average, with earnings supported by lower provisions and operating expenses, as compared to the Peer Group averages. At March 31, 2013, ALLB reported total assets of $457 million and a tangible equity-to-assets ratio of 17.4%. For the twelve months ended March 31, 2013, ALLB reported earnings of 0.52% of average assets. ALLB had a market capitalization of $71 million at May 17, 2013.

• Athens Bancshares Corp. of TN (“AFCB”) operates through 7 banking offices throughout southeast Tennessee. AFCB’s balance sheet reflects a similar asset and funding mix relative to the Peer Group average, with a slightly higher proportion of deposits and lower proportion of borrowings as a percent of assets. AFCB’s loan portfolio composition compared closely to the Peer Group averages, with the exception of the higher investment in construction/land loans. Asset quality ratios, including reserve coverage ratios are more favorable than the Peer Group averages. Net income was the highest of all the Peer Group companies, which was the result of higher net interest income, supported by higher spreads and a high level of non-interest income. At March 31, 2013, AFCB reported total assets of $296 million and a tangible equity-to-assets ratio of 15.5%. For the twelve months ended March 31, 2013, AFCB reported net income of 0.89% of average assets. AFCB had a market capitalization of $41 million at May 17, 2013.

• Wolverine Bancorp, Inc. of MI (“WBKC”) operates out of five offices in Central Michigan. WBKC reported the highest loans/assets ratio and the highest equity/assets ratio of all Peer Group companies, while also reporting a high level of borrowed funds. WBKC was more profitable than the Peer Group, reporting a higher net interest income ratio and stronger non-operating income ratio than the Peer Group averages and medians. WBKC had the highest concentration of commercial real estate/multi-family mortgage loans of any Peer Group company, contributing to a high risk-weighted assets-to-assets ratio. WBKC’s NPA/Assets ratios fell below the averages and medians of the Peer Group, while the reserve coverage ratios were above the Peer Group averages and medians. As of March 31, 2013, WBKC had total assets of $290 million and a tangible equity-to-assets ratio of 21.7%. For the twelve months ended March 31, 2013, WBKC reported earnings of 0.62% of average assets. WBKC had a market capitalization of $46 million at May 17, 2013.

• Central Federal Corp. of OH (“CFBK”) operates out of four offices throughout central and eastern Ohio. CFBK reported a higher ratio of loans as a percent of assets than the Peer Group average and median, funded by the higher deposits and lower borrowings as a percent of assets, in comparison to the Peer Group averages. CFBK realized asset shrinkage over the last twelve months in order to increase equity ratios in the face of high net losses. The Company’s bank subsidiary is under a Cease and Desist Order, issued May 2011, which provides for specific IMCRs. Portfolio loans are more heavily concentrated in commercial mortgage and non-mortgage loans in comparison to the Peer Group, which resulted in a high risk-weighted assets-to-assets ratio. CFBK

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.7

reported a high level of NPAs in comparison to the Peer Group. CFBK reported a net loss of 1.71% of average assets due to a low spread, coupled with elevated provisions and high operating expenses. At March 31, 2013, CFBK reported total assets of $216 million and a tangible equity-to-assets ratio of 10.5%. CFBK had a market capitalization of $24 million at May 17, 2013.

• First Fed of N. Michigan of MI (“FFNM”) operates eight offices in northern Michigan and is the smallest of the Peer Group companies in terms of asset size. The asset base was funded with a higher level of borrowed funds and lower deposits than the Peer Group, and also reported an equity/assets ratio slightly below the Peer Group. FFNM was one of the four Peer Group companies to report a net loss over the past twelve months, at a level below the Peer Group average and median, as FFNM’s operating expense ratio is at the upper end of the Peer Group range. The loan portfolio was concentrated in 1-4 family loans (inclusive of MBS), resulting in a lower than average risk-weighted assets-to-assets ratio. Asset quality measures were generally comparable to the Peer Group, although FFNM has less favorable reserve coverage ratios. As of March 31, 2013, FFNM had total assets of $213 million and a tangible equity-to-assets ratio of 11.4%. For the twelve months ended March 31, 2013, FFNM reported a net loss of 0.35%. FFNM had a market capitalization of $13 million at May 17, 2013, the lowest among the Peer Group companies.

In the aggregate, the Peer Group companies maintain a slightly higher tangible equity level, in comparison to the industry median (12.74% of assets versus 11.66% for all non-MHC public companies) and generate a lower level of core profitability (0.03% of average assets for the Peer Group versus 0.36% of average assets for all non-MHC public companies). The Peer Group companies reported a minimal median core ROE, whereas all non-MHC public companies have a higher median core ROE than the Peer Group (0.22% for the Peer Group versus 2.81% for all non-MHC public companies). Overall, the Peer Group’s pricing ratios were at a discount to all full stock publicly traded thrift institutions on both a P/TB and core P/E basis.

	All Non-MHC Public-Thrifts			Peer Group
Financial Characteristics (Medians)
Assets ($Mil)	$	817		$	492
Market Capitalization ($Mil)	$	93		$	48
Tangible Equity/Assets (%)		11.66	%		12.74	%
Core Return on Average Assets (%)		0.36	%		0.03	%
Core Return on Average Equity (%)		2.81	%		0.22	%
Pricing Ratios (Medians)(1)
Price/Core Earnings (x)		20.33	x		19.63	x
Price/Tangible Book (%)		94.74	%		82.53	%
Price/Assets (%)		12.13	%		10.47	%

(1) Based on market prices as of May 17, 2013.

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.8

The thrifts selected for the Peer Group were relatively comparable to Delanco Bancorp in terms of all of the selection criteria and are considered the “best fit” group. While there are many similarities between Delanco Bancorp and the Peer Group on average, there are some notable differences that lead to valuation adjustments. In this regard, the requirement to select publicly traded companies necessarily resulted in peer group companies which are larger than the Company and which have greater liquidity in their stock. The following comparative analysis highlights key similarities and differences between Delanco Bancorp and the Peer Group.

Financial Condition

Table 3.2 shows comparative balance sheet measures for Delanco Bancorp and the Peer Group, reflecting balances as of March 31, 2013, for the Company and as of March 31, 2013, or the most recent date available for the Peer Group, respectively. On a reported basis, Delanco Bancorp’s equity-to-assets ratio of 8.8% was below the Peer Group’s median equity-to-assets ratio of 12.8%. Tangible equity-to-assets ratios for the Company and the Peer Group equaled 8.8% and 12.8%, respectively, with the Peer Group reporting a limited intangible assets balance while the Company did not have any intangible assets.

The Company’s pro forma capital position will increase with the addition of stock proceeds, providing the Company with an equity and tangible equity ratio that is expected to remain below the Peer Group’s ratios (i.e., in a range of 10.7% to 11.9%). As a result of the Second Step Conversion, the increase in Delanco Bancorp’s pro forma equity position will enhance the ability to address the high level of NPAs which management believes will facilitate the restoration of profitable operations. At the same time, the Company’s capital remains at risk given the level of NPAs and in view of the uncertainties with respect to a weak local economy, the strength and duration of an economic recovery, and the related recovery of real estate values. Important from the perspective of the valuation, the Peer Group is subject to these same risks given their high level of NPAs and likely, as a result, recent history of loan loss provisions and weak earnings or losses.

The interest-earning asset (“IEA”) composition for the Company and the Peer Group reflects a broad similarity in terms of the proportion of loans, as Delanco Bancorp’s ratio of loans/assets of 68.3% was only slightly below the Peer Group median ratio of 72.8%. At the same time, Delanco Bancorp’s level of cash and investments equal to 22.6% of assets was slightly above the comparable Peer Group median of 18.0%. Overall, Delanco Bancorp’s interest-earning assets amounted to 90.9% of assets which was similar to the Peer Group’s

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.9

Table 3.2

Balance Sheet Composition and Growth Rates

Comparable Institution Analysis

As of March 31, 2013

	Balance Sheet as a Percent of Assets																														Balance Sheet Annual Growth Rates																					Regulatory Capital
	Cash & Equivalents			MBS & Invest			BOLI			Loans			Deposits			Borrowed Funds			Subd. Debt			Net Worth			Goodwill & Intang			Tng Net Worth			Assets			MBS, Cash & Investments			Loans			Deposits			Borrows. & Subdebt			Net Worth			Tng Net Worth			Tangible			Core			Reg.Cap.
Delanco Bancorp, Inc.
March 31, 2013		5.2	%		17.4	%		0.1	%		68.3	%		90.4	%		0.0	%		0.0	%		8.8	%		0.0	%		8.8	%		-3.64	%		19.14	%		-11.08	%		-3.75	%		NA			-2.96	%		-2.96	%		7.79	%		7.79	%		14.67	%
All Public Companies
Averages		6.3	%		21.2	%		1.8	%		66.4	%		74.7	%		10.2	%		0.4	%		13.4	%		0.8	%		12.6	%		4.39	%		0.94	%		5.13	%		5.61	%		-5.38	%		2.67	%		2.36	%		12.69	%		12.55	%		21.61	%
Medians		4.8	%		17.8	%		1.9	%		68.7	%		75.5	%		8.6	%		0.0	%		12.8	%		0.1	%		11.7	%		-0.23	%		-2.98	%		2.47	%		0.79	%		-8.18	%		1.54	%		1.24	%		12.10	%		11.95	%		20.18	%
State of NJ
Averages		3.9	%		26.6	%		2.4	%		62.7	%		74.2	%		11.6	%		0.2	%		12.9	%		1.1	%		11.9	%		2.74	%		-1.56	%		4.76	%		4.10	%		-7.88	%		1.17	%		1.16	%		14.28	%		14.28	%		22.49	%
Medians		3.0	%		21.8	%		2.2	%		66.8	%		75.4	%		10.0	%		0.0	%		12.4	%		0.3	%		11.1	%		0.94	%		-4.00	%		1.96	%		1.40	%		-9.12	%		0.25	%		0.25	%		14.46	%		14.46	%		21.33	%
Comparable Recent Conversions(1)
CHFN    Charter Financial Corp. of GA		10.5	%		18.9	%		3.3	%		57.8	%		77.5	%		7.8	%		0.0	%		13.8	%		0.5	%		13.3	%		-11.90	%		-4.88	%		-8.96	%		-12.16	%		-26.36	%		2.23	%		2.74	%		12.16	%		12.16	%		19.22	%
Comparable Group
Averages		8.2	%		15.5	%		2.0	%		70.7	%		75.6	%		9.1	%		0.5	%		13.8	%		0.1	%		13.7	%		-1.91	%		-9.61	%		2.58	%		-1.71	%		-2.87	%		-3.91	%		-3.80	%		10.83	%		10.83	%		18.83	%
Medians		7.4	%		10.6	%		2.2	%		72.8	%		77.3	%		8.5	%		0.0	%		12.8	%		0.0	%		12.8	%		-1.21	%		-3.71	%		2.13	%		-0.41	%		0.00	%		-3.47	%		-3.47	%		10.47	%		10.47	%		17.90	%
Comparable Group
ALLB Alliance Bancorp, Inc. of PA		23.9	%		9.7	%		2.7	%		60.5	%		80.6	%		0.6	%		0.0	%		17.4	%		0.0	%		17.4	%		-5.48	%		-10.65	%		-0.11	%		-5.89	%		-6.27	%		-3.86	%		-3.86	%		NA			NA			NA
AFCB Athens Bancshares Corp. of TN		10.3	%		10.6	%		3.2	%		72.8	%		81.4	%		1.5	%		0.0	%		15.6	%		0.1	%		15.5	%		0.56	%		-8.35	%		3.18	%		2.45	%		-2.40	%		-9.12	%		-9.03	%		13.46	%		13.46	%		22.00	%
CFBK Central Federal Corp. of OH		7.9	%		7.6	%		2.1	%		78.1	%		78.0	%		7.8	%		2.4	%		10.6	%		0.0	%		10.5	%		-10.35	%		-60.66	%		19.71	%		-18.83	%		5.80	%		NM			NM			NA			NA			NA
COBK Colonial Financial Serv. of NJ		1.0	%		46.3	%		2.3	%		47.0	%		87.6	%		1.3	%		0.0	%		10.7	%		0.0	%		10.7	%		-0.90	%		-4.28	%		1.08	%		-1.59	%		NM			-4.89	%		-4.89	%		9.93	%		9.93	%		20.36	%
FFNM First Fed of N. Michigan of MI		0.9	%		27.0	%		2.1	%		64.7	%		74.3	%		13.5	%		0.0	%		11.5	%		0.1	%		11.4	%		-1.51	%		-2.41	%		-1.30	%		4.68	%		-25.05	%		-2.88	%		-2.37	%		10.47	%		10.47	%		17.66	%
HBNK Hampden Bancorp, Inc. of MA		6.9	%		22.3	%		2.5	%		65.9	%		71.6	%		14.3	%		0.0	%		13.0	%		0.0	%		13.0	%		9.24	%		11.76	%		8.90	%		9.79	%		18.36	%		-0.80	%		-0.80	%		NA			NA			NA
NVSL Naugatuck Valley Fin Crp of CT (2)		4.4	%		10.5	%		1.9	%		79.9	%		76.5	%		9.1	%		0.0	%		12.7	%		0.0	%		12.7	%		-8.08	%		5.05	%		-10.69	%		-1.94	%		-32.40	%		-19.27	%		-19.25	%		9.79	%		9.79	%		16.22	%
SVBI Severn Bancorp, Inc. of MD (2)		11.0	%		4.8	%		0.0	%		77.8	%		70.3	%		13.5	%		2.8	%		12.8	%		0.0	%		12.8	%		-5.39	%		-0.53	%		-4.96	%		-8.18	%		0.00	%		2.89	%		2.90	%		NA			NA			NA
THRD TF Fin. Corp. of New town PA		6.8	%		14.3	%		2.7	%		72.8	%		79.8	%		7.6	%		0.0	%		11.6	%		0.6	%		11.0	%		3.26	%		-3.14	%		6.14	%		1.62	%		15.99	%		6.21	%		6.58	%		10.50	%		10.50	%		17.90	%
WBKC Wolverine Bancorp, Inc. of MI		8.8	%		1.6	%		0.0	%		87.2	%		56.0	%		21.3	%		0.0	%		21.7	%		0.0	%		21.7	%		-0.45	%		-22.89	%		3.86	%		0.78	%		0.11	%		-3.47	%		-3.47	%		NA			NA			NA

(1) Ratios are based on the date of the most recent financial statements disclosed in the offering prospectus.

(2) As of December 31, 2012.

Source: SNL Financial, LC. and RP^® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

Copyright (c) 2013 by RP^® Financial, LC.

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.10

median ratio of 90.8%. Both the Company’s and the Peer Group’s IEA ratios exclude BOLI as an interest-earning asset. On a pro forma basis immediately following the Second Step Conversion, a portion of the proceeds will initially be invested into shorter term investment securities, increasing the relative proportion of cash and investments for the Company in comparison to the Peer Group over the short term.

Delanco Bancorp’s funding liabilities currently reflect a lower level of borrowed funds and a higher level of funding through deposits. Specifically, the ratio of deposits/assets equaled 90.4% for the Company versus the median of 77.3% for the Peer Group, and while the Company did not have borrowings, borrowed funds equaled 8.5% (inclusive of subordinated debt) for the Peer Group. Total IBL maintained as a percent of assets equaled 90.4% and 85.8% for Delanco Bancorp and the Peer Group, respectively, reflecting the Company’s lower equity position, before the completion of the Second Step Conversion. The ratio of IBL will be reduced on a post-offering basis as the Company funds a greater portion of its operations with equity.

A key measure of balance sheet strength for a financial institution is the IEA/IBL ratio, with higher ratios often facilitating stronger profitability levels, depending on the overall asset/liability mix. Presently, the Company’s IEA/IBL ratio of 100.6% is below the Peer Group’s median ratio of 105.8%. The shortfall for the Company reflects several factors including its lower capital ratio and significant non-interest earnings assets on its balance sheet including significant balances of OREO (1.9% of assets), fixed assets (5.3% of assets) and BOLI (0.1% of assets). The additional equity realized from stock proceeds will increase the Company’s IEA/IBL ratio relative to the Peer Group, as the net proceeds realized from Delanco Bancorp’s stock offering are expected to be reinvested into interest-earning assets and the increase in the Company’s equity position will result in a lower level of interest-bearing liabilities funding assets.

The rates of change in key balance sheet aggregates over the last twelve months by the Company and the Peer Group were relatively modest. During this period, the Company recorded a modest asset decline of 3.64% versus an asset decline of 1.21% recorded by the Peer Group based on the median. Reductions in assets for Delanco Bancorp were sustained through a declining loan balance (11.08%), which was partially mitigated by a 19.14% increase in cash and investments, while the Peer Group reported a decline in cash and investments (3.71%), but reported a modest increase in loans (2.13%).

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.11

The asset shrinkage for Delanco Bancorp was enabled by a 3.75% reduction in deposit balances. Similarly, asset shrinkage for the Peer Group was supported by a modest decline in deposits, while funds generated from the Peer Group’s shrinking earning asset portfolios were utilized to pay down borrowings for many of the Peer Group members. The Company’s equity decreased by 2.96%, during the twelve month period, which was slightly less than the 3.47% reduction of equity for the Peer Group. Both the Company’s and Peer Group’s equity have been impacted by low or negative earnings given the selection criteria employed. Reversing the recent trend of capital erosion for both Delanco Bancorp and the Peer Group will be primarily dependent on reducing loan loss provisions, operating expenses related to OREO, and improving asset quality, which will facilitate earnings improvement.

Income and Expense Components

Table 3.3 shows comparative income statement measures for the Company and the Peer Group, reflecting earnings for the twelve months ended March 31, 2013, or the most recent date available for the Peer Group. Delanco Bancorp reported an operating loss equal to 0.25% of average assets versus a net loss equal to 0.10% of average assets for the Peer Group based on the average, and positive income equal to 0.45% based on the median. Within the income statement, Delanco Bancorp reported a lower net interest income ratio, lower non-interest income and net non-operating losses compared to the Peer Group medians, which were partially offset by the Company’s tax benefits. Delanco Bancorp’s loan loss provisions and operating expenses were relatively similar to the Peer Group, as they fell in between the averages and medians of the Peer Group.

The Company’s interest income to average assets, as well as the ratio of interest expense to average assets both fell below the Peer Group’s averages and medians. Overall, the Company’s ratio of net interest income to average assets, equal to 3.12%, was slightly lower than the Peer Group’s average and median ratios of 3.14% and 3.20%, respectively. The Company’s lower interest income ratio is primarily due to the lower loans/assets ratio than maintained by the Peer Group, along with the lower yield on interest-earning assets and higher NPAs. The lower ratio of interest expense to average assets reflects the Company’s restricted deposit growth in order to reduce the cost of funds and also the Peer Group’s supplemental funding with higher cost borrowings to fund assets.

Sources of non-interest operating income provided a larger contribution to the Peer Group’s earnings than the Company’s, with such income amounting to 0.26% and 0.64%, respectively. Historically, the Company has had relatively modest levels of fee generating activities, primarily due to a high concentration of CDs in the deposit portfolio that do not

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.12

Table 3.3

Income as Percent of Average Assets and Yields, Costs, Spreads

Comparable Institution Analysis

For the 12 Months Ended March 31, 2013

					Net Interest Income															Other Income												G&A/Other Exp.						Non-Op. Items						Yields, Costs, and Spreads
		Net Income			Income			Expense			NII			Loss Provis. on IEA			NII After Provis.			Loan Fees			R.E. Oper.			Other Income			Total Other Income			G&A Expense			Goodwill Amort.			Net Gains			Extrao. Items			Yield On Assets			Cost Of Funds			Yld-Cost Spread			MEMO: Assets/ FTE Emp.		MEMO: Effective Tax Rate
Delanco Bancorp, Inc.
March 31, 2013			-0.25	%		3.93	%		0.82	%		3.12	%		0.49	%		2.63	%		0.00	%		0.00	%		0.26	%		0.26	%		3.18	%		0.00	%		-0.12	%		0.00	%		4.22	%		0.92	%		3.30	%	$	5,883		-39.25	%
All Public Companies
Averages			0.51	%		3.89	%		0.84	%		3.05	%		0.37	%		2.68	%		0.04	%		-0.07	%		0.72	%		0.70	%		3.02	%		0.02	%		0.46	%		0.00	%		4.16	%		0.99	%		3.17	%	$	5,624		29.61	%
Medians			0.56	%		3.88	%		0.80	%		3.05	%		0.21	%		2.81	%		0.00	%		-0.01	%		0.61	%		0.57	%		2.78	%		0.00	%		0.12	%		0.00	%		4.13	%		0.94	%		3.15	%	$	4,819		30.29	%
State of NJ
Averages			0.35	%		3.67	%		0.86	%		2.82	%		0.57	%		2.24	%		0.00	%		-0.06	%		0.46	%		0.40	%		2.15	%		0.01	%		0.06	%		0.00	%		4.01	%		1.03	%		2.98	%	$	7,811		31.15	%
Medians			0.50	%		3.57	%		0.81	%		2.81	%		0.27	%		2.47	%		0.00	%		-0.01	%		0.47	%		0.41	%		2.07	%		0.00	%		0.07	%		0.00	%		3.90	%		1.06	%		3.25	%	$	6,484		35.74	%
Comparable Recent Conversions(1)
CHFN	Charter Financial Corp. of GA		0.46	%		4.48	%		0.99	%		3.48	%		0.42	%		3.07	%		0.04	%		0.00	%		1.02	%		1.06	%		3.70	%		0.05	%		0.14	%		0.00	%		5.35	%		1.23	%		4.12	%	$	3,535		11.37	%
Comparable Group
Averages			-0.10	%		4.06	%		0.92	%		3.14	%		0.64	%		2.51	%		0.07	%		-0.13	%		0.71	%		0.66	%		3.27	%		0.01	%		0.22	%		0.00	%		4.31	%		1.08	%		3.23	%	$	4,315		35.48	%
Medians			0.45	%		4.13	%		0.87	%		3.20	%		0.46	%		2.92	%		0.00	%		-0.08	%		0.64	%		0.57	%		3.13	%		0.00	%		0.20	%		0.00	%		4.43	%		1.04	%		3.26	%	$	4,135		34.89	%
Comparable Group
ALLB	Alliance Bancorp, Inc. of PA		0.52	%		3.64	%		0.64	%		3.00	%		0.20	%		2.80	%		0.00	%		0.00	%		0.34	%		0.34	%		2.48	%		0.00	%		-0.17	%		0.00	%		3.89	%		0.79	%		3.10	%	$	4,765		27.37	%
AFCB	Athens Bancshares Corp. of TN		0.89	%		4.90	%		0.85	%		4.04	%		0.38	%		3.66	%		0.00	%		0.00	%		1.84	%		1.84	%		4.13	%		0.03	%		0.00	%		0.00	%		5.22	%		1.04	%		4.18	%	$	2,926		33.66	%
CFBK	Central Federal Corp. of OH		-1.71	%		3.11	%		1.08	%		2.03	%		0.56	%		1.47	%		0.01	%		-0.27	%		0.75	%		0.48	%		3.88	%		0.02	%		0.23	%		0.00	%		3.32	%		1.18	%		2.13	%	$	3,491		NM
COBK	Colonial Financial Serv. of NJ		-0.24	%		3.27	%		0.80	%		2.46	%		0.84	%		1.62	%		0.00	%		-0.32	%		0.90	%		0.58	%		2.66	%		0.00	%		0.02	%		0.00	%		3.45	%		0.90	%		2.55	%	$	5,809		44.87	%
FFNM	First Fed of N. Michigan of MI		-0.35	%		4.15	%		0.70	%		3.44	%		0.53	%		2.92	%		0.27	%		-0.03	%		0.61	%		0.84	%		3.91	%		0.06	%		0.28	%		0.00	%		4.46	%		0.80	%		3.66	%	$	2,596		NM
HBNK	Hampden Bancorp, Inc. of MA		0.51	%		3.85	%		0.88	%		2.97	%		0.05	%		2.92	%		0.00	%		0.00	%		0.48	%		0.48	%		2.73	%		0.00	%		0.17	%		0.00	%		4.05	%		1.03	%		3.02	%	$	5,856		38.66	%
NVSL	Naugatuck Valley Fin Crp of CT(2)		-2.44	%		4.35	%		0.97	%		3.38	%		2.73	%		0.65	%		0.41	%		-0.09	%		0.33	%		0.65	%		3.92	%		0.00	%		0.36	%		0.00	%		4.59	%		1.15	%		3.44	%	$	3,441		NM
SVBI	Severn Bancorp, Inc. of MD(2)		0.39	%		4.43	%		1.42	%		3.01	%		0.09	%		2.92	%		0.01	%		-0.38	%		0.99	%		0.62	%		3.12	%		0.00	%		0.23	%		0.00	%		4.76	%		1.62	%		3.14	%	$	6,001		41.85	%
THRD	TF Fin. Corp. of New tow n PA		0.78	%		4.11	%		0.63	%		3.48	%		0.33	%		3.14	%		0.00	%		-0.11	%		0.66	%		0.56	%		2.75	%		0.00	%		0.10	%		0.00	%		4.39	%		0.73	%		3.66	%	$	4,447		27.09	%
WBKC	Wolverine Bancorp, Inc. of MI		0.62	%		4.82	%		1.22	%		3.60	%		0.65	%		2.95	%		0.00	%		-0.06	%		0.24	%		0.18	%		3.14	%		0.00	%		0.96	%		0.00	%		4.95	%		1.59	%		3.37	%	$	3,822		34.89	%

(1) Ratios are based on the date of the most recent financial statements disclosed in the offering prospectus.

(2) As of December 31, 2012.

Source: SNL Financial, LC. and RP^® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

Copyright (c) 2013 by RP^® Financial, LC.

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.13

generate notable levels of fee income. Over the most recent fiscal year, however, the Company’s non-interest income increased due to an increase in rental income, as the Company started to collect rental payments from tenants of delinquent loan and OREO properties.

Delanco Bancorp’s operating expense ratio equaled 3.18% for the twelve months ended March 31, 2013, which fell in between the Peer Group median and average of 3.13% and 3.27%. As discussed in the financial analysis of the Company, while Delanco Bancorp has sought to reduce expenses and focus on controlling cost levels, expenses primarily related to the resolution of OREO properties, as well as loan expenses related to the collection of delinquent loans has represented a significant expense. In addition, over the past year, expenses related to real estate taxes and maintenance costs on delinquent loans and OREO properties, as well as selling costs, increased. While such expenses should diminish if Delanco Bancorp can reduce its classified assets to targeted levels, the costs of the stock-related benefit plans will partially mitigate the savings.

Delanco Bancorp’s efficiency ratio (operating expenses as a percent of the sum of non-interest operating income and net interest income) of 94.1% is less favorable than the Peer Group’s ratio of 81.5%, as the Company’s similar operating expenses were more than offset by its slightly lower net interest income and lower non-interest income. Loan loss provisions had a similar impact on the Company’s earnings as compared to the Peer Group median, with loan loss provisions equaling 0.49% and 0.46% of average assets, respectively. The Company’s level of loan loss provisions have declined in the most recent fiscal year as new loan delinquencies have been limited and the level of NPAs continues to diminish, albeit gradually.

Non-operating income/expense for the Company and the Peer Group were at minimal levels, equal to a non-operating loss of 0.12% of average assets for Delanco Bancorp, in comparison to the Peer Group’s average and median net non-operating gains of 0.22% and 0.20%, respectively. The Company’s non-operating expense consisted of loss on the sale of OREO.

Due to the Company’s fiscal year operating losses, the Company reported a tax benefit equal to 39.25% of pre-tax income. Three Peer Group companies reporting losses also were in a tax benefit position, but the majority of the Peer Group companies were profitable and reported an average tax rate in the range of 35%.

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.14

Loan Composition

Table 3.4 presents data related to the comparative loan portfolio composition (including the investment in MBS). The Company’s loan portfolio composition reflected a higher concentration of 1-4 family permanent mortgage loans and MBS relative to the Peer Group median (59.50% of assets versus 36.24% of assets for the Peer Group). The Company’s higher ratio was attributable to the Company’s historical concentration on 1-4 lending, but is also reflective of the recent retrenchment from commercial lending. The Company did not report a balance of loans serviced for others or servicing assets, while six of ten Peer Group members reported a balance of loans serviced for others and five of the Peer Group companies maintained relatively modest balances of loan servicing intangibles.

Diversification into higher risk and higher yielding types of lending was more significant for the Peer Group compared to the Company, as the ratio of such loans equaled 33.12% versus 11.32% for the Company. The majority of the Company’s and the Peer Group’s higher risk lending is in commercial real estate and multi-family loans, which shows a lower concentration for the Company at 9.58% of assets versus 24.87% of assets for the Peer Group. The Company’s level of other high risk weighted loans including construction, commercial non-mortgage and consumer loans were also lower than the Peer Group average and median ratios, which is also reflected in the Company’s lower risk weighted assets-to-assets ratio of 57.65% versus the Peer Group’s average and median ratios of 70.53% and 65.86%.

Credit Risk

Overall, based on a comparison of credit quality measures, the Company’s credit risk exposure was considered to be less favorable in comparison to the Peer Group. As shown in Table 3.5, the Company’s NPAs/assets and NPLs/loans ratios equaled 6.82% and 7.18%, respectively, versus comparable median measures of 4.23% and 4.85% for the Peer Group. Additionally, reserves as a percentage of NPLs, NPAs, and loans were lower for the Company at 16.28%, 11.70%, and 1.17% than the comparable Peer Group medians of 46.68%, 38.33%, and 1.84%, respectively. Net loan charge-offs as a percent of loans were also higher for the Company, equaling 0.87% of loans for the Company versus 0.34% of loans for the Peer Group.

Interest Rate Risk

Table 3.6 reflects various key ratios highlighting the relative interest rate risk exposure of the Company versus the Peer Group on a pre-offering basis. In terms of balance sheet

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.15

Table 3.4

Loan Portfolio Composition and Related Information

Comparable Institution Analysis

As of March 31, 2013

		Portfolio Composition as a Percent of Assets
Institution		MBS			1-4 Family			Constr. & Land			5+Unit Comm RE			Commerc. Business			Consumer			RWA/ Assets			Serviced For  Others		Servicing Assets
		(%)			(%)			(%)			(%)			(%)			(%)			(%)			($000)		($000)
Delanco Bancorp, Inc.			1.58	%		57.92	%		0.10	%		9.58	%		0.90	%		0.74	%		57.65	%	$	0	$	0
All Public Companies
Averages			12.50	%		33.18	%		2.91	%		23.86	%		4.15	%		1.66	%		62.49	%	$	1,374,817	$	12,578
Medians			10.83	%		31.28	%		2.12	%		22.55	%		3.03	%		0.31	%		62.15	%	$	31,375	$	271
State of NJ
Averages			17.09	%		32.12	%		1.62	%		26.51	%		2.78	%		0.29	%		58.20	%	$	221,587	$	1,575
Medians			14.00	%		32.16	%		1.36	%		25.15	%		2.54	%		0.14	%		57.98	%	$	1,100	$	2
Comparable Recent Conversions(1)
CHFN	Charter Financial Corp. of GA		15.61	%		11.70	%		4.47	%		38.18	%		3.32	%		2.22	%		67.29	%	$	14,863	$	0
Comparable Group
Averages			7.17	%		34.64	%		4.96	%		26.78	%		4.35	%		1.22	%		70.53	%	$	59,972	$	352
Medians			4.73	%		31.51	%		4.08	%		24.87	%		3.86	%		0.31	%		65.86	%	$	37,460	$	13
Comparable Group
ALLB	Alliance Bancorp, Inc. of PA		1.48	%		27.69	%		2.99	%		27.93	%		1.93	%		1.13	%		54.45	%	$	0	$	0
AFCB	Athens Bancshares Corp. of TN		4.11	%		33.11	%		7.73	%		25.48	%		4.13	%		4.02	%		64.70	%	$	120,460	$	0
CFBK	Central Federal Corp. of OH		3.77	%		29.53	%		2.10	%		36.03	%		13.18	%		0.21	%		101.66	%	$	9,890	$	26
COBK	Colonial Financial Serv. of NJ		14.09	%		27.89	%		1.22	%		14.87	%		3.58	%		0.18	%		51.73	%	$	0	$	0
FFNM	First Fed of N. Michigan of MI		14.67	%		34.11	%		5.16	%		21.12	%		4.23	%		0.54	%		63.56	%	$	139,600	$	980
HBNK	Hampden Bancorp, Inc. of MA		21.07	%		28.31	%		2.67	%		24.18	%		6.37	%		5.12	%		67.70	%	$	65,030	$	0
NVSL	Naugatuck Valley Fin Crp of CT(2)		7.09	%		45.62	%		5.36	%		24.25	%		5.96	%		0.22	%		67.01	%	$	134,840	$	1,157
SVBI	Severn Bancorp, Inc. of MD(2)		0.05	%		36.73	%		12.47	%		27.11	%		1.67	%		0.12	%		92.62	%	$	0	$	305
THRD	TF Fin. Corp. of New town PA		5.35	%		53.55	%		1.58	%		17.67	%		0.73	%		0.25	%		61.79	%	$	129,900	$	1,053
WBKC	Wolverine Bancorp, Inc. of MI		0.00	%		29.90	%		8.27	%		49.11	%		1.71	%		0.37	%		80.12	%	$	0	$	0

(1) Ratios are based on the date of the most recent financial statements disclosed in the offering prospectus.

(2) As of December 31, 2012.

Source: SNL Financial LC. and RP^® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

Copyright (c) 2013 by RP^® Financial, LC.

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.16

Table 3.5

Credit Risk Measures and Related Information

Comparable Institution Analysis

As of March 31, 2013 or Most Recent Date Available

Institution		REO/ Assets			NPAs & 90+Del/ Assets (1)			NPLs/ Loans (1)			Rsrves/ Loans			Rsrves/ NPLs (1)			Rsrves/ NPAs & 90+Del (1)			Net Loan Chargeoffs		NLCs/ Loans
		(%)			(%)			(%)			(%)			(%)			(%)			($000)		(%)
Delanco Bancorp, Inc.			1.92	%		6.82	%		7.18	%		1.17	%		16.28	%		11.70	%	$	768		0.87	%
All Public Companies
Averages			0.45	%		2.91	%		3.57	%		1.50	%		64.87	%		46.32	%	$	868		0.32	%
Medians			0.15	%		1.96	%		2.56	%		1.28	%		47.80	%		41.14	%	$	334		0.20	%
State of NJ
Averages			0.48	%		3.24	%		4.18	%		1.25	%		50.39	%		38.30	%	$	1,240		0.44	%
Medians			0.14	%		2.59	%		3.09	%		1.35	%		44.49	%		32.10	%	$	750		0.20	%
Comparable Recent Conversions(2)
CHFN	Charter Financial Corp. of GA		0.26	%		0.66	%		0.79	%		1.87	%		237.67	%		147.49	%	$	4,480		1.03	%
Comparable Group
Averages			0.66	%		4.78	%		5.90	%		2.06	%		44.12	%		37.41	%	$	1,026		0.72	%
Medians			0.56	%		4.23	%		4.85	%		1.84	%		46.68	%		38.33	%	$	306		0.34	%
Comparable Group
ALLB	Alliance Bancorp, Inc. of PA		0.44	%		3.57	%		4.45	%		1.61	%		38.91	%		29.85	%	$	530		0.76	%
AFCB	Athens Bancshares Corp. of TN		0.20	%		3.07	%		3.85	%		2.07	%		53.79	%		50.20	%	$	61		0.11	%
CFBK	Central Federal Corp. of OH		0.68	%		4.91	%		5.24	%		3.25	%		62.08	%		53.52	%	$	391		-0.30	%
COBK	Colonial Financial Serv. of NJ		0.85	%		5.84	%		10.48	%		1.35	%		12.91	%		11.03	%	$	109		0.15	%
FFNM	First Fed of N. Michigan of MI		1.13	%		4.74	%		6.31	%		1.20	%		19.04	%		16.62	%	$	219		0.62	%
HBNK	Hampden Bancorp, Inc. of MA		0.22	%		2.21	%		2.99	%		1.18	%		39.56	%		35.65	%	$	220		-0.04	%
NVSL	Naugatuck Valley Fin Crp of CT(3)		0.14	%		5.01	%		6.10	%		3.33	%		56.53	%		54.96	%	$	2,020		1.84	%
SVBI	Severn Bancorp, Inc. of MD(3)		1.75	%		12.37	%		13.81	%		2.61	%		18.60	%		16.59	%	$	6,002		3.49	%
THRD	TF Fin. Corp. of New town PA		1.00	%		2.37	%		1.80	%		1.26	%		72.13	%		41.01	%	$	699		0.53	%
WBKC	Wolverine Bancorp, Inc. of MI		0.16	%		3.72	%		3.97	%		2.69	%		67.65	%		64.71	%	$	7		0.01	%

(1) Includes TDRs for the Company and the Peer Group.

(2) Ratios are based on the date of the most recent financial statements disclosed in the offering prospectus.

(3) As of December 31, 2012.

Source: Audited and unaudited financial statements, corporate reports and offering circulars, and RP^® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

Copyright (c) 2013 by RP^® Financial, LC.

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.17

Table 3.6

Interest Rate Risk Measures and Net Interest Income Volatility

Comparable Institution Analysis

As of March 31, 2013 or Most Recent Date Available

		Balance Sheet Measures
		Tangible						Non-Earn.			Quarterly Change in Net Interest Income
Institution		Equity/ Assets			IEA/ IBL			Assets/ Assets			3/31/2013		12/31/2012		9/30/2012		6/30/2012		3/31/2012		12/31/2011
		(%)			(%)			(%)			(change in net interest income is annualized in basis points)
Delanco Bancorp, Inc.			8.8	%		100.6	%		9.1	%		2		-4		-3		-8		1		-16
All Public Companies			12.3	%		107.5	%		6.0	%		-6		-3		-2		-1		-4		2
State of NJ			11.9	%		108.5	%		6.8	%		-5		-2		-1		-3		-1		1
Comparable Recent Conversions(1)
CHFN	Charter Financial Corp. of GA		13.3	%		102.1	%		12.8	%		NA		NA		-12		2		38		37
Comparable Group
Average			13.7	%		111.0	%		5.7	%		-7		-1		2		-4		-3		-3
Median			12.8	%		109.3	%		6.0	%		-12		-7		8		-7		-5		-2
Comparable Group
ALLB	Alliance Bancorp, Inc. of PA		17.4	%		116.0	%		5.8	%		1		-5		18		-13		-6		-14
AFCB	Athens Bancshares Corp. of TN		15.5	%		113.0	%		6.3	%		-11		7		12		-10		-4		9
CFBK	Central Federal Corp. of OH		10.5	%		106.1	%		6.4	%		32		-16		-3		1		-3		-11
COBK	Colonial Financial Serv. of NJ		10.7	%		106.0	%		5.7	%		-17		-9		7		-14		-11		-29
FFNM	First Fed of N. Michigan of MI		11.4	%		105.5	%		7.4	%		-5		-19		0		-4		-7		1
HBNK	Hampden Bancorp, Inc. of MA		13.0	%		110.7	%		4.9	%		-13		-13		-12		-12		-5		4
NVSL	Naugatuck Valley Fin Crp of CT(2)		12.7	%		110.7	%		5.2	%		NA		4		8		-15		2		-4
SVBI	Severn Bancorp, Inc. of MD(2)		12.8	%		107.9	%		6.5	%		NA		42		-32		11		-4		-6
THRD	TF Fin. Corp. of New town PA		11.0	%		107.5	%		6.1	%		-22		-11		11		14		-15		7
WBKC	Wolverine Bancorp, Inc. of MI		21.7	%		126.1	%		2.5	%		-22		12		12		-2		24		13

NA=Change is greater than 100 basis points during the quarter.

(1) Ratios are based on the date of the most recent financial statements disclosed in the offering prospectus.

(2) As of December 31, 2012.

Source: SNL Financial LC. and RP^® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

Copyright (c) 2013 by RP^® Financial, LC.

RP® Financial, LC.	PEER GROUP ANALYSIS
	III.18

composition, Delanco Bancorp’s interest rate risk characteristics were considered to be less favorable than the comparable measures for the Peer Group. Most notably, the Company’s tangible equity-to-assets ratio and IEA/IBL ratio were lower than the comparable Peer Group ratios. Moreover, the Company’s non-interest earning assets were above the Peer Group average. On a pro forma basis, the infusion of stock proceeds should improve the Company’s balance sheet interest rate risk characteristics, with respect to the increases that will be realized in the Company’s equity-to-assets and IEA/IBL ratios. At the same time, the modest level of capital raised will limit the improvement in comparison to the Peer Group.

To analyze interest rate risk associated with the net interest margin, we reviewed quarterly changes in net interest income as a percent of average assets for Delanco Bancorp and the Peer Group. In general, the fluctuations in the Company’s ratios were similar to those experienced by the Peer Group, implying that the interest rate risk associated with the Company’s net interest income was similar in comparison to the Peer Group, based on the interest rate environment that prevailed during the period covered in Table 3.6. The stability of the Company’s net interest margin should be enhanced by the infusion of stock proceeds, as interest rate sensitive liabilities will be funding a lower portion of Delanco Bancorp’s assets and the proceeds will be substantially deployed into interest-earning assets.

Summary

Based on the above analysis and the criteria employed in the selection of the companies for the Peer Group, RP Financial concluded that the Peer Group forms a reasonable basis for determining the pro forma market value of Delanco Bancorp. In those areas where notable differences exist, we will apply appropriate valuation adjustments in the next section.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.1

IV. VALUATION ANALYSIS

Introduction

This section presents the valuation analysis and methodology, prepared pursuant to the regulatory valuation guidelines, and valuation adjustments and assumptions used to determine the estimated pro forma market value of the common stock to be issued in conjunction with the Company’s conversion transaction.

Appraisal Guidelines

The regulatory written appraisal guidelines as reissued by the Office of the Comptroller of the Currency and which are relied upon by the Federal Reserve Board, as well as the Federal Deposit Insurance Corporation specify the market value methodology for estimating the pro forma market value of an institution pursuant to a mutual-to-stock conversion. Pursuant to this methodology: (1) a peer group of comparable publicly-traded institutions is selected; (2) a financial and operational comparison of the subject company to the peer group is conducted to discern key differences; and, (3) a valuation analysis in which the pro forma market value of the subject company is determined based on the market pricing of the peer group as of the date of valuation, incorporating valuation adjustments for key differences. In addition, the pricing characteristics of recent conversions, both at conversion and in the aftermarket, must be considered.

RP Financial Approach to the Valuation

The valuation analysis herein complies with such regulatory approval guidelines. Accordingly, the valuation incorporates a detailed analysis based on the Peer Group, discussed in Section III, which constitutes “fundamental analysis” techniques. Additionally, the valuation incorporates a “technical analysis” of recently completed stock conversions, including closing pricing and aftermarket trading of such offerings. It should be noted that these valuation analyses cannot possibly fully account for all the market forces which impact trading activity and pricing characteristics of a particular stock on a given day.

The pro forma market value determined herein is a preliminary value for the Company’s to-be-issued stock. Throughout the conversion process, RP Financial will: (1) review changes in Delanco Bancorp’s operations and financial condition; (2) monitor Delanco Bancorp’s operations and financial condition relative to the Peer Group to identify any fundamental

RP® Financial, LC.	VALUATION ANALYSIS
	IV.2

changes; (3) monitor the external factors affecting value including, but not limited to, local and national economic conditions, interest rates, and the stock market environment, including the market for thrift stocks and Delanco Bancorp’s stock specifically; and, (4) monitor pending conversion offerings (including those in the offering phase), both regionally and nationally. If material changes should occur during the conversion process, RP Financial will evaluate if updated valuation reports should be prepared reflecting such changes and their related impact on value, if any. RP Financial will also prepare a final valuation update at the closing of the Offering to determine if the prepared valuation analysis and resulting range of value continues to be appropriate.

The appraised value determined herein is based on the current market and operating environment for the Company and for all thrifts. Subsequent changes in the local and national economy, the legislative and regulatory environment, the stock market, interest rates, and other external forces (such as natural disasters or major world events), which may occur from time to time (often with great unpredictability) may materially impact the market value of all thrift stocks, including Delanco Bancorp’s value, or Delanco Bancorp’s value alone. To the extent a change in factors impacting the Company’s value can be reasonably anticipated and/or quantified, RP Financial has incorporated the estimated impact into the analysis.

Valuation Analysis

A fundamental analysis discussing similarities and differences relative to the Peer Group was presented in Chapter III. The following sections summarize the key differences between the Company and the Peer Group and how those differences affect the pro forma valuation. Emphasis is placed on the specific strengths and weaknesses of the Company relative to the Peer Group in such key areas as financial condition, profitability, growth and viability of earnings, asset growth, primary market area, dividends, liquidity of the shares, marketing of the issue, management, and the effect of government regulations and/or regulatory reform. We have also considered the market for thrift stocks, in particular new issues, to assess the impact on value of the Company coming to market at this time.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.3

1. Financial Condition

The financial condition of an institution is an important determinant in pro forma market value because investors typically look to such factors as liquidity, capital, asset composition and quality, and funding sources in assessing investment attractiveness. The similarities and differences in the Company’s and the Peer Group’s financial strengths are noted as follows:

• Overall A/L Composition. In comparison to the Peer Group, the Company’s IEA composition was broadly similar, but, reflected a slightly lower concentration of loans and a slightly higher concentration of cash and investments. Lending diversification into higher risk and higher yielding types of loans was more significant for the Peer Group. Overall, the Company reported a higher percentage of its loan portfolio in residential lending (inclusive of investment in MBS). Due to this greater concentration in residential lending, Delanco Bancorp reported a lower risk weighted assets-to-assets ratio in comparison to the Peer Group’s median ratio. Overall, in comparison to the Peer Group, the Company’s IEA composition provided for a lower yield earned on IEA. The Company’s IBL cost was relatively comparable to the Peer Group’s cost of funds and the respective funding bases of the Company and the Peer Group were broadly similar. Overall, the Company maintained a similar level of interest-earning assets and a higher level of interest-bearing liabilities compared to the Peer Group’s ratios, which resulted in a lower IEA/IBL ratio for the Company of 100.6% for the Company, as compared to 105.8% for the Peer Group. After factoring in the impact of the net stock proceeds, the Company’s IEA/IBL ratio can be improved, but still fall short of the Peer Group’s ratio.

• Credit Quality. Key credit quality measures for Delanco Bancorp were less favorable than the Peer Group. Specifically, the ratio of REO/assets, NPAs/assets and NPLs/loans were significantly higher than the comparable Peer Group ratios. Moreover, reserve coverage as reflected in the loan loss reserves as a percent of loans, NPLs, and NPAs were less favorable for the Company, as well. Net loan charge-offs as a percent of loans for the Company were above the average and median of the Peer Group. As noted above, the Company’s risk weighted assets-to-assets ratio was lower than the Peer Group’s median ratio.

• Balance Sheet Liquidity. The Company operated with a slightly higher level of cash and investment securities relative to the Peer Group median ratio. Following the infusion of stock proceeds, the Company’s cash and investments ratio is expected to increase as the proceeds retained at the holding company level will be initially deployed into shorter term investment securities while the Bank’s portion of the proceeds will also be deployed into investments pending the longer term reinvestment into loans. The Company’s future borrowing capacity was considered to be more than the Peer Group, given the high level of deposits and absence of borrowings needed to fund the Company’s assets. Overall, RP Financial concluded that pro forma balance sheet liquidity was a positive factor in our adjustment for financial condition.

• Funding Liabilities. The Company’s IBL composition reflected a higher concentration of deposits and a lower concentration of borrowings relative to the comparable Peer Group ratios, with the Company maintaining a slightly lower cost of funds than the Peer Group. Total interest-bearing liabilities as a percent of assets were higher for the Company compared to the Peer Group’s ratio, which was attributable to Delanco Bancorp’s lower capital position. Following the stock offering, the increase in the Company’s capital position will reduce the level of interest-bearing liabilities funding the Company’s assets and the IEA/IBL ratio will improve.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.4

• Tangible Equity. The Company currently operates with a lower tangible equity ratio to the Peer Group average and median. Following the stock offering, Delanco Bancorp’s pro forma tangible equity position will increase, but remain below the Peer Group, which will continue to result in less leverage potential, more dependence on interest-bearing liabilities to fund assets, and less capacity to absorb unanticipated losses.

On balance, Delanco Bancorp’s balance sheet financial condition was considered to be less favorable than the Peer Group’s balance sheet, particularly in consideration of the less favorable credit quality ratios (both the level of NPAs and the less favorable reserve coverage ratios). Accordingly, we have applied a moderate downward adjustment for the Company’s financial condition relative to the Peer Group.

2. Profitability, Growth and Viability of Earnings

Earnings are a key factor in determining pro forma market value, as the level and risk characteristics of a financial institution’s earnings stream and the prospects and ability to generate future earnings heavily influence the multiple that the investment community will pay for earnings. The major factors considered in the valuation are described below.

• Earnings. Delanco Bancorp reported a net operating loss of 0.25% of average assets relative to the Peer Group’s median net income of 0.45% of average assets and average net loss of 0.10% of average assets, for the most recent twelve month period. The Company’s recent history of operating losses is primarily attributable to elevated provisions and operating expenses related to the ongoing credit quality issues and weakened net interest margins caused by the elevated level of NPAs. The Company expects that the level of loan loss provisions and operating expense will be lower in the future and the business plan indicates that profitable operations are expected by fiscal 2015. At the same time, the Company has reported operating losses in three of the last five fiscal years. Moreover, future earnings may likely be dependent upon continuing improvement in the Company’s credit-quality ratios and an improving local economy. A total of four of the ten Peer Group companies reported losses on a core basis while the remaining five were profitable. Like Delanco Bancorp, key factors impacting the Peer Group’s future profitability may likely include asset quality trends and the strength of any economic recovery in their respective regional markets.

• Interest Rate Risk. Quarterly changes in the net interest income ratio for the Company and Peer Group indicated a similar degree of volatility. Other measures of interest rate risk, such as the tangible equity ratio and the Company’s IEA/IBL ratio were less favorable than the Peer Group. On a pro forma basis, the infusion of stock proceeds can be expected to provide the Company with improved equity-to-assets and IEA/IBL ratios, as well as enhance the stability of the Company’s net interest margin through the reinvestment of stock proceeds into IEA.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.5

• Credit Risk. Loan loss provisions were a similar factor in the Company’s and Peer Group’s profitability. In terms of future exposure to credit quality related losses, the Company maintained a slightly lower concentration of assets in loans and less lending diversification into higher credit risk loans, which resulted in a lower risk weighted assets-to-assets ratio than the Peer Group’s median ratio. NPAs and NPLs were higher for the Company compared to the Peer Group while the reserve coverage ratios (i.e., loan loss reserves in relation to loans, NPAs, and NPLs) were less favorable, all of which are indicative of the Company’s less favorable credit quality.

• Earnings Growth Potential. Several factors were considered in assessing earnings growth potential. First, the infusion of stock proceeds will increase the Company’s earnings growth potential with respect to increasing earnings through leverage. Other factors impacting the Company’s earnings growth potential include future reductions in core operating costs as asset quality improves – the Peer Group also stands to benefit from lower costs to the extent their asset quality improves. Importantly, in contrast to many company’s recently completed standard and second step conversion offerings, the Company’s capital ratio will remain below the Peer Group average and median, which will limit the Company’s growth and leverage potential. On balance, the Company’s ability to increase earnings will be challenged in comparison to the Peer Group by its relatively small size and limited ability to increase assets significantly (both as a result of the small capital base and cost of adding management/staff to effectively manage the growth and diversification).

• Return on Equity. Current operating losses for the Company have resulted in a negative ROE, reflecting erosion of Delanco Bancorp’s capital base. Likewise, the ROE measure for the Peer Group reflects modest operating returns based on the median and seven of the Peer Group companies reported a reduction in tangible capital levels on a trailing twelve month basis. The reversal of earnings to positive levels which would result in future capital increases for both the Company and the Peer Group continues to be highly dependent on stabilization of asset quality, as well as the strength and direction of the local economy and real estate market.

On balance, in evaluating Delanco Bancorp’s earnings, relative to the Peer Group, we have considered that the Company has reported operating losses in three of the last five fiscal years. Considering the historical track record of operating losses for the Company and the challenges Delanco Bancorp faces in expanding earnings in comparison to the Peer Group, in view of its pro forma capital position and small size, we applied a moderate downward adjustment for profitability, growth and viability of earnings.

3. Asset Growth

Delanco Bancorp’s assets decreased at an annual rate of 3.64% during the most recent twelve month period, while the Peer Group’s assets decreased by a median of 1.21% over the same time period. Seven of the ten Peer Group companies reported shrinking assets. The Company’s asset shrinkage in the most recent period is attributable to an effort by management to maintain the Company’s regulatory capital ratios in the face of operating losses it has

RP® Financial, LC.	VALUATION ANALYSIS
	IV.6

experienced, in order to meet the regulatory IMCRs. At the same time, many of the Peer Group’s growth rates are also being impacted by a recessionary economic environment, high NPAs and operating losses or low earnings. On a pro forma basis, the Company’s tangible equity-to-assets ratio will improve, but remain below the Peer Group’s tangible equity-to-assets ratio, indicating less leverage capacity for the Company. On balance, a slight downward adjustment was applied for asset growth.

4. Primary Market Area

The general condition of an institution’s market area has an impact on value, as future success is in part dependent upon opportunities for profitable activities in the local market served. Delanco Bancorp’s primary market area for deposits and loans is considered to be Burlington County and the southwestern New Jersey region where the Company maintains its two branch offices. Within these markets, the Company faces significant competition for loans and deposits from other financial institutions, including similarly sized community banks with a more focused market, along with larger institutions which provide a broader array of services and have significantly larger branch networks. However, the Peer Group companies also face numerous and/or larger competitors.

Demographic and economic trends and characteristics in the Company’s primary market area show some differences to the primary market areas served by the Peer Group companies (see Exhibit III-2). In this regard, the total population of Burlington County is between the average and the medians of the primary markets of the Peer Group. However, historical population growth rates in Burlington County reflect minimal growth of 0.1% over the 2010-2012 period versus higher growth for the Peer Group’s markets of 0.7% and 0.6% based on the average and median, respectively. Forecasted population growth rates are also less favorable for the Company’s markets based on projected growth of 0.3% for the 2012 to 2017 period, which is below the projected figure for the Peer Group equal to 1.0% and 0.7%, based on the average and median. Per capita income levels in Burlington County were higher than the Peer Group’s markets, indicating a more affluent population base. The deposit market share exhibited by the Company in Burlington County was lower than the Peer Group average and median, indicating a more competitive market within the Company’s primary market area. Unemployment rates for the markets served by the Peer Group companies were similar to Burlington County, with Burlington County’s unemployment rate of 8.5%, falling in between the average and median of 8.6% and 8.2%.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.7

On balance, we concluded that no adjustment was appropriate for the Company’s market area.

5. Dividends

Delanco Federal Savings Bank is currently precluded from paying a dividend to Delanco Bancorp under the terms of the Agreement, unless prior written approval is received from the OCC, and these restrictions are expected to remain in place following the completion of the Second Step Conversion. Until the Bank is released from the terms of the Agreement, the Company is not expected to pay a dividend, as 80% of the net conversion proceeds are being infused into the Bank leaving a limited balance of cash at the level of Delanco Bancorp. Accordingly, no dividends are expected to be paid by Delanco Bancorp over the near to intermediate term.

Four of the ten Peer Group companies pay regular cash dividends, with implied dividend yields ranging from 0.80% to 1.46%. The median dividend yield on the stocks of the Peer Group institutions was 0.00% as of May 17, 2013, representing a median payout ratio of 13.69% of earnings. As of May 17, 2013, 69% of all fully-converted publicly-traded thrifts had adopted cash dividend policies (see Exhibit IV-1), exhibiting an average yield of 2.23%. The dividend paying thrifts generally maintain higher than average profitability ratios, facilitating their ability to pay cash dividends.

The Company’s dividend capacity will be enhanced by the Second Step Conversion and resulting increase in equity and the pro forma equity ratio. At the same time, the Company’s recent earnings history and the presence of the Agreement will restrict the Company’s capacity to pay a dividend until the Agreement’s termination or amendment. Taking the foregoing into account, we concluded that a slight downward adjustment was warranted for the dividends valuation parameter in comparison to the Peer Group.

6. Liquidity of the Shares

The Peer Group is by definition composed of companies that are traded in the public markets. All ten of the Peer Group members trade on NASDAQ. Typically, the number of shares outstanding and market capitalization provides an indication of how much liquidity there will be in a particular stock. The market capitalization of the Peer Group companies ranged from $13.4 million to $88.4 million as of May 17, 2013, with average and median market values of $50.3 million and $48.4 million, respectively. The shares issued and outstanding to the public

RP® Financial, LC.	VALUATION ANALYSIS
	IV.8

shareholders of the Peer Group members ranged from 2.2 million to 15.8 million, with average and median shares outstanding of 5.8 million and 4.5 million, respectively. The Company’s Second Step Conversion offering is expected to provide for pro forma shares outstanding that will be less than the shares outstanding indicated for the Peer Group companies. The market capitalization of the Company at the midpoint of the offering range will be below the Peer Group average and median values. Unlike all of the Peer Group companies, the Company’s stock will continue to be quoted on the Over the Counter market following the Second Step Conversion offering. Overall, we anticipate that the Company’s stock will have a less liquid trading market as compared to the Peer Group companies, on average, and therefore, concluded a slight downward adjustment was necessary for this factor.

7. Marketing of the Issue

We believe that four separate markets exist for thrift stocks, including those coming to market such as Delanco Bancorp: (A) the after-market for public companies, in which trading activity is regular and investment decisions are made based upon financial condition, earnings, capital, ROE, dividends and future prospects; (B) the new issue market in which converting thrifts are evaluated on the basis of the same factors, but on a pro forma basis without the benefit of prior operations as a fully-converted publicly-held company and stock trading history; (C) the acquisition market for thrift franchises in New Jersey; and, (D) the market for the public stock of Delanco Bancorp. All of these markets were considered in the valuation of the Company’s to-be-issued stock.

A. The Public Market

The value of publicly-traded thrift stocks is easily measurable, and is tracked by most investment houses and related organizations. Exhibit IV-1 provides pricing and financial data on all publicly-traded thrifts. In general, thrift stock values react to market stimuli such as interest rates, inflation, perceived industry health, projected rates of economic growth, regulatory issues, and stock market conditions in general. Exhibit IV-2 displays historical stock market trends for various indices and includes historical stock price index values for thrifts and commercial banks. Exhibit IV-3 displays historical stock price indices for thrifts only.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.9

In terms of assessing general stock market conditions, the many of the broad stock market indices have trended upward with the S&P 500 and Dow Jones Industrial Indices reaching record highs. At the start of the fourth quarter of 2012, stocks traded up on some better-than-expected economic data including reports that manufacturing activity in September expanded for the first time since May, service sector activity expanded at a higher rate in September and the September unemployment rate dropped below 8.0% to a 44-month low of 7.8%. Stocks reversed course heading into mid-October, amid concerns about a slowing global economy and a disappointing start to the third quarter earnings season. Favorable readings for September retail sales and residential home construction contributed to a four day upturn in the broader stock market in mid-October, which was followed by a sell-off heading into late-October. Disappointing third quarter earnings reports posted by some “blue chip” stocks was noted as the primary factor driving the downturn. Some favorable readings on manufacturing activity and consumer confidence boosted stocks at the start of November, which was followed by a one-day sell-off despite the October employment report showing better-than-expected job growth. The broader market sell-off accelerated following the Presidential election, as investors began to focus on the looming “fiscal cliff” and more flare-ups in Europe’s debt crisis. The NASDAQ moved into correction territory in mid-November, closing down more than 10% from mid-September highs. Optimism that the U.S. budget impasse would be resolved prior to reaching the “fiscal cliff”, more signs that the recovery in the housing market was gaining momentum and a cease-fire between Israel and Hamas contributed to stock market gains heading into the second half of November. Indications that the Federal Reserve would continue to buy bonds in 2013 contributed to stock market gains in late-November. Stocks continued to trend higher into mid-December, as better-than-expected November reports for service sector activity and employment helped the DJIA erase post-election losses. Heading into the close of 2012, the DJIA climbed to a two-month high on signs of a compromise over the “fiscal cliff” stalemate. Stocks faltered in late-December, as budget negotiations stalled. However, signs of progress towards averting the “fiscal cliff” lifted the DJIA to its largest gain for the final trading day of the year.

Completion of a tax deal between Congress and the White House sent stocks soaring at the start of 2013. A December employment report that showed hiring remained steady further added to stock market gains in the first week of 2013. Some favorable economic readings and solid fourth quarter earning posted by some “blue chip” stocks helped to sustain the positive trend in stocks into late-January, as the DJIA moved to its highest close since October 2007. The DJIA closed above 14000 at the start of February, after jobs and manufacturing data indicated that the economy’s slow and stable recovery remained on track. Profit taking pulled the DJIA below 14000 the next day of trading, which was followed by a

RP® Financial, LC.	VALUATION ANALYSIS
	IV.10

narrow trading range for the broader stock market during the first full week of trading in February. Merger activity helped to propel the DJIA to a fresh five-year high in mid-February, which was followed by a one-day selloff heading into late-February. The selloff was prompted by inconclusive national election results in Italy and the increased likelihood of automatic U.S. government spending cuts kicking in. Stocks rebounded at the end of February and continued to rally through mid-March, as the DJIA closed higher for ten consecutive sessions including eight consecutive record highs. Some favorable reports on the economy and indications from the Federal Reserve that it would continue its bond buying program were factors that contributed to the rally. The rally ended when global markets stumbled on news of a problematic bailout of Cyprus’s financial services sector. Stocks were mixed heading into closing weeks of the first quarter, as investors reacted to the Federal Reserve’s reaffirmation of continued easy monetary policies and some blue chips reporting earnings that fell short of expectations. Growing investor confidence in the U.S. economic recovery helped stocks to close out the first quarter on an upswing.

Stocks pulled back at the start of the second quarter of 2013, as investors reacted to disappointing readings for manufacturing and service sector activity in March and the weaker-than-expected jobs report for March. The release of the Federal Reserve’s most recent policy meeting, which indicated that the Federal Reserve remained committed to easy monetary policy, fueled broader stock market gains heading into mid-April. Mixed first quarter earnings reports and growing concerns of a global economic slowdown provided for an up and down stock market during the second half of April, while a rally in technology stocks lifted the Standard & Poor’s 500 Index (“S&P 500”) to record highs at the end of April. The broader stock market rally continued during the first half of May, as the DJIA closed above 15000 for the first time and the S&P 500 closed at record highs for five consecutive sessions. Factors contributing to the rally were some strong earnings reports coming out of the technology sector, the April employment report showing stronger-than-expected job growth, expectations that stocks would continue to benefit from the Federal Reserve’s stimulus policies and a reading on consumer sentiment rose to its highest level in nearly six years. On May 17, 2013, the DJIA closed at 15354.40, an increase of 23.4% from one year ago and an increase of 14.5% year-to-date, and the NASDAQ Composite Index closed at 3498.97, an increase of 24.4% from one year ago and an increase of 12.4% year-to-date. The S&P 500 closed at 1667.47 on May 17, 2013, an increase of 27.8% from one year ago and an increase of 14.0% year-to-date.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.11

The market for thrift stocks has also generally shown a positive trend in recent quarters. Some September economic data that showed indications of an improving economy helped to boost thrift stocks at the start of the fourth quarter of 2012. Thrift stocks stabilized going into mid-October and then experienced a sell-off, as J.P. Morgan’s and Well Fargo’s third quarter earnings reports raised concerns of accelerating net interest margin contraction being experienced by financial institutions in general. An increase in residential home construction during September contributed to gains for the thrift sector in mid-October, which was followed by a slight pullback in the sector as investors reacted to mixed economic reports for third quarter GDP growth and pending sales of existing homes. Some favorable economic data boosted thrift stocks at the close of October and the start of November, which was followed by a downturn with the release of the October employment report. Thrift stocks participated in the broader market sell-off following the Presidential election, as investors turned their attention to the “fiscal cliff” and the possibility that it could trigger a recession in the first half 2013. Solid increases in existing home sales and home prices and a rally in the broader stock market boosted thrift stocks going into second half of November. Expectations that the Federal Reserve would continue its bond buying program to keep long-term interest rates low into 2013 provided a boost to thrift stocks at the close of November. Thrift stocks traded in a narrow range through the first half of December and then traded higher along with the broader stock market as investors focused on apparent progress in the lingering “fiscal cliff” negotiations. Following a slight pullback in late-December, thrift stocks rallied at yearend as lawmakers moved towards a budget compromise.

News that a deal that was reached to avoid the “fiscal cliff” contributed to thrift stock gains at the start of 2013. Thrift stocks traded in a narrow range through mid-January, as investors exercised caution ahead of the fourth quarter earnings season. The narrow trading range for the thrift sector continued through the end of January and the first week of February, amid mixed fourth quarter earnings reports in which a large portion of the thrift sector experienced net interest margin compression during the fourth quarter. Financial shares led the broader stock market higher in mid-February, as investors speculated that merger activity in the financial sector would pick-up in 2013. The growing threat of sequester cuts pushed thrift stocks lower in late-February, as lenders worried that already weak loan demand would be hurt by the across-the-board budget cuts. Thrifts stocks participated in the broader stock market rally that extended into mid-March, with favorable results of the Federal Reserve’s big bank stress tests and a better-than-expected employment report for February contributing to the upswing in thrift stocks. Heading into the second half of March, thrift stocks traded in a narrow range to close out the first quarter as the Federal Reserve announced that it was leaving its target interest rate unchanged and would continue its bond buying program.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.12

Disappointing job growth reflected in the March employment report contributed to a decline in thrift stocks at the start of the second quarter of 2013. Thrift shares spiked higher on news that the Federal Reserve remained committed to its stimulus program and then declined in mid-April, as initial first quarter earnings reports posted by some of the large banks generally showed a continuation of net interest margin erosion. Thrift stocks strengthened in the second half of April, as financial stocks benefitted from favorable reports on the housing sector. The favorable employment report for April provided a boost to thrift stock in early-May, which was followed by a narrow trading into mid-May. Thrift stocks strengthened along with the broader stock heading into the second week of May. On May 17, 2013, the SNL Index for all publicly-traded thrifts closed at 607.9, an increase of 20.7% from one year ago and an increase of 5.2% year-to-date.

B. The New Issue Market

In addition to thrift stock market conditions in general, the new issue market for converting thrifts is also an important consideration in determining the Company’s pro forma market value. The new issue market is separate and distinct from the market for seasoned thrift stocks in that the pricing ratios for converting issues are computed on a pro forma basis, specifically: (1) the numerator and denominator are both impacted by the conversion offering amount, unlike existing stock issues in which price change affects only the numerator; and (2) the pro forma pricing ratio incorporates assumptions regarding source and use of proceeds, effective tax rates, stock plan purchases, etc. which impact pro forma financials, whereas pricing for existing issues are based on reported financials. The distinction between pricing of converting and existing issues is perhaps no clearer than in the case of the price/book (“P/B”) ratio in that the P/B ratio of a converting thrift will typically result in a discount to book value whereas in the current market for existing thrifts the P/B ratio may reflect a premium to book value. Therefore, it is appropriate to also consider the market for new issues, both at the time of the conversion and in the aftermarket.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.13

Table 4.1

Pricing Characteristics and After-Market Trends

Recent Conversions Completed in Last Three Months

Institutional Information					Pre-Conversion Data											Offering Information											Contribution to Char. Found.					Insider Purchases															Pro Forma Data																				Post-IPO Pricing Trends
					Financial Info.					Asset Quality																						% Off Incl. Fdn. +Merger Shares															Pricing Ratios(2)(5)									Financial Charac.											Closing Price:
																Excluding Foundation													% of Public Off. Excl. Fdn.			Benefit Plans												Initial Div. Yield																							First Trading Day					After First Week (3)					After First Month (4)
Institution	Conversion Date		Ticker		Assets		Equity/ Assets			NPAs/ Assets			Res. Cov.			Gross Proc.		% Offer			% of Mid.			Exp./ Proc.			Form					ESOP			Recog. Plans			Stk Option			Mgmt.& Dirs.						P/TB			Core P/E			P/A			Core ROA			TE/ A			Core ROE			IPO Price				% Chge					% Chge					% Chge			Thru 5/17/13		% Chge
					($Mil)		(%)			(%)			(%)			($Mil.)		(%)			(%)			(%)					(%)			(%)			(%)			(%)			(%)(1)			(%)			(%)			(x)			(%)			(%)			(%)			(%)			($)		($)		(%)			($)		(%)			($)		(%)			($)		(%)
Standard - Conversions
Westbury Bancorp, Inc. - WI*		4/10/13		WBB-NASDAQ	$	533		9.04	%		2.24	%		61	%	$	50.9		100	%		132	%		4.8	%		C/S	$	491K/1	%		8.1	%		4.0	%		10.1	%		3.3	%		0.00	%		57.4	%		145.8	x		9.1	%		0.1	%		15.8	%		0.4	%	$	10.00	$	13.55		35.5	%	$	13.60		36.0	%	$	13.32		33.2	%	$	13.51		35.1	%
Averages - Standard Conversions:					$	533		9.04	%		2.24	%		61	%	$	50.9		100	%		132	%		4.8	%		N.A.		N.A.			8.1	%		4.0	%		10.1	%		3.3	%		0.00	%		57.4	%		145.8	x		9.1	%		0.1	%		15.8	%		0.4	%	$	10.00	$	13.55		35.5	%	$	13.60		36.0	%	$	13.32		33.2	%	$	13.51		35.1	%
Medians - Standard Conversions:					$	533		9.04	%		2.24	%		61	%	$	50.9		100	%		132	%		4.8	%		N.A.		N.A.			8.1	%		4.0	%		10.1	%		3.3	%		0.00	%		57.4	%		145.8	x		9.1	%		0.1	%		15.8	%		0.4	%	$	10.00	$	13.55		35.5	%	$	13.60		36.0	%	$	13.32		33.2	%	$	13.51		35.1	%
Second Step Conversions
Charter Financial Corp., -GA*		4/9/13		CHFN-NASDAQ	$	1,034		13.91	%		0.53	%		263	%	$	142.9		63	%		106	%		3.7	%		N.A.		N.A.			2.0	%		4.0	%		10.0	%		0.4	%		0.00	%		85.1	%		45.28			19.6	%		0.4	%		23.1	%		1.8	%	$	10.00	$	10.22		2.2	%	$	10.15		1.5	%	$	10.13		1.3	%	$	10.00		0.0	%
Averages - Second Step Conversions:					$	1,034		13.91	%		0.53	%		263	%	$	142.9		63	%		106	%		3.7	%		N.A.		N.A.			2.0	%		4.0	%		10.0	%		0.4	%		0.00	%		85.1	%		45.3	x		19.6	%		0.4	%		23.1	%		1.8	%	$	10.00	$	10.22		2.2	%	$	10.15		1.5	%	$	10.13		1.3	%	$	10.00		0.0	%
Medians - Second Step Conversions:					$	1,034		13.91	%		0.53	%		263	%	$	142.9		63	%		106	%		3.7	%		N.A.		N.A.			2.0	%		4.0	%		10.0	%		0.4	%		0.00	%		85.1	%		45.3	x		19.6	%		0.4	%		23.1	%		1.8	%	$	10.00	$	10.22		2.2	%	$	10.15		1.5	%	$	10.13		1.3	%	$	10.00		0.0	%
Averages - All Conversions:					$	783		11.48	%		1.54	%		162	%	$	96.9		81	%		119	%		4.3	%		N.A.		N.A.			5.0	%		4.0	%		10.1	%		1.9	%		0.00	%		71.3	%		95.5	x		14.3	%		0.2	%		19.5	%		1.1	%	$	10.00	$	11.89		18.9	%	$	11.88		18.8	%	$	11.73		17.3	%	$	11.76		17.6	%
Medians - All Conversions:					$	783		11.48	%		1.85	%		162	%	$	96.9		81	%		119	%		4.3	%		N.A.		N.A.			5.0	%		4.0	%		10.1	%		1.9	%		0.00	%		71.3	%		95.5	x		14.3	%		0.2	%		19.5	%		1.1	%	$	10.00	$	11.89		18.9	%	$	11.88		18.8	%	$	11.73		17.3	%	$	11.76		17.6	%

Note: * - Appraisal performed by RP Financial; BOLD = RP Fin. Did the business plan, “NT” - Not Traded; “NA” - Not Applicable, Not Available; C/S-Cash/Stock.

(1) As a percent of MHC offering for MHC transactions.

(2) Does not take into account the adoption of SOP 93-6.

(3) Latest price if offering is less than one week old.

(4) Latest price if offering is more than one week but less than one month old.

(5) Mutual holding company pro forma data on full conversion basis.

(6) Simultaneously completed acquisition of another financial institution.

(7) Simultaneously converted to a commercial bank charter.

(8) Former credit union.

May 17, 2013

RP® Financial, LC.	VALUATION ANALYSIS
	IV.14

As shown in Table 4.1, one second step conversion and one standard conversion have been completed during the past three months. The second step conversion offering is considered to be most relevant for Delanco Bancorp’s pro forma pricing. The recent second step conversion offering was closed between the midpoint and maximum of the respective offering range. The closing pro forma price/tangible book ratio of the recent second step conversion offering equaled 85.1%. The second step conversion offering had price appreciation of 1.5% after the first week of trading and as of May 17, 2013, showed no price change from the respective IPO price.

Importantly, there are some key differences between the Company and the recent second step conversion. Charter Financial of Georgia, which closed its offering in April 2013, at a P/TB ratio of 85.1% had a low level of NPAs on a pre-conversion basis (0.53% NPAs/assets) and was profitable on a trailing twelve month basis (pro forma core ROA equal to -0.40%). At the same time, the gross proceeds of the Charter Financial offering equaled $142.9 million and thus, the post-conversion market capitalization and expected liquidity of the newly-issued shares will be well in excess of the Company’s newly issued shares. Moreover, other differences exist in Charter Financial’s large asset size ($1.0 billion) and Georgia markets.

In addition, Northfield Bancorp, Inc. of New Jersey closed its offering in January 2013. Northfield Bancorp closed its offering at a P/TB ratio of 81.9% with the comparatively high pricing, in relation to the Company’s pro forma P/TB ratio, reflective of its strong asset quality, profitable operations, and relatively large asset size ($2.6 billion) and pro forma market capitalization ($355.6 million at the completion of its conversion).

We believe that the various positive factors with Northfield Bancorp and Charter Financial’s pro forma financial condition, operations, franchise size, and post-conversion liquidity in their shares, in comparison to Delanco Bancorp, suggest that Delanco Bancorp should be priced at a discount. Additionally, Delanco Federal Savings Bank remains subject to the Agreement while neither Charter Financial or Northfield Bancorp’s operations were subject to regulatory agreements.

Shown in Table 4.2 are the current pricing ratios for the two offerings completed during the past three months, which both trade on NASDAQ. The current average P/TB ratio of the NASDAQ traded, fully-converted recent conversions equaled 81.36% as of May 17, 2013.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.15

Table 4.2

Market Pricing Comparatives

Prices As of May 17, 2013

-	Market				Per Share Data
	Capitalization				Core		Book												Dividends(4)						Financial Characteristics(6)
	Price/		Market		12 Month		Value/		Pricing Ratios(3)										Amount/				Payout		Total		Equity/		Tang Eq/		NPAs/		Reported				Core
Financial Institution	Share (1)		Value		EPS (2)		Share		P/E		P/B		P/A		P/TB		P/Core		Share		Yield		Ratio(5)		Assets		Assets		Assets		Assets		ROA		ROE		ROA		ROE
	($)		($Mil)		($)		($)		(x)		(%)		(%)		(%)		(x)		($)		(%)		(%)		($Mil)		(%)		(%)		(%)		(%)		(%)		(%)		(%)
All Non-MHC Public Companies		14.36		306.89		0.32		14.55		19.46		101.21		13.25		109.10		21.62		0.22		1.53		24.34		2,542		13.22		12.53		2.91		0.47		3.57		0.19		1.13
Converted Last 3 Months (no MHC)		11.76		148.35		0.15		14.71		38.46		80.47		15.92		81.36		NM		0.10		1.00		0.00		865		19.65		19.47		2.50		0.33		1.55		0.25		1.12
Converted Last 3 Months (no MHC)
CHFN    Charter Financial Corp of GA		10.00		227.22		0.22		12.00		38.46		83.33		19.56		85.11		NM		0.20		2.00		NM		1,163		23.47		23.11		1.58		0.50		2.14		0.43		1.84
WBB      Westbury Bancorp, Inc. of WI		13.51		69.48		0.07		17.41		NM		77.60		12.28		77.60		NM		0.00		0.00		0.00		566		15.82		15.82		3.42		0.15		0.95		0.06		0.39

(1) Average of High/Low or Bid/Ask price per share.

(2) EPS (estimate core basis) is based on actual trailing 12 month data, adjusted to omit non-operating items on a tax-effected basis.

(3) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB = Price to tangible book value; and P/Core = Price to core earnings.

(4) Indicated 12 month dividend, based on last quarterly dividend declared.

(5) Indicated 12 month dividend as a percent of trailing 12 month estimated core earnings.

(6) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailing 12 month common earnings and average common equity and total assets balances.

(7) Excludes from averages and medians those companies the subject of actual or rumored acquisition activities or unusual operating characteristics.

Source: SNL Financial, LC. and RP^® Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

Copyright (c) 2013 by RP^® Financial, LC.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.16

C. The Acquisition Market

Also considered in the valuation was the potential impact on Delanco Bancorp’s stock price of recently completed and pending acquisitions of other thrift institutions operating in New Jersey. As shown in Exhibit IV-4, there were 10 thrift acquisitions completed from the beginning of 2008 through May 17, 2013. Additionally, there were nine acquisitions of commercial banks in New Jersey over the corresponding timeframe. The recent acquisition activity may imply a certain degree of acquisition speculation for the Company’s stock. To the extent that acquisition speculation may impact the Company’s offering, we have largely taken this into account in selecting companies for the Peer Group which operate in markets that have experienced a comparable level of acquisition activity as the Company’s market and, thus, are subject to the same type of acquisition speculation that may influence Delanco Bancorp’s stock. However, since converting thrifts are subject to a three-year regulatory moratorium from being acquired, acquisition speculation in Delanco Bancorp’s stock would tend to be less, compared to the stocks of the Peer Group companies.

D. Trading in Delanco Bancorp’s Stock

Since Delanco Bancorp’s minority stock currently trades under the symbol “DLNO” on the Over the Counter Bulletin Board, RP Financial also considered the recent trading activity of the Company in the valuation analysis. Delanco Bancorp had a total of 1,634,725 shares issued and outstanding at May 17, 2013, of which 735,626 shares were held by public shareholders and traded as public securities. The Company’s stock has had a 52 week trading range of $3.10 to $5.10 per share and its closing price on May 17, 2013 was $3.65 for an implied market value of $6.0 million.

There are significant differences between the Company’s minority stock (currently being traded) and the conversion stock that will be issued by the Company. Such differences include different liquidity characteristics, a different return on equity for the conversion stock, the stock is currently traded based on speculation of a range of exchange ratios, and dividend payments, if any, will be made on all shares outstanding. Since the pro forma impact has not been publicly disseminated to date, it is appropriate to discount the current trading level. As the pro forma impact is made known publicly, the trading level will become more informative.

* * * * * * * * * * *

In determining our valuation adjustment for marketing of the issue, we considered trends in both the overall thrift market, the new issue market including the new issue market for second step conversions, the acquisition market, and recent trading activity in the Company’s minority stock. Taking these factors and trends into account, RP Financial concluded that a slight downward adjustment was appropriate in the valuation analysis for purposes of marketing of the issue.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.17

8. Management

The Company’s management team has been adequate to manage Delanco Bancorp’s operations as currently structured. Exhibit IV-5 provides summary resumes of the Company’s Board of Directors and senior management. However, the Bank’s small asset size necessarily limits the breadth and depth of management relative to the larger Peer Group institutions, which are larger and have greater management depth. Accordingly, we have applied a slight downward adjustment for this factor.

9. Effect of Government Regulation and Regulatory Reform

In summary, as a fully-converted regulated institution, Delanco Bancorp will operate in substantially the same regulatory environment as the Peer Group members — all of whom are adequately capitalized institutions and are operating with no apparent restrictions. Exhibit IV-6 reflects the Company’s pro forma regulatory capital ratios. At the same time, the Bank is subject to the terms of a regulatory operating agreement which is expected to remain in effect on a post-conversion basis and which subjects the Company to a higher level of regulatory scrutiny and oversight and, as noted previously, requires OCC approval for any dividend payments. Based on the available public disclosures, three of the ten Peer Group companies are subject to similar regulatory agreements while seven of the Peer Group institutions do not appear to have any regulatory agreements based on their public disclosures. Since the majority of the Peer Group companies are not subject to similar agreements and/or operating restrictions, we have applied a slight downward adjustment for the effect of government regulation and regulatory reform.

Summary of Adjustments

Overall, based on the factors discussed above, we concluded that the Company’s pro forma market value should reflect the following valuation adjustments, on the following page, relative to the Peer Group:

RP® Financial, LC.	VALUATION ANALYSIS
	IV.18

Key Valuation Parameters:	Valuation Adjustment
Financial Condition	Moderate Downward
Profitability, Growth and Viability of Earnings	Moderate Downward
Asset Growth	Slight Downward
Primary Market Area	No Adjustment
Dividends	Slight Downward
Liquidity of the Shares	Slight Downward
Marketing of the Issue	Slight Downward
Management	Slight Downward
Effect of Govt. Regulations and Regulatory Reform	Slight Downward

Valuation Approaches

In applying the accepted valuation methodology originally promulgated by the OCC and adopted by the FRB, i.e., the pro forma market value approach, we considered the three key pricing ratios in valuing the Company’s to-be-issued stock — price/earnings (“P/E”), price/book (“P/B”), and price/assets (“P/A”) approaches — all performed on a pro forma basis including the effects of the stock proceeds. In computing the pro forma impact of the conversion and the related pricing ratios, we have incorporated the valuation parameters disclosed in the Company’s prospectus for reinvestment rate, effective tax rate, stock benefit plan assumptions, and expenses (summarized in Exhibits IV-7 and IV-8).

In our estimate of value, we assessed the relationship of the pro forma pricing ratios relative to the Peer Group and recent conversion offerings.

RP Financial’s valuation placed an emphasis on the following:

• P/E Approach. The P/E approach is generally the best indicator of long-term value for a stock. However, both the Company and the Peer Group have experienced either operating losses or weak earnings levels which were a defining criterion for the Peer Group selection. Accordingly, the earnings approach has been rendered less meaningful to the Company’s pro forma valuation and we have given comparatively greater weight to the other valuation approaches.

• P/B Approach. P/B ratios have generally served as a useful benchmark in the valuation of thrift stocks, particularly in the context of a conversion offering, as the earnings approach involves assumptions regarding the use of proceeds. RP Financial considered the P/B approach to be a valuable indicator of pro forma value, as the earnings approach has been rendered less meaningful to the Company’s valuation in view of Delanco Bancorp’s recent operating losses and low earnings or losses reported by the Peer Group. We have also modified the P/B approach to exclude the impact of intangible assets (i.e., price/tangible book value or “P/TB”), in that the investment community frequently makes this adjustment in its evaluation of this pricing approach.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.19

• P/A Approach. P/A ratios are generally a less reliable indicator of market value, as investors typically assign less weight to assets and attribute greater weight to book value and earnings. Furthermore, this approach as set forth in the regulatory valuation guidelines does not take into account the amount of stock purchases funded by deposit withdrawals, thus understating the pro forma P/A ratio. At the same time, the P/A ratio is an indicator of franchise value, and, can be a valuable indicator of value when earnings are low, which is the case for Delanco Bancorp.

• Trading of Delanco Bancorp’s stock. Converting institutions generally do not have stock outstanding. Delanco Bancorp, however, has public shares outstanding due to the mutual holding company form of ownership. Since Delanco Bancorp is currently traded on the Over the Counter Bulletin Board, it is an indicator of investor interest in the Company’s conversion stock and therefore received some weight in our valuation. Based on the May 17, 2013 stock price of $3.65 per share and the 1,634,725 shares of Delanco Bancorp stock outstanding, the Company’s implied market value of $6.0 million was considered in the valuation process. However, since the conversion stock will have different characteristics than the minority shares, and since pro forma information has not been publicly disseminated to date, the current trading price of Delanco Bancorp’s stock was somewhat discounted herein, but will become more important towards the closing of the offering.

The Company has adopted “Employers’ Accounting for Employee Stock Ownership Plans” (“ASC 718-40”) which causes earnings per share computations to be based on shares issued and outstanding, excluding unreleased ESOP shares. For purposes of preparing the pro forma pricing analyses, we have reflected all shares issued in the offering, including all ESOP shares, to capture the full dilutive impact, particularly since the ESOP shares are economically dilutive, receive dividends, and can be voted. However, we did consider the impact of the adoption of ASC 718-40 in the valuation.

In preparing the pro forma pricing analysis we have taken into account the pro forma impact of the MHC net assets that will be consolidated with the Company and thus will increase equity and earnings, as shown on the following page. At March 31, 2013, the MHC had unconsolidated net assets of $96,000, which includes cash which is on deposit at the Bank. As mentioned previously, while the consolidation of these assets increases the pro forma value of the Company, it also results in some pro forma ownership dilution for the minority shareholders pursuant to regulatory policy. Specifically, we have adjusted the minority ownership ratio from the current 45.00% ratio to 44.44% to account for the impact of MHC assets and have reflected the formula based on applicable FDIC policy.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.20

Delanco Bancorp, Inc. (“Mid-Tier”)

Impact of MHC Assets & Waived Dividends on Minority Ownership In 2nd Step

Financial and Stock Ownership Data as of March 31, 2013

Reflects Appraised Pro Forma Market Value as of May 17, 2013

Key Input Assumptions

Mid-Tier Stockholders’ Equity	$	11,395,000		(BOOK)
Aggregate Dividends Waived by MHC	$	0		(WAIVED DIVIDENDS)
Minority Ownership Interest		45.00	%	(PCT)
Pro Forma Market Value	$	7,649,392		(VALUE)
Market Value of MHC Assets (Other than Stock in Bank)	$	96,000		(MHC ASSETS)	(1)

Adjustment for MHC Assets & Waived Diviends—2 Step Calculation (as required by FDIC & FRB)

		(BOOK - WAIVED DIVIDENDS) x PCT
Step 1: To Account for Waiver of Dividends	=	BOOK
	=	45.00%
		(VALUE - MHC ASSETS) x Step 1
Step 2: To Account for MHC Assets	=	VALUE
	=	44.44% (rounded)

Current Ownership

MHC Shares	899,099	55.00	%
Public Shares	735,626	45.00	%
Total Shares	1,634,725	100.00	%

Pro Forma Ownership (2)

				Appraised Midpoint Value
				Per Share		Aggregate
Shares Issued in Offering (3)	531,250	55.56	%(5)	$	8.00	$	4,250,000
Public Shares (3)	424,924	44.44	%(5)	$	8.00	$	3,399,392
Pro Forma Shares (4)	956,174	100.00	%	$	8.00	$	7,649,392

(1) Net assets at MHC level, less aggregate dividends paid to MHC.

(2) Adjusted for exchange ratio reflecting offering of $8.00 per share.

(3) Incorporates adjustment in ownership ratio for MHC assets and waived dividends.

(4) Reflects pro forma shares outstanding.

(5) Rounded to two decimal points.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.21

Based on the application of the three valuation approaches, taking into consideration the valuation adjustments discussed previously, RP Financial concluded that as of May 17, 2013 the aggregate pro forma market value of Delanco Bancorp’s conversion stock equaled $7,649,392 at the midpoint, equal to 956,174 shares at $8.00 per share. The $8.00 per share price was determined by the Delanco Bancorp Board. The midpoint and resulting valuation range is based on the sale of a 55.56% ownership interest for the consolidation of the MHC net assets to the public (as adjusted on the previous page), which provides for a $4,250,000 public offering at the midpoint value.

1. Price-to-Earnings (“P/E”). The application of the P/E valuation method requires calculating the Company’s pro forma market value by applying a valuation P/E multiple to the pro forma earnings base. In applying this technique, we considered both reported earnings and a recurring earnings base, that is, earnings adjusted to exclude any one-time non-operating items, plus the estimated after-tax earnings benefit of the reinvestment of the net proceeds. The Company reported a net loss equal to $324,000 for the twelve months ended March 31, 2013, while on a core basis, excluding non-operating losses on sale of OREO on a tax-effected basis, equaled a core net loss of $233,000. Four of the ten Peer Group companies also reported trailing twelve month operating losses, while the remaining six Peer Group companies reported moderate operating returns, as shown in Table 4.3. At the same time, we have given consideration to the future impact of expense provisions on the Company’s profitability and taken into account management’s belief that loan loss provisions may be lower in the future which may provide the impetus for future earnings growth. In summary, we have primarily relied on the remaining valuation approaches to derive the Company’s pro forma market value but have given consideration to the possible impact of cost reductions, as the benefits are fully realized into earnings for Delanco Bancorp, in evaluating the appropriate pro forma P/B, P/TB and P/A ratios.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.22

Table 4.3

Public Market Pricing Versus Peer Group

Delanco Bancorp, Inc.

As of May 17, 2013

	Market				Per Share Data
	Capitalization				Core			Book																	Dividends(4)								Financial Characteristics(6)
	Price/		Market		12 Month			Value/		Pricing Ratios(3)															Amount/					Payout			Total		Equity/			Tang. Eq./			NPAs/			Reported						Core						Exchange		2nd Step
	Share(1)		Value		EPS(2)			Share		P/E			P/B			P/A			P/TB			P/Core			Share		Yield			Ratio(5)			Assets		Assets			Assets			Assets			ROA			ROE			ROA			ROE			Ratio		Proceeds
	($)		($Mil)		($)			($)		(x)			(%)			(%)			(%)			(x)			($)		(%)			(%)			($Mil)		(%)			(%)			(%)			(%)			(%)			(%)			(%)			(X)		($Mil)
Delanco Bancorp, Inc.
Supermaximum	$	8.00	$	10.12	($	0.26	)	$	12.64		NM			63.29	%		7.55	%		63.29	%		NM		$	0.00		0.00	%		0.00	%	$	134		11.93	%		11.93	%		5.97	%		-0.24	%		-2.03	%		-0.17	%		-1.46	%		0.7639	$	5.62
Maximum	$	8.00	$	8.80	($	0.30	)	$	13.90		NM			57.55	%		6.60	%		57.55	%		NM		$	0.00		0.00	%		0.00	%	$	133		11.47	%		11.47	%		6.01	%		-0.25	%		-2.14	%		-0.18	%		-1.54	%		0.6643	$	4.89
Midpoint	$	8.00	$	7.65	($	0.34	)	$	15.35		NM			52.12	%		5.76	%		52.12	%		NM		$	0.00		0.00	%		0.00	%	$	133		11.06	%		11.06	%		6.03	%		-0.25	%		-2.24	%		-0.18	%		-1.62	%		0.5776	$	4.25
Minimum	$	8.00	$	6.50	($	0.41	)	$	17.31		NM			46.22	%		4.92	%		46.22	%		NM		$	0.00		0.00	%		0.00	%	$	132		10.65	%		10.65	%		6.06	%		-0.25	%		-2.34	%		-0.18	%		-1.70	%		0.4910	$	3.61
All Non-MHC Public Companies(7)
Averages	$	14.89	$	328.08	$	0.34		$	15.49		19.24	x		97.00	%		12.62	%		104.63	%		21.69	x	$	0.23		1.57	%		25.61	%	$	2,561		13.11	%		12.44	%		2.93	%		0.47	%		3.53	%		0.19	%		1.11	%
Median	$	13.74	$	92.58	$	0.39		$	14.72		18.57	x		92.81	%		12.13	%		94.74	%		20.33	x	$	0.19		1.33	%		5.75	%	$	817		12.72	%		11.66	%		2.20	%		0.54	%		4.16	%		0.36	%		2.81	%
All Non-MHC State of NJ(7)
Averages	$	13.53	$	408.64	$	0.52		$	13.84		19.17	x		99.63	%		14.58	%		110.66	%		19.95	x	$	0.35		2.46	%		47.12	%	$	2,581		13.65	%		12.55	%		3.16	%		0.61	%		4.38	%		0.56	%		4.06	%
Medians	$	14.34	$	253.24	$	0.73		$	12.57		19.84	x		94.35	%		12.21	%		99.31	%		19.66	x	$	0.24		2.12	%		50.53	%	$	2,304		13.47	%		10.75	%		2.80	%		0.49	%		4.57	%		0.49	%		4.83	%
Comparable Group
Averages	$	12.28	$	50.34	$	0.08		$	15.14		20.63	x		80.53	%		10.89	%		81.17	%		22.07	x	$	0.08		0.47	%		17.46	%	$	487		13.76	%		13.69	%		4.78	%		-0.12	%		-2.12	%		-0.28	%		-3.27	%
Medians	$	13.60	$	48.36	$	0.02		$	15.23		20.66	x		81.00	%		10.47	%		82.53	%		19.63	x	$	0.00		0.00	%		13.69	%	$	492		12.76	%		12.74	%		4.23	%		0.45	%		2.91	%		0.03	%		0.22	%
Comparable Group
ALLB     Alliance Bancorp, Inc. of PA	$	13.70	$	70.61	$	0.58		$	15.46		28.54	x		88.62	%		15.44	%		88.62	%		23.62	x	$	0.20		1.46	%		41.67	%	$	457		17.42	%		17.42	%		3.57	%		0.53	%		3.04	%		0.64	%		3.67	%
AFCB     Athens Bancshares Corp. of TN	$	18.44	$	40.96	$	1.18		$	20.72		15.53	x		89.00	%		13.86	%		89.47	%		15.63	x	$	0.20		1.08	%		16.95	%	$	296		15.57	%		15.50	%		3.07	%		0.89	%		5.38	%		0.89	%		5.38	%
CFBK     Central Federal Corp. of OH	$	1.50	$	23.74	($	0.28	)	$	1.45		NM			103.45	%		10.96	%		104.17	%		NM		$	0.00		0.00	%		NM		$	216		10.60	%		10.53	%		4.91	%		-1.84	%		-23.21	%		-1.98	%		-25.00	%
COBK    Colonial Financial Serv. of NJ	$	13.50	$	52.02	($	0.41	)	$	17.66		NM			76.44	%		8.21	%		76.44	%		NM		$	0.00		0.00	%		NM		$	633		10.75	%		10.75	%		5.84	%		-0.24	%		-2.16	%		-0.25	%		-2.27	%
FFNM     First Fed. of N. Michigan of MI	$	4.64	$	13.38	($	0.40	)	$	8.46		NM			54.85	%		6.29	%		55.11	%		NM		$	0.00		0.00	%		NM		$	213		11.46	%		11.42	%		4.74	%		-0.35	%		-3.02	%		-0.54	%		-4.64	%
HBNK    Hampden Bancorp, Inc. of MA	$	15.28	$	88.41	$	0.44		$	14.99		27.29	x		101.93	%		13.24	%		101.93	%		34.73	x	$	0.20		1.31	%		35.71	%	$	668		12.99	%		12.99	%		2.21	%		0.51	%		3.73	%		0.40	%		2.93	%
NVSL     Naugatuck Valley Fin Crp of             CT	$	7.20	$	50.41	($	2.13	)	$	9.56		NM			75.31	%		9.58	%		75.31	%		NM		$	0.00		0.00	%		NM		$	526		12.72	%		12.72	%		5.01	%		-2.45	%		-17.65	%		-2.69	%		-19.38	%
SVBI       Severn Bancorp, Inc. of MD	$	4.60	$	46.31	$	0.05		$	8.09		13.53	x		56.86	%		5.43	%		57.07	%		NM		$	0.00		0.00	%		0.00	%	$	852		12.80	%		12.75	%		12.37	%		0.39	%		3.20	%		0.06	%		0.47	%
THRD     TF Fin. Corp. of New town PA	$	25.13	$	71.37	$	1.76		$	29.37		13.09	x		85.56	%		9.97	%		90.23	%		14.28	x	$	0.20		0.80	%		10.42	%	$	716		11.65	%		11.11	%		2.37	%		0.78	%		6.70	%		0.71	%		6.14	%
WBKC    Wolverine Bancorp, Inc. of MI	$	18.82	$	46.15	($	0.01	)	$	25.67		25.78	x		73.32	%		15.89	%		73.32	%		NM		$	0.00		0.00	%		0.00	%	$	290		21.67	%		21.67	%		3.72	%		0.62	%		2.78	%		-0.01	%		-0.04	%

(1) Average of High/Low or Bid/Ask price per share.

(2) EPS (estimate core basis) is based on actual trailing 12 month data, adjusted to omit non-operating items on a tax-effected basis, and is shown on a pro forma basis where appropriate.

(3) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB = Price to tangible book value; and P/Core = Price to core earnings.

(4) Indicated 12 month dividend, based on last quarterly dividend declared.

(5) Indicated 12 month dividend as a percent of trailing 12 month estimated core earnings.

(6) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailing 12 month common earnings and average common equity and total assets balances.

(7) Excludes from averages and medians those companies the subject of actual or rumored acquisition activities or unusual operating characteristics.

Source: Corporate reports, offering circulars, and RP Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

Copyright (c) 2013 by RP^® Financial, LC.

RP® Financial, LC.	VALUATION ANALYSIS
	IV.23

2. Price-to-Book (“P/B”). The application of the P/B valuation method requires calculating the Company’s pro forma market value by applying a valuation P/B ratio, as derived from the Peer Group’s P/B ratio, to the Company’s pro forma book value. Based on the $7.65 million midpoint valuation, the Company’s pro forma P/B and P/TB ratios equaled 52.12% and 52.12%, respectively. In comparison to the average P/B and P/TB ratios for the Peer Group of 80.53% and 81.17%, the Company’s ratios reflected a discount of 35.3% on a P/B basis and a discount of 35.8% on a P/TB basis. In comparison to the Peer Group’s median P/B and P/TB ratios of 81.00% and 82.53%, respectively, the Company’s pro forma P/B and P/TB ratios at the midpoint value reflected discounts of 35.7% and 36.9%, respectively. At the supermaximum value, the Company’s P/B and P/TB ratios equaled 63.29% and 63.29%, respectively. In comparison to the Peer Group’s average P/B and P/TB ratios, the Company’s P/B and P/TB ratios at the supermaximum value reflected discounts of 21.4% and 22.0%, respectively. RP Financial considered the discounts under the P/B approach to be reasonable given the nature of the calculation of the P/B ratio, which tends to mathematically result in a ratio discounted to book value, and in consideration of the Company’s relative asset quality and earnings performance in relation to the Peer Group, as well as its much smaller asset size ($133 million versus the Peer Group average of $487 million) and pro forma market capitalization ($7.7 million at the midpoint of the offering range versus an average of $50.3 million for the Peer Group) which will result in more limited aftermarket liquidity of Delanco Bancorp’s shares.

3. Price-to-Assets (“P/A”). The P/A valuation methodology determines market value by applying a valuation P/A ratio to the Company’s pro forma asset base, conservatively assuming no deposit withdrawals are made to fund stock purchases. In all likelihood there will be deposit withdrawals, which results in understating the pro forma P/A ratio, which is computed herein. At the $7.65 million midpoint of the valuation range, the Company’s value equaled 5.76% of pro forma assets. Comparatively, the Peer Group companies exhibited an average P/A ratio of 10.89%, which implies a discount of 47.1% has been applied to the Company’s pro forma P/A ratio. In comparison to the Peer Group’s median P/A ratio of 10.47%, the Company’s pro forma P/A ratio at the midpoint value reflects a discount of 45.0%.

Comparison to Recent Offerings

As indicated at the beginning of this section, RP Financial’s analysis of recent conversion offering pricing characteristics at closing and in the aftermarket has been limited to a “technical” analysis and, thus, the pricing characteristics of recent conversion offerings cannot be a primary determinate of value. Particular focus was placed on the P/TB approach in this analysis, since the P/E multiples do not reflect the actual impact of reinvestment and the source of the stock proceeds (i.e., external funds vs. deposit withdrawals). As discussed previously, the recent second step offering, Charter Financial, had a pro forma price/tangible book

RP® Financial, LC.	VALUATION ANALYSIS
	IV.24

ratio at closing of 85.07% (see Table 4.1). In comparison, the Company’s pro forma price/tangible book ratio at the midpoint value reflects an implied discount of 38.7%. The current P/TB ratio of the recent second step conversion, based on closing stock prices as of May 17, 2013, equaled 85.11%. In comparison to the current P/TB ratio of this recent second step conversion, the Company’s P/TB ratio at the midpoint value reflects an implied discount of 38.8%. Furthermore, the most recent second step conversion in New Jersey, Northfield Bancorp, had a pro forma price/tangible book ratio at closing of 81.93%, which, in comparison to the Company’s pro forma price/tangible book ratio at the midpoint value reflects an implied discount of 36.4%.

Charter Financial and Northfield Bancorp’s second step conversion offerings were not exactly comparable to the Company’s offering due to the comparatively larger size of both offerings, however, there are other key differences between Charter Financial and Northfield Bancorp and the Company, which suggest that the Company’s value should be discounted relative to the two companies, including: (1) Delanco Bancorp is significantly smaller than Charter Financial and Northfield Bancorp in terms of asset size and pro forma market capitalization; (2) Delanco Bancorp reported substantially less favorable NPA and other asset quality ratios than Charter Financial and Northfield Bancorp; (3) Delanco Bancorp is currently unprofitable; and, (4) Delanco Bancorp’s bank subsidiary, Delanco Federal Savings Bank, is subject to the terms of a regulatory agreement whereas Charter Financial and Northfield Bancorp are not.

Valuation Conclusion

Based on the foregoing, it is our opinion that, as of May 17, 2013, the estimated aggregate pro forma valuation of the shares of the Company to be issued and outstanding at the end of the conversion offering – including (1) newly-issued shares representing the MHC’s current ownership interest in the Company and (2) exchange shares issued to existing public shareholders of the Company - was $7,649,392 at the midpoint, equal to 956,174 shares at a per share value of $8.00. The resulting range of value and pro forma shares, all based on $8.00 per share, are as follows: $6,501,984 or 812,748 shares at the minimum, $8,796,800, or 1,099,600 shares at the maximum, and $10,116,328, or 1,264,541 shares at the supermaximum.

Based on this valuation and taking into account the ownership interest represented by the shares owned by the MHC, the midpoint of the offering range is $4,250,000, equal to 531,250 shares at $8.00 per share. The resulting offering range and offering shares, all based on $8.00 per share, are as follows: $3,612,504, or 451,563 shares at the minimum, $4,887,504

RP® Financial, LC.	VALUATION ANALYSIS
	IV.25

or 610,938 shares at the maximum, and $5,620,632 or 702,579 shares at the supermaximum. A schedule reflecting a distribution of the shares at each point in the range is reflected in the schedule below. The pro forma valuation calculations relative to the Peer Group are shown in Table 4.3 and are detailed in Exhibit IV-7 and Exhibit IV-8.

							Exchange Shares
				Offering			Issued to Public			Exchange
	Total Shares			Shares			Shareholders			Ratio
Shares (1)
Maximum, as Adjusted		1,264,541			702,579			561,962			0.7639
Maximum		1,099,600			610,938			488,662			0.6643
Midpoint		956,174			531,250			424,924			0.5776
Minimum		812,748			451,563			361,185			0.4910
Distribution of Shares (2)
Maximum, as Adjusted		100.00	%		55.56	%		44.44	%
Maximum		100.00	%		55.56	%		44.44	%
Midpoint		100.00	%		55.56	%		44.44	%
Minimum		100.00	%		55.56	%		44.44	%
Aggregate Market Value at $8 per share
Maximum, as Adjusted	$	10,116,328		$	5,620,632		$	4,495,696
Maximum	$	8,796,800		$	4,887,504		$	3,909,300
Midpoint	$	7,649,392		$	4,250,000		$	3,399,388
Minimum	$	6,501,984		$	3,612,504		$	2,889,483

(1) Based on an $8.00 per share IPO price.

(2) Ownership ratios adjusted for dilution for MHC assets.

Establishment of the Exchange Ratio

FRB regulations provide that in a conversion of a mutual holding company, the minority stockholders are entitled to exchange the public shares for newly issued shares in the fully converted company. The Board of Directors of Delanco Bancorp has independently determined the exchange ratio, which has been designed to preserve the current aggregate percentage ownership in the Company held by the public shareholders, taking into account the impact of MHC assets in the Second Step Conversion, consistent with FRB policy with respect to the treatment of MHC assets. The exchange ratio to be received by the existing minority shareholders of the Company will be determined at the end of the offering, based on the total number of shares sold in the subscription and syndicated offerings and the final appraisal. Based on the valuation conclusion herein, the resulting offering value, and the $8.00 per share

RP® Financial, LC.	VALUATION ANALYSIS
	IV.26

offering price, the indicated exchange ratio at the midpoint is 0.57764 shares of the Company for every one public share held by public shareholders. Furthermore, based on the offering range of value, the indicated exchange ratio is 0.49099 at the minimum, 0.66428 at the maximum, and 0.76392 at the supermaximum. RP Financial expresses no opinion on the proposed exchange of newly issued Company shares for the shares held by the public stockholders or on the proposed exchange ratio.

EXHIBITS

OMITTED

IN ACCORDANCE WITH RULE 202 OF REGULATION S-T, THESE EXHIBITS ARE BEING FILED IN PAPER PURSUANT TO A CONTINUING HARDSHIP EXEMPTION.