1359111--3/12/2009--Fox_Chase_Bancorp

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{loss, insurance, financial}

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{competitive, industry, competition}

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Our level of assets categorized as doubtful, substandard or special mention expose us to increased lending risk. Further, if our allowance for loan losses is insufficient to absorb losses in our loan portfolio, our earnings could decrease. The current economic environment poses significant challenges for us and could adversely affect our financial condition and results of operation. Our emphasis on multi-family and commercial real estate, commercial and construction lending may expose us to increased lending risks. The unseasoned nature of our multi-family and commercial real estate, commercial and construction loan portfolios may result in changes in estimating collectibility, which may lead to additional provisions or charge-offs, which could hurt our profits. may be larger on a per loan basis than those incurred historically with our residential mortgage loan or consumer loan portfolios. Our investment portfolio contains private label mortgage backed securities which had a significant unrealized loss position at December 31, 2008. As a member bank, we own stock in the Federal Home Loan Bank of Pittsburgh, which is experiencing financial difficulties. Our inability to significantly increase deposits may cause us to rely more heavily on wholesale funding strategies, which could increase our expenses and adversely affect our operating margins and profitability. FDIC assessments will hurt earnings. Changes in interest rates could have a material adverse effect on our operations. If we do not achieve profitability on our new branches and loan production offices, the new offices may reduce our earnings. We operate in a highly regulated environment and we may be adversely affected by changes in laws and regulations. A further downturn in the local economy or a further decline in real estate values could reduce our profits. Strong competition within our market areas could reduce our profits. Our low return on equity may negatively affect our stock price. Expenses from operating as a public company and from equity-based benefit plans will continue to adversely affect our profitability. Our ability to access capital, including undertaking a second-step conversion, is limited by current market conditions. Fox Chase MHC s majority control of our common stock will enable it to exercise voting control over most matters put to a vote of stockholders and will prevent stockholders from forcing a sale or a second-step conversion transaction you may find advantageous. Office of Thrift Supervision policy on remutualization transactions could prohibit acquisition of Fox Chase Bancorp, which may adversely affect our stock price.

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1359111--3/12/2009--Fox_Chase_Bancorp_Inc