10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.20549

FORM 10-K

þ   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended December 31, 2007

or

o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from           to          

Commission File number 2-99779

National Consumer Cooperative Bank

(Exact name of registrant as specified in its charter)

United States of America (12 U.S.C. Section 3001 et. seq.)	52-1157795
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

601 Pennsylvania Avenue N.W., North Building, Suite 750, Washington, D.C. 20004
(Address of principal executive offices)  (Zip Code)

Registrant’s telephone number, including area code (202) 349-7444

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act:  o Yes     þ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act:  o Yes     þ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements of the past 90 days. Yes  þ     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ

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 o	Accelerated filer o	Non-accelerated filer þ	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Act):  o Yes     þ No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the place at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: the registrant’s voting and non-voting common equity is not traded on any market.

Indicate the number of shares outstanding of each of the registrant’s classes of common
stock at December 31, 2007: Class B 1,727,541 and Class C 251,371. DOCUMENTS
INCORPORATED BY REFERENCE: None

INDEX

PART I
	Item 1	Business	1
	Item 1A	Risk Factors	6
	Item 2	Properties	11
	Item 3	Legal Proceedings	12
	Item 4	Submission of Matters to a Vote of Security Holders	12
PART II
	Item 5	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	12
	Item 6	Selected Financial Data	14
	Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
	Item 7A	Quantitative and Qualitative Disclosures about Market Risk	31
	Item 8	Financial Statements and Supplementary Data	40
	Item 9	Changes in and Disagreements with Accountants, on Accounting and Financial Disclosure	87
	Item 9A	Controls and Procedures	87
	Item 9B	Other Information	87
PART III
	Item 10	Directors, Executive Officers and Corporate Governance	88
	Item 11	Executive Compensation	92
	Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	111
	Item 13	Certain Relationships and Related Transactions and Director Independence	112
	Item 14	Principal Accountant Fees and Services	113
PART IV
	Item 15	Exhibits, Financial Statement Schedules	114

PART 1

ITEM 1. BUSINESS

GENERAL

The National Consumer Cooperative Bank, which does business as NCB, is a financial institution organized under the laws of the United States. NCB (sometimes referred to herein as “Bank”) principally provides financial services to eligible cooperative enterprises or enterprises controlled by eligible cooperatives. A cooperative enterprise is an organization which is owned by its members and which is engaged in producing or furnishing goods, services, or facilities for the benefit of its members or voting stockholders who are the ultimate consumers or primary producers of such goods, services, or facilities. NCB is structured as a cooperative institution whose voting stock can only be owned by its members or those eligible to become its members.

In the legislation chartering NCB (the National Consumer Cooperative Bank Act or the “Act”), Congress stated its finding that cooperatives have proven to be an effective means of minimizing the impact of inflation and economic hardship on members/owners by narrowing producer-to-consumer margins and price spreads, broadening ownership and control of economic organizations to a larger base of consumers, raising the quality of goods and services available in the marketplace and strengthening the nation’s economy as a whole. To further the development of cooperative businesses, Congress specifically directed NCB (1) to encourage the development of new and existing cooperatives eligible for its assistance by providing specialized credit and technical assistance; (2) to maintain broad-based control of NCB by its voting shareholders; (3) to encourage a broad-based ownership, control and active participation by members in eligible cooperatives; (4) to assist in improving the quality and availability of goods and services to consumers; and (5) to encourage ownership of its equity securities by cooperatives and others.

The Act also directed NCB to form NCB Capital Impact, which is a non-profit organization without capital stock organized under the laws of the District of Columbia to perform only functions provided in the Act. NCB Capital Impact provides loans and technical support to cooperative enterprises. Consistent with the Act, NCB may make deductible, voluntary contributions to NCB Capital Impact.

NCB fulfills its statutory obligations in two fashions. First, NCB makes loans and offers other financing services, which afford cooperative businesses substantially the same financing opportunities currently available for traditional enterprises. Second, NCB provides financial and other assistance to NCB Capital Impact.

The Act was passed on August 20, 1978, and NCB commenced lending operations on March 21, 1980. In 1981, Congress amended the Act (the “Act Amendments”) to convert the Class A Preferred stock of NCB previously held by the United States to Class A notes as of December 31, 1981 (the “Final Government Equity Redemption Date”). NCB maintains its executive offices at 601 Pennsylvania Avenue, N.W., Suite 750, Washington, D.C. 20004. The telephone number of its executive offices is (202) 349-7444. As explained in more detail in “Item 2, Properties” NCB vacated its offices at 1725 Eye Street in April 2007 and moved certain operational activities to Arlington, Virginia. NCB also maintains regional offices in Anchorage, Alaska, New York, New York, and Oakland, California. NCB, FSB maintains its principal office in Hillsboro, Ohio and non-retail branches in New York, New York and Washington, D.C.

When used in this report, the words “believes”, “anticipates”, “expects”, “seeks” and similar expressions are intended to identify forward-looking statements. Such statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected, including: competition within each of NCB’s businesses, the effects of international, national and regional economic conditions, and the availability of capital and other risks described from time to time in NCB’s filings with the Commission. Given these uncertainties, investors are cautioned not to place undue reliance on such statements. NCB also undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.

NCB originates various types of loans. The following are the primary types of loans NCB originates.

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The following terms, whenever used hereinafter, shall have the meaning set forth below unless otherwise stated or expressly provided.

• Consumer Loans	NCB’s Consumer Loans, including auto loans, include unsecured or secured loans to individuals primarily for personal use. If secured, Consumer Loans are secured by collateral other than real estate.
• Commercial Loans	NCB’s Commercial Loans include unsecured or secured loans to businesses (including small businesses “SBA Loans” and loans to retailer members of wholesaler cooperatives), franchises, community associations, cooperative housing corporations (unsecured only) and other entities to refinance debt or fund capital improvements. Commercial Loans to businesses and franchises are primarily secured by personal property, rents or other cash flows. Commercial Loans to community associations (“Community Association Loans”) are secured by an assignment of condominium or homeowner assessments, accounts and rents and the association’s rights to collect them.
• Real Estate — Residential Loans	NCB’s Residential Real Estate Loans include Single-family Residential Loans, Share Loans, Cooperative Loans and Multifamily Loans.
	NCB’s Single-family Residential Loans are loans to individuals or investors to purchase, refinance, construct or improve residential property consisting of one to four dwellings and are secured by the underlying real estate.
	NCB’s Share Loans are loans to individuals or investors living in a cooperative housing corporation (created for the sole purpose of owning and managing a residential apartment property for the benefit of its resident shareholders) to finance the purchase or refinance a share within the cooperative. The share or stock certificate serves as collateral for the loan.
	NCB’s Cooperative Loans are loans to cooperative housing corporations to refinance existing debt or fund capital improvements to the common areas of the entire building. NCB’s Cooperative Loans are secured by the first or second mortgage in the land and buildings and by an assignment of all leases, receivables, accounts and personal property of the cooperative housing corporation.
	NCB’s Multifamily Loans are loans to businesses or investors to purchase, refinance, construct or improve residential property consisting of five or more dwellings (e.g. apartment housing, student housing, senior housing) and are secured by the underlying real estate.
• Real Estate — Commercial Loans	NCB’s Commercial Real Estate Loans are loans to businesses (including small businesses “SBA Loans”) or investors to purchase, refinance, construct or improve non-residential property (e.g. retail centers, office buildings, industrial properties or self storage warehouse) and are secured by the underlying real estate.
• Leases	NCB has various lease programs that it offers to customers.

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LOAN REQUIREMENTS, RESTRICTIONS AND POLICIES

Eligibility Requirements

Cooperatives, cooperative-like organizations, and legally chartered entities primarily owned and controlled by cooperatives are eligible to borrow from NCB under Section 108 of the Act if they are engaged in producing or furnishing goods, services or facilities primarily for the benefit of their members or voting stockholders who are the ultimate consumers of such goods, services or facilities. In addition, to be eligible to borrow from NCB the borrower must, among other things, (1) be controlled by its members or voting stockholders on a democratic basis; (2) agree not to pay dividends on voting stock or membership capital in excess of such percentage per annum as may be approved by NCB; (3) provide that its net savings shall be allocated or distributed to all members or patrons, in proportion to their patronage, or retain such savings for the actual or potential expansion of its services or the reduction of its charges to the patrons; and (4) make membership available on a voluntary basis, without any social, political, racial or religious discrimination and without any discrimination on the basis of age, sex, or marital status to all persons who can make use of its services and are willing to accept the responsibilities of membership. NCB may also purchase obligations issued by members of eligible cooperatives. NCB maintains member finance programs for members of distribution and purchasing cooperatives primarily in the food, franchise and hardware industries. In addition, organizations applying for loans must comply with other technical and financial requirements that are customary for similar loans from financial institutions.

NCB, both directly and acting through its principal subsidiary NCB, FSB, also makes certain loans under the general lending authority and incidental powers provisions of Section 102 of the Act to entities and individuals other than eligible cooperatives, when NCB determines such loans to be incidental to and beneficial to lending programs designed for eligible cooperatives.

Lending Authorities

The Board of Directors establishes its policies governing the lending operations in compliance with the Act and management carries out the policies. Management in turn adopts and implements guidelines and procedures consistent with stated Board directives. The Board of Directors and management regularly review the lending policies and guidelines in order to make needed changes and amendments.

Management may approve individual credit exposures of up to 75% of the single borrower-lending limit, which is equal to 15% of NCB’s capital (using the definition of capital for national banks as set forth by the Office of the Comptroller of the Currency) without prior approval of the Board. The President may delegate authorities up to this limit to such committees and individual officers, as he may deem appropriate.

All loan approvals require at least two signatures and the Bank’s senior management approves credit commitments that exceed individual lending authority.

Cooperatives of Primary Producers

As provided by Section 105 of the Act the total dollar value of loans to cooperatives that produce, market and furnish goods, services and facilities on behalf of their members as primary producers (typically agricultural cooperatives) may not exceed 10% of the gross assets of NCB.

Interest Rates

NCB seeks to price its loans to yield a reasonable risk adjusted return on its portfolio in order to build and maintain its financial viability and to encourage the development of new and existing cooperatives. In addition, to ensure that NCB will have access to additional sources of capital in order to sustain its growth, NCB seeks to maintain a portfolio that is competitively priced and of sound quality.

Interest Rates for Real Estate Loans

NCB takes the following factors into consideration in pricing its Real Estate Loans: internal risk adjusted return objectives, prevailing market conditions, loan-to-value ratios, lien position, borrower payment history,

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reserves, occupancy level and cash flow. NCB fixes rates based on a basis point spread over U.S. Treasury securities with yields adjusted to constant maturity of one, three, five, seven or ten years. Interest rates may be fixed at the time of commitment for a period generally not exceeding 30 days. For Cooperative, Multifamily and Commercial Real Estate Loans, the rate lock commitments can extend 12 months or longer, but there is generally little to no fall out prior to closing.

Interest Rates on Commercial Loans

NCB originates Commercial Loans, at fixed and variable interest rates. Loan pricing is based on prevailing market conditions, income and portfolio diversification objectives and the overall assessment of risk of the transaction. Typically, Commercial Loan repayment schedules are structured by NCB with flat monthly principal reduction plus interest on the outstanding balance.

Fees

NCB assesses fees to cover the costs to NCB of its consideration of and handling of loan transactions, and to compensate NCB for setting aside funds for future draws under a commitment. The fees paid to outside vendors such as appraisers, environmental consultants and legal counsel retained by NCB for loan transactions are typically charged to the borrower.

Underwriting

When evaluating credit requests, NCB seeks to determine whether a prospective borrower has and will have sound management, sufficient cash flow to service debt, assets in excess of liabilities and a continuing demand for its products, services or use of its facilities, so that the requested loan will be repaid in accordance with its terms.

NCB evaluates repayment ability based upon an analysis of a borrower’s historical cash flow and conservative projections of future cash flows from operations. This analysis focuses on determining the predictability of future cash flows as a primary source of repayment.

Security

Loans made by NCB are generally secured by specific collateral. If collateral security is required, the value of the collateral must be reasonably sufficient to protect NCB from loss, in the event that the primary sources of repayment of financing from the normal operation of the cooperative, or refinancing, prove to be inadequate for debt repayment. Collateral security alone is not a sufficient basis for NCB to extend credit. Unsecured loans normally are made only to borrowers with strong financial conditions, operating results and demonstrated repayment ability.

Loans Benefiting Low-Income Persons

Under the Act, the Board of Directors must use its best efforts to insure that at the end of each fiscal year at least 35% of NCB’s outstanding loans are to (1) cooperatives whose members are predominantly low-income persons, as defined by NCB, and (2) other cooperatives that propose to undertake to provide specialized goods, services, or facilities to serve the needs of predominantly low-income persons. NCB defines a “low-income person,” for these purposes, as an individual whose family’s income does not exceed 80% of the median family income, adjusted for family size for the area where the cooperative is located, as determined by the Department of Housing and Urban Development. During 2007, NCB and NCB Capital Impact either directly funded or arranged the funding of over $450 million to borrowers meeting the low-income definition.

Loans to Cooperatives for Residential Purposes

Section 108 (a) of the Act prohibits NCB from making “any loan to a cooperative for the purpose of financing the construction, ownership, acquisition, or improvement of any structure used primarily for residential purposes if, after giving effect to such loan, the aggregate amount of all loans outstanding for such purpose would exceed 30 per centum of the gross assets of the Bank.”

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To date, the 30% limitation on loans to housing cooperatives for such purposes has not restricted NCB’s ability to provide financial services to housing cooperatives. NCB has been able to maintain its position in the cooperative real estate market without increased real estate portfolio exposure by selling or securitizing real estate loans to secondary market purchasers of such loans. The preponderance of NCB real estate origination volume in recent years has been predicated upon sale to secondary market purchasers. Capital markets disruptions in 2007 resulted in a significant reduction in the profitability of loans sold. There can be no assurance that NCB’s future lending to housing cooperatives for residential purposes will not be impaired by the statutory limit. As of December 31, 2007, approximately 5.7% of the total assets consisted of loans that are subject to the limitation.

OPERATIONS OF SUBSIDIARIES

NCB also attempts to fulfill its statutory mission by providing financing opportunities to cooperatives through several subsidiaries.

NCB Financial Corporation (“NCBFC”) is a Delaware chartered, wholly-owned, unitary savings and loan holding company subsidiary of NCB whose sole subsidiary is NCB, FSB.

NCB, FSB is a federally chartered, federally insured savings bank located in Hillsboro, Ohio, with retail branches in Ohio and non-retail branches in New York and Washington, D.C.

NCB Financial Advisors, Inc., a Delaware chartered wholly-owned subsidiary of NCB, ceased operations in 2007, and the corporation was dissolved.

COMPETITION

Congress created and capitalized NCB because it found that existing financial institutions were not making adequate financial services available to cooperative, not-for-profit business enterprises. However, NCB experiences considerable competition in lending to the most credit-worthy cooperative enterprises.

REGULATION

NCB is organized under the laws of the United States. The Farm Credit Administration examines NCB periodically, but that agency has no regulatory or enforcement powers over NCB. In addition, the Government Accountability Office is authorized to audit NCB. Reports of such examinations and audits are to be forwarded to Congress, which has the sole authority to amend or revoke NCB’s charter. The Office of Thrift Supervision (“OTS”) regulates NCB, FSB. As a savings and loan holding company, NCB is subject to limited regulatory and enforcement powers of and examination by the OTS pursuant to 12 U.S.C. § 1467a.

In connection with the insurance of deposit accounts, NCB, FSB, a federally insured savings bank, is required to maintain minimum amounts of regulatory capital. If NCB, FSB fails to meet its minimum required capital, the appropriate regulatory authorities may take such actions, as they deem appropriate, to protect the Deposit Insurance Fund (DIF), NCB, FSB, and its depositors and investors. Such actions may include various operating restrictions, limitations on liability growth, limitations on deposit account interest rates, and investment restrictions. NCB, FSB is also subject to the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”).

The USA PATRIOT Act of 2001 and its related regulations require insured depository institutions, broker-dealers, and certain other financial institutions to have policies, procedures, and controls to detect, prevent, and report money laundering and terrorist financing. The statute and its regulations also provide for information sharing, subject to conditions, between federal law enforcement agencies and financial institutions, as well as among financial institutions, for counter-terrorism purposes. Federal banking regulators are required, when reviewing bank holding company acquisition and bank merger applications, to take into account the effectiveness of the anti-money laundering activities of the applicants.

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TAXES

The Act provides that NCB shall be treated as a cooperative within the meaning of Section 1381(a)(2) of the Internal Revenue Code. As such and pursuant to the provisions of Subchapter T of the Internal Revenue Code and the Act, NCB, in determining its taxable income for federal income tax purposes, is allowed a deduction for an amount equal to any patronage dividends in the form of cash, Class B or Class C stock, or allocated surplus that are distributed or set aside by NCB during the applicable tax period. To date, NCB has followed the policy of distributing or setting aside such patronage dividends during the applicable tax period, which has reduced NCB’s federal income tax liability.

NCB has determined that under the Internal Revenue Code as amended by the Act, all income generated by NCB and its subsidiaries, with the exception of certain income of NCB, FSB, qualifies as patronage income under the Internal Revenue Code, with the consequence that NCB is able to issue tax deductible patronage dividends with respect to all such income.

Section 109 of the Act, as amended, provides that NCB, including its franchise, capital, reserves, surplus, mortgages or other security holding and income, is exempt from taxation by any state, county, municipality or local taxing authority, except that any real property held by NCB is subject to any state, county, municipal or local taxation to the same extent according to its value as other real property is taxed.

NCB’s subsidiaries are subject to state income and franchise taxes.

FURTHER INFORMATION

We make available free of charge on our internet website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after those reports have been electronically filed or submitted to the Securities and Exchange Commission (the “SEC”). These filings can be accessed on our website at www.ncb.coop. These filings are also accessible on the SEC’s website at www.sec.gov.  The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

ITEM 1A. RISK FACTORS

Like other financial companies, we are subject to a number of risks, many of which are outside of our direct control, though efforts are made to manage those risks while optimizing returns. Among the risks assumed are: (1) credit risk, which is the risk that loan and lease customers or other counterparties will be unable to perform their contractual obligations, (2) market risk, which is the risk that changes in market rates and prices will adversely affect our financial condition or results of operation, (3) liquidity risk, which is the risk that NCB will have insufficient cash or access to cash to meet its operating needs, and (4) operational risk, which is the risk of loss resulting from inadequate or failed internal processes, people and systems, or external events.

In addition to the other information included in this report, readers should carefully consider that the following important factors, among others, could materially impact our business, future results of operations, and future cash flows.

(1) Credit Risk

Defaults in the repayment of loans may negatively impact our business.

A borrower’s default on its obligations under one or more of our loans may result in lost principal and interest income and increased operating expenses as a result of the allocation of management time and resources to the foreclosure and collection or restructuring of the loan.

In certain situations, where collection efforts are unsuccessful or acceptable workout arrangements cannot be reached, NCB may have to write-off the loan in whole or in part. In such situations, NCB may acquire real

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estate or other assets, if any, which secure the loan through foreclosure or other similar available remedies. In such cases, the amount owed under the defaulted loan often exceeds the value of the assets acquired.

Our decisions regarding credit risk could be inaccurate and our allowance for loan losses may be inadequate, which could materially and adversely affect our business, financial condition, results of operations and future prospects.

Management periodically makes a determination of an allowance for loan losses based on available information, including the quality of our loan portfolios, certain economic conditions, the value of the underlying collateral and the level of non-accruing loans. Provisions to this allowance result in an expense for the period. If, as a result of general economic conditions or an increase in defaulted loans, management determines that additional increases in the allowance for loan losses are necessary, NCB will incur additional expenses. Bank regulatory agencies periodically review certain allowances for loan losses and the values they attribute to real estate acquired through foreclosure or other similar remedies. Such regulatory agencies may require NCB to adjust their determination of the value for these items. These adjustments could negatively impact our results of operations or financial condition.

In addition, NCB is engaged in making non-mortgage loans to commercial customers as well as making real estate loans and loans to individuals. Non-mortgage loans are generally considered not as safe as those loans secured by real estate.

NCB originates non-mortgage loans to small to medium-sized commercial customers primarily in the hardware, grocery, franchise, Employee Stock Ownership Plan (“ESOP”) and Alaska and Native American markets. These loans are secured by furniture, fixtures, and equipment, inventory, and other collateral generally not considered as secure as real estate in the event of liquidation. Should market conditions or other factors impair the cashflow and operations of our small to medium-sized commercial customers, NCB could face an increase in delinquencies, increased provision requirements and/or losses that may adversely impact financial performance.

(2) Market risk

We may not be able to attract and retain banking customers at current levels.

Competition in the banking industry coupled with our relatively small size may limit the ability of NCB to attract and retain real estate, commercial and retail banking customers.

In particular, NCB’s competitors include several major financial companies whose greater resources may afford them a marketplace advantage by enabling them to maintain numerous banking locations and mount extensive promotional and advertising campaigns. Additionally, banks and other financial institutions with larger capitalization and financial intermediaries have larger lending limits and are thereby able to serve the credit and investment needs of larger customers. Areas of competition include interest rates for loans and deposits, efforts to obtain deposits and range and quality of services provided. NCB also faces competition from out-of-state financial intermediaries which have opened low-end production offices or which solicit deposits in their respective market areas.

Because NCB maintains a smaller staff and has fewer financial and other resources than the larger institutions with which it competes, it may be limited in its ability to attract customers. In addition, some of NCB’s current commercial banking customers may seek alternative banking sources as they develop needs for credit facilities larger than NCB can accommodate.

If NCB is unable to attract and retain banking customers, it may be unable to continue its loan growth and its results of operations and financial condition may otherwise be negatively impacted.

NCB’s lines of business may be less diversified than its competitors.

NCB derives a significant amount of its earnings from blanket and share loan financing to housing cooperatives and then from members thereof. To the extent that cooperatives become a less favorable form of housing, become economically disadvantaged, or are negatively impacted by changing market conditions, NCB may be unable to attract and/or retain such banking customers and thereby may be unable to continue its loan growth and its results of operations and financial condition may be negatively impacted.

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Weakness in the economy and in the real estate market, particularly in New York City, could negatively impact our banking business.

The real estate portfolio contains a concentration of loans in the New York City area; however, the majority of loans are to housing cooperatives with low loan-to-value ratios.

With a loan concentration in the New York City area, a decline in local economic conditions could adversely affect the values of our real estate collateral and our operating performance. Consequently, a decline in local economic conditions in the New York City area may have a greater effect on our earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are geographically diverse.

In addition to considering the financial strength and cash flow characteristics of borrowers, we often secure loans with real estate collateral. The real estate collateral in each case provides an alternate source of repayment in the event of default by the borrower and may deteriorate in value during the time the credit is extended. If we are required to liquidate the collateral securing a loan to satisfy the debt during a period of reduced real estate values in the New York City area, our earnings and capital could be adversely affected.

A significant amount of NCB’s Residential Real Estate Loans are secured by property in the New York City area. Consequently, NCB’s ability to continue to originate these loans may be impaired by adverse changes in local and regional economic conditions in the New York City area real estate markets, or by acts of nature, including earthquakes, hurricanes, flooding and terrorist acts. Due to the concentration of real estate collateral, these events could have a material adverse impact on the ability of the borrowers of NCB to repay their loans and affect the value of the collateral securing these loans.

Fluctuations in interest rates may negatively impact our business.

Fluctuations in interest rates may negatively impact the business of NCB. A principal source of income from operations is net interest income, which is equal to the difference between the interest income received on interest bearing assets (usually loans and investment securities) and the interest expense incurred in connection with interest bearing liabilities (usually deposits and borrowings). These rates are highly sensitive to many factors beyond our control, including general economic conditions, both domestic and foreign, and the monetary and fiscal policies of various governmental and regulatory authorities. The net interest income can be affected significantly by changes in market interest rates. Changes in relative interest rates may reduce the net interest income as the difference between interest income and interest expense decreases. As a result, we have adopted asset and liability management policies to manage the impact of changing interest rates. However, even with these policies in place, fluctuations in interest rates can impact our results of operations or financial condition. An increase in interest rates could also have a negative impact on the results of operations by reducing the ability of borrowers to repay their current loan obligations, which could not only result in increased loan defaults, foreclosures and write-offs, but also necessitate further increases to allowances for loan losses. Decreases in interest rates, in certain circumstances, may lead to higher levels of loan prepayments, which may also have an adverse impact on our net interest income.

We engage in derivative transactions, which expose us to credit and market risk.

NCB is exposed to credit and market risk as a result of its use of derivative instruments. NCB maintains a risk management strategy that includes the use of derivative instruments to mitigate the risk to earnings caused by interest rate volatility. Use of derivative instruments is a component of NCB’s overall risk management strategy in accordance with a formal policy that is monitored by management.

The derivative instruments utilized include interest rate swaps, futures contracts and forward loan sales commitments. Interest rate swaps involve the exchange of fixed and variable rate interest payments between two parties based upon a notional principal amount and maturity date. Interest rate futures generally involve exchange-traded contracts to buy or sell U.S. Treasury bonds or notes in the future at specified prices. Forward loan sales commitments lock in the prices at which loans will be sold to investors. In the future NCB may also utilize other derivative instruments to mitigate other recognized risks.

NCB uses interest rate swaps, futures contracts and forward loan sales commitments to hedge loan commitments prior to actually funding a loan. During the commitment period, the loan commitments and related interest rate swaps, futures contracts and forward loan sales commitments are accounted for as derivatives and

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therefore recorded at fair value through the gain on sale. Once a commitment becomes a loan, the derivative associated with the commitment is designated as a hedge of the loan and is generally kept in place until such loan is committed for sale.

If the fair value of the derivative contract is positive, the counterparty owes NCB and a repayment risk exists. If the fair value of the derivative contract is negative, NCB owes the counterparty, so there is no repayment risk. NCB minimizes repayment risk by entering into transactions with counterparties that NCB believes to be financially stable that are specified by policy and reviewed periodically by management. When NCB has multiple derivative transactions with a single counterparty, the net mark-to-market exposure represents the netting of positive and negative exposures with that counterparty. The net mark-to-market exposure with a counterparty is a measure of credit risk when there is a legally enforceable master netting agreement between NCB and the counterparty. NCB uses master netting agreements with the majority of its counterparties.

NCB’s exposure to market risk is related to the impact that changes in interest rates has on the fair value of a financial instrument or expected cash flows. NCB manages the market risk associated with the interest rate hedge contracts by establishing formal policy limits concerning the types and degree of risk that may be undertaken. Compliance with this policy is monitored by management and reported to the Board of Directors.

A continuation of lower gains recorded from the sale of loans

Another important source of income for NCB is gains recorded from the sale of Multifamily, Cooperative and Commercial Real Estate Loans. The gains are influenced by many variables, including changes in interest rates and the demand of investors to purchase securities backed by loans. During 2007, NCB has been negatively impacted by market changes.

Well-publicized issues surrounding mortgage lending have had a pronounced negative effect on the mortgage securitization market and other credit markets. None of NCB’s loans held for sale are considered sub-prime. Nonetheless, NCB’s financial results during 2007, particularly its gain on loan sales, have been substantially impacted by changes in market conditions in the commercial mortgage-backed securities marketplace.

Rapidly deteriorating credit market conditions during 2007 resulted in market pricing that was substantially different than the pricing realized in previous periods. If current market conditions continue, NCB’s results of operations and financial condition may be negatively impacted.

(3) Liquidity risk

An inability to borrow funds may negatively impact NCB’s business, such as meeting the cash flow requirements of its depositors and borrowers or meeting the operating cash needs to fund corporate expansion and other activities.

Prepayments of loans may negatively impact our business.

Customers with adjustable rate loans generally may prepay the principal amount of their outstanding loans at any time. The speed at which such prepayments occur, as well as the size of such prepayments, are within such customers’ discretion. If customers prepay the principal amount of their loans, and we are unable to lend those funds to other borrowers or invest the funds at the same or higher interest rates, our interest income will be reduced. A significant reduction in interest income could have a negative impact on our results of operations and financial condition.

Our cost of funds for banking operations may increase as a result of general economic conditions, interest rates and competitive pressures.

NCB’s cost of funds for banking operations may increase as a result of general economic conditions, interest rates and competitive pressures. NCB has traditionally obtained funds through the capital markets but more recently from deposits and through borrowings from the Federal Home Loan Bank. As a general matter, deposits are a cheaper source of funds than borrowings, because interest rates paid for deposits are typically less than interest rates charged for borrowings. Historically and in comparison to commercial banking averages, NCB has had a higher percentage of its time deposits in denominations of $100,000 or more. Within the banking industry, the amounts of such deposits are generally considered more likely to fluctuate than deposits of smaller denominations.

9

If, as a result of general economic conditions, market interest rates, competitive pressures or otherwise, the value of deposits at NCB decreases relative to its overall banking operations, NCB may have to rely more heavily on borrowings as a source of funds in the future.

(4) Operational risk

We are subject to extensive regulation and our business is highly regulated which could limit or restrict our activities and impose financial requirements or limitations on the conduct of our business.

NCB operates in a highly regulated environment and we are subject to supervision and examination by federal and state regulatory agencies. The Farm Credit Administration examines NCB periodically, but that agency has no regulatory or enforcement powers over NCB. In addition, the Government Accountability Office is authorized to audit NCB. Reports of such examinations and audits are to be forwarded to Congress, which has the sole authority to amend or revoke NCB’s charter. NCB, FSB as a federal savings association is subject to regulation and supervision by the OTS.

Federal and state laws and regulations govern numerous matters including changes in the ownership or control of federal savings associations and of their holding companies, maintenance of adequate capital and the financial condition of a financial institution, permissible types, amounts and terms of extension of credit and investments, permissible non-banking activities, the level of reserves against deposits and restrictions on dividend payments. The OTS possesses cease and desist powers to prevent or remedy unsafe or unsound practices or violations of law by bank and savings associations subject to its regulation. These and other restrictions limit the manner in which we may conduct business and obtain financing.

Furthermore, NCB’s business is affected not only by general economic conditions, but also by the monetary policies of the Federal Reserve. Changes in monetary or legislative policies may affect the interest rates NCB must offer to attract deposits and the interest rates it must charge on loans, as well as the manner in which NCB offers deposits and makes loans. These monetary policies have had, and are expected to continue to have, significant effects on the operating results of depository institutions generally.

We are subject to regulatory capital adequacy guidelines, and if we fail to meet these guidelines our financial condition would be adversely affected.

Under regulatory capital adequacy guidelines and other regulatory requirements, NCB’s subsidiary, NCB, FSB, must meet guidelines that include quantitative measures of assets, liabilities, and certain off-balance sheet items, subject to qualitative judgments by regulators about components, risk weightings and other factors. If NCB fails to meet these minimum capital guidelines and other regulatory requirements, its financial condition would be materially and adversely affected. In the future, the regulatory accords on international banking institutions to be reached by the Basel Committee on Banking Supervision may require NCB to meet additional capital adequacy measures. NCB cannot predict the final form of, or the effects of, the regulatory accords. NCB’s failure to maintain the status of “well-capitalized” under its regulatory framework could affect the confidence of its customers and banking relationships, thus compromising its competitive position. In addition, failure to maintain the status of “well-capitalized” under NCB’s regulatory framework, or “well-managed” under regulatory examination procedures, could compromise NCB’s status as a bank holding company and related eligibility for a streamlined review process for acquisition proposals. NCB’s failure to maintain the status of “well-capitalized” under its regulatory framework could also impact NCB, FSB’s ability to expand its retail branching network and its ability to comply with its servicing agreements.

We rely heavily on technology, and technology can be subject to interruption and instability.

We rely on technology to conduct much of our activity. Our technological operations are vulnerable to disruptions from human error, natural disasters, power loss, computer viruses, spam attacks, unauthorized access and other similar events. Disruptions to or instability of our technology or external technology that allows our customers to use our products and services could harm our business and our reputation. In addition, technology systems, whether they be our own proprietary systems or the systems of third parties on whom we rely to conduct portions of our operations, are potentially vulnerable to security breaches and unauthorized usage. An actual or perceived breach of the security of our technology could harm our business and our reputation.

10

Environmental liability associated with commercial real estate lending could result in losses.

In the course of its business, NCB may acquire, through foreclosure, properties securing loans it has originated or purchased which are in default. Particularly in commercial real estate lending, there is a risk that hazardous substances could be discovered on these properties. In this event, NCB might be required to remove these substances from the affected properties at our sole cost and expense. The cost of this removal could substantially exceed the value of affected properties. We may not have adequate remedies against the prior owner or other responsible parties and could find it difficult or impossible to sell the affected properties. These events could have a material adverse effect on NCB’s business, results of operations and financial condition.

Changes in accounting standards could impact reported earnings.

The accounting standard setters, including the Financial Accounting Standards Board (“FASB”), the SEC and other regulatory bodies, periodically change the financial accounting and reporting standards that govern the preparation of the NCB’s consolidated financial statements. These changes can be hard to predict and can materially impact how NCB records and reports its financial condition and results of operations.

NCB is exposed to reputation, legal, compliance and other risks.

NCB is exposed to many types of operational risks, including reputation risk, legal and compliance risk, the risk of fraud or theft by employees or outsiders, unauthorized transactions by employees or operational errors, including clerical or record keeping errors or those resulting from faulty or disabled computer or telecommunications systems. Negative public opinion can result from NCB’s actual or alleged conduct in any number of activities, including lending practices and corporate governance and from actions taken by government regulators and community organizations in response to those activities. Negative public opinion can adversely affect NCB’s ability to attract and keep customers and can expose it to litigation and regulatory action. Given the volume of transactions at NCB, certain errors may be repeated or compounded before they are discovered and successfully rectified. NCB’s necessary dependence upon automated systems to record and process its transaction volume may further increase the risk that technical system flaws or employee tampering or manipulation of those systems will result in losses that are difficult to detect. NCB may also be subject to disruptions of its operating systems arising from events that are wholly or partially beyond its control (for example, computer viruses or electrical or telecommunications outages), which may give rise to disruption of service to customers and to financial loss or liability. NCB is further exposed to the risk that its external vendors may be unable to fulfill their contractual obligations (or will be subject to the same risk of fraud or operational errors by their respective employees as is NCB) and to the risk that the NCB’s (or its vendors’) business continuity and data security systems prove to be inadequate.

Failure to retain key employees could negatively impact our business.

Certain members of the executive management team, together with other key managers, are important to implement NCB’s growth strategy. The failure to retain such people or replace them in the event of departure with people of equal or greater skills could have a material adverse impact on our business, profitability or financial condition.

ITEM 2. PROPERTIES

NCB leases space for its Arlington, Virginia operations center, its Washington, D.C. executive offices and for three principal regional offices located in Anchorage, Alaska, New York City, New York and Oakland, California. NCB also maintains a Disaster Recovery facility in Silver Spring, Maryland. NCB, FSB maintains its principal offices in Hillsboro, Ohio with retail branches in Ohio and non-retail branches at NCB offices in New York, New York and Washington, D.C. NCB’s operations center and executive offices are approximately 76,000 and 3,500 square feet in size, respectively and regional offices range from approximately 2,900 to 9,700 square feet.

The rental expense for the fiscal year ended December 31, 2007 was $3.9 million for all offices combined.

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ITEM 3. LEGAL PROCEEDINGS

In the normal course of business we are involved in various types of disputes, which may lead to litigation or other legal proceedings. NCB has determined that pending legal proceedings will not have a material impact on NCB’s financial condition or future operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

NCB did not submit any matters to a vote of its security holders during 2007.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER REPURCHASES OF EQUITY SECURITIES

NCB currently has two classes of stock outstanding, the rights of which are summarized as follows:

Class B Stock — The Act permits Class B stock to be held by eligible borrowers of NCB and NCB, FSB and requires each patronage-based borrower from NCB or NCB, FSB under Section 108 of the Act to hold Class B stock at the time the loan is made at a par value equal to 1% of its loan amount. The Act prohibits NCB from paying dividends on Class B stock. There are two series of Class B stock outstanding. Class B-1 stock is Class B stock purchased from existing holders of Class B-1 stock subsequent to May 1, 1992. Class B-1 stock previously included Class B stock purchased for cash from NCB between June 28, 1984 and May 1, 1992 of which there are none outstanding. Class B-2 stock is Class B stock purchased for cash from NCB prior to June 28, 1984 and any Class B stock distributed as part of NCB’s patronage refund distribution. Class B stock is transferable to another eligible holder only with the approval of NCB. NCB does not permit any transfers of Class B-2 stock and only permits transfers of Class B-1 Stock, at the stock’s $100 par value and only as are required to permit new borrowers to obtain their required holdings of Class B stock. In each instance, NCB specifies which holder(s) are permitted to transfer their stock to the new borrower, based upon which Class B stockholders with holdings of such stock beyond that required to support their loans have held such stock for the longest time. NCB also repurchased, at par value, any shares of Class B stock that it was required to repurchase from holders by the terms of the contracts under which such stock was originally sold by NCB. No such stock remains outstanding. Class B stock has voting rights, but such voting rights are limited in accordance with the weighted voting system described in Item 10.

Class C Stock — The Act permits Class C stock to be held only by cooperatives eligible to borrow from NCB. The Act allows NCB to pay dividends on Class C stock, but so long as any Class A notes are outstanding, limits dividends on Class C stock (or any other NCB stock) to the interest rate payable on such notes, which was 5.32% in 2007. In 1994, NCB adopted a policy under which annual cash dividends on Class C stock of up to 2% of NCB’s net income may be declared. The policy does not provide any specific method to determine the amount, if any, of such dividend. Whether any such dividends will be declared and if so, in what amount, rests within the discretion of NCB’s Board of Directors. On May 3, 2007, the Board declared a cash dividend of $1.58 per Class C share payable on or before June 30, 2007 to holders of record as of March 31, 2007. In 2006, a cash dividend of $2.19 per Class C share was paid. In 1996, the Board approved a dividend de minimis provision which states that Class C stock dividends shall not be distributed to a stockholder until such time as the cumulative amount of the dividend payable to the stockholder is equal to, or exceeds, twenty-five dollars ($25.00) unless specifically requested by the stockholder. Class C stock is transferable to another eligible holder only with the approval of NCB. Class C stock has voting rights, but such voting rights are limited in accordance with the weighted voting system described in Item 10.

There is no established public trading market for any class of NCB’s common equity and it is unlikely that any such market will develop in view of the restrictions on the transfer of NCB’s stock as discussed above. Holders of Class B stock may use such stock to meet the Class B stock ownership requirements established in the Act for patronage-based borrowers from NCB or NCB, FSB and may be permitted by NCB, within the limits set forth above, to transfer Class B stock to another patronage-based borrower from NCB or NCB, FSB.

As of December 31, 2007, there were 2,472 holders of Class B stock and 472 holders of Class C stock.

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Under the Act, NCB must make annual patronage dividends to its patrons, which are those cooperatives from whose loans or other business NCB derived interest or other income during the year with respect to which a patronage dividend is declared. NCB allocates its patronage dividends among its patrons generally in proportion to the amount of income derived during the year from each patron. NCB stockholders, as such, are not automatically entitled to patronage dividends. They are entitled to patronage dividends only in the years when they have patronized NCB and the amount of their patronage does not depend on the amount of their stockholding. Under NCB’s patronage dividend policy, patronage dividends may be paid only from taxable income and only in the form of cash, Class B or Class C stock, or allocated surplus.

Under NCB’s current patronage dividend policy that became effective in 1995, as amended, NCB makes the non-cash portion of the dividend in the form of Class B stock until a patron has holdings of Class B stock of 12.5% of its loan amount and thereafter in Class C stock. Under the current patronage dividend policy, NCB generally intends to pay a minimum of 35% of the patronage dividend in cash to those patrons with stock holdings of up to 5% or less of their loan amount and up to 55% to those patrons with stock holding of 10% or more of their loan amount. There can, however, be no assurance that a cash patronage dividend of any amount will be declared for any year.

The chart below shows the number of shares of stock issued by NCB during the past three years.

	2007		2006		2005
Class B Stock Issued		101,783		158,732		112,806
Class C Stock Issued		6,464		14,972		8,968

NCB does not plan to distribute a patronage dividend for the year ended December 31, 2007.

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Item 6.

Selected Financial Data
(Dollars in thousands)

For the Years Ended December 31,	2007			2006			2005			2004			2003
Profitability
Total interest income	$	135,739		$	118,454		$	96,479		$	72,442		$	64,946
Total interest expense		85,121			72,096			52,337			35,122			30,782
Net interest income		50,618			46,358			44,142			37,320			34,164
Net yield on interest earning assets		2.67	%		2.68	%		2.76	%		2.60	%		2.68	%
Non-interest income		11,969			33,680			37,216			33,134			52,652
Non-interest expense		63,571			55,532			53,099			44,142			49,012
Net (loss) income		(472	)		19,425			25,647			22,555			32,819
Ratios
Return on average assets		0.0	%		1.1	%		1.5	%		1.5	%		2.5	%
Return on average members’ equity		-0.2	%		8.7	%		12.0	%		11.2	%		17.5	%
Efficiency		101.6	%		69.4	%		65.3	%		62.7	%		56.5	%

At December 31,	2007			2006			2005			2004			2003
Supplemental Data
Loans held for sale	$	90,949		$	242,847		$	232,024		$	303,289		$	238,564
Loans and lease financing		1,523,958			1,380,738			1,263,703			1,114,658			890,174
Total assets		1,868,433			1,829,477			1,694,567			1,612,870			1,398,247
Subordinated debt		118,235			120,676			123,117			125,583			128,000
Junior subordinated debt		50,680			50,647			50,614			50,580			50,547
Total borrowings		571,100			743,769			679,654			748,307			655,209
Members’ equity		222,763			227,838			219,008			205,490			192,758
Loans serviced for others		5,346,251			4,682,056			4,086,526			3,471,926			3,129,566
Headcount		327			306			280			266			246
Average members’ equity as a percentage of
Average total assets		11.8	%		12.8	%		12.9	%		13.7	%		14.4	%
Average total loans and lease financing		13.3	%		14.3	%		14.7	%		16.1	%		17.5	%
Net average loans and lease financing to average total assets		87.6	%		88.2	%		86.3	%		83.8	%		81.0	%
Net average earning assets to average total assets		96.1	%		97.3	%		95.0	%		96.7	%		96.6	%
Credit Quality
Allowance for loan losses		17,714			19,480			20,193			16,991			17,098
Allowance for loan losses to loans outstanding		1.1	%		1.2	%		1.4	%		1.2	%		1.5	%
Provision for loan losses		152			3,667			470			2,511			2,535
Provision for loan losses to average loans outstanding, excluding loans held for sale		0.0	%		0.3	%		0.0	%		0.2	%		0.3	%
Non-accrual loans		13,324			21,600			14,200			17,758			1,686
Real estate owned		310			193			10			29			74
Non-performing assets		13,634			21,793			14,210			17,787			1,760
Non-performing assets as a percentage of total assets		0.7	%		1.2	%		0.8	%		1.1	%		0.1	%

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TEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The purpose of this analysis is to provide the reader with information relevant to understanding and assessing NCB’s results of operations for each of the past three years and financial condition for each of the past two years. In order to fully appreciate this analysis, the reader is encouraged to review the consolidated financial statements and statistical data presented in this document.

Description of Business

NCB primarily provides financial services to eligible cooperatives or organizations controlled by eligible cooperatives throughout the United States and to members of such cooperatives. A cooperative is an organization which is owned by its members and which is engaged in producing or furnishing goods, services, or facilities for the benefit of its members or voting stockholders who are the ultimate consumers or primary producers of such goods, services, or facilities. NCB is structured as a cooperative, of which the voting stock can only be owned by its members or those eligible to become its members.

In the Act, Congress stated its finding that cooperatives have proven to be an effective means of minimizing the impact of inflation and economic hardship on members/owners by narrowing producer-to-consumer margins and price spreads, broadening ownership and control of economic organizations to a larger base of consumers, raising the quality of goods and services available in the marketplace and strengthening the nation’s economy as a whole. To further the development of cooperative businesses, Congress specifically directed NCB (1) to encourage the development of new and existing cooperatives eligible for its assistance by providing specialized credit and technical assistance; (2) to maintain broad-based control of NCB by its voting shareholders; (3) to encourage a broad-based ownership, control and active participation by members in eligible cooperatives; (4) to assist in improving the quality and availability of goods and services to consumers; and (5) to encourage ownership of its equity securities by cooperatives and others.

2007 Summary

NCB sells substantially all of its Cooperative, Multifamily and Commercial Real Estate Loans into the commercial mortgage securitization marketplace. Well-publicized issues surrounding mortgage lending have had a pronounced negative effect on the mortgage securitization market and other credit markets. NCB’s financial results, particularly its gain on loan sales, have been substantially impacted by changes in market conditions in the commercial mortgage-backed securities marketplace. NCB’s market risk has a credit and interest rate risk component. Rapidly deteriorating credit market conditions resulted in market pricing for NCB’s originated loans to progressively deteriorate from the date of the commitment to fund the loans through the date the loans were sold. Prior to 2007, pricing during the period of time between commitment and sale was stable. Because NCB does not lock in the sales price on most of its loans held for sale at the time of origination, the changes in market conditions resulted in a decline in market value of loans held for sale. NCB made the strategic decision to sell loans during the third and fourth quarters to reduce any additional exposure to a further deterioration in market conditions. Many of the loans sold were in a loss position. The cash proceeds realized from these sales were primarily reinvested in either loans held for sale with pricing reflective of current market conditions or for loans held for investment.

Despite these very challenging market conditions, NCB continues to believe that:

•   There is no current or foreseeable evidence of credit quality deterioration in NCB’s salable portfolios

•   Market demand for Cooperative Loans remains strong

•   Credit quality of NCB’s borrowers remains very strong

•   Sale channels continue to exist for NCB’s loans held for sale

•   NCB has no recourse obligation for losses related to loans sold to third parties

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Financial Performance Highlights for the twelve months ended December 31, 2007

•   Gains on loan sales of $10.7 million for the first six months of 2007 were completely offset by $10.7 million of losses on loan sales in the third and fourth quarters.

•   Deposit growth of 27.0% from December 31, 2006.

•   Net yield on interest earning assets of 2.67% vs. 2.68% for the same period last year

•   Solid credit quality — Non-performing assets of 0.7% of total assets at December 31, 2007 vs. 1.2% at December 31, 2006.

•   A lease termination expense of $3.1 million was recorded in connection with NCB’s relocation of its operations center and headquarters during 2007.

2007 and 2006 Financial Summary

NCB’s net loss for the year ended December 31, 2007 was $0.5 million compared with net income of $19.4 million for the year ended December 31, 2006. The primary factors affecting the decrease in the net income were a $21.7 million decrease in non-interest income, an $8.1 million increase in non-interest expense partially offset by a $7.8 million increase in net interest income after provision for loan losses.

Total assets increased 2.1% or $38.9 million to $1.87 billion at December 31, 2007 from $1.83 billion at December 31, 2006. A $143.2 million increase in loans and lease financing was more than offset by a $151.9 million decrease in loans held for sale.

The return on average total assets was 0% and 1.1% for the years ended December 31, 2007 and 2006, respectively. For the years ended December 31, 2007 and 2006, the return on average members’ equity was -0.2% and 8.7%, respectively.

Net Interest Income

The largest source of revenue is net interest income, which is the difference between interest income on earning assets (primarily loans and securities) and interest expense on funding sources (including interest bearing deposits and borrowings). Earning asset balances and related funding, as well as changes in the levels of interest rates, impact net interest income. The difference between the average yield on earning assets and the average rate paid for interest-bearing liabilities is the net interest spread. Non-interest bearing sources of funds, such as demand deposits and shareholders’ equity, also support earning assets. The impact of non-interest bearing sources of funds is captured in net interest margin, which is calculated as net interest income divided by average earning assets.

Net interest income for the year ended December 31, 2007 increased $4.2 million or 9.2% to $50.6 million compared with $46.4 million for 2006.

For the year ended December 31, 2007, interest income increased 14.5% or $17.2 million, to $135.7 million compared with $118.5 million for the year ended December 31, 2006. The total average earning balances increased by $162.9 million and aggregate yields increased from 6.84% in 2006 to 7.17% in 2007. The increase resulted primarily from an increase in average Real Estate Loan balances as well as an increase in average yields on Real Estate and Commercial Loan and Lease balances.

Interest income from Real Estate (Residential and Commercial) Loans increased $13.5 million or 21.0%. An increase in average balances of $155.7 million or 15.5% contributed $10.2 million of the increase while an increase in the yield from 6.38% in 2006 to 6.69% in 2007 contributed $3.3 million. Consumer and Commercial Loans and Lease interest income increased $3.2 million or 7.32%. Average balances increased by $1.3 million, contributing $0.1 million to the increase. The increase in the yield from 7.80% in 2006 to 8.35% in 2007 contributed $3.1 million. Interest income from investment securities and cash equivalents increased $0.9 million. A $7.4 million or 5.9% increase in average balances contributed $0.4 million to the increase while the increase in the yield from 5.68% in 2006 to 6.06% in 2007 contributed $0.5 million.

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Other interest income, consisting only of excess yield, is generated from the Non-Certificated Interest-Only Receivables held by NCB. Emerging Issues Task Force Issue 99-20: Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets (“EITF 99-20”) provides specific guidance on the treatment of this excess yield. Under paragraph 11 of EITF 99-20 NCB recognizes the excess of all cash flows attributable to the beneficial interest estimated at the transaction date over the initial investment (the accretable yield) as interest income over the life of the beneficial interest using the effective yield method. Thus, based on the terms in each Interest-Only Receivable, NCB is entitled to a cash interest payment. This is offset by the amortization of the Interest-Only Receivable. Non-Certificated Interest-Only Receivables are recorded in the same manner as available-for-sale investment securities in accordance with SFAS 115. Excess yield income was $2.6 million and $3.0 million for the years ended December 31, 2007 and 2006, respectively, a decrease of $0.4 million. A $1.5 million decrease in the average balance contributed $0.2 million to the decrease while a decrease in the yield from 8.88% in 2006 to 8.24% in 2007 contributed $0.2 million to the decrease.

Interest expense increased $13.0 million or 18.1% from $72.1 million for the year ended December 31, 2006 compared to $85.1 million for the year ended December 31, 2007. Interest expense on deposits increased $13.0 million or 43.1%. Average deposit balances grew by $233.1 million or 32.0% from 2006 to 2007, accounting for $10.0 million of the increase. Additionally, average deposits cost increased slightly by 34 basis points from 4.16% to 4.50%, accounting for $3.0 million of the increase. The weighted average rates on deposits at December 31, 2007 and 2006 were 4.17% and 4.08%, respectively. The average maturity of the certificates of deposit at December 31, 2007 and 2006 were 13.8 months and 20.2 months, respectively. The growth of deposits remains a key component of NCB’s funding capability.

Interest expense on short-term borrowings decreased by $0.9 million or 4.7%. The average balance on short-term borrowings decreased by $24.6 million, which was primarily driven by the decrease in FHLB advances and contributed $1.5 million to the decrease in interest expense. However, the average cost of short-term borrowings increased from 5.85% to 6.05%, offsetting the decrease by $0.6 million.

Interest expense on long-term debt, other borrowings and subordinated debt increased $0.9 million or 3.6%. The average balance increased by $14.2 million or 3.8%, accounting for the increase. In addition, the average cost of long-term, subordinated and other borrowings decreased slightly from 6.23% in 2006 to 6.22% in 2007.

For the year ended December 31, 2007, NCB recorded $0.3 million of interest income associated with its swap contracts relating to the hedging of loans and loan commitments. NCB recorded, as an offset to interest income, $0.2 million and $3.4 million associated with its swap contracts relating to the hedging of loans and loan commitments for the years ended December 31, 2006 and 2005, respectively. In addition and over the same respective periods, NCB recorded as interest expense $0.9 million, $0.5 million and $1.0 million relating to the hedging of fixed-rate liabilities.

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See Table 1 and Table 2 for detailed information of the changes in interest income and interest expense for 2007 and 2006.

Table 1
Changes in Net Interest Income
For the Years Ended December 31,
(Dollars in thousands)

	2007 Compared to 2006									2006 Compared to 2005
	Change in			Change in			Increase			Change in			Change in			Increase
	average			average			(Decrease)			average			average			(Decrease)
	volume			rate			Net*			volume			rate			Net*
Interest Income
Real Estate Loans (Residential and Commercial)	$	10,174		$	3,285		$	13,459		$	5,634		$	8,941		$	14,575
Consumer and Commercial Loans and Leases		103			3,126			3,229			1,722			3,735			5,457
Total loans and lease financing		10,277			6,411			16,688			7,356			12,676			20,032
Investment securities and cash equivalents		436			498			934			974			1,083			2,057
Other interest income		(129	)		(208	)		(337	)		(282	)		168			(114	)
Total interest income		10,584			6,701			17,285			8,048			13,927			21,975
Interest Expense
Deposits		10,095			2,950			13,045			2,044			7,185			9,229
Short-term borrowings		(1,464	)		594			(870	)		(518	)		6,360			5,842
Long-term debt, other borrowings and subordinated debt		884			(34	)		850			1,654			3,034			4,688
Total interest expense		9,515			3,510			13,025			3,180			16,579			19,759
Net interest income	$	1,069		$	3,191		$	4,260		$	4,868		$	(2,652	)	$	2,216

* Changes in interest income and interest expense due to changes in rate and volume have been allocated to “change in average volume” and “change in average rate” in proportion to the absolute dollar amounts in each.

18

Table 2
Rate Related Assets and Liabilities
For the years ended December 31,
(Dollars in thousands)

	2007								2006								2005
	Average			Income /		Average			Average			Income /		Average			Average			Income /		Average
	Balance*			Expense		Rate/Yield			Balance*			Expense		Rate/Yield			Balance*			Expense		Rate/Yield
Assets
Interest earning assets Real Estate Loans (Residential and Commercial)	$	1,161,204		$	77,662		6.69	%	$	1,005,553		$	64,203		6.38	%	$	910,351		$	49,628		5.45	%
Consumer and Commercial Loans and Leases		566,812			47,354		8.35	%		565,537			44,125		7.80	%		542,466			38,668		7.13	%
Total loans and lease financing		1,728,016			125,016		7.23	%		1,571,090			108,328		6.90	%		1,452,817			88,296		6.08	%
Investment securities and cash eqivalents		133,333			8,081		6.06	%		125,907			7,147		5.68	%		107,223			5,090		4.75	%
Other interest income		32,060			2,642		8.24	%		33,562			2,979		8.88	%		36,821			3,093		8.40	%
Total interest earning assets		1,893,409			135,739		7.17	%		1,730,559			118,454		6.84	%		1,596,861			96,479		6.04	%
Allowance for loan losses		(18,479	)							(19,815	)							(19,962	)
Non-interest earning assets
Cash		10,366								18,234								23,489
Other		65,300								28,934								59,276
Total non-interest earning assets		75,666								47,168								82,765
Total assets	$	1,950,596							$	1,757,912							$	1,659,664
Liabilities and members’ equity
Interest bearing liabilities
Deposits	$	961,489		$	43,310		4.50	%	$	728,352		$	30,265		4.16	%	$	672,240		$	21,036		3.13	%
Short-term borrowings		289,496			17,510		6.05	%		314,098			18,380		5.85	%		324,759			12,538		3.86	%
Long-term debt, other borrowings and subordinated debt		390,917			24,301		6.22	%		376,699			23,451		6.23	%		350,576			18,763		5.35	%
Total interest bearing liabilities		1,641,902			85,121		5.18	%		1,419,149			72,096		5.08	%		1,347,575			52,337		3.88	%
Other liabilities		78,344								114,608								98,024
Members’ equity		230,350								224,155								214,065
Total liabilities and members’ equity	$	1,950,596							$	1,757,912							$	1,659,664
Net interest earning assets	$	251,507							$	311,410							$	249,286
Net interest revenues and spread				$	50,618		1.99	%				$	46,358		1.76	%				$	44,142		2.16	%
Net yield on interest earning assets							2.67	%							2.68	%							2.76	%

* Average loan balances include non-accrual loans.

19

Non-interest Income
(Dollars in thousands)

	Non-interest income for the years ended December 31,
	2007			2006
Servicing fees	$	4,651		$	4,537
Letter of credit fees		3,423			3,513
Real estate loan fees		1,515			728
Prepayment fees		837			1,312
(Loss) gain on sale of loans		(1	)		19,930
SFAS 133 adjustment		(1,468	)		775
Other		3,012			2,885
Total non-interest income	$	11,969		$	33,680

Total non-interest income decreased $21.7 million or 64.5% from $33.7 million for the year ended December 31, 2006 to $12.0 million in 2007. The decrease was driven by a $19.9 million decrease in gain on loan sales from $19.9 million in 2006 to a loss of $1 thousand in 2007. The percentage of the sold principal balance of Cooperative, Multifamily and Commercial Real Estate Loans decreased from a gain of 2.20% in 2006 to a loss of -0.24% in 2007. This was due to the well publicized issues surrounding mortgage lending which had a severe negative effect on the commercial mortgage securitization market in the second half of 2007. The increased yield demanded by the ultimate purchasers of the loans during the second half of 2007 meant that many of the loans sold during this period were sold in a loss position as their pricing at the time of origination was at significantly lower levels.

The following table shows the unpaid principal balance of loans sold for the years ended December 31 (dollars in thousands):

	2007		2006
Cooperative, Multifamily and Commercial Real Estate Loans:
Sold through securitizations	$	373,498	$	593,474
Other loan sales to Fannie Mae		491,499		216,098
Total Cooperative, Multifamily and Commercial Real Estate Loans		864,997		809,572
Consumer Loans (auto loans)		220,887		179,281
Single-family Residential Loans and Share Loans		109,255		78,176
SBA loans		9,318		13,674
Total	$	1,204,457	$	1,080,703

The Consumer Loan sales represent the sale, at par, of participations in auto loans. NCB purchases and sells these notes within a 30-day cycle. The primary economic benefit to NCB of this program is the net interest income it earns while these notes are on the balance sheet for this 30-day period.

Other non-interest income includes commercial loan fees, cash management service fees, dividends on FHLB stock and other miscellaneous income NCB earns. Other non-interest income increased $0.1 million from $2.9 million for the year ended December 31, 2006 to $3.0 million for the year ended December 31, 2007.

In total, non-interest income amounted to 19.1% of total net revenue (net interest income plus non-interest income) for the year ended December 31, 2007 compared with 42.1% for the year ended December 31, 2006.

20

Non-interest Expense
(Dollars in thousands)

	Non-interest expense for the years ended December 31,
	2007			2006
Compensation and employee benefits	$	32,703		$	31,038
Occupancy and equipment		8,057			8,700
Contractual services		5,944			6,086
Information systems		4,402			2,697
Lease termination costs		3,148			-
Corporate development		2,814			3,132
Loan costs		2,082			1,609
Lower of cost or market valuation allowance		2,070			133
Travel and entertainment		1,449			1,554
Provision (credit) for unfunded commitments		488			(1,077	)
Loss on sale of investments available-for-sale		17			29
Deferred rent recognition related to lease termination		(1,860	)		-
Other		2,257			1,631
Total non-interest expense	$	63,571		$	55,532

Non-interest expense for the year ended December 31, 2007 increased 14.5% or $8.1 million to $63.6 million compared with $55.5 million for the year ended December 31, 2006 primarily due to a $1.7 million increase in compensation and employee benefits resulting from increased headcount and other factors discussed below, a $1.7 million increase in information systems costs relating to an information technology reorganization and an increase in network costs, a $3.1 million lease termination expense, a $1.9 million increase in the lower of cost or market valuation allowance on loans held for sale and an increase of $1.6 million in the provision for unfunded commitments. The increase was partially offset by the $1.9 million deferred rent recognition related to the lease termination. Non-interest expense as a percentage of average assets was 3.3% for 2007 compared with 3.2% for 2006.

Compensation and employee benefits, increased 5.4% or $1.7 million to $32.7 million compared to $31.0 million for the year ended December 31, 2006. This was largely driven by a $3.5 million increase in base salary due to an increase in headcount over the year. Also, during the fourth quarter of 2007, NCB initiated an early retirement program in which it provided certain employees with the option to retire early in exchange for specific compensation packages. In addition, NCB undertook a reduction in force to align itself with changing market conditions. The impact of these programs resulted in a $1.8 million increase in severance expense from 2006 to 2007. Offsetting this was a $3.5 million decrease in incentive expense from 2006 to 2007, principally as a result of NCB’s overall financial performance.

Per Statement of Financial Accounting Standards No. 65 “Accounting for Certain Mortgage Banking Activities” loans held for sale must be recorded at the lower of cost or market. For 2007, NCB recorded a change in the SFAS 65 valuation allowance of $2.1 million to reflect the current market pricing for NCB’s loans held for sale at December 31, 2007.

In January 2006 NCB entered into a lease for office space in Arlington, Virginia (“Arlington Lease”). The Arlington Lease agreement provided NCB with the option to have the Arlington landlord assume the economic obligation for the remaining term of its existing headquarters lease at 1725 Eye Street, NW, Washington, D.C. (“1725 Eye Street Lease”). In August 2006, NCB exercised this option. NCB vacated its offices at 1725 Eye Street in April 2007 and relocated the majority of NCB’s operational activities to Arlington, Virginia. Concurrently, NCB’s principal executive offices relocated to 601 Pennsylvania Avenue, NW, Washington, D.C.

21

Also, during the second quarter of 2007, NCB agreed to the termination of the 1725 Eye Street Lease. The termination agreement required the payment of $1.562 million by the Arlington landlord directly to the 1725 Eye Street landlord and the payment of $1.585 million by NCB to the 1725 Eye Street landlord. Through an amendment to the Arlington Lease, NCB simultaneously received reimbursement of its payment of $1.585 million from the Arlington landlord. In accordance with the FASB’s Technical Bulletin No. 88-1, the payments made to the 1725 Eye Street landlord were recognized as a lease termination cost in the consolidated statements of (loss) income and a lease incentive liability on the consolidated balance sheet. The lease incentive liability will be amortized on a straight-line basis over the fifteen-year term of the Arlington Lease totaling $3.148 million. NCB recognized the remaining deferred rent liability associated with the vacated 1725 Eye Street premises that amounted to $1.9 million.

The $1.6 million change to the provision for unfunded commitments resulted primarily from a $2.4 million reclassification from the provision for losses on unfunded commitments to the provision for loan losses following a draw down on a letter of credit that resulted in a net credit provision in 2006.

Credit Quality

To manage credit risk over a wide geographic area and lending in multiple industries, NCB uses a team-based approval process, which relies upon the expertise of lending teams familiar with particular segments of the industry in which we lend. Senior management approves those credit facilities exceeding delegated lending authority for each team in an attempt to ensure the quality of lending decisions. In order to keep abreast of economic events and market conditions throughout the United States, various lending teams regularly perform financial analysis of the industries and regions.

An inevitable aspect of the lending or risk assumption process is the fact that losses will be incurred. The extent to which losses occur depends on the risk characteristics of the loan portfolio. NCB emphasizes continuous credit risk management. Specific procedures have been established that seek to eliminate undue credit risk. They include a multilevel approval process, credit underwriting separate and apart from the approval process, and an ongoing assessment of the credit condition of the portfolio. In addition, a risk rating system is designed to classify each loan according to the risks unique to each credit facility.

Loans with risk characteristics that make their full and timely payment uncertain are assigned to the Risk Management Department. The Risk Management Department determines, on a case-by-case basis, the best course of action to restore a credit to an acceptable risk rating or to minimize potential losses to NCB.

The allowance for loan losses is increased by the provision for loan losses and decreased by the amount of charge-offs, net of recoveries. The allowance for loan losses is determined based on risk ratings, current and future economic conditions, concentrations, diversification, portfolio size, collateral and guarantee support and level of non-performing and delinquent credits, among other relevant factors.

The consolidated allowance calculation on a loan-by-loan basis at December 31, 2007 was $17.7 million, which represents a decrease of $1.8 million from December 31, 2006. The 2007 allowance for loan loss included net charge-offs of $1.9 million and provisions of $0.2 million. The allowance for loan losses was 1.1% and 1.2% of total loans and lease financing and was 1.2% and 1.4% of loans and lease financing, excluding loans held for sale, at December 31, 2007 and 2006, respectively. The allowance for loan losses was 1.30 and 0.89 times the non-performing assets at December 31, 2007 and 2006, respectively.

NCB bases credit decisions on the cash flows of its customers and views collateral as a secondary source of repayment.

The real estate portfolio contains a concentration of loans in the New York City area; however, the majority of loans are to seasoned housing cooperatives with low loan-to-value ratios. NCB also has minimal credit exposure to highly leveraged transactions, commercial real estate and construction loans. NCB has no foreign loan exposure.

Despite a general weakness in the economy, NCB has experienced an improvement in overall credit quality in its loan portfolio.

22

Table 3
SUMMARY OF ALLOWANCE FOR LOAN LOSSES
For the Years Ended December 31,
(Dollars in thousands)

	2007			2006			2005			2004			2003
Balance at beginning of year	$	19,480		$	20,193		$	16,991		$	17,098		$	14,581
Charge-offs
Consumer Loans		(715	)		(254	)		(118	)		-			-
Commercial Loans		(1,737	)		(4,435	)		(380	)		(4,711	)		(1,693	)
Real Estate Loans (Residential and Commercial)		-			(32	)		(9	)		-			(855	)
Total charge-offs		(2,452	)		(4,721	)		(507	)		(4,711	)		(2,548	)
Recoveries
Consumer Loans		297			1			-			-			-
Commercial Loans		237			340			2,681			2,092			2,434
Real Estate Loans (Residential and Commercial)		-			-			558			1			96
Total recoveries		534			341			3,239			2,093			2,530
Net (charge-offs) recoveries		(1,918	)		(4,380	)		2,732			(2,618	)		(18	)
Provision for loan losses		152			3,667			470			2,511			2,535
Balance at end of year	$	17,714		$	19,480		$	20,193		$	16,991		$	17,098

The decrease of the allowance for loan losses from $19.5 million in 2006 to $17.7 million in 2007 was the result of charge-offs totaling $2.5 million, including the charge-off of two Commercial Loans totaling $1.2 million. Partially offsetting these charge-offs were $0.5 million in recoveries and $0.2 million in additional provisions for loan losses.

Net charge offs or net recoveries were 0.1%, 0.3%, 0.2%, 0.2% and 0.0% of the average loan and lease financing balance for the years ended December 31, 2007, 2006, 2005, 2004 and 2003, respectively.

Table 4
ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
At December 31,
(Dollars in thousands)

	2007					2006					2005					2004					2003
			Percent of					Percent of					Percent of					Percent of					Percent of
	Amount		Total			Amount		Total			Amount		Total			Amount		Total			Amount		Total
Loan and lease financing Consumer and Commercial Loans		572,872		37.6	%		532,356		38.6	%		574,123		45.4	%		529,165		47.5	%		440,359		49.5	%
Real Estate Loans (Residential and Commercial)		950,512		62.4	%		847,746		61.4	%		684,951		54.2	%		569,521		51.1	%		407,718		45.8	%
Leases		574		0.0	%		636		0.0	%		4,629		0.4	%		15,972		1.4	%		42,097		4.7	%
Total loans and lease financing	$	1,523,958		100.0	%	$	1,380,738		100.0	%	$	1,263,703		100.0	%	$	1,114,658		100.0	%	$	890,174		100.0	%
Allocation of allowance for loan losses Consumer and Commercial Loans		10,907		61.6	%		14,430		74.1	%		14,780		73.2	%		11,023		64.9	%		11,340		66.3	%
Real Estate Loans (Residential and Commercial)		6,807		38.4	%		5,050		25.9	%		5,413		26.8	%		5,968		35.1	%		5,113		29.9	%
Unallocated		-		0.0	%		-		0.0	%		-		0.0	%		0		0.0	%		645		3.8	%
Total allowance for loan losses	$	17,714		100.0	%	$	19,480		100.0	%	$	20,193		100.0	%	$	16,991		100.0	%	$	17,098		100.0	%

23

Table 5
IMPAIRED ASSETS
At December 31,
(Dollars in thousands)

	2007			2006			2005			2004			2003
Real estate owned	$	310		$	193		$	10		$	29		$	74
Impaired loans		13,324			21,600			14,200			17,758			1,686
Total	$	13,634		$	21,793		$	14,210		$	17,787		$	1,760
Percentage of loans and lease financing outstanding		0.89	%		1.58	%		1.12	%		1.60	%		0.20	%

A loan is considered impaired when, based on current information, it is probable NCB will be unable to collect all amounts due under the contractual terms of the loan. Total impaired assets decreased from $21.8 million at December 31, 2006 to $13.6 million at December 31, 2007. The decrease of $8.2 million was primarily due to the payoff of two loans received from grocery businesses of $6.9 million and $4.0 million, respectively and the removal of a $2.2 million grocery loan from non-accrual status, partially offset by a $1.7 million increase for a restructured commercial loan and a $3.1 million increase in non-accrual consumer mortgage and installment loans. Management has allocated specific reserves to impaired loans totaling $2.2 million and $6.4 million as of December 31, 2007 and 2006. As of December 31, 2007, the specific allowance includes a $0.7 million loan related to a grocery retailer and a $1.5 million loan to a retirement community. At December 31, 2007 and 2006, impaired assets as a percentage of total capital were 6.1% and 9.6%, respectively.

2006 and 2005 Financial Summary

The net income for the year ended December 31, 2006 was $19.4 million. This was a 24.3% or $6.2 million decrease compared with $25.6 million for the year ended December 31, 2005. The primary factors affecting the decrease in the net income were a $3.2 million increase in the provision for loan losses, a $3.5 million decrease in non-interest income and a $2.4 million increase in non-interest expense partially offset by a $2.2 million increase in net interest income.

Total assets increased 8.0% or $135.0 million to $1.83 billion at December 31, 2006 from $1.69 billion at December 31, 2005. This was driven by a $160.2 million increase in residential real estate loan and lease financing.

The return on average total assets was 1.1% and 1.5% for the years ended December 31, 2006 and 2005, respectively. For the years ended December 31, 2006 and 2005, the return on average members’ equity was 8.7% and 12.0%, respectively.

Net Interest Income

Net interest income for the year ended December 31, 2006 increased $2.3 million or 5.0% to $46.4 million compared with $44.1 million for 2005.

For the year ended December 31, 2006, interest income increased 22.8% or $22.0 million, to $118.5 million compared with $96.5 million for the year ended December 31, 2005. The total average earning balances increased by $133.7 million and aggregate yields increased from 6.04% in 2005 to 6.84% in 2006. The increase resulted primarily from an increase in average Real Estate (Residential and Commercial) Loan balances as well as an increase in average yields on Consumer and Commercial Loan and Lease balances.

Interest income from Real Estate (Residential and Commercial) Loans increased $14.6 million or 29.4%. An increase in average balances of $95.2 million or 10.5% contributed $5.6 million of the increase while an increase in the yield from 5.45% in 2005 to 6.38% in 2006 contributed $9.0 million. Consumer and Commercial Loans and Lease interest income increased $5.5 million or 14.1%. Average balances increased by $23.1 million, contributing $1.7 million to the increase. The increase in the yield from 7.13% in 2005 to 7.80% in 2006 contributed $3.8 million to the year-over-year increase. Interest income from investment securities and cash equivalents increased

24

$2.1 million. An $18.7 million or 17.4% increase in average balances contributed $1.0 million to the increase while the increase in yield from 4.75% in 2005 to 5.68% in 2006 contributed $1.1 million to the year-over-year increase.

Interest expense increased $19.8 million or 37.8% from $52.3 million for the year ended December 31, 2005 compared to $72.1 million for the year ended December 31, 2006. Interest expense on deposits increased $9.2 million or 43.9%. Average deposit balances grew by $56.1 million or 8.3% from 2005 to 2006, accounting for $2.0 million of the increase. Additionally, average deposit cost increased 103 basis points from 3.13% to 4.16%, accounting for $7.2 million of the increase.

Interest expense on short-term borrowings increased by $5.8 million or 46.6%. The average balance on short-term borrowings decreased by $10.7 million, which was primarily driven by the termination of the commercial paper program during 2006. However, the average cost of short-term borrowings increased from 3.86% to 5.85%, accounting for $6.3 million of the increase. Included in short-term borrowing interest expense was the write off of $0.5 million of unamortized debt issuance costs relating to the termination of a revolving credit facility. Interest expense on long-term debt, other borrowings and subordinated debt increased $4.7 million or 25.0%. The average balance increased by $26.1 million or 7.5%, accounting for $1.7 million of the increase. In addition, the average cost of borrowing increased 88 basis points from 5.35% in 2005 to 6.23% in 2006, contributing $3.0 million to the increase.

NCB recorded, as an offset to interest income, $0.2 million, $3.4 million and $6.1 million associated with its swap contracts relating to the hedging of loans and loan commitments for the years ended December 31, 2006, 2005 and 2004, respectively. In addition and over the same respective periods, NCB recorded as interest expense $0.5 million, $1.0 million and $2.5 million relating to the hedging of fixed-rate liabilities.

The increase in the average rate for both interest earning assets and interest bearing liabilities in 2006 as compared to 2005 was driven primarily by the higher external interest rate environment. The interest rates on floating rate loans and many shorter term liabilities tend to move in synchronization with short term market interest rates.

See Table 1 and Table 2 for detailed information of the fluctuations in interest income and interest expense for 2006 and 2005.

Non-Interest Income

Total non-interest income decreased $3.5 million or 9.5% from $37.2 million for the year ended December 31, 2005 to $33.7 million in 2006. The decrease was primarily driven by a $5.7 million decrease in gain on loan sales from $26.4 million in 2005 to $20.7 million in 2006. The percentage gain, as a percent of sold principal balance of Cooperative, Multifamily and Commercial Real Estate Loans, declined from 3.22% in 2005 to 2.43% in 2006 due to increased competition in the commercial mortgage market.

In total, non-interest income amounted to 42.1% of total net revenue (net interest income plus non-interest income) for the year ended December 31, 2006 compared with 45.7% for the year ended December 31, 2005.

Non-Interest Expense

Non-interest expense for the year ended December 31, 2006 increased 4.6% or $2.4 million to $55.5 million compared with $53.1 million for the corresponding prior year. Compensation and employee benefits expense increased 7.0% or $2.0 million to $31.0 million in 2006 compared to $29.0 million in 2005.

The decrease or credit to the provision for unfunded commitments of $1.9 million resulted primarily from a $2.4 million reclassification from the provision for unfunded commitments to the provision for loan losses for a draw on a letter of credit, netted with additional provisions recorded during 2006.

Occupancy and equipment for the year ended December 31, 2006 increased $2.8 million or 48.4% to $8.7 million compared with $5.9 million for the corresponding prior year period.$1.4 million of the increase resulted from the acceleration of depreciation relating to fixed assets at NCB’s prior offices in Washington, D.C. in addition to rent expense incurred for the current office space in Arlington, Virginia.

25

NCB did not make a contribution to NCB Capital Impact for the year ended December 31, 2006. NCB made a contribution of $0.8 million to Capital Impact in the year ended December 31, 2005. Non-interest expense, inclusive of NCB Capital Impact contributions, as a percentage of average assets was 3.2% for 2006 and 2005.

2007 and 2006 Fourth Quarter Results

NCB’s net loss for the three months ended December 31, 2007 was $4.7 million. This was a $9.9 million decrease compared with net income of $5.2 million for the three months ended December 31, 2006. For the three months ended December 31, 2007, net interest income increased 6.1% or $0.7 million to $12.6 million compared with $11.9 million for the three months ended December 31, 2006.

For the three months ended December 31, 2007, interest income increased 8.8% or $2.7 million to $33.7 million compared with $31.0 million for the three months ended December 31, 2006. The increase was primarily due to a $1.5 million increase in Real Estate (Residential and Commercial) Loan interest income and a $1.3 million increase in Consumer and Commercial Loan and Lease interest income both resulting from increased loan volume during the three months ended December 31, 2007 compared to the same period in 2006.

For the three months ended December 31, 2007, interest expense increased $2.0 million or 10.5% from $19.1 million for the three months ended December 31, 2006 to $21.1 million for the three months ended December 31, 2007. The increase in interest expense resulted primarily from a $3.2 million increase in deposit interest expense resulting from an increase in deposit balances partially offset by a $1.0 million decrease in short-term borrowing interest expense for the three months ended December 31, 2007 compared to the same period in 2006.

For the three months ended December 31, 2007, total non-interest income decreased $11.3 million or 140.0% to a loss of $3.2 million compared to a gain of $8.1 million for the three months ended December 31, 2006. This decrease resulted primarily from a $9.9 million decrease in gain on sale of loans during the three months ended December 31, 2007 compared to the same period in 2006.

Non-interest expense for the three months ended December 31, 2007 decreased 0.2% or $0.1 million to $14.6 million compared with $14.7 million for the same period in 2006. Most activity within non-interest expense remained constant quarter to quarter.

For the three months ended December 31, 2007 and December 31, 2006, a tax benefit of $0.6 million and a tax expense of $0.3 million were recognized, respectively. The tax benefit during the three months ended December 31, 2007 resulted from a decrease in the effective tax rate for 2007 due to a decrease in the proportion of NCB’s taxable earnings in the taxable subsidiaries during 2007 compared to 2006.

26

Table 6
CONSOLIDATED QUARTERLY FINANCIAL INFORMATION
For the Three Months Ended

(Dollars in thousands)

	2007											2006
	Dec. 31			Sept. 30			June 30		Mar. 31			Dec. 31			Sept. 30			June 30			Mar. 31
Interest income	$	33,697		$	35,106		$	32,723	$	34,213		$	30,975		$	30,402		$	29,111		$	27,966
Interest expense		21,063			22,532			20,941		20,585			19,066			18,772			17,727			16,530
Net interest income		12,634			12,574			11,782		13,628			11,909			11,630			11,384			11,436
Provision (benefit) for loan losses		38			63			438		(387	)		(168	)		5,276			(1,428	)		(13	)
Income after provision (benefit) for loan losses		12,596			12,511			11,344		14,015			12,077			6,354			12,812			11,449
Non-interest income		(3,231	)		(3,122	)		8,118		10,204			8,086			9,292			8,439			7,863
Net revenue		9,365			9,389			19,462		24,219			20,163			15,646			21,251			19,312
Non-interest expense		14,634			15,186			18,640		15,111			14,660			12,663			14,598			13,611
(Loss) income before income taxes		(5,269	)		(5,797	)		822		9,108			5,503			2,983			6,653			5,701
(Benefit) provision for income taxes		(588	)		(284	)		206		2			297			(49	)		661			505
Net (loss) income	$	(4,681	)	$	(5,513	)	$	616	$	9,106		$	5,206		$	3,032		$	5,992		$	5,196

Borrowings

One of NCB’s sources of funds is debt borrowings. NCB maintains credit facilities provided by a consortium of banks. As of December 31, 2007, NCB’s revolving credit agreement had a total facility of $350.0 million. This credit agreement matures on April 29, 2011. As of December 31, 2007 and 2006, respectively $111.0 million and $156.0 million were outstanding under the revolving line of credit. An additional $5.4 million and $5.0 million were issued in letters of credit thereunder as of December 31, 2007 and December 31, 2006, respectively. Therefore, as of December 31, 2007, $233.6 million was available under this facility.

During 2007, NCB entered into two separate amendments to its revolving credit agreement principally to adjust the return on assets and fixed charge coverage ratio covenants for the final two quarters of 2007 and for all of 2008. The second amendment also includes an adjustment to the pricing, so that for London Interbank Offered Rate (LIBOR) loans, during 2008 and the first quarter of 2009, NCB will pay a minimum of LIBOR plus 0.75%. Immediately prior to the December 31, 2007 effective date of the second amendment, the applicable interest rate for LIBOR loans had been LIBOR plus 0.55%. NCB paid $0.7 million in fees in connection with these amendments.

NCB, FSB is a member of the Federal Home Loan Bank of Cincinnati, Ohio (FHLB) and it has a pledge agreement with FHLB requiring advances to be secured by eligible mortgages with a principal balance of 125% to 400% of such advances. As of December 31, 2007, the FHLB facility was $298.3 million. NCB, FSB had $160.4 million in available unused committed borrowing capacity with the FHLB as of December 31, 2007. As of December 31, 2007, there were $122.0 million outstanding advances from the FHLB, of which $50.0 million were long-term, compared to $249.5 million at December 31, 2006, of which $50.0 million were long-term. NCB also has letter of credit availability in the FHLB facility of which $15.9 million and $8.6 million was issued as of December 31, 2007 and 2006, respectively.

NCB had $20.0 million of bid lines (borrowing facilities in which no commitment fee is paid and where the other party is not committed to lend to NCB) available of which none was outstanding at December 31, 2007 and 2006.

As of December 31, 2007 and 2006, under its Medium Term Note Program, NCB had authority to issue up to $151.0 million of medium term notes, respectively inclusive of the outstanding balances. As of December 31, 2007 and December 31, 2006, NCB had $15.0 million of medium term notes outstanding under this program respectively. These notes are callable on a semi-annual basis and NCB intends to call all outstanding notes on or about May 15, 2008.

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In addition, as of December 31, 2007 and 2006, NCB had $155.0 million of privately placed debt issued to various institutional investors outstanding under two agreements, a master shelf agreement with The Prudential Insurance Company of America and related entities (collectively “Prudential”) and a note purchase agreement with Metropolitan Life Insurance Company and related entities (collectively “MetLife”). As of December 31, 2007 and 2006, NCB had $10.0 million of remaining capacity under the Prudential agreement.. On December 31, 2007, NCB amended its agreement with Prudential and its agreement with MetLife principally to adjust the fixed charge coverage ratio covenants for 2008. The amendment with MetLife also increased the cap on the amount of paid-in-capital NCB may invest in NCB Financial Corporation, the parent of NCB, FSB. NCB has since, on February 25, 2008, made a similar amendment with respect to paid-in-capital to the agreement with Prudential. NCB paid $0.4 million in fees in connection with these amendments.

As of December 31, 2007 and 2006, NCB had authority to issue up to $50.0 million in preferred stock or subordinated debt. There was no preferred stock or subordinated debt under this authority outstanding as of December 31, 2007 and 2006.

Loans and Leases

Loans and leases outstanding, including loans held for sale, remained steady from December 31, 2006 to December 31, 2007 at $1.6 billion.

The Consumer and Commercial Loan and Lease portfolio increased 7.6% to $573.4 million at December 31, 2007 compared with $533.0 million at December 31, 2006 due principally to an increase in Consumer and Commercial Loan and Lease portfolio originations.

The Real Estate (Residential and Commercial) Loan portfolio increased 12.1% to $950.5 million at December 31, 2007 from $847.7 million at December 31, 2006 due to an increase in portfolio Real Estate (Residential and Commercial) Loan originations during 2007. The Real Estate (Residential and Commercial) Loan portfolio is substantially composed of Multifamily Loans, Single-family Residential Loans and Share Loans.

NCB’s Consumer and Commercial Loan portfolio has a concentration in the food retailing and distribution industry. The loan types include lines of credit, revolving credits, and term loans. These loans are typically collateralized with general business assets (e.g., inventory, receivables, fixed assets, and leasehold interests). The loans will be repaid from cash flows generated by the borrower’s operating activities. NCB’s exposure to credit loss in the event of nonperformance by the other parties to the loan is the carrying amounts of the loans less the realizable value of collateral.

NCB’s loan portfolio is diversified both in terms of industry and geography. The following is the distribution of the loans outstanding at December 31:

	Commercial Loans						Real Estate Loans
	2007			2006			2007			2006
By Region:
Northeast		25.6	%		21.8	%		40.2	%		44.2	%
Southeast		37.8	%		32.2	%		19.7	%		20.9	%
Central		12.3	%		14.4	%		14.1	%		12.0	%
West		24.3	%		31.6	%		26.0	%		22.9	%
		100.0	%		100.0	%		100.0	%		100.0	%

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	Percentage of Total Loans
	2007			2006
By Borrower Type:
Real Estate
Residential		51.0	%		53.8	%
Commercial		13.7	%		14.5	%
Commercial
Food retailing and distribution		6.9	%		8.1	%
Community Association		5.8	%		5.1	%
Franchise		5.1	%		3.6	%
Employee Stock Ownership Plan		4.5	%		4.9	%
Hardware		3.3	%		2.9	%
Healthcare		2.6	%		1.3	%
Mission		1.8	%		1.3	%
Non-Profit		1.1	%		1.2	%
Other		4.2	%		3.3	%
		100.0	%		100.0	%

NCB originates Cooperative Loans to predominantly owner-occupied housing cooperatives. A significant portion of NCB’s mortgage loans is secured by real estate in New York City due to the city’s extensive cooperative market. As of December 31, 2007 and 2006, there were $362.3 million and $412.4 million of Cooperative Loans secured by real estate in New York City, respectively, representing 23% and 25% of total loans and leases outstanding, respectively. The collateral for Cooperative Loans consists of first mortgage liens on the land and improvements of cooperatively owned, multifamily and single-family residential properties and property leases. Furthermore, the Cooperative Loan portfolio includes loans secured by second mortgage liens. In addition, certain unsecured lines of credit have been issued to cooperative borrowers. The loans are repaid from operations of the cooperative. NCB’s exposure to credit loss in the event of nonperformance by other parties to the loans is the carrying amounts of the loans less the value of the collateral.

Table 7

MATURITY SCHEDULE OF LOANS
As of December 31, 2007
(Dollars in thousands)

	One Year or		One to Five		Over Five
	Less		Years		Years		Total
Consumer Loans	$	974	$	10,472	$	5,452	$	16,898
Commercial Loans		55,835		209,680		290,459		555,974
Real Estate Loans:
Residential		24,654		77,867		647,347		749,868
Commercial		16,698		58,646		125,300		200,644
Leases		103		471		-		574
Total loans and leases	$	98,264	$	357,136	$	1,068,558	$	1,523,958
Fixed interest rate loans	$	30,952	$	154,795	$	275,336	$	461,083
Variable interest rate loans		67,312		202,341		793,222		1,062,875
Total Loans	$	98,264	$	357,136	$	1,068,558	$	1,523,958

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Sources and Uses of Funds

Cash Provided by Operating Activities.  NCB’s net cash provided by operating activities for the year ended December 31, 2007 was $154.3 million against $21.9 million for the year ended December 31, 2006. This $132.4 million increase in cash provided was primarily due to the increase in net proceeds from loans held for sale of $104.1 million.

Cash Used in Investing Activities.  NCB’s net cash used in investing activities for the year ended December 31, 2007 was $175.2 million compared to $134.9 million for the year ended December 31, 2006. This $40.3 million increase in cash used was primarily due to a $27.4 million increase in cash used to purchase investments (net of maturities) and a $13.6 million increase in loan originations, net of principal payments.

Cash Provided by Financing Activities.  NCB’s net cash provided by financing activities for the year ended December 31, 2007 was $37.3 million against $117.8 million for the year ended December 31, 2006 primarily due a $211.8 million change in cash from the proceeds from short-term debt, offset by a $151.2 million year-over-year increase in cash from deposits.

Asset and Liability Management

Asset and liability management is the structuring of interest rate sensitivities of an entity’s assets and liabilities in order to manage the impact of changes in market interest rates on net interest income. NCB’s liquidity and internal rate of return are managed by the Asset Liability Committee (“ALCO”), composed of senior officers of NCB, which meets monthly. The fundamental role of the ALCO is to devise and implement business strategies designed to enhance earnings and the economic value of equity while simultaneously maintaining a prudent level of exposure to interest rate risk. The ALCO devises balance sheet strategies for managing loans, investments, deposits, borrowed funds and off-balance sheet transactions to achieve desired financial performance. The ALCO also develops strategies for pricing various products and services as well as ensuring compliance with related Board policies and established regulatory requirements.

Liquidity and Capital Resources

The following describe NCB’s primary areas of liquidity:

•  Net proceeds from the sale of loans held for sale of $1.2 billion have been realized during the twelve months ending December 31, 2007

•  Solid and continual growth of deposits — 27.4% since December 31, 2006

•  Revolving line of credit available capacity of $233.6 million as of December 31, 2007, with an April 2011 maturity

•  Long-term debt maturities:

•  $15.0 million Medium Term Notes callable May 2008

•  $2.5 million Class A Notes due December 2008

•  $2.5 million Class A Notes due December 2009

•  $50.0 million of privately placed debt due January 2009

•  $55.0 million of privately place debt due December 2009

•  $50.0 million of privately placed debt due December 2010

•  FHLB available capacity of $160.4 million as of December 31, 2007

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Contractual Obligations

NCB has various financial obligations, including contractual obligations that may require future cash payments. Further discussion of the nature of each obligation is included in Notes 12 through 17 of the Notes to the Consolidated Financial Statements.

At December 31, 2007 the only material change to either the type or maturity of contractual obligations from December 31, 2006 was the termination of the 1725 Eye Street lease. Although NCB had been relieved of the economic obligation of the 1725 Eye Street lease in August 2006, the termination of the lease, in the second quarter of 2007, relieved NCB of the contractual obligation.

The following table presents, as of December 31, 2007, significant fixed and determinable contractual obligations (excluding interest) to third parties by payment date (dollars in thousands):

	One Year or		One to Three		Three to Five		Over Five
	Less		Years		Years		Years		Total
Deposits without a stated maturity	$	323,466	$	—	$	—	$	—	$	323,466
Certificates of deposit		485,435		139,713		61,242		17,596		703,986
Short-term borrowings		181,891		-		-		-		181,891
Long-term debt		-		175,370		29,993		14,931		220,294
Subordinated debt		2,441		26,372		10,382		79,040		118,235
Junior subordinated debt		-		-		-		50,680		50,680
Operating leases		4,057		8,094		7,362		32,580		52,093
Total	$	997,290	$	349,549	$	108,979	$	194,827	$	1,650,645

At December 31, 2007 NCB had one depositor with deposits in excess of 5% of NCB’s total deposits. This depositor had deposits of 12.2% of NCB’s total deposits. All of the $125.0 million of deposits from this depositor relate to certificates of deposit with early withdrawal penalties. Of the $125.0 million of certificates of deposit, $12.0 million mature within 3 months and $113.0 million has a maturity ranging from 4 months to 78 months. Thus, NCB does not consider this deposit concentration a significant liquidity risk.

Commitments, Contingent Liabilities, and Off-balance Sheet Arrangements

Discussion of NCB’s commitments, contingent liabilities and off-balance sheet arrangements is included in Note 23 of the Notes to the Consolidated Financial Statements. Commitments to extend credit do not necessarily represent future cash requirements, as these commitments may expire without being drawn on based upon NCB’s historical experience.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

NCB’s principal market risk exposure is to interest rate risk.

NCB’s asset and liability management process manages NCB’s interest rate risk by structuring the balance sheet and derivative portfolios to maximize net interest income while maintaining an acceptable level of risk to changes in market interest rates. The achievement of this goal requires a balance between profitability, liquidity, and interest rate risk.

Interest rate risk is managed by the ALCO in accordance with policies approved by NCB’s Board of Directors. The ALCO formulates strategies designed to ensure appropriate level of interest rate risk. In determining the appropriate level of interest rate risk, the ALCO considers the impact on earnings and capital of the current outlook on interest rates, potential changes in interest rates and liquidity, business strategies, and other factors. The ALCO meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and liabilities, unrealized gains and losses, purchase and sale activity, warehouse loans and commitments to originate loans (“mortgage pipeline”), and the maturities of investments and

31

borrowings. Additionally, the ALCO reviews liquidity, cash flow flexibility, maturities of deposits, and consumer and commercial deposit activity.

To effectively measure and manage interest rate risk, NCB uses simulation analyses to determine the impact on net interest income of various interest rate scenarios, balance sheet trends, and strategies. From these simulations, interest rate risk is quantified and appropriate strategies are developed and implemented. Additionally, duration and market value sensitivity measures are utilized to provide additional insights concerning the interest rate risk management process. Executive management and NCB’s Board of Directors review the overall interest rate risk position and strategies on an ongoing basis. NCB has traditionally managed its business to maintain limited exposure to changes in interest rates.

NCB hedges a portion of its interest rate risk by entering into certain financial instruments including interest rate swaps, caps, floors, financial options, financial futures contracts, and forward delivery contracts. A hedge is a transaction to reduce risk by creating a relationship whereby changes in the value of the hedged asset or liability are offset in whole or in part by changes in the value of the financial instrument used for hedging. The impact of all hedging relationships is included in the following analysis.

The following tables present an analysis of the sensitivity of NCB’s net interest income and economic value of portfolio equity (market value of assets, less liabilities and derivative instruments.) The interest rate scenarios presented in the table include interest rates at December 31, 2007 and December 31, 2006 as adjusted for instantaneous parallel rate changes upward and downward of up to 200 basis points.

Net interest income was reasonably well insulated against the impact of changes in market interest rates at both December 31, 2007 and December 31, 2006. The impact of changing market interest rates is nonlinear due to the existence of customer options, primarily loan prepayments options, embedded in the balance sheet.

Since there are limitations inherent in any methodology used to estimate the exposure to changes in market interest rates, this analysis is not intended to be a forecast of the actual effect of a change in market interest rates. The net interest income variability reflects NCB’s interest sensitivity gap (defined below) and other factors.

2007
					Change In
					Economic Value
Change In		Change In Net			of Portfolio
Interest Rates		Interest Income			Equity
	+200		-5.4	%		-9.2	%
	+100		-2.2	%		-3.7	%
	-100		1.1	%		2.2	%
	-200		1.4	%		3.2	%

2006
					Change In
					Economic Value
Change In		Change In Net			of Portfolio
Interest Rates		Interest Income			Equity
	+200		-1.4	%		-8.5	%
	+100		-0.5	%		-4.2	%
	-100		-0.1	%		2.9	%
	-200		-1.3	%		4.1	%

Key assumptions used in the sensitivity analysis of net interest income and economic value of portfolio equity include the following:

1.	Balance sheet balances for various asset and liability classes are held constant for the net interest income simulations.
2.	Prepayment assumptions are predicated on an analysis of historical prepayment behavior and management expectations.

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3.  Spread relationships between various interest rate indices and interest-earning assets and interest bearing liabilities estimated based on the analysis of historical relationships and management expectations.

The interest rate sensitivity gap (“gap”) is defined as the difference between interest-earning assets and interest-bearing liabilities maturing or repricing within a given time period. During a period of rising interest rates, a positive gap (where the amount of assets maturing and repricing within one year exceeds liabilities maturing or repricing within one year) would tend to have a positive impact on net interest income while a negative gap would tend to have a detrimental impact. During a period of declining interest rates, a negative gap would tend to have a positive impact on net interest income while a positive gap would tend to have a detrimental impact. NCB’s one-year cumulative gap analysis at December 31, 2007 and 2006 were positive $81.8 million or 4.38% of assets and positive $37.5 million or 2.05% of assets, respectively. These rather small positive gaps are consistent with the simulation results that show limited changes in net interest income in response to changes in market interest rates.

While the gap position is a useful tool in measuring interest rate risk, it is difficult to predict the effect of changing interest rates solely on that measure, without accounting for alterations in the maturity or repricing characteristics of the balance sheet that occur during changes in market interest rates. For example, the gap position reflects only the prepayment assumptions pertaining to the current rate environment. Assets tend to prepay more rapidly during periods of declining interest rates than during periods of rising interest rates. Because of this and other risk factors not contemplated by the gap position, an institution could have a matched gap position in the current rate environment and still have its net interest income exposed to interest rate risk.

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The tables 8 and 9 set forth the expected maturity and repricing characteristics of NCB’s consolidated assets, liabilities and derivative contracts at December 31, 2007 and 2006.

Table 8

INTEREST RATE SENSITIVITY
At December 31, 2007
(Dollars in thousands)

															Over
	Interest -			Interest -			Interest -			Interest -			Interest -		12 Months and
	sensitivity			sensitivity			sensitivity			sensitivity			sensitivity		Non-Interest
	30 days			3 month			6 month			12 month			Total		Sensitive			Total
Interest-earning assets
Cash and cash equivalents	$	63,724		$	-		$	-		$	-		$	63,724	$	-		$	63,724
Investment securities		16,883			8,790			6,894			23,252			55,819		49,764			105,583
Loans and leases*		140,753			439,381			96,915			157,860			834,909		762,284			1,597,193
Other assets - net		70,523			482			703			1,407			73,115		28,818			101,933
Total		291,883			448,653			104,512			182,519			1,027,567		840,866			1,868,433
Interest-bearing liabilities Deposits	$	202,499		$	127,965		$	153,720		$	143,557		$	627,741	$	358,120		$	985,861
Short-term borrowings		181,891			-			-			-			181,891		-			181,891
Long-term debt		-			-			-			-			-		220,294			220,294
Subordinated debt		-			39,310			-			-			39,310		78,925			118,235
Jr. Subordinated debt		50,680			-			-			-			50,680		-			50,680
Total		435,070			167,275			153,720			143,557			899,622		657,339			1,556,961
Other
Other non-interest bearing, net	$	-		$	-		$	-		$	-		$	-	$	311,472		$	311,472
Effect of interest rate swap and financial futures		766			45,399			-			-			46,165		(46,165	)		-
Total liabilities & members’ equity, net of derivatives	$	435,836		$	212,674		$	153,720		$	143,557		$	945,787	$	922,646		$	1,868,433
Repricing differences	$	(143,953	)	$	235,979		$	(49,208	)	$	38,962		$	81,780
Cumulative gap	$	(143,953	)	$	92,026		$	42,818		$	81,780
Cumulative gap as% of total assets		-7.70	%		4.93	%		2.29	%		4.38	%

* Includes loans held for sale and allowance for loan losses.

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Table 9
INTEREST RATE SENSITIVITY
At December 31, 2006
(Dollars in thousands)

																Over
	Interest -			Interest -			Interest -			Interest -			Interest -			12 Months and
	sensitivity			sensitivity			sensitivity			sensitivity			sensitivity			Non-Interest
	30 days			3 month			6 month			12 month			Total			Sensitive		Total
Interest-earning assets
Cash and cash equivalents	$	53,154		$	-		$	-		$	-		$	53,154		$	-	$	53,154
Investment securities		5,186			2,716			6,706			12,783			27,391			59,964		87,355
Loans and leases*		181,136			403,637			71,803			104,369			760,945			843,160		1,604,105
Other assets - net		1,228			440			657			1,347			3,672			81,191		84,863
Total		240,704			406,793			79,166			118,499			845,162			984,315		1,829,477
Interest-bearing liabilities Deposits	$	181,376		$	91,303		$	65,630		$	89,529		$	427,838		$	339,019	$	766,857
Short-term borrowings		354,673			-			-			-			354,673			-		354,673
Long-term debt		-			-			-			-			-			217,773		217,773
Subordinated debt		-			39,310			-			18,218			57,528			63,148		120,676
Jr. Subordinated debt		50,647			-			-			-			50,647			-		50,647
Total		586,696			130,613			65,630			107,747			890,686			619,940		1,510,626
Other
Other non-interest bearing, net		-			-			-			-			-			318,851		318,851
Effect of interest rate swap and financial futures		(39,574	)		(43,404	)		-			-			(82,978	)		82,978		-
Total liabilities & members’ equity, net of derivatives	$	547,122		$	87,209		$	65,630		$	107,747		$	807,708		$	1,021,769	$	1,829,477
Repricing differences	$	(306,418	)	$	319,584		$	13,536		$	10,752		$	37,454
Cumulative gap	$	(306,418	)	$	13,166		$	26,702		$	37,454
Cumulative gap as % of total assets		-16.75	%		0.72	%		1.46	%		2.05	%

* Includes loans held for sale and allowance for loan losses.

Table 8 indicates that on December 31, 2007 NCB had gaps (as a percentage of total assets) of positive 4.38% and 2.29% at the one year and six month time horizons, respectively. Table 9 indicates that on December 31, 2006, NCB had a positive gap (as a percentage of total assets) of 2.05% and 1.46% at the one year and six month time horizons, respectively.

Capital

NCB’s strong capital position should support growth and continuing access to financial markets and should allow for greater flexibility during difficult economic periods. The average equity to average assets ratio was 11.8% for 2007 compared with 12.8% for 2006. The Act limits NCB’s outstanding debt to ten times its capital and surplus (including the subordinated debt). As of December 31, 2007, NCB, FSB maintained capital levels well in excess of regulatory requirements.

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Patronage Policy

Each year, NCB, in accordance with the Act, declares patronage dividends approximately equal to its taxable net income thereby substantially reducing its Federal income tax. In September 2007, NCB distributed $17.9 million to its active member-borrowers from 2006 taxable income. Of this total, approximately $7.1 million was distributed in cash.

In connection with the annual patronage dividend, NCB is required to distribute all patronage related income, less reserves for dividends on Class C stock, for interest on and redemption of Class A Notes, and for losses.

Provision for Income Taxes

The federal income tax provision is determined on the basis of non-member income generated by NCB, FSB and reserves set aside for dividends on Class C stock. NCB’s subsidiaries are also subject to varying levels of state taxation. The income tax benefit for the twelve months ended December 31, 2007 was $0.7 million and the provision for the twelve months ended December 31, 2006 was $1.4 million. NCB’s effective tax rate on consolidated operations was 6.8% for the twelve months ending December 31, 2006.

New Accounting Standards

Statement of Financial Accounting Standards No. 156

NCB adopted FASB Statement of Financial Accounting Standards No. 156, Accounting for Servicing of Financial Assets (“SFAS 156”), effective January 1, 2007. SFAS 156 provides the following: 1) revised guidance on when a servicing asset and servicing liability should be recognized, 2) requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable, 3) permits an entity to elect to measure servicing assets and servicing liabilities at fair value each reporting date and report changes in fair value in earnings in the period in which the changes occur, 4) upon initial adoption, permits a one-time reclassification of available-for-sale securities to trading securities for securities which are identified as offsetting the entity’s exposure to changes in the fair value of servicing assets or liabilities that a servicer elects to subsequently measure at fair value, and 5) requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the statement of financial position and additional footnote disclosures. NCB did not elect, subsequent to its initial measurement, to measure any of its servicing assets at fair value.

FASB Staff Position FASB Interpretation No. 48

NCB adopted the provisions of FASB Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), effective January 1, 2007. This interpretation clarifies the accounting for uncertainty in income taxes recognized in financial statements. FIN 48 prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on derecognition, classification, interest and penalties, accounting for interim periods, disclosure and transition. The adoption of FIN 48 did not have any impact on the consolidated financial statements of NCB.

Statement of Financial Accounting Standards No. 157

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements, (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements required under other accounting pronouncements, but does not change existing guidance as to whether or not an instrument is carried at fair value. Additionally, it establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. NCB adopted SFAS 157 effective January 1, 2008. The adoption is not expected to have a material effect on NCB’s financial position or results of operations.

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Statement of Financial Accounting Standards No. 159

On February 15, 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). Under this standard, NCB may elect to report financial instruments and certain other items at fair value on a contract-by-contract basis with changes in value reported in earnings. Once elected, the election is irrevocable. SFAS 159 provides an opportunity to mitigate volatility in reported earnings that is caused by measuring hedged assets and liabilities that were previously required to use a different accounting method than the related hedging contracts when the complex provisions of SFAS 133 hedge accounting are not met. SFAS 159 is effective for fiscal years beginning after November 15, 2007. NCB adopted SFAS 159 effective January 1, 2008. NCB has not made any fair value elections as of January 1, 2008.

FASB Staff Position FASB Interpretation No. 39-1

In June 2007 the FASB amended the interpretation of FASB Interpretation (“FIN”) No. 39-1 “Offsetting of Amounts Related to Certain Contracts” (“FIN 39-1”), to permit a reporting entity that is party to a master netting arrangement to offset fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement that were offset under paragraph 10 of FIN 39. Neither FIN 39 nor FIN 39-1 had any impact on the consolidated financial statements of NCB.

Staff Accounting Bulletin No. 109

In November 2007, the SEC staff issued Staff Accounting Bulletin No. 109, “Written Loan Commitments Recorded at Fair Value through Earnings” (“SAB 109”). SAB 109 will require fair value measurements of derivatives or other written loan commitments recorded through earnings to include the future cash flows related to the loan’s servicing rights. SAB 109 also states that internally developed intangible assets should not be recorded as part of the fair value of a derivative loan commitment or to written loan commitments that are accounted at fair value through earnings. SAB 109 supersedes SAB 105. SAB 109 should be applied prospectively to derivative loan commitments issued or modified in fiscal quarters beginning after December 15, 2007. NCB is currently evaluating the impact, if any, that SAB 109 will have on its financial condition and results of operations.

Other

NCB transfers Cooperative, Multifamily and Commercial Real Estate Loans to trusts that issue various classes of securities to investors. Those trusts are designed to be qualifying special purpose entities (QSPE) as defined by Statement of Financial Accounting Standards No. 140 (SFAS 140), “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” NCB has previously analyzed the governing pooling and servicing agreements for the commercial mortgage-backed securities (CMBS) trusts to which it transfers loans, and believes that their terms are consistent with the criteria in SFAS 140 for QSPE status. Regulators and standard setters have had discussions with industry participants and accounting firms regarding whether certain provisions that are common in CMBS structures satisfy the stringent QSPE criteria in SFAS 140. As a result, the FASB added this issue to its agenda in December 2005. At a July, 2006 meeting, FASB combined this project with a wider project on the Transfers of Financial Assets. If future guidance results in a determination that the CMBS trusts are not QSPEs, NCB’s transfers may be required to be accounted for as collateralized borrowings instead of as sales. Also, if such future guidance is issued, NCB cannot predict what the transition provisions for implementing such guidance will be.

Critical Accounting Policies

Allowance for Loan Losses

The allowance for loan losses is an estimate of known and inherent losses in our loan portfolio. The allowance is based on two basic principles of accounting: (i) Statement of Financial Accounting Standards (SFAS) No. 5 “Accounting for Contingencies,” which requires that losses be accrued when they are probable of having occurred and reasonably estimable and (ii) SFAS No. 114, “Accounting by Creditors for Impairment of a Loan,”

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which requires that losses be accrued based on the differences between the value of collateral, present value of future cash flows or values that are observable in the secondary market and the balance of loans which are impaired.

A loan is considered impaired when, based on current information, it is probable NCB will be unable to collect all amounts due under the contractual terms of the loan. Impairment is measured based upon the present value of future cash flows discounted for at the loan’s effective interest rate; or, the fair value of the collateral, less estimated selling costs, if the loan is collateral-dependent.

A risk rating system is designed to classify each loan according to the risk unique to the credit facility. The expected loss for each risk rating is determined using historical loss factors and collateral position of the credit facility. All loans are evaluated individually and assigned a risk rating.

Specific reserves are established for impaired loans based upon the above criteria.

General reserves are calculated on a loan-by-loan basis based upon the probability of the default and the loss in the event of default for each risk rating, based on historical experience.

NCB charges off loans, i.e. reduces the loan balance, when the loans are deemed to be uncollectible at which time the allowance for loan losses is reduced.

Servicing Assets and Interest-Only Receivables

SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” (SFAS No. 140) requires that entities that acquire servicing assets through either purchase or origination of loans and sell or securitize those loans with servicing assets retained must allocate the total cost of the loans to the servicing assets and the loans (without the servicing assets) based on their relative fair value.

Servicing assets, stated net of accumulated amortization, are amortized in proportion to the remaining net servicing revenues estimated to be generated by the underlying loans. Furthermore, servicing assets are assessed for impairment based on lower of cost or fair value. In addition, mortgage-servicing assets must be stratified based on one or more predominant risk characteristics of the underlying loans and impairment is recognized through a valuation allowance for each impaired stratum.

Interest-only receivables are created when loans are sold and a portion of the interest retained by NCB does not depend on the servicing work being performed. The interest-only receivables are amortized to interest income using the interest method. Interest-only receivables that are certificated have been included as investment securities consistent with SFAS No. 115. Interest-only receivables that are not certificated are included as other assets.

Substantially all interest-only receivables pertain to Cooperative Loans. These mortgages are typically structured with prepayment lockouts followed by prepayment penalties, yield maintenance provisions, or defeasance through maturity. In calculating interest-only receivables, NCB discounts the cash flows through the lockout or defeasance period. Cash flows beyond the lockout or defeasance period are included in the fair value of the interest-only receivable only to the extent that NCB is entitled to receive the prepayment or yield maintenance penalty.

Gains or losses on sales and securitizations depend, in part, on the previous carrying amount of the loans involved in the transfer and are allocated between the loans sold and the retained interests based on their relative fair value at the date of sale. Since quoted market prices are generally not available, NCB estimates fair value of these interest-only receivables by determining the present value of future expected cash flows using modeling techniques that incorporate management’s best estimates of key variables, including credit losses, prepayment speeds, prepayment lockouts and discount rates commensurate with the risks involved. Gains on sales and securitizations are reported in non-interest income.

The fair value of the interest-only receivables is determined using discounted future expected cash flows at various discount rates. In an effort to maximize the value of interest-only receivables, most cooperative mortgages have very strict prepayment restrictions. The most common prepayment protection is a lockout period, followed by

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either a fixed percentage penalty, or some form of yield maintenance. For loans that do not have prepayment options, the related interest-only receivable is adjusted at the time of prepayment.

For certificated interest-only receivables, the discount rate of future expected cash flows is equal to a spread over the benchmark index at which the respective loans were priced. For non-certificated interest-only receivables, the discount rate of future expected cash flows is equal to a market spread over the benchmark index for similar certificated interest-only receivables adjusted by a premium to reflect the less liquid nature of the non-certificated interest-only receivable. An appropriate spread, determined by reference to what market participants would use for similar financial instruments, is added to the index to determine the current discount rate.

The weighted average life of each interest-only receivable will vary based on the average life of the underlying collateral.

Interest-only receivables that are subject to prepayment risk such that NCB may not recover substantially all of its investment are recorded at fair value with subsequent adjustments reflected in other comprehensive income or in earnings if the fair value of the interest-only receivable has declined below its carrying amount and such decline has been determined to be other than temporary.

Accounting for Derivative Instruments and Hedging Activities

NCB maintains a risk management strategy that includes the use of derivative instruments to reduce unplanned earnings fluctuations caused by interest rate volatility. Use of derivative instruments is a component of NCB’s overall risk management strategy in accordance with a formal policy that is monitored by management, which has delegated authority over the interest rate risk management function.

The derivative instruments utilized include interest rate swaps, futures contracts and forward loan sales commitments. Interest rate swaps involve the exchange of fixed and variable rate interest payments between two parties based upon a notional principal amount and maturity date. Interest rate futures generally involve exchange-traded contracts to buy or sell U.S. Treasury bonds or notes in the future at specified prices. Forward loan sales commitments lock in the prices at which loans will be sold to investors.

NCB uses interest rate swaps, futures contracts and forward loan sales commitments to offset changes in fair value associated with loan commitments prior to funding the related or underlying loan. During the commitment period, the loan commitments and related interest rate swaps, futures contracts and forward loan sales commitments are accounted for as derivatives and therefore recorded at fair value through income. Once funded the loan generally becomes the hedged item in a fair value hedging relationship.

NCB is exposed to credit and market risk as a result of its use of derivative instruments. If the fair value of the derivative contract is positive, the counterparty owes NCB and a repayment risk exists. If the fair value of the derivative contract is negative, NCB owes the counterparty, so there is no repayment risk. NCB minimizes repayment risk by entering into transactions with financially stable counterparties that are specified by policy and reviewed periodically by management. When NCB has multiple derivative transactions with a single counterparty, the net mark-to-market exposure represents the netting of positive and negative exposures with that counterparty. The net mark-to-market exposure with a counterparty is a measure of credit risk when there is a legally enforceable master netting agreement between NCB and the counterparty. NCB uses master netting agreements with the majority of its counterparties.

Market risk is the adverse effect that a change in interest rates, credit risk or comparative currency values has on the fair value of a financial instrument or expected cash flows. NCB manages the market risk associated with the interest rate hedge contracts by establishing formal policy limits concerning the types and degree of risk that may be undertaken. Compliance with this policy is monitored by management and reported to the Board of Directors.

All derivatives are recognized on the balance sheet at fair value. When a derivative contract is entered into, NCB determines whether or not it will be designated as a fair value hedge pursuant to provisions of FAS 133. NCB documents the relationships between the hedging instruments and the hedged items to link all derivatives that are designated as fair value hedges to specific assets and liabilities on the balance sheet. NCB assesses, both at

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inception and on an on-going basis, the effectiveness of all hedges in offsetting changes in fair values of hedged items. NCB discontinues hedge accounting prospectively when (1) the derivative is no longer effective in offsetting changes in fair value of a hedged item; or (2) the derivative matures or is sold, terminated or exercised.

When hedge accounting is discontinued because the derivative no longer qualifies as an effective fair value hedge, the derivative will continue to be carried on the balance sheet at its fair value and the hedged asset or liability will no longer be adjusted to reflect changes in fair value attributed to the hedged risk. In all other situations in which hedge accounting is discontinued, the derivative will be carried at fair value with the changes in fair value recognized in earnings.

For derivative instruments designated as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged item attributable to the hedged risk is recognized in current earnings during the period of the change in fair values.

At December 31, 2007 and 2006 NCB had not entered into any cash flow hedges.

Income Taxes

The Act provides that NCB shall be treated as a cooperative and subject to the provisions of Subchapter T of the Internal Revenue Code. Under Subchapter T and the Act, NCB issues its member-borrowers patronage dividends, which are tax deductible to NCB thereby reducing its taxable income. NCB has determined that all income generated by NCB and its subsidiaries, with the exception of certain income of NCB, FSB, qualifies as patronage income under the Internal Revenue Code as amended by the Act with respect to NCB, with the consequence that NCB is able to issue tax deductible patronage dividends with respect to all such income. The Act also provides that NCB is exempt from state and local taxes with the exception of real estate taxes. Certain NCB subsidiaries, however, are subject to federal and state income taxes.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

NCB’s financial statements and notes thereto are set forth beginning on the following page. NCB is not subject to any of the requirements for supplementary financial information contained in Item 302 of Regulation S-K.

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Management’s Report on Internal Control Over Financial Reporting

The management of National Consumer Cooperative Bank and subsidiaries (the Bank) is responsible for establishing and maintaining effective internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Bank’s principal executive and principal financial officers and effected by the Bank’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (GAAP) and includes those policies and procedures that:

•   pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Bank;

•   provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Bank are being made only in accordance with authorizations of management and directors of the Bank; and

•   provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Bank’s assets that could have a material effect on its financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections or evaluations of effectiveness regarding future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with policies or procedures may deteriorate.

The Bank’s management assessed the effectiveness of its internal control over financial reporting as of December 31, 2007. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control — Integrated Framework.” Based on this assessment, management has concluded that the Bank’s internal control over financial reporting was effective as of December 31, 2007.

This annual report does not include an attestation report of the Bank’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Bank’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management’s report in this annual report.

/s/  Charles E. Snyder	/s/  Richard L. Reed
Charles E. Snyder	Richard L. Reed
President and Chief Executive Officer	Chief Financial Officer

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and

Members of NCB:

We have audited the accompanying consolidated balance sheets of NCB and subsidiaries (the Company) as of December 31, 2007, and 2006, and the related consolidated statements of (loss) income, comprehensive (loss) income, changes in members’ equity, and cash flows for each of the years in the three-year period ended December 31, 2007. 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. An audit includes 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 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 NCB and subsidiaries as of December 31, 2007, and 2006, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles.

/s/  KPMG LLP

McLean, Virginia

March 31, 2008

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NATIONAL CONSUMER COOPERATIVE BANK

CONSOLIDATED BALANCE SHEETS

December 31, 2007 and 2006

	2007			2006
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	63,724		$	47,756
Restricted cash		—			5,398
Investment securities
Available-for-sale (amortized cost of $107,396 and $86,035)		105,166			85,708
Held-to-maturity (fair value of $431 and $1,910)		417			1,647
Loans held for sale		90,949			242,847
Loans and lease financing		1,523,958			1,380,738
Less: Allowance for loan losses		(17,714	)		(19,480	)
Net loans and lease financing		1,506,244			1,361,258
Other assets		101,933			84,863
Total assets	$	1,868,433		$	1,829,477
Liabilities and Members’ Equity
Liabilities
Deposits	$	1,027,452		$	806,453
Patronage dividends payable in cash		—			7,118
Other liabilities		47,118			44,299
Borrowings
Short-term		181,891			354,673
Long-term		220,294			217,773
Subordinated debt
Current		2,500			2,500
Non-current		115,735			118,176
Junior subordinated debt		50,680			50,647
Total borrowings		571,100			743,769
Total liabilities		1,645,670			1,601,639
Members’ equity
Common stock		197,891			187,230
Retained earnings
Allocated		—			10,328
Unallocated		28,200			29,388
Accumulated other comprehensive (loss) income		(3,328	)		892
Total members’ equity		222,763			227,838
Total liabilities and members’ equity	$	1,868,433		$	1,829,477

The accompanying notes are an integral part of these consolidated financial statements.

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NATIONAL CONSUMER COOPERATIVE BANK

CONSOLIDATED STATEMENTS OF (LOSS) INCOME

For the Years Ended December 31, 2007, 2006 and 2005

	2007			2006			2005
	(Dollars in thousands)
Interest income
Loans and lease financing	$	125,016		$	108,328		$	88,296
Investment securities		8,081			7,147			5,090
Other interest income		2,642			2,979			3,093
Total interest income		135,739			118,454			96,479
Interest expense
Deposits		43,310			30,265			21,036
Short-term borrowings		17,510			18,380			12,538
Long-term debt, other borrowings and subordinated debt		24,301			23,451			18,763
Total interest expense		85,121			72,096			52,337
Net interest income		50,618			46,358			44,142
Provision for loan losses		152			3,667			470
Net interest income after provision for loan losses		50,466			42,691			43,672
Non-interest income
Servicing fees		4,651			4,537			4,202
Letter of credit fees		3,423			3,513			3,454
Real estate loan fees		1,515			728			502
Prepayment fees		837			1,312			208
(Loss) gain on sale of loans		(1	)		19,930			26,628
SFAS 133 adjustment		(1,468	)		775			(251	)
Other		3,012			2,885			2,473
Total non-interest income		11,969			33,680			37,216
Non-interest expense
Compensation and employee benefits		32,703			31,038			29,001
Occupancy and equipment		8,057			8,700			5,861
Contractual services		5,944			6,086			6,399
Information systems		4,402			2,697			2,542
Lease termination costs		3,148			—			—
Corporate development		2,814			3,132			2,942
Loan costs		2,082			1,609			1,323
Lower of cost or market valuation allowance		2,070			133			—
Travel and entertainment		1,449			1,554			1,596
Provision (credit) for unfunded commitments		488			(1,077	)		791
Loss on sale of investments available-for-sale		17			29			13
Contribution to NCB Capital Impact		—			—			750
Deferred rent recognition related to lease termination		(1,860	)		—			—
Other		2,257			1,631			1,881
Total non-interest expense		63,571			55,532			53,099
(Loss) income before income taxes		(1,136	)		20,839			27,789
(Benefit) provision for income taxes		(664	)		1,414			2,142
Net (loss) income	$	(472	)	$	19,425		$	25,647
Distribution of net (loss) income
Patronage dividends	$	—		$	17,446		$	22,825
Retained earnings		(472	)		1,979			2,822
	$	(472	)	$	19,425		$	25,647

The accompanying notes are an integral part of these consolidated financial statements.

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NATIONAL CONSUMER COOPERATIVE BANK

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

For the Years ended December 31, 2007, 2006 and 2005

	2007			2006			2005
	(Dollars in thousands)
Net (loss) income	$	(472	)	$	19,425		$	25,647
Other comprehensive income
Unrealized holding loss before tax on available-for- sale investment securities and non-certificated interest- only receivables		(4,227	)		(525	)		(2,163	)
Tax effect		7			7			10
Comprehensive (loss) income	$	(4,692	)	$	18,907		$	23,494

The accompanying notes are an integral part of these consolidated financial statements.

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NATIONAL CONSUMER COOPERATIVE BANK

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY

For the Years ended December 31, 2007, 2006 and 2005

										Accumulated
				Retained			Retained			Other			Total
	Common			Earnings			Earnings			Comprehensive			Members’
	Stock			Allocated			Unallocated			Income			Equity
	(Dollars in thousands)
Balance, December 31, 2004	$	160,475		$	12,340		$	29,112		$	3,563		$	205,490
Net income		—			—			25,647			—			25,647
Adjustment to prior year dividends		96			(162	)		57			—			(9	)
Cancellation of stock		(1,881	)		—			1,881			—			—
Other dividends paid		—			—			(449	)		—			(449	)
2004 patronage dividends distributed in stock		12,178			(12,178	)		—			—			—
2005 patronage dividends														—
To be distributed in cash		—			—			(9,518	)		—			(9,518	)
Retained in form of equity		—			13,307			(13,307	)		—			—
Unrealized loss on available-for-sale investment securities and non-certificated interest-only receivables, net of taxes		—			—			—			(2,153	)		(2,153	)
Balance, December 31, 2005		170,868			13,307			33,423			1,410			219,008
Net income		—			—			19,425			—			19,425
Adjustment to prior year dividends		—			4,003			(6,402	)		—			(2,399	)
Cancellation of stock		(1,008	)		60			900			—			(48	)
Other dividends paid		—			—			(512	)		—			(512	)
2005 patronage dividends distributed in stock		17,370			(17,370	)		—			—			—
2006 patronage dividends														—
To be distributed in cash		—			—			(7,118	)		—			(7,118	)
Retained in form of equity		—			10,328			(10,328	)		—			—
Unrealized loss on available-for-sale investment securities and non-certificated interest-only receivables, net of taxes		—			—			—			(518	)		(518	)
Balance, December 31, 2006		187,230			10,328			29,388			892			227,838
Net loss		—			—			(472	)		—			(472	)
Adjustment to prior year dividends		—			497			(485	)		—			12
Cancellation of stock		(164	)		—			155			—			(9	)
Other dividends paid		—			—			(386	)		—			(386	)
2006 patronage dividends distributed in stock		10,825			(10,825	)		—			—			—
Unrealized loss on available-for-sale investment securities and non-certificated interest-only receivables, net of taxes		—			—			—			(4,220	)		(4,220	)
Balance, December 31, 2007	$	197,891		$	—		$	28,200		$	(3,328	)	$	222,763

The accompanying notes are an integral part of these consolidated financial statements.

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NATIONAL CONSUMER COOPERATIVE BANK

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years ended December 31, 2007, 2006 and 2005

	2007			2006			2005
	(Dollars in thousands)
Cash flows from operating activities
Net (loss) income	$	(472	)	$	19,425		$	25,647
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan losses		152			3,667			470
Provision (credit) for losses on unfunded commitments		488			(1,077	)		791
Amortization and writedown of interest-only-receivables and servicing rights		11,402			10,260			10,200
Depreciation and amortization, other		3,150			6,349			1,768
Loss (gain) on sale of loans and of SFAS 133 adjustment		1,469			(20,705	)		(26,377	)
Loss on sale of investment securities available-for-sale		17			29			13
Purchase of loans-held-for-sale		(222,489	)		(179,493	)		(59,887	)
Loans originated for sale, net of principal collections		(831,604	)		(899,556	)		(842,329	)
Lower of cost or market valuation allowance		2,070			133			—
Net proceeds from sale of loans held for sale		1,195,830			1,091,690			989,646
Tenant improvement allowance		3,656			—			—
Lease termination costs		3,148			—			—
Lease termination incentive		(1,585	)		—			—
Deferred rent recognition related to lease termination		(1,860	)		—			—
Increase in other assets		(8,368	)		(3,460	)		(9,345	)
(Decrease) increase in other liabilities		(747	)		(5,381	)		5,491
Net cash provided by operating activities		154,257			21,881			96,088
Cash flows from investing activities
Decrease (increase) in restricted cash		5,398			(248	)		(154	)
Purchase of investment securities
Available-for-sale		(77,044	)		(107,770	)		(59,430	)
Held-to-maturity		—			(17	)		—
Proceeds from maturities of investment securities
Available-for-sale		50,375			107,034			43,754
Held-to-maturity		52			9			99
Proceeds from the sale of investment securities
Available-for-sale		1,037			2,725			7,285
Net increase in loans and lease financing		(145,189	)		(131,580	)		(145,789	)
Purchases of premises and equipment		(9,800	)		(5,036	)		(1,895	)
Net cash used in investing activities		(175,171	)		(134,883	)		(156,130	)
Cash flows from financing activities
Net increase in deposits		220,662			69,421			131,438
(Decrease) increase in short-term borrowings		(172,500	)		39,318			(84,099	)
Proceeds from issuance of long-term borrowings		—			105,000			50,000
Repayment of long-term borrowings		—			(80,000	)		(30,000	)
Repayment of subordinated borrowings		(2,500	)		(2,500	)		(2,500	)
Incurrence of financing costs		(1,287	)		(1,053	)		(20	)
Patronage dividends paid		(7,107	)		(11,917	)		(8,715	)
Other dividends paid		(386	)		(512	)		(449	)
Net cash provided by financing activities		36,882			117,757			55,655
Increase (decrease) in cash and cash equivalents		15,968			4,755			(4,387	)
Cash and cash equivalents, beginning of period		47,756			43,001			47,388
Cash and cash equivalents, end of period	$	63,724		$	47,756		$	43,001

The accompanying notes are an integral part of these consolidated financial statements.

47

NATIONAL CONSUMER COOPERATIVE BANK

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years ended December 31, 2007, 2006 and 2005

	2007			2006			2005
	(Dollars in thousands)
Supplemental schedule of non-cash investing and financing activities:
Unrealized holding loss on available-for-sale investment securities and non-certificated interest-only receivables, net of tax	$	(4,220	)	$	(518	)	$	(2,153	)
Loans transferred to other real estate owned	$	180		$	193		$	10
Warehouse loans transferred to portfolio	$	—		$	10,092		$	—
Common stock cancelled and loan losses recovered against allowance for loan losses	$	9		$	48		$	—
Supplemental information:
Interest paid	$	81,860		$	71,315		$	52,596
Income taxes paid	$	562		$	1,636		$	1,763

48

NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2007, 2006 and 2005

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

National Consumer Cooperative Bank, doing business as NCB, is a U.S. Government-chartered corporation organized under the National Consumer Cooperative Bank Act (the “Act”). NCB provides loans and financial services primarily to cooperatives. NCB Financial Corporation (“NCBFC”), a wholly owned subsidiary, is the holding company of NCB, FSB, a federally-chartered thrift institution. NCB, FSB provides a broad range of financial services to cooperative and non-cooperative customers. NCB Financial Advisors, Inc., ceased operations during 2007 and the corporation was dissolved.

The 1981 amendments to the Act also directed NCB to form NCB Development Corporation, now NCB Capital Impact, a related entity, which is a non-profit organization without capital stock organized under the laws of the District of Columbia to perform only functions provided in the Act. NCB Capital Impact provides loans and technical support to cooperative enterprises. NCB Capital Impact’s bylaws provide for a majority of the nine to fifteen members of the Board of Directors to be appointed by the members of NCB Capital Impact, who comprise the members of NCB’s Board, with a majority of directors to be appointed from among the members of the NCB Board. Consistent with the Act, NCB makes deductible, voluntary contributions to NCB Capital Impact.

Principles of Consolidation

The consolidated financial statements include the accounts of NCB and its subsidiaries. All significant inter-company balances and transactions have been eliminated. The consolidated financial statements of NCB do not include the assets, liabilities or results of operations of NCB Capital Impact or NCB Capital Trust I (“Trust”), a Delaware statutory trust formed by NCB in 2003 in connection with the issuance of trust preferred securities.

In December 2003, the FASB issued FASB Interpretation No 46R (“FIN 46R”), which revised FIN 46. FIN 46R clarifies the application of Accounting Research Bulletin No. 51 “Consolidated Financial Statements” to certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. Due to the adoption of FIN 46R, NCB does not consolidate its investment in the Trust.

NCB has a 50% interest in NCB Community Works, LLC (“CCW”). The remaining 50% interest is held by an unconsolidated affiliate, NCB Capital Impact, which at all times has the power to appoint an officer or employee to be Chair of the Board of Managers. NCB’s interest in CCW does not amount to a controlling financial interest and thus CCW is not consolidated. Furthermore, NCB has concluded that CCW is not a variable interest entity since it does not meet conditions (a), (b) or (c) of paragraph 5 of FIN 46R.

Estimates

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 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.

Cash and Cash Equivalents

For purposes of the statements of cash flow, cash equivalents include cash on hand, amounts due from banks, overnight investments and time deposits. Although cash equivalents generally have maturities of ninety days or less, time deposits subject to early withdrawal penalties and with maturities greater than ninety days have been included in cash equivalents.

49

NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Investments

Debt and equity securities are accounted for under Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (“SFAS 115”). NCB accounts for its debt and equity securities as follows:

Securities that will be held for indefinite periods of time, including those that may be sold in response to changes in market interest rates and related changes in the security’s prepayment risk, needs for liquidity and changes in the availability and the yield of alternative investments are classified as available-for-sale. These assets are carried at fair value. Unrealized gains and losses are determined on an aggregate basis, excluded from earnings and reported as other comprehensive income net of any tax effect. Gains and losses on the sale of available-for-sale securities are determined using the adjusted cost of the specific security sold and are included in earnings.

Securities that management has the positive intent and ability to hold until maturity are classified as held-to-maturity and are reported at amortized cost. The investment portfolio is periodically evaluated for other than temporary impairment.

Auction-rate notes are debt instruments which have their interest rates set based on the results of a Dutch style auction. The securities often have long-term or no maturity date, but the rates reset every 7-28 days. These types of securities have made negative headlines lately because many of the auctions failed, resulting in borrowing coupons much higher than current market rates. NCB has never issued or invested in auction-rate debt securities and therefore has not been adversely affected by the deterioration of this market.

Derivative Instruments and Hedging Activities

NCB maintains a risk management strategy that includes the use of derivative instruments to reduce unplanned earnings fluctuations caused by interest rate volatility. Use of derivative instruments is a component of NCB’s overall risk management strategy in accordance with a formal policy that is monitored by management, which has delegated authority over the interest rate risk management function.

The derivative instruments utilized include interest rate swaps, futures contracts and forward loan sales commitments. Interest rate swaps involve the exchange of fixed and variable rate interest payments between two parties based upon a notional principal amount and maturity date. Interest rate futures generally involve exchange-traded contracts to buy or sell U.S. Treasury bonds or notes in the future at specified prices. Forward loan sales commitments lock in the prices at which loans will be sold to investors.

NCB uses interest rate swaps, futures contracts and forward loan sales commitments to offset changes in fair value associated with loan commitments prior to funding the loan. During the commitment period, the loan commitments and related interest rate swaps, futures contracts and forward loan sales commitments are accounted for as derivatives and therefore recorded at fair value through the gain on sale. Once funded, loans are generally designated as the hedged item in a fair value hedging relationships with interest rate swaps.

NCB is exposed to credit and market risk as a result of its use of derivative instruments. If the fair value of the derivative contract is positive, the counterparty owes NCB and a repayment risk exists. If the fair value of the derivative contract is negative, NCB owes the counterparty, so there is no repayment risk. NCB minimizes repayment risk by entering into transactions with financially stable counterparties that are specified by policy and reviewed periodically by management. When NCB has multiple derivative transactions with a single counterparty, the net mark-to-market exposure represents the netting of positive and negative exposures with that counterparty. The net mark-to-market exposure with a counterparty is a measure of credit risk when there is a legally enforceable master netting agreement between NCB and the counterparty. NCB uses master netting agreements with the majority of its counterparties.

Market risk is the adverse effect that a change in interest rates or comparative currency values has on the fair value of a financial instrument or expected cash flows. NCB manages the market risk associated with the

50

NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

interest rate swap contracts by establishing formal policy limits concerning the types and degree of risk that may be undertaken. Compliance with this policy is monitored by management and reported to the Board of Directors.

All derivatives are recognized on the balance sheet at fair value. When a derivative contract is entered into, NCB determines whether or not it will be designated as a fair value hedge. When entering into hedging transactions, NCB documents the relationships between the hedging instruments and the hedged items to link all derivatives that are designated as fair value hedges to specific assets and liabilities on the balance sheet. NCB assesses, both at inception and on an on-going basis, the effectiveness of all hedges in offsetting changes in fair values of hedged items.

NCB discontinues hedge accounting prospectively when (1) the derivative is no longer effective in offsetting changes in fair value of a hedged item; or (2) the derivative matures or is sold, terminated or exercised.

When hedge accounting is discontinued because the derivative no longer qualifies as an effective fair value hedge, the derivative will continue to be carried on the balance sheet at its fair value and the hedged asset or liability will no longer be adjusted to reflect changes in fair value attributable to the hedged risk. In all other situations in which hedge accounting is discontinued, the derivative will be carried at fair value with the changes in fair value recognized in earnings.

For derivative instruments designated as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged item attributable to the hedged risk is recognized in current earnings during the period of the change in fair values. At December 31, 2007 and 2006, NCB had not designated any derivative instruments in cash flow hedge relationships.

Loan Origination Fees, Commitment Fees, and Related Costs

Loan fees received and direct origination costs are accounted for in accordance with Statement of Financial Accounting Standards No. 91, “Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases.” Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized as an adjustment to interest income over the contractual life of the loans or, with respect to loans held for sale, as an adjustment to gain on sale of loans at the time of sale. The remaining unamortized fees on paid off loans are recognized as interest income. If a commitment is exercised during the commitment period, the remaining net fee or cost at the time of exercise is recognized over the life of the loan as an adjustment of yield.

Loans and Lease Financing and Loans Held for Sale

Loans and lease financing are carried at their principal amounts outstanding, net of deferred loans origination fees and costs and net of any discounts and premiums. Loans held for sale are carried at the lower of cost or fair value and net of deferred origination fees and costs, discounts and premiums and the effects of hedge accounting or changes in fair value. NCB determines whether a loan would qualify as held for sale at the time the loan is originated.

Interest income is calculated in accordance with the terms of each individual loan and lease. NCB typically discontinues the accrual of interest on loans when principal or interest are ninety days or more in arrears or sooner when there is reasonable doubt as to collectibility. Loans may be reinstated to accrual status when all payments are brought current and, in the opinion of management, collection of the remaining balance can be reasonably expected.

When loans are sold, the gain or loss is recognized in the Consolidated Statement of (Loss) Income as the proceeds less the book value of the loan, including unamortized fees and direct origination costs.

51

NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Allowance for Loan Losses

The allowance for loan losses is an estimate of known and inherent losses in our loan portfolio. The allowance is based on two basic principles of accounting: (i) Statement of Financial Accounting Standards (SFAS) No. 5 “Accounting for Contingencies,” which requires that losses be accrued when they are probable of having occurred and reasonably estimable and (ii) SFAS No. 114, “Accounting by Creditors for Impairment of a Loan,” which requires that losses be accrued based on the differences between the value of collateral, present value of future cash flows or values that are observable in the secondary market and the balance of loans which are impaired.

A loan is considered impaired when, based on current information, it is probable NCB will be unable to collect all amounts due under the contractual terms of the loan. Impairment is measured based upon the present value of future cash flows discounted at the loan’s effective interest rate; or, the fair value of the collateral, less estimated selling costs, if the loan is collateral-dependent.

A risk rating system is designed to classify each loan according to the risk unique to the credit facility. The expected loss for each risk rating is determined using historical loss factors and collateral position of the credit facility. All loans are evaluated individually and assigned a risk rating.

Specific reserves are established for impaired loans based upon the above criteria.

General reserves are calculated on a loan-by-loan basis based upon the probability of default and the expected loss in the event of default for each risk rating, based on historical experience.

NCB charges off loans, i.e. reduces the loan balance, when the loans are deemed to be uncollectible, at which time the allowance for loan losses is reduced.

Loan Sales and Securitizations

NCB’s recognition of a gain or loss on the sale or securitization of loans is accounted for in accordance with Standards of Financial Accounting Standards No. 140 (“SFAS 140”), “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”. SFAS 140 requires that a transfer of financial assets in which NCB surrenders control over the assets be accounted for as a sale to the extent that consideration other than beneficial interests in the transferred assets is received in exchange. The carrying value of the assets sold is allocated between the assets sold and the retained interests based on their relative fair values.

To receive sale accounting for an asset transfer, SFAS 140 requires a “true sale” analysis of the treatment of the transfer under state law if the company was a debtor under the bankruptcy code. The “true sale” analysis includes several legal factors including the nature and level of recourse to the transferor and the nature of retained servicing rights. The “true sale” analysis is not absolute and unconditional but rather contains provisions that make the transferred assets “bankruptcy remote” should the transferor file for bankruptcy.

Once the “true sale” criteria has been satisfied under SFAS 140 for securitizations, other factors concerning the nature of the extent of the transferor’s control over the transferred financial assets are taken into account, including whether the special purpose entity (“SPE”) has complied with rules concerning qualifying special purpose entities in order to determine if the de-recognition of financial assets is warranted.

NCB obtains a legal opinion regarding the “true sale” of the transferred financial assets as part of the securitization process. The “true sale” opinion provides reasonable assurance that the transferred assets would not be characterized as property of the transferor in the event of insolvency.

The securitization process involves the sale of loans to a bankruptcy remote special purpose entity which then sells the loans to a separate, transaction-specific trust in exchange for considerations generated by the sale of the securities issued by the securitization trust. The securitization trust issues and sells debt securities to third party investors that are secured by payments on the loans. NCB has no obligation to provide credit support to either the third party investors or the securitization trust. Neither the third party investors nor the securitization trust generally

52

NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

have recourse to NCB’s assets or NCB and have no ability to require NCB to repurchase their securities other than through enforcement of the standard representations and warranties. NCB does make certain representations and warranties concerning the loans, such as lien status, and if NCB is found to have breached a representation and warranty, NCB may be required to repurchase the loan from the securitization trust. NCB does not guarantee any securities issued by the securitization trust. The securitization trust represents a “qualifying special purpose entity”, which meets the criteria of SFAS 140, and therefore is not consolidated for financial reporting purposes.

Servicing Assets and Interest-Only Receivables

SFAS No. 140 requires entities to allocate the total cost of the loans to the servicing assets and the loans (without the servicing assets) based on their relative fair value upon transfer of the loan.

Servicing assets, stated net of accumulated amortization, are amortized in proportion to the remaining net servicing revenues estimated by the underlying loans. Servicing assets are assessed for impairment based on lower of cost or fair value. In addition, mortgage-servicing assets must be stratified based on one or more predominant risk characteristics of the underlying loans and impairment is recognized through a valuation allowance for each impaired stratum.

Interest-only receivables are created when loans are sold and a portion of the interest retained by NCB does not depend on the servicing work being performed. The interest-only receivables are amortized to interest income using the interest method. Interest-only receivables that are certificated have been included as investment securities consistent with SFAS No. 115. Interest-only receivables that are not certificated are included as other assets.

Substantially all interest-only receivables pertain to Cooperative Loans made to cooperative housing corporations. These mortgages are typically structured with prepayment lockouts followed by prepayment penalties, yield maintenance provisions, or defeasance through maturity. In calculating interest-only receivables, NCB discounts the cash flows through the lockout or defeasance period. Cash flows beyond the lockout period are included in the fair value of the interest-only receivable only to the extent that NCB is entitled to receive the prepayment or yield maintenance penalty.

Gains or losses on sales and securitizations depend, in part, on the previous carrying amount of the loans involved in the transfer and are allocated between the loans sold and the retained interests based on their relative fair value at the date of sale. Since quoted market prices are generally not available, NCB estimates the fair value of these interest-only receivables by determining the present value of future expected cash flows using modeling techniques that incorporate management’s best estimates of key variables, including credit losses, prepayment speeds, prepayment lockouts and discount rates commensurate with the risks involved. Gains on sales and securitizations are reported in non-interest income.

The fair value of the interest-only receivables is determined using discounted future expected cash flows at various discount rates. In an effort to maximize the value of interest-only receivables, most cooperative mortgages have very strict prepayment restrictions. The most common prepayment protection is a lockout period, followed by either a fixed percentage penalty, or some form of yield maintenance. For loans that do not have prepayment options, the related interest-only receivable is adjusted at the time of prepayment.

For certificated interest-only receivables, the discounted rate of future expected cash flows is equal to a spread over the benchmark index at which the respective loans were priced. For non-certificated interest-only receivables, the discounted rate of future expected cash flows is equal to a market spread over the benchmark index for similar certificated interest-only receivables adjusted by a premium to reflect the less liquid nature of the non-certificated interest-only receivable. For quarterly valuations, the index is adjusted to reflect market conditions. An appropriate spread, determined by reference to what market participants would use for similar financial instruments, is added to the index to determine the current discount rate.

53

NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The weighted average life of each interest-only receivable will vary with the mortgage terms that back the transaction.

Interest-only receivables that are subject to prepayment risk such that NCB may not recover substantially all of its investment are recorded at fair value with subsequent adjustments reflected in other comprehensive income or in earnings if the fair value of the interest-only receivable has declined below its carrying amount and such decline has been determined to be other than temporary.

Other Assets

Premises and equipment are carried at cost less accumulated depreciation. Buildings and building improvements are depreciated on a straight-line basis over either their useful lives or 39 years. Leasehold improvements are depreciated on a straight-line basis over the term of the lease. Furnishings are depreciated using an accelerated method and are depreciated over five or seven years. Equipment and software are depreciated using an accelerated method over seven, five or three years, depending on the type of equipment or software.

Income Taxes

The Act provides that NCB shall be treated as a cooperative and subject to the provisions of Subchapter T of the Internal Revenue Code. Under Subchapter T and the Act, NCB issues its member-borrowers patronage dividends, which are tax deductible to NCB thereby reducing its taxable income. NCB has determined that all income generated by NCB and its subsidiaries, with the exception of certain income of NCB, FSB, qualifies as patronage income under the Internal Revenue Code as amended by the Act with respect to NCB, with the consequence that NCB is able to issue tax deductible patronage dividends with respect to all such income. The Act also provides that NCB is exempt from state and local taxes with the exception of real estate taxes. Certain NCB subsidiaries, however, are subject to federal and state income taxes.

NCB provides for income taxes under SFAS No. 109, “Accounting for Income Taxes”. The asset and liability approach of SFAS No. 109 requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the financial statement carrying amounts of the existing assets and liabilities and their respective tax bases.

Reclassifications

Prior year amounts have been reclassified, where necessary, to conform to the 2006 presentation. None of the reclassified amounts were material to the financial statements.

2.   CASH AND CASH EQUIVALENT

The composition of cash and cash equivalents at December 31 is as follows (dollars in thousands):

	2007		2006
Cash	$	23,224	$	24,747
Cash equivalents		40,500		23,009
Total	$	63,724	$	47,756

There was restricted cash of $0 and $5.4 million as of December 31, 2007 and 2006, respectively which related to a previous recourse obligation under an agreement with Fannie Mae. The agreement was terminated during the second quarter of 2007.

54

NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

3.   INVESTMENT SECURITIES

The composition of available-for-sale investment securities at December 31 is as follows (dollars in thousands):

	2007
			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses			Fair Value
Interest-only certificated receivables	$	35,539	$	65	$	(1,776	)	$	33,828
U.S. Treasury and agency obligations		53,920		243		(117	)		54,046
Corporate notes		5,830		46		(20	)		5,856
Mutual funds		1,573		—		(115	)		1,458
Mortgage-backed securities		10,482		3		(625	)		9,860
Equity securities		52		66		—			118
Total	$	107,396	$	423	$	(2,653	)	$	105,166

	2006
			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses			Fair Value
Interest-only certificated receivables	$	39,891	$	545	$	(486	)	$	39,950
U.S. Treasury and agency obligations		37,526		12		(257	)		37,281
Corporate notes		5,659		8		(33	)		5,634
Mutual funds		1,503		—		(124	)		1,379
Mortgage-backed securities		1,406		7		(36	)		1,377
Equity securities		50		37		—			87
Total	$	86,035	$	609	$	(936	)	$	85,708

The fair value of investment securities could change from period to period due to factors such as a change in the general level of interest rates, a deterioration in the credit quality of the issuer or in the business conditions of the issuer. NCB does not consider the unrealized losses at December 31, 2007 to be other-than-temporary in accordance with U.S. generally accepted accounting principles.

Interest-only certificated receivables

Interest-only certificated receivables substantially pertain to Cooperative Loans. The unrealized losses on NCB’s interest-only certificated receivables were caused by changes in interest rates. The certificated interest-only receivables were created when NCB sold loans directly into securitizations and the portion retained by NCB did not depend on the servicing work being performed. Because the decline in market value is attributable to changes in interest rates and not credit quality and because NCB has the ability and intent to hold these investments until a recovery of fair value, which may be maturity, NCB does not consider the certificated interest-only receivables to be other-than-temporarily impaired at December 31, 2007.

U.S. Treasury and agency obligations, Corporate notes, Mutual funds and Mortgage-backed securities

At December 31, 2007, NCB held U.S. Treasury and agency obligations that were guaranteed by the full faith and credit of the U.S. government or its agencies and therefore, NCB considers the decline in market value on these items as interest-rate related. At December 31, 2007, NCB held mortgage-backed securities, issued by Freddie Mac and Fannie Mae and considers the decline in market value on those items to be interest-rate related. At

55

NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2007, NCB held investment-grade corporate notes and given the current credit ratings of these companies, NCB considers the decline in market value on the notes to be interest-rate related. NCB considers the decline in market value on the mutual funds to be interest-rate related. Unless a credit rating downgrade occurs related to a particular investment that would cause those investments to be sold below fair value, NCB has the ability and intent to hold the U.S. treasury notes and obligations, corporate notes, mutual funds and mortgage-backed securities until a recovery of fair value, which may be maturity, and thus concludes that individually, and as a group, the decline in market values are not other-than-temporary.

The following tables present the fair value of available-for-sale investment securities with unrealized losses and the related unrealized loss amounts. The tables also disclose whether these securities have had unrealized losses for less than 12 consecutive months or for 12 consecutive months or longer at December 31 (dollars in thousands):

	2007
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Interest-only certificated receivables	$	7,192	$	(285	)	$	23,372	$	(1,491	)	$	30,564	$	(1,776	)
U.S. Treasury and agency obligations		5,830		(110	)		3,472		(7	)		9,302		(117	)
Corporate notes		1,230		(17	)		1,497		(3	)		2,727		(20	)
Mutual funds		—		—			1,458		(115	)		1,458		(115	)
Mortgage-backed securities		8,451		(595	)		36		(30	)		8,487		(625	)
Total	$	22,703	$	(1,007	)	$	29,835	$	(1,646	)	$	52,538	$	(2,653	)

	2006
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
Interest-only certificated receivables	$	7,374	$	(41	)	$	21,004	$	(445	)	$	28,378	$	(486	)
U.S. Treasury and agency obligations		14,342		(26	)		16,433		(231	)		30,775		(257	)
Corporate notes		1,693		(10	)		2,881		(23	)		4,574		(33	)
Mutual funds		—		—			1,379		(124	)		1,379		(124	)
Mortgage-backed securities		—		—			552		(36	)		552		(36	)
Total	$	23,409	$	(77	)	$	42,249	$	(859	)	$	65,658	$	(936	)

The maturities of available-for-sale U.S. Treasury and agency obligations and corporate note investment securities at December 31 are as follows (dollars in thousands):

	2007
			Weighted
	Amortized		Average			Fair
	Cost		Yield			Value
Within 1 year	$	43,019		4.84	%	$	42,948
After 1 year through 5 years		16,731		4.46	%		16,954
Total	$	59,750		4.73	%	$	59,902

56

NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	2006
			Weighted
	Amortized		Average			Fair
	Cost		Yield			Value
Within 1 year	$	21,261		4.27	%	$	21,184
After 1 year through 5 years		21,924		4.36	%		21,731
Total	$	43,185		4.31	%	$	42,915

Mutual funds, equity securities, mortgage-backed securities, and interest-only receivables are excluded from the maturity table. Mutual funds do not have contractual maturities. Mortgage-backed securities and interest-only receivables have contractual maturities, which differ from actual maturities because borrowers may have the right to call or prepay obligations. Interest-only certificated receivables pertain to Cooperative Loans to cooperative housing corporations.

During 2007 there were $1.1 million of available-for-sale securities sold and during 2006 there were $2.7 million of available-for-sale securities sold. As of December 31, 2007, NCB held five callable securities, all callable within 2008.

The composition of held-to-maturity investment securities at December 31 is as follows (dollars in thousands):

	2007
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Mortgage-backed securities	$	—	$	—	$	—	$	—
Corporate debt securities		417		14		—		431
Total	$	417	$	14	$	—	$	431

	2006
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Mortgage-backed securities	$	1,178	$	254	$	—	$	1,432
Corporate debt securities		469		9		—	$	478
Total	$	1,647	$	263	$	—	$	1,910

During December 2007, the Mortgage-backed security was redeemed. As of December 31, 2007 the cash related to the redemption value had not been received. Therefore, the receivable has been reclassified to Other Assets.

The maturities of held-to-maturity investments at December 31 are as follows (dollars in thousands):

	2007
			Weighted
	Amortized		Average			Fair
	Cost		Yield			Value
Within 1 year	$	—		0.00	%	$	—
After 1 year through 5 years		417		8.13	%		431
Total	$	417		8.13	%	$	431

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	2006
			Weighted
	Amortized		Average			Fair
	Cost		Yield			Value
Within 1 year	$	—		—		$	—
After 1 year through 5 years		468		8.31	%		478
Over 10 years		1,179		8.25	%		1,432
Total	$	1,647		8.27	%	$	1,910

Mortgage-backed securities have contractual maturities, which differ from actual maturities because borrowers may have the right to call or prepay obligations.

4.   LOAN SERVICING

The unpaid principal balance of loans serviced for others are not included in the accompanying consolidated balance sheets.

Changes in portfolio of loans serviced for others were as follows (dollars in thousands):

	2007			2006
Balance at January 1	$	4,682,056		$	4,086,526
Additions		983,570			901,422
Loan payments and payoffs		(319,375	)		(305,892	)
Balance at December 31	$	5,346,251		$	4,682,056

See Note 27 for an analysis of Mortgage Servicing Rights related to the above portfolio of loans serviced for others.

5.   LOANS HELD FOR SALE

Loans held for sale by category at December 31, are as follows (dollars in thousands):

	2007		2006
Consumer Loans	$	2,983	$	1,382
Commercial Loans		19,487		10,026
Real Estate Loans:
Residential		53,068		180,862
Commercial		15,411		50,577
Total	$	90,949	$	242,847

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Activity related to loans held for sale for the years ended December 31, are as follows (dollars in thousands):

	2007			2006
Balance at January 1	$	242,847		$	232,024
Originations		831,604			899,556
Purchases		222,489			179,493
Sales*		(1,204,457	)		(1,070,610	)
Change in valuation: SFAS 133 valuation adjustment		536			2,517
Change in valuation: lower of cost or market valuation allowance		(2,070	)		(133	)
Balance at December 31	$	90,949		$	242,847

* Includes write-off of unamortized deferred fees and costs.

Statement of Financial Accounting Standards No. 65 “Accounting for Certain Mortgage Banking Activities” requires loans held for sale to be recorded at the lower of cost or fair value. As of December 31, 2007 and 2006, a valuation allowance of $2.3 million and $0.2 million, respectively, was established to reflect the extent to which individual loans cost basis exceeded fair value at the Balance Sheet dates.

6.   LOANS AND LEASE FINANCING

Loans and leases outstanding by category at December 31, are as follows (dollars in thousands):

	2007		2006
Consumer Loans	$	16,898	$	10,707
Commercial Loans		555,974		521,649
Real Estate Loans:
Residential		749,868		701,311
Commercial		200,644		146,435
Leases		574		636
Total	$	1,523,958	$	1,380,738

The largest geographic concentration of commercial loans portfolio and loans held for sale was in the Southeast region and amounted to 37.8% at December 31, 2007. The region with the largest concentration of Commercial Loans portfolio and loans held for sale at December 31, 2006 was the Southeast region amounting to 32.2%. The largest borrower type for our Commercial Loans was food retailing and distribution at 6.9% and 8.1% at December 31, 2007 and 2006, respectively. No other borrower type exceeds 5.8% at December 31, 2007. Real Estate Loans have a geographical concentration of 40.2% at December 31, 2007 in the Northeastern United States (primarily New York City) compared to 44.2% at December 31, 2006.

7.   IMPAIRED LOANS

A loan is considered impaired when, based on current information, it is probable NCB will be unable to collect all amounts due under the contractual terms of the loan. Impaired loans, totaled $13.3 million and $21.6 million at December 31, 2007 and December 31, 2006, respectively. The average balance of impaired loans was $18.6 million, $18.3 million, and $13.4 million for the years ended December 31, 2007, 2006, and 2005, respectively. The interest income that was due, but not recognized on impaired loans was $2.5 million, $2.3 million and $1.0 million for the years ended December 31, 2007, 2006 and 2005, respectively. At December 31, 2007 NCB had a specific allowance of $2.2 million related to $7.4 million of impaired loans and a general allowance of

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NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

$1.1 million related to $5.9 million of impaired loans. At December 31, 2006 NCB had a specific allowance of $6.4 million related to $19.1 million of impaired loans and a general allowance of $0.3 million related to $2.5 million of impaired loans. Reserves at December 31, 2007 were deemed to be adequate to cover the estimated loss exposure related to the above loans.

Of the $7.4 million of impaired loans at December 31, 2007, $1.7 million was for a commercial loan that was not in non-accrual status. However, the loan was deemed impaired due to the debt being restructured during the second quarter and the realizable cash flows being significantly lower than the current outstanding principal balance of the loan at December 31, 2007. NCB has no reserve allowance for this loan.

As of December 31, 2007, there were not any commitments to lend additional funds to borrowers whose loans were impaired.

8.   ALLOWANCE FOR LOAN LOSSES AND UNFUNDED COMMITMENTS

The following is a summary of the components of the allowance for loan losses as of December 31, (dollars in thousands):

	2007		2006		2005
Specific allowance on impaired loans	$	2,198	$	6,443	$	2,809
General allowance on impaired loans		1,057		325		2,082
General allowance		14,459		12,712		15,302
Total allowance for loan losses	$	17,714	$	19,480	$	20,193

The following is a summary of the activity in the allowance for loan losses during the years ended December 31 (dollars in thousands):

	2007			2006			2005
Balance at January 1	$	19,480		$	20,193		$	16,991
Charge-offs
Consumer Loans		(715	)		(254	)		(118	)
Commercial Loans		(1,737	)		(4,435	)		(380	)
Real Estate (Residential and Commercial)		—			(32	)		(9	)
Total charge-offs		(2,452	)		(4,721	)		(507	)
Recoveries
Consumer Loans		297			1			—
Commercial Loans		237			340			2,681
Real Estate (Residential and Commercial)		—			—			558
Total recoveries		534			341			3,239
Net (charge-offs)/recoveries		(1,918	)		(4,380	)		2,732
Provision for loan losses		152			3,667			470
Balance at December 31	$	17,714		$	19,480		$	20,193

Although loans and leases increased by $143.2 million from December 31, 2006 to December 31, 2007, the allowance for loan losses decreased principally due to the full repayment of one previously impaired loan with a significant reserve against it. Also, changes in the composition of loans within the portfolio led to a higher relative percentage of loans that, based on NCB’s risk rating system, are determined to have a lower credit risk.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Included within the provision for loan losses for the twelve months ended December 31, 2006 is $2.4 million related to the reclassification of a provision for unfunded commitments. The reclassification was the result of a letter of credit that was drawn on during the third quarter of 2006. Simultaneously, $2.4 million of the loan balance relating to the draw of the letter of credit was charged-off and is reflected in the $4.4 million of Commercial Loan charge-offs for the twelve months ended December 31, 2006.

The following is a summary of the activity in the reserve for losses on unfunded commitments, which is included in other liabilities, during the years ended December 31 (dollars in thousands):

	2007		2006			2005
Balance at January 1	$	1,528	$	2,605		$	1,814
Provision (credit) for losses on unfunded commitments		488		(1,077	)		791
Balance at December 31	$	2,016	$	1,528		$	2,605

The $1.1 million credit for losses on unfunded commitments in 2006 includes the $2.4 million reclassification to the provision for loan losses (as discussed above) offset by other provisions for losses on unfunded commitments during 2006.

9.   TRANSACTIONS WITH RELATED PARTIES

Section 103 of the Act, as amended, requires that holders of Classes B and C stock elect twelve of the fifteen members of NCB’s Board of Directors and that they have actual cooperative experience. NCB voting stock is, by law, owned only by borrowers and entities eligible to borrow. The election rules require that candidates for the Board of Directors have experience as a director or senior officer of a cooperative organization that currently holds Class B or Class C stock. Therefore, it is not unusual for Board members to be directors or employees of NCB borrowers. NCB therefore has conflict of interest policies, which require, among other things, that a Board member be disassociated from decisions which pose a conflict of interest or the appearance of a conflict of interest. Loan requests from cooperatives with which members of the board may be affiliated are subject to the same eligibility and credit criteria, as well as the same loan terms and conditions, as all other loan requests.

In addition, NCB through its subsidiary, NCB, FSB, enters into transactions in the normal course of business with its directors, officers, employees, and their immediate family members.

For the years ended December 31, 2007 and December 31, 2006, activity related to loans and leases, including loans held for sale, to cooperatives affiliated with NCB’s Board of Directors and to officers, employees, and their immediate family members is as follows (dollars in thousands):

	January 1, 2007		Additions		Deductions			December 31, 2007
Outstanding balances	$	95,493	$	27,026	$	(50,375	)	$	72,144

	January 1, 2006		Additions		Deductions			December 31, 2006
Outstanding balances	$	118,224	$	48,703	$	(71,434	)	$	95,493

The majority of the above activity is related to cooperatives affiliated with NCB’s Board of Directors.

During 2007, 2006, and 2005, NCB recorded interest income of $6.5 million, $6.8 million, and $5.8 million, respectively, on loans to related parties.

As of December 31, 2007 and 2006, deposits from cooperatives affiliated with NCB’s Board of Directors and their immediate families were $86.2 million and $90.0 million, respectively. Certain officers and employees of NCB had deposits totaling $6.4 million and $6.9 million as of December 31, 2007 and 2006, respectively.

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NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

10.   PREMISES AND EQUIPMENT

Premises and equipment are included in other assets and consist of the following as of December 31 (dollars in thousands):

	2007			2006
Leasehold improvements	$	10,558		$	4,402
Furniture and equipment		5,984			5,368
Premises		3,878			2,140
Other		668			3,653
Total premises and equipment		21,088			15,563
Less: Accumulated depreciation		(5,957	)		(8,247	)
Total premises and equipment, net	$	15,131		$	7,316

Depreciation of premises and equipment included in non-interest expense for the years ended December 31, 2007, 2006, and 2005 totaled $2.0 million, $2.9 million, and $1.6 million, respectively.

In January 2006 NCB entered into a lease for office space in Arlington, Virginia (“Arlington Lease”). NCB vacated its offices at 1725 Eye Street in April 2007 and relocated the majority of its operational activities to Arlington, Virginia. Concurrently, NCB’s principal executive offices relocated to 601 Pennsylvania Avenue, NW, Washington, D.C.

Also, during the second quarter of 2007, NCB agreed to the termination of the lease for its offices at 1725 Eye Street. The termination agreement required the payment of $1.562 million by the Arlington landlord directly to the 1725 Eye Street landlord and the payment of $1.585 million by NCB to the 1725 Eye Street landlord. Through an amendment to the Arlington Lease, NCB simultaneously received reimbursement of its payment of $1.585 million from the Arlington landlord. In accordance with the FASB’s Technical Bulletin No. 88-1, the payments made to the 1725 Eye Street landlord were recognized as a lease termination cost in the consolidated statements of (loss) income and a lease incentive liability on the consolidated balance sheet. NCB recognized the remaining deferred rent liability associated with the vacated 1725 Eye Street premises that amounted to $1.9 million.

The $3.0 million decrease in Other premises and equipment relates to the build-out of NCB’s new operations center in Arlington, Virginia. These assets in 2006 along with additional assets from 2007 related to the build-out were reclassified to leasehold improvements during 2007. Within the $2.3 million change in accumulated depreciation is $1.4 million which relates to the acceleration of depreciation expense during 2006 of the fixed assets of NCB’s vacated Washington, D.C. office space.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

11.   OTHER ASSETS

At December 31, 2007 and 2006, other assets consisted of the following (dollars in thousands):

	2007		2006
Non-certificated interest-only receivables	$	29,932	$	33,053
Premises and equipment, net		15,131		7,316
Mortgage servicing rights		13,420		9,362
Accrued interest receivables		11,162		10,044
Valuation of letters of credit		9,961		6,914
Federal Home Loan Bank stock		9,274		8,421
Equity method investments		2,735		2,391
Loan related receivables		2,478		—
Prepaid assets		1,635		2,397
Derivative assets		982		2,210
Other		5,223		2,755
Total other assets	$	101,933	$	84,863

12.   LEASES

Minimum future rental payments on premises and office equipment under non-cancelable operating leases having remaining terms in excess of one year as of December 31, 2007 are as follows (dollars in thousands):

	Amount
2008	$	4,057
2009		4,048
2010		4,046
2011		3,692
2012		3,670
2013 and thereafter		32,580
Total payments	$	52,093

Rental expense on premises and office equipment in 2007, 2006, and 2005 was $3.9 million, $3.9 million, and $2.6 million, respectively. Included in 2006 rental expense was $0.8 million of expense related to the lease for office space in Arlington, Virginia where the majority of NCB’s operational activities were relocated in April 2007.

NCB is obligated to take additional space in the Arlington, Virginia office space totaling approximately 10,800 rentable square feet on dates selected by the landlord in accordance with the lease between September 2012 and September 2018.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

13.   DEPOSITS

Deposits as of December 31 are summarized as follows (dollars in thousands):

	2007					2006
			Average					Average
	Balance		Rate Paid			Balance		Rate Paid
Non-interest bearing demand deposits	$	41,591		—		$	39,596		—
Interest-bearing demand deposits		275,238		3.24	%		214,824		3.60	%
Savings deposits		6,637		0.75	%		6,493		1.26	%
Certificates of deposit		703,986		4.85	%		545,540		4.61	%
Total deposits	$	1,027,452		4.19	%	$	806,453		4.08	%

The aggregate amount of certificates of deposit with a minimum denomination of $100,000 was $549.4 million and $398.0 million at December 31, 2007 and 2006, respectively.

At December 31, the scheduled maturities of certificates of deposit with a minimum denomination of $100,000 were as follows (dollars in thousands):

	2007		2006
Within 3 months	$	138,179	$	77,901
Over 3 months through 6 months		116,228		34,974
Over 6 months through 12 months		95,969		53,124
Over 12 months		198,976		231,524
Total certificates of deposit	$	549,352	$	397,523

The cash flow to satisfy maturing certificates is derived from the sale of loans held for sale, loan maturities and issuance of new certificates of deposit. Maturing certificates are further supported by unused Federal Home Loan Bank borrowing capacity.

Deposit interest expense for the years ended December 31 is summarized as follows (dollars in thousands):

	2007		2006		2005
Interest-bearing demand deposits	$	10,750	$	7,985	$	5,718
Savings deposits		81		88		89
Certificates of deposit		32,479		22,192		15,229
Total deposit interest expense	$	43,310	$	30,265	$	21,036

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The remaining contractual maturities of certificates of deposit at December 31 are as follows (dollars in thousands):

	2007
	Less than		$100,000
	$100,000		and Greater		Total
2008	$	135,060	$	350,375	$	485,435
2009		13,938		86,044		99,982
2010		4,048		35,683		39,731
2011		1,379		39,968		41,347
2012		181		19,714		19,895
2013 and thereafter*		28		17,568		17,596
Total	$	154,634	$	549,352	$	703,986

	2006
	Less than		$100,000
	$100,000		and Greater		Total
2007	$	105,013	$	166,000	$	271,013
2008		31,678		90,065		121,743
2009		6,648		45,869		52,517
2010		3,440		34,217		37,657
2011		1,133		39,858		40,991
2012 and thereafter*		105		21,514		21,619
Total	$	148,017	$	397,523	$	545,540

* Includes discount on certificates of deposit

14.   SHORT-TERM BORROWINGS

The carrying amounts and weighted average rates for short-term borrowings as of December 31 are as follows (dollars in thousands):

	2007						2006
				Weighted						Weighted
				Average						Average
	Outstanding			Rate			Outstanding			Rate
Lines of Credit	$	111,000			5.46	%	$	156,000			5.91	%
FHLB advances		72,000			3.90	%		199,500			5.18	%
Debt issuance costs		(1,109	)					(827	)
Total short-term borrowings	$	181,891			4.84	%	$	354,673			5.50	%

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The average and maximum balance outstanding for short-term borrowings as of December 31 are as follows (dollars in thousands):

	2007				2006
	Average		Maximum		Average		Maximum
	Balance		Balance		Balance		Balance
	Outstanding		Outstanding		Outstanding		Outstanding
Lines of Credit	$	126,162	$	152,000	$	91,723	$	159,027
Commerical paper		—		—	$	57,468	$	167,121
FHLB advances	$	163,334	$	280,400	$	164,907	$	270,900

Revolving Credit Facilities

As of December 31, 2007, NCB had a $350.0 million committed revolving line of credit of which $111.0 million was outstanding. This line of credit matures on April 29, 2011. An additional $5.4 million was issued in letters of credit thereunder as of December 31, 2007. Therefore, as of December 31, 2007, $233.6 million was available under the revolving line of credit facility. During 2007, NCB entered into two separate amendments to its revolving credit agreement principally to adjust the return on assets and fixed charge coverage ratio covenants for the final two quarters of 2007 and for all of 2008. The second amendment also includes an adjustment to the pricing, so that for London Interbank Offered Rate (LIBOR) loans, during 2008 and the first quarter of 2009, NCB will pay a minimum of LIBOR plus 0.75%. Immediately prior to the December 31, 2007 effective date of the second amendment, the applicable interest rate for LIBOR loans had been LIBOR plus 0.55%. NCB paid $0.7 million in fees in connection with these amendments.

In addition, NCB had $20.0 million of uncommitted bid lines (borrowing facilities in which no commitment fee is paid and where the other party is not committed to lend to NCB) available at December 31, 2007 and December 31, 2006. None of the bid lines were outstanding as of December 31, 2007 and December 31, 2006.

Interest expense from borrowings under the revolving line of credit facilities was $8.0 million, $6.2 million and $1.1 million, in 2007, 2006 and 2005, respectively.

Borrowing rates under the revolving credit facility are based on the prime rate, federal funds rate or the LIBOR and vary with the amount of borrowings outstanding. In addition, a change in agency ratings could also impact borrowing rates. As of December 31, 2007, commitment fees paid for the line of credit were 0.20% of the unused commitment balance. Total commitment fees paid for revolving credit facilities were $0.4 million, $0.6 million, and $0.9 million, in 2007, 2006 and 2005, respectively. All borrowings under the facility, which are outstanding at expiration of the facility, are due at that time. As part of the December 31, 2007 amendment described above, the commitment fee was increased, for 2008 and the first quarter of 2009, to a minimum of 0.25% of the unused commitment balance.

As of December 31, 2007, NCB was subject to several restrictive covenants under the revolving line of credit agreements, which together with the amendments thereto are filed as exhibits to the 2007 10-K.

Other Short-term Borrowings

NCB, through its subsidiary NCB, FSB, has a pledge agreement with the Federal Home Loan Bank of Cincinnati, Ohio (FHLB) requiring advances to be secured by eligible mortgages and securities with a principal balance of 125% — 400% of such advances. As of December 31, 2007 and 2006, respectively, the principal balance of these eligible mortgages and securities totaled $451.8 million and $516.3 million. The FHLB facility was $298.3 million at December 31, 2007 and $355.5 million at December 31, 2006. Outstanding advances at December 31, 2007 and 2006 were $122.0 million and $249.5 million, respectively, of which $50.0 million were

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NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

long-term advances for 2007 and 2006. NCB also has letter of credit availability in the FHLB facility of which $15.9 million and $8.6 million was issued as of December 31, 2007 and 2006, respectively.

Interest expense on advances for the years ended December 31, 2007, 2006 and 2005 was $11.3 million, $9.7 million and $5.4 million, respectively, of which $2.8 million and $1.4 million was for long-term advances at December 31, 2007 and 2006, respectively. There were no long-term advances at December 31, 2005. Interest expense on commercial paper borrowings for the years ended December 31, 2006 and 2005 was $2.8 million and $4.8 million, respectively. NCB terminated its commercial paper program during 2006.

In an effort to reduce NCB’s cost of funds, NCB developed a program under which it borrows, on a short-term basis, from certain customers. At December 31, 2007 and 2006, there were no short-term borrowings outstanding under this program.

15.   LONG-TERM DEBT

The carrying amounts for long-term debt as of December 31, are as follows (dollars in thousands):

	2007			2006
Prudential Long-Term Private Placements
5.62% fixed rate debt due December 2009	$	55,000		$	55,000
5.60% fixed rate debt due December 2010		50,000			50,000
Total Prudential Long-Term Private Placements		105,000			105,000
Other Long-Term Private Placements
5.52% fixed rate debt due January 2009		50,000			50,000
Total Long-Term Private Placement Notes		50,000			50,000
Medium Term Notes
5.67% fixed rate debt due May 2013, callable May 2008		15,000			15,000
Total Medium Term Notes		15,000			15,000
FHLB Long-Term Advances
5.62% fixed rate due June 2009		20,000			20,000
5.80% fixed rate due June 2011		10,000			10,000
5.63 fixed rate due July 2011		20,000			20,000
Total FHLB Long-Term Advances		50,000			50,000
SFAS No. 133 valuation		907			(1,835	)
Net debt issuance costs		(613	)		(392	)
Total Long Term Debt	$	220,294		$	217,773

As of December 31, 2007, the long-term advances from the FHLB constitute the only long-term debt that is secured, and except to the extent of such security, none of the long-term debt has priority over the other. In addition as of December 31, 2007, none of the long-term debt is convertible and there are no contingencies on the payments of principal and interest.

NCB entered into master shelf agreements with The Prudential Insurance Company of America and related entities (collectively “Prudential”) in 1999 and 2001, which allowed NCB to issue private placement senior note debt. NCB issued long-term, fixed rate debt on this facility in 1999, 2001, 2005, and 2006. NCB issued $50.0 million in December 2005 at a fixed rate of 5.60% and this tranche will mature in December 2010. In

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 2006, NCB issued $55.0 million at a fixed rate of 5.62% that will mature in December 2009. All of these notes require semi-annual payments of interest only.

NCB entered into a note purchase agreement with Metropolitan Life Insurance Company and related entities (collectively “MetLife”) in January 2003 to issue $50.0 million in private placement note debt. The debt was issued at a fixed rate of 5.52% and matures in January 2009. All of these notes require semi-annual payments of interest only.

NCB has a shelf agreement in which it can issue Medium Term Notes through various agents. These notes can be issued with either a fixed or floating rate with any maturity within the shelf agreement. In May 2003 NCB issued $15.0 million of fixed rate notes through Wachovia Securities, Inc. with a fixed rate of 5.67% with a semi-annual call and maturing in May 2013. The $15.0 million fixed rate notes require semi-annual payments of interest only. On March 13, 2008, NCB notified the trustee of NCB’s election to redeem all outstanding Medium Term Notes on May 15, 2008.

As of December 31, 2007 and 2006 NCB had entered into a series of interest rate swap agreements, which have a combined notional amount of $100.0 million. The effect of the agreements is to convert $100.0 million of the long-term debt from a weighted average fixed rate of 5.60% to a floating rate based on the three-month LIBOR rate plus a spread, which repriced throughout the year. At December 31, 2007, the weighted average three-month LIBOR on the swaps was 4.95% with an effective weighted average spread of 1.09%.

As of December 31, 2007 and 2006, the notional amount by maturity date is as follows (dollars in thousands):

Notional Amount		Maturity Date	Libor Index
$	65,000	2009		Three month
	20,000	2010		Three month
	15,000	2013		Three month	*
$	100,000

* Next call date is May 2008

On December 31, 2007, NCB amended its master shelf agreement with Prudential and its senior note agreement with MetLife principally to adjust the fixed charge coverage ratio covenants for 2008. The amendment with MetLife also increased the cap on the amount of paid-in-capital NCB may invest in NCB Financial Corporation, the parent of NCB, FSB to 35%. NCB has since, on February 25, 2008, made a similar amendment with respect to paid-in-capital to the senior note agreement with Prudential, increasing the same cap to 35%. NCB paid $0.4 million in fees in connection with these amendments.

16.   SUBORDINATED DEBT

On December 31, 1981, NCB issued unsecured subordinated debt to the U.S. Treasury (“Treasury”) in the amount of $184.3 million as provided in the Act, as amended, in the form of Class A notes in full redemption of the Class A Preferred stock previously owned by the Government.

In November 2003 NCB entered into a definitive Amended and Restated Financing Agreement (the “Amended Financing Agreement”), with the Treasury relating to repayment of and interest payable on the Class A notes maturing in 2020 that were originally issued by NCB to Treasury on December 31, 1981.

In December 2003, NCB, pursuant to the Amended Financing Agreement, made a $53.6 million payment to Treasury to prepay its 91-day renewing Class A note. Also on that date, NCB replaced the remaining three Class A

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notes outstanding, in the aggregate amount of $129.0 million, by issuing five new replacement Class A notes of renewing maturities.

At maturity, each note is replaced with a reissued note for the same term, with an interest rate based upon the yield on Treasury securities of comparable maturities, as of the date of repricing, plus 100 basis points, subject to the final maturity date of October 31, 2020, on which date all remaining balances under the notes are due.

During 2007, $2.5 million of the subordinated debt was paid down pursuant to the Amended Financing Agreement. During 2008, pursuant to the same agreement, $2.5 million of the subordinated debt will be paid down from the tranche repricing on December 15, 2008. The interest payments for each tranche are determined in accordance with the following schedule, which also includes the carrying amounts of the subordinated debt at December 31, (dollars in thousands):

2007
				Next Repricing		Carrying
Index	Rate			Date		Amount
91 - day Treasury rate		3.88	%		17-Mar-08	$	39,310
2 - year Treasury rate		4.31	%		15-Dec-09		15,718
3 - year Treasury rate		5.63	%		15-Dec-09		25,064
7 - year Treasury rate		4.79	%		15-Dec-10		32,847
10 - year Treasury rate		5.28	%		15-Dec-13		6,050
							118,989
Debt issuance costs							(754	)
Total						$	118,235

2006
				Next Repricing		Carrying
Index	Rate			Date		Amount
91 - day Treasury rate		5.96	%		15-Mar-07	$	39,310
2 - year Treasury rate		5.37	%		15-Dec-07		18,218
3 - year Treasury rate		5.63	%		15-Dec-09		25,064
7 - year Treasury rate		4.79	%		15-Dec-10		32,847
10 - year Treasury rate		5.28	%		15-Dec-13		6,050
							121,489
Debt issuance costs							(813	)
Total						$	120,676

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table shows, pursuant to the Amended Financing Agreement, the amortization schedule of the five Class A notes as of December 31, 2007 (dollars in thousands):

Debt Amortization
					Periodic
Year	Beginning Balance		Annual Amortization		Amortization		Ending Balance
2007	$	121,489	$	2,500	$	—	$	118,989
2008		118,989		2,500		—		116,489
2009		116,489		2,500		—		113,989
2010		113,989		—		23,989		90,000
2011		90,000		5,000		—		85,000
2012		85,000		5,500		—		79,500
2013		79,500		6,050		—		73,450
2014		73,450		6,655		—		66,795
2015		66,795		7,320		—		59,475
2016		59,475		8,053		—		51,422
2017		51,422		8,858		—		42,564
2018		42,564		9,744		—		32,820
2019		32,820		10,718		—		22,102
2020		22,102		—		22,102		—
Total			$	75,398	$	46,091

The Class A notes and all related payments are subordinate to any secured and unsecured notes and debentures thereafter issued by NCB, but the notes and subordinated debt issued by NCB, that by its terms are junior to the Class A notes, have first preference with respect to NCB’s assets over all classes of stock issued by NCB. NCB currently cannot pay any dividend on any class of stock at a rate greater than the statutory interest rate payable on the Class A notes (See Note 22).

The Act also states that the amount of NCB borrowings, which may be outstanding at any time, shall not exceed 10 times the paid-in capital and surplus that, as defined by the Act, includes the subordinated debt.

17.   JUNIOR SUBORDINATED DEBT

In December 2003, NCB sold $50.0 million of trust preferred securities through a Delaware statutory business trust, NCB Capital Trust I (“Trust”). NCB owns all of the common securities of this Trust. The Trust has no independent assets or operations and exists for the sole purpose of issuing preferred securities and investing the proceeds thereof in an equivalent amount of junior subordinated debentures issued by NCB. The junior subordinated debentures, which are the sole assets of the Trust, are unsecured obligations of NCB, and are subordinate and junior in right of payment to all present and future senior and subordinated indebtedness and certain other financial obligations of NCB. This debt is based on the 3-month LIBOR rate plus 290 bps and the rate resets every 3 months.

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The following is a schedule of outstanding Junior Subordinated debt at December 31, 2007 and 2006

(dollars in thousands):

						Carrying
						Amount
Index	Index Rate			Maturity Date		2007
3-month LIBOR		5.24	%		07-Jan-34	$	51,547
Debt issuance costs							(867	)
						$	50,680

				Carrying
				Amount
				2006
3-month LIBOR	5.37	%	07-Jan-34	$	51,547
Debt issuance costs					(900	)
				$	50,647

18.   COMMON STOCK AND MEMBERS’ EQUITY

NCB’s common stock consists of Class B stock owned by its borrowers and Class C stock owned by entities eligible to borrow from NCB.

The following relates to common stock at December 31:

	2007				2006
	Class B		Class C		Class B		Class C
Par value per share	$	100	$	100	$	100	$	100
Shares authorized		1,900,000		300,000		1,800,000		300,000
Shares issued and outstanding		1,727,541		251,371		1,627,361		244,938

The changes in Class B and C common stock are described below (dollars in thousands):

	Class B			Class C			Total
Balance, December 31, 2004	$	137,716		$	22,759		$	160,475
2004 patronage dividends distributed in common stock		11,281			897			12,178
Cancellation of stock		(1,575	)		(306	)		(1,881	)
Adjustment to prior year dividends		62			34			96
Balance, December 31, 2005		147,484			23,384			170,868
2005 patronage dividends distributed in common stock		15,873			1,497			17,370
Cancellation of stock		(621	)		(387	)		(1,008	)
Balance, December 31, 2006		162,736			24,494			187,230
2006 patronage dividends distributed in common stock		10,178			647			10,825
Cancellation of stock		(160	)		(4	)		(164	)
Balance, December 31, 2007	$	172,754		$	25,137		$	197,891

Members’ equity currently includes the two classes of common stock, allocated and unallocated retained earnings, and accumulated other comprehensive income. Allocated retained earnings have been designated for patronage dividend distribution, whereas unallocated retained earnings have not been designated.

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Patronage-based borrowers from NCB or NCB, FSB under section 108 of the Act are required to own Class B stock in NCB. Stock owned by a borrower may be cancelled by NCB, at NCB’s sole discretion, in case of certain events, including default.

19.   REGULATORY CAPITAL AND RETAINED EARNINGS OF NCB, FSB

In connection with the insurance of deposit accounts, NCB, FSB, a federally chartered, federally insured savings bank, is required to maintain minimum amounts of regulatory capital. If NCB, FSB fails to meet its minimum required capital, the appropriate regulatory authorities may take such actions, as they deem appropriate, to protect the Deposit Insurance Fund (DIF), NCB, FSB, and its depositors and investors. Such actions may include various operating restrictions, limitations on liability growth, limitations on deposit account interest rates and investment restrictions.

NCB, FSB’s capital exceeded the minimum capital requirements at December 31, 2007 and 2006. The following table summarizes NCB, FSB’s capital and pro-forma minimum capital requirements (ratios and dollars) at December 31, 2007 and 2006 (dollars in thousands):

											To be Well
											Capitalized
						For Capital Adequacy					Under Prompt Corrective
	Actual					Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2007:
Tangible Capital (to tangible assets)	$	127,684		9.86	%	$	19,425		1.50	%		N/A		N/A
Total Risk-Based Capital (to-risk-weighted assets)		136,659		12.46	%		87,721		8.00	%	$	109,651		10.00	%
Tier I Risk-Based Capital (to-risk-weighted assets)		127,194		11.60	%		N/A		N/A			65,791		6.00	%
Core Capital (to adjusted tangible assets)		127,684		9.86	%		51,800		4.00	%		64,750		5.00	%
As of December 31, 2006:
Tangible Capital (to tangible assets)	$	130,128		10.74	%	$	18,173		1.50	%		N/A		N/A
Total Risk-Based Capital (to-risk-weighted assets)		134,892		14.09	%	$	76,599		8.00	%	$	95,749		10.00	%
Tier I Risk-Based Capital (to-risk-weighted assets)		129,619		13.54	%		N/A		N/A			57,450		6.00	%
Core Capital (to adjusted tangible assets)		130,128		10.74	%	$	48,462		4.00	%		60,577		5.00	%

The Office of Thrift Supervision regulations impose limitations upon all capital distributions by a savings institution, including cash dividends. NCB, FSB must provide prior notice to the Office of Thrift Supervision of the capital distribution. If NCB, FSB’s capital were ever to fall below its regulatory requirements or the Office of Thrift Supervision notified NCB, FSB that it was in need of increased supervision, its ability to make capital distributions could be restricted. In addition, the Office of Thrift Supervision could prohibit a proposed capital distribution that would otherwise be permitted by the regulation, if the agency determines that such distribution would constitute an unsafe or unsound practice. At December 31, 2007, no such limitations or restrictions existed.

20.   EMPLOYEE BENEFITS

Substantially all employees are covered by a non-contributory, defined contribution retirement plan. NCB contributes 6% of each employee’s salary after one year of employment. Total expense for the retirement plan for 2007, 2006, and 2005 was $1.0 million, $0.9 million, and $0.9 million, respectively.

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NCB maintains an employee thrift plan organized under Internal Revenue Code Section 401(k) and matches up to 6% of each participant’s salary for every 1% the employee contributes. Participants receive vesting credit (non-forfeitable rights to the money in their 401(k) account) based on their number of years of employment with NCB. Contributions and expenses for 2007, 2006, and 2005 were $1.2 million, $0.9 million and $0.8 million, respectively.

Participant matching contributions and earnings for the defined contribution retirement plan and the thrift plan are vested in accordance with the following schedule:

Years of Service	Vesting
less than 2 years		0	%
2		20	%
3		50	%
4		70	%
5		85	%
6		100	%

21.   INCOME TAXES

Each year under the Act, NCB must declare tax-deductible patronage dividends in the form of cash, stock, or allocated surplus, which effectively reduce NCB’s federal income tax liability. Patrons of NCB receiving such patronage dividends consent to include them in their taxable income. Because of NCB’s 2007 taxable net loss, there will be no patronage dividend payment during 2008.

The (benefit) provision for income taxes for the years ended December 31, consists of the following (dollars in thousands):

	2007			2006			2005
Current tax expense
Federal	$	(274	)	$	495		$	884
State and local		(135	)		869			1,148
Total current		(409	)		1,364			2,032
Deferred tax (benefit) provision
Federal		(21	)		(197	)		(16	)
State and local		(234	)		247			126
Total deferred		(255	)		50			110
(Benefit) provision for income tax expense	$	(664	)	$	1,414		$	2,142

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to pretax income as a result of the following differences for the years ended December 31 (dollars in thousands):

	2007			2006			2005
Statutory U.S. tax rate	$	(386	)	$	7,085		$	9,229
Patronage dividends		365			(6,982	)		(8,342	)
State and local taxes		(369	)		1,115			1,273
Other		(274	)		196			(18	)
(Benefit) provision for income tax expense	$	(664	)	$	1,414		$	2,142

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Deferred tax assets net of liabilities, included in other assets, are composed of the following at December 31, (dollars in thousands):

	2007			2006
Allowance for loan losses	$	486		$	356
Deferred commitment fees		264			288
Mark to market adjustments		201			333
Net operating loss carryforward		271			—
Other		128			107
Gross deferred tax assets		1,350			1,084
Mortgage servicing rights		(306	)		(300	)
Federal Home Loan Bank stock dividends		(571	)		(573	)
Gross deferred tax liabilities		(877	)		(873	)
Net deferred tax asset	$	473		$	211

Management has concluded that it is more likely than not that all deferred tax assets will be realized based on NCB’s history of earnings and management’s expectations that NCB will generate sufficient taxable income in future years to offset the reversal of temporary differences.

22.   INCOME AVAILABLE FOR DIVIDENDS ON STOCK

Under existing senior debt agreements, the aggregate amount of cash dividends on Class C stock, together with patronage dividends payable in cash, is limited to the sum of $15,000,000 plus 50% of NCB’s consolidated adjusted net income accumulation (or minus 100% of NCB’s consolidated adjusted net income in the case of a deficit) from January 1, 1992 through the end of the most current fiscal year ended. If the aggregate amount of cash dividends and patronage dividends payable in cash exceeds the limitation previously described, total patronage dividends payable in cash and cash dividends payable on any calendar year may not exceed 20% of NCB’s taxable income for such calendar year. At December 31, 2007, NCB was not limited by the restrictions detailed above and thus the amount available for dividends on stock was approximately $129.2 million.

Notwithstanding the above restriction, NCB is prohibited by law from paying dividends on its Class C stock at a rate greater than the statutory interest rate payable on the subordinated Class A notes. Those rates for 2007, 2006, and 2005 are 5.32%, 4.88% and 4.03%, respectively. Consequently, the amounts available for payment on the Class C stock for 2007, 2006, and 2005 are $1.3 million, $1.2 million, and $0.9 million, respectively. In addition, under the Act and its bylaws, NCB may not pay dividends on its Class B stock.

23.   FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

NCB is a party to financial instruments with off-balance sheet risk. These financial instruments may include commitments to extend credit and standby letters of credit and involve, to varying degrees, elements of credit and interest rate risk in excess of the notional amount recognized in the balance sheets. The contract amounts of those instruments reflect the exposure that NCB has in particular classes of financial instruments. Unless noted otherwise, NCB does not require collateral or other security to support off-balance sheet financial instruments.

NCB’s exposure to credit loss in the event of nonperformance by the other parties to the commitments to extend credit and standby letters of credit issued is represented by the contract or notional amounts of those instruments. NCB uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. For interest rate swap transactions, forward commitments, and financial futures contracts, the contract or notional amounts do not represent exposure to credit loss.

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In the normal course of business, NCB makes loan commitments to extend credit to customers 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 completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. NCB evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by NCB upon extension of credit, is based on management’s credit evaluation of the customer. Collateral varies, but may include accounts receivable, inventory, property, plant and equipment, and residential and income-producing commercial properties.

NCB also makes rate lock commitments to extend credit to borrowers for the origination of Single-family Residential, Share, Cooperative and Commercial Real Estate Loans. In the case of Single-family Residential and Share Loans, the rate lock commitments generally extend for a 30-day period. Some of these commitments will expire due to the transactions not being completed within 30 days. For Cooperative and Commercial Real Estate Loans, the rate lock commitments can extend for 12 months or longer, but there is generally little to no fall out prior to closing.

Standby letters of credit can be either financial or performance-based. Financial standby letters of credit obligate NCB to disburse funds to a third party if the customer fails to repay an outstanding loan or debt instrument. Performance letters of credit obligate NCB to disburse funds if the customer fails to perform a contractual obligation, including obligations of a non-financial nature.

Issuance fees associated with the standby letters of credit range from 0.5% to 4.5% of the commitment amount. The standby letters of credit mature throughout 2008 to 2016.

The contract or commitment amounts and the respective estimated fair value of NCB’s commitments to extend credit and standby letters of credit at December 31, are as follows (dollars in thousands):

	Contract or				Estimated
	Commitment Amounts				Fair Value
	2007		2006		2007			2006
Financial instruments whose contract amounts represent credit risk:
Undrawn commitments to extend credit	$	879,718	$	809,869	$	4,399		$	4,049
Rate lock commitments to extend credit:
Single-family Residential and Share Loans	$	5,912	$	5,153	$	(32	)	$	11
Cooperative and Commercial Real Estate Loans	$	38,055	$	107,306	$	(546	)	$	(632	)
Standby letters of credit	$	280,959	$	219,456	$	13,165		$	5,837

In November 2002, the Financial Accounting Standards Board issued Interpretation No. 45 (“FIN 45”), “Guarantor’s Accounting and Disclosure Requirements for Guarantors, including Indirect Guarantees of Indebtedness of Others: an Interpretation of FASB Statement No. 5, 57 and 107 and rescission of FASB Interpretation No. 34.” In accordance with FIN 45, a liability of $9.8 million was recorded in Other liabilities and a correlating asset of $10.0 million was recorded in Other assets in the Consolidated Balance Sheet at December 31, 2007. The corresponding amount at December 31, 2006 was $6.8 million in Other liabilities and $6.9 million in Other Assets.

NCB reserved $2.0 million and $1.5 million as of December 31, 2007 and 2006 to cover its loss exposure to unfunded commitments.

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24.   DERIVATIVE FINANCIAL INSTRUMENTS

NCB uses derivative financial instruments in the normal course of business for the purpose of reducing its exposure to fluctuations in interest rates. These instruments include interest rate swaps, financial futures contracts, and forward loan sales commitments. Existing NCB policies prohibit the use of derivative financial instruments for any purpose other than managing interest rate risk for NCB or any of its customers.

NCB enters into interest rate swaps and futures contracts and forward loan sales commitments to offset changes in fair value associated with fixed rate warehouse loans, rate lock commitments and debt due to changes in benchmark interest rates. Some of these interest rate swaps and futures contracts are designated derivatives hedging commitments in a fair value hedging relationship. NCB may use additional derivative instruments in the future.

Operating results related to the activities entered into to hedge (both economically and for accounting purposes) changes in fair value attributable to changes in benchmark interest rates related to loans held for sale, rate lock commitments, designated and undesignated derivatives and other non-hedging derivatives are summarized below in the accompanying consolidated statements of (loss) income for the years ended December 31 (dollars in thousands):

	2007			2006
Unrealized (loss) on designated derivatives recognized(1)	$	(500	)	$	(1,987	)
Increase in value of warehouse loans(2)		575			2,065
Net hedge ineffectiveness(3)		75			78
Unrealized (loss) gain on undesignated loan commitments recognized(4)		(76	)		94
(Loss) gain on undesignated derivatives recognized(5)		(356	)		119
Net (loss) gain on undesignated derivatives		(432	)		213
Unrealized (loss) gain on non-hedging derivatives(6)		(1,111	)		484
Net SFAS 133 adjustment	$	(1,468	)	$	775

(1)	Includes the results of derivatives, which are designated and accounted for as hedges. It quantifies the change in fair value of the swap over the period presented. Excludes derivatives hedging debt, accounted for using the shortcut method under SFAS 133. Net hedge ineffectiveness is not impacted by shortcut method accounting.
(2)	Quantifies the change in fair value of the loans (i.e. resulting from the change in the benchmark rate over the period presented).
(3)	Summarizes the net ineffectiveness that results from the extent to which the change in fair value of the hedged item is not offset by the change in fair value of the derivative.
(4)	Quantifies the change in value of the loan commitment from the date the borrower entered into the loan commitment or from the beginning of the period, whichever is later.
(5)	Quantifies the change in value of the swap or forward sales commitment over the period presented.
(6)	Represents the changes in value of other derivative instruments that do not qualify for hedge accounting.

Interest rate swaps are executed to manage the interest rate risk associated with specific assets or liabilities. An interest rate swap agreement commits each party to make periodic interest payments to the other based on an agreed-upon fixed rate or floating rate index. There are no exchanges of principal amounts. Entering into an interest rate swap agreement involves the risk of default by counterparties and interest rate risk resulting from unmatched positions. The amounts potentially subject to credit risk are significantly smaller than the notional amounts of the agreements. NCB is exposed to credit loss in the event of nonperformance by its counterparties in the aggregate amount of $0.1 million at December 31, 2007. NCB does not anticipate nonperformance by any of its

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

counterparties. Income or expense from interest rate swaps is treated as an adjustment to interest expense/income on the hedged asset or liability.

Financial futures are contracts for delayed delivery of specific securities at a specified future date and at a specified price or yield. NCB purchases/sells these contracts to economically hedge the interest rate risk associated with originating mortgage loans that will be held for sale. NCB has minimal credit risk exposure on these financial instruments since changes in market value of financial futures are settled in cash on the following business day, and payment is guaranteed by the clearinghouse. For the periods presented, futures contracts have served as economic hedges. These futures contracts have not been designated as accounting hedges under FAS 133, as amended.

Forward loan sales commitments lock in the prices at which, Single-family Residential, Share, Multifamily and Cooperative Loans will be sold to investors. Management limits the variability of a major portion of the change in fair value of these loans held for sale by employing forward loan sale commitments to minimize the interest rate and pricing risks associated with the origination and sale of such loans held for sale. NCB also participates in a cash window program with Fannie Mae to forward sell Cooperative, Residential Real Estate and Multifamily Loans. To the extent that a loan is ultimately granted and the borrower ultimately accepts the terms of the loan, these rate lock commitments expose NCB to variability in their fair value due to changes in interest rates. To mitigate the effect of this interest rate risk, NCB enters into offsetting forward loan sale commitments. Both the rate lock commitments and the forward loan sale commitments are undesignated derivatives, and accordingly are marked to market through earnings.

The estimated fair values of NCB’s financial futures contracts, interest rate swaps and forward sales commitments are recorded as a component of other assets and other liabilities on the consolidated balance sheet.

The contract or notional amounts and the respective estimated fair value of NCB’s financial futures contracts, interest rate swaps and forward sales commitments at December 31, are as follows (dollars in thousands):

	Notional Amounts				Fair Value
	2007		2006		2007			2006
Financial futures contracts	$	6,400	$	17,500	$	17		$	295
Interest rate swap agreements	$	170,190	$	376,784	$	(1,981	)	$	(3,049	)
Forward sales commitments
Single-family Residential and Share Loans	$	15,010	$	13,025	$	(102	)	$	23
Cooperative and Multifamily Loans	$	25,630	$	26,500	$	(78	)	$	(188	)

25.   FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS No. 107, “Disclosure about Fair Value of Financial Instruments,” requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. In cases where quoted market prices are not available for identical or comparable instruments, fair values are based on estimates using the present value of estimated cash flows using a discount rate commensurate with the risks involved or other valuation techniques. The resultant fair values are affected by the assumptions used, including the discount rate and estimates as to the amounts and timing of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of year-end or that will be realized in the future.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value:

Cash and cash equivalents — The carrying amount approximates fair value.

Restricted Cash — The carrying amount approximates fair value.

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Investments — Fair values are based on quoted market prices for identical or comparable securities. Fair values for investments that do not have a quoted price for identical or comparable securities are estimated by discounting the future cash flows using current market investor discount rates for similar securities.

Non-certificated interest-only receivables — The fair value of interest-only receivables is estimated by discounting the future cash flows using current market investor discount rates for similar securities.

Servicing Assets — The fair value of servicing assets is based on discounted future net cash flows received for servicing mortgages at current market rates offered by purchasers of mortgage servicing rights.

Loans and lease financing — The fair market value of adjustable rate loans is estimated by discounting the future cash flows assuming that the loans mature on the next repricing date using the rates at which similar loans would be made to borrowers with similar credit quality and the same stated maturities. The fair value of fixed rate commercial and other loans and leases, excluding loans held for sale, is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit quality and for the same remaining maturities.

Loans held-for-sale and rate lock commitments — The fair values are based on commitments on hand from investors or prevailing market rates. The fair value of loans held for sale is based on market prices for similar loans sold in the secondary market adjusted for differences in loan characteristics. The contract amount and fair value of the rate lock commitments are the same.

Interest rate swap agreements — The fair value of interest rate swaps is the estimated amount that NCB would receive or pay to terminate the swap agreements at the reporting date, taking into account current interest rates and the current creditworthiness of the swap counter parties.

Financial futures and forward contracts — The fair value of interest rate futures is based on the closing price of the Chicago Board of Trade at December 31, 2007 and 2006. The fair value of forward commitments is based on current market prices for similar contracts.

Accrued interest receivable and accrued interest payable — The carrying value of accrued interest payable is deemed to approximate fair value.

Deposit liabilities — The fair value of demand deposits, savings accounts, and certain money market deposits is determined using estimates of the value of the customer relationship provided by the Office of Thrift Supervision. The fair value of fixed-maturity certificates of deposit is estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates of deposits of similar remaining maturities.

Short-term and other borrowings — The carrying amounts approximate fair value.

Long-term debt — The fair value of long-term debt is estimated by discounting the future cash flows using the current borrowing rates at which similar types of borrowing arrangements with the same remaining maturities could be obtained by NCB.

Subordinated debt — The fair value of subordinated debt is estimated by discounting the future cash flows using the current borrowing rates at which similar types of borrowing arrangements with the same remaining maturities could be obtained by NCB.

Junior subordinated debt — The fair value of junior subordinated debt is estimated by discounting the future cash flows using the current borrowing rates at which similar types of borrowing arrangements with the same remaining maturities could be obtained by NCB.

Commitments to extend credit, standby letters of credit, and financial guarantees written — The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counter parties. For fixed-

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

rate loan commitments, fair value also considers the difference between current levels of interest rates and committed rates. The fair value of guarantees and letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the customers at the reporting date. The estimated fair values of NCB’s financial instruments as of December 31 are as follows (dollars in thousands):

	2007						2006
	Carrying						Carrying
	Amount			Fair Value			Amount			Fair Value
Financial Assets:
Cash and cash equivalents	$	63,724		$	63,724		$	47,756		$	47,756
Restricted cash		—			—			5,398			5,398
Investment securities
Available-for-sale		105,166			105,166			85,708			85,708
Held-to-maturity		417			431			1,647			1,910
Non-certificated interest-only receivables		29,932			29,932			33,053			33,053
Servicing assets		13,420			18,246			9,362			12,059
Loans held for sale		90,949			92,708			242,847			250,038
Loans and lease financing, net		1,506,244			1,527,295			1,361,258			1,356,599
Interest rate swap agreements		(1,981	)		(1,981	)		(3,049	)		(3,049	)
Financial futures		17			17			295			295
Forward sale commitments		(180	)		(180	)		(165	)		(165	)
Accrued interest receivables		11,162			11,162			10,044			10,044
Financial Liabilities:
Deposits		1,027,452			1,020,396			806,453			787,101
Short-term borrowings		181,891			181,891			354,673			354,673
Long-term debt		220,294			219,035			217,773			216,691
Subordinated debt		118,235			103,103			120,676			118,883
Junior subordinated debt		50,680			50,390			50,647			50,647
Accrued interest payable		7,232			7,232			3,971			3,971

	Contract or					Contract or
	Commitment		Estimated			Commitment		Estimated
Off-Balance Sheet Financial Instruments:	Amounts		Fair Value			Amounts		Fair Value
Undrawn commitments to extend credit	$	879,718	$	4,399		$	810,759	$	3,851
Standby letters of credit	$	280,959	$	13,165		$	219,456	$	5,837
Rate lock commitments to extend credit	$	43,967	$	(578	)	$	112,459	$	(621	)

26.   SEGMENT REPORTING

NCB’s reportable segments are strategic business units that provide diverse products and services within the financial services industry. NCB has five reportable segments: Commercial Lending, Real Estate Lending, Warehouse Lending, Retail and Consumer Lending, and Other. The Commercial Lending segment provides financial services to cooperative and member-owned businesses. The Real Estate Lending segment originates and services multi-family cooperative real estate and community association loans (included in Commercial Loans in Note 6) nationally, with a concentration in New York City. The Warehouse Lending segment originates Residential and Commercial Real Estate Loans for sale in the secondary market. The Retail and Consumer Lending segment provides traditional banking services such as lending and deposit gathering to retail, corporate and commercial

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

customers. The Other segment consists of NCB’s unallocated administrative income and expense, and net interest income from investments and corporate debt after allocations to segments. The Other segment assets consist mostly of unallocated cash and cash equivalents, investment securities, Federal Home Loan Bank stock, premises and equipment and equity investment securities. NCB evaluates segment performance based on earnings before taxes. The accounting policies of the segments are substantially the same as those described in the summary of significant accounting policies.

The following is the segment reporting for the years ended December 31, 2007, 2006 and 2005 (dollars in thousands):

				Real					Retail and
	Commercial			Estate		Warehouse			Consumer					NCB
2007	Lending			Lending		Lending			Lending		Other			Consolidated
Net interest income:
Interest income	$	40,378		$	36,496	$	23,690		$	29,579	$	5,596		$	135,739
Interest expense		22,110			20,487		18,399			19,437		4,688			85,121
Net interest income		18,268			16,009		5,291			10,142		908			50,618
Provision (benefit) for loan losses		(1,488	)		936		—			704		—			152
Non-interest income		4,331			4,478		(396	)		1,110		2,446			11,969
Non-interest expense:
Direct expense		6,455			3,205		4,837			3,197		24,067			41,761
Overhead and support		8,383			4,006		5,371			4,050		—			21,810
Total non-interest expense		14,838			7,211		10,208			7,247		24,067			63,571
Income (loss) before taxes	$	9,249		$	12,340	$	(5,313	)	$	3,301	$	(20,713	)	$	(1,136	)
Total average assets	$	462,938		$	479,066	$	370,052		$	493,498	$	145,042		$	1,950,596
Total assets	$	493,998		$	524,318	$	156,270		$	511,532	$	182,315		$	1,868,433

			Real					Retail
	Commercial		Estate			Warehouse		Consumer						NCB
2006	Lending		Lending			Lending		Lending			Other			Consolidated
Net interest income:
Interest income	$	34,735	$	30,610		$	21,176	$	27,525		$	4,408		$	118,454
Interest expense		20,028		15,661			16,698		16,226			3,483			72,096
Net interest income		14,707		14,949			4,478		11,299			925			46,358
Provision (benefit) for loan losses		5,278		(337	)		—		(1,274	)		—			3,667
Non-interest income		4,338		3,526			22,855		1,709			1,252			33,680
Non-interest expense:
Direct expense		6,206		3,981			4,517		4,813			21,168			40,685
Overhead and support		4,765		3,276			2,914		3,892			—			14,847
Total non-interest expense		10,971		7,257			7,431		8,705			21,168			55,532
Income (loss) before taxes	$	2,796	$	11,555		$	19,902	$	5,577		$	(18,991	)	$	20,839
Total average assets	$	472,553	$	321,095		$	353,341	$	480,083		$	130,840		$	1,757,912
Total assets	$	456,178	$	433,875		$	329,793	$	484,263		$	125,368		$	1,829,477

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NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

				Real				Retail
	Commercial			Estate		Warehouse		Consumer					NCB
2005	Lending			Lending		Lending		Lending		Other			Consolidated
Net interest income:
Interest income	$	38,204		$	18,984	$	15,800	$	20,904	$	2,587		$	96,479
Interest expense		20,186			8,069		11,766		10,218		2,098			52,337
Net interest income		18,018			10,915		4,034		10,686		489			44,142
(Benefit) provision for loan losses		(825	)		317		—		978		—			470
Non-interest income		6,135			3,182		25,032		2,867		—			37,216
Non-interest expense:
Direct expense		7,205			2,552		5,346		5,052		16,375			36,530
Overhead and support		4,630			1,948		4,822		5,169		—			16,569
Total non-interest expense		11,835			4,500		10,168		10,221		16,375			53,099
Income (loss) before taxes	$	13,143		$	9,280	$	18,898	$	2,354	$	(15,886	)	$	27,789
Total average assets	$	490,628		$	252,531	$	310,614	$	402,065	$	203,826		$	1,659,664
Total assets	$	546,429		$	285,513	$	220,734	$	478,650	$	163,241		$	1,694,567

27.   LOAN SALES AND SECURITIZATIONS

Well-publicized issues surrounding mortgage lending have had a pronounced negative effect on the mortgage securitization market and other credit markets. None of NCB’s loans held for sale are considered sub-prime. Nonetheless, NCB’s financial results, particularly its gain on loan sales, have been adversely impacted by changes in market conditions in the commercial mortgage-backed securities marketplace.

Rapidly deteriorating credit market conditions during the second half of 2007 resulted in market pricing that was substantially different than the pricing realized in previous periods. Because NCB does not lock in the sales price on most of its loans held for sale at the time of origination, the changes in market conditions resulted in a decline in market value of loans held for sale. NCB made the strategic decision to sell loans during the third and fourth quarters to reduce any additional exposure to a further deterioration in market conditions. Many of the loans sold were in a loss position. The cash proceeds were primarily reinvested in either loans held for sale with pricing reflective of current market conditions or for loans held for investment.

When NCB sells loans, it generally retains the mortgage servicing rights and, depending on the nature of the sale, may also retain interest-only securities (retained interests).

During 2007 and 2006, NCB sold loans through securitized transactions. The net proceeds from NCB’s 2007 sale of loans through securitized transactions were $370.2 million and generated a total of $3.2 million in retained interests. The proceeds from NCB’s 2006 sales of loans through securitized transactions were $601.6 million and generated a total of $5.5 million in retained interests.

During the years ended December 31, 2007 and 2006, NCB also sold loans through non-securitized transactions. The net proceeds from the sale of these loans were $604.7 million and generated a total of $7.1 million in retained interests for the year ended December 31, 2007. The net proceeds from the sale of these loans were $310.8 million and generated a total of $4.4 million in retained interests for the year ended December 31, 2006.

NCB does not retain any interests on Consumer Loan sales, which generated net proceeds of $220.9 million and $179.3 million for the years ended December 31, 2007 and 2006 respectively.

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NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In total, excluding SFAS 133 adjustment impact, NCB generated a loss on the sale of loans of $1 thousand for the year ended December 31, 2007 compared with a gain of $19.9 million for the year ended December 31, 2006.

See Note 4 — Loan Servicing for changes on the portfolio of loans that NCB services.

Mortgage Servicing Rights (“MSRs”)

MSRs arise from contractual agreements between NCB and investors (or their agents) related to securities and loans. MSRs represent assets when the benefits of servicing are expected to be more than adequate compensation for NCB’s servicing of the related loans. Under these contracts, NCB performs loan servicing functions in exchange for fees and other remuneration. The servicing functions typically performed include: collecting and remitting loan payments, responding to borrower inquiries, accounting for principal and interest, holding custodial (impound) funds for payment of property taxes and insurance premiums, counseling delinquent mortgagors, supervising foreclosures and property dispositions, and generally administering the loans. For performing these functions, NCB receives a servicing fee generally ranging from 0.06% to 0.38% annually on the remaining outstanding principal balances of the loans. The servicing fees are collected from the monthly payments made by the borrowers. In addition, NCB generally receives other remuneration consisting of float benefits derived from collecting and remitting mortgage payments, as well as rights to various mortgagor-contracted fees such as late charges and prepayment penalties. In addition, NCB generally has the right to solicit the borrowers for other products and services.

In accordance with paragraph 63 of SFAS 140, MSRs are periodically tested for impairment. The impairment test is segmented into the risk tranches, which are stratified, based upon the predominant risk characteristics of the loans.

Activity related to MSRs for the years ended December 31, was as follows (dollars in thousands):

	Mortgage Servicing Rights
	2007			2006
Balance at January 1	$	9,362		$	5,803
Additions		5,574			4,397
Amortization		(1,277	)		(838	)
Impairment of MSR		(239	)		—
Balance at December 31	$	13,420		$	9,362

At December 31, 2007 and 2006 the MSR balance relating to the servicing of Share and Single-family Residential Loans was $2.9 million and $2.4 million, respectively. At December 31, 2007 and 2006 the MSR balance relating to the servicing of all other loans was $10.5 million and $7.0 million, respectively.

A $239 thousand impairment was recorded for MSRs during 2007. No impairments were recorded during 2006.

Considerable judgment is required to determine the fair values of NCB’s retained interests because these assets are generally not actively traded in stand-alone markets.

NCB’s MSR valuation process combines the use of sophisticated discounted cash flow models to arrive at an estimate of fair value at the time of the loan sale and each subsequent balance sheet date. The key assumptions used in the valuation of MSRs are mortgage prepayment speeds, the discount rate of residual cash flows and the earnings rate of P&I float, escrows and replacement reserves. These variables can and generally will change from

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

quarter to quarter as market conditions and projected interest rates change. Multiple models are required to reflect the nature of the MSR of the different types of loans that NCB services.

Key economic assumptions used in determining the fair value of MSRs at the time of securitization for the years ended December 31 were as follows:

	2007			2006			2005
Weighted-average life (in years):
Share and Single-family Residential Loans		5.6			3.9			6.2
Multifamily, Cooperative and Commercial Real Estate Loans		8.5			8.7			9.3
Weighted-average annual prepayment speed:
Share and Single-family Residential Loans		20.0	%		28.4	%		13.9	%
Multifamily, Cooperative and Commercial Real Estate Loans		5.0	%		4.6	%		0.8	%
Residual cash flow discount rate (annual):
Share and Single-family Residential Loans		10.0	%		10.3	%		10.0	%
Multifamily, Cooperative and Commercial Real Estate Loans		9.4	%		11.0	%		11.0	%
Earnings rate P&I float, escrows and replacement reserves:
Share and Single-family Residential Loans		5.00	%		5.00	%		3.93	%
Multifamily, Cooperative and Commercial Real Estate Loans		5.41	%		5.34	%		4.53	%

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NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Key economic assumptions used in measuring the period-end fair value of NCB’s MSRs at December 31, and the effect on the fair value of those MSRs from adverse changes in those assumptions, are as follows (dollars in thousands):

	2007			2006
Fair value of mortgage servicing rights:
Share and Single-family Residential Loans	$	4,277		$	3,868
Multifamily, Cooperative and Commercial Real Estate Loans	$	13,969		$	8,191
Weighted-average remaining life (in years):
Share and Single-family Residential Loans		5.3			5.7
Multifamily, Cooperative and Commercial Real Estate Loans		7.3			7.9
Weighted-average annual prepayment speed:
Share and Single-family Residential Loans		20.2	%		19.5	%
Multifamily, Cooperative and Commercial Real Estate Loans		2.9	%		2.3	%
Impact on fair value of 10% adverse change:
Share and Single-family Residential Loans	$	(180	)	$	(164	)
Multifamily, Cooperative and Commercial Real Estate Loans	$	(69	)	$	(26	)
Impact on fair value of 20% adverse change:
Share and Single-family Residential Loans	$	(343	)	$	(313	)
Multifamily, Cooperative and Commercial Real Estate Loans	$	(137	)	$	(52	)
Residual cash flows discount rate (annual):
Share and Single-family Residential Loans		10.0	%		10.3	%
Multifamily, Cooperative and Commercial Real Estate Loans		9.0	%		11.0	%
Impact on fair value of 10% adverse change:
Share and Single-family Residential Loans	$	(117	)	$	(112	)
Multifamily, Cooperative and Commercial Real Estate Loans	$	(486	)	$	(365	)
Impact on fair value of 20% adverse change:
Share and Single-family Residential Loans	$	(228	)	$	(218	)
Multifamily, Cooperative and Commercial Real Estate Loans	$	(947	)	$	(705	)
Earnings Rate of P&I float, escrow and replacement:
Share and Single-family Residential Loans		5.0	%		5.0	%
Multifamily, Cooperative and Commercial Real Estate Loans		4.6	%		5.3	%
Impact on fair value of 10% adverse change:
Share and Single-family Residential Loans	$	(120	)	$	(1	)
Multifamily, Cooperative and Commercial Real Estate Loans	$	(597	)	$	(475	)
Impact on fair value of 20% adverse change:
Share and Single-family Residential Loans	$	(240	)	$	(3	)
Multifamily, Cooperative and Commercial Real Estate Loans	$	(1,194	)	$	(950	)

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NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Interest-Only receivables

Activity related to interest-only receivables for the years ended December 31 is as follows (dollars in thousands):

	Certificated
	Interest-Only Receivables
	2007			2006
Balance at January 1 at fair value	$	39,950		$	42,027
Additions		1,108			3,006
Amortization		(5,377	)		(5,041	)
Change in mark-to-market		(1,770	)		(37	)
Writedown of asset due to prepayment		(83	)		(5	)
Balance at December 31 at fair value	$	33,828		$	39,950

	Non-certificated Interest-Only Receivables
	2007			2006
Balance at January 1 at fair value	$	33,053		$	35,671
Additions		3,619			2,487
Reclass		—			4
Amortization		(4,376	)		(4,091	)
Change in mark-to-market		(2,314	)		(730	)
Writedown of asset due to prepayment		(50	)		(288	)
Balance at December 31 at fair value	$	29,932		$	33,053

For interest-only receivables, NCB estimates fair value both at initial recognition and on an ongoing basis through the use of discounted cash flow models. The key assumptions used in the valuation of NCB’s interest-only receivables are the discount rate and the life of the estimated cash flows.

Key economic assumptions used in determining the fair value of interest-only receivables at the time of sale as of December 31 are as follows:

	2007			2006			2005
Weighted-average life (in years)		8.7			9.2			9.3
Weighted-average annual discount rate		6.44	%		6.99	%		5.44	%

Key economic assumptions used in subsequently measuring the fair value of NCB’s other interest-only receivables at December 31, and the effect on the fair value of those other interest-only receivables from adverse changes in those assumptions are as follows (dollars in thousands):

	2007			2006
Fair value	$	63,760		$	73,003
Weighted-average life (in years)		6.5			6.8
Weighted average annual discount rate		8.12	%		6.25	%
Impact on fair value of 10% adverse change	$	(1,574	)	$	(1,529	)
Impact on fair value of 20% adverse change	$	(3,084	)	$	(3,007	)

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NATIONAL CONSUMER COOPERATIVE BANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

At December 31, 2007 and 2006 the total principal amount outstanding of the underlying loans of the interest-only receivables was $4.5 billion and $3.9 billion, respectively. At December 31, 2007 there was $4.9 million or 0.1%, of delinquent loans. At December 31, 2006 there was $3.6 million or 0.1%, of delinquent loans.

All of the sensitivities above are hypothetical and should be used with caution. The effect of a variation in a particular assumption on the fair value of the retained interest is calculated independently without changing any other assumption. In reality, changes in one factor may result in changes in another factor, which might compound or counteract the sensitivities.

The following table summarizes the cash flows received from loan sale activity and retained interests for the years ended December 31, (dollars in thousands):

	2007		2006
Net proceeds from loans sold through securitizations	$	370,178	$	601,516
Net proceeds from auto loan sales	$	220,887	$	179,281
Net proceeds from other loan sales	$	604,765	$	310,893
Servicing fees received	$	5,711	$	5,375
Cash flows received on interest-only receivables	$	14,880	$	14,951

28.   SUBSEQUENT EVENTS

As noted, NCB has elected to redeem all $15 million in Medium Term Notes on May 15, 2008.

During the first quarter of 2008, additional collateral was pledged for one of NCB’s commercial loans resulting in a reduction of NCB’s allowance for loan losses and related provision for loan losses of approximately $0.4 million.

29.   LEGAL PROCEEDINGS

NCB is involved in various litigation arising from the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on NCB’s consolidated financial position, results of operations, or liquidity.

86

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None

ITEM 9A. CONTROLS AND PROCEDURES

NCB’s management, including its Chief Executive Officer and Chief Financial Officer, evaluated NCB’s disclosure controls and procedures as of December 31, 2007 pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, NCB’s Chief Executive Officer and Chief Financial Officer concluded that NCB’s disclosure controls and procedures are functioning effectively to provide reasonable assurance that NCB can meet its obligations to disclose in a timely manner material information required to be included in NCB’s reports under the Exchange Act.

There has been no change in NCB’s internal control over financial reporting that occurred during NCB’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, NCB’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

87

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The directors and executive officers of NCB and the positions held by each are as follows:

		Year First
		Elected or		End of
	Position	Appointed		Term	Age
William F. Casey, Jr.	Chairperson of the Board of Directors and Director		2002	2008		63
Irma Cota	Vice Chairperson of the Board of Directors and Director		2003	2009		54
Charles E. Snyder	President and Chief Executive Officer		1983	-		54
Roger B. Collins	Director		2005	2008		59
Steven F. Cunningham	Director		2005	2008		66
William F. Hampel	Director		2004	2010		56
Grady B. Hedgespeth	Director		2003	2009		52
Janis Herschkowitz*	Director		2007	2010		48
H. Jeffrey Leonard	Director		2002	2008		53
Rosemary Mahoney	Director		2003	2009		47
Stephanie McHenry	Director		2001	2009		45
David G. Nason*	Director		2007	2010		37
Richard A. Parkinson	Director		2003	2009		58
Stuart M. Saft	Director		2007	2010		60
Walden Swanson	Director		2007	2010		57
Nguyen Van Hanh*	Director		2007	2010		70
Steven A. Brookner	Executive Managing Director, NCB;		1997	-		44
	Chief Executive Officer, NCB, FSB
Patrick N. Connealy	Managing Director, Corporate Banking Group		1986	-		51
Charles H. Hackman	Managing Director, Chief Credit Officer, NCB;		1984	-		62
	President, NCB Financial Corporation
Mark W. Hiltz	Managing Director, Chief Risk Officer		1982	-		59
Kathleen M. Luzik	Managing Director, NCB; Chief Operating Officer, NCB,		1991	-		44
	FSB
Richard L. Reed	Executive Managing Director, Chief Financial Officer, NCB;		1985	-		49
	Chief Financial Officer, NCB Financial Corporation and NCB, FSB

* Presidentially appointed Directors who will serve until their successors are appointed and confirmed.

William F. Casey, Jr., has been the President and Chief Executive Officer of the Co-operative Central Bank in Boston, Massachusetts since April 2000. At the Co-operative Central Bank, he also held the positions of Financial Vice President from 1980 to 1990, Financial Vice President and Treasurer from 1990 to 1992 and Executive Vice President and Treasurer from 1992 to 2000. He has also been President of BIF Services, LLC since August of 2005.

Irma Cota is Chief Executive Officer of North County Health, formerly President of California Primary Care Association and immediate past President of the San Diego Council of Community Clinics. Ms. Cota holds a masters degree in public health from San Diego State University. Having over thirty years of experience specializing in health/medical, Ms. Cota has extensive experience in working with non-profit boards of directors, and is currently serving on the Alliance Health Care Foundation Board.

Charles E. Snyder was named President and Chief Executive Officer of NCB in January 1992. He had been Corporate Vice President and Chief Financial Officer of NCB from 1983 to December 1991.

Roger Collins is President and Chief Executive Officer of Harp’s Food Stores, Inc., a regional grocery chain located in Arkansas, Oklahoma, and Missouri. He currently serves on the board of directors of Associated Wholesale Grocers. Mr. Collins has a B.S. in economics from Rice University and an MBA from the University of Texas at Austin.

Steven F. Cunningham is President Emeritus of IMARK Group, Inc., a purchasing cooperative of independently owned electrical suppliers and equipment wholesalers located in Oxon Hill, Maryland. He currently serves as President and Director of Elite Distributors Insurance Co., located in Grand Cayman. He also serves as a

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director of Mutual Services Cooperative and is currently chair of the National Cooperative Business Association’s Board of Directors. Mr. Cunningham has a bachelor’s degree in accounting from Lehigh University, Bethlehem, Pennsylvania.

William F. Hampel is Senior Vice President for Research and Policy Analysis and Chief Economist of Credit Union National Association located in Washington, D.C. Mr. Hampel holds a Bachelor of Arts degree in Economics from University of Dallas and a PhD in Economics from Iowa State University. Mr. Hampel was a member of the board of CUNA Credit Union from 1991 to 2004 serving as secretary, treasurer, vice president, and chair. Mr. Hampel is also a member of CUNA’s regulatory and legislative advocacy team.

Grady B. Hedgespeth is the Director of Financial Assistance for the United States Small Business Administration located in Washington, D.C. Prior to that, Mr. Hedgespeth was the Chief Financial Officer of Seedco.

Janis Herschkowitz is President and Chief Executive Office of PRL, Inc, a group of manufacturing companies located in Cornwall, Pennsylvania. Ms. Herschkowitz holds a Bachelor of Arts degree in International Relations from Penn State University and a Masters in Business Administration in Finance from the University of Texas.

H. Jeffrey Leonard has been President, founding shareholder and Director of Global Environmental Fund Management Corporation since 1989. He is also President of the Global Environmental Fund since 1989, and is the Chairwoman of the Board of Beacon House Community Ministry since 1994. Prior to the founding of GEF Management, he served as Vice President at World Wildlife Fund and Conservation Foundation.

Rosemary K. Mahoney is a Consultant of Main Street Cooperative Group, LLC. Ms. Mahoney is a member of the Board of Directors of the National Cooperative Business Association.

Stephanie McHenry is President of ShoreBank Cleveland Banking Region. Prior to the merger of ShoreBank affiliated institutions, she was President and Chief Operating Officer of ShoreBank in Cleveland, Ohio. Prior to joining ShoreBank Ms. McHenry was director of Minority Business Development of Greater Cleveland Growth Association and Executive Director of Northern Ohio Minority Business Council since 1998.

David G. Nason is Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury located in Washington, D.C. Prior to that, Mr. Nason was the Deputy Assistant Secretary for Financial Institutions Policy at Treasury since 2005. Mr. Nason holds a Bachelor of Science in Finance from the American University and a J.D. summa cum laude from the Washington College of Law at the American University.

Richard A. Parkinson is the President and Chief Executive Officer of Associated Food Stores, Inc., in Salt Lake City, Utah. Mr. Parkinson also served as a member of the executive committee of the Board for Associated Food Stores.

Stuart M. Saft is a Partner at the real estate practice of Dewey & LeBouf. Prior to that, Mr. Saft was a Partner and Chairman of the Real Estate division at Wolf Haldenstein Adler Freeman & Herz LLP. Mr. Saft holds a Doctor of Jurisprudence from Columbia University Law School.

Walden Swanson is a Founder and Chief Executive Officer of CoopMetrics, the first cooperative incorporated under the progressive Minnesota cooperative statutes. Mr. Swanson has served on numerous cooperative boards, including NCB Capital Impact, the National Cooperative Business Association, the Cooperative Development Fund, and the Central Committee of the International Cooperative Alliance.

Nguyen Van Hanh is a professor of Economics at California State University, Sacramento. Dr. Van Hanh holds a PhD in Economics from the University of California at Davis, having earlier received a Bachelor of Science with high honors and a Master’s of Science degree in Agricultural Science both from the University of Florida

Steven A. Brookner is the Chief Executive Officer of NCB, FSB since November 2001 and Executive Managing Director at NCB responsible for overseeing the real estate originations, capital markets, servicing and investor reporting functions of NCB. From 1997 through September 1998, he was a Managing Director responsible for strategic initiatives and new product development. Previously, he was a partner of Hamilton Securities Group for

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one year and Co-founder and Principal of BNC & Associates, a financial and management consulting firm, for five years.

Patrick N. Connealy is a Managing Director and the head of the Corporate Banking Group of NCB. Prior to joining NCB in 1986, he worked as a supervisory officer with the Farm Credit Administration in Washington, DC, and as assistant vice president and loan officer for the Farm Credit Bank of Omaha.

Charles H. Hackman is a Managing Director and Chief Credit Officer of NCB and NCB, FSB. He was formerly Corporate Vice President and Chief Financial Officer from 1992 to 1994. He was Corporate Vice President, Credit Policy, of NCB from 1984 to 1992. He is President of NCB Financial Corporation.

Mark W. Hiltz is a Managing Director and Chief Risk Officer of NCB. He was a Corporate Vice President and Manager of Special Assets from 1994 to 1998 and a Senior Vice President of the Special Assets Department from 1986 to 1994. Previously he was Vice President of Loan Administration from 1983 to 1986 and General Auditor from 1982 to 1983.

Kathleen M. Luzik is a Managing Director of NCB, and Chief Operating Officer of NCB, FSB. Ms. Luzik joined NCB in 1991, and has held positions as a real estate underwriter and lender, business development officer, vice president of secondary marketing, and managing director of real estate loan servicing. In 1999, she was named managing director of NCB’s Real Estate Group where she was responsible for all operational activities of the Real Estate Group, overseeing the National Real Estate and Master Servicing Teams. Prior to joining NCB, Ms. Luzik was a financial analyst for the Patrician Financial Company.

Richard L. Reed is Executive Managing Director and Chief Financial Officer of NCB. He was named Senior Vice President and Chief Financial Officer in 1994. Prior to that, he was Vice President and Treasurer from 1992 to 1994. He was Vice President, Treasury from 1989 to 1992.

Non-Incumbent Nominees for Directorships

Alfred A. Plamann

Peter A. Conrad

Bill Kooistra

Wilson H. Beebe, Jr.

Alfred A. Plamann is President and CEO of Unified Western Grocers, formerly known as Certified Grocers of California, Ltd. in Commerce, California. Mr. Plamann was the Senior Vice President and Chief Financial Officer of Certified Grocers from 1989 to 1993. He has served in an executive capacity with Atlantic Richfield Co. (ARCO) and has served on the board of directors of several of Unified’s subsidiaries. Additionally, he has served on the board of directors of the National American Wholesale Grocers Association (NAWGA) and the California Grocer’s Association (CGA), and is a member of the board of directors of the Food Marketing Institute (FMI), the Greater Los Angeles Area of the Chamber of Commerce and the board of the Weingart Center, a homeless shelter in Los Angeles. He holds a B.S. in accounting and real estate from the University of Colorado and an MBA from the Wharton School of the University of Pennsylvania. Mr. Plamann served as a NCB director from 1995 to 2001 and from 2003 to 2007.

Peter A. Conrad is the Executive Vice President, Treasurer, Corporation Clerk and Chief Operating Officer of the Cooperative Central Bank in Boston, Massachusetts. He is President elect and is scheduled to succeed William Casey as President and CEO on May 1, 2008. Mr. Conrad has been a trustee of the Cooperative Banks Employees Retirement Association (CBERA) and the Cooperative Banks Employees Benefit Association (CBEBA) since June, 2005.

Bill Kooistra is the Chief Financial Officer of Frontier Natural Products Cooperative in Norway, Iowa which specializes in natural and organic products. In the past, he has been a partner in a CPA firm doing annual audits and providing strategic planning assistance to numerous agricultural cooperatives.

Wilson H. Beebe, Jr. has been the President and CEO of Thanexus, Incorporated since 1985. Thanexus, Inc. is a cooperative of privately owned funeral businesses that exist to consolidate their human resource, employee benefit and financial service functions. Mr. Beebe also serves as the head of each of Thanexus, Inc’s affiliated

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organizations. He has served on the board of directors of the National Cooperative Business Association (NCBA) for almost five years.

Incumbent Nominees for Directorships

Roger B. Collins

Steven F. Cunningham

COMPOSITION OF BOARD OF DIRECTORS

The Act provides that the Board of Directors of NCB shall consist of 15 persons serving three-year terms. An officer of NCB may not also serve as a director. The President of the United States is authorized to appoint three directors with the advice and consent of the Senate. No director may be elected to more than two consecutive full terms. After expiration of the term of a director, he or she may continue to serve until a successor has been elected or has been appointed and qualified. Of the Presidential appointees, one must be selected from among proprietors of small business concerns that are manufacturers or retailers; one must be selected from among the officers of the agencies and departments of the United States; and one must be selected from among persons having extensive experience representing low-income cooperatives eligible to borrow from NCB. Janis Herschkowitz is the Presidential appointee from among proprietors of small business concerns. Nguyen Van Hanh is the Presidential appointee from among persons representing low-income cooperatives. David G. Nason is the presidential appointee from among the officers of the agencies and departments of the United States.

The holders of Class B and Class C stock elect the remaining 12 directors. Under the bylaws of NCB, each stockholder-elected director must have at least three years experience as a director or senior officer of the class of cooperatives that he or she represents. The five classes of cooperatives are: (a) housing, (b) consumer goods, (c) low-income cooperatives, (d) consumer services, and (e) all other eligible cooperatives. At all times each class must have at least one, but not more than three, directors representing it on the Board.

COMMITTEES OF THE BOARD

The Board of Directors directs the management of NCB and establishes the policies of NCB governing its funding, lending, and other business operations. In this regard, the Board has established a number of committees, such as Audit/Risk Management, Mission Banking/Low Income, Executive/Compensation, Corporate Governance and Strategic Planning Committees.

The Audit/Risk Management Committee assists the Board of Directors in fulfilling its statutory and fiduciary responsibilities. It is responsible for overseeing all examinations and audits, monitoring all accounting and financial reporting practices, determining that there are adequate administrative and internal accounting controls and assuring that NCB, its subsidiaries and affiliate are operating within prescribed policies and procedures and in conformance with the applicable conflict of interest policies. The members of the committee are Roger B. Collins (Chair), Stephanie McHenry, William F. Hampel, Richard A. Parkinson, Stuart M. Saft, William F. Casey and David G. Nason. The Board of Directors has determined that Roger B. Collins, is an “audit committee financial expert” and is “independent,” as those terms are defined in applicable regulations of the Securities and Exchange Commission (Item 407) under Regulation S-K).

The Mission Banking/Low Income Committee is responsible for evaluating NCB’s best efforts to achieve 35 percent of loans outstanding to low income cooperatives in accordance with established policies and for recommending to management ways in which NCB can further leverage its resources to have maximum impact on low income communities. The Committee is also responsible for collaborating with NCB Capital Impact to establish a plan for the creation and implementation of a development banking strategy that integrates and focuses resources across NCB and NCB Capital Impact, resulting in a range of development banking financial services that can be delivered to low income communities and other community development financial institutions. The members of the committee are Rosemary K. Mahoney (Chair), H. Jeffrey Leonard, Irma Cota, Grady B. Hedgespeth, Nguyen Van Hanh, Walden Swanson, Stephanie McHenry and Steven F. Cunningham.

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The Executive/Compensation Committee exercises all powers of the Board of Directors when failure to act until the next regular meeting will adversely affect the best interests of NCB, authorizes actions on fast moving issues when authority is granted by the entire Board, reviews and approves loans in excess of management authority and loan policy exceptions, serves as the appeal authority for loan turndowns, recommends nominees to the Board to fill unexpired terms of previously elected board members and reviews and recommends the consolidated annual budget for board approval. The members are Irma Cota (Chair), William F. Casey, Jr., H. Jeffrey Leonard, Richard A. Parkinson and Roger B. Collins.

The Executive/Compensation Committee is also responsible for assuring that the senior executives are compensated effectively in a manner consistent with the stated compensation strategy of NCB. The Executive/Compensation Committee also communicates the compensation policies to the members and the reasoning behind such policies, and recommends to the Board retainer and meeting fees for the Board of Directors and Committees of the Board. They also review NCB’s compensation strategy for executive council and matters relating to management succession. The Executive/Compensation Committee reviews NCB’s employee benefit programs.

The Corporate Governance Committee, formerly called the Nominating Committee, annually oversees the election for NCB directors. The committee periodically drafts election rules on behalf of the Board of Directors and reviews modifications and election materials. The Committee reviews the eligibility of nominees taking into consideration financial experience, size of constituency, organization represented, leadership and ability. The members of the committee are Grady B. Hedgespeth (Chair), Irma Cota, Janis L. Hershkowitz, Richard A. Parkinson, Stuart M. Saft, Walden Swanson and Rosemary K. Mahoney.

The Strategic Planning Committee monitors and reviews all NCB-related entities’ planning activities delegated to them by the Board. The members of the committee are William F. Casey, Jr. (Chair) and the full Board of Directors.

CODE OF ETHICS

NCB has adopted a code of conduct and ethics that includes an NCB Senior Financial Officers’ Code of Ethics that applies to NCB’s principal executive officer, principal financial officer and principal accounting officer. A copy of the code is filed as an exhibit to this annual report.

ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Overview

NCB’s executive compensation program is designed to attract, retain, motivate and reward talented executives, including named executive officers (“NEOs”), who contribute to NCB’s growth and success. These objectives also guide NCB in establishing all of its compensation programs. As a result, the executive compensation program for NCB’s NEOs has the same overall structure as NCB’s other compensation programs.

Compensation Philosophy and Objectives

NCB’s philosophy is that as employees, including its NEOs, progress to higher levels at NCB, an increasing proportion of their pay should be linked to NCB’s success. In keeping with that philosophy, NCB bases compensation packages on a number of factors: the level of job responsibility, individual performance, company performance and marketplace considerations. NCB’s executive compensation program rewards NEOs for sustained financial and operating performance and leadership excellence. In this way, the programs serve as a mechanism to build loyalty among NCB’s executives, including the NEOs, align their interests with NCB’s Strategic Plan and encourage them to remain at NCB for long and productive careers.

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Implementing NCB’s Philosophy and Objectives

The Board of Directors (the “Board”) has delegated the authority and responsibility to establish and administer NCB’s executive compensation to the Executive/Compensation Committee (the “Committee”). The Committee determines the overall compensation goals, how to implement them and who administers them, including delegating authority to the CEO and involving management to help design performance incentive compensation.

Benchmarking

NCB strives to provide competitive overall compensation for its Chief Executive Officer (“CEO”) and other NEOs and to achieve an appropriate mix between base salary, incentive compensation and other benefits. To further these goals, every other year the Committee engages independent executive compensation consultants to review CEO and other NEO compensation packages. Annually, the Committee reconsiders whether to retain an independent consultant or to rely on previously provided information. The Committee and the CEO each use these reviews as a reference to inform their judgment in setting total CEO and other NEO compensation, respectively, in line with company objectives and in a manner that is competitive with comparable organizations in the banking and financial services industry with assets of at least $2 billion and an employee population under 500. To determine significant changes in individual CEO and NEO compensation, NCB considers significant changes to a NEO’s responsibility and significant changes in the relevant market. To further its goal of fostering executive commitment and long-term service, NCB seeks to compensate NEOs with total compensation packages within the 50^th to 75^th percentile range of the relevant market data.

Compensation Decisions

Under its delegated authority, the Committee determines and administers the CEO’s compensation package, which is approved by the Board. After reviewing market data and reports from the independent consultants, the Committee meets with the CEO to discuss and determine his annual compensation package and individual performance objectives for the year. The Committee sets the CEO’s overall compensation package and reports its decision to the Board. At the end of the year, the Board conducts a performance evaluation of the CEO in light of the agreed upon objectives, his contribution to NCB performance, and other leadership accomplishments. The Committee takes the Board’s evaluation into consideration when it determines the CEO’s award under the LTIP (as defined below), and the Committee recommends to the Board an award under the STIP (as defined below) along with any other changes to the CEO’s compensation.

The Committee delegates responsibility to the CEO to evaluate and determine compensation packages for the other NEOs. The other NEOs, along with the other executives, each write a “Max Plan,” which consists of individual goals and objectives linked to the wider NCB performance goals. The executives, including the other NEOs, present them to the CEO for approval. At the end of the year, the CEO carefully evaluates each of the other NEO’s performance by reference to individual Max Plans and assesses each individual’s achievement of agreed upon objectives, contribution to NCB performance and other leadership accomplishments. After evaluation, the CEO approves merit increases in base salary for the upcoming year and incentive compensation awards for the executives, including the other NEOs. For both the CEO and the other NEOs, past compensation is not a factor in determining incentive plan awards.

Components of 2007 Executive Compensation

The elements of NCB’s executive compensation programs are:

•     base salary;

•     short-term incentive compensation;

•     long-term incentive compensation;

•     core employee benefits;

•     retirement benefits; and

•     perquisites and other personal benefits.

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In 2007, NCB distributed compensation among base salary, cash incentive awards and other benefits. For the CEO, these elements were paid approximately in the following percentages: 68% for base salary, 0% for incentive compensation and 32% for other benefits. The other NEOs were paid in the following approximate percentages: 88% for base salary, 0% for incentive compensation and 12% for other benefits.

Base Salary

NCB provides its employees, including its NEOs, a base salary for services performed each year. To attract, retain and motivate its employees, NCB sets base salaries at approximately the median of the market, but they vary depending on the scope of responsibilities, skill set, long-term performance and the period of time performing those responsibilities. Typically, NCB reviews base salary levels annually as part of each individual’s performance review and also upon any change in job responsibilities.

The annual salary review for the CEO and other NEOs takes into account the following factors:

•     individual performance;

•     market value of the NEO’s responsibility and skill set; and

•     contribution to NCB.

After review, the Committee recommends merit increases for the CEO based on individual performance and may recommend adjustments to base salary. The CEO, in turn, may approve merit increases or other adjustments to the base salaries of other NEOs based on the individual performance and other factors.

Performance-Based Incentive Compensation

NCB believes incentive compensation should represent a significant portion of executive compensation to align the interests of NCB executives, including NEOs, with the NCB Strategic Plan and reflect the fact that the performance of high-level executives impacts NCB’s success and growth. As a result, NCB has two non-equity cash incentive plans for its NEOs: the Executive Management Short-Term Incentive Plan (the “STIP”) and the Executive Long-Term Incentive Plan (the “LTIP,” collectively with the STIP, the “Incentive Plans”). In furtherance of NCB’s philosophy to reward financial operating success and to encourage long-term commitment, the Incentive Plans compensate NEOs for performance success by reference to specific company short-term and long-term performance goals, and to individual achievements with respect to the STIP only.

Executive Management Short-Term Incentive Plan

The STIP is an annual cash incentive program for certain NCB executives, including the NEOs. Each year, the Committee reviews the plan objectives, specific performance goals established for each objective, weights assigned to each of them and potential awards under the STIP. Thereafter, the Committee recommends the plan to the Board for any action and approval. Consistent with NCB’s overall compensation philosophy, the objectives in the STIP parallel those of the performance plans for teams and individuals throughout NCB, including the NEOs. Performance under the plan is reviewed by management quarterly and communicated to STIP participants to motivate them to achieve the performance goals.

STIP for 2007

In 2007, to be eligible for a STIP award, plan objectives must be accomplished in a manner sufficient to earn a minimum of 55 points. Each objective is weighted to reflect the particular objective’s importance to the NCB Strategic Plan. Within each objective, the specific performance goals are weighted according to their relative importance in achieving the objective. Points are awarded based on those weights.

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For the 2007 STIP, the six broad objective categories and cumulative point values associated with them are:

	Objectives	Weight
•	Grow Core Profitability		55 Points
•	Develop New Products, Markets and Businesses		10 Points
•	Successfully Implement Mission Banking Strategy		15 Points
•	Successfully Implement Human Resources Strategy		10 Points
•	Successfully Implement Information Management Strategy		10 Points

Awards increase as a percentage of “Adjusted Base Salary” for each increment of 10-15 points above 55 points up to 90 points. The term “Adjusted Base Salary” means the salary calculated as if any increase in base salary effective February 1 of the STIP year applied retroactively since January 1 of that same year. Management reports its performance against each objective to the Board and recommends, based on that performance, that each participant be eligible for an incentive payment equal to a certain percentage of his Adjusted Base Salary. The potential maximum percentage of Adjusted Base Salary awarded for the points earned is based on a schedule set forth in the plan. The Committee then recommends the actual award for the CEO, and the CEO determines actual awards for the other NEOs, each within their discretion up to the maximum percentage available for the points earned.

Under the 2007 STIP, cash awards for points were calculated as a percentage of a NEO’s Adjusted Base Salary, as follows:

		Incentive Award as a
		Percentage of Year End
		2007 Adjusted Base Salary
Points		Others			CEO
55 - 64.9	Up to		15	%		20	%
65 - 79.9	Up to		25	%		30	%
80 - 89.9	Up to		30	%		40	%
90 and over	Up to		35	%		45	%

In addition, if pretax net income exceeds the budget, the CEO (or the Committee with respect to the CEO) has discretion to increase the above listed percentages of Adjusted Base Salary awarded (the “Add-on”). The maximum Add-on award is 5% of Adjusted Base Salary for the CEO and 7.5% of Adjusted Base Salary for each other executive, including NEOs. For each 1% that pretax net income exceeds the budget, 1% of Adjusted Base Salary is added to the award up to a maximum total STIP award of 50% of Adjusted Base Salary for the CEO and 42.5% of Adjusted Base Salary for other executives, including NEOs.

The Committee determines the STIP award (if any) for the CEO and submits a report of its determination to the Board. The CEO, as authorized by the Committee, determines the STIP awards (if any) for the other executives, including all of the other NEOs. The actual amounts awarded for the 2007 STIP award are reported in the Summary Compensation Table and explained in the notes to it.

STIP for 2008

In an effort to focus on growing core profitability, NCB modified its STIP for 2008. The 2008 plan was modified from the balanced scorecard approach of prior plans which awarded points for achieving certain objectives to a plan focused on achieving a certain level of net income and continuing to meet critical mission objectives.

In summary, under the 2008 STIP all of the following objectives must be achieved for the CEO and other NEOs to receive any STIP for 2008:

Ø   Grow Core Profitability

•     Pretax net income must be at least $13 million

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Ø   Risk Management

•     Non-performing assets must not exceed 1.5% of total assets

Ø   Mission Banking

•     Must achieve “best efforts” evaluation for low income business development

For the CEO and the other executives, including NEOs, the STIP for 2008 will have a potential award of 45% and 35% of Adjusted Base Salary, respectively. If pretax net income equals $13 million and the Risk Management and Mission Banking objectives are met, the STIP award for the CEO and the other NEOs will be awarded at a maximum of 25% and 20% for the CEO and the other NEOs, respectively. If all three objectives are met and pretax income is greater than $13 million, then the award percentage will increase proportionately to the target award levels of 45% and 35% for the CEO and the other NEOs, respectively for 2007. The target award levels may be awarded when pretax net income is at least $23 million.

In addition, under the 2008 STIP, if pretax net income exceeds the $23 million target and the Risk Management and Mission Banking objectives are satisfied, the CEO (or the Committee with respect to the CEO) has discretion to award an Add-on award. The maximum Add-on award is 5% of Adjusted Base Salary for the CEO and 7.5% of Adjusted Base Salary for all other executives, including NEOs. For each 1% that pretax net income exceeds the target of $23 million in pretax net income, 1% of Adjusted Base Salary is added to the award earned up to a maximum Add-on award of 50% of Adjusted Base Salary for the CEO and 42.5% of Adjusted Base Salary for all other executives, including NEOs.

Awards made under the 2008 STIP will be made (if any) in 2009.

Executive Management Long-Term Incentive Plan

In 1999, in furtherance of motivating and retaining executives for the long-term, NCB established the LTIP to provide long-term incentive awards for NCB’s executives, including NEOs, consistent with NCB’s long-term strategic plan. The LTIP sets forth company-wide performance goals for a three year period and establishes award levels proportionally to the stated performance goals.

In 1999, the Board delegated to the Committee the authority and responsibility to administer the LTIP and approve the participants, the measurement period, potential awards and the performance goals. Pursuant to that authority, the Committee reviews and approves LTIP awards (if any) for the CEO based on approved performance goals specified in the plan. In addition, the Committee delegated its authority to the CEO to administer the LTIP with respect to the other executives, including the other NEOs. Pursuant to that authority, the CEO determines the other executives’ awards, including the NEO awards, by reference to approved performance goals specified in the plan.

Each LTIP has a three year performance period and executives, including NEOs, receive awards, if earned, based on achievement of NCB strategic long-term performance goals but only at the end of the entire period. Awards vest at the end of the three year period and are based on a percentage of a NEO’s “Aggregate Base Salary,” which is the sum of the NEO’s base salary in years one and two of the applicable plan period. Awards, if earned, are payable more frequently than every three years; they are payable every other year because a new LTIP period commences at the beginning of the third year of the immediately preceding three year LTIP period. This structure encourages long-term commitment because executives, including NEOs, only receive long-term incentive compensation, if at all, every other year based on NCB’s previous three years of performance.

If employment terminates before an award vests due to cause or involuntary termination, then it is forfeited. In the event of death, disability or retirement before the end of a LTIP three year period, the NEO or the NEO’s beneficiary is entitled to a prorated award (if any) based upon the number of months that the NEO was employed during the plan period. If a change in control occurs, awards vest at the target performance level as of the date of the change in control, unless NCB’s actual performance exceeds the target level on such date, in which case, any awards vest at the superior performance level.

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2005 to 2007 LTIP

In January 2005, the Committee approved the 2005 to 2007 LTIP for the period January 1, 2005 through December 31, 2007. For the 2005 to 2007 LTIP, the Committee used the 2005 to 2007 Strategic Plan to set the performance goals and set award opportunities as a percentage of Aggregate Base Salary at threshold, target and superior levels as follows:

Annualized Award Opportunity at Select Performance
as % of Base Salary, including Low Income Market Development Adjustment

	Threshold	Target			Superior
CEO	17%		50	%		81.25	%
NEO	12.75%		30	%		56.25	%

The threshold levels for the CEO and the other NEOs are 20% and 15%, respectively, but when the low income market development adjustment is incorporated the threshold award level under the LTIP decreases to 17% for the CEO and 12.75% for the other NEOs. Similarly, the low income market development adjustment increases the superior level percentage under the plan from 65% to 81.25% for the CEO and from 45% to 56.25% for the other NEOs.

NCB determined the 2005 to 2007 LTIP award percentage by reference to three categories of performance goals weighted in accordance with NCB’s objectives under the 2005 to 2007 Strategic Plan. The performance measures (1) financial strength: average return on equity (“ROE”); (2) value to customers: revenue from new customers and products; and (3) total financial transactions for customers.

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The performance goals used to compute potential 2005 — 2007 LTIP awards are as follows:

			Goal
PERFORMANCE GOALS
01/01/05 - 12/31/07	Weight	Awards	Threshold	Target	Superior
Financial Strength: Average ROE over three years.	35%		10% Average ROE	11% Average ROE	12% Average ROE
		CEO	7% of Base Salary	17.5% of Base Salary	22.75% of Base Salary
		NEOs	5.25% of Base Salary	10.5% of Base Salary	15.75% of Base Salary
Value to Customers: Replicable Breakthrough Innovations that each generate at least $4 million of actual revenue over the 2005 - 2007 period. A Prospective Breakthrough Innovation has generated at least $2 million of actual revenue over the 2005 - 2007 period plus additional verifiable projected revenue of $2 million by its third year.	35%		One Breakthrough Innovation	One Breakthrough Innovation and one Prospective Breakthrough Innovation	Two Breakthrough Innovations
		CEO	7% of Base Salary	17.5% of Base Salary	22.75% of Base Salary
		NEOs	5.25% of Base Salary	10.5% of Base Salary	15.75% of Base Salary
Total commitments and financial transactions arranged for customers including loans, leases, letters of credit, private placements and deals closed by referral sources.	30%		$4.5 billion 2005 through 2007	$5 billion 2005 through 2007	$6 billion 2005 through 2007
		CEO	6% of Base Salary	15% of Base Salary	19.5% of Base Salary
		NEOs	4.5% of Base Salary	9% of Base Salary	13.5% of Base Salary
Total	100%	CEO	20% of Base Salary	50% of Base Salary	65% of Base Salary
		NEOs	15% of Base Salary	30% of Base Salary	45% of Base Salary
Adjustment for Low Income Market Development			-15% of Total Award	+0%	+25% of Total Award

For this plan, success with respect to financial strength and breakthrough innovations are each weighted at 35% and total financial transactions are weighted at 30%. The applicable award depends on where NCB’s performance falls with respect to the established goals in each category of performance. If the performance level with respect to a performance goal achieved falls between any of two levels, then an award payment is adjusted, proportionately. In addition, the Committee in its discretion may decrease the award by 15% or increase it by 25% depending upon the level of low-income market development during the period. Based on the formula in the 2005 to 2007 LTIP table as of December 31, 2007, in February 2008 the Committee certified performance and approved an award level for the CEO of 32% of Aggregate Base Salary and the CEO certified performance and approved an award level for the executives, including the other NEOs, of 22% of Aggregate Base Salary. These award amounts are not included in the Summary Compensation Table because performance measure is not satisfied until the degree of attainment of the goals is certified in early 2008. In February 2008 after certification when the prerequisites of the LTIP plan were completed, NCB made awards under the 2005 to 2007 LTIP.

In 2006, the Committee certified performance and approved cash awards for plan performance at 75.5% of Aggregate Base Salary for the CEO and 50.5% of Aggregate Base Salary for the other NEOs for the 2003 to 2005 LTIP. As a result, the Summary Compensation Table includes the award amounts paid out in 2006 for each NEO under the 2003 to 2005 LTIP.

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2007 to 2009 LTIP

In January 2007, the Committee approved the 2007 to 2009 LTIP for the period of January 1, 2007 through December 31, 2009. The Committee used the 2007 to 2009 Strategic Plan to set the performance goals and will evaluate performance, certify it and pay awards (if any) in 2010.

For the 2007 to 2009 LTIP, the Committee set threshold and target percentages of Aggregate Base Salary at the same level as under the previous two LTIP periods, but increased the maximum percent of Aggregate Base Salary from 81.25% to 87.5% for the CEO and from 56.25% to 62.5% for the other executives, including the NEOs. These maximum thresholds are computed by multiplying the maximum percentage available (shown on the 2007 to 2009 LTIP table below as 70% for the CEO and 50% for the other NEOs) by 25% (the increase for a low income market development adjustment) and adding those two figures for the maximum percentage. The Committee designated (1) financial strength; (2) value to customers; and (3) deposit growth as the overall categories of performance goals and set performance goals and weights as detailed in the LTIP 2007 to 2009 plan table below:

			Goal
PERFORMANCE GOALS
01/01/07 - 12/31/09	Weight	Awards	Threshold	Target	Superior
Financial Strength: Average ROE at NCB, FSB over three years.	50%		13.5% Average ROE	15% Average ROE	16.5% Average ROE
		CEO	10% of Base Salary	25% of Base Salary	35% of Base Salary
		NEOs	7.5% of Base Salary	15% of Base Salary	25% of Base Salary
Value to Customers: Total commitments and financial transactions arranged for customers including loans, leases, letters of credit, private placements and deals closed by referral sources.	25%		$5.5 billion 2007 through 2009	$6 billion 2007 through 2009	$7 billion 2007 through 2009
		CEO	5% of Base Salary	12.5% of Base Salary	17.75% of Base Salary
		NEOs	3.75% of Base Salary	7.5% of Base Salary	12.5% of Base Salary
Deposit Growth: From the base levels at 12/31/06, increase deposits over three years with at least $50 million of total deposits in non-interest bearing DDA excluding escrows for saleable real estate loans.	25%		75% Increase	125% Increase	150% Increase
		CEO	5% of Base Salary	12.5% of Base Salary	17.5% of Base Salary
		NEOs	3.75% of Base Salary	7.5% of Base Salary	12.5% of Base Salary
Total	100%	CEO	20% of Base Salary	50% of Base Salary	70% of Base Salary
		NEOs	15% of Base Salary	30% of Base Salary	50% of Base Salary
Adjustment for Low Income Market Development			−15% of Total Award	+0%	+25% of Total Award

Based on the formula in the 2007 to 2009 LTIP table, the estimated award level for the CEO is 5% of Aggregate Base Salary and for the executives including the other NEOs is 3.75% of Aggregate Base Salary as of December 31, 2007. Pursuant to the plan, whether any awards are actually earned under the plan is subject to NCB’s actual performance for January 1, 2007 to December 31, 2009, which may only be determined after that time. Awards, if any, under this plan are not payable until 2010 after certification of performance. Accordingly, the elements of the performance goals in the 2007 to 2009 LTIP have not been satisfied yet. In addition, under the plan no awards vest until the end of the performance period, and even then are subject to certification and approval. Since the three year period is ongoing and no awards have been earned as of December 31, 2007, no information is included in the Summary Compensation Table with respect to the 2007 to 2009 LTIP.

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Benefits

Core Employee Benefits

NCB offers core employee benefits to all of its employees, including its NEOs, to meet their needs in the event of illness or injury and to enhance productivity and job satisfaction with programs that focus on work/life balance. NCB provides life insurance coverage and accidental death and dismemberment insurance at three times annual salary up to a maximum of $1,000,000 for the CEO and $750,000 for the other NEOs. NCB also provides travel accident insurance, worker’s compensation and retirement insurance.

Through its consumer banking program, NCB provides all of its employees, including its NEOs, and directors the opportunity to earn an extra one percent interest on deposits, reduced fees on a variety of checking and savings accounts, a one percent lower interest rate than otherwise available for consumer loans and a one percent rebate up to $10,000 annually on mortgage loans.

In keeping with NCB’s goal of rewarding long-term commitment, NCB honors employees, including its NEOs, with cash service awards for every five years of service beginning on an employee’s fifth anniversary in varying amounts depending on the length of service. Steven A. Brookner received a $508 service award during 2007.

Retirement Benefits

To facilitate employee retention, NCB provides employees, including NEOs, opportunities to save for retirement under the NCB Retirement and 401(k) Plan. Employees who participate select from a variety of options to invest their retirement savings. NCB balances the savings and retirement plans’ effectiveness as a compensation and retention tool with their cost.

Employees, including NEOs, may make pre-tax contributions qualified under section 401(k) of the Internal Revenue Code (“IRC”). Each eligible employee, including the NEOs, may elect to contribute up to 60% of base salary or $15,500 (the limit prescribed by the IRC) for 2007. NCB matches employee contributions up to 6% of base salary. With continuous service, NCB’s matching contributions vest incrementally after two years and fully vest after six years.

NCB also makes non-elective retirement contributions under NCB’s plan for all of its employees, including the NEOs, beginning one year after their employment with NCB. NCB contributes approximately 6% of each eligible employee’s base salary up to $220,000, as limited by IRC. Like NCB’s 401(k) matching contributions, retirement account contributions vest incrementally after two years and fully vest after six years with continuous service.

The two plans are combined and maintained in one account. NCB’s Retirement and 401(k) Plan is a tax-qualified defined contribution plan. NCB does not have any tax-qualified defined benefit pension plans.

Deferred Compensation

NCB has also implemented an unfunded Deferred Compensation Plan to motivate and retain executives, including the NEOs, and directors by providing them with additional flexibility in structuring the timing of their compensation payments. NCB provides this benefit to allow NEOs to save for retirement in a tax-efficient manner at minimal cost to NCB. Because other similarly situated financial institutions provide deferred compensation plans, NCB believes that its Deferred Compensation Plan is an important recruitment and retention tool.

Under the Deferred Compensation Plan, NEOs may defer receipt of base salary and cash incentive compensation payments. Any amount deferred is credited with interest at a rate equal to the average yield on actively traded U.S. Treasury issues, adjusted to a constant maturity of one year plus one percent. The reported interest rate is determined in December of the prior year. The interest rate credited to these accounts under the Deferred Compensation Plan in 2007 was “above market;” accordingly, earnings on deferred amounts that were “above market” appear in the summary compensation table. In 2006 the interest rate credited to these accounts was not “above market;” accordingly, earnings on deferred amounts under the Deferred Compensation Plan do not

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appear in the Summary Compensation Table. NCB pays compensation benefits deferred under the plan on July 1 or December 31 following a NEO’s retirement, disability or termination.

Additionally, NCB entered into a deferred compensation agreement with NCB’s CEO, on November 4, 1994, in recognition of NCB’s improved financial condition and operating results during the period of his presidency beginning in January 1992. The CEO’s deferred compensation agreement is also an incentive for him to continue serving as NCB’s President. Under his deferred compensation agreement, the CEO may elect to defer an amount or percentage of his compensation. Interest is credited to the account on the last day of each quarter in an amount equal to 100 basis points above the yield on a five-year U.S. Treasury Note with a maturity date on or nearest to the date of such quarterly credit. Like the accounts under NCB’s Deferred Compensation Plan, the CEO’s account is unfunded. The interest rate credited under the CEO’s deferred compensation agreement in 2007 was not “above market;” accordingly, those earnings do not appear on the summary compensation table. In 2006 the interest rate credited was “above market;” accordingly, those earnings on deferred amounts that were “above market” do appear in the Summary Compensation Table.

NCB does not pay compensation benefits deferred under the CEO’s compensation agreement earlier than three months after the date of the CEO’s retirement or other termination of employment. Accumulated amounts under the Deferred Compensation Plan and the CEO’s deferred compensation agreement are shown in the Nonqualified Deferred Compensation Table and are discussed in further detail under the heading “Nonqualified Deferred Compensation.”

Perquisites and Other Personal Benefits

NCB provides its executives, including its NEOs, with perquisites and other personal benefits that are reasonable and consistent with its overall compensation program to better enable NCB to attract and retain superior employees for key positions. These benefits are reflected in the Summary Compensation Table in the “All Other Compensation” column. These benefits include monetary service awards, discretionary spot awards for individual achievement, premiums paid on life insurance policies, in some instances payments to defray income tax incurred with respect to those life insurance premiums, and a car allowance for the CEO. The Committee annually reviews the level of perquisites and other personal benefits provided to its executives to ensure that they are consistent with NCB’s compensation philosophy and objectives.

Salary Continuation Program

NCB has a salary continuation program to assist eligible employees in transitioning to other employment. Employees, including NEOs, are eligible for the program with the approval of the applicable division head and the Managing Director of Human Resources. This program is an efficient and cost-saving way to provide extended protection and financial reassurance to NCB employees, including NEOs, and thereby facilitates NCB’s retention and productivity goals. It is competitive with the programs offered by comparable organizations.

To participate in the program employees must have at least 90 days of service at NCB. The amount of salary continuation available under the program increases with the length of service at NCB up to a maximum of one year of service and is contingent on the employee executing a release. Eligible employees, including the NEOs, also may continue to receive medical insurance benefits and will receive payment for vacation accrued as of the date of termination. Salary continuation benefits cease in certain circumstances, including when the person dies, or continues employment with NCB or an acquiring entity in a non-comparable position. Other than the salary continuation program available to NCB employees generally, NCB does not have severance agreements with its NEOs, other than the CEO.

NCB has a severance agreement with the CEO to provide reasonable and conservatively competitive payments and benefits if NCB terminates him without cause. Termination for cause includes but is not limited to the CEO’s failure to perform substantial duties, gross negligence, bad faith or willful misconduct.

The CEO’s severance agreement also provides benefits in the event of the CEO’s voluntary termination without good cause on nine months’ prior written notice. In exchange for NCB’s agreement to pay severance under this agreement, the CEO must comply with non-competition and confidentiality provisions and provide limited

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consulting services to NCB for three years up to a maximum of 15 days per year on matters to which he devotes significant time while at NCB. For a more detailed description of these post-employment benefits, see the discussion under “Potential Payments upon Termination or Change in Control.”

THE COMPENSATION COMMITTEE REPORT

The Executive/Compensation Committee of NCB has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussion, the Executive/Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in NCB’s annual report on Form 10-K.

Irma Cota, Chair
William F. Casey, Jr.
H. Jeffrey Leonard
Roger B. Collins
Richard Parkinson

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COMPENSATION OF THE OFFICERS

The Summary Compensation Table below summarizes the total compensation earned by each of NCB’s NEOs for the years ended December 31, 2007 and 2006.

SUMMARY COMPENSATION TABLE

							Change in Pension
							Value and
					Non-Equity		Nonqualified
					Incentive Plan		Deferred		All Other
					Compensation		Compensation		Compensation
Name and Principal Position	Year		Salary		(1)		Earnings (2)		(3)		Total
Charles E. Snyder,		2007	$	523,412	$	-	$	-	$	249,855	$	773,267
President & Chief Executive Officer		2006	$	490,129	$	917,128	$	1,376	$	225,050	$	1,633,683
Richard L. Reed		2007	$	302,188	$	-	$	-	$	42,796	$	344,984
Executive Managing Director & Chief Financial Officer		2006	$	284,236	$	340,222	$	-	$	27,900	$	652,358
Steven A. Brookner		2007	$	389,736	$	-	$	-	$	141,304	$	531,040
Executive Managing Director of NCB & Chief Executive Officer of NCB, FSB		2006	$	324,087	$	405,605	$	-	$	125,900	$	855,592
Kathleen M. Luzik		2007	$	289,510	$	-	$	216	$	42,776	$	332,502
Managing Director of NCB and Chief Operating Officer of NCB, FSB		2006	$	254,182	$	311,755	$	-	$	27,900	$	593,837
Charles H. Hackman		2007	$	278,934	$	-	$	1,020	$	37,759	$	317,713
Managing Director & Chief Credit Officer of NCB and NCB, FSB		2006	$	269,060	$	355,277	$	-	$	27,900	$	652,237

(1)

For 2007, the Non-Equity Incentive Plan Compensation column reflects cash awards to the NEOs for performance in 2007 under the STIP. The 2007 STIP specifies a maximum amount that may be awarded to the CEO and the other NEOs for a given balanced score achieved for 2007 under the 2007 STIP. NCB achieved a balanced score of 80 points under the 2007 STIP scorecard. Accordingly, NCB’s score of 80 points under the plan was enough for an award of up to 40% of Adjusted Base Salary and up to 30% of Adjusted Base Salary for the CEO and the other executives, including NEOs, respectively. However, it is within the discretion of the Committee for the CEO and within the discretion of the CEO for the other executives, including the NEOs to determine the actual amount of an award (if any) under the STIP. For 2007 the Committee and the CEO exercised that discretion due to NCB’s overall financial performance and made no awards under the 2007 STIP even though the actual performance achieved permitted an award.

Also, there were no LTIP payments earned during 2007 because the certification of performance and approval of the award completing the prerequisite for awards under the LTIP did not occur until February 2008; however, the February 2008 awards for the 2005 – 2007 LTIP are included in the 2007 Non-Equity Incentive Awards Table below.

2007 Non-Equity Incentive Awards Table:

		2005 - 2007 LTIP
		(performance measure
Name	2007 STIP	completed February 2008)
Charles E. Snyder	-	$	307,567
Richard L. Reed	-	$	124,582
Steven A. Brookner	-	$	146,546
Kathleen M. Luzik	-	$	110,536
Charles H. Hackman	-	$	116,752

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For 2006, the Non-Equity Incentive Plan Compensation column on the Summary Compensation Table reflects cash awards to the NEOs for performance in 2006 under the STIP and the 2003 to 2005 LTIP. Each plan is discussed under the heading “Executive Management Short-Term Incentive Plan” and “Executive Management Long-Term Incentive Plan,” respectively, in the Compensation Discussion and Analysis.

The amounts awarded under each Incentive Plan in 2006 are listed separately below in the 2006 Non-Equity Incentive Awards Table, as follows:

2006 Non-Equity Incentive Awards Table:

			Add-on 2006
Name	2006 STIP		STIP		2003 - 2005 LTIP
Charles E. Snyder	$	223,256	$	24,806	$	669,066
Richard L. Reed	$	102,025	$	16,616	$	222,036
Steven A. Brookner	$	119,438	$	19,451	$	266,716
Kathleen M. Luzik	$	91,287	$	14,867	$	205,601
Charles H. Hackman	$	94,174	$	15,337	$	245,766

STIP Awards 2006

The amount listed in the 2006 STIP column was earned in 2006 and paid in February 2007. NCB’s performance for 2006 earned 90 points of the 100 point maximum under the 2006 STIP. Based on that performance, NCB paid STIP awards at the maximum percentage rate available in the amount of 45% of the CEO’s Adjusted Base Salary and 35% of each of the other NEO’s Adjusted Base Salary. For 2006, the pretax net income exceeded the budget and as a result the CEO and other NEOs were eligible to receive Add-on awards in the estimated amount of 5.0% and 5.7% of Adjusted Base Salary, respectively. Those amounts are listed in the 2006 STIP Add-on column.

2003 to 2005 LTIP Awards

NCB paid the 2003 to 2005 LTIP award (the “2006 LTIP Award”) in February 2006 for NCB’s performance over the three year period of January 1, 2003 to December 31, 2005 in proportion to the long-term performance goals achieved. Pursuant to the LTIP, the awards were based on the NEOs Aggregate Base Salary with a maximum award potential of 81.25% and 56.25% of that Aggregate Base Salary for the CEO and each NEO, respectively. Based on NCB’s performance, NCB paid an award equal to 75.53% and 50.53% of Aggregate Base Salary to the CEO and each NEO, respectively.

Add-on 2006 STIP Award

The add-on 2006 STIP award was paid in 2007 at a rate of 5.0% of the CEO’s Adjusted Base Salary and 5.9% of the Adjusted Base Salary for the other NEOs.

(2)	This amount is the “above market” interest earned on deferred compensation for 2007 and 2006. The effective interest rate for 2007 was 6.1%, which was 0.33% above the applicable market. The effective interest rate for 2006 was 5.9%, which was 0.26% above the applicable market.
(3)	For each NEO, the amount shown in the “All Other Compensation” column is comprised of the following for 2007:

NCB’s contribution of $13,500 to the retirement contribution accounts of each NEO, which is further explained in the Compensation, Discussion and Analysis under the heading “Retirement Benefits.”

NCB’s matching contribution of $13,500 to the 401(k) contribution accounts of each NEO, which is further explained in the Compensation, Discussion and Analysis under the heading “Retirement Benefits.”

NCB’s insurance premium payments in the amount of $1,680 for the CEO and $1,260 for all other NEO’s.

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NCB’s health insurance premium payments in the amount of $8,925 for Mr. Hackman and $13,960 for all other NEO’s.

NCB’s long-term disability insurance premiums in the amount of $10,066 for the CEO and ranging from $556 to $576 for all other NEO’s.

The “All Other Compensation” column for Mr. Snyder and Mr. Brookner includes $183,900 and $98,000, respectively, to pay life insurance policy premiums and to defray income tax incurred with respect to those life insurance premiums; Mr. Snyder’s compensation also includes a $13,250 car allowance and Mr. Brookner’s includes a $508 service award.

Narrative to the Summary Compensation Table

For 2007 and 2006, each of the NEOs received cash compensation in the form of a base salary, non-equity incentive compensation, retirement and savings plans contributions, and some other personal benefits as described in the footnote (3) to the Summary Compensation Table. In addition, NCB’s NEOs participate in NCB’s core benefits programs as described in the Compensation Discussion and Analysis under the heading “Benefits.” NCB’s NEOs did not receive any payments during 2007 and 2006 that would be characterized as “Bonus,” “Stock Awards” or “Option Awards,” and as a result, NCB has not included those columns in its Summary Compensation Table.

NCB has no written employment agreements with its NEOs, except the CEO. NCB has an agreement with its CEO, pursuant to which NCB agrees to continue to employ him and the CEO agrees to devote his time, attention, skills and efforts to the performance of his duties. If NCB terminates him without cause or if he resigns, in some circumstances, the agreement provides for post-employment benefits. The CEO’s post-employment benefits are described more fully under the heading “Post-Employment Benefits” in the Compensation Discussion and Analysis and under the heading “Potential Payments on Termination of Employment or Change in Control.”

Grants of Plan-Based Awards – 2007

Estimated Future Payouts Under Non-

Equity Incentive Plan Awards

Grant

Action

Threshold

Target

Maximum

Name

Date (1)

Date (2)

Plan (3)

Amount

Amount

Amount

Charles E. Snyder

01/01/07

02/02/07

STIP(4

)

$

0 to $131,473

-

$

262,947

Richard L. Reed

01/01/07

02/02/07

STIP(4

)

$

0 to $ 68,211

-

$

128,843

Steven A. Brookner

01/01/07

02/02/07

STIP(4

)

$

0 to $ 88,682

-

$

167,511

Kathleen M. Luzik

01/01/07

02/02/07

STIP(4

)

$

0 to $ 65,727

-

$

124,150

Charles H. Hackman

01/01/07

02/02/07

STIP(4

)

$

0 to $ 62,962

-

$

118,928

This table sets forth the range of potential awards available under NCB’s 2007 STIP, described in the Compensation Discussion and Analysis, under the heading “Performance-Based Incentive Compensation.” The amounts in the table above are calculated based on the NEOs salaries at December 31, 2007, which differ from the NEOs total 2007 salary reflected in the Summary Compensation Table. The STIP provides performance based cash awards. NCB has no equity incentive plans. The payments actually awarded under this plan are reflected in the Summary Compensation Table.

(1)	The grant date is the date that begins the measurement period under the applicable Incentive Plan.
(2)	The action date listed in this column is the date NCB adopted the plan setting forth the performance goals, with the weights attributable to each goal and the corresponding potential awards.
(3)	This column indicates the plan applicable to the potential awards.
(4)	Under the STIP, NCB determines the actual award by reference to the number of points earned by NCB for a one year period, as described in the Compensation Discussion and Analysis under the heading “Short-Term Incentive Compensation for 2007.” The STIP only has a set maximum percentage of Adjusted Base Salary potentially available, but no stated target or minimum. In other words, even if NCB achieves

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performance sufficient to earn the minimum number of points required to earn an award under the plan, (in this case 55 points), whether any amount and how much is awarded under the plan up to a maximum percentage for 55 points is discretionary. Accordingly, to show the fact that the minimum number of points could result in varying percentages of Adjusted Base Salary available as an award or none at all, NCB has shown the threshold under the plan as the range of potential awards up to the maximum award for 55 points, plus the Add-on. In light of the structure of this plan, the “target” amount in the table is blank. Under the STIP, the threshold percentages ranged from 0% to 25% of Adjusted Base Salary (20% of Adjusted Base Salary plus an Add-on of 5% of Adjusted Base Salary) and from 0% to 22.5% (15% of Adjusted Base Salary plus an Add-on of 7.5% of Adjusted Base Salary), respectively for the CEO and the other NEOs. The maximum percentages were 50% and 42.5%, respectively for the CEO and the other NEOs.

Nonqualified Deferred Compensation

The Deferred Compensation Table below sets forth certain information with respect to non-tax qualified deferrals of compensation by NCB’s NEOs, none of whom deferred any compensation in 2007.

Deferred Compensation Table - 2007

						Aggregate
	Executive		Aggregate			Withdrawals/
	Contributions in		Earnings			Distributions		Aggregate Balance at
Name	2007		in 2007			in 2007		12/31/07
Charles E. Snyder	$	-	$	33,423		$	-	$	636,854
Richard L. Reed	$	-	$	-		$	-	$	-
Steven A. Brookner	$	-	$	-		$	-	$	-
Kathleen M. Luzik	$	-	$	7,137	(1)	$	-	$	124,653
Charles H. Hackman	$	-	$	33,721	(2)	$	-	$	588,916

(1)	$216 of this amount was the “above market” interest earned. This amount is also reflected in the Summary Compensation Table.
(2)	$1,020 of this amount was the “above market” interest earned. This amount is also reflected in the Summary Compensation Table

Narrative to Deferred Compensation Table

Eligible participants, including NEOs, in the Deferred Compensation Plan may elect to defer up to 100% of incentive compensation payments and up to 25% of their base salary. To defer compensation under the plan, participants generally must submit an irrevocable election no later than December 15^th of the year preceding the year in which the compensation to be deferred is to be earned.

NCB maintains unfunded individual accounts for each participant and credits each account with the amount deferred by the participant and interest at the rate of actively traded U.S. Treasury issues, adjusted to a constant maturity of one year, plus one percent. The reported interest rate is determined in December of the prior year. For 2007, the interest rate determined as of December 31, 2006 was 5.77%.

Benefits under the Deferred Compensation Plan will be paid no earlier than the beginning of the month following a NEO’s termination due to retirement, involuntary termination, disability, death or change in control, provided that the NEO’s service terminates within 24 months of such change of control, but participants, including NEOs, may defer receipt of any payment until age 66. However, a NEO may be allowed to access funds in his deferred compensation account earlier than the beginning of the first month following retirement or separation from NCB under certain circumstances upon a showing of financial hardship. Distributions are made in lump sum, or in semi-monthly or annual installments over a maximum of fifteen (15) years, generally, at the election of the participant. If a participant is terminated for cause, the plan requires a lump sum payment.

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Under the CEO’s deferred compensation agreement, he may elect to defer some amount or percentage of his compensation. Interest is credited to his account on the last day of each quarter in an amount equal to 100 basis points plus the yield on a five-year U.S. Treasury Note with a maturity date on or nearest to the date of such quarterly credit.

NCB does not pay compensation benefits deferred under the CEO’s deferred compensation agreement earlier than three months after the date of the CEO’s retirement or other termination of employment with NCB. At that time pursuant to the agreement, NCB makes annual payments on the anniversary of such termination date in equal amounts of $25,000 or 20% of the account balance. In the event of death prior to the date of final payment, the remaining balance is paid to his beneficiary on the earlier of the 60th day after his death or the next annual payment date after his death. Like the Deferred Compensation Plan, this account is unfunded.

NCB does not make contributions to any accounts under the Deferred Compensation Plan or under the CEO’s deferred compensation agreement, other than the credited interest. Accordingly, NCB has not included a column for registrant’s contributions.

Potential Payments Upon Termination of Employment or Change of Control

The discussion and tables below describe potential payments and benefits to which each NEO would be entitled under certain circumstances (“Trigger Events”) if the NEO’s employment with NCB terminates. Trigger Events include: voluntary termination with good reason; voluntary termination without good reason; involuntary termination for cause; involuntary termination without cause; termination due to death, disability, or retirement; and termination due to change of control. The applicable Trigger Events under each agreement or program entitling the NEO to payments or benefits upon termination or change of control vary and are described in more detail below.

The payments and benefits discussed and shown in the tables below do not include payments and benefits to the extent they are provided on a non-discriminatory basis to salaried employees upon termination generally, including continued participation in health, dental or vision insurance; salary continuation for up to one year; payment of accrued vacation leave; and 401(k) and retirement plan benefits. The amounts shown on the tables in this section assume that the effective date of each Trigger Event is December 31, 2007, and reflect the estimated amounts earned and payable as of that date. The actual amounts to be paid can only be determined at the time any such event occurs.

Regular benefits under the NCB Retirement and 401(k) Plan

See “Retirement Benefits” in the Compensation Discussion and Analysis.

Deferred Compensation

Under the Deferred Compensation Plan applicable to the NEOs (except the CEO), in the event of voluntary termination, involuntary termination, termination due to death, disability, or retirement, or change of control where service to NCB terminates within 24 months after the occurrence of such change of control, the unfunded amount credited to each NEO is payable under the terms of the plan. Assuming a Trigger Event effective December 31, 2007, the amounts are payable beginning January 1, 2008. Amounts are payable either in a lump sum or semi-monthly or annual installments, not to exceed 15 years, as elected by the NEO or the NEO’s beneficiary. In the case of termination for cause, the amount is payable in a lump sum only.

Under the CEO’s deferred compensation agreement, if retirement or termination of employment occurred on December 31, 2007, then NCB would be obligated to make annual payments to the CEO or his beneficiary beginning on March 1, 2008 in the amount of $25,000. If the balance is less than $25,000 on the annual payment date, then the annual payment shall be a final payment in the amount of such balance.

The amounts payable under the Deferred Compensation Plan and the CEO’s deferred compensation agreement upon termination, death, disability, retirement or change of control where service to NCB terminates within 24 months after the occurrence of such change of control are shown in the Nonqualified Deferred Compensation Table.

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LTIP

The LTIP rewards performance over a three-year measurement period. The current three-year measurement period spans from January 1, 2005 through December 31, 2007 (“2005 to 2007 STIP”). In the event of death, disability or retirement, before the end of the three-year period, the award amount is prorated based on the number of months employed during the three-year measurement period.

To determine the award for termination due to death, disability or retirement occurring on December 31, 2007, the terms of the LTIP provide for the following assumptions: (1) that the NEO received the same base salary that he or she was receiving on the date of the applicable event, and (2) that NCB achieved the target level of performance without regard to the actual level achieved. For 2007, the awards available for meeting the target performance goals were 50% of Aggregate Base Salary and 30% of Aggregate Base Salary for the CEO and the other NEOs, respectively. Under these circumstances, the amount of the award is prorated based on the number of months an employee was employed under the plan. Where the death, disability or retirement occurs on December 31, 2007, the employee would have been employed for the full 36 months of the 2005 to 2007 LTIP and for 12 months under the 2007 to 2009 LTIP. The certification of performance and approval of awards are presumed under these circumstances and NCB is deemed to have achieved the target level of performance without regard to the actual level achieved and without any certification and approval. Accordingly, with respect to the 2005 to 2007 LTIP the amount would not be prorated and the amount payable would be the full amount at the target level. Under the 2007 to 2009 LTIP the amount would be prorated to one-third of the target level of 50% of Aggregate Base Salary. The amounts payable under each LTIP and in the aggregate for termination due to death, disability or retirement occurring on December 31, 2007 for each NEO is shown in the table below.

	Amount paid under		Amount paid under
Name	2005 - 2007 LTIP		2007 - 2009 LTIP		Total
Charles E. Snyder	$	482,387	$	261,706	$	744,093
Richard L. Reed	$	168,413	$	90,657	$	259,070
Steven A. Brookner	$	198,104	$	116,921	$	315,025
Kathleen M. Luzik	$	149,426	$	86,853	$	236,279
Charles H. Hackman	$	157,829	$	83,680	$	241,509

For termination due to change of control, the NEOs are entitled to an award based on the rate for performance meeting target goals or the rate for actual performance estimated on the applicable date, if higher. The estimated performance as of December 31, 2007 was below the target rate, thus the applicable rate for termination due to a change in control is at the target goal level of 50% of Aggregate Base Salary and 30% of Aggregate Base Salary for the CEO and the other NEOs, respectively. Unlike awards made for termination due to death, disability or retirement, payments for termination due to change of control are not subject to any prorating.

If employment terminated on December 31, 2007 due to cause or involuntary termination, the requisite certification of performance and approval of awards under the LTIP would not have occurred and the LTIP award would be forfeited.

	Termination Due to Death,
Name	Disability or Retirement		Change in Control
Charles E. Snyder	$	744,093	$	1,005,799
Richard L. Reed	$	259,069	$	349,726
Steven A. Brookner	$	315,025	$	431,945
Kathleen M. Luzik	$	236,279	$	323,132
Charles H. Hackman	$	241,509	$	325,189

STIP

In the event a NEO is terminated for cause or involuntarily terminated without cause, the STIP is forfeited. For all other Trigger Events, assuming the date of the Trigger Event is December 31, 2007 and NCB achieved 80 points based on performance under the 2007 STIP, the CEO and the other NEOs, within the discretion

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of the Committee and the CEO, respectively, are eligible for an award under the plan up to 40% of 2007 Adjusted Base Salary, including any applicable Add-on awards for the CEO and 30% of 2007 Adjusted Base Salary, including any applicable Add-on awards for the other NEOs. However, the actual awards are within the discretion of the Committee for the CEO and within the discretion of the CEO for the other executives, including the NEOs and based on NCB’s performance during 2007, the Committee and the CEO exercised that discretion and made no awards under the 2007 STIP due to NCB’s overall financial performance in 2007. Therefore, these amounts are zero as of December 31, 2007.

Life Insurance Proceeds

As reflected in the Summary Compensation Table in the “All Other Compensation” column and described in the notes to it, NCB pays premiums on life insurance policies for each of its NEOs and pays premiums for additional life insurance for Mr. Snyder and Mr. Brookner. The policies available for all NEOs have a face value of $1,000,000 and $750,000 for the CEO and the other NEOs, respectively. The supplemental policies for Mr. Snyder and Mr. Brookner have with a face value of $2,640,970 and $3,076,000, respectively. All ownership rights of the supplemental policies belong to Mr. Snyder and Mr. Brookner. In the event of death, the insurer, not NCB, would pay the face value of the deceased NEO’s policy or policies, as the case may be, to the designated beneficiary. Also, in the event of Mr. Snyder’s death, NCB would be entitled to a payment of $177,823 from the proceeds to reimburse it for the initial premium paid by NCB in 2002. Due to changes in federal tax laws and the enactment of Sarbarnes-Oxley, NCB now pays the premiums on behalf of Mr. Snyder and treats the entire premium payment as taxable compensation to him, as described in more detail above in the section titled “Perquisites and Other Personal Benefits.”

Because all regular salaried employees of NCB are entitled to life insurance for three times base salary up to a maximum amount of $500,000, the amounts shown below reflect only the additional benefits to which the NEOs are entitled. The CEO is also entitled to continued premium payments for his additional life insurance policy for six months following termination under certain circumstances under his severance agreement, as described in more detail below in the section titled “Benefits Payable to the CEO under Severance Agreement.”

Name	Termination Due to Death
Charles E. Snyder	$	2,963,147	(1)
Richard L. Reed	$	250,000
Steven A. Brookner	$	3,326,000	(1)
Kathleen M. Luzik	$	250,000
Charles H. Hackman	$	250,000

⁽¹⁾ These amounts are based upon the face value of Mr. Snyder’s and Mr. Brookner’s supplemental policies, less, in Mr. Snyder’s case, the amount payable to NCB to reimburse it for the initial premium. The policies are variable life insurance policies and the actual amount of the death benefit will vary depending on the earnings on the investment options selected by the NEO under the policy.

Benefits Payable to the CEO under Severance Agreement

NCB has no severance agreements with its NEOs, except its CEO. Under his severance agreement, the CEO receives cash payments and other employee benefits for any Trigger Event except termination for cause, change of control or the CEO’s voluntary termination without good reason. The severance agreement entitles him to receive continued salary payments in an amount that is the greater of (1) his base salary at the rate on the termination date, or (2) if within the 60 days prior to his termination his salary was reduced, his salary prior to such reduction, for eighteen (18) months following termination. Because regular salaried employees of NCB are entitled to salary continuation for up to one year, based on years of service, the amount shown in the table reflects the additional six months of base salary to which the CEO would be entitled under the severance agreement.

In addition to salary continuation, the CEO is entitled to other benefits. Many of these benefits are also available to regular salaried employees of NCB under its salary continuation program. Benefits to which the CEO would be entitled under the severance agreement not otherwise available to regular salaried NCB employees are: payment of accrued sick leave; an amount equal to the cost of NCB providing the NCB Retirement and 401(k) Plan

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benefits as though the CEO continued to be employed by NCB during the first six months following termination; premium payments for the CEO’s supplemental life insurance policy for six months following termination; and payment of additional disability buy-up insurance premiums for six months. As of December 31, 2007, the CEO had zero accrued sick leave. The estimated amounts payable for a Trigger Event except termination for cause, change of control or the CEO’s voluntary termination without good reason, for the remaining benefits are shown in the table below.

If both parties agree, the CEO may be paid in one lump-sum for the value of all of his severance benefits. If the CEO is terminated for a disability that renders him unable to perform his job, the benefits payable under the severance agreement are reduced by the amount of any disability benefits actually received under any other NCB employee disability benefits. If the CEO secures new employment during the eighteen month benefit period, then NCB’s obligation to pay benefits is terminated or reduced as follows: If the new position has a base salary plus bonus or incentive compensation (the “New Compensation”) equal to at least 90% of the CEO’s base salary plus an amount equal to his average incentive compensation for the five fiscal years preceding the termination year (the “Old Compensation”), then his severance benefit terminates. Otherwise, his severance benefit is reduced to an amount that combined with the New Compensation, equals 90% of his Old Compensation.

In exchange for severance benefits, the CEO must execute a mutual release under which the CEO releases NCB of any obligations arising from the CEO’s employment, with the exception of the CEO’s earned deferred compensation, and NCB releases the CEO of any claims it has or may have against the CEO. Payment of severance benefits is contingent on certain provisions for the three years beginning on termination, including the non-competition and confidentiality provisions pursuant to which the CEO may not (1) become a substantial owner, employee or agent of any NCB competitor, or (2) induce any officer of NCB or an affiliate to leave NCB or engage in a competitive business. Furthermore, during that period, the CEO must provide limited consulting services to NCB upon request up to a maximum of 15 days per year, on matters to which he devoted significant time while at NCB and thereafter, cooperate with any governmental investigation or any litigation arising out of matters to which he devoted significant amounts of time while at NCB.

If the CEO voluntarily terminates employment without good reason, but provides NCB at least nine months prior notice, then the CEO is entitled to a resignation allowance in the amount of one year’s salary payable in three equal annual payments beginning on the first anniversary of his resignation. However, because regular salaried employees of NCB are entitled to salary continuation for up to one year, based on years of service, the CEO receives no greater payments under this provision, as reflected in the table below.

	Any Termination in
	Employment, Except
	Termination for Cause,
	Change of Control or		Voluntary
	Voluntary Termination		Termination Without
Name	Without Good Reason		Good Reason
Charles E. Snyder
Salary continuation	$	-	$	-
Accrued sick leave	$	-	$	-
Continued retirement payments	$	13,500	$	-
401(k) Pension	$	13,500	$	-
Premium payments for supplement life insurance policy	$	91,965	$	-
Premium payments for additional disability buy-up insurance	$	4,745	$	-

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Director Compensation Table – 2007

	Fees Earned or
Name	Paid in Cash		Total
William F. Casey, Jr., Chairperson	$	33,500	$	33,500
Irma Cota, Vice Chairperson	$	22,000	$	22,000
Allan J. Baum	$	3,750	$	3,750
Roger B. Collins	$	27,000	$	27,000
Rafael Cuellar	$	1,754	$	1,754
Steven Cunningham	$	22,750	$	22,750
William Hampel	$	21,000	$	21,000
Grady B. Hedgespeth	$	21,750	$	21,750
Janis Herschkowitz	$	2,338	$	2,338
Rosemary Mahoney	$	22,500	$	22,500
Stephanie McHenry	$	24,000	$	24,000
Richard A. Parkinson	$	18,750	$	18,750
Alfred A. Plamann	$	5,338	$	5,338
Andrew Reicher	$	2,250	$	2,250
Stuart M. Saft	$	22,250	$	22,250
Walden Swanson	$	1,795	$	1,795
Nguyen Van Hanh	$	2,338	$	2,338
David G. Nason*	$	-	$	-

* As the Presidential appointee from among the officers of the agencies and departments of the United States, Mr. Nason is not entitled to director compensation.

Narrative to Director Compensation Table

Members of NCB’s Board of Directors (the “Board”) receive cash compensation for their Board service as shown in the preceding table. Under the Act, directors who are appointed by the President of the United States from among proprietors of small business and from persons with experience in low-income cooperatives are entitled to (1) compensation at the daily equivalent of the compensation of a GS 18 civil servant which amounted in 2007 to $595 a day, and (2) travel expenses. Typically, these directors receive compensation for no more than nine days a year.

Directors elected by shareholders are entitled to (1) annual compensation of $13,000, (2) $1,000 for serving as the chair of each committee, except the annual compensation for the Audit Committee Chair is $3,000, (3) $1,000 for each board meeting attended, (4) $500 for each committee meeting attended up to two meetings only, (5) $250 for each conference call or webinar meeting attended and (6) travel expenses. The Chair of the Board is entitled to $8,000 in compensation in addition to the above amounts. Directors of subsidiary corporations are entitled to (1) $500 for each board meeting attended when not held in conjunction with NCB board meetings and (2) travel expenses. Chairs of affiliate/subsidiary boards are entitled to an additional compensation of $3,000 per year.

NCB directors do not receive stock or option awards or non-equity incentive plan compensation for their service as directors. They are entitled to participate in some of the benefit programs, which are generally available to all NCB employees. Directors may participate in NCB’s Deferred Compensation Plan under the same terms as the NEOs as described under the heading “Nonqualified Deferred Compensation.” None of the current NCB directors have elected to participate in the Deferred Compensation Plan.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Stock Ownership of Certain Stockholders and Management

Three of NCB’s stockholders own in excess of 5% of the outstanding shares of NCB’s Class B or Class C stock. The shareholders purchased a portion of this stock in connection with sizable loans made by NCB to them and

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received a portion of the stock as patronage dividends from NCB. NCB’s voting policy, however, does not allocate voting rights solely based on the number of shares of Class B or Class C stock held and prohibits any one stockholder from being allocated more than five percent of the votes allocated in connection with any stockholder action.

The following table shows those cooperatives that owned more than 5 percent of NCB’s Class B or Class C stock as of December 31, 2007.

	Class B Stock					Class C Stock
			Percent of					Percent of
Name of Shareholders	Shares		Class			Shares		Class
The Co-operative Central Bank		30,500		1.77	%		29,614		11.78	%
Greenbelt Homes, Inc.		14,440		0.84	%		29,518		11.74	%
Group Health, Inc.*		14,227		0.82	%		15,068		5.99	%

* Included in Group Health, Inc. is Central Minnesota Group Health Plan’s (who is affiliated with Group Health, Inc.) 5,469 and 3,588 shares of Class B and Class C stock, respectively.

Because the Act restricts ownership of NCB’s Class B and Class C stock to eligible cooperatives, NCB’s officers and directors do not own any Class B or Class C stock, although cooperatives with which such officers and directors are affiliated may own such stock.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE

Certain Transactions

In the ordinary course of business, NCB has made loans at prevailing interest rates and terms to directors and executive officers of NCB and to certain entities to which these individuals are related. At December 31, 2007 and 2006, loans to executive officers and current directors of the company and its affiliates, including loans to their associates, totaled $20.3 million and $68.2 million, respectively. During 2007, loan additions were $16.8 million and loan repayments were $64.8 million. There were no related party loans that were impaired, non-accrual, past due, restructured or potential problems at December 31, 2007 or December 31, 2006.

NCB had a $5.0 million committed line of credit facility and a $7.5 million bid line with the Co-operative Central Bank of which Mr. Casey is the President and CEO. There was no outstanding balance as of December 31, 2007.

NCB had a letter of credit with IMARK Group, Inc. of which Mr. Cunningham is President Emeritus. As of December 31, 2007, the exposure with the letter of credit was $2.1 million.

NCB had term loans with Harp’s Food Stores, Inc. of which Mr. Collins is President and CEO. As of December 31, 2007, the term loans had outstanding balances totaling $6.7 million.

NCB had a loan and line of credit with GEF Management Corporation (32% ESOP) of which H. Jeffrey Leonard is President and a minority shareholder. As of December 31, 2007, the ESOP term loan had a balance of $1.9 million and the $6.4 million revolving line of credit had $0.5 million outstanding.

NCB had a loan with Moreland Court TPC, LP. Shorebank, of which Stephanie McHenry is President of its Cleveland Banking Region, bought a participation in this loan from NCB. As of December 31, 2007, the balance of the loan was $8.9 million. NCB also had a $3.0 million line of credit with Moreland Court TPC, LP of which $2.3 million was outstanding as of December 31, 2007.

NCB believes that the foregoing transactions contain terms comparable to those obtainable in an arm’s length transaction. NCB has determined that these loans were made in the ordinary course of business on substantially the same terms, including interest and collateral, as those prevailing at the time for comparable transactions with other persons and did not involve more than the normal risk of collectability or present

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unfavorable features. The loans were made in accordance with NCB’s lending policies and regulatory requirements, properly approved and evaluated for disclosure in the financial statements.

Director Independence

Each director is considered by NCB to be an independent director. NCB uses the independence standards adopted by the NASDAQ Stock Market, Inc. (“NASDAQ”). (NCB does not have any securities listed on NASDAQ, but SEC rules require that reporting companies such as NCB select independence standards of a national securities exchange or national securities association, such as NASDAQ). Most importantly, no director is an officer of, or employed by, NCB or any of its subsidiaries. Although some cooperatives associated with directors have loan relationships with NCB (described in the section above), no director has a relationship that, in the opinion of NCB’s Board of Directors, would interfere with the exercise of independent judgment of the director in carrying out his or her responsibilities.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

NCB has paid or expects to pay the following fees to KPMG LLP for work performed in 2007 and 2006 (in thousands):

	2007		2006
Audit fees	$	463	$	502
Audit-related fees		29		10
Tax fees		-		-
All other fees		-		48
Total fees	$	492	$	560

Audit fees include fees for services that would normally be provided by the accountant in connection with the statutory and regulatory filings or engagements and that generally only an independent accountant can provide. In addition to fees for an audit or review in accordance with generally accepted auditing standards, this category contains fees for comfort letters, statutory audits, consents, and assistance with and review of documents filed with the SEC. Audit-related fees are assurance related services that are traditionally performed by the independent accountant, such as: employee benefit plan audits, due diligence related to mergers and acquisitions, internal control reviews, attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards. Tax fees would relate to the review of corporate tax filings. No other fees have been incurred by NCB.

The audit committee has reviewed the fees paid to KPMG LLP. These policies and procedures involve annual pre-approval by the Audit Committee of the types of services to be provided by NCB’s independent auditor and fee limits for each type of service on both a per engagement and aggregate level. Additional service engagements that exceed these pre-approved limits must be submitted to the Audit Committee for further pre-approval.

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PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Item 15(a)(1) The following financial statements are filed as a part of this report.

Financial Statements as of December 31, 2007, 2006 and 2005:

Page #
42	Report of Independent Registered Public Accountants
43	Consolidated Balance Sheets
44	Consolidated Statements of (Loss) Income
45	Consolidated Statements of Comprehensive (Loss) Income
46	Consolidated Statements of Changes in Members’ Equity
47-48	Consolidated Statements of Cash Flows
49-86	Notes to the Consolidated Financial Statements

Item 15(a)(2)               Not applicable

Items 15(a)(3) and 15(b)The following exhibits are filed as a part of this report.

Exhibit No.
(a)	3.1	National Consumer Cooperative Bank Act, as amended through 1981
(c)	3.2	1989 Amendment to National Consumer Cooperative Bank Act
(ii)	3.3	Bylaws of NCB
(ii)	4.1	Election Rules of NCB. For other instruments defining the rights of security holders, see Exhibits 3.1 and 3.2
(h)	4.11	Form of Indenture for Debt Securities
(i)	4.12	Form of Fixed Rate Medium-term Note
(j)	4.13	Form of Floating Rate Medium-term Note
*(x)	10.3	Deferred Compensation Agreement with Charles E. Snyder
*(x)	10.4	Severance Agreement with Charles E. Snyder
(b)	10.7	Subordination Agreement with Consumer Cooperative Development Corporation (now NCB Capital Impact)
*(x)	10.13	NCB Executive Long-Term Incentive Plan Approved 7/28/03
*(ii)	10.14	NCB Executive Long-Term Incentive Plan Approved 1/19/05
*(ii)	10.15	NCB Executive Long-Term Incentive Plan Approved 1/23/07
(n)	10.25	Note Purchase and Uncommitted Master Shelf Agreement with Prudential Insurance Company (Dec. 2001)
(p)	10.31	Split Dollar Agreement with Chief Executive Officer
*(x)	10.33	NCB Executive Short-Term Incentive Plan for 2004
*(ii)	10.32	NCB Executive Short-Term Incentive Plan for 2005
*(ii)	10.35	NCB Executive Short-Term Incentive Plan for 2006
*(ii)	10.36	NCB Executive Short-Term Incentive Plan for 2007
*(ii)	10.38	NCB Executive Short-Term Incentive Plan for 2008
(t)	10.34	$50 million Note Purchase Agreement with Metropolitan Life Insurance Company et al (Jan. 2003)

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Exhibit No.
(w)	10.37	Amended and Restated Financing Agreement with U.S. Treasury dated November 26, 2003
(x)	10.40	First Amendment dated December 15, 2003 to Note Purchase Agreement with Metropolitan Life Insurance Company et al
(x)	10.43	First Amendment dated December 9, 2003 to Note Purchase and Uncommitted Master Shelf Agreement with Prudential Insurance Company of America et al
(x)	10.44	Purchase Agreement relating to Trust Preferred Securities dated December 15, 2003
(x)	10.45	Indenture related to Junior Subordinated Debt Securities dated December 17, 2003
(x)	10.46	Guarantee Agreement dated December 17, 2003
*(x)	10.47	Memorandum of Understanding with Respect to Tax Treatment of Employer Payments under Split Dollar Arrangement with CEO, dated December 30, 2003
(ee)	10.48	Blanket Agreement for Advances with Federal Home Loan Bank of Cincinnati dated June 30, 2006
(z)	10.51	Second Amendment dated December 31, 2004 to Note Purchase and Uncommitted Master Shelf Agreement with Prudential Insurance Company of America et al
*(z)	10.52	Memorandum of Understanding With Respect to Tax Treatment of Employer Payments Under Split- Dollar Agreement with Charles Snyder
(ii)	10.53	First Amendment dated October 16, 2006 to Credit Agreement among NCB, various banks and SunTrust Bank, as administrative agent
*(z)	10.54	Agreement to Provide Supplemental Retirement Benefits for CEO of NCB, FSB
(bb)	10.55	Lease for 2011 Crystal Drive, Arlington, Virginia 22202
(dd)	10.56	Credit Agreement among NCB, various banks and SunTrust Bank, as administrative agent
(hh)	10.57	Second Amendment dated September 28, 2007 to Credit Agreement among NCB, various banks and SunTrust Bank, as administrative agent
(ii)	10.58	Third Amendment dated December 31, 2007 to Credit Agreement among NCB, various banks and SunTrust Bank, as administrative agent
(ii)	10.59	Second Amendment dated December 31, 2007 to Note Purchase Agreement with Metropolitan Life Insurance Company et al
(ii)	10.60	Third Amendment dated December 28, 2006 to Note Purchase and Uncommitted Master Shelf Agreement with Prudential Insurance Company of America et al
(ii)	10.61	Fourth Amendment dated December 31, 2007 to Note Purchase and Uncommitted Master Shelf Agreement with Prudential Insurance Company of America et al
(ii)	10.62	Fifth Amendment dated February 25, 2008 to Note Purchase and Uncommitted Master Shelf Agreement with Prudential Insurance Company of America et al
(gg)	13	2007 Annual Report
(ii)	14	NCB Senior Financial Officers’ Code of Ethics
(jj)	21.1	List of Subsidiaries and Affiliates of NCB
(ii)	23.1	Consent of KPMG LLP
(n)	24.11	Power of Attorney by Stephanie McHenry
(t)	24.17	Power of Attorney by William F. Casey, Jr.
(t)	24.18	Power of Attorney by H. Jeffery Leonard
(x)	24.19	Power of Attorney by Irma Cota
(x)	24.20	Power of Attorney by Grady B. Hedgespeth
(x)	24.21	Power of Attorney by Rosemary Mahoney

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Exhibit No.
(x)	24.22	Power of Attorney by Richard A. Parkinson
(z)	24.26	Power of Attorney by William Hampel
(aa)	24.27	Power of Attorney of Roger Collins
(aa)	24.28	Power of Attorney of Steven Cunningham
(ii)	24.29	Power of Attorney of Janis Herschkowitz
(ii)	24.30	Power of Attorney of Nguyen Van Hanh
(ii)	24.31	Power of Attorney of Stuart M. Saft
(ii)	24.32	Power of Attorney of Walden Swanson
(ii)	31.1	Rule 15d-14(a) Certifications
(ii)	31.2	Rule 15d-14(a) Certifications
(ii)	32	Section 1350 Certifications
(ii)	99.1	Registrant’s 2008 Election Materials

*	Exhibits marked with an asterisk are management contracts or compensatory plans.
(a)	Incorporated by reference to the exhibit of the same number filed as part of Registration Statement No. 2-99779 (Filed August 20, 1985).
(b)	Incorporated by reference to the exhibit of the same number filed as part of Amendment No. 1 to Registration Statement No. 2-99779 (Filed May 7, 1986).
(c)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s annual report on Form 10-K for the year ended December 31, 1989 (File No. 2-99779).
(d)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s quarterly report on Form 10-Q for the three months ended June 30, 1992 (File No. 2-99779).
(e)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s annual report on Form 10-K for the year ended December 31, 1994 (File No. 2-99779).
(f)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s annual report on Form 10-K for the year ended December 31, 1995 (File No. 2-99779).
(g)	Incorporated by reference to Exhibit 10.16 filed as part of the registrant’s annual report on Form 10-K for the year ended December 31, 1989 (File No. 2-99779).
(h)	Incorporated by reference to Exhibit 4.1 filed as part of Amendment No. 1 to Registration Statement No. 333-17003 (Filed January 21, 1997).
(i)	Incorporated by reference to Exhibit 4.2 filed as part of Amendment No. 1 to Registration Statement No. 333-17003(Filed January 21, 1997).
(j)	Incorporated by reference to Exhibit 4 to the registrant’s report on Form 8-K filed February 11, 1997 (File No. 2-99779).
(k)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s annual report on Form 10-K for the year ended December 31, 1997 (File No. 2-99779).
(l)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 1999 (File No. 2-99779).
(m)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s annual report on Form 10-K for the year ended December 31, 1999 (File No. 2-99779).
(n)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s annual report on Form 10-K for the year ended December 31, 2001 (File No. 2-99779).
(o)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2002 (File No. 2-99779).

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(p)	Incorporated by reference to exhibit 17 filed as part of the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2002 (File No. 2-99779).
(q)	Incorporated by reference to exhibit 20 filed as part of the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2002 (File No. 2-99779).
(r)	Incorporated by reference to exhibit 28 filed as part of the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2002 (File No. 2-99779).
(s)	Incorporated by reference to exhibit 99 filed as part of the registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2002 (File No. 2-99779).
(t)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s annual report on Form 10-K for the year ended December 31, 2002 (File No. 2-99779).
(u)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2003 (File No. 2-99779).
(v)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2003 (File No. 2-99779).
(w)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s report on Form 8-K filed December 23, 2003 (File No. 2-99779).
(x)	Incorporated by reference to the exhibit of the same number filed as part the registrant’s annual report on Form 10-K for the year ended December 31, 2003 (File No. 2-99779).
(y)	Incorporated by reference to the exhibit of the same number filed as part the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2004 (File No. 2-99779).
(z)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s annual report on Form 10-K for the year ended December 31, 2004 (File No. 2-99779)
(aa)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s annual report Form 10-K for the period ended December 31, 2005 (File No. 2-99779)
(bb)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s report on Form 8-K, January 30, 2006 (File No. 2-99779)
(cc)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s quarterly report on Form 10-Q for the period ended March 31, 2006 (File No. 2-99779)
(dd)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s report on Form 8-K filed May 5, 2006 (File No. 2-99779)
(ee)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s quarterly report on Form 10-Q for the period ended June 30, 2006 (File No. 2-99779)
(ff)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s annual report Form 10-K for the period ended December 31, 2006 (File No. 2-99779)
(gg)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s quarterly report on Form 10-Q for the period ended March 31, 2007 (File No. 2-99779)
(hh)	Incorporated by reference to the exhibit of the same number filed as part of the registrant’s quarterly report on Form 10-Q for the period ended September 30, 2007 (File No. 2-99779)
(ii)	Filed herewith
(jj)	Included in Part I of this report or Form 10-K

**********

Item 15(c) All other schedules are omitted because they are not applicable or the required information is shown in the financial statements, or the notes thereto.

117

SIGNATURES

Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf of the undersigned, thereunto duly authorized.

NATIONAL CONSUMER COOPERATIVE BANK

DATE: March 31, 2008	BY/s/  Charles E. Snyder
	Charles E. Snyder
	President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates noted:

Signature	Title	Date
*/s/  William F. Casey, Jr. William F. Casey Jr.	Chairperson of the Board of Directors and Director	03/31/08
*/s/  Irma Cota Irma Cota	Vice Chairperson of the Board of Directors and Director	03/31/08
*/s/  Charles E. Snyder Charles E. Snyder	President and Chief Executive Officer	03/31/08
*/s/  Roger B. Collins Roger B. Collins	Director	03/31/08
*/s/  Steven F. Cunningham Steven F. Cunningham	Director	03/31/08
*/s/  William F. Hampel William F. Hampel	Director	03/31/08
*/s/  Grady B. Hedgespeth Grady B. Hedgespeth	Director	03/31/08
*/s/  Janis Herschkowitz Janis Herschkowitz	Director	03/31/08
*/s/  H. Jeffrey Leonard H. Jeffrey Leonard	Director	03/31/08
*/s/  Rosemary Mahoney Rosemary Mahoney	Director	03/31/08
*/s/  Stephanie McHenry Stephanie McHenry	Director	03/31/08
/s/  David G. Nason David G. Nason	Director	03/31/08
*/s/  Richard A. Parkinson Richard A. Parkinson	Director	03/31/08

118

Signature	Title	Date
*/s/  Stuart M. Saft Stuart M. Saft	Director	03/31/08
*/s/  Walden Swanson Walden Swanson	Director	03/31/08
*/s/  Nguyen Van Hanh Nguyen Van Hanh	Director	03/31/08
*/s/  Richard L. Reed Richard L. Reed	Executive Managing Director, Principal Financial Officer	03/31/08
*/s/  Dean Lawler Dean Lawler	Senior Vice President, Principal Accounting Officer	03/31/08
*By: /s/  Richard L. Reed Richard L. Reed (Attorney-in-Fact)

119

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(D) OF THE ACT BY REGISTRANTS, WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT

With this report, the registrant is furnishing to the Commission for its information the registrant’s election materials for its 2008 annual meeting. The registrant has not yet distributed the 2007 annual report to stockholders and will furnish such report to the Commission when it is sent to security holders.

Exhibit Index

Ex. No.	Exhibit
3.3	Bylaws of NCB
4.1	Election Rules of NCB. For other instruments defining the rights of security holders, see Exhibits 3.1 and 3.2
10.14	NCB Executive Long-Term Incentive Plan Approved 1/19/05
10.15	NCB Executive Long-Term Incentive Plan Approved 1/23/07
10.32	NCB Executive Short-Term Incentive Plan for 2005
10.35	NCB Executive Short-Term Incentive Plan for 2006
10.36	NCB Executive Short-Term Incentive Plan for 2007
10.38	NCB Executive Short-Term Incentive Plan for 2008
10.53	First Amendment dated October 16, 2006 to Credit Agreement among NCB, various banks and SunTrust Bank, as administrative agent
10.58	Third Amendment dated December 31, 2007 to Credit Agreement among NCB, various banks and SunTrust Bank, as administrative agent
10.59	Second Amendment dated December 31, 2007 to Note Purchase Agreement with Metropolitan Life Insurance Company et al
10.60	Third Amendment dated December 28, 2006 to Note Purchase and Uncommitted Master Shelf Agreement with Prudential Insurance Company of America et al
10.61	Fourth Amendment dated December 31, 2007 to Note Purchase and Uncommitted Master Shelf Agreement with Prudential Insurance Company of America et al
10.62	Fifth Amendment dated February 25, 2008 to Note Purchase and Uncommitted Master Shelf Agreement with Prudential Insurance Company of America et al
14	NCB Senior Financial Officers’ Code of Ethics
23.1	Consent of KPMG LLP
24.29	Power of Attorney of Janis Herschkowitz
24.30	Power of Attorney of Nguyen Van Hanh
24.31	Power of Attorney of Stuart M. Saft
24.32	Power of Attorney of Walden Swanson
31.1	Rule 15d-14(a) Certifications
31.2	Rule 15d-14(a) Certifications
32	Section 1350 Certifications
99.1	Registrant’s 2008 Election Materials

120

EX-3.3

Exhibit 3.3

March 7, 2007

NATIONAL CONSUMER COOPERATIVE BANK

CORPORATE BYLAWS

ARTICLE I

NAME, CHARTER, PURPOSES AND OFFICES

Section 1.1 Name. The name of the corporation is the National Consumer Cooperative Bank (“the Bank”). The Bank may conduct its operations under the trade name, “National Cooperative Bank.”

Section 1.2 Charter. The Bank is created and chartered as a body corporate by Act of the Congress of the United States, the National Consumer Cooperative Bank Act, as amended (“the Bank Act”).

Section 1.3 Purposes. The purpose of the Bank is to make available necessary financial and technical assistance to cooperative self-help endeavors and conduct other activities and operations set forth in the Bank Act.

Section 1.4 Offices. The principal office of the Bank shall be in Washington, District of Columbia. Branch or other offices may be established at such times and maintained at such places as the Board of Directors may authorize. The President of the Bank may authorize other work sites for Bank representatives as he or she may deem necessary.

ARTICLE II

BOARD OF DIRECTORS

Section 2.1 General Powers. The business and affairs of the Bank shall be conducted under the direction and control of its Board of Directors (“the Board”). The powers and responsibilities of the Board are set forth in the Bank Act and in these Bylaws. The Board shall establish the policies of the Bank governing its business and affairs and shall direct the management of the Bank. The Board may adopt such rules and regulations for the conduct of its meetings and the management of the Bank as it may deem proper, not inconsistent with these Bylaws and the Bank Act.

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Section 2.2 Board Composition. The number of directors constituting the entire Board shall be fifteen (15). Three (3) shall be appointed to the Board by the President of the United States, in the manner specified in the Bank Act and may be removed only by the President as provided in the Bank Act. Twelve (12) directors shall be elected by the holders of the Bank’s class B stock and the Bank’s class C stock in the manner specified in the Bank Act. No one of the classes of (1) housing, (2) consumer goods, (3) low-income cooperatives, (4) consumer services, or (5) all other eligible cooperatives shall be represented on the Board by less than one or more than three elected directors.

Section 2.3 Term. All directors shall serve for a term of three (3) years unless otherwise specified in the Bank Act. No director shall be eligible to be elected for more than two consecutive full three-year terms. However, any director may continue to serve until his or her successor has been elected or appointed and has been qualified and seated, in accordance with the Bank Act, these Bylaws, and the election rules adopted under section 3.3 of these Bylaws. The Board, in its sole discretion, may determine when the term of a director shall commence after any election date and the date on which a director-elect shall be seated on the Board, assuming the full authority of a director.

Section 2.4 Resignation; Removal.

     (a) Any director may resign at any time. Such resignation shall be made in writing and shall take effect on the date specified in the director’s written resignation or, if no effective date is specified in such letter, the date such written resignation is received by the Secretary. A director’s resignation shall be effective as provided without acceptance or further action by the Board.

     (b) Any elected director may be removed for Good Cause (i) by affirmative vote of a majority of votes cast at an annual or special meeting of stockholders with respect to which notice of such proposed vote for removal has been given or (ii) by affirmative vote of two-thirds (2/3) of disinterested directors following a report of the audit/risk management committee as to the existence of Good Cause. For purposes of this Section 2.4(b), “Good Cause” shall include a material violation of the Bank’s Code of Conduct and Ethics, conviction of or plea of nolo contendere to a felony or of a misdemeanor that causes material injury to the business or reputation of the Bank, willful or reckless failure or refusal to perform the duties of a director, mental or physical inability to function as a director or such other matters as the Board reasonably determines, by such affirmative vote, to result in material harm to the business or reputation of the Bank.

Section 2.5 Vacancies. A director’s seat shall be vacant upon the death of the director; or on the effective date of the director’s resignation; or on the effective date of an appointed director’s removal by the President of the United States or an elected director’s removal pursuant to Section 2.4(b) hereof. If a vacant seat was held by an elected director, such vacant seat may be filled by vote of the Board for the remainder of the unexpired term of such vacant seat.

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Section 2.6 Compensation of Directors.

     (a) Appointed Directors. The directors appointed to the Board by the President shall be compensated as provided in the Bank Act.

     (b) Elected Directors. The directors who are elected by the holders of Class B stock and Class C stock shall be entitled to receive such compensation and reimbursement for expenses for the performance of their duties on the Board as may be provided from time to time by the Board.

Section 2.7 Officers of the Board. The Board shall, at its first meeting after each annual meeting of stockholders and at such other times as may be necessary to fill vacancies for officers of the Board, elect one director to be Chair and one director to be Vice Chair of the Board. It shall also select a Secretary of the Board, who need not be a director. The Chair, Vice Chair, and Secretary of the Board shall hold office for one year terms or until their respective successors shall be selected and take office. The Secretary of the Board shall prepare and retain minutes of all meetings of the Board and perform such other duties from time to time as may be assigned by the Board or by the President. In the absence or disability of the Secretary, the Corporate Secretary shall perform the duties of the Secretary of the Board.

Section 2.8 Regular Meetings. Regular meetings of the Board shall be held at least quarterly at places and times fixed by the Board.

Section 2.9 Special Meetings. Special meetings of the Board may be in person or telephonic and shall be held upon the call of the Chair or upon the call of any five directors. Each special in person meeting of the Board shall be held at the principal office of the Bank, unless the person calling prescribes, and the notice of such meeting specifies, another place.

Section 2.10 Notice of Meeting. The Secretary of the Board shall give each director notice of the time, place, or date of each regular meeting of the Board and notice of the purpose, time, place, date, and calling authority of any special meeting of the Board. Whenever a regular or special meeting of the Board shall be recessed, the Secretary of the Board shall give notice of when the meeting shall reconvene as soon as may be practical under the circumstances.

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Section 2.11 Method of Giving Notice. Notice shall be mailed first class postage prepaid at least ten days prior to the meeting date, or shall be sent prepaid by express mail, telegram, facsimile or cable, presented for transmission not later than five days preceding the day of the meeting, or shall otherwise be delivered to the director, including, without limitation, by email with receipt acknowledged, not later than three days before the meeting date. Notice may be waived in writing by a director before, during, or after a meeting. A director’s participation in a meeting is a waiver of notice of that meeting, unless the director participates solely for the purpose of objecting to transaction of any business because the meeting was not properly called or convened.

Section 2.12 Quorum. At all meetings, the presence of a majority of the directors qualified and seated at the time of the meeting shall constitute a quorum for the transaction of business. Except as otherwise specifically provided in the Bank Act or these Bylaws, the act of a majority of the directors present at a regular or special meeting at which a quorum is present or participating shall be the act of the Board.

Section 2.13 Meeting Rules. The Board shall conduct its meetings in accordance with such rules as it may establish from time to time, including rules on the manner of submitting items for the agenda, the allocation of time of presentation and debate, and voting. If the Board has not adopted its own rules, and for matters not addressed in any rules adopted by the Board, meetings shall be conducted in accordance with the procedures for meetings described in Roberts rules of Order, latest edition, unless such procedures are otherwise inconsistent with these Bylaws or the Bank Act.

Section 2.14 Public Observation.

     (a) Open Meetings. Except as provided in subsection (b), meetings of the Board and its committees shall be open to members or representatives of all eligible cooperatives, eligible organizations and invited persons, as observers only.

     (b) Closed Meetings. Meetings of the Board and its committees may be closed to public observation and attendance may be further limited only to directors, as provided in the Bank Act and rules established by the Board not inconsistent with the Bank Act.

     (c) Notice of Meeting. The Board and its committees shall make a public announcement of all meetings. Generally notice shall be provided at the Bank at least seven (7) days before a meeting is scheduled, but shorter notice may be provided at the earliest practicable time.

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Section 2.15 Records. Copies of proceedings of regular and special meetings of the Board, the Bylaws and any amendments thereto, reports of committees of directors and proceedings of the Executive Committee, or any standing committees, shall be recorded in the minute books of the Bank. The minutes of the Board and its committees shall be signed by the Chair of the Board or the Chair of the committee or the Secretary of the Board.

Section 2.16 Action By Consent. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if written consent thereto is signed by all members of the Board or of such committee as the case may be and such written consent is filed with the minutes of proceedings of the Board or committee.

ARTICLE III

ELECTION OF DIRECTORS

Section 3.1 Record Date. The Board shall fix a date not less than ninety (90) days prior to the date of any election or special election as the record date for determining stockholders of record entitled to vote. The record date for any run-off election shall be the same record date established under this section for the original election.

Section 3.2 Notice.

     (a) The Corporate Secretary shall give notice of any election to all stockholders of record at least sixty (60) days preceding an election, special election or run-off election. Notice shall be mailed to stockholders of record at the address appearing on the Corporate Secretary’s records. An official ballot which shall describe the qualifications of nominees and their positions on issues, the date when ballots must be received by the Bank, and all other information necessary for participation in the election shall be mailed to stockholders of record no later than thirty days preceding an election.

     (b) Waiver. Participation by any stockholder in any election shall constitute a waiver by that stockholder of notice of such election, except where the participation is for the express purpose of objecting to the transaction of any business because the election or meeting was not properly called. A written waiver of notice of any election signed by an authorized officer or a stockholder shall be deemed equivalent to giving proper notice to such stockholder.

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Section 3.3 Nominations and Election Procedures. The Board shall adopt election rules, consistent with the provisions of the Bank Act, governing nominations to vacant directorships and procedures for the conduct of elections. Such election rules may provide procedures that will cause, over the course of several succeeding elections, the arrangement of the terms of all elected directors so that the terms of no more than one-third of them will expire in the same year. Such election rules shall provide procedures for nomination of candidates by stockholders, in addition to other procedures; provided that each stockholder nominee must establish support by at least fifteen percent (15%) of the stockholders eligible to vote on the record date for the election. The decision of the Board on any matter that shall arise with regard to the election rules described in these Bylaws shall be final. No contested director shall participate in any decision with respect to such dispute.

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ARTICLE IV

BOARD COMMITTEES

Section 4.1 Executive Committee. There shall be constituted an Executive Committee which shall be accountable to the full Board and which shall also act as the Compensation Committee unless the Board votes to the contrary. The members of the Executive Committee shall be the Chair of the Board, the Vice Chair of the Board, the Chair of each Standing Committee of the Board and the Chair of NCB Capital Impact, so long as the latter person is also a member of the Board of the Bank. The Chair of the Board shall be the chair of the Executive Committee.

     (a) Duties and Responsibilities. Except as otherwise limited in these Bylaws, the Executive Committee shall exercise all of the powers of the Board when the Board is not in session, when waiting for the next regular meeting of the Board will adversely affect the best interests of the Bank. All actions of the Executive Committee on behalf of the Board shall be subject to review and ratification by the Board at its next meeting.

     (b) Committee Meetings and Minutes. The Executive Committee shall meet at stated times, at the call of the Chair or at the request of at least three (3) members of the committee. Four members of the Committee shall constitute a quorum. Minutes of each Executive Committee meeting shall be prepared and shall be made available to the full Board.

Section 4.2 Standing Committees of the Board. The standing committees of the Board shall be (a) the Audit Committee and (b) the Compensation Committee. The chair of the Board, subject to approval of the Board, shall appoint directors to standing committees, including one director to be chair of each committee.

Section 4.3 Other Committees. The Board may by resolution establish such other committees of directors as it deems necessary or desirable. The Chair of the Board, subject to approval of the Board, shall appoint directors to committees, including one director to be chair of each committee. The Chair of the Board may establish and appoint ad hoc committees at his or her discretion.

Section 4.4 Delegations to Committees. In addition to the authority granted to the committees in these Bylaws, the Board may by Resolution delegate to a committee the power to exercise the authority of the full Board on specified matters, provided however, that no committee, including the Executive Committee, shall have authority to take any of the following actions:

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     (a) the filling of vacancies on any committee of directors;

     (b) the fixing of compensation of directors;

     (c) the amendment or repeal of these Bylaws or the adoption of new Bylaws;

     (d) the adoption of Bank policies;

     (e) the declaration of patronage refunds or dividends on stock; and

     (f) the termination or appointment of the President of the Bank.

Section 4.5 Committee Procedure, Quorum. Except as otherwise provided in these Bylaws or a resolution of the Board establishing the committee, or for ad hoc committees, a majority of a committee shall constitute a quorum thereof, the act of a majority of those present or participating at a meeting where a quorum is present shall be the act of the committee, and meetings of each committee shall be called by the chair of the committee or a majority of its members. Each committee shall provide such reports at such times as the Board may require. All committees, including the Executive Committee, may transact business by in person or telephonic meetings, in accordance with the rules applicable to Board meetings set forth in Article II of these Bylaws.

ARTICLE V

OPERATING OFFICERS, AGENTS, AND EMPLOYEES

Section 5.1 Officers. The officers of the Bank shall be the President, the Treasurer, the Corporate Secretary, and such other officers as the Board may establish, each of whom shall have such authority and perform such duties as the President may delegate.

Section 5.2 Appointment, Term of Operating Officers, and Qualifications. All officers of the Bank who report directly to the President should be appointed by the President and ratified by the Board. No officer may be a director of the Bank. The President shall be appointed by the Board and may be removed by the Board.

Section 5.3 The President. The President of the Bank shall be its Chief Executive Officer and shall have full responsibility and full authority for the day-to-day administration of the affairs of the Bank, under the general supervision of the Board. The President shall also have such other powers and perform such other duties as the Board may from time to time prescribe. The President shall supervise all other officers, employees and agents of the Bank. Except as otherwise provided by the Board or in these Bylaws, the President may delegate the authority of that officer among the operating officers and employees of the Bank as he or she deems necessary or convenient for the efficient operation of the Bank.

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Section 5.4 The Treasurer. The Treasurer, who shall also be an officer of the Bank, shall (a) have charge and custody of, and be responsible for, all funds and securities of the Bank, and shall deposit all such funds and securities in depositories selected according to resolutions adopted by the Board; (b) receive, and give receipts for, monies due and payable to the Bank from any source whatsoever; (c) sign such documents as require the signature of the Treasurer; and (d) perform all duties incident to the office of Treasurer and such other duties as from time to time may be assigned by the Board or by the President.

Section 5.5 The Corporate Secretary. The Corporate Secretary shall be responsible for the custody of all Bank books, records and files and correspondence of the Bank, except as shall be in the charge of the Treasurer, the Secretary of the Board or of some other person authorized to have custody and possession thereof by the Board or the President. The Corporate Secretary shall have custody of the seal of the corporation and shall affix the same to all instruments requiring it. The President may appoint one or more assistant secretaries to perform such duties and to have such powers of the Corporate Secretary as shall from time to time be assigned to them by the President.

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ARTICLE VI

CAPITALIZATION

Section 6.1 Class A Notes.

     On the Final Government Equity Redemption Date, as defined in the Bank Act (December 31, 1981), the Bank fully redeemed all of the Class A preferred stock held by the Secretary of the Treasury in exchange for Class A notes, which were issued by the Bank to the Secretary of the Treasury on behalf of the United States. The Class A notes have a total face value equal to the total par value of the Class A stock which was so redeemed, are payable as to principal and interest as provided in the Bank Act, and are subordinate to all obligations issued by the Bank after December 31, 1981, except for obligations relating to any class of stock issued by the Bank.

Section 6.2 Common Stock.

     (a) Authority to Issue. The capital stock of the Bank shall be issued by the Board under the authority of the Bank Act.

     (b) Class B Stock. Class B stock shall be common stock with voting rights as specified in these Bylaws. Class B stock shall be issued to and held only by eligible cooperatives who are recipients of loans and shall be transferable only in strict compliance with capitalization policies adopted by the Board. Borrowers under patronage-based loans shall be required to own Class B stock in an amount equal to one percent (1%) of the face amount of the loan at the time the loan is made. Class B stock shall be issued at par value as shall be determined by the Board and classified series 1 and 2, the former of which constitutes class B stock purchased for cash at par value on or after June 29, 1984, and the latter of which constitutes all other Class B stock.

     (c) Class C Stock. Class C stock shall be common stock with voting rights as specified in these Bylaws. Class C stock shall be available for purchase and shall be held only by borrowers, by organizations controlled by such borrowers or by other eligible cooperatives. Class C stock shall be issued at par value as shall be determined by the Board. Class C stock may be transferred only to another eligible cooperative. If a Class C stockholder becomes a recipient of a new loan, Class C stock, in an amount equal to one percent (1%) of the face amount of the loan commitment, may be converted to Class B stock provided that such conversion privilege shall only apply to Class C stock purchased for cash from the Bank.

     (d) Nonvoting Common Stock. The Board may authorize and issue other classes and series of nonvoting common stock with such rights, powers, privileges and preferences of the separate classes as the Board may specify. Such stock may be issued in fractional shares and sold, transferred or pledged when authorized by the Board in accordance with the Bank Act.

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     (e) Preferences and Dividends. The common stock shall be subject to the prior rights of the holders of Class A notes as specified in the Bank Act. No dividend shall be paid on Class B stock. The Board may declare dividends, payable only from income, on Class C stock, at such rate and under such terms and conditions as it may determine; except that until all Class A notes have been retired, the rate of such dividends shall not exceed the statutory interest rate for Class A notes.

     (f) Voting Rights.

          (i) Only stockholders holding shares of record with voting power will be entitled to vote. Regardless of the number of shares of stock of any class or series held by a stockholder, and as shall be further defined in election rules adopted pursuant to Section 3.3 of these Bylaws, each stockholder of record with one or more shares of voting stock shall be entitled to vote in the affairs of the Bank as hereinafter provided: (A) each borrower-stockholder of record shall be entitled to five (5) votes; (B) each non-borrower stockholder shall receive one vote; and (C) each stockholder of record shall be entitled to additional votes based upon factors as stated in the election rules, except that, notwithstanding the allocations of votes that would otherwise be made under this section, no voting stockholder shall be entitled to more than five percent (5%) of the total voting control held by all voting stockholders and no stockholder that is a developing cooperative (as that term is defined in election rules) shall receive more than five (5) votes.

          (ii) The Board may at any time alter the voting rights for certain stockholders as is provided in the Bank Act.

     (g) No Liens on Stock. No stockholder shall cause or permit the creation of any security interest or other lien or encumbrance in favor of any person (other than, by separate agreement, the Bank) with respect to any shares of any class of capital stock of the Bank. The Bank will not honor any request of any stockholder or other person to indicate in any way on its books or records the existence of any such encumbrance.

     (h) Transfer on the Books of the Bank. Transfers of shares of any class or series of stock shall not be valid unless and until registered on the books of the Bank. No transfer shall be registered on the books of the Bank without the approval of the Bank.

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     (i) Involuntary Exchange. In the event the Bank shall determine, in its sole discretion, that a formerly eligible cooperative stockholder has dissolved or become inactive, or is not functioning as an eligible cooperative organization, full ownership and title to any and all of the stock of the Bank held by such stockholder as shown on the books of the Bank shall pass to and become vested in the Bank. The Bank may, in its sole discretion, authorize the involuntary exchange of shares of Class B or Class C stock for an equivalent dollar amount of any class or series of non-voting common stock as shall then be authorized for issuance. For purposes of this section, the Bank may determine the value of the stock to be purchased or exchanged without right of appraisal not to exceed par. If any holder of stock is more than sixty (60) days past due on any indebtedness to the Bank, the Bank may at its sole option and discretion apply the price or exchange value of that holder’s shares to reduce the total amount of such indebtedness.

     (j) Redemption or Repurchase. The Bank shall retire the Class A notes as provided in the Bank Act and these Bylaws. Class B and Class C stock are not redeemable, except that the Board may at its pleasure establish policies for the redemption or repurchase by the Bank of Class B or Class C stock at such values, not exceeding par, and under such terms and conditions as it may determine. For purposes of any such policies, the Board may treat stock purchased from the Bank differently from stock distributed as a patronage refund.

ARTICLE VII

DISTRIBUTION OF EARNINGS

After payment of all operating expenses of the Bank, including interest on its obligations, and after setting aside appropriate funds for any dividends payable on any class of stock, for reserves for losses, for interest payments on Class A notes, and for any redemption of Class A notes, the Bank shall annually set aside the remaining earnings of the Bank for patronage refunds, under patronage refund policies that shall be adopted by the Board consistent with the Bank Act.

ARTICLE VIII

STOCKHOLDERS’ MEETINGS

Section 8.1 Annual Meeting. The Bank shall hold an annual meeting of its stockholders in each calendar year at such time and place, or at such other location as the Board may determine, to receive reports of the Bank’s activities during the year and of the Bank’s financial condition and to conduct such other business as may come before the meeting according to these Bylaws and such rules as the Board may from time to time adopt.

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Section 8.2 Special Meetings. Special meetings of the stockholders may be called by the affirmative vote of two-thirds of the Board of Directors.

Section 8.3 Record Date. The record date for an annual or special meeting of stockholders shall be the ninetieth (90) day prior to the date of the meeting or such other date as is provided in the Rules adopted by the Board under Section 3.3 of these Bylaws.

Section 8.4 Notice of Meeting.

     (a) The Secretary shall give notice of an annual or special meeting of stockholders to all stockholders of record by the ninetieth day preceding such meeting. Notice stating the date, time, place and agenda for the meeting shall be mailed to each such stockholder at the stockholder’s address appearing on the records of the Bank. Such notice shall include an official ballot for any proposals presented pursuant to Section 8.6. No notice of any recessed meeting of the stockholders need be given if the time and place to which the meeting is recessed are announced at the meeting at which the recess is taken, and provided a new record date is not set for the meeting.

     (b) Participation by any stockholder, either in person or by mail or by electronic method, in any meeting of which it is entitled to notice shall constitute a waiver by that stockholder of notice of such meeting, except where the participation is for the express purpose of objecting to the transaction of any business because the election or meeting was not properly called. A written waiver of notice of any meeting signed by an authorized officer of a stockholder shall be deemed equivalent to giving proper notice to such stockholder.

Section 8.5 Manner and Effect of Vote by Shareholders.

     (a) Representatives of the holders of voting stock may cast votes in person or by mail or by electronic method for any matter properly placed on the agenda of an annual or special meeting for advisory vote of the stockholders.

     (b) Each stockholder eligible to vote shall designate one representative who shall be entitled to cast its vote. The stockholder’s representative must be designated by presenting to the Bank a written authorization from the stockholder’s governing body in accordance with rules adopted by the Board under Section 3.3 of these Bylaws.

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Section 8.6 Stockholder Proposals. The Bank’s stockholders eligible to vote shall be entitled to present written proposals for consideration and adoption by all stockholders participating in any annual or special meeting of stockholders according to rules adopted by the Board and included as an exhibit to each notice given under section 8.4 of these Bylaws.

Section 8.7 Quorum. The stockholders participating in person or by mail or by electronic method in a meeting for which a required notice has been given shall constitute a quorum.

Section 8.8 Procedures. The Chair shall preside at all meetings of stockholders. All meetings shall be conducted according to rules adopted by the Board. If the Board has not adopted its own rules, and as to matters not covered in any rules adopted by the Board, meetings shall be conducted in accordance with the procedures for meetings described in Roberts Rules of Order, latest edition, unless such procedures are otherwise inconsistent with these Bylaws or the Bank Act.

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ARTICLE IX

INDEMNIFICATION/INSURANCE

Section 9.1 Action, Other Than by or in the Right of the Bank. The Bank shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit, proceeding, investigation, arbitration or other dispute resolution mechanism, whether civil, criminal, investigative or administrative, and whether external or internal to the Bank (an “Action”) other than a judicial action or suit brought by or in the right of the Bank, by reason of the fact that he or she is or was a director, officer, employee, or trustee of the Bank or is or was serving at the request of the Bank as a director, officer, employee or trustee of another corporation, partnership, joint venture, trust or other enterprise (all such persons being referred to hereafter as an “Agent”), against expenses (including attorneys’ and other professional fees), judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by him or her in connection with such Action if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Bank, and with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any such Action by judgment, order, settlement, arbitration or similar award, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Bank, and, with respect to any criminal action or proceeding, that he or she had reasonable cause to believe that his or her conduct was unlawful.

Section 9.2 Action, by or in the Right of the Bank. The Bank shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed judicial action or suit brought by or in the right of the Bank to procure a judgment in its favor by reason of the fact that he or she is or was an Agent (as defined above) against expenses (including attorneys’ and other professional fees) actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Bank, except that no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his or her duty to the Bank unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. The termination of any such Action by judgment, order, settlement, arbitration or similar award shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Bank.

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Section 9.3 Indemnification Against Expenses of Successful Party. Notwithstanding the other provisions of this Article, to the extent that an Agent has been successful on the merits or otherwise, including the dismissal of an Action without prejudice or the settlement of an Action without admission of liability, in defense of any Action, or in defense of any claim, issue or matter therein, otherwise covered by the indemnification provisions in this Article, such Agent shall be indemnified against all expenses incurred in connection therewith. If the Agent is not wholly successful in such Action but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Action, the Bank shall indemnify the Agent against all expenses actually and reasonably incurred by him or her in connection with each successfully resolved claim, issue or matter.

Section 9.4 Advances of Expenses. Except as limited by Section 9.5 of this Article, expenses incurred in any Action covered by the indemnification provisions in Section 9.1 or 9.2 shall be paid by the Bank in advance of the final disposition of such matter if the Agent shall undertake to repay such amount in the event that it is ultimately determined as provided herein that such person is not entitled to indemnification. The Agent shall not be required to post a bond as part of such undertaking. Notwithstanding the foregoing, no advance shall be made by the Bank if a determination is reasonably and promptly, and in any event within ninety (90) days, made by the Board of directors by a vote of two-thirds of a quorum of Disinterested Directors (as defined in Section 9.5 below), or (if such a quorum is not obtainable or, even if obtainable, a quorum of Disinterested Directors, so directs) by independent legal counsel in a written opinion, that, based upon the facts known to the Board or such counsel at the time such determination is made, such person acted in bad faith and in a manner that such person did not believe to be in or not opposed to the best interest of the Bank, or with respect to any criminal proceeding, that such person believed or had reasonable cause to believe his or her conduct was unlawful. In no event shall any advance be made in instances where the Board or such counsel reasonably determined that such person deliberately breached his or her duty to the Bank or its shareholders.

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Section 9.5 Right of Agent to Indemnification Upon Application: Procedure Upon Application. Any indemnification under Sections 9.1, 9.2, or 9.3, or advance under section 9.4 of this Article, shall be made promptly, and in any event within ninety (90) days, upon the written request of the Agent, unless a determination within such time is made (i) by the Board of Directors by a vote of two-thirds of a quorum consisting of not less than half of directors who neither are nor were parties to such action, suit or proceeding (“Disinterested Directors”), or (ii) if such a quorum is not obtainable, or, even if obtainable, if a majority of such a quorum so directs, by a written opinion of independent legal counsel selected by the Board of Directors, or (iii) if neither the procedures described in clause (i) and clause (ii) are available or if directed by the Board, by the stockholders, that such person is not entitled to indemnification under the standards set forth in Sections 9.1, 9.2, 9.3 or 9.4, as applicable. The right to indemnification or advances as granted by this Article shall be enforceable by the Agent in any court of competent jurisdiction, if the Board or independent legal counsel denies the claim, in whole or in part, or if no disposition of such claim is made within ninety (90) days. The Agent’s expense incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such proceeding shall also be indemnified by the Bank.

Section 9.6 Other Rights and Remedies. The indemnification provided by this Article shall not be deemed exclusive of any other rights to which an Agent seeking indemnification may be entitled under any bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be an agent and shall inure to the benefit of the heirs, executors and administrators of such person. All rights to indemnification under this Article shall be deemed to be provided by a contract between the Bank and the Agent who serves in such capacity at any time while these Bylaws are in effect. Any repeal or modification thereof shall not affect any rights or obligations then existing. This Article is intended to grant the Agents at least as complete and favorable indemnification as is available under the laws of the State of Delaware, and it shall be not be construed to provide less protection to the Agents than as permitted by such laws.

Section 9.7 Insurance. Upon resolution passed by the Board, the Bank may purchase and maintain insurance on behalf of any person who is or was Agent against any liability that may be asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Bank would have the power or obligation to indemnify him or her against such liability under the provisions of this Article.

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Section 9.8 Other Enterprises, Fines, Serving at Bank’s Request and Witness Expenses. For purposes of this Article, references to “other enterprise” in Section 9.1 shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the Bank” shall include any service as a director, officer, employee, or trustee of the Bank which imposes duties on, or involves services by, such director, officer, employee, or trustee, as a director, officer, or employee of any subsidiary of the Bank or with respect to any employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interest of the Bank” as referred to in this Article. Without limiting any of the provisions contained herein, to the extent that the Agent is, by reason of his or her status as Agent, a witness in any Action to which the Agent is not a party, he or she shall be indemnified against all expenses actually and reasonably incurred by him or her in connection therewith.

Section 9.9 Limitation on Liability. No director or officer of the Bank shall be personally liable to the Bank or its stockholders for monetary damages for breach of fiduciary duty as a director or officer (as the case may be), except for liability (i) for any breach of a duty of loyalty to the Bank or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or (iii) for any transaction from which the director or officer derived any improper personal benefit.

Section 9.10 Savings Clause. If this Article or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, then the Bank shall nevertheless indemnify each Agent as to expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit, proceeding or investigation whether civil, criminal or administrative, and whether internal or external, including a grand jury proceeding and an action or suit brought by or in the right of the Bank, to the full extent permitted by any application portion of this Article that shall not have been invalidated, or by any other applicable law.

ARTICLE X

AMENDMENTS

These Bylaws may be amended or repealed or new Bylaws may be adopted only by the affirmative vote of two-thirds (2/3) of the directors seated at the time of such vote. The Board shall, wherever practicable, solicit advisory stockholder comments on proposed Bylaw amendments.

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ARTICLE XI

MISCELLANEOUS

Section 11.1 Fiscal Year. The Bank’s fiscal year shall begin on the first day of January and end on the last day of December of each year.

Section 1.2 Seal. The Seal of the Bank shall be such as shall be adopted and approved by the Board of Directors. The Seal may be affixed by impression, printing, rubber stamp or otherwise.

Section 11.3 Conflict of Interest. The Board shall adopt and publish conflict of interest rules which implement Section 114 of the Bank Act. The rules shall prohibit the Bank directors, officers and employees from participation or action or the use of inside information for personal advantage on any Bank matters and shall provide procedures for enforcement of such rules.

Section 11.4 Eligible Cooperatives. An eligible cooperative is an organization the Bank determines to be eligible under the provisions of Section 105 of the Bank Act and the eligibility policies the Board may adopt from time to time to implement Section 105 of the Bank Act.

Section 11.5 Limitation on Dividends for Eligible Cooperatives. An eligible cooperative shall not pay dividends on membership capital or voting stock at a percentage rate in excess of the rate permitted under its charter or bylaws or by applicable laws of the state of its incorporation; provided that the Board reserves the right to determine and publish from time to time maximum dividend rates payable by eligible cooperatives to which the Bank extends credit.

EX-4.1

Exhibit 4.1

National Cooperative Bank
Rules for Election of Directors

Section 1: Purpose, Distribution. These election rules have been adopted by the National Cooperative Bank’s (“NCB”) Board of Directors (the “Board”) to establish procedures for the conduct of an election to fill vacant stockholder directorships on the Board, in accordance with the National Consumer Cooperative Bank Act and the bylaws of NCB. The results of the election will be announced at the next annual meeting of the Corporation.

The Corporate Secretary shall distribute a copy of these rules to all stockholders of record. Each stockholder of record shall make these rules available to its members if so requested.

Section 2: Election Officer. The Corporate Secretary shall be NCB’s election officer responsible for the conduct of the election and the interpretation of these rules. Subject to final Board review, the Corporate Secretary may designate other NCB officials to assist in the conduct of the election and the Corporate Secretary shall appoint persons outside of NCB to act as independent election tellers or to provide other assistance as will enhance and protect the integrity of the election. All questions regarding these rules and all required correspondence and submissions should be directed to:

Irrainna Blackmon-Corbin
Corporate Secretary
NCB
2011 Crystal Drive, Suite 800
Arlington, VA 22202

Section 3: Record Date, Stockholder List. December 31, of the year prior to the date of any election or special election shall be the record date for determining stockholders of record entitled to vote. The record date for any run-off election shall be the same record date established under this section for the original election. Upon written request, the Corporate Secretary shall promptly make available a voting list containing the names and addresses of all stockholders of record.

Section 4: Notice of Election.

4.1 Notice. The Corporate Secretary shall give notice of any election to all stockholders of record at least sixty days preceding an election, special election or run-off election. Notice shall be mailed to stockholders of record at the address appearing on the Corporate Secretary’s records. An official ballot, which shall describe the qualifications of nominees and their positions on issues, the date when ballots must be received by NCB, and all other information necessary for participation in the election shall be mailed to stockholders of record no later than thirty days preceding an election.

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     (a) Any stockholder who has failed to provide NCB with a current address for three consecutive years will be considered an inactive member and shall not be considered an eligible participant in the election process.

4.2 Waiver of Notice. Participation by any stockholder in the election shall constitute a waiver by that stockholder of notice of such election, except where the participation is for the express purpose of objecting to the transaction of any business because the election or meeting was not properly called. A written waiver of notice of any election signed by an authorized officer or a stockholder shall be deemed equivalent to giving proper notice to such stockholder.

Section 5: Voting Procedure.

5.1 Proxies, Mail Voting, and Cumulative Voting. Voting by proxy shall not be permitted. Cumulative voting shall not be permitted. Election ballots will be accepted by mail or by electronic method.

5.2 Official Ballot. The Corporate Secretary shall prepare the official ballot for the election and such ballot shall be distributed to all stockholders of record. The official ballot shall include an appropriate form by which stockholders of record may cast their votes for nominees for election. Additional information to describe the qualifications of nominees also will be distributed with the ballot. All votes must be cast on the official ballot in order to be counted. The Corporate Secretary or other officer of the stockholder of record, who is authorized to certify its corporate documents, must certify that votes cast have been duly authorized on behalf of the stockholder of record under its governing rules.

To be counted by the election date, all ballots must be mailed and be received by the Election Teller at a designated address no later than the close of business on April 24, 2008

5.3 Vote Final, Confidentiality. When the Election Teller receives a ballot, the votes cast by the stockholder shall be final. A ballot cannot be withdrawn or changed if a nominee withdraws or for any other reason. Upon receipt of a duly authorized request from a stockholder of record (certified by its Secretary or other appropriate officer) the Corporate Secretary will provide another official ballot to replace one that has been lost or destroyed.

5.4 Secret Ballot. NCB will conduct the election by a secret ballot process and votes by particular stockholders of record will be kept confidential at all times.

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5.5 Ballot Disqualification.

     Ballot disqualification occurs if:

(a)	Postmarked after midnight of due date;
(b)	Hand-delivered to Election Teller;
(c)	Not properly certified; and
(d)	Stockholders vote for more than four (4) candidates.

Section 6.1: Vacancies. The Board and the stockholders of record will nominate persons to fill vacant stockholder directorships that have been created by the expiration of the term of a director, by resignation or otherwise, under the Bank Act and the bylaws. Nominations may be made of persons from the following classes of cooperatives: (a) housing, (b) consumer goods,(c) low-income cooperatives, (d) consumer services, and (e) all other eligible cooperatives. All nominees shall be selected by the Board and/or the stockholders as described in subsection 6.2 and 6.3 respectively, and nominees must meet the qualifications set forth in subsection 6.4. Nominations and the election shall be conducted in a manner that will ensure, at all times, that there shall be at least one but no more than three directors representing each of the following classes of cooperatives: housing, consumer goods, low-income cooperatives, consumer services, and all other eligible cooperatives.

6.2 Board Nominations. The Board shall, upon recommendation of the chairman, elect a Corporate Governance Committee, which shall by a majority vote, nominate persons for election to fill vacant stockholder directorships. No person other than an NCB director shall serve on the Corporate Governance Committee. The Corporate Governance Committee shall solicit advice and recommendations from stockholders of record, the cooperative community, and other sources in its consideration of potential nominees. The Corporate Governance Committee shall by a majority vote select at least two (2) nominees for each vacant stockholder directorship. Nominees may present a statement of qualifications and issues to be distributed with the official ballot. Such nominees shall be listed on the official ballot, but shall not receive any preferential treatment or special use of the Bank’s resources. Statements of qualifications and issues and other materials distributed by a nominee may not use the NCB logo or confusingly similar logo and may not state or imply that NCB supports or endorses such nominee. Any elected director who has served two consecutive three-year terms shall not be eligible for re-nomination by the Corporate Governance Committee for two years after completion of the consecutive terms and shall not begin service for the new term for three years after completion of the original consecutive terms. The list of persons nominated by the Board shall be mailed to all stockholders of record with the official notice of the election.

6.3 Stockholder Nominations. In addition to the nominees selected by the Corporate Governance Committee under subsection 6.2, other persons may be nominated to fill vacant stockholder’s directorships and may be listed on the official ballot under this subsection. To qualify for the official ballot, such persons must receive support for their nomination from at least fifteen percent (15%) of the stockholders of record. Stockholder nominees must obtain resolutions of support (on a form to be provided by NCB) from the required number of stockholders. Such resolutions must be compiled by potential nominees and received by NCB no later than 45 days prior to the election date. The Corporate Secretary will promptly verify the qualifications of persons receiving the required support and will promptly notify all persons seeking nomination under this subsection, whether or not their efforts were successful.

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Stockholder nominees also may submit a statement of qualifications and issues to be distributed with the official ballot. Statements of qualifications and issues and other materials distributed by a nominee may not use the NCB logo or confusingly similar logo and may not state or imply that NCB supports or endorses such nominee.

6.4 Qualifications.

6.4.1 Each nominee for a shareholder directorship of a particular class shall have at least three years experience as a director or senior officer in the class of cooperatives to be represented. Each nominee shall currently be associated with a voting stockholder of NCB. Each nominee shall be required to designate the particular class of cooperative, which he or she is qualified to represent. No nominee shall be allowed to run to fill vacancies in more than one class of cooperative. Further requirements are as follows:

     (a) Loans outstanding from NCB must be in good standing.

     (b) A nominee who qualified through a management position must also have demonstrated experience as a Board director.

     (c) A nominee shall have business experience in at least one of the following fields: finance, marketing, operations, or economic development.

     (d) Except for requirements in the Bank Act, the Corporate Governance Committee may make exceptions to these qualifications at its discretion.

6.4.2 All nominees shall submit (on a form provided by NCB) such information as NCB deems necessary to verify that the nominee has the required experience.

6.4.3 No NCB employee shall be qualified for nomination until three (3) years after the date such employee’s employment with NCB was terminated. If NCB determines that any nominee does not meet these qualifications, the Corporate Secretary shall report the reasons for such failure to the Board.

6.4.4 Each nominee will be required to file with the Ethics Official of NCB (on a form to be provided) and make public, a statement of the nominee’s financial interests and positions, if any, in any corporation, trust, partnership, or cooperative organization in which such nominee holds a substantial financial interest or holds a position as a Board member or senior officer, the activity of which organization might be relevant to, be competitive with, or be inconsistent with the objectives of NCB.

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6.4.5 Subject to review by the Corporate Governance Committee, the Corporate Secretary shall determine the validity of documentary evidence submitted in support of a nomination as outlined in Section 6.4.2. Nominations to fill vacancies on the Board of Directors will not be accepted from the floor at any annual or special meeting of stockholders.

Section 7: Election of Directors.

7.1 Election Order. The election shall be decided based on a plurality of votes cast by the stockholders of record who participate in the election. Directors shall be elected to fill available vacancies in the particular class for which the director is nominated and to the extent vacancies exist (see section 6.1). In the event two nominees are seeking election to a single board seat within a particular class, the nominee receiving the greatest number of votes will be elected. The unsuccessful nominee will not be considered for a seat on the Board.

7.2 Voting Power. For each election or run-off election, only stockholders of record shall be entitled to vote, but only as provided in this section. Each stockholder of record shall be entitled to cast votes for the number of nominees equal to the number of vacancies to be filled in the election or run-off election. A stockholder of record shall not be required to vote for each vacancy but may only vote once for each nominee.

7.3 Definitions. For purposes of these rules, the following definitions shall apply:

     (a) “borrowing-stockholder” shall mean any stockholder of record who has a loan outstanding from NCB at any time during the patronage period;

     (b) “non-borrower-stockholder” shall mean a stockholder of record who holds Class C stock not connected with a loan and/or any former borrower, who fully paid off loans in the calendar year preceding the patronage period;

     (c) For the purpose of voting, “patronage” shall mean the amount of interest paid to NCB, including interest paid on loans originally made by NCB which have been sold and which NCB is now servicing, and loan fees, including commitment, origination, line and letter of credit fees, paid by a current borrower during a given year;

     (d) “patronage period” shall mean the calendar year preceding the election year; and

     (e) “developing cooperative” shall mean a borrower-stockholder that is chartered on a cooperative basis and determined to be an eligible cooperative while at a developmental stage of operation and does not presently have members who are identified as ultimate consumers (or primary producers) of the goods, services and facilities provided but that, at some definite time in the future, will be controlled by and provide services to ultimate consumers (or primary producers).

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     7.4 Allocations. Except as otherwise limited in this section:

     (a) Each borrower-stockholder of record shall be entitled to at least five (5) votes, except as provided under Section 7.4(e);

     (b) Each borrower-stockholder of record shall be entitled to additional votes which shall be allocated based on the proportion a particular borrower-stockholder’s patronage bears to patronage in that stockholder’s portfolio category, calculated during the patronage period which, for example, results in the following allocation:

Member Patronage	Votes
.1% - .5%		5
.6 - 1.0%		10
1.1% - 1.5%		15
1.6% - 2.0%		20
2.1% - 2.5%		25
2.6% - 3.0%		30
3.1% - 3.5%		35
3.6% - 4.0%		40
4.1% - 4.5%		45
4.6% - 5.0%		50
5.1% - 5.5%		55
5.6% - 6.0%		60
6.1% - 6.5%		65
6.6% - 7.0%		70
7.1% - 7.5%		75
7.6% - 8.0%		80
8.1% - 8.5%		85
8.6% - 9.0%		90
9.1% - 9.5%		95
9.6% - 10.0%		100
10.1% - 10.5%		105
10.6% - 11.0%		110
11.1% - 11.5%		115
11.6%		120

     (c) Each non-borrower stockholder shall be entitled to at least one vote and the non-borrower stockholder voting class shall receive a minimum of 10% of the outstanding votes allocated;

     (d) Notwithstanding any of the foregoing additional allocations of votes that would otherwise be applied to the vote of a stockholder of record, no stockholder of record shall be entitled to more than five percent (5%) of the total votes allocated to all voting stockholders of record; no stockholder of record that is a developing cooperative shall receive more than five (5) votes; and the total votes allocated to any one portfolio class of stockholders shall not exceed forty-five percent (45%) of the total number of votes allocated; and

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     (e) The Board reserves the right to adjust the allocations of votes described in this section in order to preserve the voting balance among NCB’s stockholders of record required by the Bank Act.

7.5 Limited Voting Power—Delinquent Borrowers. NCB shall refuse to allocate additional votes on the basis of interest or fees relative to any borrower-stockholder which as of the record date is more than ninety (90) days past due under (i) any agreement between the member and NCB or NCBFSB or (ii), if a borrower-stockholders vote allocation is based in whole or in part upon one or more eligible transactions between NCB or NCBFSB with one or more of the member’s members (a “Retail Member”) under NCB’s member finance program, any agreement between the Retail Member and NCB or NCBFSB or (iii) if borrower-stockholders vote allocation is based in whole or in part upon one or more eligible transactions between NCB or NCBFSB with one or more subsidiaries of the member, any agreement between such subsidiary and NCB or NCBFSB.

Section 8. Run-off Election. If there is a tie vote and, as a result, vacancies remain in stockholder directorships after the procedures described in this section are followed, the Board shall fix a date for a run-off election. Such election shall be held not later than sixty (60) days from the original election date. The Corporate Secretary shall issue notice of the run-off election and an official ballot for the election in accordance with Section 4 and Section 5 of these rules, respectively. The official ballot for the run-off election shall include only the names of those nominees who tied on the original ballot and are qualified to fill remaining vacancies. In a run-off election, the qualified nominee receiving the highest number of votes cast for each vacancy in a particular class shall be elected.

Section 9. NCB Employee Participation. NCB employees shall not solicit votes, campaign for nominees, or use employment with NCB in any other manner to influence the outcome of any nomination or election under these rules. Violation of this section may lead to disciplinary action or termination of employment under NCB’s Code of Conduct. Nothing in this section shall be construed to prevent NCB employees from having legitimate communications with nominees, stockholders or directors as a result of their official job responsibilities.

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EX-10.14

Exhibit 10.14

Approved by the Compensation Committee 1/19/05

The Executive Long Term Incentive Plan, as approved by the Board of Directors on July 31, 1999, delegates to the Compensation Committee the authority to approve the Measurement Period, the Employee Participants, the Performance-Based Cash Awards, the Performance Goals, and the Payment of Awards.

A. The Measurement Period is the 3-year period from 1/01/2005 through 12/31/2007, and the Performance-Based Cash Awards, if any, will be granted every other year according to the following schedule:

2001	2002	2003	2004	2005	2006	2007	2008
Award	Award	Vest	Payment
		Award	Award	Vest	Payment
				Award	Award	Vest	Payment

B. Employee Participants:

CEO:	Charles E. Snyder
Others:	Steven Brookner
	Patrick N. Connealy
	Charles H. Hackman
	Michele Fantt Harris
	Mark Hiltz
	Kathleen Luzik
	Richard L. Reed

C. Performance-Based Cash Award Potential:

Annualized Award Opportunity at Select Performance
as a percent of Base Salary not including Low Income Adjustment
	Threshold			Target			Superior
CEO		20	%		50	%		65	%
Other Participants		15	%		30	%		45	%

D. The Payment of Awards shall be made no later than 90 days after the end of the Measurement Period.

NCB Executive Long-Term Incentive Plan
Measurement Period 1/1/05 — 12/31/07

E. Performance Goals used to compute potential Performance-Based Cash Awards:

PERFORMANCE GOALS					Goals and Awards for the CEO
1/1/05 – 12/31/07	Weight				Threshold	Target	Superior
Financial Strength:Average ROE less NCBDC contribution over three years		35	%	Goal	10% Average ROE	11% Average ROE	12% Average ROE
				Award	7% of Salary	17.5% of Salary	22.75% of Salary
Value to Customers: Replicable Breakthrough Innovations that each generate at least $4 million of actual revenue over the 2005-2007 period (including NCBDC revenue.) A Prospective Breakthrough Innovation has generated at least $2 million of actual revenue over the 2005-2007 period plus additional verifiable projected revenue of $2 million by its third year.		35	%	Goal	One Breakthrough Innovation	One Breakthrough Innovation and one Prospective Breakthrough Innovation	Two Breakthrough Innovations
				Award	7% of Salary	17.5% of Salary	22.75% of Salary
Total commitments and financial transactions arranged for customers including loans, leases, letters of credit, private placements, and deals closed by referral sources.		30	%	Goal	$4.5 billion 2005 through 2007	$5 billion 2005 through 2007	$6 billion 2005 through 2007
				Award	6% of Salary	15% of Salary	19.5% of Salary
		100	%		20% of Salary	50% of Salary	65% of Salary
Adjustment for Low Income Market Development					-15% of Total Award	+0%	+25% of Total Award

PERFORMANCE GOALS					Goals and Awards for Other Participants
1/1/05 – 12/31/07	Weight				Threshold	Target	Superior
Financial Strength: Average ROE less NCBDC contribution over three years		35	%	Goal	10% Average ROE	11% Average ROE	12% Average ROE
				Award	5.25% of Salary	10.5% of Salary	15.75% of Salary
Value to Customers: Replicable Breakthrough Innovations that each generate at least $4 million of actual revenue over the 2005-2007 period (including NCBDC revenue.) A Prospective Breakthrough Innovation has generated at least $2 million of actual revenue over the 2005-2007 period plus additional verifiable projected revenue of $2 million by its third year.		35	%	Goal	One Breakthrough Innovation	One Breakthrough Innovations and one Prospective Breakthrough Innovation	Two Breakthrough Innovations
				Award	5.25% of Salary	10.5% of Salary	15.75% of Salary
Total commitments and financial transactions arranged for customers including loans, leases, letters of credit, private placements, and deals closed by referral sources.		30	%	Goal	$4.5 billion 2005 through 2007	$5 billion 2005 through 2007	$6 billion 2005 through 2007
				Award	4.5% of Salary	9% of Salary	13.5% of Salary
Totals		100	%		15% of Salary	30% of Salary	45% of Salary
Adjustment for Low Income Market Development					-15% of Total Award	+0%	+25% of Total Award

EX-10.15

Exhibit 10.15

Executive Long Term Incentive Plan

Approved by the Executive/Compensation Committee 1/23/07

The Executive Long Term Incentive Plan, as approved by the Board of Directors on July 31, 1999, delegates to the Compensation Committee the authority to approve the Measurement Period, the Employee Participants, the Performance-Based Cash Awards, the Performance Goals, and the Payment of Awards. See the Plan for additional requirements.

A. The Measurement Period is the 3-year period from 1/01/2007 through 12/31/2009, and the Performance-Based Cash Awards, if any, will be granted every other year according to the following schedule:

2003	2004	2005	2006	2007	2008	2009	2010
Award	Award	Vest	Payment
		Award	Award	Vest	Payment
				Award	Award	Vest	Payment

B. Employee Participants:

CEO:	Charles E. Snyder
Other Participants:	Steven Brookner Patrick N. Connealy Charles H. Hackman Michele Fantt Harris Mark Hiltz Andrew Kho Kathleen Luzik Richard L. Reed Russell J. Schofield Terry Simonette
Fellows:	Mary Ann Donovan Casey Fannon

C. Performance-Based Cash Award Potential:

Annualized Award Opportunity at Select Performance
as a percent of Base Salary not including the Low Income Adjustment
	Threshold			Target			Superior
CEO		20	%		50	%		70	%
Other Participants		15	%		30	%		50	%

Fellows participate at one-half of the award potential of Other Participants.

D. The Payment of Awards shall be made no later than 90 days after the end of the Measurement Period.

NCB Executive Long-Term Incentive Plan
Measurement Period 1/1/07 — 12/31/09

E. Performance Goals used to compute potential Performance-Based Cash Awards:

PERFORMANCE GOALS				Goals and Awards for the CEO
1/1/07 – 12/31/09	Weight				Threshold	Target	Superior
Financial Strength: Average ROE at NCB, FSB over three years.		50	%	Goal	13.5% Average ROE	15% Average ROE	16.5% Average ROE
				Award	10% of Salary	25% of Salary	35% of Salary
Value to Customers: Total commitments and financial transactions arranged for customers including loans, leases, letters of credit, private placements, and deals closed by referral sources.		25	%	Goal	$5.5 billion 2007 through 2009	$6 billion 2007 through 2009	$7 billion 2007 through 2009
				Award	5% of Salary	12.5% of Salary	17.75% of Salary
Deposit Growth: From the base levels at 12/31/06, increase deposits over three years with at least $50 million of total deposits in non-interest bearing DDA (excluding escrows for saleable real estate loans.)		25	%	Goal	75% Increase	125% Increase	150% Increase
				Award	5% of Salary	12.5% of Salary	17.75% of Salary
		100	%		20% of Salary	50% of Salary	70% of Salary
Adjustment for Low Income Market Development					-15% of Total Award	+0%	+25% of Total Award

PERFORMANCE GOALS				Goals and Awards for Other Participants
1/1/0 7– 12/31/09	Weight				Threshold	Target	Superior
Financial Strength: Average ROE at NCB, FSB over three years.		50	%	Goal	13.5% Average ROE	15% Average ROE	16.5% Average ROE
				Award	7.5% of Salary	15% of Salary	25% of Salary
Value to Customers: Total commitments and financial transactions arranged for customers including loans, leases, letters of credit, private placements, and deals closed by referral sources.		25	%	Goal	$5.5 billion 2007 through 2009	$6 billion 2007 through 2009	$7 billion 2007 through 2009
				Award	3.75% of Salary	7.5% of Salary	12.5% of Salary
Deposit Growth: From the base levels at 12/31/06, increase deposits over three years with at least $50 million of total deposits in non-interest bearing DDA (excluding escrows for saleable real estate loans.)		25	%	Goal	75% Increase	125% Increase	150% Increase
				Award	3.75% of Salary	7.5% of Salary	12.5% of Salary
Totals		100	%		15% of Salary	30% of Salary	50% of Salary
Adjustment for Low Income Market Development					-15% of Total Award	+0%	+25% of Total Award

F. Adjustment for Low Income Market Development

The Committee may make an adjustment as indicated above for low income market development based upon its assessment of: management’s efforts to achieve the annual “best efforts” evaluation in the Bank Act; a recommendation from the Low Income Committee of the Board of Directors; and other actions such as achieving high low income volume, being instrumental in formulating a high impact public policy, facilitating the development of an innovative transaction or program, and/or enabling access to resources for an underserved segment.

2

EX-10.32

Exhibit 10.32

Approved by the Compensation Committee 1/19/05

EXECUTIVE MANAGEMENT

SHORT TERM INCENTIVE PLAN for 2005

1. PROFITABLY GROW CORE ASSETS (25 Points)

A.	10 points for originating $1.5 billion of transactions during the year including booked commitments for loans, leases, placements, and deals closed by referral sources, plus one additional point up to a maximum of 5 points for each $50 million of portfolio loan growth in excess of the budget.
B.	10 points for meeting pretax net income budget.
C.	5 points for 12.5% increase over 2004 cross-selling referrals.

2. STRENGTHEN ENTERPRISE RISK MANAGEMENT (25 Points)

A.	5 points for achieving the Board approved asset and liability management objectives by operating in the “green range” for a minimum of 90% of the measurements during the year and crossing into the “red range” not more than once during the year.
B.	5 points for the average percentage of non-performing assets (non-accruing and OREO) of 1.5% or less of total loans and LC’s plus an additional 5 points if the ratio is 1% or less with a reduction of 5 points if net charge offs exceed .5%.
C.	10 points for satisfactory evaluations from Loan Review, auditors, FCA, OTS, and regulatory compliance (SOX and others.)
D.	5 points for exceeding regulatory well capitalize standards for total risk-based capital.

3. DEVELOP NEW PRODUCTS, MARKETS, AND BUSINESSES (15 Points)

A.	5 points for strengthening CSI model
B.	5 points for aligning reward system through balanced scorecards and management reporting
C.	5 points for establishing team based innovation standards

4. SUCCESFULLY IMPLEMENT MISSION BANKING STRATEGY (15 Points)

A.	7.5 points for “best efforts” evaluation; and for originating and arranging low-income transactions of $268 million during the year, plus one point up to a maximum of 5 points for each $5 million in excess of the goal.
B.	7.5 points for implementation of Mission Banking strategy.

Executive Management Short Term Incentive Plan for 2005
Page 2

5. CREATE BRAND AWARENESS AND DEVELOP A STRATEGY TO MANAGE BRAND (10 Points)

A. Develop a customized brand strategy (Contractor deliverable) and then establish the framework for and the organizational competency for brand management.

6. LEADERSHIP (10 Points)

A.	5 points for meeting objectives in the strategic plan for employee retention, diversity, internal promotions, and Organizational Development.
B.	5 points for increasing number of shareholders by 60.

AWARD LEVELS

	Incentive Award as a Percentage
	of Year End 2005 Base Salary
Points		Executive Council			CEO
50 - 64.9	Up to		15	%		20	%
65 - 79.9	Up to		25	%		30	%
80 - 89.9	Up to		30	%		40	%
90 and over	Up to		35	%		45	%

In addition, an “Add-on” award may be earned by exceeding the pretax net income budget goal. The maximum additional award is 5% of salary for the CEO and 7.5% of salary for the Executive Council. For each 1% that pretax net income exceeds goal, 1% of salary is added to the award earned for achievement of the other goals, up to a maximum total award of 50% of salary for the CEO and 42.5% of salary for the Executive Council. .

The CEO determines incentive awards for each Executive Council participant based upon the results of this plan and the achievement of individual performance objectives. The Compensation Committee determines the award for the CEO.

PARTICIPANTS

Brookner, Connealy, Hackman, Harris, Hiltz, Kho, Luzik, Reed, Schofield, Simonette, and Snyder

EX-10.35

Exhibit 10.35

Approved by the Board of Directors 2/3/06

EXECUTIVE MANAGEMENT

SHORT TERM INCENTIVE PLAN for 2006

1. PROFITABLY GROW CORE ASSETS (30 Points)

A.	10 points for originating $1.8 billion of transactions during the year including booked commitments for loans, leases, placements, and deals closed by referral sources, plus one additional point up to a maximum of 5 points for each $50 million of portfolio loan growth in excess of the budget.
B.	5 points for meeting pretax net income budget (excluding NCBDC contribution.)
C.	5 points for 12.5% increase over 2005 cross-selling referrals.
D.	10 points for achieving budgeted core efficiency ratio (that excludes excess sale gains, unbudgeted operating expenses that generate new sources of revenue, and NCBDC contribution.)

2. STRENGTHEN ENTERPRISE RISK MANAGEMENT (20 Points)

A.	5 points for achieving the Board approved asset and liability management objectives by operating in the “green range” for a minimum of 90% of the measurements during the year and crossing into the “red range” not more than once during the year.
B.	5 points for the average percentage of non-performing assets (non-accruing and OREO) of 1.5% or less of total loans and LC’s plus an additional 5 points if the ratio is 1% or less with a reduction of 5 points if net charge offs exceed .5%.
C.	5 points for satisfactory evaluations from Loan Review, auditors, FCA, OTS, and FIDICA compliance.
D.	5 points for development of a long term IT strategy.

3. DEVELOP NEW PRODUCTS, MARKETS, AND BUSINESSES (15 Points)

A. 15 points for achieving a breakthrough innovation.

4. SUCCESFULLY IMPLEMENT MISSION BANKING STRATEGY (10 Points)

A.	5 points for “best efforts” evaluation; and for originating and arranging low-income transactions of $302 million during the year, plus one point up to a maximum of 5 points for each $5 million in excess of the goal.
B.	5 points for achieving 2006 Mission Banking goals.

Executive Management Short Term Incentive Plan for 2006
Page 2

5. CREATE BRAND AWARENESS AND DEVELOP A STRATEGY TO MANAGE BRAND (10 Points)

A. 10 points for achieving 2006 brand strategy milestones.

6. LEADERSHIP (15 Points)

A.	5 points for meeting objectives in the strategic plan for employee retention, diversity, internal promotions, and Organizational Development.
B.	10 points for making significant progress on commercial bank charter conversion or acquisition of a commercial bank.

AWARD LEVELS

	Incentive Award as a Percentage
	of Year End 2006 Base Salary
Points		Executive Council			CEO
50 - 64.9	Up to		15	%		20	%
65 - 79.9	Up to		25	%		30	%
80 - 89.9	Up to		30	%		40	%
90 and over	Up to		35	%		45	%

In addition, an “Add-on” award may be earned by exceeding the pretax net income budget goal. The maximum additional award is 5% of salary for the CEO and 7.5% of salary for the Executive Council. For each 1% that pretax net income exceeds goal, 1% of salary is added to the award earned for achievement of the other goals, up to a maximum total award of 50% of salary for the CEO and 42.5% of salary for the Executive Council.

The CEO determines incentive awards for each Executive Council participant based upon the results of this plan and the achievement of individual performance objectives. The Compensation Committee determines the award for the CEO.

PARTICIPANTS

Brookner, Connealy, Donovan, Fannon, Hackman, Harris, Hiltz, Kho, Luzik, Reed, Schofield, Simonette, and Snyder

EX-10.36

Exhibit 10.36

Approved by the Board of Directors 2/2/07

NCB EXECUTIVE MANAGEMENT

SHORT TERM INCENTIVE PLAN for 2007

1. GROW CORE PROFITIBILITY (55 Points)

A.	10 points for originating $2 billion of transactions during the year including booked commitments for loans, leases, placements, and deals closed by referral sources. As an adjustment, one additional point up to a maximum of 5 points for each $20 million of portfolio loan growth in excess of the budget.
B.	20 points for average NCB consolidated budgeted ROE (less NCB Capital Impact contribution) of 10%.
C.	10 points for increasing average non-interest bearing demand deposits in the fourth quarter 2007 (excluding saleable real estate loan escrow accounts) from average fourth quarter 2006 level by 50%.
D.	10 Points for the average percentage of non-performing assets (non-accruing and REO) of 1.5% or less of total loans and LC’s plus an additional 5 points if the ratio is 1% or less with a reduction of 5 points if net charge offs exceed .5%.
E.	5 points for satisfactory evaluations from Loan Review, auditors, FCA, and OTS, including FIDICA compliance.

2. DEVELOP NEW PRODUCTS, MARKETS, AND BUSINESSES (10 Points)

A. 10 points for achieving one breakthrough innovation that will generate at least $5 million of revenue by its third year.

3. SUCCESFULLY IMPLEMENT MISSION BANKING STRATEGY (15 Points)

A.	10 points for “best efforts” evaluation and for originating and arranging low-income transactions of $400 million during the year, plus one point up to a maximum of 5 points for each $5 million in excess of the goal.
B.	5 points for achieving 2007 Mission Banking goals.

4. SUCCESSFULLY IMPLEMENT HUMAN RESOURCES STRATEGY (10 Points)

A.	5 points for achieving 2007 Human resources strategy milestones.
B.	5 points for meeting goals in HR Strategy for employee retention, diversity, internal promotions, and Organizational Development.

5. SUCCESSFULLY IMPLEMENT INFORMATION MANAGEMENT STRATEGY (10 Points)

A. 10 points for completion of the McCracken upgrade, core systems conversion, and commercial real estate underwriting system.

Executive Management Short Term Incentive Plan for 2007
Page 2

AWARD LEVELS

	Incentive Award as a Percentage
	of Year End 2007 Base Salary
Points		Executive Council			CEO
55 - 64.9	Up to		15	%		20	%
65 - 79.9	Up to		25	%		30	%
80 - 89.9	Up to		30	%		40	%
90 and over	Up to		35	%		45	%

In addition, an “Add-on” award may be earned by exceeding the pretax net income budget goal. The maximum additional award is 5% of salary for the CEO and 7.5% of salary for the Executive Council. For each 1% that pretax net income exceeds budget, 1% of salary is added to the award earned for achievement of the other goals, up to a maximum total award of 50% of salary for the CEO and 42.5% of salary for the Executive Council.

The CEO determines incentive awards for each Executive Council participant based upon the results of this plan and the achievement of individual performance objectives. The Compensation Committee determines the award for the CEO.

PARTICIPANTS

Snyder, Brookner, Connealy, Donovan, Fannon, Hackman, Harris, Hiltz, Kho, Luzik, Reed, Schofield, and Simonette

EX-10.38

Exhibit 10.38

Approved by the Board of Directors 2/1/08

NCB EXECUTIVE MANAGEMENT

SHORT TERM INCENTIVE PLAN for 2008

1. Grow Core Profitability

A.	Meet pretax net income budget.
B.	No award is earned under this plan if pretax net income is below budget.

2. Risk Management

A. No award is earned under this plan if non-performing assets exceed 1.5% of total consolidated assets at year end.

3. Mission Banking

A. No award is earned under this plan unless “Best Efforts” evaluation is achieved.

Awards

	Incentive Award as a Percentage
	Of Year End 2008 Base Salary
Pretax Net Income		Executive Council			CEO
Budget	Up to		20	%		25	%
$23 Million	Up to		35	%		45	%

          The award for the CEO and Executive Council will be adjusted upward proportionately for pretax net income between budget and the target of $23 million.

          In addition, an “Add-on” award may be earned by exceeding the pretax net income target of $23 million. The maximum additional award is 5% of salary for the CEO and 7.5% of salary for the Executive Council. For each 1% that pretax net income exceeds the $23 million target, 1% of salary is added to the award earned, up to a maximum total award of 50% of salary for the CEO and 42.5% of salary for the Executive Council.

          The CEO determines incentive awards for each Executive Council participant based upon the results of this plan and the achievement of individual performance objectives. The Compensation Committee determines the award for the CEO.

          Any awards under the Short Term Incentive Plan shall be paid on February 15, 2009 and only to participants who are employed by NCB on February 15, 2009.

          PARTICIPANTS

          Snyder, Brookner, Connealy, Fannon, Hackman, Harris, Hiltz, Luzik, and Reed

EX-10.53

Exhibit 10.53

FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) dated as of October 16, 2006 by and among NATIONAL CONSUMER COOPERATIVE BANK, D/B/A NATIONAL COOPERATIVE BANK (the “Borrower”), each of the financial institutions a party hereto (the “Banks”), and SUNTRUST BANK, as Agent (the “Agent”).

     WHEREAS, the Borrower, the Banks, and the Agent have entered into that certain Credit Agreement dated as of May 1, 2006 (as in effect immediately prior to the date hereof, the “Credit Agreement”); and

     WHEREAS, the Borrower, the Banks and the Agent desire to amend certain provisions of the Credit Agreement on the terms and conditions contained herein;

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

     Section 1. Specific Amendments to Credit Agreement. The parties hereto agree that the Credit Agreement is amended as follows:

     (a) The Credit Agreement is amended by deleting Section 2.1(b)(i) in its entirety and substituting in its place the following:

     (i) SWING LINE LOANS. Subject to the terms and conditions hereof and relying on the representations and warranties herein set forth, upon the Borrower’s request, and subject to the terms and conditions of this Agreement and so long as the Swing Line Lender does not have actual notice that there exists an Event of Default or Default, the Swing Line Lender hereby agrees to make Swing Line Loans to the Borrower from time to time during the Availability Period and upon the terms provided in this Agreement in an aggregate principal amount that will not exceed a Swing Line Loan Limit of up to Thirty Million Dollars ($30,000,000.00); provided, that the Swing Line Lender shall not in any event be permitted to make any Swing Line Loan if, after giving effect thereto (A) the Revolving Credit Exposure of all Banks at any time exceeds the Aggregate Revolving Commitment, or (B) the aggregate outstanding principal balance of Swing Line Loans would exceed the Swing Line Commitment. Within such limits of time and amount and subject to the other provisions of this Agreement, the Borrower may borrow, repay in whole or in part, and reborrow under the Swing Line Loan Limit. Indebtedness of the Borrower under the Swing Line Loan Limit shall be evidenced by the Swing Line Note.

     (b) The Credit Agreement is amended by deleting the introductory clause of Article 5 in its entirety and substituting in its place the following:

     While any Revolving Commitments are outstanding, and, in the event any Loan or LC Exposure remains outstanding, and until payment in full of the Notes and full and complete performance of all of its other obligations arising hereunder, the Borrower shall deliver each of the following statements, reports, certificates and notices to the Agent and the Banks; provided, that documents required to be delivered pursuant to this Article 5 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which the Agent receives notice from the Borrower that such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Bank and the Agent have access (whether a commercial, third-party website or whether sponsored by the Agent). Notwithstanding anything contained herein, (i) the Borrower shall deliver paper copies of such documents at the request of the Agent and (ii) in every instance the Borrower shall be required to provide paper copies of the compliance certificate required by Section 5.5 to the Agent. Except for such compliance certificate, the Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Bank shall be solely responsible for requesting delivery to it or maintaining its copies of such documents:

     (c) The Credit Agreement is amended by deleting the final paragraph of Section 5.2 in its entirety.

     Section 2. Conditions Precedent. The effectiveness of this Amendment is subject to receipt by the Agent of each of the following, each in form and substance satisfactory to the Agent:

     (a) A counterpart of this Amendment duly executed by the Borrower and the Majority Banks; and

     (b) Such other documents, instruments and agreements as the Agent may reasonably request.

     Section 3. Representations. The Borrower represents and warrants to the Agent and the Banks that:

     (a) Authorization. The Borrower has the right and power, and has taken all necessary action to authorize it, to execute and deliver this Amendment and to perform its obligations hereunder and under the Credit Agreement, as amended by this Amendment, in accordance with their respective terms. This Amendment has been duly executed and delivered by a duly authorized officer of the Borrower and each of this Amendment and the Credit Agreement, as amended by this Amendment, is a legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or other similar laws, now or hereafter in effect, relating to or affecting the enforcement of creditors’ rights generally and except that the remedy of specific performance and other equitable remedies are subject to judicial discretion.

     (b) Compliance with Laws, etc. The execution and delivery by the Borrower of this Amendment and the performance by the Borrower of this Amendment and the Credit Agreement, as amended by this Amendment, in accordance with their respective terms, do not and will not, by the passage of time, the giving of notice or otherwise: (i) require the consent, license, approval, authorization or declaration of any Governmental Authority, bureau or agency, or violate any applicable laws relating to the Borrower; (ii) conflict with or result in a breach of any court or Governmental Authority, bureau or agency, domestic or foreign, or any charter or by-laws of the Borrower (iii) create a default under or breach of any agreement, bond, note or indenture to which the Borrower is a party, or by which the Borrower is bound or any of its properties or assets is affected or (iv) result in the imposition of any Lien of any nature whatsoever upon any of the properties or assets owned by or used in connection with the business of the Borrower.

     (c) No Default. No Default or Event of Default has occurred and is continuing as of the date hereof nor will exist immediately after giving effect to this Amendment.

     Section 4. Reaffirmation of Representations by Borrower. The Borrower hereby repeats and reaffirms all representations and warranties made by the Borrower to the Agent and the Banks in the Credit Agreement and the other Loan Documents to which it is a party on and as of the date hereof with the same force and effect as if such representations and warranties were set forth in this Amendment in full.

     Section 5. Certain References. Each reference to the Credit Agreement in any of the Loan Documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment.

     Section 6. Expenses. Consistent with and subject to Section 10.1 of the Credit Agreement, the Borrower shall reimburse the Agent and each Lender upon demand for all reasonable costs and expenses (including reasonable attorneys’ fees) incurred by the Agent or such Lender in connection with the preparation, negotiation and execution of this Amendment.

2

     Section 7. Benefits. This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

     Section 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

     Section 9. Effect. Except as expressly herein amended, the terms and conditions of the Credit Agreement and the other Loan Documents remain in full force and effect. The amendments contained herein shall be deemed to have prospective application only, unless otherwise specifically stated herein.

     Section 10. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and shall be binding upon all parties, their successors and assigns.

     Section 11. Definitions. All capitalized terms not otherwise defined herein are used herein with the respective definitions given them in the Credit Agreement.

[Signatures on Next Page]

3

     IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Credit Agreement to be executed as of the date first above written.

THE BORROWER:
NATIONAL CONSUMER COOPERATIVE BANK      D/B/A NATIONAL COOPERATIVE BANK
By:
	Name:
	Title:
THE AGENT AND THE BANKS: SUNTRUST BANK, AS ADMINISTRATIVE AGENT,      AS A BANK, AS ISSUING BANK, AND AS SWING LINE LENDER
By:
	Name:
	Title:
PNC BANK, NATIONAL ASSOCIATION
By:
	Name:
	Title:
WACHOVIA BANK, N.A.
By:
	Name:
	Title:

[Signatures Continued on Next Page]

[Signature Page to First Amendment to Credit Agreement]

CALYON NEW YORK BRANCH
By:
	Name:
	Title:
UNION BANK OF CALIFORNIA, N.A.
By:
	Name:
	Title:
JP MORGAN CHASE BANK NY
By:
	Name:
	Title:
BANK OF AMERICA, N.A.
By:
	Name:
	Title:
CREDIT SUISSE, CAYMAN ISLANDS BRANCH
By:
	Name:
	Title:

[Signatures Continued on Next Page]

[Signature Page to First Amendment to Credit Agreement]

MANUFACTURERS AND TRADERS TRUST COMPANY
By:
	Name:
	Title:
LASALLE BANK N.A.
By:
	Name:
	Title:
COÖPERATIEVE CENTRALE RAIFFEISEN BOERENLEENBANK B.A., “RABOBANK INTERNATIONAL”, NEW YORK BRANCH
By:
	Name:
	Title:
MIZUHO CORPORATE BANK (USA)
By:
	Name:
	Title:
U.S. BANK N.A.
By:
	Name:
	Title:

[Signatures Continued on Next Page]

THE BANK OF NOVA SCOTIA

[Signature Page to First Amendment to Credit Agreement]

By:
	Name:
	Title:
TAIPEI FUBON COMMERCIAL BANK, NEW YORK AGENCY
By:
	Name:
	Title:
FIRST COMMERCIAL BANK, LOS ANGELES BRANCH
By:
	Name:
	Title:

EX-10.58

Exhibit 10.58

THIRD AMENDMENT TO CREDIT AGREEMENT

     THIS THIRD AMENDMENT TO CREDIT AGREEMENT dated as of December 31, 2007 (this “Amendment”) by and among NATIONAL CONSUMER COOPERATIVE BANK, a corporation chartered by Act of Congress of the United States which conducts business under the trade name NCB (the “Borrower”), the Lenders listed on the signature pages hereof (the “Lenders”) and SUNTRUST BANK, as Administrative Agent (the “Agent”).

     WHEREAS, the Borrower, the Lenders and the Agent are parties to that certain Credit Agreement dated as of May 1, 2006 (as amended from time to time prior to the date hereof, the “Credit Agreement”; capitalized terms used herein and not otherwise defined herein are used herein with the respective definitions given them in the Credit Agreement); and

     WHEREAS, the Borrower, the Lenders and the Agent desire to amend the Credit Agreement on the terms and conditions contained herein.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

     Section 1. Amendments to Credit Agreement. Subject to the satisfaction of the conditions precedent set forth in Section 2 below:

     (a) The Credit Agreement is hereby amended by deleting the defined terms “Applicable Margin” and “Applicable Percentage” contained in Article 1 thereof and substituting in lieu thereof the following defined terms, respectively:

          “‘Applicable Margin’ shall mean, as of any date, with respect to LIBOR Loans outstanding on any date, (a) at all times during which any Ratings are in effect, a percentage per annum set forth on the pricing grid contained in Part I of Schedule 1 based upon the Ratings in effect as of the date of determination and (b) at all times during which no Ratings are in effect, percentage per annum determined by reference to the ratio of the Borrower’s Consolidated Debt to Consolidated Adjusted Net Worth (as calculated in accordance with Section 6.9(c)) in effect on the date of determination as set forth on the pricing grid contained in Part II of Schedule 1. A change in the Applicable Margin resulting from a change in the Ratings shall be effective on the day on which either Rating Agency changes its Ratings and shall continue until the day prior to a further change becomes effective. Any change in the Applicable Margin resulting from a change in the ratio of the Borrower’s Consolidated Debt to Consolidated Adjusted Net Worth shall be effective on the third day after which the Borrower is required to deliver the financial statements required by Sections 5.1 and 5.2 and the compliance certificate required by Section 5.5; provided further, that if at any time the Borrower shall have failed to deliver such financial statements and such certificate (after giving effect to the applicable cure period provided in Section 8.3), the Applicable Margin shall be at Level V until such time as such financial statements and certificate are delivered, at which time the Applicable Margin shall be determined as provided above. Notwithstanding the foregoing: (x) the Applicable Margin from the Effective Date until the first financial statement and compliance certificate are required to be delivered shall be at Level III and (y) subject to the provisions of this Agreement otherwise providing for a change of the Applicable Margin to Level V, the Applicable Margin for the period from January 1, 2008 to the third day after the Borrower is required to deliver the financial statements required by Section 5.1 for its fiscal year ending December 31, 2008 (such third day after the Borrower is required to deliver such financial statements, the “Margin Reset Date”) shall be at Level IV. On and after Margin Reset Date, the Applicable Margin shall be determined as provided above without giving effect to the immediately preceding sentence.”

          “‘Applicable Percentage’ shall mean, with respect to the Commitment Fee as of any date, (a) at all times during which any Ratings are in effect, a percentage per annum set forth on the pricing grid contained in Part I of Schedule 1 based upon the Ratings in effect as of the date of determination and (b) at all times during which no Ratings are in effect, percentage per annum determined by reference to the ratio of the Borrower’s Consolidated Debt to Consolidated Adjusted Net Worth (as calculated in accordance with Section 6.9(c)) in effect on the date of determination as set forth on the pricing grid contained in Part II of Schedule 1. A change in the Applicable Percentage resulting from a change in the Ratings shall be effective on the day on which either Rating Agency changes its Ratings and shall continue until the day prior to a further change becomes effective. Any change in the Applicable Percentage resulting from a change in the ratio of the Borrower’s Consolidated Debt to Consolidated Adjusted Net Worth shall be effective on the third day after which the Borrower is required to deliver the financial statements required by Sections 5.1 and 5.2 and the compliance certificate required by Section 5.5; provided further, that if at any time the Borrower shall have failed to deliver such financial statements and such certificate (after giving effect to the applicable cure period provided in Section 8.3), the Applicable Percentage shall be at Level V until such time as such financial statements and certificate are delivered, at which time the Applicable Percentage shall be determined as provided above. Notwithstanding the foregoing: (x) the Applicable Percentage from the Effective Date until the first financial statement and compliance certificate are required to be delivered shall be a Level III and (y) subject to the provisions of this Agreement otherwise providing for a change of the Applicable Percentage to Level V, the Applicable Percentage for the period from January 1, 2008 to the third day after the Borrower is required to deliver the financial statements required by Section 5.1 for its fiscal year ending December 31, 2008 (such third day after the Borrower is required to deliver such financial statements, the “Percentage Reset Date”) shall be at Level IV. On and after Percentage Reset Date, the Applicable Percentage shall be determined as provided above without giving effect to the immediately preceding sentence.”

     (b) The Credit Agreement is hereby further amended by deleting the word “and” which appears immediately prior to clause (xi) in the definition of “Consolidated Adjusted Net Income” contained in Article 1 thereof, and inserting the following new clauses (xii), (xiii) and (xiv) immediately before the period at the end of such definition:

          “(xii) solely for the fiscal quarter of the Borrower ended June 30, 2007: losses, charges and expenses incurred pursuant to relocation programs in the aggregate amount of $1,288,000; (xiii) solely for the fiscal quarter of the Borrower ended September 30, 2007: net losses, charges and expenses incurred on loan sales during such quarter in the amount of $5,328,000; losses, charges and expenses incurred due to the application of Financial Accounting Standards Board Statement 133 in the amount of $1,077,000; losses, charges and expenses incurred due to the adjustment of loan values to reflect the lower of cost or Fair Market Value in the amount of $2,251,000; losses, charges and expenses incurred pursuant to separation programs in the aggregate amount of $840,000; and transaction costs and expenses incurred in connection with amending this Agreement in the aggregate amount of $220,000, and (xiv) solely for the fiscal quarter of the Borrower ending December 31, 2007: net losses, charges and expenses incurred on loan sales; losses, charges and expenses incurred due to the application of Financial Accounting Standards Board Statement 133; losses, charges and expenses incurred due to the adjustment of loan values to reflect the lower of cost or Fair Market Value; losses, charges and expenses incurred pursuant to relocation, separation and early retirement programs; and transaction costs and expenses incurred by the Borrower in connection with amendments to this Agreement and the Senior Note Agreements or the prepayment of the Met Life Notes (together with the termination of the associated interest rate swap agreement with Union Bank of California); provided, however, that the adjustments permitted to be made under this clause (xiv) for such fiscal quarter shall not exceed $7,500,000 in the aggregate.”

     (c) The Credit Agreement is hereby further amended by inserting the following new defined terms in proper alphabetical order in Article 1 thereof:

          “Met Life Agreement” shall mean that certain Note Purchase Agreement dated as of January 8, 2003 among the Borrower, Metropolitan Life Insurance Company and the other parties a signatory thereto.

          “Met Life Notes” shall mean $50,000,000 in aggregate principal amount of 5.52% Senior Notes due January 8, 2009 issued pursuant to the Met Life Agreement.

     (d) The Credit Agreement is hereby further amended by deleting the defined term “Return on Average Assets” contained in Article 1 thereof and substituting in lieu thereof the following:

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          “Return on Average Assets” shall mean, with respect to the Thrift for any Quarterly Fiscal Date, a percentage determined by dividing (a) the sum of Thrift Net Income for such Quarterly Fiscal Date and the three preceding Quarterly Fiscal Dates by (b) the average of the “total assets” of the Thrift (as stated in TFR Report Schedule SO, Line SI870) for such four Quarterly Fiscal Dates.

     (e) The Credit Agreement is hereby further amended by inserting the following new defined term in proper alphabetical order in Article 1 thereof:

          “Thrift Net Income” shall mean, for any period, the amount stated as “net income” of the Thrift in TFR Report Schedule SO, Line SO91 for such period.

     (f) The Credit Agreement is hereby further amended by deleting Section 2.10 in its entirety and substituting in lieu thereof the following:

          “SECTION 2.10 USE OF PROCEEDS OF LOANS.

          The Borrower will use the proceeds of all Loans, subject to Section 7.8 hereof, to refinance Indebtedness of the Borrower from time to time (including, without limitation, the Indebtedness under the Existing Loan Agreement, the Met Life Notes and the Borrower’s medium term note and commercial paper programs), to finance working capital needs and for other general corporate purposes of the Borrower and its Subsidiaries.”

     (g) The Credit Agreement is hereby further amended by deleting clause (b) contained in Section 6.9 thereof and substituting in lieu thereof the following:

          “FIXED CHARGE COVERAGE RATIO. With respect to the Borrower, maintain for any period of four (4) consecutive fiscal quarters of the Borrower, Consolidated Earnings Available for Fixed Charges not less than one hundred ten percent (110%) of Consolidated Fixed Charges for such period; provided, however, that, solely for the test periods ending December 31, 2007, March 31, 2008, June 30, 2008, September 30, 2008 and December 31, 2008, the Borrower shall only be required to maintain Consolidated Earnings Available for Fixed Charges of not less than one hundred percent (100%) of Consolidated Fixed Charges for such periods.”

     (h) The Credit Agreement is hereby further amended by deleting clause (g) contained in Section 6.9 thereof and substituting in lieu thereof the following:

          “RETURN ON AVERAGE ASSETS. Cause the Thrift to have at each Quarterly Fiscal Date a Return on Average Assets for such Quarterly Fiscal Date of not less than 0.75%; provided, however, that, solely for the test periods ending September 30, 2007 through December 31, 2008, the Thrift shall not be required to maintain a minimum Return on Average Assets. Notwithstanding that the Thrift shall not be required to maintain a minimum Return on Average Assets for the test periods ending September 30, 2007 through December 31, 2008, the Borrower shall nonetheless report the Return on Average Assets for each such test period at the time it delivers the financial statements required under Section 5.1 and Section 5.2.”

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     (i) The Credit Agreement is hereby further amended by inserting the following new clause (j) in Section 6.9 thereof:

          “(j) MINIMUM NET INCOME. Cause the Thrift to have Thrift Net Income of the following minimum amounts for the following Quarterly Fiscal Dates: (a) for the fiscal quarter ending June 30, 2008, not less than $750,000; (b) for the fiscal quarter ending September 30, 2008, not less than $2,000,000; and (c) for the fiscal quarter ending December 31, 2008, not less than $3,500,000.

     (j) The Credit Agreement is hereby further amended by deleting clause (a) contained in Section 7.8 thereof and substituting in lieu thereof the following:

          “(a) Make any voluntary or optional prepayment of any Indebtedness of the Borrower or any of its Subsidiaries for borrowed money incurred or permitted to exist under the terms of this Agreement, other than (i) Indebtedness evidenced by the Notes; (ii) Indebtedness described on Schedule 7.1 annexed hereto, (iii) any such Indebtedness which has a maturity of not more than one year from the date of its incurrence; (iv) Indebtedness under the Borrower’s medium term note and commercial paper programs; and (v) Indebtedness under the Met Life Notes; provided, however, that, the Borrower shall not, and shall not permit any of its Subsidiaries to make any prepayment of Indebtedness described in clauses (ii), (iii), (iv) and/or (v) of this Section 7.8 if immediately prior to making such prepayment, a Default or Event of Default exists, or immediately after giving effect to such prepayment, a Default or Event of Default would result.”

     Section 2. Effectiveness of Amendments. The effectiveness of this Amendment (and the amendments contained in Section 1 hereof) is subject to the truth and accuracy of the representations set forth in Sections 3 and 4 below and receipt by the Agent of each of the following, each of which shall be in form and substance satisfactory to the Agent:

(i) Counterparts of this Amendment duly executed by the Borrower, the Agent and the Majority Banks;

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(ii) Evidence of the effectiveness (including fully executed copies) of an amendment to each of the Senior Note Agreements pursuant to which the parties thereto amend the applicable terms and provisions of the Senior Note Agreements consistent with the amendments herein to the extent applicable to the Senior Note Agreements; provided, however, that no such amendment to the Met Life Agreement shall be required if the Borrower shall have provided prior to the effective date of this Amendment evidence satisfactory to the Agent that either (a) the Borrower has formally and irrevocably notified the holders of the Met Life Notes that the Borrower will voluntarily prepay the Met Life Notes in full on or before January 31, 2008 in lieu of entering into such an amendment (in which case the Lenders hereby waive any Default or Event of Default which may be triggered by a default or event of default under the Met Life Agreement between January 1, 2008 and January 31, 2008) or (b) the necessary holders of the Met Life Notes shall have provided the Borrower with a waiver of any and all “Defaults” and/or “Events of Default” under the Met Life Agreement on and as of December 31, 2007 (including all financial covenants measured as of such date); provided, further that the parties hereto agree that it shall constitute an immediate Event of Default under the Credit Agreement if (x) the notice of voluntary prepayment of the Met Life Notes is provided to the Agent as described in clause (a) immediately above, but the Borrower does not so repay the holders of the Met Life Notes in full by January 31, 2008 or (y) on or before January 31, 2008, the Borrower shall not have either paid off the Met Life Notes in full or provided the Agent with evidence of the effectiveness (including fully executed copies) of an amendment (in form and substance acceptable to the Agent) to the Met Life Agreement pursuant to which the parties thereto amend the applicable terms and provisions of the Met Life Agreement consistent with the amendments herein to the extent applicable to the Met Life Agreement;

(iii) Payment by the Borrower of all fees and expenses due and payable under that certain letter agreement dated December 5, 2007 between the Borrower and SunTrust Robinson Humphrey, Inc.; and

(iv) Such other documents, agreements, instruments, certificates or other confirmations as the Agent may request.

     Section 3. Representations of the Borrower. The Borrower represents and warrants to the Agent and the Lenders that:

     (a) Corporate Power and Authority. The Borrower has the power and authority to execute, deliver and perform the terms and provisions of this Amendment, and has taken all necessary action to duly authorize the execution, delivery and performance by the Borrower of this Amendment. Each of this Amendment and the Credit Agreement, as amended by this Amendment, constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles.

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     (b) No Violation. The execution, delivery and performance by the Borrower of this Amendment, and compliance by the Borrower with the terms and provisions of the Credit Agreement, as amended by this Amendment: (i) will not contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court or Governmental Authority, (ii) will not conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of the Borrower or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other agreement, contract or instrument, to which the Borrower or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject or (iii) will not violate any provision of the charter documents of the Borrower.

     (c) Governmental Approvals. No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for those that have otherwise been obtained or made on or prior to the date of the effectiveness of this Amendment and which remain in full force and effect on such date), or exemption by, any Governmental Authority, is required to authorize, or is required in connection with, (i) the execution, delivery and performance of this Amendment by the Borrower or (ii) the legality, validity, binding effect or enforceability of Credit Agreement, as amended by this Amendment, against the Borrower.

     (d) No Default. No Default or Event of Default now exists or will exist immediately after giving effect to this Amendment.

     Section 4. Reaffirmation of Representations. The Borrower hereby repeats and reaffirms all representations and warranties made by it to the Agent and the Lenders in the Credit Agreement, as amended by this Amendment, and the other Loan Documents to which it is a party on and as of the date hereof (and after giving effect to this Amendment) with the same force and effect as if such representations and warranties were set forth in this Amendment in full (except to the extent that such representations and warranties relate expressly to an earlier date, in which case such representations and warranties were true and correct as of such earlier date).

     Section 5. No Further Amendments; Ratification of Liability. Except as expressly amended hereby, the Credit Agreement and each of the other Loan Documents shall remain in full force and effect in accordance with their respective terms. The Borrower hereby ratifies, confirms and reaffirms its liabilities, its payment and performance obligations (contingent or otherwise) and its agreements under the Credit Agreement and the other Loan Documents, all as amended by this Amendment. The Lenders’ agreement to the terms of this Amendment or any other amendment of the Credit Agreement or any other Loan Document shall not be deemed to establish or create a custom or course of dealing among the Borrower or the Lenders, or any of them. This Amendment shall be deemed to be a “Loan Document” for all purposes under the Credit Agreement.

     Section 6. No Waiver; References to the Credit Agreement. Except as expressly provided herein, nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Credit Agreement or any of the other Loan Documents, or constitute a course of conduct or dealing among the parties. The Agent and the Lenders reserve all rights, privileges and remedies under the Loan Documents. Each reference to the Credit Agreement in any of the Loan Documents (including the Credit Agreement) shall be deemed to be a reference to the Credit Agreement, as amended by this Amendment.

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     Section 7. Benefits. This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective permitted successors and assigns. This Amendment is solely for the benefit of the Borrower, the Lenders and the Agent, and no term or provision hereof shall be deemed to confer any benefit or rights on any other Person.

     Section 8. Expenses. The Borrower agrees to reimburse the Agent on demand for all reasonable costs and expenses (including, without limitation, attorneys’ fees) incurred by such parties in negotiating, documenting and consummating this Amendment, the other documents referred to herein, and the transactions contemplated hereby and thereby.

     Section 9. Severability. In case any provision of or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

     Section 10. Headings. Headings and captions used in this Amendment are included for convenience of reference only and shall not be given any substantive effect.

     Section 11. GOVERNING LAW. THIS AMENDMENT SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

     Section 12. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

     Section 13. Counterparts; Integration. This Amendment may be executed and delivered via facsimile with the same force and effect as if an original were executed and may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures hereto were upon the same instrument. This Amendment constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.

[Signatures On Following Pages]

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     IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to Credit Agreement to be executed as of the date first above written.

BORROWER: NATIONAL CONSUMER COOPERATIVE BANK,      D/B/A/ NCB
By:
	Name:
	Title:
AGENT AND LENDERS: SUNTRUST BANK, as Administrative Agent, as a Bank, as Issuing Bank, and as Swing Line Lender
By:
	Name:
	Title:
PNC BANK, NATIONAL ASSOCIATION
By:
	Name:
	Title:
WACHOVIA BANK, N.A.
By:
	Name:
	Title:

CALYON NEW YORK BRANCH
By:
	Name:
	Title:
UNION BANK OF CALIFORNIA, N.A.
By:
	Name:
	Title:
JP MORGAN CHASE BANK NY
By:
	Name:
	Title:
BANK OF AMERICA, N.A.
By:
	Name:
	Title:
CREDIT SUISSE, CAYMAN ISLANDS BRANCH
By:
	Name:
	Title:

MANUFACTURERS AND TRADERS TRUST COMPANY
By:
	Name:
	Title:
LASALLE BANK N.A.
By:
	Name:
	Title:
COÖPERATIEVE CENTRALE RAIFFEISEN BOERENLEENBANK B.A., “RABOBANK INTERNATIONAL”, NEW YORK BRANCH
By:
	Name:
	Title:
By:
	Name:
	Title:
MIZUHO CORPORATE BANK (USA)
By:
	Name:
	Title:

U.S. BANK N.A.
By:
	Name:
	Title:
THE BANK OF NOVA SCOTIA
By:
	Name:
	Title:
TAIPEI FUBON COMMERCIAL BANK, NEW YORK AGENCY
By:
	Name:
	Title:
FIRST COMMERCIAL BANK, LOS ANGELES BRANCH
By:
	Name:
	Title:

EX-10.59

Exhibit 10.59

National Consumer Cooperative Bank

Second Amendment
Dated as of December 31, 2007

to

Note Purchase Agreement
Dated as of January 8, 2003

Second Amendment to Note Purchase Agreement

     This Second Amendment dated as of December 31, 2007 (the or this “Second Amendment”) to the Note Purchase Agreement dated as of January 8, 2003 is between National Consumer Cooperative Bank (d/b/a/ NCB), a banking corporation chartered pursuant to the National Consumer Cooperative Bank Act, as amended, 12 U.S.C. §§3001-3051 (the “Company”), and each of the institutions which is a signatory to this Second Amendment (collectively, the “Noteholders”).

Recitals:

     A. The Company and each of the Noteholders have heretofore entered into the Note Purchase Agreement dated as of January 8, 2003 which was amended by the First Amendment to Note Purchase Agreement dated as of December 15, 2003 (as amended and in effect on the date hereof, the “Note Agreement”).

     B. The Company and the Noteholders now desire to amend the Note Agreement in the respects, but only in the respects, hereinafter set forth.

     C. Capitalized terms used herein shall have the respective meanings ascribed thereto in the Note Agreement unless herein defined or the context shall otherwise require.

     D. All requirements of law have been fully complied with and all other acts and things necessary to make this Second Amendment a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed.

     Now, therefore, upon the full and complete satisfaction of the conditions precedent to the effectiveness of this Second Amendment set forth in Section 3.1 hereof, and in consideration of good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Company and the Noteholders do hereby agree as follows:

Section 1. Amendments.

     Section 1.1. Section 9.9 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

     “Section 9.9. Incorporation of Affirmative and Negative Covenants.

(a) During all such times as the Bank Loan Agreement or the Prudential Agreements shall remain in force, (i) the Company and the Restricted Subsidiaries shall comply and remain at all times in compliance with the provisions of Article 6 and Article 7 of the Bank Loan Agreement and with Sections 5 and 6 of the Prudential Agreements and with any Financial Covenant set forth in any other provision of such agreements and (ii) all of the provisions of Article 6 and Article 7 of the Bank Loan Agreement and Sections 5 and 6 of the Prudential Agreements and any other Financial Covenants set forth therein, together with all relevant definitions pertaining thereto, shall hereby be incorporated herein by reference, mutatis mutandis. The Company shall give all holders of Notes written notice of any amendment, modification or waiver of Article 6, Article 7 or any Financial Covenant of the Bank Loan Agreement or of Section 5, Section 6 or any Financial Covenant of the Prudential Agreements, attaching an executed copy of the amendment, modification or waiver to such written notice, within five (5) Business Days of such amendment, modification or waiver.

(b) No Financial Covenant incorporated herein by virtue of Section 9.9(a) hereof shall supersede, replace, amend, supplement or modify any other provision of this Agreement, including any covenant contained herein which addresses a subject matter similar to that of such incorporated Financial Covenant.”

     Section 1.2. Section 9.11 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

     “Paid in Capital. The Company will limit its Investments in the form of “Paid-in-Capital” (as determined in accordance with GAAP) in NCB Financial Corporation to an aggregate amount not greater than thirty five percent (35%) of Consolidated Adjusted Net Worth at the time of such investment.”

     Section 1.3. Section 10.3 of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

“The Company shall not, at any time, permit the Fixed Charges Coverage Ratio to be less than 1.10 to 1, provided, however, that, for each of the quarterly periods ending December 31, 2007, March 31, 2008, June 30, 2008, September 30, 2008 and December 31, 2008, the Company shall not, at any time, permit the Fixed Charge Coverage Ratio to be less than 1 to 1.”

     Section 1.4. Subparagraph (vii) of Section 10.4(a) of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

     “(vii) Debt of NCB, FSB (formerly known as NCB Savings Bank, FSB) that (A) consists of demand and time deposits and (B) consists of advances from the Federal Home Loan Bank of Cincinnati (“FHLBC”) secured pursuant to that certain Blanket Security Agreement, dated as of June 30, 2006 (superseding and replacing the agreement dated November 30, 2000) between NCB, FSB and FHLBC, as the same may be amended or restated from time to time.”

     Section 1.5. The definition of “Consolidated Adjusted Net Income” shall be and is hereby amended by deleting the word “and” at the end of Subparagraph (j) thereof, replacing period with a semicolon at the end of Subparagraph (k) thereof and adding the following after Subparagraph (k):

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“(l) solely for the fiscal quarter of the Company ended June 30, 2007: losses, charges and expenses incurred pursuant to relocation programs in the aggregate amount of $1,288,000;

(m) solely for the fiscal quarter of the Company ended September 30, 2007: net losses, charges and expenses incurred on loan sales during such quarter in the amount of $5,328,000; losses, charges and expenses incurred due to the application of Financial Accounting Standards Board Statement 133 in the amount of $1,077,000; losses, charges and expenses incurred due to the adjustment of loan values to reflect the lower of cost or Fair Market Value in the amount of $2,251,000; losses, charges and expenses incurred pursuant to separation programs in the aggregate amount of $840,000; and transaction costs and expenses incurred in connection with amending the Revolving Credit Agreement dated May 1, 2006 by and among the Company, SunTrust (as Agent) and the other banks party thereto (as may be amended from time to time, the “Revolving Credit Agreement”) in the aggregate amount of $220,000; and

(n) solely for the fiscal quarter of the Company ending December 31, 2007: net losses, charges and expenses incurred on loan sales; losses, charges and expenses incurred due to the application of Financial Accounting Standards Board Statement 133; losses, charges and expenses incurred due to the adjustment of loan values to reflect the lower of cost or Fair Market Value; losses, charges and expenses incurred pursuant to relocation, separation and early retirement programs; and transaction costs and expenses incurred by the Company in connection with amendments to the Revolving Credit Agreement, the Note Purchase and Uncommitted Master Shelf Agreement dated December 28, 2001 by and among the Company, Prudential Insurance Company of America and the other note holders thereunder (the “Prudential Agreement”) and the Note Agreement; provided, however, that the adjustments permitted to be made under this clause (n) for such fiscal quarter shall not exceed $7,500,000 in the aggregate.”

     Section 1.6. Schedule B of the Note Agreement shall be and is hereby amended by replacing the definition of “Bank Loan Agreement” with the following:

     “Bank Loan Agreement” means the Credit Agreement dated as of May 1, 2006 by and among the Company, the bank signatory thereto, and SunTrust Bank as Administrative Agent, as amended and restated or replaced from time to time.

     Section 1.7. Schedule B of the Note Agreement shall be and is hereby amended by replacing the parenthetical in the definition of “Consolidated Debt” with the following:

     “(including, without limitation, advances under that certain Blanket Security Agreement dated as of June 30, 2006 (superseding and replacing the agreement dated November 30, 2000) with FHLBC, as amended or restated from time to time)”

     Section 1.8. Schedule B of the Note Agreement shall be and is hereby amended by replacing the definition of “Prudential Agreements” with the following:

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     “Prudential Agreements” means (i) the Note Purchase and Uncommitted Master Shelf Agreement dated as of December 28, 2001 between the Company and the Prudential Insurance Company of America, and (ii) any other agreement involving indebtedness between the Company or any of its Subsidiaries and the Prudential Insurance Company of America or any of its Subsidiaries or Affiliates, in each case as amended from time to time.

     Section 1.9. Subparagraphs (e) and (f) of the definition of Restricted Investments shall be and are hereby amended by deleting in each case “, and provided further, that such obligations mature within 365 days from the date of acquisition thereof”.

     Section 1.10. The definition of Restricted Investments shall be and is hereby further amended by deleting the word “and” the end of Subparagraph (n) and by inserting the following before the period at the end of Subparagraph (o):

“and;

     (p) Investments in interest only receivables, other retained interests, and other securities specifically related to the Company’s or any Subsidiary’s loan sales or Asset Securitizations in an aggregate amount not greater than sixty percent (60%) of Consolidated Adjusted Net Worth at the time of such investment. For purposes of this calculation, mortgage servicing rights shall not be included.

     Section 1.11. Schedules 5.4 (Subsidiaries/Officers) and 5.15 (Indebtedness) to the Note Agreement shall be and are hereby amended and replaced in their entirety with the schedules attached hereto as Schedule 5.4 and Schedule 5.15 (the “Replaced Schedules”) respectively for the purposes of the representation as of the date hereof given by the Company in Section 2.1(g) of this Second Amendment only. In no way shall these Replaced Schedules be deemed to replace the schedules referenced in Section 10.11 and in the definition of “Restricted Subsidiary” in the Note Agreement from the original Schedules 5.4 and 5.15 as of the date of Closing on January 8, 2003. Section 5.15(a) shall be and is hereby amended by replacing the reference to “January 3, 2003” with “December 18, 2007”.

Section 2. Representations and Warranties of the Company.

     Section 2.1. To induce the Noteholders to execute and deliver this Second Amendment (which representations shall survive the execution and delivery of this Second Amendment), the Company represents and warrants to the Noteholders that:

     (a) the Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and the Company has the corporate power and authority to execute and deliver this Second Amendment and to perform the provisions hereof and the provisions of the Note Agreement, as amended by this Second Amendment;

- 4 -

     (b) this Second Amendment has been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

     (c) the Note Agreement, as amended by this Second Amendment, constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

     (d) the execution, delivery and performance by the Company of this Second Amendment will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary;

     (e) no consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution or delivery by the Company of this Second Amendment or performance by the Company of the Note Agreement, as amended by this Second Amendment;

     (f) after giving effect to this Second Amendment, no Default or Event of Default has occurred which is continuing; and

     (g) all the representations and warranties contained in Section 5 of the Note Agreement are true and correct in all material respects with the same force and effect as if made by the Company on and as of the date hereof; provided that Schedules 5.4 and 5.15 are amended by substituting the attached Schedules in lieu thereof.

     (h) The Company has not paid or agreed to pay any fees or other consideration, or given any additional security or collateral, or shortened the maturity or average life of any indebtedness or permanently reduced any borrowing capacity, in each case, in connection with the obtaining of any consents or approvals in connection with the transactions contemplated hereby including, without limitation thereof in connection with the Bank Loan Agreement and the Prudential Agreements, other than the payment of legal fees of counsel to the lenders and agents under the respective amendment and the payment of 25 basis points to each Prudential Noteholder and, with respect to the Bank Loan Agreement, 10 basis points to each consenting lender, and an arrangement fee to SunTrust.

- 5 -

Section 3. Conditions to Effectiveness of This Second Amendment.

     Section 3.1. This Second Amendment shall not become effective until, and shall become effective when, each and every one of the following conditions shall have been satisfied:

     (a) executed counterparts of this Second Amendment, duly executed by the Company and the Required Holders, shall have been delivered to the Noteholders;

     (b) the representations and warranties of the Company set forth in Section 2 hereof are true and correct on and with respect to the date hereof; and

     (c) the Noteholders shall have received such additional documents or certificates with respect to legal matters or corporate or other proceedings related to the transactions contemplated hereby as may be reasonably requested by the Noteholders.

     (d) the Noteholders shall have received evidence satisfactory to them that the Bank Loan Agreement and the Prudential Agreements have been amended substantially as proposed in the forms annexed thereto as Exhibits A and B, respectively;

     (e) the Noteholders shall have received by wire transfer to each Noteholder’s account specified in Schedule A to the Note Purchase Agreement (or otherwise specified to the Company in writing) their pro rata portion of an amendment fee equal to $125,000;

     (f) the Company shall have paid the fees and disbursements of the Noteholders’ special counsel, Chapman and Cutler LLP, incurred in connection with the negotiation, preparation, execution and delivery of this Second Amendment Agreement and the transactions contemplated hereby which fees and disbursements are reflected in the statement of such special counsel delivered to the Company at the time of the execution and delivery of this Second Amendment Agreement.

Upon receipt of all of the foregoing, this Second Amendment shall become effective.

Section 4. Miscellaneous.

     Section 4.1. This Second Amendment shall be construed in connection with and as part of the Note Agreement, and except as modified and expressly amended by this Second Amendment, all terms, conditions and covenants contained in the Note Agreement and the Notes are hereby ratified and shall be and remain in full force and effect.

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     Section 4.2. Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this Second Amendment may refer to the Note Agreement without making specific reference to this Second Amendment but nevertheless all such references shall include this Second Amendment unless the context otherwise requires.

     Section 4.3. The descriptive headings of the various Sections or parts of this Second Amendment are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

     Section 4.4. This Second Amendment shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

     Section 4.5. The execution hereof by you shall constitute a contract between us for the uses and purposes hereinabove set forth, and this Second Amendment may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one agreement.

[Signature Page Follows]

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	National Consumer Cooperative Bank
	By
		Name: Richard L. Reed
		Title: Managing Director and Chief Financial Officer
Accepted and Agreed to:
	Metropolitan Life Insurance Company
	By
		Name:
		Title:
	MetLife Investors USA Insurance Company
	By:	Metropolitan Life Insurance Company, as
		Investment Manager
		By
			Name:
			Title:

- 8 -

New England Life Insurance Company
By:	Metropolitan Life Insurance Company, as Investment Manager
	By
		Name:
		Title:
First MetLife Investors Insurance Company
By: Metropolitan Life Insurance Company, as Investment Manager
	By
		Name:
		Title:
MetLife Bank, National Association
By: Metropolitan Life Insurance Company, as Investment Manager
	By
		Name:
		Title:
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By:
	Name:
	Title:
By:
	Name:
	Title:

- 9 -

EX-10.60

Exhibit 10.60

National Consumer Cooperative Bank

Third Amendment
Dated as of December 28, 2006

to

NOTE PURCHASE AND UNCOMMITTED MASTER SHELF AGREEMENT
Dated as of December 28, 2001

Re: $55,000,000 5.62 % Senior Notes
Due December 28, 2006

Third Amendment

     This Third Amendment dated as of December 27, 2006 (the or this “Third Amendment”) to the Note Purchase and Uncommitted Master Shelf Agreement dated as of December 28, 2001 is between National Consumer Cooperative Bank (d/b/a/ National Cooperative Bank), a banking corporation chartered pursuant to the National Consumer Cooperative Bank Act, as amended, 12 U.S.C. §§3001-3051 (the “Company”), and each of the institutions which is a signatory to this Third Amendment (collectively, the “Noteholders”).

Recitals:

     A. The Company and each of the Noteholders have heretofore entered into the Note Purchase and Uncommitted Master Shelf Agreement dated as of December 28, 2001 (as amended and in effect on the date hereof, the “Note Agreement”). The Company has heretofore issued $55,000,000 of its 6.99 % Senior Notes Due December 28, 2006 (the “Notes”) pursuant to the Note Agreement. On December 28, 2006, the Company intends to issue new 5.62% Senior Notes in the same principal amount due December 28, 2009 and use the proceeds therefrom to repay the Notes in full.

     B. The Company and the Noteholders now desire to clarify the intent of the parties that the Note Agreement authorizes such a new issuance of notes to repay existing notes without violating Section 2B(1) by amending the Note Agreement in the respects, but only in the respects, hereinafter set forth.

     C. Capitalized terms used herein shall have the respective meanings ascribed thereto in the Note Agreement unless herein defined or the context shall otherwise require.

     D. All requirements of law have been fully complied with and all other acts and things necessary to make this Third Amendment a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed.

     Now, therefore, in consideration of good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Company and the Noteholders do hereby agree as follows:

Section 1. Amendments.

     Section 1.1. Paragraph 2B(1) shall be and are hereby amended in its entirety to read as follows:

- 1 -

     “2B(1). Facility. Prudential is willing to consider, in its sole discretion and within limits which may be authorized for purchase by Prudential and Prudential Affiliates from time to time, the purchase of Shelf Notes pursuant to this Agreement. As used herein, the “Facility” shall refer to the willingness of Prudential to consider such purchase of Shelf Notes. The “Available Facility Amount” shall refer to, at any time, the aggregate principal amount of Shelf Notes stated in paragraph 1B, minus the aggregate principal amount of Shelf Notes purchased and sold pursuant to this Agreement during the Issuance Period (other than the aggregate principal amount of any such Shelf Notes that have been or, on or before the date of the issuance of then-existing Accepted Notes (as hereinafter defined), will be, repaid in full), minus the aggregate principal amount of Accepted Notes which have not yet been purchased and sold hereunder during the Issuance Period; provided, however, that in no event shall the aggregate principal amount of Series A Notes, other Shelf Notes or 1999 Notes held by Prudential Affiliates exceed $150,000,000. NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF SHELF NOTES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.

Section 2. Miscellaneous.

     Section 2.1. This Third Amendment shall be construed in connection with and as part of the Note Agreement, and except as modified and expressly amended by this Third Amendment, all terms, conditions and covenants contained in the Note Agreement are hereby ratified and shall be and remain in full force and effect.

     Section 2.2. Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this Third Amendment may refer to the Note Agreement without making specific reference to this Third Amendment but nevertheless all such references shall include this Third Amendment unless the context otherwise requires.

     Section 2.3. The descriptive headings of the various Sections or parts of this Third Amendment are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

     Section 2.4. This Third Amendment shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

-- 2 --

     Section 2.5. The execution hereof by you shall constitute a contract between us for the uses and purposes hereinabove set forth, and this Third Amendment may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one agreement.

National Consumer Cooperative Bank
By
	Name:
	Title:

-- 3 --

Accepted and Agreed to:

The Prudential Insurance Company Of America
By:
	Name: Yvonne Guajardo
	Title:   Vice President
Hartford Life Insurance Company
By:	Prudential Private Placement Investors, L.P., as Investment Advisor
By:	Prudential Private Placement Investors, Inc., General Partner
By:
	Name: Yvonne Guajardo
	Title:   Vice President

-- 4 --

EX-10.61

Exhibit 10.61

National Consumer Cooperative Bank

Fourth Amendment
Dated as of December 31, 2007

to

NOTE PURCHASE AND UNCOMMITTED MASTER SHELF AGREEMENT
Dated as of December 28, 2001

Fourth Amendment

     This Fourth Amendment dated as of December 31, 2007 (the or this “Fourth Amendment”) to the Note Purchase and Uncommitted Master Shelf Agreement dated as of December 28, 2001 is between National Consumer Cooperative Bank (d/b/a/ NCB), a banking corporation chartered pursuant to the National Consumer Cooperative Bank Act, as amended, 12 U.S.C. §§3001-3051 (the “Company”), and each of the institutions which is a signatory to this Fourth Amendment (collectively, the “Noteholders”).

Recitals:

     A. The Company and each of the Noteholders have heretofore entered into the Note Purchase and Uncommitted Master Shelf Agreement dated as of December 28, 2001, as amended by a First Amendment, dated as of December 9, 2003, a Second Amendment, dated as of December 28, 2004 and a Third Amendment, dated as of December 28, 2006 (as so amended and in effect on the date hereof, the “Note Agreement”).

     B. The Company and the Noteholders now desire to amend the Note Agreement in the respects, but only in the respects, hereinafter set forth.

     C. Capitalized terms used herein shall have the respective meanings ascribed thereto in the Note Agreement unless herein defined or the context shall otherwise require.

     D. All requirements of law have been fully complied with and all other acts and things necessary to make this Fourth Amendment a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed.

     Now, therefore, upon the full and complete satisfaction of the conditions precedent to the effectiveness of this Fourth Amendment set forth in Section 3.1 hereof, and in consideration of good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Company and the Noteholders do hereby agree as follows:

Section 1. Amendments.

     Section 1.1 Section 5G of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

     “Section 5G. Incorporation of Affirmative and Negative Covenants.

     (i) During all such times as the Bank Loan Agreement or the MetLife Agreement shall remain in force, (i) the Company and the Restricted Subsidiaries shall comply and remain at all times in compliance with the provisions of Article 6 and Article 7 of the Bank Loan Agreement and with Sections 9 and 10 of the MetLife Agreement and with any Financial Covenant set forth in any other provision of such agreements and (ii) all of the provisions of Article 6 and Article 7 of the Bank Loan Agreement and Sections 9 and 10 of the MetLife Agreement and any other Financial Covenants set forth therein, together with all relevant definitions pertaining thereto, shall hereby be incorporated herein by reference, mutatis mutandis. The Company shall give all holders of Notes written notice of any amendment, modification or waiver of Article 6, Article 7 or any Financial Covenant of the Bank Loan Agreement or of Section 9, Section 10 or any Financial Covenant of the MetLife Agreement, attaching an executed copy of the amendment, modification or waiver to such written notice, within five (5) Business Days of such amendment, modification or waiver.

     (ii) No Financial Covenant incorporated herein by virtue of paragraph 5G(i) hereof shall supersede, replace, amend, supplement or modify any other provision of this Agreement, including any covenant contained herein which addresses a subject matter similar to that of such incorporated Financial Covenant.”

     Section 1.2 The definition of “Consolidated Adjusted Net Income” shall be and is hereby amended by deleting the word “and” at the end of Subparagraph (j) thereof, replacing the period with a semicolon at the end of Subparagraph (k) thereof and adding the following after Subparagraph (k):

“(l) solely for the fiscal quarter of the Company ended June 30, 2007: losses, charges and expenses incurred pursuant to relocation programs in the aggregate amount of $1,288,000;

(m) solely for the fiscal quarter of the Company ended September 30, 2007: net losses, charges and expenses incurred on loan sales in the amount of $5,328,000; losses, charges and expenses incurred due to the application of Financial Accounting Standards Board Statement 133 in the amount of $1,077,000; losses, charges and expenses incurred due to the adjustment of loan values to reflect the lower of cost or Fair Market Value in the amount of $2,251,000; losses, charges and expenses incurred pursuant to separation programs in the aggregate amount of $840,000; and transaction costs and expenses incurred in connection with amending the Bank Loan Agreement in the aggregate amount of $220,000; and

(n) solely for the fiscal quarter of the Company ending December 31, 2007: net losses, charges and expenses incurred on loan sales; losses, charges and expenses incurred due to the application of Financial Accounting Standards Board Statement 133; losses, charges and expenses incurred due to the adjustment of loan values to reflect the lower of cost or Fair Market Value; losses, charges and expenses incurred pursuant to relocation, separation and early retirement programs; and transaction costs and expenses incurred by the Company in connection with amendments to the Bank Loan Agreement, this Agreement and to the Note Purchase Agreement dated January 8, 2003 with Metropolitan Life Insurance Company and other signatories thereto (the “MetLife Agreement”) (or the prepayments of the notes issued thereunder together with the termination of the associated interest rate swap agreement with Union Bank of California); provided, however, that the adjustments permitted to be made under this clause (n) for such fiscal quarter shall not exceed $7,500,000 in the aggregate.”

3

     Section 1.3. Paragraph 6H of the Note Agreement shall be and is hereby amended in its entirety to read as follows:

“The Company shall not permit the Consolidated Earnings Available for Fixed Charges for any period of four (4) consecutive fiscal quarters of the Company to be less than one hundred ten percent (110%) of Consolidated Fixed Charges for such period; provided, however, that, for each of such periods ending December 31, 2007, March 31, 2008, June 30, 2008, September 30, 2008 and December 31, 2008, such minimum percentage shall be reduced to one hundred percent (100%).”

     Section 1.4. The last four lines of the definition of Restricted Investments shall be and are hereby amended in their entirety to read as follows:

“provided, that the term Restricted Investments shall for all purposes include all Investments described in the foregoing clauses (d) and (g) through (k), inclusive, to the extent that they mature more than one (1) year from the date of acquisition thereof by the Company or a Restricted Subsidiary.”

     Section 1.5. The definition of Restricted Investments shall be and is hereby further amended by deleting the word “and” the end of Subparagraph (o) and by inserting the following before the colon at the end of Subparagraph (p):

          “and;

     (q) Investments in interest only receivables, other retained interests, and other securities specifically related to the Company’s or any Subsidiary’s loan sales or Asset Securitizations”

     Section 1.6 Paragraph 8O shall be and is hereby amended by replacing the second sentence appearing therein with the following: “There is no Subordinated Debt outstanding other than the Class A Notes and the Trust Preferred Debentures as listed on Schedule 8O.” Schedule 8O to the Note Agreement shall be and is hereby amended and replaced in its entirety with the schedule attached hereto as Schedule 8O.

     Section 1.7 The definition of the “Bank Loan Agreement” shall be and is hereby amended in its entirety to read as follows:

     “Bank Loan Agreement” means the Credit Agreement dated as of May 1, 2006 by and among the Company, the banks signatory thereto, and SunTrust Bank as Administrative Agent, as amended and restated or replaced from time to time.

Section 2. Representations and Warranties of the Company.

     Section 2.1. To induce the Noteholders to execute and deliver this Fourth Amendment (which representations shall survive the execution and delivery of this Fourth Amendment), the Company represents and warrants to the Noteholders that:

4

     (a) the Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and the Company has the corporate power and authority to execute and deliver this Fourth Amendment and to perform the provisions hereof and the provisions of the Note Agreement, as amended by this Fourth Amendment;

     (b) this Fourth Amendment has been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

     (c) the Note Agreement, as amended by this Fourth Amendment, constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

     (d) the execution, delivery and performance by the Company of this Fourth Amendment will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary;

     (e) no consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution or delivery by the Company of this Fourth Amendment or performance by the Company of the Note Agreement, as amended by this Fourth Amendment;

     (f) immediately after giving effect to this Fourth Amendment, no Default or Event of Default has occurred which is continuing; and

     (g) all the representations and warranties contained in Section 8 of the Note Agreement are true and correct in all material respects with the same force and effect as if made by the Company on and as of the date hereof; provided that Schedule 8O to the Note Agreement is amended by substituting the attached Schedule 8O.

5

     (h) The Company has not paid or agreed to pay any fees or other consideration, or given any additional security or collateral, or shortened the maturity or average life of any indebtedness or permanently reduced any borrowing capacity, in each case, in connection with the obtaining of any consents or approvals in connection with the transactions contemplated hereby including, without limitation thereof in connection with the Bank Loan Agreement and the MetLife Agreement, other than the payment of legal fees of counsel to the lenders and agents under the respective amendment and the payment of 25 basis points to each MetLife Noteholder and, with respect to the Bank Loan Agreement, 10 basis points to each consenting lender, and an arrangement fee to SunTrust.

Section 3. Conditions to Effectiveness of This Fourth Amendment.

     Section 3.1. This Fourth Amendment shall not become effective until, and shall become effective when, each and every one of the following conditions shall have been satisfied:

     (a) executed counterparts of this Fourth Amendment, duly executed by the Company and the Required Holders, shall have been delivered to the Noteholders;

     (b) the representations and warranties of the Company set forth in Section 2 hereof are true and correct on and with respect to the date hereof;

     (c) each Noteholder shall have received an amendment fee in an amount equal to .25% (25 basis points) of the outstanding principal amount of the Notes held by it (to be paid in the same manner and to the same account as amounts payable in respect of the Notes);

     (d) the Noteholders shall have received evidence satisfactory to them that the Bank Loan Agreement and the January 8, 2003 Note Purchase Agreement, providing for the issuance of $50,000,000 in principal amount of the Company’s 5.52% Senior Notes, have been amended to provide for substantially the same changes as those set forth above; and

     (e) the Noteholders shall have received such additional documents or certificates with respect to legal matters or corporate or other proceedings related to the transactions contemplated hereby as may be reasonably requested by the Noteholders.

Upon satisfaction of the foregoing conditions, this Fourth Amendment shall become effective.

Section 4. Miscellaneous.

     Section 4.1. This Fourth Amendment shall be construed in connection with and as part of the Note Agreement, and except as modified and expressly amended by this Fourth Amendment, all terms, conditions and covenants contained in the Note Agreement and the Notes are hereby ratified and shall be and remain in full force and effect.

6

     Section 4.2. Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this Fourth Amendment may refer to the Note Agreement without making specific reference to this Fourth Amendment but nevertheless all such references shall include this Fourth Amendment unless the context otherwise requires.

     Section 4.3. The descriptive headings of the various Sections or parts of this Fourth Amendment are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

     Section 4.4. This Fourth Amendment shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

     Section 4.5. The execution hereof by you shall constitute a contract between us for the uses and purposes hereinabove set forth, and this Fourth Amendment may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one agreement.

[Signature Page Follows]

7

National Consumer Cooperative Bank
By:
	Name: Richard L. Reed
	Title: Managing Director and Chief Financial Officer

Accepted and Agreed to:

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By
	Vice President

PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY
By:	Prudential Investment Management, Inc., as investment manager
	By
		Vice President
FARMERS NEW WORLD LIFE INSURANCE COMPANY
By:	Prudential Private Placement Investors, L.P. (as Investment Advisor)
By:	Prudential Private Placement Investors, Inc. (as its General Partner)
	By:
		Vice President

8

GIBRALTAR LIFE INSURANCE CO., LTD.
By:	Prudential Investment Management (Japan), Inc., as Investment Manager
By:	Prudential Investment Management, Inc., as Sub-Adviser
	By:
		Vice President
PHYSICIANS MUTUAL INSURANCE COMPANY
By:	Prudential Private Placement Investors, L.P. (as Investment Advisor)
By:	Prudential Private Placement Investors, Inc. (as its General Partner)
	By:
		Vice President
MTL INSURANCE COMPANY
By:	Prudential Private Placement Investors, L.P. (as Investment Advisor)
By:	Prudential Private Placement Investors, Inc. (as its General Partner)
	By:
		Vice President

9

TIME INSURANCE COMPANY
By:	Prudential Private Placement Investors, L.P. (as Investment Advisor)
By:	Prudential Private Placement Investors, Inc. (as its General Partner)
	By:
			Vice President
AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA, INC.
By:	Prudential Private Placement Investors, L.P. (as Investment Advisor)
By:	Prudential Private Placement Investors, Inc. (as its General Partner)
	By:
		Vice President

10

EX-10.62

Exhibit 10.62

National Consumer Cooperative Bank

Fifth Amendment
Dated as of February 25, 2008

to

NOTE PURCHASE AND UNCOMMITTED MASTER SHELF AGREEMENT
Dated as of December 28, 2001

Re: $55,000,000 5.62 % Senior Notes Due 2009
$50,000,000 5.60 % Senior Notes Due 2010

Fifth Amendment

     This Fifth Amendment dated as of February 25, 2008 (this “Amendment”) to the Note Purchase and Uncommitted Master Shelf Agreement dated as of December 28, 2001 is between National Consumer Cooperative Bank (d/b/a/ National Cooperative Bank), a banking corporation chartered pursuant to the National Consumer Cooperative Bank Act, as amended, 12 U.S.C. §§3001-3051 (the “Company”), and each of the institutions which is a signatory to this Amendment (collectively, the “Noteholders”).

Recitals:

     A. The Company and each of the Noteholders have heretofore entered into the Note Purchase and Uncommitted Master Shelf Agreement dated as of December 28, 2001 (as amended and in effect on the date hereof, the “Note Agreement”). The Company has heretofore issued $55,000,000 of its 5.62 % Senior Notes Due December 28, 2009 and $50,000,000 of its 5.60% Senior Notes Due December 28, 2010 (collectively, the “Notes”) pursuant to the Note Agreement.

     B. The Company and the Noteholders now desire to amend the Note Agreement in the respects, but only in the respects, hereinafter set forth.

     C. Capitalized terms used herein shall have the respective meanings ascribed thereto in the Note Agreement unless herein defined or the context shall otherwise require.

     D. All requirements of law have been fully complied with and all other acts and things necessary to make this Amendment a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed.

     Now, therefore, upon the full and complete satisfaction of the conditions precedent to the effectiveness of this Amendment set forth in Section 3.1 hereof, and in consideration of good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Company and the Noteholders do hereby agree as follows:

Section 1. Amendments.

     Section 1.1. Paragraph 5M shall be and is hereby amended by replacing it in its entirety as follows:

     5M. Paid-in-Capital. The Company will at all times limit its ‘Paid-in-Capital’ (as determined in accordance with GAAP) in NCB Financial Corporation to an aggregate amount not to exceed 35% of Consolidated Adjusted Net Worth at the time of such investment.

     Section 1.2. Prudential hereby designates the following individuals as “Authorized Officers” for purposes of the Note Agreement:

Paul L. Meiring
Paul Price
Yvonne M. Guajardo
Engin W. Okaya

Section 2. Representations and Warranties of the Company.

     Section 2.1. To induce the Noteholders to execute and deliver this Amendment (which representations shall survive the execution and delivery of this Amendment), the Company represents and warrants to the Noteholders that:

     (a) the Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and the Company has the corporate power and authority to execute and deliver this Amendment and to perform the provisions hereof and the provisions of the Note Agreement, as amended by this Amendment;

     (b) this Amendment has been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

     (c) the Note Agreement, as amended by this Amendment, constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

     (d) the execution, delivery and performance by the Company of this Amendment will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary;

-2-

     (e) no consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution or delivery by the Company of this Amendment or performance by the Company of the Note Agreement, as amended by this Amendment;

     (f) as of the date hereof and after giving effect to this Amendment, no Default or Event of Default has occurred which is continuing; and

     (g) all the representations and warranties contained in Section 8 of the Note Agreement are true and correct in all material respects with the same force and effect as if made by the Company on and as of the date hereof; provided that Schedule 8O to the Note Agreement is amended by substituting the attached Schedule 8O.

Section 3. Conditions to Effectiveness of This Amendment.

     Section 3.1. This Amendment shall not become effective until, and shall become effective when, each and every one of the following conditions shall have been satisfied:

     (a) executed counterparts of this Amendment, duly executed by the Company and the Required Holders of the Notes, shall have been delivered to the Noteholders;

     (b) the representations and warranties of the Company set forth in Section 2 hereof are true and correct on and with respect to the date hereof; and

     (c) such additional documents or certificates with respect to legal matters or corporate or other proceedings related to the transactions contemplated hereby as may be reasonably requested by the Noteholders.

Upon satisfaction of all of the foregoing, this Amendment shall become effective.

Section 4. Miscellaneous.

     Section 4.1. This Amendment shall be construed in connection with and as part of the Note Agreement, and except as modified and expressly amended by this Amendment, all terms, conditions and covenants contained in the Note Agreement and the Notes are hereby ratified and shall be and remain in full force and effect.

     Section 4.2. Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this Amendment may refer to the Note Agreement without making specific reference to this Amendment but nevertheless all such references shall include this Amendment unless the context otherwise requires.

-3-

     Section 4.3. The descriptive headings of the various Sections or parts of this Amendment are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

     Section 4.4. This Amendment shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

[Signature pages follow.]

-4-

     Section 4.5. The execution hereof by you shall constitute a contract between us for the uses and purposes hereinabove set forth, and this Amendment may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one agreement.

NATIONAL CONSUMER COOPERATIVE BANK
By
	Name:
	Title:

Accepted and Agreed to:

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By
	Vice President

PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY
By:	Prudential Investment Management, Inc., as investment manager
	By
		Vice President
FARMERS NEW WORLD LIFE INSURANCE COMPANY
By:	Prudential Private Placement Investors, L.P. (as Investment Advisor)
By:	Prudential Private Placement Investors, Inc. (as its General Partner)
	By:
		Vice President
GIBRALTAR LIFE INSURANCE CO., LTD.
By:	Prudential Investment Management (Japan), Inc., as Investment Manager
By:	Prudential Investment Management, Inc., as Sub-Adviser
	By:
		Vice President

-2-

PHYSICIANS MUTUAL INSURANCE COMPANY
By:	Prudential Private Placement Investors, L.P. (as Investment Advisor)
By:	Prudential Private Placement Investors, Inc. (as its General Partner)
	By:
		Vice President
MTL INSURANCE COMPANY
By:	Prudential Private Placement Investors, L.P. (as Investment Advisor)
By:	Prudential Private Placement Investors, Inc. (as its General Partner)
	By:
		Vice President
TIME INSURANCE COMPANY
By:	Prudential Private Placement Investors, L.P. (as Investment Advisor)
By:	Prudential Private Placement Investors, Inc. (as its General Partner)
	By:
		Vice President
AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA, INC.
By:	Prudential Private Placement Investors, L.P. (as Investment Advisor)
By:	Prudential Private Placement Investors, Inc. (as its General Partner)
	By:
		Vice President

-3-

EX-14

Exhibit 14

NCB Senior Financial Officers’ Code of Ethics

M. Proper Accounting and Financial Reporting

1.	NCB has established internal accounting controls and records-keeping policies to meet both business and legal requirements. Employees are expected to comply with these controls and policies.
2.	The accounting business records of NCB must be complete, accurate and supported in reasonable detail. Underlying transactions must be accurate, properly authorized and timely recorded. They are subject to review and audit by the Chief Auditor, Loan Review, Regulatory Compliance, external auditors and examiners. Employees are expected to fully cooperate in a candid manner with such reviews and audits. Employees of NCB authorized to incur business expenses are responsible for the accurate and timely reporting of such expenses. All expenses must be in accordance with existing policies.
3.	These standards are applicable to all employees of NCB, but the full, fair, accurate, timely and understandable preparation, reporting and disclosure of NCB’s financial condition and results of operations are particularly the responsibility of the Chief Executive Officer (CEO), Chief Financial Officer (CFO), the Controller, and any other officer performing functions in the nature of a “senior financial officer” as that term may be defined in regulations issued under the Sarbanes-Oxley Act of 2002. All senior financial officers are required, in performing their functions as financial officers:

a)	To act with honesty and integrity
b)	To avoid actual or apparent conflicts of interest
c)	To prepare and provide information that is accurate, complete, objective, relevant and understandable
d)	To comply with applicable rules and regulations of federal and state governments and other appropriate private and public regulatory bodies
e)	To act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing their independent judgment to be subordinated
f)	To proactively promote ethical behavior as responsible partners among peers

g)	To respect the confidentiality of information except when authorized or otherwise legally obligated to disclose
h)	To share knowledge and maintain skills important and relevant to the needs of NCB and its members
i)	To achieve responsible use and control of all assets and resources of NCB to the best of their ability
j)	To preserve records created or used in performance of their functions and use their reasonable best efforts to prevent destruction of such records by others, except pursuant to reasonable document retention policies not designed to hide wrongdoing
k)	To report in good faith to the Chair of the Audit Committee any violation of these provisions (a) through (j) of which they acquire notice or knowledge

The provisions of this paragraph M(2) shall be known as the “NCB Senior Financial Officers’ Code of Ethics.”

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors
National Consumer Cooperative Bank:

We consent to the incorporation by reference in Registration Statement No. 333-90457 dated December 21, 1999 and Registration Statement No. 333-17003 dated January 24, 1997 of National Consumer Cooperative Bank and subsidiaries (the Company) of our report dated March 31, 2008, relating to the consolidated balance sheets of the Company as of December 31, 2007 and 2006, and the related consolidated statements of income, comprehensive income, changes in members’ equity, and cash flows for each of the years in the three-year period ended December 31, 2007, which report appears in the December 31, 2007 annual report on Form 10-K of the Company.

McLean, Virginia
March 31, 2008

EX-24.29

Exhibit 24.29

POWER OF ATTORNEY

Know all men by these presents:

That I, Janis Herschkowitz,

of (address) 579 Lovell Ct, Hummelstown, PA 17036, as a member of the Board of Directors of THE NATIONAL CONSUMER COOPERATIVE BANK, do hereby make, constitute and appoint as my true lawful attorney in fact Richard L. Reed or Irrainna Blackmon-Corbin for me and in my name, place and stead to sign any and all of the following and amendments thereto executed on behalf of THE NATIONAL CONSUMER COOPERATIVE BANK and filed with the Securities and Exchange Commission, as follows:

Annual Reports on Form 10-K for the NATIONAL CONSUMER COOPERATIVE BANK.

IN WITNESS WHEREOF, I have hereunto set my hand this 6^th day of March, 2008.

/s/ Janis Herschkowitz

Signature

State of Pennsylvania     )	)	SS:
County of Lebanon          )

     On this 6^th day of March, 2008, before me personally appeared the above, to me known and known to me to be the person mentioned and described in and who executed the foregoing instrument and he duly acknowledged to me that he executed the same.

/s/

Notary Public

My Commission expires: 12/01/08

EX-24.30

Exhibit 24.30

POWER OF ATTORNEY

Know all men by these presents:

                    That I, Nguyen Van Hanh,

of 7534 S. Land Park Dr., Sacramento, CA 95831, as a member of the Board of Directors of THE NATIONAL CONSUMER COOPERATIVE BANK, do hereby make, constitute and appoint as my true lawful attorney in fact Richard L. Reed or Irrainna Blackmon-Corbin for me and in my name, place and stead to sign any and all of the following and amendments thereto executed on behalf of THE NATIONAL CONSUMER COOPERATIVE BANK and filed with the Securities and Exchange Commission, as follows:

Annual Reports on Form 10-K for the NATIONAL CONSUMER COOPERATIVE BANK.

     IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of March, 2008.

/s/ Nguyen Van Hanh 

Signature 

State of California            )
                                                                                               )                           SS:
County of Sacramento    )

     On this 28th day of March, 2008, before me personally appeared the above, to me known and known to me to be the person mentioned and described in and who executed the foregoing instrument and he duly acknowledged to me that he executed the same.

/s/ 

Notary Public 

My Commission expires: 12/11/08

EX-24.31

Exhibit 24.31

POWER OF ATTORNEY

Know all men by these presents:

That I, Stuart M. Saft,

of 125 West 55^th Street, New York, NY, as a member of the Board of Directors of THE NATIONAL CONSUMER COOPERATIVE BANK, do hereby make, constitute and appoint as my true lawful attorney in fact Richard L. Reed or Irrainna Blackmon-Corbin for me and in my name, place and stead to sign any and all of the following and amendments thereto executed on behalf of THE NATIONAL CONSUMER COOPERATIVE BANK and filed with the Securities and Exchange Commission, as follows:

Annual Reports on Form 10-K for the NATIONAL CONSUMER COOPERATIVE BANK.

     IN WITNESS WHEREOF, I have hereunto set my hand this 25th day of March, 2008.

/s/ Stuart M. Saft

Signature

State of New York                    )	)          SS:
County of New York                    )

     On this 25th day of March, 2008, before me personally appeared the above, to me known and known to me to be the person mentioned and described in and who executed the foregoing instrument and he duly acknowledged to me that he executed the same.

/s/

Notary Public

My Commission expires: 07/23/11

EX-24.32

Exhibit 24.32

POWER OF ATTORNEY

Know all men by these presents:

     That I, Walden Swanson,
of 50 Walnut Street, Bldg A, Andover, MA 01810, as a member of the Board of Directors of THE NATIONAL CONSUMER COOPERATIVE BANK, do hereby make, constitute and appoint as my true lawful attorney in fact Richard L. Reed or Irrainna Blackmon-Corbin for me and in my name, place and stead to sign any and all of the following and amendments thereto executed on behalf of THE NATIONAL CONSUMER COOPERATIVE BANK and filed with the Securities and Exchange Commission, as follows:

Annual Reports on Form 10-K for the NATIONAL CONSUMER COOPERATIVE BANK.

IN WITNESS WHEREOF, I have hereunto set my hand this 4^th day of March, 2008.

/s/ Walden Swanson Signature

State of Massachusetts                     )

) SS:

County of Essex                                )

     On this 4^th day of March, 2008, before me personally appeared the above, to me known and known to me to be the person mentioned and described in and who executed the foregoing instrument and he duly acknowledged to me that he executed the same.

/s/ Notary Public

My Commission expires: 10/13/11

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Charles E. Snyder, Chief Executive Officer of National Consumer Cooperative Bank, certify that:

1.	I have reviewed this annual report on Form 10-K of National Consumer Cooperative Bank;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 31, 2008

/s/ Charles E. Snyder  

Charles E. Snyder 

Chief Executive Officer 

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Richard L. Reed, Chief Financial Officer of National Consumer Cooperative Bank, certify that:

1.	I have reviewed this annual report on Form 10-K of National Consumer Cooperative Bank;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 31, 2008

/s/ Richard L. Reed  

Richard L. Reed 

Chief Financial Officer 

EX-32

EXHIBIT 32

CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of the National Consumer Cooperative Bank (“NCB”) on Form 10-K for the year ended December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge;

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of NCB.

/s/ Charles E. Snyder Charles E. Snyder

President and

Chief Executive Officer

/s/ Richard L. Reed Richard L. Reed

Executive Managing Director

and Chief Financial Officer

March 31, 2008

EX-99.1

Exhibit 99.1

Dear Stockholder:

RE: 2008 Board of Directors Election

I am pleased to present the official ballot and information needed for your company to cast its votes in the 2008 election of directors for NCB. The board of directors has fixed December 31, 2007, as the record date for the determination of stockholders entitled to vote in the 2008 election. The votes allocated to your company are shown on the ballot.

The stockholders will elect four candidates to fill the vacancies in the 12 stockholder-elected directorships. All directors are elected to serve three-year terms.

This year NCB is adapting a web based ballot in addition to the traditional paper ballot. You have the option of casting your votes either in a paper form by regular mail or electronically via the web. Specific instructions for either method are enclosed. Whichever method you select, the ballots must be either delivered by regular mail or cast through the internet site on or before April 11, 2008.

On behalf of the board of directors, I appreciate your participation, and encourage you to cast your ballot.

Sincerely,


William F. Casey
Chair
NCB Board of Directors
 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held May 1, 2008

The 2008 annual meeting of the stockholders of NCB will be held on Thursday, May 1, 2008 at 5:00 p.m., at the Navy Heritage Center — United States Navy Memorial, 701 Pennsylvania Avenue, NW, Washington, D.C.

The board of directors and management look forward to personally greeting those stockholders able to attend, and will respond to questions you may have concerning NCB.

Upon request, a copy of NCB’s 2007 Annual Report will be mailed to stockholders under a separate cover.

Very truly yours,


Irrainna Blackmon-Corbin
Corporate Secretary
NCB
 

2008 Board of Directors
Official Election Ballot

Place an “X” next to any four (4) candidates of your choice.

Roger Collins*
Consumer Goods

Steven Cunningham*
Consumer Goods

Wilson H. Beebe, Jr.
Other

Peter A. Conrad
Consumer Services

Bill Kooistra
Consumer Services

Alfred Plamann
Low Income

*incumbent

Ballot Instructions

• Members casting their vote by mail must use this original, Official Election Ballot form, no substitutes will be allowed.

• Votes should be cast by placing an “X” in the box next to the name of each selected candidate. In the event your selection needs to be changed, please cross out the incorrect selection by drawing a line through the candidate’s name.

• You may vote for four (4) of the six (6) candidates. Ballots indicating more than four (4) selections will not be counted.

• Ballots must be cast by an official of the cooperative stockholder in order to be counted.

• If you are casting this paper ballot, in order to be counted, the ballot must be received by the independent teller, Survey & Ballot Systems, PO Box 46430, Eden Prairie, MN 55344 no later than April 11, 2008. Please use the self-addressed envelope enclosed with this packet. Hand-delivered ballots will not be counted.

The undersigned officer of the cooperative casting this ballot acknowledges receipt of notification of the National Consumer Cooperative Bank annual meeting and certifies that he/she is authorized to cast ballots on behalf of the cooperative stockholder.

Signature of Authorized Representative Date

ELECTION OF DIRECTORS

The stockholders are holding an election to elect four directors among the six candidates nominated to fill four vacancies on the board of NCB.

Nominees for election are qualified as representatives of five classes of cooperatives. The election rules require that the election be conducted in such a manner so as to ensure that each of the five cooperative classes shall be represented by at least one and no more than three directors.

Listed below, by class are all of the stockholder-elected directorships currently filled by incumbent directors who will continue to serve out their terms; and the number of directorships available in each class.

Stockholder-Elected Directorships

Class of					Incumbent		Available
Cooperative	Minimum		Maximum		Seats 2008		Seats 2008
Consumer Services		1		3		1		2
Low Income		1		3		2		1
Other		1		3		2		1
Housing		1		3		2		1
Consumer Goods		1		3		1		2

Under the election rules, the four nominees receiving the highest vote shall be elected, subject to the maximum and minimum limitations imposed on each class. Stockholders may vote for any four nominees.

Voting Instructions

     Voting by Mail:

• Members casting their vote by mail must use the original Official Election Ballot form, no substitutes will be allowed.

• Mark your selections by placing an X in the box next to the candidate of your choice.

• Do not mail to the NCB Office

• Detach ballot and place in the enclosed return envelope. Mail to Survey & Ballot Systems, PO Box 46430, Eden Prairie, MN 55344. Envelopes must be received no later than April 11, 2008. Please allow sufficient time for delivery.

     Voting Online:

•	Go to https://www.directvote.net/ncb to access the login page of the official 2008 NCB election.
•	Above and to the left is your ID Number and your E-Signature (election passcode). Use both of these numbers to login.
•	Once registered, follow the online voting instructions.
•	Online voting begins February 25, 2008 and ends at 11:59 AM ET, April 11, 2008.
	If you have any problems voting online, please e-mail support@directvote.net

     Incumbent — Consumer Goods

     Roger Collins is President and Chief Executive Officer of Harp’s Food Stores, Inc., a regional grocery chain located in Arkansas, Oklahoma, and Missouri. He currently serves on the board of directors of Associated Wholesale Grocers. Mr. Collins has a B.S. in economics from Rice University and an MBA from the University of Texas at Austin.

     Incumbent — Consumer Goods

     Steven F. Cunningham is President Emeritus of IMARK Group, Inc., a purchasing cooperative of independently owned electrical suppliers and equipment wholesalers located in Oxon Hill, Maryland. He currently serves as President and Director of Elite Distributors Insurance Co., located in Grand Cayman. He also serves as a director of Mutual Services Cooperative and is currently chair of the National Cooperative Business Association’s Board of Directors. Mr. Cunningham has a bachelor’s degree in accounting from Lehigh University, Bethlehem, Pennsylvania.

     Other

     Wilson H. Beebe, Jr. has been the President and CEO of Thanexus, Incorporated since 1985. Thanexus, Inc. is a cooperative of privately owned funeral businesses that exist to consolidate their human resource, employee benefit and financial service functions. Mr. Beebe also serves as the head of each of Thanexus, Inc’s affiliated organizations. He has served on the board of directors of the National Cooperative Business Association (NCBA) for almost five years.

     Consumer Services

     Peter A. Conrad is the Executive Vice President, Treasurer, Corporation Clerk and Chief Operating Officer of the Cooperative Central Bank in Boston, Massachusetts. He is President elect and is scheduled to succeed William Casey as President and CEO on May 1, 2008. Mr. Conrad has been a trustee of the Cooperative Banks Employees Retirement Association (CBERA) and the Cooperative Banks Employees Benefit Association (CBEBA) since June, 2005.

     Consumer Services

     Bill Kooistra is the Chief Financial Officer of Frontier Natural Products Cooperative in Norway, Iowa which specializes in natural and organic products. In the past, he has been a partner in a CPA firm doing annual audits and providing strategic planning assistance to numerous agricultural cooperatives.

     Low Income

     Alfred A. Plamann is President and CEO of Unified Western Grocers, formerly known as Certified Grocers of California, Ltd. in Commerce, California. Mr. Plamann was the Senior Vice President and Chief Financial Officer of Certified Grocers from 1989 to 1993. He has served in an executive capacity with Atlantic Richfield Co. (ARCO) and has served on the board of directors of several of Unified’s subsidiaries. Additionally, he has served on the board of directors of the National American Wholesale Grocers Association (NAWGA) and the California Grocer’s Association (CGA), and is a member of the board of directors of the Food Marketing Institute (FMI), the Greater Los Angeles Area of the Chamber of Commerce and the board of the Weingart Center, a homeless shelter in Los Angeles. He holds a B.S. in accounting and real estate from the University of Colorado and an MBA from the Wharton School of the University of Pennsylvania. Mr. Plamann served as a NCB director from 1995 to 2001 and from 2003 to 2007.