##### Table of Contents



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, 2010
 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: 000-54133
 CENTURY NEXT FINANCIAL CORPORATION
  Louisiana
    
    27-2851432(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification Number)
 505 North Vienna Street, Ruston, Louisiana
    
    71270(Address of Principal Executive Offices)
    
    (Zip Code)
  
 Common Stock, $.01 par value per share
 YES o NO þ
 o þ
 YES þ NO o
 o o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



CENTURY NEXT FINANCIAL CORPORATION
2010 ANNUAL REPORT ON FORM 10-K
 TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    25Item 1B. Unresolved Staff Comments
    
    
    25Item 2. Properties
    
    
    25Item 3. Legal Proceedings
    
    
    25Item 4. (Removed and Reserved)
    
    
    25PART IIItem 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    26Item 6. Selected Financial Data
    
    
    26Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    28Item 7A. Quantitative and Qualitative Disclosures about Market Risk
    
    
    37Item 8. Financial Statements and Supplementary Data
    
    
    38Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    58Item 9A. Controls and Procedures
    
    
    58Item 9B. Other Information
    
    
    59PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    59Item 11. Executive Compensation
    
    
    59Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    59Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    59Item 14. Principal Accounting Fees and Services
    
    
    59PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    60SIGNATURES
    
    
    61Exhibit 23.0Exhibit 31.1Exhibit 31.2Exhibit 32.0




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##### Table of Contents



Forward-Looking Statements
 This Annual Report on Form 10-K contains certain forward looking statements (as defined in the
Securities Exchange Act of 1934 and the regulations thereunder). Forward looking statements are
not historical facts but instead represent only the beliefs, expectations or opinions of Century
Next Financial Corporation and its management regarding future events, many of which, by their
nature, are inherently uncertain. Forward looking statements may be identified by the use of such
words as: believe, expect, anticipate, intend, plan, estimate, or words of similar
meaning, or future or conditional terms such as will, would, should, could, may,
likely, probably, or possibly. Forward looking statements include, but are not limited to,
financial projections and estimates and their underlying assumptions; statements regarding plans,
objectives and expectations with respect to future operations, products and services; and
statements regarding future performance. Such statements are subject to certain risks,
uncertainties and assumption, many of which are difficult to predict and generally are beyond the
control of Century Next Financial Corporation. and its management, that could cause actual results
to differ materially from those expressed in, or implied or projected by, forward looking
statements. The following factors, among others, could cause actual results to differ materially
from the anticipated results or other expectations expressed in the forward looking statements: (1)
economic and competitive conditions which could affect the volume of loan originations, deposit
flows and real estate values; (2) the levels of non-interest income and expense and the amount of
loan losses; (3) competitive pressure among depository institutions increasing significantly; (4)
changes in the interest rate environment causing reduced interest margins; (5) general economic
conditions, either nationally or in the markets in which Century Next Financial Corporation is or
will be doing business, being less favorable than expected;(6) political and social unrest,
including acts of war or terrorism; or (7) legislation or changes in regulatory requirements
adversely affecting the business in which Century Next Financial Corporation will be engaged.
Century Next Financial Corporation undertakes no obligation to update these forward looking
statements to reflect events or circumstances that occur after the date on which such statements
were made.
  
 PART I
 
 Item 1.
    
    Business.
 General
    1




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##### Table of Contents



Market Area and Competition
  Lending Activities
 General.
   Loan Portfolio Composition.
 December 31,2010
    
    
    2009Amount
    
    
    %
    
    
    Amount
    
    
    %(Dollars in thousands)Real estate loans:One- to four-family residential
    
    $
    36,267
    
    
    
    50.50
    %
    
    $
    36,099
    
    
    
    53.74
    %Commercial real estate and lines of credit
    
    
    12,853
    
    
    
    17.90
    
    
    
    12,670
    
    
    
    18.86Multi-family
    
    
    2,027
    
    
    
    2.82
    
    
    
    2,247
    
    
    
    3.35Land
    
    
    6,891
    
    
    
    9.60
    
    
    
    4,292
    
    
    
    6.39Residential construction
    
    
    777
    
    
    
    1.08
    
    
    
    1,365
    
    
    
    2.03Total real estate loans
    
    
    58,815
    
    
    
    81.90
    
    
    
    56,673
    
    
    
    84.37Other loans:Home equity line of credit
    
    
    1,250
    
    
    
    1.74
    
    
    
    1,697
    
    
    
    2.53Consumer non-real estate loans
    
    
    5,782
    
    
    
    8.05
    
    
    
    4,368
    
    
    
    6.50Commercial business loans
    
    
    5,970
    
    
    
    8.31
    
    
    
    4,436
    
    
    
    6.60Total other loans
    
    
    13,002
    
    
    
    18.10
    
    
    
    10,501
    
    
    
    15.63Total loans
    
    $
    71,817
    
    
    
    100.00
    %
    
    $
    67,174
    
    
    
    100.00
    %Less:Allowance for loan losses
    
    
    204
    
    
    
    
    
    
    
    176Net loans
    
    $
    71,613
    
    
    
    
    
    
    $
    66,998
  2




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##### Table of Contents



Origination of Loans.
 ex officio
  Year Ended December 31,2010
    
    
    2009(In thousands)Loan originations:One- to four-family residential
    
    $
    45,850
    
    
    $
    44,126Commercial real estate and lines of credit
    
    
    8,711
    
    
    
    4,213Multi-family
    
    
    282
    
    
    
    5,040Land
    
    
    9,130
    
    
    
    4,491Residential construction
    
    
    2,196
    
    
    
    6,307Home equity lines of credit
    
    
    513
    
    
    
    824Consumer non-real estate loans
    
    
    6,264
    
    
    
    7,780Commercial business loans
    
    
    7,563
    
    
    
    2,984Total loan originations
    
    
    80,509
    
    
    
    75,765Loans purchased
    
    
    
    
    
    
    Loans sold
    
    
    25,629
    
    
    
    31,631Loan principal repayments
    
    
    50,260
    
    
    
    38,392Total loans sold and principal repayments
    
    
    75,889
    
    
    
    70,023Increase due to other items, net(1)
    
    
    23
    
    
    
    29Net increase in total loans
    
    $
    4,643
    
    
    $
    5,771
 
 (1)
    
    Other items consist of loans in process and deferred fees.   3




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##### Table of Contents



Contractual Terms to Final Maturities.
 CommercialOne- to
    
    
    Real Estate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Home
    
    
    Consumer
    
    
    CommercialFour-Family
    
    
    and Lines of
    
    
    Multi-
    
    
    
    
    
    
    Residential
    
    
    Equity Lines
    
    
    Non-Real
    
    
    BusinessResidential
    
    
    Credit
    
    
    Family
    
    
    Land
    
    
    Construction
    
    
    of Credit
    
    
    Estate Loans
    
    
    Loans
    
    
    Total(In Thousands)Amounts due after
December 31, 2010 in:One year or less
    
    $
    4,490
    
    
    $
    2,714
    
    
    $
    48
    
    
    $
    3,808
    
    
    $
    777
    
    
    $
    219
    
    
    $
    1,433
    
    
    $
    3,792
    
    
    $
    17,281After one year through two years
    
    
    6,313
    
    
    
    3,070
    
    
    
    635
    
    
    
    490
    
    
    
    
    
    
    
    531
    
    
    
    925
    
    
    
    402
    
    
    
    12,366After two years through three years
    
    
    8,372
    
    
    
    3,737
    
    
    
    226
    
    
    
    1,425
    
    
    
    
    
    
    
    500
    
    
    
    909
    
    
    
    903
    
    
    
    16,072After three years through five years
    
    
    4,778
    
    
    
    2,201
    
    
    
    1,118
    
    
    
    956
    
    
    
    
    
    
    
    
    
    
    
    2,126
    
    
    
    763
    
    
    
    11,942After five years through ten years
    
    
    1,972
    
    
    
    1,131
    
    
    
    
    
    
    
    117
    
    
    
    
    
    
    
    
    
    
    
    389
    
    
    
    110
    
    
    
    3,719After ten years through 15 years
    
    
    1,716
    
    
    
    
    
    
    
    
    
    
    
    95
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,811After 15 years
    
    
    8,626
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,626Total
    
    $
    36,267
    
    
    $
    12,853
    
    
    $
    2,027
    
    
    $
    6,891
    
    
    $
    777
    
    
    $
    1,250
    
    
    $
    5,782
    
    
    $
    5,970
    
    
    $
    71,817
   Floating or
    
    
    Total atFixed-Rate
    
    
    Adjustable-Rate
    
    
    December 31, 2010(In thousands)One- to four-family residential
    
    $
    31,777
    
    
    $
    
    
    
    $
    31,777Commercial real estate and lines of credit
    
    
    10,139
    
    
    
    
    
    
    
    10,139Multi-family
    
    
    1,979
    
    
    
    
    
    
    
    1,979Land
    
    
    3,083
    
    
    
    
    
    
    
    3,083Residential construction
    
    
    
    
    
    
    
    
    
    
    Home equity lines of credit
    
    
    1,031
    
    
    
    
    
    
    
    1,031Consumer non-real estate loans
    
    
    4,349
    
    
    
    
    
    
    
    4,349Commercial business loans
    
    
    2,178
    
    
    
    
    
    
    
    2,178Total
    
    $
    54,536
    
    
    $
    
    
    
    $
    54,536
 One- to Four-Family Residential Real Estate Loans.
   4




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##### Table of Contents



Commercial Real Estate and Lines of Credit.
  Land Loans.
 Multi-family Residential Loans.
 Commercial Business Loans.
 Residential Construction Loans.
  5




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##### Table of Contents



Home Equity Loans and Lines of Credit.
 Consumer Non-real estate Loans.
 Loan Origination and Other Fees.
 Asset Quality
 General.
    6




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##### Table of Contents



Delinquent Loans
 December 31, 2010
    
    
    December 31, 200930-89
    
    
    90 or More
    
    
    30-89
    
    
    90 or MoreDays Overdue
    
    
    Days Overdue
    
    
    Days Overdue
    
    
    Days OverdueNumber
    
    
    Principal
    
    
    Number
    
    
    Principal
    
    
    Number
    
    
    Principal
    
    
    Number
    
    
    Principalof Loans
    
    
    Balance
    
    
    of Loans
    
    
    Balance
    
    
    of Loans
    
    
    Balance
    
    
    of Loans
    
    
    Balance(Dollars in thousands)One- to four-family residential
    
    
    7
    
    
    $
    557
    
    
    
    7
    
    
    $
    447
    
    
    
    6
    
    
    $
    304
    
    
    
    2
    
    
    $
    205Commercial real estate and lines of credit, multi-family and land
    
    
    5
    
    
    
    474
    
    
    
    3
    
    
    
    317
    
    
    
    1
    
    
    
    95
    
    
    
    1
    
    
    
    4Residential construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Home equity lines of credit
    
    
    1
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consumer non-real estate loans
    
    
    10
    
    
    
    76
    
    
    
    2
    
    
    
    10
    
    
    
    14
    
    
    
    99
    
    
    
    2
    
    
    
    11Commercial business loans
    
    
    2
    
    
    
    96
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    5
    
    
    
    1
    
    
    
    28Total delinquent loans
    
    
    25
    
    
    $
    1,223
    
    
    
    12
    
    
    $
    774
    
    
    
    22
    
    
    $
    503
    
    
    
    6
    
    
    $
    248Delinquent loans to total net loans
    
    
    
    
    
    
    1.71
    %
    
    
    
    
    
    
    1.08
    %
    
    
    
    
    
    
    0.75
    %
    
    
    
    
    
    
    0.37
    %Delinquent loans to total loans
    
    
    
    
    
    
    1.70
    %
    
    
    
    
    
    
    1.08
    %
    
    
    
    
    
    
    0.75
    %
    
    
    
    
    
    
    0.37
    %
 Non-performing Assets.
 December 31,2010
    
    
    2009(Dollars in thousands)Non-accruing loans:One- to four-family residential
    
    $
    413
    
    
    $
    204Commercial real estate and lines of credit, multi-family and land
    
    
    4
    
    
    
    4Residential construction
    
    
    
    
    
    
    Home equity lines of credit
    
    
    
    
    
    
    Consumer non-real estate loans
    
    
    6
    
    
    
    12Commercial business loans
    
    
    
    
    
    
    28Total non-accruing loans
    
    $
    423
    
    
    $
    248Accruing loans 90 days or more past dueOne- to four-family residential
    
    $
    34
    
    
    $
    Commercial real estate and lines of credit, multi-family and land
    
    
    313
    
    
    
    Residential construction
    
    
    
    
    
    
    Home equity lines of credit
    
    
    
    
    
    
    Consumer non-real estate loans
    
    
    4
    
    
    
    Commercial business loans
    
    
    
    
    
    
    Total accruing loans 90 days or more past due
    
    $
    351
    
    
    $
    Total non-performing loans
    
    $
    774
    
    
    
    248Other repossessed assets(1)
    
    
    21
    
    
    
    2Total non-performing assets
    
    $
    795
    
    
    $
    250Total non-performing loans as a percentage of loans, net
    
    
    1.08
    %
    
    
    0.37
    %Total non-performing loans as a percentage of total assets
    
    
    0.79
    %
    
    
    0.29
    %Total non-performing assets as a percentage of total assets
    
    
    0.81
    %
    
    
    0.29
    %
 
 (1)
    
    Other repossessed assets consist solely of a truck and a boat and trailer at December 31,
2010.  7




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##### Table of Contents



Classified Assets.
  Allowance for Loan Losses.
   At or for the Year EndedDecember 31,2010
    
    
    2009(Dollars in thousands)Total loans outstanding at end of period
    
    $
    71,817
    
    
    $
    67,173Average loans outstanding
    
    
    70,964
    
    
    
    64,231Allowance for loan losses, beginning of period
    
    
    176
    
    
    
    183Provision for loan losses
    
    
    43
    
    
    
    16Charge-offs:One- to four-family residential
    
    
    
    
    
    
    (11
    )Commercial real estate and lines of credit
    
    
    
    
    
    
    Multi-family
    
    
    
    
    
    
    Land
    
    
    
    
    
    
    Residential construction
    
    
    
    
    
    
    Home equity lines of credit
    
    
    
    
    
    
    Consumer non-real estate loans
    
    
    (2
    )
    
    
    (13
    )Commercial business loans
    
    
    (16
    )
    
    
    Total charge-offs
    
    
    (18
    )
    
    
    (24
    )Recoveries on loans previously charged off
    
    
    3
    
    
    
    1Allowance for loan losses, end of period
    
    $
    204
    
    
    $
    176Allowance for loan losses as a percent of non-performing loans
    
    
    26.36
    %
    
    
    70.97
    %Ratio of net charge-offs during the period to average loans outstanding during the period
    
    
    0.03
    %
    
    
    0.04
    %
  8




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##### Table of Contents



December 31,2010
    
    
    2009Loan
    
    
    
    
    
    
    LoanCategory
    
    
    
    
    
    
    CategoryAmount of
    
    
    as a % of
    
    
    Amount of
    
    
    as a % ofAllowance
    
    
    Total Loans
    
    
    Allowance
    
    
    Total Loans(Dollars in thousands)One-to four-family residential
    
    $
    50
    
    
    
    50.50
    %
    
    $
    
    
    
    
    53.74
    %Commercial real estate and lines of credit
    
    
    117
    
    
    
    17.90
    
    
    
    
    
    
    
    18.86Multi-family
    
    
    
    
    
    
    2.82
    
    
    
    
    
    
    
    3.35Land
    
    
    
    
    
    
    9.60
    
    
    
    
    
    
    
    6.39Residential construction
    
    
    
    
    
    
    1.08
    
    
    
    
    
    
    
    2.03Home equity line of credit
    
    
    
    
    
    
    1.74
    
    
    
    
    
    
    
    2.53Consumer non-real estate
    
    
    32
    
    
    
    8.05
    
    
    
    23
    
    
    
    6.50Commercial business loans
    
    
    5
    
    
    
    8.31
    
    
    
    
    
    
    
    6.60Unallocated
    
    
    
    
    
    
    
    
    
    
    153
    
    
    
    Total
    
    $
    204
    
    
    
    100.00
    %
    
    $
    176
    
    
    
    100.00
    %
 Contingencies Receivables
   9




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##### Table of Contents



Investment Activities
 General.
         10




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##### Table of Contents



Investment and Mortgage-backed Securities Portfolios.
 December 31,2010
    
    
    2009Amortized
    
    
    Market
    
    
    Amortized
    
    
    MarketCost
    
    
    Value
    
    
    Cost
    
    
    Value(In thousands)Securities available-for-sale:Mortgage-backed securities
    
    $
    3,903
    
    
    $
    4,018
    
    
    $
    5,607
    
    
    $
    5,703U.S. Government and agency obligations
    
    
    7,103
    
    
    
    7,095
    
    
    
    1,029
    
    
    
    1,035Municipal obligations
    
    
    310
    
    
    
    313
    
    
    
    345
    
    
    
    348Equity Securities
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Total securities available-for-sale
    
    
    11,316
    
    
    
    11,426
    
    
    
    6,982
    
    
    
    7,087Securities held to maturity:Mortgage-backed securities
    
    
    137
    
    
    
    137
    
    
    
    171
    
    
    
    171Total securities held to maturity
    
    
    137
    
    
    
    137
    
    
    
    171
    
    
    
    171FHLB stock
    
    
    280
    
    
    
    280
    
    
    
    280
    
    
    
    280Total investment and mortgage-
backed securities and FHLB stock
    
    $
    11,733
    
    
    $
    11,843
    
    
    $
    7,433
    
    
    $
    7,538
  Amounts at December 31, 2010, Which Mature InAfter One
    
    
    After FiveOne Year
    
    
    to Five
    
    
    to Ten
    
    
    Over 10or Less
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    Total(Dollars in thousands)Available-for-sale:Mortgage-backed securities
    
    $
    
    
    
    $
    
    
    
    $
    101
    
    
    $
    3,917
    
    
    $
    4,018U.S. government and agency obligations
    
    
    1,012
    
    
    
    6,083
    
    
    
    
    
    
    
    
    
    
    
    7,095Municipal obligations
    
    
    
    
    
    
    
    
    
    
    313
    
    
    
    
    
    
    
    313Total
    
    
    1,012
    
    
    
    6,083
    
    
    
    414
    
    
    
    3,917
    
    
    
    11,426Weighted average yield
    
    
    0.88
    %
    
    
    0.41
    %
    
    
    1.81
    %
    
    
    1.71
    %
    
    
    1.71
    %Held to maturity:Mortgage-backed securities
    
    $
    3
    
    
    $
    
    
    
    $
    134
    
    
    $
    
    
    
    $
    137Total
    
    
    3
    
    
    
    
    
    
    
    134
    
    
    
    
    
    
    
    137Weighted average yield
    
    
    n/m
    *
    
    
    
    %
    
    
    1.63
    %
    
    
    
    %
    
    
    1.63
    %Total mortgage-backed and investment securities:Mortgage-backed securities
    
    $
    3
    
    
    $
    
    
    
    $
    235
    
    
    $
    3,917
    
    
    $
    4,155U.S. government and agency obligations
    
    
    1,012
    
    
    
    6,083
    
    
    
    
    
    
    
    
    
    
    
    7,095Municipal obligations
    
    
    
    
    
    
    
    
    
    
    313
    
    
    
    
    
    
    
    313Total
    
    
    1,015
    
    
    
    6,083
    
    
    
    548
    
    
    
    3,917
    
    
    
    11,563Weighted average yield
    
    
    0.88
    %
    
    
    0.41
    %
    
    
    1.75
    %
    
    
    1.71
    %
    
    
    1.70
    %
 
 *
    
    Not meaningful.  11




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##### Table of Contents



December 31,2010
    
    
    2009(In thousands)Fixed-rate:Available-for-sale
    
    $
    1,343
    
    
    $
    2,007Held to maturity
    
    
    3
    
    
    
    19Total fixed-rate
    
    
    1,346
    
    
    
    2,026Adjustable-rate:Available-for-sale
    
    
    2,675
    
    
    
    3,696Held to maturity
    
    
    134
    
    
    
    151Total adjustable-rate
    
    
    2,809
    
    
    
    3,847Total mortgage-backed securities
    
    $
    4,155
    
    
    $
    5,873
 Sources of Funds
 General.
 Deposits.
    December 31,2010
    
    
    2009Amount
    
    
    %
    
    
    Amount
    
    
    %(Dollars in thousands)Certificate accounts:0.00%  0.99%
    
    $
    3,977
    
    
    
    5.10
    %
    
    $
    
    
    
    
    
    %1.00%  1.99%
    
    
    21,142
    
    
    
    27.14
    
    
    
    14,958
    
    
    
    19.702.00%  2.99%
    
    
    11,900
    
    
    
    15.28
    
    
    
    17,294
    
    
    
    22.773.00%  3.99%
    
    
    1,697
    
    
    
    2.18
    
    
    
    11,557
    
    
    
    15.224.00%  4.99%
    
    
    
    
    
    
    
    
    
    
    475
    
    
    
    0.635.00%  or more
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total certificate accounts
    
    $
    38,716
    
    
    
    49.70
    %
    
    $
    44,284
    
    
    
    58.31
    %Transaction accounts:Savings
    
    $
    6,839
    
    
    
    8.78
    %
    
    $
    6,716
    
    
    
    8.84
    %Checking:Interest bearing
    
    
    15,997
    
    
    
    20.54
    
    
    
    13,919
    
    
    
    18.33Non-interest bearing
    
    
    7,881
    
    
    
    10.12
    
    
    
    7,065
    
    
    
    9.30Money market
    
    
    8,462
    
    
    
    10.86
    
    
    
    3,959
    
    
    
    5.21Total transaction accounts
    
    
    39,179
    
    
    
    50.30
    
    
    
    31,659
    
    
    
    41.69Total deposits
    
    $
    77,895
    
    
    
    100.00
    %
    
    $
    75,943
    
    
    
    100.00
    %
  12




---



##### Table of Contents



Year Ended December 31,2010
    
    
    2009Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    Interest
    
    
    Rate
    
    
    Average
    
    
    Interest
    
    
    RateBalance
    
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    Paid(Dollars in thousands)Savings accounts
    
    $
    7,035
    
    
    $
    28
    
    
    
    0.40
    %
    
    $
    7,213
    
    
    $
    52
    
    
    
    0.72
    %Checking
  Interest Bearing
    
    
    15,985
    
    
    
    64
    
    
    
    0.40
    
    
    
    14,629
    
    
    
    97
    
    
    
    0.66Money market
    
    
    5,968
    
    
    
    59
    
    
    
    1.00
    
    
    
    3,528
    
    
    
    48
    
    
    
    1.36Certificates of Deposit
    
    
    42,853
    
    
    
    842
    
    
    
    1.96
    
    
    
    40,255
    
    
    
    1,010
    
    
    
    2.52Total interest- bearing deposits
    
    $
    71,841
    
    
    $
    993
    
    
    
    1.38
    
    
    $
    65,625
    
    
    $
    1,293
    
    
    
    1.97Total deposits
    
    $
    80,083
    
    
    $
    993
    
    
    
    1.24
    %
    
    $
    72,345
    
    
    $
    1,293
    
    
    
    1.79
    %
  Year Ended December 31,2010
    
    
    2009(In thousands)Total deposits
    
    $
    343,949
    
    
    $
    280,943Total withdrawals
    
    
    (343,000
    )
    
    
    (275,574
    )Interest credited
    
    
    1,003
    
    
    
    1,292Total increase in deposits
    
    $
    1,952
    
    
    $
    6,661
  Balance at December 31, 2010Maturing in the 12 Months Ending December 31,Certificates of Deposit
    
    2011
    
    
    2012
    
    
    2013
    
    
    Thereafter
    
    
    Total(In thousands)0.00%  0.99%
    
    $
    3,977
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    3,9771.00%  1.99%
    
    
    19,445
    
    
    
    1,697
    
    
    
    
    
    
    
    
    
    
    
    21,1422.00%  2.99%
    
    
    5,890
    
    
    
    570
    
    
    
    
    
    
    
    
    
    
    
    6,4603.00%  3.99%
    
    
    1,567
    
    
    
    
    
    
    
    
    
    
    
    130
    
    
    
    1,6974.00%  4.99%
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.00%  or more
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total certificate accounts
    
    $
    30,879
    
    
    $
    2,267
    
    
    $
    
    
    
    $
    130
    
    
    $
    33,276
  At December 31, 2010Quarter Ending:
    
    Amount
    
    
    Weighted Average Rate(Dollars in thousands)March 31, 2011
    
    $
    4,396
    
    
    
    1.61
    %June 30, 2011
    
    
    3,747
    
    
    
    1.57September 30, 2011
    
    
    2,431
    
    
    
    1.82December 31, 2011
    
    
    2,611
    
    
    
    1.44After December 31, 2011
    
    
    917
    
    
    
    2.10Total certificates of deposit with balances of $100,000 or more
    
    $
    14,102
    
    
    
    1.64
    %
 Borrowings.
   13




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##### Table of Contents



At or For the Year EndedDecember 31,2010
    
    
    2009(Dollars in thousands)FHLB advances and other borrowings:Average balance outstanding
    
    $
    1,077
    
    
    $
    1,070Maximum amount outstanding at any month-end during the period
    
    
    1,372
    
    
    
    960Balance outstanding at end of period
    
    
    1,003
    
    
    
    907Average interest rate during the period
    
    
    1.21
    %
    
    
    2.62
    %Weighted average interest rate at end of period
    
    
    1.92
    %
    
    
    1.03
    %
 Subsidiaries
  Total Employees
  REGULATION
  General
   14




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##### Table of Contents



Recently Enacted Regulatory Reform
   
    
    The Office of Thrift Supervision will be merged into the Office of the Comptroller
of the Currency and the authority of the other two bank regulatory agencies
restructured. The federal thrift charter will be preserved with the Federal Reserve
given authority over savings and loan holding companies.
 
    
    A new independent consumer financial protection bureau will be established within
the Federal Reserve, empowered to exercise broad regulatory, supervisory and
enforcement authority with respect to both new and existing consumer financial
protection laws. Smaller financial institutions, like Bank of Ruston, will be subject
to the supervision and enforcement of their primary federal banking regulator with
respect to the federal consumer financial protection laws.
  15




---



##### Table of Contents




    
    The Federal Deposit Insurance Act was amended to direct federal regulators to
require depository institution holding companies to serve as a source of strength for
their depository institution subsidiaries.
 
    
    Tier 1 capital treatment for hybrid capital items like trust preferred securities
is eliminated subject to various grandfathering and transition rules.
 
    
    The current prohibition on payment of interest on demand deposits was repealed,
effective July 21, 2011.
 
    
    State law is preempted only if it would have a discriminatory effect on a federal
savings association or is preempted by any other federal law. The Office of the
Comptroller of the Currency must make a preemption determination on a case-by-case
basis with respect to a particular state law or other state law with substantively
equivalent terms.
 
    
    Deposit insurance is permanently increased to $250,000 and unlimited deposit
insurance for noninterest-bearing transaction accounts extended through the end of
2012.
 
    
    Deposit insurance assessment base calculation will equal the depository
institutions total assets minus the sum of its average tangible equity during the
assessment period.
 
    
    The minimum reserve ratio of the Deposit Insurance Fund increased to 1.35 percent of
estimated annual insured deposits or assessment base; however, the Federal Deposit
Insurance Corporation is directed to offset the effect of the increased reserve ratio
for insured depository institutions with total consolidated assets of less than $10
billion.
  
    
    Leverage capital requirements and risk based capital requirements applicable to
depository institutions will be extended to thrift holding companies.
 
    
    The Securities and Exchange Commission is authorized to adopt rules requiring public
companies to make their proxy materials available to shareholders for nomination of
their own candidates for election to the board of directors.
 
    
    Public companies will be required to provide their shareholders with a non-binding
vote: (i) at least once every three years on the compensation paid to executive
officers, and (ii) at least once every six years on whether they should have a say on
pay vote every one, two or three years.
 
    
    A separate, non-binding shareholder vote will be required regarding golden
parachutes for named executive officers when a shareholder vote takes place on mergers,
acquisitions, dispositions or other transactions that would trigger the parachute
payments.
 
    
    Securities exchanges will be required to prohibit brokers from using their own
discretion to vote shares not beneficially owned by them for certain significant
matters, which include votes on the election of directors, executive compensation
matters, and any other matter determined to be significant.
  16




---



##### Table of Contents




    
    Stock exchanges, which does not include the OTC Bulletin Board, will be prohibited
from listing the securities of any issuer that does not have a policy providing for (i)
disclosure of its policy on incentive compensation payable on the basis of financial
information reportable under the securities laws, and (ii) the recovery from current or
former executive officers, following an accounting restatement triggered by material
noncompliance with securities law reporting requirements, of any incentive compensation
paid erroneously during the three-year period preceding the date on which the
restatement was required that exceeds the amount that would have been paid on the basis
of the restated financial information.
 
    
    Disclosure in annual proxy materials will be required concerning the relationship
between the executive compensation paid and the financial performance of the issuer.
 
    
    Item 402 of Regulation S-K will be amended to require companies to disclose the
ratio of the Chief Executive Officers annual total compensation to the median annual
total compensation of all other employees.
 
    
    Smaller reporting companies are exempt from complying with the internal control
auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.
 Regulation of Century Next Financial Corporation
 Holding Company Acquisitions.
  Holding Company Activities.
 Federal Securities Laws.
  17




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##### Table of Contents



The Sarbanes-Oxley Act of 2002.
 
    
    the creation of an independent accounting oversight board;
 
    
    auditor independence provisions that restrict non-audit services that accountants
may provide to their audit clients;
    
    additional corporate governance and responsibility measures, including the
requirement that the chief executive officer and chief financial officer certify
financial statements;
 
    
    a requirement that companies establish and maintain a system of internal control
over financial reporting and that a companys management provide an annual report
regarding its assessment of the effectiveness of such internal control over financial
reporting to the companys independent accountants and that such accountants provide an
attestation report with respect to managements assessment of the effectiveness of the
companys internal control over financial reporting;
 
    
    the forfeiture of bonuses or other incentive-based compensation and profits from the
sale of an issuers securities by directors and senior officers in the twelve month
period following initial publication of any financial statements that later require
restatement;
 
    
    an increase in the oversight of, and enhancement of certain requirements relating to
audit committees of public companies and how they interact with the companys
independent auditors;
 
    
    the requirement that audit committee members must be independent and are absolutely
barred from accepting consulting, advisory or other compensatory fees from the issuer;
 
    
    the requirement that companies disclose whether at least one member of the audit
committee is a financial expert (as such term is defined by the SEC) and if not, why
not;
 
    
    expanded disclosure requirements for corporate insiders, including accelerated
reporting of stock transactions by insiders and a prohibition on insider trading during
pension blackout periods;
 
    
    a prohibition on personal loans to directors and officers, except certain loans made
by insured financial institutions;
 
    
    disclosure of a code of ethics and the requirement of filing of a Form 8-K for a
change or waiver of such code;
 
    
    mandatory disclosure by analysts of potential conflicts of interest; and
 
    
    a range of enhanced penalties for fraud and other violations.
  18




---



##### Table of Contents



Regulation of Bank of Ruston
 General.
  Insurance of Accounts.
      19




---



##### Table of Contents



Regulatory Capital Requirements.
  
    
    tangible capital requirement  tangible capital equal to at least 1.5% of
adjusted total assets;
 
    
    leverage capital requirement  core capital equal to at least 4.0% of adjusted
total assets; and
 
    
    risk-based capital requirement  total capital (a combination of core and
supplementary capital) equal to at least 8.0% of risk-weighted assets.
       20




---



##### Table of Contents



Prompt Corrective Action.
 Total Risk-based
    
    
    Tier 1 Risk-based
    
    
    Tier 1 LeverageCapital Category
    
    Capital
    
    
    Capital
    
    
    CapitalWell capitalized
    
    10% or more
    
    6% or more
    
    5% or moreAdequately capitalized
    
    8% or more
    
    4% or more
    
    4% or moreUndercapitalized
    
    Less than 8%
    
    Less than 4%
    
    Less than 4%Significantly undercapitalized
    
    Less than 6%
    
    Less than 3%
    
    Less than 3%
    Capital Distributions.
 Qualified Thrift Lender Test.
   21




---



##### Table of Contents




    
    Making any new investments or engaging in any new activity not allowed for both a
national bank and a savings association;
 
    
    Establishing any new branch office unless allowable for a national bank; and
 
    
    Paying dividends unless allowable for a national bank.
   Community Reinvestment Act.
 Limitations on Transactions with Affiliates.
  22




---



##### Table of Contents



Anti-Money Laundering.
 Federal Home Loan Bank System. i.e.
   Federal Reserve System.
  23




---



##### Table of Contents



TAXATION
 Federal Taxation
 General.
  Method of Accounting.
 Bad Debt Reserves.
 Taxable Distributions and Recapture.
  Alternative Minimum Tax.
 Net Operating Loss Carryovers.
 Corporate Dividends-Received Deduction.
  24




---



##### Table of Contents



State and Local Taxation
  (a)
    
    20% of our capitalized earnings, plus
 (b)
    
    80% of our taxable stockholders equity, minus
 (c)
    
    50% of our real and personal property assessment.
  
 Item 1A.
    
    Risk Factors.
  
 Item 1B.
    
    Unresolved Staff Comments.
  
 Item 2.
    
    Properties.
 Properties
  Net BookDate of Lease
    
    
    Value of
    
    
    Amount ofDescription/Address
    
    Leased/Owned
    
    Expiration
    
    
    Property
    
    
    Deposits(In thousands)Main Office:505 North ViennaRuston, Louisiana 71270
    
    Owned
    
    
    N/A
    
    
    $
    1,991
    
    
    $
    70,015Branch Office:2109 Farmerville Highway
Ruston, Louisiana 71270
    
    Owned
    
    
    N/A
    
    
    
    1,697
    
    
    
    7,880Total
    
    
    
    
    
    
    
    $
    3,688
    
    
    $
    77,895
 
 Item 3.
    
    Legal Proceedings.
  
 Item 4.
    
    (Removed and Reserved).
  25




---



##### Table of Contents



PART II
 
 Item 5.
    
    Market for the Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities.
   Fiscal 2010Quarter Ended:
    
    High Bid
    
    
    Low BidDecember 31, 2010
    
    $
    12.00
    
    
    $
    11.00September 30, 2010
    
    
    N/A
    
    
    
    N/AJune 30, 2010
    
    
    N/A
    
    
    
    N/AMarch 31, 2010
    
    
    N/A
    
    
    
    N/A
   
 Item 6.
    
    Selected Financial Data.
  At December 31,2010
    
    
    2009(In thousands)Selected Financial Data:Total assets
    
    $
    98,115
    
    
    $
    85,875Cash and cash equivalents
    
    
    7,581
    
    
    
    4,674Investment securities, available for sale
    
    
    7,408
    
    
    
    1,384Mortgage-backed securities:Held to maturity
    
    
    137
    
    
    
    171Available for sale
    
    
    4,018
    
    
    
    5,703FHLB stock
    
    
    280
    
    
    
    280Loans receivable, net
    
    
    71,612
    
    
    
    66,998Deposits
    
    
    77,895
    
    
    
    75,943FHLB advances
    
    
    415
    
    
    
    Total equity
    
    
    18,308
    
    
    
    8,476
  26




---



##### Table of Contents



At or For the Year EndedDecember 31,2010
    
    
    2009(Dollars in thousands)Selected Operating Data:Total interest income
    
    $
    4,615
    
    
    $
    4,406Total interest expense
    
    
    1,006
    
    
    
    1,298Net interest income
    
    
    3,609
    
    
    
    3,108Provision for loan losses
    
    
    43
    
    
    
    16Net interest income after provision for loan losses
    
    
    3,566
    
    
    
    3,092Total non-interest income
    
    
    900
    
    
    
    773Total non-interest expense
    
    
    3,475
    
    
    
    3,219Income before income taxes
    
    
    991
    
    
    
    646Income taxes
    
    
    335
    
    
    
    182Net income
    
    $
    656
    
    
    $
    464Selected Operating Ratios(1)Average yield on interest-earning assets
    
    
    5.43
    %
    
    
    5.88
    %Average rate on interest-bearing liabilities
    
    
    1.38
    
    
    
    1.97Average interest rate spread(2)
    
    
    4.05
    
    
    
    3.91Net interest margin(2)
    
    
    4.25
    
    
    
    4.15Average interest-earning assets to average
interest-bearing liabilities
    
    
    116.50
    
    
    
    114.20Net interest income after provision for loan
losses to non-interest expense
    
    
    102.62
    
    
    
    96.05Total non-interest expense to average assets
    
    
    3.75
    
    
    
    3.92Efficiency ratio(3)
    
    
    77.07
    
    
    
    82.94Return on average assets
    
    
    0.71
    
    
    
    0.57Return on average equity
    
    
    6.30
    
    
    
    5.63Average equity to average assets
    
    
    11.22
    %
    
    
    10.04
    %Asset Quality Ratios:(4)Non-performing loans as a percent of
total loans receivable(5)
    
    
    1.08
    %
    
    
    0.37
    %Non-performing assets as a percent of
total assets(5)
    
    
    0.81
    %
    
    
    0.29
    %Allowance for loan losses as a percent of
non-performing loans
    
    
    26.36
    %
    
    
    70.97
    %Net charge-offs (recoveries) to average loans
receivable
    
    
    0.03
    %
    
    
    0.04
    %Capital Ratios:(6)Tier 1 capital ratio
    
    
    14.60
    %
    
    
    9.79
    %Tier 1 risk-based capital ratio
    
    
    21.09
    %
    
    
    13.65
    %Total risk-based capital ratio
    
    
    21.36
    %
    
    
    13.93
    %Other Data:Banking offices
    
    
    2
    
    
    
    2
 
 (1)
    
    With the exception of end of period ratios, all ratios are based on average monthly
balances during the indicated periods. Ratios for the three month periods are annualized.(2)
    
    Average interest rate spread represents the difference between the average yield on
interest-earning assets and the average rate paid on interest-bearing liabilities, and net
interest margin represents net interest income as a percentage of average interest-earning
assets.(3)
    
    The efficiency ratio represents the ratio of non-interest expense divided by the sum of net
interest income and non-interest income.(4)
    
    Asset quality ratios are end of period ratios, except for net charge-offs to average loans
receivable.(5)
    
    Non-performing loans consist of all loans 90 days or more past due and all non-accruing
loans. Non-performing assets consist of non-performing loans and other repossessed assets.(6)
    
    Capital ratios are end of period ratios.  27




---



##### Table of Contents



Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations.
 Overview
     Business Strategy
  
    
    Growing Our Loan Portfolio.We plan to expand our origination of commercial real
estate loans secured by owner-occupied commercial real estate and investment real
estate with strong guarantor support. We plan to continue to emphasize originating
short-term one-to four family residential loans for portfolio and selling a significant
amount of our one-to four-family residential loans having longer terms into the
secondary market. We plan to build on our banking relationships with small- and
medium-sized businesses in our local market area. As a local community bank with a
senior management team that has significant commercial banking experience in Lincoln
Parish and the contiguous communities, Bank of Ruston is positioned to more effectively
meet the commercial banking needs of local businesses that are currently underserved by
larger financial institutions that place more of an emphasis on developing large
commercial banking relationships. Bank of Rustons ability to provide small- and
medium-sized commercial banking customers with local decision-making and superior
service will be a core marketing focus in competing for commercial real estate loans
and deposits. We will continue to pursue residential lending which we expect will also
be a potential source of core deposit growth in our local market and originating loans
throughout the state of Louisiana.
  28




---



##### Table of Contents




    
    Growing our Retail Core Deposits.We plan to grow our retail deposits by
emphasizing transactional deposit accounts. According to the market share report of
the Federal Deposit Insurance Corporation, as of June 30, 2010, the most recent date
for which information is available, Bank of Ruston had 9.7% of the market in Lincoln
Parish which was the fourth largest, following one bank that operates nationally and
two regional banks. Growth of retail core deposits will be pursued through offering
products and services that meet the full service banking needs of all age groups and
developing more of a sales culture in the branches. Advertising, promotions and
offering attractive rates on certain transaction accounts may also be utilized as
means to increase retail core deposits.
 
    
    Maintaining High Asset Quality.We continue to maintain high levels of asset
quality. At December 31, 2010, we had $774,000 of non-performing loans in our
portfolio and no real estate acquired in foreclosure. We attribute our high asset
quality to our prudent and conservative underwriting practices, which include low
loan-to-value ratios, personal guarantees, cross-collateralization and tailoring loan
terms for the individual customer. We intend to maintain high asset quality, even as we
grow Bank of Ruston.
 
    
    Continuing to Provide Exceptional Customer Service.As a community oriented savings
bank, we take pride in providing exceptional customer service as a means to attract and
retain customers. We deliver personalized service to our customers that distinguishes
us from the large regional banks operating in our market area. Our management team has
strong ties to, and deep roots in, the community. We believe that we know our
customers banking needs and can respond quickly to address them.
 Critical Accounting Policies
  Allowance for Loan Losses.
  29




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Other-Than-Temporary Impairment
   Income Taxes.
 Use of Estimates.
 Comparison of Financial Condition at December 31, 2010 and December 31, 2009
   30




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##### Table of Contents



Comparison of Operating Results for the Years Ended December 31, 2010 and 2009
  Net Interest Income.
   31




---



##### Table of Contents



Non-Interest Income.
 Non-Interest Expense.
 Income Tax Expense.
  32




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##### Table of Contents



Average Balances, Net Interest Income, and Yields Earned and Rates Paid.
 Year Ended December 31,2010
    
    
    2009Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    
    Interest
    
    
    Rate(1)
    
    
    Balance
    
    
    Interest
    
    
    Rate(1)(Dollars in thousands)Interest-earning assets:Loans receivable(1)
    
    $
    70,964
    
    
    $
    4,436
    
    
    
    6.25
    %
    
    $
    64,911
    
    
    $
    4,188
    
    
    
    6.45
    %Investment securities
    
    
    6,789
    
    
    
    178
    
    
    
    2.62
    
    
    
    7,088
    
    
    
    217
    
    
    
    3.07Other interest-earning assets
    
    
    7,199
    
    
    
    1
    
    
    
    0.01
    
    
    
    2,969
    
    
    
    1
    
    
    
    0.04Total interest-earning assets
    
    
    84,952
    
    
    
    4,615
    
    
    
    5.43
    %
    
    
    74,968
    
    
    
    4,406
    
    
    
    5.88
    %Non-interest-earning assets
    
    
    7,802
    
    
    
    
    
    
    
    
    
    
    
    6,976Total assets
    
    $
    92,754
    
    
    
    
    
    
    
    
    
    
    $
    81,944Interest-bearing liabilities:Savings, NOW and money market accounts
    
    
    28,988
    
    
    
    151
    
    
    
    0.52
    %
    
    
    25,370
    
    
    
    197
    
    
    
    0.78
    %Certificates of deposit
    
    
    42,853
    
    
    
    842
    
    
    
    1.96
    
    
    
    40,255
    
    
    
    1,096
    
    
    
    2.72Total interest-bearing deposits
    
    
    71,841
    
    
    
    993
    
    
    
    1.38
    
    
    
    65,625
    
    
    
    1,293
    
    
    
    1.97FHLB advances and other borrowings
    
    
    1,077
    
    
    
    13
    
    
    
    1.21
    
    
    
    1,070
    
    
    
    5
    
    
    
    Total interest-bearing liabilities
    
    
    72,918
    
    
    
    1,006
    
    
    
    1.38
    %
    
    
    66,695
    
    
    
    1,298
    
    
    
    1.97
    %Non-interest-bearing liabilities
    
    
    9,425
    
    
    
    
    
    
    
    
    
    
    
    7,981Total liabilities
    
    
    82,343
    
    
    
    
    
    
    
    
    
    
    
    74,676Equity
    
    
    10,411
    
    
    
    
    
    
    
    
    
    
    
    6,732Total liabilities and equity
    
    $
    92,754
    
    
    
    
    
    
    
    
    
    
    $
    81,408Net interest-earning assets
    
    $
    12,034
    
    
    
    
    
    
    
    
    
    
    $
    8,273Net interest income; average interest rate spread
    
    
    
    
    
    $
    3,609
    
    
    
    4.05
    %
    
    
    
    
    
    $
    3,108
    
    
    
    3.91
    %Net interest margin(2)
    
    
    
    
    
    
    
    
    
    
    4.25
    %
    
    
    
    
    
    
    
    
    
    
    4.15
    %Average interest-earning assets to
average interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    116.50
    %
    
    
    
    
    
    
    
    
    
    
    114.20
    %
 
 (1)
    
    Calculated net of deferred fees and discounts, loans in process and allowance for loan
losses.(2)
    
    Equals net interest income divided by average interest-earning assets.  33




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Rate/Volume Analysis.
 Year Ended December 31,
    
    
    Year Ended December 31,2010 compared to 2009
    
    
    2009 compared to 2008Increase (Decrease)
    
    
    Total
    
    
    Increase (Decrease)
    
    
    TotalDue to
    
    
    Increase
    
    
    Due to
    
    
    IncreaseRate
    
    
    Volume
    
    
    (Decrease)
    
    
    Rate
    
    
    Volume
    
    
    (Decrease)(In thousands)Interest income:Loans receivable
    
    $
    (124
    )
    
    $
    372
    
    
    $
    248
    
    
    $
    (192
    )
    
    $
    312
    
    
    $
    120Investment securities
    
    
    (30
    )
    
    
    (9
    )
    
    
    (39
    )
    
    
    (103
    )
    
    
    25
    
    
    
    (78
    )Other interest-earning assets
    
    
    (1
    )
    
    
    1
    
    
    
    
    
    
    
    (52
    )
    
    
    (33
    )
    
    
    (85
    )Total interest income
    
    
    (155
    )
    
    
    364
    
    
    
    209
    
    
    
    (347
    )
    
    
    304
    
    
    
    (43
    )Interest expense:Savings, NOW and money
market accounts
    
    
    (81
    )
    
    
    35
    
    
    
    (46
    )
    
    
    (31
    )
    
    
    23
    
    
    
    (8
    )Certificates of deposit
    
    
    (331
    )
    
    
    77
    
    
    
    (254
    )
    
    
    (491
    )
    
    
    74
    
    
    
    (417
    )Total deposits
    
    
    (412
    )
    
    
    112
    
    
    
    (300
    )
    
    
    (522
    )
    
    
    97
    
    
    
    (425
    )FHLB advances and other
borrowings
    
    
    8
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    (4
    )
    
    
    (4
    )Total interest expense
    
    
    (404
    )
    
    
    112
    
    
    
    (292
    )
    
    
    (522
    )
    
    
    93
    
    
    
    (429
    )Increase (decrease) in net
interest income
    
    $
    249
    
    
    $
    252
    
    
    $
    501
    
    
    $
    175
    
    
    $
    211
    
    
    $
    386
 Provision for Loan Losses.
     34




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##### Table of Contents



Exposure to Changes in Interest Rates
  Net Portfolio Value Analysis.
 Change in InterestRatesIn Basis Points
    
    Net Portfolio Value
    
    
    NPV as % of Portfolio Value of Assets(Rate Shock)
    
    Amount
    
    
    $ Change
    
    
    % Change
    
    
    NPV Ratio
    
    
    Change(Dollars in thousands)300bp
    
    $
    20,092
    
    
    $
    (145
    )
    
    
    (1
    )%
    
    
    19.48
    %
    
    6
    bp200
    
    
    20,307
    
    
    
    70
    
    
    
    
    
    
    
    19.59
    
    
    17
    bp100
    
    
    20,367
    
    
    
    130
    
    
    
    1
    
    
    
    19.58
    
    
    16
    bp50
    
    
    20,308
    
    
    
    71
    
    
    
    
    
    
    
    19.51
    
    
    9
    bpStatic
    
    
    20,237
    
    
    
    
    
    
    
    
    
    
    
    19.42
    
    
    
    (50)
    
    
    20,114
    
    
    
    (122
    )
    
    
    (1
    )
    
    
    19.30
    
    
    (12
    )bp(100)
    
    
    20,124
    
    
    
    (112
    )
    
    
    (1
    )
    
    
    19.29
    
    
    (13
    )bp
  Liquidity and Capital Resources
    35




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##### Table of Contents



Off-Balance Sheet Arrangements
  Commitments.
 TotalAmountsCommitted at
    
    
    Amount of Commitment Expiration  Per PeriodDecember 31,
    
    
    To 1
    
    
    1-3
    
    
    4-5
    
    
    After 52010
    
    
    Year
    
    
    Years
    
    
    Years
    
    
    Years(In thousands)Letters of credit
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Standby letters of credit
    
    
    159
    
    
    
    159
    
    
    
    
    
    
    
    
    
    
    
    Unused lines of credit
    
    
    3,198
    
    
    
    3,198
    
    
    
    
    
    
    
    
    
    
    
    Undisbursed portion of loans in process
    
    
    443
    
    
    
    443
    
    
    
    
    
    
    
    
    
    
    
    Commitments to originate loans
    
    
    3,788
    
    
    
    3,788
    
    
    
    
    
    
    
    
    
    
    
    Total commitments
    
    $
    7,588
    
    
    $
    7,588
    
    
    $
    
    
    
    $
    
    
    
    $
    
  36




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##### Table of Contents



Contractual Cash Obligations.
 Total at
    
    
    Payments Due By PeriodDecember 31,
    
    
    To 1
    
    
    1-3
    
    
    4-5
    
    
    After 52010
    
    
    Year
    
    
    Years
    
    
    Years
    
    
    Years(In thousands)Certificates of deposit
    
    $
    33,276
    
    
    $
    30,879
    
    
    $
    2,267
    
    
    $
    130
    
    
    $
    Total contractual obligations
    
    $
    33,276
    
    
    $
    30,879
    
    
    $
    2,267
    
    
    $
    130
    
    
    $
    
 
 Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk.
   37




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##### Table of Contents



Item 8.
    
    Financial Statements and Supplementary Data.
    
 
 Report of Independent Registered Public Accounting Report
    
  38




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##### Table of Contents



CENTURY NEXT FINANCIAL CORPORATION  AND SUBSIDIARY
 
 CONSOLIDATED BALANCE SHEETS  (In thousands, except share data)
 December 31,2010
    
    
    2009ASSETSCash and cash equivalents
    
    $
    7,581
    
    
    $
    4,674Investment and mortgage-backed securities
    
    
    11,563
    
    
    
    7,258Federal Home Loan Bank stock
    
    
    280
    
    
    
    280Loans (includes loans held for sale of $801 and $761),
less allowance for loan losses of $204 and $176
    
    
    71,613
    
    
    
    66,998Accrued interest receivable:Loans
    
    
    358
    
    
    
    308Securities
    
    
    38
    
    
    
    28Premises and equipment, net of accumulated depreciation of
$1,499 and $1,313
    
    
    3,779
    
    
    
    3,885Foreclosed real estate
    
    
    
    
    
    
    Other assets
    
    
    2,903
    
    
    
    2,444Total assets
    
    $
    98,115
    
    
    $
    85,875LIABILITIES AND EQUITYLiabilities:Deposits:Savings and demand
    
    $
    39,179
    
    
    $
    31,659Time
    
    
    38,716
    
    
    
    44,284Total deposits
    
    
    77,895
    
    
    
    75,943Advances from borrowers for insurance and taxes
    
    
    37
    
    
    
    21FHLB advances
    
    
    415
    
    
    
    Securities sold under agreements to repurchase
    
    
    588
    
    
    
    907Accrued interest payable
    
    
    18
    
    
    
    21Other liabilities
    
    
    854
    
    
    
    506Total liabilities
    
    
    79,807
    
    
    
    77,399Equity:Preferred Stock, $.01 par value  1,000,000 shares
authorized; none issued
    
    
    
    
    
    
    Common Stock, $.01 par value  9,000,000 shares
authorized; 1,058,000 issued, 1,058,000 outstanding
    
    
    11
    
    
    
    Additional Paid In Capital
    
    
    9,821
    
    
    
    Unearned ESOP Shares (65,870 shares)
    
    
    (661
    )
    
    
    Accumulated other comprehensive income, net
of taxes of $37 and $35
    
    
    73
    
    
    
    69Retained earnings
    
    
    9,064
    
    
    
    8,407Total equity
    
    
    18,308
    
    
    
    8,476Total liabilities and equity
    
    $
    98,115
    
    
    $
    85,875
 The accompanying notes are an integral part of the consolidated financial statements.
  39




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CENTURY NEXT FINANCIAL CORPORATION  AND SUBSIDIARY
 
 CONSOLIDATED STATEMENTS OF INCOME  (In thousands, except share data)
 Years EndedDecember 31,2010
    
    
    2009Interest income:First mortgage loans
    
    $
    661
    
    
    $
    748Consumer and other loans
    
    
    3,775
    
    
    
    3,440Investment securities
    
    
    178
    
    
    
    217Other
    
    
    1
    
    
    
    1Total interest income
    
    
    4,615
    
    
    
    4,406Interest expense:Savings and interest-bearing demand deposits
    
    
    151
    
    
    
    197Time deposits
    
    
    842
    
    
    
    1,096Other borrowings
    
    
    13
    
    
    
    5Total interest expense
    
    
    1,006
    
    
    
    1,298Net interest income
    
    
    3,609
    
    
    
    3,108Provision for loan losses
    
    
    43
    
    
    
    16Net interest income after provision for loan losses
    
    
    3,566
    
    
    
    3,092Noninterest income:Service charges
    
    
    180
    
    
    
    201Loan fees
    
    
    562
    
    
    
    408Gain on sale of foreclosed real estate
    
    
    3
    
    
    
    Gain on cash value of life insurance
    
    
    44
    
    
    
    28Gain on sale of fixed assets
    
    
    53
    
    
    
    Other operating income
    
    
    58
    
    
    
    136Total noninterest income
    
    
    900
    
    
    
    773Noninterest expenseSalaries and benefits
    
    
    2,084
    
    
    
    1,929Occupancy expense
    
    
    372
    
    
    
    355Expense of foreclosed real estate
    
    
    1
    
    
    
    8FDIC deposit insurance
    
    
    104
    
    
    
    140Outside service fees
    
    
    100
    
    
    
    97Service bureau expenses
    
    
    155
    
    
    
    125Advertising
    
    
    139
    
    
    
    119Office supplies, stationery and printing
    
    
    62
    
    
    
    73Other operating expense
    
    
    458
    
    
    
    373Total noninterest expense
    
    
    3,475
    
    
    
    3,219Income before income taxes
    
    
    991
    
    
    
    646Income taxes
    
    
    335
    
    
    
    182Net income
    
    $
    656
    
    
    $
    464Earnings Per Common ShareBasic
    
    $
    0.66
    
    
    
    N/ADiluted
    
    $
    0.66
    
    
    
    N/A
 The accompanying notes are an integral part of the consolidated financial statements.
  40




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##### Table of Contents



CENTURY NEXT FINANCIAL CORPORATION  AND SUBSIDIARY
 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY  (in thousands)
 AccumulatedAdditional
    
    
    Unearned
    
    
    OtherCommon
    
    
    Paid In
    
    
    ESOP
    
    
    Comprehensive
    
    
    Retained
    
    
    TotalStock
    
    
    Capital
    
    
    Shares
    
    
    Income
    
    
    Earnings
    
    
    EquityBalance at December 31, 2008
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    16
    
    
    $
    7,943
    
    
    $
    7,959Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    465
    
    
    
    465Unrealized gain on
securities available for
sale, net of taxes of
$27
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53
    
    
    
    
    
    
    
    53Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    518Balance at December 31, 2009
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    69
    
    
    $
    8,408
    
    
    $
    8,477Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    656
    
    
    
    656Unrealized gain on
securities available for
sale, net of taxes of $2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    660Issuance of Common Stock for Initial Public
Offering, net of $748
conversion cost
    
    
    11
    
    
    
    9,821
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,832Shares Purchased for ESOP
    
    
    
    
    
    
    
    
    
    
    (667
    )
    
    
    
    
    
    
    
    
    
    
    (667
    )ESOP Shares released for allocation
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    6Balance at December 31, 2010
    
    $
    11
    
    
    $
    9,821
    
    
    $
    (661
    )
    
    $
    73
    
    
    $
    9,064
    
    
    $
    18,308
 The accompanying notes are an integral part of the consolidated financial statements.
  41




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CENTURY NEXT FINANCIAL CORPORATION  AND SUBSIDIARY
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS  (In thousands)
 Years EndedDecember 31,2010
    
    
    2009Cash flows from operating activities:Net income
    
    $
    656
    
    
    $
    464Adjustments to reconcile net income to net cash provided by operating activities:Provision for loan losses
    
    
    43
    
    
    
    16Depreciation
    
    
    205
    
    
    
    184(Gain) on sale of foreclosed real estate
    
    
    (3
    )
    
    
    Net (increase) decrease in loans held for sale
    
    
    (40
    )
    
    
    (175
    )(Gain) loss on cash value of life insurance
    
    
    (44
    )
    
    
    (Gain) loss on sale of fixed assets
    
    
    (53
    )
    
    
    (Increase) decrease in accrued interest receivable
    
    
    (60
    )
    
    
    (26
    )Increase (decrease) in accrued interest payable
    
    
    (3
    )
    
    
    (18
    )(Increase) decrease in other assets
    
    
    125
    
    
    
    (414
    )Increase (decrease) in other liabilities
    
    
    347
    
    
    
    89Total adjustments
    
    
    517
    
    
    
    (344
    )Net cash used by operating activities
    
    
    1,173
    
    
    
    120Cash flows from investing activities:Proceeds from sales and maturities of investment securities
    
    
    1,760
    
    
    
    2,506Purchase of investment securities
    
    
    (6,064
    )
    
    
    (2,967
    )Net redemption (purchase) of Federal Home Loan Bank stock
    
    
    (1
    )
    
    
    Proceeds from sale of foreclosed real estate
    
    
    4
    
    
    
    Purchases of life insurance
    
    
    (542
    )
    
    
    Proceeds from fixed assets
    
    
    150
    
    
    
    Purchase of premises and equipment, net
    
    
    (197
    )
    
    
    (398
    )Net (increase) decrease in loans
    
    
    (4,604
    )
    
    
    (5,619
    )Net cash provided (used) by investing activities
    
    
    (9,494
    )
    
    
    (6,478
    )Cash flows from financing activities:Net increase (decrease) in savings and demand deposits
    
    
    7,520
    
    
    
    (81
    )Net increase (decrease) in time deposits
    
    
    (5,569
    )
    
    
    6,742Increase (decrease) in advances from borrowers for
insurance and taxes
    
    
    16
    
    
    
    1Net increase (decrease) in FHLB advances
    
    
    415
    
    
    
    (53
    )Net increase (decrease) in securities sold under agreements to
repurchase
    
    
    (319
    )
    
    
    907Proceeds from Issuance of Common Stock
    
    
    10,580
    
    
    
    Cost of Issuance of Common Stock
    
    
    (748
    )
    
    
    Loan to ESOP for purchase of stock
    
    
    (667
    )
    
    
    Net cash provided (used) by financing activities
    
    
    11,228
    
    
    
    7,516Net increase (decrease) in cash and cash equivalents
    
    
    2,907
    
    
    
    1,158Cash and cash equivalents at beginning of year
    
    
    4,674
    
    
    
    3,516Cash and cash equivalents at end of year
    
    $
    7,581
    
    
    $
    4,674Supplementary cash flow information:Cash paid: Interest
    
    $
    1,009
    
    
    $
    1,316Income Taxes
    
    $
    49
    
    
    $
    210
 The accompanying notes are an integral part of the consolidated financial statements.
  42




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CENTURY NEXT FINANCIAL CORPORATION  AND SUBSIDIARY
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2010 AND 2009
 1.
    
    Summary of Significant Accounting Policies
  a.
    
    Investments in securities
  
    
    Securities Held to Maturity. Bonds, notes and debentures for which the Bank has the
positive intent and ability to hold to maturity are reported at cost, adjusted for
amortization of premiums and accretion of discounts, which are recognized in interest
income using the straight-line method over the period to maturity.
    
    Securities Available for Sale. Securities available for sale consist of bonds,
notes, debentures, and certain equity securities not classified as trading securities
nor as securities held to maturity.
    b.
    
    Use of estimates
     43




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##### Table of Contents



1.
    
    Summary of Significant Accounting Policies(Continued)
  c.
    
    Loans and allowance for loan losses
      d.
    
    Premises and equipment
  e.
    
    Bank Owned Life Insurance
   44




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##### Table of Contents



1.
    
    Summary of Significant Accounting Policies(Continued)
 f.
    
    Income taxes
  g.
    
    Cash and cash equivalents
  h.
    
    Advertising costs
  i.
    
    Comprehensive income (loss)
  j.
    
    Reclassifications
  k.
    
    Recent accounting pronouncements
 Topic 105 
Generally Accepted Accounting Principles amendments based on Statement of Financial
Accounting Standards No. 168  The FASB Accounting Standards Codification and the Hierarchy
of Generally Accepted Accounting Principles The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles
   45




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##### Table of Contents



1.
    
    Summary of Significant Accounting Policies(Continued)
 The Hierarchy of Generally Accepted
Accounting Principles
 Fair Value
Measurements and Disclosures (Topic 820)  Improving Disclosures about Fair Value
Measurements
 2.
    
    Investment Securities
  December 31, 2010Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    EstimatedCost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueSecurities available for sale:Mortgage backed securities:GNMA certificates
    
    $
    14
    
    
    $
    
    
    
    $
    
    
    
    $
    14FHLB certificates
    
    
    2,305
    
    
    
    90
    
    
    
    
    
    
    
    2,395FNMA certificates
    
    
    1,347
    
    
    
    24
    
    
    
    
    
    
    
    1,371FNR certificates
    
    
    230
    
    
    
    1
    
    
    
    
    
    
    
    231SBA pools
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    7U.S. Government obligations
    
    
    7,103
    
    
    
    5
    
    
    
    13
    
    
    
    7,095Municipal securities
    
    
    310
    
    
    
    3
    
    
    
    
    
    
    
    313$
    11,316
    
    
    $
    123
    
    
    $
    13
    
    
    $
    11,426Securities held to maturity:Mortgage backed securities:FHLB certificates
    
    $
    3
    
    
    $
    
    
    
    $
    
    
    
    
    3SBA pools
    
    
    134
    
    
    
    1
    
    
    
    1
    
    
    
    134$
    137
    
    
    $
    1
    
    
    $
    1
    
    
    $
    137
  46




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##### Table of Contents



2.
    
    Investment Securities(Continued)
 December 31, 2009Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    EstimatedCost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueSecurities available for sale:Mortgage backed securities:FHLB certificates
    
    $
    3,034
    
    
    $
    80
    
    
    $
    
    
    
    $
    3,114GNMA certificates
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    15FNMA certificates
    
    
    2,293
    
    
    
    13
    
    
    
    3
    
    
    
    2,303FNR certificates
    
    
    257
    
    
    
    6
    
    
    
    
    
    
    
    263SBA pools
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    8U.S. Government obligations
    
    
    1,029
    
    
    
    6
    
    
    
    
    
    
    
    1,035Municipal securities
    
    
    345
    
    
    
    3
    
    
    
    
    
    
    
    348Total debt securities
    
    
    6,981
    
    
    
    108
    
    
    
    3
    
    
    
    7,086Equity securities
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    1$
    6,982
    
    
    $
    108
    
    
    $
    3
    
    
    $
    7,087Securities held to maturity:SBA pools
    
    $
    171
    
    
    $
    1
    
    
    $
    1
    
    
    $
    171
  December 31, 2010Less than 12 Months
    
    
    12 Months or Greater
    
    
    TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossEstimated
    
    
    Unrealized
    
    
    Estimated
    
    
    Unrealized
    
    
    Estimated
    
    
    UnrealizedFair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesMortgage backed securities:U.S. Government obligations
    
    $
    6,083
    
    
    $
    13
    
    
    $
    
    
    
    $
    
    
    
    $
    6,083
    
    
    $
    13FNMA certificates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    FNR certificates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    FHR certificates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    SBA pools
    
    
    
    
    
    
    
    
    
    
    61
    
    
    
    1
    
    
    
    61
    
    
    
    1$
    6,083
    
    
    $
    13
    
    
    $
    61
    
    
    $
    1
    
    
    $
    6,144
    
    
    $
    14
 December 31, 2009Less than 12 Months
    
    
    12 Months or Greater
    
    
    TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossEstimated
    
    
    Unrealized
    
    
    Estimated
    
    
    Unrealized
    
    
    Estimated
    
    
    UnrealizedFair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesMortgage backed securities:FNMA certificates
    
    $
    629
    
    
    $
    2
    
    
    $
    
    
    
    $
    
    
    
    $
    629
    
    
    $
    2FNR certificates
    
    
    
    
    
    
    
    
    
    
    463
    
    
    
    1
    
    
    
    463
    
    
    
    1FHR certificates
    
    
    
    
    
    
    
    
    
    
    42
    
    
    
    
    
    
    
    42
    
    
    
    SBA pools
    
    
    
    
    
    
    
    
    
    
    93
    
    
    
    2
    
    
    
    93
    
    
    
    2$
    629
    
    
    $
    2
    
    
    $
    598
    
    
    $
    3
    
    
    $
    1,227
    
    
    $
    5
  47




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##### Table of Contents



2.
    
    Investment Securities(Continued)
    Securities Held to Maturity
    
    
    Securities Available for SaleEstimated
    
    
    
    
    
    EstimatedAmortized Cost
    
    
    Fair Value
    
    
    Amortized Cost
    
    
    Fair ValueDue in one year or less
    
    $
    3
    
    
    $
    3
    
    
    $
    1,007
    
    
    $
    1,012Due from one year to
five years
    
    
    
    
    
    
    
    
    
    
    6,096
    
    
    
    6,083Due from five to ten
years
    
    
    134
    
    
    
    134
    
    
    
    411
    
    
    
    414Due after ten years
    
    
    
    
    
    
    
    
    
    
    3,802
    
    
    
    3,917$
    137
    
    
    $
    137
    
    
    $
    11,316
    
    
    $
    11,426
   December 31,2010
    
    
    2009Held to Maturity
    
    
    Available for Sale
    
    
    Held to Maturity
    
    
    Available for SalePurchases of securities
    
    $
    
    
    
    $
    6,064
    
    
    $
    
    
    
    $
    2,967Maturities of securities
    
    $
    34
    
    
    $
    1,726
    
    
    $
    104
    
    
    $
    2,403
  48




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##### Table of Contents



3.
    
    Loans
  December 31,2010
    
    
    2009Held for sale (one- to four family)
    
    $
    801
    
    
    $
    761Residential real estate (one-to four family)
    
    
    35,466
    
    
    
    35,338Commercial real estate and lines of credit
    
    
    12,853
    
    
    
    12,670Multifamily real estate
    
    
    2,027
    
    
    
    2,247Land
    
    
    6,891
    
    
    
    4,292Residential construction
    
    
    777
    
    
    
    1,365Commercial business
    
    
    5,970
    
    
    
    4,436Home equity lines of credit
    
    
    1,250
    
    
    
    1,697Consumer non-real estate
    
    
    5,740
    
    
    
    4,337Overdrafts
    
    
    42
    
    
    
    3171,817
    
    
    
    67,174Allowance for loan losses
    
    
    (204
    )
    
    
    (176
    )$
    71,613
    
    
    $
    66,998
  December 31,2010
    
    
    2009Beginning balance
    
    $
    176
    
    
    $
    183Provision for loan losses
    
    
    43
    
    
    
    16Loans charged off
    
    
    (18
    )
    
    
    (24
    )Recoveries
    
    
    3
    
    
    
    1Ending Balance
    
    $
    204
    
    
    $
    176
     49




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##### Table of Contents



4.
    
    Premises and Equipment
  Estimated
    
    
    December 31,Useful Lives
    
    
    2010
    
    
    2009Land
    
    
    
    
    
    $
    1,080
    
    
    $
    1,150Buildings and improvements
    
    15-40 years
    
    
    2,934
    
    
    
    2,898Furniture, fixtures and equipment
    
    3-10 years
    
    
    1,227
    
    
    
    1,121Vehicles
    
    4 years
    
    
    37
    
    
    
    295,278
    
    
    
    5,198Less  accumulated depreciation
    
    
    
    
    
    
    (1,499
    )
    
    
    (1,313
    )Premises and equipment
    
    
    
    
    
    $
    3,779
    
    
    $
    3,885
  5.
    
    Regulatory Capital
    50




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##### Table of Contents



5.
    
    Regulatory Capital(Continued)
  To Be Well CapitalizedFor Capital Adequacy
    
    
    Under Prompt CorrectiveActual
    
    
    Purposes
    
    
    Action Provisions:Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioAs of December 31, 2010Total Capital (to
Risk Weighted
Assets)
    
    
    14,502
    
    
    
    21.36
    %
    
    
    5,432
    
    
    
    38.0
    %
    
    
    6,790
    
    
    
    310.0
    %Core (Tier 1)
Capital (to Risk
Weighted Assets)
    
    
    14,318
    
    
    
    21.09
    %
    
    
    2,716
    
    
    
    34.0
    %
    
    
    4,074
    
    
    
    36.0
    %Core (Tier 1)
Capital (to Total
Assets)
    
    
    14,318
    
    
    
    14.60
    %
    
    
    3,923
    
    
    
    34.0
    %
    
    
    4,904
    
    
    
    35.0
    %Tangible Capital
(to Total Assets)
    
    
    14,318
    
    
    
    14.60
    %
    
    
    1,471
    
    
    
    31.5
    %
    
    
    N/A
    
    
    
    N/AAs of December 31, 2009Total Capital (to
Risk Weighted
Assets)
    
    
    8,580
    
    
    
    13.93
    %
    
    
    4,927
    
    
    
    38.0
    %
    
    
    6,159
    
    
    
    310.0
    %Core (Tier 1)
Capital (to Risk
Weighted Assets)
    
    
    8,407
    
    
    
    13.65
    %
    
    
    N/A
    
    
    
    N/A
    
    
    
    3,695
    
    
    
    36.0
    %Core (Tier 1)
Capital (to Total
Assets)
    
    
    8,407
    
    
    
    9.79
    %
    
    
    3,434
    
    
    
    34.0
    %
    
    
    4,293
    
    
    
    35.0
    %Tangible Capital
(to Total Assets)
    
    
    8,407
    
    
    
    9.79
    %
    
    
    1,288
    
    
    
    31.5
    %
    
    
    N/A
    
    
    
    N/A
  December 31,2010
    
    
    2009GAAP equity
    
    $
    15,054
    
    
    $
    8,476Allowance for loan losses/other
    
    
    (552
    )
    
    
    104Total capital
    
    $
    14,502
    
    
    $
    8,580
 6.
    
    Related Party Transactions
  7.
    
    Commitments and Contingencies
   51




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##### Table of Contents



7.
    
    Commitments and Contingencies (Continued)
    2011 (end of term)
    
    $
    103$
    103
  8.
    
    Deposits
  December 31,2010
    
    
    2009Weighted Average
    
    
    
    
    
    
    Weighted AverageAmount
    
    
    Rate
    
    
    Amount
    
    
    RateSavings and DemandNon interest bearing accounts
    
    $
    7,881
    
    
    
    
    
    
    $
    7,065
    
    
    
    Interest bearing checking
    
    
    15,997
    
    
    
    0.40
    %
    
    
    13,919
    
    
    
    0.40
    %Savings accounts
    
    
    6,839
    
    
    
    0.40
    %
    
    
    6,716
    
    
    
    0.40
    %Money market
    
    
    8,462
    
    
    
    1.00
    %
    
    
    3,959
    
    
    
    1.00
    %39,179
    
    
    
    
    
    
    
    31,659Time0.00% to 0.99%
    
    
    3,977
    
    
    
    0.74
    %
    
    
    
    
    
    
    1.00% to 1.99%
    
    
    21,142
    
    
    
    1.37
    %
    
    
    14,958
    
    
    
    1.62
    %2.00%  2.99%
    
    
    11,900
    
    
    
    2.36
    %
    
    
    17,294
    
    
    
    2.19
    %3.00%  3.99%
    
    
    1,697
    
    
    
    3.11
    %
    
    
    11,557
    
    
    
    3.26
    %4.00%  4.99%
    
    
    
    
    
    
    
    
    
    
    475
    
    
    
    4.16
    %5.00%  5.99%
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total time deposits
    
    
    38,716
    
    
    
    
    
    
    
    44,284Total deposits
    
    $
    77,895
    
    
    
    
    
    
    $
    75,943
  52




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##### Table of Contents



8.
    
    Deposits (Continued)
  2011
    
    $
    30,8792012
    
    
    2,267Thereafter
    
    
    130$
    33,276
  9.
    
    Income Taxes
  December 31,2010
    
    
    2009Federal:Current
    
    $
    320
    
    
    $
    142Community Renewal credits
    
    
    
    
    
    
    (22
    )Deferred
    
    
    15
    
    
    
    62Total income taxes
    
    $
    335
    
    
    $
    182
  December 31,2010
    
    
    2009Federal statutory income tax rate
    
    
    34.0
    %
    
    
    34.0
    %Wage credits
    
    
    
    
    
    
    (2.2
    )Non-taxable income
    
    
    (1.0
    )
    
    
    (4.1
    )Other
    
    
    0.7
    
    
    
    0.5Effective tax rate expense (benefit)
    
    
    33.7
    %
    
    
    28.2
    %
  December 31,2010
    
    
    2009Allowance for loan losses
    
    $
    142
    
    
    $
    130Deferred compensation
    
    
    40
    
    
    
    30Subtotal deferred tax assets
    
    
    182
    
    
    
    160Depreciation
    
    
    (109
    )
    
    
    (88
    )Unrealized gains on securities available for sale
    
    
    (37
    )
    
    
    (35
    )Subtotal deferred tax liability
    
    
    (146
    )
    
    
    (123
    )Total deferred income tax asset, net
    
    $
    36
    
    
    $
    37
  53




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##### Table of Contents



9.
    
    Income Taxes (Continued)
    10.
    
    Foreclosed Real Estate
  11.
    
    Retirement Plans
      54




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##### Table of Contents



11.
    
    Retirement Plans (Continued)
  12.
    
    Deferred Compensation Plan
   December 31,2010
    
    
    2009Cash surrender value of life insurance contracts
    
    $
    2,506
    
    
    $
    1,920Earnings (loss) of life insurance contracts-directors
    
    
    42
    
    
    
    86Earnings (loss) of life insurance contracts-officers
    
    
    44
    
    
    
    6Deferred compensation payable-directors
    
    
    300
    
    
    
    213Deferred compensation payable officers
    
    
    237
    
    
    
    210
 13.
    
    Borrowings
   December 31,2010
    
    
    2009Long-term advance dated 9-22-10, monthly payment (in
thousands) of $4 for ten years, including interest
fixed at 3.234%
    
    $
    415
    
    
    $
    
    55




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##### Table of Contents



13.
    
    Borrowings (Continued)
  14.
    
    Fair Value Measurements
 Accounting standards in the United States of America establish a framework for using fair value
to measure assets and liabilities, and define fair value as the price that would be received to
sell an asset or paid to transfer a liability (an exit price) as opposed to the price that would
be paid to acquire the asset or received to assume the liability (an entry price).
 Under these standards, a fair value measure should reflect the assumptions that market
participants would use in pricing the asset or liability, including the assumptions about the
risk inherent in a particular valuation technique, the effect of a restriction on the sale or
use of an asset, and the risk of nonperformance. Required disclosures stratify balance sheet
accounts measured at fair value based on inputs the Bank uses to derive fair value measurements.
These strata include:
 
    
    Level 1 valuations, where the valuation is based on quoted market prices for
identical assets or liabilities traded in active markets (which include exchanges
and over-the-counter markets with sufficient volume).
 
    
    Level 2 valuations, where the valuation is based on quoted market prices for
similar instruments traded in active markets, quoted prices for identical or similar
instruments in markets that are not active, and model-based valuation techniques for
which all significant assumptions are observable in the market.
 
    
    Level 3 valuations, where the valuation is generated from model-based techniques
that use significant assumptions not observable in the market, but observable based on
Bank-specific data. These unobservable assumptions reflect the Banks own estimates
for assumptions that market participants would use in pricing the asset or liability.
Valuation techniques typically include option pricing models, discounted cash flow
models, and similar techniques, but may also include the use of market prices of assets
or liabilities that are not directly comparable to the subject asset or liability.
 Items Measured at Fair Value on a Recurring Basis
 For the Bank, the only items recorded at fair value on a recurring basis are securities
available for sale. These securities consist primarily of mortgage-backed (including Agency)
securities. When available, the Bank uses quoted market prices of identical assets on active
exchanges (Level 1 measurements). Where such quoted market prices are not available, the Bank
typically employs quoted market prices of similar instruments (including matrix pricing) and/or
discounted cash flows to estimate a value of these securities (Level 2 measurements). Level 3
measurements include discounted cash flow analyses based on assumptions that are not readily
observable in the market place, including projections of future cash flows, loss assumptions,
and discount rates.
  56




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##### Table of Contents



14.
    
    Fair Value Measurements(Continued)
 The following table presents financial assets and liabilities (in thousands) measured at fair
value on a recurring basis at December 31, 2010 and December 31, 2009:
 EstimatedLevel 1
    
    
    Level 2
    
    
    Level 3
    
    
    Fair ValueDecember 31, 2010Securities available for sale:FHLB certificates
    
    $
    
    
    
    $
    2,395
    
    
    $
    
    
    
    $
    2,395GNMA certificates
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    14FNMA certificates
    
    
    
    
    
    
    1,371
    
    
    
    
    
    
    
    1,371FNR certificates
    
    
    
    
    
    
    231
    
    
    
    
    
    
    
    231SBA pools
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    7U.S. Government obligations
    
    
    
    
    
    
    7,095
    
    
    
    
    
    
    
    7,095Municipal securities
    
    
    
    
    
    
    313
    
    
    
    
    
    
    
    313$
    
    
    
    $
    11,426
    
    
    $
    
    
    
    $
    11,426
 EstimatedLevel 1
    
    
    Level 2
    
    
    Level 3
    
    
    Fair ValueDecember 31, 2009Securities available for sale:FHLB certificates
    
    $
    
    
    
    $
    3,114
    
    
    $
    
    
    
    $
    3,114GNMA certificates
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    15FHLMC certificates
    
    
    
    
    
    
    1,035
    
    
    
    
    
    
    
    1,035FNMA certificates
    
    
    
    
    
    
    2,303
    
    
    
    
    
    
    
    2,303FNR certificates
    
    
    
    
    
    
    263
    
    
    
    
    
    
    
    263SBA pools
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    8Municipal securities
    
    
    
    
    
    
    348
    
    
    
    
    
    
    
    348Equity securities
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1$
    
    
    
    $
    7,087
    
    
    $
    
    
    
    $
    7,087
 Items Measured at Fair Value on a Non-Recurring Basis
 From time to time, certain assets may be recorded at fair value on a non-recurring basis,
typically as a result of the application of lower of cost or fair value accounting or a
write-down occurring during the period. The only item recorded at fair value on a non-recurring
basis is foreclosed real estate, which is recorded at the lower of cost or fair value less
estimated costs to sell. Fair value is determined by reference to appraisals (performed either
by the Bank or by independent appraisers) on the subject property, using market prices of
similar real estate assets (Level 2 measurements). The Bank held no foreclosed real estate at
December 31, 2010 or December 31, 2009.
 15.
    
    Subsequent Events
 The Bank is required to evaluate events or transactions that may occur after the balance sheet
date for potential recognition or disclosure in the consolidated financial statements. The Bank
performed such an evaluation through March 21, 2011, the date which the consolidated financial
statements were available to be issued, and noted no such subsequent events.
 16.
    
    Conversion and Stock Offering
 On September 30, 2010, the Bank completed its conversion from a mutual to a stock form of
organization as a subsidiary of Century Next Financial (the Company), and the Company
completed an initial public offering in which it issued 1,058,000 shares of its common stock for
a total of $10.6 million in gross offering proceeds and $9.8 million in net proceeds.
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##### Table of Contents



16.
    
    Conversion and Stock Offering (Continued)
 In conjunction with the conversion, the Bank established a liquidation account in an amount
equal to the Banks retained earnings contained in the final prospectus. The liquidation
account will be maintained for the benefit of eligible account holders and supplemental eligible
account holders who maintain deposit accounts in the Bank after the conversion.
 In the event of a complete liquidation (and only in such event), each eligible account holder
and supplemental eligible account holder will be entitled to receive a liquidation distribution
from the liquidation account in the amount of the then current adjusted balance of deposit
accounts held, before any liquidation distribution may be made with respect to common stock.
Except for the payment of dividends by the Bank, the existence of the liquidation account will
not restrict the use or application of such retained earnings.
 
 Item 9.
    
    Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure.
  
 Item 9A.
    
    Controls and Procedures.
  Managements Report on Internal Control Over Financial Reporting.
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##### Table of Contents



Item 9B.
    
    Other Information.
  
 PART III
 
 Item 10.
    
    Directors, Executive Officers and Corporate Governance.
   
 Item 11.
    
    Executive Compensation.
  
 Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
 Security Ownership of Certain Beneficial Owners and Management.
  
 Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence.
 
 
 Item 14.
    
    Principal Accounting Fees and Services.
   59




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##### Table of Contents



PART IV
 
 Item 15.
    
    Exhibits and Financial Statement Schedules.
  Report of Independent Registered Public Accounting Firm
    
    
    38Consolidated Balance Sheets at December 31, 2010 and 2009
    
    
    39Consolidated Statements of Income for the years ended December 31, 2010 and 2009
    
    
    40Consolidated Statements of Changes in Stockholders Equity for the years ended December 31, 2010 and 2009
    
    
    41Consolidated Statements of Cash Flows for the years ended December 31, 2010 and 2009
    
    
    42Notes to Consolidated Financial Statements
    
    
    43
    No.
    
    Description
    
    Location3.1
    
    
    Articles of Incorporation of Century Next Financial Corporation
    
    
    (1
    )3.2
    
    
    Bylaws of Century Next Financial Corporation
    
    
    (1
    )4.0
    
    
    Form of Stock Certificate of Century Next Financial Corporation
    
    
    (1
    )10.1
    
    
    Bank of Ruston Officers Deferred Compensation Plan*
    
    
    (1
    )10.2
    
    
    Bank of Ruston Death Benefit Only Income Continuation Plan*
    
    
    (1
    )10.3
    
    
    Bank of Ruston Directors Indexed Deferred Compensation Plan*
    
    
    (1
    )10.4
    
    
    Bank of Ruston Directors Deferral Income Plan*
    
    
    (1
    )21.0
    
    
    Subsidiaries of the Registrant
    
    Reported in Item 123.0
    
    
    Consent of Heard McElroy & Vestal, LLP
    
    Filed herewith31.1
    
    
    Rule 13(a)-14(a) Certification of the Chief Executive Officer
    
    Filed herewith31.2
    
    
    Rule 13(a)-14(a) Certification of the Chief Financial Officer
    
    Filed herewith32.0
    
    
    Section 1350 Certification
    
    Filed herewith
 
 *
    
    Denotes a management contract or compensatory plan or arrangement.(1)
    
    Incorporated by reference from the like-numbered exhibit
included in Century Next Financials registration statement on Form S-1, filed
June 7, 2010, as amended (SEC File No. 333-167589). (b)
    
    The exhibits listed under (a)(3) of this Item 15 are filed herewith.
 (c)
    
    Reference is made to (a)(2) of this Item 15.
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##### Table of Contents



SIGNATURES
  CENTURY NEXT FINANCIAL CORPORATIONMarch 29, 2011
    By:
    /s/ Benjamin L. DennyBenjamin L. DennyPresident and Chief Executive Officer  Name
    
    Title
    
    Date/s/ Thomas W. RogersThomas W. Rogers
    
    Chairman
of the Board
    
    March 29, 2011/s/ Benjamin L. DennyBenjamin L. Denny
    
    President and Chief Executive
Officer
    
    March 29, 2011/s/ G. Randall AllisonG. Randall Allison
    
    Vice President and Chief Financial
Officer (principal financial and
accounting officer)
    
    March 29, 2011/s/ J. Brandon EwingJ. Brandon Ewing
    
    Director
    
    March 29, 2011/s/ William D. HoganWilliam D. Hogan
    
    Director
    
    March 29, 2011/s/ Daniel D. ReneauDaniel D. Reneau
    
    Director
    
    March 29, 2011/s/ Scott R. ThompsonScott R. Thompson
    
    Director
    
    March 29, 2011/s/ Dewey C. ThurmonDewey C. Thurmon
    
    Director
    
    March 29, 2011/s/ Neal WalpoleNeal Walpole
    
    Director
    
    March 29, 2011
  61