SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

|X|   Annual report under Section 13 or 15(d) of the Securities Exchange Act of
      1934.

For the fiscal year ended December 31, 2006

                                       OR

|_|   Transition report under Section 13 or 15(d) of the Securities Exchange Act
      of 1934.

                         Commission File No.: 000-49882
                                              ---------

                               MINDEN BANCORP, INC
--------------------------------------------------------------------------------
                 (Name of Small Business Issuer in Its Charter)

        United States                                           13-4203146
-------------------------------                           ----------------------
(State or Other Jurisdiction of                              (I.R.S. Employer
Incorporation or Organization)                            Identification Number)

   100 MBL Bank Dr., Minden, Louisiana                            71055
----------------------------------------                       ------------
(Address of Principal Executive Offices)                        (Zip Code)

                                 (318) 377-0523
                (Issuer's Telephone Number, Including Area Code)

         Securities registered under Section 12(b) of the Exchange Act:
                                 Not Applicable

         Securities registered under Section 12(g) of the Exchange Act:
--------------------------------------------------------------------------------
                     Common Stock (par value $.01 per share)
                                (Title of Class)

Check whether the issuer is not required to file reports  pursuant to Section 13
on 15(d) of the Exchange Act. |_|

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.
      Yes  |X|  No  |_|

<PAGE>

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. |X|

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) Yes |_| No |X|

Issuer's revenues for its most recent fiscal year: $8.3 million.

As of February 28, 2007,  the  aggregate  value of the 388,512  shares of Common
Stock of the Registrant  outstanding on such date held by non-affiliates,  which
excludes  135,671  shares held by all directors  and  executive  officers of the
Registrant (not including 11,500 shares held by the Registrant's  Employee Stock
Ownership  Plan  ("ESOP") on such  persons'  behalf),  52,371 shares held by the
Registrant's ESOP, and 800,112 shares held by Minden Mutual Holding Company, was
approximately  $8.61 million.  This figure is based on the closing sale price of
$22.15 per share of the Registrant's Common Stock on February 28, 2007. Although
directors and executive officers and the ESOP were assumed to be "affiliates" of
the Registrant for purposes of this calculation, the classification is not to be
interpreted as an admission of such status.

Number of shares of Common Stock outstanding as of February 28, 2007:  1,376,666
Transitional Small Business Disclosure Format: Yes |_| No |X|

                       DOCUMENTS INCORPORATED BY REFERENCE

      List hereunder the following  documents  incorporated by reference and the
part of the Form 10-KSB into which the document is incorporated.

(1) Portions of the Annual Report to Stockholders are incorporated into Part II,
Items 5 through 7 and Part III, Item 13 of this Form 10-KSB.

(2) Portions of the  definitive  proxy  statement for the 2007 Annual Meeting of
Stockholders are  incorporated  into Part III, Items 9 through 12 and Item 14 of
this Form 10-KSB.

<PAGE>

                                     PART I

Item 1. Description of Business.
-------------------------------

General

      On December 11, 2001,  the Board of Directors of Minden  Building and Loan
Association,   a   Louisiana-chartered   building  and  loan   association  (the
"Association"),   adopted  a  plan  of  reorganization  pursuant  to  which  the
Association  converted  to stock form and became a wholly  owned  subsidiary  of
Minden Bancorp, Inc. (the "Company"). In connection with the reorganization, the
Company  became a majority  owned  (55%)  subsidiary  of Minden  Mutual  Holding
Company  (the  "MHC"),  a  federally  chartered  mutual  holding  company.   The
reorganization was consummated on July 2, 2002. The Company is a unitary savings
and loan holding company whose assets consist  primarily of the ownership of the
outstanding  capital stock of the Association,  investments of proceeds retained
from the  reorganization  and the Company's loan to the employee stock ownership
plan.

      The  management  of  the  Company,   the  MHC  and  the   Association  are
substantially identical and the Company neither owns nor leases any property but
instead uses the premises,  equipment and furniture of the Association  with the
payment  of  appropriate   rental  fees,  as  required  by  applicable  law  and
regulations.

      The  Association  was  originally  organized  in 1910.  The  Association's
business consists  primarily of attracting  deposits from the general public and
using those funds to make loans.  The Association  moved to its new headquarters
on March 19, 2007, and began using the name MBL Bank (the "Bank").  The building
located at 415 Main Street became the first branch.

      In  addition to the  historical  information,  this Annual  Report on Form
10-KSB may be deemed to include certain forward-looking  statements as that term
is  defined  by the  Private  Securities  Litigation  Reform  Act of 1995.  Such
statements  include,  but may  not be  limited  to  comments  regarding  (a) the
potential for earnings  volatility  from changes in the estimated  allowance for
loan losses over time, (b) the expected growth rate of the loan  portfolio,  (c)
future  changes in the mix of deposits,  (d) the results of net interest  income
simulations  run by the Company to measure  interest rate  sensitivity,  (d) the
performance  of the  Company's  net  interest  income  and net  interest  margin
assuming certain future conditions, and (f) changes or trends in certain expense
levels.

Forward-looking  statements are based on numerous assumptions,  certain of which
may be referred to specifically in connection with a particular statement.  Some
of the more important assumptions include:

      o     expectations  about overall economic  recovery in the  Association's
            market area,

      o     expectations  about the ability of the  Association's  borrowers  to
            make  payments  on  outstanding  loans  and the  sufficiency  of the
            allowance for loan losses,

      o     expectations  about the current  values of  collateral  securing the
            Association's outstanding loans,

      o     expectations about the movement of interest rates, including actions
            that may be taken  by the  Federal  Reserve  Board  in  response  to
            changing economic conditions,

      o     reliance on existing or  anticipated  changes in laws or regulations
            affecting the activities of the banking industry and other financial
            service providers, and

<PAGE>

      o     expectations regarding the nature and level of competition,  changes
            in customer behavior and preferences,  and the Association's ability
            to execute its plans to respond effectively.

Because it is uncertain  whether future conditions and events will confirm these
assumptions,  there is a risk that the  Company's  future  results  will  differ
materially  from what is stated or implied by such  forward-looking  statements.
The Company cautions the reader to consider this risk.

Lending Activities

      General.  At December 31, 2006, the net loan portfolio of the  Association
totaled $75.0 million,  representing  approximately 64.6% of its total assets at
that date. The principal  lending activity of the Association is the origination
of  one-to-four  family  residential  loans.  At December 31, 2006,  one-to-four
family  residential loans amounted to $40.6 million,  or 50.8% of its total loan
portfolio,  before net items. As part of the implementation of the Association's
lending   strategy  of  diversifying  its  loan  portfolio  and  decreasing  its
dependence on single-family residential lending, the Association also offers the
following lending products:

      o     commercial  real estate loans,  which amounted to 16.5% of the total
            loan  portfolio  at  December  31,  2006 as compared to 17.4% of the
            total loan portfolio at December 31, 2005;

      o     consumer loans,  which amounted to 10.2% of the total loan portfolio
            at December 31, 2006 as compared to 9.5% of the total loan portfolio
            at December 31, 2005;

      o     commercial business loans, which amounted to 13.3% of the total loan
            portfolio  at  December  31,  2006 as compared to 13.8% of the total
            loan portfolio at December 31, 2005; and

                                      -1-

<PAGE>

      o     construction  loans,  which  amounted  to  9.3%  of the  total  loan
            portfolio  at December  31,  2006,  as compared to 5.7% of the total
            loan portfolio at December 31, 2005.

      The types of loans  that the  Association  may  originate  are  subject to
federal  and state laws and  regulations.  Interest  rates  charged on loans are
affected  principally  by the  demand  for such  loans  and the  supply of money
available for lending purposes and the rates offered by its  competitors.  These
factors are, in turn, affected by general and economic conditions,  the monetary
policy  of  the  federal  government,   including  the  Federal  Reserve  Board,
legislative and tax policies, and governmental budgetary matters.

      A savings  institution  generally  may not make loans to one  borrower and
related  entities  in an amount  which  exceeds  the  greater  of (i) 15% of its
unimpaired  capital  and  surplus,  although  loans  in an  amount  equal  to an
additional  10% of  unimpaired  capital and surplus may be made to a borrower if
the loans are fully secured by readily marketable securities, and (ii) $500,000.
At  December  31,  2006,  the  Association's  regulatory  limit on  loans-to-one
borrower was approximately  $2.9 million and its five largest loans or groups of
loans-to-one borrower, including related entities, aggregated $1.6 million, $1.6
million,  $1.4 million,  $861,000 and $826,000.  Each of the Association's  five
largest  loans or  groups of loans  was  performing  in  accordance  with  their
respective terms at December 31, 2006.

      Loan Portfolio Composition. The following table sets forth the composition
of the Association's loan portfolio by type of loan at the dates indicated.

<TABLE>
<CAPTION>
                                                            December 31,
                                             ------------------------------------------
                                                     2006                   2005
                                             -------------------    -------------------
                                              Amount     Percent     Amount     Percent
                                             --------    -------    --------    -------
                                                       (Dollars in Thousands)
<S>                                          <C>           <C>      <C>           <C>
      Real estate loans:
         One-to-four family ..............   $ 40,576      50.78%   $ 38,746      53.64%
         Commercial ......................     13,184      16.50      12,570      17.40
         Construction ....................      7,393       9.25       4,113       5.70
      Commercial business ................     10,609      13.28       9,933      13.75
      Consumer:
         Loans secured by savings accounts      1,409       1.76       1,439       1.99
         Other(1) ........................      6,731       8.43       5,431       7.52
                                             --------    -------    --------    -------
         Total loans receivable ..........   $ 79,902     100.00%   $ 72,232     100.00%
                                                         =======                =======
      Less:
         Undisbursed loans in process ....     (4,038)                (1,278)
         Allowance for loan losses .......       (901)                  (837)
                                             --------               -------
           Total loans receivable, net ...   $ 74,963               $ 70,117
                                             ========               =======
</TABLE>

(1)   Includes automobile, boat, recreational vehicle, and unsecured loans.

      Origination  of Loans.  The  lending  activities  of the  Association  are
subject to the written  underwriting  standards and loan origination  procedures
established by the board of directors and


                                       -2-

<PAGE>

management.  Loan  originations  are  obtained  through  a variety  of  sources,
primarily  consisting  of  referrals  from  real  estate  brokers  and  existing
customers.  Written loan applications are taken by one of the Association's loan
officers.  The loan officer also  supervises the  procurement of credit reports,
appraisals and other  documentation  involved with a loan. For real estate loans
in excess of $250,000,  the  Association's  loan policy  mandates  that property
valuations  be performed by an  independent  outside  appraiser  approved by its
board of directors.  As a matter of practice,  however,  the Association obtains
independent  outside  appraisals on substantially  all of its real estate loans.
Under the lending policies of the Association,  a title opinion must be obtained
for each real estate loan.

      The  Association's  loan  approval  process  is  intended  to  assess  the
borrower's ability to repay the loan, the viability of the loan and the adequacy
of the value of the  property  that will  secure the loan.  Generally,  loans in
excess of $100,000 must be approved by the  Association's  loan committee or the
board of directors. All loans are ratified by the board of directors.

      The  following  table shows total loans  originated  and repaid during the
periods indicated. No loans were sold during the periods presented.

                                                  Year Ended December 31,
                                                 ------------------------
                                                    2006           2005
                                                 ----------     ---------
                                                      (In Thousands)

          Loan originations:
           Real estate loans:
             One-to -four family .............     $14,716       $15,627
             Commercial ......................       6,694         7,562
             Construction ....................       9,588         6,761
           Commercial business ...............      13,091        19,142
           Consumer (1) ......................       8,671         7,130
                                                   -------       -------
             Total loans originated ..........      52,760        56,222
                                                   -------       -------
          Deduct loan principal reduction ....      47,013        47,868
          Decrease due to other items, net (2)         901           837
                                                   -------       -------
          Net increase in loan portfolio .....     $ 4,846       $ 7,517
                                                   =======       =======

(1)   Includes loans secured by deposits, automobile, boat and recreational
      vehicle loans.

(2)   Other items consist of loans in process and allowance for loan losses.

      Although  Louisiana laws and  regulations  permit savings  institutions to
originate  and purchase  loans  secured by real estate  located  throughout  the
United States, the Association  concentrates its lending activity on its primary
market area in Webster Parish,  Louisiana and the surrounding  area.  Subject to
its  loans-to-one  borrower  limitation,  the Association is permitted to invest
without  limitation in residential  mortgage loans and up to 400% of its capital
in loans secured by  non-residential  or commercial real estate. The Association
also may  invest in  secured  and  unsecured  consumer  loans in an  amount  not
exceeding 35% of total assets.  This 35%  limitation may be exceeded for certain
types of consumer  loans,  such as home equity and  property  improvement  loans
secured by residential real property. In addition, the Association may invest up
to 10% of its total


                                       -3-

<PAGE>

assets in secured and unsecured  loans for  commercial,  corporate,  business or
agricultural  purposes.  At December 31, 2006, the Association was in compliance
with each of the above lending limits.

      Maturity  of  Loan  Portfolio.   The  following  table  presents   certain
information at December 31, 2006,  regarding the dollar amount of loans maturing
in the  Association's  portfolio based on their contractual terms to maturity or
scheduled  amortization,  but does not  include  potential  prepayments.  Demand
loans, loans having no stated schedule of repayments and no stated maturity, and
overdrafts are reported as becoming due within one year.

<TABLE>
<CAPTION>
                                                                  At December 31, 2006
                                     ---------------------------------------------------------------------------

                                     One-to-four   Commercial                              Commercial    Total
                                       Family      Real Estate   Construction   Consumer    Business     Loans
                                     -----------   -----------   ------------   --------   ----------    -----
                                                                      (In Thousands)
<S>                                    <C>          <C>            <C>           <C>        <C>          <C>
Amounts due in:
  One year or less ...............     $  3,487     $  2,052       $ 7,393       $  2,081   $  3,991     $19,004
  More than one year to five years        6,873        8,092            --          5,822      6,109      26,896
  More than five years ...........       30,216        3,040            --            237        509      34,002
                                        -------       ------        ------          -----     ------      -------
      Total amount due ...........     $ 40,576     $ 13,184       $ 7,393       $  8,140   $ 10,609     $79,902
                                       ========      =======       =======          =====     ======      =======
</TABLE>

            The  following  table  sets  forth the  dollar  amount of all loans,
before net items, due after December 31, 2007 which have fixed interest rates or
which have floating or adjustable interest rates.

<TABLE>
<CAPTION>
                                      Fixed-Rates   Floating or Adjustable Rates    Total
                                      -----------   ----------------------------    -----
                                                          (In Thousands)
<S>                                     <C>                 <C>                    <C>
Real estate loans:
  One-to-four family ..............     $ 37,037            $     52               $37,089
  Commercial ......................        9,417               1,715                11,132
  Construction ....................           --                  --                    --
Commercial business ...............        2,421               4,197                 6,618
Consumer loans ....................        6,028                  31                 6,059
                                        --------            --------               -------
      Total loans .................     $ 54,903            $  5,995               $60,898
                                        ========            ========               =======
</TABLE>

      Scheduled  contractual  maturities of loans do not necessarily reflect the
actual expected term of the loan  portfolio.  The average life of mortgage loans
is  substantially   less  than  their  average   contractual  terms  because  of
prepayments.  The average life of mortgage  loans tends to increase when current
mortgage  loan  rates are  higher  than rates on  existing  mortgage  loans and,
conversely,  decrease  when  rates on  current  mortgage  loans are  lower  than
existing  mortgage  loan  rates  (due  to  refinancing  of  adjustable-rate  and
fixed-rate loans at lower rates).  Under the latter  circumstance,  the weighted
average  yield on loans  decreases  as  higher  yielding  loans  are  repaid  or
refinanced at lower rates.

      One-to-Four  Family  Residential  Real Estate Loans.  The primary  lending
activity of the  Association  has been and  continues to be the  origination  of
loans secured by single-family residences


                                       -4-

<PAGE>

At December 31, 2006,  $40.6  million,  or 50.8%,  of its total loan  portfolio,
before net items, consisted of one-to-four family residential loans.

      The loan-to-value  ratio,  maturity and other provisions of the loans made
by the  Association  generally have reflected the policy of making less than the
maximum loan permissible under applicable regulations,  in accordance with sound
lending practices,  market conditions and underwriting  standards established by
the Association.  The Association's current lending policy on one-to-four family
residential loans generally limits the maximum loan-to-value ratio to 90% of the
appraised  value of the  property.  These loans are amortized on a monthly basis
with principal and interest due each month and generally  include  "due-on-sale"
clauses.

      Substantially  all of the  Association's  one-to-four  family  residential
loans have fixed rates of interest.  Fixed-rate  loans generally have maturities
ranging from 15 to 30 years and are fully  amortizing with monthly loan payments
sufficient to repay the total amount of the loan with interest by the end of the
loan term. Although it has been the Association's  practice to retain all of the
one-to-four  family  residential  loans,  its  fixed-rate  loans  generally  are
originated  under terms,  conditions and  documentation  which permit them to be
sold to U.S.  Government-sponsored  agencies,  such as  Freddie  Mac,  and other
investors in the secondary mortgage market. At December 31, 2006, $40.2 million,
or 99.1%, of the Association's  one-to-four  family  residential  mortgage loans
were fixed-rate loans.

      Of the $40.6 million of one-to-four  family  residential loans held by the
Association  at December 31, 2006,  $1.1  million  consisted of second  mortgage
loans.  These  loans are  secured  by the  underlying  equity in the  borrower's
residence.  The  Association  holds the first  mortgage on virtually  all of the
properties  that  secure  its  second   mortgage   loans.   The  amount  of  the
Association's  second  mortgage loans  generally  cannot exceed the lesser of an
aggregate  loan-to-value ratio combining the first and the second lien of 90% or
$100,000.  These loans are typically three-to-five year balloon loans with fixed
rates and contain an on-demand  clause that allows the  Association  to call the
loan in full at any time.

      Commercial  Real Estate  Loans.  The  Association  began to emphasize  the
origination  of commercial  real estate loans in 2001 as part of its strategy to
diversify  its loan  portfolio.  In order to implement  its lending  strategy of
serving  commercial  real estate  customers,  the  Association  hired in 2001 an
experienced   senior  loan  officer  and  established   prudent  procedures  for
originating commercial real estate loans. Commercial real estate loans generally
have interest rates that are higher than interest  rates on  one-to-four  family
residential  loans  because  they usually  involve a higher  degree of risk than
loans secured by residential property. The Association's  commercial real estate
loans consist  primarily of loans secured by land,  storefront retail and office
buildings,  churches  and  schools.   Substantially  all  of  the  Association's
commercial  real estate  loans were  secured by  properties  located  within its
market area.  At December 31, 2006,  the  Association's  commercial  real estate
loans amount to $13.2 million, or 16.5% of its total loan portfolio,  before net
items,  compared  to $12.6  million,  or 17.4% of its total  loan  portfolio  at
December 31, 2005.


                                       -5-

<PAGE>

      The   Association's   commercial   real   estate   loans  have  a  maximum
loan-to-value  ratio of 80%. The terms of each  commercial  real estate loan are
negotiated  on  a  case-by-case  basis,   although  these  loans  are  generally
structured  as  three-to-five  year  balloon  loans with  either  fixed rates or
variable  rates tied to the Wall Street Journal prime rate with a 10- to 15-year
amortization  schedule.  In determining whether to make a commercial real estate
loan, the Association  considers the net operating  income of the property,  the
borrower's  expertise,  credit  history and  profitability  and the value of the
underlying  property.  In most cases the Association obtains personal guarantees
from the borrowers.  The Association has generally  required that the properties
securing these  commercial  real estate loans have debt service  coverage ratios
(the ratio of  earnings  before  debt  service  to debt  service)  of 1.2x.  The
Association  requires  written  appraisals  prepared by a certified  independent
appraiser of all properties  securing  commercial real estate loans greater than
$250,000. At December 31, 2006, the average individual loan balance of the loans
in the Association's commercial real estate portfolio was approximately $139,000
and its largest commercial real estate loan at such date was $861,000. This loan
was current at December 31, 2006.

      The land loans in the Association's  commercial real estate loan portfolio
are secured primarily by income producing properties,  such as land utilized for
growing  timber.  A small  percentage of the land loans are for  development  of
residential  property.  The Association's land loans typically are three-to-five
year balloon loans.  At December 31, 2006, the  Association  had $3.6 million in
land loans (which amount is included in the $13.2 million  aggregate  balance of
commercial  real estate loans),  which loans had an average  balance of $39,000.
The  Association's  largest land loan at December 31, 2006 amounted to $375,000.
This loan was current at December 31, 2006.

      Commercial real estate lending is generally considered to involve a higher
degree  of risk  than  one-to-four  family  residential  lending.  Such  lending
typically  involves  large loan balances  concentrated  in a single  borrower or
groups of related borrowers for rental or business properties.  In addition, the
payment experience on loans secured by income-producing  properties is typically
dependent  on the success of the  operation  of the related  project and thus is
typically  affected by adverse  conditions  in the real estate market and in the
economy.  The Association  generally  attempts to mitigate the risks  associated
with its  commercial  real  estate  lending  by,  among  other  things,  lending
primarily to established  businesses in its market area with existing  operating
performance which can be analyzed,  requiring conservative debt coverage ratios,
obtaining   personal   guarantees  from  the  principals  of  the  borrower  and
periodically monitoring the operation and physical condition of the collateral.

      Commercial Business Loans. The Association  originates commercial business
loans  primarily  to small  business  owners in its market area for  purposes of
working  capital or equipment  financing.  These loans are typically  secured by
equipment,  machinery,  commercial real estate,  and other corporate assets. The
commercial  business loans are usually  one-to-five year loans with either fixed
rates or variable  rates of interest  tied to the prime rate.  During 2006,  the
Association  continued  to expand  its  activities  in the  commercial  business
lending  market  with  originations  totaling  $13.1  million  compared to $19.1
million in 2005. At December 31, 2006, the Association's commercial


                                       -6-

<PAGE>

business loans amounted to $10.6 million,  or 13.3%, of its total loan portfolio
compared to $9.9 million, or 13.8% of its loan portfolio at December 31, 2005.

      Commercial  business  loans  generally are considered to involve a greater
risk than single-family  residential mortgage loans. The Association attempts to
minimize its risk exposure by limiting  these loans to proven  businesses and by
obtaining personal guarantees from the principals of the borrower.

      Consumer  Loans.  The  Association  is authorized to make loans for a wide
variety of personal or consumer purposes.  The Association  originates  consumer
loans in order to  accommodate  its customers  and because such loans  generally
have shorter terms and higher  interest rates than  residential  mortgage loans.
The  consumer  loans  offered by the  Association  consist  of loans  secured by
deposit accounts with the Association,  automobile loans,  recreational  vehicle
loans,  boat  loans  and  other  miscellaneous  loans.  As part  of its  lending
strategy,  the Association  began to emphasize the origination of consumer loans
in 2001. At December 31, 2006, $8.1 million, or 10.2% of the Association's total
loan portfolio  consisted of consumer loans compared to $6.9 million, or 9.5% of
its total loan portfolio, before net items, at December 31, 2005.

      The  Association   offers  loans  secured  by  deposit   accounts  in  the
Association,  which loans amounted to $1.4 million, or 1.8% of the Association's
total loan portfolio,  before net items, at December 31, 2006,  compared to $1.4
million or 2.0% at December 31, 2005. Such loans are originated for up to 90% of
the  account  balance,  with  a  hold  placed  on the  account  restricting  the
withdrawal of the account  balance.  These loans typically are payable on demand
with a maturity date of one year.

      The Association also offers loans for  automobiles,  primarily used, boats
and recreational vehicles,  unsecured and other. Such loans typically have terms
of no more than 54 months and a maximum  loan-to-value ratio of 75%. At December
31, 2006, the  Association's  automobile,  boat and  recreational  vehicle loans
amounted to $5.1 million, or 6.4% of its total loan portfolio, before net items.

      Consumer loans generally have shorter terms and higher interest rates than
residential  mortgage  loans,  but  generally  entail  greater  credit risk than
residential  mortgage  loans,  particularly  those loans  secured by assets that
depreciate rapidly,  such as automobiles,  boats and recreational  vehicles.  In
such cases, repossessed collateral for a defaulted consumer loan may not provide
an adequate  source of  repayment  for the  outstanding  loan and the  remaining
deficiency often does not warrant further substantial collection efforts against
the borrower.  In  particular,  amounts  realizable  on the sale of  repossessed
automobiles  may be  significantly  reduced  based  upon  the  condition  of the
automobiles and the fluctuating demand for used automobiles.

      Construction   Loans.  The  Association  also  originates  loans  for  the
construction  of  one-to-four  family  residences.  At December 31,  2006,  $7.4
million,  or 9.3% of the Association's  total loan portfolio,  before net items,
consisted of residential and commercial  construction  loans. The  Association's
construction loans are typically made for the construction of pre-sold homes and


                                       -7-

<PAGE>

typically are six-month  fixed-rate  loans which require the payment of interest
only during the construction phase.

      Before making a commitment to fund a construction  loan,  the  Association
requires an independent appraisal of the property.  The Association also reviews
and inspects each property  before  disbursement of funds during the term of the
construction  loan. The borrower is required to fund the difference  between the
loan  amount  and the  estimated  cost of  completion  prior to the  Association
disbursing  any funds.  Loan proceeds are disbursed  after each stage of work is
completed.

      Construction  lending  generally  involves  a higher  degree  of risk than
one-to-four  family permanent  mortgage lending because of the greater potential
for disagreements  between borrowers and builders and the failure of builders to
pay  subcontractors.  Additional  risk  often  exists  because  of the  inherent
difficulty in estimating both a property's value upon completion of construction
and  the  estimated  construction  costs.  If the  estimate  of the  value  upon
completion  proves to be inaccurate,  the  Association  may be confronted with a
property whose value is insufficient to assure full repayment.

      Loan  Origination and Other Fees. In addition to interest earned on loans,
the Association generally receives loan origination fees for originating loans.

Asset Quality

      General. The Association's  collection procedures provide that when a loan
is 15 days past due, a late  charge  notice is sent to the  borrower  requesting
payment.  If the delinquency  continues at 30 days, personal contact efforts are
attempted,  either in person or by telephone. If a loan becomes 60 days past due
and no progress has been made in resolving the delinquency,  a collection letter
from  legal  counsel is sent and  personal  contact  is  attempted.  When a loan
continues in a delinquent  status for 90 days or more, and a repayment  schedule
has not been  made or kept by the  borrower,  generally  a notice  of  intent to
foreclose is sent to the borrower. If the delinquency is not cured,  foreclosure
proceedings are initiated. In most cases, deficiencies are cured promptly. While
the  Association  generally  prefers  to work with  borrowers  to  resolve  such
problems,  the  Association  will  institute  foreclosure  or  other  collection
proceedings when necessary to minimize any potential loss.

      Loans are  placed on  non-accrual  status  when  management  believes  the
probability  of  collection  of interest is  doubtful.  When a loan is placed on
non-accrual  status,  previously  accrued but unpaid  interest is deducted  from
interest income. The Association generally  discontinues the accrual of interest
income when the loan becomes 90 days past due as to principal or interest unless
the credit is well secured and the Association believes it will fully collect.


                                       -8-

<PAGE>

      Real estate and other assets  acquired by the  Association  as a result of
foreclosure  or by  deed-in-lieu  of  foreclosure  are classified as real estate
owned until sold. The Association did not have any real estate owned at December
31, 2006 and 2005.

      Delinquent  Loans. The following table sets forth  information  concerning
delinquent  loans at December 31, 2006, in dollar amounts and as a percentage of
the  Association's  total loan portfolio.  The amounts  presented  represent the
total  outstanding  principal  balances  of the related  loans,  rather than the
actual payment amounts which are past due.

<TABLE>
<CAPTION>
                                                       December 31, 2006
                                   ------------------------------------------------------------
                                        30-59                60-89            90 or More Days
                                     Days Overdue         Days Overdue            Overdue
                                   -----------------    -----------------    ------------------
                                             Percent             Percent              Percent
                                            of Total            of Total             of Total
                                   Amount     Loans     Amount    Loans      Amount    Loans
                                   ------   --------    -------  --------    ------  ----------
                                                     (Dollars in Thousands)
<S>                                <C>          <C>     <C>          <C>     <C>           <C>
Real estate loans:
  One-to -four family ..........   $1,068       1.34%   $  146       0.18%   $  176        .22%
  Commercial and Land ..........      369       0.46        --         --        --         --
  Construction .................       --         --        --         --        --         --
Commercial business ............      101       0.13        --         --        --         --
Consumer loans .................      209       0.26        71        .09        68        .09
                                    -----       -----     ----       -----     -----       ----
  Total loans ..................   $1,747       2.19%   $  217       0.27%   $  244        .31%
                                   ======       =====    =====       =====     =====       ====
</TABLE>

      Non-Performing  Assets.  The following  table  presents  information  with
respect to the Association's nonperforming assets at the dates indicated.

<TABLE>
<CAPTION>
                                                                       At December 31,
                                                                   ----------------------
                                                                      2006         2005
                                                                   ---------    ---------
                                                                   (Dollars in Thousands)
<S>                                                                  <C>          <C>
      Nonaccruing loans:
        Real estate loans:
          One-to-four family ...................................     $  17        $  22
          Commercial ...........................................        --           --
          Construction .........................................        --           --
        Commercial business ....................................        --           --
        Consumer loans .........................................        19           37
                                                                     -----        -----
          Total nonaccruing loans ..............................        36           59
      Accruing loans delinquent 90 days or more(1) .............       215          201
      Real estate owned ........................................        --           --
                                                                     -----        -----
            Total nonperforming assets(2) ......................       251          260
      Troubled debt restructuring ..............................        --           --
      Troubled debt restructurings and total
        nonperforming assets ...................................     $ 251        $ 260
                                                                     =====        =====
      Total nonperforming assets and troubled debt
        restructurings as a percentage of total assets .........      0.22%        0.23%
                                                                     =====        =====
</TABLE>


                                       -9-

<PAGE>

(1)   This figure includes properties that are in bankruptcy.

(2)   Nonperforming assets consist of nonperforming loans and real estate owned.

      If the $36,000 of nonaccruing loans of the Association had been current in
accordance  with their terms during  2006,  the gross income on such loans would
have been  approximately  $4,000.  There were  $59,000 in  nonaccruing  loans at
December 31, 2005.

      Classified Assets.  Federal banking  regulations require that each insured
savings  institution  classify its assets on a regular  basis.  In addition,  in
connection with  examinations of insured  institutions,  federal  examiners have
authority to identify  problem assets and, if appropriate,  classify them. There
are three  classifications  for problem  assets:  "substandard,"  "doubtful" and
"loss."  Substandard  assets  have  one  or  more  defined  weaknesses  and  are
characterized  by the distinct  possibility  that the insured  institution  will
sustain some loss if the  deficiencies  are not corrected.  Doubtful assets have
the weaknesses of substandard assets with the additional characteristic that the
weaknesses  make  collection  or  liquidation  in full on the basis of currently
existing  facts,  conditions  and  values  questionable,  and  there is a higher
possibility of loss. An asset classified loss is considered uncollectible and of
such  little  value  that  continuance  as an  asset of the  institution  is not
warranted.   Another  category   designated   "special  mention"  also  must  be
established  and maintained for assets which do not currently  expose an insured
institution  to a  sufficient  degree  of  risk  to  warrant  classification  as
substandard,  doubtful or loss.  Assets  classified as  substandard  or doubtful
require the institution to establish  general  allowances for loan losses. If an
asset or portion  thereof is classified as loss,  the insured  institution  must
either  establish  specific  allowances for loan losses in the amount of 100% of
the portion of the asset  classified  loss, or charge-off  such amount.  General
loss  allowances   established  to  cover  possible  losses  related  to  assets
classified   substandard   or  doubtful  may  be  included  in   determining  an
institution's  regulatory capital,  while specific valuation allowances for loan
losses do not qualify as regulatory capital. Federal examiners may disagree with
an insured institution's classifications and amounts reserved.

      The Association's total classified assets at December 31, 2006 amounted to
$251,000,  all of  which  were  classified  as  substandard,  all of  which  are
nonperforming  assets.  The largest  classified asset at December 31, 2006 was a
mortgage  loan  secured  by a first  mortgage  with a balance  of  approximately
$48,000,  which is also a  nonperforming  loan.  As of December  31,  2006,  the
Association had no property in real estate owned. The  Association's  classified
assets as of December 31, 2006 included all of its nonperforming assets.

      Allowance  for Loan  Losses.  At  December  31,  2006,  the  Association's
allowance  for loan  losses  amounted  to  $901,000,  or 1.1% of its total  loan
portfolio,  before net items.  The  allowance for loan losses is maintained at a
level believed,  to the best of management's  knowledge,  to cover all known and
inherent  losses in the  portfolio  which are both  probable and  reasonable  to
estimate at each reporting date. The level of allowance for loan losses is based
on management's  periodic review of the  collectibility of the loans in light of
historical  experience,  the nature and  volume of the loan  portfolio,  adverse
situations that may affect the borrower's  ability to repay,  estimated value of
any underlying collateral and prevailing conditions.


                                      -10-

<PAGE>

The  management  of the  Association  also  considers  the  deficiencies  of all
classified loans in determining the amount of allowance for loan losses required
at each reporting date. Management analyzes the probability of the correction of
the substandard loans' weaknesses and the extent of any known or inherent losses
that the  Association  might sustain on them.  It determined  that no additional
provision was necessary for those loans as of the reporting dates.

      While  management  believes that it  determines  the size of the allowance
based on the best  information  available at the time, the allowance may need to
be  adjusted  as  circumstances  change  and  assumptions  are  updated.  Future
adjustments to the allowance could significantly affect net income.

      The following  table sets forth  information  concerning the allocation of
the  Association's  allowance  for loan losses by loan  categories  at the dates
indicated.

                                               December 31,
                               --------------------------------------------
                                       2006                    2005
                               --------------------    --------------------
                                         Percent of              Percent of
                                          Loans in                Loans in
                                            Each                    Each
                                        Category to             Category to
                               Amount   Total Loans    Amount   Total Loans
                               ------   -----------    ------   -----------
                                          (Dollars in Thousands)
      Allocated:
      Real estate loans:
        One-to-four family .   $  140       50.78%     $  224       53.64%
        Commercial .........      295       16.50         147       17.40
        Construction .......       --        9.25          20        5.70
      Commercial business ..      259       13.28         326       13.75
      Consumer loans .......      207       10.19         120        9.51
                               ------    --------      ------    --------
           Total ...........   $  901      100.00%     $  837      100.00%
                               ======    ========      ======    ========

                                      -11-

<PAGE>


      The following table sets forth an analysis of the Association's  allowance
for loan losses and other ratios at or for the dates indicated.

<TABLE>
<CAPTION>
                                                            Year Ended December 31,
                                                            -----------------------
                                                               2006        2005
                                                             --------    -------
                                                            (Dollars in Thousands)
<S>                                                           <C>        <C>
   Total loans outstanding ................................   $79,902    $72,232
   Average loans outstanding, net .........................    74,113     67,480
   Balance of allowance at beginning of
      period ..............................................       837        877
   Charge-offs:
   Real estate loans:
     One-to-four family ...................................        --         25
     Commercial ...........................................         3         --
     Construction .........................................        --         --
   Commercial business loans ..............................        --         --
   Consumer loans .........................................        31         20
                                                              -------    -------
       Total charge-offs ..................................        34         45
                                                              -------    -------
   Recoveries:
   Real estate loans:
     One-to-four family ...................................        --         --
     Commercial ...........................................         2         --
     Construction .........................................        --         --
   Commercial business loans ..............................        --         --
   Consumer loans .........................................         1          5
                                                              -------    -------
        Total recoveries ..................................         3          5
                                                              -------    -------
   Net charge-offs ........................................        31         40
   Provision for losses on loans ..........................        95         --
                                                              -------    -------
   Balance at end of period ...............................   $   901    $   837
                                                              =======    =======
   Allowance for loan losses as a
     percent of total loans outstanding ...................      1.13%      1.16%
                                                              =======    =======
   Allowance for loan losses as a
     percent of total nonperforming
     loans(1) .............................................    358.96%    321.92%
   Ratio of net charge-offs to
     average loans outstanding, net .......................       .04%       .06%
                                                              =======    =======
</TABLE>

(1)   Total  nonperforming loans consist of total nonaccruing loans and accruing
      loans delinquent 9 0 days or more.

Investment Securities

      The  Association  has authority to invest in various types of  securities,
including mortgage-backed securities,  U.S. Treasury obligations,  securities of
various federal agencies and of state and municipal governments, certificates of
deposit at federally  insured banks and savings  institutions,  certain bankers'
acceptances  and  federal  funds.  The  Association's   investment  strategy  is
established by the board of directors.


                                      -12-

<PAGE>

      The following table sets forth information  relating to the amortized cost
and fair value of the Association's mortgage-backed and investment securities.

<TABLE>
<CAPTION>
                                                          December 31,
                                         ------------------------------------------------
                                                   2006                     2005
                                         ----------------------   -----------------------
                                         Amortized                Amortized
                                           Cost      Fair Value     Cost      Fair Value
                                         ---------   ----------   ---------   -----------
                                                         (In Thousands)
<S>                                      <C>         <C>          <C>         <C>
      Held to maturity:
         U S  Government and agencies    $      --   $       --   $      --   $       --
         Mortgage-backed securities ..         308          306         424          423
         Certificates of deposit .....         800          800         900          900
      Available for sale:
         U  S  Government and agencies          --           --          --           --
         Mutual fund .................      10,067        9,838       9,617        9,408
         Mortgage-backed securities ..      17,475       17,402      19,711       19,585
         FHLMC stock .................          11          743          12          823
         Municipal bonds .............         230          228         230          227
                                         ---------   ----------   ---------   ----------
       Total .........................   $  28,891   $   29,317   $  30,894   $   31,366
                                         =========   ==========   =========   ==========
</TABLE>


      The   following   table  sets  forth  the  amount  of  the   Association's
mortgage-backed  and  investment  securities  which  mature  during  each of the
periods  indicated and the weighted  average yields for each range of maturities
at December 31, 2006.  The amounts  reflect the fair value of the  Association's
securities at December 31, 2006.

<TABLE>
<CAPTION>
                                                                   Contractually Maturing
                               ------------------------------------------------------------------------------------------------

                                          Weighted             Weighted               Weighted              Weighted
                               Under 1    Average      1-5     Average       6-10     Average     Over 10   Average
                                 Year      Yield      Years     Yield       Years      Yield       Years     Yield       Total
                               -------    --------    -----    --------     -----     --------    -------   --------     -----
                                                                    (Dollars in Thousands)
<S>                            <C>            <C>     <C>          <C>     <C>            <C>     <C>           <C>     <C>
U.S. Government and agencies   $     --         --%   $   --         --%   $     --         --%   $    --         --%   $    --

Mortgage-backed securities .         --         --       518       4.67         637       6.24     16,553       5.50     17,708

Municipal bonds ............         --         --       228       3.35          --         --         --         --        228

Certificate of deposit .....        200       2.70       600       3.38          --         --         --         --        800
                               --------               ------               --------               -------               -------
   Total ...................   $    200       2.70%   $1,346       3.87%   $    637       6.24%   $16,553       5.50%   $18,736
                               ========   ========    ======   ========    ========   ========    =======   ========    =======
</TABLE>

      Mortgage-backed securities represent a participation interest in a pool of
one- to-four family or  multi-family  mortgages.  The mortgage  originators  use
intermediaries  (generally  U.S.  Government  agencies and  government-sponsored
enterprises)  to pool and repackage the  participation  interests in the form of
securities,  with investors receiving the principal and interest payments on the
mortgages.  Such U.S. Government agencies and  government-sponsored  enterprises
guarantee the payment of principal and interest to investors.

      Mortgage-backed  securities  are  typically  issued with stated  principal
amounts,  and the  securities  are backed by pools of mortgages  that have loans
with  interest  rates that are within a range and have varying  maturities.  The
underlying pool of mortgages,  i.e.,  fixed-rate or adjustable-rate,  as well as
prepayment  risk,  are  passed  on to the  certificate  holder.  The  life  of a
mortgage-backed  passthrough  security  approximates  the life of the underlying
mortgages.


                                      -13-

<PAGE>

      The  mortgage-backed  securities of the Association  consist of Ginnie Mae
securities,  Freddie Mac securities and Fannie Mae  securities.  Ginnie Mae is a
government  agency within the Department of Housing and Urban  Development which
is intended to help finance  government-assisted  housing  programs.  Ginnie Mae
securities are backed by loans insured by the Federal Housing Administration, or
guaranteed by the Veterans  Administration.  The timely payment of principal and
interest on Ginnie Mae  securities is guaranteed by Ginnie Mae and backed by the
full  faith  and  credit  of the  U.S.  Government.  Freddie  Mac  is a  private
corporation  chartered by the U.S. Government.  Freddie Mac issues participation
certificates  backed  principally by conventional  mortgage  loans.  Freddie Mac
guarantees the timely  payment of interest and the ultimate  return of principal
on participation certificates.  Fannie Mae is a private corporation chartered by
the U.S.  Congress  with a mandate to establish a secondary  market for mortgage
loans.  Fannie Mae  guarantees  the timely  payment of principal and interest on
Fannie Mae  securities.  Freddie Mac and Fannie Mae securities are not backed by
the full faith and credit of the U.S.  Government,  but because  Freddie Mac and
Fannie  Mae are U.S.  Government-sponsored  enterprises,  these  securities  are
considered  to be among the highest  quality  investments  with  minimal  credit
risks.

      Mortgage-backed  securities  generally  yield  less than the  loans  which
underlie  such  securities   because  of  their  payment  guarantees  or  credit
enhancements  which offer  nominal  credit risk.  In  addition,  mortgage-backed
securities  are more liquid than  individual  mortgage  loans and may be used to
collateralize borrowings or other obligations of the Association.

      In addition to investments in various types of mortgage-backed  securities
issued by Ginnie Mae, Fannie Mae and Freddie Mac, the  Association  also invests
in a mutual fund that invests primarily in adjustable-rate  mortgage-backed  and
mortgage-related  securities  issued  by  those  same  entities  as  well  as in
securities  of that type issued by private  companies.  As of December 31, 2006,
the  Association  had a $9.8 million fair value  investment in this mutual fund.
The  Association  has also  invested  a  maximum  of  $100,000  each in  various
certificates  of deposits with  maturities of up to five years.  The interest is
paid monthly to the  Association.  The Association  invested in a municipal bond
with a maturity of 2011. The interest is paid semi-annually to the Association.

Sources of Funds

      General.  Deposits are the primary source of the  Association's  funds for
lending and other investment  purposes.  In addition to deposits,  principal and
interest payments on loans and investment securities are a source of funds. Loan
repayments are a relatively  stable source of funds,  while deposit  inflows and
outflows are significantly influenced by general interest rates and money market
conditions.  Borrowings may also be used on a short-term basis to compensate for
reductions in the  availability of funds from other sources and on a longer-term
basis for general business purposes.

      Deposits.  Deposits are  attracted  by the  Association  principally  from
Webster Parish. Deposit account terms vary, with the principal differences being
the minimum balance required,  the time periods the funds must remain on deposit
and the interest rate.


                                      -14-

<PAGE>

      The Association  obtains  deposits  primarily from residents of Louisiana.
The Association has not solicited  deposits from outside  Louisiana or paid fees
to brokers to solicit funds for deposit.

      Interest rates paid, maturity terms, service fees and withdrawal penalties
are established on a periodic basis.  Management  determines the rates and terms
based on rates  paid by  competitors,  the need for funds or  liquidity,  growth
goals and federal  regulations.  The Association attempts to control the flow of
deposits by pricing its accounts.

      The  following   table  shows  the   distribution  of  and  certain  other
information  relating  to the  Association's  deposits  by type as of the  dates
indicated.

<TABLE>
<CAPTION>
                                                              December 31,
                                              ------------------------------------------
                                                      2006                   2005
                                              --------------------   --------------------
                                                        Percent of             Percent of
                                              Amount     Deposits    Amount     Deposits
                                              ------    ----------   ------    ----------
                                                       (Dollars in Thousands)
<S>                                          <C>          <C>       <C>         <C>
      Transaction accounts:
        Demand deposits ..................   $ 13,766      18.23%   $ 14,244      20.11%
        Savings deposits .................     10,657      14.11      12,812      18.09
                                             --------     ------    --------     ------
          Total transaction accounts .....     24,423      32.34      27,056      38.20
                                             --------     ------    --------     ------
      Certificate accounts:
        2.00% - 2.99% ....................         78        .10       9,725      13.73
        3.00% - 3.99% ....................      6,061       8.03      26,139      36.91
        4.00% - 4.99% ....................     33,840      44.81       7,901      11.16
        5.00% - 5.99% ....................     11,121      14.72          --         --
                                             --------     ------    --------     ------
          Total certificate accounts .....     51,100      67.66      43,765      61.80
                                             --------     ------    --------     ------
          Total deposits .................   $ 75,523     100.00%   $ 70,821     100.00%
                                             ========     ======    ========     ======
</TABLE>

      The following  table sets forth the deposit  activities of the Association
during the periods indicated.

                                                         Year Ended December 31,
                                                       -------------------------
                                                           2006          2005
                                                       -----------   -----------
                                                             (In Thousands)
      Total deposits at beginning of period .........   $  70,821     $  70,665
      Deposits ......................................     303,344       267,438
      Withdrawals ...................................    (300,615)     (268,635)
                                                        ---------     ---------
      Net deposits ..................................      73,550        69,468
      Interest credited .............................       1,973         1,353
                                                        ---------     ---------
        Total deposits at end of period .............   $  75,523     $  70,821
                                                        =========     =========


                                      -15-

<PAGE>

      The following  table shows the interest rate and maturity  information for
the Association's certificates of deposit at December 31, 2006.

<TABLE>
<CAPTION>
                                                  Maturity Date
                 ------------------------------------------------------------------------------
Interest Rate    One Year or Less   Over 1 -2 Years   Over 2 -3 Years   Over 3 Years     Total
-------------    ----------------   ---------------   ---------------   ------------     -----
                                                 (In Thousands)
<S>                   <C>               <C>                <C>              <C>         <C>
2.00% - 2.99%         $      78         $      --          $    --          $   --      $    78
3.00% - 3.99%             6,003                58               --              --        6,061
4.00% - 4.99%            29,854             3,750              236              --       33,840
5.00% - 5.99%            11,017               104               --              --       11,121
                      ---------         ---------          -------          -------     -------
 Total                $  46,952         $   3,912          $   236          $   --      $51,100
                      =========         =========          =======          =======     =======
</TABLE>

      As of December 31, 2006, the aggregate amount of outstanding  certificates
of deposit at the Association in amounts greater than or equal to $100,000,  was
approximately $17.6 million.  The following table presents the maturity of these
time certificates of deposit at such date.

                                                                   December 31,
                                                                       2006
                                                                   ------------

                                                                  (In Thousands)

3 months  or less ................................................   $ 5,647
Over 3 months through 6 months ...................................     6,044
Over 6 months through 1 2 months .................................     4,716
Over 12 months ...................................................     1,166
                                                                     -------
                                                                     $17,573
                                                                     =======

      Borrowings. The Association may obtain advances from the Federal Home Loan
Bank of Dallas upon the  security  of the common  stock it owns in that bank and
certain  of  its  residential  mortgage  loans  and  mortgage-backed  and  other
investment  securities,  provided certain standards related to  creditworthiness
have been met. These advances are made pursuant to several credit programs, each
of which has its own interest  rate and range of  maturities.  Federal Home Loan
Bank advances are generally  available to meet seasonal and other withdrawals of
deposit accounts and to permit increased lending.

      As of December 31, 2006, the  Association was permitted to borrow up to an
aggregate total of $46.0 million from the Federal Home Loan Bank of Dallas.  The
Association  had $19.0  million  and $20.5  million  of  Federal  Home Loan Bank
advances  outstanding at December 31, 2006 and December 31, 2005,  respectively.
The  Association  has not utilized other types of borrowings  such as securities
sold under agreements to repurchase.


                                      -16-

<PAGE>

      The following  table shows certain  information  regarding the  short-term
borrowings of the Association at or for the dates indicated:

<TABLE>
<CAPTION>
                                                            At or for the Year Ended
                                                                   December 31,
                                                           --------------------------
                                                              2006            2005
                                                           ----------      ----------
                                                             (Dollars in Thousands)
<S>                                                          <C>            <C>
Federal Home Loan Bank advances:
   Average balance outstanding ...........................   $20,458        $21,377
   Maximum amount outstanding at any
      month-end during the period ........................   $22,000        $23,000
   Balance outstanding at end of period ..................   $19,000        $20,500
   Average interest rate during the period ...............      4.97%          3.25%
   Weighted average interest rate at end of period .......      5.19%          3.26%
</TABLE>


                                      -17-

<PAGE>

Subsidiaries

      At December 31, 2006, the Association had one subsidiary, Minden Services,
Inc., a real estate holding company. The subsidiary owned real estate located on
Homer Road, in Minden,  Louisiana  totaling  $923,000 at December 31, 2006.  The
Association  has sold a portion of this property.  This property was used as the
site for the Association's new headquarters office.

      Effective  as of January 1, 2006,  the  Company  purchased  all the common
stock of Woodard Walker Insurance  Agency,  Inc. (the "Agency"),  a property and
casualty insurance agency located in Minden, Louisiana,  resulting in the Agency
becoming a wholly owned subsidiary of the Company.  One of the principals of the
Agency is R.E.  Woodard,  III,  who is also a director  of the  Company  and the
Association.

Employees

      The Association had 21 full-time  employees and two part-time employees at
December 31,  2006.  None of these  employees  are  represented  by a collective
bargaining  agent,  and the  Association  believes that it enjoys good relations
with its personnel.

Market Area

      The Association  presently has two offices  located in Minden,  Louisiana,
which  are  located  approximately  31 miles  from  Shreveport,  Louisiana.  The
Association  moved its main office to 100 MBL Bank Drive on March 19, 2007,  and
made the office located at 415 Main its first branch. The Association's  primary
market area consists of Webster Parish,  Louisiana and is  predominantly  rural.
The economy in the Association's primary market area is fairly diversified, with
services,  wholesale and retail trade, manufacturing and government constituting
the  basis  of  the  economy.  The  largest  employer  in  Webster  Parish  is a
manufacturer of concrete modular facilities.

      The population of Webster  Parish in 2000 was  approximately  42,000.  The
population growth rate for Webster Parish has been slightly negative since 1990.
The  projected  population  growth  rate is less  than the  projected  rates for
Louisiana and the United States.  Average household income for Webster Parish is
below Louisiana and national averages.  The annual unemployment rate for Webster
Parish was 4.2% for 2006 as compared to the  overall  unemployment  rate for the
United States as of 2006 of 4.5%.

Competition

      The Association faces significant  competition both in attracting deposits
and in  making  loans.  Its  most  direct  competition  for  deposits  has  come
historically from commercial banks, credit unions and other savings institutions
located in its primary market area, including many large financial  institutions
which have greater  financial  and  marketing  resources  available to them.  In
addition,  the Association  faces  significant  competition for investors' funds
from short-term  money market  securities,  mutual funds and other corporate and
government securities. The Association does not


                                      -18-

<PAGE>

rely upon any individual group or entity for a material portion of its deposits.
The ability of the  Association  to attract and retain  deposits  depends on its
ability to generally provide a rate of return,  liquidity and risk comparable to
that offered by competing investment opportunities.

      The Association's competition for real estate loans comes principally from
mortgage banking  companies,  commercial banks,  other savings  institutions and
credit unions. The Association competes for loan originations  primarily through
the interest  rates and loan fees it charges,  and the efficiency and quality of
services it provides borrowers. Factors which affect competition include general
and local economic  conditions,  current  interest rate levels and volatility in
the mortgage  markets.  Competition  may increase as a result of the  continuing
reduction  of   restrictions   on  the   interstate   operations   of  financial
institutions.

                                   REGULATION

      The  following  discussion  of  certain  laws and  regulations  which  are
applicable to the Company,  the Association and the MHC, as well as descriptions
of laws and regulations  contained  elsewhere herein,  summarizes the aspects of
such laws and  regulations  which are deemed to be material to the Company,  the
Association  and the MHC.  However,  the summary does not purport to be complete
and  is  qualified  in  its  entirety  by  reference  to  applicable   laws  and
regulations.

Minden Bancorp, Inc.

      Holding  Company  Acquisitions.  The Company is a savings and loan holding
company  within the meaning of the Home Owners'  Loan Act, as amended  ("HOLA"),
and is registered with the Office of Thrift  Supervision.  Federal law generally
prohibits a savings and loan  holding  company,  without  prior Office of Thrift
Supervision  approval,  from  acquiring  the  ownership  or control of any other
savings   institution  or  savings  and  loan  holding   company,   or  all,  or
substantially  all, of the assets or more than 5% of the voting shares  thereof.
These provisions also prohibit, among other things, any director or officer of a
savings and loan holding  company,  or any  individual who owns or controls more
than 25% of the voting shares of such holding company, from acquiring control of
any savings  institution  not a  subsidiary  of such  savings  and loan  holding
company, unless the acquisition is approved by the Office of Thrift Supervision.

      The Office of Thrift  Supervision  may not  approve any  acquisition  that
would result in a multiple savings and loan holding company  controlling savings
institutions in more than one state, subject to two exceptions: (i) the approval
of interstate supervisory acquisitions by savings and loan holding companies and
(ii) the  acquisition  of a savings  institution in another state if the laws of
the  state  of  the  target  savings   institution   specifically   permit  such
acquisitions.  The states  vary in the extent to which  they  permit  interstate
savings and loan holding company acquisitions.

      Holding Company Activities.  The Company operates as a unitary savings and
loan  holding  company.  Under  prior law, a unitary  savings  and loan  holding
company was not generally  restricted as to the types of business  activities in
which it may engage, provided it continued to be a qualified


                                      -19-

<PAGE>

thrift  lender.  See  "  -  MBL  Bank  -  Qualified  Thrift  Lender  Test."  The
Gramm-Leach-Bliley  Act of 1999,  however,  restricts  unitary  savings and loan
holding  companies  not existing or applied for before May 4, 1999 to activities
permissible  for  financial  holding  companies  under  the law or for  multiple
savings  and loan  holding  companies.  The  Company  does not  qualify  for the
grandfather-clause  exemption and is limited to the activities  permissible  for
financial  holding companies or multiple savings and loan holding  companies.  A
financial holding company may engage in activities that are financial in nature,
incidental to financial  activities or complementary to a financial activity.  A
multiple  savings and loan holding  company is generally  limited to  activities
permissible for bank holding companies under Section 4(c)(8) of the Bank Holding
Company Act, subject to the prior approval of the Office of Thrift  Supervision,
and certain activities authorized by Office of Thrift Supervision regulation.

      Although  savings and loan holding  companies  are not subject to specific
capital  requirements  or specific  restrictions  on the payment of dividends or
other capital distributions,  federal regulations do prescribe such restrictions
on subsidiary  savings  institutions,  as described  below. The Association must
notify the Office of Thrift Supervision 30 days before declaring any dividend to
the  Company.  In addition,  the  financial  impact of a holding  company on its
subsidiary  institution  is a matter that is  evaluated  by the Office of Thrift
Supervision  and the agency has  authority to order  cessation of  activities or
divestiture of subsidiaries  deemed to pose a threat to the safety and soundness
of the institution. See "- MBL Bank - Capital Distributions."

      Restrictions  on  Transactions  With  Affiliates.  Transactions  between a
savings  institution  and its  "affiliates"  are  subject  to  quantitative  and
qualitative  restrictions  under Sections 23A and 23B of the Federal Reserve Act
and  Office  of  Thrift  Supervision   regulations.   Affiliates  of  a  savings
institution include,  among other entities,  the savings  institution's  holding
company and companies  that are  controlled by or under common  control with the
savings institution.

      In general,  the extent to which a savings institution or its subsidiaries
may engage in certain  "covered  transactions"  with affiliates is limited to an
amount equal to 10% of the  institution's  capital and  surplus,  in the case of
covered  transactions  with any one affiliate,  and to an amount equal to 20% of
such  capital  and  surplus,  in the  case  of  covered  transactions  with  all
affiliates.  In addition,  a savings institution and its subsidiaries may engage
in covered  transactions and certain other  transactions only on terms and under
circumstances  that are  substantially the same, or at least as favorable to the
savings  institution  or its  subsidiary,  as those  prevailing  at the time for
comparable transactions with nonaffiliated companies. A "covered transaction" is
defined to include a loan or extension of credit to an affiliate;  a purchase of
investment  securities  issued by an  affiliate;  a purchase  of assets  from an
affiliate,  with certain  exceptions;  the acceptance of securities issued by an
affiliate as collateral  for a loan or extension of credit to any party;  or the
issuance  of a  guarantee,  acceptance  or  letter  of  credit  on  behalf of an
affiliate.

      In addition, a savings institution may not:


                                      -20-

<PAGE>

      o     make a loan or  extension  of  credit  to an  affiliate  unless  the
            affiliate is engaged only in activities permissible for bank holding
            companies;

      o     purchase or invest in securities  of an affiliate  other than shares
            of a subsidiary;

      o     purchase a low-quality asset from an affiliate; or

      o     engage  in  covered  transactions  and  certain  other  transactions
            between a savings  institution or its  subsidiaries and an affiliate
            except on terms and  conditions  that are  consistent  with safe and
            sound banking practices.

With  certain  exceptions,  each  loan  or  extension  of  credit  by a  savings
institution  to an affiliate  must be secured by collateral  with a market value
ranging from 100% to 130% (depending on the type of collateral) of the amount of
the loan or extension of credit.

      Office of Thrift  Supervision  regulations  generally exclude all non-bank
and non-savings institution  subsidiaries of savings institutions from treatment
as affiliates, except to the extent that the Office of Thrift Supervision or the
Federal Reserve Board decides to treat such  subsidiaries as affiliates.  Office
of Thrift  Supervision  regulations also provide that certain classes of savings
institutions  may be  required  to give the Office of Thrift  Supervision  prior
notice of affiliate transactions.

      Waivers of Dividends by Minden Mutual  Holding  Company.  Office of Thrift
Supervision  regulations  require  the  MHC  to  notify  the  Office  of  Thrift
Supervision of any proposed waiver of its receipt of dividends from the Company.
The  Office  of  Thrift  Supervision   reviews  dividend  waiver  notices  on  a
case-by-case basis, and, in general,  does not object to any such waiver if: (i)
the mutual holding  company's board of directors  determines that such waiver is
consistent with such directors' fiduciary duties to the mutual holding company's
members; (ii) for as long as the savings association subsidiary is controlled by
the mutual holding company,  the dollar amount of dividends waived by the mutual
holding company are considered as a restriction to the retained  earnings of the
savings association,  which restriction, if material, is disclosed in the public
financial  statements  of the  savings  association  as a note to the  financial
statements;  (iii) the  amount of any  dividend  waived  by the  mutual  holding
company is available for  declaration as a dividend solely to the mutual holding
company, and, in accordance with Statement of Financial Accounting Standards No.
5, where the savings association determines that the payment of such dividend to
the mutual holding company is probable, an appropriate dollar amount is recorded
as a  liability;  and (iv) the amount of any waived  dividend is  considered  as
having been paid by the savings  association in evaluating any proposed dividend
under Office of Thrift Supervision capital  distribution  regulations.  To date,
the MHC has  requested  and received the  non-objection  of the Office of Thrift
Supervision  to its  annual  request  to waive  receipt  of  dividends  from the
Company.  The MHC  anticipates  that it will continue to waive dividends paid by
the Company. Under Office of Thrift Supervision regulations, public stockholders
would not be diluted because of any dividends waived by the MHC


                                      -21-

<PAGE>

(and waived  dividends  would not be considered in  determining  an  appropriate
exchange ratio) in the event the MHC converts to stock form.

      Federal Securities Laws. The Company's common stock is registered with the
SEC under Section 12(g) of the Securities  Exchange Act of 1934, as amended (the
"Exchange  Act").  The Company is subject to the proxy and tender  offer  rules,
insider  trading  reporting  requirements  and  restrictions,  and certain other
requirements  under the Exchange Act.  Pursuant to Office of Thrift  Supervision
regulations and the plan of stock issuance,  the Company agreed to maintain such
registration  for a minimum  of three  years  following  the  completion  of the
reorganization in July 2002.

      Shares of common  stock  purchased  by persons  who are not the  Company's
affiliates may be sold without  registration.  Shares purchased by the Company's
affiliates  are  subject  to the  resale  restrictions  of Rule  144  under  the
Securities  Act of 1933,  as amended  (the  "Securities  Act").  If the  Company
continues to meet the current public information  requirements of Rule 144 under
the Securities Act, each of the Company's affiliates who complies with the other
conditions  of Rule  144  will be able  to sell in the  public  market,  without
registration,  a number of shares not to exceed, in any three-month  period, the
greater of (a) 1% of the Company's  outstanding shares or (b) the average weekly
volume of trading in such shares during the preceding four calendar weeks.

Sarbanes-Oxley Act of 2002.

      On July 30, 2002, the President signed into law the  Sarbanes-Oxley Act of
2002  implementing   legislative  reforms  intended  to  address  corporate  and
accounting fraud. In addition to the establishment of a new accounting oversight
board which is empowered to enforce  auditing,  quality control and independence
standards,  the  Sarbanes-Oxley  Act  restricts  provision of both  auditing and
consulting  services by accounting  firms. To ensure auditor  independence,  any
non-audit services being provided to an audit client require pre-approval by the
company's  audit  committee  members.  In addition,  the audit  partners must be
rotated.  The  Sarbanes-Oxley  Act requires chief  executive  officers and chief
financial officers, or their equivalent,  to certify to the accuracy of periodic
reports  filed with the SEC,  subject to civil and  criminal  penalties  if they
knowingly or  willfully  violate this  certification  requirement.  In addition,
under the  Sarbanes-Oxley  Act,  attorneys are required to report  evidence of a
material  violation of the  securities  laws or a breach of fiduciary  duty by a
company to its chief executive officer or its chief legal officer,  and, if such
officer does not  appropriately  respond,  to report such  evidence to the audit
committee  or other  similar  committee  of the board of  directors or the board
itself.

      Longer prison terms were  legislated for corporate  executives who violate
federal  securities  laws, the period during which certain types of suits can be
brought against a company or its officers has been extended,  and bonuses issued
to top executives prior to restatement of a company's  financial  statements are
now subject to disgorgement if such restatement was due to corporate misconduct.
Executives are also prohibited from insider trading during retirement plan


                                      -22-

<PAGE>

"blackout"  periods,  and loans to  company  executives  are  restricted  except
certain  loans  made  by  insured  financial  institutions  in  compliance  with
Regulation O. In addition,  a provision  directs that civil penalties  levied by
the  SEC  as a  result  of any  judicial  or  administrative  action  under  the
Sarbanes-Oxley  Act be deposited to a fund for the benefit of harmed  investors.
The Federal Accounts for Investor Restitution (FAIR) provision also requires the
SEC  to  develop  methods  of  improving   collection   rates.  The  legislation
accelerates the time frame for disclosures by public  companies for any material
changes in their  financial  condition or  operations  and certain other events.
Directors and executive officers must also provide  information for most changes
in ownership in a company's securities within two business days of the change.

      The  Sarbanes-Oxley  Act also  increases  the  oversight  of, and codifies
certain  requirements  relating to audit  committees of public companies and how
they interact with the company's  "registered  public  accounting  firm" (RPAF).
Audit  Committee  members  of  companies  that have  listed  securities  must be
independent  and  are  barred  from  accepting  consulting,  advisory  or  other
compensatory fees from the issuer. In addition,  companies must disclose whether
at least one member of the  committee is a  "financial  expert," as such term is
defined by the SEC, and if not, why not. Under the Sarbanes-Oxley Act, a RPAF is
prohibited from performing  statutorily mandated audit services for a company if
such company's chief executive officer,  chief financial  officer,  comptroller,
chief accounting officer or any person serving in equivalent  positions has been
employed by such firm and  participated  in the audit of such company during the
one-year period preceding the audit initiation date. The Sarbanes-Oxley Act also
prohibits  any officer or director of a company or any other person acting under
their  direction  from  taking any  action to  fraudulently  influence,  coerce,
manipulate or mislead any independent public or certified  accountant engaged in
the audit of the company's financial statements for the purpose of rendering the
financial statement's  materially  misleading.  The Sarbanes-Oxley Act also will
require  inclusion of an internal control report and assessment by management in
the annual report to shareholders. The Sarbanes-Oxley Act requires the RPAF that
issues the audit report to attest to and report on  management's  assessment  of
the company's  internal controls.  In addition,  the Sarbanes-Oxley Act requires
that each  financial  report  required  to be prepared in  accordance  with,  or
reconciled to, generally accepted  accounting  principles and filed with the SEC
reflect all material  correcting  adjustments  that are  identified by a RPAF in
accordance  with  generally  accepted  accounting  principles  and the rules and
regulations of the SEC.

MBL Bank

      General. As part of the reorganization,  the Association  converted from a
Louisiana-chartered    mutual    building    and   loan    association    to   a
Louisiana-chartered stock building and loan association. The Louisiana Office of
Financial Institutions is the Association's  chartering authority and the Office
of Thrift Supervision is its primary federal regulator.  The Louisiana Office of
Financial  Institutions  and the  Office of Thrift  Supervision  have  extensive
authority over the operations of  Louisiana-chartered  savings institutions.  As
part of this authority, Louisiana-chartered savings institutions are required to
file periodic  reports with the Louisiana  Office of Financial  Institutions and
the Office of Thrift Supervision and are subject to periodic examinations by the
Louisiana Office of Financial Institutions, the Office of Thrift Supervision and
the Federal Deposit  Insurance  Corporation  ("FDIC").  The Association  also is
subject to regulation by the FDIC and to


                                      -23-

<PAGE>

requirements  established  by the Federal  Reserve  Board.  The  investment  and
lending  authority of savings  institutions  are  prescribed by federal laws and
regulations,   and  such  institutions  are  prohibited  from  engaging  in  any
activities  not  permitted by such laws and  regulations.  Such  regulation  and
supervision  is primarily  intended for the  protection  of  depositors  and the
Deposit Insurance Fund ("DIF") administered by the FDIC.

      The Office of Thrift Supervision's  enforcement authority over all savings
institutions  and their holding  companies  includes,  among other  things,  the
ability to assess  civil money  penalties,  to issue cease and desist or removal
orders and to initiate injunctive actions. In general, these enforcement actions
may be initiated for  violations of laws and  regulations  and unsafe or unsound
practices.  Other  actions or  inactions  may provide the basis for  enforcement
action, including misleading or untimely reports filed with the Office of Thrift
Supervision.

      Insurance of Accounts.  The deposits of the Association are insured to the
maximum extent  permitted by the DIF, which is administered by the FDIC, and are
backed by the full faith and credit of the U.S. Government. As insurer, the FDIC
is  authorized  to  conduct  examinations  of,  and  to  require  reporting  by,
FDIC-insured  institutions.  It also may prohibit any  FDIC-insured  institution
from engaging in any activity the FDIC determines by regulation or order to pose
a serious  threat  to the FDIC.  The FDIC  also has the  authority  to  initiate
enforcement  actions  against savings  institutions,  after giving the Office of
Thrift Supervision an opportunity to take such action.

      Under  regulations  effective  January  1,  2007,  the FDIC  adopted a new
risk-based  premium system that provides for quarterly  assessments  based on an
insured  institution's  ranking  in one  of  four  risk  categories  based  upon
supervisory and capital evaluations.  Well-capitalized  institutions  (generally
those with CAMELS  composite  ratings of 1 or 2) are grouped in Risk  Category I
and assessed  for deposit  insurance at an annual rate of between five and seven
basis points.  The assessment  rate for an individual  institution is determined
according  to a  formula  based  on a  weighted  average  of  the  institution's
individual CAMEL component  ratings plus either five financial ratios or, in the
case of an institution with assets of $10.0 billion or more, the average ratings
of its long-term  debt.  Institutions in Risk Categories II, III and IV assessed
at annual rates of 10, 28 and 43 basis points, respectively.

      In addition to the  assessment  for deposit  insurance,  institutions  are
required  to make  payments on bonds  issued in the late 1980s by the  Financing
Corporation, a federal agency established to recapitalize the predecessor to the
DIF.  Since  January  1,  2000,  there  has  been  equal  sharing  of  Financing
Corporation  payments  between members of both insurance  funds.  The assessment
will continue until the Financing Corporation's bonds mature in 2019.

      The FDIC may  terminate  the deposit  insurance of any insured  depository
institution,  including the  Association,  if it determines after a hearing that
the institution has engaged or is engaging in unsafe or unsound practices, is in
an unsafe or unsound  condition  to continue  operations,  or has  violated  any
applicable law, regulation,  order or any condition imposed by an agreement with
the FDIC. It also may suspend deposit insurance  temporarily  during the hearing
process for the permanent  termination of insurance,  if the  institution has no
tangible  capital.  If insurance of accounts is terminated,  the accounts at the
institution at the time of the termination,  less subsequent withdrawals,  shall
continue to be insured for a period of six months to two years, as determined by


                                      -24-

<PAGE>

the FDIC. Management is aware of no existing circumstances which would result in
termination of the Association's deposit insurance.

      On February 8, 2006, the President signed into law legislation that merged
the Bank  Insurance  Fund  ("BIF") and the Savings  Association  Insurance  Fund
("SAIF")  to form  the  DIF,  eliminated  any  disparities  in bank  and  thrift
risk-based premium assessments, reduced the administrative burden of maintaining
and operating two separate funds and established  certain new insurance coverage
limits and a mechanism for possible  periodic  increases.  The legislation  also
gave the FDIC greater discretion to identify the relative risks all institutions
present to the deposit insurance fund and set risk-based premiums.

            Major provisions in the legislation include:

            o     Maintaining  basic  deposit and  municipal  account  insurance
                  coverage at $100,000 but providing  for a new basic  insurance
                  coverage  for  retirement  accounts  of  $250,000.   Insurance
                  coverage for basic deposit and  retirement  accounts  could be
                  increased for inflation every five years in $10,000 increments
                  beginning in 2011.

            o     Providing  the FDIC  with the  ability  to set the  designated
                  reserve  ratio  within a range of  between  1.15%  and  1.50%,
                  rather  than  maintaining  1.25% at all  times  regardless  of
                  prevailing economic conditions.

            o     Providing  a  one-time  assessment  credit of $4.7  billion to
                  banks and savings  associations  in  existence on December 31,
                  1996. The institutions qualifying for the credit may use it to
                  offset future premiums with certain limitations.

            o     Requiring  the payment of dividends of 100% of the amount that
                  the  insurance  fund  exceeds  1.5% of the  estimated  insured
                  deposits  and  the  payment  of  50% of the  amount  that  the
                  insurance   fund  exceeds  1.35%  of  the  estimated   insured
                  deposits.  (when the reserve is greater than 1.35% but no more
                  than 1.5%).

            o     Merging of the SAIF and BIF which became  effective  March 31,
                  2006.

      Regulatory Capital  Requirements.  Federally insured savings  institutions
are required to maintain  minimum  levels of regulatory  capital.  The Office of
Thrift Supervision has established  capital standards  applicable to all savings
institutions.  These standards  generally must be as stringent as the comparable
capital requirements imposed on national banks. The Office of Thrift Supervision
also is authorized to impose capital  requirements  in excess of these standards
on individual institutions on a case-by-case basis.


                                      -25-

<PAGE>

      Current Office of Thrift  Supervision  capital  standards  require savings
institutions to satisfy three different capital requirements:

            o     "tangible"  capital  equal to at least 1.5% of adjusted  total
                  assets,

            o     "core"  capital  equal  to at  least  3.0% of  adjusted  total
                  assets, and

            o     "total"  capital (a  combination  of core and  "supplementary"
                  capital) equal to at least 8.0% of "risk-weighted" assets.

      Core capital generally consists of common  stockholders' equity (including
retained  earnings).  Tangible  capital  generally  equals  core  capital  minus
intangible  assets,  with  only  a  limited  exception  for  purchased  mortgage
servicing rights. The Association had no intangible assets at December 31, 2006.
Both core and  tangible  capital  are  further  reduced by an amount  equal to a
savings  institution's  debt and equity  investments in subsidiaries  engaged in
activities not permissible to national banks (other than subsidiaries engaged in
activities  undertaken as agent for customers or in mortgage banking  activities
and  subsidiary  depository  institutions  or their  holding  companies).  These
adjustments do not affect the Association's regulatory capital.

      In determining  compliance  with the  risk-based  capital  requirement,  a
savings  institution  is allowed to include both core capital and  supplementary
capital in its total capital,  provided that the amount of supplementary capital
included does not exceed the savings  institution's core capital.  Supplementary
capital generally consists of general allowances for loan losses up to a maximum
of  1.25% of  risk-weighted  assets,  together  with  certain  other  items.  In
determining the required amount of risk-based capital,  total assets,  including
certain  off-balance  sheet items,  are multiplied by a risk weight based on the
risks  inherent in the type of assets.  The risk weights  range from 0% for cash
and securities issued by the U.S.  Government or  unconditionally  backed by the
full  faith and  credit of the U.S.  Government  to 100% for loans  (other  than
qualifying residential loans weighted at 80%) and repossessed assets.

      Savings institutions must value securities available for sale at amortized
cost for regulatory  capital purposes.  This means that in computing  regulatory
capital,  savings  institutions should add back any unrealized losses and deduct
any unrealized  gains,  net of income taxes,  on debt  securities  reported as a
separate component of GAAP capital.

      At December  31, 2006,  the  Association  exceeded  all of its  regulatory
capital requirements, with tangible, core and total risk-based capital ratios of
15.91%, 15.91% and 29.18%, respectively.

      Any  savings  institution  that fails any of the capital  requirements  is
subject to possible  enforcement  actions by the Office of Thrift Supervision or
the FDIC.  Such actions  could include a capital  directive,  a cease and desist
order,  civil  money  penalties,   the  establishment  of  restrictions  on  the
institution's  operations,  termination  of federal  deposit  insurance  and the
appointment  of a conservator  or receiver.  The Office of Thrift  Supervision's
capital regulation provides that such


                                      -26-

<PAGE>

actions, through enforcement proceedings or otherwise, could require one or more
of a variety of corrective actions.

      Prompt Corrective  Action. The following table shows the amount of capital
associated  with the  different  capital  categories  set  forth  in the  prompt
corrective action regulations.

<TABLE>
<CAPTION>
                                        Total                Tier 1               Tier 1
Capital Category                 Risk -Based Capital   Risk -Based Capital   Leverage Capital
----------------                 -------------------   -------------------   ----------------
<S>                                 <C>                   <C>                  <C>
Well capitalized                     10% or more           6% or more           5% or more

Adequately capitalized               8% or more            4% or more           4% or more

Undercapitalized                    Less than 8%          Less than 4%         Less than 4%

Significantly undercapitalized      Less than 6%          Less than 3%         Less than 3%
</TABLE>

      In addition,  an institution is "critically  undercapitalized" if it has a
ratio of  tangible  equity to total  assets  that is equal to or less than 2.0%.
Under  specified  circumstances,  a federal banking agency may reclassify a well
capitalized  institution as adequately capitalized and may require an adequately
capitalized  institution  or an  undercapitalized  institution  to  comply  with
supervisory  actions as if it were in the next lower  category  (except that the
FDIC  may  not  reclassify  a  significantly   undercapitalized  institution  as
critically undercapitalized).

      An institution  generally  must file a written  capital  restoration  plan
which  meets  specified  requirements  within  45  days  of the  date  that  the
institution   receives   notice  or  is  deemed  to  have   notice  that  it  is
undercapitalized, significantly undercapitalized or critically undercapitalized.
A federal  banking  agency must provide the  institution  with written notice of
approval or  disapproval  within 60 days after  receiving a capital  restoration
plan,  subject to extensions by the agency.  An institution which is required to
submit a  capital  restoration  plan  must  concurrently  submit  a  performance
guaranty  by  each  company  that   controls  the   institution.   In  addition,
undercapitalized  institutions are subject to various  regulatory  restrictions,
and the  appropriate  federal  banking  agency  also  may  take  any  number  of
discretionary supervisory actions.

      At December  31, 2006,  the  Association  was deemed a "well  capitalized"
institution for purposes of the above  regulations and as such is not subject to
the above mentioned restrictions.

      Safety and Soundness Guidelines.  The Office of Thrift Supervision and the
other  federal  banking  agencies  have  established  guidelines  for safety and
soundness,   addressing  operational  and  managerial  standards,   as  well  as
compensation matters for insured financial institutions. Institutions failing to
meet  these  standards  are  required  to  submit   compliance  plans  to  their
appropriate federal  regulators.  The Office of Thrift Supervision and the other
agencies have also established  guidelines  regarding asset quality and earnings
standards  for insured  institutions.  The  Association  believes  that it is in
compliance with these guidelines and standards.


                                      -27-

<PAGE>

      Liquidity.  All savings institutions are required to maintain a sufficient
amount of liquid assets to ensure their safe and sound operation.

      Capital  Distributions.  Office of Thrift  Supervision  regulations govern
capital  distributions  by savings  institutions,  which include cash dividends,
stock  repurchases  and other  transactions  charged to the capital account of a
savings  institution to make capital  distributions.  A savings institution must
file an  application  for Office of Thrift  Supervision  approval of the capital
distribution  if either (1) the total capital  distributions  for the applicable
calendar  year exceed the sum of the  institution's  net income for that year to
date plus the institution's retained net income for the preceding two years, (2)
the  institution  would not be at least  adequately  capitalized  following  the
distribution,  (3)  the  distribution  would  violate  any  applicable  statute,
regulation,  agreement or Office of Thrift Supervision-imposed condition, or (4)
the  institution is not eligible for expedited  treatment of its filings.  If an
application  is not  required  to be  filed,  a savings  institution  which is a
subsidiary of a holding  company (as well as certain other  institutions)  still
must file a notice with the Office of Thrift Supervision at least 30 days before
the board of directors declares a dividend or approves a capital distribution.

      Community Reinvestment Act and the Fair Lending Laws. Savings institutions
have a responsibility  under the Community  Reinvestment Act of 1977 ("CRA") and
related  regulations of the Office of Thrift Supervision to help meet the credit
needs of their communities,  including low-and moderate-income neighborhoods. In
addition,  the Equal Credit  Opportunity Act and the Fair Housing Act (together,
the "Fair Lending Laws") prohibit lenders from  discriminating  in their lending
practices  on the  basis of  characteristics  specified  in those  statutes.  An
institution's  failure to comply with the provisions of CRA could, at a minimum,
result in regulatory restrictions on its activities.  Failure to comply with the
Fair Lending Laws could  result in  enforcement  actions by the Office of Thrift
Supervision,  as well as other federal regulatory agencies and the Department of
Justice.

      Qualified  Thrift Lender Test.  All savings  institutions  are required to
meet a qualified  thrift lender,  or QTL, test to avoid certain  restrictions on
their operations.  A savings  institution can comply with the QTL test by either
qualifying  as a  domestic  building  and loan  association  as  defined  in the
Internal  Revenue  Code or meeting the second prong of the QTL test set forth in
the HOLA, as described  below. A savings  institution that does not meet the QTL
test  must  either  convert  to a bank  charter  or  comply  with the  following
restrictions on its operations:

      o     the  institution  may not engage in any new activity or make any new
            investment,  unless such activity or investment is permissible for a
            national bank;

      o     the branching powers of the institution shall be restricted to those
            of a national bank;

      o     the  institution  shall not be eligible  to obtain any new  advances
            from its  FHLB,  other  than  special  liquidity  advances  with the
            approval of the Office of Thrift Supervision; and


                                      -28-

<PAGE>

      o     payment  of  dividends  by the  institution  shall be subject to the
            rules regarding payment of dividends by a national bank.

Upon the expiration of three years from the date the savings  institution ceases
to be a QTL,  it must  cease any  activity  and not retain  any  investment  not
permissible  for a national  bank and  immediately  repay any  outstanding  FHLB
advances (subject to safety and soundness considerations).

      Currently,  the prong of the QTL test  that is not  based on the  Internal
Revenue  Code  requires  that 65% of an  institution's  "portfolio  assets"  (as
defined)  consist of certain  housing and  consumer-related  assets on a monthly
average basis in nine out of every 12 months.  Assets that qualify without limit
for inclusion as part of the 65% requirement include:

      o     loans  made to  purchase,  refinance,  construct,  improve or repair
            domestic residential housing;

      o     home equity loans;

      o     most mortgage-backed securities;

      o     stock issued by one of the 12 FHLBs; and

      o     direct or indirect obligations of the FDIC.

In addition,  the following assets, among others, may be included in meeting the
test subject to an overall limit of 20% of the savings  institution's  portfolio
assets: 50% of residential  mortgage loans originated and sold within 90 days of
origination;  100% of consumer loans (limited to 10% of total portfolio assets);
and stock issued by Freddie Mac or Fannie Mae. Portfolio assets consist of total
assets minus the sum of (1) goodwill and other intangible  assets,  (2) property
used by the savings  institution to conduct its business,  and (3) liquid assets
up to 20% of the institution's total assets. At December 31, 2006, the qualified
thrift investments of the Association were approximately 72.61% of its portfolio
assets.

      Privacy Requirements of the Gramm-Leach-Bliley Act. The Gramm-Leach-Bliley
Act of 1999 provided for sweeping financial  modernization for commercial banks,
savings  banks,  securities  firms,  insurance  companies,  and other  financial
institutions  operating  in the  United  States.  Among  other  provisions,  the
Gramm-Leach-Bliley  Act places  limitations on the sharing of consumer financial
information    with    unaffiliated    third    parties.    Specifically,    the
Gramm-Leach-Bliley  Act requires all financial  institutions  offering financial
products or services to retail  customers  to provide  such  customers  with the
financial   institution's   privacy   policy  and  provide  such  customers  the
opportunity to "opt out" of the sharing of personal  financial  information with
unaffiliated third parties.

      Anti-Money  Laundering.  On October 26, 2001, in response to the events of
September  11,  2001,  the  President of the United  States  signed into law the
Uniting and  Strengthening  America by Providing  Appropriate  Tools Required to
Intercept  and Obstruct  Terrorism  Act of 2001  (referred to as the USA PATRIOT
Act).  The  USA  PATRIOT  Act  significantly  expands  the  responsibilities  of
financial institutions,  including savings and loan associations,  in preventing
the use of the U.S. financial system to fund terrorist activities.  Title III of
the USA PATRIOT Act provides for a significant  overhaul of the U.S.  anti-money
laundering regime.  Among other provisions,  it requires financial  institutions
operating in the United States to develop new anti-money  laundering  compliance
programs,  due  diligence  policies  and  controls to ensure the  detection  and
reporting  of  money  laundering.  Such  compliance  programs  are  intended  to
supplement  existing  compliance  requirements,  also  applicable  to  financial
institutions,  under  the Bank  Secrecy  Act and the  Office of  Foreign  Assets
Control Regulations.  The Association has established policies and procedures to
ensure compliance with the USA PATRIOT Act's  provisions,  and the impact of the
USA PATRIOT Act on its operations has not been material.

      Federal Home Loan Bank System.  The Association is a member of the FHLB of
Dallas,  which is one of 12 regional FHLBs that  administers  the home financing
credit  function  of  savings  institutions.  Each FHLB  serves as a reserve  or
central bank for its members within its assigned region.  It is funded primarily
from  proceeds  derived from the sale of  consolidated  obligations  of the FHLB
System.  It makes loans to members (i.e.,  advances) in accordance with policies
and  procedures  established  by the Board of Directors of the FHLB. At December
31, 2006, the Association had $19.0 million of FHLB advances.

      As a member, the Association is required to purchase and maintain stock in
the FHLB of  Dallas in an amount  equal to at least 1% of its  aggregate  unpaid
residential mortgage loans or similar obligations at the beginning of each year.
At December 31, 2006, the Association had $1.2 million in FHLB stock,  which was
in compliance with this requirement.


                                      -29-

<PAGE>

      The FHLBs are  required to provide  funds for the  resolution  of troubled
savings  institutions  and to contribute to affordable  housing programs through
direct loans or interest subsidies on advances targeted for community investment
and  low-  and  moderate-income  housing  projects.   These  contributions  have
adversely  affected the level of FHLB dividends paid in the past and could do so
in the  future.  These  contributions  also could have an adverse  effect on the
value of FHLB stock in the future.

      Federal Reserve System.  The Federal Reserve Board requires all depository
institutions to maintain reserves against their transaction  accounts (primarily
NOW and Super NOW checking  accounts) and  non-personal  time deposits.  Because
required   reserves  must  be  maintained  in  the  form  of  vault  cash  or  a
noninterest-bearing  account  at a  Federal  Reserve  Bank,  the  effect of this
reserve  requirement is to reduce an institution's  earning assets.  At December
31, 2006, the Association met its reserve requirement.

      Louisiana  Regulation.   As  a   Louisiana-chartered   building  and  loan
association,  the  Association  also is subject to regulation and supervision by
the Louisiana Office of Financial  Institutions.  The Association is required to
file periodic reports with and is subject to periodic examinations at least once
every four years by the Louisiana Office of Financial Institutions. In addition,
the  Association  is required by Louisiana  law and  regulations  to comply with
certain reserve and capital requirements.  At December 31, 2006, the Association
was in compliance with all applicable reserve and capital requirements.

      Louisiana law and  regulations  also  restrict the lending and  investment
authority of Louisiana chartered savings institutions. Such laws and regulations
restrict the amount a Louisiana-chartered building and loan association can lend
to any one borrower to an amount which,  in the  aggregate,  does not exceed the
lesser of (i) 10% of the  association's  savings deposits or (ii) the sum of the
association's  paid-in  capital,  surplus,  reserves for losses,  and  undivided
profits.  Federal regulations,  however,  impose more restrictive limitations on
loans to one borrower. See "Business - Lending Activities."  Notwithstanding the
foregoing, Louisiana and federal law permits any such association to lend to any
one borrower an aggregate amount of at least $500,000.

      In addition,  Louisiana law  restricts the ability of  Louisiana-chartered
building and loan associations to invest in, among other things,  (i) commercial
real estate loans (including  commercial  construction  real estate loans) up to
40%  of  total  assets;   (ii)  real  estate  investments  for  other  than  the
association's  offices  up  to  10%  of  total  assets;  (iii)  consumer  loans,
commercial  paper and corporate debt securities up to 30% of total assets;  (iv)
commercial, corporate, business or agricultural loans up to 10% of total assets;
(v) tangible movable property, or leases thereon, up to 10% of total assets; and
(v) capital stock,  obligations and other securities of service organizations up
to 10% of total  assets.  Louisiana  law also sets forth  maximum  loan-to-value
ratios with respect to various types of loans.  Applicable  federal  regulations
impose  more  restrictive  limitations  in certain  instances.  See  "Business -
Lending Activities."

      The  investment  authority  of   Louisiana-chartered   building  and  loan
associations  is  broader  in many  respects  than that of  federally  chartered
savings associations. However, state-chartered savings associations, such as the
Association,  are generally  prohibited  from  acquiring or retaining any equity
investment, other than certain investments in service corporations, of a type or
in  an  amount  that  is  not  permitted  for  a  federally   chartered  savings
association. This prohibition applies to equity investments in


                                      -30-

<PAGE>

real estate  (except those held through a service  corporation  or subsidiary of
the  Association),  investments in equity securities and any other investment or
transaction that is in substance an equity  investment,  even if the transaction
is nominally a loan or other permissible transaction.  At December 31, 2006, the
Association was in compliance with such provisions.

      Furthermore,  state-chartered  savings  associations  may  not  engage  as
principal in any activity not permitted for federal associations unless the FDIC
has determined that such activity would pose no significant risk to the affected
deposit  insurance  fund and the  association  is in  compliance  with the fully
phased-in capital standards prescribed under federal  regulations.  When certain
activities are permissible for a federal association,  the state association may
engage in the activity in a higher  amount if the FDIC has not  determined  that
such  activity  would pose a  significant  risk of loss to the affected  deposit
insurance  fund  and  the  association   meets  the  fully   phased-in   capital
requirements.  This increased investment authority does not apply to investments
in  nonresidential  real estate loans. At December 31, 2006, the Association had
no investments which were affected by the foregoing limitations.

      Under Louisiana law, a  Louisiana-chartered  building and loan association
may  establish  or maintain a branch  office  anywhere in  Louisiana  with prior
regulatory approval.  In addition, an out-of-state building and loan association
or  holding  company  may  acquire  a  Louisiana-chartered   building  and  loan
association or holding company if the Louisiana Office of Financial Institutions
determines  that  the laws of such  other  state  permit  a  Louisiana-chartered
building and loan  association or holding company to acquire a building and loan
association or holding company in such other state. Any such  acquisition  would
require the  out-of-state  entity to apply to the Louisiana  Office of Financial
Institutions  and  receive  approval  from the  Louisiana  Office  of  Financial
Institutions.

Minden Mutual Holding Company

      The MHC is a federal mutual holding  company within the meaning of Section
10(o) of the HOLA. As such, the MHC is registered  with and subject to Office of
Thrift  Supervision  examination  and  supervision as well as certain  reporting
requirements.  In addition,  the Office of Thrift  Supervision  has  enforcement
authority  over the MHC and its  non-savings  bank  subsidiaries,  if any. Among
other  things,  this  authority  permits  the  Office of Thrift  Supervision  to
restrict or prohibit  activities that are determined to be a serious risk to the
financial safety,  soundness or stability of a subsidiary  savings bank. The MHC
is subject to the same  activities  limitations to which the Company is subject.
See " - Minden Bancorp, Inc."

                                    TAXATION

Federal Taxation

      General.  The Company and the Association are subject to the corporate tax
provisions  of the Internal  Revenue  Code,  and the  Association  is subject to
certain additional provisions which apply to thrift and other types of financial
institutions. The following discussion of federal taxation is intended only to


                                      -31-

<PAGE>

summarize  certain pertinent federal income tax matters relevant to the taxation
of the Company and the Association and is not a comprehensive  discussion of the
tax rules applicable to the Company and the Association.

      Fiscal Year. The Association  currently reports its income and expenses on
the accrual  method of  accounting  and uses a tax year  ending  December 31 for
filing its federal income tax returns.

      Bad Debt Reserves.  In August 1997,  legislation was enacted that repealed
the reserve  method of accounting  (including  the  percentage of taxable income
method) previously used by many savings institutions to calculate their bad debt
reserve for federal income tax purposes.  Savings institutions with $500 million
or less in assets may,  however,  continue  to use the  experience  method.  The
Association  must recapture that portion of its reserve which exceeds the amount
that could have been taken under the experience  method for post-1987 tax years.
At December 31, 2006, the Association did not have any post1987 excess reserves.
The legislation also requires savings  institutions to account for bad debts for
federal income tax purposes on the same basis as commercial  banks for tax years
beginning  after  December  31,  1995.  This  change in  accounting  method  and
recapture  of  excess  bad  debt  reserves  is  adequately  provided  for in the
Association's deferred tax liability.

      At December 31, 2006, the federal  income tax reserves of the  Association
included $1.3 million for which no federal income tax has been provided. Because
of these federal income tax reserves,  the retained  earnings of the Association
are substantially restricted.

      Distributions.  If the Association  were to distribute cash or property to
its stockholders, and the distribution was treated as being from its accumulated
bad  debt  reserves,  the  distribution  would  cause  the  Association  to have
additional  taxable income. A distribution is from accumulated bad debt reserves
if (a) the reserves  exceed the amount that would have been  accumulated  on the
basis of actual loss  experience,  and (b) the  distribution is a "non-qualified
distribution."  A  distribution   with  respect  to  stock  is  a  non-qualified
distribution to the extent that, for federal income tax purposes,

      o     it is in redemption of shares,

      o     it is pursuant to a liquidation of the institution, or

      o     in the case of a current distribution,  together with all other such
            distributions  during the taxable year, it exceeds the institution's
            current and post-1951 accumulated earnings and profits.

The amount of additional taxable income created by a non-qualified  distribution
is an amount  that when  reduced by the tax  attributable  to it is equal to the
amount of the distribution.

      Minimum Tax. The Internal Revenue Code imposes an alternative  minimum tax
at a rate of 20%. The  alternative  minimum tax  generally  applies to a base of
regular taxable income plus certain tax


                                      -32-

<PAGE>

preferences  ("alternative  minimum taxable income" or "AMTI") and is payable to
the extent such AMTI is in excess of an exemption  amount.  Tax preference items
include the following:

      o     depreciation, and

      o     75% of the excess (if any) of

            (1)   adjusted  current  earnings as defined in the Internal Revenue
                  Code, over

            (2)   AMTI determined without regard to this preference and prior to
                  reduction by net operating losses.

      Capital Gains and Corporate  Dividends-Received  Deduction.  Corporate net
capital gains are taxed at a maximum rate of 34%.  Corporations which own 20% or
more of the stock of a corporation distributing a dividend may deduct 80% of the
dividends  received.  Corporations  which  own less  than 20% of the  stock of a
corporation  distributing  a dividend may deduct 70% of the dividends  received.
However,  a  corporation  that  receives  dividends  from a  member  of the same
affiliated group of corporations may deduct 100% of the dividends received.

      Other Matters.  Federal  legislation is introduced  from time to time that
would  limit the  ability of  individuals  to deduct  interest  paid on mortgage
loans.  Individuals  are currently not permitted to deduct  interest on consumer
loans.  Significant  increases  in tax  rates  or  further  restrictions  on the
deductibility of mortgage interest could adversely affect the Association.

      The Association's federal income tax returns for the tax years ended 2006,
2005 and 2004 are open  under the  statute  of  limitations  and are  subject to
review by the IRS. The Association has not been audited by the Internal  Revenue
Service during the last five years.

State Taxation

      The Company is subject to the  Louisiana  Corporation  Income Tax based on
the Company's  Louisiana taxable income.  The Corporation  Income Tax applies at
graduated rates from 4% upon the first $25,000 of Louisiana taxable income to 8%
on all  Louisiana  taxable  income in excess of  $200,000.  For these  purposes,
"Louisiana  taxable  income"  means net  income  which is earned by the  Company
within or derived from sources within the State of Louisiana,  after adjustments
permitted  under  Louisiana law,  including a federal  income tax deduction.  In
addition,  the  Association  is  subject  to the  Louisiana  Shares Tax which is
imposed on the assessed value of a company's stock. The formula for deriving the
assessed value is to calculate 15% of the sum of:

      (a)   20% of the company's capitalized earnings, plus

      (b)   80% of the company's taxable stockholders' equity, minus


                                      -33-

<PAGE>

      (c)   50% of the company's real and personal property assessment.

Various  items may also be subtracted  in  calculating  a company's  capitalized
earnings.  The Company paid $141,000 in Louisiana  Shares Tax for the year ended
December 31, 2006.


                                      -34-

<PAGE>

Item 2. Description of Property.
--------------------------------

Properties

      Subsequent  to  December  31,  2006,  the   Association   opened  its  new
headquarters office as discussed below.

      The  following  table  sets  forth  certain  information  relating  to the
Association's offices at December 31, 2006.

<TABLE>
<CAPTION>
                                             Lease      Net Book Value of
                                Owned or   Expiration      Property at          Deposits at
Location                         Leased       Date      December 31, 2006    December 31, 2006
--------------------------      --------   ----------   -----------------    -----------------
                                                                   (In Thousands)
<S>                              <C>           <C>          <C>                  <C>
415 Main Street (1)              Owned         NA           $  1,945             $  75,523
Minden, Louisiana
</TABLE>

      (1) Includes the adjacent parking lot.

      During 2004, the Association's  subsidiary acquired property on Homer Road
in Minden,  Louisiana for further expansion  purposes at a cost of approximately
$750,000.  As of  December  31,  2006,  the  total  cost  of  the  property  was
approximately  $923,000. The Association completed building a new main office at
an approximate cost of $4.0 million.  The Association  moved to the new location
located on Homer Road  Property  at 100 MBL Bank Drive on March 19, 2007 and the
415 Main Street  location  was  converted  into a branch.  In  conjunction  with
establishing the new location,  the Association obtained regulatory approval and
began using its new name "MBL Bank".

Item 3. Legal Proceedings.
--------------------------

      The  Company and the  Association  are not  involved in any pending  legal
proceedings other than nonmaterial  legal proceedings  occurring in the ordinary
course of business which, in the opinion of management, will not have a material
adverse  affect  on  the  consolidated   financial  conditions  and  results  of
operations of the Company.

Item 4. Submission of Matters to a Vote of Security Holders.
------------------------------------------------------------

      Not applicable

                                     PART II

Item 5. Market for Common Equity and Related Stockholder Matters.
-----------------------------------------------------------------

      The  information  required herein is incorporated by reference from page 3
of the Company's 2006 Annual Report to  Stockholders  filed as Exhibit 13 hereto
("2006 Annual Report").  Information for equity based compensation  arrangements
is incorporated by reference from Item 11 hereof.


                                      -35-

<PAGE>

      The following table contains  information about the Company's purchases of
its equity securities  pursuant to its stock repurchase plans during the quarter
ended December 31, 2006.

<TABLE>
<CAPTION>
                                                                  Total Number of     Maximum Number of
                                                                  Shares Purchased    Remaining Shares
                                 Total Number                       as Part of a         that May Be
                                  of Shares      Average Price        Publicly       Purchased Under the
Period                            Purchased     Paid per Share     Announced Plan           Plan
--------------------------------------------------------------------------------------------------------
<S>                                  <C>           <C>                  <C>                <C>
October 1 - October 31, 2006          --                 --              --                18,889

November 1 - November 30, 2006       500           $  21.90             500                18,389

December 1 - December 31, 2006        --                 --              --                18,389

Total                                500           $  21.90             500                18,389
</TABLE>

      The Company  instituted a repurchase  program in September 2003 for 39,278
shares of the  Company's  outstanding  shares  along with the  authorization  to
purchase  up to  26,186  shares  to fund  the  Company's  2003  Recognition  and
Retention Plan and Trust Agreement (the "Recognition  Plan"). In September 2004,
the Company  authorized the second stock repurchase plan for up to 31,000 shares
of the  Company's  outstanding  common  shares.  Upon  completion  of the second
repurchase  program in May 2005, the Company  announced a third stock repurchase
program to repurchase up to an additional  29,000 shares of  outstanding  common
stock. There is no expiration date for the third stock repurchase program.

      A total of 26,186 shares have been purchased for the Recognition  Plan and
80,889  shares have been  purchased  under the  repurchase  programs with 18,389
shares  remaining to be  repurchased  as December 31, 2006 under the third stock
repurchase program.

      The  declaration and payment of dividends is at the sole discretion of the
board of  directors,  and the Amount and timing of any such dividend will depend
on the board of directors'  consideration of the earnings,  financial conditions
and  capital  needs  of  the  Company  and  certain   other  factors   including
restrictions  arising  from  federal  banking  laws and  regulations.  See "Item
1-Description  of  Business-Regulation-MBL  Bank-Capital  Distributions'  for  a
further discussion on restrictions on paying dividends.


                                      -36-

<PAGE>

6. Management's Discussion and Analysis or Plan of Operation.
   ----------------------------------------------------------

      The information  required herein is incorporated by reference from pages 6
to 17 of the 2006 Annual Report.

Item 7. Financial Statements.
-----------------------------

      The information required herein is incorporated by reference from pages 19
to 39 of the 2006 Annual Report.

Item  8.  Changes  in and  Disagreements  With  Accountants  on  Accounting  and
Financial Disclosure.
---------------------

      Not applicable

Item 8 A. Controls and Procedures.
----------------------------------

      Our management  evaluated,  with the  participation of our Chief Executive
Officer  and  Chief  Financial  Officer,  the  effectiveness  of our  disclosure
controls and  procedures  (as defined in Rule  13a-15(e) or 15d-15(e)  under the
Securities  Exchange Act of 1934) as of the end of December  31, 2006.  Based on
such evaluation,  our Chief Executive  Officer and Chief Financial  Officer have
concluded  that our  disclosure  controls and  procedures are designed to ensure
that  information  required to be disclosed by us in the reports that we file or
submit  under  the  Securities  Exchange  Act of  1934 is  recorded,  processed,
summarized and reported within the time periods specified in the SEC's rules and
regulations and are operating in an effective manner.

      No change in the Company's  internal control over financial  reporting (as
defined in Rules  13a-15(f) or 15d-15(f)  under the  Securities  Exchange Act of
1934, as amended)  occurred  during the quarter ended December 31, 2006 that has
materially affected or is affected or is reasonably likely to materially affect,
the Company's internal control over financial reporting.

Item 8 B. Other Information.
----------------------------

      There is no  information  to be  reported on Form 8-K that has not already
been reported pursuant thereto.

                                    PART III

Item 9. Directors,  Executive Officers, Promoters, Control Persons and Corporate
Goverance; Compliance with Section 16(a) of the Exchange Act.
-------------------------------------------------------------

      The information  required herein is incorporated by reference to "Election
of Directors," "Nominees for Directors," "Directors whose Terms are Continuing,"
"Executive  Officers  Who Are Not  Directors,"  "Committees  and Meetings of the
Board of Directors of Minden  Bancorp,"  "Selection  of Nominees for the Board,"
"Director  Nominations,"  "Section 16 (a) Beneficial Ownership  Compliance," and
"Stockholders  Proposals,  Nominations,  and  Communications  with the  Board of
Directors"  in the  definitive  proxy  statement  of the  Company for the Annual
Meeting of Stockholders


                                      -37-

<PAGE>


which as of the date hereof is expected to be held on May 8, 2007, which will be
filed with the SEC within 120 days of December 31, 2006 ("Proxy Statement").

      The Company has adopted a Conflict of Interest  Policy that applies to its
principal  executive officer and principal  financial officer,  as well as other
officers,  employees and directors of the Company and the Association. A copy of
the Conflict of Interest Policy is available upon request. The request should be
submitted in writing to Mr. Michael P. Burton,  Secretary,  Minden Bancorp Inc.,
100 MBL Bank Drive, Minden, LA 71055.

Item 10. Executive Compensation.
--------------------------------

      The   information   required   herein  is  incorporated  by  reference  to
"Management  Compensation"  in the  Proxy  Statement.  The  report  of the Audit
Committee  included  in the  Proxy  Statement  should  not be  deemed  filed  or
incorporated  by  reference  into this filing or any other filing by the Company
under the  Securities  Exchange Act of 1934 or Securities  Act of 1933 except to
the extent the Company  specifically  incorporates said report herein or therein
by reference thereto.

Item 11.  Security  Ownership of Certain  Beneficial  Owners and  Management and
Related Stockholder Matters.
----------------------------

      The   information   required   herein  is  incorporated  by  reference  to
"Beneficial   Ownership  of  Common  Stock  by  Certain  Beneficial  Owners  and
Management" in the Proxy Statement.

      The  following  table  provides  information  as of December 31, 2006 with
respect  to shares  of  Common  Stock  that may be  issued  under the  Company's
existing equity  compensation plans which include the 2003 Stock Option Plan and
the 2003 Recognition and Retention Plan and Trust Agreement  (collectively,  the
"Plans"). Each of the Plans has been approved by the Company's stockholders.


                                      -38-

<PAGE>

<TABLE>
<CAPTION>
                                                                       Number of securities
                        Number of securities                          remaining available for
                         to be issued upon       Weighted-average      future issuance under
                            exercise of         exercise price of       equity compensation
                        outstanding options,       outstanding           plans (excluding
                              warrants               options,         securities reflected in
                             and rights        warrants and rights          column (a))
Plan Category                   (a)                    (b)                      (c)
---------------------   --------------------   -------------------    -----------------------
<S>                             <C>                    <C>                     <C>
Equity compensation
plans approved by
security holders                70,739 (1)             $15.55 (1)              20,911 (2)
Equity compensation
plans not approved by
security holders                     0                     NA                       0
                                ------                                         ------
      Total                     70,739                 $15.55                  20,911
                                ======                 ======                  ======
</TABLE>

(1) Included in such number are 18,354  shares  which are subject to  restricted
stock grants.  The weighted  average  exercise price excludes  restricted  stock
grants.

(2) Included in such number are 7,832 shares  available for grant under the 2003
Recognition and Retention Plan and Trust Agreement.

Item  12.  Certain   Relationships   and  Related   Transactions   and  Director
Independence.
-------------

      The   information   required   herein  is  incorporated  by  reference  to
"Management   Compensation-Transactions   with  Certain  Related   Persons"  and
"Information  with Respect to Nominees for  Director,  Continuing  Directors and
Executive  Officers," and  "Committees and Meetings of the Board of Directors of
Minden Bancorp" in the Proxy Statement.

Item 13. Exhibits.
------------------

      (1)The  following  documents  are  filed  as part of this  report  and are
incorporated herein by reference from the Company's 2006 Annual Report:

            Report of Independent Certified Public Accountants.

            Consolidated Balance Sheets as of December 31, 2006 and 2005.

            Consolidated  Statements of Income for the Years Ended  December 31,
            2006 and 2005.  Consolidated  Statements of Stockholders' Equity for
            the Years Ended December 31, 2006 and 2005.

            Consolidated  Statements of Cash Flows for the Years Ended  December
            31, 2006 and 2005.

            Notes to Consolidated Financial Statements.

      (2)The following  exhibits are filed as part of the Form 10-KSB,  and this
list includes the Exhibit Index:


                                      -39-

<PAGE>

      No.   Exhibits
      ---   --------------------------------------------------------------------
      3.1   Federal Stock Charter of Minden Bancorp, Inc.*

      3.2   Bylaws, as amended, of Minden Bancorp, Inc.

      4     Form of Stock Certificate of Minden Bancorp, Inc.*

      10.1  2003 Stock Option Plan** (1)

      10.2  2003 Recognition and Retention Plan and Trust Agreement**(1)

      10.3  Supplemental  Executive  Retirement  Agreement  with A. David  Evans
            ***(1)

      10.4  Employment Agreement with A. David Evans ****(1)

      10.5  Supplemental  Executive  Retirement Agreement with Michael P. Burton
            ***(1)

      10.6  Supplemental  Executive  Retirement  Agreement with Becky T. Harrell
            ***(1)

      13    Annual Report to Stockholders

      21    List of Subsidiaries  (See "Item I. Business - Subsidiaries" in this
            Form 10-KSB)

      23    Consent of Heard, McElroy, and Vestal LLP

      31.1  Certification pursuant to Rule 13a-14 of the Securities Exchange Act
            of 1934,  as  amended,  as adopted  pursuant  to Section  302 of the
            Sarbanes-Oxley Act of 2002.

      31.2  Certification pursuant to Rule 13a-14 of the Securities Exchange Act
            of 1934,  as  amended,  as adopted  pursuant  to Section  302 of the
            Sarbanes-Oxley Act of 2002.

      32.1  Certification  pursuant  to  18  U.S.C.  Section  1350,  as  adopted
            pursuant  to  Section  906  of  the   Sarbanes-Oxley  Act  of  2002.
            Certification  pursuant  to  18  U.S.C.  Section  1350,  as  adopted
            pursuant to

      32.2  Section 906 of the Sarbanes-Oxley Act of 2002.


*     Incorporated herein by reference from the Company's Registration Statement
      on Form  SB-2  filed  with the SEC on March  21,  2002  (Registration  No.
      333-84706).

**    Incorporated  by reference from the Company's  definitive  proxy statement
      filed by the Company with the SEC on April 22, 2003.

***   Incorporated by reference from the Company's  Annual Report on Form 10-KSB
      for the year ended December 31, 2005 filed on March 31, 2006.

****  Incorporated by references from the Company's Annual Report on Form 10-KSB
      for the year ended December 31, 2004 filed on March 31, 2005.

(1)   Consists of management contract compensatory plan.


Item 14. Principal Accountant Fees and Services.
------------------------------------------------

      Incorporated by reference to  "Ratification  of Appointment of Independent
Registered Public Accounting Firm" in the Proxy Statement.


                                      -40-

<PAGE>


                                   SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                    MINDEN BANCORP, INC.

                                    By:    /s/ A. David Evans
                                           ------------------
                                           A. David Evans
                                           President and Chief Executive Officer

                                    Date:  April 2, 2007

      Pursuant to the  requirements  of the Securities  Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

           Name                          Title                Date
---------------------------    -----------------------    -------------

/s/ A. David Evans             Director, President and    April 2, 2007
-----------------------        Chief Executive Officer
A. David Evans

/s/ Russell A. Adams           Director                   April 2, 2007
-----------------------
Russell A. Adams

/s/ John B. Benton, Jr.        Director                   April 2, 2007
-----------------------
John B. Benton, Jr.


-----------------------
Jack E. Byrd, Jr.              Director                   April 2, 2007

/s/ John P. Collins            Director                   April 2, 2007
-----------------------
John P. Collins

/s/ Michael S. Harper          Director                   April 2, 2007
-----------------------
Michael S. Harper

/s/ A. Loye Jones              Director                   April 2, 2007
-----------------------
A. Loye Jones

/s/ F. Dare Lott, Jr.          Director                   April 2, 2007
-----------------------
F. Dare Lott, Jr.


                                      -41-

<PAGE>

           Name                         Title                 Date
---------------------------   -----------------------     -------------

/s/ Michael W. Wise           Director                    April 2, 2007
----------------------
 Michael W. Wise

/s/ R. E. Woodard, III        Director                    April 2, 2007
----------------------
R. E. Woodard, III

/s/ Becky T. Harrell          Chief Financial Officer     April 2, 2007
----------------------        and Chief Accounting
Becky T. Harrell              Officer


                                      -42-