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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



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FORM 10-Q



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(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2007

OR



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

For the transition period from  to

Commission file number: 001-33573



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Louisiana Bancorp, Inc.

(Exact Name of Registrant as Specified in Its Charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Louisiana                                                      |  | 20-8715162                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)



|                                                      |  |           
|----------------------------------------------------- |  | ----------
|1600 Veterans Memorial Boulevard, Metairie, Louisiana |  | 70005     
|(Address of Principal Executive Offices)              |  | (Zip Code)

(504) 834-1190

(Registrants Telephone Number, Including Area Code)



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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check One):

Large Accelerated
Filer ̈Accelerated Filer ̈Non-Accelerated Filer  x

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date: As of
November 14, 2007, there were 6,345,732 shares of the Registrants common stock issued and outstanding.



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##### Table of Contents

PART I - FINANCIAL INFORMATION

Interim financial information required by Rule 10-01 of Regulation S-X and Item 303 of
Regulation S-K is included in this Form 10-Q as referenced below.



|                            |  |                                                                                       |  |     
|--------------------------- |  | ------------------------------------------------------------------------------------- |  | ----
|                            |  |                                                                                       |  | Page
|                            |  |                                                                                      
|Item 1 -                    |  | Financial Statements                                                                  |  | 3   
|                            |  |                                                                                      
|Item 2 -                    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 19  
|                            |  |                                                                                      
|Item 3 -                    |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 26  
|                            |  |                                                                                      
|Item 4T -                   |  | Controls and Procedures                                                               |  | 26  
|                           
|PART II - OTHER INFORMATION
|                            |  |                                                                                      
|Item 1 -                    |  | Legal Proceedings                                                                     |  | 27  
|                            |  |                                                                                      
|Item 1A -                   |  | Risk Factors                                                                          |  | 27  
|                            |  |                                                                                      
|Item 2 -                    |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 27  
|                            |  |                                                                                      
|Item 3 -                    |  | Defaults Upon Senior Securities                                                       |  | 28  
|                            |  |                                                                                      
|Item 4 -                    |  | Submission of Matters to a Vote of Security Holders                                   |  | 28  
|                            |  |                                                                                      
|Item 5 -                    |  | Other Information                                                                     |  | 28  
|                            |  |                                                                                      
|Item 6 -                    |  | Exhibits                                                                              |  | 28  
|                            | 
|Signatures                  |  | 29                                                                                   



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LOUISIANA BANCORP, INC.

BALANCE SHEETS

(Dollars in Thousands)

ASSETS



|                                                                                                                                                |  |                   |         |   |                  |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                                |  | September 30,2007 |         |   | December 31,2006 |  
|                                                                                                                                                |  | (Unaudited)       |         |   | (Audited)        |  
|Cash and Due from Banks                                                                                                                         |  | $                 | 3,109   |   |                  | $ | 2,244   |  
|Short-term Interest-bearing Deposits in other Banks                                                                                             |  |                   | 11,335  |   |                  |   | 1,581   |  
|                                                                                                                                                |  |                   |         |   |                  |   |         |  
|Total Cash and Cash Equivalents                                                                                                                 |  |                   | 14,444  |   |                  |   | 3,825   |  
|Certificates of Deposit                                                                                                                         |  |                   | 1,704   |   |                  |   | 2,624   |  
|Securities Available-for-Sale, at Fair Value                                                                                                    |  |                   |         |   |                  |   |         |  
|(Amortized Cost of $73,848 in 2007 and $56,514 in 2006)                                                                                         |  |                   | 73,656  |   |                  |   | 55,691  |  
|Securities Held-to-Maturity, at Amortized Cost                                                                                                  |  |                   |         |   |                  |   |         |  
|(Estimated Fair Value of $73,794 in 2007 and $60,983 in 2006)                                                                                   |  |                   | 73,956  |   |                  |   | 61,289  |  
|Loans, Net of Allowance for Loan Losses of $2,133 in 2007 and $2,292 in 2006                                                                    |  |                   | 90,723  |   |                  |   | 89,266  |  
|Accrued Interest Receivable                                                                                                                     |  |                   | 1,469   |   |                  |   | 1,259   |  
|Stock in Federal Home Loan Bank, at Cost                                                                                                        |  |                   | 1,355   |   |                  |   | 2,202   |  
|Premises and Equipment, Net                                                                                                                     |  |                   | 1,911   |   |                  |   | 1,939   |  
|Other Assets                                                                                                                                    |  |                   | 1,237   |   |                  |   | 1,631   |  
|                                                                                                                                                |  |                   |         |   |                  |   |         |  
|Total Assets                                                                                                                                    |  | $                 | 260,455 |   |                  | $ | 219,726 |  
|                                                                                                                                                |  |                   |         |   |                  |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                            | 
|                                                                                                                                                |  |                  
|LIABILITIES                                                                                                                                     |  |                   |         |   |                  |   |         |  
|Deposits                                                                                                                                        |  |                   |         |   |                  |   |         |  
|Noninterest-bearing                                                                                                                             |  | $                 | 3,336   |   |                  | $ | 4,095   |  
|Interest-bearing                                                                                                                                |  |                   | 139,530 |   |                  |   | 146,240 |  
|                                                                                                                                                |  |                   |         |   |                  |   |         |  
|Total Deposits                                                                                                                                  |  |                   | 142,866 |   |                  |   | 150,335 |  
|FHLB Advances                                                                                                                                   |  |                   | 25,423  |   |                  |   | 35,242  |  
|Advance Payments by Borrowers for Taxes and Insurance                                                                                           |  |                   | 2,053   |   |                  |   | 3,073   |  
|Accrued Interest Payable                                                                                                                        |  |                   | 512     |   |                  |   | 473     |  
|Other Liabilities                                                                                                                               |  |                   | 1,287   |   |                  |   | 1,405   |  
|                                                                                                                                                |  |                   |         |   |                  |   |         |  
|Total Liabilities                                                                                                                               |  | $                 | 172,141 |   |                  | $ | 190,528 |  
|                                                                                                                                                |  |                   |         |   |                  |   |         |  
|COMMITMENTS AND CONTINGENCIES                                                                                                                   |  |                   |         |   |                  |   |         |  
|                                                                                                                                                |  |                  
|SHAREHOLDERS EQUITY                                                                                                                            |  |                   |         |   |                  |   |         |  
|Common Stock, $.01 par value, 6,345,732 shares issued and outstanding at September 30, 2007 and none issued or outstanding at
December 31, 2006 |  | $                 | 63      |   |                  |   |        |  
|Additional Paid-in-Capital                                                                                                                      |  |                   | 62,063  |   |                  |   |        |  
|Unearned Compensation (ESOP)                                                                                                                    |  |                   | (5,077  | ) |                  |   |        |  
|Retained Earnings                                                                                                                               |  |                   | 31,392  |   |                  |   | 29,741  |  
|Accumulated Other Comprehensive Loss                                                                                                            |  |                   | (127    | ) |                  |   | (543    | )
|                                                                                                                                                |  |                   |         |   |                  |   |         |  
|Total Shareholders Equity                                                                                                                      |  |                   | 88,314  |   |                  |   | 29,198  |  
|                                                                                                                                                |  |                   |         |   |                  |   |         |  
|Total Liabilities and Shareholders Equity                                                                                                      |  | $                 | 260,455 |   |                  | $ | 219,726 |  
|                                                                                                                                                |  |                   |         |   |                  |   |         |  

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



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LOUISIANA BANCORP, INC.

STATEMENTS OF INCOME (Unaudited)

(Dollars in Thousands)



|                                                   |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  
|-------------------------------------------------- |  | ----------------------------------- | ----- | - | ---------------------------------- | - | ----- | ---- |  | - | ----- | - |  | - | ----- | -
|                                                   |  | For the Three MonthsEnded Sept. 30, |       |   | For the Nine MonthsEnded Sept. 30, |  
|                                                   |  | 2007                                |       |   | 2006                               |   |       | 2007 |  |   | 2006  |  
|INTEREST AND DIVIDEND INCOME                       |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  
|Loans, Including Fees                              |  | $                                   | 1,633 |   |                                    | $ | 1,445 |      |  | $ | 4,803 |   |  | $ | 4,363 |  
|Mortgage Backed Securities                         |  |                                     | 1,047 |   |                                    |   | 1,159 |      |  |   | 3,070 |   |  |   | 3,408 |  
|Investment Securities                              |  |                                     | 445   |   |                                    |   | 372   |      |  |   | 1,066 |   |  |   | 1,033 |  
|Other Interest Bearing Deposits                    |  |                                     | 527   |   |                                    |   | 71    |      |  |   | 773   |   |  |   | 442   |  
|                                                   |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  
|Total Interest and Dividend Income                 |  |                                     | 3,652 |   |                                    |   | 3,047 |      |  |   | 9,712 |   |  |   | 9,246 |  
|                                                   |  |                                     |       |  
|INTEREST EXPENSE                                   |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  
|Deposits                                           |  |                                     | 1,044 |   |                                    |   | 913   |      |  |   | 3,118 |   |  |   | 2,575 |  
|Advances from Federal Home Loan Bank               |  |                                     | 304   |   |                                    |   | 435   |      |  |   | 1,051 |   |  |   | 1,350 |  
|                                                   |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  
|Total Interest Expense                             |  |                                     | 1,348 |   |                                    |   | 1,348 |      |  |   | 4,169 |   |  |   | 3,925 |  
|                                                   |  |                                     |       |  
|NET INTEREST INCOME                                |  |                                     | 2,304 |   |                                    |   | 1,699 |      |  |   | 5,543 |   |  |   | 5,321 |  
|                                                   |  |                                     |       |  
|(RECOVERY) FOR LOAN LOSSES                         |  |                                     | (75   | ) |                                    |   | (213  | )    |  |   | (135  | ) |  |   | (586  | )
|                                                   |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  
|NET INTEREST INCOME AFTER RECOVERY FOR LOAN LOSSES |  |                                     | 2,379 |   |                                    |   | 1,912 |      |  |   | 5,678 |   |  |   | 5,907 |  
|                                                   |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  
|NON-INTEREST INCOME                                |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  
|Customer Service Fees                              |  |                                     | 111   |   |                                    |   | 64    |      |  |   | 249   |   |  |   | 164   |  
|Net (Loss) on Sales of Securities                  |  |                                     |      |   |                                    |   | (92   | )    |  |   | (20   | ) |  |   | (92   | )
|Other Income                                       |  |                                     | 36    |   |                                    |   | 196   |      |  |   | 115   |   |  |   | 307   |  
|                                                   |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  
|Total Non-Interest Income                          |  |                                     | 147   |   |                                    |   | 168   |      |  |   | 344   |   |  |   | 379   |  
|                                                   |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  
|NON-INTEREST EXPENSES                              |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  
|Salaries and Employee Benefits                     |  |                                     | 753   |   |                                    |   | 686   |      |  |   | 2,249 |   |  |   | 2,058 |  
|Occupancy Expense                                  |  |                                     | 237   |   |                                    |   | 251   |      |  |   | 752   |   |  |   | 730   |  
|Other Expenses                                     |  |                                     | 189   |   |                                    |   | 154   |      |  |   | 569   |   |  |   | 471   |  
|                                                   |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  
|Total Non-Interest Expenses                        |  |                                     | 1,179 |   |                                    |   | 1,091 |      |  |   | 3,570 |   |  |   | 3,259 |  
|                                                   |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  
|INCOME BEFORE INCOME TAX EXPENSE                   |  |                                     | 1,347 |   |                                    |   | 989   |      |  |   | 2,452 |   |  |   | 3,027 |  
|INCOME TAX EXPENSE                                 |  |                                     | 447   |   |                                    |   | 324   |      |  |   | 801   |   |  |   | 996   |  
|                                                   |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  
|NET INCOME                                         |  | $                                   | 900   |   |                                    | $ | 665   |      |  | $ | 1,651 |   |  | $ | 2,031 |  
|                                                   |  |                                     |       |   |                                    |   |       |      |  |   |       |   |  |   |       |  

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



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LOUISIANA BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(Dollars
in Thousands)



|                                                              |  |                                        |       |      |   |      
|------------------------------------------------------------- |  | -------------------------------------- | ----- | ---- | - | -----
|                                                              |  | For the Nine MonthsEnded September 30,
|                                                              |  | 2007                                   |       | 2006
|NET INCOME                                                    |  | $                                      | 1,651 |      | $ | 2,031
|OTHER COMPREHENSIVE INCOME, NET OF TAX:                       |  |                                        |       |      |   |      
|Unrealized Holding Gains Arising During the Period            |  |                                        | 396   |      |   | 98   
|Reclassification Adjustment for Losses Included in Net Income |  |                                        | 20    |      |   | 92   
|                                                              |  |                                        |       |      |   |      
|Total Other Comprehensive Income                              |  |                                        | 416   |      |   | 190  
|                                                              |  |                                        |       |      |   |      
|COMPREHENSIVE INCOME                                          |  | $                                      | 2,067 |      | $ | 2,221
|                                                              |  |                                        |       |      |   |      

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



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LOUISIANA BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited)

For the Nine Months Ended September 30, 2007 and 2006

(Dollars in Thousands)



|                                                                                     |  |             |    |                            |   |                     |  |   |                   |   |                                            |   |        |                          |   |      |   |  |   |        |  
|------------------------------------------------------------------------------------ |  | ----------- | -- | -------------------------- | - | ------------------- |  | - | ----------------- | - | ------------------------------------------ | - | ------ | ------------------------ | - | ---- | - |  | - | ------ | -
|                                                                                     |  | CommonStock |    | Additional Paid-in Capital |   | Unearned ESOP Stock |  |   | Retained Earnings |   | AccumulatedOtherComprehensiveIncome (Loss) |   |        | TotalShareholdersEquity |  
|BALANCES AT DECEMBER 31, 2005                                                        |  |             |   |                            |   |                    |  |   |                  |   |                                            | $ | 27,718 |                          | $ | (806 | ) |  | $ | 26,912 |  
|Net Income  Nine Months Ended September 30, 2006                                    |  |             |    |                            |   |                     |  |   |                   |   |                                            |   | 2,031  |                          |   |      |   |  |   | 2,031  |  
|Other Comprehensive Gains, Net of Applicable Deferred Income Taxes                   |  |             |   |                            |   |                    |  |   |                  |   |                                            |   |       |                          |   | 190  |   |  |   | 190    |  
|                                                                                     |  |             |    |                            |   |                     |  |   |                   |   |                                            |   |        |                          |   |      |   |  |   |        |  
|Balances At September 30, 2006                                                       |  |             |   |                            |   |                    |  |   |                  |   |                                            | $ | 29,749 |                          | $ | (616 | ) |  | $ | 29,133 |  
|                                                                                     |  |             |    |                            |   |                     |  |   |                   |   |                                            |   |        |                          |   |      |   |  |   |        |  
|                                                                                     |  |             |    |                            |   |                    
|BALANCES AT DECEMBER 31, 2006                                                        |  |             |    |                            |   |                     |  |   |                   |   |                                            |   | 29,741 |                          |   | (543 | ) |  |   | 29,198 |  
|Net Income  Nine Months Ended September 30, 2007                                    |  |             |    |                            |   |                     |  |   |                   |   |                                            |   | 1,651  |                          |   |      |   |  |   | 1,651  |  
|Other Comprehensive Gains, Net of Applicable Deferred Income Taxes                   |  |             |    |                            |   |                     |  |   |                   |   |                                            |   |        |                          |   | 416  |   |  |   | 416    |  
|Issuance of Common Stock for Initial Public Offering net of expenses of $1.3 million |  |             | 63 |                            |   | 62,063              |  |   |                   |   |                                            |   |        |                          |   |      |   |  |   | 62,126 |  
|Stock Purchased for ESOP                                                             |  |             |    |                            |   |                     |  |   | (5,077            | ) |                                            |   |        |                          |   |      |   |  |   | (5,077 | )
|                                                                                     |  |             |    |                            |   |                     |  |   |                   |   |                                            |   |        |                          |   |      |   |  |   |        |  
|Balances at September 30, 2007                                                       |  | $           | 63 |                            | $ | 62,063              |  | $ | (5,077            | ) |                                            | $ | 31,392 |                          | $ | (127 | ) |  | $ | 88,314 |  
|                                                                                     |  |             |    |                            |   |                     |  |   |                   |   |                                            |   |        |                          |   |      |   |  |   |        |  

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



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LOUISIANA BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollars in Thousands)



|                                                                                  |  |                                        |         |   |      |   |         |  
|--------------------------------------------------------------------------------- |  | -------------------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                  |  | For the Nine MonthsEnded September 30, |        
|                                                                                  |  | 2007                                   |         |   | 2006 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                              |  |                                        |         |   |      |   |         |  
|Net Income                                                                        |  | $                                      | 1,651   |   |      | $ | 2,031   |  
|                                                                                  |  |                                        |         |   |      |   |         |  
|Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |  |                                        |         |   |      |   |         |  
|Depreciation                                                                      |  |                                        | 183     |   |      |   | 194     |  
|Recovery for Loan Losses                                                          |  |                                        | (135    | ) |      |   | (585    | )
|Discount Accretion Net of Premium Amortization                                    |  |                                        | 101     |   |      |   | 235     |  
|Loss on Sale of Securities                                                        |  |                                        | 20      |   |      |   | 92      |  
|Gain on Sale of Loans                                                             |  |                                        | (19     | ) |      |   | (34     | )
|Originations of Loans Held-for-Sale                                               |  |                                        | (653    | ) |      |   |        |  
|Proceeds from Sales of Loans Held-for-Sale                                        |  |                                        | 666     |   |      |   |        |  
|(Increase) Decrease in Accrued Interest Receivable                                |  |                                        | (210    | ) |      |   | 299     |  
|Decrease in Other Assets                                                          |  |                                        | 180     |   |      |   | 431     |  
|Increase in Accrued Interest Payable                                              |  |                                        | 38      |   |      |   | 82      |  
|Decrease in Other Liabilities                                                     |  |                                        | (119    | ) |      |   | (192    | )
|                                                                                  |  |                                        |         |   |      |   |         |  
|Net Cash Provided by Operating Activities                                         |  | $                                      | 1,703   |   |      | $ | 2,553   |  
|                                                                                  |  |                                        |         |   |      |   |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                              |  |                                        |         |   |      |   |         |  
|Purchase of Certificates of Deposit                                               |  | $                                      | (615    | ) |      |   | (842    | )
|Purchase of Securities Available-for-Sale                                         |  |                                        | (26,055 | ) |      |   | (13,824 | )
|Purchase of Securities Held-to-Maturity                                           |  |                                        | (22,153 | ) |      |   | (13,939 | )
|Proceeds from Maturities of Certificates of Deposits                              |  |                                        | 1,535   |   |      |   | 495     |  
|Proceeds from Maturities of Securities Available-for-Sale                         |  |                                        | 6,556   |   |      |   | 7,208   |  
|Proceeds from Maturities of Securities Held-to-Maturity                           |  |                                        | 9,550   |   |      |   | 8,805   |  
|Proceeds from Sales of Securities Available-for-Sale                              |  |                                        | 1,980   |   |      |   | 5,907   |  
|Net (Increase) Decrease in Loans Receivable                                       |  |                                        | (2,696  | ) |      |   | 1,308   |  
|Proceeds from Sales of Loans Held for Investing                                   |  |                                        | 1,381   |   |      |   | 4,355   |  
|Purchase of Property and Equipment                                                |  |                                        | (156    | ) |      |   | (133    | )
|Net Decrease in Investment in Federal Home Loan Bank Stock                        |  |                                        | 847     |   |      |   | 635     |  
|                                                                                  |  |                                        |         |   |      |   |         |  
|Net Cash Used in Investing Activities                                             |  | $                                      | (29,826 | ) |      | $ | (25     | )
|                                                                                  |  |                                        |         |   |      |   |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                              |  |                                        |         |   |      |   |         |  
|Decrease in Deposits                                                              |  |                                        | (7,468  | ) |      |   | (4,803  | )
|Decrease in Advances by Borrowers for Taxes and Insurance                         |  |                                        | (1,020  | ) |      |   | (1,007  | )
|Decrease in Advances from Federal Home Loan Bank, Net                             |  |                                        | (9,819  | ) |      |   | (9,085  | )
|Net Proceeds from Common Stock Offering                                           |  |                                        | 62,126  |   |      |   |         |  
|Stock Purchased for ESOP                                                          |  |                                        | (5,077  | ) |      |   |         |  
|                                                                                  |  |                                        |         |   |      |   |         |  
|Net Cash Provided by (Used in) Financing Activities                               |  | $                                      | 38,742  |   |      | $ | (14,895 | )
|                                                                                  |  |                                        |         |   |      |   |         |  



|                                                     |  |   |        |  |   |         |  
|---------------------------------------------------- |  | - | ------ |  | - | ------- | -
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |  |   | 10,619 |  |   | (12,367 | )
|                                                     |  |   |        |  |   |         |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD       |  |   | 3,825  |  |   | 15,690  |  
|                                                     |  |   |        |  |   |         |  
|CASH AND CASH EQUIVALENTS, END OF PERIOD             |  | $ | 14,444 |  | $ | 3,323   |  
|                                                     |  |   |        |  |   |         |  
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION     |  |   |        |  |   |         |  
|Cash Paid During the Period for:                     |  |   |        |  |   |         |  
|Interest                                             |  | $ | 4,131  |  | $ | 3,842   |  
|Income Taxes                                         |  | $ | 455    |  | $ | 531     |  

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



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LOUISIANA BANCORP, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE A  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

BASIS OF PRESENTATION

Louisiana Bancorp, Inc., a Louisiana corporation (the Company or Louisiana Bancorp), was organized by the Bank of New Orleans (the Bank) in March 2007 to facilitate the conversion
of the Bank from the mutual to the stock form (the Conversion). The Conversion was completed on July 9, 2007, at which time the Company became the holding company for the Bank and issued 6,345,732 shares of its common stock to
certain depositors of the Bank and the Companys employee stock ownership plan in a subscription offering. The Company is now the Banks parent holding company and holds all of the issued and outstanding shares of capital stock of the
Bank.

The accompanying unaudited financial statements of the Company were prepared in accordance with instructions for Form
10-Q and Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, and cash flows in conformity with generally accepted accounting principles. However, in the
opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial statements have been included. The results of operations for the three month and nine month periods ended
September 30, 2007, are not necessarily indicative of the results which may be expected for the entire fiscal year.

NATURE OF
OPERATIONS

The Bank is a Federal stock form savings bank which attracts deposits from the general public and uses such
deposits primarily to originate loans secured by first mortgages on owner-occupied, family residences and other properties, as well as those for other consumer needs.

The Bank is subject to competition from other financial institutions, and is also subject to the regulations of certain Federal agencies
and undergoes periodic examinations by those regulatory authorities.

SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK

Most of the Banks activities are with customers located within the greater New Orleans area in Louisiana. Note B discusses the types
of securities in which the Bank invests. Note C discusses the types of lending in which the Bank engages. The Bank does not have any significant concentrations in any one industry or to any one customer.

CASH AND CASH EQUIVALENTS

For the purposes of the Statements of Cash Flows, cash and cash equivalents include cash and balances due from banks, short-term interest-bearing deposits in other banks, federal funds sold and securities purchased under agreements to
resell, all of which were purchased with an original maturity of three months or less.



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NOTE A  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



INVESTMENT SECURITIES

Securities are being accounted for in accordance with Statement of Financial Accounting Standards (SFAS) No. 115, Accounting for
Certain Investments in Debt and Equity Securities. SFAS No. 115 requires the classification of securities into one of three categories: Trading, Available-for-Sale, or Held-to-Maturity. Management determines the appropriate classification
of debt securities at the time of purchase and re-evaluates this classification periodically.

Available-for-sale securities
are stated at market value, with unrealized gains and losses, net of income taxes, reported as a separate component of accumulated other comprehensive income until realized. The amortized cost of available-for-sale debt securities is adjusted for
amortization of premiums and accretion of discounts to maturity or, in the case of mortgage-backed securities, over the estimated life of the security.

Securities designated as held-to-maturity are stated at cost adjusted for amortization of the related premiums and accretion of discounts, using the interest method. The Bank has the positive intent and ability to
hold these securities to maturity.

The Bank held no trading securities as of September 30, 2007 or December 31,
2006.

Amortization, accretion and accrued interest are included in interest income on securities. Realized gains and
losses, and declines in value judged to be other than temporary, are included in net securities gains or losses. Gains and losses on the sale of securities available-for-sale are determined using the specific-identification method.

LOANS

The Bank
grants one-to four-family, multi-family residential, commercial, and land mortgage loans, and consumer and construction loans, and lines of credit to customers. Certain first mortgage loans are originated and sold under loan sale agreements. A
substantial portion of the loan portfolio is represented by mortgage loans secured by properties located throughout the greater New Orleans area. The ability of the Banks debtors to honor their contracts is dependent upon the real estate and
general economic conditions in this area.

Loans are reported at their outstanding unpaid principal balance adjusted for
charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid principal balance.

When the payment of principal or interest on a loan is delinquent for more than 90 days, or earlier in some cases, the loan is placed on non-accrual status, unless the loan is in the process of collection and the
underlying collateral fully supports the carrying value of the loan. If the decision is made to continue accruing interest on the loan, periodic reviews are made to confirm the accruing status of the loan. When a loan is placed on non-accrual
status, interest accrued during the current year prior to the judgment of uncollectibility is charged to operations. Interest accrued during prior periods is charged to the allowance for loan losses. Generally, any payments received on non-accrual
loans are applied first to outstanding loan amounts and next to the recovery of charged-off loan amounts. Any excess is treated as recovery of lost interest.



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NOTE A  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



The Bank considers a loan to be impaired when, based upon current information and
events, it believes it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. The Banks impaired loans include troubled debt restructuring, and performing and
non-performing major loans in which full payment of principal or interest is not expected. The Bank calculates an allowance required for impaired loans based on the present value of expected future cash flows discounted at the loans effective
interest rate, or at the loans observable market price or the fair value of its collateral.

Subsequent to Hurricane
Katrina, the Bank deferred loan payments for certain loans for the months of September, October and November 2005. Interest continued to accrue at the contract rate, and unpaid interest for these months was added to the customers balance and
re-amortized through the loans maturity. For loans which were performing prior to Katrina, the deferral period was not considered in measuring delinquency and performing status.

ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is a valuation allowance available for losses incurred on loans. All losses are charged to the allowance for loan losses when the loss actually occurs or when a determination is made that a loss is likely to
occur. Recoveries are credited to the allowance at the time of recovery.

The allowance is an amount that represents the
amount of probable and reasonably estimable known and inherent losses in the loan portfolio, based on evaluations of the collectibility of loans. The evaluations take into consideration such factors as changes in the types and amount of loans in the
loan portfolio, historical loss experience, adverse situations that may affect the borrowers ability to repay, estimated value of any underlying collateral, estimated losses relating to specifically identified loans, and current economic
conditions. This evaluation is inherently subjective as it requires material estimates including, among others, exposure at default, the amount and timing of expected future cash flows on impacted loans, value of collateral, estimated losses on our
commercial and residential loan portfolios and general amounts for historical loss experience. All of these estimates may be susceptible to significant change.

It should be understood that estimates of future loan losses involve an exercise of judgment. While it is possible that in particular
periods, the Bank may sustain losses, which are substantial relative to the allowance for loan losses, it is the judgment of management that the allowance for loan losses reflected in the accompanying statements of condition is adequate to absorb
possible losses in the existing loan portfolio.

LOANS HELD-FOR-SALE

Loans held-for-sale include originated mortgage loans intended for sale in the secondary market, which are carried at the lower of cost or
estimated market value. Loans held-for-sale are identified at the time of origination, in accordance with the Banks interest rate risk strategy. In addition, the Bank occasionally sells loans that it originates, but cannot hold, due to
regulatory limitations on loans to one borrower, concentrations of credit in a particular property type or industry.



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NOTE A  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



Student loans are held for investment purposes as long as the student is still in
school. In accordance with the Banks agreement with SLMA, these loans are transferred to the held-for-sale category and are sold, once the student has gone into repayment status.

LOAN FEES, LOAN COSTS, DISCOUNTS AND PREMIUMS

Loan origination and commitment fees and certain direct loan origination costs are deferred and amortized as an adjustment to the related loans yield using the interest method over the contractual life of the
loan.

Discounts received in connection with mortgage loans purchased are amortized to income over the term of the loan
using the interest method. Premiums on purchased loans are amortized over the term of the loan using the interest method.

PREMISES AND
EQUIPMENT

Premises and equipment are carried at cost, less accumulated depreciation. The Bank computes depreciation and
amortization generally on the straight-line method for both financial reporting and Federal income tax purposes. Estimated useful lives of premises and equipment range as follows:



|                                  |  |              
|--------------------------------- |  | -------------
|Buildings                         |  | 20  40 Years
|Furniture, Fixtures and Equipment |  | 3  10 Years 
|Automobiles                       |  | 5 Years      

REAL ESTATE OWNED

Real estate acquired through, or in lieu of, loan foreclosure is initially recorded at fair value, less estimated cost to sell, at the
date of foreclosure and any related write-down is charged to the allowance for loan losses. Management periodically performs valuations, and an allowance for losses will be established when any significant and permanent decline reduces the fair
value to less than the carrying value. The ability of the Bank to recover the carrying value of real estate is based upon future sales of the real estate owned. The ability to affect such sales is subject to market conditions and other factors, many
of which are beyond the Banks control. Operating income of such properties, net of related expenses, and gains and losses on their disposition are included in the accompanying statements of income.

INCOME TAXES

Deferred income tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates
are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

ADVERTISING COSTS

The Bank expenses advertising costs as incurred. Advertising costs were $151,000 and $120,000 for the nine months ended
September 30, 2007 and 2006, respectively.



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NOTE A  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



COMPREHENSIVE EARNINGS

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain
changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the shareholders equity section of the balance sheets, such items, along with net earnings, are
components of comprehensive earnings.

USE OF ESTIMATES

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management
is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheets and reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for losses on loans and deferred taxes.

NOTE B  SECURITIES

A summary of securities classified as available-for-sale at
September 30, 2007 and December 31, 2006, with gross unrealized gains and losses, is as follows:



|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|-------------------------------------- |  | ------------------ | ------ | -------------------- | - | --------------------- |  | - | ------------------- | - |  | - | ------
|                                       |  | September 30, 2007
|                                       |  | AmortizedCost      |        | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | EstimatedFair Value
|                                       |  | (In Thousands)    
|Securities Available-for-Sale          |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|U.S. Government and Agency Obligations |  | $                  | 39,635 |                      | $ | 202                   |  | $ |                    |   |  | $ | 39,837
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Mortgage-Backed Securities             |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|GNMA                                   |  |                    | 915    |                      | $ | 21                    |  |   |                    |   |  |   | 936   
|FNMA                                   |  |                    | 22,864 |                      |   | 36                    |  |   | (388                | ) |  |   | 22,512
|FHLMC                                  |  |                    | 10,434 |                      |   | 19                    |  |   | (82                 | ) |  |   | 10,371
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Total Mortgage-Backed Securities       |  |                    | 34,213 |                      |   | 76                    |  |   | (470                | ) |  |   | 33,819
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Total Securities Available-for-Sale    |  | $                  | 73,848 |                      | $ | 278                   |  | $ | (470                | ) |  | $ | 73,656
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|                                       | 
|                                       |  | December 31, 2006 
|                                       |  | AmortizedCost      |        | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | EstimatedFair Value
|                                       |  | (In Thousands)    
|Securities Available-for-Sale          |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|U.S. Government and Agency Obligations |  | $                  | 21,682 |                      | $ | 45                    |  | $ | (51                 | ) |  | $ | 21,676
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Mortgage-Backed Securities             |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|GNMA                                   |  |                    | 1,087  |                      | $ | 27                    |  |   |                    |   |  |   | 1,114 
|FNMA                                   |  |                    | 25,762 |                      |   | 16                    |  |   | (689                | ) |  |   | 25,089
|FHLMC                                  |  |                    | 7,983  |                      |   |                      |  |   | (171                | ) |  |   | 7,812 
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Total Mortgage-Backed Securities       |  |                    | 34,832 |                      |   | 43                    |  |   | (860                | ) |  |   | 34,015
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Total Securities Available-for-Sale    |  | $                  | 56,514 |                      | $ | 88                    |  | $ | (911                | ) |  | $ | 55,691
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       



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NOTE B  SECURITIES (Continued)



A summary of securities classified as held-to-maturity at September 30, 2007 and
December 31, 2006, with gross unrealized gains and losses, is as follows:



|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|-------------------------------------- |  | ------------------ | ------ | -------------------- | - | --------------------- |  | - | ------------------- | - |  | - | ------
|                                       |  | September 30, 2007
|                                       |  | AmortizedCost      |        | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | EstimatedFair Value
|                                       |  | (In Thousands)    
|Securities Held-to-Maturity:           |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|U.S. Government and Agency Obligations |  | $                  | 6,496  |                      | $ | 26                    |  | $ |                    |   |  | $ | 6,522 
|Municipal Obligations                  |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Revenue Bonds                          |  |                    | 550    |                      |   | 17                    |  |   |                    |   |  |   | 567   
|General Obligation Bonds               |  |                    | 2,899  |                      |   | 71                    |  |   |                    |   |  |   | 2,970 
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Total Municipal Obligations            |  |                    | 3,449  |                      |   | 88                    |  |   |                    |   |  |   | 3,537 
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Mortgage-Backed Securities             |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|GNMA                                   |  |                    | 1,901  |                      |   | 52                    |  |   | (1                  | ) |  |   | 1,952 
|FNMA                                   |  |                    | 41,712 |                      |   | 178                   |  |   | (414                | ) |  |   | 41,476
|FHLMC                                  |  |                    | 20,398 |                      |   | 68                    |  |   | (159                | ) |  |   | 20,307
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Total Mortgage-Backed Securities       |  |                    | 64,011 |                      |   | 298                   |  |   | (574                | ) |  |   | 63,735
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Total Securities-Held-to-Maturity      |  | $                  | 73,956 |                      | $ | 412                   |  | $ | (574                | ) |  | $ | 73,794
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|                                       | 
|                                       |  | December 31, 2006 
|                                       |  | AmortizedCost      |        | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | EstimatedFair Value
|                                       |  | (In Thousands)    
|Securities Held-to-Maturity:           |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|U.S. Government and Agency Obligations |  | $                  | 298    |                      | $ |                      |  | $ |                    |   |  | $ | 298   
|Municipal Obligations                  |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Revenue Bonds                          |  |                    | 550    |                      |   | 21                    |  |   |                    |   |  |   | 571   
|General Obligation Bond                |  |                    | 2,896  |                      |   | 88                    |  |   |                    |   |  |   | 2,984 
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Total Municipal Obligations            |  |                    | 3,446  |                      |   | 109                   |  |   |                    |   |  |   | 3,555 
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Mortgage-Backed Securities             |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|GNMA                                   |  |                    | 2,460  |                      |   | 55                    |  |   | (5                  | ) |  |   | 2,510 
|FNMA                                   |  |                    | 40,569 |                      |   | 153                   |  |   | (502                | ) |  |   | 40,220
|FHLMC                                  |  |                    | 14,516 |                      |   | 33                    |  |   | (149                | ) |  |   | 14,400
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Total Mortgage-Backed Securities       |  |                    | 57,545 |                      |   | 241                   |  |   | (656                | ) |  |   | 57,130
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       
|Total Securities-Held-to-Maturity      |  | $                  | 61,289 |                      | $ | 350                   |  | $ | (656                | ) |  | $ | 60,983
|                                       |  |                    |        |                      |   |                       |  |   |                     |   |  |   |       



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NOTE B  SECURITIES (Continued)



The amortized cost and fair value of available-for-sale and held-to-maturity
securities by contractual maturity at September 30, 2007, are as follows. Actual maturities will differ from contractual maturities because borrowers have the right to put or prepay obligations with or without call or prepayment penalties.



|                     |  |                               |        |                             |   |               |  |                     |        |  |   |       
|-------------------- |  | ----------------------------- | ------ | --------------------------- | - | ------------- |  | ------------------- | ------ |  | - | ------
|                     |  | Available-for-Sale Securities |        | Held-to-Maturity Securities
|                     |  | AmortizedCost                 |        | EstimatedFair Value         |   | AmortizedCost |  | EstimatedFair Value
|                     |  | (In Thousands)               
|Amounts Maturing in: |  |                               |        |                             |   |               |  |                     |        |  |   |       
|Within One Year      |  | $                             | 17,175 |                             | $ | 17,170        |  | $                   | 17     |  | $ | 17    
|One to Five Years    |  |                               | 23,804 |                             |   | 23,921        |  |                     | 10,072 |  |   | 10,190
|Five to Ten Years    |  |                               | 22,368 |                             |   | 22,179        |  |                     | 12,523 |  |   | 12,512
|Over Ten Years       |  |                               | 10,501 |                             |   | 10,386        |  |                     | 51,344 |  |   | 51,075
|                     |  |                               |        |                             |   |               |  |                     |        |  |   |       
|                     |  | $                             | 73,848 |                             | $ | 73,656        |  | $                   | 73,956 |  | $ | 73,794
|                     |  |                               |        |                             |   |               |  |                     |        |  |   |       

Information pertaining to securities with gross unrealized losses at
September 30, 2007 and December 31, 2006, aggregated by investment category and length of time that individual securities have been in a continuous loss position follows:



|                                       |  |                            |    |                               |   |                       |  |                     |     |  |   |       
|-------------------------------------- |  | -------------------------- | -- | ----------------------------- | - | --------------------- |  | ------------------- | --- |  | - | ------
|                                       |  | Available-for-Sale        
|                                       |  | Losses Less Than 12 Months |    | Losses Greater Than 12 Months
|                                       |  | GrossUnrealizedLosses      |    | EstimatedFair Value           |   | GrossUnrealizedLosses |  | EstimatedFair Value
|                                       |  | (In Thousands)            
|September 30, 2007                     |  |                            |    |                               |   |                       |  |                     |     |  |   |       
|U.S. Government and Agency Obligations |  | $                          |   |                               | $ |                      |  | $                   |    |  | $ |      
|                                       |  |                            |    |                               |   |                       |  |                     |     |  |   |       
|Mortgage-Backed Securities             |  |                            |    |                               |   |                       |  |                     |     |  |   |       
|FNMA                                   |  |                            |   |                               |   |                      |  |                     | 388 |  |   | 19,278
|FHLMC                                  |  |                            |   |                               |   |                      |  |                     | 82  |  |   | 6,223 
|                                       |  |                            |    |                               |   |                       |  |                     |     |  |   |       
|Total Mortgage-Backed Securities       |  |                            |   |                               |   |                      |  |                     | 470 |  |   | 25,501
|                                       |  |                            |    |                               |   |                       |  |                     |     |  |   |       
|Total                                  |  | $                          |   |                               | $ |                      |  | $                   | 470 |  | $ | 25,501
|                                       |  |                            |    |                               |   |                       |  |                     |     |  |   |       
|December 31, 2006                      |  |                            |    |                               |   |                       |  |                     |     |  |   |       
|U.S. Government and Agency Obligations |  | $                          | 21 |                               | $ | 8,775                 |  | $                   | 30  |  | $ | 1,970 
|                                       |  |                            |    |                               |   |                       |  |                     |     |  |   |       
|Mortgage-Backed Securities             |  |                            |    |                               |   |                       |  |                     |     |  |   |       
|FNMA                                   |  |                            |   |                               |   |                      |  |                     | 690 |  |   | 23,375
|FHLMC                                  |  |                            |   |                               |   |                      |  |                     | 170 |  |   | 7,813 
|                                       |  |                            |    |                               |   |                       |  |                     |     |  |   |       
|Total Mortgage-Backed Securities       |  |                            |   |                               |   |                      |  |                     | 860 |  |   | 31,188
|                                       |  |                            |    |                               |   |                       |  |                     |     |  |   |       
|Total                                  |  | $                          | 21 |                               | $ | 8,775                 |  | $                   | 890 |  | $ | 33,158
|                                       |  |                            |    |                               |   |                       |  |                     |     |  |   |       



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NOTE B  SECURITIES (Continued)



|                           |  |                            |     |                               |   |                       |  |                     |     |  |   |       
|-------------------------- |  | -------------------------- | --- | ----------------------------- | - | --------------------- |  | ------------------- | --- |  | - | ------
|                           |  | Held-to-Maturity          
|                           |  | Losses Less Than 12 Months |     | Losses Greater Than 12 Months
|                           |  | GrossUnrealizedLosses      |     | EstimatedFair Value           |   | GrossUnrealizedLosses |  | EstimatedFair Value
|                           |  | (In Thousands)            
|September 30, 2007         |  |                            |     |                               |   |                       |  |                     |     |  |   |       
|Mortgage-Backed Securities |  |                            |     |                               |   |                       |  |                     |     |  |   |       
|GNMA                       |  | $                          |    |                               | $ |                      |  | $                   | 1   |  | $ | 170   
|FNMA                       |  |                            | 89  |                               |   | 6,671                 |  |                     | 325 |  |   | 18,054
|FHLMC                      |  |                            | 61  |                               |   | 9,593                 |  |                     | 98  |  |   | 4,156 
|                           |  |                            |     |                               |   |                       |  |                     |     |  |   |       
|Total                      |  | $                          | 150 |                               | $ | 16,264                |  | $                   | 424 |  | $ | 22,380
|                           |  |                            |     |                               |   |                       |  |                     |     |  |   |       
|December 31, 2006          |  |                            |     |                               |   |                       |  |                     |     |  |   |       
|Mortgage-Backed Securities |  |                            |     |                               |   |                       |  |                     |     |  |   |       
|GNMA                       |  | $                          |    |                               | $ |                      |  | $                   | 5   |  | $ | 452   
|FNMA                       |  |                            | 57  |                               |   | 7,429                 |  |                     | 446 |  |   | 22,049
|FHLMC                      |  |                            | 27  |                               |   | 7,540                 |  |                     | 122 |  |   | 4,910 
|                           |  |                            |     |                               |   |                       |  |                     |     |  |   |       
|Total                      |  | $                          | 84  |                               | $ | 14,969                |  | $                   | 573 |  | $ | 27,411
|                           |  |                            |     |                               |   |                       |  |                     |     |  |   |       

The unrealized losses on the Banks investments were caused by interest rate
increases. The Bank purchased these investments at a premium relative to their face amount in anticipation of a continuing stable interest rate environment. Because the decline in market value is attributable to changes in interest rates and not
credit quality and because the Bank has the ability and intent to hold these investments until a recovery of fair value, which may be maturity, the Bank did not consider these investments to be other-than-temporarily impaired at September 30,
2007 or December 31, 2006.



15



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##### Table of Contents

NOTE C  LOANS

A summary of the balances of loans follows:



|                                                 |  |                    |        |   |                   |   |        |  
|------------------------------------------------ |  | ------------------ | ------ | - | ----------------- | - | ------ | -
|                                                 |  | September 30, 2007 |        |   | December 31, 2006 |  
|                                                 |  | (In Thousands)     |       
|Loans Secured by First Mortgages on Real Estate: |  |                    |        |   |                   |   |        |  
|1-4 Family Residential                           |  | $                  | 44,685 |   |                   | $ | 45,594 |  
|Multi-Family Residential, Commercial and Land    |  |                    | 36,072 |   |                   |   | 33,995 |  
|                                                 |  |                    |        |   |                   |   |        |  
|Total Real Estate Loans                          |  |                    | 80,757 |   |                   |   | 79,589 |  
|                                                 |  |                    |        |   |                   |   |        |  
|Consumer and Other Loans:                        |  |                    |        |   |                   |   |        |  
|Student Loans                                    |  |                    | 2,647  |   |                   |   | 2,654  |  
|Loans Secured by Deposits                        |  |                    | 500    |   |                   |   | 520    |  
|Home Equity Loans and Lines                      |  |                    | 8,071  |   |                   |   | 8,514  |  
|Other                                            |  |                    | 1,222  |   |                   |   | 671    |  
|                                                 |  |                    |        |   |                   |   |        |  
|Total Consumer and Other Loans                   |  |                    | 12,440 |   |                   |   | 12,359 |  
|                                                 |  |                    |        |   |                   |   |        |  
|Less:                                            |  |                    |        |   |                   |   |        |  
|Allowance for Loan Losses                        |  |                    | (2,133 | ) |                   |   | (2,292 | )
|Net Deferred Loan Origination Costs              |  |                    | (341   | ) |                   |   | (390   | )
|                                                 |  |                    |        |   |                   |   |        |  
|Loans, Net                                       |  | $                  | 90,723 |   |                   | $ | 89,266 |  
|                                                 |  |                    |        |   |                   |   |        |  

An analysis of the allowance for loan losses is as follows:



|                                     |  |                                      |       |   |                             |   |       |  
|------------------------------------ |  | ------------------------------------ | ----- | - | --------------------------- | - | ----- | -
|                                     |  | Nine Months Ended September 30, 2007 |       |   | Year EndedDecember 31, 2006 |  
|                                     |  | (In Thousands)                       |      
|Balance, Beginning of Period         |  | $                                    | 2,292 |   |                             | $ | 2,760 |  
|Reduction of Provision for Losses    |  |                                      | (135  | ) |                             |   | (458  | )
|Loans Charged-off, net of recoveries |  |                                      | (24   | ) |                             |   | (10   | )
|                                     |  |                                      |       |   |                             |   |       |  
|Balance, End of Period               |  | $                                    | 2,133 |   |                             | $ | 2,292 |  
|                                     |  |                                      |       |   |                             |   |       |  

Nonaccrual loans, net of allowance for loan loss, amounted to approximately
$235,000 and $184,000 at September 30, 2007 and December 31, 2006, respectively. Renegotiated loans for which interest rates have been reduced amounted to zero and approximately $2,000 at September 30, 2007 and December 31,
2006, respectively. The effect of the interest not recorded on these loans under their original terms did not have a significant effect on net income in the 2007 or 2006 periods. The Bank has no commitments to lend additional funds to these
borrowers.

NOTE D  REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements administered by its primary federal regulator, the Office of Thrift Supervision (OTS). Failure to meet the minimum regulatory capital requirements can
initiate certain mandatory, and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank and the Companys financial statements. Under the regulatory capital adequacy
guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines involving quantitative measures of



16



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##### Table of Contents

NOTE D  REGULATORY MATTERS (Continued)



the Banks assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Banks capital amounts
and classification under the prompt corrective action guidelines are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of:
total risk-based capital and Tier I capital to risk-weighted assets (as defined in the regulations), Tier I capital to adjusted total assets (as defined), tangible capital to adjusted total assets (as defined), and tangible equity to adjusted total
assets (as defined). As of September 30, 2007 and December 31, 2006, the Bank met all of the capital requirements to which it is subject and is deemed to be well capitalized. There have been no subsequent conditions or events which
management believes have changed the Banks status.

The actual and required capital amounts and ratios applicable to
the Bank at September 30, 2007 and December 31, 2006, are presented in the following tables:



|                          |  |                        |        |       |                              |   |        |                                                                       |       |  |      |        |  |       |        |  |       |  
|------------------------- |  | ---------------------- | ------ | ----- | ---------------------------- | - | ------ | --------------------------------------------------------------------- | ----- |  | ---- | ------ |  | ----- | ------ |  | ----- | -
|                          |  | Actual                 |        |       | Minimum for AdequacyPurposes |   |        | Minimum to be WellCapitalized UnderPrompt CorrectiveAction Provisions |      
|                          |  | Amount                 |        | Ratio |                              |   | Amount |                                                                       | Ratio |  |      | Amount |  | Ratio |       
|                          |  | (Dollars in Thousands) |       
|September 30, 2007        |  |                        |        |       |                              |   |        |                                                                       |       |  |      |        |  |       |        |  |       |  
|Tangible Capital          |  | $                      | 57,152 |       | 24.10                        | % |        | $                                                                     | 3,558 |  | 1.50 | %      |  |       | N/A    |  | N/A   |  
|Tangible Equity Ratio     |  |                        | 57,152 |       | 24.10                        |   |        |                                                                       | 4,744 |  | 2.00 |        |  |       | N/A    |  | N/A   |  
|Core/Leverage Capital     |  |                        | 57,152 |       | 24.10                        |   |        |                                                                       | 7,116 |  | 3.00 |        |  | $     | 11,859 |  | 5.00  | %
|Tier 1 Risk-Based Capital |  |                        | 56,974 |       | 60.55                        |   |        |                                                                       | 3,764 |  | 4.00 |        |  |       | 5,645  |  | 6.00  |  
|Total Risk-Based Capital  |  | $                      | 58,156 |       | 61.81                        | % |        | $                                                                     | 7,527 |  | 8.00 | %      |  | $     | 9,409  |  | 10.00 | %
|                          |  |                        |        |       |                              |  
|December 31, 2006         |  |                        |        |       |                              |   |        |                                                                       |       |  |      |        |  |       |        |  |       |  
|Tangible Capital          |  | $                      | 29,741 |       | 13.51                        | % |        | $                                                                     | 3,302 |  | 1.50 | %      |  |       | N/A    |  | N/A   |  
|Tangible Equity Ratio     |  |                        | 29,741 |       | 13.51                        |   |        |                                                                       | 4,403 |  | 2.00 |        |  |       | N/A    |  | N/A   |  
|Core/Leverage Capital     |  |                        | 29,741 |       | 13.51                        |   |        |                                                                       | 6,605 |  | 3.00 |        |  | $     | 11,008 |  | 5.00  | %
|Tier 1 Risk-Based Capital |  |                        | 29,563 |       | 32.80                        |   |        |                                                                       | 3,605 |  | 4.00 |        |  |       | 5,408  |  | 6.00  |  
|Total Risk-Based Capital  |  | $                      | 30,695 |       | 34.06                        | % |        | $                                                                     | 7,210 |  | 8.00 | %      |  | $     | 9,013  |  | 10.00 | %



17



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##### Table of Contents

NOTE D  REGULATORY MATTERS (Continued)



The Banks capital under generally accepted accounting principles (GAAP) is
reconciled as follows:



|                                                   |  |                    |        |   |                   |   |        |  
|-------------------------------------------------- |  | ------------------ | ------ | - | ----------------- | - | ------ | -
|                                                   |  | September 30, 2007 |        |   | December 31, 2006 |  
|                                                   |  | (In Thousands)     |       
|Capital Under GAAP                                 |  | $                  | 56,978 |   |                   | $ | 29,198 |  
|Unrealized Losses on Available-for-Sale Securities |  |                    | 174    |   |                   |   | 543    |  
|                                                   |  |                    |        |   |                   |   |        |  
|Tier 1 Capital                                     |  |                    | 57,152 |   |                   |   | 29,741 |  
|Allowance for Loan Losses(1)                       |  |                    | 1,182  |   |                   |   | 1,132  |  
|Recourse Obligations                               |  |                    | (178   | ) |                   |   | (178   | )
|                                                   |  |                    |        |   |                   |   |        |  
|Total-Risk Based Capital                           |  | $                  | 58,156 |   |                   | $ | 30,695 |  
|                                                   |  |                    |        |   |                   |   |        |  

---

|(1) | The allowance for loan losses included in risk-based capital is limited to 1.25% of risk-based assets. At September 30, 2007, $429,000 of the Banks allowance for loan
losses was excluded from total risk-based capital.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE E  EMPLOYEE STOCK OWNERSHIP PLAN

In connection with the Conversion, the Bank established an employee stock ownership plan (ESOP) that will provide retirement
benefits to all eligible employees of Bank of New Orleans. On July 9, 2007, the ESOP borrowed $5,076,590 from Company and used these funds to purchase 8%, or 507,659 shares, of the shares sold in the Companys offering. As the loan is
repaid and shares are released from collateral, the shares will be allocated to the ESOP participants based on their individual compensation as a percentage of total plan compensation. The Bank will recognize compensation expense equal to the fair
value of the ESOP shares committed to be released during the period.



18



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##### Table of Contents

Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains certain forward-looking statements and information
relating to the Company and the Bank that are based on the beliefs of management as well as assumptions made by and information currently available to management. In addition, in portions of this document the words anticipate,
believe, estimate, expect, intend, should and similar expressions or the negative thereof, as they relate to the Company or the Bank or their management, are intended to identify
forward-looking statements. Such statements reflect the current views of the Company and/or the Bank with respect to forward-looking events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. The Company does not intend to update these
forward-looking statements.

General

The Company commenced operations as the parent holding company for the Bank on July 9, 2007 upon consummation of the Conversion. The Companys results of operations initially will be primarily dependent on the results of the Bank,
which now is a wholly owned subsidiary of the Company. The Banks results of operations depend, to a large extent, on net interest income, which is the difference between the income earned on its loan and investment portfolios and the cost of
funds, consisting of the interest paid on deposits and borrowings. Results of operations are also affected by provisions for loan losses, fee income and other non-interest income and non-interest expense. Non-interest expense principally consists of
compensation and employee benefits, office occupancy and equipment expense, data processing, advertising and business promotion and other expense. Our results of operations are also significantly affected by general economic and competitive
conditions, particularly changes in interest rates, government policies and actions of regulatory authorities. Future changes in applicable law, regulations or government policies may materially impact our financial conditions and results of
operations.

Critical Accounting Policies

In reviewing and understanding financial information for the Company, you are encouraged to read and understand the significant accounting policies used in preparing our financial statements. These policies are described in Note A of the
notes to our financial statements. The accounting and financial reporting policies of the Company conform to accounting principles generally accepted in the United States of America and to general practices within the banking industry. Accordingly,
the financial statements require certain estimates, judgments, and assumptions, which are believed to be reasonable, based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of income and expenses during the periods presented. The following accounting policies comprise those that management believes are the most critical to aid in fully understanding and
evaluating our reported financial results. These policies require numerous estimates or economic assumptions that may prove inaccurate or may be subject to variations which may significantly affect our reported results and financial condition for
the period or in future periods.

Allowance for Loan Losses. The allowance for loan losses is established through a provision for
loan losses charged to expense. Loans are charged against the allowance for loan losses when management believes that the collectibility of the principal is unlikely. Subsequent recoveries are added to the allowance. The allowance is an amount that
represents the amount of probable and reasonably estimable known and inherent



19



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##### Table of Contents

losses in the loan portfolio, based on evaluations of the collectibility of loans. The evaluations take into consideration such factors as changes in the
types and amount of loans in the loan portfolio, historical loss experience, adverse situations that may affect the borrowers ability to repay, estimated value of any underlying collateral, estimated losses relating to specifically identified
loans, and current economic conditions. This evaluation is inherently subjective as it requires material estimates including, among others, exposure at default, the amount and timing of expected future cash flows on impacted loans, value of
collateral, estimated losses on our commercial and residential loan portfolios and general amounts for historical loss experience. All of these estimates may be susceptible to significant change.

While management uses the best information available to make loan loss allowance evaluations, adjustments to the allowance may be necessary based on
changes in economic and other conditions or changes in accounting guidance. Historically, our estimates of the allowance for loan loss have not required significant adjustments from managements initial estimates. In addition, the Office of
Thrift Supervision, as an integral part of its examination processes, periodically reviews our allowance for loan losses. The Office of Thrift Supervision may require the recognition of adjustments to the allowance for loan losses based on its
judgment of information available to it at the time of their examinations. To the extent that actual outcomes differ from managements estimates, additional provisions to the allowance for loan losses may be required that would adversely impact
earnings in future periods.

Income Taxes. We make estimates and judgments to calculate some of our tax liabilities and determine
the recoverability of some of our deferred tax assets, which arise from temporary differences between the tax and financial statement recognition of revenues and expenses. We also estimate a reserve for deferred tax assets if, based on the available
evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. These estimates and judgments are inherently subjective. Historically, our estimates and judgments to calculate
our deferred tax accounts have not required significant revision to our initial estimates.

In evaluating our ability to recover deferred
tax assets, we consider all available positive and negative evidence, including our past operating results, recent cumulative losses and our forecast of future taxable income. In determining future taxable income, we make assumptions for the amount
of taxable income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies. These assumptions require us to make judgments about our future taxable income and are consistent with the plans and
estimates we use to manage our business. Any reduction in estimated future taxable income may require us to record a valuation allowance against our deferred tax assets. An increase in the valuation allowance would result in additional income tax
expense in the period and could have a significant impact on our future earnings.

Comparison of Financial Condition at September 30, 2007 and
December 31, 2006

Our total assets at September 30, 2007 were $260.5 million, an increase of $40.8 million from the
December 31, 2006 balance of $219.7 million. During this period, cash and cash equivalents, investment securities and mortgage-backed securities increased by $41.3 million in the aggregate. This increase is attributed to the investment of most
of the net proceeds from our stock offering into short and intermediate term investments. Our net loans receivable increased during the nine-month period by $1.5 million, despite the receipt of three significant loan payoffs during the third
quarter. During the quarter ended September 30, 2007, three loans secured by nonresidential real estate with an aggregate balance of $7.3 million were repaid. Our investment in the stock of the Federal Home Loan Bank of Dallas was $1.4 million
at September 30, 2007, a decrease of $847,000 from the December 31, 2006 balance of $2.2 million. This decrease in our investment in FHLB stock is the result of mandatory repurchases of capital stock required by the FHLB of Dallas
capital management plan.



20



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##### Table of Contents

Total deposits decreased by $7.4 million, or 5.0% during the first nine months of 2007. Non-interest
bearing deposits declined by $0.7 million, while interest-bearing deposits declined by $6.7 million. A significant portion of this decline is directly attributable to the withdrawal of $4.9 million of deposits to purchase stock in the Companys
initial public offering. The remaining decrease in total deposits is the result of the continued outflow of short-term deposits that were received following Hurricane Katrina, due to our customers utilizing deposits made upon receipt of insurance
settlements received for storm-related damages, as well as increased competition in the local market for those short-term deposits. Our borrowings from the FHLB were $25.4 million as of September 30, 2007, a 27.9% decrease from the
December 31, 2006 balance of $35.2 million. Total shareholders equity increased by $59.1 million to $88.3 million as of September 30, 2007. The Company raised $62.1 million of capital in its July 2007 public offering, of which $5.1
million has been reserved for distribution by the Companys Employee Stock Ownership Plan. Net income of $1.7 million for the nine month period ended September 30, 2007, and an increase of $416,000 in other comprehensive income account for
the remaining increase in shareholders equity.

Comparison of Our Operating Results for the Three Months and Nine Months Ended September 30,
2007 and 2006

General.The Companys net income for the quarter ended September 30, 2007 was $900,000, an increase of
$235,000, or 35.3%, from the third quarter of 2006. The increase in net income for the third quarter of 2007 is attributed to an increase in net interest income due to investment of the net proceeds generated by the Companys recently completed
stock offering. Interest income and net interest income increased during the quarter by approximately $600,000, to $3.7 million and $2.3 million, respectively. Interest expense held constant during the quarter at $1.3 million. During the third
quarter, the Companys net interest spread, the difference between interest income and interest expense, declined by 13 basis points. The net interest spread for the third quarter of 2007 was 2.50% compared to 2.63% during the third quarter of
2006. However, the net interest margin, the ratio of net interest spread to average interest-earning assets, increased by 57 basis points from the 2006 period. The net interest margin for the quarter ended September 30, 2007 was 3.62% compared
to 3.05% for the quarter ending September 30, 2006. The rise in net interest margin reflects the impact the additional capital raised in the public offering had as a non-interest bearing funding source.

For the nine month period ended September 30, 2007, the Company reported net income of $1.7 million, a decrease of $380,000, or 18.7%, from the
comparable 2006 period. The primary reason for the decrease in net income during the nine months ended September 30, 2007 compared to the nine months ended September 30, 2006 was a lower level of recoveries from the allowance for loan
losses in the 2007 period, as well as an increase in non-interest expense in 2007 due to increased salary and benefit costs and other non-interest expenses. The Company reported recoveries of the $135,000 for the first nine months of 2007 compared
to recoveries of $586,000 for the first nine months of 2006. The recoveries for both periods are related to the reversal of loss allowances established immediately following Hurricane Katrina. The Company records recoveries as the result of loans
repaid from insurance proceeds or the sale of the underlying collateral. The Company



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anticipates the recoveries will continue at a decreasing rate for several quarters. Non-interest expense was $3.6 million for the nine month period ended
September 30, 2007, an increase of $311,000 or 9.5%. This increase was primarily due to a regional increase in employment expenses in the post-Katrina environment, which has heightened demand for available employees.

Average Balances, Net Interest Income, and Yields Earned and Rates Paid. The following tables show for the periods indicated the total dollar
amount of interest from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. Tax-exempt income and yields
have not been adjusted to a tax-equivalent basis. All average balances are based on monthly balances. Management does not believe that the monthly averages differ significantly from what the daily averages would be.



|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|----------------------------------------------------------------------- |  | -------------------------------- | ------- | -------- | ---- | ---------------------- |  | ------ | --------------- |  | -------- | ------- | ------------------- | - | ----- |  | ------ | -
|                                                                        |  | Three Months Ended September 30, |        
|                                                                        |  | 2007                             |         |          | 2006 |                       
|                                                                        |  | Average Balance                  |         | Interest |      | Average Yield/ Rate(1) |  |        | Average Balance |  | Interest |         | Average Yield/ Rate |  
|Interest-earning assets:                                                |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Loans receivable(1)                                                     |  | $                                | 90,897  |          | $    | 1,633                  |  | 7.19   | %               |  | $        | 87,226  |                     | $ | 1,445 |  | 6.63   | %
|Mortgage-backed securities                                              |  |                                  | 90,254  |          |      | 1,047                  |  | 4.64   |                 |  |          | 98,595  |                     |   | 1,159 |  | 4.70   |  
|Investment securities                                                   |  |                                  | 38,029  |          |      | 445                    |  | 4.68   |                 |  |          | 31,360  |                     |   | 372   |  | 4.74   |  
|Other interest-earning assets                                           |  |                                  | 35,222  |          |      | 527                    |  | 5.98   |                 |  |          | 5,864   |                     |   | 71    |  | 4.84   |  
|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Total interest-earning assets                                           |  |                                  | 254,402 |          |      | 3,652                  |  | 5.74   |                 |  |          | 223,045 |                     |   | 3,047 |  | 5.46   |  
|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Non-interest-earning assets                                             |  |                                  | 7,224   |          |      |                        |  |        |                 |  |          | 6,745   |                     |   |       |  |        |  
|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Total assets                                                            |  |                                  | 261,626 |          |      |                        |  |        |                 |  |          | 229,790 |                     |   |       |  |        |  
|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Interest-bearing liabilities:                                           |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Passbook, checking and money market accounts                            |  |                                  | 46,193  |          |      | 54                     |  | 0.47   |                 |  |          | 53,635  |                     |   | 56    |  | 0.42   |  
|Certificate accounts                                                    |  |                                  | 93,815  |          |      | 990                    |  | 4.22   |                 |  |          | 94,825  |                     |   | 857   |  | 3.62   |  
|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Total deposits                                                          |  |                                  | 140,008 |          |      | 1,044                  |  | 2.98   |                 |  |          | 148,460 |                     |   | 913   |  | 2.46   |  
|FHLB advances                                                           |  |                                  | 26,235  |          |      | 304                    |  | 4.64   |                 |  |          | 42,328  |                     |   | 435   |  | 4.11   |  
|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Total interest-bearing liabilities                                      |  |                                  | 166,243 |          |      | 1,348                  |  | 3.24   | %               |  |          | 190,788 |                     |   | 1,348 |  | 2.83   | %
|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Non-interest-bearing liabilities                                        |  |                                  | 7,455   |          |      |                        |  |        |                 |  |          | 10,265  |                     |   |       |  |        |  
|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Total liabilities                                                       |  |                                  | 173,698 |          |      |                        |  |        |                 |  |          | 201,053 |                     |   |       |  |        |  
|Stockholders Equity                                                    |  |                                  | 87,928  |          |      |                        |  |        |                 |  |          | 28,737  |                     |   |       |  |        |  
|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Total liabilities and Stockholders Equity                              |  | $                                | 261,626 |          |      |                        |  |        |                 |  | $        | 229,790 |                     |   |       |  |        |  
|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Net interest-earning assets                                             |  | $                                | 88,159  |          |      |                        |  |        |                 |  | $        | 32,257  |                     |   |       |  |        |  
|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Net interest income; average interest rate spread                       |  |                                  |         |          | $    | 2,304                  |  | 2.50   | %               |  |          |         |                     | $ | 1,699 |  | 2.63   | %
|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Net interest margin(2)                                                  |  |                                  |         |          |      |                        |  | 3.62   | %               |  |          |         |                     |   |       |  | 3.05   | %
|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Average interest-earning assets to average interest-bearing liabilities |  |                                  |         |          |      |                        |  | 153.03 | %               |  |          |         |                     |   |       |  | 116.91 | %
|                                                                        |  |                                  |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  

---

|(1) | Includes nonaccrual loans
during the respective periods. Calculated net of deferred fees and discounts and allowance for loan losses.
|--- | -------------------------------------------------------------------------------------------------------------------------------------

|(2) | Equals net interest income
divided by average interest-earning assets.
|--- | ----------------------------------------------------------------------



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|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|----------------------------------------------------------------------- |  | ------------------------------- | ------- | -------- | ---- | ---------------------- |  | ------ | --------------- |  | -------- | ------- | ------------------- | - | ----- |  | ------ | -
|                                                                        |  | Nine Months Ended September 30, |        
|                                                                        |  | 2007                            |         |          | 2006 |                       
|                                                                        |  | Average Balance                 |         | Interest |      | Average Yield/ Rate(1) |  |        | Average Balance |  | Interest |         | Average Yield/ Rate |  
|Interest-earning assets:                                                |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Loans receivable(1)                                                     |  | $                               | 93,028  |          | $    | 4,803                  |  | 6.88   | %               |  | $        | 87,355  |                     | $ | 4,363 |  | 6.66   | %
|Mortgage-backed securities                                              |  |                                 | 87,086  |          |      | 3,070                  |  | 4.70   |                 |  |          | 99,860  |                     |   | 3,408 |  | 4.55   |  
|Investment securities                                                   |  |                                 | 29,516  |          |      | 1,066                  |  | 4.82   |                 |  |          | 30,097  |                     |   | 1,033 |  | 4.58   |  
|Other interest-earning assets                                           |  |                                 | 20,362  |          |      | 773                    |  | 5.06   |                 |  |          | 12,231  |                     |   | 442   |  | 4.82   |  
|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Total interest-earning assets                                           |  |                                 | 229,992 |          |      | 9,712                  |  | 5.63   |                 |  |          | 229,543 |                     |   | 9,246 |  | 5.37   |  
|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Non-interest-earning assets                                             |  |                                 | 6,935   |          |      |                        |  |        |                 |  |          | 7,141   |                     |   |       |  |        |  
|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Total assets                                                            |  |                                 | 236,927 |          |      |                        |  |        |                 |  |          | 236,684 |                     |   |       |  |        |  
|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Interest-bearing liabilities:                                           |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Passbook, checking and money market accounts                            |  |                                 | 52,794  |          |      | 166                    |  | 0.42   |                 |  |          | 57,794  |                     |   | 176   |  | 0.41   |  
|Certificate accounts                                                    |  |                                 | 96,011  |          |      | 2,952                  |  | 4.10   |                 |  |          | 94,822  |                     |   | 2,399 |  | 3.37   |  
|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Total deposits                                                          |  |                                 | 148,805 |          |      | 3,118                  |  | 2.79   |                 |  |          | 152,616 |                     |   | 2,575 |  | 2.25   |  
|FHLB advances                                                           |  |                                 | 30,568  |          |      | 1,051                  |  | 4.58   |                 |  |          | 44,944  |                     |   | 1,350 |  | 4.00   |  
|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Total interest-bearing liabilities                                      |  |                                 | 179,373 |          |      | 4,169                  |  | 3.10   |                 |  |          | 197,560 |                     |   | 3,925 |  | 2.65   |  
|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Non-interest-bearing liabilities                                        |  |                                 | 8,469   |          |      |                        |  |        |                 |  |          | 11,219  |                     |   |       |  |        |  
|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Total liabilities                                                       |  |                                 | 187,842 |          |      |                        |  |        |                 |  |          | 208,779 |                     |   |       |  |        |  
|Stockholders Equity                                                    |  |                                 | 49,085  |          |      |                        |  |        |                 |  |          | 27,905  |                     |   |       |  |        |  
|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Total liabilities and Stockholders Equity                              |  | $                               | 236,927 |          |      |                        |  |        |                 |  | $        | 236,684 |                     |   |       |  |        |  
|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Net interest-earning assets                                             |  | $                               | 50,619  |          |      |                        |  |        |                 |  | $        | 31,983  |                     |   |       |  |        |  
|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Net interest income; average interest rate spread                       |  |                                 |         |          | $    | 5,543                  |  | 2.53   | %               |  |          |         |                     | $ | 5,321 |  | 2.72   | %
|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Net interest margin(2)                                                  |  |                                 |         |          |      |                        |  | 3.21   | %               |  |          |         |                     |   |       |  | 3.09   | %
|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  
|Average interest-earning assets to average interest-bearing liabilities |  |                                 |         |          |      |                        |  | 128.22 | %               |  |          |         |                     |   |       |  | 116.19 | %
|                                                                        |  |                                 |         |          |      |                        |  |        |                 |  |          |         |                     |   |       |  |        |  

---

|(1) | Includes nonaccrual loans
during the respective periods. Calculated net of deferred fees and discounts and allowance for loan losses.
|--- | -------------------------------------------------------------------------------------------------------------------------------------

|(2) | Equals net interest income
divided by average interest-earning assets.
|--- | ----------------------------------------------------------------------

Interest Income. Interest income was $3.7 million for the
third quarter of 2007, and $3.0 million for the third quarter of 2006. The average balance of our net loan portfolio increased by $3.7 million, or 4.2% in the quarter ended September 30, 2007, in comparison to the average balance of the net
loan portfolio during the quarter ended September 30, 2006. The average yield on our net loan portfolio increased by 56 basis points during the third quarter of 2007, in comparison to the third quarter of 2006. The primary reason for this
significant increase was a higher interest rate on the loans originated during the three months ended September 30, 2007 as compared to the three months ended September 30, 2006. The average balance of our mortgage-backed securities
declined by $8.3 million, or 8.5% during the period ended September 30, 2007, as compared to the quarter ended September 30, 2006. The average balance in our investment securities and other interest-earnings assets increased $6.7 million
and $29.4 million respectively, in the third quarter of 2007 compared to the third quarter of 2006. These increases were due primarily to the investment of the proceeds of the Companys stock offering into short and intermediate term investment
securities and interest-bearing deposits in other banks.

For the nine months ended September 30, 2007, the Banks interest
income was $9.7 million compared to $9.2 million for the nine months ended September 30, 2006. The primary reason for this increase was an increase in the average balance of our net loans receivable. The average balance of our net loans
receivable for the first nine months of 2007 was $93.0 million, an increase of $5.6 million from the average balance for the first nine months of 2006, which was $87.4 million. Interest income on loans receivable for the first nine months of 2007
was $4.8 million, which is an increase of $440,000, or 10.1% from the interest income on loans for the first nine months of 2006, which was $4.4 million.



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Interest Expense. The Banks total interest expense was $1.3 million for the third quarter of
both 2007 and 2006. However, the average rate paid on interest-bearing liabilities increased to 3.24% during the 2007 period, compared to 2.83% in the third quarter of 2006. For the nine-month period ended September 30, 2007, interest expense
increased by $244,000 to $4.2 million compared to the nine months ended September 30, 2006. The average rate paid on interest-bearing liabilities increased by 45 basis points in the first nine months of 2007 compared to the same period of 2006.
The increases in the average rates paid on interest-bearing liabilities in the quarter and nine months ended September 30, 2007 was due to the increased cost of deposits, resulting from an increased market rate of interest, and the maturity of
certain lower costing FHLB advances.

Interest paid on deposits during the third quarter of 2007 was $1.0 million, an increase of $131,000
from the third quarter of 2006. The average rate of interest paid on deposits during the third quarter of 2007 was 2.98% on an average balance of $140.0 million. The average rate of interest paid on deposits during the third quarter of 2006 was
2.46% on an average balance of $148.5 million. The average rate of interest paid on FHLB advances during the third quarter of 2007 was 4.64% on an average balance of $26.2 million. The average rate of interest paid on FHLB advances during the third
quarter of 2006 was 4.11% on an average balance of $42.3 million.

On a year-to-date basis for the 2007 period, interest paid on deposits
was $3.1 million, an increase of $543,000 from the comparable 2006 period. The average rate of interest paid on deposits during the first nine months of 2007 was 2.79% on an average balance of $148.8 million. The average rate of interest paid on
deposits during the first nine months of 2006 was 2.25% on an average balance of $152.6 million. The average balance of FHLB advances for the first nine months of 2007 was $30.6 million, a $14.3 million decrease from the average balance of $44.9
million for the first nine months of 2006. During the first nine months of 2007, the average rate paid on FHLB advances increased to 4.58%, from 4.00% during the comparable 2006 period.

Provision (Recovery) for Loan Losses.We have identified the evaluation of the allowance for loan losses as a critical accounting policy where
amounts are sensitive to material variation. This policy is significantly affected by our judgment and uncertainties and there is a likelihood that materially different amounts would be reported under different, but reasonably plausible, conditions
or assumptions. Our activity in the provision for loan losses, which are charges or recoveries to operating results, is undertaken in order to maintain a level of total allowance for losses that management believes covers all known and inherent
losses that are both probable and reasonably estimable at each reporting date. Our evaluation process typically includes, among other things, an analysis of delinquency trends, non-performing loan trends, the level of charge-offs and recoveries,
prior loss experience, total loans outstanding, the volume of loan originations, the type, size and geographic concentration of our loans, the value of collateral securing the loan, the borrowers ability to repay and repayment performance, the
number of loans requiring heightened management oversight, local economic conditions and industry experience. Various regulatory agencies, as an integral part of their examination process, periodically review our allowance for loan losses. Such
agencies may require it to make additional provisions for estimated loan losses based upon judgments different from those of management.

We had a $75,000 recovery for loans losses in the quarter ended September 30, 2007 compared to a $213,000 recovery in the quarter ended September 30, 2006. Our total non-performing assets amounted to $235,000 at September 30,
2007 compared to $63,000 at September 30, 2006. We charged off $41,000 and $10,000, respectively, of loans in the nine months ending September 30, 2007 and 2006. In both the 2007 and



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##### Table of Contents

2006 periods the amounts charged-off related primarily to single-family residential mortgage loans.For the first nine months of 2007, the
Companys recovery for loan losses amounted to $135,000 compared to $586,000 for the first nine months of 2006. The amount of such recoveries during these periods primarily was due to the amounts of repayments received on loans with respect to
which the Bank previously had established an allowance subsequent to Hurricane Katrina.

Non-interest Income. Our non-interest
income was $147,000 for the quarter ended September 30, 2007 compared to $168,000 for the quarter ended September 30, 2006. For the nine-months ended September 30, 2007, non-interest income amounted to $344,000 compared to $379,000
for the first nine months of 2006.

Non-interest Expense. Non-interest expense amounted to $1.2 million for the quarter ended
September 30, 2007 compared to $1.1 million in the quarter ended September 30, 2006, an increase of $88,000 or 8.1%. The increase in non-interest expense during the 2007 period was due primarily to a $67,000 increase in salary and employee
benefit expenses, primarily reflecting increased wages necessitated in order to hire and retain personnel in light of the demand for employees in the greater New Orleans market area.

For the first nine months of 2007 compared to the first nine months of 2006, total non-interest expense increased by $311,000, or 9.5%, to $3.6 million.
Again, the primary reason for the increase was higher salary and benefit expense in the 2007 period.

As a result of the Banks
conversion to the stock form of ownership during the quarter ended September 30, 2007, the Bank will be subject to the Louisiana bank shares tax beginning in January 2008. This tax is based upon capitalized earnings and taxable
shareholders equity minus real and personal property credits and will increase our non-interest expense in future periods.

Income
Tax Expense. Our income tax expense amounted to $447,000 for the third quarter of 2007 compared to $324,000 in the third quarter of 2006. This increase was due to higher level of pre-tax income in the third quarter of 2007, compared to 2006.
Income tax expense amounted to $801,000 and $996,000, respectively, for the nine months ended September 30, 2007 and 2006. The differences were due primarily to the higher amounts of pre-tax income in the 2006 periods.

Liquidity and Capital Resources

Our primary sources
of funds are from deposits, amortization of loans, loan prepayments and the maturity of loans, mortgage-backed securities and other investments, and other funds provided from operations. While scheduled payments from the amortization of loans and
mortgage-backed securities and maturing investment securities are relatively predictable sources of funds, deposit flows and loan prepayments can be greatly influenced by general interest rates, economic conditions and competition. We also maintain
excess funds in short-term, interest-bearing assets that provide additional liquidity. At September 30, 2007, our cash and cash equivalents amounted to $14.4 million. In addition, at such date our available for sale investment and
mortgage-backed securities amounted to an aggregate of $73.7million.

We use our liquidity to fund existing and future loan commitments, to
fund maturing certificates of deposit and demand deposit withdrawals, to invest in other interest-earning assets, and to meet operating expenses. At September 30, 2007, we had certificates of deposit maturing within the next 12 months amounting
to $67.9 million. Based upon historical experience, we anticipate that a significant portion of the maturing certificates of deposit will be redeposited with us. For the three months ended September 30, 2007, the average balance of our
outstanding FHLB advances was $26.2 million. At September 30, 2007, we had $25.4 million in outstanding FHLB advances and we had $141.2 million in additional FHLB advances available to us.



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##### Table of Contents

In addition to cash flow from loan and securities payments and prepayments as well as from sales of
available for sale securities, we have significant borrowing capacity available to fund liquidity needs. In recent years we have utilized borrowings as a cost efficient addition to deposits as a source of funds. Our borrowings consist primarily of
advances from the Federal Home Loan Bank of Dallas, of which we are a member. Under terms of the collateral agreement with the Federal Home Loan Bank, we pledge residential mortgage loans and mortgage-backed securities as well as our stock in the
Federal Home Loan Bank as collateral for such advances.

The following table summarizes our contractual cash obligations at
September 30, 2007.



|                              |  |                |         |                        |   |                   |  |                   |        |               |   |        |  |   |    
|----------------------------- |  | -------------- | ------- | ---------------------- | - | ----------------- |  | ----------------- | ------ | ------------- | - | ------ |  | - | ---
|                              |  |                |         | Payments Due By Period
|                              |  | Total          |         | To 1 Year              |   | Over 1 to 3 Years |  | Over 3 to 5 Years |        | After 5 Years
|                              |  | (In Thousands)
|Certificates of deposit       |  | $              | 94,287  |                        | $ | 67,939            |  | $                 | 15,368 |               | $ | 10,980 |  | $ |   
|                              |  |                |         |                        |  
|FHLB advances                 |  |                | 25,423  |                        |   | 14,698            |  |                   | 5,908  |               |   | 4,393  |  |   | 424
|                              |  |                |         |                        |   |                   |  |                   |        |               |   |        |  |   |    
|Total long-term debt          |  |                | 119,710 |                        |   | 82,637            |  |                   | 21,276 |               |   | 15,373 |  |   | 424
|Operating lease obligations   |  |                | 310     |                        |   | 57                |  |                   | 82     |               |   | 62     |  |   | 109
|                              |  |                |         |                        |   |                   |  |                   |        |               |   |        |  |   |    
|Total contractual obligations |  | $              | 120,020 |                        | $ | 82,694            |  | $                 | 21,358 |               | $ | 15,435 |  | $ | 533
|                              |  |                |         |                        |   |                   |  |                   |        |               |   |        |  |   |    

We anticipate that we will continue to have sufficient funds and alternative funding sources to
meet our current commitments.

Impact of Inflation and Changing Prices

The financial statements, accompanying notes, and related financial data of the Company presented herein have been prepared in accordance with generally accepted accounting principles, which require the measurement of
financial position and operating results in terms of historical dollars without considering the changes in purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of operations. Most of our
assets and liabilities are monetary in nature; therefore, the impact of interest rates has a greater impact on its performance than the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or to the
same extent as the prices of goods and services.

Item 3  Quantitative and Qualitative Disclosures About Market Risk.

For a discussion of the
Banks asset and liability management policies as well as the methods used to manage its exposure to the risk of loss from adverse changes in market prices and rates market, see Managements Discussion and Analysis of Financial
Condition and Results of Operations  How We Manage Market Risk in the Companys prospectus dated May 14, 2007.

Item 4T  Controls and Procedures.

Our management evaluated, with the participation of our President
and Chief Executive Officer and our Senior Vice President and Chief Financial Officer of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period
covered



26



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##### Table of Contents

by this report. Based on such evaluation, our President and Chief Executive Officer and our Senior Vice President and Chief Financial Officer 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 our internal control
over financial reporting (as defined in Rules 13a-15(f) or 15(d)-15(f) under the Securities Exchange Act of 1934) occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings.

There are no matters required to be reported under this item.

Item 1A - Risk Factors.

See Risk Factors at pages 13-18 in the prospectus included in the
Companys registration statement on Form S-1 (File No. 333-141465), which is incorporated herein by reference thereto. There have been no material changes from the risk factors previously disclosed in the Companys prospectus.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds.

(a) Not applicable.

(b) The Companys initial public offering of securities, which was registered on a Form S-1 (which was effective on May 14, 2007) filed under
the Securities Act of 1933, as amended (SEC File No. 333-141465), was consummated on July 9, 2007, concurrent with the Banks reorganization from a federally-chartered mutual savings bank to a federally-chartered stock savings bank.
Upon completion of the Conversion and the offering, all of the Banks stock is owned by the Company, and all of the Companys stock is, in turn, owned by the public. In connection with the Conversion and offering, the Company sold
6,345,732 shares of its common stock at a price of $10.00 per share, raising $63,457,320 of gross proceeds.

Sandler
ONeill & Partners, LP (Sandler ONeill) was engaged to assist in the marketing of the common stock. For their services, Sandler ONeill received a management fee equal to 1% of the dollar amount of common stock
sold in the offering other than shares purchased by the officers, directors, or employees (or members of their immediate family) of the Bank or the Company or qualified and non-qualified employee benefit plans of the Bank or Company, for which no
fee was to be paid.

Expenses related to the offering were approximately $1.3 million, including the fees and expenses paid to Sandler
ONeill described above, none of which were paid to officers or directors of Company, the Bank or associates of such persons. No underwriting discounts, commissions or finders fees were paid in connection with the offering. Net proceeds of the
offering were approximately $62.1 million. As a result of completion of the offering, 6,345,732 shares of the Companys common stock are outstanding as of November 14, 2007.

Fifty percent of the net proceeds of the offering, or $31.0 million, were contributed by the Company to Bank of New Orleans in return for 100% of the
issued and outstanding shares of common stock of the Bank. In addition, the Bank made a loan to the Banks employee stock ownership plan (ESOP) in the amount of $5.1 million which the ESOP used to purchase 507,659 shares of the
Companys common stock.



27



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##### Table of Contents

The Companys common stock is quoted on the Nasdaq Global Market under the trading symbol
LABC.

(c) Not applicable.

Item 3 - Defaults Upon Senior Securities.

There are no matters required to be reported under this item.

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

There are no matters required to be reported
under this item.

Item 5 - Other Information.

There are no matters required to be reported under this item.

Item 6 - Exhibits.

(a) List of exhibits: (filed herewith unless otherwise noted)



|     |  |                                                                                  
|---- |  | ---------------------------------------------------------------------------------
|31.1 |  | Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer            
|     | 
|31.2 |  | Rule 13a-14(a)/15d-14(a) Section 302 Certification of the Chief Financial Officer
|     | 
|32.1 |  | Section 1350 Certification                                                       



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SIGNATURES

Pursuant to the requirements 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.



|                        |  |     |  |                                      
|----------------------- |  | --- |  | -------------------------------------
|                        |  |     |  | LOUISIANA BANCORP, INC.              
|                        |  |    
|Date: November 14, 2007 |  | By: |  | /s/ Lawrence J. LeBon, III           
|                        |  |     |  | Lawrence J. LeBon, III               
|                        |  |     |  | President and Chief Executive Officer



29