##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549





FORM 10-Q





(Mark One)

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

For the quarterly period ended June 30, 2009

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





Louisiana Bancorp, Inc.

(Exact Name
of Registrant as Specified in Its Charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|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)





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 has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.     ̈  Yes     ̈  No

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



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  |  ̈
|                        |  |                                                  | 
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller reporting company |  | 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 August 12, 2009, there were 5,307,660 shares of the Registrants common stock outstanding.









---

##### 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 |  | 18  
|Item 3                      |  | -  |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 24  
|Item 4T                     |  | -  |  | Controls and Procedures                                                               |  | 24  
|                           
|PART II - OTHER INFORMATION
|                            |  |    | 
|Item 1                      |  | -  |  | Legal Proceedings                                                                     |  | 24  
|Item 1A                     |  | -  |  | Risk Factors                                                                          |  | 24  
|Item 2                      |  | -  |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 24  
|Item 3                      |  | -  |  | Defaults Upon Senior Securities                                                       |  | 25  
|Item 4                      |  | -  |  | Submission of Matters to a Vote of Security Holders                                   |  | 25  
|Item 5                      |  | -  |  | Other Information                                                                     |  | 25  
|Item 6                      |  | -  |  | Exhibits                                                                              |  | 25  
|Signatures                  |  | 26



2



---

##### Table of Contents

LOUISIANA BANCORP, INC.

Consolidated Balance Sheets



|                                                                                                                                                                                         |  |                      |         |   |            |   |         |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------- | ------- | - | ---------- | - | ------- | -
|                                                                                                                                                                                         |  | (unaudited)6/30/2009 |         |   | 12/31/2008 |  
|                                                                                                                                                                                         |  | (in thousands)       |        
|Assets                                                                                                                                                                                   |  |                      |         |   |            |   |         |  
|Cash and Due from Banks                                                                                                                                                                  |  | $                    | 1,707   |   |            | $ | 3,308   |  
|Short-term Interest-Bearing Deposits                                                                                                                                                     |  |                      | 9,324   |   |            |   | 1,666   |  
|                                                                                                                                                                                         |  |                      |         |   |            |   |         |  
|Total Cash and Cash Equivalents                                                                                                                                                          |  |                      | 11,031  |   |            |   | 4,974   |  
|                                                                                                                                                                                         |  |                     
|Certificates of Deposit                                                                                                                                                                  |  |                      | 2,270   |   |            |   | 1,425   |  
|Securities Available-for-Sale, at Fair Value(amortized cost of $63,605, and $78,065, respectively)                                                                                       |  |                      | 65,365  |   |            |   | 80,091  |  
|Securities Held-to-Maturity, at Amortized Cost(estimated fair value of $106,152, and $127,255, respectively)                                                                             |  |                      | 102,184 |   |            |   | 123,429 |  
|Loans, Net of Allowance for Loan Losses of $2,005, and $1,952, respectively                                                                                                              |  |                      | 135,339 |   |            |   | 111,236 |  
|Accrued Interest Receivable                                                                                                                                                              |  |                      | 1,343   |   |            |   | 1,649   |  
|Stock in Federal Home Loan Bank                                                                                                                                                          |  |                      | 2,297   |   |            |   | 2,293   |  
|Premises and Equipment, Net                                                                                                                                                              |  |                      | 1,852   |   |            |   | 1,804   |  
|Other Assets                                                                                                                                                                             |  |                      | 510     |   |            |   | 548     |  
|                                                                                                                                                                                         |  |                      |         |   |            |   |         |  
|Total Assets                                                                                                                                                                             |  | $                    | 322,191 |   |            | $ | 327,449 |  
|                                                                                                                                                                                         |  |                      |         |   |            |   |         |  
|                                                                                                                                                                                         |  |                     
|Liabilities and Shareholders Equity                                                                                                                                                     |  |                      |         |   |            |   |         |  
|Deposits                                                                                                                                                                                 |  |                      |         |   |            |   |         |  
|Noninterest-bearing                                                                                                                                                                      |  | $                    | 5,576   |   |            | $ | 4,219   |  
|Interest-bearing                                                                                                                                                                         |  |                      | 168,679 |   |            |   | 156,370 |  
|                                                                                                                                                                                         |  |                      |         |   |            |   |         |  
|Total deposits                                                                                                                                                                           |  |                      | 174,255 |   |            |   | 160,589 |  
|                                                                                                                                                                                         |  |                     
|Borrowings                                                                                                                                                                               |  |                      | 64,216  |   |            |   | 76,660  |  
|Advance Payments by Borrowers for Taxes and Insurance                                                                                                                                    |  |                      | 1,704   |   |            |   | 1,639   |  
|Accrued Interest Payable                                                                                                                                                                 |  |                      | 669     |   |            |   | 664     |  
|Other Liabilities                                                                                                                                                                        |  |                      | 1,707   |   |            |   | 2,170   |  
|                                                                                                                                                                                         |  |                      |         |   |            |   |         |  
|Total Liabilities                                                                                                                                                                        |  |                      | 242,551 |   |            |   | 241,722 |  
|                                                                                                                                                                                         |  |                      |         |   |            |   |         |  
|                                                                                                                                                                                         |  |                     
|Commitments and Contigencies                                                                                                                                                             |  |                      |        |   |            |   |        |  
|                                                                                                                                                                                         |  |                     
|Shareholders Equity                                                                                                                                                                     |  |                      |         |   |            |   |         |  
|Common Stock, $.01 Par Value, 40,000,000 Shares Authorized; 6,345,732 Shares Issued; 5,310,460 Shares Outstanding at June 30, 2009 and
5,931,312 Shares Outstanding at December 31, 2008 |  |                      | 63      |   |            |   | 63      |  
|Additional Paid-in-Capital                                                                                                                                                               |  |                      | 62,375  |   |            |   | 62,305  |  
|Unearned ESOP Shares                                                                                                                                                                     |  |                      | (4,696  | ) |            |   | (4,696  | )
|Unearned Recognition and Retention Plan Shares                                                                                                                                           |  |                      | (2,646  | ) |            |   | (3,200  | )
|Treasury Stock, at Cost (1,035,272 Shares at June 30, 2009 and 414,420 Shares at December 31, 2008)                                                                                      |  |                      | (13,046 | ) |            |   | (5,208  | )
|Retained Earnings                                                                                                                                                                        |  |                      | 36,428  |   |            |   | 35,126  |  
|Accumulated Other Comprehensive Income                                                                                                                                                   |  |                      | 1,162   |   |            |   | 1,337   |  
|                                                                                                                                                                                         |  |                      |         |   |            |   |         |  
|Total Shareholders Equity                                                                                                                                                               |  |                      | 79,640  |   |            |   | 85,727  |  
|                                                                                                                                                                                         |  |                      |         |   |            |   |         |  
|                                                                                                                                                                                         |  |                     
|Total Liabilities and Shareholders Equity                                                                                                                                               |  | $                    | 322,191 |   |            | $ | 327,449 |  
|                                                                                                                                                                                         |  |                      |         |   |            |   |         |  

See accompanying notes to unaudited consolidated financial statements.



3



---

##### Table of Contents

LOUISIANA BANCORP, INC.

Consolidated Statements of Income (Unaudited)



|                                                               |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|-------------------------------------------------------------- |  | ------------------------------------- | ----- | - | -------------------------------- | - | ----- | ---- |  | ---- | ----- |  | - | ----- | -
|                                                               |  | For the Three MonthsEnded June 30,    |       |   | For the Six MonthsEnded June 30, |  
|                                                               |  | 2009                                  |       |   | 2008                             |   |       | 2009 |  | 2008 |      
|                                                               |  | (in thousands, except per share data) |      
|Interest and Dividend Income                                   |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|Loans, Including Fees                                          |  | $                                     | 2,037 |   |                                  | $ | 1,725 |      |  | $    | 3,875 |  | $ | 3,408 |  
|Mortgage Backed Securities                                     |  |                                       | 1,999 |   |                                  |   | 1,583 |      |  |      | 4,206 |  |   | 3,003 |  
|Investment Securities                                          |  |                                       | 151   |   |                                  |   | 542   |      |  |      | 364   |  |   | 1,103 |  
|Other interest-bearing deposits                                |  |                                       | 21    |   |                                  |   | 68    |      |  |      | 39    |  |   | 221   |  
|                                                               |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|Total Interest and Dividend Income                             |  |                                       | 4,208 |   |                                  |   | 3,918 |      |  |      | 8,484 |  |   | 7,735 |  
|                                                               |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|                                                               |  |                                       |       |  
|Interest Expense                                               |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|Deposits                                                       |  |                                       | 942   |   |                                  |   | 992   |      |  |      | 1,886 |  |   | 2,022 |  
|Borrowings                                                     |  |                                       | 649   |   |                                  |   | 473   |      |  |      | 1,296 |  |   | 892   |  
|                                                               |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|Total Interest Expense                                         |  |                                       | 1,591 |   |                                  |   | 1,465 |      |  |      | 3,182 |  |   | 2,914 |  
|                                                               |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|                                                               |  |                                       |       |  
|Net Interest Income                                            |  |                                       | 2,617 |   |                                  |   | 2,453 |      |  |      | 5,302 |  |   | 4,821 |  
|                                                               |  |                                       |       |  
|Provision (Recovery) for Loan Losses                           |  |                                       | (4    | ) |                                  |   | (10   | )    |  |      | 53    |  |   | (27   | )
|                                                               |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|                                                               |  |                                       |       |  
|Net Interest Income after Provision (Recovery) for Loan Losses |  |                                       | 2,621 |   |                                  |   | 2,463 |      |  |      | 5,249 |  |   | 4,848 |  
|                                                               |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|                                                               |  |                                       |       |  
|Non-Interest Income                                            |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|Customer Service Fees                                          |  |                                       | 84    |   |                                  |   | 85    |      |  |      | 170   |  |   | 161   |  
|Gain on Sale of Securities                                     |  |                                       |      |   |                                  |   |      |      |  |      | 91    |  |   |      |  
|Other Income                                                   |  |                                       | 22    |   |                                  |   | 42    |      |  |      | 48    |  |   | 77    |  
|                                                               |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|Total Non-Interest Income                                      |  |                                       | 106   |   |                                  |   | 127   |      |  |      | 309   |  |   | 238   |  
|                                                               |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|                                                               |  |                                       |       |  
|Non-Interest Expense                                           |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|Salaries and Employee Benefits                                 |  |                                       | 1,106 |   |                                  |   | 1,020 |      |  |      | 2,213 |  |   | 1,939 |  
|Occupancy Expense                                              |  |                                       | 284   |   |                                  |   | 247   |      |  |      | 553   |  |   | 502   |  
|Other Expenses                                                 |  |                                       | 462   |   |                                  |   | 399   |      |  |      | 775   |  |   | 794   |  
|                                                               |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|Total Non-Interest Expense                                     |  |                                       | 1,852 |   |                                  |   | 1,666 |      |  |      | 3,541 |  |   | 3,235 |  
|                                                               |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|                                                               |  |                                       |       |  
|Income Before Income Tax Expense                               |  |                                       | 875   |   |                                  |   | 924   |      |  |      | 2,017 |  |   | 1,851 |  
|                                                               |  |                                       |       |  
|Income Tax Expense                                             |  |                                       | 313   |   |                                  |   | 287   |      |  |      | 715   |  |   | 593   |  
|                                                               |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|                                                               |  |                                       |       |  
|Net Income                                                     |  | $                                     | 562   |   |                                  | $ | 637   |      |  | $    | 1,302 |  | $ | 1,258 |  
|                                                               |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|                                                               |  |                                       |       |  
|Earnings Per Share                                             |  |                                       |       |   |                                  |   |       |      |  |      |       |  |   |       |  
|Basic                                                          |  | $                                     | 0.12  |   |                                  | $ | 0.11  |      |  | $    | 0.27  |  | $ | 0.22  |  
|Diluted                                                        |  | $                                     | 0.12  |   |                                  | $ | 0.11  |      |  | $    | 0.27  |  | $ | 0.22  |  

See accompanying notes to unaudited financial statements.



4



---

##### Table of Contents

LOUISIANA BANCORP, INC.

Consolidated Statements of Comprehensive Income

(Unaudited)



|                                                             |  |                                  |       |   |      |   |       |  
|------------------------------------------------------------ |  | -------------------------------- | ----- | - | ---- | - | ----- | -
|                                                             |  | For the Six MonthsEnded June 30, |      
|                                                             |  | 2009                             |       |   | 2008 |  
|                                                             |  | (in thousands)                   |      
|                                                             |  |                                 
|Net Income                                                   |  | $                                | 1,302 |   |      | $ | 1,258 |  
|                                                             |  |                                 
|Other Comprehensive Loss                                     |  |                                  |       |   |      |   |       |  
|Unrealized Holding Losses Arising During the period          |  |                                  | (84   | ) |      |   | (120  | )
|Reclassification Adjustment for Gains Included in Net Income |  |                                  | (91   | ) |      |   |      |  
|                                                             |  |                                  |       |   |      |   |       |  
|                                                             |  |                                 
|Total Other Comprehensive Loss                               |  |                                  | (175  | ) |      |   | (120  | )
|                                                             |  |                                  |       |   |      |   |       |  
|                                                             |  |                                 
|Comprehensive Income                                         |  | $                                | 1,127 |   |      | $ | 1,138 |  
|                                                             |  |                                  |       |   |      |   |       |  



5



---

##### Table of Contents

LOUISIANA BANCORP, INC.

Consolidated Statements of Changes in Shareholders Equity (unaudited)

For the Six Months Ended June 30, 2009 and 2008

(Dollars in thousands)



|                                                   |  |             |    |                          |   |        |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          |        |  |   |       |   |  |   |        |  
|-------------------------------------------------- |  | ----------- | -- | ------------------------ | - | ------ | ----------------- |  | - | ---------------- | - |  | ------------- | ------ | - | ---------------- | - | ------------------------------------------ | - |  | ------------------------ | ------ |  | - | ----- | - |  | - | ------ | -
|                                                   |  | CommonStock |    | AdditionalPaid-inCapital |   |        | UnearnedESOPStock |  |   | UnearnedRRPStock |   |  | TreasuryStock |        |   | RetainedEarnings |   | AccumulatedOtherComprehensiveIncome (Loss) |   |  | TotalShareholdersEquity |       
|                                                   |  |             |    |                          |   |        |                   | 
|Balances at December 31, 2007                      |  | $           | 63 |                          | $ | 62,073 |                   |  | $ | (4,950           | ) |  | $             |       |   |                  | $ |                                           |   |  | $                        | 32,382 |  | $ | 302   |   |  | $ | 89,870 |  
|Net Income - Six Months Ended June 30, 2008        |  |             |    |                          |   |        |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          | 1,258  |  |   |       |   |  |   | 1,258  |  
|Other Comprehensive Loss,                          |  |             |    |                          |   |        |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          |        |  |   |       |   |  |   |        |  
|Net of Applicable                                  |  |             |    |                          |   |        |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          |        |  |   |       |   |  |   |        |  
|Deferred Income Taxes                              |  |             |    |                          |   |        |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          |        |  |   | (120  | ) |  |   | (120   | )
|Stock Purchased for Recognition and Retention Plan |  |             |    |                          |   |        |                   |  |   |                  |   |  |               | (1,310 | ) |                  |   |                                            |   |  |                          |        |  |   |       |   |  |   | (1,310 | )
|Stock Option Expense                               |  |             |    |                          |   | 76     |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          |        |  |   |       |   |  |   | 76     |  
|                                                   |  |             |    |                          |   |        |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          |        |  |   |       |   |  |   |        |  
|Balance at June 30, 2008                           |  | $           | 63 |                          | $ | 62,149 |                   |  | $ | (4,950           | ) |  | $             | (1,310 | ) |                  | $ |                                           |   |  | $                        | 33,640 |  | $ | 182   |   |  | $ | 89,774 |  
|                                                   |  |             |    |                          |   |        |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          |        |  |   |       |   |  |   |        |  
|                                                   |  |             |    |                          |   |        |                   | 
|Balances at December 31, 2008                      |  | $           | 63 |                          | $ | 62,305 |                   |  | $ | (4,696           | ) |  | $             | (3,200 | ) |                  | $ | (5,208                                     | ) |  | $                        | 35,126 |  | $ | 1,337 |   |  | $ | 85,727 |  
|Net Income - Six Months Ended June 30, 2009        |  |             |    |                          |   |        |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          | 1,302  |  |   |       |   |  |   | 1,302  |  
|Other Comprehensive Loss,                          |  |             |    |                          |   |        |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          |        |  |   |       |   |  |   |        |  
|Net of Applicable                                  |  |             |    |                          |   |        |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          |        |  |   |       |   |  |   |        |  
|Deferred Income Taxes                              |  |             |    |                          |   |        |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          |        |  |   | (175  | ) |  |   | (175   | )
|Stock Purchased for Treasury                       |  |             |    |                          |   |        |                   |  |   |                  |   |  |               |        |   |                  |   | (7,838                                     | ) |  |                          |        |  |   |       |   |  |   | (7,838 | )
|RRP Shares Earned                                  |  |             |    |                          |   | (48    | )                 |  |   |                  |   |  |               | 554    |   |                  |   |                                            |   |  |                          |        |  |   |       |   |  |   | 506    |  
|Stock Option Expense                               |  |             |    |                          |   | 118    |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          |        |  |   |       |   |  |   | 118    |  
|                                                   |  |             |    |                          |   |        |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          |        |  |   |       |   |  |   |        |  
|Balance at June 30, 2009                           |  | $           | 63 |                          | $ | 62,375 |                   |  | $ | (4,696           | ) |  | $             | (2,646 | ) |                  | $ | (13,046                                    | ) |  | $                        | 36,428 |  | $ | 1,162 |   |  | $ | 79,640 |  
|                                                   |  |             |    |                          |   |        |                   |  |   |                  |   |  |               |        |   |                  |   |                                            |   |  |                          |        |  |   |       |   |  |   |        |  



6



---

##### Table of Contents

LOUISIANA BANCORP, INC.

Consolidated Statements of Cash Flows (Unaudited)



|                                                          |  |                                  |         |   |      |   |         |  
|--------------------------------------------------------- |  | -------------------------------- | ------- | - | ---- | - | ------- | -
|                                                          |  | For the Six MonthsEnded June 30, |        
|                                                          |  | 2009                             |         |   | 2008 |  
|                                                          |  | (In Thousands)                   |        
|Cash Flows from Operating Activities                      |  |                                  |         |   |      |   |         |  
|Net Income                                                |  | $                                | 1,302   |   |      | $ | 1,258   |  
|Adjustments to Reconcile Net Income to Net Cash           |  |                                  |         |   |      |   |         |  
|Provided by Operating Activities:                         |  |                                  |         |   |      |   |         |  
|Depreciation                                              |  |                                  | 117     |   |      |   | 116     |  
|Provision (Recovery) for Loan Losses                      |  |                                  | 53      |   |      |   | (27     | )
|Net Increase in RRP Shares Earned                         |  |                                  | 506     |   |      |   |        |  
|Stock Option Plan Expense                                 |  |                                  | 118     |   |      |   | 76      |  
|Discount Accretion Net of Premium Amortization            |  |                                  | (192    | ) |      |   | (72     | )
|Gain on Insurance Settlement                              |  |                                  | (2      | ) |      |   |        |  
|Deferred Income Tax Benefit                               |  |                                  | (27     | ) |      |   | (20     | )
|Gain on Sale of Securities                                |  |                                  | (91     | ) |      |   |        |  
|Gain on Sale of Loans                                     |  |                                  | (6      | ) |      |   | (21     | )
|Gain on Sale of Property and Equipment                    |  |                                  |        |   |      |   | (7      | )
|Originations of Loans Held-for-Sale                       |  |                                  | (2,272  | ) |      |   | (979    | )
|Proceeds from Sales of Loans Held-for-Sale                |  |                                  | 2,272   |   |      |   | 970     |  
|Decrease (Increase) in Accrued Interest Receivable        |  |                                  | 306     |   |      |   | (65     | )
|Decrease in Other Assets                                  |  |                                  | 38      |   |      |   | 65      |  
|Increase in Accrued Interest Payable                      |  |                                  | 5       |   |      |   | 38      |  
|(Decrease) Increase in Other Liabilities                  |  |                                  | (346    | ) |      |   | 619     |  
|                                                          |  |                                  |         |   |      |   |         |  
|                                                          |  |                                 
|Net Cash Provided by Operating Activities                 |  |                                  | 1,781   |   |      |   | 1,951   |  
|                                                          |  |                                  |         |   |      |   |         |  
|                                                          |  |                                 
|Cash Flows from Investing Activities                      |  |                                  |         |   |      |   |         |  
|Investment in Certificates of Deposit                     |  |                                  | (1,502  | ) |      |   | (1,000  | )
|Purchase of Securities Available-for-Sale                 |  |                                  | (12,993 | ) |      |   | (14,569 | )
|Purchase of Securities Held-to-Maturity                   |  |                                  |        |   |      |   | (34,565 | )
|Proceeds from Maturities of Certificates of Deposit       |  |                                  | 657     |   |      |   | 1,297   |  
|Proceeds from Maturities of Securities Available-for-Sale |  |                                  | 27,450  |   |      |   | 19,347  |  
|Proceeds from Maturities of Securities Held-to-Maturity   |  |                                  | 19,683  |   |      |   | 8,710   |  
|Proceeds from Sales of Securities Available-for-Sale      |  |                                  | 1,849   |   |      |   |        |  
|Net Increase in Loans Receivable                          |  |                                  | (24,912 | ) |      |   | (7,300  | )
|Proceeds from Sales of Loans Held for Investing           |  |                                  | 762     |   |      |   | 784     |  
|Insurance Proceeds - Property Damage                      |  |                                  | 42      |   |      |   |        |  
|Purchase of Property and Equipment                        |  |                                  | (205    | ) |      |   | (96     | )
|Proceeds from Sale of Property and Equipment              |  |                                  |        |   |      |   | 15      |  
|Net Increase in Investment in                             |  |                                  |         |   |      |   |         |  
|                                                          |  |                                  |         |   |      |   |         |  
|Federal Home Loan Bank Stock                              |  |                                  | (4      | ) |      |   | (26     | )
|                                                          |  |                                  |         |   |      |   |         |  
|                                                          |  |                                 
|Net Cash Provided by (Used in) Investing Activities       |  |                                  | 10,827  |   |      |   | (27,403 | )
|                                                          |  |                                  |         |   |      |   |         |  



7



---

##### Table of Contents

|                                                          |  |                                  |         |   |      |   |        |  
|--------------------------------------------------------- |  | -------------------------------- | ------- | - | ---- | - | ------ | -
|                                                          |  | For the Six MonthsEnded June 30, |        
|                                                          |  | 2009                             |         |   | 2008 |  
|                                                          |  | (In Thousands)                   |        
|Cash Flows from Financing Activities                      |  |                                  |         |   |      |   |        |  
|Increase in Deposits                                      |  |                                  | 13,666  |   |      |   | 5,509  |  
|Increase in Advances by Borrowers for Taxes and Insurance |  |                                  | 65      |   |      |   | 18     |  
|(Decrease) Increase in Borrowings                         |  |                                  | (12,444 | ) |      |   | 16,767 |  
|Stock Purchased for RRP                                   |  |                                  |        |   |      |   | (1,310 | )
|Purchase of Treasury stock                                |  |                                  | (7,838  | ) |      |   |       |  
|                                                          |  |                                  |         |   |      |   |        |  
|                                                          |  |                                 
|Net Cash (Used in) Provided by Financing Activities       |  |                                  | (6,551  | ) |      |   | 20,984 |  
|                                                          |  |                                  |         |   |      |   |        |  
|                                                          |  |                                 
|Net Increase (Decrease) in Cash and Cash Equivalents      |  |                                  | 6,057   |   |      |   | (4,468 | )
|                                                          |  |                                 
|Cash and Cash Equivalents, Beginning of Year              |  |                                  | 4,974   |   |      |   | 11,648 |  
|                                                          |  |                                  |         |   |      |   |        |  
|                                                          |  |                                 
|Cash and Cash Equivalents, End of Year                    |  | $                                | 11,031  |   |      | $ | 7,180  |  
|                                                          |  |                                  |         |   |      |   |        |  
|                                                          |  |                                 
|Supplemental Disclosure of Cash Flow Information          |  |                                  |         |   |      |   |        |  
|Cash Paid During the Year for:                            |  |                                  |         |   |      |   |        |  
|Interest                                                  |  | $                                | 3,177   |   |      | $ | 2,875  |  
|                                                          |  |                                  |         |   |      |   |        |  
|                                                          |  |                                 
|Income Taxes                                              |  | $                                | 1,444   |   |      | $ | 654    |  
|                                                          |  |                                  |         |   |      |   |        |  



8



---

##### Table of Contents

LOUISIANA BANCORP, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

BASIS OF PRESENTATION

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 six month periods ended June 30, 2009, are not necessarily indicative of the results which may be expected for the entire
fiscal year.

NATURE OF OPERATIONS

Louisiana Bancorp, Inc. (the Company) was organized as a Louisiana corporation on March 16, 2007, for the purpose of becoming the holding company of Bank of New Orleans (the Bank) in
anticipation of converting the Bank from a federally chartered mutual savings bank to a federally chartered stock savings bank. In July 2007, the conversion of the Bank was completed. 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 Bank operates in the banking/savings and loan industry and, as such, attracts deposits from the general public and uses such deposits primarily to originate loans
secured by first mortgage loans on owner-occupied single-family residences and other properties, as well as those for 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 Companys activities are with customers located within the greater New Orleans area in Louisiana. Note 2 summarizes the types of securities in which the Company invests. Note 3 summarizes the types of
lending in which the Company engages. The Company does not have any significant concentrations in any one industry or to any one customer.

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 Company has the positive intent and ability to hold these securities to maturity.

The Company held no trading securities as of June 30, 2009 or December 31, 2008.

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 Company
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 Companys debtors to honor their contracts is dependent, in part, upon the real
estate and general economic conditions in this area.



9



---

##### Table of Contents

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. All interest accrued but not collected on
loans placed in non-accrual status or on loans charged-off, is reversed against income. The interest on these loans is accounted for on the cash basis or cost-recovery method, until qualifying for return to accrual basis. Loans are returned to
accrual basis when all of the principal and interest contractually due are brought current and future payments are reasonably assured.

The Company considers a loan to be impaired when, based upon current information and events, it believes it is probable that the Company will be unable to collect all amounts due according to the contractual terms of
the loan agreement. The Companys impaired loans include performing and non-performing loans on which full payment of principal or interest is not expected. The Company 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.

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 Company 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 Companys interest rate risk strategy. In addition, the Company occasionally sells loans that it originates, but cannot hold, due to
regulatory limitations on loans to one borrower or concentrations of credit in a particular property type or industry.

Student loans are held for investment purposes as long as the student is still in school. In accordance with the Companys agreement with the Student Loan Marketing Association (Sallie Mae), 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 accreted 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.

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.



10



---

##### Table of Contents

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 2  SECURITIES

A summary of securities classified as available-for-sale at
June 30, 2009 and December 31, 2008, with gross unrealized gains and losses, is as follows:



|                                       |  |                   |        |                      |   |                       |  |   |                     |   |  |   |       
|-------------------------------------- |  | ----------------- | ------ | -------------------- | - | --------------------- |  | - | ------------------- | - |  | - | ------
|                                       |  | June 30, 2009    
|                                       |  | AmortizedCost     |        | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | EstimatedFair Value
|                                       |  | (in thousands)   
|Securities Available-for-Sale          |  |                   |       
|Mortgage-Backed Securities             |  |                   |        |                      |   |                       |  |   |                     |   |  |   |       
|GNMA                                   |  | $                 | 11,381 |                      | $ | 245                   |  | $ |                    |   |  | $ | 11,626
|FNMA                                   |  |                   | 21,433 |                      |   | 785                   |  |   |                    |   |  |   | 22,218
|FHLMC                                  |  |                   | 9,497  |                      |   | 383                   |  |   |                    |   |  |   | 9,880 
|                                       |  |                   |        |                      |   |                       |  |   |                     |   |  |   |       
|Total Mortgage-Backed Securities       |  |                   | 42,311 |                      |   | 1,413                 |  |   |                    |   |  |   | 43,724
|U.S. Government and Agency Obligations |  |                   | 21,294 |                      |   | 361                   |  |   | (14                 | ) |  |   | 21,641
|                                       |  |                   |        |                      |   |                       |  |   |                     |   |  |   |       
|Total Securities Available-for-Sale    |  | $                 | 63,605 |                      | $ | 1,774                 |  | $ | (14                 | ) |  | $ | 65,365
|                                       |  |                   |        |                      |   |                       |  |   |                     |   |  |   |       
|                                       | 
|                                       |  | December 31, 2008
|                                       |  | AmortizedCost     |        | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | EstimatedFair Value
|                                       |  | (in thousands)   
|Securities Available-for-Sale          |  |                   |       
|Mortgage-Backed Securities             |  |                   |        |                      |   |                       |  |   |                     |   |  |   |       
|GNMA                                   |  | $                 | 15,682 |                      | $ | 427                   |  | $ |                    |   |  | $ | 16,109
|FNMA                                   |  |                   | 25,750 |                      |   | 727                   |  |   |                    |   |  |   | 26,477
|FHLMC                                  |  |                   | 11,228 |                      |   | 345                   |  |   |                    |   |  |   | 11,573
|                                       |  |                   |        |                      |   |                       |  |   |                     |   |  |   |       
|Total Mortgage-Backed Securities       |  |                   | 52,660 |                      |   | 1,499                 |  |   |                    |   |  |   | 54,159
|U.S. Government and Agency Obligations |  |                   | 25,405 |                      |   | 527                   |  |   |                    |   |  |   | 25,932
|                                       |  |                   |        |                      |   |                       |  |   |                     |   |  |   |       
|Total Securities Available-for-Sale    |  | $                 | 78,065 |                      | $ | 2,026                 |  | $ |                    |   |  | $ | 80,091
|                                       |  |                   |        |                      |   |                       |  |   |                     |   |  |   |       



11



---

##### Table of Contents

A summary of securities classified as held-to-maturity at June 30, 2009 and December 31, 2008,
with gross unrealized gains and losses, is as follows:



|                                       |  |                   |         |                      |   |                       |  |   |                     |   |  |   |        
|-------------------------------------- |  | ----------------- | ------- | -------------------- | - | --------------------- |  | - | ------------------- | - |  | - | -------
|                                       |  | June 30, 2009    
|                                       |  | AmortizedCost     |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | EstimatedFair Value
|                                       |  | (in thousands)   
|Securities Held-to-Maturity            |  |                   |        
|Mortgage-Backed Securities             |  |                   |         |                      |   |                       |  |   |                     |   |  |   |        
|GNMA                                   |  | $                 | 10,477  |                      | $ | 331                   |  | $ |                    |   |  | $ | 10,808 
|FNMA                                   |  |                   | 56,792  |                      |   | 2,081                 |  |   | (4                  | ) |  |   | 58,869 
|FHLMC                                  |  |                   | 33,565  |                      |   | 1,528                 |  |   | (1                  | ) |  |   | 35,092 
|                                       |  |                   |         |                      |   |                       |  |   |                     |   |  |   |        
|Total Mortgage-Backed Securities       |  |                   | 100,834 |                      |   | 3,940                 |  |   | (5                  | ) |  |   | 104,769
|U.S. Government and Agency Obligations |  |                   |        |                      |   |                      |  |   |                    |   |  |   |       
|Municipal Bonds                        |  |                   |         |                      |   |                       |  |   |                     |   |  |   |        
|Revenue Bonds                          |  |                   | 285     |                      |   | 13                    |  |   |                    |   |  |   | 298    
|General Obligation Bonds               |  |                   | 1,065   |                      |   | 20                    |  |   |                    |   |  |   | 1,085  
|                                       |  |                   |         |                      |   |                       |  |   |                     |   |  |   |        
|Total Municipal Obligations            |  |                   | 1,350   |                      |   | 33                    |  |   |                    |   |  |   | 1,383  
|                                       |  |                   |         |                      |   |                       |  |   |                     |   |  |   |        
|Total Securities Held-to-Maturity      |  | $                 | 102,184 |                      | $ | 3,973                 |  | $ | (5                  | ) |  | $ | 106,152
|                                       |  |                   |         |                      |   |                       |  |   |                     |   |  |   |        
|                                       | 
|                                       |  | December 31, 2008
|                                       |  | AmortizedCost     |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | EstimatedFair Value
|                                       |  | (in thousands)   
|Securities Held-to-Maturity            |  |                   |        
|Mortgage-Backed Securities             |  |                   |         |                      |   |                       |  |   |                     |   |  |   |        
|GNMA                                   |  | $                 | 11,695  |                      | $ | 220                   |  | $ | (7                  | ) |  | $ | 11,908 
|FNMA                                   |  |                   | 65,818  |                      |   | 2,052                 |  |   | (17                 | ) |  |   | 67,853 
|FHLMC                                  |  |                   | 39,809  |                      |   | 1,487                 |  |   | (7                  | ) |  |   | 41,289 
|                                       |  |                   |         |                      |   |                       |  |   |                     |   |  |   |        
|Total Mortgage-Backed Securities       |  |                   | 117,322 |                      |   | 3,759                 |  |   | (31                 | ) |  |   | 121,050
|U.S. Government and Agency Obligations |  |                   | 3,000   |                      |   | 1                     |  |   |                    |   |  |   | 3,001  
|Municipal Bonds                        |  |                   |         |                      |   |                       |  |   |                     |   |  |   |        
|Revenue Bonds                          |  |                   | 550     |                      |   | 23                    |  |   |                    |   |  |   | 573    
|General Obligation Bonds               |  |                   | 2,557   |                      |   | 74                    |  |   |                    |   |  |   | 2,631  
|                                       |  |                   |         |                      |   |                       |  |   |                     |   |  |   |        
|Total Municipal Obligations            |  |                   | 3,107   |                      |   | 97                    |  |   |                    |   |  |   | 3,204  
|                                       |  |                   |         |                      |   |                       |  |   |                     |   |  |   |        
|Total Securities Held-to-Maturity      |  | $                 | 123,429 |                      | $ | 3,857                 |  | $ | (31                 | ) |  | $ | 127,255
|                                       |  |                   |         |                      |   |                       |  |   |                     |   |  |   |        

The amortized cost and fair value of available-for-sale and held-to-maturity securities by
contractual maturity at June 30, 2009, 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      |  | $                             |       |                             | $ |              |  | $                   |        |  | $ |       
|One to Five Years    |  |                               | 30,352 |                             |   | 30,934        |  |                     | 5,961   |  |   | 6,143  
|Five to Ten Years    |  |                               | 5,873  |                             |   | 6,142         |  |                     | 14,230  |  |   | 14,838 
|Over Ten Years       |  |                               | 27,380 |                             |   | 28,289        |  |                     | 81,993  |  |   | 85,171 
|                     |  |                               |        |                             |   |               |  |                     |         |  |   |        
|                     |  | $                             | 63,605 |                             | $ | 65,365        |  | $                   | 102,184 |  | $ | 106,152
|                     |  |                               |        |                             |   |               |  |                     |         |  |   |        



12



---

##### Table of Contents

Information pertaining to securities with gross unrealized losses at June 30, 2009 and
December 31, 2008, 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      |    | EstimatedFairValue            |   | Gross UnrealizedLosses |  | Estimated FairValue
|                                       |  | (in thousands)            
|June 30, 2009                          |  |                            |   
|Mortgage-Backed Securities             |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|GNMA                                   |  | $                          |   |                               | $ |                       |  | $                   |  |  | $ |  
|FNMA                                   |  |                            |   |                               |   |                       |  |                     |  |  |   |  
|FHLMC                                  |  |                            |   |                               |   |                       |  |                     |  |  |   |  
|                                       |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|Total Mortgage-Backed Securities       |  |                            |   |                               |   |                       |  |                     |  |  |   |  
|U.S. Government and Agency Obligations |  |                            | 14 |                               |   | 4,486                  |  |                     |  |  |   |  
|                                       |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|Total                                  |  | $                          | 14 |                               | $ | 4,486                  |  | $                   |  |  | $ |  
|                                       |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|                                       |  |                            |    |                              
|December 31, 2008                      |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|Mortgage-Backed Securities             |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|GNMA                                   |  | $                          |   |                               | $ |                       |  | $                   |  |  | $ |  
|FNMA                                   |  |                            |   |                               |   |                       |  |                     |  |  |   |  
|FHLMC                                  |  |                            |   |                               |   |                       |  |                     |  |  |   |  
|                                       |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|Total Mortgage-Backed Securities       |  |                            |   |                               |   |                       |  |                     |  |  |   |  
|U.S. Government and Agency Obligations |  |                            |   |                               |   |                       |  |                     |  |  |   |  
|                                       |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|Total                                  |  | $                          |   |                               | $ |                       |  | $                   |  |  | $ |  
|                                       |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|                                       | 
|                                       |  | Held-to-Maturity          
|                                       |  | Losses Less Than 12 Months |    | Losses Greater Than 12 Months
|                                       |  | GrossUnrealizedLosses      |    | EstimatedFairValue            |   | Gross UnrealizedLosses |  | Estimated FairValue
|                                       |  | (in thousands)            
|June 30, 2009                          |  |                            |   
|Mortgage-Backed Securities             |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|GNMA                                   |  | $                          |   |                               | $ |                       |  | $                   |  |  | $ |  
|FNMA                                   |  |                            | 3  |                               |   | 326                    |  |                     | 1 |  |   | 31
|FHLMC                                  |  |                            | 1  |                               |   | 101                    |  |                     |  |  |   |  
|                                       |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|Total Mortgage-Backed Securities       |  |                            | 4  |                               |   | 427                    |  |                     | 1 |  |   | 31
|U.S. Government and Agency Obligations |  |                            |   |                               |   |                       |  |                     |  |  |   |  
|                                       |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|Total                                  |  | $                          | 4  |                               | $ | 427                    |  | $                   | 1 |  | $ | 31
|                                       |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|                                       |  |                            |    |                              
|December 31, 2008                      |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|Mortgage-Backed Securities             |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|GNMA                                   |  | $                          | 7  |                               | $ | 325                    |  | $                   |  |  | $ |  
|FNMA                                   |  |                            | 17 |                               |   | 1,874                  |  |                     |  |  |   |  
|FHLMC                                  |  |                            | 7  |                               |   | 996                    |  |                     |  |  |   |  
|                                       |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|Total Mortgage-Backed Securities       |  |                            | 31 |                               |   | 3,195                  |  |                     |  |  |   |  
|U.S. Government and Agency Obligations |  |                            |   |                               |   |                       |  |                     |  |  |   |  
|                                       |  |                            |    |                               |   |                        |  |                     |   |  |   |   
|Total                                  |  | $                          | 31 |                               | $ | 3,195                  |  | $                   |  |  | $ |  
|                                       |  |                            |    |                               |   |                        |  |                     |   |  |   |   

The unrealized losses on the Companys investments were caused by interest rate increases.
Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company has the ability and intent to hold these investments until a recovery of fair value, which may be maturity, the Company
did not consider these investments to be other-than-temporarily impaired at June 30, 2009 or December 31, 2008.



13



---

##### Table of Contents

NOTE 3  LOANS

The following table summarizes the composition of our loan receivable:



|                                                |  |                |         |   |                   |   |         |  
|----------------------------------------------- |  | -------------- | ------- | - | ----------------- | - | ------- | -
|                                                |  | June 30, 2009  |         |   | December 31, 2008 |  
|                                                |  | (in thousands) |        
|Loans Secured by First Mortgages on Real Estate |  |                |         |   |                   |   |         |  
|1-4 Family Residential                          |  | $              | 72,643  |   |                   | $ | 51,547  |  
|Multi-family Residential, Commercial and Land   |  |                | 50,061  |   |                   |   | 48,654  |  
|                                                |  |                |         |   |                   |   |         |  
|Total First Mortgages Secured by Real Estate    |  |                | 122,704 |   |                   |   | 100,201 |  
|                                                |  |               
|Consumer and Other Loans                        |  |                |         |   |                   |   |         |  
|Student Loan                                    |  |                | 636     |   |                   |   | 1,398   |  
|Loans Secured by Deposits                       |  |                | 398     |   |                   |   | 283     |  
|Home Equity Loans and Lines                     |  |                | 13,016  |   |                   |   | 10,297  |  
|Other                                           |  |                | 889     |   |                   |   | 1,368   |  
|                                                |  |                |         |   |                   |   |         |  
|Total Consumer and Other Loans                  |  |                | 14,939  |   |                   |   | 13,346  |  
|                                                |  |               
|Less:                                           |  |                |         |   |                   |   |         |  
|Allowance for Loan Losses                       |  |                | (2,005  | ) |                   |   | (1,952  | )
|Net Deferred Loan Origination Fess/Costs        |  |                | (299    | ) |                   |   | (359    | )
|                                                |  |                |         |   |                   |   |         |  
|Total Loans, Net                                |  | $              | 135,339 |   |                   | $ | 111,236 |  
|                                                |  |                |         |   |                   |   |         |  

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



|                                     |  |                              |       |                             |   |       |  
|------------------------------------ |  | ---------------------------- | ----- | --------------------------- | - | ----- | -
|                                     |  | Six MonthsEndedJune 30, 2009 |       | Year EndedDecember 31, 2008 |  
|                                     |  | (in thousands)               |      
|                                     |  |                             
|Balance, Beginning of Period         |  | $                            | 1,952 |                             | $ | 1,999 |  
|Provision (Recovery) for Loan Losses |  |                              | 53    |                             |   | (43   | )
|Loans Charged-Off                    |  |                              |      |                             |   | (4    | )
|                                     |  |                              |       |                             |   |       |  
|Balance, End of Period               |  | $                            | 2,005 |                             | $ | 1,952 |  
|                                     |  |                              |       |                             |   |       |  



14



---

##### Table of Contents

Nonaccrual loans, exclusive of allowance for loan loss, were$2.6 million at June 30, 2009, $2.6
million at March 31, 2009, and $520,000 at December 31, 2008.



|                                                        |  |           |       |           |   |            |  |   |    
|------------------------------------------------------- |  | --------- | ----- | --------- | - | ---------- |  | - | ---
|                                                        |  | 6/30/2009 |       | 3/31/2009 |   | 12/31/2008
|Nonperforming Assets:                                   |  |           |       |           |   |            |  |   |    
|Non-Accruing Loans                                      |  |           |       |           |   |            |  |   |    
|One-to-Four Family Residential                          |  | $         | 1,099 |           | $ | 1,104      |  | $ | 52 
|Multi-Family Residential, Commercial Real Estate & Land |  |           | 950   |           |   | 950        |  |   |   
|Consumer and Other                                      |  |           | 599   |           |   | 547        |  |   | 468
|                                                        |  |           |       |           |   |            |  |   |    
|Total Non-Accruing Loans                                |  | $         | 2,648 |           | $ | 2,601      |  | $ | 520
|                                                        |  |           |       |           |   |            |  |   |    
|                                                        |  |           |      
|Accruing Loans 90 Days or More Past Due:                |  |           |       |           |   |            |  |   |    
|One-to-Four Family Residential                          |  |           |      |           |   |           |  |   |   
|Multi-Family Residential, Commercial Real Estate & Land |  |           |      |           |   |           |  |   |   
|Consumer and Other                                      |  |           |      |           |   |           |  |   |   
|                                                        |  |           |       |           |   |            |  |   |    
|Total Accruing Loans 90 Days or More Past Due           |  |           |      |           |   |           |  |   |   
|                                                        |  |           |       |           |   |            |  |   |    
|Total Nonperforming Loans(1)                            |  | $         | 2,648 |           | $ | 2,601      |  | $ | 520
|                                                        |  |           |       |           |   |            |  |   |    
|                                                        |  |           |      
|Real Estate Owned, Net (2)                              |  |           |      |           |   |           |  |   |   
|                                                        |  |           |       |           |   |            |  |   |    
|Total Nonperforming Assets                              |  | $         | 2,648 |           | $ | 2,601      |  | $ | 520
|                                                        |  |           |       |           |   |            |  |   |    

At June 30, 2009 and at March 31, 2009, our nonaccrual loans included two loans to a
single borrower with an aggregate balance of $1,247,000, which are secured by a single family residence. During the second quarter of 2009, the Bank determined that these loans were impaired based on an updated fair market appraisal of the
collateral. Accordingly, the Bank allocated $212,000 of our allowance for loan losses to these loans. Management believes that the net book value of $1.0 million properly reflects the value of its investment in these loans. In addition, at
June 30, 2009, our nonaccrual loans included a $950,000 commercial real estate construction loan with a remaining commitment of $50,000. This loan represents our participation interest in a $170 million mixed-use property in Baton Rouge,
Louisiana. Due to the borrowers inability to make its contractual interest payments and the level of construction remaining to complete the project, management has classified this loan as impaired and allocated $396,000 of our allowance for
loan losses to the loan.

As of June 30, 2009 and December 31, 2008, the Company did not hold any loans classified as troubled
debt restructurings.



15



---

##### Table of Contents

NOTE 4  EARNINGS PER COMMON SHARE

Earnings per common share are computed using the weighted average number of shares outstanding as prescribed in SFAS No. 128. Net income is divided
by the weighted average number of shares outstanding during the period to calculate basic net earnings per common share. Diluted earnings per common share are calculated to give effect to dilutive stock options.



|                                                                   |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|------------------------------------------------------------------ |  | --------------------------- | --------- | - | ------------------------- | - | --------- | ---- |  | - | --------- | - |  | - | --------- | -
|                                                                   |  | Three Months Ended June 30, |           |   | Six Months Ended June 30, |  
|                                                                   |  | 2009                        |           |   | 2008                      |   |           | 2009 |  |   | 2008      |  
|Net Income                                                         |  | $                           | 562,000   |   |                           | $ | 637,000   |      |  | $ | 1,302,000 |   |  | $ | 1,258,000 |  
|                                                                   |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|                                                                   |  |                             |           |  
|Weighted Average Shares Issued                                     |  |                             | 6,345,732 |   |                           |   | 6,345,732 |      |  |   | 6,345,732 |   |  |   | 6,345,732 |  
|Weighted Average Unearned ESOP Shares                              |  |                             | (469,586  | ) |                           |   | (494,968  | )    |  |   | (469,586  | ) |  |   | (494,968  | )
|Weighted Average Unearned RRP Shares                               |  |                             | (209,888  | ) |                           |   | (49,717   | )    |  |   | (220,570  | ) |  |   | (27,695   | )
|Weighted Average Treasury Shares                                   |  |                             | (993,128  | ) |                           |   |          |      |  |   | (808,505  | ) |  |   |          |  
|                                                                   |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Weighted Average Shares Outstanding for Basic Earnings per Share   |  |                             | 4,673,130 |   |                           |   | 5,801,047 |      |  |   | 4,847,071 |   |  |   | 5,823,069 |  
|                                                                   |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|                                                                   |  |                             |           |  
|Earnings per Share, Basic                                          |  | $                           | 0.12      |   |                           | $ | 0.11      |      |  | $ | 0.27      |   |  | $ | 0.22      |  
|                                                                   |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|                                                                   |  |                             |           |  
|Weighted Average Shares Outstanding for Basic Earnings per Share   |  |                             | 4,673,130 |   |                           |   | 5,801,047 |      |  |   | 4,847,071 |   |  |   | 5,823,069 |  
|Effect of Dilutive Securities                                      |  |                             | 80,374    |   |                           |   | 34,035    |      |  |   | 58,811    |   |  |   | 16,567    |  
|                                                                   |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|Weighted Average Shares Outstanding for Diluted Earnings per Share |  |                             | 4,753,504 |   |                           |   | 5,835,082 |      |  |   | 4,905,882 |   |  |   | 5,839,636 |  
|                                                                   |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  
|                                                                   |  |                             |           |  
|Earnings per Shares, Diluted                                       |  | $                           | 0.12      |   |                           | $ | 0.11      |      |  | $ | 0.27      |   |  | $ | 0.22      |  
|                                                                   |  |                             |           |   |                           |   |           |      |  |   |           |   |  |   |           |  

NOTE 5  REGULATORY CAPITAL

The actual and required regulatory capital amounts and ratios applicable to the Bank at June 30, 2009 and December 31, 2008, 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) |       
|June 30, 2009             |  |                        |        |       |                              |   |        |                                                                       |        |  |      |        |  |       |        |  |       |  
|Tangible Capital          |  | $                      | 56,916 |       | 18.55                        | % |        | $                                                                     | 4,601  |  | 1.50 | %      |  |       | N/A    |  | N/A   |  
|Core/Leverage Capital     |  |                        | 56,916 |       | 18.55                        |   |        |                                                                       | 9,203  |  | 3.00 |        |  | $     | 15,338 |  | 5.00  | %
|Tier 1 Risk-Based Capital |  |                        | 56,855 |       | 45.46                        |   |        |                                                                       | 5,002  |  | 4.00 |        |  |       | 7,504  |  | 6.00  |  
|Total Risk-Based Capital  |  | $                      | 57,996 |       | 46.37                        | % |        | $                                                                     | 10,005 |  | 8.00 | %      |  | $     | 12,506 |  | 10.00 | %
|                          |  |                        |        |       |                              |  
|December 31, 2008         |  |                        |        |       |                              |   |        |                                                                       |        |  |      |        |  |       |        |  |       |  
|Tangible Capital          |  | $                      | 55,816 |       | 18.35                        | % |        | $                                                                     | 4,562  |  | 1.50 | %      |  |       | N/A    |  | N/A   |  
|Core/Leverage Capital     |  |                        | 55,816 |       | 18.35                        |   |        |                                                                       | 9,124  |  | 3.00 |        |  | $     | 15,207 |  | 5.00  | %
|Tier 1 Risk-Based Capital |  |                        | 55,755 |       | 47.99                        |   |        |                                                                       | 4,647  |  | 4.00 |        |  |       | 6,970  |  | 6.00  |  
|Total Risk-Based Capital  |  | $                      | 57,209 |       | 49.24                        | % |        | $                                                                     | 9,294  |  | 8.00 | %      |  | $     | 11,617 |  | 10.00 | %



16



---

##### Table of Contents

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



|                                                  |  |                |        |   |                   |   |        |  
|------------------------------------------------- |  | -------------- | ------ | - | ----------------- | - | ------ | -
|                                                  |  | June 30, 2009  |        |   | December 31, 2008 |  
|                                                  |  | (In Thousands) |       
|Capital Under GAAP                                |  | $              | 57,866 |   |                   | $ | 56,884 |  
|Unrealized Gains on Available-for-Sale Securities |  |                | (950   | ) |                   |   | (1,068 | )
|                                                  |  |                |        |   |                   |   |        |  
|Tier 1 Capital                                    |  |                | 56,916 |   |                   |   | 55,816 |  
|Allowance for Loan Losses                         |  |                | 1,141  |   |                   |   | 1,454  |  
|Recourse Obligations                              |  |                | (61    | ) |                   |   | (61    | )
|                                                  |  |                |        |   |                   |   |        |  
|Total-Risk Based Capital                          |  | $              | 57,996 |   |                   | $ | 57,209 |  
|                                                  |  |                |        |   |                   |   |        |  



17



---

##### 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 are 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, or recoveries from, the
allowance 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 1 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 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, the 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, the 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.



18



---

##### Table of Contents

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 June 30, 2009
and December 31, 2008

During the first six months of 2009, total assets decreased by $5.3 million to $322.2 million. Cash and cash
equivalents were $11.0 million at June 30, 2009, an increase of $6.1 million from December 31, 2008. Total loans receivable increased by $24.1 million, or 21.7% during this six month period due to increased originations of residential
mortgage loans. Loans secured by 1-4 family residential properties increased by $21.1 million to $72.6 million at June 30, 2009. Loans secured by multifamily residential real estate, commercial real estate, or vacant ground were $50.1 million
at June 30, 2009, an increase of $1.4 million from December 31, 2008. During the first six months of 2009, our home equity loans and lines of credit increased by $2.7 million, or 26.4%, to $13.0 million. Our aggregate securities portfolio
decreased during the first six months of 2009, by $36.0 million, due primarily to increased prepayments on our mortgage-backed securities portfolio, and maturities of callable agency notes.

At June 30, 2009, we had total non-performing assets of $2.6 million, representing an increase of $2.1 million compared to total non-performing
assets of $520,000 at December 31, 2008. The increase in non-performing assets during the first six months of 2009 was due primarily to two loan relationships that were classified as non-performing during the quarter ended March 31, 2009.
The first of these relationships consists of two loans secured by a single-family residence located in our market area with an aggregate outstanding balance of $1.2 million at June 30, 2009. Both of these loans were placed in non-accrual status
during the first quarter of 2009 and were deemed impaired during the quarter ended June 30, 2009. We have commenced foreclosure proceedings with respect to the property securing these loans. As of June 30, 2009, $212,000 of our allowance
for loan losses was allocated to these two loans. The second significant addition to our non-performing assets during the first half of 2009 is a $950,000 participation interest in a $170.0 million real estate construction loan secured by a
mixed-use commercial and residential project located in Baton Rouge, Louisiana. We are participated in this loan as part of the Shared National Credit Program. This loan represents our only shared national credit. The loan was placed on non-accrual
status during the first quarter of 2009 and deemed impaired during the quarter ended June 30, 2009. The lead lender has commenced foreclosure proceedings on the collateral securing this debt as a result of the borrowers failure to make
scheduled payments as well as cost overruns on the project. At June 30, 2009, we had allocated $396,000 of our allowance for loan losses to this loan.

Total deposits increased during the first six months of 2009 by $13.7 million to $174.3 million. Noninterest-bearing deposits were $5.6 million at June 30, 2009, an increase of $1.4 million from December 31,
2008. Interest-bearing deposits increased by $12.3 million during the first six months of 2009, to $168.7 million. This increase occurred primarily in certificates of deposit with maturities of one year or less. Total borrowings decreased during the
period by $12.4 million to $64.2 million, primarily due to the repayment of short-term FHLB advances used to fund the purchase of mortgage backed securities during the fourth quarter of 2008.

During the six month period ended June 30, 2009, total shareholders equity decreased by $6.1 million to $79.6 million. This decrease was
primarily due to the Companys acquisition of its common shares pursuant to its publicly announced repurchase plans. During the first six months of 2009, the Company repurchased 621,032 shares at an aggregate cost of $7.8 million. In addition,
43,941 shares acquired pursuant to the Companys Recognition and Retention Plan Trust became vested and were released to participants during the first six months of 2009. The release of these shares decreased the balance of the associated
contra equity account by $554,000 to $2.6 million at June 30, 2009. Net income of $1.3 million increased retained earnings to $36.4 million at June 30, 2009. Accumulated other comprehensive income was $1.2 million at June 30, 2009, a
decrease of $175,000 from December 31, 2008.



19



---

##### Table of Contents

Comparison of Our Operating Results for the Three Months and Six Months Ended June 30, 2009 and 2008

General. Net income for the quarter ended June 30, 2009 was $562,000, a decrease of $75,000, or 11.8%, from the second
quarter of 2008. The primary reason for the decrease in net income between the periods was a five basis point special assessment imposed by the FDIC on all insured institutions. This special assessment resulted in a $126,000 expense during the
second quarter of 2009. Net income for the six months ended June 30, 2009 was $1.3 million, an increase of $44,000 from the six months ended June 30, 2008. The increase in net income for the six month period ended June 30, 2009
compared to the six months ended June 30, 2008 was primarily due to increased levels of net interest income generated by increased levels of interest-earning assets. The impact of the increase in net interest income was partially offset by
higher levels of non-interest expense, which included the FDIC special assessment and increases in our salaries and benefits expense associated with the growth in our workforce.

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 income 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.



|                                                  |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  
|------------------------------------------------- |  | ---------------------- | ------- | -------- | - | ----------------- |  | ---- | -------------- |  | -------- | ------- | ----------------- | - | ----- |  | ---- | -
|                                                  |  | AverageBalance         |         | Interest |   | AverageYield/Rate |  |      | AverageBalance |  | Interest |         | AverageYield/Rate |  
|                                                  |  | (Dollars in Thousands) |        
|Interest-Earning Assets:                          |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  
|Loans Receivable (1)                              |  | $                      | 127,684 |          | $ | 2,037             |  | 6.38 | %              |  | $        | 102,402 |                   | $ | 1,725 |  | 6.74 | %
|Mortgage-backed Securities                        |  |                        | 153,101 |          |   | 1,999             |  | 5.22 | %              |  |          | 123,846 |                   |   | 1,583 |  | 5.11 | %
|Investment Securities                             |  |                        | 19,801  |          |   | 151               |  | 3.05 | %              |  |          | 46,851  |                   |   | 542   |  | 4.63 | %
|Other Interest-Earnings Assets                    |  |                        | 12,447  |          |   | 21                |  | 0.67 | %              |  |          | 9,824   |                   |   | 68    |  | 2.77 | %
|                                                  |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  
|Total Interest-Earning Assets                     |  |                        | 313,033 |          |   | 4,208             |  | 5.38 | %              |  |          | 282,923 |                   |   | 3,918 |  | 5.54 | %
|                                                  |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  
|                                                  |  |                        |         |          |   |                  
|Non-Interest Earning Assets                       |  |                        | 5,932   |          |   |                   |  |      |                |  |          | 6,596   |                   |   |       |  |      |  
|                                                  |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  
|Total Assets                                      |  | $                      | 318,965 |          |   |                   |  |      |                |  | $        | 289,519 |                   |   |       |  |      |  
|                                                  |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  
|                                                  |  |                        |         |          |   |                  
|Interest-Bearing Liabilities:                     |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  
|Passbook, Checking and Money Market Accounts      |  | $                      | 43,243  |          |   | 45                |  | 0.42 | %              |  | $        | 44,303  |                   |   | 45    |  | 0.41 | %
|Certificates of Deposit                           |  |                        | 122,885 |          |   | 897               |  | 2.92 | %              |  |          | 98,744  |                   |   | 947   |  | 3.84 | %
|                                                  |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  
|Total Interest-Bearing Deposits                   |  |                        | 166,128 |          |   | 942               |  | 2.27 | %              |  |          | 143,047 |                   |   | 992   |  | 2.77 | %
|                                                  |  |                        |         |          |   |                  
|Borrowings                                        |  |                        | 63,925  |          |   | 649               |  | 4.06 | %              |  |          | 48,354  |                   |   | 473   |  | 3.91 | %
|                                                  |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  
|Total Interest-Bearing Liabilities                |  |                        | 230,053 |          |   | 1,591             |  | 2.77 | %              |  |          | 191,401 |                   |   | 1,465 |  | 3.06 | %
|                                                  |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  
|                                                  |  |                        |         |          |   |                  
|Non-Interest Bearing Liabilities                  |  |                        | 8,671   |          |   |                   |  |      |                |  |          | 7,796   |                   |   |       |  |      |  
|                                                  |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  
|                                                  |  |                        |         |          |   |                  
|Total Liabilities                                 |  |                        | 238,724 |          |   |                   |  |      |                |  |          | 199,197 |                   |   |       |  |      |  
|                                                  |  |                        |         |          |   |                  
|Stockholders Equity                              |  |                        | 80,241  |          |   |                   |  |      |                |  |          | 90,322  |                   |   |       |  |      |  
|                                                  |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  
|Total Liabilities and Stockholders Equity        |  | $                      | 318,965 |          |   |                   |  |      |                |  | $        | 289,519 |                   |   |       |  |      |  
|                                                  |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  
|Net Interest-Earning Assets                       |  | $                      | 82,980  |          |   |                   |  |      |                |  | $        | 91,522  |                   |   |       |  |      |  
|                                                  |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  
|Net Interest Income; Average Interest Rate Spread |  |                        |         |          | $ | 2,617             |  | 2.61 | %              |  |          |         |                   | $ | 2,453 |  | 2.48 | %
|                                                  |  |                        |         |          |   |                   |  |      |                |  |          |         |                   |   |       |  |      |  



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

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



20



---

##### Table of Contents

|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|----------------------------------------------------------------------- |  | ------------------------- | ------- | -------- | ---- | ----------------- |  | ------ | -------------- |  | -------- | ------- | ----------------- | - | ----- |  | ------ | -
|                                                                        |  | Six months Ended June 30, |        
|                                                                        |  | 2009                      |         |          | 2008 |                  
|                                                                        |  | AverageBalance            |         | Interest |      | AverageYield/Rate |  |        | AverageBalance |  | Interest |         | AverageYield/Rate |  
|                                                                        |  | (Dollars in Thousands)    |        
|Interest-Earning Assets:                                                |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|Loans Receivable (1)                                                    |  | $                         | 121,429 |          | $    | 3,875             |  | 6.38   | %              |  | $        | 100,235 |                   | $ | 3,408 |  | 6.80   | %
|Mortgage-backed Securities                                              |  |                           | 159,793 |          |      | 4,206             |  | 5.26   | %              |  |          | 117,717 |                   |   | 3,003 |  | 5.10   | %
|Investment Securities                                                   |  |                           | 22,656  |          |      | 364               |  | 3.21   | %              |  |          | 46,031  |                   |   | 1,103 |  | 4.79   | %
|Other Interest-Earnings Assets                                          |  |                           | 10,366  |          |      | 39                |  | 0.75   | %              |  |          | 12,803  |                   |   | 221   |  | 3.45   | %
|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|Total Interest-Earning Assets                                           |  |                           | 314,244 |          |      | 8,484             |  | 5.40   | %              |  |          | 276,786 |                   |   | 7,735 |  | 5.59   | %
|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|                                                                        |  |                           |         |          |      |                  
|Non-Interest Earning Assets                                             |  |                           | 6,336   |          |      |                   |  |        |                |  |          | 6,559   |                   |   |       |  |        |  
|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|Total Assets                                                            |  | $                         | 320,580 |          |      |                   |  |        |                |  | $        | 283,345 |                   |   |       |  |        |  
|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|                                                                        |  |                           |         |          |      |                  
|Interest-Bearing Liabilities:                                           |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|Passbook, Checking and Money Market Accounts                            |  | $                         | 43,089  |          |      | 88                |  | 0.41   | %              |  | $        | 44,900  |                   |   | 91    |  | 0.41   | %
|Certificates of Deposit                                                 |  |                           | 119,714 |          |      | 1,798             |  | 3.00   | %              |  |          | 96,934  |                   |   | 1,931 |  | 3.98   | %
|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|Total Interest-Bearing Deposits                                         |  |                           | 162,803 |          |      | 1,886             |  | 2.32   | %              |  |          | 141,834 |                   |   | 2,022 |  | 2.85   | %
|                                                                        |  |                           |         |          |      |                  
|Borrowings                                                              |  |                           | 67,245  |          |      | 1,296             |  | 3.85   | %              |  |          | 43,825  |                   |   | 892   |  | 4.07   | %
|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|Total Interest-Bearing Liabilities                                      |  |                           | 230,048 |          |      | 3,182             |  | 2.77   | %              |  |          | 185,659 |                   |   | 2,914 |  | 3.14   | %
|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|Non-Interest Bearing Liabilities                                        |  |                           | 8,299   |          |      |                   |  |        |                |  |          | 7,325   |                   |   |       |  |        |  
|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|Total Liabilities                                                       |  |                           | 238,347 |          |      |                   |  |        |                |  |          | 192,984 |                   |   |       |  |        |  
|                                                                        |  |                           |         |          |      |                  
|Stockholders Equity                                                    |  |                           | 82,233  |          |      |                   |  |        |                |  |          | 90,361  |                   |   |       |  |        |  
|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|Total Liabilities and Stockholders Equity                              |  | $                         | 320,580 |          |      |                   |  |        |                |  | $        | 283,345 |                   |   |       |  |        |  
|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|Net Interest-Earning Assets                                             |  | $                         | 84,196  |          |      |                   |  |        |                |  | $        | 91,127  |                   |   |       |  |        |  
|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|Net Interest Income; Average Interest Rate Spread                       |  |                           |         |          | $    | 5,302             |  | 2.63   | %              |  |          |         |                   | $ | 4,821 |  | 2.45   | %
|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|                                                                        |  |                           |         |          |      |                  
|Net Interest Margin (2)                                                 |  |                           |         |          |      |                   |  | 3.37   | %              |  |          |         |                   |   |       |  | 3.48   | %
|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  
|                                                                        |  |                           |         |          |      |                  
|Average Interest-Earning Assets to Average Interest-Bearing Liabilities |  |                           |         |          |      |                   |  | 136.60 | %              |  |          |         |                   |   |       |  | 149.08 | %
|                                                                        |  |                           |         |          |      |                   |  |        |                |  |          |         |                   |   |       |  |        |  



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

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

Interest Income.Net interest income for the second quarter of 2009 was $2.6 million, an increase of $164,000 from the second quarter of 2008. Our
average interest rate spread for the quarter ended June 30, 2009 was 2.61%, an increase of 13 basis points from the quarter ended June 30, 2008. Interest income increased by $290,000 in the second quarter of 2009 compared to the second
quarter of 2008 due to an increase in the average balance of interest-earning assets of $30.1 million between the respective periods. The average yield of our interest-earnings assets for the second quarter of 2009 was 5.38%, a decrease of 16 basis
points from the second quarter of 2008. This decrease was primarily due to a decline in market rates of interest between the periods. Interest income on loans increased by $312,000 and interest income on mortgage backed securities increased by
$416,000 during the second quarter of 2009 compared to the second quarter of 2008. Interest income on investment securities decreased by $391,000 during the quarter ended June 30, 2009 compared to the second quarter of 2008, and interest income
on other interest-earning deposits declined during the period by $47,000. For the six months ended June 30, 2009, net interest income was $5.3 million, an increase of $481,000 from the six month period ended June 30, 2008. During the six
month period ended June 30, 2009, interest income increased by $749,000 compared to the six months ended June 30, 2008. During the first six months of 2009, the average balance on total interest-earning assets was $314.2 million,



21



---

##### Table of Contents

an increase of $37.5 million from the first six months of 2008. Our average interest rate spread for the first half of 2009 was 2.63%, an increase of 18
basis points from the first six months of 2008. Our net interest margin for the six month periods ended June 30, 2009 and June 30, 2008 was 3.37% and 3.48%, respectively.

Interest Expense. Total interest expense was $1.6 million with an average cost on our total interest-bearing liabilities of 2.77% for the quarter
ended June 30, 2009 compared to $1.5 million at an average cost on our total interest-bearing liabilities of 3.06% for the quarter ended June 30, 2008. Interest paid on deposits for the second quarter of 2009 was $942,000, a decrease of
$49,000 from the second quarter of 2008. Interest expense on borrowings was $649,000 during the second quarter of 2009, an increase of $176,000 from the second quarter of 2008. Average total borrowings were $63.9 million, at an average cost of
4.06%, during the second quarter of 2009 compared to $48.4 million, at an average cost of 3.91%, during the second quarter of 2008. Total interest expense was $3.2 million for the six month period ended June 30, 2009, an increase of $268,000
from the six month period ended June 30, 2008. Average total interest-bearing liabilities were $230.0 million during the six months ended June 30, 2009, an increase of $44.4 million from the six month period ended June 30, 2008. The
average rate paid on interest-bearing liabilities during the six month periods ended June 30, 2009 and June 30, 2008, was 2.77% and 3.14%, respectively.

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 us to make additional provisions for
estimated loan losses based upon judgments different from those of management.

The Bank recorded net recoveries on its allowance for loan
losses of $4,000 during the second quarter of 2009, compared to net recoveries on its loan loss provisions of $10,000 for the same quarter of 2008. For the six months ended June 30, 2009, the Bank recorded loan loss provisions of $53,000
compared to net recoveries of $27,000 for the six months ended June 30, 2008. Our total allowance for loan losses at June 30, 2009 was $2.0 million, or 75.72% of our non-performing loans. Expressed as a percentage of total loans
receivable, our allowance for loan losses was 1.46% at June 30, 2009, a decline of 26 basis points from December 31, 2008. We had no charge-offs during the six months ended June 30, 2009. For the year ended December 31, 2008, our
loan charge-offs totaled $4,000. Management reviews the allowance for loan losses on a regular basis and establishes provisions after thorough consideration of several factors, including the type of collateral securing the debt, delinquency status,
local economic market conditions and other factors related to the collectability of the debt. In addition, this continuing review of the performance of our loan portfolio includes an analysis of the repayment history of those loans secured by
collateral impaired by Hurricane Katrina. As a result of this analysis, we have reduced the segment of our allowance for loan losses established to reflect the probable losses incurred as a result of the storm. This reduction in our allowance for
loan losses has occurred in both the allocated and unallocated portions of the total loss allowance. Such reduction in our total allowance for loan losses has resulted in recoveries in the allowance for loan losses or has reduced the amount of
provisions for loan losses that we otherwise would have taken in recent periods.

Non-interest Income.Our non-interest income for
the second quarter of 2009 was $106,000 compared to $127,000 for the second quarter of 2008. Non-interest income for the six months ended June 30, 2009 and 2008 was $309,000 and $238,000, respectively. The $71,000 increase in non-interest
income between the respective six month periods is primarily attributed to a $91,000 gain on the sale of available-for-sale securities during the first quarter of 2009.

Non-interest Expense.Non-interest expense for the second quarter of 2009 was $1.9 million, an increase of $186,000 from the second quarter of 2008. Salaries and employee benefits expense increased by $86,000
in the second quarter of 2009 compared to the second quarter of 2008. This increase is due primarily to an increase in full-time equivalent employees from 57 at June 30, 2008, to 65 at June 30, 2009. Other non-interest expenses increased
by $63,000 during the second quarter of 2009 compared to the second quarter of 2008. During the second quarter of 2009, the Bank recorded a $126,000 expense associated with a FDIC mandated special assessment charged to all insured financial
institutions. This additional expense was partially offset by decreases in our advertising expenditures and in our estimated Louisiana bank shares taxes. Non-interest



22



---

##### Table of Contents

expense was $3.5 million for the six month period ended June 30, 2009, an increase of $306,000 from the six month period ended June 30, 2008. This
increase was due primarily to a $274,000 increase in salaries and benefits expense, as well as the $126,000 FDIC special assessment. The increase in our salaries and benefits expense is attributed to the increase in our overall level of staffing and
the implementation of our shareholder approved equity-based compensation plans. Our equity-based compensation plans were approved by our shareholders in February 2008, and therefore did not affect periods prior thereto.

Income Tax Expense.Income tax expense for the second quarter of 2009 was $313,000 compared to $287,000 for the second quarter of 2008. For the
six month periods ended June 30, 2009 and June 30, 2008, income tax expense was $715,000 and $593,000, respectively.

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
June 30, 2009, our cash and cash equivalents amounted to $11.0 million. In addition, at such date our available-for-sale investment and mortgage-backed securities amounted to an aggregate of $65.4 million.

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 June 30, 2009, we had certificates of deposit maturing within the next 12 months amounting to $91.7 million. Based upon historical experience, we anticipate that a significant
portion of the maturing certificates of deposit will be redeposited with us. At June 30, 2009, we had $64.2 million in total borrowings, including $38.2 million in FHLB advances and $26.0 million in reverse repurchase agreements with commercial
banks.

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. As a member of the Federal Home Loan Bank of Dallas, we pledge
residential mortgage loans and mortgage-backed securities as well as our stock in the Federal Home Loan Bank as collateral for advances. At June 30, 2009, the Company had $143.1 million in additional funds available through the Federal Home
Loan Bank.

In light of the Companys regulatory capital, which is significantly in excess of well capitalized standards, and taking
into consideration the Companys projected earnings, asset growth, and business strategy, we have decided not to seek Federal funding through the U. S. Treasury Departments Capital Purchase Program, although we believe we would be
eligible for such funds.

The following table summarizes our contractual cash obligations at June 30, 2009.



|                                   |  |                        |         |           |   |                           |  |                            |        |                  |   |        |  |   |      
|---------------------------------- |  | ---------------------- | ------- | --------- | - | ------------------------- |  | -------------------------- | ------ | ---------------- | - | ------ |  | - | -----
|                                   |  | Payments Due by Period
|                                   |  | Total                  |         | To 1 Year |   | More Than1 Year to 3Years |  | More Than3 Years to5 Years |        | More Than5 Years
|                                   |  | (Dollars In Thousands)
|Certificates of Deposit            |  | $                      | 125,712 |           | $ | 91,691                    |  | $                          | 21,578 |                  | $ | 12,443 |  | $ |     
|FHLB Advances and Other Borrowings |  |                        | 64,216  |           |   | 5,404                     |  |                            | 14,172 |                  |   | 38,670 |  |   | 5,970
|                                   |  |                        |         |           |   |                           |  |                            |        |                  |   |        |  |   |      
|Total Long-Term Debt               |  |                        | 189,928 |           |   | 97,095                    |  |                            | 35,750 |                  |   | 51,113 |  |   | 5,970
|Operating Lease Obligations        |  | $                      | 215     |           | $ | 36                        |  | $                          | 62     |                  | $ | 62     |  | $ | 55   
|                                   |  |                        |         |           |   |                           |  |                            |        |                  |   |        |  |   |      
|Total Contractual Obligations      |  | $                      | 190,143 |           | $ | 97,131                    |  | $                          | 35,812 |                  | $ | 51,175 |  | $ | 6,025
|                                   |  |                        |         |           |   |                           |  |                            |        |                  |   |        |  |   |      

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



23



---

##### Table of Contents

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 our 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 Company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 at Part II, Item 7 in the Companys Annual Report on Form 10-K for the year ended December 31, 2008.

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 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 or 15d-15
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 29-33 in the Companys Annual Report on Form 10-K for the year ended December 31, 2008 (SEC File No. 1-33573), which is incorporated herein by reference thereto.

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

(a) Not applicable.

(b) Not applicable.

(c) The Companys purchases of its common stock made during the quarter consisted of purchases of treasury shares pursuant to
repurchase plans approved by the Companys Board of Directors, as set forth in the following table.



24



---

##### Table of Contents

|                         |  |                               |  |                            |       |                                                                           |         |                                                                             |        
|------------------------ |  | ----------------------------- |  | -------------------------- | ----- | ------------------------------------------------------------------------- | ------- | --------------------------------------------------------------------------- | -------
|Period                   |  | TotalNumber ofSharesPurchased |  | AveragePrice Paidper Share |       | Total Number ofSharesPurchased
asPart of PubliclyAnnouncedPlan or Program |         | MaximumNumber ofShares that MayYet be PurchasedUnder the Planof Program
(1)
|April 1 - April 30, 2009 |  | 56,790                        |  | $                          | 12.99 |                                                                           | 56,790  |                                                                             | 200,484
|May 1 - May 31, 2009     |  | 22,100                        |  |                            | 13.75 |                                                                           | 22,100  |                                                                             | 178,384
|June 1 - June 30, 2009   |  | 36,089                        |  |                            | 13.99 |                                                                           | 36,089  |                                                                             | 142,295
|                         |  |                               |  |                            |       |                                                                           |         |                                                                             |        
|Total                    |  | 114,979                       |  | $                          | 13.45 |                                                                           | 114,979 |                                                                             |        
|                         |  |                               |  |                            |       |                                                                           |         |                                                                             |        



|(1) | On March 17, 2009, the Company announced a stock repurchase program to acquire 5%, or 272,008 shares of its common stock over a six month period.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------

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.

The annual meeting of the shareholders of Louisiana Bancorp, Inc. was held on May 7, 2009
at which time the two nominees for director, as set forth in the proxy materials for the meeting, were elected by the following vote:



|                       |  |           |  |              
|---------------------- |  | --------- |  | -------------
|Director Nominee       |  | Votes For |  | VotesWithheld
|Maurice F. Eagan, Jr.  |  | 4,654,138 |  | 45,920       
|Lawrence J. LeBon, III |  | 4,618,169 |  | 81,889       

In addition, the shareholders ratified the appointment of LaPorte, Sehrt, Romig &
Hand as our independent registered public accounting firm for the fiscal year ending December 31, 2009, with the following vote:



|            |  |                                            
|----------- |  | -------------------------------------------
|            |  | Ratification of LaPorte, Sehrt,Romig & Hand
|For         |  | 4,659,063                                  
|Against     |  | 19,500                                     
|Abstentions |  | 21,495                                     

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) /Section 302 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                                                        



25



---

##### Table of Contents

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: August 12, 2009 |  | By: |  | /s/ Lawrence J. LeBon, III                       
|                      |  |     |  | Lawrence J. LeBon, III                           
|                      |  |     |  | President and Chief Executive Officer            
|                      |  |    
|Date: August 12, 2009 |  | By: |  | /s/ John LeBlanc                                 
|                      |  |     |  | John LeBlanc                                     
|                      |  |     |  | Senior Vice President and Chief Financial Officer



26