10-Q

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 March 31, 2012

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 shorter period that the registrant was required to submit and post such files).   [x] 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	[  ]	Smaller reporting company	[x]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the 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 May 10, 2012, there were 3,239,094 shares of the Registrant’s common stock outstanding.

1

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	23
Item 3 -	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4 -	Controls and Procedures	28
PART II - OTHER INFORMATION
Item 1 -	Legal Proceedings	29
Item 1A -	Risk Factors	29
Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3 -	Defaults Upon Senior Securities	29
Item 4 -	Mine Safety Disclosure	29
Item 5 -	Other Information	29
Item 6 -	Exhibits	29
Signatures		31

2

LOUISIANA BANCORP, INC.

Consolidated Balance Sheets

	(unaudited) March 31, 2012			December 31, 2011
	(In Thousands)
Assets
Cash and Due from Banks	$	2,416		$	2,064
Short-Term Interest-Bearing Deposits		2,078			25,525
Total Cash and Cash Equivalents		4,494			27,589
Certificates of Deposit		742			742
Securities Available-for-Sale, at Fair Value (Amortized Cost of $14,476 and $21,780, respectively)		15,385			22,750
Securities Held-to-Maturity, at Amortized Cost (Estimated Fair Value of $89,833 and $63,067, respectively)		86,353			59,581
Loans, Net of Allowance for Loan Losses of $1,749 and $1,805, respectively		201,306			195,632
Loans Held for Sale		3,352			-
Accrued Interest Receivable		1,096			1,081
Other Real Estate Owned		832			532
Stock in Federal Home Loan Bank		1,726			1,543
Premises and Equipment, Net		2,203			1,636
Other Assets		1,839			2,042
Total Assets	$	319,328		$	313,128
Liabilities and Shareholders' Equity
Deposits
Non-Interest-Bearing	$	9,438		$	9,764
Interest-Bearing		183,988			184,562
Total Deposits		193,426			194,326
Borrowings		64,170			57,113
Advance Payments by Borrowers for Taxes and Insurance		1,793			2,395
Accrued Interest Payable		270			297
Other Liabilities		1,422			1,477
Total Liabilities		261,081			255,608
Commitments and Contigencies		-			-
Shareholders' Equity
Common Stock, $.01 Par Value, 40,000,000 Shares Authorized; 6,345,732 Shares Issued; 3,239,094 and 3,257,130 Outstanding, respectively		63			63
Additional Paid-in-Capital		63,228			63,218
Unearned ESOP Shares		(3,934	)		(3,934	)
Unearned Recognition and Retention Plan Shares		(983	)		(1,516	)
Treasury Stock, at Cost (3,106,638 shares and 3,088,602 shares, respectively)		(43,582	)		(43,286	)
Retained Earnings		42,854			42,335
Accumulated Other Comprehensive Income		601			640
Total Shareholders' Equity		58,247			57,520
Total Liabilities and Shareholders' Equity	$	319,328		$	313,128

See accompanying notes to unaudited consolidated financial statements.

3

LOUISIANA BANCORP, INC.

Consolidated Statements of Income (Unaudited)

	For the Three Months Ended March 31,
	2012		2011
	(In Thousands, Except per Share data)
Interest and Dividend Income
Loans, Including Fees	$	2,723	$	2,730
Mortgage Backed Securities		780		897
Investment Securities		40		196
Other Interest-Bearing Deposits		9		8
Total Interest and Dividend Income		3,552		3,831
Interest Expense
Deposits		559		710
Borrowings		552		653
Total Interest Expense		1,111		1,363
Net Interest Income		2,441		2,468
Provision for Loan Losses		55		37
Net Interest Income after Provision for Loan Losses		2,386		2,431
Non-Interest Income
Customer Service Fees		140		125
Gain on Sale of Loans		109		56
Other Income		25		19
Total Non-Interest Income		274		200
Non-Interest Expense
Salaries and Employee Benefits		1,192		1,133
Occupancy Expense		291		277
Louisiana Bank Shares Tax		58		57
FDIC Insurance Premium		37		53
Net Cost of OREO Operations		38		2
Other Expenses		248		224
Total Non-Interest Expense		1,864		1,746
Income Before Income Tax Expense		796		885
Income Tax Expense		277		306
Net Income	$	519	$	579
Earnings Per Share
Basic	$	0.19	$	0.19
Diluted	$	0.18	$	0.18

See accompanying notes to unaudited consolidated financial statements.

4

LOUISIANA BANCORP, INC.

Consolidated Statements of Comprehensive Income

(Unaudited)

	For the Three Months Ended March 31,
	2012			2011
	(In Thousands)
Net Income	$	519		$	579
Other Comprehensive Loss, Net of Tax
Unrealized Holding Losses Arising During the Period		(39	)		(181	)
Reclassification Adjustment for Gains Included in Net Income		-			-
Total Other Comprehensive Loss		(39	)		(181	)
Comprehensive Income	$	480		$	398

See accompanying notes to unaudited consolidated financial statements.

5

LOUISIANA BANCORP, INC.

Consolidated Statements of Changes in Shareholders' Equity (unaudited)

For the Three Months Ended March 31, 2012 and 2011

(Dollars in thousands)

	Common Stock		Additional Paid-in Capital			Unearned ESOP Stock			Unearned RRP Stock			Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total Shareholders' Equity
Balances at December 31, 2010	$	63	$	62,880		$	(4,188	)	$	(2,074	)	$	(37,321	)	$	40,218	$	700		$	60,278
Net Income - Three Months Ended March 31, 2011		-		-			-			-			-			579		-			579
Other Comprehensive Loss, Net of Applicable Deferred Income Taxes		-		-			-			-			-			-		(181	)		(181	)
Stock Purchased for Treasury		-		-			-			-			(259	)		-		-			(259	)
RRP Shares Earned		-		(46	)		-			534			-			-		-			488
Stock Option Expense		-		61			-			-			-			-		-			61
Balances at March 31, 2011	$	63	$	62,895		$	(4,188	)	$	(1,540	)	$	(37,580	)	$	40,797	$	519		$	60,966
Balances at December 31, 2011	$	63	$	63,218		$	(3,934	)	$	(1,516	)	$	(43,286	)	$	42,335	$	640		$	57,520
Net Income - Three Months Ended March 31, 2012		-		-			-			-			-			519		-			519
Other Comprehensive Loss, Net of Applicable Deferred Income Taxes		-		-			-			-			-			-		(39	)		(39	)
Stock Purchased for Treasury		-		-			-			-			(352	)		-		-			(352	)
RRP Shares Earned		-		(46	)		-			533			-			-		-			487
Stock Options Exercised		-		(2	)								56								54
Stock Option Expense		-		58			-			-			-			-		-			58
Balances at March 31, 2012	$	63	$	63,228		$	(3,934	)	$	(983	)	$	(43,582	)	$	42,854	$	601		$	58,247

See accompanying notes to unaudited consolidated financial statements.

6

LOUISIANA BANCORP, INC.

Consolidated Statements of Cash Flows (Unaudited)

	For the Three Months Ended March 31,
	2012			2011
	(In Thousands)
Cash Flows from Operating Activities
Net Income	$	519		$	579
Adjustments to Reconcile Net Income to Net Cash (Used in) Provided by Operating Activities:
Depreciation		50			48
Provision for Loan Losses		55			37
Net Increase in RRP Shares Earned		487			487
Stock Option Plan Expense		58			61
Discount Accretion Net of Premium Amortization		27			(31	)
Deferred Income Tax Benefit		(13	)		(13	)
Gain on Sale of Loans		(109	)		(56	)
Gain on the Sale of Property and Equipment		(5	)		-
Originations of Loans Held-for-Sale		(5,920	)		(4,809	)
Proceeds from Sales of Loans Held-for-Sale		6,030			3,809
Net Increase in Loans Held-for-Sale		(3,352	)		-
Increase in Accrued Interest Receivable		(15	)		(79	)
Impairment of Other Real Estate Owned		30			-
Decrease in Other Assets		237			326
Decrease in Accrued Interest Payable		(27	)		(46	)
Decrease in Other Liabilities		(55	)		(157	)
Net Cash (Used in) Provided by Operating Activities		(2,003	)		156
Cash Flows from Investing Activities
Purchase of Securities Available-for-Sale		-			(3,000	)
Purchase of Securities Held-to-Maturity		(31,353	)		-
Proceeds from Maturities of Securities Available-for-Sale		7,310			1,880
Proceeds from Maturities of Securities Held-to-Maturity		4,548			6,434
Net Increase in Loans Receivable		(6,060	)		(4,041	)
Purchase of Property and Equipment		(634	)		(29	)
Proceeds from Sale of Property and Equipment		22			-
Proceeds from Sale of Other Real Estate Owned		-			350
Net Increase in Investment in Federal Home Loan Bank Stock		(183	)		(10	)
Net Cash (Used in) Provided by Investing Activities		(26,350	)		1,584

See accompanying notes to unaudited consolidated financial statements.

7

	For the Three Months Ended March 31,
	2012			2011
	(In Thousands)
Cash Flows from Financing Activities
(Decrease) Increase in Deposits		(900	)		4,455
Decrease in Advances by Borrowers for Taxes and Insurance		(602	)		(542	)
Increase (Decrease) in Borrowings		7,058			(790	)
Purchase of Treasury stock		(352	)		(259	)
Proceeds from Exercise of Stock Options		54			-
Net Cash Provided by Financing Activities		5,258			2,864
Net (Decrease) Increase in Cash and Cash Equivalents		(23,095	)		4,604
Cash and Cash Equivalents, Beginning of Year		27,589			6,610
Cash and Cash Equivalents, End of Period	$	4,494		$	11,214
Supplemental Disclosure of Cash Flow Information
Cash Paid During the Period:
Interest	$	1,138		$	1,408
Income Taxes	$	-		$	-
Loans Transferred to Other Real Estate Owned During the Period	$	330		$	-

See accompanying notes to unaudited consolidated financial statements.

8

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 accounting principles generally accepted in the United States (“U.S. GAAP”). 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 period ended March 31, 2012, 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”).  The Company 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 FASB Accounting Standards Codification (“ASC”) 320-10, Investments – Debt and Equity Securities.  FASB ASC 320-10 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 these classifications 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 March 31, 2012 or December 31, 2011.

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 real estate values and general economic conditions in this area.

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

9

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 was appropriate under U.S. GAAP.

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.

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.

COMPREHENSIVE INCOME

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 income, are components of comprehensive income.

10

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 March 31, 2012 and December 31, 2011, with gross unrealized gains and losses, follows:

	March 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
Securities Available-for-Sale
Mortgage-Backed Securities
GNMA	$	127	$	7	$	-	$	134
FNMA		5,425		420		-		5,845
FHLMC		2,786		210		-		2,996
		8,338		637		-		8,975
U.S. Government and Agency Obligations		5,955		236		-		6,191
Equity Securities		183		36		-		219
Total	$	14,476	$	909	$	-	$	15,385
	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
Securities Available-for-Sale
Mortgage-Backed Securities
GNMA	$	146	$	9	$	-	$	155
FNMA		6,347		470		-		6,817
FHLMC		3,155		229		-		3,384
		9,648		708		-		10,356
U.S. Government and Agency Obligations		11,949		262		-		12,211
Equity Securities		183		-		-		183
Total	$	21,780	$	970	$	-	$	22,750

11

A summary of securities classified as held-to-maturity at March 31, 2012 and December 31, 2011, with gross unrealized gains and losses, follows:

	March 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In Thousands)
Securities Held-to-Maturity
Mortgage-Backed Securities
GNMA	$	5,647	$	225	$	-		$	5,872
FNMA		38,535		1,992		(25	)		40,502
FHLMC		13,406		1,146		-			14,552
		57,588		3,363		(25	)		60,926
Collateralized Mortgage Obligations
FNMA		13,693		34		(12	)		13,715
FHLMC		15,072		137		(17	)		15,192
	$	86,353	$	3,534	$	(54	)	$	89,833
	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In Thousands)
Securities Held-to-Maturity
Mortgage-Backed Securities
GNMA	$	5,987	$	244	$	-		$	6,231
FNMA		38,994		2,031		-			41,025
FHLMC		14,600		1,211		-			15,811
	$	59,581	$	3,486	$	-		$	63,067

The amortized cost and fair value of available-for-sale and held-to-maturity securities by contractual maturity at March 31, 2012, 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
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(In Thousands)
Amounts Maturing in:
Less than One Year	$	390	$	411	$	-	$	-
One to Five Years		7,497		7,813		453		484
Five to Ten Years		5,781		6,265		13,119		14,195
Over Ten Years		625		677		72,781		75,154
Total	$	14,293	$	15,166	$	86,353	$	89,833
Equity Securities		183		219
	$	14,476	$	15,385

12

Information pertaining to securities with gross unrealized losses at March 31, 2012 and December 31, 2011, 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
	Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
March 31, 2012
Mortgage-Backed Securities
GNMA	$	-	$	-	$	-	$	-
FNMA		-		-		-		-
FHLMC		-		-		-		-
U.S. Government and Agency Obligations		-		-		-		-
Total	$	-	$	-	$	-	$	-
December 31, 2011
Mortgage-Backed Securities
GNMA	$	-	$	-	$	-	$	-
FNMA		-		-		-		-
FHLMC		-		-		-		-
U.S. Government and Agency Obligations		-		-		-		-
Total	$	-	$	-	$	-	$	-

13

	Held-to-Maturity
	Losses Less Than 12 Months				Losses Greater Than 12 Months
	Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
March 31, 2012
Mortgage-Backed Securities
GNMA	$	-	$	-	$	-	$	-
FNMA		25		3,956		-		-
FHLMC		-		-		-		-
		25		3,956		-		-
Collateralized Mortgage Obligations
FNMA		12		3,997
FHLMC		17		6,308
U.S. Government and Agency Obligations		-		-		-		-
Total	$	54	$	14,261	$	-	$	-
December 31, 2011
Mortgage-Backed Securities
GNMA	$	-	$	-	$	-	$	-
FNMA		-		-		-		-
FHLMC		-		-		-		-
		-		-		-		-
U.S. Government and Agency Obligations		-		-		-		-
Total	$	-	$	-	$	-	$	-

The unrealized losses on the company’s investments were caused by interest rate increases.  Because the decline in the 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 at maturity, the Company did not consider these investment to be other-than-temporarily impaired at March 31, 2012.

14

NOTE 3 – LOANS

The following table summarizes the composition of our total net loans receivable:

	March 31, 2012			December 31, 2011
	(In Thousands)
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	109,219		$	105,718
Home Equity Loans and Lines		19,546			18,467
Multi-family Residential		18,591			14,591
Commercial Real Estate		57,624			56,492
Land		824			1,299
Total Loans Secured by Real Estate		205,804			196,567
Consumer and Other Loans
Loans Secured by Deposits		452			568
Other		270			452
Total Consumer and Other Loans		722			1,020
Less:
Allowance for Loan Losses		(1,749	)		(1,805	)
Net Deferred Loan Origination Fess/Costs		(119	)		(150	)
Total Loans, Net	$	204,658		$	195,632

A summary of our current, past due and nonaccrual loans as of March 31, 2012 and December 31, 2011 follows:

March 31, 2012	30-89 Days Past Due		90 Days or More Past Due and Accruing		Nonaccrual Loans		Total Past Due		Current Loans		Total Loans
Real Estate Secured Loans	(In Thousands)
1-4 Family Residential	$	-	$	-	$	572	$	572	$	108,647	$	109,219
Home Equity Loans and Lines		66		-		444		510		19,036		19,546
Multi-family Residential		-		-		27		27		18,591		18,618
Commercial Real Estate		-		-		48		48		57,549		57,597
Land		-		-		-		-		824		824
Consumer and Other Loans		8		-		-		8		714		722
Total	$	74	$	-	$	1,091	$	1,165	$	205,361	$	206,526
December 31, 2011	30-89 Days Past Due		90 Days or More Past Due and Accruing		Nonaccrual Loans		Total Past Due		Current Loans		Total Loans
Real Estate Secured Loans	(in Thousands)
1-4 Family Residential	$	463	$	-	$	110	$	573	$	105,145	$	105,718
Home Equity Loans and Lines		125		-		569		694		17,773		18,467
Multi-family Residential		-		-		-		-		14,591		14,591
Commercial Real Estate		-		-		330		330		56,162		56,492
Land		-		-		-		-		1,299		1,299
Consumer and Other Loans		-		-		65		65		955		1,020
Total	$	588	$	-	$	1,074	$	1,662	$	195,925	$	197,587

15

An analysis of the allowance for loan losses follows:

	Three Months Ended March 31, 2012			Year Ended December 31, 2011
	(In Thousands)
Balance, Beginning of Period	$	1,805		$	1,759
Provision for Loan Losses		55			53
Loan Recoveries		6			1
Charge-Offs		(117	)		(8	)
Balance, End of Period	$	1,749		$	1,805

The following table details the activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2012 and March 31, 2011.

	Real Estate Secured Mortgage Loans
March 31, 2012	1-4 Family Residential		Home Equity Loans/Lines			Multi-Family Residential		Commercial		Land			Consumer and Other			Total
	(In Thousands)
Balance, Beginning of Year	$	889	$	207		$	148	$	485	$	2		$	74		$	1,805
Provision for (Recovery of)  Loan Losses		27		(4	)		32		6		-			(6	)		55
Charge-Offs		-		(48	)		-		-		-			(69	)		(117	)
Recoveries of prior charge-offs		3		1			-		-		-			2			6
Balance, End of Year	$	919	$	156		$	180	$	491	$	2		$	1		$	1,749
Ending Balance Allocated to:
Loans individually evaluated for impairment	$	2	$	9		$	-	$	-	$	-		$	-		$	11
Loans collectively evaluated for impairment		917		147			180		491		2			1			1,738
	$	919	$	156		$	180	$	491	$	2		$	1		$	1,749
Ending Loan Balance Disaggregated by Evaluation Method
Loans individually evaluated for impairment	$	109	$	292		$	-	$	-	$	-		$	-		$	401
Loans collectively evaluated for impairment		109,110		19,254			18,591		57,624		824			722			206,125
	$	109,219	$	19,546		$	18,591	$	57,624	$	824		$	722		$	206,526
	Real Estate Secured Mortgage Loans
March 31, 2011	1-4 Family Residential		Home Equity Loans/Lines			Multi-Family Residential		Commercial		Land			Consumer and Other			Total
	(In Thousands)
Balance, Beginning of Year	$	858	$	270		$	100	$	442	$	9		$	80		$	1,759
Provision for (Recovery of)  Loan Losses		1		(4	)		15		27		(1	)		(1	)		37
Loans Charged-Off		-		(2	)		-		-		-			-			(2	)
Recoveries of prior charge-offs		-		-			-		-		-			-			-
Balance, End of Year	$	859	$	264		$	115	$	469	$	8		$	79		$	1,794
Ending Balance Allocated to:
Loans individually evaluated for impairment	$	-	$	146		$	-	$	-	$	1		$	68		$	215
Loans collectively evaluated for impairment		859		118			115		469		7			11			1,579
	$	859	$	264		$	115	$	469	$	8		$	79		$	1,794
Ending Loan Balance Disaggregated by Evaluation Method
Loans individually evaluated for impairment	$	-	$	309		$	-	$	-	$	-		$	68		$	377
Loans collectively evaluated for impairment		98,247		15,286			13,895		56,053		922			1,364			185,767
	$	98,247	$	15,595		$	13,895	$	56,053	$	922		$	1,432		$	186,144

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A summary of the loans evaluated for possible impairment follows:

	March 31, 2012		December 31, 2011
	(In Thousands)
Impaired Loans Requiring a Loss Allowance	$	401	$	232
Imparied Loans not Requiring a Loss Allowance		690		842
Total Impaired Loans	$	1,091	$	1,074
Loss Allowance on Impaired Loans	$	11	$	128

At March 31, 2012 and December 31, 2011, all impaired loans were in nonaccrual status.  The Bank did not hold any renegotiated loans on these dates.  The amount of foregone interest on nonaccrual loans at March 31, 2012 and December 31, 2011, was approximately $70,000 and $65,000, respectively.

The following table provides additional information with respect to impaired loans by portfolio segment and the impairment methodology used to analyze the credit.  

As of March 31, 2012	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment YTD		Interest Income Recognized
Impaired loans with no related allowance:	(In Thousands)
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	462	$	462	$	-	$	286	$	-
Home Equity Loans and Lines		153		153		-		277		5
Multi-family Residential		27		27		-		14		-
Commercial Real Estate		48		48		-		189		-
Land		-		-		-		-		-
Consumer and Other Loans		-		-		-		-		1
Total	$	690	$	690	$	-	$	766	$	6
Impaired loans with a related allowance:
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	109	$	109	$	2	$	55	$	2
Home Equity Loans and Lines		292		292		9		230		1
Multi-family Residential		-		-		-		-		-
Commercial Real Estate		-		-		-		-		-
Land		-		-		-		-		-
Consumer and Other Loans		-		-		-		32		-
Total	$	401	$	401	$	11	$	317	$	3
Total Impaired Loans
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	571	$	571	$	2	$	341	$	2
Home Equity Loans and Lines		445		445		9		507		6
Multi-family Residential		27		27		-		14		-
Commercial Real Estate		48		48		-		189		-
Land		-		-		-		-		-
Consumer and Other Loans		-		-		-		32		1
Total	$	1,091	$	1,091	$	11	$	1,083	$	9

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As of December 31, 2011	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment YTD		Interest Income Recognized
Impaired loans with no related allowance:	(In Thousands)
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	110	$	110	$	-	$	95	$	4
Home Equity Loans and Lines		402		402		-		346		10
Multi-family Residential		-		-		-		-		-
Commercial Real Estate		330		330		-		66		16
Land		-		-		-		14		-
Consumer and Other Loans		-		-		-		8		-
Total	$	842	$	842	$	-	$	529	$	30
Impaired loans with a related allowance:
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	-	$	-	$	2	$	-	$	-
Home Equity Loans and Lines		167		167		61		233		17
Multi-family Residential		-		-		-		-		-
Commercial Real Estate		-		-		-		-		-
Land		-		-		-		-		-
Consumer and Other Loans		65		65		65		67		5
Total	$	232	$	232	$	128	$	300	$	22
Total Impaired Loans
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	110	$	110		2	$	95	$	4
Home Equity Loans and Lines		569		569		61		579		27
Multi-family Residential		-		-		-		-		-
Commercial Real Estate		330		330		-		66		16
Land		-		-		-		14		-
Consumer and Other Loans		65		65		65		75		5
Total	$	1,074	$	1,074	$	128	$	829	$	52

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The following table summarizes the credit grades assigned by the Company to our loan portfolio as of March 31, 2012 and December 31, 2011.  Additional information related to the criteria used to assess these risk ratings can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, as amended.  These balances are presented gross of any allowance for loan loss.

	Real Estate Secured Mortgage Loans
March 31, 2012	1-4 Family Residential		Home Equity Loans/Lines		Multi-Family Residential		Commercial		Land		Consumer and Other		Total
Credit Classification:	(In Thousands)
Pass	$	108,648	$	19,101	$	18,564	$	57,576	$	824	$	722	$	205,435
Special Mention		-		-		-		-		-		-		-
Substandard		571		445		27		48		-		-		1,091
Loss		-		-		-		-		-		-		-
Total	$	109,219	$	19,546	$	18,591	$	57,624	$	824	$	722	$	206,526
	Real Estate Secured Mortgage Loans
December 31, 2011	1-4 Family Residential		Home Equity Loans/Lines		Multi-Family Residential		Commercial		Land		Consumer and Other		Total
Credit Classification:	(In Thousands)
Pass	$	105,608	$	17,984	$	14,591	$	56,162	$	1,299	$	955	$	196,599
Special Mention		-		-		-		-		-		-		-
Substandard		110		316		-		330		-		-		756
Loss		-		167		-		-		-		65		232
Total	$	105,718	$	18,467	$	14,591	$	56,492	$	1,299	$	1,020	$	197,587

NOTE 4 – EARNINGS PER COMMON SHARE

Earnings per common share (“EPS”) are computed using the weighted average number of shares outstanding as prescribed in FASB ASC 260-10, Earnings per Share.  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 March 31,
	2012			2011
Net Income	$	519,000		$	579,000
Weighted Average Shares Issued		6,345,732			6,345,732
Weighted Average Unearned ESOP Shares		(393,389	)		(418,813	)
Weighted Average Unearned RRP Shares		(98,481	)		(142,892	)
Weighted Average Treasury Shares		(3,097,012	)		(2,715,169	)
Weighted Average Shares Outstanding for Basic EPS		2,756,850			3,068,858
Earnings per Share, Basic	$	0.19		$	0.19
Weighted Average Shares Outstanding for Basic EPS		2,756,850			3,068,858
Effect of Dilutive Securities		136,418			107,572
Weighted Average Shares Outstanding for Diluted EPS		2,893,268			3,176,430
Earnings per Shares, Diluted	$	0.18		$	0.18

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NOTE 5 – REGULATORY CAPITAL

The actual and required regulatory capital amounts and ratios applicable to the Bank at March 31, 2012 and December 31, 2011, are presented in the following table:

	Actual					Minumum for Adequacy Purposes					Minimum to be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars In Thousands)
March 31, 2012
Tangible Capital	$	47,192		14.86	%	$	4,763		1.50	%		N/A		N/A
Core/Leverage Capital		47,192		14.86	%		9,525		3.00	%	$	15,875		5.00	%
Tier 1 Risk-Based Capital		47,192		28.73	%		6,571		4.00	%		9,856		6.00	%
Total Risk-Based Capital		48,941		29.79	%		13,142		8.00	%		16,427		10.00	%
December 31, 2011
Tangible Capital	$	46,684		15.00	%	$	4,668		1.50	%		N/A		N/A
Core/Leverage Capital		46,684		15.00	%		9,336		3.00	%	$	15,560		5.00	%
Tier 1 Risk-Based Capital		46,623		29.32	%		6,360		4.00	%		9,540		6.00	%
Total Risk-Based Capital		48,300		30.38	%		12,720		8.00	%		15,900		10.00	%

The Bank’s capital under accounting principles generally accepted in the United States (“GAAP”) is reconciled to its regulatory capital as follows:

	March 31, 2012			December 31, 2011
	(In Thousands)
Capital Under GAAP	$	47,727		$	47,277
Unrealized Gains on Available-for-Sale Securities		(535	)		(593	)
Tier 1 Capital		47,192			46,684
Allowance for Loan Losses		1,749			1,677
Recourse Obligations		-			(61	)
Total Risk-Based Capital	$	48,941		$	48,300

NOTE 6 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company adopted FASB ASC 820, Fair Value Measurements, on January 1, 2008 for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized at fair value in the financial statements.  FASB ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

FASB ASC 820 defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.  In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.

In addition to defining fair value, FASB ASC 820 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs.  The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.  The level in the fair value hierarchy within which a fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.  These levels are:

20

·   Level 1 - Quoted prices for identical assets or liabilities in active markets.

·   Level 2 - Observable inputs other than quoted prices included within Level I, such as quoted prices for similar instrumentsin active markets, quoted prices for identical or similar instruments in markets that are not active, or other inputs that areobservable in the market or can be corroborated by observable market data.

·   Level 3 - Inputs are generally unobservable and typically reflect management’s estimates of assumptions that marketparticipants would use in pricing the asset or liability.  The fair values are therefore determined using model-basedtechniques that include option pricing models, discounted cash flow models, and similar techniques.

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis at March 31, 2012 and December 31, 2011.  All of the mortgage-backed securities reported at fair value on March 31, 2012, and December 31, 2011, were secured by first mortgage loans on residential real estate.

	Fair Value Measurements
March 31, 2012	(Level 1)		(Level 2)		(Level 3)		Total
Assets:	(In Thousands)
Available-for-Sale Securities
Mortgage-Backed Securities	$	-	$	8,975	$	-	$	8,975
US Government and Agency Obligations		-		6,191		-		6,191
Equity Securities		219		-		-		219
Loans Held-for-Sale		-		3,385		-		3,385
Total	$	219	$	18,551	$	-	$	18,770
	Fair Value Measurements
December 31, 2011	(Level 1)		(Level 2)		(Level 3)		Total
Assets:	(In Thousands)
Available-for-Sale Securities
Mortgage-Backed Securities	$	-	$	10,356	$	-	$	10,356
US Government and Agency Obligations				12,211		-		12,211
Equity Securities		183		-		-		183
Total	$	183	$	22,567	$	-	$	22,750

The Company did not record any liabilities at fair market value for which measurement of the fair value was made on a recurring basis at March 31, 2012 or December 31, 2011.

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The following table presents the Company’s assets and liabilities measured at fair value on a non-recurring basis at March 31, 2012 and December 31, 2011.

	Fair Value Measurements
March 31, 2012	(Level 1)		(Level 2)		(Level 3)		Total
Assets:	(In Thousands)
Impaired Loans	$	-	$	-	$	1,091	$	1,091
Other Real Estate Owned		-		832		-		832
Total	$	-	$	832	$	1,091	$	1,923
	Fair Value Measurements
December 31, 2011	(Level 1)		(Level 2)		(Level 3)		Total
Assets:	(In Thousands)
Impaired Loans	$	-	$	-	$	947	$	947
Other Real Estate Owned		-		532		-		532
Total	$	-	$	532	$	947	$	1,479

The Company did not record any liabilities at fair market value for which measurement of the fair value was made on a non-recurring basis at March 31, 2012 or December 31, 2011.

FASB ASC 825, Financial Instruments, requires disclosure of the fair value of financial instruments for which it is practical to estimate.  Included in this disclosure are the methods and significant assumptions used to estimate the fair value of financial instruments.  A detailed description of the valuation methodologies used in estimating the fair value of the financial instruments can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

	March 31, 2012						December 31, 2011
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
	(In Thousands)
Financial Assets
Cash and Cash Equivalents	$	4,494		$	4,494		$	27,589		$	27,589
Certificates of Deposit		742			747			742			745
Securities		101,738			105,218			82,331			85,817
Loans		206,407			215,309			197,437			206,594
Less Allowance for Loan Losses		(1,749	)		(1,749	)		(1,805	)		(1,805	)
Loans, Net of Allowance		204,658			213,560			195,632			204,789
Federal Home Loan Bank Stock		1,726			1,726			1,543			1,543
Financial Liabilities
Deposits	$	193,426		$	199,154		$	194,326		$	200,413
Borrowings		64,170			67,057			57,113			60,489
Unrecognized Financial Instruments
Commitments to Extend Credit	$	21,559		$	21,564		$	18,518		$	18,523

NOTE 7 – SUBSEQUENT EVENTS

In accordance with FASB ASC 855, Subsequent Events, the Company evaluates events and transactions that occur after the balance sheet date for potential recognition in the financial statements.  The effect of all subsequent events that provide additional evidence of conditions that existed at the balance sheet date are recognized in the financial statements as of March 31, 2012.  In preparing these financial statements, the Company evaluated the events and transactions that occurred through the date these financial statements were issued.

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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

During the first quarter of 2012, the Bank purchased a branch office building and related improvements in Covington, Louisiana from a regional commercial bank which consolidated its operations in the market.  The purchase did not include deposits or loans of the former owner.  Management anticipates opening the new location as a full service branch office in June 2012.

The Company’s results of operations are primarily dependent on the results of the Bank, which 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 the Comptroller of the Currency, as an integral part of its examination processes, periodically reviews our allowance for loan losses. The Office of the Comptroller of the Currency 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 its 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.

23

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 March 31, 2012 and December 31, 2011

Total assets were $319.3 million at March 31, 2012, an increase of $6.2 million from December 31, 2011.  Cash and cash equivalents declined by $23.1 million to $4.5 million at March 31, 2012.  Total securities available-for-sale were $15.4 million at March 31, 2012, a decrease of $7.4 million compared to December 31, 2011.  This decrease was due to the maturity of $6.0 million in US Agency debt securities and a $1.4 million reduction in the balance of available-for-sale mortgage-backed securities.  During the first quarter of 2012, total securities held-to-maturity increased by $26.8 million, to $86.4 million.  This increase in the balance of our securities held-to-maturity was due to the purchase of $27.4 million in US Agency issued CMOs and $4 million in US Agency issued mortgage-backed securities.  These purchases were partially offset by the receipt of $4.6 million in scheduled principal payments and unscheduled prepayments of principal on mortgage-backed securities.  Net loans receivable were $204.7 million at March 31, 2012, an increase of $9.0 million compared to December 31, 2011.  During the quarter ended March 31, 2012, our first mortgage loans secured by single family residences increased by $3.5 million, our home equity loans and lines of credit increased by $1.1 million, our first mortgage loans secured by multifamily residential collateral increased by $4.0 million, and first mortgage loans secured by non-residential commercial real estate increased by $1.1 million.

Total impaired loans were $1.1 million at both March 31, 2012 and December 31, 2011.  At these dates, our impaired loans were comprised solely of nonaccrual loans.  Other real estate owned increased by $300,000 to $832,000 during the first three months of 2012.  At March 31, 2012, our other real estate owned was comprised of a restaurant located in Baton Rouge, Louisiana with a fair value of $300,000, a single family residence located in New Orleans with a fair market value of $150,000, and the Bank’s participation interest in a $170 million construction loan secured by a multi-use development in Baton Rouge, Louisiana, which had a fair value of $382,000 at March 31, 2012.  Total nonperforming assets were $1.9 million at March 31, 2012, and $1.6 million at December 31, 2011.  Expressed as a percentage of total assets, nonperforming assets were 0.60% at March 31, 2012, and 0.51% at December 31, 2011.

Total deposits were $193.4 million at March 31, 2012, and $194.3 million at December 31, 2011.  At the end of the first quarter of 2012, our total deposits were comprised of $9.4 million in noninterest bearing accounts and $184.0 million of interest bearing accounts.  Total Federal Home Loan Bank advances and other borrowings were $64.2 million at March 31, 2012, an increase of $7.1 million compared to December 31, 2011.  This increase in total borrowings was due to $7.5 million in short-term FHLB advances used to fund the growth in our loan portfolio during the quarter.

Total shareholders’ equity was $58.2 million at March 31, 2012, an increase of $727,000 from December 31, 2011.  Total shareholders’ equity was increased by $519,000 in net income, and the release of 42,284 shares held by the Recognition and Retention Plan Trust, with a cost basis of $533,000, which became vested and were released to plan participants.  These increases were partially offset by the acquisition of 22,036 shares of common stock at an aggregate cost of $352,000, pursuant to our stock repurchase plans, and a $39,000 reduction in accumulated other comprehensive income.    The Bank’s tier 1 capital ratio was 14.86% at March 31, 2012, which was well in excess of well-capitalized regulatory standards at such date.  Tier 1 risk-based capital and total risk-based capital were 28.73% and 29.79%, respectively, at March 31, 2012.

24

Comparison of Our Operating Results for the Three Months Ended March 31, 2012 and 2011

General.  Net income for the quarter ended March 31, 2012 was $519,000, a decrease of $60,000 from the first quarter of 2011.  Diluted earnings per share were $0.18 for both quarters ended March 31, 2012 and 2011.  Net interest income was $2.4 million during the first quarter of 2012, a decrease of $27,000 compared to the first quarter of 2011.  Non-interest income increased by $74,000 between the respective quarters due primarily to increased gains on the sale of residential mortgage loans.  Non-interest expense was $1.9 million for the first quarter of 2012, an increase of $118,000 compared to the first quarter of 2011.

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.

	Three months Ended March 31,
	2012							2011
	Average Balance		Interest		Average Yield/ Rate			Average Balance		Interest		Average Yield/ Rate
	(Dollars in Thousands)
Interest-Earning Assets:
Loans Receivable (1)	$	200,282	$	2,723		5.44	%	$	183,032	$	2,730		5.97	%
Mortgage-backed Securities		86,812		780		3.59	%		73,316		897		4.89	%
Investment Securities		7,859		40		2.04	%		50,366		196		1.56	%
Other Interest-Earning Assets		12,020		9		0.30	%		7,467		8		0.43	%
Total Interest-Earning Assets		306,973		3,552		4.63	%		314,181		3,831		4.88	%
Non-Interest Earning Assets		7,339							8,185
Total Assets	$	314,312						$	322,366
Interest-Bearing Liabilities:
Passbook, Checking and Money Market Accounts	$	49,909		28		0.22	%	$	45,505		42		0.37	%
Certificates of Deposit		133,668		531		1.59	%		135,305		668		1.97	%
Total Interest-Bearing Deposits		183,577		559		1.22	%		180,810		710		1.57	%
Borrowings		59,441		552		3.71	%		68,147		653		3.83	%
Total Interest-Bearing Liabilities		243,018		1,111		1.83	%		248,957		1,363		2.19	%
Non-Interest Bearing Liabilities		13,396							12,797
Total Liabilities		256,414							261,754
Stockholders' Equity		57,898							60,612
Total Liabilities and Stockholders' Equity	$	314,312						$	322,366
Net Interest-Earning Assets	$	63,955						$	65,224
Net Interest Income; Average Interest Rate Spread			$	2,441		2.80	%			$	2,468		2.69	%
Net Interest Margin (2)						3.18	%						3.14	%
Average Interest-Earning Assets to Average Interest-Bearing Liabilities						126.32	%						126.20	%

_______________________________________ 

(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.

25

Interest Income.  Net interest income was $2.4 million during the first quarter of 2012, a decrease of $27,000 compared to the first quarter of 2011.  During the 2012 period, interest income was $3.6 million, a decrease of $279,000 compared to the 2011 period.  This decrease in interest income was attributed to a decrease in average interest-earning assets of $7.2 million between the respective quarterly periods, due to a reduction in our investment securities portfolio, and a 25 basis point decrease in the average yield on our interest-earning assets.  The average yield on our interest-earning assets was 4.63% and 4.88%, respectively, for the three month periods ended March 31, 2012 and 2011.  Interest income on loans receivable was $2.7 million during the first quarter of both 2012 and 2011.  We saw a $17.3 million increase in the average balance of our loans receivable during the first quarter of 2012 compared to the first quarter of 2011, although this was offset by a 53 basis point reduction in the average yield earned on our loan portfolio.  The average balance of our mortgage-backed securities increased by $13.5 million while the average yield on our mortgage-backed securities decreased by 130 basis points during the first quarter of 2012 compared to the first quarter of 2011, resulting in a decrease in interest income on mortgage-backed securities of $117,000.  Interest income on investment securities decreased by $156,000 to $40,000 for the three month period ended March 31, 2012 compared to the three month period ended March 31, 2011.  This decrease in interest income on investment securities was primarily due to a $42.5 million decrease in the average balance of our investment securities.

Interest Expense.  Total interest expense was $1.1 million, with our interest-bearing liabilities having an average cost of 1.83% during the first quarter of 2012, compared to $1.4 million and an average cost of 2.19% for the first quarter of 2011.  The average rate paid on interest-bearing deposits was 1.22% during the quarter ended March 31, 2012, a decrease of 35 basis points from the quarter ended March 31, 2011.  Interest expense on borrowings was $552,000 at an average cost of 3.71% during the first quarter of 2012, and $653,000 at an average cost of 3.83% during the first quarter of 2011.  The net interest rate spread between our interest-earning assets and our interest-bearing liabilities improved to 2.80% for the first quarter of 2012, compared to 2.69% for the first quarter of 2011.  Our net interest margin, which expresses net interest income as a percentage of average interest-earning assets, was 3.18% for the three month period ended March 31, 2012, an increase of four basis points from the three month period ended March 31, 2011.

Provision 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 Company recorded provisions for loan losses of $55,000 during the first quarter of 2012, compared to provisions for loan losses of $37,000 during the first quarter of 2011.  Our allowance for loan losses was $1.7 million at March 31, 2012, or 160.31% of our non-performing loans at such date.  Stated as a percentage of total loans receivable, our allowance for loan losses was 0.85% and 0.91% at March 31, 2012 and December 31, 2011, respectively.  The Company recorded charge-offs of $48,000 against its home equity loans and lines of credit and $69,000 against its consumer loans during the first quarter of 2012.

Non-interest Income.  Non-interest income for the first quarter of 2012 was $274,000, an increase of $74,000 from the first quarter of 2011.  Customer service fees, which are primarily comprised of fees earned on transaction accounts and broker fees earned on certain loan sales, were $140,000 during the 2012 period, an increase of $15,000 from the 2011 period.  During the quarter ended March 31, 2012, the Bank sold $5.9 million in mortgage loans resulting in gains of $109,000 compared to the sale of $3.8 million in mortgage loans which resulted in gains of $56,000 during the quarter ended March 31, 2011.  Other non-interest income was $25,000 and $19,000, respectively for the three month periods ended March 31, 2012 and 2011.

Non-interest Expense. Non-interest expense for the quarter ended March 31, 2012 was $1.9 million, an increase of $118,000 from the quarter ended March 31, 2011.  Salaries and employee benefits expense was $1.2 million during the first quarter of 2012, an increase of $59,000 compared to the first quarter of 2011.  The increase in salaries and benefits expense was primarily due to an increase in commissions earned on loan originations and overall higher levels of salaries due to an increase in our number of employees.  Occupancy expenses were $291,000 and $277,000 for the respective quarters ended March 31, 2012 and 2011.  This increase in occupancy expense was attributed to repairs and renovations to our new branch office.  The Louisiana Bank Shares tax was $58,000 and $57,000, respectively, for the three month periods ended March 31, 2012 and 2011.  Our FDIC deposit insurance premiums decreased by $16,000 during the first three months of 2012 compared to the first three months of 2011.  This decrease in our FDIC deposit insurance premium was due to a reduction in the base assessment applicable to our institution.  The net cost of OREO operations was $38,000 for the first quarter of 2012, an increase of $36,000 compared to the first quarter of 2011.  During the 2012 period, the Company recorded write-downs of $30,000 against its OREO.  Other non-interest expenses were $248,000 and $224,000, respectively, for the period ended March 31, 2012 and 2011.  This increase was primarily due to increases in our advertising expenses, postage expense and costs associated with our public reporting requirements.

26

Income Tax Expense. Income tax expense was $277,000 based on pre-tax income of $796,000 during the first quarter of 2012 compared to income tax expense of $306,000 on pre-tax income of $885,000 during the first quarter of 2011.

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 March 31, 2012, our cash and cash equivalents amounted to $4.5 million. In addition, at such date our available-for-sale investment and mortgage-backed securities amounted to an aggregate of $15.4 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 March 31, 2012, we had certificates of deposit maturing within the next 12 months amounting to $83.8 million. Based upon historical experience, we anticipate that a significant portion of the maturing certificates of deposit will be redeposited with us.  At March 31, 2012, 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 collateral for advances.  At March 31, 2012, the Company had $125.5 million in additional borrowing capacity available through the Federal Home Loan Bank.

The following table summarizes our contractual cash obligations at March 31, 2012.

	Payments Due by Period
	Total		To 1 Year		More Than 1 Year to 3 Years		More Than 3 Years to 5 Years		More Than 5 Years
	(Dollars In Thousands)
Certificates of Deposit	$	133,211	$	83,816	$	32,848	$	16,547	$	-
FHLB Advances and Other Borrowings		64,170		38,035		14,927		8,037		3,171
Total Long-Term Debt		197,381		121,851		47,775		24,584		3,171
Operating Lease Obligations	$	136	$	34	$	68	$	34	$	-
Total Contractual Obligations	$	197,517	$	121,885	$	47,843	$	24,618	$	3,171

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

Impact of Inflation and Changing Prices

The financial statements, accompanying notes, and related financial data of the Company presented herein have been prepared in accordance with generally accepted accounting principles, which require the measurement of financial position and operating results in terms of historical dollars without considering the changes in purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of operations. Most of our assets and liabilities are monetary in nature; therefore, the impact of interest rates has a greater impact on 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.

27

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, 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, 2011.

Item 4 – 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.

28

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 31-34 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (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 shares pursuant to repurchase plans approved by the Company’s Board of Directors, as set forth in the following table.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan or Program		Maximum Number of Shares that May Yet be Purchased Under the Plan or Program (1)
January 1 - January 31, 2012		-		-		-		157,025
February 1 - February 29, 2012		14,963	$	15.96		14,963		142,062
March 1 - March 31, 2012		7,073		15.94		7,073		134,989
Total		22,036	$	15.96		22,036

_______________

(1)   On October 28, 2011, the Company announced a stock repurchase program to acquire up to 5%, or 163,163 shares of its outstanding common stock over a six-month period.  On April 27, 2012, the Company extended the duration of this program to October 26, 2012.

Item 3 - Defaults Upon Senior Securities.

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

Item 4 – Mine Safety Disclosure

Not applicable.

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

29

The following Exhibits are being furnished* as part of this report:

No.	Description
101.INS	XBRL Instance Document.*
101.SCH	XBRL Taxonomy Extension Schema Document.*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*
101.DEF	XBRL Taxonomy Extension Definitions Linkbase Document.*

______________________

* These interactive data files are being furnished as part of this Quarterly Report, and, in accordance with Rule 402 of Regulation S-T, shall not be deemed filed for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under those sections.

30

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: May 10, 2012	By:	/s/ Lawrence J. LeBon, III
		Lawrence J. LeBon, III
		President and Chief Executive Officer
Date: May 10, 2012	By:	/s/ John LeBlanc
		John LeBlanc
		Senior Vice President and Chief Financial Officer

 31

EX-31.1

EXHIBIT 31.1

PURSUANT TO RULES 13a-14 AND 15d-14 OF THE SECURITIES EXCHANGE ACT

OF 1934 AND SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

I, Lawrence J. LeBon, III, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Louisiana Bancorp, Inc. (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: May 10, 2012	By:	/s/ Lawrence J. LeBon, III
		Lawrence J. LeBon, III
		President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

PURSUANT TO RULES 13a-14 AND 15d-14 OF THE SECURITIES EXCHANGE ACT

OF 1934 AND SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

I, John LeBlanc, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Louisiana Bancorp, Inc. (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: May 10, 2012	By:	/s/ John LeBlanc
		John LeBlanc
		Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

SECTION 1350 CERTIFICATION

In connection with the Quarterly Report of Louisiana Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2012, each of the undersigned, Lawrence J. LeBon, III, President and Chief Executive Officer of the Company, and John LeBlanc, Senior Vice President and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2012	By:	/s/ Lawrence J. LeBon, III
		Lawrence J. LeBon, III
		President and Chief Executive Officer
Date: May 10, 2012	By:	/s/ John LeBlanc
		John LeBlanc
		Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act has been provided to Louisiana Bancorp, Inc. and will be retained by Louisiana Bancorp, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Note 2 – Securities

3 Months Ended

Mar. 31, 2012

Marketable Securities [Table Text Block]

NOTE 2 – SECURITIES

A summary of securities classified as available-for-sale at March 31, 2012 and December 31, 2011, with gross unrealized gains and losses, follows:

	March 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
Securities Available-for-Sale
Mortgage-Backed Securities
GNMA	$	127	$	7	$	-	$	134
FNMA		5,425		420		-		5,845
FHLMC		2,786		210		-		2,996
		8,338		637		-		8,975
U.S. Government and Agency Obligations		5,955		236		-		6,191
Equity Securities		183		36		-		219
Total	$	14,476	$	909	$	-	$	15,385
	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
Securities Available-for-Sale
Mortgage-Backed Securities
GNMA	$	146	$	9	$	-	$	155
FNMA		6,347		470		-		6,817
FHLMC		3,155		229		-		3,384
		9,648		708		-		10,356
U.S. Government and Agency Obligations		11,949		262		-		12,211
Equity Securities		183		-		-		183
Total	$	21,780	$	970	$	-	$	22,750

A summary of securities classified as held-to-maturity at March 31, 2012 and December 31, 2011, with gross unrealized gains and losses, follows:

	March 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In Thousands)
Securities Held-to-Maturity
Mortgage-Backed Securities
GNMA	$	5,647	$	225	$	-		$	5,872
FNMA		38,535		1,992		(25	)		40,502
FHLMC		13,406		1,146		-			14,552
		57,588		3,363		(25	)		60,926
Collateralized Mortgage Obligations
FNMA		13,693		34		(12	)		13,715
FHLMC		15,072		137		(17	)		15,192
	$	86,353	$	3,534	$	(54	)	$	89,833
	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In Thousands)
Securities Held-to-Maturity
Mortgage-Backed Securities
GNMA	$	5,987	$	244	$	-		$	6,231
FNMA		38,994		2,031		-			41,025
FHLMC		14,600		1,211		-			15,811
	$	59,581	$	3,486	$	-		$	63,067

The amortized cost and fair value of available-for-sale and held-to-maturity securities by contractual maturity at March 31, 2012, 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
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(In Thousands)
Amounts Maturing in:
Less than One Year	$	390	$	411	$	-	$	-
One to Five Years		7,497		7,813		453		484
Five to Ten Years		5,781		6,265		13,119		14,195
Over Ten Years		625		677		72,781		75,154
Total	$	14,293	$	15,166	$	86,353	$	89,833
Equity Securities		183		219
	$	14,476	$	15,385

Information pertaining to securities with gross unrealized losses at March 31, 2012 and December 31, 2011, 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
	Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
March 31, 2012
Mortgage-Backed Securities
GNMA	$	-	$	-	$	-	$	-
FNMA		-		-		-		-
FHLMC		-		-		-		-
U.S. Government and Agency Obligations		-		-		-		-
Total	$	-	$	-	$	-	$	-
December 31, 2011
Mortgage-Backed Securities
GNMA	$	-	$	-	$	-	$	-
FNMA		-		-		-		-
FHLMC		-		-		-		-
U.S. Government and Agency Obligations		-		-		-		-
Total	$	-	$	-	$	-	$	-

	Held-to-Maturity
	Losses Less Than 12 Months				Losses Greater Than 12 Months
	Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
March 31, 2012
Mortgage-Backed Securities
GNMA	$	-	$	-	$	-	$	-
FNMA		25		3,956		-		-
FHLMC		-		-		-		-
		25		3,956		-		-
Collateralized Mortgage Obligations
FNMA		12		3,997
FHLMC		17		6,308
U.S. Government and Agency Obligations		-		-		-		-
Total	$	54	$	14,261	$	-	$	-
December 31, 2011
Mortgage-Backed Securities
GNMA	$	-	$	-	$	-	$	-
FNMA		-		-		-		-
FHLMC		-		-		-		-
		-		-		-		-
U.S. Government and Agency Obligations		-		-		-		-
Total	$	-	$	-	$	-	$	-

The unrealized losses on the company’s investments were caused by interest rate increases.  Because the decline in the 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 at maturity, the Company did not consider these investment to be other-than-temporarily impaired at March 31, 2012.

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Note 1 – Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2012

Significant Accounting Policies [Text Block]

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 accounting principles generally accepted in the United States (“U.S. GAAP”). 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 period ended March 31, 2012, 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”).  The Company 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 FASB Accounting Standards Codification (“ASC”) 320-10, Investments – Debt and Equity Securities.  FASB ASC 320-10 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 these classifications 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 March 31, 2012 or December 31, 2011.

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 real estate values and general economic conditions in this area.

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

When the payment of principal or interest on a loan is delinquent for more than 90 days, or earlier in some cases, the loan is placed on non-accrual status, unless the loan is in the process of collection and the underlying collateral fully supports the carrying value of the loan. If the decision is made to continue accruing interest on the loan, periodic reviews are made to confirm the accruing status of the loan.  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 was appropriate under U.S. GAAP.

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.

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.

COMPREHENSIVE INCOME

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 income, are components of comprehensive income.

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.

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Consolidated Balance Sheets (March 31, 2012 unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Assets
Cash and Due from Banks	$ 2,416	$ 2,064
Short-Term Interest-Bearing Deposits	2,078	25,525
Total Cash and Cash Equivalents	4,494	27,589
Certificates of Deposit	742	742
Securities Available-for-Sale, at Fair Value (Amortized Cost of $14,476 and $21,780, respectively)	15,385	22,750
Securities Held-to-Maturity, at Amortized Cost (Estimated Fair Value of $89,833 and $63,067, respectively)	86,353	59,581
Loans, Net of Allowance for Loan Losses of $1,749 and $1,805, respectively	201,306	195,632
Loans Held for Sale	3,352
Accrued Interest Receivable	1,096	1,081
Other Real Estate Owned	832	532
Stock in Federal Home Loan Bank	1,726	1,543
Premises and Equipment, Net	2,203	1,636
Other Assets	1,839	2,042
Total Assets	319,328	313,128
Deposits
Non-Interest-Bearing	9,438	9,764
Interest-Bearing	183,988	184,562
Total Deposits	193,426	194,326
Borrowings	64,170	57,113
Advance Payments by Borrowers for Taxes and Insurance	1,793	2,395
Accrued Interest Payable	270	297
Other Liabilities	1,422	1,477
Total Liabilities	261,081	255,608
Commitments and Contigencies
Shareholders' Equity
Common Stock, $.01 Par Value, 40,000,000 Shares Authorized; 6,345,732 Shares Issued; 3,239,094 and 3,257,130 Outstanding, respectively	63	63
Additional Paid-in-Capital	63,228	63,218
Unearned ESOP Shares	(3,934)	(3,934)
Unearned Recognition and Retention Plan Shares	(983)	(1,516)
Treasury Stock, at Cost (3,106,638 shares and 3,088,602 shares, respectively)	(43,582)	(43,286)
Retained Earnings	42,854	42,335
Accumulated Other Comprehensive Income	601	640
Total Shareholders' Equity	58,247	57,520
Total Liabilities and Shareholders' Equity	$ 319,328	$ 313,128

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Consolidated Statements of Changes in Shareholders’ Equity (unaudited) (USD $) In Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Unearned ESOP Stock [Member]	Unearned RRP Stock [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Beginning Balances at Dec. 31, 2010	$ 63	$ 62,880	$ (4,188)	$ (2,074)	$ (37,321)	$ 40,218	$ 700	$ 60,278
Net Income - Three Months Ended March 31						579		579
Other Comprehensive Loss, Net of Applicable Deferred Income Taxes							(181)	(181)
Stock Purchased for Treasury					(259)			(259)
RRP Shares Earned		(46)		534				488
Stock Option Expense		61						61
Ending Balances at Mar. 31, 2011	63	62,895	(4,188)	(1,540)	(37,580)	40,797	519	60,966
Beginning Balances at Dec. 31, 2011	63	63,218	(3,934)	(1,516)	(43,286)	42,335	640	57,520
Net Income - Three Months Ended March 31						519		519
Other Comprehensive Loss, Net of Applicable Deferred Income Taxes							(39)	(39)
Stock Purchased for Treasury					(352)			(352)
RRP Shares Earned		(46)		533				487
Stock Options Exercised		(2)			56			54
Stock Option Expense		58						58
Ending Balances at Mar. 31, 2012	$ 63	$ 63,228	$ (3,934)	$ (983)	$ (43,582)	$ 42,854	$ 601	$ 58,247

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash Flows from Operating Activities
Net Income	$ 519	$ 579
Adjustments to Reconcile Net Income to Net Cash (Used in) Provided by Operating Activities:
Depreciation	50	48
Provision for Loan Losses	55	37
Net Increase in RRP Shares Earned	487	487
Stock Option Plan Expense	58	61
Discount Accretion Net of Premium Amortization	27	(31)
Deferred Income Tax Benefit	(13)	(13)
Gain on Sale of Loans	(109)	(56)
Gain on the Sale of Property and Equipment	(5)
Originations of Loans Held-for-Sale	(5,920)	(4,809)
Proceeds from Sales of Loans Held-for-Sale	6,030	3,809
Net Increase in Loans Held-for-Sale	(3,352)
Increase in Accrued Interest Receivable	(15)	(79)
Impairment of Other Real Estate Owned	30
Decrease in Other Assets	237	326
Decrease in Accrued Interest Payable	(27)	(46)
Decrease in Other Liabilities	(55)	(157)
Net Cash (Used in) Provided by Operating Activities	(2,003)	156
Cash Flows from Investing Activities
Purchase of Securities Available-for-Sale		(3,000)
Purchase of Securities Held-to-Maturity	(31,353)
Proceeds from Maturities of Securities Available-for-Sale	7,310	1,880
Proceeds from Maturities of Securities Held-to-Maturity	4,548	6,434
Net Increase in Loans Receivable	(6,060)	(4,041)
Purchase of Property and Equipment	(634)	(29)
Proceeds from Sale of Property and Equipment	22
Proceeds from Sale of Other Real Estate Owned		350
Net Increase in Investment in Federal Home Loan Bank Stock	(183)	(10)
Net Cash (Used in) Provided by Investing Activities	(26,350)	1,584
Cash Flows from Financing Activities
(Decrease) Increase in Deposits	(900)	4,455
Decrease in Advances by Borrowers for Taxes and Insurance	(602)	(542)
Increase (Decrease) in Borrowings	7,058	(790)
Purchase of Treasury stock	(352)	(259)
Proceeds from Exercise of Stock Options	54
Net Cash Provided by Financing Activities	5,258	2,864
Net (Decrease) Increase in Cash and Cash Equivalents	(23,095)	4,604
Cash and Cash Equivalents, Beginning of Year	27,589	6,610
Cash and Cash Equivalents, End of Period	4,494	11,214
Cash Paid During the Period:
Interest	1,138	1,408
Loans Transferred to Other Real Estate Owned During the Period	$ 330

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Consolidated Balance Sheets (March 31, 2012 unaudited) (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Securities Available-for-Sale, amortized cost (in Dollars)	$ 14,476	$ 21,780
Securities Held-to-Maturity, estimated fair value (in Dollars)	89,833	63,067
Loans, Allowance for Loan Losses (in Dollars)	$ 1,749	$ 1,805
Common Stock, Par Value (in Dollars per share)	$ 0.01	$ 0.01
Common Stock, Shares Authorized	40,000,000	40,000,000
Common Stock, Shares Issued	6,345,732	6,345,732
Common Stock, Shares Outstanding	3,239,094	3,257,130
Treasury Stock, Shares	3,106,638	3,088,602

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Document And Entity Information	3 Months Ended
	Mar. 31, 2012	May 10, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	LOUISIANA BANCORP INC
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		3,239,094
Amendment Flag	false
Entity Central Index Key	0001392562
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Mar. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1

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Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Interest and Dividend Income
Loans, Including Fees	$ 2,723	$ 2,730
Mortgage Backed Securities	780	897
Investment Securities	40	196
Other Interest-Bearing Deposits	9	8
Total Interest and Dividend Income	3,552	3,831
Interest Expense
Deposits	559	710
Borrowings	552	653
Total Interest Expense	1,111	1,363
Net Interest Income	2,441	2,468
Provision for Loan Losses	55	37
Net Interest Income after Provision for Loan Losses	2,386	2,431
Non-Interest Income
Customer Service Fees	140	125
Gain on Sale of Loans	109	56
Other Income	25	19
Total Non-Interest Income	274	200
Non-Interest Expense
Salaries and Employee Benefits	1,192	1,133
Occupancy Expense	291	277
Louisiana Bank Shares Tax	58	57
FDIC Insurance Premium	37	53
Net Cost of OREO Operations	38	2
Other Expenses	248	224
Total Non-Interest Expense	1,864	1,746
Income Before Income Tax Expense	796	885
Income Tax Expense	277	306
Net Income	$ 519	$ 579
Earnings Per Share
Basic (in Dollars per share)	$ 0.19	$ 0.19
Diluted (in Dollars per share)	$ 0.18	$ 0.18

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Note 5 – Regulatory Capital

3 Months Ended

Mar. 31, 2012

Regulatory Capital Requirements under Banking Regulations [Text Block]

NOTE 5 – REGULATORY CAPITAL

The actual and required regulatory capital amounts and ratios applicable to the Bank at March 31, 2012 and December 31, 2011, are presented in the following table:

	Actual					Minumum for Adequacy Purposes					Minimum to be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars In Thousands)
March 31, 2012
Tangible Capital	$	47,192		14.86	%	$	4,763		1.50	%		N/A		N/A
Core/Leverage Capital		47,192		14.86	%		9,525		3.00	%	$	15,875		5.00	%
Tier 1 Risk-Based Capital		47,192		28.73	%		6,571		4.00	%		9,856		6.00	%
Total Risk-Based Capital		48,941		29.79	%		13,142		8.00	%		16,427		10.00	%
December 31, 2011
Tangible Capital	$	46,684		15.00	%	$	4,668		1.50	%		N/A		N/A
Core/Leverage Capital		46,684		15.00	%		9,336		3.00	%	$	15,560		5.00	%
Tier 1 Risk-Based Capital		46,623		29.32	%		6,360		4.00	%		9,540		6.00	%
Total Risk-Based Capital		48,300		30.38	%		12,720		8.00	%		15,900		10.00	%

The Bank’s capital under accounting principles generally accepted in the United States (“GAAP”) is reconciled to its regulatory capital as follows:

	March 31, 2012			December 31, 2011
	(In Thousands)
Capital Under GAAP	$	47,727		$	47,277
Unrealized Gains on Available-for-Sale Securities		(535	)		(593	)
Tier 1 Capital		47,192			46,684
Allowance for Loan Losses		1,749			1,677
Recourse Obligations		-			(61	)
Total Risk-Based Capital	$	48,941		$	48,300

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Note 4 – Earnings Per Common Share

3 Months Ended

Mar. 31, 2012

Earnings Per Share [Text Block]

NOTE 4 – EARNINGS PER COMMON SHARE

Earnings per common share (“EPS”) are computed using the weighted average number of shares outstanding as prescribed in FASB ASC 260-10, Earnings per Share.  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 March 31,
	2012			2011
Net Income	$	519,000		$	579,000
Weighted Average Shares Issued		6,345,732			6,345,732
Weighted Average Unearned ESOP Shares		(393,389	)		(418,813	)
Weighted Average Unearned RRP Shares		(98,481	)		(142,892	)
Weighted Average Treasury Shares		(3,097,012	)		(2,715,169	)
Weighted Average Shares Outstanding for Basic EPS		2,756,850			3,068,858
Earnings per Share, Basic	$	0.19		$	0.19
Weighted Average Shares Outstanding for Basic EPS		2,756,850			3,068,858
Effect of Dilutive Securities		136,418			107,572
Weighted Average Shares Outstanding for Diluted EPS		2,893,268			3,176,430
Earnings per Shares, Diluted	$	0.18		$	0.18

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Note 6 – Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2012

Fair Value Disclosures [Text Block]

NOTE 6 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company adopted FASB ASC 820, Fair Value Measurements, on January 1, 2008 for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized at fair value in the financial statements.  FASB ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

FASB ASC 820 defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.  In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.

In addition to defining fair value, FASB ASC 820 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs.  The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.  The level in the fair value hierarchy within which a fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.  These levels are:

·   Level 1 - Quoted prices for identical assets or liabilities in active markets.

·   Level 2 - Observable inputs other than quoted prices included within Level I, such as quoted prices for similar instrumentsin active markets, quoted prices for identical or similar instruments in markets that are not active, or other inputs that areobservable in the market or can be corroborated by observable market data.

·   Level 3 - Inputs are generally unobservable and typically reflect management’s estimates of assumptions that marketparticipants would use in pricing the asset or liability.  The fair values are therefore determined using model-basedtechniques that include option pricing models, discounted cash flow models, and similar techniques.

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis at March 31, 2012 and December 31, 2011.  All of the mortgage-backed securities reported at fair value on March 31, 2012, and December 31, 2011, were secured by first mortgage loans on residential real estate.

	Fair Value Measurements
March 31, 2012	(Level 1)		(Level 2)		(Level 3)		Total
Assets:	(In Thousands)
Available-for-Sale Securities
Mortgage-Backed Securities	$	-	$	8,975	$	-	$	8,975
US Government and Agency Obligations		-		6,191		-		6,191
Equity Securities		219		-		-		219
Loans Held-for-Sale		-		3,385		-		3,385
Total	$	219	$	18,551	$	-	$	18,770
	Fair Value Measurements
December 31, 2011	(Level 1)		(Level 2)		(Level 3)		Total
Assets:	(In Thousands)
Available-for-Sale Securities
Mortgage-Backed Securities	$	-	$	10,356	$	-	$	10,356
US Government and Agency Obligations				12,211		-		12,211
Equity Securities		183		-		-		183
Total	$	183	$	22,567	$	-	$	22,750

The Company did not record any liabilities at fair market value for which measurement of the fair value was made on a recurring basis at March 31, 2012 or December 31, 2011.

The following table presents the Company’s assets and liabilities measured at fair value on a non-recurring basis at March 31, 2012 and December 31, 2011.

	Fair Value Measurements
March 31, 2012	(Level 1)		(Level 2)		(Level 3)		Total
Assets:	(In Thousands)
Impaired Loans	$	-	$	-	$	1,091	$	1,091
Other Real Estate Owned		-		832		-		832
Total	$	-	$	832	$	1,091	$	1,923
	Fair Value Measurements
December 31, 2011	(Level 1)		(Level 2)		(Level 3)		Total
Assets:	(In Thousands)
Impaired Loans	$	-	$	-	$	947	$	947
Other Real Estate Owned		-		532		-		532
Total	$	-	$	532	$	947	$	1,479

The Company did not record any liabilities at fair market value for which measurement of the fair value was made on a non-recurring basis at March 31, 2012 or December 31, 2011.

FASB ASC 825, Financial Instruments, requires disclosure of the fair value of financial instruments for which it is practical to estimate.  Included in this disclosure are the methods and significant assumptions used to estimate the fair value of financial instruments.  A detailed description of the valuation methodologies used in estimating the fair value of the financial instruments can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

	March 31, 2012						December 31, 2011
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
	(In Thousands)
Financial Assets
Cash and Cash Equivalents	$	4,494		$	4,494		$	27,589		$	27,589
Certificates of Deposit		742			747			742			745
Securities		101,738			105,218			82,331			85,817
Loans		206,407			215,309			197,437			206,594
Less Allowance for Loan Losses		(1,749	)		(1,749	)		(1,805	)		(1,805	)
Loans, Net of Allowance		204,658			213,560			195,632			204,789
Federal Home Loan Bank Stock		1,726			1,726			1,543			1,543
Financial Liabilities
Deposits	$	193,426		$	199,154		$	194,326		$	200,413
Borrowings		64,170			67,057			57,113			60,489
Unrecognized Financial Instruments
Commitments to Extend Credit	$	21,559		$	21,564		$	18,518		$	18,523

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Note 7 – Subsequent Events

3 Months Ended

Mar. 31, 2012

Subsequent Events [Text Block]

NOTE 7 – SUBSEQUENT EVENTS

In accordance with FASB ASC 855, Subsequent Events, the Company evaluates events and transactions that occur after the balance sheet date for potential recognition in the financial statements.  The effect of all subsequent events that provide additional evidence of conditions that existed at the balance sheet date are recognized in the financial statements as of March 31, 2012.  In preparing these financial statements, the Company evaluated the events and transactions that occurred through the date these financial statements were issued.

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Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Net Income	$ 519	$ 579
Other Comprehensive Loss, Net of Tax
Unrealized Holding Losses Arising During the Period	(39)	(181)
Total Other Comprehensive Loss	(39)	(181)
Comprehensive Income	$ 480	$ 398

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Note 3 – Loans

3 Months Ended

Mar. 31, 2012

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 3 – LOANS

The following table summarizes the composition of our total net loans receivable:

	March 31, 2012			December 31, 2011
	(In Thousands)
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	109,219		$	105,718
Home Equity Loans and Lines		19,546			18,467
Multi-family Residential		18,591			14,591
Commercial Real Estate		57,624			56,492
Land		824			1,299
Total Loans Secured by Real Estate		205,804			196,567
Consumer and Other Loans
Loans Secured by Deposits		452			568
Other		270			452
Total Consumer and Other Loans		722			1,020
Less:
Allowance for Loan Losses		(1,749	)		(1,805	)
Net Deferred Loan Origination Fess/Costs		(119	)		(150	)
Total Loans, Net	$	204,658		$	195,632

A summary of our current, past due and nonaccrual loans as of March 31, 2012 and December 31, 2011 follows:

March 31, 2012	30-89 Days Past Due		90 Days or More Past Due and Accruing		Nonaccrual Loans		Total Past Due		Current Loans		Total Loans
Real Estate Secured Loans	(In Thousands)
1-4 Family Residential	$	-	$	-	$	572	$	572	$	108,647	$	109,219
Home Equity Loans and Lines		66		-		444		510		19,036		19,546
Multi-family Residential		-		-		27		27		18,591		18,618
Commercial Real Estate		-		-		48		48		57,549		57,597
Land		-		-		-		-		824		824
Consumer and Other Loans		8		-		-		8		714		722
Total	$	74	$	-	$	1,091	$	1,165	$	205,361	$	206,526
December 31, 2011	30-89 Days Past Due		90 Days or More Past Due and Accruing		Nonaccrual Loans		Total Past Due		Current Loans		Total Loans
Real Estate Secured Loans	(in Thousands)
1-4 Family Residential	$	463	$	-	$	110	$	573	$	105,145	$	105,718
Home Equity Loans and Lines		125		-		569		694		17,773		18,467
Multi-family Residential		-		-		-		-		14,591		14,591
Commercial Real Estate		-		-		330		330		56,162		56,492
Land		-		-		-		-		1,299		1,299
Consumer and Other Loans		-		-		65		65		955		1,020
Total	$	588	$	-	$	1,074	$	1,662	$	195,925	$	197,587

An analysis of the allowance for loan losses follows:

	Three Months Ended March 31, 2012			Year Ended December 31, 2011
	(In Thousands)
Balance, Beginning of Period	$	1,805		$	1,759
Provision for Loan Losses		55			53
Loan Recoveries		6			1
Charge-Offs		(117	)		(8	)
Balance, End of Period	$	1,749		$	1,805

The following table details the activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2012 and March 31, 2011.

	Real Estate Secured Mortgage Loans
March 31, 2012	1-4 Family Residential		Home Equity Loans/Lines			Multi-Family Residential		Commercial		Land			Consumer and Other			Total
	(In Thousands)
Balance, Beginning of Year	$	889	$	207		$	148	$	485	$	2		$	74		$	1,805
Provision for (Recovery of)  Loan Losses		27		(4	)		32		6		-			(6	)		55
Charge-Offs		-		(48	)		-		-		-			(69	)		(117	)
Recoveries of prior charge-offs		3		1			-		-		-			2			6
Balance, End of Year	$	919	$	156		$	180	$	491	$	2		$	1		$	1,749
Ending Balance Allocated to:
Loans individually evaluated for impairment	$	2	$	9		$	-	$	-	$	-		$	-		$	11
Loans collectively evaluated for impairment		917		147			180		491		2			1			1,738
	$	919	$	156		$	180	$	491	$	2		$	1		$	1,749
Ending Loan Balance Disaggregated by Evaluation Method
Loans individually evaluated for impairment	$	109	$	292		$	-	$	-	$	-		$	-		$	401
Loans collectively evaluated for impairment		109,110		19,254			18,591		57,624		824			722			206,125
	$	109,219	$	19,546		$	18,591	$	57,624	$	824		$	722		$	206,526
	Real Estate Secured Mortgage Loans
March 31, 2011	1-4 Family Residential		Home Equity Loans/Lines			Multi-Family Residential		Commercial		Land			Consumer and Other			Total
	(In Thousands)
Balance, Beginning of Year	$	858	$	270		$	100	$	442	$	9		$	80		$	1,759
Provision for (Recovery of)  Loan Losses		1		(4	)		15		27		(1	)		(1	)		37
Loans Charged-Off		-		(2	)		-		-		-			-			(2	)
Recoveries of prior charge-offs		-		-			-		-		-			-			-
Balance, End of Year	$	859	$	264		$	115	$	469	$	8		$	79		$	1,794
Ending Balance Allocated to:
Loans individually evaluated for impairment	$	-	$	146		$	-	$	-	$	1		$	68		$	215
Loans collectively evaluated for impairment		859		118			115		469		7			11			1,579
	$	859	$	264		$	115	$	469	$	8		$	79		$	1,794
Ending Loan Balance Disaggregated by Evaluation Method
Loans individually evaluated for impairment	$	-	$	309		$	-	$	-	$	-		$	68		$	377
Loans collectively evaluated for impairment		98,247		15,286			13,895		56,053		922			1,364			185,767
	$	98,247	$	15,595		$	13,895	$	56,053	$	922		$	1,432		$	186,144

A summary of the loans evaluated for possible impairment follows:

	March 31, 2012		December 31, 2011
	(In Thousands)
Impaired Loans Requiring a Loss Allowance	$	401	$	232
Imparied Loans not Requiring a Loss Allowance		690		842
Total Impaired Loans	$	1,091	$	1,074
Loss Allowance on Impaired Loans	$	11	$	128

At March 31, 2012 and December 31, 2011, all impaired loans were in nonaccrual status.  The Bank did not hold any renegotiated loans on these dates.  The amount of foregone interest on nonaccrual loans at March 31, 2012 and December 31, 2011, was approximately $70,000 and $65,000, respectively.

The following table provides additional information with respect to impaired loans by portfolio segment and the impairment methodology used to analyze the credit.  

As of March 31, 2012	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment YTD		Interest Income Recognized
Impaired loans with no related allowance:	(In Thousands)
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	462	$	462	$	-	$	286	$	-
Home Equity Loans and Lines		153		153		-		277		5
Multi-family Residential		27		27		-		14		-
Commercial Real Estate		48		48		-		189		-
Land		-		-		-		-		-
Consumer and Other Loans		-		-		-		-		1
Total	$	690	$	690	$	-	$	766	$	6
Impaired loans with a related allowance:
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	109	$	109	$	2	$	55	$	2
Home Equity Loans and Lines		292		292		9		230		1
Multi-family Residential		-		-		-		-		-
Commercial Real Estate		-		-		-		-		-
Land		-		-		-		-		-
Consumer and Other Loans		-		-		-		32		-
Total	$	401	$	401	$	11	$	317	$	3
Total Impaired Loans
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	571	$	571	$	2	$	341	$	2
Home Equity Loans and Lines		445		445		9		507		6
Multi-family Residential		27		27		-		14		-
Commercial Real Estate		48		48		-		189		-
Land		-		-		-		-		-
Consumer and Other Loans		-		-		-		32		1
Total	$	1,091	$	1,091	$	11	$	1,083	$	9

As of December 31, 2011	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment YTD		Interest Income Recognized
Impaired loans with no related allowance:	(In Thousands)
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	110	$	110	$	-	$	95	$	4
Home Equity Loans and Lines		402		402		-		346		10
Multi-family Residential		-		-		-		-		-
Commercial Real Estate		330		330		-		66		16
Land		-		-		-		14		-
Consumer and Other Loans		-		-		-		8		-
Total	$	842	$	842	$	-	$	529	$	30
Impaired loans with a related allowance:
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	-	$	-	$	2	$	-	$	-
Home Equity Loans and Lines		167		167		61		233		17
Multi-family Residential		-		-		-		-		-
Commercial Real Estate		-		-		-		-		-
Land		-		-		-		-		-
Consumer and Other Loans		65		65		65		67		5
Total	$	232	$	232	$	128	$	300	$	22
Total Impaired Loans
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	110	$	110		2	$	95	$	4
Home Equity Loans and Lines		569		569		61		579		27
Multi-family Residential		-		-		-		-		-
Commercial Real Estate		330		330		-		66		16
Land		-		-		-		14		-
Consumer and Other Loans		65		65		65		75		5
Total	$	1,074	$	1,074	$	128	$	829	$	52

The following table summarizes the credit grades assigned by the Company to our loan portfolio as of March 31, 2012 and December 31, 2011.  Additional information related to the criteria used to assess these risk ratings can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, as amended.  These balances are presented gross of any allowance for loan loss.

	Real Estate Secured Mortgage Loans
March 31, 2012	1-4 Family Residential		Home Equity Loans/Lines		Multi-Family Residential		Commercial		Land		Consumer and Other		Total
Credit Classification:	(In Thousands)
Pass	$	108,648	$	19,101	$	18,564	$	57,576	$	824	$	722	$	205,435
Special Mention		-		-		-		-		-		-		-
Substandard		571		445		27		48		-		-		1,091
Loss		-		-		-		-		-		-		-
Total	$	109,219	$	19,546	$	18,591	$	57,624	$	824	$	722	$	206,526
	Real Estate Secured Mortgage Loans
December 31, 2011	1-4 Family Residential		Home Equity Loans/Lines		Multi-Family Residential		Commercial		Land		Consumer and Other		Total
Credit Classification:	(In Thousands)
Pass	$	105,608	$	17,984	$	14,591	$	56,162	$	1,299	$	955	$	196,599
Special Mention		-		-		-		-		-		-		-
Substandard		110		316		-		330		-		-		756
Loss		-		167		-		-		-		65		232
Total	$	105,718	$	18,467	$	14,591	$	56,492	$	1,299	$	1,020	$	197,587