Form 10-Q LOUISIANA BANCORP INC For: Mar 31

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May 13, 2015 1:05 PM EDT

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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, 2015

¨	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 o 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 o 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 o Accelerated filer o

Non-accelerated filer o 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). o 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 13, 2015, there were 2,904,382 shares of the Registrant’s common stock outstanding.

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	27

Item 4 -	Controls and Procedures	27

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		30

LOUISIANA BANCORP, INC.

Consolidated Balance Sheets

	(unaudited)
	March 31, 2015			December 31, 2014
	(In Thousands)
Assets
Cash and Due from Banks	$	2,167		$	3,016
Short-Term Interest-Bearing Deposits		2,550			2,032
Total Cash and Cash Equivalents		4,717			5,048

Certificates of Deposit		481			481
Securities Available-for-Sale, at Fair Value (Amortized Cost of $2,246 and $2,422, respectively)		2,551			2,733
Securities Held-to-Maturity, at Amortized Cost (Estimated Fair Value of $39,320 and $41,269, respectively)		37,914			39,979

Loans Held for Sale		1,046			620
Loans Held for Investment		275,948			276,674
Allowance for Loan Loss		(2,365	)		(2,368	)
Total Loans Receivable		274,629			274,926

Accrued Interest Receivable		931			912
Stock in Federal Home Loan Bank		3,300			3,245
Premises and Equipment, Net		3,258			2,947
Other Assets		2,957			3,075
Total Assets	$	330,738		$	333,346

Liabilities and Shareholders' Equity
Deposits
Non-Interest-Bearing	$	15,913		$	16,507
Interest-Bearing		184,797			176,591
Total Deposits		200,710			193,098

Borrowings		65,441			75,509
Advance Payments by Borrowers for Taxes and Insurance		3,126			4,477
Accrued Interest Payable		114			123
Other Liabilities		2,401			1,742
Total Liabilities		271,792			274,949

Commitments and Contigencies		-			-

Shareholders' Equity

Common Stock, $.01 Par Value, 40,000,000 Shares Authorized; 6,345,732 Shares Issued; 2,906,592 and 2,901,592 Outstanding, respectively		63			63
Additional Paid-in-Capital		63,557			63,563
Unearned ESOP Shares		(3,173	)		(3,173	)
Unearned Recognition and Retention Plan Shares		(327	)		(327	)
Treasury Stock, at Cost (3,439,140 shares and 3,444,140 shares, respectively)		(49,811	)		(49,883	)
Retained Earnings		48,436			47,949
Accumulated Other Comprehensive Income		201			205
Total Shareholders' Equity		58,946			58,397

Total Liabilities and Shareholders' Equity	$	330,738		$	333,346

See accompanying notes to unaudited consolidated financial statements.

LOUISIANA BANCORP, INC.

Consolidated Statements of Income (Unaudited)

	For the Three Months Ended March 31,
	2015			2014
	(In Thousands, Except per Share Data)
Interest and Dividend Income
Loans, Including Fees	$	2,897		$	2,740
Mortgage Backed Securities		281			374
Investment Securities		20			28
Other Interest-Bearing Deposits		5			4
Total Interest and Dividend Income		3,203			3,146

Interest Expense
Deposits		297			390
Borrowings		255			271
Total Interest Expense		552			661

Net Interest Income		2,651			2,485

(Recovery of) Provision for Loan Losses		(8	)		21

Net Interest Income after Provision for Loan Losses		2,659			2,464

Non-Interest Income
Customer Service Fees		203			202
Gain on Sale of Loans		175			140
Other Income		15			21
Total Non-Interest Income		393			363

Non-Interest Expense
Salaries and Employee Benefits		1,250			1,130
Occupancy Expense		374			360
Louisiana Bank Shares Tax		50			48
FDIC Insurance Premium		40			37
Supplies & Printing		45			30
Net Cost of OREO Operations		-			3
Advertising Expense		69			64
Professional Service Fees		82			75
Other Expenses		135			137
Total Non-Interest Expense		2,045			1,884

Income Before Income Tax Expense		1,007			943

Income Tax Expense		338			323

Net Income	$	669		$	620

Earnings Per Share
Basic	$	0.26		$	0.25
Diluted	$	0.25		$	0.23

See accompanying notes to unaudited consolidated financial statements.

LOUISIANA BANCORP, INC.

Consolidated Statements of Comprehensive Income

(Unaudited)

	For the Three Months Ended March 31,
	2015			2014
	(In Thousands)

Net Income	$	669		$	620

Other Comprehensive Loss, Net of Tax
Change in Unrealized Gains During the Period		(4	)		(25	)

Reclassification Adjustment for Gains Included in Net Income		-			-

Total Other Comprehensive Loss		(4	)		(25	)

Comprehensive Income	$	665		$	595

See accompanying notes to unaudited consolidated financial statements.

LOUISIANA BANCORP, INC.

Consolidated Statements of Changes in Shareholders' Equity (unaudited)

For theThree Months Ended March 31, 2015 and 2014

(Dollars in thousands)

	Common Stock		Additional Paid-in Capital			Unearned ESOP Stock			Unearned RRP Stock			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income			Total Shareholders' Equity

Balances at December 31, 2013	$	63	$	63,533		$	(3,427	)	$	(368	)	$	(49,651	)	$	47,550		$	239		$	57,939
Net Income - Three Months Ended March 31, 2014		-		-			-			-			-			620			-			620
Other Comprehensive Loss, Net of Applicable Deferred Income Taxes		-		-			-			-			-			-			(25	)		(25	)
Dividends Paid																(126	)					(126	)
Stock Purchased for Treasury		-		-			-			-			(409	)		-			-			(409	)
RRP Shares Earned		-		-			-			-			-			-			-			-
Stock Option Expense		-		7			-			-			-			-			-			7

Balances at March 31, 2014	$	63	$	63,540		$	(3,427	)	$	(368	)	$	(50,060	)	$	48,044		$	214		$	58,006



Balances at December 31, 2014	$	63	$	63,563		$	(3,173	)	$	(327	)	$	(49,883	)	$	47,949		$	205		$	58,397
Net Income - Three Months Ended March 31, 2015		-		-			-			-			-			669			-			669
Other Comprehensive Loss, Net of Applicable Deferred Income Taxes		-		-			-			-			-			-			(4	)		(4	)
Dividends Paid		-		-			-			-			-			(182	)		-			(182	)
Stock Options Exercised		-		(10	)		-			-			72			-			-			62
Stock Option Expense		-		4			-			-			-			-			-			4

Balances at March 31, 2015	$	63	$	63,557		$	(3,173	)	$	(327	)	$	(49,811	)	$	48,436		$	201		$	58,946

See accompanying notes to unaudited consolidated financial statements.

LOUISIANA BANCORP, INC.

Consolidated Statements of Cash Flows (Unaudited)

	For the Three Months Ended March 31,
	2015			2014
	(In Thousands)
Cash Flows from Operating Activities
Net Income	$	669		$	620
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation		76			67
(Recovery of) Provision for Loan Losses		(8	)		21
Stock Option Plan Expense		4			7
Net Premium Amortization		18			14
Deferred Income Tax Benefit		(19	)		(152	)
Gain on Sale of Loans		(175	)		(140	)
Originations of Loans Held-for-Sale		(8,779	)		(1,364	)
Proceeds from Sales of Loans Held-for-Sale		8,431			3,885
Net Decrease in Loans Held-for-Sale		426			405
Increase in Accrued Interest Receivable		(20	)		(22	)
Decrease in Other Assets		102			124
Decrease in Accrued Interest Payable		(9	)		(1	)
Increase in Other Liabilities		696			622
Net Cash Provided by Operating Activities		1,412			4,086

Cash Flows from Investing Activities
Purchase of Securities Available-for-Sale		-			(1,500	)
Proceeds from Maturities of Securities Available-for-Sale		176			267
Proceeds from Maturities of Securities Held-to-Maturity		2,048			2,786
Net Decrease (Increase) in Loans Receivable		402			(3,042	)
Purchase of Property and Equipment		(387	)		(72	)
Proceeds from Sale of Foreclosed Assets		-			23
Net Increase in Investment in Federal Home Loan Bank Stock		(55	)		(261	)
Net Cash Provided by (Used in) Investing Activities		2,184			(1,799	)

See accompanying notes to unaudited consolidated financial statements.

	For the Three Months Ended March 31,
	2015			2014
	(In Thousands)
Cash Flows from Financing Activities
Increase in Deposits		7,612			78
Decrease in Advances by Borrowers for Taxes and Insurance		(1,350	)		(1,184	)
Decrease in Borrowings		(10,069	)		(122	)
Purchase of Treasury stock		-			(409	)
Proceeds from Exercise of Stock Options		62			-
Dividends Paid		(182	)		(126	)

Net Cash Used in Financing Activities		(3,927	)		(1,763	)

Net (Decrease) Increase in Cash and Cash Equivalents		(331	)		524

Cash and Cash Equivalents, Beginning of Year		5,048			6,964

Cash and Cash Equivalents, End of Period	$	4,717		$	7,488


Supplemental Disclosure of Cash Flow Information
Cash Paid During the Period:
Interest	$	561		$	661

Income Taxes	$	-		$	-

Loans Transferred to Other Real Estate Owned During the Period	$	-		$	-

See accompanying notes to unaudited consolidated financial statements.

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, 2015 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 Accounting Standards Codification (“ASC”) 320-10, Investments – Debt and Equity Securities. ASC 320-10, promulgated by the Financial Accounting Standards Board (“FASB”), 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, 2015 or December 31, 2014.

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 is 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.

NOTE 2 – SECURITIES

A summary of securities classified as available-for-sale at March 31, 2015 and December 31, 2014, with gross unrealized gains and losses, follows:

	March 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
Securities Available-for-Sale
Mortgage-Backed Securities
GNMA	$	1	$	-	$	-	$	1
FNMA		1,322		101		-		1,423
FHLMC		790		58		-		848
		2,113		159		-		2,272

Equity Securities		133		146		-		279

Total	$	2,246	$	305	$	-	$	2,551

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
Securities Available-for-Sale
Mortgage-Backed Securities
GNMA	$	1	$	-	$	-	$	1
FNMA		1,426		106		-		1,532
FHLMC		862		63		-		925
		2,289		169		-		2,458

Equity Securities		133		142		-		275

Total	$	2,422	$	311	$	-	$	2,733

A summary of securities classified as held-to-maturity at March 31, 2015 and December 31, 2014, with gross unrealized gains and losses, follows:

	March 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In Thousands)
Securities Held-to-Maturity
Mortgage-Backed Securities
GNMA	$	2,327	$	74	$	-		$	2,401
FNMA		13,195		701		-			13,896
FHLMC		4,302		419		-			4,721
		19,824		1,194		-			21,018

Collateralized Mortgage Obligations
FNMA		6,780		59		-			6,839
FHLMC		8,430		111		-			8,541
		15,210		170		-			15,380

Municipal Bond Obligations
General Obligation Bonds		2,880		45		(3	)		2,922
Total	$	37,914	$	1,409	$	(3	)	$	39,320

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In Thousands)
Securities Held-to-Maturity
Mortgage-Backed Securities
GNMA	$	2,426	$	85	$	-		$	2,511
FNMA		13,989		667		-			14,656
FHLMC		4,572		427		-			4,999
		20,987		1,179		-			22,166

Collateralized Mortgage Obligations
FNMA		7,162		5		(12	)		7,155
FHLMC		8,949		58		-			9,007
		16,111		63		(12	)		16,162

Municipal Bond Obligations
General Obligation Bonds		2,881		60		-			2,941
Total	$	39,979	$	1,302	$	(12	)	$	41,269

The following table reflects the amortized cost and fair value of available-for-sale and held-to-maturity securities by contractual maturity, and of our equity securities (which do not have maturities), as of March 31, 2015. 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	$	1	$	1	$	-	$	-
One to Five Years		434		456		1,517		1,594
Five to Ten Years		1,678		1,815		3,398		3,656
Over Ten Years		-		-		32,999		34,070

	$	2,113	$	2,272	$	37,914	$	39,320

Equity Securities		133		279		-		-

Total	$	2,246	$	2,551	$	37,914	$	39,320

At March 31, 2015 and December 31, 2014, the Company held no available-for-sale securities that had unrealized losses. The following table reflects our held-to-maturity securities with unrealized losses at March 31, 2015 and December 31, 2014.

	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, 2015

Collateralized Mortgage Obligations
FNMA	$	-	$	-	$	-	$	-
FHLMC		-		-		-		-
		-		-		-		-

Municipal Obligations
General Obligation Bonds		3		609		-		-
Total	$	3	$	609	$	-	$	-


December 31, 2014

Collateralized Mortgage Obligations
FNMA	$	12	$	4,776	$	-	$	-
FHLMC		-		-		-		-
		12		4,776		-		-

Municipal Obligations
General Obligation Bonds		-		-
Total	$	12	$	4,776	$	-	$	-

NOTE 3 – LOANS

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

	March 31, 2015			December 31, 2014
	(In Thousands)
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	159,920		$	161,134
Home Equity Loans and Lines		35,872			32,346
Multi-family Residential		20,587			20,844
Commercial Real Estate		59,418			61,874
Land		100			17

Total Loans Secured by Real Estate		275,897			276,215

Consumer and Other Loans
Loans Secured by Deposits		368			350
Other		372			332

Total Consumer and Other Loans		740			682

Less:
Allowance for Loan Losses		(2,365	)		(2,368	)
Net Deferred Loan Origination Fees/Costs		357			397

Total Loans, Net	$	274,629		$	274,926

A summary of our current, past due and nonaccrual loans as of March 31, 2015 and December 31, 2014 follows:

March 31, 2015	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	$	-	$	-	$	698	$	698	$	159,222	$	159,920
Home Equity Loans and Lines		95		-		76		171		35,701		35,872
Multi-family Residential		-		-		-		-		20,587		20,587
Commercial Real Estate		-		-		751		751		58,667		59,418
Land		-		-		-		-		100		100
Consumer and Other Loans		5		-		-		5		735		740

Total	$	100	$	-	$	1,525	$	1,625	$	275,012	$	276,637

December 31, 2014	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	$	807	$	-	$	102	$	909	$	160,225	$	161,134
Home Equity Loans and Lines		18		-		76		94		32,252		32,346
Multi-family Residential		-		-		-		-		20,844		20,844
Commercial Real Estate		-		-		783		783		61,091		61,874
Land		-		-		-		-		17		17
Consumer and Other Loans		-		-		-		-		682		682

Total	$	825	$	-	$	961	$	1,786	$	275,111	$	276,897

An analysis of the allowance for loan losses follows:

	Three Months Ended March 31, 2015			Year Ended December 31, 2014
	(In Thousands)

Balance, Beginning of Period	$	2,368		$	2,221
(Recovery of) Provision for Loan Losses		(8	)		189
Loan Recoveries		15			71
Charge-Offs		(10	)		(113	)
Balance, End of Period	$	2,365		$	2,368

The following table details the activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2015 and March 31, 2014.

	Real Estate Secured Mortgage Loans
March 31, 2015	1-4 Family Residential			Home Equity Loans/Lines		Multi-Family Residential			Commercial			Land		Consumer and Other			Total
	(In Thousands)
Balance, Beginning of Year	$	1,326		$	288	$	184		$	563		$	1	$	6		$	2,368
Provision for Loan Losses		(18	)		27		(4	)		(22	)		1		8			(8	)
Charge-Offs		-			-		-			-			-		(10	)		(10	)
Recoveries of prior charge-offs		4			8		-			-			-		3			15

Balance, End of Period	$	1,312		$	323	$	180		$	541		$	2	$	7		$	2,365

Ending Balance Allocated to:
Loans individually evaluated for impairment	$	15		$	4	$	-		$	-		$	-	$	-		$	19
Loans collectively evaluated for impairment		1,297			319		180			541			2		7			2,346
	$	1,312		$	323	$	180		$	541		$	2	$	7		$	2,365

Ending Loan Balance Disaggregated by Evaluation Method
Loans individually evaluated for impairment	$	698		$	76	$	-		$	751		$	-	$	-		$	1,525
Loans collectively evaluated for impairment		159,222			35,796		20,587			58,667			100		740			275,112
	$	159,920		$	35,872	$	20,587		$	59,418		$	100	$	740		$	276,637

	Real Estate Secured Mortgage Loans
March 31, 2014	1-4 Family Residential		Home Equity Loans/Lines		Multi-Family Residential			Commercial		Land			Consumer and Other			Total
	(In Thousands)
Balance, Beginning of Year	$	1,126	$	253	$	190		$	642	$	2		$	8		$	2,221
Provision for Loan Losses		15		-		(13	)		20		(1	)		-			21
Charge-Offs		-		-		-			-		-			(8	)		(8	)
Recoveries of prior charge-offs		3		2		-			-		-			4			9

Balance, End of Period	$	1,144	$	255	$	177		$	662	$	1		$	4		$	2,243

Ending Balance Allocated to:
Loans individually evaluated for impairment	$	-	$	-	$	-		$	99	$	-		$	-		$	99
Loans collectively evaluated for impairment		1,144		255		177			563		1			4			2,144
	$	1,144	$	255	$	177		$	662	$	1		$	4		$	2,243

Ending Loan Balance Disaggregated by Evaluation Method
Loans individually evaluated for impairment	$	17	$	97	$	-		$	1,244	$	-		$	-		$	1,358
Loans collectively evaluated for impairment		139,238		28,278		18,816			61,098		97			867			248,394
	$	139,255	$	28,375	$	18,816		$	62,342	$	97		$	867		$	249,752

A summary of the loans evaluated for possible impairment follows:

	March 31, 2015		December 31, 2014
	(In Thousands)

Impaired Loans Requiring a Loss Allowance	$	128	$	111
Impaired Loans not Requiring a Loss Allowance		1,397		850

Total Impaired Loans	$	1,525	$	961

Loss Allowance on Impaired Loans	$	19	$	17

At March 31, 2015 and December 31, 2014, all impaired loans were on nonaccrual status. The Bank did not hold any renegotiated loans on these dates. The amount of foregone interest on nonaccrual loans at March 31, 2015 and December 31, 2014, was approximately $28,000 and $9,000, respectively.

The following table summarizes our impaired loans by portfolio segment as of the dates indicated.

As of March 31, 2015	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	$	607	$	607	$	-	$	308	$	-
Home Equity Loans and Lines		39		39		-		47		-
Multi-family Residential		-		-		-		-		-
Commercial Real Estate		751		751		-		767		-
Land		-		-		-		-		-
Consumer and Other Loans		-		-		-		-		-

Total	$	1,397	$	1,397	$	-	$	1,122	$	-

Impaired loans with a related allowance:
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	92	$	92	$	15	$	92	$	-
Home Equity Loans and Lines		36		36		4		29		-
Multi-family Residential		-		-		-		-		-
Commercial Real Estate		-		-		-		-		-
Land		-		-		-		-		-
Consumer and Other Loans		-		-		-		-		-

Total	$	128	$	128	$	19	$	121	$	-

Total Impaired Loans
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	699	$	699	$	15	$	400	$	-
Home Equity Loans and Lines		75		75		4		76		-
Multi-family Residential		-		-		-		-		-
Commercial Real Estate		751		751		-		767		-
Land		-		-		-		-		-
Consumer and Other Loans		-		-		-		-		-

Total	$	1,525	$	1,525	$	19	$	1,243	$	-

As of December 31, 2014	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	$	10	$	10	$	-	$	53	$	-
Home Equity Loans and Lines		57		57		-		70		4
Multi-family Residential		-		-		-		-		-
Commercial Real Estate		783		783		-		953		-
Land		-		-		-		-		-
Consumer and Other Loans		-		-		-		-		-

Total	$	850	$	850	$	-	$	1,076	$	4

Impaired loans with a related allowance:
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	92	$	92	$	15	$	18	$	1
Home Equity Loans and Lines		19		19		2		4		1
Multi-family Residential		-		-		-		-		-
Commercial Real Estate		-		-		-		40		-
Land		-		-		-		-		-
Consumer and Other Loans		-		-		-		-		-

Total	$	111	$	111	$	17	$	62	$	2

Total Impaired Loans
Loans Secured by Mortgages on Real Estate
1-4 Family Residential	$	102	$	102	$	15	$	71	$	1
Home Equity Loans and Lines		76		76		2		74		5
Multi-family Residential		-		-		-		-		-
Commercial Real Estate		783		783		-		993		-
Land		-		-		-		-		-
Consumer and Other Loans		-		-		-		-		-

Total	$	961	$	961	$	17	$	1,138	$	6

The following table summarizes the credit grades assigned by the Company to our loan portfolio as of March 31, 2015 and December 31, 2014. 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, 2014. These balances are presented gross of any allowance for loan loss.

	Real Estate Secured Mortgage Loans
March 31, 2015	1-4 Family Residential		Home Equity Loans/Lines		Multi-Family Residential		Commercial		Land		Consumer and Other		Total
Credit Classification:	(In Thousands)
Pass	$	159,222	$	35,796	$	20,587	$	58,667	$	100	$	740	$	275,112
Special Mention		-		-		-		-		-		-		-
Substandard		683		72		-		751		-		-		1,506
Doubtful		-		-		-		-		-		-		-
Loss		15		4		-		-		-		-		19
Total	$	159,920	$	35,872	$	20,587	$	59,418	$	100	$	740	$	276,637

	Real Estate Secured Mortgage Loans
December 31, 2014	1-4 Family Residential		Home Equity Loans/Lines		Multi-Family Residential		Commercial		Land		Consumer and Other		Total
Credit Classification:	(In Thousands)
Pass	$	160,127	$	32,022	$	20,844	$	61,091	$	17	$	682	$	274,783
Special Mention		307		248		-		-		-		-		555
Substandard		685		74		-		783		-		-		1,542
Doubtful		-		-		-		-		-		-		-
Loss		15		2		-		-		-		-		17
Total	$	161,134	$	32,346	$	20,844	$	61,874	$	17	$	682	$	276,897

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,
	2015			2014

Net Income	$	669,000		$	620,000

Weighted Average Shares Issued		6,345,732			6,345,732
Weighted Average Unearned ESOP Shares		(317,289	)		(342,672	)
Weighted Average Unearned RRP Shares		(26,002	)		(29,302	)
Weighted Average Treasury Shares		(3,441,529	)		(3,477,514	)

Weighted Average Shares Outstanding for Basic EPS		2,560,912			2,496,244

Earnings per Share, Basic	$	0.26		$	0.25


Weighted Average Shares Outstanding for Basic EPS		2,560,912			2,496,244
Effect of Dilutive Securities		148,668			160,315
Weighted Average Shares Outstanding for Diluted EPS		2,709,580			2,656,559

Earnings per Shares, Diluted	$	0.25		$	0.23

NOTE 5 – REGULATORY CAPITAL

The federal banking agencies have adopted regulations that substantially amend the capital regulations currently applicable to us. These regulations implement the Basel III regulatory capital reforms and changes required by the Dodd-Frank Act.

Effective January 1, 2015 (with some changes transitioned into full effectiveness over two to four years), the Bank became subject to new capital requirements adopted by the OCC. These new requirements create a new required ratio for common equity Tier 1 ("CETI") capital, increase the leverage and Tier 1 capital ratios, change the risk weight of certain assets for purposes of the risk-based capital ratios, create an additional capital conservation buffer over the required capital ratios and change what qualifies as capital for purposes of meeting these various capital requirements. Beginning in 2016, failure to maintain the required capital conservation buffer will limit the ability of the Bank to pay dividends, repurchase shares or pay discretionary bonuses. The Company is exempt from consolidated capital requirements as those requirements do not apply to certain small bank holding companies with assets under $1 billion.

Under the new capital regulations, the minimum capital ratios are: (1) CETI capital ratio of 4.5% of risk-weighted assets; (2) a Tier 1 capital ratio of 6.0% of risk-weighted assets: (3) a total capital ratio of 8.0% of risk-weighted assets; and (4) a leverage ratio of 4.0%. CETI generally consists of common stock and retained earnings, subject to applicable regulatory adjustments and deductions.

There are a number of changes in what constitutes regulatory capital, some of which are subject to transition periods. These changes include the phasing-out of certain instruments as qualifying capital. The Bank does not use any of these instruments. Under the new requirements for total capital, Tier 2 capital is no longer limited to the amount of Tier 1 capital included in total capital. Mortgage servicing rights, certain deferred tax assets and investments in unconsolidated subsidiaries over designated percentages of CETI will be deducted from capital. The Bank has elected to permanently opt-out of the inclusion of accumulated other comprehensive income in our capital calculations, as permitted by the regulations. This opt-out will reduce the impact of market volatility on our regulatory capital levels.

The new requirements also include changes in the risk-weights of assets to better reflect credit risk and other risk exposures. These include a 150% risk weight (increased from 100%) for certain high volatility commercial real estate acquisition, development and construction loans and for non-residential mortgage loans that are 90 days past due or otherwise in non-accrual status; a 20% (increased from 0%) credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable; a 250% risk weight (increased from 100%) for mortgage servicing and deferred tax assets that are not deducted from capital; and increased risk weights (0% to 600%) for equity exposures.

In addition to the minimum CETI, Tier 1 and total capital ratios, the Bank will have to maintain a capital conservation buffer consisting of additional CETI capital greater than 2.5% of risk-weighted assets above the required minimum levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. This new capital conservation buffer requirement will be phased in beginning in January 2016 at 0.625% of risk-weighted assets and increasing each year until fully implemented in January 2019.

The OCC's prompt corrective action standards changed effective January 1, 2015. Under the new standards, in order to be considered well-capitalized, the Bank must have a CETI ratio of 6.5% (new), a Tier 1 ratio of 8.0% (increased from 6.0%), a total risk-based capital ratio of 10.0% (unchanged) and a leverage ratio of 5.0% (unchanged). The Bank meets all these new requirements, including the full capital conservation buffer.

The Bank’s actual capital amounts and ratios and those required by the regulatory standards in effect as of the dates presented are as follows:

	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, 2015
Core/Leverage Capital	$	48,776		14.76	%	$	13,218		4.00	%	$	16,524		5.00	%
CET1 Capital		48,776		24.18	%		9,077		4.50	%		13,111		6.50	%
Tier 1 Risk-Based Capital		48,776		24.18	%		12,102		6.00	%		16,136		8.00	%
Total Risk-Based Capital		51,141		25.35	%		16,136		8.00	%		20,171		10.00	%

December 31, 2014
Core/Leverage Capital	$	48,054		14.46	%	$	9,970		3.00	%	$	16,617		5.00	%
Tier 1 Risk-Based Capital		48,054		23.79	%		8,081		4.00	%		12,121		6.00	%
Total Risk-Based Capital		50,422		24.96	%		16,162		8.00	%		20,202		10.00	%

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

	March 31, 2015			December 31, 2014
	(In Thousands)

Capital Under GAAP	$	48,867		$	48,150
Unrealized Gains on Available-for-Sale Securities		(91	)		(96	)
Tier 1 Capital and CET1 Capital		48,776			48,054

Allowance for Loan Losses		2,365			2,368
Total Risk-Based Capital	$	51,141		$	50,422

NOTE 6 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows the guidance provided in FASB ASC 820, Fair Value Measurements, 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 upontransfer of a liability in an orderly transaction between market participants at the measurement date and in the principalor 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 regarding fair value andestablishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on theextent 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 1, such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or other inputs that are observable 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 market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

The following table presents the Company’s assets measured at fair value on a recurring basis at March 31, 2015 and December 31, 2014. All of the mortgage-backed securities reported at fair value on March 31, 2015, and December 31, 2014, were secured by first mortgage loans on residential real estate.

	Fair Value Measurements
March 31, 2015	Total		(Level 1)		(Level 2)		(Level 3)
Assets:	(In Thousands)
Available-for-Sale Securities
Mortgage-Backed Securities	$	2,272	$	-	$	2,272	$	-
Equity Securities		279		279		-		-
Loans Held-for-Sale		1,046		-		1,046		-

Total	$	3,597	$	279	$	3,318	$	-

	Fair Value Measurements
December 31, 2014	Total		(Level 1)		(Level 2)		(Level 3)
Assets:	(In Thousands)
Available-for-Sale Securities
Mortgage-Backed Securities	$	2,458	$	-	$	2,458	$	-
Equity Securities		275		275		-		-
Loans Held-for-Sale		620		-		620		-

Total	$	3,353	$	275	$	3,078	$	-

The Company did not record any liabilities at fair market value for which measurement of the fair value wasmade on a recurring basis at March 31, 2015 or December 31, 2014.

The following table presents the Company’s assets measured at fair value on a non-recurring basis at March 31,2015 and December 31, 2014.

	Fair Value Measurements
March 31, 2015	Total		(Level 1)		(Level 2)		(Level 3)
Assets:	(In Thousands)
Impaired Loans, Net of Allowance	$	1,506	$	-	$	-	$	1,506

Total	$	1,506	$	-	$	-	$	1,506

	Fair Value Measurements
December 31, 2014	Total		(Level 1)		(Level 2)		(Level 3)
Assets:		(In Thousands)
Impaired Loans, Net of Allowance	$	944	$	-	$	-	$	944

Total	$	944	$	-	$	-	$	944

The Company did not record any liabilities at fair market value for which measurement of the fair value wasmade on a non-recurring basis at March 31, 2015 or December 31, 2014.

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, 2014.

	March 31, 2015						December 31, 2014
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
	(In Thousands)
Financial Assets
Cash and Cash Equivalents	$	4,717		$	4,717		$	5,048		$	5,048
Certificates of Deposit		481			483			481			482
Securities		40,465			41,871			42,712			44,002

Loans		276,994			282,212			277,294			281,908
Less Allowance for Loan Losses		(2,365	)		(2,365	)		(2,368	)		(2,368	)
Loans, Net of Allowance		274,629			279,847			274,926			279,540

Federal Home Loan Bank Stock		3,300			3,300			3,245			3,245

Financial Liabilities
Deposits	$	200,710		$	211,853		$	193,098		$	204,304
Borrowings		65,441			64,776			75,509			74,538

Unrecognized Financial Instruments
Commitments to Extend Credit	$	51,504		$	51,663		$	47,017		$	47,154

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, 2015. In preparing these financial statements, the Company evaluated the events and transactions that occurred through the date these financial statements were issued.

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

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

General

The Company’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 condition 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.

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, 2015 and December 31, 2014

Total assets were $330.7 million at March 31, 2015, a decrease of $2.6 million compared to December 31, 2014. During the first three months of 2015, cash and cash equivalents decreased by $331,000, securities available-for-sale decreased by $182,000 and securities held-to-maturity decreased by $2.1 million. Net loans receivable were $274.6 million at March 31, 2015, a decrease of $297,000 compared to December 31, 2014. During the first quarter of 2015, single-family mortgage loans decreased by $1.2 million and commercial real estate loans decreased by $2.5 million, while the outstanding balance of our home equity lines of credit increased by $3.5 million.

Total impaired loans were $1.5 million at March 31, 2015, an increase of $564,000 from December 31, 2014. At March 31, 2015, our total impaired loans were comprised of three single-family mortgage loans, four home equity loans, and a commercial real estate loan secured by a strip shopping center. All of our impaired loans were on non-accrual status at March 31, 2015 and at December 31, 2014. The Bank had no other real estate owned as of March 31, 2015 or December 31, 2014. Expressed as a percentage of total assets, nonperforming loans and nonperforming assets were 0.46% at March 31, 2015 and 0.29% at December 31, 2014.

Total deposits increased by $7.6 million, to $200.7 million at March 31, 2015 compared to $193.1 million at December 31, 2014. During the first quarter of 2015, the Bank sourced $8.6 million in deposits from its internet marketing channels. The resulting increase in deposits led to a decrease in FHLB advances of $10.1 million during the period. As of March 31, 2015, non-interest bearing deposits were $15.9 million, and interest-bearing deposits were $184.8 million. Total FHLB advances decreased from $75.5 million at December 31, 2014 to $65.4 million at March 31, 2015.

Total shareholders’ equity was $58.9 million at March 31, 2015, an increase of $549,000 compared to December 31, 2014. During the first quarter of 2015, total shareholders’ equity was increased by net income of $669,000 and the issuance of 5,000 shares of common stock at a net cost of $62,000 upon the exercise of stock options. These increases in total shareholders’ equity were partially offset by the payment of a cash dividend of $0.07 per share, or $182,000 in the aggregate. The Bank’s Tier 1 leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital were 14.76%, 24.18%, and 25.35%, respectively, at March 31, 2015.

Comparison of Our Operating Results for the Three Months Ended March 31, 2015 and 2014

General. Net income for the quarter ended March 31, 2015 was $669,000, an increase of $49,000 from the first quarter of 2014. Diluted earnings per share were $0.25 and $0.23, respectively, for the quarters ended March 31, 2015 and 2014. Net interest income was $2.7 million during the first quarter of 2015, an increase of $166,000 compared to the first quarter of 2014. In addition, our provision for loan losses decreased by $29,000, our non-interest income increased by $30,000 and our non-interest expense increased by $161,000 between the respective quarterly periods ended March 31, 2015 and 2014.

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,
	2015							2014
					Average							Average
	Average				Yield/			Average				Yield/
	Balance		Interest		Rate			Balance		Interest		Rate
	(Dollars in Thousands)
Interest-Earning Assets:
Loans Receivable (1)	$	274,993	$	2,897		4.21	%	$	248,897	$	2,740		4.40	%
Mortgage-backed Securities		38,428		281		2.92	%		49,204		374		3.04	%
Investment Securities		3,158		20		2.53	%		3,425		28		3.27	%
Other Interest-Earning Assets		6,610		5		0.30	%		6,424		4		0.25	%
Total Interest-Earning Assets		323,189		3,203		3.96	%		307,950		3,146		4.09	%

Non-Interest Earning Assets		10,032							9,125

Total Assets	$	333,221						$	317,075

Interest-Bearing Liabilities:
Passbook, Checking and Money Market Accounts	$	86,417		56		0.26	%	$	61,377		34		0.22	%
Certificates of Deposit		93,741		241		1.03	%		124,968		356		1.14	%
Total Interest-Bearing Deposits		180,158		297		0.66	%		186,345		390		0.84	%

Borrowings		72,773		255		1.40	%		53,304		271		2.03	%
Total Interest-Bearing Liabilities		252,931		552		0.87	%		239,649		661		1.10	%

Non-Interest Bearing Liabilities		21,635							19,524

Total Liabilities		274,566							259,173

Stockholders' Equity		58,655							57,902

Total Liabilities and Stockholders' Equity	$	333,221						$	317,075

Net Interest-Earning Assets	$	70,258						$	68,301

Net Interest Income; Average Interest Rate Spread			$	2,651		3.09	%			$	2,485		2.99	%

Net Interest Margin (2)						3.28	%						3.23	%

Average Interest-Earning Assets to Average Interest-Bearing Liabilities						127.78	%						128.50	%

________________________________________________

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

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

Interest Income. Net interest income was approximately $2.7 million during the first quarter of 2015, an increase of $166,000 compared to the first quarter of 2014. Between the respective quarterly periods, the average yield on our total interest-earning assets declined by 13 basis points and the average cost of our total interest-bearing liabilities decreased 23 basis points resulting in a ten basis point increase in the average interest rate spread. Our net interest margin, which expresses net interest income as a percentage of average interest-earning assets, was 3.28% and 3.23%, respectively, for the three month periods ended March 31, 2015, and March 31, 2014.

During the first quarter of 2015, interest income was $3.2 million, an increase of $57,000 compared to the first quarter of 2014. The average balance of interest earning assets increased by $15.2 million while the average yield on interest-earning assets decreased from 4.09% to 3.96% during the three month period ended March 31, 2015 compared to the same three month period in the prior year. Interest income on loans receivable was $2.9 million during the first quarter of 2015, with an average outstanding loan balance of $275.0 million and an average yield of 4.21%. In comparison, interest income of $2.7 million was earned on loans receivable with an average balance of $248.9 million and an average yield of 4.40% during the first quarter of 2014. The average balance of our mortgage-backed securities decreased by $10.8 million, to $38.4 million and interest income on mortgage-backed securities decreased by $93,000, to $281,000, during the first quarter of 2015 compared to the first quarter of 2014. Interest income on investment securities during the first quarter of 2015 was $20,000, at an average yield of 2.53%, compared to $28,000, at an average yield of 3.27%, during the first quarter of 2014. Interest income earned on other interest-earning assets was $5,000 and $4,000, respectively, for the quarters ended March 31, 2015 and 2014.

Interest Expense. Total interest expense was $552,000, with our interest-bearing liabilities having an average cost of 0.87% during the first quarter of 2015, compared to interest expense of $661,000 and an average cost of 1.10% during the first quarter of 2014. The average rate paid on interest-bearing deposits was 0.66% during the quarter ended March 31, 2015, a decrease of 18 basis points from the quarter ended March 31, 2014. Interest expense on borrowings was $255,000 at an average cost of 1.40% during the first quarter of 2015, and $271,000 at an average cost of 2.03% during the first quarter of 2014.

Provision for Loan Losses. During the first quarter of 2015, the Company recorded a recovery of provisions for loan losses of $8,000, compared to provisions for loan losses of $21,000 during the first quarter of 2014. Our allowance for loan losses was $2.4 and $2.2 million, respectively, at March 31, 2015, and 2014. At such dates, our allowance for loan losses was 0.85% and 0.90%, respectively, of total loans receivable. At March 31, 2015, total non-performing loans and total non-performing assets were $1.5 million, or 0.46% of total assets, compared to $1.9 million, or 0.60% of total assets, at March 31, 2014.

Non-interest Income. Non-interest income for the first quarter of 2015 was $393,000, an increase of $30,000 from the first quarter of 2014. Our customer service fees, which are primarily comprised of fees earned on transaction accounts, loan servicing fees, and brokered loan commissions, were $203,000 and $202,000, respectively, during the first quarters of 2015 and 2014. Gains on the sale of mortgage loans were $175,000 in the first quarter of 2015, an increase of $35,000 comparted to the first quarter of 2014. Other non-interest income was $15,000 and $21,000, respectively, during the quarterly periods ended March 31, 2015 and 2014.

Non-interest Expense. Total non-interest expense was $2.0 million for the first quarter of 2015, an increase of $161,000 compared to the first quarter of 2014. Salaries and employee benefits expense increased by $120,000, to $1.3 million, for the quarter ended March 31, 2015 compared to the quarter ended March 31, 2014. This increase was due to an overall increase in our employee’s base compensation and an increase in the cost of our equity based compensation that are tied to the market price of our common stock. Occupancy expenses increased by $14,000, to $374,000, during the first quarter of 2015 compared to the first quarter of 2014 due primarily to increased depreciation expense associated with our new Transcontinental branch office. The Louisiana bank shares tax was $50,000 and $48,000, respectively, and our FDIC deposit insurance premiums were $40,000 and $37,000, respectively, for the quarters ended March 31, 2015 and March 31, 2014. Advertising expense increased by $5,000 to $69,000, and professional service fees increased by $7,000, to $82,000, between the first quarter of 2015 and the first quarter of 2014. Other non-interest expenses were $135,000 for the first quarter of 2015, and $137,000 for the first quarter of 2014.

Income Tax Expense. For the quarter ended March 31, 2015, the Company recorded income tax expense of $338,000, an increase of $15,000 from the quarter ended March 31, 2014. This increase in income tax expense was primarily due to an increase in pre-tax income of $64,000 between the respective quarterly periods.

Liquidity and Capital Resources

Our primary sources of funds are from deposits, amortization of loans, loan prepayments and the maturities 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, 2015, our cash and cash equivalents amounted to $4.7 million. In addition, at such date our available-for-sale investment and mortgage-backed securities amounted to an aggregate of $2.6 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, 2015, we had certificates of deposit maturing within the next 12 months amounting to $52.3 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, 2015, we had $65.4 million in total borrowings, comprised solely of FHLB advances.

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, 2015, the Company had $81.0 million in additional borrowing capacity available through the Federal Home Loan Bank.

The following table summarizes our contractual cash obligations at March 31, 2015.

	Payments Due by Period
					More Than		More Than
					1 Year		3 Years		More Than
	Total		To 1 Year		to 3 Years		to 5 Years		5 Years
	(Dollars In Thousands)

Certificates of Deposit	$	97,488	$	52,315	$	32,073	$	13,100	$	-
FHLB Advances and Other Borrowings		65,441		18,834		15,702		11,058		19,847
Total Long-Term Debt		162,929		71,149		47,775		24,158		19,847

Operating Lease Obligations		49		44		5		-		-

Total Contractual Obligations	$	162,978	$	71,193	$	47,780	$	24,158	$	19,847

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.

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, 2014.

Item 4 – Controls and Procedures.

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

No change in our internal control over financial reporting (as defined in Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934) occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings.

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

Item 1A - Risk Factors.

See “Risk Factors” at pages 30-33 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (SEC File No. 1-33573), which is incorporated herein by reference thereto.

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

Not applicable.

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
	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.

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 13, 2015	By:	/s/Lawrence J. LeBon, III
		Lawrence J. LeBon, III
		President and Chief Executive Officer

Date: May 13, 2015	By:	/s/John LeBlanc
		John LeBlanc
		Executive Vice President and Chief Financial Officer

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;

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 13, 2015	By:	/s/Lawrence J. LeBon, III
		Lawrence J. LeBon, III
		President and Chief Executive Officer

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;

(a)

(b)

(c)

(d)

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)

(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 13, 2015	By:	/s/John LeBlanc
		John LeBlanc
		Executive Vice President and Chief Financial Officer

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, 2015, each of the undersigned, Lawrence J. LeBon, III, President and Chief Executive Officer of the Company, and John LeBlanc, Executive 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 13, 2015	By:	/Lawrence J. LeBon, III
		Lawrence J. LeBon, III
		President and Chief Executive Officer

Date: May 13, 2015	By:	/s/John LeBlanc
		John LeBlanc
		Executive 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.

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Form 10-Q LOUISIANA BANCORP INC For: Mar 31

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