UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2013

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: 333-169458

Minden Bancorp, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Louisiana	90-0610674
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

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

(318) 371-4156

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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. ýYes            ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ýYes            ¨ 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	ý
(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            ý 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 October 31, 2013, 2,377,990 shares of the Registrant’s common stock were outstanding.

Explanatory Note

Minden Bancorp, Inc. (“Minden Bancorp”) is a Louisiana corporation (the “Registrant” or the “Company”) and a savings and loan holding company which owns 100% of MBL Bank, which is a Louisiana-chartered community oriented building and loan association headquartered in Minden, Louisiana. On January 4, 2011, the “second-step” conversion of MBL Bank from a mutual holding company structure to the stock holding company structure pursuant to a Plan of Conversion and Reorganization was completed. Upon completion of the conversion and reorganization, Minden Bancorp became the holding company for MBL Bank and owns all of the issued and outstanding shares of MBL Bank’s common stock. In connection with the conversion and reorganization, 1,394,316 shares of common stock, par value $0.01 per share, of Minden Bancorp were sold in subscription and community offerings to certain depositors of MBL Bank and other investors for $10.00 per share, or $13.9 million in the aggregate, and 984,889 shares of common stock were issued in exchange for the outstanding shares of common stock of the federally chartered mid-tier holding company of MBL Bank, which was also known as Minden Bancorp, Inc. (“old Minden Bancorp”), held by the “public” shareholders of old Minden Bancorp (all shareholders except Minden Mutual Holding Company). Each share of common stock of old Minden Bancorp was converted into the right to receive 1.7427 shares of common stock of Minden Bancorp in the conversion and reorganization.

Minden Bancorp is the successor to old Minden Bancorp and references to Minden Bancorp include references to old Minden Bancorp where applicable.

Table of Contents

PART I -	FINANCIAL INFORMATION	Page
Item 1 -	Financial Statements (Unaudited)	1
Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3 -	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4 -	Controls and Procedures	36
PART II -	OTHER INFORMATION
Item 1 -	Legal Proceedings	36
Item 1A -	Risk Factors	36
Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3 -	Defaults Upon Senior Securities	37
Item 4 -	(Removed and Reserved)	37
Item 5 -	Other Information	37
Item 6 -	Exhibits	37
Signatures		38

MINDEN BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(in thousands, except shares and per share)

	September 30,		December 31,
ASSETS	2013		2012
	(Unaudited)
Cash and noninterest-bearing deposits	$	4,223	$	6,499
Interest-bearing demand deposits		15,702		26,791
Federal funds sold		1,000		1,000
Total cash and cash equivalents		20,925		34,290
Securities available-for-sale, at estimated market value		90,644		88,188
First National Banker’s Bank stock, at cost		210		210
Federal Home Loan Bank stock, at cost		111		109
Loans, net of allowance for loan losses of $1,655-2013 and $1,605-2012		155,476		146,481
Accrued interest receivable		752		822
Premises and equipment, net		5,042		5,243
Prepaid and other assets		766		1,148
Total assets	$	273,926	$	276,491

The accompanying notes are an integral part of the consolidated financial statements.

1

	September 30,			December 31,
LIABILITIES AND STOCKHOLDERS’ EQUITY	2013			2012
	(Unaudited)
Liabilities:
Deposits:
Noninterest-bearing	$	27,521		$	41,461
Interest-bearing		203,123			192,502
Total deposits		230,644			233,963
Accrued interest payable		232			212
Other liabilities		1,621			1,991
Total liabilities		232,497			236,166
Commitments and contingent liabilities
Stockholders' equity:
Preferred stock-$.01 par value; authorized
10,000,000 shares; none issued-no
rights/preferences set by board		—			—
Common stock-$.01 par value; authorized
40,000,000 shares: 2,471,802 shares-2013 and
2,445,315 shares-2012 issued and 2,377,990-
2013 and 2,355,831 shares-2012 outstanding		25			24
Additional paid-in capital		30,501			30,219
Retained earnings		13,800			11,677
Accumulated other comprehensive income (loss)		(527	)		803
Unearned common stock held by Recognition
and Retention Plan (RRP) (37,691 shares - 2013 and 47,736 shares – 2012)		(453	)		(539	)
Unallocated common stock held by ESOP
(48,103 - shares-2013 and 50,195 shares-2012 unreleased)		(501	)		(516	)
Treasury stock-at cost 93,812 shares-2013 and 89,484 shares-2012		(1,416	)		(1,343	)
Total stockholders' equity		41,429			40,325
(Substantially restricted)
Total liabilities and stockholders' equity	$	273,926		$	276,491

The accompanying notes are an integral part of the consolidated financial statements.

2

MINDEN BANCORP. INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share)

	Three months Ended				Nine months Ended
	September 30, 2013		September 30, 2012		September 30, 2013		September 30, 2012
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Interest income:
Loans, including fees	$	2,169	$	2,111	$	6,381	$	6,230
Investments-taxable:
Securities		85		75		262		220
Mortgage-backed securities		249		220		682		689
Other		10		14		34		53
Total interest income		2,513		2,420		7,359		7,192
Interest expense:
Interest-bearing demand deposits and
savings		71		61		206		188
Certificates of deposit		248		256		732		791
Total interest expense		319		317		938		979
Net interest income		2,194		2,103		6,421		6,213
Provision for loan losses		24		30		69		90
Net interest income after provision
for loan losses		2,170		2,073		6,352		6,123
Noninterest income:
Customer service fees		202		175		593		516
Gain on sale of assets		3		—		5		1
Other operating income		11		18		33		40
Total noninterest income		216		193		631		557
Noninterest expense:
Salaries and benefits		657		632		1,969		1,937
Occupancy expense		199		184		580		558
FDIC deposit insurance		33		35		99		105
Professional and supervisory fees		60		73		180		253
Computer Expense		43		40		129		122
Other operating expense		103		105		313		324
Total noninterest expense		1,095		1,069		3,270		3,299
Income before income taxes		1,291		1,197		3,713		3,381
Income tax expense		425		394		1,186		1,137
Net income	$	866	$	803	$	2,527	$	2,244
Earnings per share (EPS)-basic	$	0.38	$	0.35	$	1.10	$	0.98
Diluted EPS	$	0.36	$	0.33	$	1.04	$	0.91

3

MINDEN BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)  

	Three months Ended				Nine months Ended
	September 30, 2013		September 30, 2012		September 30, 2013			September 30, 2012
	(Unaudited)		(Unaudited)		(Unaudited)			(Unaudited)
Consolidated net income:	$	866	$	803	$	2,527		$	2,244
Other comprehensive income (loss) before tax:
Unrealized gains (losses) on securities
available for sale:
Unrealized holding gains (losses)		189		524		(2,015	)		861
		189		524		(2,015	)		861
Income tax:
Unrealized gains (losses) on securities
available for sale		64		178		(685	)		292
		64		178		(685	)		292
Other comprehensive income (loss)		125		346		(1,330	)		569
Comprehensive income	$	991	$	1,149	$	1,197		$	2,813

The accompanying notes are an integral part of the consolidated financial statements.

4

MINDEN BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

(in thousands, except per share)

	Common Stock		Additional Paid in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Unearned RRP			Unearned ESOP			Treasury Stock			Total
Balance January 1, 2012	$	24	$	29,922	$	9,560		$	394		$	(319	)	$	(551	)	$	—		$	39,030
Net income		—		—		2,244			—			—			—			—			2,244
Other comprehensive income									569												569
Exercise of stock options		—		118																	118
Dividends (.225 per share)		—		—		(541	)		—			—			—			—			(541	)
Amortization of awards under RRP-net of release of RRP/ESOP/SOP		—		—		—			—			87			28			—			115
Unearned ESOP		—		—		—			—			—			48			—			48
Purchase of shares for RRP		—		—		—			—			(335	)		—			—			(335	)
Purchase of treasury stock		—		—		—			—			—			—			(903	)		(903	)
Balance September 30, 2012	$	24	$	30,040	$	11,263		$	963		$	(567	)	$	(475	)	$	(903	)	$	40,345
Balance January 1, 2013	$	24	$	30,219	$	11,677		$	803		$	(539	)	$	(516	)	$	(1,343	)	$	40,325
Net income		—		—		2,527			—			—			—			—			2,527
Other comprehensive loss		—		—		—			(1,330	)		—			—			—			(1,330	)
Dividends (.170 per share)						(404	)														(404	)
Exercise of stock options		1		253		—			—			—			—			—			254
Amortization of awards under RRP-net of release of RRP/SOP		—		29		—			—			86			—			—			115
Unearned ESOP		—		—		—			—			—			15			—			15
Purchase of treasury stock		—		—		—			—			—			—			(73	)		(73	)
Balance September 30, 2013	$	25	$	30,501	$	13,800		$	(527	)	$	(453	)	$	(501	)	$	(1,416	)	$	41,429

The accompanying notes are an integral part of the consolidated financial statements.

5

MINDEN BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, except per share)

	Nine months Ended
	September 30, 2013			September 30, 2012
	(Unaudited)			(Unaudited)
Cash flows from operating activities:
Net income	$	2,527		$	2,244
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		69			90
Depreciation		201			197
RRP and other expenses		128			162
Net amortization of securities		1,049			827
(Gain) on sale of assets		(5	)		(1	)
(Increase) decrease in prepaid expenses and other assets		515			(140	)
Increase in interest payable and other liabilities		271			308
Net cash provided by operating activities		4,755			3,687
Cash flows from investing activities:
Sales, maturities and pay-downs of securities available for sale		23,373			17,411
Purchase of securities available for sale		(28,891	)		(31,057	)
Net (increase) in loans		(9,085	)		(10,072	)
Purchase of premises and equipment, net		—			(55	)
Proceeds from sale of other assets		25			132
Net cash (used) by investing activities		(14,578	)		(23,641	)
Cash flows from financing activities:
Net  (decrease) in deposits		(3,319	)		(7,841	)
Proceeds from stock options exercised		254			118
Purchase of shares for RRP		—			(335	)
Purchase of treasury stock		(73	)		(903	)
Dividends paid		(404	)		(541	)
Net cash (used) by financing activities		(3,542	)		(9,502	)

The accompanying notes are an integral part of the consolidated financial statements.

6

MINDEN BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, except per share)

	Nine months Ended
	September 30, 2013			September 30, 2012
	(Unaudited)			(Unaudited)
Net (decrease) in cash and cash equivalents		(13,365	)		(29,456	)
Cash and cash equivalents at beginning of period		34,290			52,407
Cash and cash equivalents at end of period	$	20,925		$	22,951
Supplemental disclosures:
Interest paid on deposits and borrowed funds	$	929		$	1,030
Income taxes paid	$	1,122		$	1,169
Noncash investing and financing activities:
Transfer of loans to repossessed assets	$	26		$	168
Increase (Decrease) in unrealized gain on securities available for sale	$	(2,015	)	$	861

The accompanying notes are an integral part of the consolidated financial statements.

7

MINDEN BANCORP, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2013 (UNAUDITED) AND DECEMBER 31, 2012

1. Summary of Significant Accounting Policies

Minden Bancorp, Inc. is a savings and loan holding company (the “Company”) established in 2010 as the successor to Minden Bancorp, Inc., a Federal corporation established in 2001 as described below. MBL Bank (the “Bank”) is the wholly-owned subsidiary of the Company. The Company's significant assets and business activity are its investment in the Bank. All intercompany transactions have been eliminated in consolidation of Minden Bancorp, Inc. and MBL Bank. The Bank accepts customer demand, savings, and time deposits and provides residential mortgages, commercial mortgages, and consumer and business loans to customers. The Bank is subject to the regulations of certain federal and state agencies and undergoes periodic examinations by those regulatory authorities.

On December 11, 2001, the Board of Directors of Minden Building and Loan Association, a Louisiana chartered building and loan association, which changed its name to MBL Bank in 2007, adopted a plan of reorganization pursuant to which the Association converted to stock form and became the wholly-owned subsidiary of Minden Bancorp, Inc., a federally chartered corporation (“old Minden”). In connection with the reorganization, the Company became a majority owned (58.6%) subsidiary of Minden Mutual Holding Company. On January 4, 2011, the “second-step” conversion of the Bank from the mutual holding company structure to the stock holding company structure pursuant to a Plan of Conversion and Reorganization adopted in September 2010 was completed. Upon completion of the conversion and reorganization, the Company, a newly formed Louisiana corporation, became the holding company for the Bank and owns all of the issued and outstanding shares of the Bank’s common stock. In connection with the conversion and reorganization, 1,394,316 shares of common stock, par value $0.01 per share, of the Company were sold in subscription and community offerings to certain depositors of the Bank and other investors for $10.00 per share, or $13.9 million in the aggregate, and 984,889 shares of common stock were issued in exchange for the outstanding shares of common stock of old Minden held by the “public” shareholders of old Minden (all shareholders except Minden Mutual Holding Company). Each share of common stock of old Minden was converted into the right to receive 1.7427 shares of common stock of new Minden Bancorp in the conversion and reorganization. Total shares outstanding of common stock of the Company immediately after the conversion and reorganization were 2,379,205. In addition, the Company’s employee stock ownership plan purchased in the offering 55,772 shares of common stock of the Company with proceeds of a loan from the Company. See Note 11 for more information.

Basis of Presentation.

In accordance with the subsequent events topic of the ASC, the Company evaluates events and transactions that occur after the balance sheet date for potential recognition in the financial statements. The effects 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 September 30, 2013. In preparing these financial statements, the Company evaluated subsequent events through the date these financial statements were issued.

8

1. Summary of Significant Accounting Policies  (continued)

Use of Estimates. In preparing financial statements in conformity with accounting principles generally accepted in theUnited States of America (GAAP), management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet 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 in the near term relate to the determination of the allowance for loan losses, and the valuation of foreclosed real estate, deferred tax assets and trading activities.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses on loans, fair value of financial instruments, and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans. In connection with the determination of the allowances for losses on credits and foreclosed real estate, management obtains independent appraisals for significant properties. While management uses available information to recognize losses on credits, future additions to the allowances may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowances for losses on loans. Such agencies may require the Bank to recognize additions to the allowances based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the allowances for credit losses on loans may change materially in the future.

Significant Group Concentrations of Credit Risk. Most of the Bank's activities are with customers located within Webster Parish, Louisiana. Note 2 to the financial statements summarizes the types of investment securities in which the Bank makes investments, and Note 3 summarizes the types of loans included in the Bank's loan portfolio. The Bank does not have any significant concentrations to any one industry or customer.

Cash and Cash Equivalents. For purposes of the statements of cash flows, cash and cash equivalents include cash and balances due from banks, federal funds sold and interest-bearing deposits at other banks, all of which mature within ninety days.

Investment Securities. Management determines the appropriate classification of securities at the time of purchase. If management has the positive intent and ability to hold investments in bonds, notes, and debentures until maturity, they are classified as held to maturity and carried at cost, adjusted for amortization of premiums and accretion of discounts which are recognized in interest income using the effective interest method over the period to maturity. Securities to be held for indefinite periods of time yet not intended to be held to maturity or on a long-term basis are classified as securities available for sale and carried at fair value. Unrealized gains and losses on securities available for sale which have been reported as direct increases or decreases in stockholders' equity, net of related deferred tax effects, are accounted for as other comprehensive income. The cumulative changes in unrealized gains and losses on such securities are accounted for in accumulated other comprehensive income as part of stockholders' equity. Gains and losses on the sale of securities available for sale are determined using the specific-identification method. Other-than-temporary impairments of debt securities is based upon the guidance as follows (a) if a company does not have the intent to sell a debt security prior to recovery and (b) it is more likely than not that it will not have to sell the debt security prior to recovery, the security would not be considered other-than-temporarily impaired unless there is a credit loss. When an entity does not intend to sell the security, and it is more likely than not, the entity will not have to sell the security before recovery of its cost basis, it will recognize the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income. For held-to-maturity debt securities, the amount of an other-than-temporary impairment recorded in other comprehensive income for the noncredit portion of a previous other-than-temporary impairment should be amortized prospectively over the remaining life of the security on the basis of the timing of future estimated cash flows of the security.

9

1. Summary of Significant Accounting Policies  (continued)

Mortgage-Backed Securities. Mortgage-backed securities represent participating interests in pools of long-term first mortgage loans originated and serviced by issuers of the securities. Mortgage-backed securities are carried at unpaid principal balances, adjusted for unamortized premiums and unearned discounts. Premiums and discounts are amortized using the interest method over the remaining period to contractual maturity. Management intends and has the ability to hold such securities to maturity that are classified held to maturity. The cost of securities called is determined using the specific identification method.

Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Declines in the fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

Loans. The Bank grants mortgage, business and consumer loans to customers. A substantial portion of the loan portfolio is represented by mortgage loans secured by properties throughout Webster Parish, Louisiana and the surrounding parishes. The ability of the Bank's debtors to honor their contracts is dependent upon the real estate and general economic conditions in this area.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any deferred fees for costs on originated loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method.

The accrual of interest on mortgage, commercial real estate and commercial business, and consumer loans is discontinued at the time the loan is 90 days delinquent unless the credit is well-secured and in process of collection. Past due status is based upon contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

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

Allowance for Loan Losses. The allowance for loan losses is established as a provision for loan losses charged to earnings. Loan losses not associated with a related valuation reserve are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management and is based upon an amount management believes will cover known and inherent losses in the loan portfolio based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

10

1. Summary of Significant Accounting Policies  (continued)

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for business and construction loans by either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Bank does not separately identify individual consumer and residential loans for impairment disclosures.

The FASB issued Accounting Standards Update No. 2010-20, “Disclosures about the Credit Quality of Financing Receivables and Allowance for Credit Losses,” which requires financial institutions to provide a greater level of disaggregated information about the credit quality of loans and the allowance for loan losses.  This standard also requires financial institutions to disclose additional information related to credit quality indicators and information about past due loans. 

The FASB also issued Accounting Standards Update No. 2011-02, Receivables (Topic 310) A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring.  ASU 2011-02 clarifies whether loan modifications constitute troubled debt restructuring.  In evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that both of the following exist:  (a) the restructuring constitutes a concession and (b) the debtor is experiencing financial difficulties. See Note 3 for detailed information.

Credit Related Financial Instruments. In the ordinary course of business, the Bank has entered into commitments to extend credit, including commitments under commercial letters of credit and standby letters of credit. Such financial instruments are recorded when they are funded.

Other Real Estate Owned. Other real estate owned represents properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure on loans on which the borrowers have defaulted as to payment of principal and interest. These properties are carried at the lower of cost of acquisition or the asset's fair value, less estimated selling costs. Reductions in the balance at the date of acquisition are charged to the allowance for loan losses. Any subsequent write-downs to reflect current fair value are charged to noninterest expense. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from foreclosed assets.

Premises and Equipment. Premises and equipment are stated at cost less accumulated depreciation. The Bank records depreciation on property and equipment using accelerated and straight-line methods with lives ranging from 5 to 15 years on furniture, fixtures and equipment and to 40 years on the building.

Income Taxes. The company files a consolidated federal income tax return with its subsidiary. Income taxes and benefits are generally allocated based on each subsidiary's contribution to the total federal tax liability. Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax bases of the various balance sheet assets and liabilities and give current recognition to changes in tax rates and laws.

11

1. Summary of Significant Accounting Policies  (continued)

Advertising Costs. Advertising costs are expensed as incurred. Such costs amounted to approximately $16,000 and $24,000 for the nine months ended September 30, 2013 and 2012, respectively, and are included in other operating expense.

Stock compensation. The cost of employee services received in exchange for stock options and stock grants (RRP) is measured using the fair value of the award on the grant date and is recognized over the service period, which is usually the vesting period.

Treasury stock. Common stock shares repurchased are recorded as treasury stock at cost.

Earnings per share. Basic earnings per share represents income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects additional potential common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company related solely to outstanding stock options and are determined using the treasury stock method.

Treasury shares are not deemed outstanding for earnings per share calculations.

Comprehensive Income (Loss). 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 equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income. ASU 2011-05 requires entities to present the total of comprehensive income, the components of net income and the components of other comprehensive income in a single continuous statement of comprehensive income or in two separate consecutive statements. The effective date for ASU 2011-05 is for annual and interim periods beginning after December 15, 2011. The Company has adopted ASU 2011-05 with the inclusion of the Consolidated Statements of Comprehensive Income on page 4 in the financial statements.

12

2. Investment Securities

There were no securities held-to-maturity at September 30, 2013 and December 31, 2012.

Securities available-for-sale (in thousands) consists of the following:

			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
September 30, 2013:
Municipals	$	8,926	$	—	$	707	$	8,219
Agency Bonds/Notes		13,067		97		1		13,163
CMO		7,753		21		169		7,605
FNMA pools		35,552		301		249		35,604
FHLMC pools		22,747		187		241		22,693
GNMA pools		3,398		5		43		3,360
	$	91,443	$	611	$	1,410	$	90,644
December 31, 2012:
Municipals	$	6,029	$	50	$	43		6,036
Agency Bonds/Notes		18,694		203		—		18,897
CMO		10,619		7		137		10,489
FNMA pools		36,553		750		1		37,302
FHLMC pools		13,195		371		—		13,566
GNMA pools		1,882		16		—		1,898
	$	86,972	$	1,397	$	181	$	88,188

The amortized cost and estimated market value of investment securities (in thousands) at September 30, 2013 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available for Sale
	Amortized Cost		Fair Value
One year or less	$	8,057	$	8,115
After 1 year thru 5 years		66,365		66,523
After 5 years thru 10 years		10,949		10,522
After 10 years		6,072		5,484
	$	91,443	$	90,644

At September 30, 2013, investment securities with a financial statement carrying amount (in thousands) of $63,052 were pledged to secure public and private deposits. There were six mortgage pools with a book value totaling $3,804 (in thousands) sold for the nine months ending September 30, 2013 for a net gain of $1 (in thousands). No investment securities were sold in 2012. Maturities and calls are detailed on the statement of cash flows.

13

2. Investment Securities (continued)

Information pertaining to securities with gross unrealized losses (in thousands) at September 30, 2013 and December 31, 2012, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:

	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
September 30, 2013:
Municipals	$	7,693	$	677	$	526	$	30	$	8,219	$	707
Agency Bonds/Notes		1,998		1		—		—		1,998		1
CMO		1,654		57		3,272		112		4,926		169
Mortgage Pools		24,892		533		—		—		24,892		533
	$	36,237	$	1,268	$	3,798	$	142	$	40,035	$	1,410
December 31, 2012:
Municipals	$	2,628	$	43	$	—	$	—	$	2,628	$	43
CMO		9,024		137		—		—		9,024		137
Mortgage Pools		1,771		1		—		—		1,771		1
	$	13,423	$	181	$	—	$	—	$	13,423	$	181

Management evaluates securities for other-than-temporary impairment on a monthly basis. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

The majority of these securities are guaranteed and or backed directly by the U.S. Government or other U.S. government agencies. These unrealized losses relate principally to current interest rates for similar types of securities. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. As management has the ability to hold debt securities until maturity, or for the foreseeable future if classified as available-for-sale, no declines are deemed to be other-than-temporary.

14

3. Loans and Allowance for Loan Losses

The composition of the Company’s loan portfolio (in thousands) at September 30, 2013 and December 31, 2012, consisted of the following:

	2013			2012
Loans secured by real estate:
Secured by 1-4 family residential properties	$	61,173		$	61,185
Secured by nonfarm, nonresidential properties		66,286			59,868
Commercial and industrial loans		18,264			15,960
Consumer loans (including overdrafts of
$146 and $43)		8,009			8,845
Loans secured by deposits		6,014			4,592
Total		159,746			150,450
Less: Allowance for loan losses		(1,655	)		(1,605	)
Unfunded construction loan commitments		(2,615	)		(2,364	)
Loans, net	$	155,476		$	146,481

Changes in the allowance for loan losses (in thousands) for the nine months ended September 30, 2013 and the year ended December 31, 2012 are summarized as follows:

	2013			2012
Balance, beginning of period	$	1,605		$	1,625
Provision for loan losses		69			120
Recoveries		10			47
Loans charged off		(29	)		(187	)
Balance, end of period	$	1,655		$	1,605

The following tables detail the balance in the allowance for loan losses (in thousands) by portfolio segment at September 30, 2013 and September 30, 2012:

	Balance						Provision			Balance
	January 1,		Charge-				for Loan			Sept. 30,
	2013		offs		Recoveries		Losses			2013
Loans secured by real estate:
Secured by 1-4 family residential properties	$	638	$	—	$	—	$	(12	)	$	626
Secured by nonfarm, nonresidential properties		620		—		—		65			685
Commercial and industrial loans		168		—		—		25			193
Consumer loans		179		29		10		(9	)		151
Loans secured by deposits		—		—		—		—			—
Total	$	1,605	$	29	$	10	$	69		$	1,655

15

3. Loans and Allowance for Loan Losses (continued)

							Provision			Balance
	January 1,		Charge-				for Loan			Sept. 30,
	2012		offs		Recoveries		Losses			2012
Loans secured by real estate:
Secured by 1-4 family residential properties	$	322	$	140	$	—	$	447		$	629
Secured by nonfarm, nonresidential properties		692		—		—		(103	)		589
Commercial and industrial loans		233		—		—		(71	)		162
Consumer loans		378		41		25		(183	)		179
Loans secured by deposits		—		—		—		—			—
Total	$	1,625	$	181	$	25	$	90		$	1,559

	September 30, 2013
	Allowance for Loan Losses
	Disaggregated by Impairment Method
	Individually		Collectively		Total
Loans secured by real estate:
Secured by 1-4 family residential properties	$	17		609		626
Secured by nonfarm, nonresidential properties		—		685		685
Commercial and industrial loans		11		182		193
Consumer loans		1		150		151
Loans secured by deposits		—		—		—
	$	29	$	1,626	$	1,655

	September 30, 2012
	Allowance for Loan Losses
	Disaggregated by Impairment Method
	Individually		Collectively		Total
Loans secured by real estate:
Secured by 1-4 family residential properties	$	22		607		629
Secured by nonfarm, nonresidential properties		—		589		589
Commercial and industrial loans		—		162		162
Consumer loans		4		175		179
Other loans		—		—		—
	$	26	$	1,533	$	1,559

16

3. Loans and Allowance for Loan Losses  (continued)

The following tables summarize information (dollars in thousands) relative to loan modifications determined to be troubled debt restructurings. As of September 30, 2013 and 2012, all the troubled debt restructurings are included in impaired loans.

Troubled Debt Restructurings

	September 30, 2013
			Pre-Modification		Post-Modification
	Number of		Outstanding		Outstanding
	Contracts		Recorded Investment		Recorded Investment
1-4 family residential		8	$	204	$	204
Nonfarm, nonresidential		3		47		47
Total real estate loans		11		251		251
Commercial and industrial		2		35		35
Consumer loans		9		61		61
Total loans		22	$	347	$	347

	September 30, 2012
			Pre-Modification		Post-Modification
	Number of		Outstanding		Outstanding
	Contracts		Recorded Investment		Recorded Investment
1-4 family residential		7	$	224	$	224
Nonfarm, nonresidential		4		781		781
Total real estate loans		11		1,005		1,005
Commercial and industrial		1		15		15
Consumer loans		12		78		78
Total loans		24	$	1,098	$	1,098

There were no subsequent defaults of troubled debt restructurings for the periods ending September 30, 2013 and September 30, 2012.

Restructured loans (loans which had been renegotiated at below-market interest rates or for which other concessions were granted, but are accruing interest) were $706,000 at September 30, 2012. The loan was subsequently paid in full in January 2013.

17

3. Loans and Allowance for Loan Losses  (continued)

The following tables detail loans individually and collectively evaluated for impairment (in thousands) at September 30, 2013 and 2012:

	Loans Evaluated for Impairment
	Individually		Collectively		Total
September 30, 2013:
Loans secured by real estate:
Secured by 1-4 family residential properties	$	386	$	58,661	$	59,047
Secured by nonfarm, nonresidential properties		47		65,750		65,797
Commercial and industrial loans		35		18,229		18,264
Consumer loans		127		7,882		8,009
Loans secured by deposits		—		6,014		6,014
Total	$	595	$	156,536	$	157,131

	Loans Evaluated for Impairment
	Individually		Collectively		Total
September 30, 2012:
Loans secured by real estate:
Secured by 1-4 family residential properties	$	327	$	58,016	$	58,343
Secured by nonfarm, nonresidential properties		804		53,839		54,643
Commercial and industrial loans		15		15,953		15,968
Consumer loans		98		9,700		9,798
Loans secured by deposits		—		4,244		4,244
Total	$	1,244	$	141,752	$	142,996

	Impaired Loans
	For the Nine Months Ended September 30, 2013
			Unpaid				Interest
	Recorded		Principal		Related		Income
	Investment		Balance		Allowance		Recognized
With no related allowance recorded:
Secured by 1-4 family residential properties	$	345	$	345	$	—	$	—
Secured by nonfarm, nonresidential properties		47		47		—		—
Commercial and industrial loans		13		13		—		—
Consumer loans		122		122		—		2
Loans secured by deposits		—		—		—		—
With an allowance recorded:
Secured by 1-4 family residential properties		41		41		17		—
Secured by nonfarm, nonresidential properties		—		—		—		—
Commercial and industrial loans		22		22		11		—
Consumer loans		5		5		1		—
Loans secured by deposits		—		—		—		—
Total:
Secured by 1-4 family residential properties	$	386	$	386	$	17	$	—
Secured by nonfarm, nonresidential properties		47		47		—		—
Commercial and industrial loans		35		35		11		—
Consumer loans		127		127		1		2
Loans secured by deposits		—		—		—		—

18

3. Loans and Allowance for Loan Losses  (continued)

	Impaired Loans
	For the Nine Months Ended September 30, 2012
			Unpaid				Interest
	Recorded		Principal		Related		Income
	Investment		Balance		Allowance		Recognized
With no related allowance recorded:
Secured by 1-4 family residential properties	$	281	$	281	$	—	$	20
Secured by nonfarm, nonresidential properties		804		804		—		1
Commercial and industrial loans		15		15		—		3
Consumer loans		93		93		—		5
Loans secured by deposits		—		—		—		—
With an allowance recorded:
Secured by 1-4 family residential properties		46		46		22		3
Secured by nonfarm, nonresidential properties		—		—		—		—
Commercial and industrial loans		—		—		—		—
Consumer loans		16		16		4		1
Loans secured by deposits		—		—		—		—
Total:
Secured by 1-4 family residential properties	$	327	$	327	$	22	$	23
Secured by nonfarm, nonresidential properties		804		804		—		1
Commercial and industrial loans		15		15		—		3
Consumer loans		109		109		4		6
Loans secured by deposits		—		—		—		—

The average recorded investment on the impaired loans for the nine months ended September 30, 2013 and 2012 were $764,000 and $1.1 million, respectively.

Total non-accrual loans (in thousands) at September 30, 2013 and September 30, 2012 were $347 and $392, respectively. Interest income (in thousands) of approximately $30 and $33 would have been recognized for the nine months ended September 30, 2013 and September 30, 2012, respectively, had the loans not been on non-accrual.

Credit Indicators

Loans are categorized into risk categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The following definitions are utilized for risk ratings, which are consistent with the definitions used in supervisory guidance:

Special Mention – Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

19

3. Loans and Allowance for Loan Losses  (continued)

Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.

The table below illustrates the carrying amount (in thousands) of loans by credit quality indicator at September 30, 2013 and 2012:

			Special
	Pass		Mention		Substandard		Doubtful		Loss		Total
September 30, 2013:
Loans secured by real estate:
Secured by 1-4 family residential
Properties	$	58,253	$	432	$	362	$	—	$	—	$	59,047
Secured by nonfarm, nonresidential
Properties		64,941		621		235		—		—		65,797
Commercial and industrial loans		18,251		—		13		—		—		18,264
Consumer loans		7,836		40		133		—		—		8,009
Loans secured by deposits		6,014		—		—		—		—		6,014
Total	$	155,295	$	1,093	$	743	$	—	$	—	$	157,131

			Special
	Pass		Mention		Substandard		Doubtful		Loss		Total
September 30, 2012:
Loans secured by real estate:
Secured by 1-4 family residential
properties	$	57,491	$	483	$	369	$	—	$	—	$	58,343
Secured by nonfarm, nonresidential
properties		53,342		1,203		98		—		—		54,643
Commercial and industrial loans		15,944		9		15		—		—		15,968
Consumer loans		9,539		161		98		—		—		9,798
Loans secured by deposits		4,243		1		—		—		—		4,244
Total	$	140,559	$	1,857	$	580	$	—	$	—	$	142,996

A summary of current, past due and nonaccrual loans (in thousands) was as follows:

			Past Due				Total
	Past Due		Over 90 Days				Past Due
	30-89		and		Non-		and Non-				Total
	Days		Accruing		Accruing		Accruing		Current		Loans
September 30, 2013:
Loans secured by real estate:
Secured by 1-4 family residential
properties	$	442	$	182	$	204	$	828	$	58,219	$	59,047
Secured by nonfarm, nonresidential properties		36		—		47		83		65,714		65,797
Commercial and industrial loans		304		—		35		339		17,925		18,264
Consumer loans		93		66		61		220		7,789		8,009
Loans secured by deposits		—		—		—		—		6,014		6,014
Total	$	875	$	248	$	347	$	1,470	$	155,661	$	157,131

20

3. Loans and Allowance for Loan Losses  (continued)

			Past Due				Total
	Past Due		Over 90 Days				Past Due
	30-89		and		Non-		and Non-				Total
	Days		Accruing		Accruing		Accruing		Current		Loans
September 30, 2012:
Loans secured by real estate:
Secured by 1-4 family residential properties	$	1,884	$	103	$	224	$	2,211	$	56,132	$	58,343
Secured by nonfarm, nonresidential properties		212		23		75		310		54,333		54,643
Commercial and industrial loans		210		—		15		225		15,743		15,968
Consumer loans		283		21		78		382		9,416		9,798
Loans secured by deposits		13		—		—		13		4,231		4,244
Total	$	2,602	$	147	$	392	$	3,141	$	139,855	$	142,996

The Company charges a flat rate for the origination or assumption of a loan. These fees are designed to offset direct loan origination costs and the net amount, if material, is deferred and amortized, as required by accounting standards.

The Company’s lending activity is concentrated within Webster Parish, Louisiana. The Company’s lending activities include on-to-four family dwelling units, commercial real estate, commercial business and consumer loans. The Company requires collateral sufficient in value to cover the principal amount of the loan. Such collateral is evidenced by mortgages on property held and readily accessible to the Bank.

21

4. Prepaid and Other Assets

Prepaid and other assets (in thousands) at September 30, 2013 and December 31, 2012 consist of the following:

	2013		2012
Cash value of life insurance	$	620	$	611
Prepaid expenses		64		470
Other		82		67
	$	766	$	1,148

5. Deposits

Deposits as of September 30, 2013 and December 31, 2012 (in thousands) are summarized as follows:

	2013		2012
Demand deposit accounts (including official checks of $922 in 2013 and $765 in 2012)	$	119,359	$	128,330
Savings		15,962		15,446
Certificates of deposit:
0.00% – 0.99%		58,126		38,266
1.00% – 1.99%		36,740		51,015
2.00% – 2.99%		457		906
Total certificates of deposit		95,323		90,187
Total deposits	$	230,644	$	233,963

Scheduled maturities of certificates of deposit (in thousands) at September 30, 2013 are as follows:

	2013		2014		2015		2016		Total
0.00% – 0.99%	$	19,276	$	37,613	$	1,237	$	—	$	58,126
1.00% – 1.99%		2,170		16,259		11,011		7,300		36,740
2.00% – 2.99%		457		—		—		—		457
Total	$	21,903	$	53,872	$	12,248	$	7,300	$	95,323

Included in deposits (in thousands) at September 30, 2013 and December 31, 2012 are $53,073 and $47,527, respectively, of certificates of deposit (CD) in denominations of $100,000 or more.

Effective January 1, 2013, deposits held in noninterest-bearing transaction accounts are aggregated with any interest-bearing deposits the owner may hold in the same ownership category, and the combined total insured up to at least $250,000 by the FDIC.

22

6. Federal Home Loan Bank Advances

Federal Home Loan Bank (“FHLB”) advances represent short-term, fixed-rate borrowings from the Federal Home Loan Bank of Dallas. The Bank has borrowed advances for periods from overnight to four and one-half months. Interest rates paid on the advances vary by term and are set by the FHLB. There were no advances outstanding at September 30, 2013 and December 31, 2012.

The Bank has an available line of credit (in thousands) with the FHLB of $84,342 at September 30, 2013 with $84,342 available for use.

7. Pension/ESOP Plan

In 2001, the Bank adopted a 401(k) retirement plan covering all employees based on a year of service. The Bank contributes up to a 6% match of the employee’s contribution based upon Board approval. Plan contributions (in thousands) for the nine months ended September 30, 2013 and 2012 were $70 and $64, respectively.

The Company established an ESOP and loaned the ESOP $524 (in thousands) in July 2002 to purchase shares of common stock, which amounted to 3.8% of the outstanding shares at such date. The loan matured and was paid off on June 30, 2012. Additionally the ESOP was extended a loan in 2011 in the amount of $558 (in thousands) to purchase 55,772 shares of common stock. The remaining balance (in thousands) due of $500 at $38 (in thousands) per year including interest is payable over approximately seventeen years. The Bank made contributions to the ESOP to enable it to make the note payments (in thousands) of $29 and $62, respectively, during the nine months ended September 30, 2013 and 2012, which is included in salaries and benefits on the income statement. As the note is paid, the shares will be released and allocated to the participants of the ESOP. The market value of the unreleased ESOP shares (48,103) at September 30, 2013 was approximately $806 (in thousands).

8. Retained Earnings and Regulatory Capital

The Bank is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below, in thousands) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as defined). Management believes, as of September 30, 2013, that the Bank met all capital adequacy requirements to which it is subject.

23

8. Retained Earnings and Regulatory Capital (continued)

As of September 30, 2013, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as adequately capitalized the Bank must maintain minimum total risk-based, Tier I leverage ratios, and tangible capital ratios as set forth in the table (amounts in thousands). The Bank's actual capital amounts (in thousands) and ratios are also presented in the table. There are no conditions or events since that notification that management believes have changed the institution's category.

	Actual		For Capital Adequacy Purposes:		To be Well Capitalized Under Prompt Corrective Action Provisions:
	Amount	Ratio	Amount	Ratio	Amount	Ratio
As of September 30, 2013
Total capital (to Risk
Weighted Assets)	$40,121	26.97%	>$11,901	>8.0%	>$14,876	>10.0%
Core (Tier I) Capital (to
Risk Weighted Assets)	$38,466	25.86%	N/A	N/A	>$8,926	>6.0%
Core (Tier I) Capital (to
Total Assets)	$38,466	14.04%	>$10,957	>4.0%	>$13,696	>5.0%
Tangible Capital
(to Total Assets)	$38,466	14.04%	>$4,109	>1.5%	N/A	N/A
As of December 31, 2012
Total capital (to Risk
Weighted Assets)	$37,370	26.27%	>$11,380	>8.0%	>$14,226	>10.0%
Core (Tier I) Capital (to
Risk Weighted Assets)	$35,765	25.14%	N/A	N/A	>$8,535	>6.0%
Core (Tier I) Capital (to
Total Assets)	$35,765	12.94%	>$11,058	>4.0%	>$13,822	>5.0%
Tangible Capital
(to Total Assets)	$35,765	12.94%	>$4,147	>1.5%	N/A	N/A

Capital for the Company is not significantly different than those above for the Bank. The following is a reconciliation of the Bank’s equity under GAAP to regulatory capital at the dates indicated (dollars in thousands):

	September 30, 2013		December 31, 2012
GAAP equity	$	37,939	$	36,568
Accumulated other comprehensive unrealized (gain) loss		527		(803	)
Tier 1 Capital		38,466		35,765
Allowance for loan losses		1,655		1,605
Total capital	$	40,121	$	37,370

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9. Fair Value of Financial Instruments

The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. FASB ASC #825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

The following methods and assumptions were used by the Bank in estimating fair value disclosures for financial instruments:

Cash and cash equivalents: The carrying amounts of cash and short-term instruments approximate fair values.

Securities: Fair values for securities, excluding Federal Home Loan Bank stock and First National Bankers Bank (“FNBB”) stock, are based on quoted market prices. The carrying value of Federal Home Loan Bank stock approximates fair value based on the redemption provisions of the Federal Home Loan Bank.

Loans receivable: For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. Fair values for certain mortgage loans (e.g., one-to-four family residential), and other consumer loans are based on quoted market prices of similar loans sold in conjunction with securitization transactions, adjusted for differences in loan characteristics. Fair values for other loans (e.g., commercial real estate and investment property mortgage loans, commercial and industrial loans) are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Fair values for nonperforming loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable.

Deposit liabilities: The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). The carrying amounts of variable-rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.

Short-term borrowings: The carrying amounts of Federal Home Loan Bank advances maturing within ninety days approximate their fair values.

Accrued interest: The carrying amounts of accrued interest approximate fair value.

Off-balance-sheet instruments: Fair values for off-balance-sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties' credit standing. Fair values for off-balance sheet commitments to extend credit approximate their carrying value.

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9. Fair Value of Financial Instruments  (continued)

The estimated fair values (in thousands), and related carrying or notional amounts, of the Company’s financial instruments are as follows:

	September 30, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	20,925	$	20,925	$	34,290	$	34,290
Securities available for sale		90,644		90,644		88,188		88,188
FNBB & FHLB stock		321		321		319		319
Loans, net		155,476		154,994		146,481		146,027
Accrued interest receivable		752		752		822		822
Financial liabilities:
Deposits		230,644		230,852		233,963		234,174
Accrued interest payable		232		232		212		212
Off-balance sheet credit related to financial instruments:
Commitments to extend credit		27,562		27,562		32,643		32,643

Off-balance sheet derivative financial instruments: None

The Company adopted FASB Accounting Standards Topic 820, “Fair Value Measurements” (Topic 820), as of January 1, 2008. Topic 820 requires disclosures that stratify balance sheet amounts measured at fair value based on the inputs used to derive fair value measurements. These strata included:

· Level 1 valuations, where the valuation is based on quoted market prices for identical assets or liabilities traded in active markets (which include exchanges and over-the-counter markets with sufficient volume),

· Level 2 valuations, where the valuation is based on quoted market prices for similar instruments traded in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market, and

· Level 3 valuations, where the valuation is generated from model-based techniques that use significant assumptions not observable in the market, but observable based on the Company’s-specific data. These unobservable assumptions reflect the Company’s own estimates for assumptions that market participants would use in pricing the asset or liability. Valuation techniques typically include option pricing models, discounted cash flow models and similar techniques, but may also include the use of market prices of assets or liabilities that are not directly comparable to the subject asset or liability.

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9. Fair Value of Financial Instruments  (continued)

Fair values of assets and liabilities (in thousands) measured on a recurring basis at September 30, 2013 and December 31, 2012 are as follows:

	Level 1		Level 2		Level 3		Fair Value
September 30, 2013:
Securities available for sale	$	—	$	90,644	$	—	$	90,644
December 31, 2012:
Securities available for sale		—		88,188		—		88,188

10. Segment Reporting

The Company, due to its size (both assets and employees), has only one reportable segment. The Company reports its lending activities (mortgages, consumer and commercial) as one segment. It does not operate as multiple segments nor does it manage or report as other than one segment.

The Company does not have a single external customer from which it derives 10% or more of its revenue. Refer to Note 3 for the one geographical area it operates in.

11. Stock Based Benefit Plans

In 2003 and 2011 the Company established recognition and retention plan and trust agreements (“the 2003 RRP” and “the 2011 RRP”), which are stock-based incentive plans. Shares subject to awards under the agreements vest at the rate of 20% per year.

The Company authorized 45,634 shares of the Company’s common stock to be awarded under the 2003 RRP plan agreement and purchased the shares in the open market to fund the plan. As of September 30, 2013 3,785 shares had not vested. Shares vested and issued during the nine months ended September 30, 2013 and 2012 were 2,281 and 2,281, respectively.

On July 12, 2011 the Company authorized 49,534 shares of the Company’s common stock to be awarded under the 2011 RRP agreement. As of September 30, 2013, 49,534 shares had been purchased in the open market at a cost of $686,000. As of September 30, 2013, 42,637 shares had been awarded under the 2011 RRP agreement. Initial vesting of shares under this agreement began on July 12, 2012 with 7,864 shares vesting on such date. Shares totaling 7,764 vested on July 12, 2013.

Expense for the 2003 RRP and 2011 RRP is being amortized over a 60-month period and is based on the market value of the Company’s stock as of the date of the awards which was $6.31 and $12.00 for the 2009 and 2011 awards, respectively. All awards prior to 2009 have been fully amortized. Total compensation under the 2003 RRP and 2011 RRP agreements for the nine months ended September 30, 2013 and 2012 was $86,000 and $87,000, respectively, and is included in salaries and benefits.

The Company established the 2003 Stock Option Plan (“the 2003 Option Plan”) and the 2011 Stock Option Plan (“the 2011 Option Plan”) under which 114,084 and 123,836 shares of Company stock, respectively, are reserved for the grant of stock options to directors, officers and employees. The Plans provide for vesting of options granted to participants at 20% per year and the options expire in ten years. The exercise price of the options is equal to the fair market value of the common stock on the grant date. As of September 30, 2013, options covering 120,853 shares were outstanding and had an average exercise price of $11.52, a weighted average remaining life of 8.1 years and an intrinsic value of $632,000. Options totaling 48,462 shares were vested and exercisable at September 30, 2013 with an average exercise price of $10.04 and an intrinsic value of $325,000.

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11. Stock Based Benefit Plans (continued)

The fair value of each outstanding option is estimated on the date of the grant using the Black-Scholes option-pricing formula with the following weighted average assumptions; 1% dividend yield, 10 years expected life, 30.07% expected volatility and 3.53% risk free interest. All of the 2003 Option Plan options that were granted in May 2003 have fully vested and have been exercised. The value of 4,888 shares granted in 2008 was considered immaterial and the value of 20,867 shares issued in 2009 had an approximate value of $50,000 under the Black-Scholes option-pricing formula. 2011 Option Plan shares granted (95,098) had an approximate value of $180,000 under the Black-Scholes option-pricing formula.

The expected volatility is based on historical volatility. The risk-free interest rates for periods within the contractual life of the awards are based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life is based on historical exercise experience. The dividend yield assumption is based upon the Company’s history and expectation of dividend payouts.

The Company's Stock Benefits Administration Committee of the Board of Directors oversees the RRP and Option Plans.

12. Supplemental Retirement Benefit Agreement

The Bank has entered into supplemental retirement benefit agreements (the “Agreements”) with three key executives. The Agreements provide for monthly retirement benefits in the amount of $5,000 per month for ten to fifteen years from the date they retire for the executive group as a whole. As of September 30, 2013 and December 31, 2012, a liability (in thousands) of $332 and $337, respectively, was accrued for the Agreements.

13. Earnings Per Share (EPS)

EPS is calculated based on average weighted common shares outstanding less ESOP and RRP shares not released and less treasury stock. The number of shares used in the EPS computation at September 30, 2013 was 2,287,803 and at September 30, 2012 was 2,297,659.

14. Plan of Conversion

On September 14, 2010, the old Minden Bancorp, Inc. (“old Minden”) announced that old Minden, the Bank and Minden Mutual Holding Company had adopted a Plan of Conversion and Reorganization (the “Plan of Conversion”). On January 4, 2011 the Plan of Conversion was completed resulting in the old Minden’s and the Bank’s reorganization from the two-tier mutual holding company structure to the stock holding company structure. Pursuant to the Plan of Conversion, (i) Minden Mutual Holding Company converted to stock form and then merged with and into old Minden, with old Minden being the surviving entity, (ii) old Minden merged with and into the Company with the Company being the survivor thereof, (iii) the shares of common stock of old Minden held by persons other than Minden Mutual Holding Company were converted into shares of common stock of the Company pursuant to an exchange ratio designed to preserve the percentage ownership interests of such persons, (iv) shares of common stock of old Minden held by Minden Mutual Holding Company were canceled, (v) shares of the common stock of the Bank held by old Minden are owned by the Company with the result that the Bank became the wholly owned subsidiary of the Company, and (vi) the Company offered and sold shares of its common stock to depositors of the Bank and others in the manner and subject to the priorities set forth in the Plan of Conversion.

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14. Plan of Conversion  (continued)

In connection with the conversion, shares of old Minden’s common stock previously owned by Minden Mutual Holding Company were canceled and new shares of common stock, representing the approximate 58.6% ownership interest of Minden Mutual Holding Company, were offered for sale by the Company. Concurrent with the completion of the offering, old Minden’s existing public stockholders received a specified number of shares of the Company’s common stock for each share of old Minden’s common stock they owned at the date, based on an exchange ratio to ensure that they would own approximately the same percentage of the Company’s common stock as they owned of old Minden’s common stock immediately prior to the conversion.

At the time of the conversion, liquidation accounts were established for the benefit of certain depositors of the Bank by the Company and the Bank in an amount equal to the percentage ownership in old Minden owned by Minden Mutual Holding Company multiplied by old Minden’s stockholders’ equity as reflected in the latest statement of financial condition used in the final offering prospectus for the conversion plus the value of the net assets of Minden Mutual Holding Company as reflected in the latest statement of financial condition of Minden Mutual Holding Company prior to the effective date of the conversion. Neither the Company nor the Bank may declare or pay a cash dividend if the effect thereof would cause its equity to be reduced below either the amount required for the liquidation account or the regulatory capital requirements imposed by the FDIC.

The transactions contemplated by the Plan of Conversion were subject to and approved by old Minden’s stockholders, depositors of the Bank, the Office of Thrift Supervision and the Louisiana Office of Financial Institutions. Upon completion of the conversion, conversion costs of approximately $920,000 were netted against the offering proceeds.

15. Stock Repurchase Plans

On May 16, 2012 and October 10, 2012, the Board of Directors approved stock repurchase plans providing for the repurchase of up to 70,000 (3%) and 50,000 (2%) shares, respectively, of the Company’s issued and outstanding shares of common stock. As of September 30, 2013, a total of 26,188 shares remain to be purchased under the October 10, 2012 plan. On February 12, 2013, the Board of Directors approved an additional stock repurchase plan providing for the repurchase of up to an additional 120,000, or approximately 5.2% of the Company’s issued and outstanding shares of common stock upon completion of the October 10, 2012 plan.

The shares for the stock repurchase plans may be purchased in the open market or in privately negotiated transaction from time to time depending upon the market conditions and other factors.

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16. Subsequent Event

On October 28, 2013, the Board of Directors approved a new stock repurchase plan that provides for the repurchase of up to 150,000 shares, or approximately 6.3% of its issued and outstanding shares of common stock as of September 30, 2013. The shares may be purchased in the open market or in privately negotiated transactions from time to time depending upon market conditions and other factors. Concurrent with this authorization, the Company terminated its second share repurchase program which had 26,188 shares remaining to be repurchased as well as its third share repurchase program which had not commenced covering 120,000 shares.

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

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of Minden Bancorp, Inc. (“Minden Bancorp” or the “Company”) the company for MBL Bank (the “Bank”) from December 31, 2012 to September 30, 2013 and on its results of operations during the first nine months of 2013 and 2012. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this quarterly report on Form 10-Q, particularly the financial statements and related notes appearing in Item 1.

To the extent that statements in this Form 10-Q relate to future plans, objectives, financial results or performance of the Company, these statements are deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, which are based on management’s current information, estimates and assumptions and the current economic environment, are generally identified by the use of the words “plan”, “believe”, “expect”, “intend”, “anticipate”, “estimate”, “project” or similar expressions. The Company’s actual strategies and results in future periods may differ materially from those currently expected due to various risks and uncertainties. Factors that may cause actual results to differ materially from these forward-looking statements include, but are not limited to, the risk factors described under the heading “Risk Factors” in the prospectus, dated November 9, 2010 (SEC File No. 333-169458, of the Company, the newly formed Louisiana corporation which became the holding company for the Bank upon completion of the second-step conversion of Minden Mutual Holding Company (the “MHC”), the mutual holding company parent of Minden Bancorp. The Company was formed by Minden Bancorp in connection with the MHC’s second-step conversion which was completed on January 4, 2011. The Company's results of operations are primarily dependent on the results of the Bank, which is a wholly owned subsidiary.

Critical Accounting Policies

In reviewing and understanding financial information for Minden Bancorp, you are encouraged to read and understand the significant accounting policies used in preparing our consolidated financial statements included elsewhere in this document. These policies are described in Note 1 of the notes to our consolidated financial statements. The accounting and financial reporting policies of Minden Bancorp conform to accounting principles generally accepted in the United States of America and to general practices within the banking industry. Accordingly, the consolidated 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 consolidated 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 consolidated 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. Charges against the allowance for loan losses are made when management believes that the collectibility of loan principal is unlikely. Subsequent recoveries are added to the allowance. The allowance is an amount that management believes will cover 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 impaired 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.

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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 losses have not required significant adjustments from management’s initial estimates. In addition, the Louisiana Office of Financial Institutions and the Federal Deposit Insurance Corporation, as an integral part of their examination processes, periodically review our allowance for loan losses. The Louisiana Office of Financial Institution and the Federal Deposit Insurance Corporation may require the recognition of adjustments to the allowance for loan losses based on their judgment of information available to them at the time of their examinations. To the extent that actual outcomes differ from management’s estimates, additional provisions to the allowance for loan losses may be required that would adversely impact earnings in future periods.

Income Taxes. We make estimates and judgments to calculate some of our tax liabilities and determine the recoverability of some of our deferred tax assets, which arise from temporary differences between the tax and financial statement recognition of revenues and expenses. We also estimate a deferred tax asset valuation allowance 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 an additional 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.

Other than Temporary Impairment of Securities. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) whether or not we intend to sell or expect that it is more likely than not that we will be required to sell the security prior to an anticipated recovery in fair value. Once a decline in value for a debt security is determined to be other-than-temporary, the other-than-temporary impairment is separated into (a) the amount of total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and (b) the amount of other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to credit loss is recognized in earnings. The amount of other-than-temporary impairment related to other factors is recognized in other comprehensive income (loss).

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Changes in Financial Condition at September 30, 2013 Compared to December 31, 2012

Total assets decreased $2.6 million or 0.9% to $273.9 million at September 30, 2013 compared to $276.5 million at December 31, 2012. The decrease primarily reflected a $13.4 million decrease in cash and cash equivalents partially offset by a $2.5 million increase in investment securities and a $9.0 million increase in net loans. Total deposits decreased by $3.3 million or 1.4% to $230.6 million at September 30, 2013. The decrease in deposits reflected normal seasonal withdrawals.

Stockholders’ equity increased by $1.1 million or 2.7% to $41.4 million at September 30, 2013 as compared to $40.3 million at December 31, 2012. The increase was in part due to net income of $2.5 million and the exercise of stock options of $254,000 for the nine months ended September 30, 2013. Stockholders’ equity was reduced by other comprehensive loss of $1.3 million and the purchase of treasury stock for $73,000.

Non-performing assets and troubled debt restructuring, which consist of non-accruing loans, accruing loans 90 days or more delinquent, troubled debt restructurings, and other repossessed assets owned, decreased to $595,000 or 0.2% of total assets at September 30, 2013 from $1.4 million or 0.5% of total assets at December 31, 2012. This decrease was due to a $63,000 decrease in accruing loans 90 days or more delinquent, a $60,000 decrease in non-accrual loans and the payment in full in January 2013 of a $706,000 restructured loan. At September 30, 2013, the $595,000 of nonperforming assets consisted of $248,000 of accruing loans 90 days or more delinquent and $347,000 of non-accrual loans. At September 30, 2013, the $347,000 of non-accrual loans consisted of $204,000 of single-family residential mortgage loans, $47,000 of nonresidential loans, $35,000 of commercial and industrial loans and $61,000 of consumer loans. Management continues to aggressively pursue the collection and resolution of all delinquent loans.

At September 30, 2013 and December 31, 2012, the allowance for loan losses amounted to $1.7 million and $1.6 million, respectively. At September 30, 2013, the allowance for loan losses amounted to 278.2% of nonperforming loans and 1.1% of total loans receivable, as compared to 223.5% and 1.1%, respectively, at December 31, 2012. The increase in the ratio of the allowance for loan losses to total non-performing loans was primarily due to a decrease in the amount of non-performing loans.

Comparison of Results of Operations for the Three and Nine Months Ended September 30, 2013 and 2012

We recorded net income of $866,000 for the three months ended September 30, 2013 as compared to net income of $803,000 for the same period in 2012.

Net interest income for the three months ended September 30, 2013 increased $91,000 or 4.3% to $2.2 million as compared to $2.1 million for the same period in 2012. Net interest income increased $208,000 or 3.3% to $6.4 million for the nine months ended September 30, 2013 as compared to $6.2 million for the same period in 2012. The increase in net interest income for the three months ended September 30, 2013 reflected an increase in interest income of $93,000 and a $2,000 increase in interest expense. The increase in interest income for the nine months ended September 30, 2013 reflected an increase in interest income of $167,000 combined with a $41,000 decrease in interest expense.

For the three and nine month periods ended September 30, 2013, the average rates paid on interest-bearing liabilities were 0.63% and 0.62%, respectively, as compared to 0.66% and 0.69% for the comparable periods in 2012. The yields on our net interest-earning assets were 3.82 and 3.74, respectively, for the 2013 periods as compared to 3.92% and 3.87% for the comparable 2012 periods. Our net interest margins were 3.33% and 3.26% for the three and nine months ended September 30, 2013 compared to 3.41% and 3.34% for the three and nine months ended September 30, 2012.

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The provision for loan losses amounted to $24,000 and $69,000 for the three and nine months ended September 30, 2013 as compared to $30,000 and $90,000 for the comparable periods in 2012.

Total non-interest income increased from $193,000 and $557,000 for the three and nine months ended September 30, 2012, to $216,000 and $631,000 for the comparable periods in 2013. The increases for the three and nine months ended September 30, 2013 primarily reflect an increase in customer service fees.

Non-interest expense was $1.1 million and $3.3 for both the three and nine month periods ended September 30, 2013 and 2012.

We incurred income tax expense of $425,000 and $1.2 million for the three and nine months ended September 30, 2013 as compared to $394,000 and $1.1 million for the comparable period in 2012. Our effective tax rates were 32.9% and 31.9% for three and nine months ended September 30, 2013 as compared to 32.9% and 33.6% for the same periods in 2012.

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Liquidity and Capital Resources

We maintain levels of liquid assets deemed adequate by management. We adjust our liquidity levels to fund deposit outflows, repay our borrowings and to fund loan commitments. We also adjust liquidity as appropriate to meet asset and liability management objectives.

Our primary sources of funds are deposits, amortization and prepayment of loans and mortgage-backed securities, maturities of investment securities and other short-term investments, loan sales and earnings and funds provided from operations. While scheduled principal repayments on loans and mortgage-backed securities are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. We set the interest rates on our deposits to maintain a desired level of total deposits. In addition, we invest excess funds in short-term interest-earning accounts and other assets, which provide liquidity to meet lending requirements. Our deposit accounts with the Federal Home Loan Bank of Dallas amounted to $1.7 million and $3.6 million at September 30, 2013 and December 31, 2012, respectively.

A significant portion of our liquidity consists of securities classified as available-for-sale and cash and cash equivalents. Our primary sources of cash are net income, principal repayments on loans and mortgage-backed securities and increases in deposit accounts. If we require funds beyond our ability to generate them internally, we have borrowing agreements with the Federal Home Loan Bank of Dallas which provide an additional source of funds. At September 30, 2013, we did not have any advances from the Federal Home Loan Bank of Dallas and had $84.3 million in borrowing capacity.

At September 30, 2013, we had outstanding commitments to originate loans totaling $27.6 million. At September 30, 2013, certificates of deposit scheduled to mature in less than one year, totaled $70.4 million. Based on prior experience, management believes that a significant portion of such deposits will remain with us, although there can be no assurance that this will be the case. In addition, the cost of such deposits could be significantly higher upon renewal if such renewals occur in a rising interest rate environment. We intend to utilize our high levels of liquidity to fund our lending activities. If additional funds are required to fund lending activities, we intend to sell our securities classified as available-for-sale as needed.

The Bank is required to maintain regulatory capital sufficient to meet tangible, core and risk-based capital ratios of at least 1.5%, 3.0% and 8.0%, respectively. At September 30, 2013, the Bank exceeded each of its capital requirements with ratios of 14.04%, 14.04% and 26.97%, respectively, and was deemed “well-capitalized” for regulatory capital purposes.

Impact of Inflation and Changing Prices

The consolidated financial statements and related financial data presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America, which require the measurement of financial position and operating results in terms of historical dollars, without considering changes in relative purchasing power over time due to inflation. Unlike most industrial companies, virtually all of our assets and liabilities are monetary in nature. As a result, interest rates generally have a more significant impact on a financial institution’s performance than does the effect of inflation.

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Item 3 – Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4 – Controls and Procedures.

Our management evaluated, with the participation of our President and Chief Executive Officer and our 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 Chief Financial Officer concluded that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations and are operating in an effective manner.

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

PART II – OTHER INFORMATION

Item 1 – Legal Proceedings.

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

Item 1A – Risk Factors.

Not applicable.

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

(a) Not applicable.

(b) Not applicable

(c) Minden Bancorp’s repurchases of its common stock made during the quarter ended September 30, 2013 are set forth in the table below:

							Maximum
					Total Number of		Number of Shares
			Average		Shares Purchased		That May Yet Be
	Total Number		Price		as Part of Publicity		Purchased Under
	of Shares		Paid per		Announced Plans		the Plans or
Period	Purchased		Share		or Programs		Programs (a)
July 1, 2013 – July 31, 2013		—				—		148,362
Aug. 1, 2013 – Aug. 31, 2013		2,174		17.14		2,174		146,188
Sept. 1, 2013 – Sept. 30, 2013		—				—		146,188
Total		2,174	$	17.14		2,174

____________________________

Notes to this table:

(a) On May 16, 2012 and October 10, 2012, Minden Bancorp approved stock repurchase plans providing for the repurchase of up to 70,000 (3%) and 50,000 (2%) shares, respectively, of the Company’s issued and outstanding shares of common stock. The second repurchase plan will be in effect for one year unless extended. As of September 30, 2013, a total of 26,188 shares remain to be purchased in the second plan. On February 12, 2013, Minden Bancorp announced a third repurchase plan to repurchase up to 120,000, or approximately 5.2% of its outstanding shares of common stock upon completion of the second repurchase plan. A total of 146,188 shares remain to be repurchased under the existing plans.

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Item 3 – Defaults Upon Senior Securities.

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

Item 4 – (Removed and Reserved).

Item 5 – Other Information.

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

Item 6 – Exhibits.

List of exhibits: (filed herewith unless otherwise noted)

No.	Description
31.1	Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer
32.1	Section 1350 Certification

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.*

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MINDEN BANCORP, INC.
Date: November 14, 2013	By:	/s/ Jack E. Byrd, Jr.
		Jack E. Byrd, Jr.
		President and Chief Executive Officer
Date:  November 14, 2013	By:	/s/ Becky T. Harrell
		Becky T. Harrell
		Chief Financial Officer

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