Forward-Looking Statements

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

General

The Company was formed by the Bank in June 2008, in connection with the Bank's conversion to a Louisiana chartered stock form savings bank (the "Conversion") completed on January 27, 2009. The Company's results of operations are primarily dependent on the results of the Bank, which became a wholly owned subsidiary upon completion of the Conversion. The Bank's results of operations depend, to a large extent, on net interest income, which is the difference between the income earned on its loan and investment portfolios and the cost of funds, consisting of the interest paid on deposits and borrowings. Results of operations are also affected by provisions for loan losses, fee income and other non-interest income and non-interest expense. Non-interest expense principally consists of compensation and employee benefits, office occupancy and equipment expense, data processing, advertising and business promotion and other expense. The Bank's results of operations are also significantly affected by general economic and competitive conditions, particularly changes in interest rates, government policies and actions of regulatory authorities. Future changes in applicable law, regulations or government policies may materially impact our financial condition and results of operations.

Critical Accounting Policies

In reviewing and understanding financial information for Hibernia, you are encouraged to read and understand the significant accounting policies used in preparing our financial statements. These policies are described in Note 1 of the notes to our financial statements. The accounting and financial reporting policies of Hibernia 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 financial statements and the reported amounts of income and expenses during the periods presented. The following accounting policies comprise those that management believes are the most critical to aid in fully understanding and evaluating our reported financial results. These policies require numerous estimates or economic assumptions that may prove inaccurate or may be subject to variations which may significantly affect our reported results and financial condition for the period or in future periods.

Allowance for Loan Losses. The allowance for loan losses is maintained at a level to provide for probable credit losses related to specifically identified loans and for losses inherent in the loan portfolio that have been incurred as of the balance sheet date. The reserve is comprised of specific reserves and a general reserve. Specific reserves are assessed for each loan that is reviewed for impairment or for which a probable loss has been identified. The reserve related to loans that are identified as impaired is based on discounted expected future cash flows using the loan's initial effective interest rate, the observable market value of the loan, or the estimated fair value of the collateral for certain collateral dependent loans. Factors contributing to the determination of specific reserves include the financial condition of the borrower, changes in the value of pledged collateral and general economic conditions. General reserves are established based on historical charge-offs considering factors that include risk rating, concentrations and loan type. For the general reserve, management also considers trends in delinquencies and non-accrual loans, concentrations, volatility of risk ratings and the evolving mix in terms of collateral, relative loan size and the degree of seasoning within the various loan products.

Changes in underwriting standards, credit administration and collection policies, regulation and other factors which affect the credit quality and collectability of the loan portfolio also impact the reserve levels. The reserve for loan losses is based on management's estimate of probable credit losses inherent in the loan portfolio; actual credit losses may vary from the current estimate. The reserve for loan losses is reviewed periodically, taking into consideration the risk characteristics of the loan portfolio, past charge-off experience, general economic conditions and other factors that warrant current recognition. As adjustments to the reserve for loan losses become necessary, they are reflected as a provision for loan losses in current-period earnings. Actual loan charge-offs are deducted from and subsequent recoveries of previously charged-off loans are added to the reserve.

Income Taxes. 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 assets and liabilities and gives current recognition to changes in tax rates and laws. Realizing our deferred tax assets principally depends upon our achieving projected future taxable income. We may change our judgments regarding future profitability due to future market conditions and other factors. We may adjust our deferred tax asset balances if our judgments change.

Comparison of Financial Condition at June 30, 2009 and December 31, 2008

Hibernia Homestead Bancorp's total assets decreased $441,000, or .8%, to $57.8 million at June 30, 2009 compared to $58.2 million at December 31, 2008. During the first six months of 2009, the largest decrease was in cash and cash equivalents, which decreased $5.6 million and was offset by an increase of $3.6 million in net loans receivable, an increase of $1.1 million in certificates of deposits and an increase of $1.1 million in investment securities available-for-sale. The decrease in cash and cash equivalents as of June 30, 2009, is primarily a result of the funding of new loans and the investment of excess liquidity in certificates of deposit and available-for-sale securities. Our net loans receivable increased by $3.6 million, or 11.1%, to $35.9 million at June 30, 2009, compared to $32.3 million at December 31, 2008. During the first six months of 2009 our total loan originations amounted to $10.4 million and loan principal payments were $6.8 million. Our total investment securities amounted to $13.1 million at June 30, 2009, compared to $11.9 million at December 31, 2008, an increase of $1.2 million, or 9.5%. The increase in investment securities was offset by maturities and paydowns of $1.5 million received during the period.

Hibernia's deposits decreased $9.3 million, or 21.5%, to $33.9 million at June 30, 2009, compared to $43.1 million at December 31, 2008, primarily as a result of the completion of our mutual to stock conversion in January, 2009. Deposits as of December 31, 2008 included $9.3 million in deposits being held in escrow for stock subscriptions in connection with Hibernia's initial public offering. The average balance of deposits, was $34.6 million for the six months ended June 30, 2009 as compared to $34.8 million for the prior year period. We did not hold any Federal Home Loan Bank advances at June 30, 2009, or December 31, 2008, as we continued our strategy in recent periods of managing interest rate risk by paying down higher cost borrowings. Our stockholders' equity amounted to $23.5 million at June 30, 2009 compared to $14.2 million at December 31, 2008, an increase of $9.3 million, or 66.1%. The increase in stockholders' equity was the result of $10.4 million in net proceeds from the issuance of common stock partially offset by $891,000 in the value of shares allocated to the employee stock ownership plan and a $68,000 increase in accumulated other comprehensive income.

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

For the three months ended June 30, 2009, Hibernia Homestead Bancorp had a net loss of $83,000 compared to a net loss of $110,000 for the three months ended June 30, 2008. Our results in the 2009 quarterly period reflect, in part, an increase in our net interest margin for the quarter ended June 30, 2009. In addition, our non-interest expenses increased $101,000, or 18.2%, over the prior three month period. Our net interest margin increased by 77 basis points to 3.96% for the three months ended June 30, 2009 compared to 3.19% for the three months ended June 30, 2008, while our average interest rate spread improved to 3.37% for the three months ended June 30, 2009, compared to 2.55% for the three months ended June 30, 2008. During the three months ended June 30, 2009, the average rate paid on certificates of deposit decreased 156 basis points from 3.94% for the three months ended June 30, 2008, to 2.38% for the three months ended June 30, 2009.

For the six months ended June 30, 2009, our net loss was $195,000 compared to a net loss of $224,000 for first six months of 2008. Our results in the 2009 period reflect in part an increase in our net interest margin for the six months ended June 30, 2009. In addition, our non-interest expenses increased $173,000, or 15.9%, over the prior six month period. For the first six months of 2009, our net interest margin and average interest rate spread were 3.74% and 3.15%, respectively, compared to 3.08% and 2.39%, respectively for the six months ended June 30, 2008. During the first six months of 2009, the average rate paid on certificates of deposit decreased 163 basis points from 4.20% for the six months ended June 30, 2008, to 2.57% for the six months ended June 30, 2009. Lower rates on certificates of deposit during the six months ended June 30, 2009, reflect general interest rate declines during the period and management's decision not to aggressively compete for certificate deposits.

Interest Income. Hibernia's total interest income was $628,000 for the three months ended June 30, 2009, compared to $594,000 for the three months ended June 30, 2008, a $34,000 or 5.7% increase. The increase in interest income in the three months ended June 30, 2009, compared to the three months ended June 30, 2008, was due primarily to increases in average interest-earning assets, partially offset by decreases in the average yields on loans and investments. The average yield on our interest-earning assets was 5.03% for the three months ended June 30, 2009, compared to 5.50% for the comparable period in 2008. Average interest-earning assets were $49.9 million for the three months ended June 30, 2009, compared to $43.2 million for the comparable period in 2008.

For the six months ended June 30, 2009, total interest income was $1.23 million, compared to $1.20 million for the six months ended June 30, 2008, a $29,000 or 2.4% increase. The increase in interest income for the six months ended June 30, 2009, compared to the six months ended June 30, 2008, was due primarily to increases in average interest-earning assets, partially offset by decreases in the average yields on loans and investments. The average yield on our interest-earning assets was 4.93% for the six months ended June 30, 2009, compared to 5.51% for the comparable period in 2008. Average interest-earning assets were $49.9 million for the six months ended June 30, 2009, compared to $43.6 million for the comparable period in 2008.

Interest Expense. Hibernia's total interest expense was $135,000 for the three months ended June 30, 2009, compared to $252,000 for the three months ended June 30, 2008, a decrease of $117,000, or 46.4%. The decrease in interest expense for the three month period ended June 30, 2009 was primarily due to lower average rates of interest paid on our certificates of deposit in the 2009 period combined with decreases in the average balances of certificates of deposit. Our average rate paid on interest-bearing liabilities was 1.66% for the three months ended June 30, 2009, compared to 2.95% for the three months ended June 30, 3008.

Our total interest expense was $305,000 for the six months ended June 30, 2009, compared to $535,000 for the six months ended June 30, 2008, a decrease of $230,000, or 43.0%. The decrease in interest expense for the six months ended June 30, 2009 was primarily due to lower average rates of interest paid on our certificates of deposit in the 2009 period combined with decreases in the average balances of certificates of deposit. For the six months ended June 30, 2009, our average rate paid on interest-bearing liabilities was 1.78%, compared to 3.12% for the six months ended June 30, 2008.

Non-Interest Income. Hibernia's non-interest income consists of rental income, net of related expenses, fees and service charges, and realized gains and losses on investments.

Hibernia's total non-interest income amounted to $36,000 for the three months ended June 30, 2009, compared to $46,000 for the three months ended June 30, 2008, a $10,000, or 21.7%, decrease. The decrease for the three month period was primarily due to higher maintenance costs associated with the related rental properties.

For the six months ended June 30, 2009, our non-interest income was $58,000, compared to $84,000 for the six months ended June 30, 2008, a $26,000, or 31.0%, decrease. The decrease for the six month period was also primarily due to higher maintenance costs associated with the related rental properties.

Non-Interest Expense. Hibernia's total non-interest expense increased by $101,000, or 18.2%, to $656,000 in the quarter ended June 30, 2009, compared to $555,000 in the quarter ended June 30, 2008. For the six months ended June 30, 2009, compared to the six months ended June 30, 2008, our non-interest expense increased by $173,000, or 15.9%. The primary reasons for the increase in non-interest expense for the three months and six months ended June 30, 2009 were salaries and employee benefits expense, as additional staff was added to manage Hibernia's operations as a publicly owned company, higher insurance, data processing, and occupancy expenses, and legal and audit professional fees incurred in connection with public company reporting requirements following the conversion of Hibernia Homestead Bank from a mutual savings bank to a stock savings bank effective in January 2009.

Average Balances, Net Interest Income, and Yields Earned and Rates Paid. The following tables show for the periods indicated the total dollar amount of interest from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. As the Company owned no tax-exempt securities during the periods presented, no yield adjustments were made. All average balances are based on daily averages.

                                                   Three Months Ended June 30,
                                         2009                                       2008
                                                      Average                                    Average
                         Average                      Yield/        Average                      Yield/
                         Balance       Interest       Rate(1)       Balance       Interest        Rate
Interest-earning
assets:                                              (Dollars in thousands)
 Loans receivable(1)    $  34,319     $      498          5.80 %   $  29,096     $      444          6.11 %
 Investment
securities                 13,623            126          3.70        13,562            147          4.33
 Other
interest-earning
assets                      1,938              4          0.74           518              3          2.03
   Total
interest-earning
assets                     49,880            628          5.03 %      43,177            594          5.50 %
Non-interest-earning
assets                      7,337                                      6,657
   Total assets         $  57,217                                  $  49,834
Interest-bearing
liabilities:
  Savings, NOW and
money market
   accounts                13,613             22          0.65 %      11,842             31          1.04 %
  Certificates of
deposit                    19,003            113          2.38        22,547            221          3.94
    Total
interest-bearing
deposits                   32,616            135          1.66        34,389            252          2.95
FHLB advances                  --             --            --            33             --            --
   Total
interest-bearing
liabilities                32,616            135          1.66 %      34,422            252          2.95 %
Non-interest-bearing
liabilities                   946                                      1,134
   Total liabilities       33,562                                     35,557
 Retained earnings         23,655                                     14,278
   Total liabilities
and retained earnings   $  57,217                                  $  49,834
 Net interest-earning
assets                  $  17,264                                  $   8,754
 Net interest income;
average interest rate
   spread                             $      493          3.37 %                 $      342          2.55 %
 Net interest
margin(2)                                                 3.96 %                                     3.19 %
 Average
interest-earning
assets to
   average
interest-bearing
liabilities                                             152.93 %                                   125.43 %

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

                                                    Six Months Ended June 30,
                                         2009                                       2008
                                                      Average                                    Average
                         Average                      Yield/        Average                      Yield/
                         Balance       Interest       Rate(1)       Balance       Interest        Rate
Interest-earning
assets:                                              (Dollars in thousands)
 Loans receivable(1)    $  33,211     $      970          5.84 %   $  29,037     $      889          6.13 %
 Investment
securities                 13,173            254          3.86        14,217            308          4.33
 Other
interest-earning
assets                      3,531              7          0.41           365              5          2.60
   Total
interest-earning
assets                     49,915          1,231          4.93 %      43,619          1,202          5.51 %
Non-interest-earning
assets                      7,398                                      6,386
   Total assets         $  57,313                                  $  50,005
Interest-bearing
liabilities:
  Savings, NOW and
money market accounts      15,052             58          0.77 %      11,809             63          1.07 %
  Certificates of
deposit                    19,379            247          2.57        22,328            467          4.20
    Total
interest-bearing
deposits                   34,431            305          1.78        34,137            530          3.12
FHLB advances                  --             --            --           344              5          3.11
   Total
interest-bearing
liabilities                34,431            305          1.78 %      34,481            535          3.12 %
Non-interest-bearing
liabilities                   592                                      1,201
   Total liabilities       35,023                                     35,682
 Retained earnings         22,290                                     14,323
   Total liabilities
and retained earnings   $  57,313                                  $  50,005
 Net interest-earning
assets                  $  15,484                                  $   9,137
 Net interest income;
average interest rate
spread                                $      926          3.15 %                 $      667          2.39 %
 Net interest
margin(2)                                                 3.74 %                                     3.08 %
 Average
interest-earning
assets to
   average
interest-bearing
liabilities                                             144.97 %                                   126.50 %

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

Provision for Loan Losses. The allowance for loan losses is established through a provision for loan losses charged to earnings as losses are estimated to have occurred in our loan portfolio. The allowance for loan losses is maintained at a level to provide for probable credit losses related to specifically identified loans and for losses inherent in the loan portfolio that have been incurred as of the balance sheet date. The reserve is comprised of specific reserves and a general reserve.

Specific reserves are assessed for each loan that is reviewed for impairment or for which a probable loss has been identified. The reserve related to loans that are identified as impaired is based on discounted expected future cash flows using the loan's initial effective interest rate, the observable market value of the loan, or the estimated fair value of the collateral for certain collateral dependent loans. Factors contributing to the determination of specific reserves include the financial condition of the borrower, changes in the value of pledged collateral and general economic conditions. General reserves are established based on historical charge-offs considering factors that include risk rating, concentrations and loan type. For the general reserve, management also considers trends in delinquencies and non-accrual loans, concentrations, volatility of risk ratings and the evolving mix in terms of collateral, relative loan size and the degree of seasoning within the various loan products.

Changes in underwriting standards, credit administration and collection policies, regulation and other factors which affect the credit quality and collectability of the loan portfolio also impact the reserve levels. The reserve for loan losses is based on management's estimate of probable credit losses inherent in the loan portfolio; actual credit losses may vary from the current estimate. The reserve for loan losses is reviewed periodically, taking into consideration the risk characteristics of the loan portfolio, past charge-off experience, general economic conditions and other factors that warrant current recognition. As adjustments to the reserve for loan losses become necessary, they are reflected as a provision for loan losses in current-period earnings. Actual loan charge-offs are deducted from and subsequent recoveries of previously charged-off loans are added to the reserve.

A loan loss provision of $15,000 was made to the allowance during the six months ended June 30, 2009. No provision was made during the six months ended June 30, 2008 or the three months ended June 30, 2009 or 2008. To the best of management's knowledge, the allowance is maintained at a level believed to cover all known and inherent losses in the loan portfolio, both probable and reasonable.

In 2005, Hurricane Katrina affected the residents and businesses within the Hibernia's market area. The adverse financial impacts of this event on the Bank's loan portfolio were recognized at that time. Management continues to closely monitor the loan portfolio, and no substantial additional losses directly related to Hurricane Katrina have been experienced to date. However, the extent to which the still affected areas within the Company's market eventually recover is unknown at this time as are the ultimate adverse additional impacts that might have, if any, on the Company's loan portfolio.

Liquidity and Capital Resources

Hibernia maintains levels of liquid assets deemed adequate by management. Hibernia adjusts its liquidity levels to fund deposit outflows, repay its borrowings and to fund loan commitments. Hibernia also adjusts liquidity as appropriate to meet asset and liability management objectives.

Hibernia's primary sources of funds are deposits, amortization and prepayment of loans and to a lesser extent, rental income and funds provided from operations. While scheduled principal repayments on loans are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. Hibernia sets the interest rates on its deposits to maintain a desired level of total deposits. In addition, the Company invests excess funds in short-term interest-earning accounts and other assets, which provide liquidity to meet lending requirements. Hibernia Homestead Bancorp's cash and cash equivalents amounted to $1.3 million at June 30, 2009.

A significant portion of the Hibernia's liquidity consists of non-interest earning deposits. Primary sources of cash are principal repayments on loans and increases in deposit accounts. If the Bank requires funds beyond its ability to generate them internally, borrowing agreements exist with the Federal Home Loan Bank of Dallas, which provide an additional source of funds. At June 30, 2009, Hibernia did not have any advances from the Federal Home Loan Bank of Dallas and had $20.0 million in borrowing capacity. Additionally, at June 30, 2009, the Bank was a party to a Master Purchase Agreement with First National Banker's Bank whereby First National Banker's Bank may sell to Hibernia Homestead Bank federal funds in an amount not to exceed $5.0 million. As of June 30, 2009, Hibernia Homestead Bank had $-0- of federal funds purchased from First National Banker's Bank.

At June 30, 2009, the Bank had outstanding loan commitments of $3.3 million to originate loans. At June 30, 2009, certificates of deposit scheduled to mature in less than one year totaled $16.4 million. Based on prior experience, management believes that a significant portion of such deposits will remain with . . .