1998

                                 Annual Report


                                IBL Bancorp, Inc.

<PAGE>

                                IBL Bancorp, Inc.
                               23910 Railroad Ave.
                              Plaquemine, LA 70764



To Our Stockholders:

         With the  successful  completion  of the stock  conversion of Iberville
Building  and Loan  Association,  we are  delighted to present this first annual
report to the stockholders of its holding company, IBL Bancorp, Inc.

         The  Company  is  positioned  to  begin  a new  era of  service  to the
community with the additional capital obtained through the stock offering.  Loan
demand has held up well and we hope to continue to expand our loan portfolio. We
plan to take advantage of the opportunities afforded us in this very competitive
marketplace.

         We are confident of the  Association's  sound  financial  condition and
look  forward to the  future  with  optimism  and  energy.  We  appreciate  your
investment in the Company and invite your continued  support of the Association,
which is Iberville  and West Baton Rouge  Parishes  truly home- owned  community
Association.

         We  invite  you to  review  this  Annual  Report  which  discusses  our
performance during fiscal year 1998.

Sincerely,


/s/G. Lloyd Bouchereau, Jr.
---------------------------
G. Lloyd Bouchereau, Jr.
President & CEO


                                       1

<PAGE>
                                IBL BANCORP, INC.
                      IBERVILLE BUILDING & LOAN ASSOCIATION


         IBL  BANCORP,  INC.  ("our  holding  company"  or  the  "Company")  was
incorporated  under the laws of the State of  Louisiana  in 1998 to serve as the
holding company for Iberville  Building & Loan Association  ("us," "we," etc. or
the  "Association")  following  our  conversion  from  mutual to stock form (the
"Conversion").  On September 30, 1998, we consummated  the  Conversion,  and the
Company  completed its offering of Common Stock through the sale and issuance of
210,870 shares of common stock at a price of $10.00 per share,  realizing  gross
proceeds of $2.1 million.  The Company purchased all of the capital stock of the
Association  in  exchange  for  50% of the net  Conversion  proceeds.  Prior  to
September  30,  1998,  the  Company had no material  assets or  liabilities  and
engaged in no business  activities.  Accordingly,  the  information set forth in
this report including the audited Consolidated  Financial Statements and related
data, relates primarily to the Association.

         Our holding  company's  executive offices are located at 23910 Railroad
Avenue, Plaquemine, Louisiana 70764, and its telephone number is (225) 687-6337.

         IBERVILLE  BUILDING & LOAN  ASSOCIATION.  We were  organized as a state
chartered mutual savings  institution in 1915. We currently  operate through one
full service  banking office located in Plaquemine,  Louisiana.  At December 31,
1998, we had total assets of $23.9 million, deposits of $19.9 million and equity
of $3.3 million or 14.1% of total assets.

         We attract  deposits from the general  public and invest those funds in
loans secured by first  mortgages on  owner-occupied  single-family  residences,
commercial  real estate loans and consumer loans. We also maintain an investment
portfolio,  primarily of  mortgage-backed  securities issued by the Federal Home
Loan Mortgage Corporation ("FHLMC") or the Federal National Mortgage Association
("FNMA") and obligations of the federal government and agencies.

         We  derive  our  income  principally  from  interest  earned  on loans,
investment securities and other interest-earning  assets. Our principal expenses
are  interest  expense on deposits  and  noninterest  expenses  such as employee
compensation,  deposit insurance and miscellaneous other expenses. Funds for our
activities are provided principally by deposit growth, repayments of outstanding
loans and  investment  securities,  other  operating  revenues and, from time to
time, advances from the Federal Home Loan Bank of Dallas.

         As a state chartered savings  institution,  we are subject to extensive
regulation by the Office of Financial  Institutions,  State of Louisiana ("OFI")
and by the Office of Thrift  Supervision  ("OTS").  Our lending  activities  and
other  investments  must  comply  with  state  and  various  federal  regulatory
requirements,   and  these  regulatory  agencies  periodically  examine  us  for
compliance with various regulatory  requirements.  The Federal Deposit Insurance
Corporation ("FDIC") also has the authority to conduct special examinations.  We
must also file reports with the OTS  describing  our  activities  and  financial
condition and are subject to certain monetary reserve  requirements  promulgated
by the Board of Directors of the Federal Reserve System.


                                       2
<PAGE>
MARKET FOR COMMON STOCK
AND RELATED STOCKHOLDER MATTERS

         Market for Common Stock.  The  Company's  common stock was first quoted
and began  trading  on the Nasdaq  Small Cap  Market  System on October 1, 1998,
under the symbol "IBLB". At that date there were approximately 210,870 shares of
the Company's common stock outstanding,  and there were approximately 222 record
holders of the Company's  common stock.  Due to the relatively small size of the
offering  and  small  number of  stockholders  there  was only  limited  trading
activity in the fourth  quarter of 1998.  There were eight  known  trades in the
fourth  quarter of 1998 the lowest of which was at $9.25 and the  highest was at
$10.00.

         The  payment  of   dividends   on  the  common   stock  is  subject  to
determination  and declaration by the Board of Directors of our holding company.
The Board of Directors has adopted a policy of paying annual cash dividends at a
rate of $0.15 per share  commencing  with the Company's  first  dividend paid in
January  1999.  The  payment  of  future   dividends  will  be  subject  to  the
requirements of applicable law and the  determination  by our holding  company's
Board of Directors that our net income, capital and financial condition,  thrift
industry  trends  and  general  economic   conditions  justify  the  payment  of
dividends,  and we cannot assure you that  dividends will continue to be paid in
the future.





                                       3

<PAGE>
<TABLE>
<CAPTION>
                        SELECTED FINANCIAL AND OTHER DATA

                                                             At December 31,
                                                             ---------------
                                                           1998            1997
                                                           ----            ----
                                                         (Dollars in thousands)
<S>                                                      <C>             <C>    
Selected Financial Condition Data:
Total assets ...................................         $23,878         $22,395
Loans receivable, net ..........................          17,209          16,318
Other cash and amounts due
    from depository institutions ...............           1,858           1,110
Investment securities:
    Available for sale .........................           1,454           1,948
     Held to maturity ..........................           2,123           2,386
Deposits .......................................          19,899          20,026
Borrowed money .................................             495             610
Equity .........................................           3,383           1,622

<CAPTION>
                                                     Year Ended December 31,
                                                     -----------------------
                                                1998         1997        1996
                                               -------      -------     -------
                                                   (Dollars in thousands)
<S>                                            <C>          <C>         <C>    
Selected Operating Data:
Interest income ..........................     $ 1,736      $ 1,691     $ 1,645
Interest expense .........................         915          917         908
                                               -------      -------     -------
Net interest income before
     provision for loan losses ...........         821          774         737
Provision for loan losses ................          21           42          39
                                               -------      -------     -------

Net interest income after
     provision for loan losses ...........         800          732         698
Noninterest income .......................         101           98         131

Noninterest expense ......................         604          568         703
                                               -------      -------     -------
Income before income taxes ...............         297          262         126
Income taxes .............................         102           98          70
                                               -------      -------     -------

Net income ...............................         195          164          56
Other comprehensive income (loss), net ...          (3)           4          (3)
                                               -------      -------     -------
      Comprehensive income ...............     $   192      $   168     $    53
                                               -------      -------     -------
</TABLE>

                                       4
<PAGE>
<TABLE>
<CAPTION>
Selected Ratios

                                                                  At or for the
                                                             Year Ended December 31,
                                                             -----------------------
                                                                1998          1997
                                                                ----          ----                            
<S>                                                           <C>           <C> 
Performance Ratios:
Return on average assets (net income
   divided by average total assets) ................             .84%          .74%
Return on average equity (net income
   divided by average equity) ......................            9.04         10.64
Interest rate spread (average yield on assets
   minus average rate on liabilities) ..............            3.19          3.24
Net interest margin (net interest income
   divided by average interest-earning assets) .....            3.59          3.55
Ratio of average interest-earning assets
   to average interest-bearing liabilities .........          109.78        107.42
Ratio of noninterest expense to average
   total assets ....................................            2.60          2.58
Efficiency Ratio (noninterest expense
   divided by total of net interest income
   and noninterest income) .........................           65.51         65.13


Asset Quality Ratios:
Nonperforming assets to total assets at
   end of  period ..................................            1.01          1.48
Nonperforming loans to total loans at
   end of  period ..................................            1.31          1.93
Allowance for loan losses to total loans
   at end of  period ...............................            2.34          2.41
Allowance for loan losses to nonperforming
   loans at end of  period .........................          170.25        121.69
Provision for loan losses to total loans ...........             .12           .25
Net charge-offs to average loans
   outstanding .....................................             .08           .01

</TABLE>
                                        5

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

         Our principal business consists of attracting deposits from the general
public  and  investing  those  funds in  loans  secured  by one- to  four-family
residential  properties  located in our primary  market area,  which consists of
mainly  Iberville  and West Baton Rouge  Parishes.  We also  originate  consumer
loans, a limited amount of commercial real estate loans and maintain a portfolio
of investment  securities.  Our investment securities portfolio consists of U.S.
Treasury  notes  and  U.S.  government  agency  securities  and  mortgage-backed
securities which are guaranteed as to principal and interest by the FHLMC,  FNMA
or other governmental  agencies.  We also maintain an investment in Federal Home
Loan Bank of Dallas common stock.

         Our net income primarily  depends on our net interest income,  which is
the difference between interest income earned on loans and investment securities
and interest paid on customers' deposits and borrowings.  Our net income is also
affected by non-interest  income,  such as service charges on customers' deposit
accounts,  loan  service  charges  and other  fees,  and  non-interest  expense,
primarily  consisting  of  compensation  expense,  deposit  insurance  and other
expenses incidental to our operations.

         Our  operations  and  those  of the  thrift  industry  as a  whole  are
significantly  affected by prevailing economic  conditions,  competition and the
monetary and fiscal policies of governmental  agencies.  Our lending  activities
are influenced by demand for and supply of housing and competition among lenders
and the level of interest  rates in our market area. Our deposit flows and costs
of funds are  influenced  by prevailing  market rates of interest,  primarily on
competing investments,  account maturities and the levels of personal income and
savings in our market area.

         This   Annual   Report   includes   statements   that  may   constitute
forward-looking statements,  usually containing the words "believe," "estimate,"
"project," "expect," "intend" or similar expressions.  These statements are made
pursuant to the safe harbor  provisions  of the  Private  Securities  Litigation
Reform  Act of 1995.  Forward-looking  statements  inherently  involve  risk and
uncertainties  that could cause actual results to differ  materially  from those
reflected  in the  forward-looking  statements.  Factors that could cause future
results to vary from current  expectation  include,  but are not limited to, the
following:  changes in economic conditions (both generally and more specifically
in the markets in which we operate);  changes in interest rates,  deposit flows,
loan  demand,  real  estate  values  and  competition;   changes  in  accounting
principles,  policies or guidelines and in government legislation and regulation
(which  change from time to time and over which we have no  control);  and other
risks  detailed in this Annual Report and in our other  Securities  and Exchange
Commission fillings.  Readers are cautioned not to place undue reliance on these
forward-looking statements,  which reflect our analysis only as part of the date
hereof.  We undertake no  obligation  to publicly  revise these  forward-looking
statements to reflect events or circumstances that arise after the date hereof.



                                       6
<PAGE>
The Year 2000


         We have reviewed the Association's  computer and data processing issues
relating to the Year 2000 and have  developed a written Year 2000 Policy as well
as  written  Year  2000  Contingency  and Test  Plans.  The  Association's  data
processing  is handled by an  independent  third party data  center.  Successful
testing with this data center was  completed in September of 1998 and went well.
Based on our review of our internal bookkeeping  practices and the assurances by
our third  party data  processor  and  software  vendor  that they are Year 2000
compliant,  we do not expect to incur significant additional  bookkeeping,  data
processing or other  expenses in connection  with issues related to the upcoming
millennium  (that is, "Year 2000"  issues).  We have set a budget of $15,000 for
cost  associated  with  the  Year  2000,  of which  $5,000  has  been  incurred.
Management  and the Board of Directors are committed to providing  uninterrupted
service to our customers throughout the new millenium.


Asset/Liability Management

         Net  interest  income,  the primary  component  of our net  income,  is
determined  by the  difference  or  "spread"  between  the  yield  earned on our
interest-earning assets and the rates paid on our interest-bearing  liabilities,
and the relative  amounts of such assets and  liabilities.  Key components of an
asset/liability  strategy  are the  monitoring  and  managing of  interest  rate
sensitivity   on  both  the   interest-earning   assets   and   interest-bearing
liabilities.  The  matching  of our assets and  liabilities  may be  analyzed by
examining  the extent to which our  assets and  liabilities  are  interest  rate
sensitive and by monitoring the expected effects of interest rate changes on our
net portfolio value.

         An asset or liability is interest rate sensitive within a specific time
period if it will  mature or  reprice  within  that time  period.  If our assets
mature or reprice more quickly or to a greater extent than our liabilities,  our
net portfolio value and net interest income would tend to increase during period
of rising interest rates but decrease during periods of falling  interest rates.
If our  assets  mature or reprice  more  slowly or to a lesser  extent  than our
liabilities,  our net  portfolio  value and net  interest  income  would tend to
decease during periods of rising  interest rates but increase  during periods of
falling  interest rates.  Our policy has been to mitigate the interest rate risk
inherent  in  the  traditional  savings  institution   business  of  originating
long-term  loans  funded  by  short-term  deposits  by  pursuing  the  following
strategies:  (1) we have historically maintained liquidity and capital levels to
compensate for unfavorable  movements in market interest rates; and (2) in order
to mitigate the adverse  effect of interest rate risk on future  operations,  we
emphasize the  origination  of  adjustable-rate  mortgage loans and shorter term
consumer loans and the purchase of adjustable-rate mortgage backed securities.

         The OTS  requires us to measure  our  interest  rate risk by  computing
estimated  changes  in the net  portfolio  value  ("NPV") of our cash flows from
assets,  liabilities  and  off-balance  sheet  items in the  event of a range of
assumed changes in market interest rates. These computations estimate the effect
on our NPV of sudden and  sustained 1% to 4% increases  and  decreases in market
interest rates.  Our board of directors has adopted an interest rate risk policy
which establishes maximum decreases in our estimated NPV in the event of 1%, 2%,
3% and 4% increases and decreases in market interest rates, respectively.


                                       7
<PAGE>
         The following table presents the  Association's  NPV as of December 31,
1998 as calculated by the OTS, based on  information  provided to the OTS by the
Association:
<TABLE>
<CAPTION>


                         Net Portfolio Value          NPV as % of PV of Assets

 Change in Rates   $ Amount    $ Change   % Change    NPV Ratio         Change
 ---------------   --------    --------   --------    ---------         ------
<S>     <C>           <C>        <C>        <C>         <C>               <C>      
       +400 bp        3,649      (102)      (3 %)       15.44 %           0 bp     
                                                                           
       +300 bp        3,752         1        0 %        15.72 %         +28 bp     
                                                                           
       +200 bp        3,797        46       +1 %        15.79 %         +34 bp     
                                                                           
       +100 bp        3,783        32       +1 %        15.65 %         +20 bp     
                                                                           
          0 bp        3,751        --       --          15.45 %          --        
                                                                           
       -100 bp        3,761        10        0 %        15.39 %         (6) bp     
                                                                           
       -200 bp        3,792        41       +1 %        15.40 %         (4) bp     
                                                                           
       -300 bp        3,870       119       +3 %        15.75 %         +13 bp     
                                                                           
       -400 bp        3,928       177        +5 %       15.67 %         +22 bp     
</TABLE>
As with any method of measuring  interest rate risk,  certain  shortcomings  are
inherent  in the  method of  analysis  presented  in the  foregoing  table.  For
example,  although certain assets and liabilities may have similar maturities or
periods to repricing,  they may react in different  degrees to changes in market
interest  rates.  Also,  the  interest  rates on  certain  types of  assets  and
liabilities may fluctuate in advance of changes in market interest rates,  while
interest  rates  on  other  types  may  lag  behind  changes  in  market  rates.
Additionally,  certain assets,  such as  adjustable-rate  mortgage  loans,  have
features which restrict changes in interest rates on a short-term basis and over
the life of the  asset.  Further,  in the event of a change in  interest  rates,
expected rates of prepayments on loans and early  withdrawals from  certificates
could deviate significantly from those assumed in calculating the table.

         Our Board of  Directors  is  responsible  for  reviewing  our asset and
liability  policies.  On at least a quarterly  basis, the Board reviews interest
rate risk and trends,  as well as liquidity and capital ratios and requirements.
Our management is responsible for administering the policies and  determinations
of the Board of  Directors  with  respect to our asset and  liability  goals and
strategies.
<PAGE>
Average Balances, Interest and Average Yields

         The  following   table  sets  forth   information   about  our  average
interest-earning  assets  and  interest-bearing  liabilities  and  reflects  the
average   yield   of   interest-earning   assets   and  the   average   cost  of
interest-bearing  liabilities for the periods and at the date indicated. Average
balances are derived from month-end balances.  Investment securities include the
aggregate of  securities  available  for sale and held to maturity.  The average
balance and average yield on investment securities is based on the fair value of
securities  available  for sale and the  amortized  cost of  securities  held to
maturity.  The average balance of loans receivable  includes  delinquent  loans,


                                       8
<PAGE>
which are not considered significant. The average balance of equity includes the
net unrealized gain on available for sale  securities.  The following table does
not reflect any effect of income taxes.





                                       9
<PAGE>
<TABLE>
<CAPTION>
IBL Bancorp, Inc.
Average Balances, Net Interest Income, Yields Earned and Rates Paid

                                                                           Year Ended                           Year Ended  
                                                                        December 31, 1998                    December 31, 1997
                                                              Average                  Average     Average                  Average 
                                                              Balance       Interest     Rate      Balance     Interest       Rate  
                                                              -------       --------     ----      -------     --------       ----  
                                                                                       (Dollars in Thousands)
<S>                                                          <C>            <C>          <C>        <C>        <C>            <C> 
Interest-earning Assets:
  Loans receivable (2)                                       $ 16,611       $ 1,407      8.47%      $ 15,735   $ 1,346        8.55% 
  Mortgage-backed securities                                    3,788           223      5.89%         4,176       258        6.18% 
  FHLB stock and other investment securities                      224            13      5.80%           367        22        5.99% 
  Interest-bearing deposits                                     2,265            93      4.11%          1519        65        4.28%
                                                             --------       -------      ----       --------   -------        ----  
    Total interest-earning assets                              22,888         1,736      7.58%        21,797     1,691        7.76% 
Non-interest earning assets                                       340                                    253   
                                                             --------                               --------                      
      Total assets                                           $ 23,228                               $ 22,050                        
                                                             ========                               ======== 
                        
INTEREST-BEARING LIABILITIES                                                                                                        
Interest-bearing Liabilities:                                                                                                       
  Deposits (4)                                               $ 20,556       $   898      4.37%      $ 20,154   $   910        4.52% 
  FHLB advances                                                   293            17      5.80%           138         7        5.07% 
                                                             --------       -------      ----       --------   -------        ----  
    Total interest-bearing liabilities                         20,849           915      4.39%        20,292       917        4.52% 
                                                                            -------                            ------- 
Non-interest bearing liabilities                                  221                                    216 
                                                             --------                               --------                        
      Total liabilities                                        21,070                                 20,508                        
Equity                                                          2,158                                  1,542                        
      Total liabilities and equity                           $ 23,228                               $ 22,050                        
                                                             ========                               ========                        
Net interest income / average interest rate spread                          $   821      3.19%                 $   774        3.24% 
                                                                            =======      ====                  =======        ====
Net interest margin (5)                                                                  3.59%                                3.55% 
                                                                                         ====                                 ====  
Interest-earning assets to interest-bearing liabilities        109.78%                                107.42%                       
                                                             ========                               ========  
</TABLE>

(continued)
                                       10
<PAGE>
<TABLE>
<CAPTION>
IBL Bancorp, Inc.
Average Balances, Net Interest Income, Yields Earned and Rates Paid

                                                                           Year Ended              
                                                                        December 31, 1996          
                                                              Average                  Average     
                                                              Balance       Interest     Rate      
                                                              -------       --------     ----      
                                                                  (Dollars in Thousands)
<S>                                                          <C>            <C>          <C>       
Interest-earning Assets:
  Loans receivable (2)                                       $ 14,727       $ 1,269      8.62%     
  Mortgage-backed securities                                    4,282           259      6.05%     
  FHLB stock and other investment securities                      478            32      6.69%     
  Interest-bearing deposits                                     1,815            85      4.68%     
                                                             --------       -------      ----      
    Total interest-earning assets                              21,302         1,645      7.72%     
Non-interest earning assets                                       316                              
                                                             --------                              
      Total assets                                           $ 21,618                              
                                                             ========                              
                        
INTEREST-BEARING LIABILITIES                                                                       
Interest-bearing Liabilities:                                                                      
  Deposits (4)                                               $ 19,974       $   908      4.55%     
  FHLB advances                                                                          0.00%     
                                                             --------       -------      ----      
    Total interest-bearing liabilities                         19,974           908      4.55%     
                                                                            -------                
Non-interest bearing liabilities                                  180                              
                                                             --------                              
      Total liabilities                                        20,154                              
Equity                                                          1,464                              
      Total liabilities and equity                           $ 21,618                              
                                                             ========                              
Net interest income / average interest rate spread                          $   737      3.17%     
                                                                            =======      ====      
Net interest margin (5)                                                                  3.46%     
                                                                                         ====      
Interest-earning assets to interest-bearing liabilities        106.65%                             
                                                             ========                              
</TABLE>

(1)  At December 31, 1998,  the weighted  average  yields  earned and rates paid
     were as follows:  loans  receivable,  7.98%;  mortgage  backed  securities,
     5.76%;  investment  securities,  5.80%;  other  interest-bearing  deposits,
     4.69%;  total  interest  earning  assets,  7.33%;  deposits,   4.75%;  FHLB
     advances,  4.61%; total interest bearing  liabilities,  4.75%; and, average
     interest rate spread, 2.58%.
(2)  Includes non-accruing loans.
(3)  Includes FHLB stock.
(4)  Includes noninterest-bearing checking accounts.
(5)  equals net interest income divided by average interest-earning assets.


                                       10

<PAGE>

Comparison of Financial Condition at December 31, 1998 and December 31, 1997

         Total assets  increased  $1.5 million,  or 6.6%,  from $22.4 million at
December 31, 1997 to $23.9 million at December 31, 1998.

         Loans receivable  increased slightly from December 31, 1997 to December
31, 1998 as  originations  exceeded  repayments for the period by  approximately
$888,000.  Our market area has  experienced an increase in refinancing  activity
during this  period.  While the  proceeds  from the  conversion  initially  were
invested in  short-term  investment  securities,  over time we expect to use the
proceeds to increase our loans receivable.

         Investment securities decreased from December 31, 1997, to December 31,
1998, by $773,000 due to the repayment of principal and the premium amortization
in the  amount  of $1.3  million.  During  the year we  purchased  $559,000  new
mortgage-backed securities.

         Total  deposits  decreased by $100,000 from $20 million at December 31,
1997 to $19.9  million at December 31, 1998.  The decrease was  primarily due to
existing  customers  using their savings  accounts to purchase  stock during the
conversion.

         Our equity increased $1,741,000 from $1,642,000 at December 31, 1997 to
$3,383,000 at December 31, 1998.  The increase was due to $195,000 of net income
and $1,546,000 net proceeds from the conversion.

Comparison of Results  of Operations for the Years Ended December 31, 1998, 1997
and 1996

         Net income was $195,000 for the year ended  December 31, 1998  compared
to $164,000 for the year ended  December 31, 1997 and $77,000 for the year ended
December 31, 1996.  The lower net income in 1996 was primarily  attributable  to
the special  assessment paid to the SAIF of $123,000 ($75,000 after taxes).  Net
income for 1998 resulted in a return on average  assets of .84% compared to .74%
and .04% for 1997 and 1996, respectively.

         Interest Income: Interest income totaled $1.7 million, $1.7 million and
$1.6 million for the years ended December 31, 1998, 1997 and 1996, respectively.
The  average  yield  on  interest-earning  assets  in 1996 was  7.7%,  increased
slightly in 1997 to 7.8% and decreased  slightly to 7.6% in 1998 due to a slight
decrease in market  interest  rates for investment  securities.  The increase in
1997  was  due to an  overall  increase  in the  market  interest  rates  in all
categories of  interest-earning  assets. The average balance of interest-earning
assets increased $1.1 million in 1998 and $400,000 in 1997.

         Our primary source of interest  income for the three-year  period ended
December  31,  1998  was from  loans  receivable.  Interest  income  from  loans
receivable  was $1.4 million,  $1.3 million and $1.2 million for the years ended
December 31, 1998, 1997 and 1996,  respectively.  


                                       11
<PAGE>
The average balances of loans receivable also increased during the period with a
$876,000  increase  in 1998,  a $1.1  million  increase  in 1997 and a  $678,000
increase in 1996 due to increase loan demand in our market area. Interest income
on investment  securities  decreased in 1998 by $16,000 due to a slight decrease
in average  rates,  and  decreased  in 1997 by $31,000  due to a decrease in the
average balance of $513,000.

         Interest Expense: Interest on deposits decreased by $11,350 or 1.25% in
1998 after increasing by $2,000 or .02% in 1997 compared to the respective prior
periods.  The  decrease in 1998 was due to a decline in the average rate paid to
4.39% from 4.52% and to a $127,000 or .6% decline in the  average  balance.  The
average rate paid also declined in 1997  compared to 1996,  but this decline was
offset by a $180,000 or .9% increase in the average balance. The average balance
of lower rate  passbooks and NOW accounts has increased  during 1998,  while the
average  balance of money market deposit  accounts and  certificates of deposits
has generally declined.

         Interest  on  advances  from the Federal  Home Loan Bank  increased  by
$9,700 or 138% over 1997 due to the fact the  Association  utilized  advances in
1998 to purchase  mortgage-backed  securities  and  certificates  of deposits in
other financial institutions. No borrowed money in 1996 was used.

         Net Interest  Income:  Net interest  income was $821,000,  $774,000 and
$737,000 for the years ended December 31, 1998, 1997 and 1996, respectively. The
increases in net interest income reflect an increase in our interest rate spread
from  3.17% for 1996 to 3.24% for 1997 and to 3.19%  for  1998,  coupled  with a
slight increase in average interest-earning assets over average interest-bearing
liabilities  each year. Our net interest  margin was 3.59%,  3.55% and 3.46% for
the years ended December 31, 1998, 1997 and 1996.

         Provisions  for Loan  Losses:  The net  provision  for loan  losses was
$21,000 in 1998,  which  increased  our allowance for loan losses to $412,000 or
2.3% of the loan  portfolio.  In 1997,  the net  provision  for loan  losses was
$42,000,  which  increased  our allowance for loan losses to $404,000 or 2.4% of
the loan  portfolio and in 1996,  the provision was $39,000 which  increased our
allowance  for loan  losses  to  $362,000  or 2.4% of the loan  portfolio.  With
non-performing  assets at  December  31,  1998,  1997 and 1996  being  $241,000,
$332,000 and $270,000,  our analysis of the provision for loan losses led to the
conclusion  that the allowance for loan losses was sufficient to meet the modest
charge-off and the current asset quality of the loan portfolio.

         Noninterest Income: Noninterest income for the years ended December 31,
1998,  1997  and  1996  was  $101,000,   $98,000  and  $131,000,   respectively.
Noninterest  income  consisted  primarily  of customer  service  fees related to
customers'  deposit  accounts  and  loan  service  charges.  Noninterest  income
decreased from 1996 to 1997  primarily due to the  disposition of the investment
in a captive life insurance company in 1996.

         Noninterest  Expense:  Noninterest expense for the years ended December
31, 1998, 1997 and 1996 was $604,000, $568,000 and $703,000,  respectively.  The
decrease in  noninterest  expense in 1997 was  primarily due to the special SAIF
assessment  paid in 1996.  Excluding  the 


                                       12
<PAGE>
effects  of such  one-time  assessment,  total  noninterest  expense  would have
decreased  by  $12,000  or 2.1% in  1997  compared  to  1996,  primarily  due to
decreases  in regular  deposit  insurance  premiums  and in  professional,  data
processing and other  miscellaneous  expenses partially offset by an increase in
compensation and benefits expense.  The increase in noninterest  expense in 1998
was $36,000 or 6.3% over 1997,  primarily due to an increase in compensation and
benefits,  data  processing,  office  supplies  and postage and other  expenses.
Compensation and benefits were higher because of overall wage increases, as well
as the  addition of a part-time  employee  and  increased  benefit  costs.  Data
processing increased due to $4,500 costs for a year 2000 test and an increase in
monthly service  charges.  Office  supplies and postage  increased by $6,000 due
primarily  to an  increase  in  mailing  due to the  conversion  and  additional
supplies used during the conversion.  Other expenses  increased by $6,000 due to
an increase in employee  expense by $2,600 due to the employees  attending  more
seminars,  increase in telephone expense by $1,300,  increase in loan expense by
$1,100 and an increase in supervisory examination by $1,000.

         Our   operating   efficiency,   measured  by  our   efficiency   ratios
(noninterest expense divided by the total of net interest income and noninterest
income),  was 65.5%, 65.1% and 86.0% for the years ended December 31, 1998, 1997
and 1996,  respectively.  The higher operating efficiency ratio for 1996 was due
to the inclusion of the special  assessment for deposit insurance in noninterest
expense of $123,000.  Excluding this special assessment,  our adjusted operating
efficiency  ratio  for 1996  would  have  been  66.8%.  The  adjusted  ratios of
noninterest  expense to average total assets ratio  (excluding  the SAIF special
assessment) were 2.6%, 2.6% and 2.7% for the years ended December 31, 1998, 1997
and 1996, respectively.  We expect our noninterest expenses for compensation and
other operating  expenses will increase,  particularly  when the ESOP expense is
recognized for a full year and if our holding company's  management  recognition
plan is implemented.

         Income Taxes: Our effective tax rate varied for each of the three years
ended  December 31, 1998.  Our  effective  tax rate was 34%, 37% and 56% for the
years ended December 31, 1998, 1997 and 1996,  respectively.  The 1996 effective
tax rate was higher than  anticipated  primarily due to the effect of changes in
the methods required to be used to calculate bad debt tax deductions. See Note J
of the Notes to Consolidated Financial Statements.

Sources of Capital and Liquidity

         We have  historically  maintained  substantial  levels of capital.  The
assessment  of capital  adequacy  depends on several  factors,  including  asset
quality, earnings trends, liquidity and economic conditions. We seek to maintain
high levels of regulatory capital to give us maximum flexibility in the changing
regulatory  environment  and to  respond  to  changes  in  market  and  economic
conditions.  These  levels of  capital  have been  achieved  through  consistent
earnings enhanced by low levels of noninterest  expense and have been maintained
at those high  levels as a result of our  policy of  moderate  growth  generally
confined to our market  area.  At December  31,  1998,  we exceeded  all current
regulatory capital  requirements and met the definition of a  "well-capitalized"
institution. See Note O of the Notes to Consolidated Financial Statements.

         The primary business of our holding company is holding the stock of the
Association.  The net proceeds of the Conversion retained by our holding company
on September 30, 1998 


                                       13
<PAGE>
have provided sufficient funds for its initial operations. Our holding company's
primary  sources  of  liquidity  in the  future  will be  dividends  paid by the
Association,  repayment  of  the  ESOP  loan  and  income  from  investments  in
securities  and  other  financial  institutions.   We  are  subject  to  certain
regulatory  limitations  with respect to the payment of dividends to our holding
company.

         We are required to maintain  minimum levels of liquid assets as defined
by OTS regulations.  This requirement,  which may be varied at the discretion of
the OTS depending on economic  conditions and deposit outflows,  is based upon a
percentage of deposits and, if any, short-term borrowings. At December 31, 1998,
current OTS  regulations  required that a savings  institution  maintain  liquid
assets of not less than 4% of its  average  daily  balance  of net  withdrawable
deposit accounts and borrowings payable in one year or less, of which short-term
liquid  assets  must  consist of not less than 1%. At  December  31,  1998,  our
liquidity,  as measured for regulatory  purposes,  was 17.46% or $2.7 million in
excess of the minimum  OTS  liquidity  requirement  of 4%. We seek to maintain a
relatively  high level of liquidity in order to retain  flexibility  in terms of
lending and investment  opportunities and deposit pricing,  and in order to meet
funding needs of deposit outflows and loan  commitments.  Historically,  we have
been able to meet our liquidity demands through internal sources of funding.

         Deposits  are our  primary  source  of  funds  for  lending  and  other
investment  purposes.  In addition to deposits,  we derive funds from payment of
principal  and  interest on loans and  investment  securities.  While  scheduled
principal  and  interest  payments  on loans  and  investment  securities  are a
relatively  predictable  source of funds,  deposit flows and loan and investment
securities  prepayments  are  greatly  influenced  by  general  interest  rates,
economic  conditions,  competition and other factors. We do not solicit deposits
outside of our market area through brokers or other financial institutions.

         We have also  designated  certain  securities  as available for sale in
order to meet  liquidity  demands.  At  December  31,  1998,  we had  designated
securities  with a fair value of $1.8 million as available for sale. In addition
to internal sources of funding, we are a member of the Federal Home Loan Bank of
Dallas and have substantial  borrowing authority with the Federal Home Loan Bank
of Dallas. Our use of a particular source of funds is based on need, comparative
total costs and availability.

         At December  31, 1998,  we had  outstanding  approximately  $442,000 in
commitments to originate loans and unused lines of credit. At the same date, the
total amount of  certificates  of deposit which were  scheduled to mature in one
year or less was $9.7 million. We anticipate that we will have resources to meet
our current  commitments  through  internal  funding  sources  described  above.
Historically,  we have been able to retain a significant  amount of our deposits
as they mature.



                                       14
<PAGE>
Impact of Inflation and Changing Prices

         The financial  statements and related notes appearing elsewhere in this
report have been  prepared in  accordance  with  generally  accepted  accounting
principles,  which require the  measurement of financial  position and operating
results in terms of historical  dollars  without  considering  the change in the
relative purchasing power of money over time due to inflation.  Virtually all of
our assets and liabilities are monetary. As a result,  changes in interest rates
have a greater impact on our  performance  than do the effects of general levels
of inflation. Interest rates do not necessarily move in the same direction or to
the same extent as the prices of goods and services.

Impact of New Accounting Standards

         The following are recently  issued  accounting  standards which we have
yet to adopt. For information  about recent  accounting  standards which we have
adopted, see the Notes to Consolidated Financial Statements in this report.

         The  Statement of Financial  Accounting  Standards  No. 133 (SFAS 133),
Accounting of Derivative  Instruments and Hedging Activities,  which establishes
additional  accounting  and  reporting  standards  for  derivative   instruments
embedded in other contracts and hedging activities. We do not currently have any
financial  instruments  that meet the  standard's  definition  of a  derivative.
Consequently,  the provisions of this  pronouncement  will not materially affect
our consolidated financial position or results of operations.





                                       15


<PAGE>
                    [LETTERHEAD L.A. CHAMPAGNE & CO., L.L.P.

                          INDEPENDENT AUDITOR'S REPORT


     Shareholders and Directors
      IBL Bancorp, Inc.

     We have  audited the  accompanying  consolidated  statements  of  financial
     condition  of IBL  Bancorp,  Inc.  and  its  wholly-owned  subsidiary,  The
     Iberville Building and Loan Association,  as of December 31, 1998 and 1997,
     and the related consolidated statements of income and comprehensive income,
     changes in  shareholders'equity,  and cash flows for the years then  ended.
     These  financial   statements  are  the  responsibility  of  the  Bancorp's
     management.  Our responsibility is to express an opinion on these financial
     statements based on our audits.

     We conducted  our audits in accordance  with  generally  accepted  auditing
     standards.  Those  standards  require that we plan and perform the audit to
     obtain reasonable assurance about whether the financial statements are free
     of material  misstatement.  An audit includes  examining,  on a test basis,
     evidence   supporting   the  amounts  and   disclosures  in  the  financial
     statements. An audit also includes assessing the accounting principles used
     and  significant  estimates made by  management,  as well as evaluating the
     overall  financial  statement  presentation.  We  believe  that our  audits
     provide a reasonable basis for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
     in all  material  respects,  the  consolidated  financial  position  of IBL
     Bancorp, Inc. and its wholly-owned  subsidiary,  The Iberville Building and
     Loan Association as of December 31, 1998 and 1997, and the results of their
     operations and their cash flows for the years then ended in conformity with
     generally accepted accounting principles.

     As discussed in Notes A and S, IBL Bancorp,  Inc. was formed in 1998 as the
     holding company for The Iberville  Building and Loan Association  which was
     acquired  by the  Bancorp  under  a plan  for  business  reorganization  of
     entities under common control  carried out in a manner similar to a pooling
     of interest.  The accompanying  financial  statements for 1998 are based on
     the assumption that the Bancorp and the  Association  were combined for the
     full year,  and the 1997  financial  statements  have been restated to give
     effect  to the  combination.  


                                       16
<PAGE>
     As discussed in Note P, the 1997 financial statements have been restated to
     present  comprehensive income as required under the provisions of Statement
     of Financial Accounting Standards No. 130, Reporting  Comprehensive Income.
     The financial  statements have also been restated to reflect adjustments in
     the  computation  of  deferred  income  taxes,  and to include  information
     regarding the fair value of financial  instruments as required by Statement
     of Financial  Accounting Standards No. 107, Disclosures About Fair Value of
     Financial Instruments.


     /s/L.A. Champagne & Co., L.L.P.
     -------------------------------
     L.A. Champagne & Co., L.L.P.
     January 13, 1999






                                       17

<PAGE>
<TABLE>
<CAPTION>
                                                     IBL BANCORP, INC.
                                      CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                                December 31, 1998 and 1997
                                                                                                          1997
                                                                                                       (Restated -
                                                                                 1998                    Note P)
                                                                             ------------            ------------ 
<S>                                                                          <C>                     <C>      
ASSETS
Cash and amounts due from depository institutions.............               $    177,068            $    142,714
Interest-bearing deposits in other institutions...............                  1,681,430                 967,494 
                                                                             ------------            ------------ 
  Total cash..................................................                  1,858,498               1,110,208 
                                                                             ------------            ------------ 
Time deposits.................................................                    795,000                      - 
                                                                             ------------            ------------ 
Investment securities held-to-maturity (estimated market
 value $15,085 in 1997)......................................                           -                  15,152
Mortgage-backed securities held-to-maturity (estimated
 market value $2,116,824 and $2,374,282)......................                  2,122,507               2,385,948
Mortgage-backed securities available-for-sale (amortized
 cost $1,454,057 and $1,943,217)..............................                  1,453,613               1,947,685 
                                                                             ------------            ------------ 
  Total investment securities.................................                  3,576,120               4,348,785 
                                                                             ------------            ------------ 
Loans receivable..............................................                 17,620,600              16,722,127
Less allowance for loan losses................................                    411,621                 403,768 
                                                                             ------------            ------------ 
  Loans receivable, net.......................................                 17,208,979              16,318,359 
                                                                             ------------            ------------ 
Premises and equipment, net...................................                    154,179                 163,330
Federal Home Loan Bank stock, at cost.........................                    170,800                 363,100
Accrued interest receivable...................................                     74,242                  80,394
Other assets..................................................                     40,200                  10,822 
                                                                             ------------            ------------ 
  Total assets.................................................              $ 23,878,018            $ 22,394,998 
                                                                             ============            ============ 
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                     IBL BANCORP, INC.
                                      CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                                December 31, 1998 and 1997
                                                                                                          1997
                                                                                                       (Restated -
                                                                                 1998                    Note P)
                                                                             ------------            ------------ 
<S>                                                                          <C>                     <C>      
LIABILITIES AND EQUITY
Deposits......................................................               $ 19,898,684            $ 20,026,417
Advances from Federal Home Loan Bank..........................                    495,000                 610,000
Advances by borrowers for taxes and insurance.................                     12,781                  15,004
Federal income taxes payable..................................                     39,388                  47,657
Other liabilities and deferrals...............................                     49,570                  73,960 
                                                                             ------------            ------------ 
  Total liabilities............................................                20,495,423              20,773,038 
                                                                             ------------            ------------ 
Commitments and contingencies.................................                          -                       - 
                                                                             ------------            ------------ 
Preferred stock $.01 par, 2,000,000 shares authorized.........                          -                       -
Common stock - $.01 par, 5,000,000 shares authorized,
 210,870 shares issued .......................................                      2,109                       -
Additional paid-in capital....................................                  1,740,254                       -
Unearned ESOP shares..........................................                   (165,971)                      -
Retained earnings - substantially restricted..................                  1,806,496               1,619,011
Accumulated other comprehensive income (loss).................                       (293)                  2,949 
                                                                             ------------            ------------ 
  Total equity................................................                  3,382,595               1,621,960 
                                                                             ------------            ------------ 
  Total liabilities and equity................................               $ 23,878,018            $ 22,394,998 
                                                                             ============            ============ 
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                      - 18 -
<PAGE>
<TABLE>
<CAPTION>
                                                     IBL BANCORP, INC.
                                             CONSOLIDATED STATEMENTS OF INCOME
                                                 AND COMPREHENSIVE INCOME
                                          Years ended December 31, 1998 and 1997

                                                                                               1997
                                                                                             Restated -
                                                                              1998             Note P)
                                                                           -----------      -----------
<S>                                                                        <C>              <C>        
INTEREST INCOME
Loans....................................................                  $ 1,407,096      $ 1,346,487
Mortgage-backed securities...............................                      223,105          258,333
FHLB stock and other securities..........................                       13,353           20,880
Deposits.................................................                       92,613           65,009
                                                                           -----------      -----------
  Total interest income..................................                    1,736,167        1,690,709 
                                                                           -----------      -----------
INTEREST EXPENSE
Deposits
 Interest-bearing demand deposit accounts................                       87,811           69,005
 Passbook savings accounts...............................                      103,940           90,325
 Certificate of deposit accounts.........................                      706,649          750,420
                                                                           -----------      -----------
  Total interest on deposits.............................                      898,400          909,750
Advances from Federal Home Loan Bank.....................                       16,700            7,003
                                                                           -----------      ----------- 
  Total interest expense.................................                      915,100          916,753 
                                                                           -----------      -----------
  Net interest income....................................                      821,067          773,956
Provision for losses on loans............................                       20,926           42,147 
                                                                           -----------      -----------
NET INTEREST INCOME AFTER PROVISION FOR
 LOSSES ON LOANS.........................................                      800,141          731,809
                                                                           -----------      -----------
NON-INTEREST INCOME
Service charges on deposit accounts......................                       86,834           70,888
Other....................................................                       14,023           27,135 
                                                                           -----------      -----------
  Total non-interest income..............................                      100,857           98,023
                                                                           -----------      -----------
NON-INTEREST EXPENSES
Compensation and benefits................................                      332,770          316,209
Occupancy ...............................................                       27,662           32,133
Furniture and equipment .................................                       26,896           26,822
Deposit insurance premium................................                       12,323           10,347
Data processing..........................................                       70,946           57,305
Legal and other professional.............................                       17,289           24,105
Advertising..............................................                       15,720           12,340
Office supplies and postage..............................                       31,518           25,763
Other general and administrative.........................                       68,825           62,930 
                                                                           -----------      -----------
  Total non-interest expenses............................                      603,949          567,954 
                                                                           -----------      -----------
</TABLE>
Continued
                                      - 19 -
<PAGE>
<TABLE>
<CAPTION>
                                                                                               1997
                                                                                             Restated -
                                                                              1998             Note P)
                                                                             ---------        --------- 
<S>                                                                          <C>              <C>        
INCOME BEFORE PROVISION FOR INCOME TAXES.................                    $ 297,049        $ 261,878
PROVISION FOR INCOME TAXES...............................                      101,656           98,134 
                                                                             ---------        --------- 
NET INCOME...............................................                    $ 195,393        $ 163,744 
                                                                             =========        ========= 
Basic earnings per share.................................                    $    1.01        $       - 
                                                                             =========        ========= 
COMPREHENSIVE INCOME
Net income...............................................                    $ 195,393        $ 163,744
Other comprehensive income
  Unrealized holding gains (losses) on
   securities arising during the period..................                       (4,912)           6,745
  Income tax expense (benefit) related to
   unrealized holding gains (losses).....................                       (1,670)           2,463
                                                                             ---------        --------- 

Other comprehensive income (loss), net of                  
  tax effects............................................                       (3,242)           4,282 
                                                                             ---------        --------- 

Comprehensive income.....................................                    $ 192,151        $ 168,026 
                                                                             =========        ========= 
</TABLE>

The accompanying notes are an integral part of these financial statements


                                      - 20 -
<PAGE>
<TABLE>
<CAPTION>
                                                IBL BANCORP, INC.
                            CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                     Years ended December 31, 1998 and 1997


                                                                                                    Retained        
                                                                                                    Earnings        
                                                                Additional          Unearned        Substan-        
                                                  Common         Paid  In             ESOP            tially        
                                                  Stock           Capital            Shares         Restricted      
                                                ---------       -----------         ----------      -----------     
<S>                                              <C>            <C>                <C>              <C>                 
BALANCE, DECEMBER 31, 1996, AS PREVIOUSLY
 REPORTED................................        $      -       $         -        $         -      $ 1,477,100         
Prior period adjustment..................               -                 -                  -          (21,833)        
                                                ---------       -----------         ----------      -----------         

BALANCE, DECEMBER 31, 1996, AS RESTATED..               -                 -                  -        1,455,267         
COMPREHENSIVE INCOME

Net income, as restated..................               -                 -                  -          163,744         
Other comprehensive income, net of tax
  Unrealized losses on securities........               -                 -                  -                -         
                                                ---------       -----------         ----------      -----------         

BALANCE, DECEMBER 31, 1997 (RESTATED)....       $       -       $         -         $        -      $ 1,619,011  
                                                =========       ===========         ===========     ===========
BALANCE, DECEMBER 31, 1997 AS PREVIOUSLY                                                         
 REPORTED................................       $       -       $         -         $        -      $ 1,638,709  

Prior period adjustment..................               -                 -                  -          (19,698) 
                                                ---------       -----------         ----------      -----------  

BALANCE, DECEMBER 31, 1997, AS RESTATED..               -                 -                  -        1,619,011  
                                                =========       ===========         ===========     ===========  
COMPREHENSIVE INCOME
Net income...............................               -                 -                  -          195,393
Other comprehensive income, net of tax
  Unrealized losses on securities........               -                 -                  -                -  
                                                ---------       -----------         ----------      -----------  
  Comprehensive income...................                                                             1,814,404  
Issuance of common stock.................           2,109         1,740,254                  -                -  
Acquisition of unearned ESOP shares......               -                 -           (168,690)               -  
ESOP shares released for allocation......               -                 -              2,719                -  
Dividends................................               -                 -                  -           (7,908) 
                                                ---------       -----------         ----------      -----------  
BALANCE, DECEMBER 31, 1998...............       $   2,109       $ 1,740,254         $ (165,971)     $ 1,806,496  
                                                =========       ===========         ===========     ===========  
</TABLE>
<PAGE>
<TABLE>      
<CAPTION>
                                                Accumulated                  
                                                   Other                     
                                                  Compre-                    
                                                  hensive          Total       
                                                  Income          Equity      
                                                 --------       -----------   
<S>                                              <C>            <C>                                                  
BALANCE, DECEMBER 31, 1996, AS PREVIOUSLY   
 REPORTED................................        $ (1,333)      $ 1,475,767              
Prior period adjustment..................               -           (21,833)                                  
                                                 --------       -----------     
                                                                                
BALANCE, DECEMBER 31, 1996, AS RESTATED..          (1,333)        1,453,934     
COMPREHENSIVE INCOME                                                            
                                                                                
Net income, as restated..................               -           163,744     
Other comprehensive income, net of tax                                          
  Unrealized losses on securities........           4,282             4,282     
                                                 --------       -----------     
                                                                                
BALANCE, DECEMBER 31, 1997 (RESTATED)....         $ 2,949       $ 1,621,960    
                                                 ========       ===========     
 
BALANCE, DECEMBER 31, 1997 AS PREVIOUSLY                                        
 REPORTED................................         $ 2,949       $ 1,641,658     
                                                                                
Prior period adjustment..................               -           (19,698)    
                                                 --------       -----------     
                                                                                
BALANCE, DECEMBER 31, 1997, AS RESTATED..           2,949         1,621,960     
COMPREHENSIVE INCOME                                                            
Net income...............................               -           195,393     
Other comprehensive income, net of tax                                          
  Unrealized losses on securities........          (3,242)           (3,242)   
                                                 --------       -----------      
  Comprehensive income...................            (293)        1,814,111     
Issuance of common stock.................               -         1,742,363     
Acquisition of unearned ESOP shares......               -          (168,690)    
ESOP shares released for allocation......               -             2,719     
Dividends................................               -            (7,908)    
                                                 --------       -----------     
BALANCE, DECEMBER 31, 1998...............        $   (293)      $ 3,382,595     
                                                 ========       ===========     
                                                 
                                                 
                                                
</TABLE>


The accompanying notes are an integral part of these financial statements.

                                       21
<PAGE>
<TABLE>
<CAPTION>
                                               IBL BANCORP, INC.
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     Years ended December 31, 1998 and 1997
                                                                                                        1997
                                                                                                    (Restated -
                                                                                    1998               Note P)
                                                                               -----------          -----------
<S>                                                                            <C>                  <C>        
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ...........................................................         $   195,393          $   163,744
                                                                               -----------          -----------
Adjustments to reconcile net income to
 net cash provided by operating activities:
  Depreciation .......................................................              22,394               23,031
  Provision for loan losses ..........................................              20,925               42,147
  ESOP contribution ..................................................               2,719                    -
  Provision for deferred federal income tax (tax credit) .............             (36,354)                (432)
  Amortization of net premium on investment and mortgage
   backed securities .................................................              27,604               18,106
  Net discount charged on installment loans ..........................              40,692               28,265
  Net loan fees deferred .............................................               1,865                1,975
  Deferred profit recognized on sale of real estate ..................                 (85)                 (76)
  Stock dividends from Federal Home Loan Bank ........................             (12,700)             (20,700)
  Net decrease (increase) in interest receivable .....................               6,152               (3,126)
  Net decrease (increase) in other assets ............................              (7,734)              22,599
  Net increase (decrease) in interest payable ........................               4,704              (10,998)
  Net increase (decrease) in  income taxes payable ...................              (8,269)              47,657
  Net increase (decrease) in other liabilities .......................             (15,833)              16,548
                                                                               -----------          -----------
    Total adjustments ................................................              46,080              164,996
                                                                               -----------          -----------

Net cash provided by operating activities ............................             241,473              328,740
                                                                               -----------          -----------

CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans receivable .....................................            (954,102)          (1,196,543)
Purchases of securities availableforsale .............................            (119,776)            (762,465)
Principal payments received on mortgagebacked securities
 available-for-sale ..................................................             593,732              242,415
Purchases of securities heldtomaturity ...............................            (438,975)            (154,850)
Maturity of U.S. Government obligation ...............................              15,152                    -
Proceeds from sale of Federal Home Loan Bank stock ...................             205,000                    -
Principal payments received on mortgagebacked securities
 held-to-maturity ....................................................             690,016              491,701
Purchases of office property and equipment ...........................             (13,243)             (14,705)
Certificates of deposits acquired ....................................            (795,000)                   -
                                                                               -----------          -----------

Net cash used in investing activities ................................            (817,196)          (1,394,447)
                                                                               -----------          -----------

</TABLE>
Continued . . .
                                       22

<PAGE>
<TABLE>
<CAPTION>
                                                                                                        1997
                                                                                                     (Restated -
                                                                                    1998                Note P)
                                                                               -----------          -----------
<S>                                                                            <C>                  <C>        
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in deposit accounts..............................                 $   (132,437)        $  (240,909)
Net decrease in advances by borrowers for taxes
 and insurance................................................                       (2,223)             (1,676)
Advances from Federal Home Loan Bank..........................                      495,000             695,000
Repayment of advances from Federal Home Loan Bank.............                     (610,000)            (85,000)
Net proceeds from sale of common stock........................                    1,573,673                   -  
                                                                               ------------         ----------- 

Net cash provided by financing activities.....................                    1,324,013             367,415
                                                                               ------------         ----------- 
                                                                                                    

NET INCREASE (DECREASE) IN CASH...............................                      748,290            (698,292)
Cash-beginning of year........................................                    1,110,208           1,808,500
                                                                               ------------         ----------- 
Cash-end of year..............................................                 $  1,858,498         $ 1,110,208
                                                                               ============         ===========

</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       23
<PAGE>
                                IBL BANCORP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1998


A:       SIGNIFICANT ACCOUNTING POLICIES

         Nature of operations
         IBL Bancorp,  Inc.(Bancorp) was organized as a Louisiana corporation on
         June 16, 1998. The Bancorp was essentially inactive until September 30,
         1998,  when it acquired The  Iberville  Building  and Loan  Association
         (Association)  under a plan for  business  reorganization  of  entities
         under common  control  carried out in a manner  similar to a pooling of
         interest.  The  Association  became a wholly  owned  subsidiary  of the
         Bancorp through the exchange of all of its stock then outstanding.  The
         accompanying  financial statements for 1998 are based on the assumption
         that the Bancorp and the  Association  were combined for the full year,
         and the financial  statements of prior years have been restated to give
         effect to the combination.

         The  Association  is a  state  chartered  financial  institution  whose
         deposits  are  insured by the  Federal  Deposit  Insurance  Corporation
         (FDIC). It is subject to regulation of the Office of the Comptroller of
         the  Currency,  the  Office of Thrift  Supervision,  and the  Office of
         Financial  Institutions  for the State of  Louisiana.  The  Association
         provides a variety of banking  services to individuals  and businesses.
         Its primary deposit  products are demand  deposits and  certificates of
         deposit,  and its primary  lending  products  are real estate  mortgage
         loans.  The Association  primarily serves the parishes of Iberville and
         West  Baton  Rouge  from  its  only  office   location  in  Plaquemine,
         Louisiana.

         Principles of consolidation
         The accompanying consolidated financial statements include the accounts
         of the Bancorp and its wholly-owned  subsidiary,  the  Association.  In
         consolidation,   intercompany   accounts  and  transactions  have  been
         eliminated.

         Basis of financial statement presentation
         The accounting and reporting  policies  followed by the Bancorp and the
         Association  are  in  accordance  with  generally  accepted  accounting
         principles and conform to general practices within the savings and loan
         industry.  The more significant of the principles used in preparing the
         financial statements are briefly described below.

         Estimates
         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that  affect  the  reported  amounts  of  assets  and
         liabilities and disclosure of contingent  assets and liabilities at the
         date of the financial statements and the reported amounts of

                                      24
<PAGE>
 A:      SIGNIFICANT ACCOUNTING POLICIES (Continued)

         revenues and expenses during the reporting period. Actual results could
         differ from those estimates.

         Material  estimates  that are  particularly  susceptible to significant
         change relate to the determination of the allowance for losses on loans
         and real estate owned. A majority of the  Association's  loan portfolio
         consists of single-family residential loans in Iberville and West Baton
         Rouge parishes. The ultimate collectibility of a substantial portion of
         the  Association's  loan  portfolio is  susceptible to changes in local
         economic conditions.

         While  management  uses available  information  to recognize  losses on
         loans,  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  Association's  allowances for losses on loans and foreclosed  real
         estate.   Such  agencies  may  require  the  Association  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,  management's  estimate of credit losses  inherent in the loan
         portfolio  and the  related  allowance  may  change  in the near  term.
         However, the amount of the change that is reasonably possible cannot be
         estimated.

         Investment securities
         Trading securities - Debt securities and equity securities with readily
         determinable  fair values that are acquired with the intention of being
         resold in the near term are  classified as trading  securities  and are
         recorded at their fair values. Realized and unrealized gains and losses
         on trading account  securities are recognized in current earnings.  The
         Association   does  not  currently  hold  any  securities  for  trading
         purposes.

         Securities  held-to-maturity  - Debt  securities  which the Association
         both  positively  intends and has the  ability to hold to maturity  are
         reported at cost,  adjusted for  amortization of premiums and accretion
         of discounts  that are  recognized  in interest  income  using  methods
         approximating the interest method over the period to maturity.

         Securities  available-for-sale - Securities not meeting the criteria of
         either trading securities or securities held to maturity are classified
         as available for sale and carried at fair value.

         Unrealized   holding  gains  and  losses  for  these   securities   are
         recognized,  net of related tax  effects,  as a separate  component  of
         comprehensive income and equity.  Realized gains and losses on the sale
         of   securities    available-for-sale    are   determined   using   the
         specific-identification method based on original cost. The amortization
         of premiums and the accretion of discounts are recognized in

                                      25
<PAGE>
A:       SIGNIFICANT ACCOUNTING POLICIES (Continued)

         interest  income using methods  approximating  the interest method over
         the period to maturity.

         Declines  in  the  fair  value  of  individual   held-to-maturity   and
         available-for-sale  securities  below  their  cost that are other  than
         temporary  result in write-downs of the individual  securities to their
         fair  value.  The  related  write-downs  are  included  in  earnings as
         realized losses.

         Loans receivable
         Loans  receivable  are stated at unpaid  principal  balances,  less the
         allowance for loan losses, and net deferred loan-origination fees.

         Interest on consumer loans with maturities of sixty months or less made
         on a discount basis is recognized and included in interest income using
         the sum-of-the-months-digits method over the term of the loan. Interest
         on all  other  loans is  accrued  periodically  based on the  principal
         balance  outstanding.  Interest  accrued on such loans is  included  in
         accrued interest receivable.

         When, in the judgement of management, collection of accrued interest on
         a loan becomes doubtful, or when a loan becomes ninety days delinquent,
         further  accrual of interest income is suspended and the loan is placed
         on a  non-accrual  status.  Interest  accrued on such loans  during the
         current  year,  but  uncollected,   is  reversed  against   operations.
         Subsequent  payments  are  generally  applied to reduce  the  principal
         amount outstanding.

         Loans  determined to be impaired  under the  provisions of Statement of
         Accounting  Standards  (SFAS) No.  114,  Accounting  by  Creditors  for
         Impairment  of a Loan and SFAS No. 118,  Accounting  by  Creditors  for
         Impairment of a Loan - Income  Recognition  and Disclosures are carried
         at either the discounted present value of expected future cash flows or
         the  fair  value of  underlying  collateral  if the loan is  collateral
         dependent.  A loan is  considered  impaired  when it is  probable  that
         principal  and interest  will not be  collected  under the terms of the
         loan. All nonaccrual loans are considered  impaired.  The provisions of
         SFAS Nos. 114 and 118 do not apply to large  groups of smaller  balance
         homogeneous  loans  including  certain  smaller balance home equity and
         improvement  loans  and  other  consumer  loans  that are  collectively
         evaluated for impairment.  Losses on impaired loans are included in the
         allowance for loan losses.

         Allowance for losses
         It is the  Association's  policy to provide a valuation  allowance  for
         estimated losses on loans. Various factors including the composition of
         the  loan  portfolio,  past  loan  loss  experience,  current  economic
         conditions and a specific  provision for impaired loans provide a basis
         for management's determination of the amount of the valuation allowance
         for loan losses. Additions to the allowance

                                       26
<PAGE>
A:       SIGNIFICANT ACCOUNTING POLICIES (Continued)

         are charged  against  current  operations.  Loans or portions of loans,
         including  impaired loans,  deemed to be uncollectible  are charged off
         against the allowance for loan losses,  and subsequent  recoveries,  if
         any, are credited to the allowance.

         Loan origination fees
         Loan  origination  fees and certain  direct costs of  underwriting  and
         closing loans are deferred and amortized to income over the life of the
         related loans using the level yield method.

         Real estate acquired in settlement of loans
         Real estate acquired in settlement of loans is recorded at the lower of
         cost,  that is, the balance of the loan, or its estimated fair value on
         the date acquired.  Capital  improvements made thereafter to facilitate
         sale are  added to the  carrying  value,  and  adjustments  are made to
         reflect  declines,  if any, in net realizable values below the recorded
         amounts.  Costs of holding real estate  acquired in settlement of loans
         are reflected in income  currently.  Gains and losses realized on sales
         of such real  estate  are  reflected  in  current  income  based on the
         property's initial recorded value plus capital improvements.

         When sales of real estate are  facilitated  by financing,  the adjusted
         sales price is determined to be the sum of the cash  proceeds,  if any,
         and the  discounted  present  value of the loan.  Gains and  losses are
         determined  with  reference  to  the  adjusted  sales  price,  and  are
         recognized currently except in certain circumstances when the cash paid
         in is deemed insufficient,  in which case, any gains resulting from the
         sale are deferred and recognized as the debt principal is recognized.

         Premises and equipment
         Premises  and   equipment   are  stated  at  cost,   less   accumulated
         depreciation.  Depreciation is computed on the  straight-line  basis or
         under  various  accelerated  methods  over  estimated  useful  lives as
         follows:

                  Office building........................... 30-40 years
                  Furniture, fixtures and equipment.........  5-10 years

         Costs of major additions are  capitalized  while repair and maintenance
         costs are charged to operations as incurred.

         Recognition of FHLB stock dividends
         In accordance with current industry practice,  stock dividends from the
         FHLB are  recorded  as income when  declared  based upon a par value of
         $100 per share for the number of shares issued.

                                       27
<PAGE>
A:       SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Income taxes
         Income taxes are provided for the tax effects of transactions  reported
         in the  financial  statements  and consist of taxes  currently due plus
         deferred taxes which are determined under the liability method.

         Deferred  taxes are related  primarily to the  differences  between the
         financial  and  income  tax bases of  certain  assets  and  liabilities
         including accumulated depreciation on premises and equipment,  deferred
         loan fees and costs,  interest  discount and accruals,  allowances  for
         losses on loans,  Federal Home Loan Bank stock,  and  deferred  gain on
         property  sales.  Deferred  tax assets and  liabilities  represent  the
         future tax return  consequences of those  differences which will either
         be taxable or deductible  when the assets and liabilities are recovered
         or settled.

         Cash flows
         Cash  consists  of cash and  interest-earning  deposits  due from other
         financial  institutions.  For purposes of the  statement of cash flows,
         the Association considers highly liquid deposits including certificates
         of deposits with  maturities of three months or less when  purchased to
         be  "cash."  All  other  deposits,   debt  securities  and  investments
         regardless of maturities  are classified as time deposits or investment
         securities.

         Off-balance-sheet financial instruments
         In  the  ordinary  course  of  business  the  Association  enters  into
         transactions  that  produce  off-balance-sheet   financial  instruments
         consisting of letters of credit and other commitments to extend credit.
         Such  financial  instruments  are recorded in the financial  statements
         when they are funded.

         Loan servicing
         None of the  Association's  loan  servicing  rights was obtained  after
         December 15, 1995. Consequently,  the cost of loan servicing rights has
         not been capitalized.

         Advertising
         The  Association  expenses  advertising  costs  as they  are  incurred.
         Advertising  expense is reflected  in the  accompanying  statements  of
         income and comprehensive income.

                                       28
<PAGE>
B:       LOANS RECEIVABLE

         Loans  receivable  as of December  31, 1998 and 1997  consisted  of the
         following:
<TABLE>
<CAPTION>
                                                             1998            1997
                                                         -----------     -----------
<S>                                                      <C>             <C>        
First mortgage loans
 Single-family residential..........................     $12,488,381     $11,531,849
 Construction ......................................         692,000         420,000
 Commercial real estate ............................         896,156         942,556
 Land ..............................................         237,977         271,163
                                                         -----------     -----------
                                                          14,314,514      13,165,568
Less: undisbursed loans in process .................         650,000         260,145
          deferred loan fees .......................           9,102           7,237
          allowance for losses .....................         358,524         337,524
                                                         -----------     -----------
Net first mortgage loans ...........................      13,296,888      12,560,662
                                                         -----------     -----------
Home equity and improvement loans ..................       1,004,651       1,172,307

Share loans ........................................         617,093         785,886

Other consumer and single-pay loans ................       2,572,722       2,054,334
Less: unearned discount ............................         229,278         188,586
                                                         -----------     -----------
Net other consumer loans ...........................       2,343,444       1,865,748
                                                         -----------     -----------
Total consumer loans ...............................       3,965,188       3,823,941
Less: allowance for losses .........................          53,097          66,244
                                                         -----------     -----------
Net consumer loans .................................       3,912,091       3,757,697
                                                         -----------     -----------

Net loans receivable................................     $17,208,979     $16,318,359
                                                         ===========     ===========
</TABLE>

         At December 31, 1998 and 1997,  unpaid  balances of impaired loans upon
         which the  accrual of  interest  had been  suspended,  all of which had
         allowances  determined  in  accordance  with SFAS No. 114 and No.  118,
         amounted to $241,731 and $331,771,  respectively. None of the allowance
         for loan  losses  related to impaired  loans at  December  31, 1998 and
         $62,173 of the  allowance  at December  31,  1997,  related to impaired
         loans.  Interest  income on  impaired  loans of $51,475 and $28,864 was
         recognized for cash payments  received in 1998 and 1997,  respectively.
         The average recorded investment in impaired loans for those periods was
         $255,275 and $301,037, respectively.

         The  Association is not committed to lend  additional  funds to debtors
         whose loans have been classified as nonperforming.

         At December 31, 1998 and 1997,  the  directors  and  officers  (related
         parties) owed the Association $474,853 and $507,705, respectively.


                                       29
<PAGE>
B:       LOANS RECEIVABLE (Continued)

         During the years ended  December  31, 1998 and 1997,  new loans to such
         related  parties   amounted  to  $47,465  and  $98,500,   respectively.
         Principal  repayments by such related  parties  amounted to $80,317 and
         $50,895 for the years ended  December 31, 1998 and 1997,  respectively.
         Such  loans  were  made  in  the   ordinary   course  of   business  on
         substantially the same terms,  including interest rates and collateral,
         as those prevailing at the time in comparable transactions with others.
         These loans do not involve more than a normal risk of collectibility or
         carry other terms unfavorable to the Association.

C:       ALLOWANCE FOR LOSSES

         A summary of the changes in the allowance for loan losses for the years
         ended December 31, 1998 and 1997, is as follows:
<TABLE>
<CAPTION>
                                                            1998              1997
                                                         ---------         ---------
<S>                                                      <C>               <C>      
         Balance - beginning of year.................    $ 403,768         $ 361,857
         Provision for loan losses...................       20,925            42,147
         Charge-offs.................................      (13,147)           (2,089)
         Recoveries..................................           75             1,853
                                                         ---------         ---------
                                                         $ 411,621         $ 403,768
                                                         =========         =========
</TABLE>
         There were no other real estate holdings or related  allowance for real
         estate losses for the years ended December 31, 1998 and 1997.


D:       PREMISES AND EQUIPMENT

         Premises and equipment as of December 31, 1998 and 1997 are  summarized
         by major classifications as follows:
<TABLE>
<CAPTION>
                                                         1998             1997
                                                       --------         --------
<S>                                                    <C>              <C>     
Land .........................................         $ 22,416         $ 22,416
Office building ..............................          261,578          255,262
Furniture, fixtures and equipment ............          160,327          171,138
                                                       --------         --------
                                                        444,321          448,816
Less: accumulated depreciation ...............          290,141          285,486
                                                       --------         --------
                                                       $154,180         $163,330
                                                       ========         ========
<CAPTION>
                                                         1998             1997
                                                       -------          --------
<S>                                                    <C>              <C>     
Depreciation expense .........................         $22,394          $ 23,031
                                                       =======          ========

</TABLE>

                                       30
<PAGE>
E:       INVESTMENT SECURITIES

         The  amortized  cost  and  estimated  market  value of  investments  in
         securities are as follows as of December 31, 1998 and 1997:
<TABLE>
<CAPTION>
                                                                              Gross            Gross           Estimated
                                                          Amortized        Unrealized       Unrealized          Market
                                                            Cost             Gains            Losses            Value
                                                         ------------        ---------        -----------     -----------
<S>                                                      <C>                 <C>              <C>             <C>        
         Securities Available-for-sale:
         December 31, 1998
         Mortgage-backed securities
          FNMA.......................................... $  1,347,574        $   3,182        $     3,406     $ 1,347,350
          GNMA..........................................      106,483                -                220         106,263
                                                         ------------        ---------        -----------     -----------
                                                         $  1,454,057        $   3,182        $     3,626     $ 1,453,613
                                                         ============        =========        ===========     ===========
<CAPTION>
         December 31, 1997

         Mortgage-backed securities
<S>                                                      <C>                 <C>              <C>             <C>        
          FNMA...........................................$  1,943,217        $   8,696        $     4,228     $ 1,947,685
                                                         ============        =========        ===========     ===========
<CAPTION>
<S>                                                      <C>                 <C>              <C>             <C>        
         Securities to be Held-to-Maturity:
         December 31, 1998

         Mortgage-backed securities
          FNMA...........................................$  1,402,165        $   4,510        $    12,374     $ 1,394,301
          GNMA...........................................     119,337            1,152                  -         120,489
          FHLMC..........................................     601,005            3,848              2,819         602,034
                                                         ------------        ---------        -----------     -----------
                                                         $  2,122,507        $   9,510        $    15,193     $ 2,116,824
                                                         ============        =========        ===========     ===========
<CAPTION>
<S>                                                      <C>                 <C>              <C>             <C>        
         December 31, 1997

         U.S.Treasury securities and
          obligations of U.S. government
          corporations and agencies......................$     15,152        $       -        $        67     $    15,085
                                                         ------------        ---------        -----------     -----------
         Mortgage-backed securities
          FNMA...........................................   1,173,209            5,945             17,772       1,161,382
          GNMA...........................................     162,842            2,893                136         165,599
          FHLMC..........................................   1,049,897            8,289             10,885       1,047,301
                                                         ------------        ---------        -----------     -----------
                                                            2,385,948           17,127             28,793       2,374,282
                                                         ------------        ---------         ----------     -----------
                                                         $  2,401,100        $  17,127         $   28,860     $ 2,389,367
                                                         ============        =========         ==========     ===========
</TABLE>
                                       31

<PAGE>
E:       INVESTMENT SECURITIES (Continued)

         The following is a summary of maturities of securities held-to-maturity
         and available-for-sale as of December 31, 1998 and 1997:
<TABLE>
<CAPTION>
            December 31, 1998
                                                                        Weighted
                                                                         Average                Amortized               Fair
                                                                          Yield                    Cost                 Value
                                                                          -----                -----------          -----------
<S>                                                                        <C>                 <C>                  <C>        
            Available-for-Sale
            ------------------
               Due in one year or less..................................   6.62%               $   115,237          $   116,082
               Due from one to five years...............................      -                          -                    -
               Due from five to ten years...............................      -                          -                    -
               Due after ten years......................................   6.21%                 1,338,820            1,337,531
                                                                                               -----------          -----------
                                                                           6.25%               $ 1,454,057          $ 1,453,613
                                                                                               ===========          ===========
            Held-to-Maturity
            ----------------
               Due in one year or less..................................   7.80%               $    37,474          $    37,804
               Due from one to five years...............................   4.71%                   456,042              453,864
               Due from five to ten years...............................   5.71%                   449,367              450,013
               Due after ten years......................................   6.08%                 1,179,624            1,175,143
                                                                                               -----------          -----------
                                                                           5.74%               $ 2,122,507          $ 2,116,824
                                                                                               ===========          ===========
            December 31, 1997
            -----------------

            Available-for-Sale
            ------------------
               Due in one year or less..................................       -               $         -          $         -
               Due from one to five years...............................   6.58%                   242,642              244,434
               Due from five to ten years...............................       -                         -                    -
               Due after ten years......................................   6.66%                 1,700,575            1,703,251
                                                                                               -----------          -----------
                                                                           6.65%               $ 1,943,217          $ 1,947,685
                                                                                               ===========          ===========
            Held-to-Maturity
            ----------------
               Due in one year or less..................................   5.38%               $    17,652          $    17,584
               Due from one to five years...............................   5.94%                   352,207              348,449
               Due from five to ten years...............................   5.68%                   342,198              337,277
               Due after ten years......................................   6.33%                 1,689,043            1,686,057
                                                                                               -----------          -----------
                                                                           6.17%               $ 2,401,100          $ 2,389,367
                                                                                               ===========          ===========
</TABLE>
                                       32
<PAGE>
E:       INVESTMENT SECURITIES (Continued)

         The amortized  cost and fair value of  mortgage-backed  securities  are
         presented by  contractual  maturity in the  preceding  table.  Expected
         maturities will differ from contractual  maturities  because  borrowers
         may  have the  right  to call or  prepay  obligations  without  call or
         prepayment penalties.

         Mortgage-backed  securities  with a  carrying  amount of  $484,080  and
         $228,133  were  pledged to secure  deposits as required or permitted by
         law at December 31, 1998 and 1997, respectively. See also note G.

F:       DEPOSITS

         An  analysis of  customers  deposit  accounts  by interest  rates as of
         December 31, 1998 and 1997 follows:

<TABLE>
<CAPTION>
                                                            -----------1998-----------         ------------1997------------
         Balances by interest rate                            Amount           Percent             Amount          Percent
<S>                                                         <C>                 <C>            <C>                   <C>   
         Passbook and full-paid
          accounts 2.5% to 3.0%.............................$ 3,322,644         16.70%         $ 3,095,126           15.45%
                                                            -----------       --------         -----------         --------
         Certificates and money-
          market accounts
          4.2 to 5.7%....................................... 12,173,341         61.18%          11,914,079           59.49%
          5.8 to 6.7%.......................................  1,942,451          9.76%           2,613,125           13.05%
          6.8 to 7.7%.......................................    110,000          0.55%             110,000            0.55%
                                                            -----------       --------         -----------         --------
                                                             14,225,792         71.49%          14,637,204           73.09%
                                                            -----------       --------         -----------         --------

         Now accounts
          Non-interest bearing..............................    356,666          1.79%             403,533            2.02%
          2.3 to 3.0%.......................................  1,955,646          9.83%           1,857,322            9.27%
                                                            -----------       --------         -----------         --------
                                                              2,312,312         11.62%           2,260,855           11.29%
                                                            -----------       --------         -----------         --------
                                                             19,860,748         99.81%          19,993,185           99.83%
         Accrued interest payable...........................     37,936          0.19%              33,232            0.17%
                                                            -----------       --------         -----------         --------
                                                            $19,898,684        100.00%         $20,026,417          100.00%
                                                            ===========       ========         ===========         ========

</TABLE>

         The aggregate  amount of jumbo  certificates  of deposit with a minimum
         denomination  of $100,000 was $2,417,099 and $2,089,962 at December 31,
         1998 and 1997, respectively.  Deposit amounts in excess of $100,000 are
         not federally insured.


                                       33
<PAGE>
         Maturities of certificates of deposit accounts are as follows:
<TABLE>
<CAPTION>
<S>                                                                  <C>          
                 One year or less....................................$   9,769,390
                 Over one to two years...............................    2,787,169
                 Over two to three years.............................    1,020,140
                 Over three years....................................      649,093
                                                                     -------------
                                                                     $  14,225,792
                                                                     =============
</TABLE>
         Interest  paid on  deposits  during  1998  and 1997  was  $901,660  and
         $920,214, respectively.

         Officers'  and  directors'  savings  accounts  amounted to $126,138 and
         $376,477 at December 31, 1998 and 1997, respectively.


 G:       ADVANCES FROM FHLB AND OTHER BORROWED MONEY

         Advances  from the  Federal  Home Loan  Bank  (FHLB)  consisted  of the
         following:
<TABLE>
<CAPTION>
                            Maturity       Contract
                              Date           Rate         1998             1997
                           ----------     ----------   ----------       ----------
<S>                           <C>            <C>       <C>              <C>       
                              1998           5.90%     $        -       $  610,000
                              2000           4.58%        198,000                -
                              2001           4.60%         99,000                -
                              2001           4.51%         99,000                -
                              2003           4.77%         99,000                -
                                                       ----------       ----------
                                                       $  495,000      $  610,000
                                                       ==========      ==========
</TABLE>

         At December 31, 1998, pursuant to collateral  agreements with the FHLB,
         advances  are  secured  by a blanket  floating  lien on first  mortgage
         loans. At December 31, 1997, the advances were  collateraized by pledge
         of certain FNMA participation  certificates with outstanding  principal
         balances  net  of  unamortized   purchase  premiums  and  discounts  of
         $651,309.

         Interest  paid on advances from the Federal Home Loan Bank for 1998 and
         1997 was $14,799 and $7,003, respectively.



                                       34
<PAGE>
H:       LOAN SERVICING

         Mortgage   loans   serviced   for  others  are  not   included  in  the
         accom-panying  statements of financial condition.  The unpaid principal
         balances of these loans at December 31, 1998 and 1997 are summarized as
         follows:
<TABLE>
<CAPTION>

                                                                     1998                  1997
                                                                  ---------             ---------
<S>                                                               <C>                   <C>      
                  Mortgage loan underlying FHLMC
                   mortgage backed securities...................  $ 569,347             $ 772,342
                                                                  =========             =========
</TABLE>

         Revenue from loan  servicing  was $2,877 and $3,780 for the years ended
December 31, 1998 and 1997, respectively.

         Custodial  escrow balances  maintained in connection with the foregoing
loan   servicing  were  $2,562  and  $3,229  at  December  31,  1998  and  1997,
respectively.

 
I:       ACCRUED INTEREST RECEIVABLE

         Accrued interest receivable at December 31, 1998 and 1997 is summarized
         as follows:
<TABLE>
<CAPTION>
                                                      1998         1997
                                                   ----------   ----------
<S>                                                <C>          <C>       
         Time deposits and other
          investment securities................... $    3,970   $      260
         Mortgage-backed securities...............     20,694       28,932
         Loans receivable.........................     49,578       51,202
                                                   ----------   ----------

                                                   $   74,242   $   80,394
                                                   ==========   ==========
</TABLE>
J:       FEDERAL INCOME TAXES

         Income tax expense for the years  ended  December  31, 1998 and 1997 is
         summarized as follows:
<TABLE>
<CAPTION>
                                                                   1997
                                                                (Restated -
                                                      1998        Note P)
                                                   ----------   ----------
<S>                                                <C>          <C>       
         Current...............................    $  138,010   $   98,566
         Deferred expense (benefit)............       (36,354)        (432)
                                                   ----------   ----------
                                                   $  101,656   $   98,134
                                                   ==========   ==========
</TABLE>

                                       35
<PAGE>
J:       FEDERAL INCOME TAXES (Continued)

         Deferred  income  tax  assets  and  liabilities  are  reflected  in the
         accompanying balance sheets as follows:
<TABLE>
<CAPTION>
                                                                        1997
                                                                     (Restated -
                                                        1998            Note P )
                                                     ---------        ---------
<S>                                                  <C>              <C>       
Deferred tax liabilities .....................       $ (44,711)       $ (76,001)
Deferred tax assets ..........................       $ 123,446        $ 110,733
Deferred tax asset valuation allowance .......         (57,091)         (51,112)
                                                     ---------        ---------
Net deferred tax asset (included in
 other assets) ...............................       $  21,644
                                                     =========
Net deferred tax liability (included
 in other liabilities and deferrals) .........                        $ (16,380)
                                                                      =========

</TABLE>
         Provision  for federal  income taxes  differs from that computed at the
         statutory 34% corporate tax rate, as follows:
<TABLE>
<CAPTION>
                                                              ---------1998------------          -----------1997----------
                                                                                                   Amount
                                                                            Effective           (Restated -     Effective
                                                                Amount         Rate                Note P)         Rate
                                                              ---------      -------             ---------        -----
<S>                                                           <C>            <C>                 <C>              <C>
         Tax at statutory rate................................$ 101,997          34%             $  89,039          34%
         Increase (decrease) in taxes:
          Effect of graduated tax rates.......................        -            -                (1,970)          (1)%
         Deferred tax effect thrift
          bad debt reserve adjustment.........................        -            -                     -          -
         Other................................................     (341)           -                11,065           4%
                                                              ---------      -------             ---------        -----
                                                              $ 101,656          34%             $  98,134          37%
                                                              =========      =======             =========        =====
</TABLE>
         The  Association  paid income taxes of $146,279 and $50,910  during the
         years ended December 31, 1998 and 1997, respectively.

         In  prior  years,  the  Association  was  allowed  a  special  bad debt
         deduction  under  various  income tax  provisions.  If the amounts that
         qualified as deductions  for federal income tax purposes are later used
         for purposes other than bad debt losses, they become subject to federal
         income tax at the then current  corporate  rate.  Retained  earnings at
         December 31, 1998 and 1997 include  $110,577 for which  federal  income
         tax has not been provided.  The unrecorded  deferred liability on these
         amounts was  approximately  $37,600.  Additionally,  with the repeal in
         1996 of the thrift bad debt  reserve  method that  allowed for bad debt
         deductions  based upon a percentage of taxable income,  the Association
         is required to recapture over a six year period the $85,465  portion of
         its bad  debt  reserves  that  exceeds  allowable  reserves  under  the
         experience method.

                                       36
<PAGE>
K:   COMMITMENTS

         The   Association   is  a   party   to   financial   instruments   with
         off-balance-sheet  risk in the normal  course of  business  to meet the
         financing needs of its customers.  These financial  instruments consist
         primarily of commitments to extend credit.  These instruments  involve,
         to varying  degrees,  elements  of credit  risk in excess of the amount
         recognized in the balance  sheet.  The contract or notional  amounts of
         those instruments reflect the extent of the involvement the Association
         has in  particular  classes of financial  instruments.  Commitments  to
         extend credit are  agreements to lend to a customer as long as there is
         no  violation  of  any  condition  established  in  the  contract.  The
         Association   evaluates  each   customer's   credit   worthiness  on  a
         case-by-case  basis. The  Association's  exposure to credit loss in the
         event of nonperformance by the other party to the financial instruments
         is represented by the contractual notional amount of those instruments.

         As of December  31, 1998 and 1997,  the  Association  was  committed to
         grant adjustable-rate  mortgage loans with contract notional amounts of
         $313,500 and $518,400, respectively. Additionally, the Association held
         a $30,000 open letter of credit at December  31,  1998,  and had issued
         lines of credit with contract  notional  amounts of the unused  portion
         totalling  $98,570  and  $105,716  as of  December  31,  1998 and 1997,
         respectively.


L:       PROFIT-SHARING PLAN

         The  Association  provides  a  non-contributory   defined  contribution
         retirement plan for all eligible  employees.  Contributions to the plan
         are based  upon  employee  compensation  at rates not to exceed  15% as
         determined  annually by the Board of  Directors.  Contributions  to the
         plan were $28,532 and $31,151 for 1998 and 1997, respectively.


M:       EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)

         During 1998, the Bancorp  established an employee stock ownership plan.
         The IBL Bancorp,  Inc.  Employee Stock Ownership Plan enables  eligible
         employees of the Bancorp and the  Association to share in the growth of
         the Bancorp through the  acquisition of stock.  Employees are generally
         eligible to  participate  in the ESOP after  completion  of one year of
         service and attaining age 21.

         The ESOP acquired  16,869 shares of Bancorp stock at $10 a share in the
         Bancorp's initial public offering. The acquisition was funded by a loan
         from the  Bancorp  which  bears  interest  at 8.5%  and will be  repaid
         principally from company contributions to the ESOP over a period of ten
         years.  The loan agreement  requires  quarterly

                                       37
<PAGE>
M:       EMPLOYEE STOCK OWNERSHIP PLAN (ESOP) (Continued)

         interest and principal  payments of $6,303.  The loan is secured by the
         pledge of the common stock purchased. Contributions to the ESOP must be
         sufficient  for debt  service,  but the company  may, in any plan year,
         make  additional  discretionary  contributions  for the benefit of plan
         participants in the form of cash or shares of common stock.

         In  the  event  of  plan  or  participant  termination,   or  upon  the
         participant's  death,  disability  or  retirement,  the  Bancorp may be
         required to purchase,  subject to certain limitations,  the shares from
         the participants at the then fair market value.

         Shares purchased by the ESOP with the proceeds of the loan will be held
         in a suspense  account and released to participants on a pro-rata basis
         as debt service  payments are made. As the Bancorp and the  Association
         make  contributions  to the ESOP  sufficient  to meet the principal and
         interest requirements on the loan, shares are released from collateral.

         The Bancorp  accounts  for its ESOP in  accordance  with  Statement  of
         Position 93-6.  Accordingly,  the debt of the ESOP is not recorded as a
         note  receivable by the Bancorp,  but the shares  pledged as collateral
         are  reported as unearned  ESOP shares on the  statement  of  financial
         condition. As shares are released from collateral,  the Bancorp reports
         compensation expense equal to the fair market value of the shares. ESOP
         compensation  expense was $9,511 for the year ended  December 31, 1998.
         Any excess or  deficit  of fair value over the cost of the ESOP  shares
         released  is  recorded  in  the  equity  section  of the  statement  of
         financial  condition  as  additional  paid-in-capital.  The cost of all
         unallocated  shares held by the ESOP is reflected  on the  statement of
         financial condition as a contra equity account.

         The ESOP shares as of December 31, 1998 were as follows:

                      Allocated shares...............................          -
                      Shares committed to be released................        422
                      Unreleased shares..............................     16,447
                                                                       ---------
                       Total ESOP shares.............................     16,869
                                                                       =========
                       Fair value of unreleased shares...............  $ 152,135
                                                                       =========


N:       NONCASH INVESTING AND FINANCING ACTIVITIES

         There were no noncash investing and financing  activities for the years
         ended December 31, 1998 and 1997.

                                       38
<PAGE>
O:       REGULATORY MATTERS

         The Association is subject to various regulatory  capital  requirements
         administered  by its primary  federal  regulator,  the Office of Thrift
         Supervision  (OTS).  Failure  to meet the  minimum  regulatory  capital
         requirements can initiate certain  mandatory,  and possible  additional
         discretionary  actions by regulators that, if undertaken,  could have a
         direct material affect on the Association and its financial statements.
         Under the  regulatory  capital  adequacy  guidelines and the regulatory
         framework  for prompt  corrective  action,  the  Association  must meet
         specific  capital  guidelines  involving  quantitative  measures of the
         Association's assets, liabilities,  and certain off-balance sheet items
         as calculated under regulatory accounting practices.  The Association's
         capital amounts and  classification  under the prompt corrective action
         guidelines are also subject to qualitative judgements by the regulators
         about components, risk weightings, and other factors.

         Quantitative  measures  established  by  regulation  to ensure  capital
         adequacy require the Association to maintain minimum amounts and ratios
         of: total risk-based capital and Tier I capital to risk-weighted assets
         (as  defined  in the  regulations),  Tier I capital to  adjusted  total
         assets (as defined),  and tangible capital to adjusted total assets (as
         defined). As discussed in greater detail below, as of December 31, 1998
         and 1997, the Association  meets the capital  adequacy  requirements to
         which it is subject.

         As of December 31, 1998 and 1997, based upon the most recent regulatory
         filings with OTS, the Association  was categorized as well  capitalized
         under the regulatory  framework for prompt corrective action. To remain
         categorized as well capitalized,  the Association will have to maintain
         minimum total risk-based, Tier I risk-based, and Tier I leverage ratios
         as disclosed in the table below.

         The actual and required  capital  amounts and ratios  applicable to the
         Association are presented in the table below (dollars in thousands).

<TABLE>
<CAPTION>
                                                                                                         Minimum Required
                                                                                                            To be Well
                                                                           Minimum Required              Capitalized Under
                                                                              For Capital                Prompt Corrective
                                                      Actual               Adequacy Purposes             Action Provisions
                                                 -----------------         -----------------             ------------------
                                                  Amount   Ratio            Amount     Ratio              Amount      Ratio
                                                  ------   -----            ------     -----              ------      -----
<S>                                              <C>        <C>              <C>        <C>              <C>          <C>  
         As of December 31, 1998:
         Total risk-based capital
          (To risk-weighted assets...............$ 3,541    28.38%           $ 99       8.0%             $  1,248     10.0%
         Tier I capital
          (To risk-weighted assets)..............$ 3,383    27.12%           $ 49       4.0%                 $ 74      6.0%
         Tier I capital
          (To adjusted total assets).............$ 3,383    14.20%           $ 95       4.0%              $ 1,194      5.0%
</TABLE>

                                       39
<PAGE>
O:       REGULATORY MATTERS (Continued)
<TABLE>
<CAPTION>
                                                                                                         Minimum Required
                                                                                                            To be Well
                                                                           Minimum Required              Capitalized Under
                                                                              For Capital                Prompt Corrective
                                                      Actual               Adequacy Purposes             Action Provisions
                                                 -----------------         -----------------             ------------------
                                                  Amount   Ratio            Amount     Ratio              Amount      Ratio
                                                  ------   -----            ------     -----              ------      -----
<S>                                              <C>        <C>              <C>        <C>              <C>          <C>  
         As of December 31, 1997:
         ------------------------
         Total risk-based capital
          (To risk-weighted assets...............$ 1,765     15.3%          $ 921       8.0%             $ 1,151      10.0%
         Tier I capital
          (To risk-weighted assets)..............$ 1,619     14.1%          $ 461       4.0%             $   691      6.0%
         Tier I capital
          (To adjusted total assets).............$ 1,619      7.2%          $ 896       4.0%              $ 1,120      5.0%

</TABLE>

P:       RESTATEMENTS AND PRIOR PERIOD ADJUSTMENT

         Financial  statements  as of and for the year ended  December  31, 1997
         have  been  restated.   The  accompanying   statements  now  include  a
         presentation of  comprehensive  income as required under the provisions
         of  Statement  of  Financial  Accounting  Standards  No.  ("SFAS")  130
         Reporting  of  Comprehensive  Income,  which is  effective  for periods
         beginning  after  December  15,  1997,  and  requires  presentation  of
         comprehensive  income  for prior  periods  presented  on a  comparative
         basis.

         In  addition,  disclosure  of  information  about  the  fair  value  of
         financial  instruments  under SFAS No. 107 as of December 31, 1997, not
         previously required under the provisions of SFAS No. 126 Exemption From
         Certain Required  Disclosures  About Financial  Instruments For Certain
         Nonpublic Entities, is presented in Note R.

         The December 31, 1997 financial  statements  have also been restated to
         correct certain errors in those periods in order to reflect adjustments
         to deferred income tax expense and related assets and liabilities. Such
         adjustments   give  effect  to  timing   differences   related  to  the
         recognition  of stock  dividends  from the  Federal  Home Loan Bank and
         changes to the income tax bad debt reserves  precipitated by income tax
         law  changes in August,  1996.  Deferred  tax assets  included in other
         assets were  decreased by $3,318 in 1997 and  deferred tax  liabilities
         included in other  liabilities and deferrals were increased by $16,380.
         The provision for federal income taxes was decreased and net income was
         increased by $2,135 in 1997 and previously  reported  retained earnings
         as of December 31, 1997 was decreased by $19,698.


                                       40
<PAGE>
Q:       RELATED PARTY TRANSACTIONS

         A Bancorp director is a partner in a local law firm that provides legal
         services to the Bancorp.  Fees paid to the law firm  amounted to $4,800
         for each of the years ended December 31, 1998 and 1997.


R:       ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

         The following disclosure is made in accordance with the requirements of
         SFAS No. 107,  Disclosures  About Fair Value of Financial  Instruments.
         Financial  instruments are defined as cash and  contractual  rights and
         obligations that require settlement,  directly or indirectly,  in cash.
         In cases where quoted market prices are not available, fair values have
         been  estimated  using the present  value of future cash flows or other
         valuation  techniques.  The  results  of these  techniques  are  highly
         sensitive to the assumptions used, such as those concerning appropriate
         discount  rates and  estimates  of future  cash  flows,  which  require
         considerable judgement. Accordingly, estimates presented herein are not
         necessarily  indicative of the amounts the Association could realize in
         a current settlement of the underlying financial instruments.  SFAS No.
         107  excludes  certain  financial   instruments  and  all  nonfinancial
         instruments from its disclosure requirements.  These disclosures should
         not  be  interpreted  as  representing  an  aggregate  measure  of  the
         underlying value of the Association.

         The Association  does not maintain any investment or  participation  in
         financial  instruments  or  agreements  whose  value is  linked  to, or
         derived from,  changes in the value of some underlying  asset or index.
         Such  instruments or agreements  include  futures,  forward  contracts,
         option contracts,  interest-rate  swap agreements,  and other financial
         arrangements with similar characteristics, and are commonly referred to
         as derivatives.


                                       41
<PAGE>
R:       ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

         The estimated fair value of the Association's financial instruments was
         as follows:
<TABLE>
<CAPTION>
                                                         -------------1998-------------           -------------1997-------------
                                                         Carrying            Estimated            Carrying             Estimated
                                                           Amount            Fair Value            Amount              Fair Value
                                                           ------            ----------            ------              ----------
<S>                                                      <C>                   <C>                <C>                   <C>      
         FINANCIAL ASSETS:
         Cash and amounts due from
          depository institutions...................     $    177              $    177           $    143              $    143 
         Interest-bearing deposits                                                                                               
          with other institutions...................        1,681                 1,681                967                   967 
         Time deposits..............................          795                   795                  -                     - 
         Investment securities......................        3,576                 3,570              4,349                 4,337 
         Loans receivable, net......................       17,209                17,707             16,318                16,679 
         Accrued interest receivable................           74                    74                 80                    80 
         FHLB stock.................................          171                   171                363                   363 
                                                                                                                                 
         FINANCIAL LIABILITIES:                                                                                                  
         Deposits...................................     $ 19,899              $ 19,939           $ 20,026              $ 20,042 
         Advances from FHLB.........................          495                   495                610                   610 
         Advances by borrowers for                                                                                               
          taxes and insurance.......................           13                    13                 15                    15 
         Other liabilities..........................           89                    89                122                   122 
                                                         
</TABLE>
         The  Association in estimating the fair value of financial  instruments
         used the following significant methods and assumptions.

         Cash and short-term investments
         The carrying value of highly liquid  instruments,  such as cash on hand
         and  amounts due from  depository  institutions,  and  interest-earning
         deposits in other institutions, provides a reasonable estimate of their
         fair value.

         Time deposits
         Time deposits  bear interest  rates that in the aggregate are presently
         considered fair in current market conditions.  Therefore,  the carrying
         amounts  reported in the  statement  of financial  condition  for these
         financial instruments approximate fair value.

         Investment securities
         Fair value  estimates  for  investment  securities  are based on quoted
         market  prices,  where  available.  If  quoted  market  prices  are not
         available,  fair values are based on quoted market prices of comparable
         instruments.  The  carrying  amount of accrued  interest on  securities
         approximates its fair value.



                                       42
<PAGE>
R:       ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

         Loans receivable, net of allowance
         The fair values for loans are estimated  through  discounted  cash flow
         analysis,  using  current rates at which loans with similar terms would
         be made to borrowers of similar credit quality. Appropriate adjustments
         are made to reflect  probable  credit  losses.  The carrying  amount of
         accrued interest on loans approximated its fair value.

         Federal Home Loan Bank Stock
         The Federal  Home Loan Bank's board sets the value of Federal Home Loan
         Bank stock at $100 per share.

         Deposits
         SFAS No. 107 specifies that the fair value of deposit  liabilities with
         no defined  maturity is the amount  payable on demand at the  reporting
         date, i.e., their carrying or book value. These deposits, which include
         interest and  non-interest  bearing  checking,  passbook and  full-paid
         share savings, and money market accounts, represented approximately 28%
         and 27% of total deposits at December 31, 1998 and 1997,  respectively.
         The fair value of fixed-rate certificates of deposit is estimated using
         a  discounted  cash  flow   calculation  that  applies  interest  rates
         currently offered on certificates of similar remaining  maturities to a
         schedule of aggregate expected cash flows on time deposits.

         The   carrying   amount  of  accrued   interest   payable  on  deposits
         approximates its fair value.

         Advances from Federal Home Loan Bank
         Advances  from Federal Home Loan Bank bear  interest  rates that in the
         aggregate are presently  considered fair in current market  conditions.
         Therefore,  the carrying amounts reported in the statement of financial
         condition for these financial instruments approximate fair value.

         Advances by borrowers  for taxes and  insurance  (escrows) The carrying
         amount of escrow accounts approximate fair value.

         Off-balance-sheet instruments
         Off-balance-sheet  financial  instruments include commitments to extend
         credit,  letters of credit,  and other financial  guarantees.  The fair
         value of such instruments is estimated using fees currently charged for
         similar arrangements in the marketplace,  adjusted for changes in terms
         and credit  risk as  appropriate.  The  estimated  fair value for these
         instruments  was not  significant  at December  31, 1998 and 1997.  The
         contract or notional amounts of the Association's financial instruments
         with off-balance-sheet risk are disclosed in Note K.



                                       43
<PAGE>
S:       CONVERSION FROM A MUTUAL TO A STOCK ASSOCIATION

         On September  30, 1998,  The  Iberville  Building and Loan  Association
         converted   from  a   Louisiana-chartered   mutual   savings  and  loan
         association to a Louisiana chartered stock savings and loan association
         to be known as "The  Iberville  Building  and  Loan  Association"  (the
         Association).  The Association issued and sold 1,000 shares of stock to
         IBL Bancorp, Inc. for $871,182 and became a wholly-owned  subsidiary of
         the Bancorp.

         In conjunction with the conversion, the Bancorp issued and sold 194,001
         shares of its common  stock at $10 per  share.  Net  proceeds  from the
         initial public offering  amounted to $1,573,673  after costs associated
         with  the  offering,  registration  and  conversion  in the  amount  of
         $366,337.

         In accordance with OTS Regulations, the Association appropriated,  upon
         conversion,  as a "liquidation account," $1,671,681,  the amount of its
         retained  earnings  at March 31,  1998,  the  latest  date shown in the
         prospectus  issued  in  conjunction  with the plan of  conversion.  The
         liquidation  account  will be  maintained  for the  benefit of eligible
         holders  who  continue to maintain  their  accounts at the  Association
         after the conversion.  The liquidation account will be reduced annually
         to the extent that the eligible  account  holders  have  reduced  their
         qualifying deposits.  Subsequent increases will not restore an eligible
         account holder's interest in the liquidation account. In the event of a
         complete  liquidation of the Association,  and only in such event, each
         account  holder  will be entitled  to receive a  distribution  from the
         liquidation  account  in  an  amount   proportionate  to  the  adjusted
         qualifying  account  balances then held.  The  Association  may not pay
         dividends  or  repurchase   its  common  stock  if  such  dividends  or
         repurchases would reduce its equity below applicable regulatory capital
         requirements or the required liquidation account amount.


T:       CONCENTRATION OF CREDIT RISK

         The  Bancorp's  loan  portfolio  consists of the various types of loans
         described  in Note B above.  Real  estate or other  assets  secure most
         loans.  These loans have been made to  individuals  and  businesses  in
         south central Louisiana who are dependent on the area economy for their
         livelihood and servicing of their loan obligations.

         The Bancorp maintains deposits in other financial institutions that may
         from time to time exceed the federally insured deposit limits.


U:       DIVIDEND DECLARED

         On December  17, 1998,  the board of  directors  of IBL  Bancorp,  Inc.
         declared  a $.0375  per share  dividend  to  stockholders  of record at


                                       44
<PAGE>
U:       DIVIDEND DECLARED (Continued)

         January 14,  1999,  payable on January  29,  1999.  The total  dividend
         payable of $7,908 is included in other liabilities.

V:       EARNINGS PER SHARE

         The computation of basic earnings per share for 1998 includes  reported
         net income in the numerator and the weighted  average  number of shares
         outstanding of 194,002 in the denominator.


W:       NEW ACCOUNTING STANDARDS

         Statement  of  Financial  Accounting  Standards  No.  133  (SFAS  133),
         Accounting  of  Derivative  Instruments  and  Hedging  Activities,   is
         effective for all fiscal  quarters of all fiscal years  beginning after
         June 15, 1999. Early application of the provisions of this statement is
         encouraged,  but it shall not be  applied  retroactively  to  financial
         statements of prior  periods.  This  statement  establishes  additional
         accounting  and  reporting   standards  for   derivative   instruments,
         including certain derivative  instruments  embedded in other contracts,
         (collectively  referred to as derivatives) and for hedging  activities.
         It requires that entities recognize all derivatives as either assets or
         liabilities  in the  statement of financial  position and measure those
         instruments at fair value.  The association does not currently have any
         financial   instruments  that  meet  the  Standard's  definition  of  a
         derivative. Consequently, the provisions of this pronouncement will not
         materially  affect the financial  position or the results of operations
         of the Bancorp.  Early  adoption of the provisions of this statement is
         not anticipated,  and presently,  management is not  contemplating  any
         transfers of securities  held-to-maturity to the  available-for-sale or
         trading categories nor any transfers of  available-for-sale  securities
         to the trading category.


X:       PARENT COMPANY FINANCIAL STATEMENTS

         The  financial  statements  for IBL  Bancorp,  Inc.  (parent  company),
         prepared on an unconsolidated basis are presented below:

<TABLE>
<CAPTION>
BALANCE SHEETS
December 31, 1998
<S>                                                                 <C>        
 ASSETS
 Cash ......................................................        $   708,099
  Investment in Iberville Building & Loan
  Association at equity in underlying net assets ...........          2,682,921
                                                                    -----------
    Total assets ...........................................        $ 3,391,020
                                                                    ===========
</TABLE>
                                       45
<PAGE>
 X:     PARENT COMPANY FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
<S>                                                                 <C>        
 LIABILITIES AND SHAREHOLDERS' EQUITY

 LIABILITIES
 Other liabilities .........................................        $     8,425
                                                                    -----------
SHAREHOLDERS' EQUITY
Preferred stock, $.01 par, 2,000,000 shares
  authorized
 Common stock, $.01 par, 5,000,000 shares author
  ized, 210,870 shares issued and outstanding ..............              2,109
 Additional paid-in-capital ................................          1,740,254
 Unearned ESOP shares ......................................           (165,971)
 Retained earnings  substantially restricted ...............          1,806,496
 Accumulated other comprehensive income ....................               (293)
                                                                    -----------
     Total shareholders' equity ............................          3,382,595
                                                                    -----------
    Total liabilities and shareholders' equity .............        $ 3,391,020
                                                                    ===========
STATEMENTS OF INCOME AND RETAINED EARNINGS
YEARS ENDED DECEMBER 31, 1998

 INCOME
 Interest ..................................................        $     3,589

 EXPENSES
 Other general and administrative ..........................                700
                                                                    -----------
 INCOME BEFORE EQUITY IN UNDISTRIBUTED EARNINGS OF
 IBERVILLE BUILDING & LOAN ASSOCIATION .....................              2,889
                                                                    -----------
 Equity in undistributed earnings of Iberville
  Building & Loan Association ..............................            193,021
                                                                    -----------

 INCOME BEFORE INCOME TAXES ................................            195,910
 PROVISION FOR INCOME TAXES ................................                517
                                                                    -----------
 NET INCOME ................................................            195,393

 Retained earnings  beginning of year ......................          1,619,011
 Less dividends declared ...................................             (7,908)
                                                                    -----------
 Retained earnings  end of year ............................        $ 1,806,496
                                                                    ===========
</TABLE>
                                       46
<PAGE>
X:               PARENT COMPANY FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
                 STATEMENTS OF CASH FLOWS


                 YEARS ENDED DECEMBER 31, 1998
<S>                                                                 <C>        
 CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income ...............................................         $   195,393
 Adjustments to reconcile net income to
  net cash provided by operating activities:
   Equity in undistributed earnings of
    Iberville Building & Loan Association .................            (193,021)
   Increase in other liabilities ..........................                 517
                                                                    -----------
 Net cash provided by operating activities ................               2,889
                                                                    -----------

 CASH FLOWS FROM INVESTING ACTIVITIES:
 Acquisition of Iberville Building & Loan
 Association ..............................................            (871,182)
                                                                    -----------
 Net cash used in investing activities ....................            (871,182)
                                                                    -----------

 CASH FLOWS FROM FINANCING ACTIVITIES:


 Net proceeds from sale of common stock ...................           1,573,673
 Payment of ESOP shares ...................................               2,719
                                                                    -----------
 Net cash provided by financing activities ................           1,576,392
                                                                    -----------
 

 NET INCREASE IN CASH .....................................             708,099
 Cash  beginning of year ..................................                   -
                                                                    -----------
 Cash  end of year ........................................         $   708,099
                                                                    ===========

</TABLE>
                                       47
<PAGE>
                              CORPORATE INFORMATION


Directors:                                Annual Stockholders Meeting:

G. Lloyd Bouchereau, Jr.                  April 28, 1999; 10:00 a.m.
President and Chief Executive Officer     23910 Railroad Avenue
                                          Plaquemine, Louisiana
                                          Record Date:  March 3, 1999

John L. Delahaye                          Main Office:
Attorney                                  23910 Railroad Avenue
Plaquemine, Louisiana                     Plaquemine, Louisiana



Gary K. Pruitt                            Independent Auditor:
Retired                                   L.A. Champagne & Co., L.L.P.
Greater Baton Rouge Port Commission       Baton Rouge, Louisiana
Port Allen, Louisiana



Bobby E. Stanley                          General Counsel:
Self Employed Accountant                  Borron & Delahaye
Port Allen, Louisiana                     Plaquemine, Louisiana



Edward Steinmetz                          Securities and Regulatory Councel:
Plant Manager                             Elais, Matz, Tiernan & Herrick L.L.P.
Ashland Chemical Company                  Washington, D. C.
Plaquemine, Louisiana


Danny M. Strickland                       Stock Registrar & Transfer Agent:
Vice-President                            Registrar and Transfer Company
                                          Cranford, New Jersey

Executive Officers:

G. Lloyd Bouchereau, Jr.
President and Chief Executive Officer

Danny M. Strickland
Vice-President

                                       48