UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                           FORM 10-KSB

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
          For the fiscal year ended December 31, 1996
                             OR
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
     SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
     For the transition period from -----------  to -------------
     Commission File Number 0-21165

                FIRST ALLEN PARISH BANCORP, INC.
         (Name of small business issuer in its charter)

          Delaware                          72-1331593
-----------------------------------------------------------------
       (State or other          (I.R.S. Employer Identification
        jurisdiction of                        No.)
incorporation or organization)

222 South 10th Street, Oakdale, Louisiana              71463
-----------------------------------------------------------------
(Address of principal executive offices)               (Zip Code)

       Registrant's telephone number, including area code:
                         (318) 335-2031
 
   Securities Registered Pursuant to Section 12(b) of the Act:
                              None
   Securities Registered Pursuant to Section 12(g) of the Act:
             Common Stock, par value $.01 per share
                        (Title of class)

     Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. 
YES / X /    NO ---.

     Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B contained herein, and no
disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [   ]

     The Registrant's revenues for the fiscal year ended December
31, 1996 were $2,135,358.

     As of January 29, 1997, there were issued and outstanding
264,506 shares of the Registrant's Common Stock.  The
Registrant's voting stock is not regularly and actively traded,
and there are no regularly quoted bid and  asked prices for the
Registrant's voting stock.  Accordingly, the Registrant is unable
to determine the aggregate market value of the voting stock held
by non-affiliates.

<PAGE>

               DOCUMENTS INCORPORATED BY REFERENCE

     Parts II and III of Form 10-KSB - Portions of Annual Report
to Stockholders for the fiscal year ended December 31, 1996.

     Part III of Form 10-KSB - Portions of Proxy Statement for
1997 Annual Meeting of Stockholders.

<PAGE>

                             PART I

Item 1.  Description of Business

General

     First Allen Parish Bancorp, Inc. ("First Allen Parish
Bancorp" and, with its subsidiaries, the "Company") was formed in
June 1996 at the direction of First Federal Savings and Loan
Association of Allen Parish ("First Federal" or the
"Association") for the purpose of owning all of the outstanding
stock of the Association issued upon the conversion of the
Association from the mutual to stock form (the "Conversion").  On
September 27, 1996, First Allen Parish Bancorp acquired all of
the shares of the Association in connection with the completion
of the Conversion.  All references to the Company, unless
otherwise indicated, at or before September 27, 1996 refer to the
Association.  The Company's common stock is quoted on the
National Security Quotation System "Pink Sheets" under the symbol
"FALN".
  
     First Federal is a federally-chartered stock savings and
loan association headquartered in Oakdale, Louisiana.  First
Federal was originally chartered in 1962.  Its deposits are
insured up to the maximum allowable amount by the Savings
Association Insurance Fund ("SAIF") of the Federal Deposit
Insurance Corporation (the "FDIC").  Through its office in
Oakdale, First Federal serves communities located in Allen Parish
and in the surrounding parishes in the State of Louisiana.  At
December 31, 1996, the Company had total assets of $31.5 million,
deposits of $25.7 million and stockholders' equity of $4.3
million.

     The Association has been, and intends to continue to be, a
community-oriented financial institution offering selected
financial services to meet the needs of the communities it
serves.  The Association attracts deposits from the general
public and historically has used such deposits, together with
other funds, to originate loans secured by real estate, including
one- to four-family residential mortgage loans, commercial real
estate loans, land loans, construction loans and loans secured by
other properties.  At December 31, 1996, 83.6% of the
Association's gross loan portfolio consisted of loans secured by
real estate.  The Association also originates consumer and other
loans consisting primarily of loans secured by automobiles,
manufactured homes, loans secured by deposits ("share loans") and
lines of credit.  At December 31, 1996, consumer and other loans
constituted 25.3% of the Association's gross loan portfolio.  In
order to supplement its loan originations, the Association has
invested a significant portion of its assets in mortgage-backed
securities, which are insured or guaranteed by federal agencies,
as well as other investments.  At December 31, 1996, the
Association's mortgage-backed securities portfolio totaled $17.2
million, or 54.6% of total assets.  See "- Investment
Activities."

     The executive office of the Company and the Association is
located at 222 South 10th Street, Oakdale, Louisiana 71463 and
its telephone number is (318) 335-2031.

Market Area and Competition

     First Federal serves Allen Parish, Louisiana and the
surrounding parishes, from its office in Oakdale, Louisiana. 
Allen Parish consists of small farms and residential communities
of predominantly one- to four-family residences.  The
Association's market for deposits is concentrated in Allen
Parish.  The Association is the only independent financial
institution headquartered in Allen Parish.

     The economy of the Association's market area consists
primarily of small farming communities, the timber and wood
industry and state and local government.  The largest employers
in the Association's market area are the Federal Bureau of
Prisons, which operates a corrections facility, Boise Cascade
Corporation, a wood manufacturer, Arizona Chemical, a division of
International Paper Co., Grand Casino, which is operated by the
Coushatta Indians and the Allen Parish School Board. In recent
years the oil and gas industry has become a growing segment of
the Association's economy.

     The Association's business and operating results are
significantly affected by the general economic conditions
precedent in the Association's market area.  As of March 31,
1996, the unemployment rate in the Association's market area was
7.8%.  During the period between 1990 and 1994, per capita income
growth in the Association's market area

<PAGE>

was below that experienced in the state of Louisiana and the
nation as a whole.  Management believes that the population in
the Association's market area will remain stable in the
foreseeable future.

     The Association faces significant competition in attracting
deposits from commercial banks, other savings  institutions and
credit unions.  The Association faces additional competition for
deposits from short-term money market funds, from other corporate
and government securities funds and from brokerage funds and
insurance companies.  The Association also faces significant
competition in the origination of loans from savings
institutions, mortgage banking companies, credit unions and
commercial banks.

Lending Activities

     General.  The Association's loan portfolio consists
primarily of loans secured by real estate which consist primarily
of loans secured by one- to four-family residences, commercial
real estate loans, construction loans and loans secured by other
properties.  The Association also originates consumer and other
loans consisting primarily of loans secured by automobiles,
manufactured homes, share loans, lines of credit and other
consumer loans.  At December 31, 1996, the Association's gross
loans totaled $13.0 million, of which $7.3 million or 56.1% were
one-to four-family residential mortgage loans.  Of the one- to
four-family mortgage loans outstanding at that date, 26.1% were
fixed-rate loans, and 73.9% were adjustable-rate loans.  At
December 31, 1996, $1.5 million or 11.5% of gross loans were
secured by commercial real estate properties consisting of retail
shops and churches, $487,000, or 3.7%, of gross loans were
construction loans for the construction of owner-occupied homes,
and $451,000, or 3.5% of gross loans consisted of land loans.  At
that date, consumer and other loans totaled $3.0 million or 23.2%
of the Association's gross loan portfolio, of which $795,000, or
6.1%, consisted of share loans, $475,000, or 3.7%, consisted of
automobile loans, $1,003,000, or 7.7%, consisted of lines of
credit to small farms and businesses, $22,000 or 0.17% consisted
of loans on manufactured homes and $721,000 or 5.5% consisted of
other loans (consisting of personal loans, disaster relief loans,
and loans to governmental entities and non-profit organizations).

     The Association also invests in mortgage-backed securities. 
At December 31, 1996, mortgage-backed and related securities
totaled $17.2 million.  See "- Investment Activities."

     The Association's loans-to-one borrower limit is generally
the greater of 15% of unimpaired capital and surplus or $500,000. 
At December 31, 1996, the maximum amount which the Association
could have lent under this limit to any one borrower and the
borrower's related entities was approximately $615,000.  At
December 31, 1996, the Association had no loans or groups of
loans to related borrowers with outstanding balances in excess of
this amount.  The Association's largest lending relationship at
December 31, 1996 was $540,000 in loans to one borrower which was
comprised of ten loans, seven of which were secured by real
estate and three of which were unsecured commercial loans.  The
Association's second largest lending relationship at December 31,
1996 was $375,770 in loans to one borrower which was comprised of
nine loans, eight of which were secured by real estate and one of
which was an unsecured commercial loan.  The Association's third
largest lending relationship totaled $332,760, which consisted of
two commercial real estate loans. At December 31, 1996, all of
these loans were performing in accordance with their terms.

<PAGE>

     Loan Portfolio Composition. Set forth below is data relating
to the composition of the Association's loan portfolio by type of
loan as of the dates indicated.

<TABLE>

                                                            At December 31,

                                             1996                 1995                 1994
                                       -----------------    -----------------    -----------------
                                       Amount    Percent    Amount    Percent    Amount    Percent
                                       -----------------------------------------------------------

<S>                                    <C>       <C>        <C>       <C>        <C>        <C>
Real estate loans:
 One- to four-family residential       $ 7,279    60.97%    $ 7,918    70.50%    $ 8,710     75.96%
 Commercial real estate loans            1,519    12.73       1,208    10.76         881      7.68
 Construction                              487     4.08         260     2.32         162      1.41
 Land loans                                451     3.78         203     1.81         181      1.58
 Other real estate loans                   237     1.99         131     1.17         235      2.05
 Total first mortgage loans              9,973    83.55       9,720    86.55      10,169     88.69

Consumer and other loans
 Automobile                                475     3.97         496     4.42         460      4.01
 Manufactured homes                         22     0.19          12     0.11          21      0.18
 Share loans                               795     6.66         800     7.12         765      6.67
 Lines of credit                         1,003     8.41         440     3.92         165      1.44
 Other loans                               721     6.04         415     3.70         346      3.01

   Total consumer and other loans        3,016    25.27       2,163    19.26       1,757     15.31
   Total loans receivable               12,989   108.82      11,883   105.82      11,926    104.00

Less:
 Undisbursed loans proceeds               (755)   (6.34)       (335)   (2.98)       (131)    (1.13)
 Unearned discounts                         --       --          --       --          (1)     (.01)
 Allowance for loan losses                (296)   (2.48)       (317)   (2.82)       (328)    (2.86)
   Total loans receivable, net         $11,938   100.00%    $11,231   100.00%    $11,466    100.00%

</TABLE>

     One-to Four-Family Mortgage Loans.  The Association's
primary lending activity is the origination of one- to four-
family, owner-occupied, residential mortgage loans secured by
property located in the Association's market area.  Loans are
generated through the Association's marketing efforts, its
existing customers and referrals, real estate brokers, builders
and local businesses.  The Association generally has limited its
real estate loan originations to the financing of properties
located within its market area and will not make out of state
loans.  At December 31, 1996, the Association had $7.3 million,
or 56.1% of its gross loan portfolio, invested in mortgage loans
secured by one- to four-family residences.

     The Association originates for retention in its portfolio
fixed-rate residential one- to four-family loans with terms of up
to 15 years.  The Association's fixed-rate mortgage loans
amortize monthly with principal and interest due each month. 
Residential real estate loans often remain outstanding for
significantly shorter periods than their contractual terms
because borrowers may refinance or prepay loans at their option. 

     The Association currently offers ARM loans with amortization
periods ranging up to 30 years.  The Association generally offers
ARM loans that either adjust every year or every three years from
the date of origination, with interest rate adjustment
limitations up to two percentage points per adjustment and with a
cap of up to six percentage points on total interest rate
increases over the life of the loan.  Currently, ARM loans are
originated with a minimum interest rate of five percent and a
maximum rate of 15% regardless of the initial rate.  In a rising
interest rate environment, such rate limitations may prevent ARM
loans from repricing to market interest rates, which would have
an adverse effect on net interest income.  The Association has
used different interest indices for ARM loans in the past, and
currently uses the National Average Contract Interest Rate for
Major Lenders on the Purchase of Previously Occupied Loans as its
index.  ARM loans secured by residential one- to four-family real
estate totaled $5.4 million, or 73.9% of the Association's total
one- to four-family residential real estate loans receivable at
December 31, 1996.  The origination of fixed-rate mortgage loans
versus ARM loans is monitored on an ongoing basis and is affected
significantly by the level of market interest rates, customer
preference, the Association's interest rate gap position and loan
products offered by the Association's competitors.  Particularly
in a relatively low interest rate


<PAGE>

environment, borrowers may prefer fixed-rate loans to ARM loans. 
During the year ended December 31, 1996, the Association
originated $162,000 in fixed-rate residential mortgage loans and
428,000 of ARM loans.

     The primary purpose of offering ARM loans is to make the
Association's loan portfolio more interest rate sensitive. 
However, as the interest income earned on ARM loans varies with
prevailing interest rates, such loans do not offer the
Association predictable cash flows as would long-term, fixed-rate
loans.  ARM loans carry increased credit risk associated with
potentially higher monthly payments by borrowers as general
market interest rates increase.  It is possible, therefore,
during periods of rising interest rates, that the risk of
delinquencies and defaults on ARM loans may increase due to the
upward adjustment of interest costs to the borrower, resulting in
increased loan losses.

     The Association's residential first mortgage loans
customarily include due-on-sale clauses, which are provisions
giving the Association the right to declare a loan immediately
due and payable in the event, among other things, that the
borrower sells or otherwise disposes of the underlying real
property serving as security for the loan.  Due-on-sale clauses
are a means of imposing assumption fees and increasing the
interest rate on the Association's mortgage portfolio during
periods of rising interest rates.

     Effective December 19, 1993, all financial institutions were
required to adopt and maintain comprehensive written real estate
lending policies that are consistent with safe and sound banking
practices.  These lending policies must reflect consideration of
the Interagency Guidelines for Real Estate Lending Policies
adopted by the Federal banking agencies, including the OTS, in
December 1992 ("Guidelines").  The Guidelines set forth, pursuant
to the mandates of the FDICIA, uniform regulations prescribing
standards for real estate lending.  Real estate lending is
defined as extension of credit secured by liens on interests in
real estate or made for the purpose of financing the construction
of a building or other improvements to real estate, regardless of
whether a lien has been taken on the property.

     The policies must address certain lending considerations set
forth in the Guidelines, including loan-to-value ("LTV") limits,
loan administration procedures, underwriting standards, portfolio
diversification standards, and documentation, approval and
reporting requirements.  These policies must also be appropriate
based upon the size of the institution and the nature and scope
of its operations, and must be reviewed and approved by the
institution's board of directors at least annually.  The LTV
ratio framework, with an LTV ratio being the total amount of
credit to be extended divided by the appraised value of the
property at the time the credit is originated, must be
established for each category of real estate loans.  If not a
first lien, the lender must combine all senior liens when
calculating this ratio.  The Guidelines, among other things,
establish the following supervisory LTV limits: raw land (65%);
land development (75%); construction (commercial, multi-family
and nonresidential) (80%); improved property (85%); and owner
occupied one- to four-family residential (no maximum ratio,
however, any LTV ratio in excess of 90% requires appropriate
insurance or readily marketable collateral).

     Certain institutions are permitted to make real estate loans
that do not conform with the established LTV ratio limits up to
100% of the institution's total capital.  Within this aggregate
limit, total loans for all commercial, agricultural, multi-family
and other non-one- to four-family residential properties should
not exceed 30% of total capital.  An institution will come under
increased supervisory scrutiny as the total of such loans
approaches these levels.  Certain loans are exempt from the LTV
ratios (e.g., those guaranteed by a government agency, loans to
facilitate the sale of real estate owned, loans renewed,
refinanced or restructured by the original lender(s) to the same
borrower(s) where there is no advancement of new funds, etc.).

<PAGE>

     Regulations limit the amount that a savings association may
lend relative to the appraised value of the real estate securing
the loan, as determined by an appraisal at the time of loan
origination.  Such regulations permit a maximum LTV ratio of 95%
for residential property (and 100% for loans guaranteed by the
Veterans Administration) and 90% for all other real estate loans. 
The Association's lending policies, however, generally limit the
maximum LTV ratio on fixed-rate and ARM loans to 95% of the
lesser of the appraised value or the purchase price of the
property securing the loan in the case of loans secured by one-
 to four-family owner-occupied properties.  The maximum LTV ratio
on other types of real estate loans is generally the lesser of
80% of the appraisal value or the purchase price of the property.

     When underwriting residential real estate loans, the
Association reviews and verifies each loan applicant's
employment, income and credit history.  Management believes that
stability of income and past credit history are integral parts in
the underwriting process.  Generally, the applicant's total
monthly mortgage payment, including all escrow amounts, is
limited to 28% of the applicant's total monthly income.  In
addition, total monthly obligations of the applicant, including
mortgage payments, should not generally exceed 42% of total
monthly income.  Written appraisals are generally required on
real estate property offered to secure an applicant's loan.  For
real estate loans with LTV ratios of between 80% and 95%, the
Association requires private mortgage insurance.  The Association
requires fire, casualty and where necessary flood insurance on
all properties securing real estate loans.  The Association
requires title insurance, and an attorney's title opinion.

     Commercial Real Estate Loans.  The Association originates
commercial real estate loans typically secured by retail
facilities, churches and office buildings.  At December 31, 1996,
$1.5 million, or 11.5% of the Association's gross loan portfolio
consisted of commercial real estate loans.  At December 31, 1996,
all of the Association's commercial real estate loans were
secured by properties within the State of Louisiana.  The maximum
loan to value ratio for commercial real estate loans originated
by the Association is 80%.  At December 31, 1996, the largest
commercial real estate loan had a principal balance of $259,000,
and was secured by commercial real estate.  The loan was
performing in accordance with its terms at December 31, 1996.

     The underwriting standards employed by the Association for
commercial real estate loans include a determination of the
applicant's credit history and an assessment of the applicant's
ability to meet existing obligations and payments on the proposed
loan.  Written appraisals are obtained on all commercial real
estate loans.  The Association assesses the creditworthiness of
the applicant by reviewing a credit report, financial statements
and tax returns on the applicant.

     Loans secured by commercial real estate generally involve a
greater degree of credit risk than one- to four-family mortgage
loans.  The increased risk is the result of several factors,
including the effects of general economic conditions in income
producing properties and the successful operation or management
of the properties securing the loans.  Furthermore, the repayment
of loans secured by commercial real estate is typically dependent
upon the successful operation of the related business and real
estate property.  If the cash flow from the project is reduced,
the borrower's ability to repay the loan may be impaired.

     Land Loans.  The Association offers land loans, primarily
loans to purchase and develop single family homesites, which may
consist of individual lots or large acreage tracts.  At December
31, 1996, $451,000, or 3.5% of the Association's gross loan
portfolio consisted of land loans.  The maximum loan amount
generally does not exceed 75% of the appraised value of the
property.  The terms of land loans are negotiated on a case by
case basis; however, fixed rate loans are typically originated
for terms of 5 years or less; adjustable rate land loans are
originated for terms up to 15 years and will either adjust at a
premium over the prime rate or will be based upon the National
Average Contract Interest Rate for Major Lenders on the Purchase
of Previously Occupied Loans.  The Association will make a
limited number of land loans for speculation purposes. Land loans
are typically made to companies or individuals with whom the
Association has had a prior business relationship.

<PAGE>
     Construction Lending.  At December 31, 1996, the Association
had $487,000 or 3.7% of its gross loan portfolio, invested in
construction loans.  First Federal offers loans to both builders
and individuals for the construction of one- to four-family
residences.  Currently, such loans are offered with fixed- or
adjustable-rates of interest, with loan terms of six months.  The
interest rates of construction loans are typically at a margin
over the prime rate or the National Average Contract Interest
Rate for Major Lenders on the Purchase of Previously Owned Homes. 
The maximum loan amount will not exceed 80% of the appraised
value of the project.  The Association requires the builder to
submit plans, specifications and cost projections.  In addition,
the Association reviews the borrower's existing financial
condition, including total outstanding debt.  Funds are dispersed
as the construction project progresses.  Following the
construction period, these loans may convert to permanent loans,
generally with terms for up to 15 years if the interest rate is
fixed and up to 30 years if the interest rate is adjustable.  At
December 31, 1996, none of the Association's construction loans
were non-performing. 

     Construction lending and land loans are generally considered
to involve a higher level of credit risk than one- to four-family
residential lending since the risk of loss on construction loans
is dependent largely upon the accuracy of the initial estimate of
the individual property's value upon completion of the project
and the estimated cost (including interest) of the project.  If
the cost estimate proves to be inaccurate, the Association may be
required to advance funds beyond the amount originally committed
to permit completion of the project.

     Consumer and Other Lending.  First Federal offers a variety
of consumer loans, including loans secured by deposits, lines of
credit, automobile and home improvement loans.  The Association
currently originates substantially all of its consumer loans in
its primary market area generally to its existing customers.  At
December 31, 1996, the Association's consumer and other loan
portfolio totaled $3.0 million, or 23.2% of its gross loan
portfolio.

     The Association offers loans secured by the borrower's
savings deposits ("share loans").  At December 31, 1996, share
loans totaled $795,000, or 6.1% of the Association's gross loan
portfolio.

     First Federal originates home improvement loans.  Home
equity and home improvement loans secured by second mortgages,
together with loans secured by all prior liens, are generally
limited to 80% or less of the appraised value of the home. 
Generally, such loans have a maximum term of up to 15 years.  As
of December 31, 1996, home improvement loans amounted to $88,000,
which represented 0.68% of the Association's gross loan
portfolio.

     The Association also originates lines of credit for
businesses.  These loans are made on both a secured and unsecured
basis. Lines of credit may be secured by real estate, equipment
and inventory. They are generally originated with interest rates
that adjust at a premium above the prime rate. All lines of
credit are reviewed annually by the Association.  Lines of credit
loans amounted to approximately $1.0 million at December 31,
1996, which represented 7.7% of the Association's gross loan
portfolio.

     Another component of the Association's consumer loan
portfolio consists of automobile loans.   The Association
originates automobile loans on a direct basis, where the
Association extends credit directly to the borrower.  These loans
generally have terms that do not exceed five years and carry a
fixed-rate of interest.  Generally, loans on new vehicles are
made in amounts up to 80% of dealer cost and loans on used
vehicles are made in amounts up to 80% of the vehicle's published
NADA value.  At December 31, 1996, the Association's automobile
loans totaled $475,000 or 3.7% of the Association's gross loan
portfolio.

     Consumer loan terms vary according to the type and value of
collateral, length of contract and creditworthiness of the
borrower.  The underwriting standards employed by the Association
for consumer loans include an application, a determination of the
applicant's payment history on other debts and an assessment of
ability to meet existing obligations and payments on the proposed
loan.  Although creditworthiness of the applicant is a primary
consideration, the underwriting process also includes a
comparison of the value of the security, if any, in relation to
the proposed loan amount.

     Consumer loans entail greater credit risk than do
residential mortgage loans, particularly in the case of consumer
loans which are unsecured or are secured by rapidly depreciable
assets, such as automobiles.  Further, any repossessed collateral
for a defaulted consumer loan may not provide an adequate source
of repayment of the

<PAGE>

outstanding loan balance as a result of the greater likelihood of
damage, loss or depreciation.  In addition, consumer loan
collections are dependent on the borrower's continuing financial
stability, and thus are more likely to be affected by adverse
personal circumstances.  Furthermore, the application of various
federal and state laws, including bankruptcy and insolvency laws,
may limit the amount which can be recovered on such loans. 
Management believes that its level of delinquencies is relatively
low in comparison with other financial institutions, and that its
low level of consumer loan delinquencies is attributable to the
Association's policy of aggressively contacting borrowers who
become delinquent in repaying their loans.  At December 31, 1996,
$0 in consumer loans were non-performing.  See "- Delinquencies
and Classified Assets."  There can be no assurances, however,
that delinquencies will not increase in the future.

Loan Maturity Schedule

     The following table sets forth certain information at
December 31, 1996, regarding the dollar amount of loans maturing
in the Association's portfolio based on their contractual terms
to maturity.  Demand loans, loans having no stated schedule of
repayments and no stated maturity, and overdrafts are reported as
due in one year or less. 

<TABLE>
                                    Within      1-3       3-5      5-10      10-20   Beyond 20
                                    1 Year     Years     Years     Years     Years     Years     Total
                                    ------------------------------------------------------------------
<S>                               <C>         <C>       <C>       <C>       <C>       <C>       <C>
First mortgage loans:
 One- to four-family residential  $  112      $  210    $  642    $ 1,972   $ 3,219   $ 1,124   $ 7,279
 Other properties                    351          93       379        435       647       302     2,207
 Construction                        141          --        --         90       221        35       487
Consumer and other loans           1,919         576       503         18        --        --     3,016
   Total                          $2,523      $  879    $1,524    $ 2,515   $ 4,087   $ 1,461   $12,989
</TABLE>


    The following table sets forth the dollar amount of all
loans at December 31, 1996 that have predetermined interest rates
and have floating or adjustable interest rates and which are due
after December 31, 1997.

<TABLE>
                                                   Floating or
                                  Fixed-Rates    Adjustable Rates    Total
                                  -------------------------------------------
                                                  (In Thousands)

<S>                               <C>            <C>                 <C>
First mortgage loans:
 One- to four-family residential  $ 1,724        $ 5,443             $ 7,167
 Other properties                   1,060            796               1,856
 Construction                         346             --                 346
Consumer and other loans            1,097             --               1,097
   Total                          $ 4,227        $ 6,239             $10,466

</TABLE>
<PAGE>

Origination of Loans

     Loan originations are developed from continuing business
with depositors and borrowers, soliciting realtors, builders,
walk-in customers and third-party sources.  All real estate loans
must be approved by the Association's board of directors. 
Consumer and other loans up to $15,000 may be approved by the
Association's President.  All other consumer and other loans must
be approved by the Board of Directors.

     While the Association originates both adjustable-rate and
fixed-rate loans, its ability to originate loans to a certain
extent is dependent upon the relative customer demand for loans
in its market, which is affected by the interest rate
environment, among other factors.  For the year ended December
31, 1996, the Association originated $4.2 million in fixed-rate
loans and $1.7 million in adjustable rate loans.

     In recent years the Association has neither purchased, nor
sold loans.  All loans originated by the Association are retained
in the Association's portfolio. 

     Set forth below is a table showing the Association's loan
originations and repayments for the periods indicated.

<TABLE>

                                               Year Ended December 31,

                                            1996        1995       1994
                                                   (In Thousands)

<S>                                         <C>         <C>        <C>
Total loans receivable at beginning of
 period                                     $11,883     $11,926    $11,431
 First mortgage loans:
  One- to four-family residential               590         482      1,006
  Construction                                  664         243        493
  Other properties                            1,025         257        160
 Consumer and other loans:
  Automobile                                    308         359        554
  Manufactured home                               5          38         11
  Other                                       2,564         773        540
 Refinancing                                    755         764        933
  Total originations                          5,911       2,916      3,697
 Transfers of mortgage to foreclosed
  real estate                                   (74)         --        (91)
  Repayments                                 (4,731)     (2,959)    (3,111)
Net loan activity                             1,106         (42)       495
  Total loans receivable at end of period   $12,989     $11,883    $11,926

</TABLE>


Delinquencies and Classified Assets

     The Association's collection procedures provide that when a
loan is 15 days past due, a computer-generated late charge notice
is sent to the borrower requesting payment plus a late charge. If
the loan remains delinquent a telephone call is made or a letter
is sent to the borrower stressing the importance of reinstating
the loan and obtaining reasons for the delinquency before the
loan becomes delinquent after 30 days.  After 45 days a written
commitment to bring the loan current is required. When a loan
continues in a delinquent status for 90 days or more, and a
repayment schedule has not been made or adhered to by the
borrower, a notice of intent to foreclose upon the underlying
property is sent to the borrower by the Association's attorney,
giving the borrower 10 days to cure the delinquency.  If not
cured, foreclosure proceedings are initiated. 

     In recent years the Association has increased its collection
efforts by more closely monitoring delinquent loans and employing
diligent collection efforts.  Management believes that these
efforts have contributed to the loan portfolio's low delinquency
levels.  At December 31, 1996, 1995 and 1994 the percentage of
total loans delinquent 90 days or more to net loans receivable
were 0%, .06% and 0%, respectively.

<PAGE>

     Delinquent Loans and Nonperforming Assets.  Generally, when
a loan becomes more than 90 days delinquent, the Association will
place the loan on non-accrual status and previously accrued
interest income on the loan is charged against current income. 
The loan will remain on a non-accrual status as long as the loan
is more than 90 days delinquent.

     Real estate acquired through foreclosure or by deed-in-lieu
of foreclosure is classified as real estate owned until such time
as it is sold.  When real estate owned is acquired, it is
recorded at the lower of the unpaid principal balance of the
related loan, or its fair market value, less estimated selling
expenses.  Any further write-down of real estate owned is charged
against earnings.  At December 31, 1996, the Association owned
approximately $75,000 of property classified as real estate
owned.

     Delinquent consumer loans are handled in a similar manner as
to those described above; however, shorter time frames for each
step apply due to the type of collateral generally associated
with such types of loans.  The Association's procedures for
repossession and sale of consumer collateral are subject to
various requirements under Louisiana and federal consumer
protection laws.

     The following table sets forth information with respect to
the Association's delinquent loans and other problem assets at
December 31, 1996.

<TABLE>

                                                  At December 31, 1996
                                                  Balance       Number
                                                     (In Thousands)

<S<                                               <C>           <C>
One- to four-family residential real estate:
   Loans 60 to 89 days delinquent                 $105           3
   Loans 90 days or more delinquent                 --          --
Other properties:
   Loans 60 to 89 days delinquent                    5        --
   Loans 90 days or more delinquent                 --        --
Construction:
   Loans 60 to 89 days delinquent                    5         2
   Loans 90 days or more delinquent                 --        --
Consumer and other loans:
   Loans 60 to 89 days delinquent                   --        --
    Loans 90 days or more delinquent                --        --
Foreclosed real estate and repossessions            75         2
Other nonperforming assets                          --        --
Restructured loans within the meaning of
 Statement of Financial Accounting Standards
 No. 15 (not included in other nonperforming
 categories above)                                 154         7
Loans to facilitate sale of real estate owned      538        23

</TABLE>
<PAGE>

     The following table sets forth information regarding
delinquent loans and real estate owned by the Association at the
dates indicated.  At December 31, 1996, the Association had
$154,000 in restructured loans within the meaning of SFAS 15.

<TABLE>

                                           Year Ended December 31,

                                        1996       1995       1994
                                              (In Thousands)

<S>                                     <C>        <C>        <C>
Non-accruing loans:
 First mortgage loans:
  One- to four-family residential       $  44      $ 144      $  62
  Other properties                         --         --         --
  Construction                             --         --         --
 Consumer and other loans                  --         11         --
  Total non-accruing loans                 44        155         62

Accruing loans past due 90 day or more:
 First mortgage loans:
  One- to four-family residential       $  --      $  --      $  --
  Other properties                         --         --         --
  Construction                             --         --         --
 Consumer and other loans                  --          6         --
  Total accruing loans delinquent
   90 days or more                         --          6         --
    Total non-performing loans             44        161         62

Total real estate owned                    75         39         45
  Total non-performing assets           $ 119      $ 200      $ 107

Performing troubled debt restructurings $ 154      $ 191      $ 121
 Total non-performing assets and
  troubled debt restructurings          $ 273      $ 391      $ 228

Total loans delinquent 90 days or
 more to net loans receivable            0.00%      0.06%      0.00%
Total loans delinquent 90 days or
 more to total assets                    0.00%      0.02%      0.00%
Total non-performing loans and
 REO to total assets                     0.38%      0.69%      0.50%
Total non-performing assets and
 troubled debt restructurings total
 assets                                  0.87%      1.35%      0.85%

</TABLE>
<PAGE>


Delinquent Loans

     The following table sets forth information with respect to
loans past due 60-89 days in the Association's portfolio at the
dates indicated.

<TABLE>

                                            At December 31,
                                        1996      1995      1994
                                            (In Thousands)

<S>                                     <C>       <C>       <C>
Loans past due 60-89 days:
 First mortgage loans:
  One- to four-family residential       $105      $15       $32
  Other properties                         5       --        --
  Construction                            --       --        --
 Consumer and other loans                  5       10        12

</TABLE>


     For the year ended December 31, 1996 gross interest income
which would have been recorded had the non-accruing loans been
current in accordance with their original terms amounted to
$5,800. The amount that was included in interest income on such
loans was $3,000 for the year ended December 31, 1996.

     Classified Assets.  Federal regulations provide for the
classification of loans and other assets, such as debt and equity
securities, considered by the OTS to be of lesser quality, as
"substandard," "doubtful" or "loss."  An asset is considered
"substandard" if it is inadequately protected by the current net
worth and paying capacity of the obligor or the collateral
pledged, if any.  "Substandard" assets include those
characterized by the "distinct possibility" that the insured
institution will sustain "some loss" if the deficiencies are not
corrected.  Assets classified as "doubtful" have all of the
weaknesses inherent in those classified "substandard" with the
added characteristic that the weaknesses present make "collection
or liquidation in full" on the basis of currently existing facts,
conditions and values, "highly questionable and improbable." 
Assets classified as "loss" are those considered "uncollectible"
and of such little value that their continuance as assets without
the establishment of a specific loss reserve is not warranted.

     When an insured institution classifies problem assets as
either substandard or doubtful, it may establish general
allowances for losses in an amount deemed prudent by management. 
General allowances represent loss allowances which have been
established to recognize the inherent risk associated with
lending activities, but which, unlike specific allowances, have
not been allocated to particular problem assets.  When an insured
institution classifies problem assets as "loss," it is required
either to establish a specific allowance for losses equal to 100%
of that portion of the asset so classified or to charge-off such
amount.  An institution's determination as to the classification
of its assets and the amount of its valuation allowances is
subject to review by the regulatory authorities, who may order
the establishment of additional general or specific loss
allowances.

     In connection with the filing of its periodic reports with
the OTS and in accordance with its classification of assets
policy, the Association regularly reviews loans in its portfolio
to determine whether such assets require classification in
accordance with applicable regulations.  On the basis of
management's review of its assets, at December 31, 1996, the
Association had classified a total of $164,000 of its assets as
substandard, $0 as doubtful, and $21,000 as loss.  At
December 31, 1996, total classified assets comprised $185,000, or
4.3% of the Association's capital, or .59% of the Association's
total assets.

     Other Loans of Concern.  Other than the non-performing loans
set forth in the tables above, as of March 31, 1996, there were
no loans classified by the Association with respect to which
known information about the possible credit problems of the
borrowers or the cash flows of the security properties have
caused management to have some doubts as to the ability of the
borrowers to comply with present loan repayment terms and which
may result in the future inclusion of such items in the non-
performing asset categories.

<PAGE>

     Allowance for Loan Losses.  The allowance for loan losses is
established through a provision for loan losses based on
management's evaluation of the risk inherent in its loan
portfolio and changes in the nature and volume of its loan
activity, including those loans which are being specifically
monitored by management.  Such evaluation, which includes a
review of loans for which full collectibility may not be
reasonably assured, considers among other matters, the loan
classifications discussed above, the estimated fair value of the
underlying collateral, economic conditions, historical loan loss
experience, the amount of loans outstanding and other factors
that warrant recognition in providing for an adequate loan loss
allowance.

     Real estate properties acquired through foreclosure are
recorded at the lower of cost or fair value minus estimated cost
to sell.  If fair value at the date of foreclosure is lower than
the balance of the related loan, the difference will be
charged-off to the allowance for loan losses at the time of
transfer.  Valuations are periodically updated by management and
if the value declines, a specific provision for losses on such
property is established by a charge to operations.  At December
31, 1996, the Association had properties with a net book value of
$75,000 which were acquired through foreclosure.

     Although management believes that it uses the best
information available to determine the allowance, unforeseen
market conditions could result in adjustments and net earnings
could be significantly affected if circumstances differ
substantially from the assumptions used in making the final
determination.  Future additions to the Association's allowance
for loan losses will be the result of periodic loan, property and
collateral reviews and thus cannot be predicted in advance.  In
addition, federal regulatory agencies, as an integral part of the
examination process, periodically review the Association's
allowance for loan losses.  Such agencies may require the
Association to increase the allowance based upon their judgment
of the information available to them at the time of their
examination.  At December 31, 1996, the Association had a total
allowance for loan losses of $296,000, representing 670.8% of
total non-performing loans and 2.5% of the Association's loans,
net.  See Note 5 of the Notes to Consolidated Financial
Statements.

<PAGE>

     The following table sets forth the allocation for loan
losses by category for the periods indicated.<PAGE>
<TABLE>

                                                             At December 31,

                                       1996                        1995                      1994
                               ---------------------      ----------------------     ----------------------

                                          % of Loans                 % of Loans                 % of Loans
                                            In Each                    In Each                    In Each
                                          Category to                Category to                Category to
                               Amount     Total Loans     Amount     Total Loans     Amount     Total Loans

<S>                             <C>          <C>           <C>         <C>            <C>           <C>
First mortgage loans:
  1-4 family residential        $217          56.04%       $230         66.63%        $242           73.04%
  Other properties                37          16.99          37         12.98           36           10.88
  Construction                    --           3.75          --          2.19           --            1.36
Consumer and other loans          42          23.22          50         18.20           50           14.72
  Balance, end of period        $296         100.00%       $317        100.00%        $328          100.00%

</TABLE>


     The following table sets forth information with respect to
the Association's allowance for loan losses at the dates
indicated.


<TABLE>

                                           Year Ended December 31,

                                        1996       1995       1994
                                              (In Thousands)

<S>                                     <C>        <C>        <C>
Balance at beginning of period          $  317     $  328     $  333
Charge-offs:
 First mortgage loans                      (10)        --         --
 Consumer and other loans                   (8)        (7)       (14)
Recoveries:
 First mortgage loans                       --         --         --
 Consumer and other loans                    5         17          7
  Net charge offs                          (13)        10         (7)
   Provision for loan losses (recoveries)   (8)       (21)         2
Balance, at end of period               $  296     $  317     $  328

Allowance for loan losses as a
 percent of net loans receivable at
 end of period                            2.48%      2.83%      2.86%
Ratio of net loans charged off during
 the period to average loans outstanding
 during the period                      (0.11)%      0.09%    (0.07)%
Ratio of allowance for loan losses
 to total noon-performing loans at
 end of period                          670.81%    196.90%    529.04%
Ratio of allowance for loan losses
 to total non-performing loans and
 REO at end of period                   249.02%    158.50%    306.54%

</TABLE>
<PAGE>
Investment Activities

     General.  First Federal must maintain minimum levels of
investments that qualify as liquid assets under OTS regulations. 
Liquidity may increase or decrease depending upon the
availability of funds and comparative yields on investments in
relation to the return on loans.  Historically, the Association
has generally maintained liquid assets at levels above the
minimum requirements imposed by the OTS regulations and at levels
believed adequate to meet the requirements of normal operations,
including repayments of maturing debt and potential deposit
outflows.  Cash flow projections are regularly reviewed and
updated to assure that adequate liquidity is maintained.  At
December 31, 1996, the Association's liquidity ratio (liquid
assets as a percentage of net withdrawable savings deposits and
current borrowings) was 7.8%. See"Regulation - Liquidity."

     Federally chartered savings institutions have the authority
to invest in various types of liquid assets, including United
States Treasury obligations, securities of various federal
agencies, certain certificates of deposit of insured banks and
savings institutions, certain bankers' acceptances, repurchase
agreements and federal funds.  Subject to various restrictions,
federally chartered savings institutions may also invest their
assets in commercial paper, investment grade corporate debt
securities and mutual funds whose assets conform to the
investments that a federally chartered savings institution is
otherwise authorized to make directly.

     Generally, the investment policy of the Association, as
established by the Board of Directors, is to invest funds among
various categories of investments and maturities based upon the
Association's liquidity needs, asset/liability management
policies, investment quality, marketability and performance
objectives.

     Mortgage-backed and Related Securities.  The Association
purchases mortgage-backed and related securities to supplement
residential loan production and as part of its asset/liability
strategy.  The type of securities purchased is based upon the
Association's asset/liability management strategy and balance
sheet objectives.  For instance, substantially all of the
mortgage-backed and related investments purchased by the
Association over the last several years have had adjustable rates
of interest.  Management believes that the adjustable rate
feature of the mortgages underlying adjustable rate mortgage-
backed and related securities generally will help to reduce
changes in the value of the mortgage-backed and related security
in response to normal interest rate fluctuations.  As the
interest rates on the mortgages underlying the adjustable rate
mortgage-backed and related securities are reset periodically,
the yields of such securities will gradually align themselves to
reflect changes in the market rates so that the market value of
such securities will remain relatively constant as compared to
fixed rate instruments.  The Association has invested primarily
in federal agency securities, principally Freddie Mac (formerly
the Federal Home Loan Mortgage Corporation), Government National
Mortgage Association ("GNMA"), Federal National Mortgage
Association ("FNMA") and Small Business Association ("SBA")
obligations.  At December 31, 1996, the Association's investment
in mortgage-backed and related securities totaled $17.2 million
or 54.6% of its total assets.  At December 31, 1996, $13.2
million of the Association's mortgage-backed and related
securities were classified as held-to-maturity and $4.0 million
were classified as available for sale.  See Note 4 of the Notes
to Consolidated Financial Statements.

     The FNMA, Freddie Mac and GNMA certificates are modified
pass-through mortgage-backed and related securities that
represent undivided interests in underlying pools of fixed-rate,
or certain types of adjustable-rate, single-family residential
mortgages issued by these government-sponsored entities.  As a
result, the interest rate risk characteristics of the underlying
pool of mortgages, i.e., fixed rate or adjustable rate, as well
as prepayment risk, are passed on to the certificate holder. 
FNMA and Freddie Mac provide the certificate holder a guarantee
of timely payments of interest and ultimate collection of
principal, whether or not they have been collected.  GNMA's
guarantee to the holder timely payments of principal and interest
and are backed by the full faith and credit of the U.S.
government.  The FNMA, Freddie Mac, GNMA and SBA certificates are
modified pass-through mortgage-backed and related securities that
represent undivided interests in underlying pools of fixed-rate,
or certain types of adjustable-rate, single-family residential
mortgages, or in the case of the SBA certificates, the portion of
commercial and/or real estate loans guaranteed by the SBA.  As a
result, the interest rate characteristics of the underlying pool
of mortgages, i.e., fixed-rate or adjustable-rate, as well as
prepayment risk, are passed on to the certificate holder.  FNMA
and Freddie Mac provide the certificate holder a guarantee of
timely payments of interest and ultimate collection of principal,
whether or not they have been collected.

<PAGE>

     Mortgage-backed and related securities generally yield less
than the loans that underlie such securities, because of the cost
of payment guarantees or credit enhancements that reduce credit
risk.  In addition, mortgage-backed and related securities are
more liquid than individual mortgage loans and may be used to
collateralize obligations of the Association.  In general,
mortgage-backed securities issued or guaranteed by FNMA and
Freddie Mac are weighted at no more than 20% for risk-based
capital purposes, and mortgage-backed securities issued or
guaranteed by GNMA are weighted at 0% for risk-based capital
purposes, compared to an assigned risk weighting of 50% to 100%
for whole residential mortgage loans.  These types of securities
thus allow the Association to optimize regulatory capital to a
greater extent than non-securitized whole loans.  The Association
has sought to improve the yield on its mortgage-backed securities
portfolio by investing in mortgage-backed securities with
maturities in excess of 10 years.

     While mortgage-backed securities carry a reduced credit risk
as compared to whole loans, such securities remain subject to the
risk that a fluctuating interest rate environment, along with
other factors such as the geographic distribution of the
underlying mortgage loans, may alter the prepayment rate of such
mortgage loans and so affect both the prepayment speed, and
value, of such securities.

     Set forth below is a table showing the Association's
purchases and repayments of mortgage-backed securities for the
periods indicated.  The Association did not sell any mortgage-
backed securities during the periods indicated.

<TABLE>

                                           Year Ended December 31,

                                        1996       1995       1994
                                              (In Thousands)

<S>                                     <C>        <C>        <C>
Mortgage-backed securities at
 beginning of period                    $15,391    $13,257    $13,943
  Purchases                               3,915      4,275      2,290
  Repayments                             (2,078)    (2,069)    (2,845)
Discount (premium) amortization             (42)       (72)      (131)
Mortgage-backed securities at end
 of period                              $17,186    $15,391    $13,257

</TABLE>


     At December 31, 1996, the Association's investment
securities consisted solely of FHLB stock totaling $259,200. The
Association invests excess liquidity in FHLB overnight deposits.

     OTS regulations restrict investments in corporate debt and
equity securities by the Association.  These restrictions include
prohibitions against investments in the debt securities of any
one issuer in excess of 15% of the Association's unimpaired
capital and unimpaired surplus as defined by federal regulations,
plus an additional 10% if the investments are fully secured by
readily marketable collateral.  At December 31, 1996, the
Association was in compliance with this regulation.  See
"Regulation - Federal Regulation of Savings Associations" for a
discussion of additional restrictions on the Association's
investment activities. 

     The following table sets forth the carrying value of the
Association's FHLB stock and mortgage-backed securities at the
dates indicated.  At December 31, 1996, the market value of the
Association's mortgage-backed portfolios and investment
securities was approximately $16.9 million and $259,200,
respectively.

<TABLE>

                                     At December 31,
                                 1996     1995     1994
                                      (In Thousands)

<S>                              <C>      <C>      <C>
Mortgage-backed securities       $17,186  $15,391  $13,257
Federal Home Loan Bank stock         259      260      248
 Total investments               $17,448  $15,651  $13,505

</TABLE>
PAGE
<PAGE>
     Mortgage-Backed and Investment Portfolio Maturities.
The following table sets forth the scheduled maturities,
carrying values, market values and average yields for the
Association's investment securities at December 31, 1996.

<TABLE>

                                                              At December 31, 1996


                 One Year or Less    One to Five Years   Five to Ten Years   Beyond Ten Years        Total Investment Portfolio


                Carrying  Average   Carrying  Average   Carrying  Average   Carrying  Average   Carrying   Market  Average
                 Value     Yield     Value     Yield     Value     Yield     Value     Yield    Value      Value    Yield
                 --------------------------------------------------------------------------------------------------------
<S>              <C>          <C>   <C>        <C>       <C>       <C>      <C>         <C>      <C>      <C>         <C>
Mortgage-backed
and investment
securities held
to maturity:
 GNMA
 certificates    $   --       --%   $    6     6.24%     $  8      8.00%    $   356     6.64%    $   370  $   371     6.67%
 Freddie Mac
 certificates        --       --        --       --        15      7.25       4,497     6.10       4,512    4,429     6.10
 FNMA
 certificates        --       --        --       --        --        --       8,285     6.25       8,285    8,115     6.25
 Collateralized
 mortgage
 obligations         --       --        --       --        --        --          72     7.25          72       64     7.25
FHLB Stock           --       --        --       --        --        --         259     5.90         259      259     5.90
  Total          $   --       --%   $    6     6.24%     $ 23      7.53%    $13,469     6.21%    $13,498  $13,238     6.21%

Mortgage-backed
and investment
securities available
for sale:
 GNMA
 certificates    $   --       --%   $   --       --%     $ --        --%    $   536     6.70%    $   536  $   536     6.70%
 Freddie Mac
 certificates        --       --        --       --        10      7.38         719     7.13         729      729     7.13
 FNMA
 certificates        --       --       173     7.14        --        --       1,135     6.77       1,308    1,308     6.82
 SBA
 certificates        --       --        --       --        --        --       1,374     6.13       1,374    1,374     6.13
   Total         $   --       --%   $  173     7.14%     $ 10      7.38%    $ 3,764     6.59%    $ 3,947  $ 3,947     6.62%

</TABLE>
PAGE
<PAGE>
     The Association's investment securities portfolio at
December 31, 1996, contained neither tax-exempt securities nor
securities of any issuer with an aggregate book value in excess
of 10% of the Association's retained earnings, excluding those
issued by the U.S. government, or its agencies.

Sources of Funds

     General.  The Association's primary sources of funds are
deposits, receipt of principal and interest on loans and
securities, interest-earning deposits with other banks, FHLB
advances, and other funds provided from operations.

     FHLB advances are used to support lending activities and to
assist in the Association's asset/liability management strategy. 
See "- Asset/Liability Management."  Typically, the Association
does not use other forms of borrowings.  At December 31, 1996,
the Association had $1.2 million in FHLB advances.  

     Deposits.  First Federal offers a variety of deposit
accounts having a wide range of interest rates and terms.  The
Association's deposits consist of passbook, commercial demand,
NOW, money market deposit and certificate accounts.  The
certificate accounts currently range in terms from 30 days to
five years.

     The Association relies primarily on advertising, competitive
pricing policies and customer service to attract and retain these
deposits.  Currently, First Federal solicits deposits from its
market area only, and does not use brokers to obtain deposits. 
The flow of deposits is influenced significantly by general
economic conditions, changes in money market and prevailing
interest rates and competition.  

     The Association has become more susceptible to short-term
fluctuations in deposit flows as customers have become more
interest rate conscious.  The Association endeavors to manage the
pricing of its deposits in keeping with its profitability
objectives giving consideration to its asset/liability
management.  Notwithstanding the foregoing, a significant
percentage of the Association's deposits are for terms of less
than one year.  At December 31, 1996, $14.9 million or 58.1% of
the Association's deposits were in certificates of deposits with
terms of 11 months or less.  The Association believes that upon
maturity most of these deposits will remain at the Association. 
The ability of the Association to attract and maintain savings
accounts and certificates of deposit, and the rates paid on these
deposits, has been and will continue to be significantly affected
by market conditions.

<PAGE>

Savings Portfolio

     Deposits in the Association as of December 31, 1996, were
represented by the various types of deposit programs described
below.

<TABLE>

 Weighted
 Average                                                                  Percentage
Interest  Minimum      Checking and             Minimum                    of Total
   Rate   Term         Savings                  Amount       Balance       Savings
----------------------------------------------------------------------------------------
                                                          (In thousands)

<S>       <C>          <C>                      <C>         <C<           <C>
0.00%     None         Non interest-bearing
                        demand                  $5,000      $   456         1.77%
2.06      None         Passbook accounts            50        2,758        10.71
2.39      None         Money market              2,500          833         3.24
1.80      None         NOW accounts                100        3,222        12.51

                       Certificates of Deposit

4.88%     1-5 mos      Fixed term, fixed rate    2,500       10,365        40.25
5.14      6-11 mos     Fixed term, fixed rate    2,500        4,583        17.80
5.13      12-17 mos    Fixed term, fixed rate    1,000        1,988         7.72
5.34      18-23 mos    Fixed term, fixed rate    1,000        1,261         4.90
5.66      24-29 mos    Fixed term, fixed rate    1,000          129         0.50
5.69      30-35 mos    Fixed term, fixed rate    1,000           39         0.15
7.67      36-47 mos    Fixed term, fixed rate    1,000           33         0.13
5.84      48-53 mos    Fixed term, fixed rate    1,000           30         0.12
5.93      54-59 mos    Fixed term, fixed rate    1,000           53         0.20
 --       60 mos or
            greater    Fixed term, fixed rate    1,000           --
                                                            $25,750       100.00%

</TABLE>


Deposit Activity

     The following table sets forth the deposit activities of the
Association for the periods indicated:

<TABLE>
                                           Year Ended December 31,

                                        1996       1995       1994
                                              (In Thousands)

<S>                                     <C>        <C>        <C>
Deposits, beginning of period           $26,583    $24,523    $25,525
Deposits                                 55,778     57,787     46,051
Withdrawals                             (57,752)   (56,808)   (47,846)
 Net increase (decrease) before
  interest credited                      (1,947)       979     (1,795)
Interest credited                         1,141      1,081        793
 Net increase (decrease) in deposits       (833)     2,060     (1,002)
Deposits, end of period                 $25,750    $26,583    $24,523
</TABLE>
PAGE
<PAGE>
Deposit Flow

     The following table sets forth the change in dollar amount
of savings deposits in the various types of savings accounts
offered by the Association between the dates indicated.

<TABLE>

                                                                      At December 31,

                                               1996                         1995                         1994
                                    Balance   Percent   Change   Balance   Percent   Change   Balance   Percent
                                    ---------------------------------------------------------------------------
                                                                (Dollars in Thousands)

<S>                                 <C>        <C>      <C>      <C>        <C>      <C>      <C>        <C>
Now interest-bearing demand         $   456      1.77%  $   331  $   331      1.25%  $   39   $   292      1.19%
NOW Accounts                          3,222     12.51       249    2,973     11.18     (177)    3,150     12.85
Passbook savings                      2,758     10.71      (156)   2,914     10.96     (489)    4,304     13.88
Money market deposit accounts           833      3.24      (174)   1,007      3.79     (324)    1,331      5.43
Time deposits:
 which mature
   within 12 months                  14,948     58.05    (1,122)  16,070     60.45    3,232    12,838     52.35
   within 12-24 months                3,249     12.62       659    2,590      9.74      108     2,482     10.12
   beyond 24 months                     284      1.10      (414)     698      2.64     (329)    1,027      4.19
      Total                         $25,750    100.00%  $  (833) $26,583    100.00%  $2,060   $24,523    100.00%

</TABLE>


     The following table indicates the amount of the
Association's certificates of deposit of $100,000 or more by time
remaining until maturity at December 31, 1996.

<TABLE>

                                   Certificates
                                   of Deposits
                                  (In thousands)

<S>                                   <C>
Three months or less                  $1,243
Over three through six months            304
Over six through twelve months           400
Over twelve months                     1,232
Total                                 $3,179

</TABLE>

Time Deposits by Rates

     The following table sets forth the time deposits in the
Association classified by rates as of the dates indicated.

<TABLE>

                                           Year Ended December 31,

                                        1996       1995       1994
                                              (In Thousands)

<S>                                     <C>        <C>        <C>
Rates:
3.99% or less                           $     5    $   172    $ 8,552
4.00%-5.99%                              18,409     17,180      6,803
6.00%-7.99%                                  --      1,961        946
8.00%-8.75%                                  67         45         46
   Total                                $18,481    $19,358    $16,347

</TABLE>
<PAGE>

Time Deposit Maturity Schedule

     The following table sets forth the amount and maturities of
time deposits at December 31, 1996.

<TABLE>


                        One Year     1-2       2-3       3-4      4-5    Five and more
                        or Less     Years     Years     Years     Years      Years       Total

<S>                    <C>         <C>       <C>        <C>       <C>       <C>         <C>
Rate:
3.99% or less          $     5     $   --    $   --     $   --    $   --    $  --       $     5
4.00-5.99%              14,943      3,250       216         --        --       --        18,409
6.00-7.99%                  --         --        --         --        --       --            --
8.00-9.99%                  --         --        67         --        --       --            67
   Total               $14,948     $3,250    $  283     $   --    $   --    $  --       $18,481

</TABLE>


     Borrowings.  First Federal's borrowings historically have
consisted of advances from the FHLB of Dallas.  Such advances may
be made pursuant to different credit programs, each of which has
its own interest rate and range of maturities.  Federal law
limits an institution's borrowings from the FHLB to 20 times the
amount paid for capital stock in the FHLB, subject to regulatory
collateral requirements.  At December 31, 1996, the Association
had $1.2 million in advances from the FHLB.  The Association has
the ability to purchase additional capital stock from the FHLB. 
For additional information regarding the term to maturity and
average rate paid on FHLB advances, see Note 11 of the Notes to
Financial Statements.

     The following table sets forth the maximum month-end balance
and average balance of FHLB advances.

<TABLE>

                                           Year Ended December 31,

                                        1996       1995       1994
                                              (In Thousands)

<S>                                     <C>        <C>        <C>
FHLB advances
  Maximum balance                       $1,500     $--        $500
  Average                               $  175     $62        $316

</TABLE>

Regulation

General

     As a federally chartered savings institution, the
Association is subject to extensive regulation by the OTS.  Both
the OTS and FDIC, as insurer of deposit accounts, periodically
examine the Association for compliance with various regulatory
requirements.  The Association must file reports with the OTS
describing its activities and financial condition.  The
Association is also subject to certain reserve requirements
promulgated by the Board of Governors of the Federal Reserve
System ("Federal Reserve Board").  This supervision and
regulation is intended primarily for the protection of
depositors.  The regulatory structure also gives the regulatory
authorities extensive discretion in connection with their
supervisory and enforcement activities and examination policies,
including policies with respect to the classification of assets
and the establishment of adequate loan loss reserves for
regulatory purposes.  Any change in such regulation, whether by
the OTS, the FDIC or the Congress could have a material adverse
impact on the Company, the Association

<PAGE>

and their operations.  As a savings association holding company,
the Company is subject to OTS regulation, examination,
supervision and reporting requirements.

Federal Regulation of Savings Associations

     The OTS has extensive authority over the operations of
savings associations.  As part of this authority, the Association
is required to file periodic reports with the OTS and is subject
to periodic examinations by the OTS and the FDIC.  The last
regular OTS and FDIC examinations of the Association were as of
May 1996. When these examinations are conducted by the OTS and
the FDIC, the examiners may require the Association to provide
for higher general or specific loan loss reserves.

     All savings associations are subject to a semi-annual
assessment, based upon the savings association's total assets. 
The Association's OTS assessment for the fiscal year ended
December 31, 1996, was approximately $10,200.

     The OTS also has extensive enforcement authority over all
savings institutions and their holding companies, including the
Association and the Holding Company.  This enforcement authority
includes, among other things, the ability to assess civil money
penalties, to issue cease-and-desist or removal orders and to
initiate injunctive actions.  In general, these enforcement
actions may be initiated for violations of laws and regulations
and unsafe or unsound practices.  Other actions or inactions may
provide the basis for enforcement action, including misleading or
untimely  reports filed with the OTS.  Except under certain
circumstances, public disclosure of final enforcement actions by
the OTS is required.

     In addition, the investment, lending and branching authority
of the Association is prescribed by federal laws, and
regulations, and it is prohibited from engaging in any activities
not permitted by such laws and regulations.  For instance, no
savings institution may invest in non-investment grade corporate
debt securities.  In addition, the permissible level of
investment by federal associations in loans secured by non-
residential real property may not exceed 400% of total capital,
except with approval of the OTS.  Federal savings associations
are also generally authorized to branch nationwide.  The
Association is in compliance with the noted restrictions.  

     The Association's general permissible lending limit for
loans-to-one-borrower is equal to the greater of $500,000 or 15%
of unimpaired capital and surplus (except for loans fully secured
by certain readily marketable collateral, in which case this
limit is increased to 25% of unimpaired capital and surplus). 
The Association is in compliance with the loans to one borrower
limitation.

     The OTS, as well as the other federal banking agencies, has
adopted guidelines establishing safety and soundness standards on
such matters as loan underwriting and documentation, internal
controls and audit systems, interest rate risk exposure and
compensation and other employee benefits.  Any institution which
fails to comply with these standards must submit a capital
compliance plan.  A failure to submit a plan or to comply with an
approved plan will subject the institution to further enforcement
action.  The OTS and the other federal banking agencies have also
proposed additional guidelines on asset quality and earnings
standards.  No assurance can be given as to whether or in what
form the proposed regulations will be adopted.  The guidelines
are not expected to materially effect the Association.

Insurance of Accounts and Regulation by the FDIC

     First Federal is a member of the SAIF, which is administered
by the FDIC.  Deposits are insured up to applicable limits by the
FDIC and such insurance is backed by the full faith and credit of
the United States Government.  As insurer, the FDIC imposes
deposit insurance premiums and is authorized to conduct
examinations of and to require reporting by FDIC-insured
institutions.  It also may prohibit any FDIC-insured institution
from engaging in any activity the FDIC determines by regulation
or order to pose a serious risk to the FDIC.  The FDIC also has
the authority to initiate enforcement actions against savings
associations, after giving the OTS an opportunity to take such
action, and

<PAGE>

may terminate the deposit insurance if it determines that the
institution has engaged or is engaging in unsafe or unsound
practices, or is in an unsafe or unsound condition.

     The FDIC's deposit insurance premiums for SAIF-insured
institutions are assessed through a risk-based system under which
all insured depository institutions are placed into one of nine
categories and assessed insurance premiums, ranging from .23% to
 .31% of deposits, based upon their level of capital and
supervisory evaluation.  Under the system, institutions
classified as well capitalized (i.e., a core capital ratio of at
least 5%, a ratio of core capital to risk-weighted assets of at
least 6% and a risk-based capital ratio of at least 10%) and
considered healthy would pay the lowest premium while
institutions that are less than adequately capitalized (i.e., a
core capital or core capital to risk-based capital ratios of less
than 4% or a risk-based capital ratio of less than 8%) and
considered of substantial supervisory concern would pay the
highest premium.  Risk classification of all insured institutions
will be made by the FDIC for each semi-annual assessment period.

     The FDIC is authorized to increase assessment rates, on a
semiannual basis, if it determines that the reserve ratio of the
SAIF will be less than the designated reserve ratio of 1.25% of
SAIF insured deposits.  In setting these increased assessments,
the FDIC must seek to restore the reserve ratio to that
designated reserve level, or such higher reserve ratio as
established by the FDIC.  The FDIC may also impose special
assessments on SAIF members to repay amounts borrowed from the
United States Treasury or for any other reason deemed necessary
by the FDIC.

     In September 1996, Congress enacted legislation to
recapitalize the SAIF by a one-time assessment on all SAIF-
insured deposits held as of March 31, 1995.  The assessment was
65.7 basis points per $100 in deposits, payable on November 30,
1996.  For the Association, the assessment amounted to $170,000
(or $112,000 when adjusted for taxes), based on the Association's
deposits on March 31, 1995.  In addition, beginning January 1,
1997, pursuant to the legislation, interest payments on FICO
bonds issued in the late 1980's by the Financing Corporation to
recapitalize the now defunct Federal Savings and Loan Insurance
Corporation will be paid jointly by BIF-insured institutions and
SAIF-insured institutions.  The FICO assessment will be 1.29
basis points per $100 in BIF deposits and 6.44 basis points per
$100 in SAIF deposits.  Beginning January 1, 2000, the FICO
interest payments will be paid pro rata by banks and thrifts
based on deposits (approximately 2.4 basis points per $100 in
deposits). 

     The legislation further provides that the BIF and SAIF will
merge on January 1, 1999 if there are no more savings
associations as of that date.  Several bills have been introduced
in the current Congress that would eliminate the federal thrift
charter and OTS.  The bills would require that all federal
savings associations convert to national banks or state
depository institutions by no later than January 1, 1998 in one
bill and June 30, 1998 in the other and would treat all state
savings associations as state banks for purposes of federal
banking laws.  Subject to a narrow grandfathering, all savings
and loan holding companies would become subject to the same
regulation as bank holding companies under the pending
legislative proposals.  Under such proposals, any lawful activity
in which a savings association participates would be permitted
for up to two years following the effective date of its
conversion to the new charter, with two additional one-year
extensions which may be granted as the discretion of the
regulator.  The legislative proposals would also abolish the OTS
and transfer its functions to the federal bank regulators with
respect to the institutions and to the Federal Reserve Board with
respect to the regulation of holding companies.  The Association
is unable to predict whether the legislation will be enacted or,
given such uncertainty, determine the extent to which the
legislation, if enacted, would affect its business.  The
Association is also unable to predict whether the SAIF and BIF
funds will eventually be merged.

     While the legislation has reduced the disparity between
premiums paid on BIF deposits and SAIF deposits, and has relieved
the thrift industry of a portion of the contingent liability
represented by the FICO bonds, the premium disparity between
SAIF-insured institutions, such as the Association, and BIF-
insured institutions will continue until at least January 1,
1999.  Under the legislation, the Association anticipates that
its ongoing annual SAIF premiums will be approximately $16,000.

<PAGE>

Regulatory Capital Requirements

     Federally insured savings associations, such as the
Association, are required to maintain a minimum level of
regulatory capital.  The OTS has established capital standards,
including a tangible capital requirement, a leverage ratio (or
core capital) requirement and a risk-based capital requirement
applicable to such savings associations.  Generally, these
capital requirements must be generally as stringent as the
comparable capital requirements for national banks.  The OTS is
also authorized to impose capital requirements in excess of these
standards on individual associations on a case-by-case basis.

     The capital regulations require tangible capital of at least
1.5% of adjusted total assets (as defined by regulation). 
Tangible capital generally includes common stockholders' equity
and retained income, and certain noncumulative perpetual
preferred stock and related income.  In addition, all intangible
assets, other than a limited amount of purchased mortgage
servicing rights, must be deducted from tangible capital for
calculating compliance with the requirement.  Further, the
valuation allowance applicable to the write-down of investments
and mortgage-backed securities in accordance with SFAS No. 115 is
excluded from the regulatory capital calculation.  At December
31, 1996, the Association had no intangible assets and an
unrealized loss on investment securities available for sale net
of tax of $6,004.

     At December 31, 1996, the Association had tangible capital
of $4.5 million, or 14.4% of adjusted total assets, which is
approximately $4.1 million above the minimum requirement of 1.5%
of adjusted total assets in effect on that date.

     The capital standards also require core capital of at least
3% of adjusted total assets.  Core capital generally consists of
tangible capital plus certain intangible assets, including a
limited amount of purchased credit card relationships.  As a
result of the prompt corrective action provisions discussed
below, however, a savings association must maintain a core
capital ratio of at least 4% to be considered adequately
capitalized unless its supervisory condition is such to allow it
to maintain a 3% ratio.  At December 31, 1996, the Association
had no intangible assets which were subject to these tests. 

     At December 31, 1996, the Association had core capital equal
to $4.5 million, or 14.4% of adjusted total assets, which is $3.6
million above the minimum leverage ratio requirement of 3% as in 
effect on that date.

      The OTS risk-based requirement requires savings
associations to have total capital of at least 8% of risk-
weighted assets.  Total capital consists of core capital, as
defined above, and supplementary capital.  Supplementary capital
consists of certain permanent and maturing capital instruments
that do not qualify as core capital and general valuation loan
and lease loss allowances up to a maximum of 1.25% of risk-
weighted assets.  Supplementary capital may be used to satisfy
the risk-based requirement only to the extent of core capital. 
The OTS is also authorized to require a savings association to
maintain an additional amount of total capital to account for
concentration of credit risk and the risk of non-traditional
activities.  At December 31, 1996, the Association had no capital
instruments that qualify as supplementary capital and $158,000 of
general loss reserves, which was less than 1.25% of risk-weighted
assets.

     Certain exclusions from capital and assets are required to
be made for the purpose of calculating total capital.  Such
exclusions consist of equity investments (as defined by
regulation) and that portion of land loans and nonresidential
construction loans in excess of an 80% loan-to-value ratio and
reciprocal holdings of qualifying capital instruments.  The
Association had exclusions from capital and assets at December
31, 1996 of $19,000.

     In determining the amount of risk-weighted assets, all
assets, including certain off-balance sheet items, will be
multiplied by a risk weight, ranging from 0% to 100%, based on
the risk inherent in the type of asset.  For example, the OTS has
assigned a risk weight of 50% for prudently underwritten
permanent one- to four-family first lien mortgage loans not more
than 90 days delinquent and having a loan to value ratio of not
more than 80% at origination unless insured to such ratio by an
insurer approved by the FNMA or FHLMC.

<PAGE>

     The OTS has adopted a final rule that requires every savings
association with more than normal interest rate risk exposure to
deduct from its total capital, for purposes of determining
compliance with such requirement, an amount equal to 50% of its
interest-rate risk exposure multiplied by the present value of
its assets.  This exposure is a measure of the potential decline
in the net portfolio value of a savings association, greater than
2% of the present value of its assets, based upon a hypothetical
200 basis point increase or decrease in interest rates (whichever
results in a greater decline).  Net portfolio value is the
present value of expected cash flows from assets, liabilities and
off-balance sheet contracts.  The rule provides for a two quarter
lag between calculating interest rate risk and recognizing any
deduction from capital.  Any savings association with less than
$300 million in assets and a total risk-based capital ratio in
excess of 12% is exempt from this requirement unless the OTS
determines otherwise.

     On December 31, 1996, the Association had total capital of
$4.6 million (including $4.5 million in  core capital and
$188,000 in qualifying supplementary capital) and risk-weighted
assets of $12.6 million (including $0 in converted off-balance
sheet assets); or total capital of 37.2% of risk-weighted assets. 
This amount was 29.2% above the 8% requirement in effect on that
date.

     Pursuant to FDICIA, the federal banking agencies, including
the OTS, have also proposed regulations authorizing the agencies
to require a depository institution to maintain additional total
capital to account for concentration of credit risk and the risk
of non-traditional activities.  No assurance can be given as to
the final form of any such regulation.

     The OTS and the FDIC are authorized and, under certain
circumstances required, to take certain actions against savings
associations that fail to meet their capital requirements. 
Effective December 19, 1992, the federal banking agencies,
including the OTS, were given additional enforcement authority
over undercapitalized depository institutions.  The OTS is
generally required to take action to restrict the activities of
an "undercapitalized association" (generally defined to be one
with less than either a 4% core capital ratio, a 4% Tier 1
risked-based capital ratio or an 8% risk-based capital ratio). 
Any such association must submit a capital restoration plan and
until such plan is approved by the OTS may not increase its
assets, acquire another institution, establish a branch or engage
in any new activities, and generally may not make capital
distributions.  The OTS is authorized to impose the additional
restrictions that are applicable to significantly
undercapitalized associations.

      As a condition to the approval of the capital restoration
plan, any company controlling an undercapitalized association
must agree that it will enter into a limited capital maintenance
guarantee with respect to the institution's achievement of its
capital requirements.

     Any savings association that fails to comply with its
capital plan or is "significantly undercapitalized" (i.e., Tier 1
risk-based or core capital ratios of less than 3% or a risk-based
capital ratio of less than 6%) must be made subject to one or
more of additional specified actions and operating restrictions,
which may cover all aspects of its operations and include a
forced merger or acquisition of the association.  An association
that becomes "critically undercapitalized" (i.e., a tangible
capital ratio of 2% or less) is subject to further mandatory
restrictions on its activities in addition to those applicable to
significantly undercapitalized associations.  In addition, the
OTS must appoint a receiver (or conservator with the concurrence
of the FDIC) for a savings association, with certain limited
exceptions, within 90 days after it becomes critically
undercapitalized.  Any undercapitalized association is also
subject to the general enforcement activity of the OTS and the
FDIC, including the appointment of a receiver or conservator.

     The OTS is also generally authorized to reclassify an
association into a lower capital category and impose restrictions
applicable to such category if the institution is engaged in
unsafe or unsound practices or is in an unsafe or unsound
condition.

     The imposition by the OTS or the FDIC of any of these
measures on First Federal may have a substantial adverse effect
on the Association's operations and profitability and the value
of the Company's common stock purchased in the Conversion.  The
Company's shareholders do not have preemptive rights, and
therefore, if the Company is directed by the OTS or the FDIC to
issue additional shares of Common Stock, such issuance may result
in the dilution in the percentage of ownership of the Company of
the Company's shareholders.


<PAGE>

Limitations on Dividends and Other Capital Distributions

     OTS regulations impose various restrictions or requirements
on associations with respect to their ability to pay dividends or
make other distributions of capital.  OTS regulations prohibit an
association from declaring or paying any dividends or from
repurchasing any of its stock if, as a result, the regulatory
capital of the association would be reduced below the amount
required to be maintained for the liquidation account established
in connection with its mutual to stock conversion.

     The OTS utilizes a three-tiered approach to permit
associations, based on their capital level and supervisory
condition, to make capital distributions which include dividends,
stock redemptions or repurchases, cash-out mergers and other
transactions charged to the capital account.  See "- Regulatory
Capital Requirements."

     Generally, Tier 1 associations, which are associations that
before and after the proposed distribution meet their fully
phased-in capital requirements, may make capital distributions
during any calendar year equal to the greater of 100% of net
income for the year-to-date plus 50% of the amount by which the
lesser of the association's tangible, core or risk-based capital
exceeds its fully phased-in capital requirement for such capital
component, as measured at the beginning of the calendar year, or
the amount authorized for a Tier 2 association.  However, a
Tier 1 association deemed to be in need of more than normal
supervision by the OTS may be downgraded to a Tier 2 or Tier 3
association as a result of such a determination.  The Association
meets the requirements for a Tier 1 association and has not been
notified of a need for more than normal supervision.  Tier 2
associations, which are associations that before and after the
proposed distribution meet their current minimum capital
requirements, may make capital distributions of up to 75% of net
income over the most recent four quarter period.

     Tier 3 associations (which are associations that do not meet
current minimum capital requirements) that propose to make any
capital distribution and Tier 2 associations that propose to make
a capital distribution in excess of the noted safe harbor level
must obtain OTS approval prior to making such distribution. 
Tier 2 associations proposing to make a capital distribution
within the safe harbor provisions and Tier 1 associations
proposing to make any capital distribution need only submit
written notice to the OTS 30 days prior to such distribution.  As
a subsidiary of the Holding Company, the Association will also be
required to give the OTS 30 days' notice prior to declaring any
dividend on its stock.  The OTS may object to the distribution
during that 30-day period based on safety and soundness concerns. 
See "- Regulatory Capital Requirements."

     The OTS has proposed regulations that would revise the
current capital distribution restrictions.  The proposal
eliminates the current tiered structure and the safe-harbor
percentage limitations.  Under the proposal a savings association
may make a capital distribution without notice to the OTS (unless
it is a subsidiary of a holding company) provided that it has a
CAMEL 1 or 2 rating, is not in troubled condition and would
remain adequately capitalized (as defined by regulation)
following the proposed distribution. Savings associations that
would remain adequately capitalized following the proposed
distribution but do not meet the other noted requirements must
notify the OTS 30 days prior to declaring a capital distribution. 
The OTS stated it will generally regard as permissible that
amount of capital distributions that do not exceed 50% of the
institution's excess regulatory capital plus net income to date
during the calendar year.  A savings association may not make a
capital distribution without prior approval of the OTS and the
FDIC if it is undercapitalized before, or as a result of, such a
distribution.  A savings association will be considered in
troubled condition if it has a CAMEL rating of 4 or 5, is subject
to an enforcement action relating to its safety and soundness or
financial viability or has been informed in writing by the OTS
that it is in troubled condition.  As under the current rule, the
OTS may object to a capital distribution if it would constitute
an unsafe or unsound practice.  No assurance may be given as to
whether or in what form the regulations may be adopted. 

<PAGE>

Liquidity

     All savings associations, including the Association, are
required to maintain an average daily balance of liquid assets
equal to a certain percentage of the sum of its average daily
balance of net withdrawable deposit accounts and borrowings
payable in one year or less.  For a discussion of what the
Association includes in liquid assets, see "Business - Investment
Activities."  This liquid asset ratio requirement may vary from
time to time (between 4% and 10%) depending upon economic
conditions and savings flows of all savings associations.  At the
present time, the minimum liquid asset ratio is 5%.

     In addition, short-term liquid assets (e.g., cash, certain
time deposits, certain bankers acceptances and short-term United
States Treasury obligations) currently must constitute at least
1% of the association's average daily balance of net withdrawable
deposit accounts and current borrowings.  Penalties may be
imposed upon associations for violations of either liquid asset
ratio requirement.  At December  31, 1996, the Association was in
compliance with both requirements, with an overall liquid asset
ratio of 7.8% and a short-term liquid assets ratio of 6.4%.

Accounting

     An OTS policy statement applicable to all savings
associations clarifies and re-emphasizes that the investment
activities of a savings association must be in compliance with
approved and documented investment policies and strategies, and
must be accounted for in accordance with GAAP.  Under the policy
statement, management must support its classification of and 
accounting for loans and securities (i.e., whether held for
investment, sale or trading) with appropriate documentation.

     The OTS has adopted an amendment to its accounting
regulations, which may be made more stringent than GAAP by the
OTS, to require that transactions be reported in a manner that
best reflects their underlying economic substance and inherent
risk and that financial reports must incorporate any other
accounting regulations or orders prescribed by the OTS.  The
Association is in compliance with these amended rules.

Qualified Thrift Lender Test

     All savings associations, including the Association, are
required to meet a qualified thrift lender ("QTL") test to avoid
certain restrictions on their operations.  This test requires a
savings  association to have at least 65% of its portfolio assets
(as defined by regulation) in qualified thrift investments on a
monthly average for nine out of every 12 months on a rolling
basis.  Such assets primarily consist of residential housing
related loans and investments.  At December 31, 1996, the
Association complied with the QTL requirement.

     Any savings association that fails to meet the QTL test must
convert to a national bank charter, unless it requalifies as a
QTL and thereafter remains a QTL.  If an association does not
requalify and converts to a national bank charter, it must remain
SAIF-insured until the FDIC permits it to transfer to the BIF. 
If such an association has not yet requalified or converted to a
national bank, its new investments and activities are limited to
those permissible for both a savings association and a national
bank, and it is limited to national bank branching rights in its
home state.  In addition, the association is immediately
ineligible to receive any new FHLB borrowings and is subject to
national bank limits for payment of dividends.  If such
association has not requalified or converted to a national bank
within three years after the failure, it must divest of all
investments and cease all activities not permissible for a
national bank.  In addition, it must repay promptly any
outstanding FHLB borrowings, which may result in prepayment
penalties.  If any association that fails the QTL test is
controlled by a holding company, then within one year after the
failure, the holding company must register as a bank holding
company and become subject to all restrictions on bank holding
companies.  See "- Holding Company Regulation."

Community Reinvestment Act

     Under the Community Reinvestment Act ("CRA"), every FDIC
insured institution has a continuing and affirmative obligation
consistent with safe and sound banking practices to help meet the
credit needs of its entire community, including low and moderate
income neighborhoods.  The CRA does not establish specific
lending

<PAGE>

requirements or programs for financial institutions nor does it
limit an institution's discretion to develop the types of
products and services that it believes are best suited to its
particular community, consistent with the CRA.  The CRA requires
the OTS, in connection with the examination of the Association,
to assess the institution's record of meeting the credit needs of
its community and to take such record into account in its
evaluation of certain applications, such as a merger or the
establishment of a branch, by the Association.  An unsatisfactory
rating may be used as the basis for the denial of an application
by the OTS.

     The federal banking agencies, including the OTS, have
recently revised the CRA regulations and the methodology for
determining an institution's compliance with the CRA.  Due to the
heightened attention being given to the CRA in the past few
years, the Association may be required to devote additional funds
for investment and lending in its local community.  The
Association was examined for CRA compliance in 1996 and received
a rating of "Satisfactory", as indicated in the OTS Community
Reinvestment Act Performance Evaluation public disclosure dated
April 1, 1996.

Transactions with Affiliates

     Generally, transactions between a savings association or its
subsidiaries and its affiliates are required to be on terms as
favorable to the association as transactions with non-affiliates. 
In addition, certain of these transactions, such as loans to an
affiliate, are restricted to a percentage of the association's
capital.  Affiliates of the Association include the Holding
Company and any company which is under common control with the
Association.  In addition, a savings association may not lend to
any affiliate engaged in activities not permissible for a bank
holding company or acquire the securities of most affiliates.

     Certain transactions with directors, officers or controlling
persons are also subject to conflict of interest regulations
enforced by the OTS.  These conflict of interest regulations and
other statutes also impose restrictions on loans to such persons
and their related interests.  Among other things, such loans must
be made on terms substantially the same as for loans to
unaffiliated individuals.

Holding Company Regulation

     The Company is a unitary savings and loan holding company
subject to regulatory oversight by the OTS.  As such, the Company
is required to register and file reports with the OTS and is
subject to regulation and examination by the OTS.  In addition,
the OTS has enforcement authority over the Company and its non-
savings association subsidiaries which also permits the OTS to
restrict or prohibit activities that are determined to be a
serious risk to the subsidiary savings association.

     As a unitary savings and loan holding company, the Company
generally is not subject to activity restrictions.  If the
Company acquires control of another savings association as a
separate subsidiary, it would become a multiple savings and loan
holding company, and the activities of the Company and any of its
subsidiaries (other than the Association or any other SAIF-
insured savings association) would become subject to such
restrictions unless such other associations each qualify as a QTL
and were acquired in a supervisory acquisition.

     If the Association fails the QTL test, the Company must
obtain the approval of the OTS prior to continuing after such
failure, directly or through its other subsidiaries, any business
activity other than those approved for multiple savings and loan
holding companies or their subsidiaries.  In addition, within one
year of such failure the Holding Company must register as, and
will become subject to, the restrictions applicable to bank
holding companies.  The activities authorized for a bank holding
company are more limited than are the activities authorized for a
unitary or multiple savings and loan holding company.  See "-
Qualified Thrift Lender Test."

     The Company must obtain approval from the OTS before
acquiring control of any other SAIF-insured association.  Such
acquisitions are generally prohibited if they result in a
multiple savings and loan holding company controlling savings
associations in more than one state.  However, such interstate
acquisitions are permitted based on specific state authorization
or in a supervisory acquisition of a failing savings association.

<PAGE>

Federal Securities Law

     The stock of the Company is registered with the SEC under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act").  The Company is subject to the information, proxy
solicitation, insider trading restrictions and other requirements
of the SEC under the Exchange Act.

     Company stock held by persons who are affiliates (generally
officers, directors and principal stockholders) of the Company
may not be resold without registration or unless sold in
accordance with certain resale restrictions.  If the Company
meets specified current public information requirements, each
affiliate of the Company is able to sell in the public market,
without registration, a limited number of shares in any three-
month period.

Federal Reserve System

     The Federal Reserve Board requires all depository
institutions to maintain non-interest bearing reserves at
specified levels against their transaction accounts (primarily
checking, NOW and Super NOW checking accounts).  At December 31,
1996, the Association was in compliance with these reserve
requirements.  The balances maintained to meet the reserve
requirements imposed by the Federal Reserve Board may be used to
satisfy liquidity requirements that may be imposed by the OTS. 
See "- Liquidity."

     Savings associations are authorized to borrow from the
Federal Reserve Bank "discount window," but Federal Reserve Board
regulations require associations to exhaust other reasonable
alternative sources of funds, including FHLB borrowings, before
borrowing from the Federal Reserve Bank.

Federal Home Loan Bank System

     The Association is a member of the FHLB of Dallas, which is
one of 12 regional FHLBs, that administers the home financing
credit function of savings associations.  Each FHLB serves as a
reserve or central bank for its members within its assigned
region.  It is funded primarily from proceeds derived from the
sale of consolidated obligations of the FHLB System.  It makes 
loans to members (i.e., advances) in accordance with policies and
procedures established by the board of directors of the FHLB. 
These policies and procedures are subject to the regulation and
oversight of the Federal Housing Finance Board.  All advances
from the FHLB are required to be fully secured by sufficient
collateral as determined by the FHLB.  In addition, all long-term
advances are required to provide funds for residential home
financing.

     As a member, the Association is required to purchase and
maintain stock in the FHLB of Dallas.  At December 31, 1996, the
Association had $259,200 of FHLB stock, which was in compliance
with this requirement.  In past years, the Association has
received substantial dividends on its FHLB stock.  Over the past
five fiscal years such dividends have averaged 4.87% and were
5.9% for the year ended December 31,  1996.  No assurance can be
given that such dividends will continue in the future at such
levels.

     Under federal law, the FHLBs are required to provide funds
for the resolution of troubled savings associations and to
contribute to low- and moderately priced housing programs through
direct loans or interest subsidies on advances targeted for
community investment and low- and moderate-income housing
projects.  These contributions have affected adversely the level
of FHLB dividends paid and could continue to do so in the future. 
These contributions could also have an adverse effect on the
value of FHLB stock in the future.  A reduction in value of the
Association's FHLB stock may result in a corresponding reduction
in the Association's capital.

Federal and State Taxation

     Federal Taxation.  Savings associations such as the
Association that meet certain definitional tests relating to the
composition of assets and other conditions prescribed by the
Internal Revenue Code of 1986, as amended (the "Code"), are
permitted to establish reserves for bad debts and to make annual
additions thereto which may, within specified formula limits, be
taken as a deduction in computing taxable income for federal
income tax purposes.  The amount of the bad debt reserve
deduction for "non-qualifying loans" is computed under the
experience method.  For tax years beginning before December 31,
1995, the amount of the bad debt reserve deduction for
"qualifying real

<PAGE>

property loans" (generally, loans secured by improved real
estate) may be computed under either the experience method or the
percentage of taxable income method (based on an annual
election).  If a savings association elected the latter method,
it could claim, each year, a deduction based on a percentage of
taxable income, without regard to actual bad debt experience.

     Under the experience method, the bad debt reserve deduction
is an amount determined under a formula based generally upon the
bad debts actually sustained by the savings association over a
period of years.  

     Under recently enacted legislation, the percentage of
taxable income method has been repealed for years beginning after
December 31, 1995, and "large" associations, i.e., the quarterly
average of the association's total assets or of the consolidated
group of which it is a member, exceeds $500 million for the year,
may no longer be entitled to use the experience method of
computing additions to their bad debt reserve.  A "large"
association must use the direct write-off method for deducting
bad debts, under which charge-offs are deducted and recoveries
are taken into taxable income as incurred. If the Association is
not a "large" association, the Association will continue to be
permitted to use the experience method. The Association will be
required to recapture (i.e., take into income) over a six-year
period its applicable excess reserves, i.e, the balance of its
reserves for losses on qualifying loans and nonqualifying loans,
as of the close of the last tax year beginning before January 1,
1996, over the greater of (a) the balance of such reserves as of
December 31, 1987 (pre-1988 reserves) or (b) in the case of a
bank which is not a "large" association, an amount that would
have been the balance of such reserves as of the close of the
last tax year beginning before January 1, 1996, had the bank
always computed the additions to its reserves using the
experience method. Postponement of the recapture is possible for
a two-year period if an association meets a minimum level of
mortgage lending for 1996 and 1997.  As of December 31, 1996, the
Association's bad debt reserve subject to recapture over a six-
year period totaled approximately $101,000.

     If an association ceases to qualify as a "bank" (as defined
in Code Section 581) or converts to a credit union, the pre-1988
reserves and the supplemental reserve are restored to income
ratably over a six-year period, beginning in the tax year the
association no longer qualifies as a bank.  The balance of the
pre-1988 reserves are also subject to recapture in the case of
certain excess distributions to (including distributions on
liquidation and dissolution), or redemptions of, shareholders.

     In addition to the regular federal income tax, corporations,
including savings associations such as the Association, generally
are subject to a minimum tax.  An alternative minimum tax is
imposed at a minimum tax rate of 20% on alternative minimum
taxable income, which is the sum of a corporation's regular
taxable income (with certain adjustments) and tax preference
items, less any available exemption.  The alternative minimum tax
is imposed to the extent it exceeds the corporation's regular
income tax and net operating losses can offset no more than 90%
of alternative minimum taxable income.  For taxable years
beginning after 1986 and before 1996, corporations, including
savings associations such as the Association, are also subject to
an environmental tax equal to 0.12% of the excess of alternative
minimum taxable income for the taxable year (determined without
regard to net operating losses and the deduction for the
environmental tax) over $2 million.  

     To the extent earnings appropriated to a savings
association's bad debt reserves for "qualifying real property
loans" and deducted for federal income tax purposes exceed the
allowable amount of such reserves computed under the experience
method and to the extent of the Association's supplemental
reserves for losses on loans ("Excess"), such Excess may not,
without adverse tax consequences, be utilized for the payment of
cash dividends or other distributions to a shareholder (including
distributions on redemption, dissolution or liquidation) or for
any other purpose (except to absorb bad debt losses).  As of
December 31, 1996, the Association's excess for tax purposes
totaled approximately $368,000.

     The Association files federal income tax returns on a
calendar year basis using the cash method of accounting.  The
Company has filed a separate federal income tax return from the
Association.  Savings associations, such as the Association, that
file federal income tax returns as part of a consolidated group
are required by applicable Treasury regulations to reduce their
taxable income for purposes of computing the percentage bad debt
deduction for losses attributable to activities of the
non-savings association members of the consolidated group that
are functionally related to the activities of the savings
association member.

<PAGE>

     The Association has not been audited by the IRS recently
with respect to federal income tax returns.  In the opinion of
management, any examination of still open returns would not
result in a deficiency which could have a material adverse effect
on the financial condition of the Association. 

     State Taxation. The Louisiana Corporation Income Tax Act
provides for an exemption from the Louisiana Corporation Income
Tax for mutual savings banks and for banking corporations, which
includes stock association (e.g., the Association).  However,
this exemption does not extend to non-banking entities such as
the Company.  The non-banking subsidiaries of the Association (as
well as the Company) are subject to the Louisiana Corporate
Income Tax based on their Louisiana taxable income, as well as
franchise taxes.  The Louisiana Corporation Income Tax applies at
graduated rates from 4% upon the first $25,000 of Louisiana
taxable income to 8% on all Louisiana taxable income in excess of
$200,000.  For these purposes, "Louisiana taxable income" means
net income which is earned within or derived from sources within
the State of Louisiana, after adjustments permitted under
Louisiana law including a federal income tax deduction and an
allowance for net operating losses, if any.  In addition, the
Association will become subject to the Louisiana Shares Tax after
the Conversion, which will be imposed on the assessed value of
the Association's stock.  The formula for deriving the assessed
value is to calculate 15% of the sum of (i) 20% of a
corporation's capitalized earnings, plus (ii) 80% of a
corporation's taxable stockholders' equity, and to subtract from
that amount 50% of a corporation's real and personal property
assessment.  Other various items may also be subtracted in
calculating a corporation's capitalized earnings.  

     Delaware Taxation.  As a Delaware holding company, the
Company is exempted from Delaware corporate income tax but is
required to file an annual report with and pay an annual fee to
the State of Delaware.  The Company is also subject to an annual
franchise tax imposed by the State of Delaware.

Employees

     At December 31, 1996, the Association had a total of 12
full-time and 2 part-time employees.  The Association's employees
are not represented by any collective bargaining group.
Management considers its employee relations to be excellent.

Executive Officers of the Association and the Company Who Are Not
Directors

     Betty Jean Parker.  Mrs. Parker, age 52, is the Treasurer
and Chief Financial Officer of the Association.  Until June 1996,
Mrs. Parker was also Corporate Secretary of the Association. 
Mrs. Parker is responsible for the supervision of the accounting
department and reporting to the regulatory authorities.

Item 2.  Description of Property  

     The Company conducts its business through one office,
located in Oakdale, Louisiana in Allen Parish.  The following
table sets forth information relating to the Association's office
as of December 31, 1996.  The total net book value of the
Company's premises and equipment (including land, buildings and
leasehold improvements and furniture, fixtures and equipment) at
December 31, 1996 was approximately $282,000.

<TABLE>
                                   Total
                                  Approx.
                          Year    Square    Net Book Value at
Location                 Opened   Footage   December 31, 1996
-------------------------------------------------------------

<S>                      <C>      <C>         <C>
Main Office:             1975     4,100       $282,000
222 South 10th Street
Oakdale, Louisiana

</TABLE>
<PAGE>

Item 3.  Legal Proceedings

     The Company is involved, from time to time, as plaintiff or
defendant in various legal actions arising in the normal course
of their businesses.  While the ultimate outcome of these
proceedings cannot be predicted with certainty, it is the opinion
of management, after consultation with counsel representing the
Company in the proceedings, that the resolution of these
proceedings should not have a material effect on the Company's
financial position or results of operations on a consolidated
basis.  

Item 4.  Submission of Matters to a Vote of Security Holders

     No matters were submitted to a vote of security holders
during the fourth quarter of the fiscal year ended December 31,
1996.

                             PART II

Item 5.  Market for the Registrant's Common Stock and Related
Security Holder Matters 

     Pages 47 to 48 of the attached 1996 Annual Report to
Shareholders is herein incorporated by reference.

Item 6.   Management's Discussion and Analysis of Financial
Condition and Results of Operations

     Pages 6 to 16 of the attached 1996 Annual Report to
Shareholders are herein incorporated by reference.

Item 7.  Financial Statements

     Pages 17 to 46 of the attached 1996 Annual Report to
Shareholders are herein incorporated by reference.

Item 8.   Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure

     There has been no Current Report on Form 8-K filed within 24
months prior to the date of the most recent financial statements
reporting a change of accountants and/or reporting disagreements
on any matter of accounting principle or financial statement
disclosure.

                            PART III

Item 9.  Directors and Executive Officers of the Registrant

     Information concerning Directors of the Registrant is
incorporated herein by reference from the Company's definitive
Proxy Statement for the Annual Meeting of Shareholders scheduled
to be held on April 24, 1997.

Item 10.  Executive Compensation

     Information concerning executive compensation is
incorporated herein by reference from the Company's definitive
Proxy Statement for the Annual Meeting of Shareholders scheduled
to be held on April 24, 1997.

Item 11.  Security Ownership of Certain Beneficial Owners and
Management

     Information concerning security ownership of certain
beneficial owners and management is incorporated herein by
reference from the Company's definitive Proxy Statement for the
Annual Meeting of Shareholders scheduled to be held on April 24,
1997.

<PAGE>

Item 12.  Certain Relationships and Related Transactions

     Information concerning certain relationships and
transactions is incorporated herein by reference from the
Company's definitive Proxy Statement for the Annual Meeting of
Shareholders scheduled to be held on April 24, 1997.


Item 13.  Exhibits List and Reports on Form 8-K

     (a) (1)  Financial Statements:

     The following information appearing in the Registrant's
Annual Report to Shareholders for the year ended December 31,
1996, is incorporated by reference in this Form 10-KSB Annual
Report as Exhibit 13.

<TABLE>

                                                       Page in
Annual Report Section                               Annual Report

<S>                                                     <C>
Report of Independent Auditors                          17

Consolidated Statements of Financial Condition
 at December 31, 1996 and 1995                          18

Consolidated Statements of Income for the Years
 ended December 31, 1996 and 1995                       19

Consolidated Statements of Stockholders' Equity
 for the Years ended December 31, 1996 and 1995         20

Consolidated Statements of Cash Flows for the
 Years ended December 31, 1996 and 1995                 21-22

Notes to Consolidated Financial Statements              23-46

</TABLE>

     (a)(2)  Financial Statement Schedules - All financial
statement schedules have been omitted as the information is
either inapplicable or not required under the related
instructions.

     (a)(3)  Exhibits - The following exhibits are either filed
or attached as part of this report or are incorporated herein by
reference.

PAGE
<PAGE>
<TABLE>
                                                        Reference to
Regulation                                             Prior Filing or
S-B Exhibit                                            Exhibit Number
  Number     Document                                  Attached Hereto
----------------------------------------------------------------------

<S>          <C>                                       <C>
2             Plan of acquisition, reorganization,     None
              arrangement, liquidation or succession

3             Certificate of Incorporation and         *
              Bylaws

4             Instruments defining the rights of       *
              security holders, including indentures

9             Voting trust agreement                   None

10.1          Employment Agreement with Charles L.     *
              Galligan

10.2          Employment Agreement with Betty Jean     *
              Parker

10.3          Employee Stock Ownership Plan            *

11            Statement re: computation of per         None
              share earnings

12            Statement re: computation or ratios      Not required

13            Annual Report to Security Holders        13

16            Letter re: change in certifying          None
              accountant

18            Letter re: change in accounting          None
              principles

21            Subsidiaries of Registrant               21

22            Published report regarding matters       None
              submitted to vote of security holders

23            Consent of experts and counsel           None

24            Power of Attorney                        Not Required

27            Financial Data Schedule                  27

28            Information from reports furnished to    None
              State insurance regulatory authorities

99            Additional exhibits                      None

___________________

</TABLE>

     *Filed on June 25, 1996, as exhibits to the Registrant's Form SB-2
registration statement (Registration No. 333-6803), pursuant to the Securities
Act of 1933.  All of such previously filed documents are hereby incorporated
herein by reference in accordance with Item 601 of Regulation S-B.

          (b)  Reports on Form 8-K - No Form 8-K was filed during
the last quarter of the year covered by this Form 10-KSB.

<PAGE>

                           SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, there-
unto duly authorized.

                         FIRST ALLEN PARISH BANCORP, INC.


Date: March  27, 1997    By:  /s/ Charles L. Galligan
                              -----------------------------------
                              Charles L. Galligan, President and 
                              Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.


By:  /s/ Charles Galligan          By:  /s/ Betty Jean Parker
     -------------------------          -------------------------
     Charles L. Galligan,               Betty Jean Parker,
     President and Chief Executive      Treasurer (Principal
     Office (Principal Executive        Financial and Accounting
     Officer)                           Officer)

Date:     March 27, 1997           Date:     March 27, 1997



By:  /s/ Dr. James D. Sandefur     By:  /s/ Jesse Boyd, Jr.
     -------------------------          -------------------------
     Dr. James D. Sandefur,             Jesse Boyd, Jr.,
     Chairman                           Director

Date:     March 27, 1997           Date:     March 27, 1997



By:  /s/ James E. Riley            By:  /s/ J.C. Smith
     -------------------------          -------------------------
     James E. Riley, Director           J.C. Smith, Director

Date:     March 27, 1997           Date:     March 27, 1997



By:  /s/ Leslie A. Smith
By:  -------------------------
     Leslie A. Smith, Director

Date:     March 27, 1997

<PAGE>

                        Index to Exhibits


Exhibit 13     1996 Annual Report to Stockholders
Exhibit 21     Subsidiaries of the Registrant
Exhibit 27     Financial Data Schedule

<PAGE>