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                       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 September 30, 1997

                                       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 0-25486.

                        ST. LANDRY FINANCIAL CORPORATION
        (Exact Name of Small Business Issuer as Specified in its Charter)

           Delaware                                               72-1284436
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

459 East St. Landry Street, Opelousas, Louisiana                        70570
    (Address of principal executive offices)                          (Zip Code)

Issuer's telephone number, including area code: (318) 942-5748

           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  Exchange  Act during the past twelve  months (or for
such shorter period that the Issuer was required to file such reports),  and (2)
has been subject to such 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 in this form,  and no disclosure  will be
contained, to the best of Issuer'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. [X]

         The  Issuer  had $4.3  million  in  gross  income  for the  year  ended
September 30, 1997.

         As of September  30, 1997,  there were issued and  outstanding  408,623
shares of the Issuer's Common Stock.  The Issuer's voting stock is not regularly
and actively traded,  and there are no regularly quoted bid and asked prices for
the Issuer's  voting stock.  Accordingly,  the Issuer is unable to determine the
aggregate market value of the voting stock held by non-affiliates.

                       DOCUMENTS INCORPORATED BY REFERENCE

         PARTS II and IV of Form 10-KSB--1997 Annual Report to Stockholders.
         PART III of Form 10-KSB--Proxy Statement for the 1997 Annual Meeting of
         Stockholders.

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<PAGE>



                                     PART I

Item  1. Description of Business

General

         St. Landry Financial  Corporation ("St.  Landry" or the "Company") is a
Delaware  corporation  which was organized in 1995 by First Federal  Savings and
Loan  Association of Opelousas  ("First Federal" or the  "Association")  for the
purpose  of  becoming  a thrift  institution  holding  company.  First  Federal,
headquartered  in  Opelousas,  Louisiana,  was  founded  in 1957 as a  federally
chartered  institution.  Its deposits are insured up to applicable limits by the
FDIC. In April 1995, the Association converted to the stock form of organization
through  the sale and  issuance  of 459,093  shares of its  common  stock to the
Company.  The  principal  asset of the Company is the  outstanding  stock of the
Association,  its wholly owned subsidiary. The Company presently has no separate
operations  and its business  consists only of the business of the  Association.
All references to the Company, unless otherwise indicated, at or before April 5,
1995 refer to the Association.

         First   Federal   has  been,   and   intends  to   continue  to  be,  a
community-based   financial  institution  that  offers  a  variety  of  selected
financial services to meet the needs of the community it serves. The Association
attracts  retail  deposits  from the  general  public  and  primarily  uses such
deposits to originate one- to  four-family  residential  mortgages.  To a lesser
extent  the  Association  also  originates   commercial  real  estate,  one-  to
four-family  construction  and consumer loans.  The  Association  also purchases
mortgage-backed securities and invests in U.S. Government and agency obligations
and other permissible investments.  See "--Lending Activities" and "--Investment
Activities."

         At September 30, 1997, the  Association's  loans  receivable  portfolio
totaled $42.9 million,  which  consisted of $38.0 million of one- to four-family
residential  mortgage  loans,  $3.5 million of  commercial  real estate and land
loans,  $309,000  of  construction  or  development  loans and $1.1  million  in
consumer loans.

         First Federal's primary market area is St Landry Parish,  Louisiana. At
September 30, 1997, the Company had total assets of $61.8  million,  deposits of
$43.6 million and stockholders' equity of $6.8 million (11.0% of total assets).

         The  executive  offices of the  Company  are located at 459 East Landry
Street, Opelousas,  Louisiana 70570, and the telephone number at that address is
(318) 942-5748.

Lending Activities

         General.  Historically,  the Association  originated fixed-rate one- to
four-family mortgage loans for retention in its portfolio.  In the early 1980's,
the Association  began the origination of adjustable rate mortgage ("ARM") loans
for retention in its portfolio,  in order to increase the percentage of loans in
its portfolio with more frequent repricing or shorter maturities than fixed-rate
mortgage loans.  However,  borrowers in the local market area traditionally have
favored fixed-rate

                                        2

<PAGE>



products  which has limited the  Association's  ability to originate  ARMs. As a
result,  the  Association  has  continued  to originate  fixed-rate  residential
mortgage loans in response to consumer demand.

         The  Association's  primary  focus  in  lending  activities  is on  the
origination  of loans  secured  by first  mortgages  on  owner-occupied  one- to
four-family  residences.  To a lesser extent,  the Association  originates loans
secured by commercial real estate, one- to four-family construction and consumer
loans.  At September  30, 1997,  the  Association's  net loans held in portfolio
totaled $42.2 million, which constituted 68% of the Association's total assets.

         The Loan  Committee of the  Association,  comprised  of Directors  Roy,
Wolfe  and  Dunbar,   has  the   responsibility   for  the  supervision  of  the
Association's  loan  portfolio  with an overview by the full Board of Directors.
Loans may be approved by the Loan Committee,  depending on the size of the loan,
with all loans subject to ratification by the full Board of Directors.  Loans in
excess of $250,000 require full board approval. In addition, foreclosure actions
or the taking of  deeds-in-lieu  of foreclosure  are subject to oversight by the
Board of Directors.

         The aggregate amount of loans that the Association is permitted to make
under  applicable  federal  regulations to any one borrower,  including  related
entities,  or the aggregate  amount that the Association  could have invested in
any one real estate  project,  is  generally  the  greater of 15% of  unimpaired
capital and surplus or $500,000. See "Regulation--Federal  Regulation of Savings
Associations."  At September 30, 1997, the maximum amount which the  Association
could have lent to any one  borrower  and the  borrower's  related  entities was
approximately $1.0 million.  At September 30, 1997, the Association had no loans
or lending  relationships with an outstanding  balance in excess of this amount.
The Association's  largest lending  relationship was a loan to a single borrower
aggregating  $627,000 at  September  30,  1997,  and was secured by an apartment
building.  The next largest  lending  relationships  at that date consisted of a
$466,000  loan  secured  by one- to  four-  family  residential  property  and a
$376,000 loan secured by a church. At September 30, 1997, all of these loans was
performing in accordance with their respective repayment terms.


                                        3

<PAGE>



         Loan Portfolio  Composition.  The following information  concerning the
composition of the Association's  rates loan portfolios in dollar amounts and in
percentages (before deductions for loans in process, deferred fees and discounts
and allowances for losses) as of the dates indicated.
<TABLE>
<CAPTION>

                                                                          September 30,
                                            ---------------------------------------------------------------------

                                                      1995                   1996                   1997
                                            ----------------------- ---------------------- ----------------------
                                               Amount      Percent    Amount      Percent    Amount       Percent
                                               ------      -------    ------      -------    ------       -------
                                                                    (Dollars in Thousands)
Real Estate Loans:
<S>                                           <C>           <C>      <C>           <C>      <C>            <C>   
 One- to four-family....................      $34,665       89.52%   $35,635       86.41%   $38,076        88.73%
 Commercial.............................        1,728        4.46      2,891        7.01      3,415         7.96
 Construction...........................        1,556        4.02      1,295        3.14        309          .72
                                            ---------    --------   --------      ------   --------      --------
     Total real estate loans............       37,949       98.00     39,821       96.56     41,800        97.40
                                             --------     -------    -------      ------   --------       -------

 Consumer Loans:
  Deposit account.......................          606        1.57        705        1.71        652         1.52
  Automobile............................          ---       ---          479        1.16        364          .85
  Mobile homes..........................           74         .19        147         .36        ---          ---
  Other.................................           91         .24         88         .21         98          .23
                                          -----------   ---------  ---------  ---------------------     --------
     Total consumer loans...............          771        2.00      1,419        3.44      1,114         2.60
                                           ----------    --------    -------    --------  ---------      -------
     Total loans........................       38,720      100.00%    41,240      100.00%    42,914       100.00%
                                             --------      ======    -------      ======   --------       ======

Less:
 Loans in process.......................          885                    711                     80
 Deferred fees and discounts............           90                     93                     85
 Allowance for losses...................          389                    580                    556
                                             --------               --------             ----------
 Total loans receivable, net............      $37,356                $39,856                $42,193
                                              =======                =======                =======
</TABLE>



                                        4

<PAGE>



         The following  table shows the  composition of the  Association's  loan
portfolios by fixed- and adjustable-rate at the dates indicated.

<TABLE>
<CAPTION>

                                                                                 September 30,
                                              -------------------------------------------------------------------------------
                                                           1995                       1996                      1997
                                              -------------------------- -------------------------- -------------------------
                                                   Amount       Percent       Amount       Percent       Amount      Percent
                                                                          (Dollars in Thousands)
<S>                                                <C>            <C>         <C>            <C>         <C>           <C>   
Fixed-Rate Loans:
 Real estate:
  One- to four-family.......................       $11,891        30.71%      $12,263        29.74%      $13,067       30.45%
  Commercial................................            76          .19            34          .08            --          --
  Construction..............................           100          .26           409          .99            72         .17
                                                 ---------     --------       --------     -------      --------    --------
     Total real estate loans................        12,067        31.16        12,706        30.81        13,139       30.62
 Consumer...................................           165          .42           714         1.73           462        1.07
                                                ----------     --------       --------      ------      --------     -------
     Total fixed-rate loans.................        12,232        31.58        13,420        32.54        13,601       31.69
                                                 ---------      -------       -------       ------      --------      ------
                                                                                                      
Adjustable-Rate Loans:                                                                                
 Real estate:                                                                                         
  One- to four-family.......................        22,774        58.82        23,372        56.67        25,009       58.28
  Commercial................................         1,652         4.27         2,857         6.93         3,415        7.96
  Construction..............................         1,456         3.76           886         2.15           237         .55
                                                  --------     --------      --------       ------     ---------   ---------
     Total real estate loans................        25,882        66.85        27,115        65.75        28,661       66.79
 Consumer...................................           606         1.57           705         1.71           652        1.52
                                                  --------     --------      --------       ------      --------    --------
     Total adjustable-rate loans............        26,488        68.42        27,820        67.46        29,313       68.31
                                                   -------      -------       -------       ------      --------     -------
     Total loans............................        38,720       100.00%       41,240       100.00%       42,914      100.00%
                                                   -------       ======       -------       ======      --------      ======
                                                                                                      
Less:                                                                                                 
 Loans in process...........................           885                        711                         80
 Deferred fees and discounts................            90                         93                         86
 Allowance for loan losses..................           389                        580                        556
                                                  --------                   --------                 ----------
    Total loans receivable, net.............       $37,356                    $39,856                    $42,193
                                                   =======                    =======                    =======
                                                                                                   
</TABLE>


                                        5

<PAGE>



         The following schedule illustrates the interest rate sensitivity of the
Association's  loan  portfolio  at  September  30,  1997.  Mortgages  which have
adjustable or renegotiable  interest rates are shown as terms to repricing.  The
Association  is  unable  to  provide  this  information   based  on  contractual
maturities. The schedule does not reflect the effects of possible prepayments or
enforcement of due-on-sale clauses.
<TABLE>
<CAPTION>

                                                                       Real Estate
                        ------------------------------------------------------------------------------------------------------------
                         One- to Four-Family       Commercial           Construction          Consumer               Total
                        -------------------- ---------------------- -------------------- -------------------- ----------------------
                                    Weighted               Weighted             Weighted             Weighted              Weighted
                                    Average                Average              Average              Average               Average
                          Amount      Rate      Amount       Rate      Amount     Rate     Amount      Rate      Amount      Rate
                        -------------------- ---------------------- -------------------- -------------------- ----------------------
                                                              (Dollars in Thousands)
      Due During
    Periods Ending
     September 30,
     -------------
<S>                      <C>          <C>       <C>          <C>         <C>      <C>       <C>        <C>      <C>          <C>  
1998...................  $24,727      7.43      $    2       6.75%       $309     8.22      $610       6.77%    $25,648      7.42%
1999 and 2000..........      451      8.94          12       7.17          --       --       464      17.26         927     13.08
2001 and 2002..........      837      9.37          47       7.38          --       --        29      13.59         913      9.40
2003 to 2007...........    1,729      9.14         145       7.99          --       --        11      17.00       1,885      9.10
2008 to 2022...........    6,541      8.73       2,250       7.73          --       --        --         --       8,791      8.47
2023 and following.....    3,791      8.70         959       7.96          --       --        --         --       4,750      8.55
                         -------                ------                -------           --------              ---------
                         $38,076                $3,415                   $309             $1,114                $42,914
                         =======                ======                   ====             ======                =======

</TABLE>



         The total amount of loans due to mature or reprice after  September 30,
1997 which have  predetermined  interest rates is $13.6 million,  and which have
floating or adjustable interest rates is $29.3 million.

                                        6

<PAGE>



         One- to  Four-Family  Residential  Mortgage  Lending.  The  Association
focuses its lending efforts  primarily on the origination of conventional  loans
for  the  acquisition  of  owner-occupied,  one-to  four-family  residences.  At
September 30, 1997, the Association's one- to four-family  residential  mortgage
loans  totalled  $38.0  million,  or  89.0%  of  the  Association's  gross  loan
portfolio.  The Association originates these loans primarily from referrals from
real estate agents, existing customers and walk-in customers.

         The Association currently offers  adjustable-rate and fixed-rate loans.
During the year ended  September  30,  1997,  the  Association  originated  $5.0
million of  adjustable-rate  real estate  loans,  80.0% of which were secured by
one- to  four-family  residential  real  estate.  During  the same  period,  the
Association  originated $3.2 million of fixed-rate real estate loans,  virtually
all of which were secured by one- to four-family  residential  real estate.  The
Association's one- to four-family  residential mortgage originations are secured
by properties primarily located in its market area.

         The Association  currently  originates one- to four-family  residential
mortgage  loans in  amounts  up to 90% of the  appraised  value of the  security
property.  The terms of such loans are  generally for up to a maximum term of 30
years.  Interest  charged  on  these  mortgage  loans  is  competitively  priced
according to local market conditions.

         The Association currently offers ARMs with one year annual adjustments.
All of the ARM loans are generally  offered at a margin over the 11th District's
cost of funds. ARM loans currently offered by the Association generally provided
for  up to a two  percent  annual  cap  and a  lifetime  cap  of 12  1/2%.  As a
consequence  of using caps,  the  interest  rates on the ARMs may not be as rate
sensitive as the Association's cost of funds. Borrowers of adjustable rate loans
are qualified at the fully-indexed rate of interest.

         In underwriting one- to four-family  residential real estate loans, the
Association  evaluates both the borrower's  ability to make monthly payments and
the value of the property  securing the loan.  Properties  securing  real estate
loans  made  by  First  Federal  are  currently  appraised  by  independent  fee
appraisers  approved and  qualified  by the Board of  Directors.  First  Federal
generally  requires  borrowers to obtain an opinion of title and fire,  property
and flood  insurance  (if required) in an amount not less than the amount of the
loan. Real estate loans originated by the Association  generally  contain a "due
on sale" clause allowing the Association to declare the unpaid principal balance
due and payable upon the sale of the security property.

         Commercial Real Estate Lending.  The Association  engages in commercial
real estate lending,  including  permanent loans secured  primarily by churches,
office  buildings,   apartment  buildings  and  retail   establishments  in  the
Association's  primary market area. At September 30, 1997, the  Association  had
$3.5  million of  commercial  real estate  loans which  represented  8.0% of the
Association's  gross loan  portfolio.  Included  in  commercial  real  estate is
approximately $368,000 of loans to individuals secured by vacant land located in
the Association's market area.

         Generally, commercial real estate loans originated by First Federal are
adjustable-rate  loans,  with annual  adjustments based upon the 11th District's
cost of funds,  subject to  limitations on the maximum annual and total interest
rate increase or decrease over the life of the loan. Commercial

                                        7

<PAGE>



real estate  loans  typically  do not exceed 75% of the  appraised  value of the
property  securing the loan. First Federal  analyzes the financial  condition of
the borrower,  the borrower's credit history, the reliability and predictability
of the net income  generated by the property  securing the loan and the value of
the property itself. The Association  generally requires personal  guaranties of
the borrowers,  which are supported by financial statements,  in addition to the
security  property  as  collateral  for such  loans.  Appraisals  on  properties
securing  commercial  real  estate  loans  originated  by  the  Association  are
generally  performed  by  independent  fee  appraisers  approved by the Board of
Directors.

         Loans  secured  by  commercial  real  estate are  generally  larger and
involve a greater  degree of credit  risk than one- to  four-family  residential
mortgage loans. Commercial real estate loans typically involve large balances to
single  borrowers  or groups of related  borrowers.  Because  payments  on loans
secured  by  commercial  real  estate  are  often  dependent  on the  successful
operation  or  management  of the  properties,  repayment  of such  loans may be
subject to adverse  conditions in the real estate market or the economy.  If the
cash flow from the project is reduced (for  example,  if leases are not obtained
or renewed), the borrower's ability to repay the loan may be impaired.

         Construction  Lending.  The Association  engages in a limited amount of
construction  lending,  with  $309,000  or .72% of its gross loan  portfolio  in
construction loans as of September 30, 1997.  Generally,  such loans are made to
owner-occupants  for  the  construction  of  one-  to  four-family   residences.
Currently, such loans are offered with terms to maturity of up to six months and
in amounts  generally up to 90% of the appraised value of the security  property
which then convert to permanent loans at the end of the construction phase.

         The   Association's   construction   loans   require   the  payment  of
interest-only  on a monthly basis.  The Association  makes the permanent loan on
the underlying property  consistent with its underwriting  standards for one- to
four-family residences.  The Association usually disburses funds on construction
loans directly to the builder,  or jointly to the individual and supplier if the
individual is acting as its own general  contractor,  at certain intervals based
upon the completed  percentage of the project.  Inspections  of loans in process
are performed by the Association's staff.

         Nevertheless, construction lending is 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.  In an effort to reduce these risks, the application process includes a
submission to the Association of accurate plans, specifications and costs of the
project to be constructed. These items are also used as a basis to determine the
appraised  value of the  subject  property.  Loans  are  based on the  lesser of
current appraised value and/or the cost of construction (land plus building).

         Consumer  Lending.  First  Federal  currently  offers loans  secured by
deposit  accounts,  as well as a limited  number of unsecured  loans to existing
customers.  Substantially all of the Association's  consumer loans originated by
the  Association  were  originated in its primary  market area. At September 30,
1997, the Association's  consumer loan portfolio totalled $1.1 million,  or 3.0%
of its

                                        8

<PAGE>



total  gross loan  portfolio.  The  majority  of  consumer  loans are secured by
savings accounts and automobiles.

         During fiscal 1996, the Association purchased a group of consumer loans
secured by used automobiles totalling $503,000.  These loans were purchased from
a loan broker which initially  retained  servicing  rights.  The Association has
experienced difficulties in obtaining information and payments from the servicer
and,  subsequent  to  September  30,  1997,  a new  servicer  has taken over the
responsibility  for servicing  this  portfolio.  As a result,  $222,000 of these
loans have been classified as substandard under the Association's classification
of assets system.

         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,  employment
stability 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 may entail  greater risk than do  residential  mortgage
loans, particularly in the case of consumer loans which are unsecured or secured
by  rapidly  depreciable  assets  such  as  automobiles.   In  such  cases,  any
repossessed collateral for a defaulted consumer loan may not provide an adequate
source of repayment of the  outstanding  loan balance as a result of the greater
likelihood of damage, loss or depreciation.  The remaining deficiency often does
not warrant further  substantial  collection  efforts  against the borrower.  In
addition,  consumer loan collections are dependent on the borrower's  continuing
financial  stability,  and thus are more likely to be adversely  affected by job
loss, divorce, illness or personal bankruptcy.  Furthermore,  the application of
various  federal and state laws,  including  federal  and state  bankruptcy  and
insolvency laws, may limit the amount which can be recovered on such loans. Such
loans may also give rise to claims  and  defenses  by a consumer  loan  borrower
against an assignee of such loan such as the Association,  and a borrower may be
able to assert  against such assignee  claims and defenses  which it has against
the seller of the  underlying  collateral.  Consumer  loan  delinquencies  often
increase over time as the loans age.

Originations, Purchases, Sales and Servicing of Loans

         Real estate loans are generally  originated by First Federal's staff of
salaried loan officers. Loan applications are taken and processed at its office.
In fiscal 1997, the Association  originated  $8.9 million of loans,  compared to
$8.7  million,  $10.1  million and $8.1 million in fiscal  1996,  1995 and 1994,
respectively.  Management  attributes the increase in  originations to sustained
low  interest  rates.  During  fiscal 1997,  there was a slight  increase in the
dollar amount of  originations  due to the first time  homeowner  program and in
part because of the fixed rates being offered.

         In periods of economic uncertainty,  including,  rising interest rates,
depressed real estate values and slowing of economic activity, the Association's
ability  to  originate  large  dollar  volumes  of  real  estate  loans  may  be
substantially reduced or restricted with a resultant decrease in related loan

                                        9

<PAGE>



origination fees, other fee income and operating earnings.  The Association does
not currently  purchase loans because there is sufficient  product available for
origination but will consider favorable purchase opportunities as they arise.

         The  following  table shows the loan  origination,  purchase,  sale and
repayment activities of the Association for the periods indicated.
<TABLE>
<CAPTION>

                                                                            Year Ended September 30,
                                                               -----------------------------------------------
                                                                  1995            1996              1997
                                                               ------------ ----------------- ----------------
                                                                              (In Thousands)
<S>                                                             <C>                <C>              <C>    
Originations by type:
 Adjustable rate:
  Real estate - one- to four-family..................           $ 5,561            $5,826           $ 3,971
                - commercial.........................             1,361               551             1,021
  Consumer...........................................               613               459               670
                                                               --------           -------          --------
         Total adjustable-rate.......................             7,535             6,836             5,662
                                                                -------            ------           -------
 Fixed rate:
  Real estate - one- to four-family..................             2,418             1,717             3,012
                - commercial.........................                 6                25               192
  Consumer...........................................                94                76                74
                                                               --------           -------          --------
         Total fixed-rate............................             2,518             1,818             3,278
                                                                -------            ------            ------
         Total loans originated......................            10,053             8,654             8,940
                                                                -------            ------            ------

Purchases:
 Total purchased.....................................               ---               503               ---
                                                               --------            ------         ---------

Sales and Repayments:
  Total sales........................................               ---               ---               ---
  Principal repayments...............................             3,625             5,133             4,951
                                                                -------            ------            ------
         Total reductions............................             3,625             5,133             4,951
                                                                -------            ------            ------
  Increase (decrease) in other items, net(1).........            (2,375)           (1,523)           (1,568)
                                                                -------            ------            ------
         Net increase (decrease).....................           $ 4,053            $2,501            $2,421
                                                                =======            ======            ======
</TABLE>
------------------

(1)  Primarily existing loans refinanced by the Association.

Asset Quality

         When a  borrower  fails  to make a  required  payment  on a  loan,  the
Association  attempts to cause the  delinquency  to be cured by  contacting  the
borrower.  Initially,  a payment reminder is sent five and 20 days after the due
date, if payment has not been received.  If the  delinquency is not cured by the
30th day,  contact with the borrower may be made by phone and by another letter.
Additional  written and oral  contacts may be made with the borrower  between 30
and 60 days after the due date. If the delinquency  continues for a period of 60
days, the Association  usually sends a default letter to the borrower and, after
90  days,  institutes  appropriate  action  to  foreclose  on the  property.  If
foreclosed,  the property is sold at public  auction and may be purchased by the
Association.  Delinquent  consumer  loans are  handled  in a  generally  similar
manner,  except that when the payment is 45 days past due,  the loan is referred
to the Association's  counsel for collection.  The Association's  procedures for
repossession and sale of consumer collateral are subject to various requirements
under Louisiana consumer protection laws.

                                       10

<PAGE>




         Generally,  when a loan becomes delinquent 90 days or more, or when the
collection of principal or interest becomes doubtful, the Association will place
the loan on a non-accrual  status and, as a result,  previously accrued interest
income on the loan is taken out of current income. Each account is handled on an
individual  basis. The loan will be transferred back to an accrual status if the
borrower brings the loan current.

         The following table sets forth the  Association's  loan  delinquencies,
approximately  $1.1  million  are  secured  by one- to  four-family  residences,
$175,000 are secured by automobiles, and $10,000 are unsecured.

                                                                          
                            Loans Delinquent For:               Total Loans 
                    ------------------------------------        Delinquent
                       60-89 Days       90 Days and Over      60 Days or More
                    ------------------------------------------------------------
                    Number   Amount     Number    Amount      Number    Amount
                    ------   ------     ------    ------      ------    ------
                                    (Dollars in Thousands)

Total...............  16      $393        40       $871         56      $1,264
                      ==      ====        ==       ====         ==      ======

         Non-Performing  Assets.  The table  below  sets forth the  amounts  and
categories of non-performing assets in the Association's loan portfolio.  At all
dates presented,  the Association had no accruing loans which were contractually
past due 90 days or more and no  troubled  debt  restructurings  (which  involve
forgiving a portion of interest or  principal  on any loans or making loans at a
rate  materially  less than that of market  rates).  Foreclosed  assets  include
assets acquired in settlement of loans.
<TABLE>
<CAPTION>

                                                                          September 30,
                                                        ------------------------------------------------
                                                          1993      1994       1995      1996     1997
                                                          ----      ----       ----      ----     ----
                                                                       (Dollars in Thousands)
Non-accruing loans:
<S>                                                      <C>       <C>        <C>       <C>       <C> 
  One- to four-family............................        $ 390     $ 561      $ 581     $ 618     $717
  Consumer........................................         ---       ---         19       184      154
                                                        ------    ------     ------     -----    -----

    Total.........................................         390       561        600       802      871
                                                        ------    ------      -----     -----    -----

Foreclosed assets:
  One- to four-family............................          274        69         56       131      122
                                                        ------    ------     ------     -----    -----
     Total.......................................          274        69         56       131      122
                                                        ------    ------     ------     -----    -----

Total non-performing assets......................        $ 664     $ 630      $ 656     $ 933     $993
                                                         =====     =====      =====     =====     ====
Total as a percentage of total assets............         1.38%     1.32%      1.23%     1.64%    1.61%
                                                          ====      ====       ====      ====     ====
</TABLE>

         For the year ended September 30, 1997 gross interest income which would
have been recorded had the  non-accruing  loans been current in accordance  with
their  original  terms  amounted  to $91,054.  The amount  that was  included in
interest income on such loans was $37,101 for the year ended September 30, 1997.


                                       11

<PAGE>



         The majority of the Association's  non-performing assets are secured by
one- to four-family  residential  property.  No single loan or real estate owned
had an outstanding balance in excess of $106,000.

         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 of the collateral  pledged,  if any.
"Substandard"  assets include those characterized by the "distinct  possibility"
that the savings  association  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  a  savings  association   classifies  problem  assets  as  either
substandard or doubtful,  it may establish general allowances for loan 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 a savings  association  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   association's   determination   as  to  the
classification  of its  assets  and the amount of its  valuation  allowances  is
subject to review by the  association's  Regional  Director at the  regional OTS
office,  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 the loans in its  portfolio  to  determine  whether any loans
require classification in accordance with applicable  regulations.  On the basis
of management's  review of its assets,  the following table presents  classified
assets at the dates indicated.
<TABLE>
<CAPTION>

                                                                                 September 30,
                                                    -----------------------------------------------------------------------
                                                        1993           1994           1995            1996            1997
                                                        ----           ----           ----            ----            ----
Classified Assets:
<S>                                                   <C>            <C>             <C>            <C>             <C>   
 Substandard................................          $1,440         $1,194          $1,171         $1,185          $1,160
 Doubtful...................................             ---            ---             ---            ---             ---
 Loss.......................................              65             63              48            230             190
                                                    --------        -------        --------        -------        --------
     Total..................................          $1,505         $1,257          $1,219         $1,415          $1,350
                                                      ======         ======          ======         ======          ======
</TABLE>

         First Federal has recognized various levels of loan loss provisions due
to the impact of a large  balance of  delinquent  and  classified  loans and the
uncertainty surrounding the Association's local market area.

                                       12

<PAGE>



         Included in the Association's  classified assets at September 30, 1997,
were $222,000 in  automobile  loans which were  purchased in October  1995,  and
$268,000 were loans made to facilitate the sale of real estate owned,  which are
properties the Association  has previously  acquired  through  foreclosure or by
deed-in-lieu  thereof.  In an attempt to offset holding costs such as insurance,
taxes and  maintenance,  the Association may sell the properties by financing up
to 100% of the  purchase  price.  Such  loans  may be made  at  fixed  rates  or
adjustable  rates of  interest  for  terms of 20  years.  Unlike  troubled  debt
restructurings,  the  Association  did not  forgive any  interest  or  principal
payments on these loans. Under regulatory  criteria,  these loans are classified
until the borrower can demonstrate an ability to repay the loan. As of September
30,  1997,  First  Federal  had 22 loans  to  facilitate  (four  of  which  were
classified), all of which were performing in accordance with their terms.

         Other  Assets  of  Concern.   As  of  September  30,  1997,  there  was
approximately $432,000 in net book value of assets classified by the Association
because of known information about the possible credit problems of the borrowers
or the cash flows of the security  property has 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  item in the
non-performing  asset categories.  Other assets of concern consist of 10 one- to
four-family  residences aggregating $314,000 and $118,000 in automobile loans at
September  30,  1997 which have been  designated  as special  mention  under OTS
regulations and the loans to facilitate, discussed above. All of these loans are
being  monitored  by  the  Association  due  to  periodic   delinquencies.   See
"--Allowance for Loan Losses."

         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
estimated  fair  value  of  the  underlying  collateral,   economic  conditions,
historical  loan loss  experience 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, less estimated  disposition costs. 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.

         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  will be the
result of periodic  loan,  property  and  collateral  reviews and thus cannot be
predicted  in advance.  At  September  30,  1997,  the  Association  had a total
allowance for loan losses of $556,000 or 55.9% of non-performing loans. See Note
1 of the Notes to Consolidated Financial Statements.


                                       13

<PAGE>



         The  following  table  sets  forth  an  analysis  of the  Association's
allowance for loan losses.

                                                        Year Ended September 30,
                                                        ------------------------
                                                         1995    1996     1997
                                                         ----    ----     ----
Balance at beginning of period........................   $351    $389     $580
                                                         ----    ----     ----
Charge-offs:
  One- to four-family.................................      2      23       29
Recoveries:
  One- to four-family.................................    ---     ---      ---
                                                        -----  ------  -------
Net charge-offs.......................................      2      23       29
                                                        -----   -----   ------
Additions charged to operations.......................     40     214        5
                                                        -----   -----  -------
  Balance at end of period............................   $389    $580     $556
                                                         ====    ====     ====
Ratio of net charge-offs during the period to
 average loans outstanding during the period..........   0.00%   0.05%    0.07%
                                                         ====    ====     ====
Ratio of net charge-offs during the period to
 average non-accruing loans...........................   3.40%   3.28%    3.01%
                                                         ====   =====     ====


         The distribution of the Association's  allowance for losses on loans at
the dates indicated is summarized as follows:
<TABLE>
<CAPTION>

                                                                             September 30,
                                -------------------------------- ---------------------------------- --------------------------------
                                               1995                              1996                              1997
                                ----------------------------------------------------------------------------------------------------
                                                         Percent                           Percent                           Percent
                                                        of Loans                           of Loans                         of Loans
                                               Loan      in Each                 Loan      in Each                 Loan      in Each
                                 Amount of   Amounts    Category   Amount of    Amounts    Category   Amount of   Amounts   Category
                                 Loan Loss      by      to Total   Loan Loss      by       to Total   Loan Loss     by      to Total
                                 Allowance   Category     Loans    Allowance   Category     Loans     Allowance  Category     Loans
                                ----------------------------------------------------------------------------------------------------
                                                                        (Dollars In thousands)
<S>                                <C>       <C>          <C>        <C>       <C>          <C>          <C>     <C>          <C>   
One- to four-family.............   $378      $34,665      89.53%     $327      $35,635      86.41%       $314    $38,076      88.54%
Commercial real estate..........      2        1,728       4.46        29        2,891       7.01          34      3,415       8.14
Construction....................      4        1,556       4.02         3        1,295       3.14           1        309        .72
Consumer........................      5          771       1.99       221        1,419       3.44         207      1,114       2.60
                                 ------       ------     ------      ----     --------    -------        ----  ---------    -------
     Total......................  $ 389      $38,720     100.00%     $580      $41,240     100.00%       $556    $42,914     100.00%
                                  =====      =======     ======      ====      =======     ======        ====    =======     ======
</TABLE>
        
Investment Activities

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

         At September 30, 1997,  the  Association  had an investment  portfolio,
consisting of mortgage-backed securities and U.S. Government obligations.  These
investments  were made in order to generate income and because these  securities
carry a low risk weighting for OTS risk-based capital

                                       14

<PAGE>



purposes and satisfy OTS  liquid-asset  requirements.  See  "Regulation--Capital
Requirements" and "--Liquidity."

         At September 30, 1997, First Federal's investment securities, including
Federal Home Loan Bank ("FHLB")  stock  totalled $3.6 million,  or 5.0% of total
assets and  mortgage-backed  securities  totalled  $14.1 million or 21% of total
assets. For information  regarding the amortized cost and market values of First
Federal's  investment  securities  portfolio,   see  Note  2  of  the  Notes  to
Consolidated  Financial Statements included in the Annual Report to Stockholders
filed as Exhibit 13 hereto.  At September 30, 1997, the weighted average term to
maturity or repricing of the  investment  securities  portfolio,  excluding FHLB
stock, was 22 years.

         Mortgage-Backed  Securities.  The Association purchases mortgage-backed
and related  securities  to  complement  and  supplement  its  mortgage  lending
activities  when there is a lack of  investment  opportunities  available in the
Association's  market area.  Management  determined that such investments  would
produce relatively higher risk-adjusted yields for the Association when compared
to other investment  securities and substituted for loan originations,  in light
of the  competition  for home  mortgages in the  Association's  market area. The
Association  has emphasized  mortgage-backed  and related  securities  with high
credit  quality,  high cash flow,  low  interest-rate  risk,  high liquidity and
acceptable   prepayment  risk.   Accordingly,   management   believes  that  the
Association's  mortgage-backed  securities  are  generally  resistant  to credit
problems.  Because these  securities  represent a  passthrough  of principal and
interest from underlying  individual  thirty year mortgages,  such securities do
present  prepayment risk. Any such individual  security contains  mortgages that
can be prepaid at any time over the life of the security.  In a rising  interest
rate  environment  the  underlying  mortgages  are likely to extend  their lives
versus a stable or declining rate environment.  A declining rate environment can
result in rapid  prepayments.  There is no certainty as to the security  life or
speed of prepayment. The geographic makeup and correlated economic conditions of
the underlying mortgages also play an important role in determining  prepayment.
In addition to  prepayment  risk,  interest rate risk is inherent in holding any
debt  security.  As interest  rates rise the value of the security  declines and
conversely   as  interest   rates   decline   values   rise.   Adjustable   rate
mortgage-backed  securities  have the  advantage of moving their  interest  rate
within  limits  with  the  contractual  index  used,  subject  to  the  risk  of
prepayment.  All  of  the  adjustable  rate  mortgage-backed  securities  in the
portfolio are tied to the Eleventh  District Cost of Funds Index or the One Year
Constant Maturity Treasury Index and all are considered held for investment. The
market valuation does not consequently present a direct impact on equity.

         The  Association's  mortgage-backed  and related  securities  portfolio
consists  primarily  of  securities  issued  under  government-sponsored  agency
programs,  including those of Government National Mortgage Association ("GNMA"),
Federal National  Mortgage  Association  ("FNMA") and Federal Home Loan Mortgage
Corporation    ("FHLMC").    The   certificates   are   modified    pass-through
mortgage-backed  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.  FNMA and
FHLMC generally provide the certificate holder a guarantee of timely payments of
interest,  whether or not  collected.  GNMA's  guarantee to the holder is timely
payments of principal and  interest,  backed by the full faith and credit of the
U.S. Government.  Private mortgage-backed securities acquired by the Association
have been pooled and

                                       15

<PAGE>



sold by private issuers and generally  underwritten by large investment  banking
firms. These securities provide for the timely payment of principal and interest
either through  insurance  issued by a reputable  insurer,  or by  subordinating
certain payments under other  securities  secured by the same mortgage pool in a
manner that is sufficient  to have the senior  mortgage-backed  securities  earn
either of the  highest  two credit  ratings  from one or more of the  nationally
recognized securities rating agencies.

         Mortgage-backed  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 to holders.  Mortgage-backed securities are
also 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,  FHLMC  and  certain  AAA-  or  AA-rated   mortgage-backed
pass-through  securities 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  following  table  sets  forth the  contractual  maturities  of the
Association's  mortgage-backed securities at September 30, 1997. For information
regarding   the   amortized   cost  and   market   values  of  First   Federal's
mortgage-backed  securities  portfolio,  see Note 3 of the Notes to Consolidated
Financial  Statements  included in the Annual  Report to  Stockholders  filed as
Exhibit 13 hereto.
<TABLE>
<CAPTION>

                                                                                                      September 30,
                                                            Due in                                         1997
                                         ------------------------------------------------------ ----------------------
                                             1 to 3         3 to 5       5 to 10       Over 10            Balance
                                              Years          Years        Years         Years           Outstanding
                                              -----          -----        -----         -----           -----------
                                                                  (In Thousands)
<S>                                         <C>             <C>          <C>        <C>                 <C>     
Federal Home Loan Mortgage
 Corporation......................          $   967         $  ---       $  ---     $   5,435           $  6,402
Federal National Mortgage
 Association......................              421            ---          174         5,734              6,329
Government National Mortgage
 Association .....................              ---             37          183         1,175              1,395
                                         ----------           ----        -----     ---------          ---------
Total.............................           $1,388           $ 37         $357       $12,344            $14,126
                                             ======           ====         ====       =======            =======

</TABLE>


                                       16

<PAGE>



         The following  table sets forth the  composition  of the  Association's
investment and mortgage-backed securities at the dates indicated.
<TABLE>
<CAPTION>

                                                                                        September 30,
                                                       -----------------------------------------------------------------------------
                                                                    1995                    1996                       1997
                                                       ------------------------- ----------------------- ---------------------------
                                                               Book      % of          Book       % of            Book      % of
                                                              Value      Total        Value       Total          Value      Total
                                                              -----      -----        -----       -----          -----      -----
                                                                                   (Dollars in Thousands)
Investment securities:
<S>                                                        <C>           <C>         <C>          <C>         <C>           <C>   
  U.S. government securities...........................    $  1,485      44.82%      $  990       30.87%      $    994      28.44%
  FHLMC stock..........................................          15        .45          378       11.79            547      15.65
  Adjustable-rate mortgage-backed securities (1).......       1,400      42.26        1,395       43.50          1,405      40.20
                                                          ---------    -------       ------     -------      ---------    -------
     Subtotal..........................................       2,900      87.53        2,763       86.16          2,946      84.29
FHLB stock.............................................         413      12.47          444       13.84            549      15.71
                                                          ---------    -------       ------     --------     ---------    -------
     Total investment securities and FHLB stock........    $  3,313     100.00%      $3,207      100.00%       $ 3,495     100.00%
                                                           ========     ======       ======       ======      ========     ======
                                                                                                             
Average remaining life of investment securities........   2.1 years               1.1 years                  1.7 years
                                                                                                             
Other interest-earning assets:                                                                               
  Interest-bearing deposits with other institutions....   $      13     100.00%     $   234      100.00%       $   676     100.00%
                                                          ---------     ------      -------      ------      ---------     ------
     Total.............................................   $      13     100.00%     $   234      100.00%       $   676     100.00%
                                                          =========     ======      =======      =======     =========     ======
                                                                                                                
Mortgage-backed securities:
  GNMA.................................................    $  1,042       9.27%       1,567       12.70%      $  1,392       9.85%
  FNMA.................................................       4,201      37.36        5,059       41.00          6,180      43.75
  FHLMC................................................       5,886      52.34        5,522       44.75          6,234      44.13
                                                           --------     ------      -------     -------       ---------   -------
                                                             11,129      98.97       12,148       98.45         13,806      97.73
Unamortized premium (discounts), net...................         117       1.03          191        1.55            320       2.27
                                                           --------     ------     --------    --------       ---------   -------
     Total mortgage-backed securities..................     $11,246     100.00%     $12,339      100.00%       $14,126     100.00%
                                                            =======     ======      =======      ======        =======     ======
</TABLE>
----------------------                            
(1)  Represents a mutual fund which invests in stock secured by  adjustable-rate
     mortgage-backed securities and other debt securities.

                                       17

<PAGE>



         The composition and maturities of the investment  securities portfolio,
excluding FHLB stock, are indicated in the following table.


                                        1 to 5      Total Investment
                                         Years         Securities
                                      ----------  ------------------------
                                      Book Value  Book Value  Market Value
                                      ----------  ----------  ------------
                                            (Dollars in Thousands)

U.S. government securities...........    $993         $993        $995
                                         ----         ----        ----
Total investment securities..........    $993         $993        $995
                                         ====         ====        ====
Weighted average yield...............    6.06%        6.06%       6.06%

         The  OTS has  issued  guidelines  regarding  management  oversight  and
accounting  treatment for securities,  including investment  securities,  loans,
mortgage-backed  securities and derivative  securities.  The guidelines  require
thrift  institutions to reduce the carrying value of securities to the lesser of
cost or market value unless it can be demonstrated that a class of securities is
intended to be held to maturity.

Sources of Funds

         General.  The  Association's  primary  sources  of funds are  deposits,
amortization and prepayment of loan principal,  borrowings,  interest earned on,
and  maturation of investment  securities and  short-term  investments,  and net
earnings.

         Borrowings may be used on a short-term basis to compensate for seasonal
reductions in deposits or deposit inflows at less than projected levels, and may
be used on a  longer-term  basis to support  expanded  lending  activities or to
increase  the  effectiveness  of the  Association's  asset/liability  management
program.  In this  regard,  in order to enhance  both the return on the  capital
raised in the  Conversion  and its interest  rate spread,  the  Association  may
utilize  advances from the FHLB of Dallas and attempt to match the maturities of
such liabilities with assets such as  mortgage-backed  securities having similar
effective  maturities  but  higher  yields  compared  to the  rate  paid on such
advances.

         Deposits. First Federal offers the following types of deposit accounts:
passbook savings, money market deposit accounts, certificates of deposit and IRA
accounts.  The Association  solicits  deposits from its market area and does not
accept  brokered  deposits.  The  Association  relies  primarily on  competitive
pricing  policies,  advertising and customer service to attract and retain these
deposits.

         The flow of deposits is influenced  significantly  by general  economic
conditions,   changes  in  money  market  and  prevailing  interest  rates,  and
competition.  The Association  currently offers competitive rates on longer term
certificates of deposit,  the result of which is designed to extend the maturity
of its  liabilities.  The  Association  believes  that this will have a positive
effect on its results

                                       18

<PAGE>



of operations,  both for  asset/liability  management  purposes and in the event
market rates of interest increase.

         The variety of deposit  accounts offered by the Association has allowed
it to be  competitive  in  obtaining  funds and to respond with  flexibility  to
changes in consumer  demand.  The  Association  has become more  susceptible  to
short-term fluctuations in deposit flows, as customers have become more interest
rate conscious which can result in disintermediation, which is the flow of funds
away from savings institutions into direct investments,  such as U.S. government
and corporate  securities,  and other investment vehicles which,  because of the
absence of federal insurance  premiums and reserve  requirements,  generally pay
higher rates of return than savings institutions.  If interest rates continue to
increase,  these  sources of funds may become  more costly  than  interest  rate
regulated sources.

         At September 30, 1997, First Federal's  deposit base was $43.6 million.
The  Association  has  been  able  to  maintain  its  deposit  base,  due to the
stabilization  of interest rates paid on deposits  during fiscal 1997.  Although
approximately  21.0% of the Association's  total deposits are in certificates of
deposit of $100,000 or more, this level has historically  been maintained and is
prevalent  in the  Association's  market  area.  Based  on its  experience,  the
Association  believes that its deposits are relatively  stable sources of funds.
However, the ability of the Association to attract and maintain  certificates of
deposit, and the rates paid on these deposits,  has been and will continue to be
significantly affected by market conditions.

         The following table sets forth the dollar amount of savings deposits in
the various types of deposit programs offered by the Association for the periods
indicated.
<TABLE>
<CAPTION>

                                                                  Year Ended September 30,
                                          -----------------------------------------------------------------------------
                                                       1995                   1996                     1997
                                          -------------------------- ---------------------- ---------------------------
                                                           Percent                Percent                    Percent
                                                 Amount   of Total      Amount   of Total        Amount     of Total
                                                                     (Dollars in Thousands)

Transactions and Savings Deposits:
----------------------------------
<S>                                             <C>          <C>       <C>          <C>       <C>              <C>   
Passbook Accounts 3.00%...................      $ 4,566      10.58%    $ 4,540      10.81%    $   4,912        11.27%
Money Market Accounts 3.05%...............        7,725      17.90       6,244      14.87         4,409        10.12
                                                -------     ------     -------     ------     ---------      -------
                                                                                              
Total Non-Certificates....................       12,291      28.48      10,784      25.68         9,321        21.39
                                                -------     ------     -------      -----     ---------      -------
                                                                                              
Certificates:                                                                                 
                                                                                              
 2.00 -  3.99%............................          675       1.57         ---        ---           ---          ---
 4.00 -  5.99%............................       28,357      65.73      28,640      68.22        25,592        58.73
 6.00 -  7.99%............................        1,820       4.22       2,562       6.10         8,665        19.88
 8.00 -  9.99%............................          ---        ---         ---        ---           ---          ---
                                              ---------   --------     -------    -------      --------      -------
                                                                                              
Total Certificates........................       30,852      71.52      31,202      74.32        34,257        78.61
                                                -------     ------     -------     ------      --------      -------
Total Deposits............................      $43,143     100.00%    $41,986     100.00%      $43,578       100.00%
                                                =======     ======     =======     ======       =======       ======
                                                                                          
</TABLE>


                                       19

<PAGE>



         The  following  table sets forth the savings  flows at the  Association
during the periods indicated.
<TABLE>
<CAPTION>

                                                                             Year Ended September 30,
                                                               -----------------------------------------------------
                                                                     1995               1996               1997
                                                                     ----               ----               ----
                                                                              (Dollars in Thousands)
<S>                                                              <C>                  <C>               <C>     
Opening balance........................................          $  42,770            $43,143           $ 41,986
Deposits...............................................             17,676              9,763             17,737
Withdrawals............................................            (18,590)           (12,228)           (17,769)
Interest credited......................................              1,287              1,308              1,624
                                                                 ---------           --------          ---------
Ending balance.........................................           $ 43,143            $41,986           $ 43,578
                                                                  ========            =======           ========
Net increase (decrease)................................           $    373            $(1,157)         $   1,592
                                                                  ========            =======          =========
Percent increase (decrease)............................                .87%             (2.76)%             3.65%
                                                                      ====              =====           ========
</TABLE>

         The  following  table  shows  rate  and  maturity  information  for the
Association's certificates of deposit as of September 30, 1997.
<TABLE>
<CAPTION>

                                            4.00-             6.00-                                Percent
                                            5.99%             7.99%             Total             of Total
                                            -----             -----             -----             --------
Certificate accounts maturing in 
quarter ending:
<S>                                      <C>                 <C>               <C>                  <C>   
December 31, 1997..............          $  7,115            $2,180            $9,295               27.13%
March 31, 1998.................             6,154             1,161             7,315               21.35
June 30, 1998..................             4,123             1,170             5,293               15.45
September 30, 1998.............             3,689               830             4,519               13.19
December 31, 1998..............             1,173               210             1,383                4.04
March 31, 1999.................               507                14               521                1.52
June 30, 1999..................               333               194               527                1.54
September 30, 1999.............               348               365               713                2.08
December 31, 1999..............               220               734               954                2.79
March 31, 2000.................             1,229               303             1,532                4.47
June 30, 2000..................                67                45               112                 .33
September 30, 2000.............               211               ---               211                 .62
Thereafter.....................               878             1,004             1,882                5.49
                                        ---------           -------          --------            --------
   Total.......................           $26,047            $8,210           $34,257              100.00%
                                          =======            ======           =======              ======

   Percent of total............             76.03%            23.97%
                                            =====             =====
</TABLE>

                                       20

<PAGE>



         The  following  table   indicates  the  amount  of  the   Association's
certificates  of deposit and other deposits by time remaining  until maturity as
of September 30, 1997.
<TABLE>
<CAPTION>

                                                                                   Maturity
                                                      ----------------------------------------------------------------
                                                                       Over        Over
                                                      3 Months        3 to 6      6 to 12        Over
                                                       or Less        Months       Months      12 months      Total
                                                       -------        ------       ------      ---------      -----
                                                                               (In Thousands)
<S>                                                     <C>           <C>          <C>           <C>         <C>    
Certificates of deposit less than $100,000.......       $6,947        $5,511       $6,779        $5,674      $24,911

Certificates of deposit of $100,000 or more......        2,333         1,804        2,933         2,161        9,231

Public funds (1).................................           15           ---          100           ---          115
                                                      --------    ----------      -------    ----------    ---------

Total certificates of deposit....................       $9,295        $7,315       $9,812        $7,835      $34,257
                                                        ======        ------       ======        ======      =======
</TABLE>

---------------

(1) Deposits from governmental and other public entities.


         Borrowings.  The  Association  has the ability to use advances from the
FHLB of Dallas to  supplement  its deposits when the rates are  favorable.  As a
member of the FHLB of Dallas,  the  Association is required to own capital stock
and is authorized to apply for  advances.  Each FHLB credit  program has its own
interest  rate,  which  may be  fixed  or  variable,  and  includes  a range  of
maturities.  The FHLB of Dallas may prescribe the acceptable uses to which these
advances  may be put, as well as  limitations  on the size of the  advances  and
repayment provisions.

         The  following  table  sets forth the  maximum  month-end  balance  and
average balance of FHLB advances, securities sold under agreements to repurchase
and other borrowings for the periods indicated.



                                                 Year Ended September 30,
                                           -----------------------------------
                                             1995         1996         1997
                                             ----         ----         ----
                                                    (In Thousands)
Maximum Balance:
  FHLB advances...........................  $2,538       $7,561      $10,825

Average Balance:
  FHLB advances...........................  $1,591       $4,809      $ 8,239



                                       21

<PAGE>



         The  following   table  sets  forth  certain   information  as  to  the
Association's borrowings at the dates indicated.
<TABLE>
<CAPTION>

                                                                   September 30,
                                                        ------------------------------
                                                         1995        1996        1997
                                                         ----        ----        ----
                                                            (Dollars in Thousands)
<S>                                                     <C>         <C>        <C>    
FHLB advances........................................   $2,538      $7,561     $10,825
                                                        ------      ------     -------
     Total borrowings................................   $2,538      $7,561     $10,825
                                                        ======      ======     =======
Weighted average interest rate of FHLB advances......     6.11%       5.53%       5.64%
</TABLE>



Subsidiary Activities

         As a federally chartered savings and loan association, First Federal is
permitted by OTS  regulations to invest up to 2% of its assets or  approximately
$1.2 million at  September  30,  1997,  in the stock of, or unsecured  loans to,
service corporation  subsidiaries.  First Federal may invest an additional 1% of
its assets in service  corporations  where  such  additional  funds are used for
inner-city  or  community  development  purposes.  At September  30,  1997,  the
Association did not have any subsidiaries.

Competition

         First Federal faces strong  competition,  both in originating loans and
in attracting  deposits.  Competition in originating  loans comes primarily from
other commercial banks, savings associations, credit unions and mortgage bankers
making loans secured by real estate  located in the  Association's  market area.
The  Association  competes for loans  principally on the basis of the quality of
services it provides to borrowers,  interest rates and loan fees it charges, and
the types of loans it originates.

         The Association attracts all of its deposits through its retail banking
office,  primarily from the  communities it serves.  Therefore,  competition for
those deposits is principally from other commercial banks,  savings associations
and brokerage houses located in the same communities.  The Association  competes
for these  deposits  by  offering  deposit  accounts  at  competitive  rates and
convenient business hours.

         The Association's  primary market area covers the parish of St. Landry,
Louisiana.  There are 13 commercial  banks,  one savings  association  and three
credit  unions  which have  offices in and compete for deposits and loans in the
Association's  primary  market area.  First  Federal  estimates its share of the
residential  mortgage  loan market and savings  deposit base to be not more than
21.0% and 6.0%, respectively.

                                       22

<PAGE>



Regulation

         General.  First  Federal  is a  federally  chartered  savings  and loan
association,  the deposits of which are federally insured and backed by the full
faith and credit of the United States Government.  Accordingly,  the Association
is  subject to broad  federal  regulation  and  oversight  extending  to all its
operations.  First  Federal  is a member of the FHLB of Dallas and is subject to
certain  limited  regulation  by the Board of Governors  of the Federal  Reserve
System  ("Federal  Reserve  Board").  As the savings and loan holding company of
First  Federal,  the  Company  also will be subject to  federal  regulation  and
oversight.  The  purpose of the  regulation  of the  Company  and other  holding
companies is to protect  subsidiary savings  associations.  The Association is a
member of the Savings Association  Insurance Fund ("SAIF"),  which together with
the Bank Insurance Fund ("BIF") are the two deposit insurance funds administered
by the FDIC. The deposits of First Federal are insured by the FDIC. As a result,
the FDIC has certain regulatory and examination authority over the Association.

         Certain of these regulatory requirements and restrictions are discussed
below or elsewhere in this document.

         Federal  Regulation  of  Savings  Associations.  The OTS has  extensive
authority  over  the  operations  of  savings  associations.  As  part  of  this
authority,  First Federal 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 First  Federal  were as of March 1997 and January
1992,  respectively.  Under  agency  scheduling  guidelines,  it is likely  that
another   examination  will  be  initiated  in  the  near  future.   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,  to fund the  operations  of the OTS. The
Association's  OTS assessment for the fiscal year ended  September 30, 1997, was
$19,600.

         The OTS also  has  extensive  enforcement  authority  over all  savings
institutions  and their holding  companies,  including the  Association  and the
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 First
Federal is prescribed by federal laws and it is prohibited  from engaging in any
activities not permitted by such laws. 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.


                                       23

<PAGE>



         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). At September 30, 1997 the Association's lending
limit under this  restriction  was $1.1 million.  First Federal 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,  asset quality,  earnings  standards,  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 compliance plan. A failure to submit a plan or to comply
with an  approved  plan will  subject  the  institution  to further  enforcement
action.

         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  SAIF or the BIF The  FDIC  also  has the
authority to initiate  enforcement actions against savings  associations,  after
giving the OTS an opportunity to take such action, and may terminate the deposit
insurance if it determines that the institution has engaged in unsafe or unsound
practices or is in an unsafe or unsound condition.

         The FDIC's deposit insurance premiums are assessed through a risk-based
system under which all insured  depository  institutions  are placed into one of
nine  categories  and  assessed  insurance  premiums  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 Tier 1
or core capital to  risk-weighted  assets  ("Tier 1  risk-based  capital") of at
least 6% and a risk-based  capital ratio of at least 10%) and considered healthy
pay the  lowest  premium  while  institutions  that  are  less  than  adequately
capitalized (i.e., core or Tier 1 risk-based capital ratios of less than 4% or a
risk-based  capital  ratio  of less  than  8%)  and  considered  of  substantial
supervisory concern pay the highest premium.  Risk classification of all insured
institutions  will be made by the FDIC for each semi-annual  assessment  period.
For the first six months of 1995,  the  assessment  schedule for BIF members and
SAIF members ranged from .23% to .31% of deposits.

         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.

         As is the case  with the SAIF,  the FDIC is  authorized  to adjust  the
insurance  premium  rates for banks  that are  insured by the BIF of the FDIC in
order to maintain the reserve ratio of the BIF at 1.25% of BIF insured deposits.
As a result of the BIF reaching its statutory reserve ratio, the

                                       24

<PAGE>



FDIC  revised the premium  schedule  for BIF insured  institutions  to provide a
range of .04% to .31% of deposits.  The revisions  became effective in the third
quarter of 1995.  In  addition,  the BIF rates were further  revised,  effective
January 1996, to provide a range of 0% to .27% with a minimum annual  assessment
of $2,000.

         In  order  to  help  eliminate  this  disparity  and  any   competitive
disadvantage due to disparate deposit insurance premium  schedules,  legislation
to recapitalize the SAIF was enacted in September 1996. The legislation provided
for a one-time  assessment  to be imposed on all  deposits  assessed at the SAIF
rates, as of March 31, 1995, in order to recapitalize the SAIF. It also provided
for the merger of the BIF and the SAIF on January  1, 1999  provided  no savings
associations  then exist.  The special  assessment rate has been  established at
 .657% of deposits by the FDIC and the resulting  assessment of $294,000 was paid
in November 1996. This special assessment  significantly  increased  noninterest
expense and adversely  affected the Company's results of operations for the year
ended September 30, 1996.  Following the special assessment,  and depending upon
capital level and supervisory  rating,  the Company's deposit insurance premiums
could decrease significantly for future periods.

         Prior  to the  enactment  of the  legislation,  a  portion  of the SAIF
assessment imposed on savings  associations was used to repay obligations issued
by a federally chartered corporation to provide financing ("FICO") for resolving
the thrift crisis in the 1980s, in an amount equal to 6.48 basis points for each
$100 in  domestic  deposits.  As a result of the  recent  legislation  discussed
above,  BIF-insured  institutions are also required to pay an assessment for the
repayment of interest on the FICO bonds, in an amount equal to 1.52 basis points
for each $100 in domestic deposits. The assessment on SAIF-insured  institutions
is  expected  to be  reduced  to 2.43  basis  points  for each $100 in  domestic
deposits no later than January 1, 2000, by which point BIF-insured  institutions
will participate fully in the FICO bond interest  repayment.  These assessments,
which  may be  revised  based  upon the  level of BIF and  SAIF  deposits,  will
continue until the bonds mature in 2017.

         Regulatory    Capital    Requirements.    Federally   insured   savings
associations, such as First Federal, 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.  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.  At September  30, 1997,  the
Association did not have any intangible  assets for calculating  compliance with
the requirement.

         The OTS regulations establish special  capitalization  requirements for
savings associations that own subsidiaries.  In determining  compliance with the
capital requirements,  all subsidiaries engaged solely in activities permissible
for national banks or engaged in certain other activities

                                       25

<PAGE>



solely  as  agent  for its  customers  are  "includable"  subsidiaries  that are
consolidated  for capital purposes in proportion to the  association's  level of
ownership.  For excludable  subsidiaries the debt and equity investments in such
subsidiaries are deducted from assets and capital. The Association currently has
no subsidiaries.

         At September 30, 1997,  the  Association  had tangible  capital of $5.6
million,  or 9.0% of adjusted total assets,  which is approximately $4.7 million
above the minimum requirement of 1.5% of adjusted total assets in effect on that
date.

         The capital standards also require core capital equal to 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 September 30, 1997, the
Association had no intangibles which were subject to these tests.

         At September 30, 1997, the  Association  had core capital equal to $5.6
million,  or 9.0% of adjusted  total  assets,  which is $3.8  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  September  30,  1997,  the
Association had no capital instruments that qualify as supplementary capital and
$368,000 of general loss  reserves,  all of which  qualified  under the 1.25% of
risk-weighted assets limit.

         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.

         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.

         On September 30, 1997,  First Federal had total capital of $6.0 million
(including  $5.6 million in core capital,  $368,000 in qualifying  supplementary
capital and risk-weighted assets of $33.6

                                       26

<PAGE>



million (including no converted  off-balance sheet assets);  or total capital of
18%  of  risk-weighted  assets.  This  amount  was  $3.3  million  above  the 8%
requirement in effect on that date.

         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.  The rule will not become effective until the OTS evaluates the process
by which  savings  associations  may  appeal an  interest  rate  risk  deduction
determination.  It is uncertain as to when this evaluation may be completed. Any
savings  association  with less than $300 million in assets and a total  capital
ratio in excess of 12% is exempt from this requirement unless the OTS determines
otherwise.

         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.  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  authority of the OTS and the FDIC  including,  the appointment of a
receiver or conservator.


                                       27

<PAGE>



         The OTS is also generally  authorized to reclassify an association into
a lower capital category and impose the 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 Common Stock purchased in the Conversion.
Company  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 those persons purchasing shares in the Conversion.

         Limitations   on  Dividends  and  Other  Capital   Distributions.   OTS
regulations impose various  restrictions on savings associations with respect to
their ability to make distributions of capital,  which include dividends,  stock
redemptions or repurchases,  cash-out mergers and other transactions  charged to
the capital account.  OTS regulations  also prohibit a savings  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.

         Generally, savings associations, such as First Federal, that before and
after the  proposed  distribution  meet  their  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 capital
requirement  for such  capital  component,  as measured at the  beginning of the
calendar year, or 75% of its net income for the most recent four quarter period.
However,  an association deemed to be in need of more than normal supervision by
the OTS may have its dividend authority restricted by the OTS. First Federal may
pay dividends in accordance with this general authority.

         Savings  associations  proposing to make any capital  distribution need
only  submit  written  notice  to the OTS 30 days  prior  to such  distribution.
Savings  associations  that do not,  or would  not meet  their  current  minimum
capital requirements  following a proposed capital  distribution,  however, must
obtain OTS approval prior to making such distribution. The OTS may object to the
distribution  during that 30-day  period  notice  based on safety and  soundness
concerns. See "- Regulatory Capital Requirements."

         The OTS has proposed  regulations that would revise the current capital
distribution  restrictions.  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 of
supervisory concern, and would remain adequately  capitalized (as defined in the
OTS prompt corrective action regulations)  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. As under the

                                       28

<PAGE>



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.

         Liquidity.  All savings  associations,  including  First  Federal,  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 "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources" in the Annual Report to Stockholders filed as Exhibit 13 hereto. 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 September 30, 1997, the Association was in compliance with
both  requirements,  with an overall liquid asset ratio of 5.0% and a short-term
liquid assets ratio of 2.0%.

         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  Association is in compliance
with these amended rules.

         OTS accounting regulations,  which may be made more stringent than GAAP
by the OTS, 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.

         Qualified Thrift Lender Test. All savings associations, including First
Federal,  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 September 30, 1997, the Association
met the test and has always met the test since its effectiveness.

         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

                                       29

<PAGE>



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  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 First Federal, 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 First Federal.  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  August  1994  and  received  a  rating  of
"satisfactory".

         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 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.


                                       30

<PAGE>



         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  First  Federal  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 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.

         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 September 30, 1997, First Federal 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. First Federal is a member of the FHLB of
Dallas,  which is one of 12 regional FHLBs,  that administers the home financing
credit function of savings

                                       31

<PAGE>



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, which are subject to the 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,  First Federal is required to purchase and maintain  stock
in the FHLB of Dallas. At September 30, 1997, First Federal had $549,100 in FHLB
stock,  which was in  compliance  with this  requirement.  In past years,  First
Federal has received substantial dividends on its FHLB stock. Over the past five
fiscal years such  dividends  have averaged 5.35% and were 6.19% for fiscal year
1997.

         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 First  Federal's FHLB stock may result in a  corresponding
reduction in First Federal's capital.

         For the fiscal year ended  September  30, 1997,  dividends  paid by the
FHLB of Dallas to First Federal  totalled  $28,000,  which  constituted a $2,000
increase over the amount of dividends received in fiscal year 1996.

Federal and State 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"),  had
been 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. The amount of the bad debt reserve deduction for "qualifying
real 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).

         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.

         The  percentage of specially  computed  taxable  income that is used to
compute a savings  association's bad debt reserve deduction under the percentage
of taxable  income  method  (the  "percentage  bad debt  deduction")  is 8%. The
percentage bad debt  deduction thus computed is reduced by the amount  permitted
as a deduction for non-qualifying loans under the experience

                                       32

<PAGE>



method.  The  availability  of the  percentage of taxable  income method permits
qualifying savings  associations to be taxed at a lower effective federal income
tax rate than that applicable to  corporations  generally  (approximately  31.3%
assuming the maximum percentage bad debt deduction).

         If an  association's  specified  assets  (generally,  loans  secured by
residential  real  estate  or  deposits,  educational  loans,  cash and  certain
government  obligations)  constitute  less  than 60% of its  total  assets,  the
association may not deduct any addition to a bad debt reserve and generally must
include existing reserves in income over a four year period.

         Under the percentage of taxable income method,  the percentage bad debt
deduction  cannot  exceed the amount  necessary  to increase  the balance in the
reserve for  "qualifying  real property  loans" to an amount equal to 6% of such
loans  outstanding  at the end of the  taxable  year or the  greater  of (i) the
amount  deductible  under the  experience  method or (ii) the amount  which when
added to the bad debt deduction for "non-qualifying  loans" equals the amount by
which 12% of the amount comprising  savings accounts at year-end exceeds the sum
of surplus,  undivided  profits and reserves at the  beginning  of the year.  At
September 30, 1997, the 6% and 12%  limitations  did not restrict the percentage
bad debt deduction  available to the Association.  It is not expected that these
limitations would be a limiting factor in the foreseeable future.

         In August 1996, legislation was enacted that repeals the reserve method
of accounting  (including  the percentage of taxable income method) used by many
thrifts,  including  the  Association,  to calculate  their bad debt reserve for
federal income tax purposes.  As a result, large thrifts such as the Association
must  recapture  that  portion of the reserve that exceeds the amount that could
have been taken under the specific  charge-off  method for  post-1987 tax years.
The  legislation  also  requires  thrifts to account  for bad debts for  federal
income  tax  purposes  on the  same  basis as  commercial  banks  for tax  years
beginning  after  December 31, 1995.  The  recapture  will occur over a six-year
period,  the  commencement of which will be delayed until the first taxable year
beginning  after  December 31,  1997,  provided the  institution  meets  certain
residential lending requirements. The management of the Company does not believe
that  the  legislation  will  have  a  material  impact  on the  Company  or the
Association.

         In addition to the regular 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

                                       33

<PAGE>



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 September 30, 1997,  the  Association's  Excess for tax purposes
totalled approximately $965,000.

         The Company files  consolidated  federal income tax returns on a fiscal
year basis using the accrual method of accounting. 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.

         The  Company  has not been  audited by the IRS with  respect to federal
income tax returns since its organization.

         Louisiana Taxation. The Company is subject to the Louisiana Corporation
Income Tax based on its Louisiana  taxable income,  as well as franchise  taxes.
The  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,  First Federal is subject to the Louisiana Shares Tax which is imposed
on the assessed value of its stock.  The formula for deriving the assessed value
is to  calculate  15% of the  sum of (a)  20% of the  Association's  capitalized
earnings, plus (b) 80% of the Association's taxable stockholders' equity, and to
subtract from that figure 50% of the  Association's  real and personal  property
assessment.   Various  items  may  also  be  subtracted   in   calculating   the
Association'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.

Executive Officers

         The following information as to the business experience during the past
five years is supplied with respect to executive officers of the Company. Except
as otherwise indicated, the persons named have served as officers of the Company
since it  became  the  holding  company  of the  Association  and all  positions
described  below  are  with  the  Association.  There  are  no  arrangements  or
understandings  between the persons named and any other person pursuant to which
such officers were selected.

         Wayne McKinnon Gilmore.  Mr. Gilmore, age 76, is Chairman of the Board,
President and Chief Executive  Officer of the  Association.  He was elected as a
director  and Chief  Executive  Officer  in 1957,  as  President  in 1987 and as
Chairman of the Board in 1994.


                                       34

<PAGE>



         H. Andrew Myers,  Jr. Mr. Myers,  48, joined the Association in 1989 as
Executive Vice President.  He is responsible for overseeing the daily management
functions of the Association.

         Jutta Codori.  Mrs. Codori,  35, joined the Association in January 1997
as  Controller.  She comes with 17 years  experience in the savings and loan and
commercial  banking  industry.  For the five years prior to January  1997,  Mrs.
Codori was the Controller of Southland Federal Savings Bank.

Employees

         At  September  30,  1997,  the  Company  had a total  of 15  employees,
including 1 part-time  employee.  The Company's employees are not represented by
any collective bargaining group.  Management considers its employee relations to
be good.

                                       35

<PAGE>



Item 2. Description of Property

         The  Company  conducts  its  business  at its main  office  located  in
Opelousas,  Louisiana.  The following table sets forth  information  relating to
each of the Company's properties as of September 30, 1997.
<TABLE>
<CAPTION>


                                                                                  Total
                                                                   Owned       Approximate         September 30,
                                                    Year            or            Square             1997 Book
Location                                          Acquired        Leased         Footage               Value
--------                                          --------        ------        ---------              -----
Main Office:                                                                                       (In Thousands)
<S>                                                 <C>            <C>            <C>                   <C> 
459 East Landry Street                              1969           Owned          5,516                 $451
Opelousas, Louisiana
Storage Facility:
434 S. Lombard Street                               1993           Owned            768                   10
Opelousas, Louisiana

</TABLE>


         The Company  believes that its current  facilities are adequate to meet
the present and foreseeable needs of the Association and the Company, subject to
possible future expansion.

         The  Company  maintains  an  on-line  data base  with a service  bureau
servicing financial institutions.  The net book value of the data processing and
computer equipment utilized by the Company at September 30, 1997 was $23,000.

Legal Proceedings

         The Company is involved  from time to time as plaintiff or defendant in
various  legal  actions  arising in the  normal  course of  business.  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 results of operations.

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

         No matter was  submitted  to a vote of  security  holders,  through the
solicitation  of proxies or otherwise,  during the quarter  ended  September 30,
1997.


                                       36

<PAGE>



                                     PART II


Item  5.  Market for Common Equity and Related
          Stockholder Matters

         Page 54 of the Company's 1997 Annual Report to  Stockholders  is herein
incorporated by reference.


Item  6.  Management's Discussion and Analysis or Plan of Operation

         Pages 5 through 17 of the Company's 1997 Annual Report to  Stockholders
is herein incorporated by reference.


Item  7.  Financial Statements

         Pages 19 through 53 of the Company's 1997 Annual Report to Stockholders
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 in
accountants and/or reporting disagreements on any matter of accounting principle
or financial statement disclosure.



                                       37

<PAGE>



                                    PART III

Item 9.  Directors and Executive Officers, Promoters and Control
         Persons; Compliance with Section 16(a) of the Exchange Act

         Information  concerning  directors of the  Registrant  is  incorporated
herein by reference from the Company's  definitive  Proxy Statement for the 1997
Annual Meeting of Stockholders, a copy of which will be filed not later than 120
days after the close of the fiscal year.

Item 10.  Executive Compensation

         Information concerning executive compensation is incorporated herein by
reference  from the  Company's  definitive  Proxy  Statement for the 1997 Annual
Meeting of  Stockholders,  a copy of which will be filed not later than 120 days
after the close of the fiscal year.

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 1997 Annual  Meeting of  Stockholders,  a copy of which
will be filed not later than 120 days after the close of the fiscal year.

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 1997 Annual Meeting of  Stockholders,  a copy of which will be filed not
later than 120 days after the close of the fiscal year.

                                       38

<PAGE>



                                     PART IV


Item 13.  Exhibits and Reports on 8-K


         (a) Exhibits:

<TABLE>
<CAPTION>

                                                                                          Reference to
                                                                                          Prior Filing
Regulation                                                                                 or Exhibit
S-B Exhibit                                                                              Number Attached
  Number                            Document                                                  Hereto
  ------                            --------                                                  ------

<S>                   <C>                                                                     <C>         
     2                Plan of Acquisition, reorganization, arrangement, liquidation or        None
                       succession.......................................................
     3                Articles of Incorporation and Bylaws..............................       *
     4                Instruments defining the rights of security holders,
                      including indentures:
                       Common Stock Certificate.........................................       *
     9                Voting Trust Agreement............................................      None
    10                Material contracts:
                       (a) Employee Stock Ownership Plan................................       *
                       (b) Stock Option and Incentive Plan..............................       *
                       (c) Employment Agreements:
                           Wayne McKinnon Gilmore.......................................       *
                           H. Andrew Myers, Jr..........................................       *
                           Kathryn Fontenot Chelette....................................       *
                       (d) Recognition and Retention Plan...............................       *
                       (e) Defined Contribution Plan....................................       *
    11                Statement re computation of per share earnings....................      None
    13                Annual Report to Security Holders for the last fiscal year........       13
    16                Letter on change in certifying accountant.........................       *
    18                Letter on Change in Accounting Principles.........................      None
    21                Subsidiaries of Registrant........................................       21
    22                Published Report Regarding Matters Submitted to Vote..............      None
    23                Consent of Experts and Counsel....................................       23
    24                Power of Attorney................................................. Not required
    27                Financial Data Schedule...........................................       27
    99                Additional Exhibits...............................................      None
</TABLE>

--------------------
         *Filed  on  December   13,   1994  as  exhibits  to  the   Registrant's
Registration  Statement No. 33-87292 on Form S-1. 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 reports on Form 8-K have been filed  during the  three-month  period
ended September 30, 1997.

                                       39

<PAGE>



                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
Registrant  caused  this  Report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                        ST. LANDRY FINANCIAL CORPORATION


Date:  December 26, 1997            By:/s/ Wayne McK. Gilmore
                                       ----------------------
                                       Wayne McK. Gilmore, Chairman of the Board
                                       President and Chief Executive Officer
                                             (Duly Authorized Representative)

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


/s/ Wayne McK. Gilmore                      /s/ H. Kent Aguillard
----------------------                      ---------------------
Wayne McK. Gilmore, Chairman of the Board   H. Kent Aguillard, Director
President and Chief Executive Officer
(Principal Executive and Operating Officer)

Date:  December 26, 1997                    Date:  December 26, 1997


/s/ Anna Lee Dunbar                         /s/ Lynette Young Feucht
-------------------                         ------------------------
Anna Lee Dunbar, Director                   Lynette Young Feucht, Director

Date:  December 26, 1997                    Date:  December 26, 1997


/s/ Patrick Fontenot                        /s/ Simon Howard Fournier
--------------------                        -------------------------
Patrick Fontenot, Director                  Simon Howard Fournier, Director

Date:  December 26, 1997                    Date:  December 26, 1997


/s/ Morgan J. Goudeau                       /s/ H. Andrew Myers, Jr.
---------------------                       ------------------------
Morgan J. Goudeau, III, Director            H. Andrew Myers, Jr., Executive 
                                              Vice President and Director
Date:  December 26, 1997                    Date:  December 26, 1997


/s/ Martin A. Roy, Jr.                      /s/ Marvin Schwartzenburg
----------------------                      -------------------------
Martin A. Roy, Jr., Vice President,         Marvin Schwartzenburg, Director
 Treasurer and Director

Date:  December 26, 1997                    Date:  December 26, 1997


/s/ Randy C. Tomlinson                      /s/ Robert L. Wolfe, Jr.
----------------------                      ------------------------
Randy C. Tomlinson, Director                Robert L. Wolfe, Jr., Director

Date:  December 26, 1997                    Date:  December 26, 1997


/s/ Jutta A. Codori
-------------------
Jutta A. Codori, Controller
(Principal Financial and Accounting Officer)

Date:  December 26, 1997


                                       40