EXHIBIT 13



<PAGE>

                                   ST. LANDRY
                              FINANCIAL CORPORATION


























                               Annual Report 1997


<PAGE>



                        St. Landry Financial Corporation





                   TABLE OF CONTENTS

Letter to Stockholders...........................  2

Selected Financial Information...................  3

Management's Discussion and Analysis ............  5

Independent Auditors' Report..................... 18

Consolidated Financial Statements................ 19

Stockholder Information.......................... 54

Board of Directors and Executive Officers ....... 55



                                             FINANCIAL HIGHLIGHTS

                                              September 30, 1997
                                              ------------------
                                             (Dollars in Thousands)
                              Total Loans.............................. $42,193
                              Mortgage-Backed Securities...............  14,113
                              Investment Securities....................   3,590
                                Total Assets...........................  61,816

                              Deposits.................................  43,578
                              Borrowings...............................  10,825

                              Net Income...............................     303

                              Stockholders' Equity.....................   6,854
                              Stockholders' Equity as a Percent 
                                 of Assets.............................    11.1%




                                        1

<PAGE>



                        ST. LANDRY FINANCIAL CORPORATION
                               Post Office Box 72
                         Opelousas, Louisiana 70571-0072
                      Phone: 318-942-5748 Fax: 318-948-1563



To Our Stockholders:

         We are pleased to present the year end report of St.  Landry  Financial
Corporation,  (the  "Company") for the fiscal year ended  September 30, 1997. On
behalf of our Board of  Directors,  Officers,  and Staff,  thank you for being a
stockholder.

         The mission of First Federal Savings and Loan  Association of Opelousas
(the "Association"),  the wholly owned subsidiary of the Company, is to give the
people of South  Central  Louisiana  a safe place to invest  their  funds and an
affordable  place to finance their homes.  Both of these areas have shown growth
in 1997.

         The  Association  continues to look for ways to enhance our growth.  We
expect to open a branch office in the Eunice,  Louisiana  area in the early part
of 1998. We have been a major home lender in this area and we feel that the time
is right to make this move because of the renewed activity in the oil industry.

         The  increase  in  net  income  over  the  past  years  is  due  to the
improvement  in the local economy.  The overall  improvement in the oil industry
and in farm  production are the most  significant  contributors  to the economic
improvement. The forecast for the future is good.

         On behalf of the Board of  Directors,  thank you for your  support  and
your investment in St. Landry Financial Corporation.


Sincerely,

/s/ Wayne Mck. Gilmore

Wayne Mck. Gilmore
President

                                        2

<PAGE>


                         SELECTED FINANCIAL INFORMATION


         The  following  financial  data does not purport to be complete  and is
qualified  in  its  entirety  by  reference  to  the  more  detailed   financial
information contained elsewhere herein.

<TABLE>
<CAPTION>
                                                                September 30,
                                           -----------------------------------------------------
                                               1993       1994       1995      1996      1997
                                           ---------- ---------- ---------- --------- ----------
                                                              (In Thousands)
Selected Financial Condition Data:
<S>                                          <C>        <C>        <C>       <C>       <C>
Total assets...............................  $48,102    $47,812    $53,206   $56,857   $61,816
Loans receivable, net......................   32,244     33,303     37,356    39,857    42,193
Mortgage-backed securities.................   10,586     10,186     11,246    12,339    14,113
Investment securities......................    3,385      3,305      3,562     3,207     3,590
Deposits...................................   43,139     42,770     43,143    41,986    43,578
Total borrowings...........................    1,200      1,052      2,538     7,561    10,825
Stockholders' equity.......................    3,456      3,745      7,173     6,703     6,854
</TABLE>
<TABLE>
<CAPTION>

                                                         Year Ended September 30,
                                           ------------------------------------------------------
                                                1993      1994        1995      1996      1997
                                           ----------- ----------- --------- --------- ----------
                                                              (In Thousands)
Selected Operations Data:
<S>                                         <C>        <C>          <C>      <C>       <C>    
Total interest income...................... $  3,560   $  3,182     $3,401   $ 4,016   $ 4,297
Total interest expense.....................    1,700      1,642      1,897     2,223     2,552
                                            --------   --------   --------   -------   -------
Net interest income........................    1,860      1,541      1,504     1,793     1,745
Provision for loan losses..................       58        100         40       214         5
                                            --------   --------   --------   -------   -------
Net interest income after provision
 for loan losses...........................    1,802      1,441      1,464     1,579     1,740

Service charges and other fees.............       20         25         24        23        25
Gain (loss) on sales of loans, mortgage-
 backed securities and investment
 securities................................      ---        ---        ---       ---        (1)
Other non-interest income..................       25         18         23        24        22
                                            --------   --------   --------   -------   -------
Total non-interest income..................       45         43         47        47        46
Total non-interest expense.................      973      1,010      1,085     1,522     1,317
                                            --------   --------   --------   -------    ------
Income before taxes and extraordinary
 item......................................      874        474        426       104       469
Income tax provision.......................      288        185        153        50       166
                                            --------   --------   --------   -------   -------
     Net income............................ $    586   $    289   $    273   $    54   $   303
                                            ========   ========   ========   =======   =======
</TABLE>

                                        3

<PAGE>

<TABLE>
<CAPTION>

                                                                Year Ended September 30,
                                                   ----------------------------------------------------------------
                                                       1993          1994        1995          1996         1997
                                                   ----------- ------------- ------------ ------------- -----------
<S>                                                    <C>            <C>         <C>           <C>          <C> 
Selected Financial Ratios and Other
 Data:
Performance Ratios:
  Return on assets (ratio of net income
   to average total assets)................            1.22%          .60%        .54%          .10%         .52%
  Return on equity (ratio of net
   income to average equity)...............           18.52          8.02        5.00           .78         4.48
  Interest rate spread information:
   Average during period...................            3.80          3.05        2.57          2.74         2.56
   End of period...........................            3.52          2.80        2.63          2.58         2.40
  Net interest margin(1)...................            3.97          3.28        3.04          3.33         3.04
  Ratio of operating expense to average
   total assets............................            2.03          2.11        2.15          2.77         2.26
  Ratio of average interest-earning
   assets to average interest-bearing
   liabilities.............................          105.54        106.86      109.95        114.19       110.72

Asset Quality Ratios:
 Non-performing assets to total assets
  at end of period.........................            1.38          1.32        1.23          1.64         1.61
 Allowance for loan losses to non-
  performing loans.........................           38.63         55.78       59.30         62.20        55.96
 Allowance for loan losses to loans
  receivable, net..........................             .80          1.05        1.04          1.46         1.32

Capital Ratios:
 Equity to total assets at end of period...            7.18          7.83       13.48         11.79        11.09
 Average equity to average assets..........            6.59          7.51       10.81         12.61        11.59

Other Data:
 Number of full-service offices............               1             1           1             1            1
</TABLE>


(1) Net interest income divided by average interest-earning assets.




                                        4

<PAGE>



                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

         St.  Landry  Financial   Corporation  (the  "Company")  is  a  Delaware
corporation  which became the savings and loan holding  company of First Federal
Savings and Loan Association of Opelousas (the "Association") in April 1995. The
Company  owns  all  of  the  outstanding  stock  of the  Association  issued  in
connection  with its  conversion to stock form.  All  references to the Company,
unless otherwise indicated, at or before April 5, 1995 refer to the Association.
Unless the context otherwise requires,  all references herein to the Association
or the Company include the Company and the Association on a consolidated basis.

         The Company is principally engaged in the business of attracting retail
savings  deposits  from the general  public and  investing  those funds in owner
occupied,  one-to  four-family  residential  mortgage loans and  mortgage-backed
securities. To a lesser extent, the Company originates residential construction,
commercial  real estate and  consumer  loans.  The Company also invests in U. S.
Government and agency obligations and other permissible investments.

         The most significant  outside factors influencing the operations of the
Company and other savings  institutions  include  general  economic  conditions,
competition  in the local  market  place and the  related  monetary  and  fiscal
policies of agencies that regulate  financial  institutions.  More specifically,
the cost of funds,  primarily consisting of deposits,  is influenced by interest
rates on competing  investments  and general  market rates of interest.  Lending
activities  are  influenced  by the demand for real estate  financing  and other
types of loans,  which in turn is affected by the  interest  rates at which such
loans  may  be  offered  and  other  factors  affecting  loan  demand  and  fund
availability.

Forward-Looking Statement

         When used in this  Annual  Report,  the words or phrases  "will  likely
result," "are  expected  to," "will  continue,"  "is  anticipated,"  "estimate,"
"project"  or similar  expressions  are  intended to  identify  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995.  Such  statements  are  subject  to  certain  risks  and  uncertainties
including changes in economic  conditions in the Company's market area,  changes
in policies by regulatory  agencies,  fluctuations in interest rates, demand for
loans in the  Company's  market area and  competition,  that could cause  actual
results  to differ  materially  from  historical  earnings  and those  presently
anticipated  or projected.  The Company  wishes to caution  readers not to place
undue reliance on any such  forward-looking  statements,  which speak only as of
the date made.  The Company  wishes to advise  readers  that the factors  listed
above  could  affect the  Company's  financial  performance  and could cause the
Company's  actual  results  for  future  periods to differ  materially  from any
opinions or statements  expressed  with respect to future periods in any current
statements.




                                        5

<PAGE>



         The  Company  does  not  undertake,   and  specifically  disclaims  any
obligation, to publicly release the result of any revisions which may be made to
any forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or  unanticipated
events.

Financial Condition

         The Company's  total assets were $56.9 million at September 30, 1996 as
compared to $61.8  million at September  30, 1997.  The increase of $4.9 million
was  primarily  due to an  increase  in  loans  receivable  and  mortgage-backed
securities.  Borrowings  from the Federal Home Loan Bank were used to fund these
loan originations and purchases of adjustable rate mortgage-backed securities.

         Net loans  receivable  increased  by $2.2  million to $42.2  million at
September 30, 1997 from $40.0  million at September  30, 1996.  The increase was
due to an increase in originations  of loans with fixed and adjustable  rates of
interest,  and a  decrease  in  principal  repayments.  Federal  Home  Loan Bank
advances  were  used to fund  these  loan  originations.  Non-performing  assets
increased  to $994,000 or 1.61% of total  assets at  September  30,  1997,  from
$933,000 or 1.64% of total  assets at  September  30,  1996.  The increase was a
result of a $69,000 increase in non-accruing  loans, and a decrease of $8,000 in
foreclosed  assets. At September 30, 1997, the Company had 21 one-to four-family
loans,  12  automobile   loans  and  seven  unsecured  loans  which  were  in  a
non-accruing status.

         Total investments  increased by $383,000 from $3.2 million at September
30,  1996 to $3.6  million  at  September  30,  1997.  The  increase  was caused
primarily  by the  purchase  of  $598,000  in  investments  securities  and  the
acquisition  of  $105,000  of stock in the  Federal  Home Loan  Bank of  Dallas,
partially offset by the maturity of $500,000 in debt securities.

         The Company also experienced a $1.8 million increase in mortgage-backed
securities during fiscal 1997.  Mortgage-backed securities in the amount of $4.4
million were purchased  during the fiscal year.  These  purchases were partially
funded with lower rate Federal Home Loan Bank advances.  The  acquisitions  were
partially offset by principal repayments.

         Deposits increased by $1.6 million from September 30, 1996 to September
30, 1997, an increase of 3.8%.

         Federal Home Loan Bank advances  increased by $3.3  million.  Borrowing
proceeds  were used to fund a portion of loan  originations.  Advances were also
used to supplement the purchase of adjustable rate mortgage-backed securities.

         Total  stockholders'  equity increased by $151,000 from $6.7 million at
September 30, 1996 to $6.9 million at September 30, 1997.  Stockholder's  equity
increased  due to an increase in retained  earnings of $303,000,  an increase in
after tax net unrealized gain on securities available for sale of $174,000 and a
reduction in unearned ESOP and RRP shares of $118,000 due to the vesting and

                                        6

<PAGE>



allocation  of shares to employees  and  directors.  The increase was  partially
offset by repurchases of Company stock placed in treasury totalling $406,000 and
$38,000 in payment of two cash dividends.

Asset/Liability Management

         Financial  institutions and their holding companies,  like the Company,
are  subject to  interest  rate risk to the extent  that their  interest-bearing
liabilities with short and intermediate-term maturities reprice more rapidly, or
on a different  basis,  than their  interest-earning  assets.  Management of the
Company  believes  it is critical to manage the  relationship  between  interest
rates and the effect on the  Association's  net portfolio  value  ("NPV").  This
approach  calculates the  difference  between the present value of expected cash
flows from assets and the present value of expected cash flows from liabilities,
as well as cash  flows  from  off-balance  sheet  contracts.  Management  of the
Association's  assets  and  liabilities  is  done  within  the  context  of  the
marketplace, but also within limits established by the Board of Directors on the
amount of change in NPV which is acceptable given certain interest rate changes.

         The OTS uses a net market  value  methodology  to measure the  interest
rate  risk  exposure  of  thrift   institutions.   Under  OTS  regulations,   an
institution's  "normal"  level of interest  rate risk in the event of an assumed
change in interest rates is a decrease in the institution's NPV in an amount not
exceeding 2% of the present value of its assets.  Beginning July 1, 1994, thrift
institutions  with greater than  "normal"  interest  rate  exposure  must take a
deduction  from their total  capital  available to meet their risk based capital
requirement.  The amount of that deduction is one-half of the difference between
(a) the institution's  actual calculated  exposure to a 200 basis point interest
rate increase or decrease  (whichever  results in the greater pro forma decrease
in NPV) and (b) its "normal"  level of exposure which is 2% of the present value
of its assets.  The change indicated for September 30, 1997 exceeds the 2% norm.
As a result,  the  Association  would be required to make a deduction from total
capital in calculating  its risk-based  capital  requirement  had this rule been
applicable to it. However, because the Association has total assets of less than
$300 million and risk-based  capital in excess of 12%, the Association is exempt
from this rule.

         Presented  below,  as of  September  30,  1997,  is an  analysis of the
Association's interest rate risk as measured by changes in NPV for instantaneous
and sustained parallel shifts in the yield curve, in 100 basis point increments,
up and down  300  basis  points  and  compared  to Board  policy  limits  and in
accordance  with  OTS  regulations.  Such  limits  have  been  established  with
consideration of the dollar impact of various rate changes and the Association's
strong capital  position.  As illustrated in the table, NPV is more sensitive to
and may be negatively impacted by rising rates than declining rates. This occurs
principally  because,  as rates  rise,  the  market  value of  fixed-rate  loans
declines  due to both the rate  increase  and  slowing  prepayments.  When rates
decline,  the Association does not experience a significant rise in market value
for these loans because  borrowers prepay at relatively high rates. The value of
the  Association's  deposits and  borrowings  change in  approximately  the same
proportion in rising or falling rate scenarios.


                                        7

<PAGE>


                                September 30, 1997
                     ---------------------------------------
     Change in
   Interest Rate           $ Change            % Change
   (Basis Points)           in NPV              in NPV
-------------------- -------------------- ------------------
                   (Dollars in Thousands)
                     -------------------- ------------------
       +300                  -2414               -34%
       +200                  -1369               -19%
       +100                   -541                -8%
        -0-        
       -100                    255                +4%
       -200                    404                +6%
       -300                    668               +10%
                   
         As  with  any  method  of  measuring   interest   rate  risk,   certain
shortcomings  are inherent in the method of analysis  presented in the foregoing
table.  For example,  although  certain assets and  liabilities may have similar
maturities  or  periods to  repricing,  they may react in  different  degrees to
changes in market interest  rates.  Also, the interest rates on certain types of
assets and  liabilities  may fluctuate in advance of changes in market  interest
rates,  while  interest  rates on other  types may lag behind  changes in market
rates.  Additionally,  certain assets,  such as adjustable rate mortgage ("ARM")
loans,  have features which  restrict  changes in interest rates on a short-term
basis  and over the life of the  asset.  Further,  in the  event of a change  in
interest  rates,  expected rates of  prepayments on loans and early  withdrawals
from  certificates  could likely  deviate  significantly  from those  assumed in
calculating the table.

         The Company  seeks to maximize net  interest  income by  attempting  to
achieve  a  positive   interest  rate  spread  that  can  be  sustained   during
fluctuations in prevailing  interest rates. The Company's  policies are designed
to reduce the impact of changes in interest rates on its net interest  income by
maintaining a favorable  match between the maturities or repricing  dates of its
interest-earning assets and interest-bearing  liabilities. In implementing these
policies,  the Company has increased its loans  receivable from $35.4 million at
September  30, 1992 to $42.2  million at September 30, 1997, an increase of 19%.
During  1994,  the Company  expanded  its  consumer  loan  portfolio  to service
existing  customers.  During 1995, the Association  purchased  automobile  loans
which are being serviced by a third party.  Consumer  loans are originated  with
shorter terms and at higher interest rates than one- to four-family  residential
loans and offer the Company the ability to improve  asset/liability  management.
However, consumer loans may entail greater credit risk than residential mortgage
loans,  therefore, no assurance can be made that delinquencies will not increase
in the future.

         During the period from  September 30, 1992 to September  30, 1997,  the
Company also  increased  its  mortgage-backed  securities  from $10.8 million to
$14.1 million. The composition of mortgage-backed  securities consisted of fixed
rate and adjustable rate securities  backed by FHLMC,  Federal National Mortgage
Association and Government National Mortgage Association.  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. All of
the adjustable rate mortgage-



                                        8

<PAGE>

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 available for sale.



                                       9

<PAGE>


         Average  Balances,  Interest  Rates and  Yields.  The  following  table
presents for the periods  indicated the total dollar  amount of interest  income
from average  interest-earning  assets and the resultant  yields, as well as the
interest  expense on average  interest-bearing  liabilities,  expressed  both in
dollars and rates. No tax equivalent adjustments were made. All average balances
are monthly average balances. Non-accruing loans have been included in the table
as loans  carrying a zero yield.  If interest  rates  continue to increase,  the
rates paid on  liabilities  will  generally  be expected to increase at a faster
pace than the rates charged on assets,  due to the nature of the timing of their
repricing.  In such an event, the Company's  interest rate spread will narrow. A
narrowing of the Company's  interest rate spread may have the effect of reducing
net interest income in future periods.
<TABLE>
<CAPTION>
                                                                           Year Ended September 30,
                                          ------------------------------------------------------------------------------------------
                                                        1995                          1996                         1997
                                          ------------------------------ ----------------------------- -----------------------------
                                            Average   Interest            Average   Interest            Average   Interest
                                          Outstanding  Earned/          Outstanding  Earned/          Outstanding  Earned/
                                            Balance     Paid  Yield/Rate  Balance     Paid  Yield/Rate  Balance     Paid  Yield/Rate
                                          ---------- -------- ---------- ---------- ------- ---------- ---------- ------- ----------
                                                                       (Dollars in Thousands)
Interest-Earning Assets:
<S>                                        <C>        <C>        <C>      <C>      <C>         <C>      <C>        <C>       <C>  
 Loans receivable(1).....................  $35,970    $ 2,599    7.23%    $39,186  $ 3,088     7.88%    $41,299    $3,271    7.92%
Mortgage-backed securities...............    9,947        597    6.00      11,774      738     6.26      12,812       826    6.45
 Investment securities...................    3,075        180    5.85       2,787      164     5.88       2,724       172    6.31
 FHLB stock..............................      413         26    6.30         444       26     5.86         477        28    5.87
                                         ---------   --------          ---------- --------           ---------- ---------
  Total interest-earning assets(1).......  $49,405      3,402    6.89     $54,191    4,016     7.41     $57,312    $4,297    7.49
                                           =======    -------             =======   ------              =======    ======
                                                                       
Interest-Bearing Liabilities:                                          
 Savings deposits........................  $12,982        427    3.04     $11,596      267     2.30     $10,760   $   303    2.82
 Certificate accounts....................   30,363      1,375    4.53      31,052    1,698     5.46      32,766     1,788    5.46
 Borrowings..............................    1,591         95    5.97       4,809      258     5.36       8,239       461    5.60
                                         ---------  ---------           --------- --------            ---------  --------    ----
  Total interest-bearing liabilities.....  $44,936      1,897    4.22     $47,457    2,223     4.68     $51,765     2,552    4.93
                                           =======   --------             =======  -------              =======   -------
Net interest income......................            $  1,505                      $ 1,793                         $1,745
                                                     ========                      =======                         ======
Net interest rate spread.................                        2.67%                         2.73%                         2.56%
                                                                 ====                          ====                          ====
Net earning assets....................... $  4,469                       $  6,734                      $  5,547
                                          ========                       ========                      ========
Net yield on average interest-earning                                  
 assets..................................                        3.05%                         3.31%                         3.04%
                                                                 ====                          ====                          ====
Average interest-earning assets to                                     
 average interest-bearing liabilities....              109.95x                      114.19x                        110.72x
                                                       ======                       ======                         ======
</TABLE>                                                              
    -----------------
(1)  Calculated net of deferred loan fees, loan discounts,  loans in process and
     loss reserves.


                                       10

<PAGE>



Rate/Volume Analysis

         The  following  schedule  presents  the  dollar  amount of  changes  in
interest income and interest  expense for major  components of  interest-earning
assets and interest-bearing  liabilities.  It distinguishes  between the changes
related to outstanding  balances and due to the changes in interest  rates.  For
each  category  of  interest-earning  assets and  interest-bearing  liabilities,
information is provided on changes  attributable to (i) changes in volume (i.e.,
changes  in  volume  multiplied  by old rate) and (ii)  changes  in rate  (i.e.,
changes in rate multiplied by old volume).  For purposes of this table,  changes
attributable  to both rate and volume,  which  cannot be  segregated,  have been
allocated  proportionately  to the  change  due to volume  and the change due to
rate.
<TABLE>
<CAPTION>

                                                                    Year Ended September 30,
                                    -----------------------------------------------------------------------------------------
                                                     1995 vs. 1996                              1996 vs. 1997
                                    -------------------------------------------  --------------------------------------------
                                                  Increase                                Increase
                                                 (Decrease)                              (Decrease)              
                                                   Due to              Total               Due to               Total
                                           --------------------      Increase       -------------------        Increase
                                           Volume          Rate     (Decrease)      Volume         Rate       (Decrease)
                                           ------          ----     ----------      ------         ----       ----------
                                                                 (Dollars in Thousands)
Interest-earning assets:
<S>                                     <C>            <C>         <C>               <C>          <C>           <C>  
 Loans receivable...................    $     246      $    243    $     489         $ 167        $  16         $ 183
 Mortgage-backed securities.........          146            (5)         141            66           22            88
 Investment securities..............          (15)           (2)         (17)           (4)          12             8
 Other..............................            2           ---            2             2          ---             2
                                      -----------    ----------   ----------       -------      -------       -------
  Total interest-earning
   assets...........................    $     379      $    236          615         $ 231        $  50           281
                                        =========      ========    ---------         =====        =====         -----
Interest-bearing liabilities:
 Savings deposits...................    $     (80)     $     --          (80)        $ (19)       $  60            41
 Borrowings.........................          173           (10)         163           184           11           195
 Certificate accounts...............          114           129          243            93          ---            93
                                        ---------      --------    ---------         -----      -------        ------
   Total interest-bearing
    liabilities.....................    $     207      $    119          326         $ 258        $  71           329
                                        =========      ========    ---------          ====        =====         -----
Net interest income.................                               $     289                                    $ (48)
                                                                   =========                                    =====
</TABLE>


                                       11

<PAGE>



Interest Rate Spread

         The  following  table  presents the weighted  average  yields earned on
loans,  investments and other interest-earning  assets, and the weighted average
rates paid on savings  deposits and borrowings  and the resultant  interest rate
spreads at the dates indicated.


                                                             At September 30,
                                                         ---------------------
                                                         1995    1996     1997
                                                         ----    ----     ----
Weighted average yield on:
 Loans receivable......................................  7.26%   7.94%    8.01%
 Mortgage-backed securities............................  6.09    6.64     6.78
 Investment securities.................................  5.25    5.23     5.34
 Other interest-earning assets.........................  5.94    5.82     6.19
   Combined weighted average yield on
    interest-earning assets............................  7.22    7.58     7.59


Weighted average rate paid on:
 Savings deposits......................................  3.04    3.04     3.04
 Certificate accounts..................................  4.80    5.27     5.54
 Borrowings............................................  6.06    5.73     5.59
   Combined weighted average rate paid on
    interest-bearing liabilities.......................  4.60    4.85     5.03

Spread.................................................  2.63    2.73     2.56


Comparison of Operating Results For The Three Years Ended September 30, 1997

         General.  The Company had net income  totalling  $273,000,  $54,000 and
$303,000,  respectively,  for the years ended September 30, 1995, 1996 and 1997.
Net income for the year ended  September  30, 1997  increased  by $249,000  from
fiscal 1996.  The increase was primarily a result of a decrease in  non-interest
expense of $205,000 due to a one-time special FDIC assessment in fiscal 1996 and
a decrease  of  $209,000  in the  provision  for loan  losses.  The  decrease in
expenses was  partially  offset by a decrease in net interest  income of $48,000
and an increase in income tax expense of $116,000.

         Net income for the year ended September 30, 1996 declined $219,000 from
fiscal  1995.  The  decrease in fiscal year 1996 was  primarily  the result of a
special FDIC  assessment  of  $295,000,  an increase in the  provision  for loan
losses of $174,000 and non-interest expense of $141,000.  The increased expenses
were partially offset by increased net interest income of $289,000 and decreased
income tax expense of $103,000.

         Net Interest  Income.  The Company's  net income is dependent  upon net
interest  income.  Net interest  income is the  difference  between the yield on
interest-earning assets and the cost of interest-bearing liabilities. During the
year ended  September  30,  1996,  the  Company  experienced  an increase in net
interest income of $289,000,  or 19%. Net interest income  decreased  during the
year ended September 30, 1997 by $48,000, or 3%.


                                       12

<PAGE>



         Economic and competitive  factors influence  interest rates, as well as
loan  demand  and  savings  activity.   To  the  extent  that   interest-bearing
liabilities  mature or  reprice at  different  intervals  from  interest-earning
assets,  interest rate risk also has an effect on the net interest income of the
Company.

         The  Company's  ability to attract  and  retain  deposits  has been and
continues  to be  significantly  affected  by the rates  paid on such  deposits.
Management  believes the rates paid on such deposits are  currently  competitive
with the rates paid on similar  products  offered by other  institutions  in the
Company's market area, as a result,  total deposits increased from $42.0 million
at September  30, 1996 to $43.6  million at September  30, 1997.  The  Company's
ability to attract and retain such deposits  will  continue to be  significantly
affected by market  conditions.  At times the Company may be required to utilize
alternative  and  potentially  higher cost funding sources which may result in a
decrease in net interest income.

         Total  interest  income  was $4.3  million  for the  fiscal  year ended
September  30,  1997.  This was an increase of $281,000 or 7% over the  previous
year.  The  increase  in interest  income was a direct  result of an increase in
average  interest-earning  assets  for the year ended  September  30,  1997.  In
conjunction with the increase in interest income, however, interest expense also
increased.  Interest expense  increased by $329,000 for the year ended September
30, 1997 from the prior year. Average interest-bearing liabilities increased for
the year  ended  September  30,  1997 in order to fund the  increase  in assets.
Average  interest-bearing  liabilities  increased  primarily  as a result  of an
increase in Federal Home Loan Bank advances, and these borrowings were generally
at higher rates of interest than deposit accounts.

          For the fiscal year 1997, the Company's  interest rate spread showed a
moderate  decline and its  interest  margin  narrowed  to 3.05%  during the 1997
fiscal year because the Company's yield on assets inclined at a slower pace than
its cost of funds.  During this period of rising rates the yields on assets were
slow to increase due to the lag in adjustment periods on such assets as a result
of an  increase  in  market  rates of  interest,  while  the cost of funds  were
increasing.

         Provision  for Loan  Losses.  For the fiscal year ended  September  30,
1997, the Company recorded a provision for loan losses of $5,000, as compared to
$214,000 for fiscal 1996 and to $40,000 for fiscal 1995.  At September 30, 1997,
the Company's  allowance for loan losses  totaled  $556,000,  which was 1.32% of
total loans and 55.9% of non-performing  assets, as compared to 1.46% and 62.2%,
respectively,  at September  30, 1996 and to 1.04% and 59.3%,  respectively,  at
September 30, 1995.  The  Company's  ratio of net  charge-offs  to average loans
outstanding during the years ended September 30, 1995, 1996 and 1997 were 0.00%,
0.01% and  0.01%,  respectively  and its  ratio of net  charge-offs  to  average
non-performing  assets  during the same  periods  were  0.34%,  2.44% and 2.92%,
respectively. The allowance for loan losses is established based on management's
evaluation of the risk inherent in its loan  activity.  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. See Note 4 of the Notes to Consolidated Financial Statements.


                                       13

<PAGE>



         The increases in the provision for loan losses in fiscal years 1996 and
1997  reflected,  among other things,  the increase in the Company's  commercial
real estate portfolio,  the decrease in consumer loans  (predominantly  loans on
used automobiles purchased from a loan broker which initially retained servicing
rights) and the  overall  increase in the total loan  portfolio  into  different
types of lending which  generally  involve  increased  risk from that of one- to
four-family  residential  lending,  the increased level of the Company's problem
loans and their estimated value, and the levels of the allowance for loan losses
established  by the  Company's  peers in assessing the adequacy of the loan loss
allowance.  Although the Company  maintains  its  allowance for loan losses at a
level which it considers  to be adequate to provide for losses,  there can be no
assurance  that  future  losses  will  not  exceed  estimated  amounts  or  that
additional provisions for loan losses will not be required in future periods.

         Non-Interest  Income.  Late charges and insurance  commissions  are the
focus of  non-interest  income  for the  Company.  Non-interest  income  totaled
$46,000 for the fiscal year ended September 30, 1997, as compared to $47,000 for
fiscal 1996 and $47,000 for fiscal 1995. Due to the Company's  size, its ability
to increase non-interest income in the future may continue to be limited.

         Non-Interest Expense. Non-interest expense totaled $1.3 million for the
fiscal  year ended  September  30,  1997 as  compared  to $1.5  million and $1.1
million for each of the fiscal  years ended  September  30, 1996 and 1995.  This
$205,000,  or 13%,  decrease  in fiscal 1997 was mainly the result of a $295,000
one-time  special  assessment  required by legislation  enacted on September 30,
1996.  The  federal   legislation,   which  affects  all  savings   associations
nationwide,  was designed to recapitalize the Savings Association Insurance Fund
of the FDIC. As of October 1, 1996,  deposit insurance premiums for highly rated
institutions  have been  eliminated.  However,  the Board  will  continue  to be
subject to a 6.5 cents per $100 of deposit  assessment to fund  repayment of the
FICO  obligations.  Compensation  and  benefit  expenses  increased  due  to the
Company's  Recognition  and Retention  Plan and normal  increases in salaries in
recent periods.

         Provision  for Income Taxes.  The Company's  income tax expense for the
fiscal year ended September 30, 1997 was $166,000 as compared to $50,000 for the
previous  year end, and  $153,000  for fiscal  1995.  The increase in taxes from
fiscal  1996 to  fiscal  1997 was due to an  increase  in  pre-tax  income.  The
decrease in taxes from fiscal 1995 to fiscal 1996 was the result of the decrease
in pre-tax  income.  Pre-tax income was $426,000,  $104,000 and $469,000 for the
years ended September 30, 1995, 1996 and 1997, respectively.

Liquidity and Capital Resources

         The  Company's  primary  sources  of funds  are  deposits,  borrowings,
principal  and  interest  payments  on  loans,  mortgage-backed  and  investment
securities.  In the event  that the  Company  should  require  funds  beyond its
ability to generate them internally,  additional  sources of funds are available
through the use of FHLB advances.  While  scheduled loan repayments and maturing
investments are relatively predictable,  deposit flows and early loan repayments
are  more  influenced  by  interest  rates,   general  economic  conditions  and
competition.


                                       14

<PAGE>



         Federal  regulations  have required the Association to maintain minimum
levels of liquid  assets.  The required  percentage has varied from time to time
based upon economic  conditions and savings flows and, as of September 30, 1997,
was 5% of net withdrawable  savings deposits and borrowings payable on demand or
in one year or less  during the  preceding  calendar  month.  Liquid  assets for
purposes of this ratio include cash,  certain time  deposits,  U.S.  Government,
government  agency  and  other  securities  and  obligations   generally  having
remaining  maturities  of less than five years.  The  Association's  most liquid
assets are cash and cash equivalents, short-term investments and mortgage-backed
and  related  securities.  The  levels  of these  assets  are  dependent  on the
Association's operating,  financing, lending and investing activities during any
given period.  The low level of liquid  investments has required the Association
to utilize FHLB  advances in order to meet  liquidity  needs.  At September  30,
1997,  1996 and 1995,  liquidity  eligible  assets  totalled $2.6 million,  $3.6
million and $4.8 million,  respectively.  At those same dates, the Association's
liquidity ratios were 5.2%, 6.5% and 10.6%,  respectively,  all in excess of the
5% minimum regulatory requirement.

         The  Company  uses its liquid  resources  principally  to meet  ongoing
commitments,  to fund maturing  certificates of deposit and deposit withdrawals,
to invest, to fund existing and future loan commitments,  to maintain  liquidity
and to  meet  operating  expenses.  At  September  30,  1997,  the  Company  had
outstanding commitments to extend credit which amounted to $900,000.  Management
believes  that loan  repayments  and other  sources of funds will be adequate to
meet the Company's foreseeable liquidity needs.

         At September 30, 1997, the Company had $26.4 million in certificates of
deposit due within one year and $9.3 million in other deposits  without specific
maturity. Based on past experience, management expects that most of the deposits
will be retained or replaced by new deposits.

         The primary investment activities of the Company are the origination of
one- to four-family,  commercial real estate, one- to four-family  construction,
and  consumer  loans,  and  the  purchase  of  investment  and   mortgage-backed
securities.  During the years  ended  September  30,  1997,  1996 and 1995,  the
Company originated loans totalling $8.2 million,  $8.7 million and $9.4 million,
respectively.  During those same periods,  the Company purchased  investment and
mortgage-backed  securities  totalling  $4.4  million,  $3.3  million  and  $3.0
million,  respectively.  These  activities  were funded  primarily  by deposits,
principal  repayments on loans and investments and  mortgage-backed  securities,
and FHLB  advances.  The Company  increased  its  purchases  of  mortgage-backed
securities as part of its asset/liability  management strategy,  even though the
demand for new loans increased.  To the extent such loan demand continues,  this
would  be  expected  to have a  positive  effect  on the  Company's  results  of
operations.  Management expects loan demand to be negatively effected,  however,
if interest rates rise, which would require management to again seek alternative
sources of investment (such as mortgage-backed securities) which could adversely
effect the Company's interest rate spreads.


                                       15

<PAGE>



         At September 30, 1997, the  Association  exceeded all of its regulatory
capital   requirements.   The  following  table  sets  forth  the  Association's
compliance with its capital requirements at September 30, 1997.


                                                  At September 30, 1997
                                               -----------------------------
                                               Amount             Percent(1)
                                               ------             ----------
                                                 (Dollars in Thousands)
                                                       (Unaudited)
Tangible Capital:
   Capital level.......................        $5,648                9.20%
   Requirement.........................           921                1.50
                                             --------                ----
   Excess..............................         4,727                7.70

Core Capital:
   Capital level.......................         5,648                9.20
   Requirement.........................         1,842                3.00
                                              -------                ----
   Excess..............................         3,806                6.20

Current Risk-Based Capital:
   Capital level.......................         6,016               17.95
   Requirement.........................         2,682                8.00
                                              -------              ------
   Excess..............................         3,334                9.95%


(1)  Tangible  and core  capital  levels are shown as a  percentage  of adjusted
     total  assets;  risk-based  capital  levels  are shown as a  percentage  of
     risk-weighted assets.


Impact of Inflation

          The financial  statements and related data presented  herein have been
prepared in accordance  with generally  accepted  accounting  principles,  which
require  the  measurement  of  financial   position  and  operating  results  in
historical dollars without  considering changes in the relative purchasing power
of money over time due to  inflation.  The primary  impact of  inflation  on the
operations of the Association is reflected in increased  operating costs. Unlike
most  industrial  companies,  virtually all of the assets and  liabilities  of a
financial  institution  are  monetary in nature.  As a result,  interest  rates,
generally,   have  a  more  significant  impact  on  a  financial  institution's
performance  than does inflation.  Interest rates do not necessarily move in the
same direction or to the same extent as the prices of goods and services. In the
current  interest  rate  environment,  liquidity  and maturity  structure of the
Association's  assets  and  liabilities  are  critical  to  the  maintenance  of
acceptable performance levels.

Impact of New Accounting Pronouncements

          In May 1995, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standards No. 122,  "Accounting For Mortgage Servicing
Rights  (SFAS  122)".  SFAS  122  amends  SFAS 65 to  require  mortgage  banking
enterprises to recognize as separate assets rights to service mortgage loans for
others,  however those  mortgage  servicing  rights are acquired.  SFAS 122 also
requires that mortgage banking  enterprises assess the impairment of capitalized
mortgage  servicing  rights  based  on the  fair  value  of  those  rights  on a
desegregated basis with the impairment

                                       16

<PAGE>



recognized through a valuation allowance. SFAS 122 is effective for fiscal years
beginning  after  December  15,  1995  and  applies  prospectively  to  retained
servicing rights including purchases prior to the adoption of the statement. The
Association  adopted  SFAS 122,  in the fiscal year  beginning  October 1, 1996,
however,  since the Company has not sold loans,  the Company does not anticipate
any impact on its operations or financial position from its implementation.

          In December  1995,  the Financial  Accounting  Standards  Board issued
Statement of Financial  Accounting Standards No. 123 "Accounting For Stock Based
Compensation  Plans  (SFAS  123)".  SFAS 123  allows a  company  the  option  of
continuing to follow  existing  accounting  principles for employee stock option
plans or to adopt the new principles set forth.  Generally,  existing accounting
principles do not require a company to record compensation expense as long as it
issues stock options with an exercise  price equal to the existing  market price
of the stock at the grant date. The new accounting  principles set forth in SFAS
123 would  require a company to record  compensation  expense  regardless of the
exercise  price at the grant  date.  If a company  chooses to  continue to apply
existing accounting principles,  it will have to include detailed disclosures of
the effect on net income had it followed the new accounting principles set forth
in SFAS 123. The Company will continue to follow existing accounting  principles
and accordingly,  will include the detailed  disclosures required by SFAS 123 in
its annual report for the year ending September 30, 1998.

          In  June  1996,  the  Financial   Accounting  Standards  Board  issued
Statement of Financial  Accounting  Standards No. 125, "Accounting for Transfers
and Servicing of Financial Assets and  Extinguishments  of Liabilities,"  ("SFAS
125").  The  statement  establishes   accounting  and  reporting  standards  for
transfers and servicing of financial assets and  extinguishments  of liabilities
based on the consistent application of the  financial-components  approach. This
approach  requires the recognition of financial assets and servicing assets that
are  controlled  by the reporting  entity,  and the  derecognition  of financial
assets and liabilities when control is extinguished. Liabilities and derivatives
incurred  or  obtained  by  transferors  in  conjunction  with the  transfer  of
financial assets are required to be measured at fair value, if practicable. SFAS
125 also supersedes Statement of Financial Accounting Standards 122, "Accounting
for Mortgage Servicing Rights."

          Servicing  assets and other retained  interests in transferred  assets
are required to be measured by allocating the previous  carrying  amount between
the assets sold, if any, and the interest that is retained, if any, based on the
relative  fair  value  of the  assets  at the  date of  transfer.  Statement  of
Financial  Accounting  Standards 127, "Deferral of the Effective Date of Certain
Provisions  of  Financial  Accounting  Standards  Board  No.125,"  was issued in
December,  1996 and deferred  application  of many of the provisions of SFAS 125
until December 31, 1997.

          Management  believes  adoption  of SFAS 125  will not have a  material
effect on financial position and the results of operations.

                                       17

<PAGE>


                   [LETTERHEAD OF JOHN S. DOWLING & COMPANY]




                          INDEPENDENT AUDITOR'S REPORT




The Board of Directors
St. Landry Financial Corporation and Subsidiary
Opelousas, Louisiana


We have audited the accompanying  consolidated statements of financial condition
of St.  Landry  Financial  Corporation  and its wholly owned  subsidiary,  First
Federal Savings and Loan  Association as of September 30, 1996 and 1997, and the
related consolidated statements of income, retained earnings, and cash flows for
each of the three years in the period ended September 30, 1997.  These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material   respects,   the  financial  position  of  St.  Landry  Financial
Corporation and Subsidiary as of September 30, 1996 and 1997, and the results of
their  operations and their cash flows for each of the three years in the period
ended  September 30, 1997,  in conformity  with  generally  accepted  accounting
principles.

As  discussed in Note 1 to the  financial  statements,  the Company  changed its
method of accounting for debt and equity securities for the year ended September
30, 1995,  as required by the  provisions  of Statement of Financial  Accounting
Standards No. 115, and changed its method of accounting for income taxes for the
year ended September 30, 1995, as required by Statement of Financial  Accounting
Standards No. 109.



/s/ John S. Dowling & Company
-----------------------------
Opelousas, Louisiana
November 14, 1997


                                       18


<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                           SEPTEMBER 30, 1996 AND 1997





         ASSETS                                             1996          1997
         ------                                             ----          ----
Cash and equivalents ...............................   $   385,363   $   780,554
Time deposits ......................................                      94,641
Investment securities
   Securities held-to-maturity, (fair value
    of $989,450 in 1996 and $994,875 in 1997) ......       989,595       993,483
   Securities available-for-sale, at fair value ....     1,773,450     1,952,316

Mortgage-backed securities
   Securities held-to-maturity (fair value of
    $2,787,272 in 1996 and $1,573,271 in 1997) .....     2,854,260     1,607,964
   Securities available-for-sale, at fair value ....     9,484,872    12,505,148

Loans receivable, net ..............................    39,856,672    42,192,721
Accrued interest receivable ........................       264,365       309,728
Foreclosed real estate, net ........................        97,827        84,919
Premises and equipment, net ........................       605,178       647,901
Investment required by law - Stock in Federal
   Home Loan Bank, at cost .........................       444,300       549,100
Other assets .......................................       100,774        97,208
                                                       -----------   -----------
     Total assets ..................................    56,856,656    61,815,683
                                                       ===========   ===========

  See accompanying notes to financial statements.


                                       19


<PAGE>


    LIABILITIES AND STOCKHOLDERS' EQUITY                1996            1997
    ------------------------------------                ----            ----
Deposits .......................................   $ 41,985,963    $ 43,577,912
Borrowed funds .................................      7,561,322      10,825,154
Advances by borrowers for taxes and insurance ..         92,468          84,727
Federal income taxes
 Currently payable
 Deferred payable ..............................         37,127         226,948
Accrued expenses and other liabilities .........        476,528         247,101
                                                   ------------    ------------
 Total liabilities .............................     50,153,408      54,961,842
                                                   ------------    ------------
   STOCKHOLDERS' EQUITY
   --------------------

Common stock $.01 par value, 1,500,000 shares
 authorized; 459,093 shares issued .............          4,591           4,591

Preferred stock, $.01 par value,
 500,000 shares authorized; 0 shares issued

Additional paid in capital .....................      3,347,621       3,369,740
Treasury stock, at cost; 22,955 and
 49,670 shares at September 30, 1996 and
 1997, respectively ............................       (350,561)       (757,199)

Unearned ESOP shares ...........................       (228,624)       (194,288)

Unearned RRP shares ............................       (291,153)       (230,027)

Retained earnings, substantially restricted ....      4,049,776       4,315,189

Unrealized gain on securities available-
 for-sale net of applicable deferred
 income taxes ..................................        171,598         345,835
                                                   ------------    ------------
 Total stockholders' equity ....................      6,703,248       6,853,841
                                                   ------------    ------------
 Total liabilities and stockholders'
  equity .......................................     56,856,656      61,815,683
                                                   ============    ============

                                       20


<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                        CONSOLIDATED STATEMENTS OF INCOME
                  YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997


                                          1995           1996           1997
                                          ----           ----           ----
INTEREST INCOME
 Loans receivable
  First mortgage loans ............   $ 2,556,966    $ 2,946,211    $ 3,159,307
  Savings account loans ...........        30,930         41,996         43,205
  Consumer loans ..................        10,643         99,796         68,089
 Investment securities ............       205,679        190,065        200,607
 Mortgage-backed securities .......       596,801        737,726        825,627
                                      -----------    -----------    -----------
    Total interest income .........     3,401,019      4,015,794      4,296,835
                                      -----------    -----------    -----------

INTEREST EXPENSE
 Deposits .........................     1,801,810      1,964,963      2,090,890
 Borrowed funds ...................        94,963        258,123        461,420
                                      -----------    -----------    -----------
   Total interest expense .........     1,896,773      2,223,086      2,552,310
                                      -----------    -----------    -----------
   Net interest income ............     1,504,246      1,792,708      1,744,525

PROVISION FOR LOAN LOSSES .........        40,000        214,000          5,000
                                      -----------    -----------    -----------
   Net interest income after
     provision for loan losses ....     1,464,246      1,578,708      1,739,525
                                      -----------    -----------    -----------

NON-INTEREST INCOME
 Service charges and other fees ...        23,847         23,253         22,786
 Insurance commissions ............        22,920         21,986         22,535
 Other ............................           722          1,362          2,225
                                      -----------    -----------    -----------
    Total non-interest income .....        47,489         46,601         47,546
                                      -----------    -----------    -----------

NON-INTEREST EXPENSE
 General and administrative
  Compensation and benefits .......       655,165        724,526        791,383
  Occupancy and equipment .........       120,585        123,883        142,711
  Marketing and other services ....        77,603        118,208        117,811
  Deposit insurance premium .......        99,547        395,241         40,138
  Net loss (gain) on foreclosed
   real estate ....................        (2,739)        (2,595)        (3,506)
  Real estate owned expense .......         7,670          9,047         (1,779)
  Loss on sale of investments .....                                       1,037
  Other ...........................       127,765        153,327        229,930
                                      -----------    -----------    -----------
    Total non-interest expense ....     1,085,596      1,521,637      1,317,725
                                      -----------    -----------    -----------
    Income before income taxes ....       426,139        103,672        469,346
INCOME TAX EXPENSE ................       153,322         49,455        165,958
                                      -----------    -----------    -----------
NET INCOME ........................       272,817         54,217        303,388
                                      ===========    ===========    ===========
NET INCOME PER COMMON SHARE .......                  $       .13    $       .80
                                                     ===========    ===========


See accompanying notes to financial statements.

                                       21

<PAGE>

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997
<TABLE>
<CAPTION>

                                                                                                                  UNREALIZED
                                                                                                                  GAIN (LOSS)
                                                                                                                 ON SECURITIES
                                                                                                                 AVAILABLE-FOR-
                                                                                                                 SALE, NET OF
                                                             ADDITIONAL    UNEARNED      UNEARNED                 APPLICABLE
                                        COMMON    PREFERRED   PAID-IN        ESOP          RRP       RETAINED      DEFERRED
                                        STOCK      STOCK      CAPITAL       SHARES        SHARES     EARNINGS     INCOME TAXES
                                        -----      -----      -------       ------        ------     --------     ------------
<S>                                    <C>        <C>         <C>          <C>            <C>        <C>          <C>         
BALANCES, September 30, 1994 .......                                                                $3,744,661
  Net income .......................                                                                   272,817
  Sale of stock ....................   $4,591
  Contribution of additional
   paid-in capital .................                        $3,316,854
  Acquisition of ESOP shares .......                                      $(293,816)
  Allocation of earned ESOP
   shares at fair value ............                            12,803       29,264
  Change in unrealized gain
   (Loss) on securities available
   for-sale, net of applicable
   deferred income taxes of $44,150                                                                                 $ 85,702
                                        -----     ----       ---------      -------      --------    ---------       -------
BALANCES, September 30, 1995 .......    4,591                3,329,657     (264,552)                 4,017,478        85,702
  Net income .......................                                                                    54,217
  Stock issued for adoption of
   recognition and retention plan ..      184                  247,730                  $(247,914)
  Purchase of treasury stock .......
  Retirement of treasury stock
   to be used for recognition and
   retention plan ..................     (184)                (247,730)                   (43,239)
  Allocation of earned ESOP shares
   at fair value ...................                            17,964       35,928
  Dividend paid ....................                                                                   (21,919)
  Change in unrealized gain (Loss)
   on securities available-for-
   sale, net of applicable deferred
   income taxes of $44,249 .........                                                                                   85,896
                                        -----       ----     ---------      -------       -------    ---------        -------
BALANCES, September 30, 1996 .......    4,591        -0-     3,347,621     (228,624)     (291,153)   4,049,776        171,598
  Net income .......................                                                                   303,388
  Purchase of treasury stock
  Allocation of earned RRP shares ..                            (7,925)                    61,126
  Allocation of earned ESOP shares
   at fair value ...................                            30,044       34,336
  Dividend paid ....................                                                                   (37,975)
  change in unrealized gain (Loss)
   on securities avaitabLe-for-sale,
   net of applicable deferred income
   taxes of $89,758 ................                                                                                  174,237
                                        -----       ----     ---------      -------       -------    ---------        -------
BALANCES, September 30, 1997 .......    4,591        -0-     3,369,740     (194,288)     (230,027)   4,315,189        345,835
                                        =====       ====     =========      =======       =======    =========        =======
</TABLE>


<PAGE>


                                                                   TOTAL
                                                  TREASURY     STOCKHOLDERS'  
                                                    STOCK          EQUITY     
                                                    -----          ------     
BALANCES, September 30, 1994 .................                 $ 3,744,661
  Net income .................................                     272,817
  Sale of stock ..............................                       4,591
  Contribution of additional
   paid-in capital ...........................                   3,316,854
  Acquisition of ESOP shares .................                    (293,816)
  Allocation of earned ESOP
   shares at fair value ......................                      42,067
  Change in unrealized gain
   (Loss) on securities available
   for-sale, net of applicable
   deferred income taxes of $44,150 ..........                      85,702
                                                    -------      ---------
BALANCES, September 30, 1995 .................                   7,172,876
  Net income .................................                      54,217
  Stock issued for adoption of
   recognition and retention plan ............
  Purchase of treasury stock .................    $(641,714)      (641,714)
  Retirement of treasury stock
   to be used for recognition and
   retention plan ............................      291,153
  Allocation of earned ESOP shares
   at fair value .............................                      53,892
  Dividend paid ..............................                     (21,919)
  Change in unrealized gain (Loss)
   on securities available-for-
   sale, net of applicable deferred
   income taxes of $44,249 ...................                      85,896
                                                    -------      ---------
BALANCES, September 30, 1996 .................     (350,561)     6,703,248
  Net income .................................                     303,388
  Purchase of treasury stock .................     (406,638)      (406,638)
  Allocation of earned RRP shares ............                      53,201
  Allocation of earned ESOP shares
   at fair value .............................                      64,380
  Dividend paid ..............................                     (37,975)
  change in unrealized gain (Loss)
   on securities avaitabLe-for-sale,
   net of applicable deferred income
   taxes of $89,758 ..........................                     174,237
                                                    -------      ---------
BALANCES, September 30, 1997 .................     (757,199)     6,853,841
                                                    =======      =========


See accompanying notes to financial statements.

                                       22

<PAGE>

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997

<TABLE>
<CAPTION>
                                                      1995           1996         1997
                                                      ----           ----         ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                              <C>            <C>            <C>        
Net income ...................................   $   272,817    $    54,217    $   303,388
Adjustments to reconcile net income
 to net cash provided by operating
 activities:
 Amortization of premiums and discounts
  on loans and mortgage-backed and related
  securities .................................         4,359         10,534          9,583
 Stock dividend on FHLB stock ................       (25,400)       (25,600)       (27,700)
 Provision for loan losses ...................        40,000        214,000          5,000
 Deferred loan fees ..........................        (1,553)                           91
 Depreciation of premises and equipment ......        24,104         31,249         40,768
 Net loss (gain) on sale of real estate
  owned ......................................        (2,739)        (2,595)        (3,505)
 Loss on sale of mortgage-backed securities
  available-for-sale .........................                                       1,037
 Net loss (gain) on sale of fixed assets .....          (182)
 Allocation of ESOP shares ...................        42,067         53,892         64,380
 Allocation of RRP shares ....................                                      53,201
 (Increase) decrease in accrued interest
  receivable .................................       (44,060)       (12,384)       (45,363)
 (Increase) decrease in other assets .........        41,484        (18,880)         3,566
 Increase (decrease) in deferred income taxes.         7,391        (75,816)       100,063
 Increase (decrease) in accrued expenses and
  other liabilities ..........................        25,422        305,216       (225,232)
                                                 -----------    -----------    -----------
     Net cash provided by operating activities       383,710        533,833        279,277
                                                 -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
Loan originations net of principal
  repayments .................................    (4,073,751)    (2,787,262)    (2,311,249)
Purchases of certificates of deposit .........                                     (94,186)
Purchase of investment securities
  held-to-maturity ...........................                                    (500,625)
Proceeds from maturities of investment
  securities held-to-maturity ................                      500,000        500,000
Principal repayments of mortgage-backed
  securities held-to-maturity ................       703,953      1,047,072      1,253,057
Purchases of mortgage-backed securities
  available-for-sale .........................    (2,987,138)    (3,687,922)    (4,419,078)
Proceeds from sale and principal
  repayments of mortgage-backed
  securities available-for-sale ..............     1,095,720      1,546,079      1,449,897
Purchase of FHLB stock .......................        (4,100)       (31,100)       (97,000)
</TABLE>


This statement continued on next page.


                                       23
<PAGE>

                 ST. LANDRY FIVANGIAL GORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                  YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997

<TABLE>
<CAPTION>

                                                        1995             1996            1997
                                                        ----             ----            ----
CASH FLOWS FROM INVESTING ACTIVITIES (Continued)
<S>                                                <C>              <C>            <C>        
  Proceeds from sale of FHLB stock .............   $    23,600      $    25,700    $    19,900
  Investment in foreclosed real estate .........                         (6,106)        (7,988)
  Proceeds from sale of foreclosed real estate .         2,250           27,320          3,250
  Proceeds from sale of premises and equipment .           275
  Purchases of premises and equipment ..........      (100,291)        (110,893)       (83,491)
                                                   -----------      -----------    -----------
       Net cash (used) by
        investing activities ...................    (5,339,482)      (3,477,112)    (4,287,513)
                                                   -----------      -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase (decrease) in deposits...........       372,371       (1,156,894)     1,591,949
  Increase (decrease) in advances
   from FHLB....................................     1,486,021        5,023,384      3,263,832
  Increase (decrease) in mortgage
   escrow funds.................................        28,615          (14,354)        (7,741)
  Dividend paid ................................                        (21,919)       (37,975)
  Purchase of treasury stock ...................                       (641,714)      (406,638)
  Net proceeds from issuance of stock ..........     3,027,629
                                                     ---------      -----------    -----------
       Net cash provided by
        financing activities ...................     4,914,636        3,188,503      4,403,427
                                                   -----------      -----------    -----------

NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS ..............................       (41,136)         245,224        395,191
CASH AND CASH EQUIVALENTS, beginning of year ...       181,275          140,139        385,363
                                                   -----------      -----------    -----------
CASH AND CASH EQUIVALENTS, end of year .........       140,139          385,363        780,554
                                                   ===========      ===========    ===========
SUPPLEMENTAL SCHEDULE OF NONCASH
 INVESTING ACTIVITIES
 Loans originated to facilitate the sale
  of real estate owned .........................   $    42,750      $    68,580    $    29,250
                                                   ===========      ===========    ===========
 Loan principal reductions resulting from
  foreclosures on real estate owned ............   $    26,462      $   147,787    $    16,951
                                                   ===========      ===========    ===========
 Increase in unrealized gain (loss) on
  securities available-for-sale net of
  applicable deferred income taxes .............   $    85,702      $    85,896    $   174,237
                                                   ===========      ===========    ===========
</TABLE>


This statement continued on next page.

                                       24



<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                  YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997



                                               1995          1996        1997
                                               ----          ----        ----
 SUPPLEMENTAL SCHEDULE OF NONCASH
  FINANCING ACTIVITIES
Retirement of treasury stock used to
fund recognition and retention plan .....                $  291,153
                                                         ==========
 SUPPLEMENTAL SCHEDULE OF INTEREST AND
  TAXES PAID
    Interest paid .......................   $1,916,017   $2,221,567   $2,526,466
                                            ==========   ==========   ==========
    Taxes paid ..........................   $  145,240   $  145,960   $   88,276
                                            ==========   ==========   ==========



See accompanying notes to financial statements.


                                       25
<PAGE>



                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     A.   BASIS OF FINANCIAL STATEMENT PRESENTATION

          St.  Landry  Financial  Corporation,  (the  "Company"),  was formed in
          December  1994 for the purpose of acquiring all of the common stock of
          First  Federal  Savings  and  Loan  Association  of  Opelousas,   (the
          "Association"),  concurrent  with its conversion  from mutual to stock
          ownership.  St.  Landry  Financial  Corporation  completed its initial
          public  stock  offering  of 459,093  shares of $.01 par value stock on
          April 5, 1995.  The  Company  utilized  one half of the net stock sale
          proceeds to acquire all of the common stock issued by the Association.
          The conversion was an internal reorganization with historical balances
          carried forward without adjustment.

          The  financial   statements   included  in  this  report  reflect  the
          consolidated  financial  condition  and results of  operations  of the
          Company and its subsidiary for the years ended  September 30, 1996 and
          1997. All material  intercompany  balances and transactions  have been
          eliminated in consolidation.

          The consolidated financial statements have been prepared in conformity
          with  generally  accepted  accounting  principles.  In  preparing  the
          consolidated  financial  statements,  management  is  required to make
          estimates and assumptions  that affect the reported  amounts of assets
          and liabilities as of the date of the statement of financial condition
          and revenues and expenses for the year.  Actual  results  could differ
          significantly from those estimates.

          Material  estimates that are  particularly  susceptible to significant
          change  relate to the  determination  of the  allowance  for losses on
          loans and the  valuation of real estate  acquired in  connection  with
          foreclosures  or in  satisfaction  of loans.  In  connection  with the
          determination  of the  allowances  for losses on loans and  foreclosed
          real estate, management obtains independent appraisals for significant
          properties.

          A substantial  portion of the Association's  loans are secured by real
          estate in local depressed markets. In addition, foreclosed real estate
          is located in this same depressed  market.  Accordingly,  the ultimate
          collectibility  of a  substantial  portion of the  Association's  loan
          portfolio and the recovery of the carrying  amount of foreclosed  real
          estate are susceptible to changes in local market conditions.

          While  management  uses available  information to recognize  losses on
          loans and foreclosed real estate,  further  reductions in the carrying
          amount  of loans  and  foreclosed  assets  may be  necessary  based on
          changes  in  local  economic  conditions.   In  addition,   regulatory
          agencies,   as  an  integral  part  of  their   examination   process,
          periodically  review the  Association's  estimated losses on loans and
          foreclosed  real estate.  Such agencies may require the Association to
          recognize additional losses based on their judgments about information
          available to them at the time of their  examination.  Because of these
          factors,  it is reasonably possible that the estimated losses on loans
          and  foreclosed  real estate may change  materially  in the near term.
          However,  the amount of the change that is reasonably  possible Cannot
          be estimated.

                                       26

<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     B.   BUSINESS

          The Company,  through its subsidiary,  provides  financial services to
          individuals  and corporate  customers,  and is subject to  competition
          from other financial  institutions.  The Association's primary deposit
          products are  passbooks,  money market  accounts and  certificates  of
          deposit.  Its primary lending products are  single-family  residential
          loans.  The  Company  and  its  subsidiary  are  also  subject  to the
          regulations  of  certain   federal   agencies  and  undergo   periodic
          examinations by those regulatory authorities.

     C.   CASH EQUIVALENTS

          For  purposes  of  reporting  cash  flows,  cash and cash  equivalents
          include  cash,   interest-bearing   deposits  in  other   institutions
          including  certificates  of deposit with original  maturities of throe
          months or less and short-term debt securities  purchased with original
          maturities of three months or less.

          Cash and cash equivalents at September 30, included the following:


                                                    1996             1997
                                                    ----             ----
               Cash .........................     $151,081         $200,020
               Interest-bearing deposits in
                 other institutions .........      234,282          580,534
                                                   -------          -------
                                                   385,363          780,554
                                                   =======          =======

     D.   INVESTMENT SECURITIES

          The Association  adopted Statement of Financial  Accounting  Standards
          No.  115,  "Accounting  for  Certain  Investments  in Debt and  Equity
          Securities,"  for  the  year  ended  September  30,  1995.  Under  the
          provisions of Statement No. 115,  investment  securities that are held
          for short-term resale are classified as trading securities and carried
          at fair value.  Debt  securities  that  management has the ability and
          intent to hold to maturity  are  classified  as  held-to-maturity  and
          carried at cost, adjusted for amortization of premium and accretion of
          discounts using a method that approximates the interest method.  Other
          marketable  securities  are classified as  available-for-sale  and are
          carried at fair value.  Realized  and  unrealized  gains and losses on
          trading  securities are included in net income.  Unrealized  gains and
          losses  on  securities  available-for-sale  are  recognized  as direct
          increases or decreases in stockholders' equity. Equity securities that
          are  nonmarketable or that have mandatory sinking funds are carried at
          cost.  Gains  and  losses  on the sale of  investment  securities  are
          determined using the specific identification method.

                                       27

<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     D.   INVESTMENT SECURITIES - Continued

          The effect of this change in  accounting  principle in the fiscal year
          ended  September  30, 1995 was an increase of $163,550 (net of related
          deferred  income tax expense of  $84,253) in equity  capital to record
          unrealized gain on investment securities available-for-sale.  FASB 115
          does not  allow  retroactive  restatement  of prior  period  financial
          statements.

     E.   MORTGAGE-BACKED SECURITIES

          Mortgage-backed  securities  are  accounted  for  in  accordance  with
          Statement of Financial  Accounting  Standards No. 115, "Accounting for
          Certain  Investments  in Debt and Equity  Securities."  This statement
          addresses  the  accounting  and reporting  for  investments  in equity
          securities  that have  readily  determinable  fair  values and for all
          investments in debt securities.

          Mortgage-backed  securities  that are held for  short-term  resale are
          classified   as  trading   securities   and  carried  at  fair  value.
          Mortgage-backed  securities that management has the ability and intent
          to hold to maturity are classified as held-to-maturity  and carried at
          cost,  adjusted for amortization of premium and accretion of discounts
          using  a  method  that   approximates  the  interest   method.   Other
          mortgage-backed  securities are classified as  available-for-sale  and
          are carried at fair value. Realized and unrealized gains and losses on
          trading  securities are included in net income.  Unrealized  gains and
          losses on mortgage-backed securities available-for-sale are recognized
          as direct  increases or decreases in stockholders'  equity.  Gains and
          losses are recognized based on the specific-identification method.

          The Association  adopted Statement of Financial  Accounting  Standards
          No.  115 for the year ended  September  30,  1995.  The effect of this
          change in  accounting  principle  was a decrease  of  $77,848  (net of
          related  deferred  income  taxes of  $40,103)  in  equity  capital  to
          recognize  unrealized  losses on  mortgage-backed  available-for-sale.
          FASB  115 does  not  allow  retroactive  restatement  of prior  period
          financial statements.

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

          Discounts on first  mortgage  loans are  amortized to income using the
          interest  method over the remaining  period to  contractual  maturity,
          adjusted for anticipated prepayments.

                                       28

<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     F.   LOANS RECEIVABLE

          Interest income generally is not recognized on specific impaired loans
          unless the  likelihood  of further loss is remote.  Interest  payments
          received  on  such  loans  are  applied  as a  reduction  of the  loan
          principal  balance.   Interest  income  on  other  impaired  loans  is
          recognized only to the extent of interest payments received.


          The  allowance  for loan losses is  maintained  at a level  which,  in
          management's judgment, is adequate to absorb credit losses inherent in
          the  loan  portfolio.   The  amount  of  the  allowance  is  based  on
          management's  evaluation of the  collectibility of the loan portfolio,
          including the nature of the portfolio,  credit concentrations,  trends
          in historical  loss  experience,  specific  impaired  loans,  economic
          conditions and other risks  inherent in the portfolio.  Allowances for
          impaired loans are generally  determined based on collateral values or
          the present value of estimated cash flows.  The allowance is increased
          by a  provision  for loan  losses,  which is charged to  expense,  and
          reduced by charge-offs, net of recoveries.

     G.   LOAN ORIGINATION FEES, COMMITMENT FEES, AND RELATED COSTS

          Loan fees are accounted for in accordance  with FASB Statement No. 91,
          "Accounting  for   Nonrefundable   Fees  and  Costs   Associated  with
          Originating  or Acquiring  Loans and Initial  Direct Costs of Leases."
          Loan fees and certain direct loan origination costs are deferred,  and
          the net fee or cost is recognized as an adjustment to interest  income
          using the interest method over the contractual life of the loans.

          The Association does not charge commitment fees.

     H.   FORECLOSED REAL ESTATE

          Real  estate and other  assets  acquired  in  settlement  of loans are
          recorded at the balance of the loan or at  estimated  fair value minus
          estimated costs to sell, whichever is less, at the date acquired, plus
          capital   improvements  made  thereafter  to  facilitate  sale.  After
          foreclosure,  valuations are periodically  performed by management and
          the real  estate is carried  at the lower of cost or fair value  minus
          estimated  costs to sell.  Costs of holding  real  estate  acquired in
          settlement of loans are shown as charges against income currency.

     I.   PREMISES AND EQUIPMENT

          Land is carried at cost. Buildings, furniture, fixtures, and equipment
          are carried at cost,  less  accumulated  depreciation.  Buildings  and
          furniture,   fixtures,   and  equipment  are  depreciated  over  their
          estimated useful lives using the  straight-line  or declining  balance
          methods.


                                       29

<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     J.   INCOME TAXES

          Deferred  income taxes are provided in  accordance  with  Statement of
          Financial Accounting Standards No. 109, "Accounting for Income Taxes."
          Deferred taxes are provided for accumulated  temporary differences due
          to  basis   differences  for  assets  and  liabilities  for  financial
          reporting  and  income  tax  purposes.  The  Association's   temporary
          differences related primarily to differences between the basis of FHLB
          stock,  unrealized gains and losses on available-for-sale  securities,
          prepaid interest, and deferred loan fees, for financial and income tax
          reporting.

          Investment  tax credits are accounted for as a reduction of income tax
          expense in the year taxes payable are reduced.

     K.   FAIR VALUES OF FINANCIAL INSTRUMENTS

          Statement  of Financial  Accounting  Standards  No. 107,  "Disclosures
          About Fair Value of Financial  Instruments,"  requires  disclosure  of
          fair value  information  about financial  instruments,  whether or not
          recognized  in the  statement of financial  condition.  In cases where
          quoted  market  prices  are not  available,  fair  values are based on
          estimates  using present value or other  valuation  techniques.  Those
          techniques  are  significantly   affected  by  the  assumptions  used,
          including  the discount  rate and  estimates of future cash flows.  In
          that regard,  the derived fair value estimates cannot be substantiated
          by comparison to independent  markets and, in many cases, could not be
          realized in immediate settlement of the instruments, Statement No. 107
          excludes   certain   financial   instruments   and  all   nonfinancial
          instruments  from  its  disclosure  requirements.   Accordingly,   the
          aggregate fair value amounts presented do not represent the underlying
          value of the Association.

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

          Cash  and cash  equivalents:  The  carrying  amounts  reported  in the
          statements  of  financial  condition  for cash  and  cash  equivalents
          approximate those assets' fair values.

          Investment and mortgage-backed  securities: Fair values for investment
          and  mortgage-backed  securities  are based on quoted  market  prices.

          Loans:  For  variable-rate  loans that reprice  frequently and with no
          significant  change in credit risk,  fair values are based on carrying
          amounts.   The  fair  values  for  other  loans  are  estimated  using
          discounted cash flow analysis, based on interest rates currently being
          offered for loans with similar  terms to  borrowers of similar  credit
          quality.  Loan fair value estimates include judgments regarding future
          expected prepayments,  loss experience and risk characteristics.  Fair
          values for impaired  loans are estimated  using  discounted  cash flow
          analysis  or  underlying  collateral  values,  where  applicable.  The
          carrying amount of accrued interest  receivable  approximates its fair
          value.


                                       30


<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     K.   FAIR VALUES OF FINANCIAL INSTRUMENTS - Continued

          Deposits:   The   carrying   amounts  of   variable-rate,   fixed-term
          money-market  accounts and certificates of deposit  approximate  their
          fair values.  Fair values for fixed-rate  certificates  of deposit are
          estimated  using a  discounted  cash  flow  calculation  that  applies
          interest  rates  currently  offered on  certificates  to a schedule of
          aggregated expected monthly maturities on time deposits.  The carrying
          amount of accrued interest payable approximates fair value.

          Borrowed  funds:  Fair values for advances  from the Federal Home Loan
          Bank are  estimated  using a  discounted  cash flow  calculation  with
          interest rates currently offered on similar instruments.

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

     L.   EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS

          In October,  1995, the Financial  Accounting  Standards Board ("FASB")
          issued  SFAS  123,  Accounting  for  Stock-Based   Compensation.   The
          statement  establishes  a fair value based  method of  accounting  for
          stock-based  compensation  plans. it encourages entities to adopt that
          method  in place of the  provisions  of  Accounting  Principles  Board
          ("APB") Opinion 25, Accounting for Stock Issued to Employees,  for all
          arrangements  under which  employees  receive shares of stock or other
          equity  instruments of the employer if the employer incurs liabilities
          to employees in amounts  based on the price of its stock.  The Company
          will continue using the accounting  methods  prescribed by APB Opinion
          25 and will  disclose  in the  footnotes  information  on a fair value
          basis for its stock-based compensation plans.

          In June 1996,  the FASB issued SFAS 125,  Accounting for Transfers and
          Servicing of Financial Assets and Extinguishments of Liabilities.  The
          statement establishes accounting and reporting standards for transfers
          and servicing of financial assets and  extinguishments  of liabilities
          based  on  the  consistent  application  of  the  financial-components
          approach.  This approach  requires the recognition of financial assets
          and servicing assets that are controlled by the reporting entity,  and
          the  derecognition of financial assets and liabilities when control is
          extinguished.  Liabilities  and  derivatives  incurred  or obtained by
          transferors in conjunction  with the transfer of financial  assets are
          required to be measured at fair value, if  practicable.  SFAS 125 also
          supersedes SFAS 122, Accounting for Mortgage Servicing Rights.


                                       31

<PAGE>


                 ST. LANDRY FINANCIAL CORPORATIQN AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTILiG POLICIES (CONTINUED)

     L.   EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS - Continued

          Servicing  assets and other retained  interests in transferred  assets
          are required to be measured by allocating the previous carrying amount
          between the assets sold, if any, and the interest that is retained, if
          any,  based on the  relative  fair  value of the assets at the date of
          transfer.  SFAS  127,  Deferral  of  the  Effective  Date  of  Certain
          Provisions of FASB Statement No. 125, was issued in December, 1996 and
          deferred application of many of the provisions of SFAS 125 until after
          December 31, 1997.

          Management  believes  adoption  of SFAS 125  will not have a  material
          effect on financial position and the results of operations.

     M.   RECIASSIFIED ITEMS

          Certain  items of the prior years have been  reclassified  in order to
          conform to the current year's presentation.

2. INVESTMENT SECURITIES

     Securities held-to-maturity consist of the following at September 30:

                                                     1996
                                 -----------------------------------------------
                                               Gross        Gross
                                 Amortized  Unrealized    Unrealized     Fair
                                   Cost        Gains        Losses      Value
                                   ----        -----        ------      -----
U.S. Government and
  agency securities ..........   $989,595     $ -0-         $(145)   $ 989,450
                                  =======      =====        ======    =========

                                                    1997
                                 -----------------------------------------------
                                               Gross        Gross
                                 Amortized  Unrealized    Unrealized     Fair
                                   Cost        Gains        Losses      Value
                                   ----        -----        ------      -----
U.S. Government and
  agency securities ..........   $993,483     $1,910        $(518)   $ 994,875
                                  =======      =====        ======    =========


                                       32

<PAGE>

                 ST. LADRY FINANCIAL CORPORATIQN AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2. INVESTMENT SECURITIES (CONTINUED)

     Securities available-for-sale consist of the following at September 30:

                                                1996
                        ------------------------------------------------------
                                         Gross        Gross
                        Amortized     Unrealized     Unrealized       Fair
                          Cost          Gains         Losses          Value
                          ----          -----         ------          -----
Equity securities....  $1,415,181      $363,233      $(4,964)       $1,773,450

                                                1997
                       -------------------------------------------------------
                                        Gross         Gross
                       Amortized      Unrealized     Unrealized       Fair
                          Cost          Gains         Losses          Value
                          ----          -----         ------          -----
Equity securities....  $1,415,181      $537,135         -0-         $1,952,316

     The   following   is  a   summary   of   maturities   of  debt   securities
     held-to-maturity at September 30, 1997:



                                                    Amortized       Fair
                                                      Cost          Value
                                                      ----          -----
         Amounts maturing in:
          One year or less......................... $500,519       $500,000
          After one year through five years........  492,964        494,875
          After five years through ten years.......
          After ten years..........................
                                                     -------        -------
                                                     993,483        994,875

     There  were no  sales of  investment  securities  during  the  years  ended
     September 30, 1995, 1996, or 1997.

     Investment  securities with an amortized cost of $492, 964 and a fair value
     of  $494,875  were  pledged  as  security  against  Federal  Home Loan Bank
     advances at September 30, 1997.

3. MORTGAGED-BACKED SECURITIES

     Mortgage-backed  securities  held-to-maturity  consist of the  following at
     September 30:

                                                 1996
                      ----------------------------------------------------------
                                        Gross            Gross
                      Amortized       Unrealized       Unrealized         Fair
                        Cost            Gains            Losses           Value
                        ----            -----            ------           -----
GNMA .........     $   273,588     $    10,930                        $  284,518
FHLMC ........       2,137,980           6,090      $   (62,627)       2,081,443
FNMA .........         442,692                          (21,381)         421,311
                     ---------          ------           ------        ---------
                     2,854,260          17,020          (84,008)       2,787,272
                     =========          ======          =======        =========


                                      33

<PAGE>

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. MORTGAGED-BACKED SECURITIES (CONTINUED)


                                               1997
                      ----------------------------------------------------------
                                        Gross           Gross
                      Amortized       Unrealized      Unrealized          Fair
                        Cost            Gains           Losses           Value
                        ----            -----           ------           -----
GNMA .........      $  219,653      $   10,264                        $  229,917
FHLMC ........         967,396                       $  (36,283)         931,113
FNMA .........         420,915                           (8,674)         412,241
                    ----------      ----------       ----------       ----------
                     1,607,964          10,264          (44,957)       1,573,271
                    ==========      ==========       ==========       ==========

     Mortgaged-backed securities  available-for-sale consist of the following at
     September 30:

                                                1996
                     -----------------------------------------------------------
                                       Gross            Gross
                     Amortized       Unrealized       Unrealized        Fair
                       Cost            Gains            Losses          Value
                       ----            -----            ------          -----
GNMA .........     $ 1,281,916     $    19,967      $    (7,144)     $ 1,294,739
FHLMC ........       3,552,220           1,451          (79,884)       3,473,787
FNMA .........       4,749,008           9,592          (42,254)       4,716,346
                   -----------     -----------      -----------      -----------
                     9,583,144          31,010         (129,282)       9,484,872
                   ===========     ===========      ===========      ===========

                                                1997
                     -----------------------------------------------------------
                                       Gross            Gross
                     Amortized       Unrealized       Unrealized        Fair
                       Cost            Gains            Losses          Value
                       ----            -----            ------          -----
GNMA .........    $  1,175,437    $     26,911     $       (735)    $  1,201,613
FHLMC ........       5,434,818          18,764          (63,321)       5,390,261
FNMA .........       5,908,036          29,597          (24,359)       5,913,274
                  ------------    ------------     ------------     ------------
                    12,518,291          75,272          (88,415)      12,505,148
                  ============    ============     ============     ============

     For the year ended  September 30, 1997, the  Association had gross proceeds
     from  the  sale of  mortgaged-  backed  securities  available-for-  sale of
     $303,223.  Gross realized losses on these sales were $1,037.  There were no
     realized gains.


                                       34


<PAGE>



                  ST. LANDRY FINANCIAL CORPORATION AND SUBSIDI
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


3. MORTGAGED-BACKED SECURITIES (CONTINUED)

     The  amortized  cost  and  fair  value of  mortgaged-backed  securities  at
     SeptemberN30,  1997, by  contractual  maturity,  are shown below.  Expected
     maturities will differ from contractual  maturities  because  borrowers may
     have the right to call or prepay  obligations  without  call or  prepayment
     penalties.

                                    Securities              Securities
                                Held-to-Maturity         Available-for-Sale
                             -----------------------    ------------------------
                             Amortized      Fair        Amortized       Fair
                               Cost         Value         Cost          Value
                             ---------      -----       ---------       -----
Amounts maturing in:
One year or less .......   $   663,034   $   638,261
After one year through
 five years ............       761,980       742,756
After five years through
 ten years .............       182,950       192,254   $   174,274   $   174,800
After ten years ........                                12,344,017    12,330,348
                           -----------   -----------   -----------   -----------
                             1,607,964     1,573,271    12,518,291    12,505,148
                           ===========   ===========   ===========   ===========

     At September 30, 1997,  mortgaged-backed  securities with amortized cost of
     $9,887,837 and fair value of $9,831,531 were specifically pledged to secure
     advances from the Federal Home Loan Bank of Dallas.

4. LOANS RECEIVABLE

     Loans receivable at September 30 are summarized as follows:


                                                        1996            1997
                                                        ----            ----
First mortgage loans (principally conventional)
 Principal balance:
  Secured by one to four family residences .....   $ 35,782,238    $ 38,076,106
  Secured by other properties ..................      2,890,583       3,414,547
  Construction loans ...........................      1,295,700         309,300
                                                   ------------    ------------
                                                     39,968,521      41,799,953
Less:
 Net deferred loan fees ........................        (21,912)        (22,003)
 Undisbursed portion of construction loans .....       (710,612)        (79,682)
 Unearned discounts ............................        (71,209)        (63,424)
                                                   ------------    ------------
   Total first mortgage loans ..................     39,164,788      41,634,844
Consumer and other loans
 Automobile loans ..............................        478,616         363,998
 Other consumer loans ..........................         88,214          97,675
 Savings account loans .........................        705,412         652,533
                                                   ------------    ------------
   Total loans .................................     40,437,030      42,749,050
Less allowance for loan losses .................       (580,358)       (556,329)
                                                   ------------    ------------

                                                     39,856,672      42,192,721
                                                     ==========       ==========


                                       35
<PAGE>

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. LOANS RECEIVABLE (CONTINUED)

     Activity in the  allowance for loan losses is summarized as follows for the
     years ended September 30:

                                             1995          1996          1997
                                             ----          ----          ----
BALANCE, beginning of year ...........    $ 351,383     $ 389,091     $ 580,358
Provision charged to income ..........       40,000       214,000         5,000
Charge-offs, net of recoveries .......       (2,292)      (22,733)      (29,028)
                                          ---------     ---------     ---------
BALANCE, end of year .................      389,091       580,358       556,330
                                          =========     =========     =========

     The Association  adopted Statements of Financial  Accounting  Standards No.
     114 and No. 118 for the year ended  September  30, 1996.  At September  30,
     1996 and 1997,  the total  recorded  investment in impaired  loans,  all of
     which had  allowances  determined in  accordance  with SFAS No. 114 and No.
     118, amounted to approximately  $801,977 and $830,447. The average recorded
     investment  in  impaired  loans  amounted  to  approximately  $793,815  and
     $816,212 for the years ended September 30, 1996 and 1997, respectively. The
     allowance  for  loan  losses   related  to  impaired   loans   amounted  to
     approximately  $272,236  and  $251,068  at  September  30,  1996 and  1997,
     respectively.  Interest income on impaired loans of $58,591 and $35,845 was
     recognized for cash received  during the years ended September 30, 1996 and
     1997, respectively.

     For the year ended  September 30, 1995 the  Association  had loans on which
     the  accrual  of  interest  had been  discontinued  totaling  approximately
     $600,636. Had the accrual of interest not been discontinued on these loans,
     interest income would have increased by approximately  $17,026 for the year
     ended September 30, 1995.

     The  Association  is not  committed to lend any  additional  funds on these
     loans.

     In the ordinary  course of  business,  the  Association  has and expects to
     continue to have  transactions,  including  borrowings,  with its officers,
     directors,  employees and their  affiliates.  In the opinion of management,
     such transactions were on substantially the same terms,  including interest
     rates  and  collateral,  as  those  prevailing  at the  time of  comparable
     transactions with other persons and did not involve more than a normal risk
     of  collectibility  or  present  any  other  unfavorable  features  to  the
     Association.  Loans to such  borrowers,  at September 30, are summarized as
     follows:

                                           1995           1996           1997
                                           ----           ----           ----
BALANCE, beginning of year ........     $ 619,733      $ 657,198      $ 828,415
Origination .......................       119,858        273,355        143,895
Repayments ........................       (82,393)      (102,138)      (164,766)
                                        ---------      ---------      ---------
BALANCE, end of year ..............       657,198        828,415        807,544
                                        =========      =========      =========

                                       36

<PAGE>

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


5. ACCRUED INTEREST RECEIVABLE

     Accrued interest receivable at September 30 is summarized as follows:

                                                          1996            1997
                                                          ----            ----
Investment securities ........................         $ 22,431         $ 21,270
Mortgage-backed securities ...................           87,671          111,247
Loans receivable .............................          154,263          177,211
                                                       --------         --------
                                                        264,365          309,728
                                                       ========         ========

6. FORECLOSED REAL ESTATE

     Foreclosed real estate at September 30 is summarized as follows:

                                                        1996             1997
                                                        ----             ----
Real estate owned at cost or fair
 value at foreclosure ........................       $ 130,884        $ 122,634
Less allowance for losses ....................         (33,057)         (37,715)
                                                     ---------        ---------
                                                        97,827           84,919
                                                     =========        =========

     Set forth below is an analysis of the activity in the  allowance for losses
     on real estate owned.

                                                 1995         1996         1997
                                                 ----         ----         ----
BALANCE, beginning of year ..............      $11,031      $13,323      $33,057
Provision charged to income .............                     4,362
Charge-offs, net of recoveries ..........        2,292       15,372        4,658
                                               -------      -------      -------
BALANCE, end of year ....................       13,323       33,057       37,715
                                               =======      =======      =======

7. PREMISES AND EQUIPMENT

     Premises and equipment at September 30 are summarized as follows:

                                                       1996              1997
                                                       ----              ----
Cost:
   Land ......................................     $    80,710      $   105,249
   Buildings .................................         640,259          648,180
   Furniture, fixtures, and equipment ........         269,369          270,271
                                                   -----------      -----------
                                                       990,338        1,023,700
   Less accumulated depreciation .............        (385,160)        (375,799)
                                                   -----------      -----------
                                                       605,178          647,901
                                                   ===========      ===========

     Depreciation amounted to $24,104,  $31,249, and $40,768 for the years ended
     September 30, 1995, 1996 and 1997, respectively.

                                       37
<PAGE>

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. DEPOSITS

     Deposits at September 30, are summarized as follows:

<TABLE>
<CAPTION>
                                      1996                    1997                Weighted
                             --------------------    --------------------     Average Rate at
                              Amount      Percent      Amount     Percent   September 30, 1997
                              ------      -------      ------     -------   ------------------
<S>                        <C>             <C>      <C>           <C>             <C>
Money market ...........   $ 6,243,478     14.87    $ 4,911,442    11.27          3.05%
Regular passbook .......     3,829,181      9.12      4,409,415    10.12          3.00%
90 day passbook ........       711,110      1.69
                            ----------     -----      ---------    -----
                            10,783,769     25.68      9,320,857    21.39
                            ----------     -----      ---------    -----
Certificates of deposit:
  4.00% - 5.99% ........    28,640,490     68.22     26,046,616    59.77          5.47%
  6.00% - 7.99% ........     2,561,704      6.10      8,210,439    18.84          6.05%
                            ----------     -----     ----------    -----
                            31,202,194     74.32     34,257,055    78.61
                            ----------     -----     ----------    -----
                           $41,985,963    100.00    $43,577,912   100.00          5.03%
                            ==========    ======     ==========   ======
</TABLE>

     The  aggregate  amount  of jumbo  certificates  of  deposit  with a minimum
     denomination  of $100,000 was  approximately  $5,129,340  and $9,230,914 at
     September 30, 1996 and 1997, respectively.

     At September 30, 1997,  scheduled maturities of certificates of deposit are
     as follows:
<TABLE>
<CAPTION>

                                               Years Ending September 30,
                    -----------------------------------------------------------------------------------
                        1998             1999              2000               2001           Thereafter
                        ----             ----              ----               ----           ----------
<S>                 <C>               <C>               <C>                <C>              <C>
4.00% - 5.99%.....  $21,080,435       $2,360,763        $1,727,393         $ 878,025
6.00% - 7.99%.....    5,340,585          783,433         1,082,431         1,003,990
                     ----------        ---------         ---------         ---------           ----
                    $26,421,020       $3,144,196        $2,809,824        $1,882,015           $ --
                    ===========       ==========        ==========        ==========           ====
</TABLE>

     Interest  expense  on  deposits  for  the  years  ended  September  30,  is
     summarized as follows:

                                  1995             1996              1997
                                  ----             ----              ----
Money market                  $ 208,075         $ 175,524         $ 171,240
Passbook                        139,695            91,597           132,049
Certificates of deposit       1,454,040         1,697,842         1,787,601
                              ---------         ---------         ---------
                             $1,801,810        $1,964,963        $2,090,890


                                       38

<PAGE>

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


9. BORROWED FUNDS

     Borrowed funds at September 30 are summarized as follows:

                                             Rate           1996        1997
                                          -----------   ----------   -----------
Advance from the Federal Home Loan Bank   5.00%-6.99%   $7,561,322   $10,825,154
                                                        ----------   -----------
                                                         7,561,322    10,825,154
                                                        ==========   ===========

     Scheduled maturities of the advances at September 30, 1997 are as follows:

      October 23, 1997 ......................     $9,900,000
      November 3, 1997 ......................         44,081
      June 1, 2005 ..........................        415,561
      August 1, 2005 ........................        420,851
      March 2, 2009 .........................         44,661
                                                  ----------
                                                  10,825,154
                                                  ==========

     Pursuant to a blanket  floating  lien with the Federal Home Loan Bank,  the
     advances at September 30, 1996 and 1997 were secured by permanent  mortgage
     loans,   mortgage  pool  securities,   and  U.  S.  Government  and  agency
     securities.

10. FEDERAL INCOME TAXES

     Consolidated  income  tax  expense  for the  years  ended  September  30 is
     summarized as follows:

                                 1995           1996               1997
                                 ----           ----               ----
       Federal:
       Current ............   $145,931       $125,271           $ 65,896
       Deferred ...........      7,391        (75,816)           100,062
                               -------        -------            -------
                               153,322         49,455            165,958
                               =======        =======            =======


                                       39

<PAGE>

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


10. FEDERAL INCOME TAXES (CONTINUED)

     Total income tax expense differed from the amounts computed by applying the
     U.S.  federal  tax rates of 34 percent for the years  ended  September  30,
     1995,  1996 and 1997,  to  income  before  income  taxes as a result of the
     following:

                                               1995          1996        1997
                                               ----          ----        ----
Federal taxes at statutory rates ........   $ 144,887    $  35,248    $ 159,578
Tax effects of
  Provisions for losses on loans and real
    estate owned ........................      13,600       72,760        1,700
  Bad debt deduction ....................     (11,928)     (87,642)      (1,167)
  Non-deductible ESOP expense ...........                    6,108       10,215
  Other .................................       6,763       22,981       (4,368)
                                            ---------    ---------    ---------
  Income tax expense ....................     153,322       49,455      165,958
                                            =========    =========    =========

     Deferred  tax  liabilities   have  been  provided  for  taxable   temporary
     differences related to FHLB stock dividends, recapture of bad debt reserves
     and unrealized gains on available-for-sale securities.  Deferred tax assets
     have been  provided for  deductible  temporary  differences  related to the
     federal insurance  premium,  prepaid  interest,  deferred loan fees and the
     ESOP plan. The net deferred tax liability in the accompanying statements of
     financial condition include the following components:

                                                       1996              1997
                                                       ----              ----
Deferred tax liabilities ...................        $(150,317)        $(242,904)
Deferred tax assets ........................          113,190            15,956
                                                    ---------         ---------
Net deferred tax liabilities ...............          (37,127)         (226,948)
                                                    =========         =========

     Retained  earnings at September  30, 1996 and 1997,  include  approximately
     $965,154  for which no  deferred  federal  income  tax  liability  has been
     recognized.  This amount  represents  an  allocation  of income to bad-debt
     deductions  for tax purposes  only.  Reduction of amounts so allocated  for
     purposes  other  than tax  bad-debt  losses  or  adjustments  arising  from
     carryback of net  operating  losses  would  create  income for tax purposes
     only, which would be subject to the then-current corporate income-tax rate.


                                       40

<PAGE>

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. RETIREMENT PLAN

     All eligible employees of the Association are covered by a defined benefit,
     multiemployer pension plan, "The Financial Institutions Retirement Fund," a
     taxqualified pension trust. Employers participating in a multiemployer plan
     are required to recognize as net pension cost the required contribution for
     the period and shall  recognize as a liability  any  contributions  due and
     unpaid.  As of and for the years ended  September 30, 1995,  1996 and 1997,
     the Association was in an overfunded  position and was not required to make
     any  contributions.  The  Association  will  continue  to  use  its  excess
     designated   "Future  Employer   Contribution   Offset"  to  absorb  future
     contribution  requirements.  Administrative  fees  paid to the fund for the
     years ended September 30, 1995, 1996 and 1997,  amounted to $1,671,  $1,821
     and $1,911, respectively.

     In January of 1995, the Association  established a  noncontributory  401(k)
     plan for all eligible  employees.  Administrative fees paid related to this
     plan amounted to $1,408,  $1,062 and $980 for the years ended September 30,
     1995, 1996 and 1997, respectively.  Employees participating in the plan are
     allowed to contribute from 2 percent to 15 percent of their annual salary.

12. EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)

     The Company sponsors a leveraged  Employee Stock Ownership Plan (ESOP). The
     plan covers  full time,  salaried  employees  of the  Association  who have
     obtained  age 21. All full time,  salaried  employees  become  eligible  to
     participate on the "entry date" after they complete 12  consecutive  months
     of service,  provided they complete 1,000 hours during those 12 consecutive
     months.  The Company  makes annual  contributions  to the ESOP equal to the
     ESOP's debt service.  The ESOP shares  initially were pledged as collateral
     for its debt. As the debt is repaid,  shares are released  from  collateral
     and  allocated  to active  employees  based on  compensation.  The  Company
     accounts  for its ESOP in  accordance  with  Statement  of  Position  93-6.
     Accordingly,  the  debt of the  ESOP is  recorded  as debt  and the  shares
     pledged  as  collateral  are  reported  as  unearned  ESOP  shares  in  the
     consolidated statement of financial condition.  As shares are released from
     collateral,  the Company reports  compensation expense equal to the current
     market  price  of  the  shares,  and  the  shares  become  outstanding  for
     earnings-per-share  (EPS) computations.  Dividends on allocated ESOP shares
     are recorded as a reduction of retained earnings;  dividends on unallocated
     ESOP shares are recorded as compensation expense. ESOP compensation expense
     was $53,892 and  $64,380 for the years ended  September  30, 1996 and 1997,
     respectively.  The fair value of  unearned  ESOP  shares was  $342,936  and
     $364,290 at September 30, 1996 and 1997, respectively.

     A summary of the ESOP shares allocation at September 30 is as follows:

                                                            1996           1997
                                                            ----           ----
Shares allocated, beginning of year ..............        $ 3,658        $ 8,149
Shares allocated during year .....................          4,491          4,292
Shares distributed during year ...................
                                                          -------        -------
   Total allocated shares held by
     by ESOP at year-end .........................          8,149         12,441
Unreleased shares ................................         28,578         24,286
                                                          -------        -------
         Total ESOP shares .......................         36,727         36,727
                                                          =======        =======


                                       41

<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                                OPELOUSAS, LOUISI
                    NOTES TO CONSOLIDATED FINANCIA STATEMENTS

13. RECOGNITION AND RETENTION PLAN (RRP)


     The Company  established the RRP for certain  officers and directors during
     the year ended September 30, 1996.  Following  shareholder  approval of the
     RRP on  January  23,  1996,  the  Company  purchased  18,363  shares of the
     corporation's  common stock in the open market at $15.86 per share to fully
     fund the related trust and to be awarded in accordance  with the provisions
     of the RRP. The cost of the shares of restricted  stock awarded under these
     plans are recorded as unearned  compensation,  a contra-equity account. The
     fair  value  of the  shares  on the  date of award  will be  recognized  as
     compensation  expense  over the vesting  period,  which is five years.  The
     holders of the  restricted  stock  receive  dividends and have the right to
     vote the shares. For the year ended September 30, 1997, the amount included
     in  compensation  expense  was  $52,028.  The grant  date fair value of the
     restricted  stock  granted  during the year ended  September  30,  1996 was
     $13.50. A summary of the changes in restricted stock is as follows:

                                                      Unawarded         Awarded
                                                        Shares          Shares
                                                        ------          ------
Balance, September 30, 1995
Purchased by plan ..........................           18,363
Granted ....................................          (17,263)         $ 17,263
Forfeited ..................................
Earned and issued ..........................
                                                     --------          --------
Balance, September 30, 1996 ................            1,100            17,263
Purchased by the plan
Granted ....................................
Forfeited ..................................              800              (800)
Earned and issued ..........................                             (3,449)
                                                     --------          --------
Balance, September 30, 1997 ................            1,900            13,014
                                                     ========          ========

 14. STOCK OPTION PLAN

     On January 23, 1996,  the  Company's  shareholders  approved a stock option
     plan for the benefit of directors,  officers, and other key employees.  The
     number of shares of common  stock  reserved  for  issuance  under the stock
     option plan was equal to 45,909 shares or 10 percent of the total number of
     common shares sold in the Company's  initial public  offering of its common
     stock upon the mutual-to-stock conversion of First Federal Savings and Loan
     Association.  The option  exercise price cannot be less than the fair value
     of the  underlying  common stock as of the date of the option grant and the
     maximum option term cannot exceed ten years.

     The stock options granted to officers and directors on January 23, 1996 are
     exercisable in five equal annual  installments.  The stock option plan also
     permits the granting of Stock  Appreciation  Rights ("SARs").  SARs entitle
     the holder to receive,  in the form of cash or stock,  the  increase in the
     fair value of Company stock from the date of grant to the date of exercise.
     No SARs have been issued under the plan.

                                       42


<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


14. STOCK OPTION PLAN (CONTINUED)

     The following table summarizes the activity related to stock options:


                                            Available      Options
                                            For Grant    Outstanding
                                            ---------    -----------
At inception ..................             $ 45,909
Granted, January 23,1996 ......              (24,935)     $(24,935)
Exercised .....................
Forfeited .....................
                                            --------      --------
At September 30, 1996 .........               20,974        24,935
Granted .......................
Exercised .....................
Forfeited .....................                2,057        (2,057)
                                            --------      --------
At September 30, 1997..........               23,031        22,878
                                            ========      ========

     The outstanding options were all granted on January 23, 1996 at an exercise
     price of $13.50.  There were no options  exercisable at September 30, 1996.
     At September 30, 1997, 4,575 options were exercisable. The weighted average
     grant date fair value of options  granted  during the year ended  September
     30, 1996 was $3.71.

     In October 1995, the FASB issued Statement of Financial Accounting Standard
     No. 123,  "Accounting  for  Stock-Based  Compensation."  SFAS 123  requires
     disclosure of the  compensation  cost for  stock-based  incentives  granted
     after  January  31,  1995 based on the fair value at grant date for awards.
     The Company  applies the provisions of APB Opinion No. 25 in accounting for
     its  stock  option  plan  as  allowed  under  SFAS  123.  Accordingly,   no
     compensation cost has been recognized for options granted. Had compensation
     cost for the plan been determined based on the fair value at the grant date
     for awards  under the plan  consistent  with the  methods of SFAS 123,  the
     Company's pro forma net income and pro forma  earnings per share would have
     been as follows at September 30,

                                            1996           1997
                                            ----           ----
            Net income
             As reported ...........      $54,217        $303,388
             Pro forma .............      $45,216        $289,888
            Earnings per share
             As reported ...........         $.13        $.80
             Pro forma .............         $.11        $.76

     The fair value of each  option is  estimated  on the date of grant using an
     option-pricing model with the following  weighted-average  assumptions used
     for the grants:  dividend  yields of 1.33 percent;  expected  volatility of
     10.44 percent;  risk-free interest rate of 5.70 percent; and expected lives
     of 8 years for all options.


                                       43


<PAGE>



                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


15. FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991 (FDICIA)
    AND FINANCIAL INSTITUTIONS REFORM, RECOVERY AND ENFORCEMENT ACT (FIRREA)
    OF 1989

     FDICIA was signed into law on December 19, 1991.  Regulations  implementing
     the prompt  corrective  action  provisions  of FDICIA  became  effective on
     December  19,   1992.   In  addition  to  the  prompt   corrective   action
     requirements,   FDICIA  includes  significant  changes  to  the  legal  and
     regulatory  environment  for  insured  depository  institutions,  including
     reductions in insurance  coverage for certain kinds of deposits,  increased
     supervision  by  the  federal  regulatory  agencies,   increased  reporting
     requirements  for  insured  institutions,  and new  regulations  concerning
     internal controls, accounting, and operations.

     The prompt corrective action regulations define specific capital categories
     based on an  institution's  capital  ratios.  The  capital  categories,  in
     declining  order,  are  "well   capitalized,"   "adequately   capitalized,"
     "undercapitalized,"   "significantly   undercapitalized,"  and  "critically
     undercapitalized."  Institutions categorized as "undercapitalized" or worse
     are subject to certain  restrictions,  including the  requirement to file a
     capital plan with their  primary  federal  regulator,  prohibitions  on the
     payment  of  dividends  and  management  fees,  restrictions  on  executive
     compensation,  and increased  supervisory  monitoring,  among other things.
     Other  restrictions may be imposed on the institution either by its primary
     federal  regulator,  the  Office of  Thrift  Supervision  (OTS),  or by the
     Federal Deposit Insurance  Corporation  (FDIC),  including  requirements to
     raise additional capital, sell assets, or sell the entire institution. Once
     an institution becomes "critically  undercapitalized," it must generally be
     placed in receivership or conservatorship within 90 days.

     FIRREA  was  signed  into law on August 9, 1989;  regulations  for  savings
     institutions'  minimum capital requirements went into effect on December 7,
     1989. In addition to its capital  requirements,  FIRREA includes provisions
     for changes in the federal regulatory structure for institutions, including
     a new deposit insurance system,  increased deposit insurance premiums,  and
     restricted  investment  activities  with  respect  to  noninvestment  grade
     corporate  debt and certain other  investments.  FIRREA also  increases the
     required ratio of  housing-related  assets in order to qualify as a savings
     institution.

     The regulations require  institutions to have a minimum regulatory tangible
     capital equal to 1.5 percent of adjusted total assets,  a minimum 4 percent
     core/leverage  capital ratio, a minimum 4 percent tier 1 risk-based  ratio,
     and a minimum 8 percent  total  risk-based  capital  ratio to be considered
     "adequately  capitalized."  An  institution  is  deemed  to be  "critically
     undercapitalized"  if it has a tangible  equity ratio of 2 percent or less.
     The ability to include qualifying  supervisory goodwill for purposes of the
     core/leverage  capital requirements was phased out January 1, 1996, and the
     ability to include investments in impermissible activities in core/leverage
     capital and tangible capital was phased out July 1, 1995.

     At  September  30,  1997,  the  Association  was  considered  to  be  "well
     capitalized."

                                       44
<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                                OPELOUSAS, LOUISI
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


15. FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991 (FDICIA) AND
    FINANCIAL INSTITUTIONS REFORM, RECOVERY AND ENFORCEMENT ACT (FIRREA) OF 1989
    (CONTINUED)

     The following table sets out the Associations's  various regulatory capital
     categories at September 30, 1997:
<TABLE>
<CAPTION>

                                     Required      Actual                  Required         Actual
                                      Ratio        Ratio      Excess       $ Amount        $ Amount        Excess
                                      -----        -----      ------       --------        --------        ------
<S>                                   <C>         <C>         <C>        <C>             <C>             <C>       
Tangible capital ................     1.50%        9.20%      7.70%      $  921,275      $5,648,636      $4,727,361
Core capital ....................     3.00%        9.20%      6.20%       1,842,549       5,648,636       3,806,087
Risk based capital ..............     8.00%       17.95%      9.95%       2,682,086       6,016,422       3,334,335
</TABLE>

16. COMMITMENTS AND CONTINGENCIES

     In the ordinary course of business, the Association has various outstanding
     commitments  and  contingent  liabilities  that  are not  reflected  in the
     accompanying  financial  statements.  In the  opinion  of  management,  the
     ultimate  disposition  of these  matters is not expected to have a material
     adverse effect on the financial  statements.  The principal  commitments of
     the Association are as follows:

     At September 30, the Association had the following loan commitments:

                                                   1996                 1997
                                                   ----                 ----
          Variable rate first mortgage loans     $177,800            $477,625
          Fixed rate first mortgage loans         443,700             449,650
                                                  -------             -------
          Total loan commitments                  621,500             927,275
                                                  =======             =======

     The Association does not charge commitment fees.

     Unused  lines-of-credit  amounted to $250,000 and $250,000 at September 30,
     1996 and 1997, respectively.

17. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

     The  Association  is a party to financial  instruments  with off  -balance-
     sheet risk in the normal course of business to meet the financing  needs of
     its customers.  These financial  instruments  include commitments to extend
     credit and standby letters of credit. Those instruments involve, to varying
     degrees, elements of credit risk in excess of the amounts recognized in the
     statement of financial position.  The contract or notional amounts of those
     instruments  reflect  the  extent  of  the  Association's   involvement  in
     particular classes of instruments.

                                       45


<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK (CONTINUED)

     The Association's exposure to credit loss in the event of nonperformance by
     the other  party to the  financial  instrument  for  commitments  to extend
     credit or  standby  letters  of credit is  represented  by the  contractual
     notional amount of those instruments.  The Association uses the same credit
     policies in making  commitments and conditional  obligations as it does for
     on-balance-sheet instruments.


                                                                 Contract or
                                                                Notional Amount
                                                                ---------------
  Financial instruments the contract amounts of
    which represent credit risk:

      Commitments to extend credit.............................     $927,275
                                                                    ========
      Standby letters of credit................................     $250,000
                                                                    ========

     Commitments  to extend credit are  agreements to lend to a customer as long
     as there is no  violation of any  condition  established  in the  contract.
     Commitments  generally  have fixed  expiration  dates or other  termination
     clauses.  Since some of the  commitments  may possibly expire without being
     drawn  upon,  the total  commitment  amounts do not  necessarily  represent
     future  cash  requirements.   The  Association  evaluates  each  customer's
     creditworthiness   on  a  case-by-case  basis.  The  amount  of  collateral
     obtained,  if it is deemed  necessary by the Association  upon extension of
     credit,  is based on management's  credit  evaluation of the  counterparty.
     Collateral   usually  consists  of  a  first  mortgage  on  the  underlying
     properties.

     Standby  letters  of  credit  are  conditional  commitments  issued  by the
     Association  to guarantee the  performance  of a customer to a third party.
     Those  guarantees  are  primarily  issued  to  support  private   borrowing
     arrangements   and  are  secured  by  first  mortgages  on  the  underlying
     properties.  All letters of credit are required to be renewed annually,  if
     applicable.  The  credit  risk  involved  in  issuing  letters of credit is
     essentially  the same as that  involved in  extending  loan  facilities  to
     customers.


                                       46


<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18. OTHER NON-INTEREST INCOME AND EXPENSE

     Other non-interest income and expense amounts are summarized as follows for
     the years ended September 30:


                                                     1995      1996      1997
                                                     ----      ----      ----
Other non-interest income:
   Miscellaneous ..............................   $    722   $  1,362   $  2,225
                                                  ========   ========   ========
Other non-interest expense:
   Expense account of officers, employees,
    and directors .............................   $  4,460   $  6,611   $  9,113
   Food service expense .......................      5,926      5,461      5,448
   Stationery and printing ....................     20,320     22,034     24,821
   Telephone ..................................     12,968     12,521     16,089
   Postage and expres .........................     15,860     15,874     14,209
   Insurance and surety bond premiums .........     27,172     24,038     27,741
   Supervisory examinations ...................     16,658     19,904     23,555
   Organizational dues and subscriptions ......     16,155     15,730     16,842
   Loan expense ...............................        907      2,579     12,975
   Service charges ............................      6,008      7,952     14,891
   Fees and other taxe ........................                16,094     59,217
   Other ......................................      1,331      4,529      5,029
                                                  --------   --------   --------
                                                   127,765    153,327    229,930
                                                  ========   ========   ========

19. CONCENTRATIONS OF CREDIT

     The majority of the  Association's  loans and its standby letters of credit
     have been granted to customers in the  Association's  market area, which is
     primarily St. Landry Parish,  Louisiana. The Parish is largely a rural area
     and  relies  heavily  on  the   agricultural   and  oil   industries.   The
     concentrations of credit by type of loan are set forth in the note on loans
     receivable  presented earlier in this report. The Association,  as a matter
     of policy,  does not extend  credit to any one borrower or group of related
     borrowers in excess of its legal lending limit.


                                       47

<PAGE>

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                                OPELOUSAS, LQUISI
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


20. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

     Selected  quarterly  financial data are presented  below by quarter for the
     years ended September 30, 1996 and 1997.
<TABLE>
<CAPTION>

                                                                 1996
                                      ---------------------------------------------------------
                                      December 31,    March 31,       June 30,    September 30,
                                         1995          1996            1996           1996
                                         ----          ----            ----           ----
<S>                                  <C>            <C>            <C>            <C>        
Total interest income ............   $   976,766    $   995,428    $ 1,024,118    $ 1,019,482

Total interest expense ...........      (535,508)      (543,919)      (560,906)      (582,753)
                                     -----------    -----------    -----------    -----------
       Net interest income .......       441,258        451,509        463,212        436,729
       Provision for loan losses .        20,000          5,000                       189,000
                                     -----------    -----------    -----------    -----------
       Net interest income after
         provision for loan losses       421,258        446,509        463,212        247,729

Total non-interest income ........        10,841          9,487         12,590         13,683
Total non-interest expense .......      (294,742)      (320,697)      (284,812)      (621,386)
       Income before income taxes        137,357        135,299        190,990       (359,974)

Income tax expense ...............        40,000         55,000         73,000       (118,545)
       Net income ................        97,357         80,299        117,990       (241,429)
       Net income per common
         share ...................   $       .23    $       .19    $       .29    $      (.58)
                                     ===========    ===========    ===========    ===========
</TABLE>

                                       48

<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

20. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (CONTINUED)

<TABLE>
<CAPTION>

                                                        1997
                                ------------------------------------------------
                                December 31,  March 31,   June 30, September 30,
                                   1996         1997        1997        1997
                                   ----         ----        ----        ----
<S>                             <C>          <C>          <C>          <C>       
Total interest income .......   $1,038,042   $1,058,454   $1,056,559   $1,109,761
Total interest expense ......      606,487      610,477      641,546      693,800
                                ----------   ----------   ----------   ----------
Net interest income .........      431,555      447,977      415,013      415,961
Provision for loan losses ...                     5,000
                                ----------   ----------   ----------   ----------
   Net interest income after
    provision for loan losses      431,555      442,977      415,013      415,961
Total non-interest income ...       18,923       21,146       24,703       26,914
Total non-interest expense ..      348,126      346,492      275,704      357,524
                                ----------   ----------   ----------   ----------
  Income before income taxes       102,352      117,631      164,012       85,351
Income tax expense ..........       36,000       43,000       68,000       18,958
                                ----------   ----------   ----------   ----------
  Net income ................       66,352       74,631       96,012       66,393
                                ==========   ==========   ==========   ==========
  Net income per common
   share ....................   $      .17   $      .19   $      .25   $      .19
                                ==========   ==========   ==========   ==========
</TABLE>

21. EARNINGS PER SHARE

     Net income per share of the Company's  common stock is computed by dividing
     net  income by the  weighted  average  number  of  shares  of common  stock
     outstanding  during each year. The weighted average number of common shares
     outstanding  excludes the weighted average  unreleased  shares owned by the
     Employee Stock  Ownership  Plan  ("ESOP").  The effect of stock options and
     unvested  Recognition and Retention Plan ("RRP) shares is calculated  using
     the treasury stock method. Application of the treasury stock method did not
     have a material  effect on earnings per share and  therefore  disclosure of
     primary and fully diluted earnings per share is not required.  Earnings per
     share for the year ended September 30, 1995 is not considered meaningful.

     In February 1997, the Financial Accounting Standards Board issued Statement
     No. 128,  "Earnings  Per  Share",  (11SFAS  12811)  which is required to be
     adopted on December 31, 1997. At that time, the Company will be required to
     change  the method  currently  used to  compute  earnings  per share and to
     restate  all prior  periods  Under  the new  requirements  for  calculating
     primary  earnings per share,  the dilutive  effect of stock options will be
     excluded.  The Company  does not believe that the effect of SFAS 128 on the
     calculation of fully diluted earnings per share would be material.


                                       49

<PAGE>

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

22. PLAN OF CONVERSION

     As discussed in Note 1, the Company was formed in December,  1994, pursuant
     to a  plan  of  conversion  adopted  by  the  Board  of  Directors  of  the
     Association on August 25, 1994. Conversion proceeds amounted to $3,027,629,
     net of $351,299 of conversion costs.

     For the purpose of granting  eligible members of the Association a priority
     in the  event  of  future  liquidation,  the  Association,  at the  time of
     conversion,  established a liquidation  account in the amount of $3,744,661
     which  was equal to its  regulatory  capital  as of the date of the  latest
     balance sheet used in the final conversion offering circular.  In the event
     (and  only  in  such  event)  of  future   liquidation   of  the  converted
     Association, an eligible savings account holder who continues to maintain a
     gavings  account  shall be  entitled  to  receive a  distribution  from the
     liquidation  account,  in  the  proportionate  amount  of  the  thencurrent
     adjusted   balance  of  the  savings   deposits   then  held,   before  any
     distributions may be made with respect to capital stock.

     Present  regulations  provide that the Association may not declare or pay a
     cash  dividend  on or  repurchase  any of its  capital  stock if the result
     thereof would be to reduce the regulatory  capital of the Association below
     the amount required for the liquidation  account or the regulatory  capital
     requirement.  Further,  any dividend  declared or paid on or repurchase of,
     the  Association's  capital stock shall be in compliance with the rules and
     regulations  of the  Office  of  Thrift  Supervision,  or other  applicable
     regulations.

23. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

     Condensed financial  information of St. Landry Financial  Corporation is as
     follows:


                             Condensed Balance Sheet
                                  September 30,
                             ------------------------

               Assets                                     1996          1997
               ------                                     ----          ----
   Cash and cash equivalents .....................     $  789,307     $  653,835
   Investment in subsidiary ......................      5,685,008      5,994,471
   Note  receivable - First Federal ..............        235,053        205,671
   Due  from  First  Federal .....................                         5,645
                                                       ----------     ----------
           Total  assets .........................      6,709,368      6,859,622
                                                       ==========     ==========

      Liabilities and Stockholders' Equity
      ------------------------------------
   Liabilities ...................................     $    6,120     $    5,781
   Stockholders' Equity ..........................      6,703,248      6,853,841
                                                       ----------     ----------
      Total liabilities and stockholders' equity .      6,709,368      6,859,622
                                                       ==========     ==========


                                       50


<PAGE>



                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

23. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (CONTINUED)

                          Condensed Statement of Income
                          -----------------------------

                                                         1996           1997
                                                         ----           ----
Interest income
  Interest on savings account ....................   $    39,198    $    19,141
  Interest on ESOP loan ..........................        20,507         18,279
                                                     -----------    -----------
      Total interest income ......................        59,705         37,420
Expenses .........................................        52,325         45,618
                                                     -----------    -----------
 Income (Loss) Before Income Tax and Undistributed
  Earninzs of Subsidiary .........................         7,380         (8,198)
 Income Tax Expense ..............................         2,509         (2,787)
                                                     -----------    -----------
 Income (Loss) Before Undistributed Earnings of
  Subsidiary .....................................         4,871         (5,411)
 Undistributed Earnings of Subsidiary ............        49,346        308,799
                                                     -----------    -----------
     Net income ..................................        54,217        303,388
                                                     ===========    ===========

                        Condensed Statement of Cash Flows
                        ---------------------------------

Cash Flows from Operating Activities
 Net income ......................................   $    54,217    $   303,388
 Adjustments to reconcile net income to net
  cash provided by operating activities:
    Undistributed earnings of subsidiary .........       (49,346)      (308,799)
   (Increase) decrease in accrued interest
      receivable - First Federal .................        11,268
   (Increase) decrease in due from First Federal .            --         (5,645)
   Increase (decrease) in due to First Federal ...        (4,044)        (1,846)
   Increase (decrease) in other liabilities ......            --          1,508
                                                     -----------    -----------
     Net cash provided (used) by operating
       activities ................................        12,095        (11,394)
                                                     -----------    -----------
Cash Flows from Investing Activities
 ESOP loan (origination) repayment ...............        58,764         29,382
                                                     -----------    -----------
     Net cash provided by investing activities ...        58,764         29,382
                                                     -----------    -----------
Cash Flows from Financing Activities
 Net proceeds from sale of RRP stock to subsidiary                      291,153
 Dividend paid ...................................       (21,919)       (37,975)
 Purchase of treasury stock ......................      (641,714)      (406,638)
                                                     -----------    -----------
     Net cash (used) by financing activities .....      (663,633)      (153,460)
                                                     -----------    -----------
     Net increase (decrease) in cash and
      cash equivalents ...........................      (592,774)      (135,472)
     Cash and cash equivalents at beginning of
      period .....................................     1,382,081        789,307
                                                     -----------    -----------
     Cash and cash equivalents at end of Period ..       789,307        653,835
                                                     ===========    ===========


                                       51

<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


23. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (CONTINUED)


                  Condensed Statement of Cash Flows (Continued)
                  ---------------------------------------------
                                                             1996         1997
                                                             ----         ----
Supplemental Schedule of Income Taxes Paid
 Income taxes paid ...................................     $  8,386     $  2,508
                                                           ========     ========
Supplemental Schedule of Noncash Investing and
 Financing Activities
 Retirement of treasury stock to be used for
  recognition and retention plan .....................     $291,153
                                                           ========
 Stock issued for recognition and retention plan .....     $291,153
                                                           ========
 Allocation of unearned ESOP shares at fair value ....     $ 53,892     $ 64,380
                                                           ========     ========
 Allocation of unearned RRP shares ...................                  $ 53,201
                                                                        ========
 Total increase in unrealized gain (loss) on
  available-for-sale securities ......................     $130,145     $263,995
                                                           ========     ========


                                       52
<PAGE>


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

24. FAIR VALUES OF FINANCIAL INSTRUMENTS

     The estimated  fair values of the Company's  financial  instruments  are as
     follows:
<TABLE>
<CAPTION>

                                              September 30, 1996                       September 30, 1997
                                        -------------------------------          ---------------------------------
                                           Carrying              Fair              Carrying                Fair
                                            Amount               Value              Amount                 Value
                                            ------               -----              ------                 -----
Financial assets:
<S>                                     <C>                  <C>                  <C>                  <C>        
Cash and cash equivalents ..........    $   385,363          $   385,363          $   780,554          $   780,554
Investment securities
 Held-to-maturity ..................        989,595              989,450              993,483              994,875
 Available-for-sale ................      1,773,450            1,773,450            1,952,316            1,952,316

Mortgage-backed securities
 Held-to-maturity ..................      2,854,260            2,787,272            1,607,964            1,573,271
 Available-for-sale ................      9,484,872            9,484,872           12,505,148           12,505,148
Loans receivable, net ..............     39,856,672           39,326,909           42,192,721           43,156,000

Accrued interest receivable ........        264,365              264,365              309,728              309,728

Financial liabilities:

 Deposits ..........................     41,985,962           42,252,383           43,577,912           43,719,000
 Borrowed funds ....................      7,561,322            7,524,383           10,825,154           10,840,000
 Advances by borrowers for
  taxes and insurance ..............         92,468               92,468               84,727               84,727
 Accrued interest payable ..........         52,883               52,883               78,727               78,727

</TABLE>

     The carrying  amounts in the preceding  table are included in the statement
     of  financial  condition  under the  applicable  captions.  The contract or
     notional   amounts  of  the   Association's   financial   instruments  with
     off-balance-sheet  risk are disclosed in Note 16. It is not  practicable to
     estimate the fair value of Federal  Home Loan Bank (FHLB) stock  because it
     is not  marketable.  The carrying  amount of that investment is reported in
     the consolidated statements of financial condition.


                                       53


<PAGE>
                             STOCKHOLDER INFORMATION

Corporate Office                                                  

459  East  Landry  Street  
Opelousas,  Louisiana 70570
(318) 942-5748 

Annual Meeting

The  Annual  Meeting  of  Stockholders  will be held  at 1:30  p.m.,  Opelousas,
Louisiana time on January 27, 1998, at the Company's  office located at 459 East
Landry Street, Opelousas, Louisiana.

Annual Report on Form 10-KSB                   

A copy of St.  Landry  Financial  Corporation's  Annual Report on Form 10-KSB as
filed with the Securities and Exchange Commission may be obtained without charge
upon written request to H. Andrew Myers, Jr., St. Landry Financial  Corporation,
459 East Landry Street, Opelousas, Louisiana 70570.

Registrar/Transfer Agent
                                           
Communications  regarding  change  of  address,   transfer  of  stock  and  lost
certificates should be sent to:
                                                    
American Securities Transfer, Incorporated 
1825 Lawrence Street 
Denver, Colorado  80202

Local Counsel                                                         

Young, Hoychick and Aguillard                                         
P.O. Box 341                                                          
Eunice, Louisiana  70535                                              

Morgan J. Goudeau, III                                                
A Professional Law Corporation                                        
P.O. Box 1419                                                         
Opelousas, Louisiana 70571                                            

Special Counsel                             
                                             
Silver,  Freedman & Taff, L.L.P.  
1100 New York Avenue,  N.W.  
Washington,  D.C.  20005

Accountants

John S. Dowling & Company 
Interstate-49 South 
P.O. Box 433 
Opelousas,  Louisiana  70571
                                                
Common Stock

There is no established  market in which the Company's Common Stock is regularly
traded,  nor any uniformly quoted price for such shares.  At September 30, 1997,
the Company had 132 holders of record of its Common Stock.

Dividends

The Company paid two cash  dividends of $.05 per share,  on June 24 and July 28,
1997 to  stockholders  as of March 15 and June 30, 1997.  The Board of Directors
may consider the payment of future cash  dividends,  dependent on the results of
operations and financial condition of the Company, tax considerations,  industry
standards,  economic  conditions,  general business practices and other factors.
The Company's  ability to pay dividends is dependent on the dividend payments it
receives from its  subsidiary,  First Federal  Savings and Loan  Association  of
Opelousas,  which are subject to  regulations  and the  Association's  continued
compliance with all regulatory capital requirements.

                                       54

<PAGE>

                        ST. LANDRY FINANCIAL CORPORATION
                                       and
                   FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION

      Directors

Wayne McKinnon Gilmore
Chairman of the Board,
President and Chief Execu-
tive Officer of the Company
and the Association

H. Andrew Myers, Jr.
Executive Vice President
of the Company and
the Association

H. Kent Aguillard
Partner, law firm

Anna Lee O. Dunbar
Retired from the
Association

Lynette Young Feucht
City Court Judge

Patrick Fontenot
Executive Vice President,
Williams-Progressive Life
Insurance Co.

Simon Howard Fournier
Employed by St. Landry
Parish Assessor's Office

Morgan J. Goudeau, III
District Attorney

Martin A. Roy, Jr.
President, Roy Motors

Marvin J. Schwartzenburg
Administrator, Bayun Vista Manor

Randy C. Tomlinson
President, Magic Wand South

Robert L. Wolfe, Jr.
President, Morgan Goudeau & Associates, Inc., 
a civil engineering corporation

         Executive Officers

Wayne McKinnon Gilmore
Chairman of the Board, President and Chief
Executive Officer

H. Andrew Myers, Jr.
Executive Vice President

Jutta A. Codori
Controller


                                       55