ST. LANDRY
                              FINANCIAL CORPORATION


























                               Annual Report 1996


<PAGE>



                        St. Landry Financial Corporation


         TABLE OF CONTENTS

Letter to Stockholders.........................................1

Selected Financial Information.................................2

Management's Discussion and Analysis...........................4

Independent Auditors' Report..................................16

Consolidated Financial Statements.............................17

Stockholder Information.......................................49

Board of Directors and Executive Officers.....................50






                              FINANCIAL HIGHLIGHTS

                               September 30, 1996
                             (Dollars in Thousands)

                Total Loans...........................................   $39,857
                Mortgage-Backed Securities............................    12,339
                Investment Securities.................................     2,763
                  Total Assets........................................    56,857

                Deposits..............................................    41,986
                Borrowings............................................     7,561

                Net Income............................................        54

                Stockholders' Equity..................................     6,703
                Stockholders' Equity as a Percent of
                Assets.............................................        11.8%




<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,  (Company) for the fiscal year ending September 30, 1996. 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
(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.  This year has been very good in  accomplishing
these two goals.

          The Company  continues to look for sound  investments that will enable
it to grow and  prosper.  This  year we have  opened a couple  of  avenues  that
promise to enhance  our  growth.  Your Board and  Management  are  committed  to
continuing to build stockholder value.

          Net  income  for the year  was only  $54,217  because  of the  special
assessment  imposed on the  savings  and loan  industry by Congress to bring the
Savings  Association  Insurance  Fund  up to  strength.  This  was  a  one  time
assessment  and will greatly  reduce our  expenses for deposit  insurance in the
future.

          The  Association  increased  the  reserve  for loan  losses  primarily
because of some automobile  loans which the Association  purchased.  We were not
satisfied  with the  performance  of the servicer of these loans and have made a
change to another  servicer  who has more  experience  in the field of auto loan
servicing.

          The  Association  is  continuing  to strive to improve  non-performing
loans. At this time the  Association has three pieces of real estate owned.  Two
of these pieces are  residences  and the third is a small  commercial  property.
These  properties are rented with the expectation that the renters will purchase
them.

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

Sincerely,



Wayne McK. Gilmore
Chairman of the Board

                                        1

<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,
                                                  ----------------------------------------------------------
                                                  1992          1993         1994          1995         1996
                                                  ----          ----         ----          ----         ----
                                                                        (In Thousands)
<S>                                              <C>          <C>          <C>            <C>         <C>
Selected Financial Condition Data:
Total assets...............................      $47,900       $48,102      $47,812       $53,206      $56,857
Loans receivable, net......................       35,353        32,244       33,303        37,356       39,857
Mortgage-backed securities.................       10,753        10,586       10,186        11,246       12,339
Investment securities......................        1,377         3,385        3,305         3,562        2,763
Deposits...................................       43,522        43,139       42,770        43,143       41,986
Total borrowings...........................        1,000         1,200        1,052         2,538        7,561
Stockholders' equity.......................        2,870         3,456        3,745         7,173        6,703
</TABLE>

<TABLE>
<CAPTION>


                                                                Year Ended September 30,
                                                  ----------------------------------------------------------
                                                  1992            1993       1994           1995        1996
                                                  ----            ----       ----           ----        ----
                                                                        (In Thousands)
<S>                                              <C>         <C>         <C>             <C>            <C>
Selected Operations Data:
Total interest income......................       $4,082      $  3,560     $  3,182        $3,401       $4,016
Total interest expense.....................        2,310         1,700        1,642         1,897        2,223
                                                 -------      --------     --------       -------      -------
Net interest income........................        1,772         1,860        1,541         1,504        1,793
Provision for loan losses..................           41            58          100            40          214
                                                --------     ---------     --------      --------     --------
Net interest income after provision
 for loan losses...........................        1,731         1,802        1,441         1,464        1,579

Service charges and other fees.............           11            20           25            24           23
Gain on sales of loans, mortgage-
 backed securities and investment
 securities................................          ---           ---          ---           ---          ---
Other non-interest income..................           33            25           18            23           24
                                                --------     ---------   ----------      --------     --------
Total non-interest income..................           44            45           43            47           47
Total non-interest expense.................        1,026           973        1,010        1,085        1,522
                                                 -------      --------    ---------      --------     -------
Income before taxes and extraordinary
 item......................................          749           874          474           426          104
Income tax provision (benefit).............          273           288          185           153           50
                                                 -------     ---------    ---------      --------     --------
     Net income............................      $   476      $    586    $     289      $    273      $    54
                                                 =======      ========    =========      ========      =======
</TABLE>


                                        2

<PAGE>

<TABLE>
<CAPTION>



                                                                Year Ended September 30,
                                                     -----------------------------------------------------------
                                                      1992          1993         1994         1995         1996
                                                      ----          ----         ----         ----         ----
<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)................            1.00%         1.22%         .60%         .54%         .10%
  Return on equity (ratio of net
   income to average equity)...............           18.09         18.52         8.02         5.00          .78
  Interest rate spread information:
   Average during period...................            3.58          3.80         3.05         2.57         2.74
   End of period...........................            4.16          3.52         2.80         2.63         2.58
  Net interest margin(1)...................            3.82          3.97         3.28         3.04         3.33
  Ratio of operating expense to average
   total assets............................            2.15          2.03         2.11         2.15         2.77
  Ratio of average interest-earning
   assets to average interest-bearing                103.28        105.54       106.86       109.93       111.17
   liabilities.............................

Asset Quality Ratios:
 Non-performing assets to total assets
  at end of period.........................            2.56          1.38         1.32         1.23         1.64
 Allowance for loan losses to non-
  performing loans.........................           18.80         38.63        55.78        59.30        62.20
 Allowance for loan losses to loans
  receivable, net..........................             .69           .80         1.05         1.04         1.46

Capital Ratios:
 Equity to total assets at end of period...           5.99          7.18         7.83         13.48        11.79
 Average equity to average assets..........           5.52          6.59         7.51         10.81        12.61

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

--------------
(1)  Net interest income divided by average interest-earning assets.
</FN>
</TABLE>




                                        3

<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.

Financial Condition

          The Company's total assets were $53.2 million at September 30, 1995 as
compared to $56.8  million at September  30, 1996.  The increase of $3.6 million
was  primarily  due to an  increase  in  loans  receivable  and  mortgage-backed
securities.  Also,  borrowings from the Federal Home Loan Bank were used to fund
loan originations and purchases of adjustable rate mortgage-backed securities.

          Net loans  receivable  increased by $2.4  million to $39.9  million at
September 30, 1996 from $37.3  million at September  30, 1995.  The increase was
due to an increase in originations,  the majority of which with adjustable rates
of  interest,  and a decrease in  principal  repayments.  Federal Home Loan Bank
advances   were  used  to   supplement   funding   of  the  loan   originations.
Non-performing  assets  increased  to  $933,000  or  1.64% of  total  assets  at
September  30, 1996,  from  $656,000 or 1.23% of total  assets at September  30,
1995. The increase was a result of a $202,000  increase in  non-accruing  loans,
and an increase of $75,000 in  foreclosed  assets.  At September  30, 1996,  the
Company had 20 one-to  four-family  loans,  14 automobile and one unsecured loan
which were in a non-accruing status.

          Total investments decreased by $355,000 from $3.6 million at September
30,  1995  to  $3.2  million  at  September  30,  1996.  An  unrealized  gain on
available-for-sale  investment  securities  increased by $110,000 from September
30, 1995 to September  30, 1996.  The  unrealized  gain in stock in Federal Home
Loan  Mortgage  Corporation  ("FHLMC") of $363,000,  was  partially  offset by a
$5,000  unrealized  loss in equity  securities.  The  decrease was caused by the
maturity  of  $500,000  in  debt  securities,   partially  offset  by  a  $3,000
acquisition of stock

                                        4

<PAGE>



in the Federal  Home Loan Bank of Dallas and a $4,000  amortization  of premiums
paid on investment securities.

          The   Company   also   experienced   a  $1.1   million   increase   in
mortgage-backed securities during fiscal 1996. Mortgage-backed securities in the
amount of $3.7 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.  The unrealized loss
on available for sale securities decreased by $19,000 from September 30, 1995 to
September 30, 1996.

          Deposits  decreased  by  $1.1  million  from  September  30,  1995  to
September 30, 1996, a decrease of 2.68%.

          Federal Home Loan Bank advances  increased by $5.0 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 decreased by $469,000 from $7.2 million at
September 30, 1995 to $6.7 million at September 30, 1996.  Stockholder's  equity
decreased by $351,000  because of the repurchase of Company stock which was used
to fund the Company's Recognition and Retention Plan, by $291,000 because of the
unearned  compensation  expense  due to the  adoption  of  the  Recognition  and
Retention  Plan, and by the payment of a cash dividend in the amount of $22,000.
The decrease in  stockholders'  equity was partially  offset by an after-tax net
unrealized gain on investment  securities available for sale and mortgage-backed
securities  available for sale in accordance with the implementation of SFAS No.
115, a  reduction  in the ESOP loan  through  loan  payments  and an increase in
retained earnings.

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, 1996 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

                                        5

<PAGE>



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,  1996,  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.


                               September 30, 1996
                               ------------------
     Change in
   Interest Rate           $ Change            % Change
   (Basis Points)           in NPV              in NPV
-------------------- -------------------- ------------------
                   (Dollars in Thousands)

      +300               -3,304               -33%
      +200               -2,247               -19%
      +100               -1,297                -8%
       -0-
      -100                  262                +4%
      -200                  261                +4%
      -300                  388                +6%

          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 $39.9 million at September 30, 1996, an increase of 12.7%.
During  1994,  the Company  expanded  its  consumer  loan  portfolio  to service
existing  customers.  During 1996, 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

                                        6

<PAGE>



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, 1995,  the
Company also  increased  its  mortgage-backed  securities  from $10.8 million to
$12.3 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-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.



                                        7

<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 (as they
have since the last quarter of fiscal 1994),  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,
                                     --------------------------------------------------------------------------------------------
                                                    1994                           1995                           1996
                                     -----------------------------  -----------------------------  ------------------------------
                                        Average   Interest            Average    Interest            Average    Interest
                                     Outstanding   Earned/  Yield/  Outstanding   Earned/  Yield/  Outstanding   Earned/   Yield/
                                       Balance      Paid    Rate      Balance      Paid     Rate     Balance      Paid      Rate
                                       -------      ----    ----      -------      ----     ----     -------      ----      ----
                                                                        (Dollars in Thousands)
<S>                                    <C>        <C>       <C>      <C>        <C>        <C>      <C>         <C>        <C>
Interest-Earning Assets:
 Loans receivable(1) ................   $32,196    $2,402    7.46     $35,970    $ 2,599    7.23     $39,186     $3,088     7.88%
Mortgage-backed securities ..........    10,295       585    5.68       9,947        597    6.00      11,774        738     6.26
 Investment securities ..............     4,017       179    4.46       3,075        180    5.85       2,787        164     5.88
 FHLB stock .........................       385        16    4.16         413         26    6.30         444         26     5.86
                                        -------    ------             -------    -------             -------      -----
  Total interest-earning assets(1) ..   $46,893     3,182    6.79     $49,405      3,402    6.89     $54,191      4,016     7.41
                                        =======    ------             =======    -------             =======      -----     

Interest-Bearing Liabilities:
 Savings deposits ...................   $12,517       368    2.94     $12,982        427    3.04     $11,596        267     2.30
 Certificate accounts ...............    30,735     1,247    4.06      30,363      1,375    4.53      31,052      1,698     5.46
 Borrowings .........................       631        27    4.28       1,591         95    5.97       4,809        258     5.36
                                        -------   -------             -------     ------             -------      -----
  Total interest-bearing liabilities    $43,883     1,642    3.74     $44,936      1,897    4.22     $47,457      2,223     4.68
                                        =======   -------             =======     ------              ======      -----
Net interest income .................             $ 1,540                         $1,505                         $1,793  

                                                  =======                         ======                         ======  
Net interest rate spread ............                        3.05%                          2.67%                           2.73%
                                                             ====                           ====                            ====
Net earning assets ..................   $ 3,010                        $4,469                        $ 6,734
                                        =======                        ======                        =======
Net yield on average interest-earning
 assets .............................                        3.28%                          3.05%                           3.53%
                                                             ====                           ====                            ====
Average interest-earning assets to
 average interest-bearing liabilities              106.86x                         109.95x                        111.21x
                                                   =======                         ======                         =======
<FN>
-----------------
(1)     Calculated net of deferred loan fees, loan  discounts,  loans in process
        and loss reserves.
</FN>
</TABLE>


                                        8

<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,
                                         ----------------------------------------------------------------------------
                                                    1994 vs. 1995                             1995 vs. 1996
                                         -----------------------------------      -----------------------------------
                                                Increase                               Increase
                                               (Decrease)                             (Decrease)
                                                 Due to             Total               Due to                Total
                                          -------------------      Increase        ------------------        Increase
                                          Volume         Rate     (Decrease)       Volume        Rate       (Decrease)
                                          ------         ----     ----------       ------        ----       ----------
                                                                      (Dollars in Thousands)
<S>                                    <C>          <C>           <C>           <C>          <C>           <C>
Interest-earning assets:
 Loans receivable...................    $     261    $     (64)    $     197     $     246    $     243     $     489
 Mortgage-backed securities.........            9            2            11           146           (5)          141
 Investment securities..............          ---            2             2           (15)          (2)          (17)
 Other..............................            1            8             9             2          ---             2
                                      -----------    ----------   ----------   -----------   ----------    ----------

  Total interest-earning
   assets...........................    $     271    $     (52)          219     $     379    $     236           615
                                        =========    =========     ---------     =========    =========     ---------

Interest-bearing liabilities:
 Savings deposits...................   $      (16)    $     (2)          (18)    $     (80)    $    ---           (80)
 Borrowings.........................           52           16            68           173          (10)          163
 Certificate accounts...............           27          178           205           114          129           243
                                        ---------      --------    ---------     ---------     --------     ---------

   Total interest-bearing
    liabilities.....................    $      63      $   192           255     $     207     $    119           326
                                        =========      ========    ---------     =========     ========     ---------

Net interest income.................                              $      (36)                               $     289
                                                                   =========                                =========

</TABLE>


                                        9

<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,
                                                         ----------------
                                                      1994      1995      1996
                                                      ----      ----      ----
Weighted average yield on:
 Loans receivable ................................    7.15%     7.26%     7.94%
 Mortgage-backed securities ......................    5.82      6.09      6.64
 Investment securities ...........................    4.92      5.25      5.23
 Other interest-earning assets ...................    4.84      5.94      5.82
   Combined weighted average yield on
    interest-earning assets ......................    6.70      7.22      7.58


Weighted average rate paid on:
 Savings deposits ................................    3.04      3.04      3.04
 Certificate accounts ............................    4.22      4.80      5.27
 Borrowings ......................................    5.04      6.06      5.73
   Combined weighted average rate paid on
    interest-bearing liabilities .................    3.90      4.60      4.85

Spread ...........................................    2.80      2.63      2.73


Comparison of Operating Results For The Three Years Ended September 30, 1995

         General.  The Company had net income totalling  $289,000,  $273,000 and
$54,000,  respectively,  for the years ended  September 30, 1994, 1995 and 1996.
Net income for the year ended  September 30, 1995  declined  $16,000 from fiscal
1994. The decline in fiscal year 1995 was primarily the result of the decline in
net  interest  income of $36,000 and the  increase in  non-interest  expenses of
$75,000,  which were partially offset by the reduction in the provision for loan
losses of  $60,000,  the  decline in income tax  expenses  of  $32,000,  and the
increase in non-interest income of $4,000.

         Net income for the year ended  September  30, 1996  decreased  $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 $288,000 and decreased
income tax expense of $104,000.

         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,  1995,  the  Company  experienced  a decrease  in net
interest income of $36,000,  or 2.4%. Net interest income  increased  during the
year ended September 30, 1996 by $288,000 or 19%.

         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.


                                       10

<PAGE>



         The  Company's  ability to attract  and  retain  deposits  has been and
continues  to be  significantly  affected  by the rates  paid on such  deposits.
Although  management  believes  the rates paid on such  deposits  are  currently
competitive  with the rates paid on similar  products offered by institutions in
the  Company's  market area,  total  deposits  decreased  from $43.1  million at
September 30, 1995 to $42.0 million at September 30, 1996. 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 $4.0  million  for the  fiscal  year ended
September 30, 1996.  This was an increase of $615,000 or 18.1% over the previous
year.  The  increase  in interest  income was a direct  result of an increase in
interest-earning  assets for the year ended  September 30, 1995. In  conjunction
with the increase in interest income,  however,  interest expense also inclined.
Interest  expense  increased by $326,000 for the year ended  September  30, 1996
from the prior year. Average interest-bearing liabilities increased for the year
ended  September  30, 1996 in order to  partially  fund the  increase in assets.
Federal Home Loan Bank advances  increased,  and these borrowings were generally
at higher rates of interest than deposit accounts.

         The Company's vulnerability to rising interest rates can be seen in its
historical  performance.  For the fiscal year 1996, the Company's  interest rate
spread showed a moderate  inclination  and its interest  margin  widened to 3.5%
during the 1996 fiscal year because the Company's  yield on assets inclined at a
faster pace than its cost of funds.  Interest  margins fell for the fiscal years
ended  September  30, 1994 and 1995.  During  these  periods of rising rates the
yields on assets were  declining  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.

         Allowance  for Loan  Losses.  For the fiscal year ended  September  30,
1995, the Company recorded a provision for loan losses of $40,000 as compared to
$100,000 for fiscal 1994.  At September 30, 1995,  the  Company's  allowance for
loan losses totaled $580,000. A provision for loan loss of $214,000 was recorded
for the fiscal year ended  September  30,  1996.  At  September  30,  1996,  the
Company's  allowance  for loan  losses  was  1.44% of total  loans  and 69.6% of
non-performing assets as compared to 1.04% and 59.3%, respectively, at September
30,  1995 and to 1.03% and 55.7%,  respectively,  at  September  30,  1994.  The
Company's ratio of net charge-offs to average loans outstanding during the years
ended  September  30,  1994,  1995  and  1996  were  0.02%,   0.01%  and  0.00%,
respectively and its ratio of net charge-offs to average  non-performing  assets
during the same periods were 1.05%, 0.16% and 2.89%, respectively.  Although net
charge-offs  have  increased  from  $2,000 at  September  30, 1995 to $23,000 at
September  30,  1996,  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.

         The increase in the allowance from fiscal 1995 to fiscal 1996 reflects,
among other  things,  the 67% increase in the Company's  commercial  real estate
portfolio,  the 84%  increase in  consumer  loans  (predominantly  loans on used
automobiles  purchased  from a loan broker which  initially  retained  servicing
rights) and the 7% 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

                                       11

<PAGE>



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
$47,000 for the fiscal year ended September 30, 1996, as compared to $47,000 for
fiscal  1995 and $43,000  for fiscal  1994.  The totals for all three years were
comparable  due to the  limited  amount of  service  the  Company  provides  its
customer  base.  As a result,  the  Company's  ability to increase  non-interest
income in the future may be limited.

         Non-Interest Expense. Non-interest expense totaled $1.5 million for the
fiscal year ended September 30, 1996 as compared to  approximately  $1.1 million
for each of the fiscal years ended  September 30, 1995 and 1994.  This $436,000,
or 40%, increase 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,  is designed to recapitalize
the SAIF 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
establishment of the Company's  Recognition and Retention Plan, normal increases
in salaries in recent periods and increases in directors fees.

         Provision  for Income Taxes.  The Company's  income tax expense for the
fiscal year ended September 30, 1996 was $49,000 as compared to $153,000 for the
previous  year end, and  $185,000  for fiscal  1994.  The decrease in taxes from
fiscal 1994 to fiscal  1995,  and from fiscal 1995 to fiscal 1996 was the result
of the decrease in pre-tax  income.  Pre-tax  income was $474,000,  $426,000 and
$103,000 for the years ended September 30, 1994, 1995 and 1996, 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.

         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 is  currently 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, 1996, 1995 and 1994,
liquidity eligible assets totalled $3.6 million,  $4.8 million and $5.4 million,
respectively. At those same

                                       12

<PAGE>



dates,  the   Association's   liquidity  ratios  were  6.5%,  10.6%  and  13.4%,
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,  1996,  the  Company  had
outstanding  commitments  to  extend  credit  which  amounted  to $1.3  million.
Management  believes  that loan  repayments  and other  sources of funds will be
adequate to meet the Company's foreseeable liquidity needs.

         At September 30, 1996, the Company had $14.0 million in certificates of
deposit due within one year and $13.7 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,  1996,  1995 and 1994,  the
Company originated loans totalling $8.7 million,  $9.4 million and $8.1 million,
respectively.  During those same periods,  the Company purchased  investment and
mortgage-backed  securities  totalling  $3.3  million,  $3.0  million  and  $4.0
million,  respectively.  These  activities  were funded  primarily  by deposits,
principal  repayments on loans and investments and  mortgage-backed  securities.
The Company decreased its purchases of mortgage-backed  securities as 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.


                                       13

<PAGE>



         At September 30, 1996, 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, 1996.


                                                     At September 30, 1996
                                                     ---------------------
                                                      Amount        Percent(1)
                                                      ------        ----------
                                                     (Dollars in Thousands)
                                                           (Unaudited)
Tangible Capital:
   Capital level ...............................     $5,513          9.73%
   Requirement .................................        850          1.50
                                                     ------          -----
   Excess ......................................     $4,663          8.23%
                                                     ======          =====

Core Capital:
   Capital level ...............................     $5,513          9.73%
   Requirement .................................      1,701          3.00
                                                     ------          -----
   Excess ......................................     $3,812          6.73%
                                                     ======          =====

Current Risk-Based Capital:
   Capital level ...............................     $5,860         19.14%
   Requirement .................................      2,449          8.00
                                                     ------          -----
   Excess ......................................     $3,411         11.14%
                                                     ======          =====
-----------------
(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 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 intends to adopt SFAS 122, in the
fiscal year beginning October 1, 1996, however, since the Company has

                                       14

<PAGE>



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, 1997.

          In  June  1996,  the  Financial   Accounting  Standards  Board  issued
Statement of Financial Accounting Standards No.125, "Accounting For Transfers of
Assets"  (SFAS  125).  SFAS  125   establishes   guidelines  on  accounting  for
transactions such as loan syndications, repurchase agreements,  securitizations,
repurchase agreements, securitizations and other similar transactions. The focus
of SFAS 125 is whether  companies  should record such  transactions  as sales or
collateralized  financing arrangements.  Based on an initial reading of SFAS 125
and an analysis of the Company's recurring asset transfer transactions,  it does
not appear that  adoption of SFAS 125,  beginning  October 1, 1996,  will have a
material effect on its financial statements or operating activities.


                                       15

<PAGE>


                                                                               


                          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, 1995 and 1996, and the
related consolidated statements of income, retained earnings, and cash flows for
each of the three years in the period ended September 30, 1996.  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, 1995 and 1996, and the results of
their  operations and their cash flows for each of the three years in the period
ended  September 30, 1996,  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 13, 1996



<PAGE>



                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                           SEPTEMBER 30, 1995 AND 1996




          ASSETS                                           1995          1996
          ------                                           ----          ----
Cash and equivalents                                     $140,139   $   385,363

Investment securities
 Securities held-to-maturity, (fair value
  of $1,476,650 in 1995 and $989,450 in 1996)           1,485,983       989,595
 Securities available-for-sale, at fair value           1,662,984     1,773,450

Mortgage-backed securities
 Securities held-to-maturity (fair value of
  $3,870,925 in 1995 and $2,787,272 in 1996)            3,895,944     2,854,260
 Securities available-for-sale, at fair value           7,349,837     9,484,872

Loans receivable, net                                  37,355,664    39,856,672

Accrued interest receivable                               251,981       264,365

Foreclosed real estate, net                                42,997        97,827

Premises and equipment, net                               525,534       605,178

Investment required by law - Stock in Federal
 Home Loan Bank, at cost                                  413,300       444,300

Other assets                                               81,894       100,774
                                                        ---------    ----------

          Total assets                                 53,206,257    56,856,656
                                                       ==========    ==========


See accompanying notes to financial statements.


<PAGE>


                                                                              


    LIABILITIES AND STOCKHOLDERS' EQUITY                 1995            1996

Deposits                                           $43,142,857      $41,985,963

Borrowed funds                                       2,537,938        7,561,322

Advances by borrowers for taxes and insurance          106,822           92,468

Federal income taxes
  Currently payable
  Deferred payable                                      68,694           37,127

Accrued expenses and other liabilities                 177,070          476,528
                                                    ----------        ---------
          Total liabilities                         46,033,381       50,153,408
                                                    ----------       ----------
    STOCKHOLDERS' EQUITY

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

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

Additional paid in capital                           3,329,657        3,347,621

Treasury stock                                                         (350,561)

Unearned ESOP shares                                  (264,552)        (228,624)

Unearned RRP shares                                                    (291,153)

Retained earnings, substantially restricted          4,017,478        4,049,776

Unrealized gain on securities available-for-sale
 net of applicable deferred income taxes                85,702          171,598
                                                     ---------        ----------
          Total stockholders' equity                 7,172,876        6,703,248
                                                     ---------        ----------

          Total liabilities and stockholders'
           equity                                   53,206,257       56,856,656
                                                    ==========       ===========



<PAGE>


                                                                            


                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                        CONSOLIDATED STATEMENTS OF INCOME
                  YEARS ENDED SEPTEMBER 30, 1994, 1995 AND 1996


                                           1994           1995           1996
                                           ----           ----           ----
INTEREST INCOME
  Loans receivable
    First mortgage loans               $ 2,367,956    $ 2,556,966    $ 2,946,211
    Savings account loans                   32,632         30,930         41,996
    Consumer loans                           1,116         10,643         99,796
  Investment securities                    195,639        205,679        190,065
  Mortgage-backed securities               585,111        596,801        737,726
                                       -----------    -----------    -----------
          Total interest income          3,182,454      3,401,019      4,015,794
                                       -----------    -----------    -----------
INTEREST EXPENSE
  Deposits                               1,614,930      1,801,810      1,964,963
  Borrowed funds                            26,938         94,963        258,123
                                       -----------    -----------    -----------
          Total interest expense         1,641,868      1,896,773      2,223,086
                                       -----------    -----------    -----------
          Net interest income            1,540,586      1,504,246      1,792,708
                                                                     -----------
PROVISION FOR LOAN LOSSES                  100,000         40,000        214,000
                                       -----------    -----------    -----------

          Net interest income after
           provision for loan losses     1,440,586      1,464,246      1,578,708
                                       -----------    -----------    -----------

NON-INTEREST INCOME
  Service charges and other fees            25,313         23,847         23,253
  Insurance commissions                     17,728         22,920         21,986
  Other                                        418            722          1,362
                                       -----------    -----------    -----------
          Total non-interest income         43,459         47,489         46,601
                                       -----------    -----------    -----------

NON-INTEREST EXPENSE
  General and administrative
    Compensation and benefits             557,042        655,165        724,526
    Occupancy and equipment               117,710        120,585        123,883
    Marketing and other services           78,114         77,603        118,208
    Deposit insurance premium             102,001         99,547        395,241
    Net loss (gain) on foreclosed
     real estate                           (2,338)        (2,739)        (2,595)
    Real estate owned expense              26,232          7,670          9,047
    Other                                 131,591        127,765        153,327
                                       -----------    -----------    -----------
          Total non-interest expense    1,010,352      1,085,596      1,521,637
                                       -----------    -----------    -----------
          Income before income taxes      473,693        426,139        103,672

INCOME TAX EXPENSE                        185,104        153,322         49,455
                                      -----------    -----------    -----------
NET INCOME                                288,589        272,817         54,217
                                      ===========    ===========    ===========
NET INCOME PER COMMON SHARE                                               $ .13
                                                                            ====

See accompanying notes to financial statements.


<PAGE>

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  YEARS ENDED SEPTEMBER 30, 1994, 1995 AND 1996


<TABLE>
<CAPTION>
                                                                                    UNREALIZED GAIN (LOSS)
                                            ADDITIONAL UNEARNED UNEARNED           ON SECURITIES AVAILABLE-                TOTAL
                           COMMON PREFERRED  PAID-IN     ESOP     RRP    RETAINED FOR-SALE, NET OF APPLICABLE TREASURY STOCKHOLDERS'
                           STOCK    STOCK    CAPITAL    SHARES   SHARES  EARNINGS    DEFERRED INCOME TAXES     STOCK      EQUITY
                           ------ --------- ---------- -------- -------- -------- --------------------------- -------- -------------
<S>                        <C>       <C>    <C>        <C>      <C>     <C>                 <C>               <C>       <C>
BALANCES, September 30,
  1993                                                                  $3,456,072                                      $3,456,072
Net income                                                                 288,589                                         288,589
                           ------    ---    ---------- -------- -------- ---------          -------           --------  ----------
BALANCES, September 30,
  1994                                                                   3,744,661                                       3,744,661
Net income                                                                 272,817                                         272,817
Sale of stock              $4,591                                                                                            4,591
Contribution of additional
  paid-in capital                           $3,316,854                                                                   3,316,854
Acquisition of ESOP shares                            $(293,816)                                                          (293,816)
Allocation of earned ESOP
  shares at fair value                          12,803   29,264                                                             42,067
Change in unrealized gain
  (loss) on securities
  available-for-sale, net
  of applicable deferred
  income taxes of $44,150                                                                   $85,702                         85,702
                           ------    ---    ---------- -------- -------- ---------          -------           --------  ----------
BALANCES, September 30,
  1995                     $4,591            3,329,657 (264,552)         4,017,478           85,702                      7,172,876
Net income                                                                  54,217                                          54,217
Stock issued for adoption
  of recognition and
  retention plan              184              247,730         $(247,914)
Purchase of treasury stock                                                                                   $(641,714)   (641,714)
Retirement of treasury
  stock to be used for
  recognition and
  retention plan             (184)            (247,730)          (43,239)                                      291,153
Allocation of earned ESOP
  shares at fair value                          17,964   35,928                                                             53,892
Dividend paid                                                              (21,919)                                        (21,919)
Change in unrealized gain
  (loss) on securities
  available-for-sale, net
  of applicable deferred
  income taxes of $44,249                                                                    85,896                         85,896
                           ------    ---    ---------- -------- -------- ---------          -------           --------  ----------
BALANCES, September 30,
  1996                      4,591    -0-     3,347,621 (228,624)(291,153)4,049,776          171,598           (350,561)  6,703,248
                           ======    ===    ========== ======== ======== =========          =======           ========  ==========
</TABLE>
 See accompanying notes to financial statements.

<PAGE>

                                                                               

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED SEPTEMBER 30, 1994, 1995 AND 1996

<TABLE>
<CAPTION>
                                                   1994           1995          1996
                                                   ----           ----          ----
<S>                                              <C>            <C>            <C>    
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                     $288,589       $272,817       $54,217
  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                                    13,751          4,359        10,534
    Stock dividend on FHLB stock                  (16,000)       (25,400)      (25,600)
    Provision for loan losses                     100,000         40,000       214,000
    Deferred loan fees                             (1,357)        (1,553)
    Depreciation of premises and equipment         27,465         24,104        31,249
    Depreciation of real estate owned               1,186
    Net loss (gain) on sale of real estate
     owned                                         (2,338)        (2,739)       (2,595)
    Net loss (gain) on sale of fixed assets                         (182)
    Allocation of ESOP shares                                     42,067        53,892
    (Increase) decrease in accrued interest
     receivable                                    23,279        (44,060)      (12,384)
    (Increase) decrease in other assets           (43,548 )       41,484       (18,880)
    Increase (decrease) in income taxes payable   (15,796)
    Increase (decrease) in deferred income taxes    2,630          7,391       (75,816)
    Increase (decrease) in accrued expenses and
     other liabilities                              2,551         25,422       305,216
                                                ---------      ---------     ---------
          Net cash provided by
           operating activities                   380,412        383,710       533,833
           --------------------                 ---------      ---------     ---------

CASH FLOWS FROM INVESTING ACTIVITIES
  Loan originations net of principal
  repayments                                   (1,014,636)    (4,073,751)   (2,787,262)
  Purchases of certificates of deposit           (196,497)
  Maturities of certificates of deposit           589,111
  Purchase of investment securities
   held-to-maturity                            (1,880,234)
  Proceeds from maturities of investment
   securities held-to-maturity                  2,000,000                      500,000
  Purchases of mortgage-backed securities
   held-to-maturity                            (2,044,098)
  Principal repayments of mortgage-backed
   securities held-to-maturity                  2,432,295        703,953     1,047,072
  Purchases of mortgage-backed securities
   available-for-sale                                         (2,987,138)   (3,687,922)
  Principal repayments of mortgage-backed
   securities available-for-sale                               1,095,720     1,546,079
  Purchase of FHLB stock                          (42,600)        (4,100)      (31,100)
</TABLE>


This statement continued on next page.

<PAGE>

                                                                               

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                  YEARS ENDED SEPTEMBER 30, 1994, 1995 AND 1996

<TABLE>
<CAPTION>
                                                   1994           1995          1996
                                                   ----           ----          ----
<S>                                              <C>            <C>            <C>    
CASH FLOWS FROM INVESTING ACTIVITIES (Continued)
  Proceeds from sale of FHLB stock               $ 14,300       $ 23,600       $25,700
  Investment in foreclosed real estate             (7,719)                      (6,106)
  Proceeds from sale of foreclosed real
   estate                                          55,165          2,250        27,320
  Proceeds from sale of premises and
   equipment                                                         275
  Purchases of premises and equipment             (24,734)      (100,291)     (110,893)
                                                ---------      ---------     ---------
          Net cash (used) by
           investing activities                  (119,647)    (5,339,482)   (3,477,112)
           --------------------                 ---------      ---------     ---------

CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase (decrease) in deposits            (368,908)       372,371    (1,156,894)
  Increase (decrease) in advances
   from FHLB                                     (148,083)     1,486,021     5,023,384
  Increase (decrease) in mortgage
   escrow funds                                   (50,166)        28,615       (14,354)
  Dividend paid                                                                (21,919)
  Purchase of treasury stock                                                  (641,714)
  Net proceeds from issuance of stock                          3,027,629
                                                ---------      ---------     ---------
          Net cash provided (used) by
           financing activities                  (567,157)     4,914,636     3,188,503
                                                ---------      ---------     ---------
NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                (306,392)       (41,136)      245,224
 ----------------

CASH AND CASH EQUIVALENTS, beginning of year      487,667        181,275       140,139
-------------------------                       ---------      ---------     ---------

CASH AND CASH EQUIVALENTS, end of year            181,275        140,139       385,363
-------------------------                       =========      =========     =========

SUPPLEMENTAL SCHEDULE OF NONCASH
 INVESTING ACTIVITIES

  Loans originated to facilitate the sale
   of real estate owned                          $190,985        $42,750       $68,580
                                                =========      =========     =========
  Loan principal reductions resulting from
   foreclosures on real estate owned              $50,932        $26,462      $147,787
                                                =========      =========     =========
  Increase in unrealized gain (loss) on
   securities available-for-sale net of
   applicable deferred income taxes                              $85,702       $85,896
                                                               =========     =========
</TABLE>

This statement continued on next page.

<PAGE>

                                                                               

                 ST. LANDRY FINANCIAL CORPORATION AND SUBSIDIARY
                              OPELOUSAS, LOUISIANA
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                  YEARS ENDED SEPTEMBER 30, 1994, 1995 AND 1996


<TABLE>
<CAPTION>
                                                   1994           1995          1996
                                                   ----           ----          ----
<S>                                              <C>            <C>            <C>    
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                                $1,649,802     $1,916,017    $2,221,567
                                               ==========     ==========    ==========
  Taxes paid                                     $215,296       $145,240      $145,960
                                               ==========     ==========    ==========
</TABLE>

See accompanying notes to financial statements.

<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, 1995
            and 1996. 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, future additions to the allowances
            may be necessary based on changes in local economic  conditions.  In
            addition,   regulatory  agencies,  as  an  integral  part  of  their
            examination   process,   periodically   review   the   Association's
            allowances  for losses on loans and  foreclosed  real  estate.  Such
            agencies may require the  Association to recognize  additions to the
            allowances based on their judgments about  information  available to
            them at the time of their examination.

<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 three
            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:

                                                       1995               1996
                                                       ----               ----
                 Cash                                $127,511           $151,081
               Interest-bearing deposits in
                  other institutions                   12,628            234,282
                                                     --------           --------
                                                      140,139            385,363
                                                     ========           ========

      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,  1996.  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.


<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 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.

            Prior to adoption of Statement No. 115, bonds,  notes and debentures
            were carried at cost,  adjusted for premiums and discounts that were
            recognized  in  interest  income  using  the  interest  method,   or
            straight-line method if not materially different, over the period to
            maturity.

            Equity  securities  that were  nonmarketable  or that had  mandatory
            sinking funds were carried at cost. All other equity securities were
            carried  at the  lower  of cost or  estimated  market  value  in the
            aggregate. Net unrealized losses were recognized through a valuation
            allowance that was shown as a reduction in the carrying value of the
            related securities and as a corresponding reduction in stockholders'
            equity.

            Gains  and  losses  on  the  sale  of  investment   securities  were
            determined using the specific-identification method.

      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 dept 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.  Prior to  adoption  of  Statement  No.  115,
            investments  in  mortgage-backed  securities  were  stated  at cost,
            adjusted  for  amortization  of premiums  and  accretion of fees and
            discount using a method that approximates level yield.

<PAGE>

                                                                              

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

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      F.    LOANS RECEIVABLE

            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.

            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  properties  acquired  through,  or in  lieu  of,  loan
            foreclosures  are  initially  recorded  at fair value at the date of
            foreclosure. After foreclosure, foreclosed assets are carried at the
            lower of (a) fair value minus  estimated  costs to sell or (b) cost.
            Costs  relating to  development  and  improvement  of  property  are
            capitalized,  whereas costs  relating to the holding of property are
            expensed.

      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.

<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 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.

<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.

            Accrued   interest:   The  carrying   amounts  of  accrued  interest
            approximate the fair values.

            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.    RECLASSIFIED 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:

                                                        1995
                                    --------------------------------------------
                                                 Gross       Gross
                                    Amortized  Unrealized  Unrealized   Fair
                                      Cost       Gains       Losses     Value
                                    --------------------------------------------
      U.S. Government obligations   $1,485,983    -0-       $(9,333)  $1,476,650
                                    ==========    ===       =======   ==========


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

<PAGE>

                                                                              

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


2.    INVESTMENT SECURITIES (CONTINUED)

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

                                                       1995
                                    --------------------------------------------
                                                 Gross       Gross
                                    Amortized  Unrealized  Unrealized   Fair
                                      Cost       Gains       Losses     Value
                                    --------------------------------------------
      Equity securities             $1,415,181  $252,767    $(4,964)  $1,662,984
                                    ==========  ========    =======   ==========


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


      The   following   is  a  summary   of   maturities   of  debt   securities
      held-to-maturity at September 30, 1996:
                                                     Amortized          Fair
            Amounts maturing in:                        Cost            Value
                                                     ---------          -----
             One year or less                         $499,878        $499,295
             After one year through five years         489,717         490,155
             After five years through ten years
             After ten years
                                                      --------        --------
                                                       989,595         989,450
                                                      ========        ========

      There  were no sales of  investment  securities  during  the  years  ended
      September 30, 1994, 1995, or 1996.

      No investment securities were pledged at September 30, 1996.

3.    MORTGAGED-BACKED SECURITIES

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

                                                       1995
                                    --------------------------------------------
                                                 Gross       Gross
                                    Amortized  Unrealized  Unrealized   Fair
                                      Cost       Gains       Losses     Value
                                    --------------------------------------------
      GNMA                          $  338,615  $14,933               $  353,548
      FHLMC                          3,105,134   27,675    $(51,364)   3,081,445
      FNMA                             452,195              (16,263)     435,932
                                    ----------  -------     -------   ----------
                                     3,895,944   42,608     (67,627)   3,870,925
                                    ==========  =======     =======   ==========

 <PAGE>

                                                                              

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

3.    MORTGAGED-BACKED SECURITIES (CONTINUED)

                                                       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
                                    ==========  =======     =======   ==========

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

                                                       1995
                                    --------------------------------------------
                                                 Gross       Gross
                                    Amortized  Unrealized  Unrealized   Fair
                                      Cost       Gains       Losses     Value
                                    --------------------------------------------
      GNMA                          $  670,786  $26,904               $  697,690
      FHLMC                          2,925,686            $(110,750)   2,814,936
      FNMA                           3,871,316    3,493     (37,598)   3,837,211
                                    ----------  -------     -------   ----------
                                     7,467,788   30,397    (148,348)   7,349,837
                                    ==========  =======     =======   ==========


                                                       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
                                    ==========  =======     =======   ==========

<PAGE>

                                                                              

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


3.    MORTGAGED-BACKED SECURITIES (CONTINUED)

      The  amortized  cost and  fair  value of  mortgaged-backed  securities  at
      September 30, 1996, 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
      Amounts maturing in:           Cost        Value        Cost       Value
                                   ---------     -----     ---------     -----
      One year or less            $1,000,442    $997,646
         After one year through
          five years               1,631,867   1,557,506
         After five years through
          ten years                  221,951     232,120
         After ten years                                  $9,583,144  $9,484,872
                                  ----------   ---------  ----------  ----------
                                   2,854,260   2,787,272   9,583,144   9,484,872
                                  ==========   =========  ==========  ==========

      At September 30, 1996,  mortgaged-backed securities with amortized cost of
      $6,622,997  and fair  value of  $6,492,077  were  specifically  pledged to
      secure a short-term advance from the Federal Home Loan Bank of Dallas.

4.  LOANS RECEIVABLE

      Loans receivable at September 30 are summarized as follows:

                                                           1995        1996
                                                           ----        ----
      First mortgage loans (principally conventional)
        Principal balance:
         Secured by one to four family residences      $34,664,343  $35,634,888
          Secured by other properties                    1,728,200    2,890,583
         Construction loans                              1,556,000    1,295,700
                                                       -----------  -----------
                                                        37,948,543   39,821,171
      Less:
         Net deferred loan fees                            (23,122)     (21,912)
         Undisbursed portion of construction loans        (884,830)    (710,612)
         Unearned discounts                                (67,632)     (71,209)
                                                       -----------  -----------
            Total first mortgage loans                  36,972,959   39,017,438

      Consumer and other loans
         Automobile loans                                               478,616
         Mobile homes                                       73,877      147,350
         Other consumer loans                               91,479       88,214
         Savings account loans                             606,440      705,412
                                                       -----------  -----------
            Total loans                                 37,744,755   40,437,030
      Less allowance for loan losses                      (389,091)    (580,358)
                                                       -----------  -----------
                                                        37,355,664   39,856,672
                                                       ===========  ===========

<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:

                                         1994            1995           1996
                                         ----            ----           ----
      BALANCE, beginning of year       $256,487        $351,383       $389,091
      Provision charged to income       100,000          40,000        214,000
      Charge-offs, net of recoveries     (5,104)         (2,292)       (22,733)
                                       --------        --------       --------
      BALANCE, end of year              351,383         389,091        580,358
                                       ========        ========       ========

      The Association adopted Statements of Financial  Accounting  Standards No.
      114 and No. 118 for the year ended  September  30, 1996.  At September 30,
      1996, 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.  The average  recorded  investment in
      impaired  loans  amounted  to  approximately  $793,815  for the year ended
      September  30, 1996.  The  allowance  for loan losses  related to impaired
      loans amounted to approximately  $272,236 at September 30, 1996.  Interest
      income on  impaired  loans of $58,591  was  recognized  for cash  received
      during the year ended September 30, 1996.

      For the years ended  September 30, 1994 and 1995 the Association had loans
      on  which  the  accrual  of  interest  had  been   discontinued   totaling
      approximately  $561,245  and  $600,636,  respectively.  Had the accrual of
      interest not been discontinued on these loans,  interest income would have
      increased  by  approximately  $18,950  and  $17,026  for the  years  ended
      September 30, 1994 and 1995, respectively.

      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:

                                         1994            1995           1996
                                         ----            ----           ----
      BALANCE, beginning of year       $398,305        $619,733       $657,198
      Origination                       405,864         119,858        273,355
      Repayments                       (184,436)        (82,393)      (102,138)
                                       --------        --------       --------
      BALANCE, end of year              619,733         657,198        828,415
                                       ========        ========       ========

<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:

                                                         1995           1996
                                                         ----           ----
      Investment securities                            $33,854        $ 22,431
      Mortgage-backed securities                        78,369          87,671
      Loans receivable                                 139,758         154,263
                                                       -------         -------
                                                       251,981         264,365
                                                       =======         =======

6.    FORECLOSED REAL ESTATE

      Foreclosed real estate at September 30 is summarized as follows:

                                                         1995           1996
                                                         ----           ----
      Real estate owned at cost or fair
        value at foreclosure                           $56,320        $130,884
      Less allowance for losses                        (13,323)        (33,057)
                                                       -------         -------
                                                        42,997          97,827
                                                       =======         =======

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

                                          1994           1995           1996
                                          ----           ----           ----
      BALANCE, beginning of year        $30,778        $11,031        $ 13,323
      Provision charged to income         2,968                          4,362
      Charge-offs, net of recoveries    (22,715)         2,292          15,372
                                        -------        -------         -------
      BALANCE, end of year               11,031         13,323          33,057
                                        =======        =======         =======

7.    PREMISES AND EQUIPMENT

      Premises and equipment at September 30 are summarized as follows:

                                                         1995           1996
                                                         ----           ----
      Cost:
        Land                                           $80,210         $80,710
        Buildings                                      576,263         640,259
        Furniture, fixtures, and equipment             234,385         269,369
                                                       -------         -------
                                                       890,858         990,338
        Less accumulated depreciation                 (365,324)       (385,160)
                                                       -------         -------
                                                       525,534         605,178
                                                       =======         =======

      Depreciation amounted to $27,465, $24,104, and $31,249 for the years ended
      September 30, 1994, 1995 and 1996, respectively.

<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>
                                       1995                   1996                Weighted
                               --------------------   --------------------     Average Rate at
                                 Amount     Percent     Amount     Percent    September 30, 1996
                                 ------     -------     ------     -------    ------------------
<S>                            <C>           <C>      <C>           <C>              <C> 
      Money market             $7,725,451    17.90    $6,243,478    14.87            3.05
      Regular passbook          3,754,953     8.70     3,829,181     9.12            3.00
      90 day passbook             810,758     1.88       711,110     1.69            3.00
                               ----------   ------    ----------   ------
                               12,291,162    28.48    10,783,769    25.68
                               ----------   ------    ----------   ------

      Certificates of deposit:
        2.00% - 3.99%             675,197     1.57
        4.00% - 5.99%          28,356,705    65.73    28,640,490    68.22            5.19
        6.00% - 7.99%           1,819,793     4.22     2,561,704     6.10            6.14
                               ----------   ------    ----------   ------
                               30,851,695    71.52    31,202,194    74.32
                               ----------   ------    ----------   ------
                               43,142,857   100.00    41,985,963   100.00            4.72
                               ==========   ======    ==========   ======
</TABLE>

      The  aggregate  amount of jumbo  certificates  of  deposit  with a minimum
      denomination  of $100,000 was  approximately  $3,935,480 and $5,129,340 at
      September 30, 1995 and 1996, respectively.

      At September 30, 1996, scheduled maturities of certificates of deposit are
      as follows:
<TABLE>
<CAPTION>
                                               Year Ending September 30
                      -------------------------------------------------------------------------
                          1997         1998         1999         2000        2001    Thereafter
                          ----         ----         ----         ----        ----    ----------
<S>                   <C>           <C>          <C>          <C>          <C>           <C>
      4.00% - 5.99%   $21,005,689   $5,483,800   $1,488,032   $  622,969   $40,000   
      6.00% - 7.99%     1,055,935      446,577      464,168      595,024
                       ----------    ---------    ---------    ---------    ------       ---
                       22,061,624    5,930,377    1,952,200    1,217,993    40,000       -0-
                       ==========    =========    =========    =========    ======       ===
</TABLE>

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

                                     1994            1995            1996
                                     ----            ----            ----
      Money market                $ 226,178       $ 208,075        $175,524
      Regular passbook              112,451         115,063          75,681
      90 day passbook                27,040          24,632          15,916
      Certificates of deposit     1,249,261       1,454,040       1,697,842
                                  ---------       ---------       ---------
                                  1,614,930       1,801,810       1,964,963
                                  =========       =========       =========

<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       1995       1996
                                               -----------    ----       ----

      Advance from the Federal Home Loan Bank  5.00%-6.99% $2,537,938 $7,561,322
                                                           ---------- ----------
                                                            2,537,938  7,561,322
                                                           ========== ==========

      Scheduled maturities of the advances at September 30, 1996 are as follows:

                 October 23, 1996                          $6,300,000
                 November 3, 1997                             299,190
                 June 1, 2005                                 454,716
                 August 1, 2005                               460,184
                 March 2, 2009                                 47,232
                                                            ---------
                                                            7,561,322
                                                            =========

      Pursuant to a blanket  floating lien with the Federal Home Loan Bank,  the
      advances at September 30, 1995 and 1996 were secured by permanent mortgage
      loans,   mortgage  pool  securities,   and  U.S.   Government  and  agency
      securities.  Specific mortgage-backed securities with an amortized cost of
      $6,622,997  and a fair  value of  $6,492,077  were  pledged  to secure the
      short-term advance maturing in October, 1996.

10.   FEDERAL INCOME TAXES

      Thrift  institutions  that meet certain  tests  prescribed by the Internal
      Revenue  Code are  allowed a bad debt  deduction  for  federal  income tax
      purposes  based on either a  percentage  of taxable  income (8 percent for
      years beginning in 1987 and  thereafter) or the Thrift's loss  experience.
      The  Association  uses the method which  produces the larger  deduction to
      determine  its  provision  for  federal  income  tax.  For the years ended
      September 30, 1994 and 1995, the Association used its loss experience, and
      the  percentage-of-taxable  income method,  respectively.  The Association
      anticipates  using the experience  method for the year ended September 30,
      1996.

      As  a  result  of   legislation   enacted  on  September  30,  1996,   the
      percentage-of-taxable  income  method  of  computing  bad  debts  has been
      repealed for tax years beginning after December 31, 1995.

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

                              1994             1995              1996
                              ----             ----              ----
      Federal:
        Current             $182,474         $145,931          $125,271
        Deferred               2,630            7,391           (75,816)
                            --------         --------          --------
                             185,104          153,322            49,455
                            ========         ========          ========

<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,
      1994,  1995 and 1996,  to income  before  income  taxes as a result of the
      following:

                                                  1994        1995       1996
                                                  ----        ----       ----
      Federal taxes at statutory rates          $161,056    $144,887    $35,248
       Tax effects of
        Provisions for losses on loans and real
         estate owned                             43,717      13,600     72,760
      Bad debt deduction                         (19,246)    (11,928)   (87,642)
        Other                                       (423)      6,763     29,089
                                                --------    --------    -------
      Income tax expense                         185,104     153,322     49,455
                                                ========    ========    =======

      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 and deferred loan fees.
      The net deferred tax liability in the accompanying statements of financial
      condition include the following components:

                                                       1995              1996
                                                       ----              ----
      Deferred tax liabilities                       $(79,842)        $(150,317)
      Deferred tax assets                              11,148           113,190
                                                     --------         ---------
           Net deferred tax liability                 (68,694)          (37,127)
                                                     ========         =========

      Retained  earnings at September 30, 1995 and 1996,  include  approximately
      $1,022,113  and  $965,154,  respectively,  for which no  deferred  federal
      income tax  liability  has been  recognized.  These  amounts  represent 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. The unrecorded deferred income-tax
      liability on the above amounts was approximately $347,518 and $328,152, at
      September 30, 1995 and 1996, respectively.

<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 tax-qualified 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, 1994, 1995 and 1996, 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, 1994,  1995 and 1996,  amounted to
      $1,685, $840 and $740, respectively.

      In January of 1994, the Association  established a noncontributory  401(k)
      plan for all eligible employees.  Administrative fees paid related to this
      plan amounted to $1,259,  $2,239 and $2,143 for the years ended  September
      30, 1994, 1995 and 1996, 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 "entity 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 less  dividends  received by the ESOP.  All  dividends
      received  by the  ESOP  are used to pay  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 a reduction of debt
      and accrued interest.  ESOP compensation  expense was $60,629 for the year
      ended September 30, 1996.

      ESOP shares were as follows at September 30:

                                                       1995              1996
                                                       ----              ----
           Allocated shares                            3,658             8,149
           Unreleased shares                          33,069            28,578
                                                      ------            ------
              Total ESOP shares                       36,727            36,727
                                                      ======            ======
           Fair value of unreleased shares at
             September 30                           $380,294          $342,936
                                                    ========          ========

<PAGE>

                                                                              

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


13.   OTHER EMPLOYEE BENEFIT PLANS

      The Company's Board of Directors adopted a Stock Option and Incentive Plan
      (SOP) and a Recognition  and Retention Plan (RRP),  which were approved by
      the shareholders at the annual meeting held in January,  1996. The SOP and
      RRP are administered by a committee of directors of the Company. Under the
      terms of the stock option plan, stock options representing an aggregate of
      up to  10  percent  of  the  shares  of  common  stock  outstanding  after
      conversion may be granted to directors and officers of the holding company
      or its  subsidiary.  The exercise price of stock options granted under the
      stock  option  plan is  required  to be at least  equal to the fair market
      value per share of the stock on the date of grant.  Pursuant  to the terms
      of the RRP,  restricted  stock  awards  covering  shares  representing  an
      aggregate  of up to 4 percent  of the shares of common  stock  outstanding
      after  completion  of the  conversion  may be  granted  to  directors  and
      executive officers of the holding company.  The SOP is to be funded by the
      issuance of authorized but unissued  shares of the holding  company stock,
      which will  result in the  dilution of  existing  stockholders'  ownership
      interest.  The RRP has been funded  through the issuance of authorized but
      unissued  stock and the  subsequent  purchase and  retirement  of treasury
      stock of an equal  number of shares  resulting  in no dilution of existing
      stockholders'  ownership interest. The unallocated RRP shares are reported
      as a  contra-equity  account in the  consolidated  statement  of financial
      condition.  There were no options  granted  under either plan for the year
      ended September 30, 1996.

14.   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.

<PAGE>

                                                                              

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


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

      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,  1996,  the  Association  was  considered  to  be "well
      capitalized."

      The following table sets out the Associations's various regulatory capital
      categories at September 30, 1996:

<TABLE>
<CAPTION>
                            Required     Actual                  Required      Actual
                              Ratio      Ratio       Excess      $ Amount     $ Amount      Excess
                            --------     ------      ------      --------     --------      ------
<S>                            <C>         <C>        <C>        <C>         <C>          <C>       
      Tangible capital         1.50%       9.73%      8.23%      $850,368    $5,513,410   $4,663,042
      Core capital             3.00%       9.73%      6.73%     1,700,735     5,513,410    3,812,675
      Risk based capital       8.00%      19.14%     11.14%     2,448,860     5,860,304    3,411,444
</TABLE>

15.   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:

<PAGE>

                                                                              

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

15.   COMMITMENTS AND CONTINGENCIES (CONTINUED)

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

                                                      1995             1996
                                                      ----             ----
      Variable rate first mortgage loans           $ 957,375         $177,800
      Fixed rate first mortgage loans                164,860          443,700
                                                   ---------          -------
            Total loan commitments                 1,122,235          621,500
                                                   =========          =======

      The Association does not charge commitment fees.

      Unused lines-of-credit  amounted to $250,000 and $250,000 at September 30,
      1995 and 1996, respectively.

16.   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.

      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                             $621,500
                                                                   ========
          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.

<PAGE>

                                                                              

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


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

      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.

17.   OTHER NON-INTEREST INCOME AND EXPENSE

      Other  non-interest  income and expense  amounts are summarized as follows
      for the years ended September 30:
                                                   1994        1995        1996
                                                   ----        ----        ----
      Other non-interest income:
        Miscellaneous                             $  418      $  722      $1,362
                                                  ======      ======      ======
      Other non-interest expense:
        Expense account of officers, employees,   
          and directors                           $4,961      $4,460      $6,611
        Food service expense                       4,788       5,926       5,461
        Stationery and printing                   19,279      20,320      22,034
        Telephone                                 11,834      12,968      12,521
        Postage and express                       14,772      15,860      15,874
        Insurance and surety bond premiums        29,366      27,172      24,038
        Supervisory examinations                  16,538      16,658      19,904
        Organizational dues and subscriptions     17,138      16,155      15,730
        Loan expense                               6,848         907       2,579
        Service charges                            5,195       6,008       7,952
        Franchise taxes                                                   16,094
        Other                                        872       1,331       4,529
                                                 -------     -------     -------
                                                 131,591     127,765     153,327
                                                 =======     =======     =======

18.   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.

<PAGE>

                                                                              

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



19.   SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

      Selected  quarterly  financial data are presented below by quarter for the
      years ended September 30, 1995 and 1996.

                                                      1995
                                ------------------------------------------------
                                December 31, March 31,   June 30,  September 30,
                                   1994        1995        1995        1995
                                ------------ ---------   --------  -------------
      Total interest income       $790,970    $834,056   $849,567    $926,426
      Total interest expense      (445,757)   (471,943)  (464,013)   (515,060)
                                  --------    --------   --------    --------
        Net interest income        345,213     362,113    385,554     411,366
        Provision for loan losses   15,000      10,000      5,000      10,000
                                  --------    --------   --------    --------
        Net interest income
          after provision for
          loan losses              330,213     352,113    380,554     401,366
      Total non-interest income     13,533      13,122     13,588       7,246
      Total non-interest expense  (271,952)   (248,708)  (253,648)   (311,288)
                                  --------    --------   --------    --------
         Income before income
           taxes                    71,794     116,527    140,494      97,324
      Income tax expense           (26,000)    (41,000)   (34,000)    (52,322)
                                  --------    --------   --------    --------
         Net income                 45,794      75,527    106,494      45,002
                                  ========    ========   ========    ========

<PAGE>

                                                                              

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

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

                                                      1996
                                ------------------------------------------------
                                December 31, March 31,   June 30,  September 30,
                                   1995        1996        1996        1996
                                ------------ ---------   --------  -------------
      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)
                                      ====        ====       ====       =====

20.   EARNINGS PER SHARE

      Earnings per share are calculated  based upon the weighted  average number
      of shares of outstanding  common and common  equivalent  shares during the
      period subsequent to the  Association's  conversion to a stock association
      on April 5,  1995.  Net income  per share  information  for the year ended
      September 30, 1995 is not considered  meaningful,  and therefore,  has not
      been presented. Net income per share is based on $413,568 weighted average
      number  of  shares  outstanding,  adjusted  for  unallocated  RRP and ESOP
      shares, for the year ended September 30, 1996.

21.   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.

<PAGE>

                                                                              

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


21.   PLAN OF CONVERSION (CONTINUED)

      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 savings  account  shall be entitled to receive a  distribution  from the
      liquidation  account,  in the  proportionate  amount  of the  then-current
      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.

22.   PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

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

                             Condensed Balance Sheet
                                  September 30,

                  Assets                           1995              1996
                  ------                           ----              ----
      Cash and cash equivalents                 $1,382,081        $  789,307
      Investment in subsidiary                   5,495,875         5,685,008
      Note receivable - First Federal              293,816           235,053
      Accrued interest receivable - ESOP loan       11,268
                                                ----------        ----------
         Total assets                            7,183,040         6,709,368

      Liabilities and Stockholders' Equity
      
      Liabilities                               $   10,164        $    6,120
      
      Stockholders' Equity                       7,172,876         6,703,248
                                                ----------        ----------
         Total liabilities and stockholders'
               equity                            7,183,040         6,709,368
                                                ==========        ==========


<PAGE>

                                                                              

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


22.   PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (CONTINUED)

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

                                                    April 5, 1995
                                                         Thru
                                                  September 30, 1995     1996
                                                  ------------------     ----
      Interest income
        Interest on savings account                    $25,116          $39,198
      Interest on ESOP loan                             11,268           20,507
                                                     ---------        ---------
              Total interest income                     36,384           59,705

      Expenses                                          11,719           52,325
                                                     ---------        ---------
      Income Before Income Tax and Undistributed
       Earnings of Subsidiary                           24,665            7,380
      Income Tax Expense                                 8,386            2,509
                                                     ---------        ---------
      Income Before Undistributed Earnings of
       Subsidiary                                       16,279            4,871
      Undistributed Earnings of Subsidiary             135,217           49,346
                                                     ---------        ---------
              Net income                               151,496           54,217
                                                     =========        =========

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

      Cash Flows from Operating Activities
        Net income                                    $151,496          $54,217
        Adjustments to reconcile net income to net
         cash provided by operating activities:
           Undistributed earnings of subsidiary       (135,217)         (49,346)
            (Increase) decrease in accrued interest
              receivable - First Federal               (11,268)          11,268
           Increase (decrease) in due to
              First Federal                             10,164           (4,044)
                                                     ---------        ---------
              Net cash provided by operating
                activities                              15,175           12,095
                                                     ---------        ---------
      Cash Flows from Investing Activities
        ESOP loan origination (repayment)             (293,816)          58,764
        Purchase of subsidiary stock                (1,660,723)
                                                     ---------        ---------
            Net cash provided (used) by
                   investing activities             (1,954,539)          58,764
                                                     ---------        ---------
      Cash Flows from Financing Activities
        Net proceeds from issuance of stock          3,321,445
        Dividend paid                                                   (21,919)
        Purchase of treasury stock                                     (641,714)
                                                     ---------        ---------
                Net cash provided (used) by
                financing activities                 3,321,445         (663,633)
                                                     ---------        ---------
                Net increase (decrease) in cash and
                cash equivalents                     1,382,081         (592,774)

                Cash and cash equivalents at
                beginning of period                                   1,382,081
                                                     ---------        ---------
                Cash and cash equivalents at end
                of period                            1,382,081          789,307
                                                     =========        =========

<PAGE>

                                                                              

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


22.   PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (CONTINUED)


                  Condensed Statement of Cash Flows (Continued)
                  ---------------------------------------------


                                                    April 5, 1995
                                                         Thru
                                                  September 30, 1995     1996
                                                  ------------------     ----
      Supplemental Schedule of Income Taxes Paid
        Income taxes paid                                  -0-           $8,386
                                                     =========        =========
      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                                   $42,067          $53,892
                                                     =========        =========
        Total increase in unrealized gain (loss) on
          available-for-sale securities               $129,852         $130,145
                                                     =========        =========
<PAGE>

                                                                              

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


23.   FAIR VALUES OF FINANCIAL INSTRUMENTS

      The estimated fair values of the Company's  financial  instruments  are as
      follows:

                                                       September 30, 1996
                                                 -----------------------------
                                                 Carrying               Fair
                                                  Amount                Value
                                                 --------               -----
      Financial assets:
         Cash and cash equivalents               $385,363              $385,363

         Investment securities
           Held-to-maturity                       989,595               989,450
           Available-for-sale                   1,773,450             1,773,450

         Mortgage-backed securities
           Held-to-maturity                     2,854,260             2,787,272
           Available-for-sale                   9,484,872             9,484,872

         Loans receivable, net                 39,856,672            39,326,909

         Accrued interest receivable              264,365               264,365

      Financial liabilities:

         Deposits                              41,985,962            42,252,383

         Borrowed funds                         7,561,322             7,524,383

         Advances by borrowers for taxes
            and insurance                          92,468                92,468

        Accrued interest payable                   11,336                11,336

      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.

<PAGE>

                                                                              

                             STOCKHOLDER INFORMATION


Corporate Office                                     Annual Meeting

459 East Landry Street              The Annual Meeting of Stockholders will be 
Opelousas, Louisiana 70570          held at 2:30 p.m., Opelousas, Louisiana time
(318) 942-5748                      on January 28, 1997, at the Company's office
                                    located at 459 East Landry Street, 
                                    Opelousas, Louisiana.

Annual Report on Form 10-KSB                 Registrar/Transfer Agent

A copy of St. Landry Financial Corporation's Communications regarding change of
Annual Report on Form 10-KSB as filed with   address, transfer of stock and lost
the Securities and Exchange Commission may   certificates should be sent to:
be obtained without charge upon written request
to H. Andrew Myers, Jr., St. Landry Financial      American Securities Transfer,
Corporation, 459 East Landry Street, Opelousas,       Incorporated
Louisiana  70570.                                  1825 Lawrence Street 
                                                      Denver Colorado  80202

Local Counsel                       Special Counsel

Young, Hoychick and Aguillard       Silver, Freedman & Taff, L.L.P.
P.O. Box 341                        1100 New York Avenue, N.W.
Eunice, Louisiana  70535            Washington, D.C.  20005

                                    Accountants

Morgan J. Goudeau, III              John S. Dowling & Company
A Professional Law Corporation      Interstate-49 South
P.O. Box 1419                       P.O. Box 433
Opelousas, Louisiana 70571          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, 1996,
the Company had 111 holders of record of its Common Stock.

Dividends

The  Company  paid a cash  dividend  of $.05  per  share,  on June  17,  1996 to
stockholders as of May 31, 1996. 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.


<PAGE>

                                                                              

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



         Directors


Wayne McKinnon Gilmore                Martin A. Roy, Jr.
Chairman of the Board,                President, Roy Motors
President and Chief Execu-
tive Officer of the Company           Marvin J. Schwartzenburg
and the Association                   Administrator, Bayon Vista Manor

H. Andrew Myers, Jr.
Executive Vice President              Randy C. Tomlinson
of the Company and                    President, Magic Wand South
the Association
                                      Robert L. Wolfe, Jr.
H. Kent Aguillard                     President, Morgan Goudeau & Associates,
Partner, law firm                     Inc., a civil engineering corporation

Anna Lee O. Dunbar
Retired from the                               Executive Officers
Association

Lynette Young Feucht                  Wayne McKinnon Gilmore
City Court Judge                      Chairman of the Board, President and Chief
                                      Executive Officer
Patrick Fontenot
Executive Vice President,             H. Andrew Myers, Jr.
Williams-Progressive Life             Executive Vice President
Insurance Co.
                                      Kathryn F. Chelette
Simon Howard Fournier                 Controller
Employed by St. Landry
Parish Assessor's Office

Morgan J. Goudeau, III
District Attorney