SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)

[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended        September 30, 1996
                          -------------------------------------

                                     - or -

| |     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from                        to
                               ----------------------    -----------------------

Commission Number:  0-25538
 

                              TECHE HOLDING COMPANY
             ------------------------------------------------------
             (Exact name of Registrant as specified in its Charter)


            Louisiana                                     72-128746
---------------------------------------------        -------------------
(State or other jurisdiction of incorporation         (I.R.S. Employer
  or organization)                                   Identification No.)


211 Willow Street                                          70538
----------------------------------------                  --------     
Address of principal executive offices)                   Zip Code


Registrant's telephone number, including area code:   (318) 828-3212
                                                      --------------


Securities registered pursuant to Section 12(b) of the Act:

        Title of Each Class         Name of Each Exchange on which Registered
        -------------------         -----------------------------------------

      Common Stock, par value               American Stock Exchange
          $.01 per share

Securities registered pursuant to Section 12(g) of the Act:      None
                                                             ------------

        Indicate by check mark whether the  Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. YES   X    NO 
                                              ----      ----
  
        Indicate by check mark if disclosure of  delinquent  filers  pursuant to
Item 405 of Regulation S-K (ss.229.405 of this chapter) is not contained herein,
and will not be contained,  to the best of registrant's knowledge, in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]

        The aggregate market value of the voting stock held by non-affiliates of
the Registrant,  based on the closing price of the Registrant's  Common Stock as
quoted on the American  Stock  Exchange,  Inc., on December 18, 1996,  was $37.5
million (2,778,310 shares at $13.50 per share).

        As  of  December 18, 1996 there  were  issued and outstanding  3,437,530
shares of the Registrant's Common Stock. DOCUMENTS INCORPORATED BY REFERENCE

1.   Portions  of the Annual  Report to  Stockholders  for the Fiscal Year Ended
     September 30, 1996. (Parts I, II and IV)
2.   Portions  of  the  Proxy   Statement   for  the  1996  Annual   Meeting  of
     Stockholders. (Part III)


<PAGE>



                                             INDEX
<TABLE>
<CAPTION>

PART I                                                                                       Page

<S>       <C>                                                                                 <C>
Item 1.   Business.........................................................................     1

Item 2.   Properties.......................................................................    33

Item 3.   Legal Proceedings................................................................    34

Item 4.   Submission of Matters to a Vote of Security-Holders..............................    34

PART II

Item 5.   Market for Registrant's Common Equity and Related Stockholder Matters............    34

Item 6.   Selected Financial Data..........................................................    34

Item 7.   Management's Discussion and Analysis of Financial Condition and
            Results of Operations..........................................................    34

Item 8.   Financial Statements and Supplementary Data......................................    34

Item 9.   Changes In and Disagreements with Accountants on Accounting and Financial
            Disclosure......................................................................   34

PART III

Item 10.  Directors and Executive Officers of the Registrant................................   35

Item 11.  Executive Compensation............................................................   35

Item 12.  Security Ownership of Certain Beneficial Owners and Management....................   35

Item 13.  Certain Relationships and Related Transactions....................................   35

PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K...................   36
</TABLE>


<PAGE>



PART I

Item 1.  Business
-----------------

General

        Teche Holding Company (the "Company" or the "Registrant") is a Louisiana
corporation organized in December 1994 at the direction of Teche Federal Savings
Bank (the "Bank" or "Teche  Federal")  to acquire all of the capital  stock that
the Bank  issued in its  conversion  from the mutual to stock form of  ownership
(the  "Conversion").  On April 17, 1995, the Registrant sold 4,232,000 shares of
its  common  stock,  par  value  $.01  per  share  (the  "Common  Stock")  in  a
subscription  offering  as part of the  Conversion.  The  Company  is a  unitary
savings and loan holding  company which,  under existing laws,  generally is not
restricted in the types of business  activities in which it may engage  provided
that the Bank  retains  a  specified  amount of its  assets  in  housing-related
investments.  References  to the "Bank" or "Teche  Federal"  herein,  unless the
context requires  otherwise,  refer to the Company on a consolidated  basis. The
net  conversion  proceeds,  including the ESOP,  totalled $41.3 million of which
$20.6 million was invested in the Bank.  At September 30, 1996,  the Company had
total  consolidated  assets of $379.6 million and stockholders'  equity of $52.3
million.

        Teche Federal is a federally  chartered stock savings bank headquartered
in  Franklin,  Louisiana.  The Bank was  founded in 1934  under the name  "Teche
Federal Savings and Loan  Association"  and became a federally  chartered mutual
savings bank in 1989 operating  under its current name. The Bank's deposits have
been federally  insured by the Savings  Association  Insurance Fund ("SAIF") and
its predecessor, the Federal Savings and Loan Insurance Corporation, since 1934,
and the Bank is a member of the FHLB System.

        The  Company  and the Bank are  subject to  regulation  by the Office of
Thrift Supervision ("OTS"),  the Federal Deposit Insurance  Corporation ("FDIC")
and the Securities and Exchange Commission ("SEC").

        The Bank is a community-oriented  savings institution offering a variety
of financial  services to meet the local banking  needs of St. Mary,  Lafayette,
Iberia,  St. Martin and  Terrebonne  Parishes,  Louisiana  (the "Primary  Market
Area").  Teche  Federal  conducts its business from its main office in Franklin,
Louisiana and eight full service  branch offices  located in Morgan City,  Bayou
Vista,  New Iberia (two offices),  Lafayette  (two  offices),  Breaux Bridge and
Houma,  Louisiana.  The  Bank  also  maintains  a  loan  production  office  in
Lafayette.

        The  Bank  attracts  deposits  from the  general  public  and uses  such
deposits  primarily to  originate  loans  secured by first  mortgages on one- to
four-family  residences  in its  market  area.  To a  lesser  extent,  the  Bank
purchases  loans  and  originates  residential  construction,  multi-family  and
commercial real estate loans and consumer loans, and invests in  mortgage-backed
and investment securities. At September 30, 1996, mortgage loans secured by one-
to  four-family  residences  totaled $288.1 million or 87.0% of the Bank's total
loan portfolio.  At that same date the Bank had  approximately  $32.1 million or
8.5% of total assets invested in  mortgage-backed  securities  (including  those
available  for sale) and $11.5  million  or 3.0% of total  assets in  investment
securities (including those available for sale).

                                        1


<PAGE>



        The principal  sources of funds for the Bank's  lending  activities  are
deposits  and the  amortization,  repayment  and  maturity of loans,  investment
securities  and  mortgage-backed  securities.  Principal  sources  of income are
interest  on  loans,  mortgage-backed  securities,   investment  securities  and
deposits held in other financial  institutions.  The Bank's principal expense is
interest paid on deposits.

Market Area/Competition

        Teche  Federal's  home office is located in  Franklin,  St. Mary Parish,
Louisiana,  which is  approximately  50 miles  southeast of Lafayette,  90 miles
south of Baton Rouge and 120 miles west of New Orleans.  The limited  population
of Franklin and St. Mary Parish  (approximately 9,000 and 64,000,  respectively)
has,  over the years,  caused the Bank to expand  through the  establishment  of
branch offices in the contiguous  Parishes of Iberia, St. Martin,  Lafayette and
Terrebonne.  In a June  1991  transaction  with  the  RTC,  the  Bank  purchased
approximately $4.7 million of loans and assumed  approximately  $17.9 million of
deposits of First Federal Savings and Loan Association of Breaux Bridge,  Breaux
Bridge,   Louisiana.   The  transaction  was  accounted  for  as  a  "purchase."
Furthermore,  in December 1992, Community Homestead Association of Houma, Houma,
Louisiana,  merged  with and into  Teche  Federal,  adding  approximately  $18.9
million  in loans  and $20.8  million  in  savings  deposits  to the  Bank.  The
transaction was accounted for as a "pooling of interests."

        The local  economy is dependent to a certain  extent on the oil and gas,
seafood and agricultural (primarily sugar cane) industries. These industries are
cyclical in nature and have a direct impact on the level and  performance of the
Bank's loan portfolio.  Economic downturns in the past have caused a decrease in
loan  originations  and  an  increase  in  nonperforming  assets.  However,  the
metropolitan Lafayette area, which is the fourth largest city in Louisiana,  has
experienced  sustained  growth and is the home to the University of Southwestern
Louisiana,  several hospitals and various small-to medium-size  businesses,  and
has provided the Bank with increased lending opportunities.

        The  Bank  encounters  strong  competition  both  in the  attraction  of
deposits  and  origination  of real estate and other  loans.  Competition  comes
primarily  from  other  financial  institutions  in  its  Primary  Market  Area,
including  savings  banks,  commercial  banks and savings  associations,  credit
unions and investment  and mortgage  brokers in serving its Primary Market Area.
The Bank  also  originates  mortgage  loans  through  its  branch  offices,  one
origination  office  and  affiliations  with  mortgage  originators,  secured by
properties throughout its Primary Market Area and other locations in Louisiana.

Lending Activities

        General.  Teche  Federal's  loan  portfolio  predominantly  consists  of
adjustable-rate  and  fixed-rate  mortgage  loans secured by one- to four-family
residences  and, to a lesser extent,  residential  construction  and land loans.
Virtually all of the Bank's mortgage loans are secured by properties  located in
Louisiana.  Teche Federal also makes multi-family and  non-residential  mortgage
loans  consisting  primarily of commercial real estate loans and consumer loans,
which include home equity, savings account,  automobile,  personal,  mobile home
and consumer credit card loans.

        As of  September  30,  1996  approximately  $185  million  of  the  loan
portfolio was  fixed-rate  (including  consumer  loans) and  approximately  $146
million was adjustable rate (including 3-10 year adjustable loans).

                                        2


<PAGE>



        Analysis of Loan Portfolio. Set forth below is selected data relating to
the composition of the Bank's loan portfolio at the dates indicated.
<TABLE>
<CAPTION>

                                                                             At September 30,
                                    ------------------------------------------------------------------------------------------------
                                             1996                      1995                     1994                     1993
                                    -----------------------   ----------------------   ----------------------   --------------------
                                                   Percent                 Percent                  Percent                Percent 
                                       Amount     of Total      Amount     of Total      Amount     of Total      Amount   of Total
                                       ------     --------      ------     --------      ------     --------      ------   --------
                                                                                       (Dollars in Thousands)              

Residential real estate mortgage loans:
<S>                                   <C>           <C>       <C>          <C>         <C>            <C>       <C>         <C>   
  One- to four-family.............    $288,109      87.03%    $234,329     87.49%      $213,325       86.27%    $187,185    85.47%
  Construction/permanent loans....      13,740       4.15        8,097      3.02         11,676        4.72       10,976     5.01
  Multi-family....................       3,006        .91        2,871      1.07          2,144         .87        2,126      .97
Commercial real estate loans......       7,346       2.22        7,540      2.82          7,152        2.89        7,627     3.48
Land loans........................       2,844        .86        2,288       .85          1,858         .75        1,778      .81

Consumer loans:
  Loans on savings accounts.......       5,657       1.71        6,260      2.34          5,312        2.15        4,912     2.24
  Other...........................      10,343       3.12        6,441      2.41          5,796        2.35        4,403     2.02
                                      --------     ------      -------    ------       --------      ------     --------   ------
                                       331,045     100.00%     267,826    100.00%       247,263      100.00%     219,007   100.00%
                                                   ======                  ======                    ======                ======

Less:
  Allowance for loan losses.......       3,182                   2,966                    2,778                    2,193
  Deferred loan fees..............       1,122                   1,266                    1,308                    1,120
  Undisbursed portion of 
    loans-in-process .............      10,525                   5,725                    9,633                    8,310
                                       -------                --------                 --------                 --------
                                      $316,216                $257,869                 $233,544                 $207,384
                                      ========                 =======                  =======                  =======

</TABLE>


                                        3


<PAGE>



        Origination,  Purchase and Repayment of Loans.  The following table sets
forth the Bank's loan  originations and loan purchases and principal  repayments
for the  periods  indicated.  The Bank  originates  loans for  retention  in its
portfolio and did not sell loans during the periods indicated.
<TABLE>
<CAPTION>
                                                          Year Ended September 30,
                                              ---------------------------------------------------
                                               1996         1995          1994           1993
                                               ----         ----          ----           ----
                                                               (In Thousands)

<S>                                           <C>          <C>            <C>            <C>     
Total gross loans receivable at beginning of  $267,826     $247,263       $219,007       $198,488
                                               =======      =======        =======        =======
  year...................................

Loans originated:

  One- to four-family residential........       10,730       33,010       $ 36,702       $ 27,434
  Residential construction/permanent(1)..       23,049       15,110         22,933         18,379
  Multi-family residential...............           --           --            268            982
  Land and non-residential real estate...        3,579        1,970          1,601          1,149
  Consumer loans.........................       11,402       11,280          8,108          4,393
                                                ------       ------          -----         ------
      Total loans originated.............      108,760       61,370         69,612         52,337
                                               -------       ------         ------         ------
Reductions in principal - primarily due to
  loan repayments and prepayments .......      (45,541)     (40,807)       (41,356)       (31,818)
                                              -------      -------        -------        -------
Net loan activity........................     $ 63,219     $ 20,563       $ 28,256       $ 20,519
                                               =======      =======        =======        =======

Total gross loans receivable at end of year   $331,045     $267,826       $247,263       $219,007
                                               =======      =======        =======        =======
</TABLE>

---------------------------
(1)     Construction/permanent  loans are  primarily  originated  for  permanent
        financing to  individuals.  See "--  Residential  Construction/Permanent
        Loans."  These loans  generally  do not pay off at  completion,  but are
        automatically  transferred to the one- to four-family  residential  loan
        portfolio.

        Loan Purchases.  While the Bank primarily  focuses on the origination of
one- to  four-family  residential  mortgages,  in 1992 the Bank  purchased  $4.7
million of performing adjustable and fixed-rate mortgage loans from the RTC at a
$200,000 discount. The Bank has not purchased any loans since 1992.

                                        4


<PAGE>



        Loan Maturity Tables. The following table sets forth the maturity of the
Bank's  loan  portfolio  at  September  30,  1996.  The table  does not  include
prepayments or scheduled principal  repayments.  Adjustable-rate  mortgage loans
are shown as maturing based on contractual maturities.
<TABLE>
<CAPTION>
                                     One- to      Residential                                             All
                                      Four-      Construction/     Multi-    Commercial                  Other
                                      Family       Permanent       Family    Real Estate      Land       Loans       Total
                                      ------       ---------       ------    -----------      ----       -----       -----
                                                                         (In Thousands)

Amounts due:

<S>                                  <C>             <C>           <C>          <C>         <C>        <C>         <C>     
  1 year or less.................    $   316         $     --      $    --      $    --     $    6     $ 4,570     $  4,892
                                      ------          -------       ------       ------      -----      ------      -------
  After 1 year:
    More than 1 year to 3 years..      1,652               --          124           59        159       4,848        6,842
    More than 3 years to 5 years.      3,713               --           --          894        264       5,603       10,474
    More than 5 years to 10 years     31,654               --          640        2,177      1,365         666       36,502
    More than 10 years to 20 years   125,450            3,184        1,063        3,928      1,050          77      134,752
    More than 20 years...........    125,324           10,556        1,179          288          --        236      137,583
                                    --------           ------        -----       ------     -------     ------     --------

      Total due after September 30,
         1997....................    287,793           13,740        3,006        7,346      2,838      11,430      326,153
                                     -------           ------        -----        -----      -----      ------      -------

      Total amount due...........   $288,109          $13,740       $3,006       $7,346     $2,844     $16,000     $331,045
                                     =======           ======        =====        =====      =====      ======      =======

</TABLE>


        The following  table sets forth the dollar amount of all loans due after
September  30, 1997,  which have  pre-determined  interest  rates and which have
floating or adjustable interest rates.
<TABLE>
<CAPTION>

                                                            Floating or
                                                Fixed        Adjustable
                                                Rates        Rates (1)         Total
                                                -----        ---------         -----
                                                          (In Thousands)

<S>                                             <C>              <C>           <C>     
One- to four-family.......................      $ 155,526        $132,583      $288,109
Residential construction/permanent........          7,573           6,167        13,740
Other.....................................         21,878           7,318        29,196
                                                 --------          ------       -------
      Total...............................      $ 184,977        $146,068      $331,045
                                                 ========         =======       =======
</TABLE>


--------------------
(1)     Many of these adjustable-rate loans have initial fixed terms of three to
        ten years,  with rates adjusting  annually  thereafter.  See "-- One- to
        Four-Family Residential Loans."

        One- to Four-Family  Residential  Loans. The primary lending activity of
Teche  Federal  is  the  origination  of  one-  to  four-family  owner-occupied,
residential  mortgage loans,  secured by property  located in the Bank's Primary
Market Area.

        Teche  Federal  generally   originates   single-family   owner  occupied
residential  mortgage  loans in amounts up to 80% of the lower of the  appraised
value  or  selling  price of the  property  securing  the  loan.  The Bank  also
originates  such loans in amounts up to 95% of the lower of the appraised  value
or selling  price of the  mortgaged  property,  provided  that private  mortgage
insurance  is  provided  on the  amount in  excess  of 80% of the  lesser of the
appraised value or selling price.

                                        5


<PAGE>




        The Bank  currently  offers  ARMs  with  terms  of up to 30  years  that
initially adjust on the first,  third, fifth or tenth year after origination and
annually  thereafter.  The Bank began offering ARMs in 1981. The Bank originated
$49.2  million of ARMs during the year ended  September  30, 1996, of which $8.0
million  will first  adjust  annually  after five  years.  The  initial  rate is
determined  by the Bank in  accordance  with  market  and  competitive  factors.
Historically,  the  predominant  index was based on the  monthly  median cost of
funds at all SAIF insured  financial  institutions.  For ARMs  originated  after
December 31, 1994,  the Bank uses an index based on the one-year  U.S.  Treasury
Bill rate  adjusted to constant  maturity.  The terms and  conditions of the ARM
loans held by the Bank are varied,  partially due to changing market  conditions
and  partially due to the  acquisition  by the Bank of loans of First Federal in
Breaux  Bridge  from the  RTC,  Community  Homestead  in Houma  and  other  loan
purchases.  The Bank's current ARM originations  adjust by a maximum of 2.0% per
adjustment,  with a current lifetime cap of 11.875%.  At September 30, 1996, the
Bank's ARM loan and mortgage-backed  securities portfolio had a weighted average
term to repricing of approximately 37 months.

        The Bank offers fixed-rate mortgages with terms of up to 30 years, which
amortize  monthly.  Interest  rates  charged on  fixed-rate  mortgage  loans are
competitively  priced based on market  conditions  and the Bank's cost of funds.
The Bank  originates  and  holds  its  fixed-rate  mortgage  loans as long  term
investments. Most loans are originated in conformance with the Federal Home Loan
Mortgage  Corporation  ("FHLMC") and the Federal National  Mortgage  Association
("FNMA")  guidelines  and can therefore be sold in the  secondary  market should
management deem it necessary.  The Bank  originated  $48.2 million of fixed-rate
mortgage loans during the year ended  September 30, 1996. Of these loans,  78.2%
had maturities of 15 years or less.

        The Bank  offers  home  equity  loans on  single  family  owner-occupied
residences.  At September  30, 1996,  home equity  mortgage  loans  totaled $3.2
million.  Home equity  loans are offered as  fixed-rate  loans for a term not to
exceed 15 years or ARMs for terms up to 30 years. The underwriting standards for
second mortgage loans are the same as the Bank's standards applicable to one- to
four-family residences.

        Residential  Construction/Permanent Loans. The Bank's construction loans
have  primarily  been  made  to  finance  the  construction  of   owner-occupied
single-family  owner occupied  residential  properties and, to a limited extent,
single  family  housing for sale by  contractors.  Construction/permanent  loans
generally are made to customers of the Bank in its Primary Market Area. The Bank
offers  construction/permanent loans in amounts up to 80% of the appraised value
of the property  securing the loan. Loan proceeds are disbursed in increments as
construction progresses and as inspections warrant. Construction/permanent loans
to individuals generally do not pay off at completion of the construction phase,
but are automatically  transferred to the Bank's one- to four-family residential
portfolio.  These  single-family  residential  loans are structured to allow the
borrower to pay interest only on the funds advanced for the  construction  for a
period  of up to six  months  at the end of which  time the loan  converts  to a
permanent  mortgage.  While  construction  lending is  generally  considered  to
involve  a  higher  degree  of  risk  than  financing  of  existing  residential
properties,  at  September  30,  1996,  no  construction/permanent   loans  were
delinquent.

        Multi-Family and Commercial Real Estate Loans. The Bank has historically
originated a limited amount of loans secured by multi-family and commercial real
estate,  including non-owner occupied  residential  multi-family  dwelling units
(more than four units),  as well as professional  office buildings and apartment
complexes.

                                        6


<PAGE>



        The Bank generally  originates  multi-family  and commercial real estate
loans up to 70% of the appraised  value of the property  securing the loan.  The
Bank's  philosophy to originate  commercial real estate and  multi-family  loans
only to borrowers  known to the Bank and on properties  in its market area.  The
multi-family and commercial real estate loans in the Bank's portfolio  generally
consist of fixed-rate and ARMs which were originated at prevailing  market rates
for terms up to 15 years.

        Loans secured by  multi-family  and commercial real estate are generally
larger and involve a greater degree of risk than one- to four-family residential
mortgage loans.  Of primary  concern in multi-family  and commercial real estate
lending  is the  borrower's  creditworthiness,  the  feasibility  and cash  flow
potential of the project, and the outlook for successful operation or management
of the  properties.  As a result,  repayment  of such  loans may be subject to a
greater extent than residential  real estate loans to adverse  conditions in the
real estate market or the economy. In accordance with the Bank's  classification
of assets policy and procedure, the Bank requests annual financial statements on
major loans secured by multi-family and commercial real estate. At September 30,
1996 the aggregate balance of the five largest  multi-family and commercial real
estate loans totaled $2.5 million with no single loan larger than $752,000.

        Land Loans. At September 30, 1996, the Bank had $2.8 million invested in
residential lot loans to individuals.

        Consumer Loans.  The Bank also offers loans in the form of loans secured
by deposits, home equity loans, automobile loans, mobile home loans, credit card
loans and unsecured personal consumer loans.  Federal regulations allow the Bank
to make secured and unsecured consumer loans of up to 35% of the Bank's assets.

        The Bank  originates  consumer loans in order to provide a wide range of
financial  services to its  customers and because the shorter terms and normally
higher  interest  rates on such loans help maintain a profitable  spread between
its average loan yield and its cost of funds.  In connection  with consumer loan
applications,  the Bank  verifies  the  borrower's  income and  reviews a credit
bureau report.  In addition,  the  relationship  of the loan to the value of the
collateral is considered.

        Loans  secured by  deposits at the Bank are  typically  made for no more
than 90% of the deposit  and at an  interest  rate 2% above the rate paid on the
deposit.  At September  30, 1996,  the Bank had $5.7 million of loans secured by
deposits.

        Teche  Federal  also  originates  automobile  and mobile home loans.  At
September 30, 1996,  $5.5 million and $.8 million  consisted of  automobile  and
mobile home loans, respectively.

        The Bank has recently instituted a credit card program whereby customers
are offered  revolving  credit  through  Teche  Federal  credit  cards which are
serviced by a third-party vender. At September 30, 1996, such credit cards had a
balance of $1.5 million.

        Consumer  loans  tend to be  originated  at higher  interest  rates than
conventional residential mortgage loans and for shorter terms which benefits the
Bank's interest rate risk management.  However, consumer loans generally involve
more risk than first mortgage one- to four-family residential real estate loans.
Repossessed  collateral for a defaulted loan may not provide an adequate  source
of repayment  of the  outstanding  loan  balance as a result of damage,  loss or
depreciation,  and the  remaining  deficiency  often  does not  warrant  further
substantial   collection  efforts  against  the  borrower.  In  addition,   loan
collections are dependent on the borrower's continuing financial stability,  and
thus are more likely to be adversely affected by job loss,  divorce,  illness or
personal bankruptcy. Further, the application of

                                        7


<PAGE>



various  state and federal  laws,  including  federal and state  bankruptcy  and
insolvency  law,  may limit the amount which may be  recovered.  These loans may
also give rise to defenses by the  borrower  against the Bank and a borrower may
be able to assert  against the Bank claims and defenses which it has against the
seller of the underlying  collateral.  In underwriting  consumer loans, the Bank
considers the borrower's  credit history,  an analysis of the borrower's  income
and ability to repay the loan, and the value of the collateral. The Bank's risks
associated with consumer loans have been further limited by the modest amount of
consumer  loans  made  by  the  Bank.  At  September  30,  1996,  the  Bank  had
approximately $10.6 in consumer loans delinquent more than 90 days.

        Loan Approval Authority and Underwriting. All loans of $100,000 or more,
including  second  mortgage  loans  where the total of both the first and second
mortgages exceeds $100,000, assumptions and loans to facilitate the sale of REO,
must be approved by a minimum of two members of the senior loan  committee and a
loan  officer  for the  geographic  area  where the  collateral  for the loan is
located.

        All loans of $30,000 to $100,000,  including second mortgage loans where
the total of both the first and second mortgages exceed this amount, assumptions
and loan to  facilitate  the sale of REO, must be approved by a minimum of three
members of the loan  committee or by two members of the loan  committee,  one of
which is a member of the senior loan committee.  All loans of under $30,000 must
be approved by two loan committee members.

        Certain  officers  approved  by the  Board  are  authorized  to  approve
consumer  loans.  The  amounts  which any one  officer may approve for a secured
consumer loan range from $25,000 to $15,000.  The maximum  amounts for unsecured
consumer loans are $5,000 to $3,000. Any two loan officers may combine authority
for consumer loans up to their combined limits.

        One-  to   four-family   residential   mortgage   loans  are   generally
underwritten  according to FHLMC and FNMA guidelines,  generally utilizing their
approved mortgage documents.  For all loans originated by the Bank, upon receipt
of a completed loan application from a prospective  borrower, a credit report is
ordered,  income and certain  other  information  is verified and, if necessary,
additional financial  information is requested.  An appraisal of the real estate
intended to secure the proposed loan is required which typically is performed by
an  independent  appraiser  designated and approved by the Board of Directors of
the Bank. The Bank makes  construction/permanent loans on individual properties.
Funds  advanced  during  the  construction  phase are held in a  loan-in-process
account and disbursed  based upon various stages of completion.  The independent
appraiser  or loan officer  determines  the stage of  completion  based upon its
physical inspection of the construction.

        The Bank generally  requires title insurance for its one- to four-family
residential loans, (except in St. Mary Parish, where an attorney's title opinion
is customarily considered sufficient).  The Bank requires that fire and extended
coverage casualty insurance (and, if appropriate, flood insurance) be maintained
in an amount at least equal to the outstanding loan balance.

        It is the Bank's  policy to  require  borrowers  to  advance  funds on a
monthly basis  together with each payment of principal and interest to an escrow
account  from which the Bank makes  disbursements  for items such as real estate
taxes and hazard insurance premiums.

        Mortgage  loans  originated by the Bank  generally  include  due-on-sale
clauses  which  provide  the Bank  with the  contractual  right to deem the loan
immediately due and payable in the event that the borrower  transfers  ownership
of the property without the Bank's consent.

                                        8


<PAGE>



        Loan Commitments.  Teche Federal issues written,  formal  commitments to
prospective borrowers on all real estate approved loans. The commitment requires
acceptance  within 30 days of the date of  issuance.  Commitments  for  consumer
loans,  which  are not  given in  writing,  expire 30 days  after  issuance.  At
September  30,  1996,  the Bank had $18.3  million of  commitments  to originate
mortgage  loans,   including  $10.6  million  of  the  undisbursed   portion  of
loans-in-process.

        Loans-to-One Borrower. Savings associations cannot make any loans to one
borrower in an amount that exceeds in the aggregate  15% of  unimpaired  capital
and retained income on an unsecured basis and an additional  amount equal to 10%
of  unimpaired  capital  and  retained  income if the loan is secured by readily
marketable collateral  (generally,  financial  instruments,  not real estate) or
$500,000, whichever is higher. The Bank's maximum loan-to-one borrower limit was
approximately $6.5 million as of September 30, 1996.

        At September 30, 1996, the Bank's largest lending relationship consisted
of a $752,000  construction/permanent  loan to a non-profit  corporation for the
construction  of a 60-apartment  complex for the elderly and low income families
in Alexandria, Louisiana. This project was funded with a $1.2 million grant from
the  Affordable  Housing  Program of the FHLB of Dallas and a $755,000 loan from
the Bank which is fully  guaranteed by the U.S.  Department of Housing and Urban
Development  ("HUD").  The project is  currently  in use.  The next five largest
lending relationships at September 30, 1996 ranged from $364,000 to $511,000 and
were secured primarily by apartment complexes and commercial  properties located
in the Bank's Primary  Market Area. Of these loans,  $1.3 million are classified
as substandard. See "-- Non-performing and Problem Assets --Classified Assets."

Non-Performing and Problem Assets

        General. Teche Federal's Primary Market Area is dependent,  to a certain
extent,  on the oil and gas,  seafood and  agricultural  (primarily  sugar cane)
industries.  These industries are cyclical in nature and have a direct impact on
the level and performance of the Bank's loan portfolio. In the mid-1980s,  after
sharp  increases in interest  rates,  oil prices fell,  causing severe  economic
problems in Louisiana and the Bank's Primary Market Area.  During this time, the
Bank experienced a sharp increase in non-performing assets and real estate owned
("REO").  The Bank's Primary Market Area has, to a certain  extent,  diversified
somewhat since the mid-1980's, however, management continues to monitor its loan
portfolio  and has  instituted  various  underwriting  standards  to address any
future economic downturns.

                                        9


<PAGE>



        Non-Performing Assets and Delinquencies. When a borrower fails to make a
required payment on a loan and does not cure the delinquency promptly,  the loan
is classified as delinquent. In this event, the normal procedure followed by the
Bank is to make contact with the borrower at  prescribed  intervals in an effort
to bring the loan to a current status.  In most cases,  delinquencies  are cured
promptly.  If a  delinquency  is not cured,  the Bank  normally,  subject to any
required prior notice to the borrower,  commences  foreclosure  proceedings,  in
which the property may be sold. In foreclosure  sale, the Bank may acquire title
to the property through  foreclosure,  in which case the property so acquired is
offered for sale and may be financed by a loan involving terms more favorable to
the borrower than those normally  offered.  Any property acquired as a result of
foreclosure or by deed in lieu of foreclosure is classified as real estate owned
until such time as it is sold or  otherwise  disposed  of by the Bank to recover
its investment. As of September 30, 1996, the Bank held real estate owned in the
amount of  $46,000  net of a  $108,000  reserve.  Any real  estate  acquired  in
settlement of loans is initially  recorded at the lower of the loan balance plus
unpaid  accrued  interest or the estimated fair value at the time of acquisition
and is  subsequently  reduced  by  additional  allowances  which are  charged to
earnings if the estimated fair value of the property  declines below its initial
value.  Subsequent  costs directly  relating to development  and  improvement of
property are  capitalized  (not to exceed fair value),  whereas costs related to
holding property are expensed.

        The Bank's general  policy is to place a loan on nonaccrual  status when
the loan becomes 90 days  delinquent  or otherwise  demonstrates  other risks of
collectibility.  Interest on loans that are  contractually  90 days or more past
due is reserved through an allowance account.  The allowance is established by a
charge to interest income equal to all interest previously accrued, and interest
is subsequently  recognized only to the extent cash payments are received until,
in management's  judgment,  the borrower's ability to make periodic interest and
principal  payments  is back to normal,  in which case the loan is  returned  to
accrual status.

                                       10


<PAGE>



        The following table sets forth information  regarding non-accrual loans,
real estate owned ("REO"),  and loans that are 90 days or more delinquent but on
which the Bank was accruing  interest at the dates  indicated  and  restructured
loans. There are no restructured loans other than those included in the table.
<TABLE>
<CAPTION>
                                                                   At September 30,
                                                        --------------------------------------
                                                        1996       1995        1994       1993
                                                        ----       ----        ----       ----
                                                                      (Dollars in thousands)
<S>                                                        <C>        <C>       <C>        <C>   
Loans accounted for on a non-accrual basis:
 Mortgage loans:
   Permanent loans secured by one- to four-family
     residences.....................................       $544       $584      $  578     $  189
   All other mortgage loans.........................         --         59         198        139
 Consumer...........................................         15         19          50         14
                                                            ---       ----       -----     ------
      Total.........................................       $559       $662      $  826     $  342
                                                            ===       ====       =====      =====

Accruing loans which are contractually past
due 90 days or more:
 Mortgage loans:
   Permanent loans secured by one- to four-family
     residences ....................................         --         --          --         --
   All other mortgage loans.........................         --         --          --         --
 Consumer...........................................         --         --          --         --
                                                           ----       ----      ------      -----
      Total.........................................       $ --       $ --      $   --      $  --
                                                           ====       ====      ======      =====
Total non-performing loans..........................       $559       $662      $  826      $ 342
                                                           ====       ====       =====      =====

Real estate owned...................................       $ 46       $253      $   99      $ 267
                                                           ====       ====       =====      =====
Total non-performing assets.........................       $605       $915      $  925      $ 609
                                                           ====       ====       =====      =====

Total non-performing loans to total loans

  outstanding before allowance......................        .17%       .25%        .35%       .16%
                                                          =====        ===         ===        ===
Total non-performing loans to total assets..........        .15%       .20%        .29%       .14%
                                                          =====        ===         ===        ===
Total non-performing assets to total assets.........        .16%       .28%        .33%       .25%
                                                          =====        ===         ===        ===
</TABLE>



        Interest  income that would have been recorded on loans accounted for on
a non-accrual  basis under the original terms of such loans was not  significant
for the year ended September 30, 1996.

        The  following  table  sets  forth the types and  dollar  amounts of the
Bank's loans which were more than 60 days delinquent as of September 30, 1996:

                                                  At
                                            September 30,
                                                 1996
                                            -------------
                                            (In Thousands)

Residential mortgage loans..............        $649
Non-residential real estate loans.......          --
Land loans..............................          --
Consumer loans..........................          39



                                       11


<PAGE>



        Real Estate  Owned.  Real  estate  acquired by the Bank as the result of
foreclosure or by deed in lieu of foreclosure is classified as real estate owned
until it is sold.  When property is acquired it is recorded at the fair value at
the date of  foreclosure.  At September  30,  1996,  the Bank had REO with a net
balance of $46,000.

        Allowances  for Loan Losses and Real Estate  Owned.  It is  management's
policy to provide for losses on loans in its loan portfolio and foreclosed  REO.
A  provision  for loan  losses is charged to  operations  based on  management's
evaluation of the losses that may be incurred in the Bank's loan portfolio. Such
evaluation, which includes a review of all loans of which full collectibility of
interest and  principal may not be reasonably  assured,  considers,  among other
matters, the estimated net realizable value of the underlying collateral.

        While the Bank's provision for loan losses has fluctuated, the amount of
provisions  recorded in future  periods may be  significantly  greater or lesser
than the  provisions  taken in the  past.  This  allowance,  as a ratio of total
loans, before the allowance, was 1.00% at September 30, 1996.

        Management  will  continue  to  review  the  entire  loan  portfolio  to
determine the extent, if any, to which further additional loss provisions may be
deemed  necessary.  There can be no assurance that the allowance for losses will
be adequate to cover losses which may in fact be realized in the future and that
additional provisions for losses will not be required.

                                       12


<PAGE>



        Allocation of Allowance for Loan Losses.  The following table sets forth
the allocation of the Bank's  allowance for loan losses by loan category and the
percent of loans in each category to total loans  receivable,  net, at the dates
indicated.  The  portion  of the loan  loss  allowance  allocated  to each  loan
category  does not  represent  the total  available  for losses  which may occur
within the loan  category  since the total loan loss  allowance  is a  valuation
reserve applicable to the entire loan portfolio.
<TABLE>
<CAPTION>
                                                                          At September 30,(1)
                            --------------------------------------------------------------------------------------------------------
                                   1996                 1995                    1994                1993               1992
                            --------------------  -------------------   ---------------------  ------------------ ------------------
                                      Percent of           Percent of             Percent of          Percent of          Percent of
                                       Loans to             Loans to               Loans to            Loans to            Loans to
                             Amount  Total Loans  Amount  Total Loans   Amount    Total Loans  Amount Total Loans Amount Total Loans
                             ------  -----------  ------  -----------   ------    -----------  ------ ----------- ------ -----------
                                                                                   (Dollars in Thousands)
                                     
At end of year allocated to:                                                                          
<S>                           <C>      <C>        <C>         <C>         <C>      <C>        <C>      <C>        <C>      <C>   
One- to four-family.........  $3,426    87.03%    $2,201       87.49%     $2,050    86.27%    $1,448    85.47%    $1,520    86.81%
Multi-family and commercial
  real estate...............     414     3.13        510        3.89         494     3.76        552     4.45        435     5.02
Construction................      25     4.15         25        3.02          25     4.72         25     5.01         15     2.97
Consumer and other loans....     317     5.69        230        5.60         209     5.25        168     5.07         72     5.20
                               -----   ------      -----      ------       -----   ------     ------   ------     ------   ------
Total allowance(1)..........  $3,182   100.00%    $2,966      100.00%     $2,778   100.00%    $2,193   100.00%    $2,042   100.00%
                               =====   ======      =====      ======       =====   ======      =====   ======      =====   ======
</TABLE>


------------------------
(1)     Includes specific reserves for assets classified as loss.



                                       13


<PAGE>



        Analysis of the  Allowance  for Loan Losses.  The  following  table sets
forth  information  with respect to the Bank's allowance for loan losses for the
periods indicated:
<TABLE>
<CAPTION>
                                                                At September 30,
                                         --------------------------------------------------------------
                                            1996         1995         1994         1993         1992
                                            ----         ----         ----         ----         ----
                                                             (Dollars in Thousands)

<S>                                        <C>          <C>          <C>           <C>         <C>     
Total loans outstanding, net..........     $316,216     $257,869     $233,554      $207,384    $189,876
                                            =======      =======      =======       =======     =======
Average loans outstanding.............     $283,962     $245,567     $219,393      $196,547    $190,479
                                            =======      =======      =======       =======     =======

Allowance balances (at beginning of year)  $  2,966     $  2,778     $  2,193      $  2,042    $  1,509
                                           --------     --------     --------      --------    --------
Provision............................           300          360          577           183         521
                                           --------     --------     --------      --------    --------
Effect of pooling.....................                        --           --            --          45
Charge offs:

  Residential real estate mortgage loans:
    One- to four-family units.........          (28)         (81)         (63)         (125)        (16)
  Construction loans..................           --           --           --            --          --
  Multi-family and commercial real estate
    loans.............................           --          (72)          --            --          --
  Land loans.........................            --           --           --            --          --
  Other...............................          (59)         (32)         (34)           --         (77)
                                            -------     --------     --------      ---------   --------
      Total charge-offs...............         (87)        (185)         (97)         (125)        (93)
Recoveries
  Residential real estate mortgage loans          3           --           --            --          --
    One- to four-family units.........           --           12          105            93          23
  Construction loans..................           --           --           --            --          37
  Multi-family and commercial real estate
    loans.............................           --           --           --            --          --
  Land loans..........................           --           --           --            --          --
  Other...............................           --            1           --            --          --
                                            -------     --------     --------      --------    --------
      Total recoveries................            3           13          105            93          60
                                            -------     --------     --------      --------    --------
  Net (charge-offs) recoveries........          (84)        (172)           8           (32)        (33)
                                            ------      -------      --------      -------     -------
Allowance balance (at end of year)....      $ 3,182     $  2,966     $  2,778      $  2,193    $  2,042
                                            =======     ========     ========      ========    ========

Allowance for loan losses to total loans
  outstanding before allowance........         1.00%        1.14%        1.18%         1.05%       1.09%
Net loans charged off as a percent of average
  loans outstanding before allowance..          .03%         .07%          --%          .02%        .02%

</TABLE>

                                       14


<PAGE>



        Analysis of the Allowance for Losses on Real Estate Owned. The following
table sets forth  information with respect to the Bank's allowance for losses on
real estate owned at the dates indicated.
<TABLE>
<CAPTION>

                                                          At September 30,
                                   -------------------------------------------------------------
                                      1996         1995        1994         1993          1992
                                      ----         ----        ----         ----          ----
                                                              (Dollars in Thousands)

<S>                                   <C>             <C>        <C>           <C>          <C>   
Total real estate owned, net.....     $    46         $253       $  99         $ 267        $1,499
                                       ======          ===        ====          ====         =====


Allowance - beginning............         131         $163        $186         $ 905        $1,511

Provision........................          --           --          --            44           140

Charge-offs......................         (23)         (32)        (23)         (763)         (746)
                                       ------         ----        ----          ----         -----

Allowance - ending...............     $   108        $ 131       $ 163         $ 186        $  905
                                       ======         ====        ====          ====        ======
Allowance for losses on
  real estate owned to real
  estate owned before allowance..          70%          34%         62%           41%           38%
</TABLE>


Investment Activities

        General.  To supplement  lending  activities,  Teche Federal  invests in
residential    mortgage-backed    securities,    investment    securities    and
interest-bearing  deposits.  These  investments have  historically  consisted of
investment  securities issued by U.S. Government  agencies.  Such securities can
serve as collateral for borrowings and, through repayments and maturities,  as a
source of liquidity. Teche Federal anticipates having the ability to fund all of
its  investing  activities  from  funds  held on  deposit  at  FHLB  of  Dallas,
maturities, loan repayments and the Bank's borrowing capacity.

        Federally chartered savings institutions have the authority to invest in
various types of assets,  including  U.S.  Treasury  obligations,  securities of
various federal agencies and of state and municipal governments, deposits at the
FHLB of  Dallas,  certificates  of deposit of  federally  insured  institutions,
certain bankers' acceptances and federal funds. Subject to various restrictions,
such  institutions  also have the authority to invest a portion of its assets in
commercial  paper,  corporate debt securities and ARM funds, the assets of which
conform to the investments  that federally  chartered  savings  institutions are
otherwise authorized to make directly. Savings institutions are also required to
maintain  minimum levels of liquid assets which vary from time to time. The Bank
may decide to increase its liquidity  above the required  levels  depending upon
the  availability of funds and comparative  yields on investments in relation to
return on loans.

        The Bank is required  under  federal  regulations  to maintain a minimum
amount of liquid assets and is also  permitted to make certain other  securities
investments.  At September 30, 1996 the Bank's  regulatory  liquidity was 6.03%,
which is in  excess  of 5%  required  by OTS  regulations.  See  "Regulation  --
Regulation  of the Bank --  Federal  Home Loan Bank  System"  and  "Management's
Discussion  and Analysis of Financial  Condition  and Results of  Operations  --
Liquidity and Capital Resources."

                                       15


<PAGE>



        The Boards of Directors of the Bank and the Company maintain  Investment
Committees which are authorized to establish and implement  investment  policies
and to supervise the Bank's or the Company's investment activities.  Pursuant to
its delegated authority,  the Investment Committees have established permissible
types of investments,  quality criteria, portfolio limits, procedures,  controls
and committee and individual  investment  authorities.  The investment  policies
consider the Bank's and the  Company's  business  plan,  growth  plans,  current
economic  environments,  range of reasonably  foreseeable economic environments,
the  types  of   securities   to  be  held  and  other   safety  and   soundness
considerations.

        Before being  purchased,  each  investment  is analyzed as to investment
intent. The Bank  distinguishes  between  investment  activities  undertaken for
investment,  for sale or for trading.  Such activities are differentiated  based
upon the Bank's desire to earn an interest yield (held to maturity),  to realize
a holding gain from assets held for  indefinite  periods of time  (available for
sale) or to earn a dealer's  spread  between the bid and asked  prices (held for
trading).  The Bank  attempts to earn an acceptable  spread  between the cost of
funds used to purchase an investment  and the return on that  investment.  Under
circumstances  when  credit  risk,  interest  rate  risk or  prepayment  risk is
significantly reduced, a lesser return may be considered acceptable.

        Securities  which are classified as "held to maturity" are accounted for
based on  historical  cost  adjusted for  amortization  of premiums or discounts
using  the  level  yield  method.  The  "held to  maturity"  portfolio  consists
primarily of U.S.  Government  obligations  and  securities  of various  federal
agencies,  municipal debt securities and mortgage-backed and related securities.
Securities  that are  classified  as  "available  for sale" are accounted for at
their market  value,  with  unrealized  gains and losses  reported as a separate
component of capital.  Securities  that are classified as "held for trading" are
accounted  for at their fair  market  value,  with  unrealized  gains and losses
included in earnings.

        The  following  table sets  forth the  carrying  value of the  Company's
investment  portfolio,  short-term  investments  and  FHLB  stock  at the  dates
indicated.
<TABLE>
<CAPTION>
                                                                 At September 30,
                                                           --------------------------------
                                                           1996         1995        1994
                                                           ----         ----        ----

                                                                  (In Thousands)
<S>                                                       <C>           <C>         <C>    
Investment securities issued by U.S.
  Government agencies and corporations (1)............    $  11,462     $20,927     $26,425
FHLB Stock............................................        3,703       2,671       2,112
Mortgage-backed securities (1)........................       32,099      28,123       9,651
Common stock and municipal obligations................          935         572          --
                                                           --------     -------   ---------
   Total investment and mortgage-backed
      securities......................................       48,199      52,293      38,188
Interest-bearing deposits.............................        6,064       5,293       6,350
                                                           --------     -------     -------
   Total investments..................................    $  54,263     $57,586     $44,538
                                                           ========      ======      ======
</TABLE>


--------------------
(1)     Investment  and  mortgage-backed  securities  "available  for  sale" are
        carried at fair  market  value,  while  investment  and  mortgage-backed
        securities "held to maturity" are carried at cost.

                                       16


<PAGE>



        Mortgage-backed and Investment  Securities.  Mortgage-backed  securities
represent a participation  interest in a pool of  single-family  or multi-family
mortgages,  the  principal  and  interest  payments on which are passed from the
mortgage  originators,   through  intermediaries  (generally  quasi-governmental
agencies)  that pool and  repackage the  participation  interests in the form of
securities,  to investors such as the Bank.  Such  quasi-governmental  agencies,
which  guarantee the payment of principal  and interest to investors,  primarily
include FHLMC, FNMA and Government National Mortgage Association ("GNMA").

        Mortgage-backed  securities  typically are issued with stated  principal
amounts,  and the  securities  are backed by pools of mortgages  that have loans
with  interest  rates that are within a range and have varying  maturities.  The
underlying pool of mortgages can be composed of either  fixed-rate  mortgages or
adjustable-rate  mortgage  loans.   Mortgage-backed   securities  are  generally
referred to as mortgage participation certificates or pass-through certificates.
As a result,  the interest rate risk  characteristics  of the underlying pool of
mortgages,  i.e., fixed rate or adjustable rate, as well as prepayment risk, are
passed on to the certificate holder. The life of a mortgage-backed  pass-through
security  is  equal  to the life of the  underlying  mortgages.  Mortgage-backed
securities  issued  by  FHLMC,  FNMA,  and  GNMA  make  up  a  majority  of  the
pass-through   certificates   market.  At  September  30,  1996,  the  Bank  had
mortgage-backed  securities  available for sale with an amortized  cost of $31.9
million and an estimated market value of $32.1 million.

        At  September  30,  1996,  Teche  Federal had an  investment  securities
portfolio with an amortized  cost of  approximately  $11.3  million,  consisting
primarily of  obligations  of U.S.  government  corporations  and  agencies,  as
permitted by the OTS regulations.  The market value of investment  securities at
September 30, 1996 (excluding  FHLB stock and  interest-bearing  accounts),  was
$11.5 million. Teche Federal will continue to seek high quality investments with
short to intermediate maturities.

        In accordance with SFAS 115, the Bank designated as "available for sale"
certain  investment and  mortgage-backed  securities that could be sold prior to
their contractual  maturity in the event of an unforeseen  liquidity need. These
securities are reported at fair value on the consolidated  balance sheets of the
Bank with any unrealized gains or losses  reflected as an separate  component of
equity capital,  net of deferred taxes. Equity capital was increased $354,000 at
September  30,  1996  as the  result  of the  designation  of all of the  Bank's
securities being designated as "available for sale."

Interest-Bearing Accounts Held at Other Financial Institutions. At September 30,
1996,  the Bank held $6.1 million in the FHLB and  interest-bearing  deposits in
other  financial  institutions.  The Bank  maintains  these accounts in order to
maintain liquidity.

                                       17


<PAGE>



        Investment Portfolio Maturities.  The following table sets forth certain
information regarding the amortized cost, carrying value, market value, weighted
average  yields and  maturities  of the Bank's  investment  and  mortgage-backed
securities portfolio at September 30, 1996.
<TABLE>
<CAPTION>

                                                             As of September 30, 1996
                           ---------------------------------------------------------------------------------------    
                             One Year or Less  One to Five Years     Five to Ten Years        More than Ten Years
                               --------------  -------------------   -----------------       ---------------------
                            Amortized Average  Amortized   Average   Amortized   Average     Amortized    Average
                              Cost     Yield      Cost      Yield      Cost       Yield        Cost        Yield 
                             ------   -------    ------    -------    ------     -------      ------      --------
                                                                              (Dollars in Thousands)    

Investment Securities
<S>                          <C>         <C>      <C>         <C>      <C>           <C>       <C>        <C>    
 available for sale......    $ 7,522     7.70%    $3,744      7.26%    $   --        N/A       $     --    N/A   

Mortgage-backed Securities
  available for sale(1)..         --      N/A         --       N/A         --        N/A         31,862   6.56   
FHLB Stock...............        N/A      N/A        N/A       N/A        N/A        N/A            N/A    N/A   
Common Stock.............        N/A      N/A        N/A       N/A        N/A        N/A            N/A    N/A   
Municipal Obligations....       2.64     6.00         --       N/A         --        N/A             --    N/A   
                              ------     ----     ------                -----                  --------          
      Total..............     $7,786     7.64%    $3,744      7.26%    $   --        N/A       $ 31,862   6.56%  
                               =====               =====                =====                   =======          
</TABLE>

<TABLE>
<CAPTION>

                                      As of September 30, 1996
                           --------------------------------------------
                                         Total Investments
                              -----------------------------------------
                              Amortized  Average    Carrying     Market
                                 Cost     Yield       Value       Value
                                ------   -------      -----      ------
                           

Investment Securities
<S>                          <C>         <C>       <C>         <C>    
 available for sale......    $11,266     7.55%     $11,462     $11,462

Mortgage-backed Securities
  available for sale(1)..     31,862     6.56       32,099      32,099
FHLB Stock...............      3,703     6.05        3,703       3,703
Common Stock.............        568       --          669         669
Municipal Obligations....        264     6.00          266         266
                             -------               -------     -------
      Total..............    $47,663     6.67%     $48,199     $48,199
                              ======                ======      ======
</TABLE>


------------------------------
(1)            Does not assume prepayments.

                                       18


<PAGE>



Sources of Funds

        General.  Deposits  are the major source of the Bank's funds for lending
and  other   investment   purposes.   Teche  Federal  also  derives  funds  from
amortization and prepayment of loans and mortgage-backed securities,  maturities
of investment  securities and operations.  Scheduled loan principal and interest
payments are a relatively  stable  source of funds,  while  deposit  inflows and
outflows and loan prepayments are  significantly  influenced by general interest
rates and market conditions.  Teche Federal also utilizes advances from the FHLB
of Dallas.

        Deposits.  Consumer and  commercial  deposits are attracted  principally
from  within the Bank's  Primary  Market Area  through  the  offering of a broad
selection  of deposit  instruments  including  regular  savings,  demand and NOW
accounts and  certificates  of deposit.  Deposit account terms vary according to
the minimum balance  required,  the time period the funds must remain on deposit
and the interest rate, among other factors.

        The interest  rates paid by the Bank on deposits can be set daily at the
direction of senior management.  Senior management  determines the interest rate
to offer the public on new and maturing accounts.  Senior management obtains the
interest rates being offered by other financial  institutions  within its market
area.  This data along with a report showing the dollar value of certificates of
deposit maturing is reviewed and interest rates are determined.

        Regular  savings  accounts,  money  market  accounts  and  NOW  accounts
constituted $59.3 million, or 23.3% of the Bank's deposit portfolio at September
30, 1996.  Certificates  of deposit  constituted  $195.4 million or 76.7% of the
deposit portfolio, including $46.6 million of which had balances of $100,000 and
over. As of September 30, 1996, the Bank had no brokered deposits.

                                       19


<PAGE>



        Time Deposits by Rate.  The following  table  presents,  by various rate
categories,  the  amount  of  certificate  accounts  outstanding  at  the  dates
indicated and the periods to maturity of the certificate accounts outstanding at
September 30, 1996.
<TABLE>
<CAPTION>
                                 Period to Maturity from September 30, 1996
                          -------------------------------------------------------
                          Less than       One to          Two to       Over Three
                          One Year       Two Years      Three Years       Years
                          --------       ---------      -----------       -----
                                               (In Thousands)
<S>       <C>               <C>             <C>             <C>            <C>   
Certificate accounts:
  3.00 to 3.99%.......      $2,000          $   --          $   --         $    2
  4.00 to 4.99%.......      31,291              62              --             40
  5.00 to 5.99%.......      44,765          39,018           8,649          2,513
  6.00 to 6.99%.......      22,892          17,606           5,741         15,731
  7.00 to 7.99%.......         516           1,818              --          2,805
                          --------         -------        --------        -------
      Total...........    $101,464         $58,504         $14,390        $21,091
                           =======          ======          ======         ======
</TABLE>


        Certificate  Accounts of $100,000 and Above.  Teche Federal  maintains a
policy of offering higher interest rates on certificates  with larger  balances.
For example,  for  certificates  with terms of 12 months which were purchased on
September 30, 1996,  those with  balances of $500 would yield 5.00%,  those with
balances of $40,000  would yield  5.30%,  those with  balances of $75,000  would
yield 5.40% and those with balances of $99,000  would yield 5.50%.  As a result,
to some extent, Teche Federal customers tend to consolidate accounts to earn the
highest possible interest.  This enables the Bank to effectively  compete in the
marketplace,  reduce the number of accounts and associated  costs, and increase,
to some extent the number of accounts with  balances of $100,000.  The following
table indicates the amount of the Bank's  certificates of deposit of $100,000 or
more by time remaining until maturity as of September 30, 1996.
<TABLE>
<CAPTION>
                                                              Certificates           Weighted
                                                               of Deposit         Interest Rate
                                                               ----------         -------------
                                                             (In Thousands)

<S>                                                            <C>                     <C>  
Maturity Period:
3 months or less........................................        $  7,977               5.58%
Over 3 through 6 months.................................           7,376               5.24
Over 6 through 12 months................................          12,292               5.65
Over 12 months..........................................          18,921               6.13
Totals..................................................          46,566               5.77

</TABLE>



                                       20


<PAGE>



        Savings  Deposit  Activity.  The following  table sets forth the savings
activities of the Bank for the periods indicated:
<TABLE>
<CAPTION>

                                                                 At September 30,
                                             ---------------------------------------------------
                                                     1996             1995             1994
                                                     ----             ----             ----
                                                                 (In Thousands)

<S>                                                <C>               <C>               <C>     
Beginning balance.........................         $233,805          $236,736          $212,996
Net deposits (withdrawals)................            9,259          (13,896)            14,695
Interest credited on deposits.............           11,659            10,965             9,045
                                                   --------           -------           -------
Ending balance............................         $254,723          $233,805          $236,736
                                                    =======           =======           =======
Total increase (decrease) in deposits.....         $ 20,918          $ (2,931)         $ 23,740
                                                    =======          ========           =======
Percentage increase (decrease)............             8.95%            (1.24)%           11.15%

</TABLE>

Borrowings

        Deposits  are the  primary  source of funds of the  Bank's  lending  and
investment activities and for its general business purposes. The Bank may obtain
advances  from the FHLB of Dallas to  supplement  its supply of lendable  funds.
Advances from the FHLB of Dallas are typically secured by a pledge of the Bank's
stock in the FHLB of Dallas and a portion of the Bank's first mortgage loans and
certain other assets.  The Bank, if the need arises, may also access the Federal
Reserve Bank discount  window to supplement  its supply of lendable funds and to
meet deposit withdrawal  requirements.  At September 30, 1996, Teche Federal had
$66.9 million in advances outstanding from the FHLB of Dallas.

        The following table sets forth certain information  regarding the Bank's
borrowed funds at or for the years ended on the dates indicated:
<TABLE>
<CAPTION>
                                                        At or For the Year Ended September 30,
                                                    -------------------------------------------
                                                      1996                1995            1994
                                                      ----                ----            ----
                                                                (Dollars in Thousands)

<S>                                                 <C>                 <C>             <C>     
FHLB advances:                                                     
  Average balance outstanding..................     $42,405             $18,842         $ 17,900
  Maximum amount outstanding at any                                
 month-end during the year.....................      72,500              34,300           24,000
  Balance outstanding at end of year...........      66,900              24,200           23,800
  Weighted average interest rate during the year       5.53%               5.77%            3.70%
  Weighted average interest rate at end of year        5.39%               5.71%            5.37%
</TABLE>                                                      


Subsidiary Activity

        The only subsidiary of the Company is Teche Federal.

        As of  September  30,  1996,  the  Bank  had one  subsidiary:  Appraisal
Services, Inc. ("ASI") and the net book value of the Bank's investment in stock,
unsecured  loans and conforming  loans in its service  corporation was $166,970.
ASI was  inactive  at  September  30,  1996 as a result of the sale of its 11.1%
interest in General  Financial  Life  Insurance  Company,  which sold credit and
mortgage life insurance through an insured institution.

                                       21


<PAGE>



        Teche  Federal  is  permitted  to invest  up to 2% of its  assets in the
capital  stock of, or secured or unsecured  loans to,  subsidiary  corporations,
with an additional investment of 1% of assets when such additional investment is
utilized primarily for community development  purposes.  Under such limitations,
as of  September  30,  1996,  Teche  Federal  was  authorized  to  invest  up to
approximately  $7.6 million in the stock of, or loans to,  service  corporations
(based upon the 2% limitation).

Personnel

        As of  September  30, 1996 the Bank had 115  full-time  and 51 part-time
employees.  None  of  the  Bank's  employees  is  represented  by  a  collective
bargaining  group. The Bank believes that its relationship with its employees is
good.

Regulation

        Set  forth  below  is a brief  description  of all  materials  laws  and
regulations  which relate to the  regulation  of the Bank and the  Company.  The
description  does not purport to be complete and is qualified in its entirety by
reference to applicable laws and regulations.

Holding Company Regulation

        General.  The  Company is a unitary  savings  and loan  holding  company
subject to regulatory  oversight by the OTS. As such, the Company is required to
register  and  file  reports  with  the OTS and is  subject  to  regulation  and
examination by the OTS. In addition,  the OTS has enforcement authority over the
Company and its non-savings association  subsidiaries,  should such subsidiaries
be formed,  which also permits the OTS to restrict or prohibit  activities  that
are determined to be a serious risk to the subsidiary savings association.  This
regulation  and  oversight  is  intended  primarily  for the  protection  of the
depositors of the Bank and not for the benefit of  stockholders  of the Company.
The Company is also required to file certain reports with, and otherwise  comply
with, the rules and regulations of the OTS and the SEC.

        Qualified  Thrift  Lender  Test.  As a unitary  savings and loan holding
company, the Company generally is not subject to activity restrictions, provided
the Bank  satisfies  the Qualified  Thrift  Lender  ("QTL") test. If the Company
acquires  control of another savings  association as a separate  subsidiary,  it
would become a multiple savings and loan holding company,  and the activities of
the  Company  and any of its  subsidiaries  (other  than the  Bank or any  other
SAIF-insured   savings   association)   would  become  subject  to  restrictions
applicable to bank holding  companies unless such other  associations  each also
qualify as a QTL and were acquired in a supervisory acquisition. See "Regulation
of the Bank -- Qualified Thrift Lender Test."

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

        Federal law  generally  provides  that no "person,"  acting  directly or
indirectly or through or in concert with one or more other persons,  may acquire
"control," as that term is defined in OTS  regulations,  of a federally  insured
savings  institution  without giving at least 60 days' written notice to the OTS
and providing the OTS an opportunity to disapprove the proposed acquisition.  In
addition,  no company may acquire  control of such an institution  without prior
OTS approval.

                                       22


<PAGE>




        Federal  Securities  Law. The Company is subject to filing and reporting
requirements  by  virtue  of  having  its  common  stock  registered  under  the
Securities  Exchange Act of 1934.  Furthermore,  Holding  Company  stock held by
persons  who  are  affiliates  (generally  officers,   directors  and  principal
stockholders)  of the Company may not be resold without  registration  or unless
sold in  accordance  with  certain  resale  restrictions.  If the Company  meets
specified current public information requirements, each affiliate of the Company
is able to sell in the public market, without registration,  a limited number of
shares in any three-month period.

Regulation of the Bank

        General. As a federally chartered, SAIF-insured savings association, the
Bank is  subject  to  extensive  regulation  by the OTS  and the  FDIC.  Lending
activities and other  investments must comply with various federal statutory and
regulatory   requirements.   The  Bank  is  also  subject  to  certain   reserve
requirements promulgated by the Federal Reserve Board.

        The OTS, in conjunction with the FDIC,  regularly  examines the Bank and
prepares  reports for the  consideration of the Bank's Board of Directors on any
deficiencies that they find in the Bank's  operations.  The Bank's  relationship
with its depositors and borrowers is also regulated to a great extent by federal
law,  especially  in such matters as the  ownership of savings  accounts and the
form and content of the Bank's mortgage documents.

        The Bank  must file  reports  with the OTS and the FDIC  concerning  its
activities  and  financial  condition,   in  addition  to  obtaining  regulatory
approvals  prior to entering into certain  transactions  such as mergers with or
acquisitions  of other savings  institutions.  This  regulation and  supervision
establishes a comprehensive  framework of activities in which an institution can
engage and is intended  primarily for the protection of the SAIF and depositors.
The  regulatory  structure  also  gives  the  regulatory  authorities  extensive
discretion in connection with their  supervisory and enforcement  activities and
examination  policies,  including policies with respect to the classification of
assets and the  establishment  of adequate  loan loss  reserves  for  regulatory
purposes.  Any change in such  regulations,  whether by the OTS, the FDIC or the
Congress could have a material adverse impact on the Company, the Bank and their
operations.

        Insurance of Deposit  Accounts.  The Bank's deposit accounts are insured
by the SAIF to a maximum of $100,000 for each insured  member (as defined by law
and regulation).  The FDIC has the authority,  should it initiate proceedings to
terminate an institution's  deposit  insurance,  to suspend the insurance of any
such institution without tangible capital. However, if a savings association has
positive capital when it includes qualifying  intangible assets, the FDIC cannot
suspend deposit  insurance unless capital declines  materially,  the institution
fails to enter into and remain in  compliance  with an approved  capital plan or
the institution is operating in an unsafe or unsound manner.

        Regardless of an institution's capital level,  insurance of deposits may
be  terminated  by the FDIC upon a finding that the  institution  has engaged in
unsafe or unsound  practices,  is in an unsafe or unsound  condition to continue
operations  or has violated  any  applicable  law,  regulation,  rule,  order or
condition imposed by the FDIC or the institution's primary regulator.

        The FDIC  charges an annual  assessment  for the  insurance  of deposits
based on the risk a particular  institution poses to its deposit insurance fund.
Under this system,  a bank or thrift pays within a range of 23 cents to 31 cents
per  $100  of  domestic   deposits,   depending  upon  the  institution's   risk
classification.  This risk  classification is based on an institution's  capital
group and supervisory subgroup assignment.  In addition,  the FDIC is authorized
to increase such deposit insurance rates, on a semi-

                                       23


<PAGE>



annual  basis,  if it  determines  that such  action is  necessary  to cause the
balance  in the  SAIF  to  reach  the  designated  reserve  ratio  of  1.25%  of
SAIF-insured  deposits  within a  reasonable  period of time.  The FDIC also may
impose special  assessments  on SAIF members to repay amounts  borrowed from the
U.S.  Treasury or for any other reason deemed  necessary by the FDIC. The Bank's
federal  deposit  insurance  premium expense for the fiscal year ended September
30, 1996, amounted to approximately $543,000.

        The  Bank  recorded  what  they  believe  is a  one-time  assessment  of
approximately  65.7 basis  points on every $100 of deposits  based on the Bank's
deposits  at March 31, 1995 for a cost of  approximately  $1.2  million  (net of
taxes).  Future deposit insurance premiums are expected to be reduced from 0.23%
to approximately 0.06%. Based upon the Bank's deposits as of September 30, 1996,
the Bank's deposit  insurance  expense would decrease by approximately  $276,000
per year  after  taxes.  Management  of the Bank is  unable to  predict  whether
ongoing  SAIF  premiums  will be  reduced to a level  comparable  to that of BIF
premiums.

        Examination  Fees. In addition to federal  deposit  insurance  premiums,
savings  institutions  like the  Bank are  required  by OTS  regulations  to pay
assessments to the OTS to fund the operations of the OTS. The general assessment
is paid on a  semi-annual  basis and is  computed  based on total  assets of the
institution,  including subsidiaries.  The Bank's OTS assessment expense for the
fiscal year ended September 30, 1996 totalled approximately $84,000.

        Regulatory Capital Requirements. OTS capital regulations require savings
institutions to meet three capital standards: (1) tangible capital equal to 1.5%
of total adjusted assets,  (2) a leverage ratio (core capital) equal to at least
3% of total adjusted assets, and (3) a risk-based  capital  requirement equal to
8.0% of total risk-weighted assets.

        Savings associations with a greater than "normal" level of interest rate
exposure  will,  in the future,  be subject to a deduction  for an interest rate
risk ("IRR")  component  may be from capital for purposes of  calculating  their
risk-based capital requirement. See "-- Net Portfolio Value Analysis."

                                       24


<PAGE>



        As shown  below,  the Bank's  regulatory  capital  exceeded  all minimum
regulatory capital requirements applicable to it as of September 30, 1996:

                                                      Percent of
                                                       Adjusted
                                      Amount            Assets
                                      ------            ------
                                         (Dollars in Thousands)

Tangible Capital:

Actual capital..................        $42,816             11.3%
Regulatory requirement..........          5,680              1.5
                                         ------             ----
Excess..........................        $37,136              9.8%
                                         ======             ====

Core Capital:

Actual capital..................        $42,816             11.3%
Regulatory requirement..........         11,360              3.0
                                         ------             ----
Excess..........................        $31,456              8.3%
                                         ======             ====

Risk-Based Capital:

Actual capital..................        $45,186             21.9%
Regulatory requirement..........         16,498              8.0
                                         ------             ----
Excess..........................        $28,688             13.9%
                                         ======             ====



        The Bank is not under any agreement with  regulatory  authorities nor is
it aware of any current  recommendations by the regulatory authorities which, if
they were to be implemented,  would have a material effect on liquidity, capital
resources or operations of the Bank or the Company.

        Net Portfolio  Value  Analysis.  In order to encourage  associations  to
reduce  their  interest  rate  risk,  the OTS  adopted a rule  incorporating  an
interest rate risk ("IRR") component into the risk-based  capital rules. The IRR
component is a dollar  amount that will be deducted  from total  capital for the
purpose of calculating an institution's  risk-based  capital  requirement and is
measured  in terms of the  sensitivity  of its Net  Portfolio  Value  ("NPV") to
changes in interest rates.  NPV is the difference  between incoming and outgoing
discounted cash flows from assets, liabilities, and off-balance sheet contracts.
An  institution's  IRR is  measured  as the  change  to its NPV as a result of a
hypothetical 200 basis point ("bp") change in market interest rates. A resulting
change in NPV of more than 2% of the  estimated  market value of its assets will
require the  institution  to deduct from its capital 50% of that excess  change.
The rules provide that the OTS will  calculate  the IRR component  quarterly for
each institution.

        The OTS uses, as a critical  point,  a change of plus or minus 200 basis
points in order to set its "normal"  institutional results and peer comparisons.
The greater the change,  positive or negative,  in NPV, the more  interest  rate
risk is assumed to exist with the  institution.  The  following  table lists the
Bank's latest  percentage  change in NPV assuming an immediate change of plus or
minus 100,  200,  300 and 400 basis  points from the level of interest  rates at
September 30, 1996.

                                       25


<PAGE>



<TABLE>
<CAPTION>

                                                                                  NPV as % of PV
                                   Net Portfolio Value                               of Assets
                               -------------------------                    ---------------------------
Change                                                                         NPV
in Rates              $ Amount         $Change(1)        %Change(2)         Ratio(3)          Change(4)
--------              --------         ----------        ----------         --------          ---------
                                                  (Dollars in Thousands)

<S>      <C>                <C>              <C>                  <C>             <C>               <C>  
         +400 bp            16,106           -32,798              -67%             4.69%            -802bp

         +300 bp            24,486           -24,418              -50%             6.92%            -579bp

         +200 bp            32,943           -15,962              -33%             9.04%            -367bp

         +100 bp            41,253            -7,651              -16%            11.01%            -171bp

            0 bp            48,904                                                12.71%

         -100 bp            55,057            +6,153              +13%            14.00%            +129bp

         -200 bp            58,516            +9,612              +20%            14.66%            +195bp

         -300 bp            60,389            11,485              +23%            14.95%            +274bp

        - 400 bp            62,788           +13,884              +28%            15.35%            +264bp

</TABLE>

----------------
(1)     Represents  the excess  (deficiency)  of the  estimated NPV assuming the
        indicated  change in interest  rates minus the estimated NPV assuming no
        change in interest rates.
(2)     Calculated  as the amount of change in the  estimated NPV divided by the
        estimated NPV assuming no change in interest rates.
(3)     Calculated as the estimated NPV divided by average total assets.
(4)     Calculated  as the excess  (deficiency)  of the NPV ratio  assuming  the
        indicated change in interest rates over the estimated NPV ratio assuming
        no change in interest rates.

                                       26


<PAGE>

<TABLE>
<CAPTION>



                                                             September 30,       September 30,
                                                                  1996               1995
                                                             -------------       --------------
<S>                                                             <C>               <C>    

         *** RISK MEASURES: 200 BP RATE SHOCK ***

Pre-Shock NPV Ratio: NPV as % of PV of Assets.............       12.71%             14.85%

Exposure Measure: Post-Shock NPV Ratio....................        9.04%             12.66%

Sensitivity Measure: Change in NPV Ratio..................         367 bp            -220 bp



*** CALCULATION OF CAPITAL COMPONENT ***

Change in NPV as % of PV of Assets........................        4.15%             -2.73%

Interest Rate Risk Capital Component ($000)...............      $ 4,135           $ 1,218

</TABLE>

        As the table  shows,  increases  in interest  rates would  result in net
decreases in the Bank's NPV,  while  decreases in interest  rates will result in
smaller  net  increases  in  the  Bank's  NPV.   Based  on  these  specific  OTS
regulations,  the Bank  would be  required  to deduct  $4.1  million  from total
capital for purposes of calculating the Bank's risk-based  capital  requirement.
(The  Bank's NPV  decreases  by 3.7% if  interest  rates  increase  by 200 basis
points.) Certain  shortcomings are inherent in the methodology used in the above
table.  Modeling changes in NPV requires the making of certain  assumptions that
may tend to oversimplify  the manner in which actual yields and costs respond to
changes in market interest rates.  First, the models assume that the composition
of  the  Bank's  interest  sensitive  assets  and  liabilities  existing  at the
beginning of a period remains  constant over the period being measured.  Second,
the models  assume  that a  particular  change in  interest  rates is  reflected
uniformly  across the yield  curve  regardless  of the  duration  to maturity or
repricing  of specific  assets and  liabilities.  Accordingly,  although the NPV
measurements  do provide an indication of the Bank's interest rate risk exposure
at a particular  point in time, such  measurements are not intended to provide a
precise forecast of the effect of changes in market interest rates on the Bank's
net interest income.

        In times of decreasing  interest rates,  the value of fixed-rate  assets
could  increase in value and the lag in  repricing  of interest  rate  sensitive
assets could be expected to have a positive effect on the Bank.

        Prompt Corrective Action. The FDICIA also established a system of prompt
corrective  action to resolve  the  problems of  undercapitalized  institutions.
Under this  system,  which  became  effective  December  19,  1992,  the banking
regulators   are  required  to  take   certain   supervisory   actions   against
undercapitalized   institutions,   the  severity  of  which   depends  upon  the
institution's  degree of  capitalization.  Under the OTS final rule implementing
the prompt  corrective action  provisions,  an institution shall be deemed to be
(i) "well  capitalized" if it has total risk-based capital of 10.0% or more, has
a Tier I risk- based  capital ratio (core or leverage  capital to  risk-weighted
assets)  of 6.0% or  more,  has a  leverage  capital  of 5.0% or more and is not
subject to any order or final capital  directive to meet and maintain a specific
capital level for any capital measure, (ii) "adequately capitalized" if it has a
total risk-based  capital ratio of 8.0% or more, a Tier I risked-based  ratio of
4.0% or more and a leverage  capital  ratio of 4.0% or more (3.0% under  certain
circumstances)  and does not meet the  definition of "well  capitalized,"  (iii)
"undercapitalized"  if it has a total risk-based capital ratio that is less than
6.0%,  a Tier I  risk-based  capital  ratio that is less than 4.0% or a leverage
capital  ratio  that is less than 4.0%  (3.0% in  certain  circumstances),  (iv)
"significantly undercapitalized" if it has a total risk-based capital ratio that
is less than 6.0%, a Tier I risk-based capital ratio that is less than 3.0% or a
leverage capital ratio that

                                       27


<PAGE>



is less than  3.0% and (v)  "critically  undercapitalized"  if it has a ratio of
tangible equity to total assets that is equal to or less than 2.0%. In addition,
under certain  circumstances,  a federal  banking  agency may  reclassify a well
capitalized  institution as adequately capitalized and may require an adequately
capitalized  institution  or an  undercapitalized  institution  to  comply  with
supervisory  actions as if it were in the next lower  category  (except that the
FDIC  may  not  reclassify  a  significantly   undercapitalized  institution  as
critically  undercapitalized).  Immediately upon becoming  undercapitalized,  an
institution shall become subject to various restrictions and could be subject to
additional supervisory actions.

          The Bank is currently a "well  capitalized  institution" as defined in
the  prompt  corrective  action  regulations  and as such is not  subject to any
prompt corrective action measures.

        Dividend and Other Capital  Distribution  Limitations.  OTS  regulations
require  the  Bank to give  the OTS 30  days'  advance  notice  of any  proposed
declaration of dividends to the Company, and the OTS has the authority under its
supervisory  powers to prohibit  the payment of  dividends  to the  Company.  In
addition,  the Bank may not declare or pay a cash  dividend on its capital stock
if the  effect  thereof  would be to reduce the  regulatory  capital of the Bank
below the amount  required  for the  liquidation  account to be  established  in
connection with the Conversion.

        OTS regulations  impose  limitations  upon all capital  distributions by
savings  institutions,  such  as  cash  dividends,  payments  to  repurchase  or
otherwise acquire its shares, payments to shareholders of another institution in
a cash-out  merger and other  distributions  charged against  capital.  The rule
establishes  three tiers of  institutions,  based primarily on an  institution's
capital  level.  An  institution  that  exceeds  all  fully  phased-in   capital
requirements  before  and  after  a  proposed  capital   distribution  ("Tier  1
institution")  and has not  been  advised  by the OTS that it is in need of more
than the normal  supervision can, after prior notice but without the approval of
the OTS, make capital  distributions during a calendar year equal to the greater
of (i) 100% of its net income to date during the  calendar  year plus the amount
that would reduce by one-half its "surplus  capital  ratio" (the excess  capital
over its fully phased-in capital  requirements) at the beginning of the calendar
year,  or (ii) 75% of its net income over the most recent four  quarter  period.
Any additional capital  distributions  require prior regulatory approval.  As of
June 30,  1993,  the Bank was a Tier 1  institution.  In the  event  the  Bank's
capital fell below its fully  phased-in  requirement or the OTS notified it that
it was in need of more than  normal  supervision,  the  Bank's  ability  to make
capital distributions could be restricted. In addition, the OTS could prohibit a
proposed  capital  distribution  by any  institution,  which would  otherwise be
permitted by the regulation,  if the OTS determines that such distribution would
constitute an unsafe or unsound practice.

        Finally,  under the FDICIA,  a savings  association  is prohibited  from
making a capital  distribution  if, after making the  distribution,  the savings
association  would  be  "undercapitalized"  (not  meet  any  one of its  minimum
regulatory capital requirements).

        Qualified  Thrift Lender Test.  The Home Owners' Loan Act  ("HOLA"),  as
amended, requires savings institutions to meet a QTL test. If the Bank maintains
an appropriate  level of Qualified  Thrift  Investments  (primarily  residential
mortgages and related investments, including certain mortgage-backed securities)
("QTIs")  and  otherwise  qualifies  as a QTL,  it will  continue  to enjoy full
borrowing privileges from the FHLB of Dallas. The required percentage of QTIs is
65% of portfolio assets (defined as all assets minus intangible assets, property
used by the  institution  in conducting  its business and liquid assets equal to
10% of total assets).  Certain assets are subject to a percentage  limitation of
20% of portfolio assets. In addition, savings associations may include shares of
stock of the FHLBs,  FNMA and FHLMC as qualifying  QTIs. The FDICIA also amended
the method for measuring  compliance  with the QTL test to be on a monthly basis
in nine out of every 12 months, as opposed to on a daily or weekly average of

                                       28


<PAGE>



QTIs.  As of  September  30,  1996,  the  Bank  was in  compliance  with its QTL
requirement with 93.07% of its assets invested in QTIs.

        A savings  association that does not meet a QTL test must either convert
to a bank charter or comply with the following  restrictions  on its operations:
(i) the savings  association  may not engage in any new activity or make any new
investment,  directly or  indirectly,  unless such  activity  or  investment  is
permissible  for a  national  bank;  (ii) the  branching  powers of the  savings
association  shall be restricted to those of a national bank;  (iii) the savings
association shall not be eligible to obtain any advances from its FHLB; and (iv)
payment of  dividends by the savings  association  shall be subject to the rules
regarding  payment of dividends by a national bank. Upon the expiration of three
years from the date the  savings  association  ceases to be a QTL, it must cease
any activity and not retain any investment not  permissible  for a national bank
and  immediately  repay any  outstanding  FHLB  advances  (subject to safety and
soundness considerations).

        Loans-to-One   Borrower.   See   "Business  --  Lending   Activities  --
Loans-to-One Borrower."

        Community Reinvestment. Under the Community Reinvestment Act ("CRA"), as
implemented  by OTS  regulations,  a savings  association  has a continuing  and
affirmative obligation consistent with its safe and sound operation to help meet
the credit needs of its entire  community,  including  low and  moderate  income
neighborhoods.  The CRA does not  establish  specific  lending  requirements  or
programs  for  financial   institutions  nor  does  it  limit  an  institution's
discretion  to develop the types of products and  services  that it believes are
best  suited  to its  particular  community,  consistent  with the CRA.  The CRA
requires the OTS, in connection with its  examination of a savings  institution,
to assess the institution's  record of meeting the credit needs of its community
and to take such record into account in its  evaluation of certain  applications
by such institution.  Current law requires public disclosure of an institution's
CRA  rating  and  requires  the  OTS  to  provide  a  written  evaluation  of an
institution's CRA performance utilizing a four-tiered  descriptive rating system
in lieu of the existing  five-tiered  numerical rating system.  The OTS reported
that  Teche  Federal  had an  "outstanding  record of meeting  community  credit
needs," in its last examination dated November 1995. The OTS further stated that
"an institution in this group has an outstanding  record of, and is a leader in,
ascertaining  and  helping  to meet the credit  needs of its  entire  delineated
community,  including  low-  and  moderate-income  neighborhoods,  in  a  manner
consistent with its resources and capabilities."

        Transactions  With Affiliates.  Generally,  restrictions on transactions
with affiliates require that transactions  between a savings  association or its
subsidiaries  and  its  affiliates  be on  terms  as  favorable  to the  Bank as
comparable  transactions  with  non-affiliates.  In  addition,  certain of these
transactions  are restricted to an aggregate  percentage of the Bank's  capital;
collateral  in  specified  amounts  must  usually be provided by  affiliates  to
receive loans from the Bank.  Affiliates of the Bank include the Company and any
company  which would be under  common  control  with the Bank.  In  addition,  a
savings  association  may not lend to any affiliate  engaged in  activities  not
permissible  for a  bank  holding  company  or  acquire  the  securities  of any
affiliate  which  is not a  subsidiary.  The  OTS has the  discretion  to  treat
subsidiaries of savings associations as affiliates on a case-by-case basis.

        The Bank's authority to extend credit to its officers, directors and 10%
shareholders,  as well as to entities  that such  persons  control is  currently
governed by Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O
promulgated by the Federal Reserve Board. Among other things,  these regulations
require such loans to be made on terms substantially similar to those offered to
unaffiliated individuals,  place limits on the amount of loans the Bank may make
to such persons  based,  in part, on the Bank's  capital  position,  and require
certain  approval  procedures  to  be  followed.  OTS  regulations,  with  minor
variation, apply Regulation O to savings associations.

                                       29


<PAGE>




        Branching by Federal  Savings  Banks.  Effective  May 11, 1992,  the OTS
amended its Policy  Statement on Branching by Federal  Savings  Associations  to
permit  interstate  branching to the full extent  permitted by statute (which is
essentially  unlimited).  This  permits  savings  associations  with  interstate
networks to  diversify  their loan  portfolios  and lines of  business.  The OTS
authority  preempts any state law  purporting  to regulate  branching by federal
associations.  However, the OTS will evaluate a branching  applicant's record of
compliance  with the CRA.  A poor CRA  record  may be the basis for  denial of a
branching application.

        Liquidity  Requirements.   All  savings  associations  are  required  to
maintain an average daily balance of liquid assets equal to a certain percentage
of the sum of its average daily balance of net withdrawable deposit accounts and
borrowings payable in one year or less. The liquidity  requirement may vary from
time to time (between 4% and 10%) depending upon economic conditions and savings
flows of all savings  associations.  At the present  time,  the required  liquid
asset ratio is 5%. At September 30, 1996, the Bank's liquidity ratio was 6.01%.

        Liquid  assets for purposes of this ratio include  specified  short-term
assets (e.g.,  cash,  certain time deposits,  certain  banker's  acceptances and
short-term  U.S.  Government  obligations),  and long-term  assets  (e.g.,  U.S.
Government  obligations  of more  than one and less  than  five  years and state
agency obligations with a minimum term of 18 months). The regulations  governing
liquidity  requirements  include as liquid  assets debt  securities  hedged with
forward  commitments  obtained  from, or debt  securities  subject to repurchase
agreements  with,  members  of the Bank of  Primary  Dealers  in  United  States
Government  Securities  or banks whose  accounts  are insured by the FDIC,  debt
securities  directly hedged with a short  financial  future  position,  and debt
securities  that  provide the holder with a right to redeem the  security at par
value,  regardless  of the stated  maturities  of the  securities.  FIRREA  also
authorized  the OTS to  designate  as  liquid  assets  certain  mortgage-related
securities  with less  than one year to  maturity.  Short-  term  liquid  assets
currently must constitute at least 1% of an association's  average daily balance
of net withdrawable deposit accounts and current borrowings.  Monetary penalties
may be imposed upon associations for violations of liquidity requirements.

        Federal  Home  Loan  Bank  System.  The Bank is a member  of the FHLB of
Dallas,  which is one of 12 regional  FHLBs that  administer  the home financing
credit  function  of  savings  associations.  Each FHLB  serves as a reserve  or
central bank for its members within its assigned region.  It is funded primarily
from  proceeds  derived from the sale of  consolidated  obligations  of the FHLB
System.  It makes loans to members (i.e.,  advances) in accordance with policies
and  procedures  established  by the  Board  of  Directors  of the  FHLB.  As of
September 30, 1996, the Bank had $66.9 million  borrowed from the FHLB of Dallas
to fund operations; however, there can be no assurances that borrowings will not
be made in the future.

        As a member,  the Bank is required to purchase and maintain stock in the
FHLB of  Dallas  in an  amount  equal  to at least  1% of its  aggregate  unpaid
residential  mortgage loans, home purchase contracts,  or similar obligations at
the beginning of each year. As of September 30, 1996,  the Bank had $3.7 million
in FHLB stock, which was in compliance with this requirement.

        The FHLBs are required to provide  funds for the  resolution of troubled
savings  associations  and to contribute to affordable  housing programs through
direct loans or interest subsidies on advances targeted for community investment
and  low-  and  moderate-income  housing  projects.   These  contributions  have
adversely  affected the level of FHLB dividends paid and could continue to do so
in the future.  For the fiscal year ended September 30, 1996,  dividends paid by
the FHLB of Dallas to the Bank totalled $178,310.

                                       30


<PAGE>



        Federal  Reserve   System.   The  Federal  Reserve  Board  requires  all
depository  institutions to maintain  non-interest bearing reserves at specified
levels against their transaction accounts (primarily checking, NOW and Super NOW
checking  accounts) and non-personal time deposits.  The balances  maintained to
meet the reserve  requirements  imposed by the Federal Reserve Board may be used
to satisfy the liquidity  requirements that are imposed by the OTS. At September
30, 1996,  the Bank's total  transaction  accounts were in  compliance  with the
Federal Reserve Board requirements.

        Savings  associations  have authority to borrow from the Federal Reserve
Bank "discount  window," but Federal Reserve policy  generally  requires savings
associations  to exhaust  all OTS  sources  before  borrowing  from the  Federal
Reserve System. The Bank had no such borrowings at September 30, 1996.

        Recapture of Post-1987 Bad-Debt Reserves.  Prior to the enactment of the
Small Business Jobs Protection Act (the "Small Business Act"),  which was signed
into law on August 21, 1996,  certain thrift  institutions such as the Bank were
allowed  income tax  deductions  for bad debts under methods more favorable than
those  granted to other  taxpayers.  The Small  Business  Act  repealed the Code
Section 593 reserve method of accounting  for bad debts by thrift  institutions,
effective  for tax years  beginning  after 1995.  Thrift  institutions  that are
treated as small banks are allowed to utilize the experience  method  applicable
to such institutions,  while thrift institutions that are treated as large banks
(banks  with  assets of more than $500  million)  are  required  to use only the
specific charge off method.

        The amount of a thrift institution's  applicable excess reserves will be
included in taxable  income  ratably over a six taxable  year period,  beginning
with the first taxable year beginning after 1995.  However,  because the Company
meets certain  residential loan requirements it will defer the beginning of such
six year period for two years.

        For the Bank, a small bank, the amount of the  institution's  applicable
excess  reserves  generally is the excess of (i) the balances of its reserve for
losses  on  qualifying  real  property  loans  and its  reserve  for  losses  on
nonqualifying  loans as of the close of its last taxable year  beginning  before
January  1, 1996,  over (ii) the  greater  of the  balance  of (a) its  pre-1988
reserves  or (b) what the  Bank's  reserves  would have been at the close of its
last tax year  beginning  before  January 1, 1996,  had the Bank always used the
experience method. At September 30, 1996, the Bank's applicable excesss reserves
were approximately  $2.8 million.  Since the percentage of taxable income method
for tax bad debt  deduction and the  corresponding  increase in the tax bad debt
reserve in excess of the base year have been  recorded as temporary  differences
pursuant  to SFAS No.  109,  this change in the tax law will not have a material
effect on the Company's financial statements.

Federal Taxation

        The Bank  files its tax return on a  September  30 year  basis.  Savings
associations are subject to the provisions of the Internal Revenue Code of 1986,
as amended  (the  "Code"),  in the same  general  manner as other  corporations.
However,  for tax years beginning before 1996, savings  associations such as the
Bank, which met certain  definitional  tests and other conditions  prescribed by
the Code benefitted from certain favorable provisions regarding their deductions
from taxable income for annual additions to their bad debt reserve. For purposes
of the bad debt reserve  deduction,  loans are separated into  "qualifying  real
property  loans,"  which  generally  are  loans  secured  by  interests  in real
property,  and  nonqualifying  loans,  which are all other  loans.  The bad debt
reserve  deduction with respect to  nonqualifying  loans must be based on actual
loss  experience.  The amount of the bad debt reserve  deduction with respect to
qualifying  real property  loans may be based upon actual loss  experience  (the
"experience method") or a percentage of taxable income determined without regard
to such actual experience (the "percentage of taxable income method").  The Bank
will review the most favorable way

                                       31


<PAGE>



to calculate the deduction  attributable  to an addition to its bad debt reserve
on an annual basis. See Note 10 of Notes to Consolidated Financial Statements.

        Under the experience  method, the bad debt deduction may be based on the
greater of (i) a six-year  moving  average of actual  losses on  qualifying  and
non-qualifying  loans,  or (ii) the  amount  required  in order for the  current
year's  ending bad debt  reserve to equal the  institution's  base year  reserve
amount.  The base year amount is equal to the tax bad debt reserve determined as
of  December  31,  1987.  Subsequently,  the Bank  switched  its tax year from a
calendar year to a fiscal year ending September 30.

        The  percentage  of specially  computed  taxable  income that is used to
compute a savings  association's bad debt reserve deduction under the percentage
of taxable  income  method  (the  "percentage  bad debt  deduction")  is 8%. The
percentage  of bad  debt  deduction  thus  computed  is  reduced  by the  amount
permitted as a deduction for  non-qualifying  loans under the experience method.
The  availability of the percentage of taxable income method permits  qualifying
savings  associations to be taxed at a lower  effective  federal income tax rate
than that applicable to corporations generally (approximately 31.3% assuming the
maximum percentage bad debt deduction).

        If an  association's  qualifying  assets  (generally,  loans  secured by
residential  real  estate or  deposits,  educational  loans,  cash,  and certain
government  obligations)  constitute  less  than 60% of its  total  assets,  the
association may not deduct any addition to a bad debt reserve and generally must
include existing reserves in income over a four year period. As of September 30,
1996, at least 60% of the Bank's assets were qualifying assets as defined in the
Code.  No  assurance  can be  given  that the  Bank  will  meet the 60% test for
subsequent taxable years.

        Earnings  appropriated  to the Bank's bad debt  reserve and claimed as a
tax  deduction  will not be available  for the payment of cash  dividends or for
distribution to  shareholders  (including  distributions  made on dissolution or
liquidation),  unless the Bank  includes  the  amount in income,  along with the
amount deemed necessary to pay the resulting federal income tax. As of September
30, 1996, the Bank had  approximately  $4.2 million of accumulated  earnings for
which federal  income taxes have not been  provided.  If such amount is used for
any purpose other than bad debt losses,  including a dividend  distribution or a
distribution  in  liquidation,  it will be subject to federal  income tax at the
then current rate.

        As discussed in more detail in  "Regulation of the  Bank - Recapture  of
Post-1987 Bad-Debt Reserves," the Small Business Act modified the method used by
the Bank in  calculating  its annual  addition  to the bad debt  reserve for tax
years beginning after 1995.

        The  Company  files a  separate  U.S.  corporate  income tax return on a
calendar year basis.

State Taxation

        The Louisiana  Corporation Income Tax Act provides for an exemption from
the Louisiana  Corporation  Income Tax for mutual  savings banks and for banking
corporations,  which includes stock associations (e.g., the Bank). However, this
exemption  does not extend to  non-banking  entities  such as the  Company.  The
non-banking subsidiaries of the Bank (as well as the Company) are subject to the
Louisiana  Corporate Income Tax based on their Louisiana taxable income, as well
as franchise  taxes. The Louisiana  Corporation  Income Tax applies at graduated
rates from 4% upon the first  $25,000 of Louisiana  taxable  income to 8% on all
Louisiana taxable income in excess of $200,000.  For these purposes,  "Louisiana
taxable  income" means net income which is earned within or derived from sources
within the State of Louisiana,  after adjustments  permitted under Louisiana law
including a federal  income tax  deduction  and an allowance  for net  operating
losses,  if any.  Beginning  January 1, 1996,  the Company became subject to the
Louisiana Shares Tax and the Louisiana Franchise Tax. The Louisiana

                                       32


<PAGE>



Shares Tax is imposed on the assessed value of the Bank's stock. The formula for
deriving  the  assessed  value  is to  calculate  15% of the sum of (i) 20% of a
corporation's  capitalized  earnings,  plus (ii) 80% of a corporation's  taxable
stockholders'  equity,  and to subtract from that amount 50% of a  corporation's
real  and  personal  property  assessment.  Other  various  items  may  also  be
subtracted in calculating a corporation's  capitalized  earnings.  The Louisiana
Shares Tax and the Louisiana  Franchise Tax increased  expense by  approximately
$300,000  (net of taxes) for the nine months ended  September  30, 1996 which is
approximately $400,000 (net of taxes) on an annualized basis.

Item  2.  Description of Properties
-----------------------------------

Properties

        The Bank  operates  from its main office  located at 211 Willow  Street,
Franklin,  Louisiana and eight branch  offices.  The Bank's total  investment in
office  property  and  equipment  is $7.4  million with a net book value of $4.5
million at September 30, 1996.  The Bank  currently  operates  automated  teller
machines at most of its branch offices.

Item 3.  Legal Proceedings
--------------------------

        Neither  the Company nor its  subsidiaries  are  involved in any pending
legal  proceedings,  other than routine legal matters  occurring in the ordinary
course of business, which in the aggregate involve amounts which are believed by
management to be immaterial to the consolidated  financial  condition or results
of operations of the Company.

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

        None.

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters
-----------------------------------------------------------------

        Information  relating to the market for  Registrant's  common equity and
related stockholder  matters appears under "Market and Dividend  Information" in
the  Registrant's  Annual  Report to  Stockholders  for the  fiscal  year  ended
September 30, 1996 ("Annual  Report") on page 3, and is  incorporated  herein by
reference.

Item 6.  Selected Financial Data
--------------------------------

        The  above-captioned  information  appears under "Selected Financial and
Other  Data" in the  Annual  Report  on page 2, and is  incorporated  herein  by
reference.

Item 7. Management's Discussion and Analysis of Financial Conditions and Results
--------------------------------------------------------------------------------
        of Operations
        -------------
        The above-captioned  information  appears under Management's  Discussion
and  Analysis of Financial  Condition  and Results of  Operations  in the Annual
Report on pages 4 through 9 and is incorporated herein by reference.

                                       33


<PAGE>



Item 8.  Financial Statements and Supplementary Data
----------------------------------------------------

        The  Consolidated   Financial   Statements  of  Teche  Holding  and  its
subsidiaries, together with the report thereon by Deloitte & Touche, LLP appears
in the  Annual  Report on pages 11  through  31 and are  incorporated  herein by
reference.

Item  9.  Changes  In and  Disagreements  with  Accountants  on  Accounting  and
--------------------------------------------------------------------------------
          Financial Disclosure
          --------------------

        None.

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant
------------------------------------------------------------

        The information contained under the section captioned  "Information with
Respect to Nominees for Director,  Directors  Continuing in Office and Executive
Officers" at pages 3 to 8 of the Registrant's definitive proxy statement for the
Registrant's  Annual Meeting of Stockholders to be held on January 22, 1997 (the
"Proxy Statement"), which was filed with the Commission on December 23, 1996 and
incorporated  herein by  reference.  See also "Item 1.  Business  of the Bank --
Personnel" included herein.

Item 11.  Executive Compensation
--------------------------------

        The  information  relating to  executive  compensation  is  incorporated
herein by reference to the Registrant's Proxy Statement at pages 8 through 12.

Item 12.  Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

        The  information  relating to security  ownership of certain  beneficial
owners and management is  incorporated  herein by reference to the  Registrant's
Proxy Statement at pages 1 through 3.

Item 13.  Certain Relationships and Related Transactions
--------------------------------------------------------

        The   information   relating  to  certain   relationships   and  related
transactions  is  incorporated  herein by  reference to the  Registrant's  Proxy
Statement at pages 13 and 14.

                                       34

<PAGE>
                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K
-------------------------------------------------------------------------

(a) The following documents are filed as a part of this report:

(1)  Financial  Statements of the Company are  incorporated  by reference to the
following indicated pages of the Annual Report.

                                                                          PAGE
                                                                          ----

Independent Auditors' Report.......................................         11

Consolidated Balance Sheets as of September 30, 1996 and 1995......         12

Consolidated Statements of Income For the Years Ended
  September 30, 1996, 1995 and 1994................................         13

Consolidated Statements of Stockholders' Equity
  for the Years Ended September 30, 1996, 1995 and 1994............         14

Consolidated Statements of Cash Flows for the Years Ended
  September 30, 1996, 1995 and 1994................................      15-16


Notes to Consolidated Financial Statements.........................         17


        The remaining  information  appearing in the Annual Report is not deemed
to be filed as part of this report, except as expressly provided herein.

        (2)  All  schedules  are  omitted  because  they  are  not  required  or
applicable,  or the required information is shown in the consolidated  financial
statements or the notes thereto.

        (3)    Exhibits

               (a)    The following exhibits are filed as part of this report.

         3.1   Articles of Incorporation of Teche Holding Company*
         3.2   Bylaws of Teche Holding Company*
         4.0   Stock Certificate of Teche Holding Company*
        10.1   Form of Teche Federal Savings Bank Management Stock Plan**
        10.2   Form of Teche Holding Company 1995 Stock Option Plan**
        11.0   Statement regarding computation of earnings per share 
                 (see Note 1 to the Notes to Consolidated Financial Statements
                 in the Annual Report)
        13.0   Annual Report to Stockholders for the fiscal year ended
                 September 30, 1996
        21.0   Subsidiary of the Registrant 
                 (see "Item 1 Business - Subsidiary Activity" herein)
        23.0   Consent of Accountants
        27.0   Financial Data Schedule***

               (b)    Reports on Form 8-K.

               None

--------------------
*       Incorporated herein by reference into this document from the Exhibits to
        Form S-1, Registration Statement, initially filed with the Commission on
        December 16, 1994, Registration No. 33- 87486.
**      Incorporated herein by reference into this document from the Exhibits to
        the Registrant's Form 10-K for the fiscal year ended September 30, 1995,
        filed with the Commission.
***     Only in electronic filing.

                                       35


<PAGE>



                                   SIGNATURES

        Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                     TECHE HOLDING COMPANY

Dated:  December 30, 1996            By:  /s/Patrick O. Little
                                          --------------------
                                          Patrick O. Little
                                          President, Chief Executive
                                          Officer and Director
                                          (Duly Authorized Representative)

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

<S>     <C>                                        <C>    <C>  
By:     /s/Patrick O. Little                       By:    /s/J.L. Chauvin
        Patrick O. Little                                 J. L. Chauvin
        President, Chief Executive Officer                Vice President and Treasurer
          and Director                                      (Principal Financial Officer)
        (Principal Executive Officer)

Date:   December 30, 1996                          Date:  December 30, 1996


By:     ___________________________                By:    /s/Robert Earl Mouton
        W. Ross Little                                    Robert Earl Mouton
        Chairman of the Board and Secretary               Director

Date:   December __, 1996                          Date:  December 30, 1996


By:     /s/Mary Coon Biggs                         By:    _______________________
        Mary Coon Biggs                                   Christian L. Olivier
        Director                                          Director

Date:   December 30, 1996                          Date:  December __, 1996

By:     ____________________________               By:    /s/H. Ross Little, Jr.
        Virginia Kyle Hine                                H. Ross Little, Jr.
        Director                                          Director

Date:   December __, 1996                          Date:  December 30, 1996


By:     /s/Henry L. Friedman                       By:    /s/Thomas F. Kramer, M.D.
        Henry L. Friedman                                 Thomas F. Kramer, M.D.
        Director                                          Director

Date:   December 30, 1996                          Date:  December 30, 1996

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