SECURITIES AND EXCHANGE COMMISSION

                         WASHINGTON, D. C. 20549



                              FORM 10 - QSB

               Quarterly Report Under Section 13 or 15 (d)
                  of the Securities Exchange Act of 1934

   For the Quarter ended March 31, 1999   Commission File Number 13397



                          Zachary Bancshares, Inc.
(Exact name of registrant as specified in its charter)

           Louisiana                                72-0981148
  (State of or other jurisdiction   (I.R.S. Employer Incorporation
        of organization)              or Identification No.)

          4700 Main Street
          Post Office Box 497
          Zachary, LA                          70791-0497
   (Address of principal executive office)       (Zipcode)

Registrant's telephone number, including area code   225 654 2701
                                     
                          NONE                                    
            (Former name, former address and former fiscal
                  year of change since last report)

      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  the  number of shares outstanding of each of  the  issuer's
classes of common stock, as of the latest practicable date.

      Common  Stock, $10 par value, 193,667 shares outstanding as of  March
31, 1999.











                                 I N D E X




Financial Statements:


  Consolidated Balance Sheets -
    March 31, 1999, December 31, 1998 and March 31, 1998          2

  Consolidated Statements of Income -
    for the three months ended March 31, 1999 and 1998            3

  Consolidated Statements of Changes in Stockholders' Equity -
    for the three months ended March 31, 1999 and 1998            4

  Consolidated Statements of Cash Flows -
    for the three months ended March 31, 1999 and 1998           5-6

  Notes to Consolidated Financial Statements                     7-11

  Management's Discussion and Analysis of Financial
    Condition and Results of Operations                         12-14

Part II - Other Information                                       15

Signatures                                                        16

 Management's Responsibility for Financial Reporting              17









                                    1
                                     
                                     
                  Zachary Bancshares, Inc. and Subsidiary
                        CONSOLIDATED BALANCE SHEETS
           March 31, 1999, December 31, 1998 and March 31, 1998
                                  ASSETS
                                     
                                 (UNAUDITED)    (UNAUDITED)  (UNAUDITED)
                                   MARCH 31,    DECEMBER 31,   MARCH 31,
                                    1999           1998         1998
Cash and Due from Banks          $ 2,416,954    $ 2,815,507  $ 3,280,870
Interest Bearing Deposits in
  Other Institutions               1,719,558      1,701,873       45,123
Reserve Funds Sold                 5,150,000      6,175,000    3,550,000
Securities Available for Sale
  (Amortized Cost $16,630,964,
  $17,563,961 and $23,482,871)    16,621,369     17,572,539   23,501,196
Loans                             54,643,071     52,372,002   46,338,808
  Less: Allowance for Loan Losses   (880,920)      (858,856)    (782,205)
                                  53,762,151     51,513,146   45,556,603

Bank Premises and Equipment        3,708,956      3,067,869    1,691,465
Other Real Estate                          6        191,592      206,154
Accrued Interest Receivable          536,312        518,258      574,968
Other Assets                         247,786        231,935      201,362
    Total Assets                 $84,163,092    $83,787,719  $78,607,732
                                     
                                LIABILITIES
Deposits:
  Noninterest Bearing            $17,753,670    $17,636,206  $14,941,689
  Interest Bearing                56,728,415     56,814,190   54,629,775
                                  74,482,085     74,450,396   69,571,464
Accrued Interest Payable             193,493        231,360      200,240
Other Liabilities                    388,050        203,202      359,343
Total Liabilities                 75,063,628     74,884,958   70,131,047
                                     
                           STOCKHOLDERS' EQUITY

Common Stock - $10 Par Value;
  Authorized 2,000,000 Shares;
  Issued 216,000 Shares, Respec-
  tively                           2,160,000      2,160,000    2,160,000
Surplus                            1,480,000      1,480,000    1,480,000
Retained Earnings                  5,912,456      5,703,759    5,271,251
Accumulated Other Comprehensive 
  Income                              (6,332)         5,662       12,094
Treasury Stock (22,333 Shares 
  at Cost)                          (446,660)      (446,660)    (446,660)
      Total Stockholders' Equity   9,099,464      8,902,761    8,476,685

      Total Liabilities and
        Stockholders' Equity     $84,163,092    $83,787,719  $78,607,732


The accompanying notes are an integral part of these financial statements.
                                             2
                  Zachary Bancshares, Inc. and Subsidiary
                     CONSOLIDATED STATEMENTS OF INCOME
                        for the three months ended
                          March 31, 1999 and 1998


                                              (UNAUDITED)
                                           THREE MONTHS ENDED
                                                MARCH 31,
                                            1999         1998
Interest Income:
  Interest and Fees on Loans             $ 1,180,457   $1,017,501
  Interest on Securities                     261,779      378,627
  Other Interest Income                       72,312       49,097
      Total Interest Income              $ 1,514,548   $1,445,225
Interest Expense on Deposits                 544,271      564,337
      Net Interest Income                $   970,277   $  880,888
Provision for Loan Losses                     44,384       23,785
      Net Interest Income After Provision for
         Loan Losses                     $   925,893   $  857,103
Other Income:
  Service Charges on Deposit Accounts        116,219      118,166
  Other Operating Income                      39,978       40,130
      Total Other Income                 $   156,197   $  158,296

       Income before Other Expenses      $ 1,082,090   $1,015,399
Other Expenses:
  Salaries and Employee Benefits             377,998      364,989
  Occupancy Expense                           47,457       41,422
  Net Other Real Estate Expense               81,363        4,922
  Other Operating Expenses                   261,583     2 34,656
      Total Other Expenses               $   768,401   $  645,990

      Income before Income Taxes             313,689      369,410
Applicable Income Taxes                      104,992      122,225
      Net Income                         $   208,697   $  247,185

Per Share:
  Net Income                             $      1.08   $     1.28




The accompanying notes are an integral part of these financial statements.

                                     3
                  Zachary Bancshares, Inc. and Subsidiary
                                     
        CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                     
            for the three months ended  March 31,1999 and 1998
                                     
                                              ACCUMULATED
                                                OTHER                  TOTAL
                    COMMON         RETAINED  COMPREHENSIVETREASURY STOCKHOLDERS'
                    STOCK  SURPLUS  EARNINGS  INCOME    STOCK      EQUITY
Balances,(Unaudited)
  January 1, 1999  $2,160,000 $1,480,000 $5,703,759 $5,662$(446,660)$8,902,761

Comprehensive Income:
  Net Income                                208,697                    208,697
  Change in Unrealized
   Gain (Loss) on Securities
   Available for Sale                               (11,994)            (11,994)
Less:  Reclassification
    Adjustment                                          -                   -

  Total Comprehensive                                                   _______
    Income                                                              196,703
Cash Dividends                                 -                            -
Balances, (Unaudited)
 March 31, 1999   $2,160,000 $1,480,000 $5,912,456$ (6,332) $(446,660)$9,099,464


Balances, (Unaudited)
  January 1, 1998 $2,160,000 $1,480,000 $5,024,066 $(2,671) $(446,660)$8,214,735
Comprehensive Income:
  Net Income                                247,185                      247,185
  Change in Unrealized
    Gain (Loss) on Securities
    Available for Sale                               14,765               14,765
Less: Reclassification
    Adjustment                                          -                   -

  Total Comprehensive
    Income                                                               261,950
Cash Dividends                               -                              -
  Balances, (Unaudited)
  March 31, 1998   $2,160,000 $1,480,000$5,271,251$ 12,094$(446,660)$8,476,685
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                                        
                                     
                                     
  The accompanying notes are an integral part of these financial statements.



                                     4


                  Zachary Bancshares, Inc. and Subsidiary

                   CONSOLIDATED STATEMENTS OF CASH FLOWS

            for the three months ended March 31, 1999 and 1998

                                                     (UNAUDITED)
                                                       MARCH 31
                                                  1999         1998
Cash Flows From Operating Activities:

  Net Income                                 $   208,697   $   247,185
  Adjustments to Reconcile Net Income to
    Net Cash Provided by Operating  Activities:
    Provision for Loan  Losses                    44,384        23,785
    Provision for Depreciation and Amortization   48,424        52,691
    Stock Dividends - Federal Home Loan Bank      (4,800)       (3,900)
    Net Amortization Securities Premium            5,312         1,671
    Charge Off of Other  Real Estate              92,654          -
    Gain on Sale of Real Estate                  (11,239)         -
   (Increase) in Accrued Interest Receivable     (18,054)      (16,467)
   (Increase)in Other  Assets                    (15,851)     (132,214)
   Increase (Decrease)in Accrued Interest Payable(37,867)       12,052
   Increase in Other Liabilities                 191,027       129,751

     Net Cash Provided by Operating
         Activities                              502,687       314,554


Cash Flows From Investing Activities:

  Net(Increase)Decrease in Reserve Funds Sold  1,025,000    (1,850,000)
  Purchase of Securities Available for Sale   (2,995,938)      (51,300)
  Maturities or Calls of Securities 
    Available for Sale                         3,000,000     1,500,000)
  Principal Payments on Mortgaged
     Back Securities                             928,423       694,819
  Net Increase in Loans                       (2,293,389)     (210,665)
  Purchases of Premises and Equipment           (689,511)      (50,269)
  Proceeds from Sales of Other Real Estate       110,171        11,247

      Net Cash Used in Investing Activities     (915,244)       43,832







                                (CONTINUED)
                                     
                                    5

                                                       (UNAUDITED)
                                                         MARCH 31
                                                   1999           1998

Cash Flows From Financing Activities:

  Net Increase (Decrease) in Demand
    Deposits, NOW Accounts and
    Savings Accounts                            (551,759)        892,201
  Net Increase (Decrease) in Certificate
    of Deposit                                   583,448        (501,509)

  Net Cash Provided by Financing Activities       31,689         390,692

  Increase (Decrease) in Cash and Interest
     Bearing Deposits                           (380,868)        749,078

Cash and Interest Bearing Deposits -
     Beginning of Period                       4,517,380       2,576,915

Cash and Interest Bearing Deposits -
     End of Period                           $ 4,136,512     $ 3,325,993


Supplemental Disclosures of Cash Flow
  Information:

    Noncash Investing Activities:

      Change in Unrealized Gain or (Loss)
         on Securities Available for Sale    $   (18,173)    $    22,372

    Change in Deferred Tax  Effect on
         Unrealized Gain or (Loss) on Securities
         Available for Sale                  $     6,179     $    (7,607)
Cash Payments For:
  Interest Paid on Deposits                  $   582,137     $    552,285






The accompanying notes are an integral part of these financial statements.    
                                     
                                     
                                     
                                     
                                     6
                  Zachary Bancshares, Inc. and Subsidiary

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              (UNAUDITED)

                        March 31, 1999 and 1998

Summary of Significant Accounting Policies -
     The accounting principles followed by Zachary Bancshares, Inc. and
its  wholly-owned  Subsidiary, Bank of Zachary,  are  those  which  are
generally  practiced  within  the banking  industry.   The  methods  of
applying  those  principles conform with generally accepted  accounting
principles and have been applied on a consistent basis.  The principles
which  significantly  affect the determination of  financial  position,
results  of operations, changes in stockholders' equity and cash  flows
are summarized below.

Presentation

The accompanying unaudited consolidated interim financial statements do
not  include all of the information and footnotes required by generally
accepted accounting principles.  Management is of the opinion that  the
unaudited  interim  financial statements reflect all normal,  recurring
accrual  adjustments  necessary to provide  a  fair  statement  of  the
results  for   the  interim  periods presented.  It is noted  that  the
results  for  the  first  three months ended  March  31,  1999  are  no
indication  of  the expected results for the annual period  which  ends
December  31,  1999.  Additional  information concerning   the  audited
financial statements and notes can be obtained from Zachary Bancshares,
Inc.'s  annual  report  and  Form 10-KSB filed  for  the  period  ended
December 31, 1998.

Principles of Consolidation
The  consolidated financial statements include the accounts of  Zachary
Bancshares, Inc.  (the Company), and its wholly-owned subsidiary,  Bank
of   Zachary   (the Bank).  All  material  intercompany  accounts   and
transactions   have   been  eliminated.   Certain reclassifications  to
previously published financial statements have been made to comply with
current reporting requirements.

Estimates

     The preparation of financial statements in conformity with gener
ally  accepted accounting principles requires management to make esti
mates and assumptions that affect the reported amounts of assets  and
liabilities  and disclosure of contingent assets and  liabilities  at
the  date  of  the financial statements and the reported  amounts  of
revenues  and  expenses during the reporting period.  Actual  results
could differ from those estimates.

     The  determination  of the adequacy of the  allowance  for  loan
losses  is  based on estimates that are particularly  susceptible  to
significant   changes   in  the  economic  environment   and   market
conditions.   In connection with the determination of  the  estimated
losses  on  loans,  management  obtains  independent  appraisals  for
significant collateral.

     The  Bank's  loans  are generally secured by specific  items  of
collateral  including  real property, consumer assets,  and  business
assets.   Although  the  Bank  has a diversified  loan  portfolio,  a
substantial portion of its debtors' ability to honor their  contracts
is dependent on local economic conditions.



                                   7
While  management uses available information to recognize  losses  on
loans,  further reductions in the carrying amounts of  loans  may  be
necessary  based  on  changes  in  local  economic  conditions.    In
addition,  regulatory  agencies,  as  an  integral  part   of   their
examination  process,  periodically review the  estimated  losses  on
loans.   Such  agencies may require the Bank to recognize  additional
losses  based on their judgments about information available to  them
at  the time of their examination.  Because of these factors,  it  is
reasonably  possible that the estimated losses on  loans  may  change
materially  in the near term. However, the amount of the change  that
is reasonably possible cannot be estimated.
                                   
Securities

Securities classified as held to maturity are those debt securities the
Bank has both the intent and ability to hold to maturity regardless  of
changes  in market  conditions,  liquidity needs or changes in  general
economic  conditions.   Securities  classified  as  trading  are  those
securities  held for resale in anticipation of short-term  market  move
ments.  The  Bank had no securities classified as held to  maturity  or
trading at March 31, 1999 or 1998.

     Securities classified as available for sale are those debt  securi
ties that the Bank intends to hold for an indefinite period of time but
not   necessarily  to  maturity.   Any  decision  to  sell  a  security
classified  as  available for sale would be based on  various  factors,
including  significant  movements in interest  rates,  changes  in  the
maturity  mix  of  the Bank's assets and liabilities, liquidity  needs,
regulatory  capital  considerations, and other similar  factors.   Secu
rities available for sale are carried at fair value.  Unrealized  gains
or  losses  are reported as increases or decreases in stockholders'  eq
uity,  net of the related deferred tax effect.  Realized gains or losse
s, determined on the basis of the cost of specific securities sold, are
included in earnings.

Loans
     Loans are stated at principal amounts outstanding, less the  allow
ance  for loan losses.  Interest on commercial and individual loans  is
accrued daily based on the principal outstanding.

     Generally,  the  Bank discontinues the accrual of interest  income
when a loan becomes 90 days past due as to principal or interest.  When
a  loan  is  placed  on non-accrual status, previously  recognized  but
uncollected interest is reversed to income or charged to the  allowance
for  loan losses.  Interest income is subsequently recognized  only  to
the  extent cash payments are received.  The Bank classifies  loans  as
impaired  if, based on current information and events, it  is  probable
that  the  Bank  will  be unable to collect the scheduled  payments  of
principal and interest when due according to the contractual  terms  of
the  loan agreement.  The measurement of impaired loans is based on the
present  value  of  the expected future cash flows  discounted  at  the
loan's effective interest rate or the loan's observable market price or
based  on  the fair value of the collateral if the loan is  collateral-
dependent.

 Allowance for Loan Losses

     The  allowance for loan losses is maintained at a level  which  in
management's judgment is adequate to absorb credit losses  inherent  in
the  loan  portfolio.  The  allowance for loan  losses  is  based  upon
management's  review  and  evaluation of the  loan  portfolio.  Factors
considered  in  the  establishment of the  allowance  for  loan  losses
include  management's  evaluation of  specific  loans;  the  level  and
composition of classified loans; historical loss experience; results of
examinations by regulatory agencies; an internal asset review  process;
expectations  of  future  economic  conditions  and  their  impact   on
particular borrowers; and other judgmental


                                   8
factors.  Allowances for impaired loans are generally determined  based
on  collateral  values  or the present value of estimated  cash  flows.
Although management  uses available information to recognize losses  on
loans,   because  of  uncertainties  associated  with  local   economic
conditions, collateral values, and future cash flows on impaired loans,
it  is  reasonably possible that a material change could occur  in  the
allowance for loan losses in the near term.  However, the amount of the
change that is reasonably possible cannot be estimated.

      The  allowance for loan losses is based on estimates of potential
future losses, and ultimate losses may vary from the current estimates.
These  estimates  are reviewed periodically and as  adjustments  become
necessary, the effect of the change in estimate is charged to operating
expenses  in  the  period  incurred.  All losses  are  charged  to  the
allowance  for  loan  losses  when the loss  actually  occurs  or  when
management  believes  that the collectibility of the  principal  is  un
likely.  Recoveries  are  credited to the  allowance  at  the  time  of
recovery.

Bank Premises and Equipment
     Bank  premises  and equipment are stated at cost less  accumulated
depreciation.   Depreciation is provided at rates based upon  estimated
useful  service  lives  using the straight-line  method  for  financial
reporting purposes and accelerated methods for  income tax reporting.

     The  cost  of  assets retired or otherwise disposed  of   and  the
related  accumulated depreciation are eliminated from the  accounts  in
the year of disposal and the resulting gains or losses are included  in
current operations.

    Expenditures for maintenance and repairs are charged to operations
as incurred.  Cost of major additions and improvements are capitalized.
                                   
Other Real Estate
     Other real estate is comprised of properties acquired through fore
closure  or  negotiated settlement.  The carrying value of  these  prop
erties  is lower of cost or fair value, minus estimated costs to  sell.
Loan  losses  arising  from the acquisition  of  these  properties  are
charged  against  the  allowance  for  loan  losses.   Any   subsequent
market   reductions  required are charged  to  Net  Other  Real  Estate
Expense.    Revenues  and  expenses  associated  with  maintaining   or
disposing of foreclosed properties are  recorded during the  period  in
which  they  are incurred.

Income Taxes

          The provision for income taxes is based on income as reported
in the financial statements.  Also certain items of income and expenses
are  recognized  in  different  time periods  for  financial  statement
purposes  than for income taxes purposes.  Thus provisions for deferred
taxes are recorded in recognition of such timing differences.

     Deferred  taxes are provided utilizing a liability method  whereby
deferred tax assets are recognized for deductible temporary differences
and  operating  loss  and  tax credit carryforwards  and  deferred  tax
liabilities   are   recognized  for  taxable   temporary   differences.
Temporary differences are the differences between the reported  amounts
of assets and liabilities and their tax bases.  Deferred tax assets are
reduced by a valuation




                                   9

allowance  when, in the opinion of management, it is more  likely  than
not  that some portion  or all of the deferred tax assets will  not  be
realized.   Deferred tax assets and liabilities are  adjusted  for  the
effects of
changes in tax laws and rates on the date of enactment.

     The  corporation  and  its subsidiary file a consolidated  federal
income tax return.  In addition, state income tax returns are filed  in
dividually by the Company in accordance with state statutes.

Earnings per Common Share

      In  February 1997, Statement of Financial Accounting Standard No.
128  "Earnings Per Share" ("SFAS No. 128") was issued which establishes
standards for computing and presenting earnings per share (EPS).  Under
SFAS  No.  128, primary EPS is replaced with basic EPS.  Basic  EPS  is
computed by dividing income applicable to common shares by the weighted
average shares outstanding; no dilution for any potentially convertible
shares  is included in the calculation.  Fully diluted EPS, now  called
diluted  EPS,  reflects  the potential dilution  that  could  occur  if
securities  or other contracts to issue common stock were exercised  or
converted into common stock or resulted in the issuance of common stock
that  then  shared in the earnings of the Company.  At March 31,  1999,
the  Company  had  no  convertible shares or other contracts  to  issue
common  stock.  The weighted average number of shares of  common  stock
used  to calculate basic EPS was 193,667 for the periods ended March  31,
1999 and 1998, respectively.

Statements of Cash Flows

     For  purposes of reporting cash flows, cash and due from banks  in
cludes cash on hand and amounts due from banks (including cash items in
process of clearing).

Comprehensive Income

     The  Financial Accounting Standards Board (FASB) issued  Statement
No.  130  "Reporting Comprehensive Income." which became effective  for
fiscal  years  beginning  after  December  15,  1997.   This  statement
established  standards for the reporting and display  of  comprehensive
income  and  its  components which are revenues, expenses,  gains,  and
losses  that  under  GAAP  are  included in  comprehensive  income  but
excluded  from net income. The Company adopted this statement in  1998.
The  components of comprehensive income are disclosed in the Statements
of Changes in Stockholder's Equity for all periods presented.



                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                  10
                Zachary Bancshares, Inc. and Subsidiary

                       MANAGEMENT'S DISCUSSION

                            March 31, 1999

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

The  following is management's discussion and analysis of  the  signifi
cant  changes in income and expenses in relation to the changes  in  fi
nancial  position for the three months ended March 31,  1999  and  1998
This  information  should  be read in conjunction  with  the  financial
statements  and the notes relating thereto.  The Company is unaware  of
any  trends,  uncertainties  or events which  would  or  could  have  a
material impact on future operating results, liquidity or capital.


FINANCIAL CONDITION ANALYSIS

Loans

Total  loans were $54,643,071 at March 31, 1999 compared to $46,338,808
at  March 31, 1998.  This represents an increase of $8,304,263 or  18%.
Loan  growth  was funded from reallocation of investment securities  as
they matured and from deposit growth.

Investment Securities

Investment  securities decreased 29% to $16,621,369 at March  31,  1999
compared  to $23,501,196 at March 31, 1998.  This decrease was  due  to
the  reallocation of these fund to the loan portfolio as the securities
matured and the payment on the building contract discussed below.

Bank Premises and Equipment

Total  bank  premises and equipment were $3,708,956 at March  31,  1999
compared to $1,691,465 at March 31, 1998.  The Company entered  into  a
contract totaling $2,916,826 for the construction of a new main  office
facility  to be located in Zachary, Louisiana.  Construction  began  in
March,  1998 and will be completed during the second quarter  of  1999.
Under the terms of the contract, disbursements totaling $2,272,585 have
been made as of March 31, 1999.


                                  11

Deposits

Total  deposits increased $4,910,621 or 7% to $74,482,085 at March  31,
1999 compared to $69,571,464 at March 31, 1998.

RESULTS OF OPERATION
For the Three Month Period Ended March 31, 1999 over 1998

Net Income

Net Income was $208,697 for the three month period ended March 31, 1999
compared  to  $247,185  in the same period in 1998.   This  change  was
primarily  due  to  an increase in total interest income  offset  by  a
$81,363 charge off of Other Real Estate Owned.

Interest Income

Interest  Income for the three month period ended March  31,  1999  was
$1,514,548 or a 5% increase over the same period in 1998.  The interest
income  increase  resulted  from  the  Company's  continued  asset  mix
reallocation  from lower yielding securities to higher yielding  loans.
The  Subsidiary's loan portfolio increased 18% to $54,643,071 while its
investment  portfolio decreased 29% to $16,621,369 in the  time  period
under consideration.

Interest Expense

Interest Expense for the quarter ended March 31, 1999 was $544,270 or a
decrease of 4% over the same quarter in 1998 at $564,337.  Non-interest
bearing deposits increased $2,811,981 to $17,753,670 at March 1999 from
$14,941,689 at March 31, 1998. Interest bearing deposits also increased
to  $56,728,415  at March 31, 1999 from $54,629,775.  Weighted  average
deposit rates decreased to 2.99% at March 31, 1999 from 3.24% at  March
31, 1998.

Provision for Loan Losses

The  Company included $44,384 for provision for loan losses during  the
three  month period ended March 31, 1999 due to continued increases  in
the  loan  portfolio.  The Company's Watch List volumes were stable  in
the  last  half  of  1998  and to date in 1999.   Management  does  not
anticipate  any  unusual Watch List changes and  remains  committed  to
providing for losses in a timely manner.



                                  12
 Total Other Expense

Total Other Expenses increased 19% or $122,412 to $768,401 at March 31,
1999 from $645,990 at March 31, 1998.  $81,363 of this increase was due
to the complete writedown of Other Real Estate Owned property which had
been  on the books of the Company for ten years.  After ten years state
law  requires  that  property in this situation be  written  off.   The
amount represents 42 lots in an existing residential subdivision  where
sale  activity  has increased recently. A purchaser has  an  option  to
acquire ten of the lots for a total of $75,000 later this year.

Employee salaries and benefits increased 4% for the three month  period
under  consideration.   Other  expenses increased  11%  or  $26,926  to
$261,582  from $234,656 at March 31,1998.  This  increase was primarily
due to expenditures of $15,694 for Year 2000 expenses.

Income Tax

The Company's income is fully taxable at the maximum rate (34%) both in
1999  and  1998  and  expects to remain taxable  at  the  current  rate
throughout 1999.

Earnings Per Share

The  Company's  1999  earnings per share at March 31,  1999  was  $1.08
compared to $1.28 per share the previous year.

Year 2000 Issues

Management  does not feel that the issues related to Y2K are reasonably
likely  to  have  or  will  have a material  effect  on  the  Company's
liquidity,  capital resources, or results of operation.  The  following
information is given regarding this determination.

The  Bank  has  had two FDIC Y2K readiness exams during  the  last  six
months and received satisfactory results on both.

Approximately  $15,000 was expensed during 1998 for  software  upgrades
and  testing.  For 1999, $60,000 has been budgeted for these  types  of
expenses, known and unknown.






                                  13
The  Board of Directors of the Bank have been given monthly updates  on
the  status  of  our  Y2K  readiness and have  approved  the  following
policies:   (a)  Policy for responding to Customer Inquiries  Regarding
Y2K; (b)  Bank of Zachary 2000 Test Plan; (c) Bank of Zachary Emergency
Operating  Procedures and Y2K Business Resumption  Plan   The  Bank  is
presently  performing  a risk assessment of its  larger  customers  and
preliminarily these do not represent any material financial  effect  on
the Bank.

This  discussion entitled "Year 2000 Issues" includes certain  "forward
looking  statements"  within  the meaning  of  the  Private  Securities
Litigation  Act  of 1995 (PSLA).  This statement is  included  for  the
purpose  of availing the Company of the protections of the safe  harbor
provisions of the PSLA.  Management's ability to predict the results of
the effects of Year 2000 issues is inherently uncertain and subject  to
factors  that may cause actual results to materially differ from  those
anticipated.   Factors  that could affect actual  results  include  the
possibility  that  contingency plans and remediation efforts  will  not
operate  as  intended,  the  Bank's failure  to  timely  or  completely
identify   all   software  and  hardware  applications   that   require
remediation,  unexpected costs, and the general uncertainty  associated
with the impact of Year 2000 issues on the banking industry, the Bank's
customers, vendors, and others with whom it conducts business.  Readers
are  cautioned  not  to place undue reliance on these  forward  looking
statements.





















                                  14









                                PART II
                                   
                                   
                                   
                                   
                                   
                                   
     Item l.  LEGAL PROCEEDINGS

          During the normal course of business, the Company is involved
in various legal proceedings.  In the opinion of management  and
counsel, any liability resulting from such proceedings would not have a
material adverse effect on the Company's financial statements.



Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

     a.   None
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
                                  15
     







                              SIGNATURES






     Pursuant to the requirement of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized

                                     ZACHARY BANCSHARES, INC.





Date:   May 12, 1999                 s/Harry S. Morris, Jr.
                                     Harry S. Morris, Jr.
                                     President


                                     s/Larry Bellard
                                     Larry Bellard
                                     Treasurer











                                   
                                   
                                  16
          Management's Responsibility for Financial Reporting


     The management of Zachary Bancshares, Inc. is responsible for the
preparation of the financial statements, related financial data and
other information in this quarterly report.  The financial statements
are prepared in accordance with generally accepted accounting princi
ples and include some amounts that are necessarily based on manage
ment's informed estimates and judgments, with consideration given to
materiality.  All financial information contained in this quarterly
report is consistent with that in the financial statements.

     Management fulfills its responsibility for the integrity, objec
tivity, consistency and fair presentation of the financial statements
and financial information through an accounting system and related
internal accounting controls that are designed to provide reasonable
assurance that assets are safeguarded and that transactions are author
ized and recorded in accordance with established policies and proce
dures.  The concept of reasonable assurance is based on the recognition
that the cost of a system of internal accounting controls should not
exceed the related benefits.  As an integral part of the system of
internal accounting controls, Zachary Bancshares, Inc. has a profes
sional staff who monitors compliance with and assesses the
effectiveness of the system of internal accounting controls and
coordinates audit coverage with the independent public accountants.

     The Audit Committee of the Board of Directors, composed solely of
outside directors, meets periodically with management, and the indepen
dent public accountants to review matters relating to financial report
ing, internal accounting control and the nature, extent and results of
the audit effort.  The independent public accountants have direct
access to the Audit Committee with or without management present.

     The financial statements as of December 31, 1998 were examined by
Hannis T. Bourgeois, L.L.P., independent public accountants, who
rendered an independent professional opinion on the financial state
ments prepared by management.  Hannis T. Bourgeois, L.L.P. has not
reviewed the financial statements as of March 31, 1999.



                                Larry Bellard, Treasurer
                                   
                                   
                                  17