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 June 30, 1998    Commission File Number 2-89559 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 organizaton)                   or Identification No.)
        
          4700 Main Street
          Post Office Box 497
          Zachary, Louisiana 70791-0497
(Address of principal executive office)(Zipcode)

Registrant's telephone number, including area code     504 6542701

                              None
              (Former name, former address and former fiscal
                   year if changed since last report)
                                    
     Indicate by check mark whether the registant (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 June
30, 1998.


                                I N D E X
                                    
                                    
                                    
Financial Statements:


  Consolidated Balance Sheets - June 30, 1998,
     December 31, 1997 and June 30, 1997                          2
                                    
  Consolidated Statements of Income - for the three
     and six months ended June 30, 1998 and 1997                  3
                                    
  Consolidated Statements of Changes in Stockholders'
    Equity - for the six months ended June 30,
      1998 and 1997                                               4

  Consolidated Statements of Cash Flows -
    for the six months ended June 30, 1998 and 1997             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 - 18














                                 1



                  Zachary Bancshares, Inc. and Subsidiary
                        CONSOLIDATED BALANCE SHEETS
          June 30, 1998, December 31, 1997 and June 30, 1997
                                ASSETS
                                   
                                     (UNAUDITED)   (UNAUDITED)    (UNAUDITED)
                                       JUNE 30,    DECEMBER 31,     JUNE 30,
                                        1998          1997           1997
Cash and Due from Banks            $ 3,874,104     $2,481,869     $3,003,080
Interest Bearing Deposits in
  Other Institutions                 1,662,292         95,046         92,395
Reserve Funds Sold                   3,175,000      1,700,000      1,200,000
Securities Available for Sale
  (Amortized Cost $22,553,745,
  $25,624,161 and $28,467,639)      22,615,974     25,620,114     28,411,277
Loans                               48,919,894     46,141,573     40,514,930
  Less:  Allowance for Loan Losses    (792,803)      (771,850)      (819,781)
                                    48,127,091     45,369,723     39,695,149
Bank Premises and Equipment          1,893,170      1,693,887      1,480,581
Other Real Estate                      206,153        217,401        363,003
Accrued Interest Receivable            564,159        558,501        586,025
Other Assets                           171,234         69,139         52,795
      Total Assets                 $82,289,177    $77,805,680    $74,884,305
                                   LIABILITIES
Deposits:
  Noninterest Bearing              $16,088,072    $14,418,082    $13,734,835
  Interest Bearing                  57,062,222     54,762,690     52,908,408
                                    73,150,294     69,180,772     66,643,243
Accrued Interest Payable               216,868        188,188        187,432
Other Liabilities                      334,893        221,985        184,841
      Total Liabilities            $73,702,055    $69,590,945    $67,015,516

                          STOCKHOLDERS' EQUITY
                                    
Common Stock - $10 Par Value; Authorized
  2,000,000 Shares; Issued 216,000
  Shares, Respectively            $2,160,000     $  2,160,000    $ 2,160,000
Surplus                            1,480,000        1,480,000      1,480,000
Retained Earnings                  5,352,711        5,024,066      4,712,648
Unrealized Gain (Loss) on Securities
Available for Sale, Net               41,071          ( 2,671)       (37,199)
Treasury Stock (22,333 Shares 
       at Cost)                     (446,660)        (446,660)      (446,660)
      Total Stockholders' Equity   8,587,122        8,214,735      7,868,789
      Total Liabilities and
        Stockholders' Equity     $82,289,177      $77,805,680    $74,884,305


The accompanying notes are an integral part of these financial statements.
                                     2

                   Zachary Bancshares, Inc. and Subsidiary
                   CONSOLIDATED STATEMENTS OF INCOME
       for the three and six months ended June 30, 1998 and 1997
                                   
                                    (UNAUDITED)                (UNAUDITED)
                                   QUARTER ENDED             SIX MONTHS ENDED
                                      JUNE 30,                  JUNE 30,
                                  1998        1997         1998        1997
Interest Income:
  Interest and Fees on Loans  $ 1,077,033  $  855,659   $2,094,534  $1,654,620 
  Interest on Securities          355,243     455,110      733,870     928,737 
  Other Interest Income            79,112      33,679      128,209      58,228
      Total Interest Income   $ 1,511,388  $1,344,448   $2,956,613  $2,641,585

Interest Expense:
  Interest Expense on Deposits $  591,170  $  533,158   $1,155,507  $1,064,030
  Interest Expense on Borrowings      441       -              441       -
       Total Interest Expense  $  591,611  $  533,158   $1,155,948  $1,064,030

   Net Interest Income         $  919,777  $  811,290   $1,800,665  $1,577,555

Provision for Loan Losses          51,567       7,735       75,352      15,214
      Net Interest Income  After
       Provision for  Loan Losses 868,210     803,555   1, 725,313   1,562,341

Other Income:
Service Charges on 
  Deposit  Accounts               120,830     131,872      238,996     256,359
  Loss on Securities                -          (4,478)       -          (5,391)
  Other Operating Income           41,136      33,933       81,266     61 ,427
       Total Other Income         161,966     161,327      320,262     312,395

  Income before Other Expenses $1,030,176  $  964,882   $2,045,575  $1,874,736

Other Expenses:
  Salaries and Employee Benefits  378,875     354,121      743,864     686,387
  Occupancy Expense                39,693      51,075       81,115     100,433 
Net Other Real Estate Expense         757       -            5,679       1,200
  Other Operating Expenses        232,181     213,795      466,837     440,938
      Total Other Expenses        651,506     618,991    1,297,495   1,228,958
      Income before Income Taxes  378,670     345,891      748,080     645,778
Applicable Income Taxes           122,910     117,725      245,135     213,778 
Net Income                     $  255,760  $  228,166   $  502,945  $  432,000

Per Share:
  Net Income                   $     1.32  $     1.18   $     2.60  $     2.23
  Cash Dividends               $      .90  $      .80   $      .90  $      .80


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 six months ended June 30, 1998 and 1997
                                    
                                    
                                    
                                    

                                                     (UNAUDITED)
                                                       JUNE 30,
                                                   1998        1997
Common Stock:
  Balance - Beginning and End of Period         $2,160,000   $2,160,000
                                    
                                    
Surplus:
  Balance - Beginning and End of Period         $1,480,000   $1,480,000
                                    
                                    
Retained Earnings:
  Balance - Beginning of Period                 $5,024,066   $4,435,582
    Net Income                                     502,945      432,000
    Cash Dividends                               (174,300)     (154,934)

  Balance - End of Period                       $5,352,711   $4,712,648

Net Unrealized Gain (Loss) on Securities
  Available for Sale:
  Balance - Beginning of Period                $   (2,671)   $  (17,046)
    Net Change in Unrealized Gain (Loss)
    on Securities Available for Sale               43,742       (20,153)
                                    
  Balance - End of Period                      $   41,071    $  (37,199)



Treasury Stock:
   Balance - Beginning and End of Period       $ (446,660)   $ (446,660)

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


                                    4

                   Zachary Bancshares, Inc. and Subsidiary
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
              for the six months ended June 30, 1998 and 1997

                                                    (UNAUDITED)
                                                       JUNE,
                                                   1998        1997
Cash Flows From Operating Activities:
  Net Income                                $    502,945  $  432,000
  Adjustments to Reconcile Net Income to
    Net Cash Provided by Operating
    Activities:
      Provision for Loan Losses                   75,352      15,214
      Provision for Depreciation and  Amortization
102,6378 1,639
   Stock Dividends on Federal Home Loan
        Bank Stock                                (7,800)      -
Net (Accretion) Amortization of
        Securities (Discounts) Premiums            1,632     (13,369)
      (Gain) Loss on Sale of Securities            -           5,391
      (Increase) Decrease in Accrued
      Interest Receivable                        (5,658)      26,543
      (Increase) Decrease in Other  Assets     (102,095)      39,910
      Increase (Decrease) in Accrued
      Interest Payable                           28,680        2,144
      Increase (Decrease) in Other  Liabilities  90,374      123,847 
Net Cash Provided by Operating
            Activities                          686,067      713,319
Cash Flows From Investing Activities:
  Net (Increase) Decrease in Reserve
    Funds Sold                               (1,475,000)    (350,000)
  Purchase of FHLB Stock                        (51,300)        -
  Purchases of Securities Available for Sale
-
(6,066,015)
  Maturities or Calls of Securities Available
    for Sale                                   1,500,000    1,000,000
  Principal Payments on Mortgage-Backed
    Securities                                 1,627,884      218,084
  Proceeds from Sales of Securities Available
    for Sale                                       -        8,942,917
  Net (Increase) Decrease in Loans            (2,832,720)  (3,270,537)
  Purchases of Premises and Equipment           (301,920)    (222,781)
  Proceeds from Sales of Other
    Real Estate                                   11,248       45,178
          Net Cash Provided by
            Investing Activities             (1,521,808)      296,846
                                (CONTINUED)
                                     5

                                                     (UNAUDITED)
                                                       JUNE 30,
                                                1998            1997
Cash Flows From Financing Activities:
  Net Increase (Decrease) in Demand
    Deposits, NOW Accounts and
    Savings Accounts                          2,921,392      (327,668)
  Net Increase (Decrease) in Certificates
    of Deposit                                1,048,130    (1,198,358)
  Cash Dividends                               (174,300)     (154,934)

          Net Cash Provided by (Used in)
            Financing Activities              3,795,222    (1,680,960)

Increase (Decrease) in Cash and Due
  from Banks                                  2,959,481      (670,795)

Cash and Due from Banks - Beginning of
    Period                                    2,576,915     3,766,270

Cash and Due from Banks - End of Period     $ 5,536,396   $ 3,095,475

Supplemental Disclosures of Cash Flow
  Information:
    Noncash Investing Activities:

    Change in Unrealized Gain (Loss)
        on Securities Available
        for Sale                           $     66,277   $   (30,534)

    Change in Deferred Tax Effect
        on Unrealized Gain on Securities
        Available for Sale                 $     22,534   $     10,381

Cash Payments For:
  Interest Paid on Deposits                $  1,127,268   $  1,061,886

  Income Tax Payments                      $    248,500   $    212,000



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


                                    6


                 Zachary Bancshares, Inc. and Subsidiary
                                    
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (UNAUDITED)
                                    
                         June 30, 1998 and 1997
                                    
                                    
Note A - 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  six months ended June 30, 1998
  are  no indication of the expected results  for the annual period
  which ends December 31, 1998.  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, 1997.

  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
  generally accepted accounting principles requires management to make
  estimates and assumptions that
  
  
                                    7
  affect the reported amounts of assets and liabilities and disclosure
  of contingent  assets  and  liabilities  at  the  date  of  the
  financial statements and reported amounts of revenues  and  expenses 
  during the period.  Actual results could differ from those estimates.   
  Material estimates that are particularly susceptible  to  change in the 
  near term relate to the determination  of the  allowance for loan losses 
  and the valuation of real estate acquired in connection with foreclosures.
  The Bank obtains independent appraisals for significant properties.
  
   Securities

   Management determines the appropriate classification of debt
   securities (Held to Maturity, Available for Sale, or Trading)
   at the time of purchase and re-evaluates this classification periodically.
   Securities that management  has both the intent and ability to  hold
   to maturity regardless of changes in market conditions, liquidity
   needs  or changes in general economic conditions are classified as
   securities held to maturity.  Securities classified as trading are
   those securities held for  resale  in anticipation of short-term
   market movements.   The  Bank holds no securities classified as held
   to maturity or trading.
   
   Securities  that  may  be  sold  prior to  maturity  are  classified
   as securities  available  for  sale.  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. Securities  available  for sale are carried at 
   fair  value.   Unrealized gains  or losses are reported as increases or
   decreases in stockholders' equity,  net  of  the reported deferred tax 
   effect.  Realized  gains  or losses,  determined on the basis of the costs
   of specific  securities sold, are included in earnings.
  
   Loans

   Loans are stated at principal amounts outstanding,less unearned income and
   allowance for loan losses.  Interest on commercial loans is accrued  daily
   based on the principal outstanding.  Interest on installment loans is 
   recognized and included in interest income using the sum-of-the-digits  
   method,  which does not differ materially from the interest method.
   The Bank  discontinues the accrual of interest income when a loan becomes
   90 days past due as to principal or interest.  Interest on impaired loans
   is discontinued when, in management's opinion the borrower may be unable 
   to meet payments as they become due.  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.

   Allowance for Loan Losses
   
   The allowance for loan losses is an amount which in management's judgment 
   is adequate to absorb potential losses 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 inter
   nal asset review process; expectations  of future economic conditions and 
   their impact on particular  borrowers; and other judgmental factors.
   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 unlikely.  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 deprecia
   tion.  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 purposes.

   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.  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  after interest income from  state  and  municipal
   securities  is excluded.  Also certain items of income and expenses  are
   recognized  in  different time periods for financial statement  purposes
   than  for  income tax purposes.  Thus provisions for deferred taxes  are
   recorded in recognition of such timing differences.
  
   Deferred  taxes are provided on a liability method whereby deferred  tax
   assets  are  recognized  for  deductible   temporary   differences   and
   operating  loss  and  tax credit carryforwards and deferred tax  liabili
   ties are recognized for taxable temporary  differences.   Temporary  dif
   ferences  are the differences  between the reported  amounts  of  assets
   and  liabilities  and their  tax bases.  Deferred tax assets are reduced
   by  a valuation 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  Company and the Bank file a consolidated federal income tax return.
   In  addition, state income tax returns are filed individually by the Com
   pany in accordance with state statutes.
  
   Comprehensive Income

   The Financial  Accounting Standards Board issued Statement  No.  130
   "Reporting Comprehensive Income" , which has  become  effective
   for years beginning after December 15, 1997.  This statement establishes
   standards for reporting and display of comprehensive income and its com
   ponents which are revenues, expenses, gains, and losses that under GAAP
   are included in comprehensive income but excluded from  net  income.   The
   Bank adopted this statement in 1998.   The only component of comprehensive
   income included in the financial statements was the unrealized gain (loss)
   on securities available for sale, which was immaterial at June 30,1998 and
   1997.

                                    10
                              
                                     
  Earnings per Common Share

  In  February 1997, Statement of Financial Accounting Standards  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 June 30, 1998  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 second quarter of 1998 and 1997.
 
  Statements of Cash Flows

  For  purposes  of  reporting  cash flows, cash and cash  equivalents  in
  cludes cash on hand and amounts due from banks (including cash items  in
  process of clearing).
  
  
  
  
  
                                   11


             Zachary Bancshares, Inc. and Subsidiary
                     MANAGEMENT'S DISCUSSION
                          June 30, 1998
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
     RESULTS OF OPERATIONS

The  following  is management's discussion and  analysis  of  the
significant  changes in income and expenses in  relation  to  the changes
in financial position for the six months ended June  30,
1998  and  1997.  This information should be read in  conjunction
with  the  financial statements and 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  $48,919,894 at  June  30,  1998  compared  to
$40,514,930  at  June 30, 1997.  This represents an  increase  of
$8,404,964  or 21%.  Loan growth was funded from reallocation  of
investment securities as they matured and from deposit growth.

Investment Securities

Investment  securities decreased 20% to $22,615,974 at  June  30,
1998 compared to $28,411,277 at June 30, 1997.  This decrease was
due  to the reallocation of these funds to the loan portfolio  as
the securities matured.

Bank Premises and Equipment

Total bank premises and equipment were $1,893,170 at June 30, 1998
compared  to  $1,480,581  at  June  30,  1997.   A  contract  for
$2,876,000 for the construction of a new Company headquarters was
signed  on  December 31, 1997. As work continues on the  project,
the building bank premises and equipment totals will increase  to
reflect  the construction in progress.  Completion of the project
is anticipated to be in the first quarter of 1999.

                                12
Deposits

Total  deposits  increased 10% to $73,150,294 at  June  30,  1998
compared to $66,643,243 at June 30, 1997.

RESULTS OF OPERATION

For the Six Month Period Ended June 30, 1998 over 1997

Net Income

Net  Income was $502,945 for the six month period ended June  30,
1998 compared to $432,000 in the same period in 1997, an increase
of  16%.  This change was primarily due to a 14% increase in  net
interest income.

Interest Income

Interest Income for the six month period ended June 30, 1998  was
$2,956,613 or a 12% increase over the same period in  1997.   The
interest  income  increase resulted from the Company's  continued
asset mix reallocation from lower yielding securities into higher
yielding  loans.   The  Bank's loan portfolio  increased  21%  to
$48,919,894  while  its  investment portfolio  decreased  20%  to
$22,615,974 in the time period under consideration.

Interest Expense

Interest  Expense  for the six months ended  June  30,  1998  was
$1,155,948  or  a  9% increase over the same period  in  1997  at
$1,064,030.    Interest   bearing  deposits   increased   8%   to
$57,062,222 from $52,908,408 at June 30, 1997.  Both  volume  and
rate increases contributed to the net interest expense change.

Provision for Loan Losses

The Company included $75,352 for provision for loan losses during
the  six  month  period  ended June 30,  1998  due  to  continued
increases in the loan portfolio. The Company's Watch List volumes
were  stable  in  the  last half of 1997 and  to  date  in  1998.
Management reviews the Watch List on a monthly basis and  remains
committed to providing for losses in a timely manner.


                                13
Total Other Income

Total  other  income  for  the  time period  under  consideration
increased  $7,867  or  3%. Service charges  on  Deposit  Accounts
decreased  $17,363  or  7% as the Company  offered  new  products
during  the  latter part of 1997 which included  reduced  monthly
service  fees.   Other income increased $19,839 or 32%  primarily
from  fee  income on investment sales which the Company  received
under  the  terms of a contract with a third party  which  offers
discount brokerage service at the Company's facility.

Total Other Expense

Total other expenses increased 6% or $68,537 to $1,297,495 at June
30,  1998 from $1,228,958 at June 30, 1997. Employee salaries and
benefits   increased   8%  for  the  six   month   period   under
consideration.  Occupancy expense decreased 19% for the 1998  six
month  time  period  as 1997's period had one  time  expenses  of
approximately  $15,000 related to the Company's  data  processing
conversion in February 1997.

Income Tax

The  Company is fully taxable at the maximum rate (34%)  in  both
1998  and 1997 and expects to remain taxable at the current  rate
throughout 1998.

Earnings Per Share

The Company's 1998 earning per share at June 30th was $2.60 a 17%
increase or $.37 per share over the previous year.

Dividends

The  Company's cash dividend increased $.10 at June 30,  1998  to
$.90 per share or 12.5% over the previous year.


                                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 manage
ment  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















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                                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: August 12, 1998
                                           Harry S. Morris, Jr.
                                           President
                                           
                                           
                                           
                                           
                                            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 principles and
include   some  amounts  that  are  necessarily   based   on
management'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, objectivity, 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 autho
rized  and recorded in accordance with established  policies
and  procedures.   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  ac
counting  controls,  Zachary Bancshares,  Inc.  has  a  pro
fessional  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 independent public accountants to review
matters relating to financial reporting, internal accounting
control  and  the nature, extent and results  of  the  audit
effort.   The independent public accountants have direct  ac
cess  to  the  Audit  Committee with or  without  management
present.






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      The  financial statements as of December 31, 1997 were
examined by Hannis T. Bourgeois, L.L.P., independent  public
accountants, who rendered an independent professional opinion
on the financial statements prepared by management. The
financial statements as of June 30, 1998 have not been
reviewed by Hannis T. Bourgeois, L.L.P.





                                        Larry Bellard, Treasurer




                                   18